CAR_Public/991021.MBX                 C L A S S   A C T I O N   R E P O R T E R

               Thursday, October 21, 1999, Vol. 1, No. 182

                                 Headlines

ABERCROMBIE & FITCH: Steven E. Cauley Files Securities Suit
ABERCROMBIE & FITCH: Wechsler Harwood Files Securities Suit In New York
ANTI-DEFAMATION: League Settles For Spying On Other Civil Rights Groups
AVIATION SALES: Kirby McInerney Files Securities Suit
AVIATION SALES: Kirby McInerney Retained to Pursue Securities Suit

CARNIVAL CORP: Multi-State Travel Agencies’ Suits Over Commission Go On
CARNIVAL CORP: Suits Over Port Charges Continue; Some Settlements Made
DOW CHEMICAL: Owners Of Rocky Flats Win Plutonium Case In Colorado
FDX CORP: NY Ct Dismisses Suit Over Excise Tax; Co. Contests Appeal
FDX CORP: Alabama Circuit Court Dismissed Suit Over Excise Tax On Oct 6

FORD MOTOR: Judge Questions EEOC Settlement Over Sex Harrassment
GNI GROUP: 1 Claim Remains In TX Property Owners’ Suit Over Deepwell
GNI GROUP: Intends To Contest Securities Suit In Delaware Over Merger
HMO: Economic Pressure May Lead To A Deal, One Of The Lead Lawyers Says
INT’L CAPITAL: Hanzman Criden, Ackerman Link File Fla. Securities Suit

MATTEL INC: Gold Bennett Files Securities Suit In CA Over Merger
MATTEL INC: Wolf Popper Files Securities Suit In New York
MILLER BROS.: Critics Of Slope Ask CA Sp Ct Not To Intervene/Stop Suit
NEWELL RUBBERMAID: Milberg Weiss Files Securities Suit In Illinois
OVERLAND DATA: Announces Settlement of Securities Suit In California

PIERCING PAGODA: Announces Dismissal Of Securities Suit In Pennsylvania
RAYTHEON COMPANY: Barrack Rodos Files Securities Suit In Massachusetts
RHINO LININGS: MI Ct Dismisses Suit – Co.’s Linings Increase Safety
RITE AID: Pennsylvania Ct Grants Leave to File Second Amended Complaint
SEARS, ROEBUCK: Fights Battery Cases In Multi States; Settles In Georg.

TOBACCO LITIGATION: Florida Ap Ct Re-Opens Door To Lump-Sum Award
WYETH-AYERST: Faces Delaware Suit Over Anti-Diarrhea Vaccine
Y2K LITIGATION: Liability Is A Matter Of Due Diligence For Can. Cos.

                              *********

ABERCROMBIE & FITCH: Steven E. Cauley Files Securities Suit
-----------------------------------------------------------
The Law Offices of Steven E. Cauley announced that it filed a class
action lawsuit against Abercrombie & Fitch (NYSE: ANF), Lazard Freres,
and other responsible individuals within both companies on behalf of
purchasers of Abercrombie & Fitch securities between October 8, 1999 and
October 13, 1999, inclusive.

The complaint alleges that on October 8, 1999, the Company tipped off
that it had experienced slow third quarter growth to favored analyst
Todd Slater of Lazard Freres, who then informed the Lazard Freres' sales
force so its preferred customers could trade on the inside information.
It was not until five days later, on October 13th, that ANF publicly
disclosed its slow third quarter growth and that it would miss earnings
estimates. On October 8th, ANF shares traded as high as $39 3/4, but
after the news was released to the rest of the investing public the
share price plummeted to as low as $23 3/8.

If you wish to serve as one of the lead plaintiffs in this lawsuit you
must file the appropriate motion with the court on or within 60 days of
the case being filed (Such a motion would be due by December 18, 1999).
To ensure your motion is received in time, you should contact the
attorney of your choice, or call the Law Offices of Steven E. Cauley.
Please E-mail or call one of the attorneys listed below: Steven E.
Cauley Scott E. Poynter Gina M. Cothern 2200 N. Rodney Parham Road Suite
218, Cypress Plaza Little Rock, AR 72212 E-mail: CauleyPA@aol.com
1-888-551-9944 - toll free


ABERCROMBIE & FITCH: Wechsler Harwood Files Securities Suit In New York
-----------------------------------------------------------------------
The Following is an Announcement by the law firm of Wechsler Harwood
Halebian & Feffer LLP:

Notice is hereby given that a securities class action lawsuit was filed
on October 18, 1999 in the United States District Court for the Southern
District of New York on behalf of those persons and entities who
purchased the securities of Abercrombie & Fitch Co. (NYSE: ANF) between
October 8, 1999 and October 13, 1999, inclusive.

The complaint charges A&F and certain of its officers and directors with
violations of the Securities Exchange Act of 1934 Sections 10(b) and
20(a), and Rule 10b-5 promulgated thereunder. The complaint alleges that
defendants failed to disclose to plaintiff and the class material
adverse facts in regard to declining sales trends. On October 13, 1999,
when A&F belatedly disclosed the material adverse information, the price
of the Company's common stock plummeted from its Class Period high of $
39.750 per share to trade as low as $ 23.375 per share.

Plaintiff is represented in this class action by the New York law firm
of Wechsler Harwood Halebian & Feffer LLP. If you purchased A&F
securities during the Class Period you may, not later than December 17,
1999, move the court to serve as a lead plaintiff, provided you meet
certain legal requirements. If you wish to discuss this action, or have
any questions concerning this notice or your rights or interests with
respect to this matter, please contact the following: Wechsler Harwood
Halebian & Feffer LLP 488 Madison Avenue, New York, New York 10022
Telephone: 877-935-7400 (toll free) or 212-935-7400 John Halebian, Esq.
jhalebian@whhf.com Shannon Cooper, Paralegal scooper@whhf.com TICKERS:
NYSE:ANF


ANTI-DEFAMATION: League Settles For Spying On Other Civil Rights Groups
-----------------------------------------------------------------------
The Anti-Defamation League has settled a class action by agreeing to pay
$ 25,000 to a community relations fund and promising not to spy on other
civil rights groups. The settlement, approved by a federal judge on
Sept. 27, resolves a suit filed in 1993 that accused the Jewish civil
rights group of spying on Arab-American, pro-Palestinian and
anti-apartheid groups and individuals. The ADL admitted no wrongdoing.
(The National Law Journal 10-11-1999)


AVIATION SALES: Kirby McInerney Files Securities Suit
-----------------------------------------------------
The following was released by Kirby McInerney & Squire, LLP:

The law firm of Kirby McInerney & Squire LLP has been retained to bring
a class action lawsuit on behalf of all purchasers of Aviation Sales Co.
(NYSE: AVS) common stock during the period between June 11, 1999 and
September 17, 1999, inclusive.

The action will assert claims against Aviation and others for violation
of section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5
of the Securities Exchange Commission by reason of material
misrepresentations and omissions during the Class Period concerning the
Company.

Plaintiff is represented by Kirby McInerney & Squire, LLP. If you have
any questions concerning the matters set forth above, please contact:
Ira M. Press, Esq. Mark A. Strauss, Esq. Ms. Danielle Feman, Paralegal
KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue 10th Floor New York, New
York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail:
dfeman@kmslaw.com TICKERS: NYSE:AVS


AVIATION SALES: Kirby McInerney Retained to Pursue Securities Suit
------------------------------------------------------------------
The following was released by Kirby McInerney & Squire, LLP:

The law firm of Kirby McInerney & Squire LLP has been retained to bring
a class action lawsuit on behalf of all purchasers of Aviation Sales Co.
(NYSE: AVS) common stock during the period between June 11, 1999 and
September 17, 1999, inclusive.

The action will assert claims against Aviation and others for violation
of section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5
of the Securities Exchange Commission by reason of material
misrepresentations and omissions during the Class Period concerning the
Company.

Plaintiff is represented by Kirby McInerney & Squire, LLP. If you have
any questions concerning the matters set forth above, please contact:
Ira M. Press, Esq. Mark A. Strauss, Esq. Ms. Danielle Feman, Paralegal
KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue 10th Floor New York, New
York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail:
dfeman@kmslaw.com TICKERS: NYSE:AVS


CARNIVAL CORP: Multi-State Travel Agencies’ Suits Over Commission Go On
-----------------------------------------------------------------------
Several complaints were filed against Carnival and/or Holland America
Westours (collectively the "Travel Agent Complaints") on behalf of
purported classes of travel agencies who had booked a cruise with
Carnival or Holland America, claiming that advertising practices
regarding port charges resulted in an improper commission bypass. These
actions, filed in California, Washington and Florida, allege violations
of state consumer protection laws, claims of breach of contract,
negligent misrepresentation, unjust enrichment, unlawful business
practices and common law fraud, and they seek unspecified compensatory
damages (or alternatively, the payment of usual and customary
commissions on port charges paid by passengers in excess of certain
charges levied by government authorities), an accounting, attorneys'
fees and costs, punitive damages and injunctive relief. These actions
are in various stages of progress and are proceeding.

It is not now possible to determine the ultimate outcome of the pending
Passenger and Travel Agent Complaints. Management believes it has
meritorious defenses to the claims. Management understands that
purported class actions similar to the Passenger and Travel Agent
Complaints have been filed against several other cruise lines.


