/raid1/www/Hosts/bankrupt/CAR_Public/991124.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Wednesday, November 24, 1999, Vol. 1, No. 206


AMERICAN UNITED: Settles Stockholders' Suit Re Breach of Fiduciary Duty
AUDITORIUM THEATRE: Venue Changed, No Explanation Given; Atty. Sues Co.
BOSCH: Rejects Court Settlement With Nazi-Era Forced Laborers
CHARLES SCHWAB: CA Suit on Online Trading Fraud Must Be Heard in Fed Ct
CPS SYSTEMS: Shalov Stone Files Related Action for TX Securities Suit

CVS CORP: Faces Chain Pharmacies' Suit in Penn. Re Price Discrimination
CVS CORP: Settles Drug Retailers' Suit over Price-Fixing in Illinois
CVS PHARMACY: MA Super. Ct. Oks Consumer Class on Invasion of Privacy
DELTA FINANCIAL: Lowey Dannenberg Files Securities Suit in New York
FMC CORP: Calls Expert to Assert Negligible Effect Of Toxic Gas

FORD MOTOR: Deadlocked Jury Had Fiery Battles over Ignition Problem
LIFE CARE: Illinois AG Sues Clinic for Claiming Cures That Don't Exist
MIAMI UNIVERSITY: Sued for Dropping Three Men's Sports Teams
MICROSOFT CORP: At Least 6 CA Suits Claim Overcharging & Monopoly Power
MICROSOFT CORP: CNN Coverage; Shares up with Olive Branch in Antitrust

MICROSOFT CORP: May Settle Antitrust Suit; Judge Appointed As Mediator
NORTHEAST UTILITIES: Will Defend Vigorously NY Suit Re Proposed Merger
NORTHWEST PERMANENTE: Employee Definition Dispute Remanded To Committee
PLANET HOLLYWOOD: Delaware Suit Seeks to Block Proposed Restructuring
TOBACCO LITIGATION: B & W Announces Denial of Minn. Class for Programs

TOWNE BANCORP: Faces 2 Suits in Ohio Re Offering of Common Stock
U.S.: Aust. Islanders to Sue over Toxic PCBs Left Behind by Army in 60s

* Should a Court Certify Class of Foreign Residents Seeking Damages?
* Uncertainty Expands In Indoor Air Quality Claims


AMERICAN UNITED: Settles Stockholders' Suit Re Breach of Fiduciary Duty
In June 1998 a stockholder class action (the "Class Action") was filed
against American United Global Inc.'s directors alleging breaches of
fiduciary duty and loyalty to the Company and its stockholders in
connection with (i) a letter of credit guarantee by the Company for ERD
Waste Corp. ("ERD"), (ii) the Hutchinson Transaction and (iii) the
delisting of the Company's Common Stock and publicly-traded warrants
from NASDAQ in February 1998. The Company has paid $4,400,000 pursuant
to its guarantee for ERD, which sought protection from creditors under
Chapter 11 of the federal bankruptcy laws on September 30, 1997.

Final judicial approval of a settlement, pursuant to which the company
will pay $2,500,000 (the "Class Payment") to members of the stockholder
class, was received in August 1999. The Class Payment will be in the
amount of $2,500,000 and will be paid in the form of $600,000 in cash
and $1,900,000 in common stock of Western Power & Equipment Corp.
("Western"). The Western common stock is presently owned by the Company
and will be transferred to a segregated fund for the benefit of the
stockholder class. The Company presently owns approximately 60.6% of the
outstanding common stock of Western and, after the Class Payment is made
(and assuming no subsequent ownership changes or transfers) will own
approximately 35% of the Western common stock. The number of shares of
Western common stock to be transferred will be calculated as the
quotient of (i) $1,900,000 divided by (ii) the average closing price of
Western common stock during the ten trading days preceding the final
approval of the settlement of the Class Action. Pursuant to such
calculation 777,414 shares of Western owned by the Company have been
allocated. In addition, two of the officers and directors of the Company
are officers or directors of Western. As a result, the Company will
remain able to materially influence the outcome of votes by the
directors and stockholders of Western on matters before its board of
directors and stockholders.

AUDITORIUM THEATRE: Venue Changed, No Explanation Given; Atty. Sues Co.
When Loop attorney Joseph V. Roddy was forced at the last minute to give
up his plush auditorium seats for kitchen chairs at a club across town
to see a popular Greek folksinger, he was angry. But when he didn't get
an explanation or money back for the difference in his ticket value or
his extra parking fees, Roddy decided to sue.

Last week, he filed suit in Cook County Circuit Court against the
Auditorium Theatre of Roosevelt University, Ticketmaster and Jam
Productions. He is seeking class-action status on behalf of all those
who showed up Nov. 1 to see Nana Mouskouri.

"There's a lot of people that this type of thing happens to that can't
afford a lawyer," Roddy said, adding that someone's got to stand up and
make sure it doesn't happen again.

Part of what irks Roddy is the fact that he paid a premium price -- $ 52
each for six reserved seats in the third row. Roddy says he and his
family showed up at the Auditorium Theatre, 50 E. Congress Pkwy., at
about 7:15 p.m. for the 7:30 p.m. show, only to be given 3-by-5 inch
sheets of paper that said the performance was being moved to the Park
West Theater, 322 W. Armitage Ave.

Roddy and his family hopped in their car, drove for about 20 minutes to
the relocated concert and shelled out a few more bucks for parking. Once
they arrived at the Park West, Roddy learned there was no reserved

He alleges breach of contract.

At the rescheduled performance, the plaintiff and his guests were seated
in six straight-backed chairs approximately 30 rows from the stage,"
Roddy's lawsuit complains. Defendants' breach caused plaintiff to suffer
extreme discomfort and interference with the expectation of the

In addition, the suit maintains defendants failed to honor another
portion of the contract on the back of the ticket, which states that in
the event of cancellation or rescheduling of an event, the ticket holder
is entitled to attend a rescheduled performance of the same event or to
exchange this ticket for a ticket, comparable in price and location, to
another similar event."
However, the last line of the ticket reads: "No refunds. No exchanges.
Event date & time subject to change. All rights reserved." Calls to Jam
Productions and the Auditorium Theatre were not returned. A spokesman
from Ticketmaster said the company had not yet been notified of the suit
and thus declined to comment.

In seeking class-action status, Roddy is asking the court to not only
force the companies to reimburse him for his hardship, but all the
others who were harmed by the alleged breach of contract. Roddy, who is
representing himself, also is seeking attorney fees.

Ticket holders were still walking in after the performance started,
which was about 8:10 p.m., he said.

While Roddy described Mouskouri as a marvelous entertainer" who put on a
good show," he was upset that she never apologized. But he doesn't blame
her. And he didn't name her in the suit.

Though he says he has yet to receive an explanation, Roddy theorized
that the producers didn't sell enough tickets to fill the Auditorium
Theatre and decided to move the show to the smaller, more clubby Park
West to save money. The highest price ticket at the Park West is about $
25, he said. This happens to so many people," he said. The big company
just tries to take advantage of the little person."

The case is Joseph V. Roddy, et al. v. Auditorium Theatre, et al., No.
99 CH 016726. (Chicago Daily Law Bulletin, Nov-22-1999)

BOSCH: Rejects Court Settlement With Nazi-Era Forced Laborers
Bosch automotive supply company declined Tuesday a court's suggestion to
settle a case from two Nazi-era forced laborers seeking compensation,
saying it would trigger an avalanche of similar claims in German courts.
''We're striving for a political solution,'' Bosch lawyer Dieter Berg

The company believes a compensation fund being organized by the
government to settle such claims, which Bosch recently joined, was the
best way to settle German industry's moral obligation to the survivors,
he said.

Talks between the U.S. and German governments, industry officials,
victims' lawyers and representatives from eastern Europe and Israel this
year have yet to reach agreement on the size of the fund, although the
two sides came closer during last week's round in Bonn. German industry
has offered 8 billion marks ( $ 4.2 billion) in exchange for legal
protection against class-action lawsuits, but lawyers representing the
victims are demanding at least 10 billion marks ( $ 5.3 billion).

The slow pace of the talks has come under sharp criticism, especially
considering the advanced age of the survivors. One of the two former
forced laborers who sued Bosch, a 79-year-old Dane, has since died,
according to their lawyer, Marcus Werner. The other is 73. They were
seeking 39,000 marks ( $ 21,000) each.

The court is to rule in the case in January.

Another case, involving four Polish former slave laborers demanding up
to 42,000 marks ( $ 22,000) from Bosch, was to be heard later Tuesday by
the same court. A verdict in a case brought by a 74-year-old Pole
against sportscar maker Porsche was expected. He is demanding 98,500
marks ( $ 52,000) compensation. (AP Worldstream Nov-23-1999)

CHARLES SCHWAB: CA Suit on Online Trading Fraud Must Be Heard in Fed Ct
Ruling on an issue of first impression, a federal judge has found that
fraud claims against Charles Schwab & Co., stemming from alleged
misrepresentations about the capabilities of its online trading system,
must be heard in federal court under the Securities Litigation Uniform
Standards Act of Abada v. Charles Schwab & Co., No. 99-CV-0940 (SD CA,
Aug. 31, 1999).

