CAR_Public/990910.MBX                  C L A S S   A C T I O N   R E P O R T E R

                Friday, September 10, 1999, Vol. 1, No. 153

                                 Headlines

ASARCO CYPRUS: Shareholders Say Directors Should Talk With Phelps Dodge
ASSOCIATES FINANCIAL: Claims Dismissed In Ariz For Lack Of Specificity
BUCKS COUNTY: Penn Ct Dismisses Female Inmates’ Claims Re Mental Health
COLUMBIA/HCA: Ct Dismisses Shareholders Suit By New York Pension Fund
FEN-PHEN: AHP Faces Fights; Settles Norplant Suits; Recalls Epinephrine

FEN-PHEN: CA Sp Ct Denies Class Cert For Medical Check-Ups In AHP Case
HIBERNIA: 5th Cir Oks Louisiana Dist Ct’s Dismissal Of Securities Suit
HILTON HOTELS: Australian Court Action Begins Over Salmonella Poisoning
MEMBERWORKS INC: Sued In Minn And CA Over Sales Practices In Minn
MERRILL LYNCH: Female Employees Fight for Equal Treatment

MIAMI SUBS: Intends To Contest Vigorously Securities Suit In Florida
OXFORD HEALTH: Defends Multi-State Shareholders’ Suits
PATHMARK STORES: Jury Awards 3.85 Mil To Former Meat Cutter Under ADA
PRUDENTIAL INSURANCE: Fined $1.5 Million by New York Agency
RICHARD SEVILLA: Ill. Common-Fund Doctrine Outside Of ERISA Preemption

SHOLODGE INC: Will Defend Vigorously Securities Fraud Suit In Tennessee
TOBACCO LITIGATION: AIF Applauds Ap Ct’s Rejection Of Lump-Sum Damages
TOBACCO LITIGATION: B&W Releases Statement Decrying Lawyers’ Payday
TOBACCO LITIGATION: Industry Wants To Have New Jury
TOBACCO LITIGATION: Judge Kaye Puts Case On Pause To Sift Thru Motions

TOBACCO LITIGATON: Reuters Report On Florida Case; Mistrial Sought

                              *********

ASARCO CYPRUS: Shareholders Say Directors Should Talk With Phelps Dodge
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Cyprus Amax and its directors have been named as defendants in five
purported class actions commenced in the Court of Chancery, County of
New Castle, State of Delaware. ASARCO has been named as a defendant in
one of the actions as aiding and abetting the other defendants in the
alleged breach of their fiduciary duty.

The plaintiffs in these lawsuits, who are purported shareholders of
Cyprus Amax, allege that: defendants have a legal duty to negotiate with
Phelps Dodge; that the Phelps Dodge proposal is more attractive than the
ASARCO-Cyprus Amax business combination; and that defendants should
conduct a negotiating or sale process in which Cyprus Amax would accept
the highest consideration available. The complaints allege that the
individual defendants have breached their fiduciary duties to the
stockholders of Cyprus Amax in negotiating the ASARCO- Cyprus Amax
business combination, and specifically by agreeing to a provision in the
merger agreement that prohibits Cyprus Amax at certain times from
negotiating with or supplying information to third parties such as
Phelps Dodge. The plaintiffs further allege that defendants breached
their duties in connection with setting the record date for the Cyprus
Amax special meeting.

As relief, the complaints seek, among other things, damages in an
unspecified amount, injunctive relief prohibiting consummation of the
ASARCO-Cyprus Amax business combination, and an order requiring Cyprus
Amax to negotiate with bidders and/or sell itself to the highest bidder.
The time for defendants to answer or respond to the complaints has not
yet elapsed. Cyprus Amax believes that the claims alleged in the
complaints are without merit.

            Interests Of Certain Persons In The Merger

As stated in the joint August 25, 1999 press release, Asarco Cyprus will
not enter into change of control agreements that may become operative
during the 90 days following completion of the business combination. The
rights and benefits under the existing arrangements with the employees
(including the executive officers, as described in the joint proxy
statement and prospectus in "Interests of Certain Persons in the
Merger") of each of Cyprus Amax and ASARCO, however, will remain in full
force and effect and will be unaffected during the 90 days following
completion of the business combination, as will any rights under
arrangements entered into with such employees in substitution for any
existing arrangements.


ASSOCIATES FINANCIAL: Claims Dismissed In Ariz For Lack Of Specificity
----------------------------------------------------------------------
Adopting the report and recommendation of Magistrate Judge James C.
Carruth, U.S. District Judge John Roll of the U.S. District Court of
Arizona held that the class action complaint filed against a group of
affiliated financial lenders failed to sufficiently plead a separate
enterprise and that the underlying allegations of fraud were not pled
with sufficient specificity as required under RICO. The court further
dismissed the action, striking all the RICO exhibits as moot, but
leaving room for the borrowers to amend. Siemer v. Associates Financial
Services Co., No. CV-97-281-TUC-JC, (D. Ariz. 7/26/99).

Quentin and Alvina Siemer (husband and wife) and Alfonso and Helen
Gamboa, (mother and son) brought a class action alleging RICO violations
among others against a group of affiliated financial lending
corporations who made loans, refinanced loans, sold insurance in
connection with the loans and sold auto and shopping club memberships.
The corporations operate through several state subsidiaries and branch
offices.

Siemer and Gamboa, the representatives of the class of borrowers,
alleged that the lenders engaged in wrongful lending practices where the
corporation would allegedly refinance loans without any benefit to the
consumer but with substantial benefit to the corporation. They further
alleged that the corporations also would charge for add-on products such
as insurance that was not requested by the customer, and allegedly made
false and misleading claims. The borrowers further claimed that the
lenders concealed material facts regarding significant aspects of loan
transactions and allegedly charged excessive fees and finance charges
and administrated an allegedly deceptive program that added "value" to
the loans. Siemer and Gamboa both secured loans and refinancing,
solicited through mailings and literature, through one of the lender
subsidiaries and were allegedly misled into loan agreements that were
not what they had requested. Asserting fraudulent conduct, the borrowers
stated that they were induced into loans that they would not have made.

                         The RICO Enterprise

The lenders moved to dismiss the RICO claims stating that the borrowers
failed to allege a separate enterprise from that of the corporation's.
The lenders stated that the borrowers did not sufficiently allege facts
necessary to show that the lenders and the enterprise existed separately
and distinctly. In the amended complaint, the lenders stated that the
borrowers only rearranged the different combinations of
parent/subsidiary companies and failed to show an actual identified or
control person. In addition, the lenders stated that it was not
sufficient to merely show that the parent company conducted the alleged
RICO activities. The court agreed, holding that the borrowers could not
simply allege RICO activities just because it operated through
subsidiaries and would not allow a rearrangement of the various
corporations in order to satisfy the distinctiveness requirement.

                               Fraud

The lenders moved to dismiss stating that the borrowers failed to allege
with specificity the predicate acts of fraud as requisite under RICO.
The court stated further that the borrowers failed to state a specific
time, place and manner of the alleged fraud perpetrated against the
borrowers by the lenders thus not satisfying the RICO requirement to
plead with specificity.

Thus, the court in adopting the recommendations of Magistrate Carruth
held that the complaint failed to sufficiently plead a separate
enterprise and that the underlying allegations of fraud were not pled
with sufficient specificity as required under RICO. The court further
dismissed the action, striking all the RICO exhibits as moot, but
leaving room for the borrowers to amend the complaint to include the
deficiencies.

Opinion by: U.S. District Judge John M. Roll.

Counsel for Plaintiffs: Melvyn I. Weiss, Richard H. Weiss, Paul D.
Young, Israel Dahan, Milberg Weiss Bershad Hyned & Lerach LLP, Boca
Raton, Fla.

Counsel for Defendants: George A. Platz, Robert M. Hatch, Lisa M. Young,
Joshua D. Krut, Lovell White Durrant, Chicago. (Civil RICO Report
8-1-1999)


BUCKS COUNTY: Penn Ct Dismisses Female Inmates’ Claims Re Mental Health
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A federal judge has dismissed most claims by current and former female
inmates at the Bucks County Correctional Facility who claimed redress
for the prison's failure to segregate mentally ill inmates from the rest
of the prison population and for other relief related to mental health
treatment. Judge James McGirr Kelly of the Eastern District of
Pennsylvania said he was not persuaded that any of the inmates' alleged
injuries met the Article III and federal Rule 12(b)(1) requirement that
injury not actually suffered must be imminent and "virtually certain" to
occur. "Hypothetical or conjectural injuries are inadequate," wrote
Kelly, and a "non-actualized injury" must directly affect a plaintiff.

Two of the inmates, Carol Marshall and Patricia Schaff, alleged that
they feared injury by mentally ill inmates due to the failure by Bucks
County and several county officials, including the warden, to segregate
inmates needing mental health treatment from the general prison
population. The practice of keeping mentally ill inmates with the
general population, the plaintiffs claimed, is different than in the
men's facility, which has a separate mental health unit.

The court found Marshall and Schaff's fear that a disturbed inmate may
attack them to be "far too remote, too speculative" to confer standing.
According to the court, Marshall and Schaff were unable to specify a
single threat against them or recall a single attack on another inmate.
Also, because neither Marshall nor Schaaf alleged that they required
mental health treatment, the court rejected their argument that standing
existed because they may someday take advantage of mental health
services. Moreover, the court disagreed that Marshall and Schaaf had
standing because they suffered fear and pain upon witnessing
altercations between guards and mentally ill patients. This type of
claim, the court stated, does not provide standing because Marshall and
Schaff are essentially asserting the legal interests of others.