CARNIVAL CORP: Suits Over Port Charges Continue; Some Settlements Made
----------------------------------------------------------------------
Several actions (collectively the "Passenger Complaints") have been
filed against Carnival Cruise Lines ("Carnival") and one action has been
filed against Holland America Westours on behalf of purported classes of
persons who paid port charges to Carnival or Holland America Line
("Holland America"), alleging that statements made in advertising and
promotional materials concerning port charges were false and misleading.

The Passenger Complaints allege violations of the various state consumer
protection acts and claims of fraud, conversion, breach of fiduciary
duties and unjust enrichment. Plaintiffs seek compensatory damages or,
alternatively, refunds of portions of port charges paid, attorneys'
fees, costs, prejudgment interest, punitive damages and injunctive and
declaratory relief. The actions against Carnival are in various stages
of progress and are proceeding.

Holland America Westours has entered into a settlement agreement for the
one Passenger Complaint filed against it. The settlement agreement was
approved by the court on September 28, 1998. Five members of the
settlement class appealed the court's approval of the settlement.
Holland America Westours has settled with four of the five members. The
appeal of one member of the settlement class is likely to take between
six and eighteen months to be resolved. Unless the appeal is successful,
Holland America will issue travel vouchers with a face value of $10-$50
depending on specified criteria, to certain of its passengers who are
U.S. residents and who sailed between April 1992 and April 1996, and
will pay a portion of the plaintiffs' legal fees. The amount and timing
of the travel vouchers to be redeemed and the effects of the travel
voucher redemption on revenues is not reasonably determinable.
Accordingly, the Company has not established a liability for the travel
voucher portion of the settlements and will account for the redemption
of the vouchers as a reduction of future revenues. In 1998 the Company
established a liability for the estimated distribution costs of the
settlement notices and plaintiffs' legal costs.


DOW CHEMICAL: Owners Of Rocky Flats Win Plutonium Case In Colorado
------------------------------------------------------------------
The largest class-action lawsuit in Colorado history took a major step
forward last Friday when notices were mailed to more than 12,000 people
who own property near Rocky Flats.

The 9-year-old federal lawsuit against Dow Chemical and Rockwell
International Corp. claims that poor environmental management at the
former nuclear weapons plant depressed values of surrounding property by
at least $ 200 million.

The 12,000 plaintiffs, who will be notified for the first time through
the mass mailing, could receive an average of $ 15,000 if U.S. District
Court Judge Richard Matsch rules in their favor, said Bruce DeBoskey,
the attorney representing the landowners.

The stain of Rocky Flats hurt all property owners in the area, said
Merilyn Cook, one of 12 landowners who filed the lawsuit in 1990.
'I think the stigma still exists,' she said. 'I think the homes and
property in the area are worth substantially less than the rest of the
metro area.'

Only people who owned property near Rocky Flats on June 7, 1989, the day
the FBI raided the plant and shut it down, are eligible to participate
in the lawsuit. Rockwell was the operator of the plant for the
Department of Energy at the time, and Dow was the previous operator.

The case has crept through the court system at a snail's pace, but
Matsch's order to send the notices is a significant step, DeBoskey said.
'This is a true indication that the judge is committed to get this case
to trial,' he said. The lawsuit - which claims that property values were
depressed because Dow and Rockwell lost plutonium, allowed plutonium to
escape into the environment and mismanaged the plant from 1952 through
1989 - should go to trial in mid-2000. 'Rocky Flats still can't account
for all the plutonium on-site,' DeBoskey said. 'As a result, Rocky Flats
neighbors still can't sell their homes for a reasonable price, even
during the hottest home-sales market in a generation.'

The two companies don't believe that's true, but even if it is, the
landowners don't have a case, said David Bernick, the Chicago-based
lawyer for Dow and Rockwell. 'They all got a great deal when they moved
in and bought a cheap piece of property,' he said. 'They bought their
property knowing it was contaminated.' In addition, the landowners can't
point to adverse health effects or any one event that hurt their
property values, he said.

But, DeBoskey countered, the FBI raid opened people's eyes to the danger
that Rocky Flats posed to the surrounding communities and had a drastic
effect on property values. 'The FBI raid is really what changed the
public's perception about the place,' he said. Before the raid, most
people thought the plant was operating safely.

The notices are to advise landowners that they are in the 'property
class,' DeBoskey said. Property owners don't need to do anything if they
want to remain part of the lawsuit.

From 1952 to 1989, Rocky Flats operated behind a curtain of secrecy,
building triggers for nuclear weapons. Plutonium was released into the
air during several fires, and the plant operators couldn't account for
some plutonium. That information was made public only years after the
events. Over the years, pressure built to shut down the plant.

The plant never restarted operations after the FBI raid and the
Department of Energy is spending $ 6 billion to clean up and permanently
close the facility by 2006.

It's a relief to have the case finally moving forward, Cook said.
'After 10 years, I'm really glad we're going to be able to have our day
in court.' (The Denver Post 10-16-1999)


FDX CORP: NY Ct Dismisses Suit Over Excise Tax; Co. Contests Appeal
-------------------------------------------------------------------
The case was filed in the Supreme Court of New York, New York County,
and contained allegations and requests for relief substantially similar
to the Alabama case, was dismissed with prejudice on FedEx's motion on
October 7, 1997. The court found that there was no breach of contract
and that the other causes of action were preempted by federal law. The
plaintiffs appealed the dismissal.

This case originally alleged that FedEx continued to collect the excise
tax on the transportation of property shipped by air after the tax
expired on December 31, 1996. The New York complaint was later amended
to cover the first expiration period of the tax (December 31, 1995
through August 27, 1996) covered in the original Alabama complaint. The
dismissal was affirmed by the appellate court on March 2, 1999. The
plaintiffs have until October 18, 1999 to seek permission to appeal to
the highest New York appellate court. If the plaintiffs either fail to
seek appeal before October 18, 1999 or if the court refuses permission
to appeal as of such date, the dismissal of this case will become final.

The air transportation excise tax expired on December 31, 1995, was
reenacted by Congress effective August 27, 1996, and expired again on
December 31, 1996. The excise tax was then reenacted by Congress
effective March 7, 1997. The expiration of the tax relieved FedEx of its
obligation to pay the tax during the periods of expiration. The Taxpayer
Relief Act of 1997, signed by President Clinton in August 1997, extended
the tax for ten years through September 30, 2007.

FedEx intends to vigorously defend itself in these cases. No amount has
been reserved for this contingency.


FDX CORP: Alabama Circuit Court Dismissed Suit Over Excise Tax On Oct 6
-----------------------------------------------------------------------
There are two separate class-action lawsuits against FedEx generally
alleging that FedEx has breached its contract with the plaintiffs in
transporting packages shipped by them. These lawsuits allege that FedEx
continued to collect a 6.25% federal excise tax on the transportation of
property shipped by air after the excise tax expired on December 31,
1995, until it was reinstated in August of 1996. The plaintiffs seek
certification as a class action, damages, an injunction to enjoin FedEx
from continuing to collect the excise tax referred to above, and an
award of attorneys' fees and costs. One case was filed in Circuit Court
of Greene County, Alabama. On October 6, 1999, the Greene County Circuit
Court dismissed all claims against FedEx by entering summary judgment.
The plaintiffs have 42 days from the date of this judgment to appeal to
the Alabama Supreme Court.


FORD MOTOR: Judge Questions EEOC Settlement Over Sex Harrassment
----------------------------------------------------------------
Victoria Williams says she still hears the racial slurs. She still hears
men working beside her make sexual overtures. She still frets about
being touched as she goes about her job. And she still goes home from a
day of working at Ford Motor Co.'s Chicago Assembly Plant feeling
"stressed out."

One of 14 female workers from the Far South Side plant and a Ford
facility in Chicago Heights, Williams and her colleagues have received a
federal judge's certification as a class-action group.

They allege widespread sexual harassment at the two facilities-- charges
the nation's second-largest automaker thought had been addressed and
settled.

Ford laid down strict new policies and reached an agreement with the
U.S. Equal Employment Opportunity Commission in September to pay $7.5
million to female workers for the racial and sexual harassment they
faced at the two plants.

But Judge Elaine E. Bucklo found fault with the agreement, ruling last
Friday that the 14 women had a right to file a separate suit rather than
accept the EEOC-brokered agreement. "In short," Bucklo wrote, "the
agreement lacks bite." Her ruling means that Ford faces a potential
courtroom battle and the risk of an even heftier payout arising from the
same allegations.

Attorneys for the women suggested that the record $34 million settlement
between Mitsubishi Motor Manufacturing of America Inc. and the EEOC in
June 1998 is an amount closer to one they would like their clients to
receive. "The $7.5 million pales in comparison," attorney Keith L. Hunt
said. If there were another settlement or a verdict against the company,
then the female workers would have the option of choosing which case to
go along with, Hunt said.

By granting class-action status to two separate cases filed last year by
the women, the judge opened the issue up for about 850 women who have
worked at the two plants since December 1993.

Besides renewing the issue for Ford, the judge's ruling raises questions
about the way the EEOC resolved the dispute.