Plaintiff Aaron Abada filed a class action lawsuit against Schwab,
alleging that the brokerage misrepresented the capabilities of its
online trading system, both in brochures and on its web site.
Specifically, Abada alleged that Schwab delayed execution of one of his
trades by three hours, resulting in his purchase of certain securities
at a significantly higher price than was in effect at the time Abada
placed the order. Abada also alleges he was unable to log on to his
Schwab account during this time.

The suit, filed in California Superior Court, alleged violations of the
California Business and Professions Code, unjust enrichment, negligent
misrepresentation, and fraud. Schwab removed the case to the U.S.
District Court for the Southern District of California, and the
plaintiff moved to remand to state court.

The question for Judge Judith N. Keep was whether Schwab's alleged
misrepresentations were "in connection with" the sale of a "covered
security" under the Uniform Standards Act. The Act was enacted in 1998
to preempt state securities fraud class actions involving the nationwide
sale of securities.

The plaintiff argued that his suit should not be preempted because it is
between a brokerage and its customers, not between an issuer of
securities and the purchasers of those securities. The plaintiff
emphasized that he is not alleging any manipulation of stock prices.

Judge Keep nonetheless concluded the suit is preempted. "In the present
case," she said, "all the misrepresentations Plaintiff alleges that
Defendant Schwab made were regarding the 'characteristics and
capabilities of Schwab trading systems,' particularly the risks involved
in such a trading system. Thus, the alleged misrepresentations were
inherently 'in connection with' the purchase or sale of securities since
the chief purpose of an online trading account is to facilitate the
purchase or sale of securities."

Judge Keep found no case law interpreting the phrase "in connection
with" under the Uniform Standards Act, so she based her ruling on
decisions interpreting that phrase as used in Sec. 10(b) of the
Securities and Exchange Act, and Rule 10(b)-5 thereunder. Those
decisions gave a broad interpretation of the language, which is
consistent with congressional intent in enacting the Uniform Standards
Act, she found. (Corporate Officers and Directors Liability Litigation
Reporter, Vol. 14; No. 24; Pg. 19, Oct-25-1999)

CPS SYSTEMS: Shalov Stone Files Related Action for TX Securities Suit
The Law Firms of Shalov Stone & Bonner and Gilman and Pastor, LLP make
the following announcement on November 19, 1999:

The Law Firms of Shalov Stone & Bonner and Gilman and Pastor, LLP were
previously appointed Lead Counsel for plaintiffs in litigation brought
on behalf of persons who purchased the stock of CPS Systems, Inc. in the
period from March 25, 1998 through and including November 4, 1998 (the
Class Period). Lead Counsel now announce that on November 3, 1999, a
related action on behalf of investors in CPS Systems stock was filed in
the United States District Court for the Northern District of Texas
against Grant Thornton, LLP, alleging violations of Section 11 of the
Securities Act of 1933. This new action is expected to be consolidated
with the prior litigation.

If you purchased shares of CPS Systems stock during the Class Period,
you may seek to be appointed lead plaintiff in the newly filed action
against Grant Thornton, LLP by filing a motion seeking such appointment
with the Court not later than 60 days from the date of this notice. In
order to serve as lead plaintiff, however, you must meet certain legal

If you would like additional information about this action, this notice
or your rights, please contact: Shalov Stone & Bonner (Ralph M. Stone),
276 Fifth Avenue, Suite 704, New York, New York 10001,
Telephone:212-686-8004, email: ralph@lawssb.com or Gilman and Pastor,
LLP (Peter Lagorio), One Boston Place, 28th Floor, Boston, Massachusetts
02108, Telephone: 617-589-3750, email: plagorio@aol.com

CVS CORP: Faces Chain Pharmacies' Suit in Penn. Re Price Discrimination
The lawsuit Rite-Aid Corporation, Et Al. Vs. Abbott Laboratories, Et Al.
was filed by individual chain pharmacies, including Revco D.S., Inc. The
suit was filed in the U.S. District Court for the Middle District of
Pennsylvania in October 1993. The suit alleges unlawful price
discrimination by approximately 15 defendant drug manufacturers and
wholesalers against approximately 17 retail pharmacy operators, in
violation of the Robinson-Patman Act, and also asserts a conspiracy in
violation of the Sherman Act. The relief sought includes unspecified
money damages and injunctive relief. A few settlements have been reached
to date and the case is expected to go to trial by no earlier than the
latter part of 1999.

CVS CORP: Settles Drug Retailers' Suit over Price-Fixing in Illinois
CVS is a party to two lawsuits that have been filed against various
pharmaceutical manufacturers and wholesalers. The first lawsuit, In Re
Brand Name Prescription Drugs Antitrust Litigation, is a class action
that was consolidated in 1994 in the U.S. District Court for the
Northern District of Illinois, Eastern Division. The class plaintiffs of
the suit, approximately 40,000 retail pharmacy operators, allege that
approximately twenty defendant manufacturers and wholesalers conspired
to fix and/or stabiliz the price of the prescription drugs sold to
retail pharmacies in violation of the Sherman Antitrust Act. CVS is a
member of the plaintiff class. The relief sought includes unspecified
money damages and injunctive relief. With respect to this suit,
approximately fifteen defendants have agreed to settlements totaling
$720 million. The class plaintiffs were not able to reach settlements
with the four remaining defendants, namely Forest Laboratories, G.D.
Searle & Co., Johnson & Johnson and Novartis. As a result, a trial on
the claims was commenced in September 1998. The trial resulted in a
directed verdict in favor of the remaining four defendants, which was
entered by the Court on November 30, 1998. With the exception of one
claim, the U.S. Court of Appeals for the Seventh Circuit has affirmed
the directed verdict. The exception was remanded back to the U.S.
District Court for the Northern District of Illinois, Eastern Division
for further proceedings, which have not yet been scheduled.

CVS PHARMACY: MA Super. Ct. Oks Consumer Class on Invasion of Privacy
According to the law firm of Finkelstein & Krinsk, class certification
was granted by Massachusetts Superior Court Judge Raymond J. Brassard in
the ground-breaking class action lawsuit against CVS Pharmacy, Inc., and
certain major pharmaceutical manufacturers.

With this Court certification, the thousands of customers of CVS
Pharmacies in Massachusetts who were subject to the defendants' alleged
wrongdoing are automatically included in the lawsuit, which seeks
injunctive relief and financial recovery for the defendants' conduct.

The lawsuit alleges that defendant CVS, while assuring customers that
the only people who will have access to prescription information are
"you, your CVS pharmacist and your doctor," deceptively collected,
misappropriated and disclosed for its own commercial benefit the
personal and private medical information that its customers had
entrusted to it without prior consent or any other appropriate
authorization. Specifically, plaintiffs allege that CVS used private
customer information in its central database to identify individuals
meeting specified medical profiles in order to target them for a direct
mail marketing program. The program was funded and directed by the
defendant pharmaceutical manufacturers and was designed, amongst other
reasons, to persuade those targeted to use the manufacturer defendants'
drugs. The letters were on CVS letterhead and, to the exclusion of other
competitive and potentially less costly alternatives, only those drugs
manufactured by the manufacturer defendants were recommended by CVS in
this way. To accomplish defendants' purposes, private information was
disclosed to a national database marketing company and a mass mailing
house. Last June, the Court denied defendants' motions for summary

"One scholar has described defendants' scheme as a gross invasion' and a
breach of fundamental medical ethical issues,'" said Arthur L. Shingler,
Esq., counsel for the class. "Such abuses are rampant in the
pharmaceutical industry. Private information is no longer private but
seen only as a means of profit."

For any inquiries, to discuss this lawsuit or the misuse of private
consumer information, contact: Jeffrey R. Krinsk or Arthur L. Shingler
at Finkelstein & Krinsk, 501 West Broadway, Suite 1250, San Diego, CA
92101, or by calling toll free 877-493-536 Fax 619-238-5425 or by e-mail
at fk@class-action-law.com

DELTA FINANCIAL: Lowey Dannenberg Files Securities Suit in New York
The following was released on November 23, 1999 by Lowey Dannenberg
Bemporad & Selinger, P.C.

A class action suit alleging violations of the federal securities laws
has been filed in the United States District Court for the Eastern
District of New York against Delta Financial Corp. (NYSE: DFC) ("Delta"
or the "Company"), certain of its senior officers, and Natwest
Securities, Prudential Securities, and U.S. Bancorp Piper Jaffray (the
"underwriters"), by the law firm of Lowey Dannenberg Bemporad &
Selinger, P.C. ("Lowey Dannenberg"). The case was filed on behalf of all
persons who purchased Delta Financial common stock during the period
October 31, 1996 to August 18, 1999, inclusive (the "Class Period").

The complaint charges Delta, certain Delta officers and directors, and
the underwriters of Delta's initial public offering (the "IPO") with
violations of Sections 11 and 15 of the Securities Act of 1933. In
particular, the complaint alleges that the registration statement and
prospectus issued in connection with the Company's IPO contained false
and misleading statements concerning the Company's questionable and
improper sales practices, allowing the Company to raise over $75,000,000
in proceeds from the IPO. Additionally, the complaint charges Delta and
certain of its officers and directors with violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder.