The other two plaintiffs, Kathleen Phillips and Barbara Lamina, claimed
they were in need of mental health treatment. But they were no longer
incarcerated at the Bucks County facility. Because of that and because
their future incarceration is unknown, they had no standing to seek
declaratory, compensatory or injunctive relief, the court ruled. A
litigant only has standing for an injunction, the court explained, when
there is injury from the defendant's alleged conduct and the injury is
continuing.

The court found that whatever injuries Philips and Lamina may have
suffered are in the past and therefore cannot support a claim for
injunctive relief.

Philips and Lamina did have standing, the court held, to maintain a
claim for past injuries but not as to Bucks County or any county
officials. The county, the court stated, is like a state, immune from
suit under the Eleventh Amendment, and county officials sued in their
official capacity are likewise immune from suit. The court left the door
open only as to claims by Philips and Lamina against county officials in
their individual capacities.

Finally, the court denied plaintiffs' class certification because
plaintiffs failed to satisfy the class action requirement of
"numerosity." In the court's view, the class was not so numerous that
joinder of all members was impracticable and in fact, the court found
that joinder of plaintiffs' claims was completely practicable. (Copies
of the nine-page opinion in Phillips v. County of Bucks, PICS No.
99-1683, are available from The Legal Intelligencer. Please refer to the
Pennsylvania Instant Case Service Order Form found on Page 3.) (The
Legal Intelligencer 9-8-1999)


COLUMBIA/HCA: Ct Dismisses Shareholders Suit By New York Pension Fund
---------------------------------------------------------------------
The nation's largest hospital company is free from a lawsuit filed on
behalf of New York's $90 billion pension fund. A federal judge on
Tuesday dismissed the shareholders' lawsuit filed against current and
former Columbia/HCA Healthcare Corp. executives.

Senior Vice President Vic Campbell said in an internal memo the decision
''moves the process of resolving these issues ... and is very positive
for the company.''

More than a dozen other plaintiffs, including California's $120 billion
pension fund, had been added to the August 1997 lawsuit alleging that
mismanagement by Columbia executives devalued their stock holdings.

In October 1997, U.S. District Judge Thomas Higgins ordered all the
shareholder lawsuits consolidated into one. Twelve were filed by
retirement funds that managed more than $380 billion and owned about
15.3 million Columbia shares.

Last year, a magistrate judge recommended dismissing the consolidated
lawsuit because plaintiffs had made no demands on the corporation before
filing it.

Higgins agreed Tuesday, saying ''there was an unseemly rush to the
courthouse to litigate.''

New York Comptroller H. Carl McCall will decide later whether to appeal,
a spokeswoman said.

The Nashville-based company has been the target of a federal billing
fraud investigation for more than two years. (AP Online 9-8-1999)


FEN-PHEN: AHP Faces Fights; Settles Norplant Suits; Recalls Epinephrine
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American Home Products' (AHP, Madison, NJ) streak of bad luck continues
with a recent spate of announcements concerning fen-phen and Norplant
litigation and a recall of epinephrine.

The Superior Court of Washington in Spokane County issued a call on
Wednesday to everyone in the state who's taken fenfluramine---the "fen"
half of fen-phen---or its chemical cousin, dexfenfluramine, to alert
them of a class-action suit that seeks to create a medical monitoring
program for possible heart valve disease related to the diet drugs.

That announcement came as court proceedings continue in a similar
class-action case among New Jersey residents. And last week, a U.S.
District Court judge in Philadelphia conditionally certified a
nationwide class-action fen-phen suit, excluding Washington and New
Jersey residents, as well as residents of Texas, Illinois, West
Virginia, and Pennsylvania---states where courts have already granted
class-action status for fen-phen plaintiffs seeking medical monitoring.
As reported earlier in Medical Industry Today, a California Superior
Court judge denied class action status to a group of fen-phen plaintiffs
in that state because California law requires "the existence of an
ascertainable class and a well-defined community of interest among the
class members."

Commenting on the Philadelphia judge's decision to grant class action
status, AHP spokesman Lowell Weiner, who called plaintiffs' demands for
monitoring "medically and scientifically unwarranted," told Reuters, "We
respectfully disagree with the court's decision."

In the New Jersey trial, an AHP official testified last week that
non-physicians at the company's Wyeth-Ayerst Laboratories division
decided whether to classify as "serious" or "non-serious" the
adverse-reaction reports received from doctors who prescribed the
company's diet drugs, the Philadelphia Inquirer reported. Only those
reports deemed to involve serious adverse reactions were then passed
along to Wyeth's Medical Monitoring Department, staffed by M.Ds and
Ph.Ds, testified Amy Myers, a pharmacist who is Wyeth's associate
director of safety surveillance.

In 1997, the FDA ordered AHP to remove fenfluramine and dexfenfluramine
from the market amid mounting evidence of significant side effects. The
other half of fen-phen, phentermine, is still on the market.

Nationwide, about 6 million people took fenfluramine or dexfenfluramine
prior to the FDA September 1997 ban, and several months after the first
reports from the Mayo Clinic linking the drugs to potentially fatal
heart valve damage in some patients. In its statement announcing the
withdrawal, FDA said findings from doctors who evaluated patients taking
fenfluramine and dexfenfluramine showed that 30 percent had abnormal
echocardiograms (a test that measures the functioning of heart valves)
even though they had no symptoms.

The New Jersey class-action trial, representing 94,000 plaintiffs, began
the week after a Texas jury awarded a single plaintiff $23 million in
the first verdict involving fen-phen. The company is facing over 4,000
individual lawsuits from former U.S. users of the drugs.

The New Jersey trial is the first class-action suit involving the diet
drugs, and the first to be brought to trial by healthy people in
anticipation of future health problems that could allegedly be related
to the drugs. As reported earlier by Medical Industry Today, the New
Jersey class-action suit is asking for what could conceivably amount to
$1 billion for medical checkups over an unknown number of years.

At least 20 individual fen-phen cases have been settled, including
several settled after a trial had begun. One of those suits, settled in
June for an undisclosed amount, was a wrongful-death suit brought on
behalf of another Texas woman. So far, settlements have reportedly
ranged from $500,000 to $4.5 million, for an estimated total of
approximately $10 million.

The Texas wrongful-death case was the first fen-phen case and the first
involving a death. In that case, AHP denied allegations that it has
purposely suppressed information about the potentially fatal side
effects of fen-phen. The woman's lawyer told the jury that there had
been increasing evidence since the early 1990s of the possible hazards
of fenfluramine, but AHP withheld the information from doctors to
protect its profits, an allegation the company denies.

Last week, AHP said that four separate fen-phen trials are due to begin
in Los Angeles County on October 4 and another Texas trial, involving
another dead woman, is set to begin that same day in San Antonio,
Reuters reported.

Adding to the company's recent legal woes, AHP also announced last week
that it has agreed to settle lawsuits with more than 35,000 women who
claimed they were inadequately warned about the hazards of the Norplant
contraceptive device. AHP refused to divulge the amount of the
settlements but published reports have contained estimates ranging from
$50 million to $75 million. The women alleged that they suffered a
variety of problems related to the surgically implanted contraceptive,
including excessive menstrual bleeding, severe headaches, nausea,
dizziness, mood swings, and depression.

In a statement, AHP said that the women "experienced the routine and
normal side effects described in the product's labeling," and that the
company was settling "the vast majority" of Norplant suits "purely" for
business reasons because the suits had been "time-consuming, expensive,
and have a chilling effect on research."

And on Tuesday of this week, AHP announced that Wyeth-Ayerst is
voluntarily recalling specific lots of its Epinephrine Injection, USP
1:1000 in 1 mL Tubex syringes, made available in insect-sting and
food-allergy kits. The epinephrine injections are sometimes used by
people suffering from severe asthma attacks, in addition to those
suffering anaphylactic shock due to severe allergic reactions to certain
foods and insect bites. Epinephrine, a naturally occurring hormone, is
used to increase blood flow and restore breathing during anaphylactic
shock, in which swelling of the airways can cut off breathing and the
heart can stop.

AHP said the company initiated the recall after routine quality control
tests discovered that a few of the syringes contained discolored
solution. "A few of these discolored samples were found to be subpotent,
which could pose a potential health hazard for those with known
allergies to insect stings or certain foods. The recall is extended to
hospitals, pharmacies, physicians, and consumers," AHP said in a
statement.

Consumers can obtain information about which lot numbers of the
Insect-Sting Treatment Kit, the Anaphylaxis Emergency Treatment Kit, the
Ana-Guard kit, and the Hollister Stier Ana-Kit are being recalled by
phoning (800) 999-9384. "We encourage those who depend on these kits to
err on the side of caution," AHP official Dr. Philip de Vane said in the
statement. The recall involves more than 500,000 kits, or 25 percent of
all allergic reaction kits on the market, Associated Press reported.

In other product problems, AHP suspended shipments this summer of a
childhood diarrhea vaccine after it was linked to bowel obstruction in
32 infants, and last year, AHP recalled the painkiller Duract after it
caused fatal liver problems. (Medical Industry Today 9-3-1999)


FEN-PHEN: CA Sp Ct Denies Class Cert For Medical Check-Ups In AHP Case
----------------------------------------------------------------------
A California Supreme Court Judge has denied a motion to certify a class
of California diet drug users seeking medical monitoring, in the case
brought by two plaintiffs on behalf of all California residents who used
American Home Products' Redux (dexfenfluramine) or Pondimin
(fenfluramine). The plaintiffs had sought a "court-supervised medical
screening program," to be funded by American Home Products, to detect
heart valve damage or primary pulmonary hypertension allegedly due to
diet drug use.