When the agreement was announced in September, EEOC officials described
it as a quick and efficient way to compensate the women at the Chicago
assembly plant and Chicago Heights stamping plant. They said it was the
fourth-largest settlement ever for such charges. And they praised Ford
for accepting, as part of the agreement, a strict discipline policy as a
way to make sure that officials and workers toe the line on harassment
policies. Furthermore, EEOC Chairwoman Ida L. Castro hailed Ford for
working out a deal with the federal agency rather than forcing it to do
battle in a costly suit.

But in her ruling, Judge Bucklo said the agreement did not allow "clear
standards or guidelines" for awarding the damages, nor were the women
and their attorneys permitted to participate while Ford and the EEOC
negotiated. As the judge noted, the agreement is set to run for three
years and is monitored by a three-person board that has the power to
extend the agreement. That arrangement, attorneys for the women argued,
is not as strong as one with the backing of a court order.

The judge agreed.

The giant automaker issued a brief statement disagreeing with the
judge's decision. "We consider the EEOC process as an effective and
timely way to resolve the issues in our Chicago plants," the company
said in its statement. Ford said it is considering an appeal.

EEOC officials were reluctant to challenge the judge's ruling,
explaining it is not agency policy to comment on judicial rulings in
private cases. As for the fairness of the settlement, John Rowe, the
EEOC's district director, pointed out that women covered by the agency's
agreement are expected to begin receiving money over the coming months.
"How long will their case and their appeal take?" he asked, referring to
the class-action suit.

Attorney Hunt said the suit's main goal is not to gain more money for
the women. "What we are looking for are long-standing, long-lasting
changes," he said, citing a history of complaints over the years and
what he described as failed efforts by Ford to deal with the problem.

Williams, a 10-year veteran worker, said her hope now "is to go to work
in an environment that we can deal with. An environment just like they
give the men."

Under its agreement, Ford had agreed to pay $7.5 million to female
employees who worked at the two plants between January 1996 and October
20, 1999. About 900 women are eligible. The women are required to file
claims with the panel, which then investigates the allegations. The
payment would vary, EEOC officials said, based upon the abuse they had
faced.

During hearings on the case, Judge Bucklo questioned such conditions,
saying there is nothing "that would give anybody a clue as to what they
could expect, and none of the rights that ordinarily they might have."

Ford also agreed to pay $250,000 to settle harassment charges filed by
two workers who were not identified. Furthermore, Ford said it would
increase the number of females in management positions at the two
plants. (Chicago Tribune 10-20-1999)


GNI GROUP: 1 Claim Remains In TX Property Owners’ Suit Over Deepwell
--------------------------------------------------------------------
The following is disclosed in the annual report of the company for the
year ended June 30, 1999, filed with the Securities and Exchange
Commission as of date October 14, 1999:

On August 31, 1995, Odilia Benavidez and certain other owners of
property near Waste Management's Corpus Christi deepwell filed suit in
the 94th Judicial District Court, Nueces County, Texas against the
Company and Chemical Waste Management, Inc., a prior owner of the Corpus
Christi deepwell, seeking injunctive relief and alleging property damage
with respect to operation of the deepwell. In June of this year, the
court granted partial summary judgment in favor of the Company against a
number of the plaintiffs' claims, while allowing the plaintiffs to
proceed with one claim against the Company. The court continues to
consider whether the plaintiffs have a right to pursue other claims
against the Company.


GNI GROUP: Intends To Contest Securities Suit In Delaware Over Merger
---------------------------------------------------------------------
The following is disclosed in the annual report of the company for the
year ended June 30, 1999, filed with the Securities and Exchange
Commission as of date October 14, 1999:

Effective July 28, 1998, Green I Acquisition Corp., a Delaware
corporation formed by 399 Venture Partners, Inc., merged with and into
the Company, with the Company as the surviving corporation (the
"Merger").

On February 27, 1998, a complaint purporting to state a class action was
filed in the Delaware Court of Chancery by William Chaffin and Marcia
Chaffin, alleged to be stockholders of GNI, on behalf of themselves and
all others similarly situated, against GNI and its directors. The
plaintiffs allege that the Merger was wrongful, unfair and harmful to
holders of GNI Common Stock, that the proposed consideration of $7.00
per share was not the result of arms-length negotiations or based upon
any independent valuation of the current or projected value of GNI, and
that the directors of the Company had conflicts of interest and violated
their fiduciary and other common law duties owed to the plaintiffs and
other members of the class. The complaint seeks to enjoin the Merger and
an unspecified amount of damages, in addition to payment of attorneys'
fees and reimbursement of expenses.

On June 5, 1998, the plaintiffs filed an amended class action complaint
(the "Amended Complaint"). The Amended Complaint added allegations based
on information set forth in the Company's original filing of preliminary
proxy materials, filed with the SEC on April 16, 1998. In addition, the
Amended Complaint (i) names Titus H. Harris, III as a defendant, (ii)
does not name John W. Lyons as a defendant and (iii) eliminates the
request to enjoin the Merger which was set forth in the original
complaint. The Company believes it has meritorious defenses and intends
to vigorously defend itself against this claim.


HMO: Economic Pressure May Lead To A Deal, One Of The Lead Lawyers Says
-----------------------------------------------------------------------
The trial lawyers who won billions from tobacco companies are now
enlisting Wall Street to prod the managed-care industry into a swift
settlement of class-action suits.

Richard Scruggs of Pascagoula, Miss., one of the lead lawyers, said
Tuesday that economic pressure from investors, in the form of declining
prices for managed-care stocks, could lead to a deal. Ultimately, it
might include Congress, which is debating legislation to expand the
rights of patients in health maintenance organizations (HMOs), he added.
Scruggs said he hopes to meet with lawmakers next week to discuss the
lawsuits his legal coalition is bringing against the nation's largest
health insurers.

Aetna Inc. and Humana Inc. were sued earlier this month, and Scruggs
said suits against several other "major players" would be filed as early
as Thursday.

The suits, based on untested legal theory, accuse the companies of
violating federal racketeering laws. They allege that companies
defrauded HMO subscribers by hiding fee arrangements with doctors and
claims processors that are designed to cut costs rather than meet
medical needs.

In contrast to the drawn-out legal battle with the cigarette industry,
Scruggs hopes to convince managed-care executives that it's in their
financial interest to settle soon. Trial lawyers have been telling Wall
Street analysts that if the lawsuits are upheld, "they would put them
(companies) out of business," said Scruggs, adding that economic
pressure on tobacco companies came years after lawsuits were filed.

Some investors apparently agree, given the drop in industry stocks since
the planned lawsuits were disclosed Sept. 30. "The stocks have done
abysmally," said Todd Richter, a health industry analyst at Bank America
Securities. Share prices for the largest companies are trading at
one-half to one-third of their 1999 highs, he added.

So far, HMOs are refusing to buckle. "It borders on extortion and will
backfire," said Karen Ignagni, president of the American Association of
Health Plans. "Working families will have to pay higher premiums to
cover liability costs." Victor Schwartz, a Washington lawyer who advises
companies on such suits, said the emphasis on economic pressure marks "a
new phenomenon" in the law: "The decision to settle is no longer being
made on the legal merits but the price of stock." (USA TODAY 10-20-1999)



INT’L CAPITAL: Hanzman Criden, Ackerman Link File Fla. Securities Suit
----------------------------------------------------------------------
The law firms of Hanzman Criden Chaykin & Ponce, P.A. and Ackerman Link
& Sartory, P.A. hereby give notice that a class action lawsuit styled
Forrest Ball, Florence Ball, Phyllis Cohen and William Reynolds v.
Kenneth T. Tripoli, Joseph F. DeSanto, Daniel J. Parker, Jared L.
D'Argenio, Lawrence T. Tripoli, Nelson N. Schembari, KTT International
Trading Corp., Thomas Consultants Inc., First Interbank Corp., and
International Credit Concepts Inc., Case No. 99-7290-Civ-Dimitrouleas
was filed in the United States District Court for the Southern District
of Florida on behalf of all persons and entities who invested in
International Capital Management Inc. ("ICM") from its inception through
and including Sept. 30, 1998 and who were damaged thereby. Excluded from
the Class are Defendants, their subsidiaries, affiliates, officers,
members of their immediate families, legal representative, heirs,
successors or assigns.

The complaint charges that Defendants participated in a scheme designed
to defraud investors and create a market for otherwise unmarketable ICM
securities. The complaint alleges that the Defendants violated state and
federal securities laws by knowingly, willfully and uniformly failing to
disclose material facts to Class members, including the facts that: (1)
ICM was a fraudulent Ponzi scheme, and Class members were being sold
illegitimate, bogus securities that were otherwise unmarketable; (2)
ICM's principals had a history of sanctions for securities violations;
(3) ICM was selling unregistered securities; (4) investment in the
foreign currency market is very risky and should only be made by
investors with strong liquidity; (5) investor money was being commingled
in ICM's accounts each month and deposited into both foreign and
domestic markets; (6) investors would see little to no return on their
investments; and (7) ICM and its principals received significant
personal compensation in the form of excessive salaries, incentives and
bonuses.