Plaintiffs are represented by Lowey Dannenberg. If you are a member of
the class described above, you may wish to join the action. You may move
the court to serve as a lead plaintiff no later than sixty days from
November 1, 1999. If you would like a copy of the complaint, or if you
would like to discuss this action, or have any questions concerning this
notice or your rights with respect to this matter, you may contact David
Harrison or Neil Selinger at Lowey Dannenberg Bemporad & Selinger, P.C.,
The Gateway, 11th Floor, One North Lexington Avenue, White Plains, NY
10601-1714, telephone 914-997-0500, telecopier 914-997-0035, or e-mail
at ldbs@westnet.com

FMC CORP: Calls Expert to Assert Negligible Effect Of Toxic Gas
Defense lawyers for FMC Corp. are asking that a jury hold their client
responsible for the effects of a chemical leak from the company's Nitro
plant in 1995. FMC lawyers say those effects, though, are negligible at
worst. They called an expert witness to the stand on November 18 to
prove that point.

After about a week of plaintiffs' evidence in the case, FMC's lawyers
took over last Wednesday and began their attempt to convince the six
jurors in the trial that the chemical maker did everything it could to
prevent and contain the leak of hydrochloric acid from its plant. More
important to the defense case, however, is the assertion that the cloud
of toxic gas was limited in scope and size. FMC maintains the leak
didn't seriously affect the hundreds of people who joined the class
action suit, seeking money for a wide range of ills and inconveniences
they allegedly suffered because of the leak.

Taking the stand were several FMC employees who were at the plant at the
time of the Dec. 5, 1995, leak. Jim Snodgrass, who appeared in the
initial trial of the case last year as a plaintiffs' witness, took the
stand for his employer this time. The case is being tried again because
Chief U.S. District Judge Charles Haden tossed out a jury verdict from
last year that awarded the plaintiffs $ 38.8 million in damages. Haden
ruled that plaintiff lawyers, led by former state Supreme Court Justice
Richard Neely, had tried to sneak in a last-minute expert witness at a
point in the trial when the defense couldn't refute his evidence.

Snodgrass was one of three FMC workers in the control room at the
chemical reactor where the leak occurred. He described the shape, size
and extent of the leak and the steps he and his co-workers followed
after the gas plume had escaped. Sherry Robinson, working alongside
Snodgrass at the time, offered similar, but more detailed, testimony.
She said the leak, which initially came out in a liquid form, flowed
down a plant access road where it was stopped by sodium bicarbonate she
and other workers put down to absorb the spill. "There was a slight
white cloud that was coming right off the top as it (the liquid) was
coming down the road. Like steam or vapors," Robinson said. She and
others maintain the southerly progress of the leak and fumes were
limited and that the only progress of the gas cloud was to the north.

Defense lawyers called an expert witness to the stand on November 18 who
they hope will buttress the eyewitness accounts of Robinson, Snodgrass
and others. Tony Eggleston, a certified environmental scientist, played
a key role in last year's original trial and promises to do so again.
His specialty, dispersion modeling, lies at the heart of FMC's claim
that the ill effects of the release were limited. Using complex
mathematical and computer models of the air space around FMC's plant,
Eggleston said he can determine not only the density and breadth, but
also the movement of the leak. Eggleston's testimony was expected to
last through much of November 18 and perhaps on into the next day.
Defense lawyers are using the scientist as a conduit to bring several
pieces of evidence into the trial. (Charleston Daily Mail, Nov-18-1999)

FORD MOTOR: Deadlocked Jury Had Fiery Battles over Ignition Problem
A jury trying to decide the fate of a $ 3 billion class-action lawsuit
against Ford Motor Co. often got into heated debates that escalated into
shouting matches, a juror said. "People were frustrated. Voices were
being raised and . .  we had to take frequent breaks to cool off," said
juror Allen Blanson, 30, of Oakland. "I think it was partly because of
the fact that we were cooped up in one place for so long."

Blanson was among 12 jurors who failed to arrive at a verdict after 12
days of deliberations on whether the automaker deliberately concealed an
ignition module problem that made millions of Ford cars prone to
dangerous stalling.

Alameda County Superior Court Judge Michael Ballachey declared a
mistrial and dismissed the jury.

The trial began in May with the jury hearing about five months of
testimony. The panel began deliberating on Oct. 27. The jurors took a
week off and in the following week they sent a note to Ballachey saying
that they were hopelessly deadlocked and asked to be dismissed. The
judge instructed them to continue deliberating.

                       Questions unresolved

Last Thursday, the jury again told the judge that coming up with even
the required minimum 9-3 vote on two key questions would be impossible.
The judge told the jury, "No mas. . . . All I can say is thanks. Now,
you can go back to your lives."

The jury was deadlocked at 7-5 and 8-4, both in favor of the plaintiffs,
on the two main questions, whether Ford had claimed its products had
characteristics they lacked and whether the automaker had falsely stated
its products were a particular standard, quality or grade.

"Before the trial started, I was kind of leaning toward Ford, but as
more and more of the evidence came out, to me, it was just obvious that
they were guilty," said Blanson. But Blanson couldn't convince enough of
his fellow jurors to see things his way.

The Ford part in question was the thick film ignition, or TFI module
that ultimately causes the spark plugs to ignite the air-fuel mixture in
the engine cylinders. Ford mounted the unit on the distributor, one of
the hottest places under the hood, in all 1983 to 1987 cars and light
trucks, and in some other vehicles up to 1995.

                         Malicious Intent?

The lawsuit charges that the automaker knew no later than 1985 that
distributor-mounted TFI would fail due to excessive heat, resulting in
possible stalls or loss of control.

Plaintiff's attorney Jeff Fazio said he was disappointed by the hung
jury and vowed to retry the case. "I think the (new) case will be more
succinct, abbreviated, to the point," he said. "The difficulty the first
time was having millions of pages of evidence, depositions . . . and
really trying to figure out what's the most important evidence out of
all of that, while we're conducting a trial."

Ford attorney Don Laugh said he wasn't sure whether he would change his
strategy in the retrial. "I think it's way too soon for that kind of
. . . quarterbacking," he said. "Facts on our side were pretty
straightforward and pretty compelling. I don't think there's a whole lot
of reason to rethink that."

The retrial date will be set after the second phase of the current
trial, which will be heard without a jury and decided by Ballachey. In
the second phase, the judge will decide whether Ford violated the
state's unfair competition law by profiting on a faulty product. The
judge could potentially award up to $ 900 million to the plaintiffs in
that portion of the case. Fazio said he'll bring three additional
witnesses starting Dec. 1 for that part of the trial.

Reaction from observers ranging from consumer groups to industry
representatives were mixed on the mistrial.

                       Good Sign For Plaintiffs

The fact that the majority of the jury sided with the consumers is a
good sign for the plaintiffs, said Clarence Ditlow, director of the
Center for Auto Safety, a Washington, D.C., nonprofit group started in
the 1970s by Ralph Nader. "This is truly bad news for Ford. The only
good decision for Ford would have been an acquittal," Ditlow said.

Furthermore, now that this case is over, it allows five other similar
cases to go forward in other parts of the country, he said.

Similar lawsuits have been pending in Alabama, Illinois, Maryland,
Tennessee and Washington state.

The president of a Sacramento-based lobby group that represents
manufacturers, said the jury's inability to convict Ford is a sign that
the lawsuit was based on flimsy allegations. "You had a lack of
injuries. You had suppositions about parts that might fail. This isn't
the kind of stuff that an ordinary person looks at and concludes that
someone had done something wrong," said John H. Sullivan, president of
Civil Justice Association of California. (The San Francisco Examiner

LIFE CARE: Illinois AG Sues Clinic for Claiming Cures That Don't Exist
For six years, Jim Meyers had been deteriorating from amyotrophic
lateral sclerosis, the neurological disorder more commonly known as Lou
Gehrig's Disease. So in June, when he and his family heard about the
development of a possible cure--at the Life Care Systems health clinic
in Aurora, just six blocks from their Montgomery home--they couldn't
wait to schedule an appointment.
"We were in such a desperate state of mind," said Janet Meyers, Jim's
wife. "They're promising . . . that my husband was going to walk and do
everything that he did before. It makes you feel so wonderful, so
excited, hopeful."

Several months--and appointments at Life Care--later, the disheartened
family has yet to even receive the results of their first test. The
Meyers, both 64, are now among the plaintiffs in a lawsuit filed last
week by Illinois Atty. Gen. Jim Ryan in Cook County Circuit Court.

The state is accusing Life Care; its research arm, GenSys Inc.; and the
company's owners, Stephen Wechter and John Peterson of violating the
Illinois Consumer Fraud and Deceptive Business Practice Act.
Specifically, the suit accuses Wechter and Peterson of "gross
misrepresentations" for claiming to have found the cure for several
degenerative disorders, including multiple sclerosis, Lyme disease and
rheumatoid arthritis, as well as Lou Gehrig's Disease. The lawsuit also
says that Wechter and Peterson promised patients that they would be
cured or their conditions would improve drastically within two years.