Judge Daniel Pratt ruled that class certification was improper because
California law requires "the existence of an ascertainable class and a
well-defined community of interest among the class members." There might
be common issues among the plaintiffs' claims, but the amount of drugs
taken by each plaintiff, whether a drug was taken alone or in
combination with other drugs, the length of time they were taken and
factors unique to each plaintiff "present increasingly disparate issues
relating to risk and damages."

Nor, he added, was certification appropriate with respect to plaintiffs'
statutory claims for unfair competition, as there was no basis for a
finding that class certification presented a superior method of
adjudicating such claims. Last month, in a similar case in Texas, the
court found against AHP and awarded damages of $ 23 million to the
plaintiff (Marketletter August 16). AHP said it will appeal.
(Marketletter (UK) 9-6-1999)


HIBERNIA: 5th Cir Oks Louisiana Dist Ct’s Dismissal Of Securities Suit
----------------------------------------------------------------------
The plaintiffs asserted both a stockholder's derivative action on behalf
of Hibernia and a class action alleging that the defendants breached
their fiduciary duty. The plaintiffs argued that the individual
defendants' acts of self-dealing diluted the value of each share of
Bancorp stock. This, the District Court held, was a wrong suffered by
the corporation that could only be enforced derivatively.

State law determines whether, and in what manner, a shareholder may
assert an action based on a corporate officer or director's breach of a
fiduciary duty. The test recognized in Louisiana is: "where the breach
of fiduciary duty causes loss to a corporation itself, the suit must be
brought as a derivative or secondary actions. However ... where the
breach of a fiduciary duty causes loss to a shareholder personally ...
the shareholder may sue individually to recover his loss."

The plaintiffs contended that the District Court erred in failing to
distinguish between a decrease in the value of stock due to a decrease
in the overall value of a corporation and a decrease in the value of
stock due to a dilution of a shareholder's interest in a corporation.
The plaintiffs argued they suffered a 12.49 percent decline in their
stock in a single day when the debentures were converted to new shares
of stock. On the other hand, they argued Bancorp suffered no injury and
therefore has no right of action.

The 5th U.S. Circuit Court of Appeals held the facts alleged did not
support the argument. The 5th Circuit found the plaintiffs' shares were
worth approximately 155 prior to the redemption of the debentures and
subsequent to the debenture redemption, the shares were worth
approximately 157 per share. The court determined the plaintiffs'
argument that their stock would have been worth 178 per share had the
additional stock not been issued had "no basis in the allegations in
their own pleadings, as it ignores the fact that the debentures
represented debt for the 1992 infusion of 850,000 into the holding
company."

Their remaining arguments, according to the court, allege injuries to
the corporation and must be pursued in a derivative action. The District
Court held, "The plaintiffs have not alleged the type of harm that a
shareholder can claim individually, that is, they have not averred that
the alleged injury to their stock is distinct from the injury suffered
by other shareholders, nor have they shown that their injury is
separable from their stock ownership in Bancorp." Therefore, the
plaintiffs had no standing, according to the District Court, to pursue
individual actions against the defendants. The 5th Circuit stated, "the
district court's holding is correct," and the complaint was correctly
categorized as a derivative action. Business Judgment Rule Louisiana's
business judgment rule provides that as long as directors of a
corporation decide matters rationally, honestly, and without a disabling
conflict of interest, the decision will not be reviewed by the courts.
Hibernia argued for the grant of a motion to dismiss on the grounds that
it had sufficiently investigated the appropriateness of pursuing the
plaintiffs' derivative fiduciary claims and that with the help of
special the litigation committee recommended against continuing the
derivative action because it was without basis and would be too costly.
Whether Hibernia was entitled to dismissal under these circumstances was
a matter of first impression in Louisiana.

The District Court concluded that, without exception, the cases have
held that after demand has been made and refused, a decision by the
board of directors - or a committee thereof - of the corporate-defendant
to seek dismissal of a derivative action brought on its behalf should be
accorded by the courts the same deference as other management decisions.

The plaintiffs argued that their allegations of self-dealing against the
Bancorp insiders made this case inappropriate for business judgment
deference. They cited Watkins v. North American Land & Timber Co., 31
So. 683 (La. 1902), in which the Louisiana Supreme Court reversed a
decision of a lower court dismissing a suit under a business judgment
theory and stated that Louisiana authorizes court involvement in
allegations of fraud, willful breach of a known duty, gross
mismanagement, and waste. The plaintiffs contended that the court, and
not the Hibernia board, should be the arbiter of the fairness of the
transactions because their suit alleges self-dealing and breach of
fiduciary duty.

The 5th Circuit was unpersuaded by this contention stating, "The
Louisiana decisions in which a court declined to defer to the board each
involved a dispute over the management of a closely-held corporation in
which all of the shareholders were present as parties." The 5th Circuit
continued, "Our best Eire guess concerning what the Louisiana Supreme
Court will do when faced with such a question, is that Louisiana will
follow the majority of jurisdictions which have considered the issue.
That is, it will defer to the management of large, publicly-traded
corporations, so long as the board, or its chosen representatives
'possess a disinterested independence and do not stand in a dual
relation which prevents an unprejudiced exercise of judgment.'"
Therefore, because the plaintiffs did not establish a genuine issue of
material fact concerning the disinterestedness of Hibernia's board or
its special litigation committee, the 5th Circuit affirmed the District
Court's grant of summary judgment for the defendants. (Lender Liability
News 9-3-1999)


HILTON HOTELS: Australian Court Action Begins Over Salmonella Poisoning
-----------------------------------------------------------------------
Court action began in Sydney as a group of people affected by food
poisoning at a north Queensland hotel last week sought compensation.
Two people were hospitalised and more than 40 others reported symptoms
of food poisoning after eating at a buffet at the Hilton Hotel in
Cairns. The hotel closed the buffet and food samples were sent for
testing.

In the Federal Court in Sydney, law firm Slater and Gordon began class
action proceedings with ACT woman Anne Jeanette Greenwood named as the
principal claimant, seeking unspecified damages from Hilton Hotels of
Australia Ltd. (AAP Newsfeed 9-9-1999)
LIVENT INC: NY Investment Funds Sue In Man Joining Rank Of plaintiffs

Two New York investment funds Wednesday added their names to the list of
plaintiffs suing former officers and auditors of bankrupt entertainment
company Livent Inc.

Cerberus Capital Management LP and Tri-Links Investment Trust filed a
purported class action suit in U.S. District Court in Manhattan, piling
more trouble on the once high-flying producer of Broadway mega-hits
"Ragtime," "Showboat" and "Fosse."

The most recent suit, brought on behalf of bondholders of Livent 9-3/8
percent senior notes due 2004, comes on top of several related suits by
shareholders, other bondholders and various defendants suing each other
in the turbulent aftermath of Livent's bankruptcy filing in November
1998.

Livent's assets were sold to SFX Entertainment Inc. last month for $96
million.

The Cerberus and Tri-Links suit names Michael Ovitz, the entertainment
executive who invested in Livent and brought to light what was later
described by the U.S. Securities and Exchange Commission as "a pervasive
eight-year fraudulent accounting scheme by the former senior management
of Livent."

The former senior management, including Canadian impresarios Garth
Drabinsky and Myron Gottlieb who are targets of a 16-count criminal
fraud indictment by the U.S. Attorney's office, were also named in the
new bondholder suit.

In addition, the filing names Roy Furman, co-founder of investment bank
Furman Selz, who Ovitz brought in as chief executive of Livent, and
Deloitte & Touche LLP, Livent's independent auditors both before and
after it declared bankruptcy.

The 92-page complaint charges the auditors with issuing unqualified
opinions of Livent's financial statements that were materially false and
misleading seeks unspecified compensatory damages, interest and attorney
costs. (AAP Newsfeed 9-8-1999)


MEMBERWORKS INC: Sued In Minn And CA Over Sales Practices In Minn
-----------------------------------------------------------------
The Company and its subsidiaries are parties in multiple defendant class
action lawsuits in Minnesota and California, and a civil action brought
by the Minnesota Attorney General's Office in connection with alleged
violations of Minnesota statutes with regard to its sales practices in
Minnesota. These proceedings are in preliminary stages and the Company
cannot predict their final outcome or estimate the amounts or potential
range of loss, if any, with respect to the resolution of these
proceedings. The resolution of these proceedings is uncertain and there
is no assurance that additional lawsuits will not be brought in other
jurisdictions based on similar or related claims. Although the Company
believes that it has strong defenses to the claims made in these
actions, the possible outcome of these proceedings could potentially
include judgements against the Company or settlements and could
potentially require substantial payments by the Company.


MERRILL LYNCH: Female Employees Fight for Equal Treatment
---------------------------------------------------------
In 1995, Marybeth Cremin, a thirteen-year broker and a vice president at
the firm, was managing between $ 60 and $ 70 million in assets and
producing about $ 400,000 annually for the company. Because of
complications with a pregnancy, Cremin took medical leave in December
1994. Under Merrill Lynch policy, she was entitled to twenty-six weeks
of paid leave. After thirteen weeks, Cremin says, the company changed
her status and docked her benefits.