Plaintiffs are represented by the law firms of Hanzman Criden Chaykin &
Ponce, P.A. and Ackerman Link & Sartory, P.A. If you are a member of the
class described above, you may, not later than Dec. 20, 1999, move the
Court to serve as lead plaintiff of the class, if you so choose. In
order to serve as lead plaintiff, however, you must meet certain legal
requirements. If you wish to discuss this action or have any questions
concerning this notice or your rights or interest with respect to these
matters, please contact Hanzman Criden Chaykin & Ponce, P.A. at
800/579-1896.


MATTEL INC: Gold Bennett Files Securities Suit In CA Over Merger
----------------------------------------------------------------
Gold Bennett & Cera LLP has filed a class action in the United States
District Court for the Central District of California, Case No.
CV-99-10847, on behalf of all purchasers of Mattel, Inc. common stock
(NYSE: MAT) during the period February 2, 1999 through October 1, 1999,
inclusive. The plaintiff purchased shares of Mattel common stock during
the Class Period and is seeking to recover damages.

The plaintiff is represented by the San Francisco law firm of Gold
Bennett & Cera LLP. For over 30 years, Gold Bennett & Cera LLP and its
predecessors have successfully engaged in commercial litigation,
including shareholder, consumer and antitrust class actions, in federal
and state courts throughout the United States, recovering hundreds of
millions of dollars for its clients.

This action arises out of an alleged fraudulent scheme by which The
Learning Company ("TLC") was merged in Mattel (the "Merger"). The
alleged scheme enabled defendants to obtain approval of the Merger
between Mattel and TLC and to artificially inflate the stock price of
Mattel. The alleged scheme also enabled the two senior TLC executives to
obtain in excess of $11 million from the sale of Mattel shares received
in the Merger shortly after its consummation.

The complaint charges that defendants materially misstated the pro forma
revenues, net income and earnings per share of TLC (and Mattel after the
Merger), made materially false or misleading statements that TLC was an
excellent strategic fit with Mattel and that the Merger would be
accretive to Mattel's 1999 results. As a result of the defendants'
alleged material misstatements and omissions, Mattel's common stock
traded at artificially inflated prices throughout the Class Period,
including as high as $30.3125 per share during the Merger pricing period
in April and May 1999. On October 4, 1999, Mattel disclosed that its TLC
division would incur a $50-$100 million loss for the third quarter
rather than an expected $50 million profit. As a result, Mattel will not
meet its forecast $1.50 earnings per share for 1999. After disclosure of
the problems at its TLC division, the price for Mattel's stock fell to
$11 7/8 on October 4, 1999 on volume of nearly 30 million shares.

If you purchased Mattel common stock during the Class Period, you may no
later than 60 days from October 7, 1999 move the Court to serve as lead
plaintiff, if you so choose. To serve as lead plaintiff, however, you
must meet certain legal requirements. If you wish to discuss this action
or have any questions concerning this notice or your rights or
interests, please contact Joseph M. Barton of Gold Bennett & Cera LLP,
595 Market Street, Suite 2300, San Francisco, California 94105, by
telephone at 800-778-1822 or 415-777-2230, by facsimile at 415-777-5189
or by e-mail at jbarton@gbcsf.com. SOURCE Gold, Bennett & Cera LLP


MATTEL INC: Wolf Popper Files Securities Suit In New York
---------------------------------------------------------
Pursuant to Section 21D(a)(3)(A)(i) of the Private Securities Litigation
Reform Act of 1995, Wolf Popper LLP hereby gives notice that a class
action complaint has been filed in the United States District Court for
the Southern District of New York on behalf of a Class of persons who
owned Mattel, Inc. (NYSE: MAT) common stock as of March 15, 1999, the
record date for the vote on the merger between Mattel, Inc. and The
Learning Company, Inc.

The Complaint charges that the Company and certain of its officers and
directors violated federal securities laws by causing Mattel to issue a
materially false and misleading proxy statement/prospectus in connection
with Mattel's merger with the Learning Company. In particular, the
complaint alleges that the proxy statement failed to disclose that,
prior to the merger, the Learning Company had: (i) been selling products
with a right of return and improperly recognizing revenue in connection
with such sales; (ii) not reserved for this contingency in accordance
with generally accepted accounting principles; and (iii) inadequately
reserved for bad debt, thereby causing the Learning Company's earnings
to be materially overstated. Defendants withheld these clearly material
facts from Class members in order to fraudulently procure their vote in
favor of Mattel's merger with the Learning Company.

On October 4, 1999, the true state of affairs at the Learning Company,
and their impact on Mattel's finances began to be disclosed. On that
date, Mattel announced that the Learning Company would report an
after-tax loss of between $50 and $100 million and a 2% to 4% revenue
decline, due to, among other things, higher than expected product
returns and the write-off of bad debts. On May 7, 1999, Mattel shares
closed at $27-5/16 per share. Following Mattel's October 4, 1999
announcement, Mattel shares closed at $11.875 per share, representing a
decline of more than 56%.

Any member of the proposed class who desires to be appointed lead
plaintiff in this action must meet certain legal requirements to serve
as a lead plaintiff. If you have questions or information regarding this
action, or if you are interested in serving as a lead plaintiff in this
action, you may call or write: Paul Paradis, Esq. or Michael A.
Schwartz, Esq. WOLF POPPER LLP 845 Third Avenue New York, NY 10022-6689
Telephone: 212-451-9676 212-451-9668 Toll Free: 877-370-7703 Facsimile:
212-486-2093 E-Mail: pparadis@wolfpopper.com, mschwart@wolfpopper.com
Website: http://www.wolfpopper.com


MILLER BROS.: Critics Of Slope Ask CA Sp Ct Not To Intervene/Stop Suit
----------------------------------------------------------------------
The plaintiffs in a $ 661 million lawsuit against the developers of Dos
Vientos Ranch have filed documents arguing that the California Supreme
Court should refuse to intervene in the case.

The defendants, Miller Bros. and Operating Engineers, have asked the
high court to overrule a judge's decision that allowed the suit against
them to proceed.

Resident Laura Lee Custodio and an environmental group filed suit in
March, claiming that the developers lied to the city about the safety of
the Borchard Road extension in order to gain approval for a 12 percent
grade. Critics say the slope is too steep and would be unsafe.

The city lost its legal battles in court to stop the road, which is
expected to be completed this month. (The Daily News Of Los Angeles
10-9-1999)


NEWELL RUBBERMAID: Milberg Weiss Files Securities Suit In Illinois
------------------------------------------------------------------
The Following is an Announcement by the Law Firm of Milberg Weiss
Bershad Hynes & Lerach LLP:

Notice is hereby given that a class action lawsuit was filed on October
19, 1999, in the United States District Court for the Northern District
of Illinois, on behalf of all persons who purchased the common stock of
Newell Co. or Newell Rubbermaid, Inc. (NYSE: NWL) between October 21,
1998, and September 3, 1999, inclusive, or exchanged shares of
Rubbermaid Incorporated (NYSE: RBD) common stock for shares of Newell
Rubbermaid common stock pursuant to a joint proxy/registration statement
and prospectus (the "Joint Proxy").

The complaint charges Newell Rubbermaid and certain of its officers and
directors with violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder. The
complaint alleges that defendants issued a series of materially false
and misleading statements the Company's business, financial condition,
earnings and prospects for Newell Rubbermaid. As a result of these
materially false and misleading statements and omissions, plaintiff
alleges that the price of Newell Rubbermaid common stock was
artificially inflated during the Class Period.

If you are a member of the class described above you may, not later than
sixty days from October 15, 1999, move the Court to serve as lead
plaintiff of the class, if you so choose. In order to serve as lead
plaintiff, however, you must meet certain legal requirements.

Plaintiff is represented by Milberg Weiss, among others. If you wish to
discuss this action or have any questions concerning this notice or your
rights or interests with respect to these matters, please contact, at
Milberg Weiss Bershad Hynes & Lerach ("Milberg Weiss"), Steven G.
Schulman or Samuel H. Rudman at One Pennsylvania Plaza, 49th Floor, New
York, New York 10119-0165, by telephone 1-800-320-5081 or via e-mail:
endfraud@mwbhlny.com or visit website at http://www.milberg.comTICKERS:
NYSE:NWL NYSE:RBD


OVERLAND DATA: Announces Settlement of Securities Suit In California
--------------------------------------------------------------------
Overland Data, Inc. (Nasdaq:OVRL) reported that it had reached tentative
settlement of the class action securities litigation currently pending
against it in the U.S. District Court for the Southern District of
California (Marucci v. Overland Data, Inc., et al.).

Plaintiff Edward Marucci filed the class action suit in 1997 on behalf
of the Company's shareholders, alleging that the Company made misleading
statements in its Prospectus for the Company's initial public offering.
The Company and its Directors and Officers who were named as defendants
had denied all liability and were prepared to defend against the claims
at a jury trial. The tentative settlement is a compromise disposition of
controverted claims, and no admissions have been made by either side of
the litigation.

The parties have signed a Memorandum of Understanding to settle the
entire dispute. Terms were not disclosed and the settlement is subject
both to execution of a definitive settlement agreement and final
approval by the court. The Company currently anticipates that the court
will act to approve the settlement before the end of November, 1999,
with a hearing on final approval likely to take place in early 2000. As
a result of the settlement, the Company will incur a one-time pre-tax
charge in its first fiscal quarter ended September 30, 1999 of
approximately $ 250,000, or slightly greater than $ .01 per share on an
after-tax basis.