A class-action lawsuit also was filed last week in Cook County on behalf
of Karen Paladino, a Roselle woman whose daughter, Lynette Tunzi, 31,
has multiple sclerosis and was treated at Life Care. The suit raises
claims similar to those in the attorney general's suit. "When you suffer
from something as disabling as MS, and someone gives you hope for life,
you grasp at it as quick as you can," said Robert Clifford, Paladino's
lawyer. "What (Wechter and Peterson) did was advertise a cure for MS
which doesn't exist. "They are snake-oil peddlers of the worst kind."
Wechter and Peterson did not respond to repeated requests for

In August, the U.S. Department of Health and Human Services suspended
Life Care's operation, citing deficiencies that jeopardized the health
of patients. Doctors who have worked with Wechter have accused him of
making similar claims to patients in the Houston and Clearwater, Fla.,

In June 1998, when Life Care was set to open in Aurora, local newspapers
quoted Wechter and Peterson as saying they had found the cause of
multiple sclerosis and rheumatoid arthritis: a bacteria that flourishes
in municipal water supplies. Furthermore, the two said they had linked
the cause with successful treatment methods that only they knew about.
"We have answers nobody else has," Peterson said at the time. Peterson
is an Elburn trustee and is president of ChemPete Inc., a company in

References in medical literature to the theory they espouse--based on
what are called "spirochete bacteria"--date back to the early 1900s. But
the theories have never been proven, doctors and MS experts said.

Currently, there is no known cure or cause for any of the diseases the
two treat, according to a spokeswoman for the Multiple Sclerosis
Association of America, in Cherry Hill, N.J.

Steven Ayre, a doctor from north suburban Wildwood who worked at Life
Care from July through October, said: "Patients were uniformly told that
they would be cured, that they would walk again. (Wechter and Peterson)
printed up literature that said they were the only ones that had a cure.
Period." Approximately 2,100 patients, the majority of them with MS,
were seen by Life Care since it opened, Ayre said.

The attorney general's suit also accuses Life Care of scamming clients
out of thousands of dollars. The Meyers said they had questions about
how they were billed. In one instance, they said, they paid $350 for a
10-minute appointment with a Geneva psychologist. The session amounted
to Janet Meyers reading a questionnaire to her husband, without a
psychologist present. Ayre said of Wechter: "His motivation is a
mystery, but the fact is he did hurt people, he did lie to people, and
he did cause people to give money for things he had no business asking
for." (Chicago Tribune Nov-22-1999)

MIAMI UNIVERSITY: Sued for Dropping Three Men's Sports Teams
Male athletes sued Miami University last Thursday for dropping three
mens' sports teams, claiming the college discriminated against them as
it tried to comply with a federal law that requires equality in men's
and women's sports.

The former wrestlers, tennis and soccer players contended that by
eliminating their teams to satisfy NCAA gender quotas, the university
violated sex discrimination provisions of Title IX, the federal program
designed to increase the number of women playing sports.
``Prohibiting men from participating in athletics simply because they
are men is sex discrimination, and that violates the equal protection
clause of the Constitution,'' said Curt Levey, spokesman for the
Washington-based Center for Individual Rights. The center, a nonprofit
group that also opposes affirmative action, is representing the athletes
without charge.

The suit, filed in U.S. District Court, accuses Miami University, its
president, trustees and athletic director of civil rights violations. It
asks the court to order Miami to reinstate the three sports teams and to
pay team members unspecified damages.

Plaintiffs are the Miami wrestling, soccer and tennis teams, and nine
athletes.  One athlete, Mario Contardi of Cincinnati, said he had
several offers to play collegiate tennis but chose Miami, only to have
to transfer to Virginia when the Miami program was eliminated. ``I want
to correct an injustice that has been done,'' Contardi said.

Miami trustees voted in April to eliminate men's soccer, tennis and
wrestling but allowed golf to continue as a varsity sport because of
money promised by supporters. Wrestling, tennis and soccer could have
stayed as well if supporters of those sports had been able to raise $13

The administration said Miami could not remain competitive in 22 sports
and still meet Title IX requirements of equity between men's and women's
programs. University president James Garland said Miami had only two
choices - cut the amount of money spent on men's sports or spend more
money on women's sports - and it had no more money in its budget for
sports.  University spokesman Rich Little declined to comment on the
lawsuit. (Cincinnati (AP)  Nov-18-1999)

MICROSOFT CORP: At Least 6 CA Suits Claim Overcharging & Monopoly Power
Another class-action suit was filed Monday in California against
Microsoft Corp., as part of a building wave of consumer lawsuits
following U.S. District Judge Thomas Penfield Jackson's finding of fact
that Microsoft is a predatory monopoly.

At least six class-action suits have been filed in the last 10 months in
California alone, all claiming that the software giant split, used its
monopoly power to overcharge consumers for its Windows 95 and 98
computer operating systems, according to attorneys.

The latest suit was filed Monday in San Francisco Superior Court by
lawyers Terry Gross and Francis Scarpulla of San Francisco and Timothy
Cohelan and Daniel Mogin of San Diego. The suit was filed on behalf of
plaintiffs Lilian Lea, a tax specialist, and Tortola Restaurants, a
small chain in San Francisco, Mogin said. The attorneys are seeking to
expand the list of plaintiffs to include all consumers in California who
purchased Windows 95 or 98, Mogin said. The case follows a similar
class-action filing on Nov. 15 in Orange County. "People are trying to
jump on the anti-Microsoft bandwagon," said Eugene Volokh, a professor
of Internet law at UCLA. "But you have to remember that Microsoft is a
very heavy body and it's going to be hard to move."

None of the suits list specific damages, but they do ask for triple
damages if they are successful--a feature that could drive the awards
into the hundreds of millions of dollars. Microsoft spokesman Tom Pilla
called the suits "baseless."

The threat of numerous class-action suits across the country creates a
greater incentive for Microsoft to settle the government's antitrust
case, because a deal could prevent Jackson's findings from being used in
other cases.

But Alan M. Mansfield, the attorney with Milberg Weiss Bershad Hynes &
Lerach who filed the Orange County suit, said he intends to continue
with his case even if Microsoft settles its federal antitrust case.

Pilla said these consumer suits make no sense because Microsoft's
Windows operating system is priced below those of most competitors. He
said the price to upgrade Windows is now $ 89, compared with $ 149 for
IBM's OS/2 and $ 99 for Apple Computer's Mac OS.

The six California class-action lawsuits have been brought under the
state's antitrust laws. California is one of 18 states that diverge from
federal practice and give consumers the right to sue a manufacturer for
overcharging them, even though a product was obtained from a retail
store or other third party. Many consumers receive Microsoft's Windows
programs because they are bundled into new personal computers.

Jackson's finding of fact on Nov. 5 has given new impetus to the
consumer suits because of the firmness of his belief that Microsoft is a
monopolist that had stifled competition. "The findings clearly establish
the credibility of the claim," Mansfield said.

But USC law professor W. David Slawson said the findings cannot be used
in a private lawsuit until the judge issues a final decision that
Microsoft violated the law or if Microsoft pleads guilty.

Ronald A. Cass, a onetime Microsoft consultant who is dean of Boston
University School of Law, said these consumer suits do not necessarily
portend a repeat of the massive litigation that engulfed the tobacco
industry in recent years. "My sense is that there was a lot of public
sympathy for the tobacco litigation," Cass said. "Here, it's hard to see
that, because there is not a real public sense of having been abused,
hurt or damaged by Microsoft."

Microsoft shares surged $ 3.81 to $ 89.81 in Nasdaq trading Monday. Late
last Friday, Jackson appointed a mediator to try to reach a settlement
in the antitrust case. The Microsoft case judge called discord among
lawyers "disturbing." (Los Angeles Times Nov-23-1999)

According to St. Louis Post-Dispatch of November 23, 1999, at least
seven suits, including one filed Monday in a state court in San
Francisco, have been filed on behalf of computer users in response to a
judge's Nov. 5 finding that Microsoft is a software monopolist that
routinely bullies high-tech rivals. The finding provided grist for
allegations by computer users that Microsoft's monopoly gave it
substantial leeway to overcharge for its Windows software program.

Microsoft is viewed as rich enough and legally savvy enough to weather a
continued onslaught of private actions, which may be consolidated anyway
into a federal suit. Among the world's most profitable companies,
Microsoft is sitting on a cash hoard of about $ 19 billion and has no

But legal experts say the state and federal lawsuits, filed so far in
Alabama, California, Louisiana and New York, could create a short-term
coordination challenge at Microsoft as it tries to ensure its legal
arguments and trial maneuvers are consistent across different

Moreover, the suits are likely to reinforce pressure on the software
giant to reach an out-of-court settlement with the Justice Department,
particularly after the judge in the trial appointed a mediator last
Friday to oversee voluntary negotiations. A settlement would make it far
more difficult for private plaintiffs to use the judge's findings to
build a foundation for a case against Microsoft.

So far, consumers have filed three cases in San Francisco; one in Orange
County, Calif.; and one each in New York; New Orleans and Birmingham,
Ala. They all seek class-action status, potentially on behalf of
millions of consumers. The suits in Alabama and Louisiana are federal
cases, while the ones in New York and California are in state courts.
New York and California are among more than a dozen states that make it
easier for consumers to sue for allegedly overcharging for products.

Regardless of the eventual outcome of the antitrust case, the broadened
legal assault could compel Microsoft to tone down its aggressive
behavior in the computer industry.