After her baby was born, she says, Joseph Gannotti, her manager,
proposed a change in her employment that would cause her to turn over
her clients to male brokers. "He told me that if I gave [the client
list] up, I could become a financial planner and would receive 50
percent of the previous year's income," she says.

Cremin finally accepted Gannotti's proposal in July of 1995 after
repeated pressure from Merrill Lynch, including questioning from
Gannotti on how a woman could combine career and family and do it well,
she says. She turned over her accounts to other brokers in the office,
informing her clients that she would remain at Merrill Lynch. While she
was awaiting the final terms of the revised agreement with Gannotti,
Cremin says she was issued an employment termination notice without
explanation. Merrill Lynch says she resigned.

Cremin repeatedly called Gannotti in disbelief, but her phone calls were
never returned, she says. "I was shocked. You just can't terminate a
thirteen-year employee after bed rest." In September of 1995, Cremin
went to see the Chicago-based law firm Stowell & Friedman.

The firm filed a class action lawsuit against Merrill Lynch on behalf of
Cremin and seven other women. "This type of discrimination and situation
is rampant," says lead lawyer Mary Stowell. "There is an industrywide
problem on issues of pay parity, mentoring, support staff advancement
and promotion, maternity and sick leave, and sexual harassment. Only 12
to 15 percent of the retail brokers are women, and the percentages are
even less for minorities."

Merrill Lynch denies the charge that the company docked Cremin's
benefits and also denies that Gannotti ever offered her the position of
financial planner. In July 1998, the company instituted a new process to
address employee complaints, says Merrill Lynch spokesman Bill Halldin.
"Merrill Lynch has increased its efforts to recruit women through ads
and search firms," he says. "Once the women join, there is a training
program and a network of women."

Stowell's class action suit against Merrill Lynch has grown to
approximately 900 claims from women within the company.

According to a June 4 memo from Launny Steffens, who is in charge of
Merrill Lynch's private client offices around the country, the company
is "prepared either to begin settlement discussions or to seek
additional information on about one third of the 900 claims." Stowell
says that Merrill Lynch will probably file over half of the remaining
claims for mediation in late fall.

And Cremin? Stowell says that the eight original plaintiffs are part of
a group of sixty-two women whose claims Merrill Lynch wants to resolve
right away. (The Progressive 9-1-1999)


MIAMI SUBS: Intends To Contest Vigorously Securities Suit In Florida
--------------------------------------------------------------------
On January 5, 1999, Miami Subs was served with a class action lawsuit
entitled Robert J. Feeney, on behalf of himself and all others similarly
situated vs. Miami Subs Corporation, et al., in Circuit Court in Broward
County, Florida, which was filed against Miami Subs, its directors and
Nathan's in a Florida state court by a shareholder of Miami Subs. The
suit alleges that the proposed merger between Miami Subs and Nathan's,
as contemplated by the companies non-binding letter of intent, is unfair
to Miami Subs' shareholders and constitutes a breach by the defendants
of their fiduciary duties to the shareholders of Miami Subs. The
plaintiff seeks among other things: class action status; preliminary and
permanent injunctive relief against consummation of the proposed merger;
and unspecified damages to be awarded to the shareholders of Miami Subs.

On March 19,1999, the Court granted the plaintiff leave to amend the
complaint, and on April 8, 1999, the plaintiff filed an amended
complaint. Miami Subs filed a motion to dismiss the complaint on April
13, 1999 while Nathan's filed a motion to dismiss on April 29, 1999. On
May 21, 1999, the court considered these motions to dismiss, but has yet
to make a ruling. All discovery has been stayed pending the court's
ruling. Miami Subs intends to defend against the suit vigorously.


OXFORD HEALTH: Defends Multi-State Shareholders’ Suits
------------------------------------------------------
Following the October 27, 1997 decline in the price per share of the
Company's common stock, purported securities class action lawsuits were
filed on October 28, 29, and 30, 1997 against the Company and certain of
its officers in the United States District Courts for the Eastern
District of New York, the Southern District of New York and the District
of Connecticut. Since that time, plaintiffs have filed additional
securities class actions (see below) against Oxford and certain of its
directors and officers in the United States District Courts for the
Southern District of New York, the Eastern District of New York, the
Eastern District of Arkansas, and the District of Connecticut.

The complaints in these lawsuits purport to be class actions on behalf
of purchasers of Oxford's securities during varying periods beginning on
February 6, 1996 through December 9, 1997. The complaints generally
allege that defendants violated Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder by making false and misleading
statements and by failing to disclose certain allegedly material
information regarding changes in Oxford's computer system, and the
Company's membership enrollment, revenues, medical expenses, and ability
to collect on its accounts receivable.

Certain of the complaints also assert claims against the individual
defendants alleging violations of Section 20(a) of the Exchange Act and
claims against all of the defendants for negligent misrepresentation.
The complaints also allege that in violation of Section 20A of the
Exchange Act certain of the individual defendants disposed of Oxford's
common stock while the price of that stock was artificially inflated by
allegedly false and misleading statements and omissions. The complaints
seek unspecified damages, attorneys' and experts' fees and costs, and
such other relief as the court deems proper.

The purported class actions commenced in the United States District
Court for the Southern District of New York are Metro Services, Inc., et
al. v. Oxford Health Plans, Inc., et al., No. 97 Civ. 08023 (filed Oct.
29, 1997); Worldco, LLC, et al. v. Oxford Health Plans, Inc., et al.,
No. 97 Civ. 8494 (filed Nov. 14, 1997); Jerovsek, et al. v. Oxford
Health Plans, Inc., et al., No. 97 Civ. 8882 (filed Dec. 2, 1997); North
River Trading Co., LLC v. Oxford Health Plans, Inc., et al., No. 97 Civ.
9372 (filed Dec. 22, 1997); National Industry Pension Fund v. Oxford
Health Plans, Inc., et al., No. 97 Civ. 9566 (filed Dec. 31, 1997);
Scheinfeld v. Oxford Health Plans, Inc., et al., No. 98 Civ. 1399
(originally filed Dec. 31, 1997 in the United States District Court for
the District of Connecticut and transferred); Paskowitz v. Oxford Health
Plans, Inc., et al., No. 98 Civ. 1991 (filed March 19, 1998); and
Sapirstein v. Oxford Health Plans, Inc., et al., No. 98 Civ. 4137 (filed
September 11, 1998).

The purported class actions commenced in the United States District
Court for the Eastern District of New York are Koenig v. Oxford Health
Plans, et al., No. 97 Civ. 6188 (filed Oct. 29, 1997); Wolper v. Oxford
Health Plans, Inc., et al., No. 97 Civ. 6299 (filed Oct. 29, 1997);
Tawil v. Oxford Health Plans, Inc., et al., No. 97 Civ. 7289 (filed Dec.
11, 1997); Winters, et al. v. Oxford Health Plans, Inc., et al., No. 97
Civ. 7449 (filed Dec. 18, 1997); and Krim v. Oxford Health Plans, Inc.,
et al., No. 98 Civ. 4032 (filed September 5, 1998).

The purported class actions commenced in the United States District
Court for the District of Connecticut are Heller v. Oxford Health Plans,
Inc., et al., No. 397 CV 02295 (filed Oct. 28, 1997); Fanning v. Oxford
Health Plans, Inc., et al., No. 397 CV 02300 (filed Oct. 29, 1997);
Lowrie, IRA v. Oxford Health Plans, Inc., et al., No. 397 CV 02299
(filed Oct. 29, 1997); Barton v. Oxford Health Plans, Inc., et al., No.
397 CV 02306 (filed Oct. 30, 1997); Sager v. Oxford Health Plans, Inc.,
et al., No. 397 CV 02310 (filed Oct. 30, 1997); Cohen v. Oxford Health
Plans, Inc., et al., No. 397 CV 02316 (filed Oct. 31, 1997); Katzman v.
Oxford Health Plans, Inc., et al., No. 397 CV 02317 (filed Oct. 31,
1997); Shapiro v. Oxford Health Plans, Inc., et al., No. 397 CV 02324
(filed Oct. 31, 1997); Willis v. Oxford Health Plans, Inc., et al., 25
No. 397 CV 02326 (filed Oct. 31, 1997); Saura v. Oxford Health Plans,
Inc., et al., No. 397 CV 02329 (filed Nov. 3, 1997); Selig v. Oxford
Health Plans, Inc., et al., No. 397 CV 02337 (filed Nov. 4, 1997);
Brandes v. Oxford Health Plans, Inc., et al., No. 397 CV 02343 (filed
Nov. 4, 1997); Ross v. Oxford Health Plans, Inc., et al., No. 397 CV
02344 (filed Nov. 4, 1997); Sole v. Oxford Health Plans, Inc., et al.,
No. 397 CV 02345 (filed Nov. 4, 1997); Henricks v. Wiggins, et al., No.
397 CV 02346 (filed Nov. 4 1997); Williams v. Oxford Health Plans, Inc.,
et al., No. 397 CV 02348 (filed Nov. 5, 1997); Direct Marketing Day in
New York, Inc. v. Oxford Health Plans, Inc., et al., No. 397 CV 02349
(filed Nov. 5, 1997); Howard Vogel Retirement Plans, Inc., et al. v.
Oxford Health Plans, Inc., et al., No. 397 CV 02325 (filed Oct. 31, 1997
and amended Dec. 17, 1997); Serbin v. Oxford Health Plans, Inc., et al.,
No. 397 CV 02426 (filed Nov. 18, 1997); Hoffman v. Oxford Health Plans,
Inc., et al., No. 397 CV 02458 (filed Nov. 24, 1997); Armstrong v.
Oxford Health Plans, Inc., et al., No. 397 CV 02470 (filed Nov. 25,
1997); Roeder, et al. v. Oxford Health Plans, Inc., et al., No. 397 CV
02496 (filed Nov. 26, 1997); Braun v. Oxford Health Plans, Inc., et al.,
No. 397 CV 02510 (filed Dec. 1, 1997); Blauvelt, et al. v. Oxford Health
Plans, Inc., et al., No. 397 CV 02512 (filed Dec. 2, 1997); Hobler et
al. v. Oxford Health Plans, Inc., et al., No. 397 CV 02535 (filed Dec.
3, 1997); Bergman v. Oxford Health Plans, Inc., et al., No. 397 CV 02564
(filed Dec. 8, 1997); Pasternak v. Oxford Health Plans, Inc., et al.,
No. 397 CV 02567 (filed Dec. 8, 1997); Perkins Partners I, Ltd. v.
Oxford Health Plans, Inc., et al., No. 397 CV 02573 (filed Dec. 9,
1997); N.I.D.D., Ltd. v. Oxford Health Plans, Inc., et al., No. 397 CV
02584 (filed Dec. 9, 1997); Burch v. Oxford Health Plans, Inc., et al.,
No. 397 CV 02585 (filed Dec. 9, 1997); Mark v. Oxford Health Plans,
Inc., et al., No. 397 CV 02594 (filed Dec. 11, 1997); Ross, et al. v.
Oxford Health Plans, Inc., et al., No. 397 CV 02613 (filed Dec. 12,
1997); Lerchbacker v. Oxford Health Plans, Inc., et al., No. 397 CV
02670 (filed Dec. 22, 1997); State Board of Administration of Florida v.
Oxford Health Plans, Inc., et al., No. 397 CV 02709 (filed Dec. 29,
1997) (the complaint, although purportedly not brought on behalf of a
class of shareholders, invites similarly situated persons to join as
plaintiffs); and Ceisler v. Oxford Health Plans, Inc., et al., No. 397
CV 02729 (filed Dec. 31, 1997).