PIERCING PAGODA: Announces Dismissal Of Securities Suit In Pennsylvania
-----------------------------------------------------------------------
Piercing Pagoda, Inc. (Nasdaq National Market symbol, PGDA) announced
that the previously announced securities class action litigation that
had been filed against it and certain of its officers by Israel H. Buck
et al. has been dismissed with prejudice by the United States District
Court for the Eastern District of Pennsylvania. The Company does not
know whether the dismissal will be appealed by the plaintiffs.

Piercing Pagoda, Inc. is the largest specialty retailer of gold jewelry
through kiosk stores in the United States, currently operating over 930
stores in 44 states and Puerto Rico. The Company primarily operates
under the names Piercing Pagoda, Plumb Gold, and Silver & Gold
Connection. The Company offers an extensive selection of popular priced
14 karat and 10 karat gold chains, bracelets, earrings, charms and
rings, as well as a selection of silver jewelry, and diamond and
gemstone merchandise, all in basic styles at everyday low prices.


RAYTHEON COMPANY: Barrack Rodos Files Securities Suit In Massachusetts
----------------------------------------------------------------------
Counsel for Class Plaintiff, Barrack, Rodos & Bacine, issued the
following:

A class action has been commenced in the United States District Court
for the District of Massachusetts on behalf of all persons who purchased
or otherwise acquired the Class A (NYSE: RTNa) or Class B (NYSE: RTNb)
common stock of Raytheon Company, between January 28, 1999 and October
12, 1999, inclusive.

The complaint alleges that Raytheon and certain of its officers and
directors violated Section 10(b) of the Securities Exchange Act of 1934
as well as Rule 10b-5 promulgated thereunder. The complaint alleges that
defendants issued a series of materially false and misleading statements
about trends in the Company's business and failed to disclose the
problems it was experiencing in integrating its acquisitions. As a
result of these materially false and misleading statements and
omissions, plaintiff alleges that the price of Raytheon common stock was
artificially inflated during the Class Period.

The plaintiff is represented by the law firm of Barrack, Rodos & Bacine.
If you are a member of the Class described above, you may, no later than
December 13, 1999, move the Court to serve as lead plaintiff of the
Class, if you so choose. In order to serve as lead plaintiff, however,
you must meet certain legal requirements. If you wish to discuss this
action or have any questions concerning this case or your rights or
interests, please contact: Maxine S. Goldman, Shareholder Relations
Manager, Barrack, Rodos & Bacine, Counsel for Class Plaintiff
3300 Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103
800-417-7305 or 215-963-0600 fax number 888-417-7306 or 215-963-0838
or e-mail at msgoldman@barrack.com


RHINO LININGS: MI Ct Dismisses Suit – Co.’s Linings Increase Safety
-------------------------------------------------------------------
A District Court judge ruled that Rhino Linings' product offers better
protection against risk of explosion than the original manufacturer's
automotive paint, and then dismissed the world's leading sprayed-on
liner from a class action suit seeking damages from truck bed lining
manufacturers based on allegations the liners caused fire dangers.

The drop-in liner companies settled out of court, but Rhino Linings
commissioned and submitted research that proved its product actually
increases truck safety compared to the original equipment.

"Rhino Linings has demonstrated by uncontested scientific evidence that
its bed liners do not share the same electrical and physical properties
of its competitors' bed liners," stated U.S. District Court Judge
Charles W. Pickering of the Southern District of Mississippi,
Hattiesburg Divison. "In fact, Rhino Linings' bed liner material
exhibits lower resistivity than the truck manufacturer's automotive
paint. This means that a truck bed coated with Rhino Linings' bed liner
material would be slightly less likely to pose a risk of ignition than a
pick-up truck with no bed liner at all."

The lawsuit (Jimmy Brown, et. al. versus Durakon Industries Inc. et.
al.) was filed in November of 1996 in the U.S. District Court for the
Southern District of Mississippi, Hattiesburg Division, against all
manufacturers of truck bed liners. The lawsuit alleges that a static
charge can build up on the surface of plastic truck bed liners and,
similar to a carpet in wintertime, discharge a spark and ignite
flammable liquids being carried in the truck bed.

Rhino Linings research however, showed that unlike traditional drop-in
liners made of plastic (polyethylene or HDPE), a Rhino Lining's
elastomeric polyurethane compound is sprayed on and dries into a tough,
non-conductive, elastic shell. In tests conducted by Lev Isaac Berger,
chief executive officer of the California Institute of Electronics and
Material Sciences, Rhino Linings exhibited lower resistivity and better
static charge dissipation characteristics. This finding means there is a
decreased chance of static build- up. Any charge created would be
dispersed across the entire truck bed surface, thus lowering the
localized voltage level and risk of sparks.

Following the ruling, Rhino Linings will be the only truck bed liner
manufacturer not required to place a warning label on its product.

"Rhino Linings has always striven to ensure the highest standards of
safety and quality," said Russell Lewis, Rhino Linings' president and
founder. "Anyone in the business knows that having a Rhino Lining is
better than having no lining at all, but we are thrilled to have
independent research and a federal judge supporting this claim!" Founded
in 1988, Rhino Linings pioneered sprayed-on polyurethane truck bed
linings.


RITE AID: Pennsylvania Ct Grants Leave to File Second Amended Complaint
-----------------------------------------------------------------------
By Order dated October 15, 1999, the United States District Court for
the Eastern District of Pennsylvania granted Berger & Montague, P.C. and
Milberg Weiss Bershad Hynes & Lerach LLP, as Lead Counsel in the
original pending securities fraud class action (No. 99-CV-1349) filed
earlier this year against Rite Aid Corporation (NYSE: RAD), until
October 29, 1999 to file a Second Amended Complaint for violations of
the federal securities laws against Rite Aid. Berger & Montague and
Milberg Weiss had specifically sought leave to file a second amended
complaint based on recent public disclosures about Rite Aid's accounting
and business practices, including the restatement of Rite Aid's prior
years financial statements.

This action was commenced in March 1999 and an amended complaint was
filed on July 2, 1999, which alleged that Rite Aid and certain of its
officers and directors had committed securities fraud by, inter alia,
improperly reporting artificially inflated net income in violation of
GAAP and by failing to disclose other adverse information relating to
its business practices and performance. The class period alleged in the
amended complaint filed on July 2, 1999 had an end date of March 11,
1999.

Based on recent events, Berger & Montague and Milberg Weiss intend to
file a second amended complaint to include additional allegations
against the Rite Aid defendants and to include claims for damages for
all investors who purchased Rite Aid securities during an extended class
period beyond the previously announced end date of March 11, 1999 that
will take into account the recent public disclosures about Rite Aid's
business and accounting practices, including the restatement of Rite
Aid's prior years financial statements. The second amended complaint
will allege a common, continuous course of misconduct during the
extended class period.

If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, you
may call or write to:

Sherrie R. Savett, Esq. or Stuart J. Guber, Esq. Berger & Montague, P.C.
1622 Locust Street Philadelphia, PA 19103 Phone: 888-891-2289 or
215-875-3000 Fax: 215-875-5715 Website: http://home.bm.net.E-mail:
InvestorProtect@bm.net Or

William C. Fredericks, Esq. or Samuel H. Rudman, Esq. Milberg Weiss
Bershad Hynes & Lerach LLP One Pennsylvania Plaza 49th Floor New York,
NY 10119-0165 Phone: 800-320-5081 Fax: 212-868-1229 Website:
http://www.milberg.come-mail: endfraud@mwbhl.com


SEARS, ROEBUCK: Fights Battery Cases In Multi States; Settles In Georg.
-----------------------------------------------------------------------
The DieHard battery first came under attack in 1996. In Georgia, a
consortium of high-profile plaintiffs' lawyers was seeking class-action
status in federal court for millions of customers who bought DieHard
batteries over a period of several years. The allegations, in Poe v.
Sears, Roebuck and Co., were that Sears has been selling "used, old or
'out of warranty' batteries as new."

One of the plaintiffs' lawyers had been instrumental in engineering what
most corporate observers consider a successful holdup of Dow Corning
Corp. in the breast implant matter. Another had won millions in punitive
damages (later drastically reduced after the case was remanded by the
U.S. Supreme Court) in a case involving paint damage on a BMW.

It's clear that one plausible outcome was a financial bath and a
marketing disaster for Sears, based in Hoffman Estates, Ill. In addition
to monetary damages, the company faced the potential for the destruction
of what Richard J. Barnett, vice president-law, for Sears Automotive
Group, calls "one of the strongest trademarks in the world, a corporate
jewel."

Compounding the problem, the Florida Attorney General's Office began an
investigation of Sears and its DieHard battery, and "Dateline NBC," an
investigative news show, picked up on the story and began to prepare a
report.

Barnett and the automotive group had become the locus of a major
corporate problem, and a stark choice had to be made: Prepare to
litigate to the end, or start maneuvering into a position to cut losses
with a settlement. The decision was made by "business management,"
according to Barnett. But it was based on a recommendation from his
group, aided by a team from Chicago-based Winston & Strawn. That team
was headed by partner Steven F. Molo, and included partner Thomas J.
Wiegand and associate Stephen V. D'Amore.