MICROSOFT CORP: CNN Coverage; Shares up with Olive Branch in Antitrust
Broadcast November 23, 1999 on Cable News Network

Transcript # 99112305V62

Wall Street is giving a thumbs up to the latest comments from Judge
Thomas Penfield Jackson, shares of Microsoft up a fraction in
after-hours trading. The judge is pressing for a settlement in the case.

    * DEBORAH MARCHINI, CNN ANCHOR: This as a federal judge presses
Microsoft and the Justice Department to find a peaceful resolution.

For some insight, we're rejoined by our technology expert Sasha Salama.

    * SASHA SALAMA, CNN CORRESPONDENT: Good morning, folks.

And so far, Wall Street giving a thumbs up to the latest comments from
Judge Thomas Penfield Jackson, shares of Microsoft up a fraction in
after-hours trading. The news today is that the judge in the case is
pressing for mediation, a settlement in this case, saying the time is
right. The worry seems to be that the 19 states and the Justice
Department, who brought the charges initially, will come to different
conclusions about what to do with Microsoft, and the federal judge is
trying to lesson the possibility of that and bring about a speedy

You may remember, on November 5th, the judge did rule that Microsoft is
a monopolist that hurt consumers and stifled competition. Some possible
remedies with Microsoft is and out-and-out breakup of the company.
Analysts saying that is the least likely resolution at this point.

Another possibility is to force Microsoft to change its behavior, either
to put other competitors' software in with the Windows package or to let
competitors sell their own version of Windows software. Those are
looking more likely, say analysts, than a breakup of the company.

So far, the news of the class-action lawsuits coming from California
really not putting a damper on investor enthusiasm about the possibility
of a settlement in this case. Basically, analysts are also saying that
the guy who was appointed as the mediator here, Richard Posner, a very
highly respected court appeals judge, is likely to be more favorable to
Microsoft, and that is seen as a plus as well.

The stock really rallied yesterday. It was the most active issue on the
Nasdaq; of course, it's also in the Dow 30 now. It was up nearly 4 to
just under $90 a share. DEFTERIOS: Big guy: Judge Posner.

    * SALAMA: That's right.

    * DEFTERIOS: Thanks a lot, Sasha.

Transcript # 99112303V62 Class-Action Unlikely in Europe

    * DEBORAH MARCHINI, CNN ANCHOR: As we've been reporting, a federal
judge is pressing Microsoft and the Justice Department to settle the
antitrust case, and investors seem to like the prospects for a

    * JOHN DEFTERIOS, CNN ANCHOR: For how this is playing across the
pond, as they say, we're joined by Richard Lambert. He's the editor, of
course, of the "FT."

And Richard, let's start on Microsoft here and the chance of legal
action across the pond. Is there a possibility? What's the angle you're

    * RICHARD LAMBERT, "FINANCIAL TIMES": Well, we don't think -- we
don't understand class actions here in Europe, we think they're
basically nuts, and, so, I don't think there's any realistic possibility
of us kind of doing a California here, and I don't think there's any
possibility of Microsoft rolling over in front of it like Toshiba did.

No, I think with -- we were impressed and excited by the announcement
last Friday of this mediator, who's a serious heavyweight person, and
that does seem to improve, as you say, John, the chances of a settlement

We're also asking: Well, what happens if they don't get a deal? We're
running a piece in tonight's paper -- we're planning at this stage
anyway, to run a piece in tonight's paper -- which would say, well, even
if they don't get a deal and there's a breakup, that actually might
itself be quite good for Microsoft's stockholders because it would kind
of release the energies within the various components of the business
and get it all charging forward. So it looks a bit like, kind of like,
heads you win, and tails I lose, or that is the wrong way around, you
know what I mean.

    * MARCHINI: That's -- we definitely know what you mean. There are a
few people here, by the way, who think class actions are crazy, too.

    * DEFTERIOS: I'm from California, so be careful with all these
(INAUDIBLE) you guys.

    * MARCHINI: OK, I'll watch it.

Transcript # 99112306FN-l01 Analysis of Microsoft

    * JOHN DEFTERIOS, CNN ANCHOR: The appointment of a mediator in the
government's antitrust suit against Microsoft has renewed hopes of a
speedy settlement in the case.

    * DEBORAH MARCHINI, CNN ANCHOR: And there is word today the judge
who presides over the case is now saying it's a good time for both sides
to reach a negotiated settlement.

Kevin Arquit is a partner at Rogers & Wells in New York, and he joins us
with a look at what the latest legal developments mean for Microsoft.

And Kevin, clearly Microsoft has a tremendous amount that potentially it
could lose. Let's look at some of the potential damage as the results of
this lawsuit being filed in California.

    * KEVIN ARQUIT, ROGERS & WELLS: The lawsuit in California is on
behalf of consumers. And Judge Jackson suggested that the overcharge for
the upgrade to Windows 98 could have been $50 or more. And so,
presumably what these plaintiff's lawyers are going to say is that
consumers paid that much more, times the number of consumers, that's one
element of damages, and under the antitrust laws you're allowed to
triple the amount in terms of your recovery.

In terms of other cases that could be brought, the direct purchasers,
the computer manufacturers, might seek to bring a case in federal court.
They would be entitled to treble damages. And also those whose
technology was the victim of Microsoft's exclusionary conduct could
bring a case for their lost profits, again treble damages there.

Now courts are supposed to try to apportion all of this, but it's a very
messy process, and the -- and there is a lot of potential exposure to

    * MARCHINI: It's a wealthy company, we could really see a feeding

    * ARQUIT: Certainly in terms of the plaintiff's class-action lawyers
we see that. And this isn't all that unusual. Whenever the government
takes a significant antitrust action you often see plaintiff's
class-action lawyer riding comfortably in the wake behind the government

    * DEFTERIOS: It's very interesting because Judge Penfield-Jackson
was very detailed in his report and analysis of the case. It doesn't
give Judge Posner, who's been appointed here, a lot of wiggle room. Does
it mean that the original analysis of this is likely to stick all the
way through?

    * ARQUIT: Well, any findings of fact by a district court judge are
entitled to a great deal of respect at the court of appeals. The court
would have to find that the findings were clearly erroneous, pretty
tough standard.

Presumably, what judge Posner does is to take these facts as a given,
and then sits down and tries to jaw-bone with the parties to find some
kind of negotiated result that's consistent with the facts as found by
this judge.

    * DEFTERIOS: What I find interesting is the stock rallied almost
four bucks yesterday. Is Wall Street not taking into account what you're
saying about the piling on here of the states and the treble damages?

    * ARQUIT: Well, I think that certainly Microsoft has taken this into
account for a long time, anybody that gets involved in one of these
types of litigations with the government knows that this is a follow-on.
And I think that the idea of certainty, the idea that this might come to
an end has to be something that investors and everyone else likes, and
that could be a reason why you see this movement in the stock.

    * MARCHINI: The pressure on Microsoft clearly is immense to settle,
would that be your expectation?

    * ARQUIT: I think the pressure is immense because, under our legal
system, people are entitled to one day in court but not two. And so if
you have facts found against you in a litigation, they bind you in other
litigations, even if it's brought by other parties. And so with these
findings of fact out there, if they stick, Microsoft really has to worry
about that.

    * MARCHINI: The question is: if they stick. For these findings of
fact to be useful, the judge also has to render a verdict that Microsoft
violated antitrust laws; is that correct?

    * ARQUIT: Well, that may or may not be true. There are some courts
that say that findings of facts, once made, even if withdrawn, are
binding because the issue is whether the litigant had a full and fair
opportunity. And if you think that Microsoft had its day in court here,
there is that risk. But the law goes both ways on that, and certainly
there is plenty of other authority that says you've got to wait until
it's a final judgment.

    * DEFTERIOS: This is fascinating material. In fact, we've never even
asked you what did you think of the case? Do you think it's actually a
solid case against Microsoft? Is it really violating antitrust laws in
your view?

    * ARQUIT: Yes, it's a 207-page dense opinion, and it gives not just
reasons for certain conclusions, but back-up reasons and back-up
reasons. It's all real belt and suspenders approach.

    * MARCHINI: Kevin Arquit, Rodgers & Wells, and we know you've seen
at least a few of these. Thanks so much for sharing your expertise with
us today.

    * DEFTERIOS: Thanks a lot.

Transcript # 99112310FN-l02 Microsoft Focus

    * SASHA SALAMA, CNNfn ANCHOR, BEFORE HOURS: Joining us now with his
assessment on the latest developments case is Tim Race. He is the editor
of the information industries section with The New York Times that we
see every Monday in that fine newspaper. Welcome.

    * TIM RACE, THE NEW YORK TIMES: Thank you.

    * SALAMA: Thank you for joining us.

    * RACE: Thanks.

    * SALAMA: What do you make of the fact that Judge Jackson is really
trying to get a settlement sooner rather than later? What is your take
on that?