The purported class actions commenced in the United States District
Court for the Eastern District of Arkansas is Rudish v. Oxford Health
Plans, Inc., et al., No. LR-C-97-1053 (filed Dec. 29, 1997).

The Company anticipates that additional class action complaints
containing similar allegations may be filed in the future.

On January 6, 1998, certain plaintiffs filed an application with the
Judicial Panel on Multidistrict Litigation ("JPML") to transfer most of
these actions for consolidated or coordinated pretrial proceedings
before Judge Charles L. Brieant of the United States District Court for
the Southern District of New York. The Oxford defendants subsequently
filed a similar application with the JPML seeking the transfer of all of
these actions for consolidated or coordinated pretrial proceedings,
together with the shareholder derivative actions discussed below, before
Judge Brieant. On April 28, 1998, the JPML entered an order transferring
substantially all of these actions for consolidated or coordinated
pretrial proceedings, together with the federal shareholder derivative
actions discussed below, before Judge Brieant.

On July 15, 1998, Judge Brieant appointed the Public Employees
Retirement Associates of Colorado ("ColPERA"), three individual
shareholders (the "Vogel plaintiffs") and The PBHG Funds, Inc. ("PBHG"),
as co-lead plaintiffs and ColPERA's counsel (Grant & Eisenhofer), the
Vogel plaintiffs' counsel (Milberg Weiss Hynes Lerach & Bershad), and
PBHG's counsel (Chitwood & Harley), as co-lead counsel. ColPERA appealed
this decision. On October 15, 1998 the United States Court of Appeals
for the Second Circuit dismissed the appeal.

On October 2, 1998, the co-lead plaintiffs filed a consolidated amended
complaint ("Amended Complaint") in the securities class actions. The
Amended Complaint (which has since been further amended by stipulation)
names as defendants Oxford, Oxford Health Plans (NY), Inc., KPMG LLP
(which was Oxford's outside independent auditor during 1996 and 1997)
and several current or former Oxford directors and officers (Stephen F.
Wiggins, William M. Sullivan, Andrew B. Cassidy, Brendan R. Shanahan,
Benjamin H. Safirstein, Robert M. Smoler, Robert B. Milligan, David A.
Finkel, Jeffery H. Boyd, and Thomas A. Travers). The Amended Complaint
purports to be brought on behalf of purchasers of Oxford's common stock
during the period from November 6, 1996 through December 9, 1997,
purchasers of Oxford call options or sellers of Oxford put options
during the Class Period and on behalf of persons who, during the Class
Period, purchased Oxford's securities contemporaneously with sales of
Oxford's securities by one or more of the individual defendants. The
Amended Complaint alleges that defendants violated Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated thereunder by making false and
misleading statements and failing to disclose certain allegedly material
information regarding changes in Oxford's computer system and the
Company's membership, enrollment, revenues, medical expenses and ability
to collect on its accounts receivable. The Amended Complaint also
asserts claims against the individual defendants alleging "controlling
person" liability under Section 20(a) of the Exchange Act. The Amended
complaint also alleges violations of Section 20A of the Exchange Act by
virtue of the individual defendants' sales of shares of Oxford's common
stock while the price of that common stock was allegedly artificially
inflated by allegedly false and misleading statements and omissions. The
Amended Complaint seeks unspecified damages, attorneys' and experts'
fees and costs, and such other relief as the court deems proper.

On December 18, 1998, Oxford, the individual defendants and, separately,
KPMG LLP moved to dismiss the Amended Complaint. On May 25, 1999 and
June 8, 1999, Judge Brieant issued decisions denying the motions to
dismiss. On June 10, 1999, KPMG LLP moved for reconsideration of the
decision denying its motion to dismiss. On July 9, 1999, Judge Brieant
granted KPMG LLP's motion for reconsideration, and on reconsideration
adhered to the prior disposition

By order dated July 9, 1999, the Court approved a Case Management Plan
submitted by counsel for both plaintiffs and defendants, which Plan
provides, inter alia, that (1) discovery and briefing of class
certification issues be completed by December 10, 1999, (2) the parties
shall attempt to complete all merits discovery in the case by September
15, 2000, and (3) summary judgment motions shall be filed by August 17,
2001.

The State Board of Administration of Florida (the "SBAF") has
stipulated, and Judge Brieant has ordered, that in the action brought by
it individually (the "SBAF Action"), it will be bound by the dismissal
of any claims it has that are asserted in the Amended Complaint. In
addition, the parties have stipulated, and Judge Brieant has ordered,
that SBAF may file an amended complaint ("Amended SBAF Complaint") by
September 23, 1999 and that Oxford has until November 25, 1999 to answer
or move to dismiss the Amended SBAF Complaint. A stipulation
memorializing these agreements will be filed with the court shortly. The
Amended SBAF Complaint likely will assert claims similar to those
asserted in the Amended Complaint in the purported class actions (see
above). The Amended SBAF Complaint may also assert claims against all of
the defendants alleging: (i) violations of Section 18(a) of the Exchange
Act, by virtue of alleged false and misleading information disseminated
in the 10-K report Oxford filed for the year ended December 31, 1996;
(ii) violations of the Florida Blue Sky laws; and (iii) common law fraud
and negligent misrepresentation. The Amended SBAF Complaint likely will
seek unspecified damages, attorneys' and experts' fees and costs, and
such other relief as the court deems proper. Defendants intend to move
to dismiss the SBAF Action, to the extent it includes claims not
precluded by Judge Brieant's decision on the motions to dismiss the
Amended Complaint.

The outcomes of these actions cannot be predicted at this time, although
the Company believes that it and the individual defendants have
substantial defenses to the claims asserted and intends to defend the
actions vigorously.

                  Shareholder Derivative Litigation

As previously reported by the Company, in the months following the
October 27, 1997 decline in the price per share of the Company's common
stock, ten purported shareholder derivative actions were commenced on
behalf of the Company in Connecticut Superior Court (the "Connecticut
derivative actions") and in the United States District Courts for the
Southern District of New York and the District of Connecticut (the
"federal derivative actions") against the Company's directors and
certain of its officers (and the Company itself as a nominal defendant).

These derivative complaints generally alleged that defendants breached
their fiduciary obligations to the Company, mismanaged the Company and
wasted its assets in planning and implementing certain changes to
Oxford's computer system, by making misrepresentations concerning the
status of those changes in Oxford's computer system, by failing to
design and to implement adequate financial controls and information
systems for the Company, and by making misrepresentations concerning
Oxford's membership enrollment, revenues, profits and medical costs in
Oxford's financial statements and other public representations. The
complaints further allege that certain of the defendants breached their
fiduciary obligations to the Company by disposing of Oxford common stock
while the price of that common stock was artificially inflated by their
alleged misstatements and omissions. The complaints seek unspecified
damages, attorneys' and experts' fees and costs and such other relief as
the court deems proper. None of the plaintiffs has made a demand on the
Company's Board of Directors that Oxford pursue the causes of action
alleged in the complaint. Each complaint alleges that plaintiff's duty
to make such a demand was excused by the directors' alleged conflict of
interest with respect to the matters alleged therein.