According to Barnett, the recommendation was based on the lawyers'
investigation of a rash of similar cases that had been filed against
other retailers and battery manufacturers. They concluded the Sears
product and its retailing methods were superior in crucial ways to its
competitors, and that Sears' accusers had no case.

Soon after the Poe case was filed, Barnett's group also discovered the
names of both the plaintiffs' attorneys and their chief investigator
were cropping up in the other cases. The Sears lawyers concluded the Poe
lawsuit was part of a systematic attempt by a plaintiff group to target
major retail battery outlets.

Their strategy appears to be paying off. Early this year, after the
Georgia court had denied class-action status and thrown out the fraud
count, Sears settled the case for $ 8,500.

The lawyers succeeded in delaying the "Dateline" story by a year "by
just bombarding NBC with information," according to Molo. "The story
they ultimately ran was quite a bit more balanced and posed questions as
opposed to making accusations."

And on a third front, the Florida Attorney General's Office agreed to
drop the investigation without filing any charges. Sears made no
admission of culpability or liability but agreed to pay the costs of the
investigation, a hefty $ 985,000.

Meanwhile, what Barnett refers to as a copycat lawsuit was filed in Cook
County, Ill. That case, dismissed twice, is now under appeal by the
plaintiffs. Barnett and Molo both say they are confident Sears will
prevail. "This is the classic story of the corporation that is under
siege and chooses to fight rather than cave in," Molo says.

               Inherent Difficulty In Trying The Case

In the course of doing this story, a strange and almost unprecedented
pattern began to emerge: Key plaintiffs' lawyers did not return phone
calls. Plaintiffs' lawyers are usually happy to discuss cases, even
losing ones, and especially pending ones. Thus an alternative
explanation for what so far appears to be a spectacular Sears triumph
was not available from that quarter.

However, the lead attorney on the Florida investigation was happy to
discuss the case, and she took issue with Sears' version of what went
down.

Florida Assistant Attorney General Lisa M. Raleigh, currently on
maternity leave, acknowledges the skeletal facts but puts a different
spin on them. According to Raleigh, Sears paid plenty in Florida and the
reason it didn't pay more-or lose the case in Georgia-has to do with the
inherent difficulty of proving the type of case that had to be made.

                      Formidable Plaintiff Group

In Poe, the plaintiffs' lawyer group included Birmingham, Ala., attorney
James J. Thompson Jr., of Hare, Wynn, Newell & Newton. Thompson had
recently won a victory in Alabama state court against BMW, in a class
action that eventually went to the Supreme Court of the United States.
An Alabama jury found BMW had fleeced hundreds of car buyers when it
repainted cars that had been damaged not by accidents, but by
atmospheric conditions. The U.S. Supreme Court eventually ruled the
punitive damage award was excessive, but Thompson had some success and
considerable notoriety from the case.

Another of the plaintiffs' attorneys was from Doffermyre, Shields,
Canfield, Knowles & Devine, Atlanta. "This firm was lead counsel in the
breast implant litigation, and they did very well," Molo says. There is
some irony in that, according to Molo, and perhaps a cautionary tale
about corporate fear to litigate. "Science is now refuting the
plaintiffs' claims. But Dow Corning basically settled and went bankrupt
and has paid billions to deal with something where liability is highly
questionable," he says.

Neither Thompson or Ralph I. Knowles Jr., the attorney of record on the
Poe case from Doffermyre, Shields, returned repeated phone calls.

The attorney identified by colleagues as most involved with the Cook
County case, Morris A. Ratner, partner in the New York office of San
Francisco-based Lieff, Cabraser, Heimann & Bernstein, fielded questions
but then did not return calls to answer them. Attorney Christopher J.
MacQuarrie of MacQuarrie & Associates in Ocala, Fla., also involved in
the case, did not return calls.

Poe was filed in U.S. District Court for the Northern District of
Georgia, Atlanta division, in February of 1996. In Georgia, the
plaintiff wasn't alleging just cosmetic damage, as he did in Thompson's
BMW case. The allegation was that Sears was engaged in a "scheme to fob
off used batteries, old batteries and out-of-warranty batteries as fresh
new batteries," and that those batteries "provide poorer performance and
are substantially less valuable than new batteries."

The charges against Sears and DieHard rest on unique characteristics of
all traditional storage batteries. They have a life expectancy that is a
function both of how long they have been used and how long they have
existed.

Batteries begin to deteriorate on the shelf to some extent as soon as
they are made, although how fast they deteriorate depends on a variety
of technical factors as well as maintenance conditions. Stored batteries
that are periodically recharged barely deteriorate for a long time;
batteries that are used slightly and then recharged are hardly affected.

To complicate the issue, variations in design affect how fast a battery
deteriorates. To complicate it further, proving that a battery has
deteriorated is extremely difficult-as is proving that it has not
deteriorated.

                            Due Diligence

Barnett took over as chief legal officer of the automotive group in
early 1996. He essentially walked right into the DieHard crisis. But he
had been with Sears for 30 years, and, before coming to the automotive
group, had been senior regulatory counsel for the entire company. "I've
done a lot of work in the automotive area. So I started to check around
in the industry to get a sense of what this was all about," he says.

Meanwhile, the Winston & Strawn attorneys did their own inquiry.
According to Barnett, the possibility that Winston & Strawn would churn
the case was not entertained. "They are very good litigators and have
worked closely with us on a number of matters since 1992."

                Both Inquiries Led To Similar Conclusions

"What we found out doing our due diligence was that there were other
cases out there, alleging substantially the same kind of thing,
involving the same lawyer, James Thompson, and the same investigator,
Steven D. Burt."

According to Barnett, they also found the batteries alleged in other
lawsuits to have been sold as old or out of warranty were different from
Sears' batteries in three respects, which Barnett maintains are crucial.

First, most of the others use antimony as a hardener for the battery
plates; Sears batteries use calcium, which Barnett says results in a
battery that holds its charge on the shelf for about 10 times longer
than the antimony type.

Second, Barnett says, because Sears is the largest retail seller of
batteries in the world, it has a high turnover rate for batteries on the
shelf. The rate, which varies with the model, averages five to seven
weeks. Sears has a company policy that requires retailers to recharge
batteries that have stayed on the shelf for more than three months.

Also significant, according to Barnett, is the nature of the Sears'
DieHard warranty. It begins at the date of purchase from the retailer,
rather than the date of manufacture, as is typically the case in the
industry. This means if a battery had been sitting on the shelf and lost
some life even with periodic charges, the buyer would be protected.

All of these factors, according to Barnett, undercut the plaintiff
argument that "bad" batteries were being sold. "In doing our due
diligence," he says "it didn't seem that the allegations that were out
there applied to our method of doing business. So we went to management
and said we thought we had a very good case to defend. They said go to
it."

Barnett acknowledges there have been plenty of cases where a good
product and a well-argued defense were not sufficient to prevail in
court. "We also looked at the forum. We were in federal court in
Atlanta, with a good solid judge. "It wasn't like Texas or rural
Alabama," he adds, "where you might have a forum that I guess would not
be favorably inclined toward large companies."

The plaintiff, Gary Poe, in fact was from Alabama, and Barnett says he
does not know why his attorneys chose the forum they did. In 1995, Poe
bought a battery from a Sears store in Calhoun County, Ala., and put it
in his trunk.

According to Sears' lawyers, the background to that event, as it
emerged, is highly suspect. Poe had previously bought a used car from
investigator Burt. The car had battery trouble. Poe attempted to reach
Burt but couldn't. Meanwhile, on an impulse, while buying tires from
Sears he also bought a battery. Then, after leaving the store with the
battery in the trunk, he happened to see Burt. He stopped and showed
Burt the battery. Burt told Poe he had been taken: He had a used
battery.

Sears' attorneys later learned Burt is a paid investigator for Thompson
in several battery cases. "We think it was a setup," says Wiegand, of
Winston & Strawn. "We can't prove it, but we think Steve Burt talked to
Gary Poe beforehand and said, 'Go and buy a battery. We'll get a story
later.'" Sears argued there was never any evidence, except Burt's
opinion, that the battery Poe bought was anything but a new, good
battery.

In the Georgia case, Wiegand explains, no class was ever certified.
Poe's fraud case was dismissed because the judge accepted the defense
argument that, even if Burt's testimony was construed as sufficient to
take the case to a jury on the grounds that the battery had been used,
there was no evidence to show the plaintiff had, in fact, suffered any
injury. "In deposition," Wiegand says, " I asked him: Do you know if
that battery has any performance problems?' He said 'No.' In fact I got
him to admit that, as far as he knows, it is the best battery he had
ever purchased."

Sears agreed to pay $ 8,500, according to Barnett, to settle a breach of
contract claim that was also part of the lawsuit, because that
settlement precluded any appeal by the plaintiffs.

They wanted more than $ 8,500, according to Barnett. Settling on that
amount apparently amounted to a little devilish knife-turning. The
$ 8,500 just "happened" to be the amount the plaintiffs' attorneys had
paid Burt to purchase batteries from Sears as part of the attempt to
establish the class-action case.