    * RACE: Well, first of all, let me say that I am not as smart or
rich a man as Bill Gates, so I hate to try to put myself inside his head
or checkbook. But I think what is happening now is with the recent
findings of fact by Judge Jackson that came down very squarely would
seem on the side of the government a case, finding that Microsoft is a
monopolist and finding that it acted in a way that was anti-competitive
stifling competition and harming consumers. It sort of puts much more
pressure than perhaps in the past on Microsoft to settle. With the
appointment of Judge Posner, who is a respected antitrust expert as well
as a respected appellate judge, in the role of mediator, I think
Microsoft now has perhaps the means for a settlement that didn't exist
in the past. And the steady cadence and drumbeat of these civil private
class action suits in various states certainly adds more urgency to the

    * SALAMA: Let's talk about those class action suits coming from
California yesterday. Not much reaction on Wall Street-- negative
reaction to this. But this is could really open the floodgates to many
more class action lawsuit around the country, couldn't it?

    * RACE: Well, it seems that it could and it's likely to litigation
attorneys being what they are. I think the reason we have not seen much
reaction on Wall Street is because in many ways what is at stake here
for Microsoft in terms of these kinds of suits is not a financial
problem. Microsoft has I think $19 billion in cash on hand. Probably the
extent of any kind of settlement of this magnitude might be several
billions of dollars I've read. So Microsoft can weather the financial
storm of this. The question and the issue all along I think has been the
opportunity cost in terms of technology both for Microsoft and for the
rest of the industry. That is what this issue and this case is really
about. Microsoft has to face the specter perhaps of litigation and
appeals dragging out for years. It could become another tobacco
litigation kind of situation. And that is probably not in the interest
of the company to be distracted that long.

    * SALAMA: So, it's sounds like what are you saying is with Judge
Jackson putting the pressure on to settle and with the appointment of
Posner that that may force Microsoft hand more than ever to actually
settlement when it may be was not so inclined to do so before.

    * RACE: Well, it puts more pressure and more urgency, but the
urgency in this case has always been more of the steady forward march of
technology to the extent Microsoft gets distracted, technology's moving
at such a rapid pace. Microsoft's perhaps bigger risk is to take its eye
off the ball and that is what Bill Gates has said all along that they
are only as good as their next upgrade.

    * SALAMA: So that is really what we need to pay attention to in as
the time table unfolds here.

    * RACE: I think so. And we have to keep in mind too I think that the
two sides are very far apart still. Bill Gates has the said that he
wants to be pragmatic, but that he is opposed to anything that would
force him to add to or take things out of Microsoft's Windows operating
system. The states and the Federal government on the other hand are
looking for I think fairly drastic remedies or at least something that
will level the playing field.

    * SALAMA: Possibly to force Microsoft to add another competitor's
program to their Windows programs.

    * RACE: Right. Which is apparently an athema to Bill Gates.

    * SALAMA: Thank you for your analysis, Tim Race editor of
information industry section of The New York Times.

MICROSOFT CORP: May Settle Antitrust Suit; Judge Appointed As Mediator
Microsoft shares surged nearly 5pc on November 22 as hopes of a
settlement of its landmark anti-trust trial overshadowed a class action
lawsuit lodged against the company. Three lawyers filed a class action
lawsuit in San Francisco claiming that Microsoft used its monopoly power
to overcharge millions of Californians for Windows 95 and 98. The case
could prompt hundreds of others, particularly if the second round of the
anti-trust trial ends, as expected, in a ruling early next year that
Microsoft has violated anti-trust laws.

However, Microsoft shares rose 4.8pc in early trading as traders reacted
to the appointment late last Friday of Judge Richard Posner as a
mediator. The shares closed up $313 16 at $89 13 16 .

Microsoft chairman Bill Gates has said he wants to settle the case and,
while substantial differences with the American government remain, trial
judge Thomas Penfield Jackson's findings of fact earlier this month have
increased pressure on Microsoft to find a solution.

Judge Jackson's findings that Microsoft uses its "prodigious market
power" to harm "any firm that could intensify competition" will lead to
pressure to break-up Microsoft if next year's ruling goes against the

In the meantime, the Californian lawyers are attempting to use the
findings as a basis for their lawsuit. However, findings of fact are not
normally admissible as evidence in private lawsuits and Judge Jackson
did not say when Microsoft became a monopoly, making it difficult to
prove when customers were disadvantaged. (The Daily Telegraph(London)

NORTHEAST UTILITIES: Will Defend Vigorously NY Suit Re Proposed Merger
On October 13, 1999, a Northeast Utilities System shareholder class
action complaint was filed in New York Supreme Court for the County of
New York. An additional class action complaint was filed with the same
court on October 18, 1999. The complaints name as defendants NU and ten
individual Trustees of NU.

The complaints allege that the defendant Trustees of NU breached their
duties to NU's shareholders by agreeing to be acquired by Consolidated
Edison without fully considering other possible offers for NU. The
plaintiffs seek equitable relief, including an order that NU consider
other offers for NU. The plaintiffs also seek to recover costs and
attorneys' fees incurred in this action. NU intends to vigorously oppose
the complaints.

NORTHWEST PERMANENTE: Employee Definition Dispute Remanded To Committee
Although a company may define its employees as "workers who receive W-2
forms," the company's pension plan cannot rely solely on that wording in
plan language and must arrive at its own definition through a common law
test, a federal judge in Oregon has ruled. Hensley v. Northwest
Permanente Retirement Plan et al., No. 96-CV-1166 (D OR, Aug. 12, 1999).

The ruling by Magistrate Judge Janice M. Stewart sends a dispute
involving Northwest Permanente PC retirement benefits back to the plan
committees overseeing the Northwest Permanente Retirement Plan and the
Permanente Physicians Retirement Plan.

"To define an employee as one who receives a W-2 form simply based on
past practice is an unwarranted abdication to the employer of the plan
administrator's responsibility," Judge Stewart said.


In 1997, Sandra Hensley and several other physician and nurse assistants
filed a class action alleging that Northwest Permanente had illegally
barred them from participating in the company's pension plans. The suit
sought a declaratory judgment finding them to be employees and an
injunction baring the plans from discriminating against their

The Northwest Permanente plan committees responded with a motion for
summary judgment, arguing for dismissal on grounds their decision
denying enrollment had not been arbitrary or capricious.

The committees argued that the plans' language limited participants to
Northwest Permanente employees, and the company recognized only those
workers who received W-2 forms as employees. Since Hensley and her
colleagues were cl assified by the company as independent contractors or
subcontractors and did not receive W2-forms, the plan committees said
the enrollments had been properly denied based on the wording of the

                            The Opinion

Judge Stewart rejected Northwest Permanente's argument that Ninth
Circuit case law gives deference to pension plan committees in applying
the term " employee" to plan participants. She said the cases cited --
Spicer v. United States (1990) and Professional Exec. Leasing Inc. v.
Commissioner of Internal Revenue (1988) -- recognized the authority of
plan committees to set their own definition of "employee," but only
under the correct legal standard.

That standard, Judge Stewart said, was a common law test for employee
status set forth in Nationwide Mutual Ins. Co. v. Darden (U.S., 1992).
The test takes in a number of factors including the amount of control
the employer exercises over the workers in question.

"The Committees, not Northwest Permanente (NWP), must determine whether
plaintiffs are 'employees' of NWP by applying the correct legal
standard. Because the plans did not expressly define the term 'employee'
as one who receives a W-2 form from NWP, the Committees should have
applied the common law definition of 'employee' in Darden. By failing to
do so, the Committees abused their discretion," the judge concluded.

In her ruling and remand order, Judge Stewart said it was up to the plan
committees to arrive at the correct legal definition of "employee" using
Darden and any other additional evidence that may come to light.
(Employment Litigation Reporter, Vol. 13; No. 23; Pg. 11, Oct-12-1999)

PLANET HOLLYWOOD: Delaware Suit Seeks to Block Proposed Restructuring
Bonnie Falkenberg, Et Al. Vs. Phi And Its Board Members

This action was commenced in the Delaware Chancery Court in August, 1999
immediately following the announcement by Planet Hollywood International
Inc.of its settlement agreement with the Holders of its Old Senior
Subordinated Notes, and the potential elimination of Old Common Stock
interests. It purports to be a class action on behalf of shareholders
(no class has been certified, however) which seeks injunctive relief
blocking the proposed restructuring. The complaint was neither served
nor prosecuted prior to the Petition Date. The Debtors have filed a
Motion to dismiss for lack of subject matter and personal jurisdiction,
insufficiency of process and failure to state a claim.

TOBACCO LITIGATION: B & W Announces Denial of Minn. Class for Programs
Brown & Williamson Tobacco Corporation issued the following statement on
November 23, 1999 regarding a federal court ruling in Minnesota denying
class certification in a suit by Minnesota smokers who seek to
participate in smoking cessation or medical monitoring programs:

"The trial court's decision continues the trend of no federal court
certifying a class action in a smoking and health case. It is yet
another demonstration that illustrates smoking and health lawsuits
should not be treated as class actions. "In this case, Federal District
Judge Paul A. Magnuson rejected the plaintiffs' application for class
certification stating that 'the plaintiffs' complaint is riddled with
individual questions that predominate over questions common to the
class.' For example, Judge Magnuson noted that to recover, 'each
plaintiff must establish an addiction to cigarettes. With a class of
approximately 700,000 individuals, the assessment necessary to make such
a finding would be impracticable and unmanageable and would certainly
predominate over questions common to the class.'