The purported shareholder derivative actions commenced in Connecticut
Superior Court are Reich v. Wiggins, et al., No. CV 97-485145 (filed on
or about Dec. 12, 1997); Gorelkin v. Wiggins, et al., No. CV 98-0163665
S (filed on or about Dec. 24, 1997); and Kellmer v. Wiggins, et al., No.
CV 98-0163664 S HAS (filed on or about Jan. 28, 1998).

The purported shareholder derivative actions commenced in the United
States District Court for the Southern District of New York are Roth v.
Wiggins, et al., No. 98 Civ. 0153 (filed Jan. 12, 1998); Plevy v.
Wiggins, et al., No. 98 Civ. 0165 (filed Jan. 12, 1998); Mosson v.
Wiggins, et al., No. 98 Civ. 0219 (filed Jan. 13, 1998); Boyd, et al. v.
Wiggins, et al., No. 98 Civ. 0277 (filed Jan. 16, 1998); and Glick v.
Wiggins, et al., No. 98 Civ. 0345 (filed Jan. 21, 1998).

The purported shareholder derivative actions commenced in the United
States District Court for the District of Connecticut are Mosson v.
Wiggins, et al., No. 397 CV 02651 (filed Dec. 22, 1997), and Fisher, et
al. v. Wiggins, et al., No. 397 CV 02742 (filed Dec. 31, 1997).

In March 1998, Oxford and certain of the individual defendants moved to
dismiss or, alternatively, to stay the Connecticut derivative actions.
Since then, the parties to the Connecticut derivative actions have
stipulated, under certain conditions, to hold all pretrial proceedings
in those actions in abeyance during the pretrial proceedings in the
federal derivative actions, and to allow the plaintiffs in the
Connecticut derivative actions to participate to a limited extent in any
discovery that is ultimately ordered in the federal derivative actions.
Stipulations memorializing this agreement have been entered in the
Connecticut derivative actions. On February 19, 1999, Judge Brieant
entered an order in the federal derivative actions permitting the
plaintiffs in the Connecticut derivative actions to participate to a
limited extent in any discovery that ultimately occurs in the federal
derivative actions.

In addition, on January 27, 1998, defendants filed an application with
the JPML to transfer the federal derivative actions for consolidated or
coordinated pretrial proceedings before Judge Charles L. Brieant of the
Southern District of New York. On April 28, 1998, the JPML entered an
order transferring all of these actions for consolidated or coordinated
pretrial proceedings, together with the securities class actions
discussed above, before Judge Brieant.

The parties to the federal derivative actions have agreed to suspend
discovery in those actions until the filing of a consolidated amended
derivative complaint in those actions and during the pendency of any
motion to dismiss or to stay the federal derivative actions or the
securities class actions. A stipulation memorializing this agreement,
consolidating the federal derivative actions under the caption In re
Oxford Health Plans, Inc. Derivative Litigation, MDL-1222-D, and
appointing lead counsel for the federal derivative plaintiffs, was
entered and so ordered by Judge Brieant on September 26, 1998.

On October 2, 1998, the federal derivative plaintiffs filed an amended
complaint. On January 29, 1999, the plaintiffs filed a second amended
derivative complaint (the "Amended Derivative Complaint"). The Amended
Derivative Complaint names as defendants certain of Oxford's directors
and a former director (Stephen F. Wiggins, James B. Adamson, Robert B.
Milligan, Fred F. Nazem, Marcia J. Radosevich, Benjamin H. Safirstein
and Thomas A. Scully) and the Company's former auditors KPMG LLP,
together with the Company itself as a nominal defendant. The Amended
Derivative Complaint alleges that the individual defendants breached
their fiduciary obligations to the Company, mismanaged the Company and
wasted its assets in planning and implementing certain changes to
Oxford's computer system, by making misrepresentations concerning the
status of those changes to Oxford's computer system, by failing to
design and implement adequate financial controls and information systems
for the Company and by making misrepresentations concerning Oxford's
membership, enrollment, revenues, profits and medical costs in Oxford's
financial statements and other public representations. The Amended
Derivative Complaint further alleges that certain of the individual
defendants breached their fiduciary obligations to the Company by
selling shares of Oxford common stock while the price of the common
stock was allegedly artificially inflated by their alleged misstatements
and omissions. The Amended Derivative Complaint seeks declaratory
relief, unspecified damages, attorneys' and experts' fees and costs and
such other relief as the court deems proper. No demand has been made
upon the Company's Board of Directors that Oxford pursue the causes of
action alleged in the Amended Derivative Complaint. The Amended
Derivative Complaint alleges that the federal derivative plaintiffs'
duty to make such a demand was excused by the individual defendants'
alleged conflict of interest with respect to the matters alleged
therein.

On March 15, 1999, Oxford, the individual defendants and, separately,
KPMG LLP, moved to dismiss the Amended Derivative Complaint, and oral
argument on defendants' motion was heard on June 24, 1999. Pursuant to
stipulations entered into and filed by the parties and so ordered by
Judge Brieant, proceedings in the federal derivative actions are stayed
during the pendency of the motions to dismiss those actions, unless any
of the parties provides written notice of their desire to terminate this
stay, in which case defendants will have 60 days from such notice to
move to stay the federal derivative actions pending resolution of the
securities class actions (see above), and except that the federal
derivative plaintiffs (and the Connecticut derivative plaintiffs) will
be permitted to attend depositions that occur in the consolidated
securities class action, and to review documents that are produced in
that action.

Although the outcome of the federal and Connecticut derivative actions
cannot be predicted at this time, the Company believes that the
defendants have substantial defenses to the claims asserted in the
complaints.


PATHMARK STORES: Jury Awards 3.85 Mil To Former Meat Cutter Under ADA
---------------------------------------------------------------------
Adding another chapter to a case that has already established
significant circuit precedent under the ADA, a federal jury returned a
verdict of 3.85 million in favor of a former meat cutter with a history
of back injury on claims raised under the ADA and Delaware law. A
reduction in the amount awarded under the ADA resulted in the entry of a
judgment totaling 1 million, the plaintiff's lawyer said.

The case of Mondzelewski v. Pathmark Stores, Inc. already had an
established history before the jury reached the verdict last month. The
plaintiff in the case is Joseph Mondzelewski, who sustained two back
injuries while working for Pathmark as a meat cutter - one in March 1992
and another in December 1993. The injuries resulted in lifting
restrictions, and Mondzelewski filed a workers' compensation claim.

Mondzelewski alleged that the employer retaliated against him for
seeking reasonable accommodation. He was scheduled to work undesirable
shifts and was given retaliatory reprimands, he claimed. A normal shift,
said his attorney, Gary W. Aber of Heiman & Aber in Wilmington, Del.,
ran from either early morning to approximately 2:00 p.m. or from noon
until late evening, thus leaving workers with either the morning or the
bulk of the afternoon off. While other workers were occasionally
assigned the "punishment shift" of 9:30 a.m. to 6:00 p.m., Aber said,
Mondzelewski was assigned the shift for more than four straight months.
Mondzelewski further claimed that he was harassed and humiliated at
work. He alleged discrimination and retaliation under the ADA, and he
further asserted state law claims. Aber added that Mondzelewski was
subjected to discipline in a manner that did not comply with the
company's progressive discipline policy or its policy regarding the ADA.
(Disability Compliance Bulletin 8-30-1999)


PRUDENTIAL INSURANCE: Fined $1.5 Million by New York Agency
-----------------------------------------------------------
The Prudential Insurance Co. has more marketing problems in New York.
The New Jersey-based company, still negotiating a settlement with
thousands of policy holders, including some Western New Yorkers from a
class action lawsuit, was fined $1.5 million by the New York State
Insurance Department Tuesday. The fine is the largest levied against a
company by the regulatory department this year.

Prudential was cited for a number of violations, including misleading
advertising. The company failed to disclose in its marketing materials
an administrative fee for a life insurance living needs benefit rider,
according to the insurance department.

In addition to paying the fine, the company has agreed to correct each
failure cited by state regulators.

Prudential is still settling with as many as 640,000 policy holders from
a 1997 class-action lawsuit settlement over deceptive sales practices.
The company was sued for tactics that included churning, an industry
term for enticing policy holders to use the value of paid up life
insurance to purchase additional policies.

The settlement process has been extremely slow and numerous local
residents have still not been compensated, according to Judith A.
Biltekoff, an Amherst-based attorney who represents local Prudential
customers. 'They have either not yet had their arbitration, or they have
selected one of the settlement options available to them and have not
received their relief, be it cash or reinstatement of a policy,' Ms.
Biltekoff said, in describing the status of the local cases.

Prudential has set aside more than $2 billion for the settlement.
The state fine appears to be another black eye for Prudential, but a
company spokesman said the department's action is unrelated to the
lawsuit concerning prior sales practices. Sales improvements the company
identified through the lawsuit have been put in place, Prudential
spokesman Bob DeFillippo said. The Insurance Department citation is
largely an administrative and record keeping issue, he said.

In addition to violating advertising regulations, the state also cited
Prudential for failing to produce documents the department requested,
failing to comply with annual reporting requirements and using
unapproved forms.

'It was and always will be important for Prudential to cooperate with
state insurance departments. Any sense by the New York State Insurance
Department that we were not cooperating is regretable and inadvertent,'
DeFillippo said. He said Prudential will provide additional training for
employees with reporting responsibilities to improve its regulatory
compliance.