In other words, Sears gave them their money back on the batteries they
bought from Sears in a failed attempt to establish their case.
"Satisfaction guaranteed," says Barnett with a grin.

                        The Cook County Case

Kelly v. Sears, Roebuck and Co. alleges a massive scheme to pass off
used, old and out-of-warranty batteries as new, as the plaintiff did in
Georgia.

Their evidence includes testimony gathered in the Florida investigation.
One former employee said they routinely put returned batteries back on
the shelf after recharging them. Documents obtained by the Florida
attorney general demonstrated Sears conducted "battery allowance"
seminars, where employees were "pressured under strict orders to reduce
battery allowances to pre-set artificial levels." A Kelly brief
concludes employees were thus left with "one inescapable option: to sell
bad batteries as new." "The Chicago suit is a copycat suit," Barnett
says. "It has been dismissed twice by lower court, and we are confident
we will succeed."

But the case, filed in Cook County, Ill., is not an exact copy. Barnett
says the plaintiffs' attorneys in Kelly have adopted a strategy based on
their recognition of why class-action status was denied in Georgia. Even
if the Poe complaint had some validity, there was no plausible way to
determine which of the people who bought Sears batteries got new ones
and which got used or out-of-warranty ones.

But the Kelly case adds an allegation not present in Poe. Not only did
Sears sell some bad batteries, it failed to tell its customers they
might be about to buy one of them. At first reading, that seems like a
bizarre allegation. But it has the effect of establishing a class
without having to face the impossible task of determining which of
millions of cruddy old batteries were sold new and which were sold used
or after sitting too long on the shelf. And the class is huge.

"Essentially," Barnett says, "they say the omission entitled everybody
who came in to buy a battery to become a member of the class."

That case has been dismissed twice and is now on appeal in Appellate
Court of Illinois, First Judicial District. "In Illinois," Barnett
explains, "you have to plead a palpable injury. The case was dismissed
on that basis."

                            The Florida Case

Raleigh, an assistant attorney general in the economic crimes division
of the Florida Attorney General's Office, headed the Sears investigation
in that state.

Interviewed by telephone while nursing a baby, she chuckles at Sears'
contention that it got rid of the Florida case by paying "only"
$ 985,000 for the cost of the investigation. "I thought we settled the
case," she says. "The salary of the investigator who worked on that case
and my salary are public record. You could call the personnel office and
find out how close to a million bucks it is."

She does acknowledge, though, that it took an extraordinary amount of
time for her and the investigator. "I thought, lived, breathed and slept
batteries for almost two years," she says.

Barnett maintains it was an extremely heavy investigation. "They were
running all over the landscape," he says, "deposing people, hiring
statisticians and various experts.'

There were really two issues in the Florida investigation, according to
Raleigh. One was the issue of whether Sears sold used batteries as new.
The other was whether, between 1994 and 1996, Sears sold a large lot of
defective Exide Corp.-produced batteries that included some DieHards and
some cheaper models.

According to Raleigh, her office obtained internal documents that showed
Sears knew the lot of batteries was defective and, in some cases, had
exploded; and that during or shortly after the period when these
batteries were sold, Exide paid Sears $ 5 million for what amounted to
hush money. The money was intended to keep Sears quiet about the quality
problems it was having with the Exide batteries, and so that, as part of
the tit for tat, Sears would keep buying batteries from Exide.

"The complaint in this case was never filed," she says. "But Florida has
a law making the documents in these cases public information after a
settlement."

The state of Florida was successful, while the plaintiff case in Georgia
was not, because the state case could rely on consumer protection laws
that do not require the establishment of a class, according to Raleigh.

"Sometimes the only ones who can do something with a case are the
enforcement authorities. Depending on what kind of project it is, it can
be old and cold, or just too dispersed for plaintiffs to make a case. I
think this is one of those cases, where it may be the responsibility of
the state attorneys general to manage it under the consumer protection
laws."

"What fundamentally irritated me about this case," she says, "is there
is absolutely no way a consumer can tell whether that battery is
defective by looking at it. They are buying a black box. They rely on
the good faith of the retailer that what they've bought is what they've
bought. And it's our opinion, in this case, they could not rely on
that."

According to Barnett, there were problems with Exide batteries during
the period Raleigh alludes to, but they did not negatively impact the
consumer. The problems arose because at the time Sears was switching
production to Exide, demand suddenly shot up, and there were start-up
problems. There were defective batteries, but few of them ever reached
the consumer, according to Barnett. They were returned to Exide. There
were no "exploding batteries" and there was no "hush money."

Exide did pay Sears $ 5 million. But it was to cover three categories of
expenses arising out of Exide's bad shipment, he says. Sears was not
completely sure it had recovered all the defective batteries, and in
part the money was to cover an extended warranty that was offered during
this period. It also covered lost sales during a period of time when
some stores were without product, and an enhanced advertising campaign
that featured the new Exide product.

A separate issue was some premature battery failures, not only from
Sears' batteries, but from all brands, due to some extremely hot
weather, according to Barnett. Heat is much harder on a battery than
cold, he points out.

"They had a theory that if a battery had a warranty of, say, 60 months,
that was a guarantee it would last that long under any conditions. And
if it died before that time, it was 'defective.'" There is no precedent
in the law for that theory, Barnett says, and there are many reasons why
some batteries die before their time, heat being the predominate one.
The warranty stands. "I don't know if Ms. Raleigh let go of that theory,
but her boss did," Barnett says.

                          Stand Up And Fight

Although the returns are not all in yet, it's clear Sears has blunted,
if not averted, a major setback by its handling of the legal attack on
the DieHard. Millions of these batteries were sold, and, according to
Molo, the potential exposure from a successful class action in this case
could have exceeded $ 1 billion.

The lesson Barnett and Molo want to underscore is that, when you have a
good product and you know you are basically in the right, you should
stand up and fight for it.

Maybe there's another lesson, though. Molo contends that "consumer class
actions are not the wave of the future, they are the wave of the
present." If that's so, then in-house lawyers at major retailers have
another job. Barnett didn't mention it directly. But, he jokes, recently
he had been out "busting tires" with a group of senior executives. They
had been sent out to tire stores, he says, "to work through selling and
operational processes, and to get our views on how they can be
improved." (Corporate Legal Times, October, 1999)


TOBACCO LITIGATION: Florida Ap Ct Re-Opens Door To Lump-Sum Award
-----------------------------------------------------------------
An appeals court ruled Wednesday that a lump-sum payment could be
awarded to plaintiffs in a landmark suit against tobacco companies.

Last July a court found tobacco companies liable in a class-action case
filed by 500,000 smokers, paving the way for an award of damages that
could reach half a trillion dollars. However, the appeals court ruled
last month that damage claims against the industry must be considered on
a case-by-case basis. Reversing the decision Wednesday, the Third
District Appeals Court ruled that the jury in the penalty phase of the
trial, which begins on November 1, may award a lump sum in punitive
damages, although compensatory damages would be decided on a
case-by-case basis.

"They reinstated lump-sum punitive," said Morton Lucoff, a court
spokesman. "Compensatory (damages must) be decided individually."

The July verdict was a damaging blow to the tobacco industry, its first
loss in a class action.

Among the accused are Philip Morris Inc., R.J. Reynolds Tobacco Co.,
Brown and Williamson, Lorillard, Liggett and the Brooke Group, as well
as the Council for Tobacco Research and the Tobacco Institute.

Tobacco stocks on Wall Street slumped on Wednesday's ruling, with Philip
Morris down 2-1/16 to 28-7/8 dollars, its lowest point of the year. R.J.
Reynolds also hit a year low of 23-13/16 dollars after shedding 2-1/8.
Lorillard parent Loews was down 1-1/16 to 68-15/16.

Lucoff, a spokesman for the Miami-Dade County Circuit Court where the
penalty phase will take place, said individual plaintiffs must win
separate damage claims before the division of the lump sum award can
take place. "This jury will be asked to fix a lump sum punitive award,"
he said. "Everybody has to win their own individual cases. But if you
win your individual cases ... they'll all have to wait until everybody's
individual cases are resolved" to find out how much they will receive.
He said that the tobacco companies could appeal against the lump-sum
ruling but they had not yet made their intentions known.
(Agence France Presse 10-20-1999)

AP Online report says that tobacco attorneys argued before a three-judge
panel of the Third District Court of Appeal for damage decisions on a
smoker-by-smoker basis. The companies could more easily defend against
individual lawsuits than one large suit carrying a potentially huge
verdict.

In July, jurors found the nation's five largest cigarette makers and
industry groups had produced a defective and deadly product. The same
jury is to determine damages in the second phase of the trial, to begin
Nov. 1.

Dan Webb, lead attorney for the tobacco companies, insisted that a
single award would cause an ''enormous amount of irreparable harm to the
industry.''

Presiding Judge David L. Levy asked Webb why tobacco lawyers didn't
raise the punitive damage issue earlier, since the structure was set by
another judge ''almost two years ago.''

Stanley Rosenblatt, attorney for the plaintiff smokers, said industry
attorneys were trying to get a year's worth of trial erased. ''They want
to bury and cause to disappear one year of very hard work by a jury that
focused on ... the misconduct of these defendants,'' said Rosenblatt.