"This federal court opinion mirrors Brown & Williamson's position that
the facts involving each individual's smoking and health experiences are
unique and should be treated as such."

The case dismissed by the Minnesota court was Janet Thompson, et al. v.
American Tobacco Company, Inc. et al.

Brown & Williamson Tobacco Corporation is headquartered in Louisville,
Ky. The company's major brands include KOOL, LUCKY STRIKE, CARLTON,

TOWNE BANCORP: Faces 2 Suits in Ohio Re Offering of Common Stock
Two class action lawsuits, filed in the U.S. District Court for the
Northern District of Ohio, Western Division, exist against the Company,
its directors, its corporate stock transfer agent, and (in one suit) its
Directors' and Officers' insurer. The suits allege violation of various
Federal and State laws in connection with the Company's offering of
common stock. The suits request unspecified damages and costs.

In one of the class action lawsuits, the presiding judge ordered the
freezing of the Company's bank account, with $150,000 allocated to
Huntington Trust Co., N.A. (a defendant in the suit), on an indicated
claim. After obtaining court approval, monies from the frozen account
can be withdrawn to pay current operating expenses.

Also in connection with one of the class action lawsuits, the Company
filed a cross claim against its casualty insurance carrier for breach of
contract for denying the voiding directors' and officers' liability
insurance and tail coverage. The Company seeks reinstatement of
coverage, and compensatory and punitive damages of $100,000 and
$10,000,000, respectively. The insurance carrier refunded the Company
approximately $100,000 of premiums paid to it by the Company, however,
the Company returned the money to the insurance carrier and intends to
vigorously pursue the cross claim.

The Company has agreed to indemnify its directors and officers for costs
assumed by them in connection with such lawsuits. The Company intends to
vigorously defend itself in connection with these lawsuits.

The Company received an informal inquiry from the Securities and
Exchange Commission, Midwest Regional Office, Division of Enforcement
regarding the initial public offering of the Company's common shares. In
connection with the informal inquiry, the Division of Enforcement has
requested that the Company furnish certain documents relating to the
offering. The Company intends to fully cooperate with the informal
inquiry. In the event the Division of Enforcement determines that there
is a basis for an enforcement action and elects to pursue such an action
against the Company, its officers or directors, the defense costs
associated with, and any resulting judgments from any enforcement action
will have a material adverse affect on the Company.

U.S.: Aust. Islanders to Sue over Toxic PCBs Left Behind by Army in 60s
Text of report by Radio Australia on November 23, 1999

In the Northern Marianas, two class actions are being prepared against
the US government alleging it has failed to properly clean up
contamination from cancer-causing PCBs [polychlorinated biphenyls]. The
PCBs were left behind by the US army in the 1960s, but local people were
told about their dangers only last month.

Former Lands Secretary (Beningo Sablan) says villagers want a clean-up
and health checks. He says all 4,000 villagers could be contaminated.
"Leakage goes into the soil, gets airborne, you ingest it, it goes
through your skin. Particularly young kids who played in the playground
where soils are contaminated with PCBs - they'll put them in their
hands, they'll put them in their mouths and that's how they get them.
But particularly through the food chain. This is a fishing village. And
so everybody in this village eats fish, everybody eats chicken,
everybody eats pig, cows, goats, that's the way we feel we consume these
toxic elements." (BBC Summary of World Broadcasts Nov-24-1999)

* Should a Court Certify Class of Foreign Residents Seeking Damages?
Should a court certify a class of foreign residents seeking damages in a
U.S. venue? This question raises a host of special problems. In
Velasquez v. Crown Life Insurance Co., (No. M-97-064 (MDL-1096), 1999
U.S. Dist. Lexis 13186. (S.D. Tex. Aug. 10, 1999)).

One Southern District of Texas federal court recently confronted with
those problems - a requested certification of an insurance "vanishing
premium" plaintiff class comprised of Central and South American
residents - did not like what it saw.

The district court considered whether the plaintiff was entitled to
class certification under Federal Rule of Civil Procedure 23(b)(3) when,
in addition to satisfying the Rule 23(a) prerequisites of numerosity,
commonality, typicality and adequacy, it had to show that "the questions
of law or fact common to the members of the class predominate over any
questions affecting only individual members," and that "a class action
is superior to other available methods for the fair and efficient
adjudication of the controversy." (Fed R. Civ. P. 23(b)(3)).

Two years ago, the U.S. Court of Appeals for the Fifth Circuit chided a
district court for failing to address the practical problems and
substantive legal issues associated with applying the law of different
states in a proposed nationwide tobacco class action, holding that
choice of law issues defeated predominance and superiority. In Castano
v. American Tobacco Co., (84 F.3d 734 (5th Cir. 1996)) the panel

In a multi-state class action, variations in state law may swamp any
common issues and defeat predominance... The district court's
consideration of state law variations was inadequate. The surveys
provided by the plaintiffs failed to discuss, in any meaningful way, how
the court could deal with variations in state law. The consumer fraud
survey simply quoted a few state courts that had certified state class
actions. The survey of punitive damages was limited to the defendants'
home states. Moreover, the two district court opinions on which the
court relied did not support the proposition that variations in state
law could be ignored. Nothing in the record demonstrates that the court
critically analyzed how variations in state law would affect
predominance. The court also failed to perform its duty to determine
whether the class action would be manageable in light of state law
variations. (Id. at 741, 743 (citations omitted)).

If nationwide classes give rise to choice of law issues that defeat the
predominance requirement, then the effect of choice of law issues is
most surely exacerbated in a multi-national class.

In addition, there are other issues in class actions involving
foreigners. Members of a putative class should have an interest in
determining the forum that resolves their alleged claims. If the
proposed class consists of foreign residents, however, should a handful
of plaintiffs seek to litigate the alleged class claims in a U.S.
jurisdiction far away from their homeland? Should a court assume that
the other members of the class desire to have their claims resolved in a
U.S. court? Sometimes the questions answer themselves.

In the Velasquez "vanishing premium" litigation, the plaintiff attempted
to certify a multinational class of customers located in approximately
20 different countries to recover damages for the purchase of certain
life insurance policies from Crown Life "while living in Central and
South America." (Opinion Aug. 10, 1999, at 1).

The plaintiff asked the court to determine and apply the laws of
countries such as Columbia, Venezuela, Chile and Peru to resolve the
claims of thousands of foreigners. On Aug. 10, Judge Sim Lake, following
Castano's admonition to enforce rigorously Rule 23's requirements and to
consider how variant laws might affect the issue of predominance, turned
them down - he denied the motion for class certification.

                        Choice of Law Issues

Judge Lake found that under choice of law principles the "Central and
South American countries in which the policies are sold would have the
most significant relationships with the claims of the proposed class
members, and the laws of each of those countries would apply." n6 (Id at
9) Judge Lake held that the plaintiff did not prove how common issues of
law or fact predominated: "Plaintiff failed to show what the substantive
laws are in each alleged class member's home country or how any
differences in those laws would affect the predominance analysis... " He
then lamented that there was no sufficient proof of disparate law
brought forth by either party. (Id at 10, 17).

The district court ruled that in addition to predominance concerns, a
class of foreign residents raised "superiority" problems under Rule
23(b)(3). In determining whether a class action is the "superior" method
of adjudication, a court must consider (i) the interests of potential
class members in individually controlling the prosecution of their
claims; (ii) the extent and nature of any litigation already commenced;
(iii) the desirability or undesirability of concentrating the litigation
in this particular forum and (iv) the difficulties likely to be
encountered in the management of the class action. (Fed R. Civ. P.

The Velasquez plaintiff wanted to litigate claims of 12,000 Central and
South Americans against a Canadian life insurance company in a Texas
federal court. Nevertheless, none of the policies was sold in Texas;
none of the parties resided in Texas; none of the witnesses was from
Texas; most of the putative class members were located in Central and
South America; and the foreign laws of the Central and South American
countries applied. Under these facts, the superiority factor clearly
weighed against certification. (Cf Seguros Comercial Americas S.A. v.
American President Lines Ltd., 910 F. Supp. 1235 (S.D. Tex. 1995) (Lake,
J.) (dismissing claims of a foreign plaintiff under doctrine of forum
non conveniens where Texas lacked a strong nexus to the dispute and
foreign law applied), vacated and remanded on other grounds, 105 F.3d
198 (5th Cir. 1996)).

Another superiority factor - that a proposed class be manageable - also
weighed against certification. The practical problems of (i) resolving
individualized issues such as reliance, causation and limitations, (ii)
applying the substantive laws of multiple jurisdictions and (iii)
attempting to try class claims without first going through the learning
curve of several individual trials would all make trial of a foreign
class unmanageable. (84 F.3d at 747-49). Ultimately, the efficiencies
thought to be achieved through a class action might in fact lengthen the
litigation process. (Id. at 749-51 (complex choice of law issues make
individual trials superior to class treatment; "the conflict of law
question itself could take decades to work its way through the courts"
and the net result might be that class action "would lengthen, not
shorten, the time" it takes to reach a final judgment)).