The class action suit concerned Prudential sales practices from 1982
through 1995. The fine levied Tuesday cites Prudential for conduct from
Jan. 1, 1996 through Dec. 31, 1997. (The Buffalo News 9-8-1999)


RICHARD SEVILLA: Ill. Common-Fund Doctrine Outside Of ERISA Preemption
----------------------------------------------------------------------
Illinois courts have subject-matter jurisdiction over common-fund
claims, and trial court erred in dismissing defendants' counterclaim
arguing that health insurers were obligated under common-fund doctrine
to pay attorney fees and expenses incurred by attorney who obtained
recovery from third-party tortfeasor; common-fund doctrine is outside of
ERISA preemption.

The Illinois Appellate Court, 1st District, 5th Division, has affirmed
in part and reversed in part a ruling by Judge John K. Madden.

Richard Sevilla was covered under a health insurance policy issued by
Continental Assurance Co. through his employer, Central Can Co., when
Sevilla was injured in a car accident. He retained private counsel to
sue the people responsible for the accident.

In turn, plaintiff Health Cost Controls, on behalf of CNA, sent a notice
of lien to Sevilla's attorney for the amount of money the insurer had
paid for Sevilla's medical bills. Sevilla and the alleged tortfeasor
entered into a settlement, and HCC sought to obtain reimbursement from
Sevilla, as authorized in the reimbursement provision of the health
insurance policy.

The settling tortfeasor's insurance carrier issued a check for the
amount of HCC's claimed lien and made the check payable to Sevilla, his
attorney and HCC.

Sevilla and his attorney decided not to endorse the check, claiming that
HCC was not entitled to the full amount of the check. They claimed that
the amount of the recovery was subject to the common-fund doctrine and
should have been reduced by one-third for attorney fees incurred in
obtaining the settlement.

HCC filed suit seeking to require Sevilla and his attorney to endorse
the check to satisfy HCC's lien in the amount of $ 2,483, the total paid
for Sevilla's medical expenses. The defendants responded by filing a
class-action counterclaim contending that under the common-fund
doctrine, HCC and CNA were obligated to pay the fees and expenses of
Sevilla's attorney incurred in obtaining the recovery from the
tortfeasor.

HCC unsuccessfully tried to remove its complaint to federal court,
contending that the defendants' counterclaim raised federal questions
under the Employee Retirement Income Security Act.

The case was remanded to the state court, which later dismissed HCC's
complaint for lack of subject-matter jurisdiction.

On appeal, Sevilla and his attorney argued that the trial judge erred in
dismissing HCC's complaint. They argued that ERISA was not an issue at
all because the application of the common-fund doctrine was a question
of state law, not federal law.

HCC argued that the federal courts had exclusive subject-matter
jurisdiction because its complaint was based on a reimbursement
provision in an ERISA-governed benefit plan.

The appeals court reversed, saying that HCC, by its own averments in its
complaint," sought to enforce its lien, secure a declaration as to its
entitlement to proceeds in satisfaction of its lien and obtain
injunctive relief against the defendants. In addition, the appeals court
said, HCC, in its appellate brief, correctly acknowledged that its
complaint did not cast to allege claims under ERISA."

Most certainly, the circuit court has subject-matter jurisdiction over
the general category of cases that, like the present complaint, seek
enforcement of an asserted lien by an insurer, a declaratory judgment
and injunctive relief," the appeals court said. Therefore, the court
said, the trial judge erred in dismissing the complaint.

The court also said state courts indisputably" have subject-matter
jurisdiction over common-fund claims. The court added that the issue of
ERISA preemption of Illinois' common-fund doctrine specifically was
considered and rejected by the Illinois Supreme Court and by the 7th
U.S. Circuit Court of Appeals.

The appeals court affirmed the trial judge's decision to deny the
defendants' motion for sanctions.

Health Cost Controls v. Richard Sevilla, et al., No. 1-98-1695. Justice
Alan J. Greiman wrote the court's opinion with Justices John N.
Hourihane and Justice Mary Jane Theis. Released Aug. 27, 1999. (16
pages) 007A (Chicago Daily Law Bulletin 9-7-1999)


SHOLODGE INC: Will Defend Vigorously Securities Fraud Suit In Tennessee
-----------------------------------------------------------------------
In 1998, two purported class action lawsuits were filed against the
Company and certain officers of the Company, by plaintiffs who claim to
be shareholders and debt security holders of the Company, respectively,
both alleging that the Company violated certain anti-fraud provisions of
the Tennessee Securities Act of 1980, as amended, by issuing allegedly
false and misleading statements and financial information to the
investing public. The complaints seek an unspecified amount of damages
and unspecified injunctive relief.

The Company filed motions to dismiss both suits on the basis that the
plaintiff's allegations failed to state a cause of action under the
applicable state statute. The trial court denied both motions. The
court's denial of the Company's motions on these suits are currently
before the Court of Appeals. One case was argued before the Court of
Appeals on May 7, 1999, but the court has not rendered an opinion. Both
cases have been set for trial on April 24, 2000. The Company believes
both suits are without merit and will defend itself vigorously. Neither
management nor legal counsel can predict the outcome at this time.


TOBACCO LITIGATION: AIF Applauds Ap Ct’s Rejection Of Lump-Sum Damages
----------------------------------------------------------------------
On Friday, Sept. 3, 1999, Florida's Third District Court of Appeals
ruled in favor of the tobacco companies' appeal of Circuit Court Judge
Robert Kaye's order instructing the jury to determine a total, one-time
punitive damage award for the entire class in the tobacco class action,
Howard A. Engle, M.D., et al. v. R.J. Reynolds Tobacco Company, et al.
Associated Industries of Florida (AIF), which filed an amicus curiae
brief, applauded the ruling.

"The ruling upholds the central principle of the civil justice system,
which is to find a fair resolution to disputes between two parties,"
said Jon L. Shebel, AIF's president & CEO. "Judge Kaye's order followed
the principle, endorsed by the plaintiff lawyer bar, that the civil
justice system existed to put money into the hands of plaintiffs and
their attorneys, regardless of liability or injury."

As it stood, Judge Kaye's order would have instructed the jury to
determine a punitive damage award for the entire class in the Engle case
on a dollar-amount basis, before any compensatory damages had been
awarded. This deviates from the procedure devised by the Florida Supreme
Court that delays determination of punitive damages until compensatory
damages have been decided.

"Punitive damages are supposed to punish the defendant for the harm it
caused," said Shebel. "How can a jury decide the punishment before it
figures out the severity of the offense? But that's what the order would
have forced them to do and it would have been bad news for any Florida
defendant."

According to Randy Miller, AIF's senior executive vice president & COO,
the Third District's ruling overturning the order recognized that
defendants also have rights in the civil justice system. "Judge Kaye
justified his order in the name of efficiency. But it was only efficient
for the plaintiffs' lawyers because it made it easier for them to
collect a lot of money in a short amount of time with a minimum amount
of effort." Miller added, "Efficiency is great, except when it trumps
justice."


TOBACCO LITIGATION: B&W Releases Statement Decrying Lawyers’ Payday
-------------------------------------------------------------------
Brown & Williamson Tobacco Corporation released the following statement
regarding announced decision by an arbitration panel awarding $90.2
million to the plaintiffs' lawyers representing the state of Hawaii in
its lawsuit against the tobacco industry.

"Today's fee award represents first-class compensation for a
second-class effort. Hawaii's private counsel did not devote the time
and effort to the State's case -- or take the kind of risk -- to support
a fee award of this magnitude.

"These lawyers were not pioneers. They did not file suit until more than
two years after the first states had sued the tobacco industry. They
brought a case that was simply a clone of earlier states' suits. Then
they let their case lay dormant for most of its 22-month lifespan. The
Hawaii lawyers never took or defended any depositions, never produced
documents, never selected trial exhibits, never filed expert witness
reports, never developed or produced proof of damages, and never filed
or responded to summary judgment motions.

"No one should receive millions of dollars for doing little work, least
of all those who claim to be working on behalf of the public. The Hawaii
lawyers spent most of their time on the sidelines, watching other
states' lawyers do the heavy lifting. They do not deserve to be paid
millions of dollars for simply watching and waiting. "The money these
lawyers will receive is far beyond reasonable compensation. Most
hard-working people cannot comprehend the amount of money awarded to
these few lawyers. But to put it in perspective, this award would be
enough to pay for round-trip airfares to the mainland for every man,
woman and child living on the Hawaiian islands of Maui and Kauai, plus
every person living in the big island's largest city, Hilo. Or, put
another way, the average Honolulu worker would have to work more than
6,000 years to earn such pay."


TOBACCO LITIGATION: Industry Wants To Have New Jury
---------------------------------------------------
Its lawyers argue they can't get a fair decision on damages from the
same jury that found tobacco at fault in the trial's first phase.

While lawyers for the tobacco industry argued 13 pretrial motions, Ralph
DellaVecchia sat quietly in the courtroom, his grief still palpable and
his eyes rimmed red with tears.

A little more than a month ago, he was at his wife's side back home
inNew Port Richey as she lay in bed, unable to walk. A smoker since age
11, Angie DellaVecchia died July 25 after a two-year battle with lung
and brain cancer. She was 53.

She died a few days after a jury here determined that cigarette makers
had deceptively made and marketed a dangerous product. Mrs. DellaVecchia
and another cancer victim, Mary Farnan, 43, were supposed to be sitting
side by side in the courtroom for the second phase of the trial, where
smokers' lawyers would ask for damages on behalf of 500,000 Florida
smokers.

But the tobacco industry has persuaded an appeals court to winnow that
class of smokers down to a handful of plaintiffs. The industry returned
to court Wednesday to ask a judge to get rid of the jurors that found
against the industry in the first phase of the trial.