U.S. juries have awarded damages in smoking liability cases only five
times twice in Florida and once in New Jersey, Oregon and California.
Both Florida verdicts and the New Jersey verdict were overturned on
appeal.

The $206 billion national settlement reached with the tobacco industry
in November bars states from suing to recoup the costs of treating sick
smokers, but doesn't stop lawsuits by individuals. (AP Online
10-20-1999)


WYETH-AYERST: Faces Delaware Suit Over Anti-Diarrhea Vaccine
------------------------------------------------------------
Parents whose children were inoculated with an anti-diarrhea vaccine
that was later pulled from the market when it was linked to bowel
obstructions deserve to get their money back from Wyeth-Ayerst
Laboratories, argues a class action filed in Delaware County Common
Pleas Court Monday.

The complaint proposes a class of "all persons who have been
administered and paid for, in whole or in part, the RotaShield vaccine."
It was filed by attorneys Kenneth A. Jacobsen of Media, Francis J.
Farina of Devon and Peter Lennon of Broomall. Lennon's wife and
daughter, Susanne E. Lennon and Adelaide L. Lennon, are the named
plaintiffs in the suit. RotaShield was the only vaccine on the market
designed to combat rotavirus, which annually causes diarrhea in some 3
million American children, of whom about 55,000 are hospitalized.
Approved for sale in the U.S. in August 1998, the vaccine has since been
administered to more than 1 million American infants.

Wyeth-Ayerst, a Delaware County-based division of American Home Products
Corp., removed RotaShield from the market last Friday after officials at
the U.S. Centers for Disease Control and Prevention recommended that
physicians immediately suspend use of the vaccine until studies could
determine whether it is causally related to intussusception, a dangerous
and painful bowel obstruction that occurs when part of the intestine
folds over itself.

According to the complaint, at least 99 infants developed
intussusception within one to two weeks of receiving the vaccine. CDC
researchers have cautioned that data concerning RotaShield's link to the
bowel complaint is preliminary and said it is too soon to tell whether
the vaccine is the cause of the reported cases. Nevertheless, 20 reports
to the CDC of intussusception were enough to raise a warning flag as
early as July, when Wyeth-Ayerst stopped shipping RotaShield pending
further study.

According to the complaint, the suspension of shipments of the vaccine
"did not result in a 'recall' of any of the vaccine which had previously
been distributed." During the suspension, the complaint alleges,
Wyeth-Ayerst "still aggressively promoted RotaShield on their Web sites
and other advertising media. As recently as Sept. 22, 1999, despite the
suspension of the drug, [Wyeth-Ayerst] continued to falsely represent
that the 'Centers for Disease Control and Prevention recommends the
routine use of RotaShield for all healthy, full-term infants,'" the
complaint says.

Plaintiffs' attorney Jacobsen said that the suit does not seek to
recover medical damages on behalf of the children who suffered from the
bowel disorder; instead, it is a consumer-protection suit aimed at
recovering the money spent on the vaccine. The complaint asserts a claim
under the Pennsylvania Unfair Trade Practices and Consumer Protection
Law as well as common-law claims for breach of contract, unjust
enrichment and breach of warranty. Jacobsen argues in the complaint that
questions of law or fact common to all members of the proposed class
predominate over those affecting only individual class members. Among
the common issues Jacobsen identifies are:

* "Whether [Wyeth Ayerst] falsely and deceptively misrepresented in
  their advertisements ... the safety and potential side effects of
  RotaShield.

* "Whether [Wyeth-Ayerst] made express or implied, direct or indirect
  misrepresentations of fact about RotaShield.

* "Whether [Wyeth Ayerst's] conduct violated the Pennsylvania Unfair
  and Deceptive Trade Practices Act."

According to the suit, RotaShield was administered in three doses, and
an infant needed to receive all three doses to receive the "purported
benefits" of the vaccine. When the suspension of shipments started in
July, the suit says, "infants who received and paid for only one or two
doses of the vaccine before the suspension of shipments received no
benefit whatsoever." But the class proposed by the suit includes infants
who received all three doses of the vaccine and suffered no ill effect,
Jacobsen said. The lawyers are proceeding under the theory that parents
"would not have subjected their children to the risks" the vaccine
allegedly created if they had been informed of them, he said.

The suit seeks to recover all of the money paid out for the vaccine,
including what was paid by insurers, Jacobsen said, and he sees a
possibility of punitive damages, as well. A paragraph in the complaint
alleges that the drug manufacturer's "decision to place profits ahead of
safety [is not] limited to the situation involving RotaShield." It then
goes on to list controversies over other products manufactured by
Wyeth-Ayerst, beginning with what it terms "the 'Fen-Phen' diet drug
debacle." "Certainly there's a claim for punitive damages, and to the
extent that it is alleged and proven that it has been a pattern and
practice of the defendants to understate the risks of its products, that
information is relevant to a punitive damages claim," Jacobsen said.

Although the complaint proposes a nationwide class of consumers, it was
filed in Delaware County and asserts claims under Pennsylvania law,
Jacobsen said, because he felt surer of his cause of action under state
law and wanted to avoid sidetracking the litigation with a
jurisdictional battle. Convenience to all parties also played a role in
his choice of venue. "Wyeth Ayers is headquartered in St. Davids, my
client lives in Delaware County, and the courthouse is right across the
street from my office," he said. Doug Petkus, a spokesperson for
Wyeth-Ayerst, said yesterday that he had not seen the complaint and
could not comment on its allegations. He could not confirm whether it
was the first action to be filed in connection with RotaShield, he said.
(The Legal Intelligencer 10-20-1999)


Y2K LITIGATION: Liability Is A Matter Of Due Diligence For Can. Cos.
--------------------------------------------------------------------
For Canadian companies, the year 2000 computer date (Y2K) predicament is
not just a technical issue. In the final countdown to Jan. 1, boards of
directors should be reviewing legal issues related to the millennium bug
problem and companies should make sure their liability bases are
covered.

Litigation is inevitable, says David Bertschi, co-chair of the insurance
litigation group at Lang Michener, Ottawa. This could happen even if
computer systems have been upgraded and are Y2K-compliant.

For example, changes made to licensed software programs without the
consent of the copyright owner could provoke legal claims. Software
licences don't usually give the right to copy, modify or alter them
without the seller's prior consent.

Disclosure and misrepresentation will be the most significant legal
issues, Mr. Bertschi says. The U.S. has passed legislation that protects
companies that meet certain conditions from some Y2K-related
liabilities. This isn't the case in Canada. The U.S. legislation limits
punitive damages to $250,000 (U.S.) or three times actual damages -- if
there's proof that preventative action had been taken.

Companies could face legal damages for failing to notify other parties
of Y2K system-failure risks. They will need to be ultra careful about
how they describe their Y2K readiness. If something goes wrong, suits
could be launched over misrepresentation of systems or products. Mr.
Bertschi says many lawyers believe Y2K problems will be a ripe ground
for class actions -- including multiple class action litigation. It's
much easier now to launch class-action suits in Quebec, Ontario and
British Columbia.

Companies that exchange information electronically will need to be sure
their trading partners are Y2K-compliant. System glitches could trigger
severe consequences. However, this kind of monitoring can be complicated
by issues of confidentiality and contractual rights.

In the U.S., more than 100 Y2K lawsuits are already under way and notice
of intention filed on hundreds more. There have even been
recommendations there to create a specialized Y2K court, with powers
similar to bankruptcy courts.

Andre Gervais, past president of the Canadian Bar Association, described
the reach of Y2K legal issues as astonishing. The CBA identified 139
areas of business operations where Y2K legal problems could arise.

It has also been reminding corporate directors and senior executives of
their responsibility to ensure their companies have showed 'due
diligence.'

Canadian corporate and securities law and legislation, such as the Bank
Act, require directors and officers to exercise proper care in
discharging their duties. While the chief executive and senior officers
have to manage the risk, the board is responsible for ensuring they have
done this diligently.

The CBA says companies can reduce risks by managing the Y2K issue as
carefully and as prudently as managing any other threat to the company's
success.

What constitutes due diligence will vary. But the CBA's advice is that
companies should act in accordance with standards and practices regarded
as the norm for their industries, and must be able to prove they have
done this if they do end up in court.

It is most important to document what's been done to prevent system
failures or glitches that result in the production of erroneous
information. The CBA recommends that documents related to Y2K-compliance
be prepared on the assumption they might have to be disclosed in the
courts eventually.

The CBA has been emphasizing the potential for using mediation and
arbitration in dealing with contentious Y2K areas. It recommends this be
specified in contracts with other parties such as suppliers,
distributors and consultants .

The CBA's checklist also includes:

Disclosure

There may be obligations to disclose in financial statements and
securities filings the possibility of Y2K problems. Canadian securities
and corporate law usually requires public disclosure of anything that
could have a material impact on a company's financial condition.

Insurance

The board should review whether existing insurance arrangements are
adequate to protect against Y2K risks. Insurance contracts may also
require prompt notification of potential claims.

As the CBA points out, Y2K legal issues involve all areas of a company's
business, not just software-related contracts. Dealing with these issues
comes down to two critical words: due diligence.
(National Post (formerly The Financial Post) 10-18-1999)


                               *********


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

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