As lawyers argued over whether he could represent his dead wife in the
case, or if indeed, her case could go on at all, DellaVecchia's friendly
block of a face spoke for him. His eyes filled with tears and the
strapping 64-year-old lowered his head as he sat in a wooden spectator
bench.

Outside the courtroom during a break, DellaVecchia pulled open his
wallet and showed his wife's picture to a reporter. The woman in the
picture had blond hair and wide, dark eyes. She was smiling. "She was
the prettiest woman you ever saw," DellaVecchia said. "Look at that
face."

Besides DellaVecchia, the plaintiffs' lawyers want the jurors to hear
from Farnan, a nurse from Inglis, who also started smoking at 11 and was
only able to quit after cancer invaded her brain. The lawyers,
defendants and plaintiffs in this case were barred by Circuit Judge
Robert Kaye from speaking publicly about the trial.

The court adjourned just before 3 p.m. so Kaye could consider the
motions. One of his biggest decisions will be whether to keep the
current jury, which heard eight months of testimony before ruling
against tobacco companies.

The industry wants the jurors thrown out because of a letter Kaye wrote
to them after their July verdict, saying they would return to set a lump
sum amount of punitive damages in the first class action by smokers to
reach trial.

"We believe we've been irrevocably prejudiced," said Dan Webb, former
U.S. attorney in Chicago and onetime defense attorney for former U.S.
Rep. Dan Rostenkowski.

The industry renewed its mistrial request, which was denied last month
by Kaye, after the 3rd District of Appeal ruled Friday that damages must
be set one smoker at a time instead of as a class of 500,000 smokers.

Another motion claims the jury is biased against the industry based on
suspicions that some jurors tuned into news media coverage of their
verdict against the industry in the first part of the trial.

The industry filed affidavits by a clinical psychiatrist, behaviorist,
media researcher and communications professor to support their
contention that the same jury cannot be fair.

"Jurors must be presumed to be prejudiced," the industry wrote in its
motion. Cigarette makers believe the jury will be influenced by a
conscious or unconscious desire to conform to "an overarching theme" of
news coverage that the jury made the right decision by going against the
industry.

Plaintiffs attorney Stanley Rosenblatt said the industry was not
surprisingly unhappy with the verdict and was trying to derail the case.
"First they want to get rid of the judge . . . then get rid of the
jury," he said. "If not for the First Amendment, they would get rid of
the media."

The defendants are the nation's five largest cigarette makers - Philip
Morris, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, Lorillard
Tobacco and the Liggett Group - and two industry associations, the
Council for Tobacco Research and the Tobacco Institute Inc.

Court papers name 14 lawyers representing the tobacco companies, but at
lunch Wednesday there were 20 lawyers sitting around a long table in a
nearby restaurant.

Across the room sat Mary Farnan, her husband, who did not give his name
to reporters, and DellaVecchia. Both men looked uncomfortable in suits
that were just a bit too tight.

Another plaintiff who had sat with Farnan in the courtroom, Frank
Amodeo, of Orlando, didn't join the others at lunch. Amodeo's throat
cancer left him unable to swallow. He takes nourishment through a hole
in his stomach.

On their way back to the courthouse, along the crowded sidewalks of
downtown Miami, Mary Farnan's husband lit a cigarette. Later, he helped
his ailing wife as she struggled to mount the courthouse steps.
(St. Petersburg Times 9-9-1999; Material from the Associated Press was
used in this report.


TOBACCO LITIGATION: Judge Kaye Puts Case On Pause To Sift Thru Motions
----------------------------------------------------------------------
The second phase of a landmark suit against the tobacco industry was put
on hold Tuesday while the judge sifts through a flurry of motions,
including requests for a mistrial and to exclude two plaintiffs in the
case, one of whom has already died.

Jurors had barely warmed their seats Tuesday morning when Circuit Judge
Robert Kaye released them, saying he needed a day or two to decide how
the case will proceed. The jury, which in July found five Big Tobacco
firms responsible for manufacturing a dangerous product, will return to
begin considering how much to award nine ailing smokers.

But tobacco industry lawyers want the case tossed out. Their argument
relies heavily on a ruling Friday from the 3rd District Court of Appeal.
That decision eliminated a potential multi-billion-dollar verdict
against the tobacco companies by removing the class-action designation
for the case. Now, money damages expected to be in the millions will be
awarded to diseased smokers individually, rather than as a group.

Defense attorneys claim the ruling prejudices the jury against them.
After their July verdict, jurors received a letter from Judge Kaye
telling them they would be returning to consider money damages for the
smokers as a class. Though that designation has been removed, jurors
still think of the case in those terms, defense lawyers said in their
motion.

And a simple instruction from the bench won't erase six weeks of
perception from jurors' minds. "The bell cannot be unrung," the motion
stated.

The defense also raised questions about whether jurors had learned of
Friday's appellate ruling. "They may have seen or read extensive media
coverage," the motion said. "That would cause irreparable injury."

No jurors responded, however, when Kaye asked Tuesday if they had been
exposed to reports about the trial. Still, the defense wants to question
jurors about how much they know.

The defense also asked Kaye to exclude the first two smokers for whom
damages are to be determined, Angie DellaVecchia of Pasco County and
Mary Farnan, 43, of Inglis. The lawyers claim the two discovered their
smoking-related illnesses only after the suit gained its class-action
status, and should be disqualified.

DellaVecchia, 53, died July 25. Stanley Rosenblatt, the attorney
representing the smokers, wants to substitute her husband, Ralph, in the
case. Also on Tuesday, new lawyers for the tobacco industry were
introduced, including the former U.S. attorney for Chicago, Dan Webb,
representing Philip Morris. Across the courtroom in the plaintiff's
gallery sat several sick smokers, some in wheelchairs or using oxygen
tanks.

Besides Philip Morris, the other tobacco companies under fire are R.J.
Reynolds Tobacco, Brown & Williamson Tobacco, Lorillard Tobacco and the
Liggett Group. (Sun-Sentinel (Fort Lauderdale, FL) 9-8-1999)


TOBACCO LITIGATON: Reuters Report On Florida Case; Mistrial Sought
------------------------------------------------------------------
Tobacco company lawyers asked for a mistrial Wednesday in the massive
Florida lawsuit that found cigarettes cause disease, arguing that the
jury had been prejudiced by the expectation it would mete out a multi-
billion dollar punishment.

The Florida jury that returned the sweeping verdict against the tobacco
companies in July was scheduled to begin hearing evidence on Tuesday to
determine what damages should be awarded to sick smokers. But the
penalty phase of the class action trial was delayed by an appeals
court's ruling on Friday that said damage awards must be considered
individually.

Circuit Court Judge Robert Kaye had planned to ask the jury to decide
first whether two women with lung cancer should receive damages to
compensate them for medical expenses and lost income. He then planned to
ask jurors to decide whether the entire class of plaintiffs -- ailing
Florida smokers whose numbers have been estimated at up to 500,000 --
should share a lump sum award of punitive damages designed to punish the
tobacco companies.

The judge sent jurors a letter on July 19 ordering them to return in
September to consider whether to award "an aggregate dollar amount to
the class."

Dan Webb, an attorney for defendant Philip Morris Cos. Inc. , contended
the letter had prejudiced the jury by creating a now-false assumption
that they would be dealing with "an enormous damage award" to
potentially thousands of plaintiffs. Another tobacco company attorney,
Ken Reilly, argued that jurors were almost certainly also prejudiced by
media reports of the appeals court ruling, which portrayed the tobacco
industry as having dodged a one-time payout that could have totaled
hundreds of billions of dollars. "We believe that this mindset of
billions of dollars ... is likely to lead to a huge award just to those
two plaintiffs," Webb said. Said Reilly, "We believe this jury can't sit
and be fair and impartial."

Kaye did not say when he would rule on the mistrial request or on a
dozen other motions that would affect the structure of the punishment
phase of the trial.

                  Plaintiffs' Attorneys Dispute Claims

Plaintiffs' attorneys Susan and Stanley Rosenblatt disputed the tobacco
company lawyers' claims and portrayed them as filing a flurry of
"frivolous" and "completely illogical" motions in an effort to stall the
procedings and void the verdict.

One of the pending motions asks Kaye to recuse himself on grounds that
he is a former smoker who could be prejudiced. Another asks that jurors
be questioned in detail about whether they had seen or heard media
reports about the trial.

"Obviously they were not happy with the verdict," Stanley Rosenblatt
said. "First they try to get rid of the judge. Then they tried to get
rid of the jury."

The lawsuit, Engle vs R.J, Reynolds et al, is named after Howard Engle,
a Miami pediatrician with emphysema. It was the first sick smokers'
class-action lawsuit to result in a liability verdict against the
tobacco industry. The jurors found on July 7 that smoking cigarettes
causes a host of diseases, including cancer, and that the tobacco
companies had conspired to hide the danger of their product.

Defendants are R.J Reynolds Tobacco Holdings Inc. , Philip Morris, Loews
Corp.'s Lorillard Tobacco Co. Inc., Brooke Group Ltd.'s Liggett Group
Inc., the Brown & Williamson unit of British American Tobacco Plc , and
the industry trade groups Council for Tobacco Research and Tobacco
Institute.

The jury was not present at Wednesday's hearing and will not return
until the judge sets a new framework for the punishment phase, which was
thrown into uncertainty by the appeals court ruling.


                               *********


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