These concerns were not lost on Judge Lake, who emphasized the
manageability of the putative class and found that a class action was
not superior to other means of adjudication. In light of the amount of
money at issue, he believed that individuals would still have an
economic incentive to bring their own cases, but in addition, the
foreign nature of the class meant that the superiority of a class action
would be lost:

The second factor that strongly militates against a finding of
superiority is the difficulty of managing this case as a class action.
The court would be faced with having to determine the legal standards
and remedies applicable in each class member's home country and with
having to resolve logistical problems inherent in litigating a case in
which the plaintiffs and many other key fact witnesses live abroad. The
court concludes that it would not be manageable or convenient to
litigate this case as a class action. (Opinion of Aug. 10, 1999 at 18
(citation omitted)).

Judge Lake cited his prior decision in Delgado v. Shell Oil Co., which
was an attempt to certify as a class foreign residents of various
countries for damages from exposure to certain toxic substances. (890 F
Supp. 1324, 1365-71 (S.D. Tex. 1995)). He had dismissed most of the
claims in Delgado on forum non conveniens grounds in light of the
logistical problems before even reaching the certification issue. (Id at

                       Problems Down the Road

If the predominance and superiority issues are resolved, there may be
further problems down the foreign class action road. If a foreign
plaintiff class is certified and tried to judgment in favor of the
defense, what is its value to the defendant?

As to an absent U.S. class member, who had adequate notice of the class
and an opportunity to opt out, the defense judgment would be a bar, even
if the second suit were brought in a forum different from that which
entered the class action judgment, under full faith and credit.
(Phillips Petroleum Co v Shutts, 472 U.S. 797 (1985)). Will a foreign
class member's attempt to relitigate be similarly barred? Can a defense
judgment be used as a bar to litigation in a foreign country that does
not recognize the class action vehicle? (In Cf Penson v. Terminal
Transp. Co., 634 F.2d 989, 995 (5th Cir. 1981), "a class member's
individual suit will not be barred by res judicata if notice of the
prior judgment in the class action is inadequate"). Many states have
adopted model codes or uniform acts or have laws based on familiar
precepts and uniform standards. In contrast, foreign jurisdictions may
have laws and codes alien to American jurisprudential precepts.

What about the class defendant who decides to settle, as many do, in the
expectation that it has bought "peace" with all claimants in one
proceeding? Peace will prove elusive at best and nonexistent at worst if
a foreign nation will not accord preclusive effect to a judgment
rendered in an aggregated claims proceeding.

For example, Germany does not have a class action procedure. Thus, it
has no law on the due process requirements for notice of opt-out rights
developed by the U.S. Supreme Court in cases like Phillips Petroleum v.
Shutts. (472 U.S. 797). In Shutts , the Supreme Court found that a
Kansas state court properly asserted jurisdiction over absent plaintiff
class members outside of Kansas, holding that as long as the class
members had adequate notice and the opportunity to opt out, they would
be barred from pursuing individual litigation under res judicata
principles. (Id at 811-13. Shutts did not confront the problem of
foreign class members who may be able to file new lawsuits in their own

The court then reviewed the notice given to potential class members and
the manner in which it was given, and held that it satisfied due process
concerns (Id at 813-14). Would a German court hold the same as Shutts?
What would be considered sufficient notice in Germany? Would newspaper
notice suffice?

Full faith and credit is hardly the rule under international law. Many
nations may not accord preclusive effect to a U.S. judgment to begin
with, and some which otherwise would, may not if the judgment is the
product of non-traditional litigation in which their resident was not
even a named party but was merely sent an opt-out notice. A prevailing
defendant, therefore, may have no assurance that the foreign class
members will not bring new lawsuits elsewhere in the world. Or worse,
what if prevailing class members decide to seek further recovery in
their homeland?

At least one court that considered whether a defendant would reap the
benefits of a class judgment decided against a certification that would
include foreign plaintiffs. In Bersch v. Drexel Firestone Inc., (519
F.2d 974, 996 (2d Cir. 1975)) a securities fraud action was brought on
behalf of a class of U.S. and foreign residents. In deciding to exclude
foreign residents, the Second Circuit stated: "While an American court
need not abstain from entering judgment simply because of a possibility
that a foreign court may not recognize or enforce it, the case stands
differently when this is a near certainty." Other courts have not been
satisfied that there is adequate proof that the home country of a class
member would not give preclusive effect to a judgment. E.g, In re
Lloyd's Am. Trust Fund, No. 96 CIV 1262 (RWS), 1998 WL 50211, at *15
(S.D.N.Y. 1998) (rejecting defendants' argument that the questionable
preclusive effect of the judgment over 1,250 foreign class members would
result in unusual management difficulties).

And there are those that are not troubled by the potential relitigation.
E.g, In re Activision Sec. Litig., 621 F. Supp. 415, 432 (N.D. Cal.
1985) (deferring exclusion of foreign class members for lack of proof
that judgment would not be given preclusive effect).

Castano teaches that defendants resisting certification have forceful
arguments that choice of law questions destroy predominance and
superiority. Velasquez demonstrates that choice of law issues may be the
Achilles heel of multinational class actions. Both cases teach that
those seeking and opposing certification should help the court by
providing it with the relevant law.

In deciding whether to certify a class action when the members include
foreign residents, the courts should perhaps also consider
enforceability of the eventual judgment in the homeland of the foreign
class members. After all, the whole purpose of the class action device
is to efficiently manage multiparty litigation. n24 If enforcement of a
class action judgment is suspect, that ought to militate against
certification. Concomitantly, class applicants and opponents should be
prepared to demonstrate the effectiveness or ineffectiveness of any
judgment outside the forum state. (See generally Amchem Prods Inc. v.
Windsor, 521 U.S. 591(1997); Shutts, 472 U.S. at 809). (New York Law
Journal, Special Sections; Litigation; Pg. S7, Nov-8-1999)

* Uncertainty Expands In Indoor Air Quality Claims
The genesis of the IAQ liability revolution is clear. As the American
population becomes more sensitized to health issues in general, its
awareness of indoor air quality concerns is heightened as well. Add to
this a litigious society that is witnessing large awards for previously
unheard of claims @ such as those against gun and cigarette
manufacturers @ and the result is a climate ripe for new forms of IAQ

Indoor air quality litigation is undergoing a revolution that exposes
countless new business people and their insurers to unexpected
liability. From Y2K computer litigation to employment discrimination
complaints, novel types of claims are transforming a dangerous, yet
generally predictable risk, into an environment of uncertainty. No
longer are "sick building" cases filed only against building owners,
managers or landlords. No longer are these claims exclusively centered
on breach of warranty or constructive eviction. Now, indoor air quality
(IAQ) problems are spawning technologically and scientifically complex
claims based on creative theories of liability that raise issues far
beyond the design, construction and operation of buildings. Potential
defendants can reduce the risk these novel IAQ claims pose by
understanding their direction and taking appropriate precautions.

As underlying claims transform so do claims for insurance coverage. New
insurance coverage issues are being raised and coverage is expanding, as
has just occurred in California. Courts are starting to spread the risk
by expanding the scope of coverage of traditionally-worded commercial
general liability ("CGL") policies. Insurers, from underwriters to loss
control professionals to claims representatives, can improve their
performance by anticipating the direction of these claims.

                      IAQ's Essential Elements

Over the past several years, there have been developments in each of the
essential elements of indoor air quality claims:

* Liability
  Traditional theories of negligence are being expanded to include
  claims for discrimination that can overcome the workers' compensation

* Sources
  New sources of potential harm such as molds, fungi, carbonless copy
  paper, and ozone generators are being identified. Even candle soot is
  being implicated.

* Routes of Exposure
  The definition of adequate ventilation is being examined and new
  standards have been proposed for residential buildings.

* Medicine
  Injury and disease are increasingly being attributed to indoor air-
  related causes.

Whether the location is a home, school, or office building, indoor air
quality problems are a lot like other problems: the more you look, the
more you find. The Environmental Protection Agency estimates that of the
4.5 million office and public buildings in the United States, thirty
percent have problems with indoor air quality. This means that more than
100 million Americans are exposed to indoor air of poor quality. Given
the number of potential claimants, the cost of remediation and the risk
of developing life-threatening disease, the legal issues raised by
indoor air quality pose both public health and liability and insurance

Several types of IAQ claims are typical of the changing nature of this
litigation: (1) the technologically-based claims resulting from Year
2000 computer glitches, (2) employment discrimination claims based on an
employer's response to an IAQ problem, and (3) claims based on novel
toxic sources of exposure, such as a class action filed over lead in
candle wicks.

                            Y2K Claims

Media pronouncements on the Y2K problem warn that on January 1, 2000 we
should have flashlights, bottled water and cash available. People claim
that they will not ride an elevator on that date. Why would we need
alternative means of water, light, money and egress? We may require them
because some computer microchips are expected to malfunction when asked
to recognize the year Thus, not only could a building's elevators,
lighting, security, fire detectors, and telecommunications fail, but the
HVAC system could malfunction as well. If the HVAC system malfunctions,
those harmed will seek to hold the building owners, managers and
engineers liable for not correcting the Y2K problem prior to the glitch.
Moreover, the HVAC system may represent the tip of the iceberg with
respect to potential sources of Y2K-related indoor air quality claims.
Subsidiary components that could go awry include boilers, chillers,
filters, thermostats, leak detectors, underground storage tank monitors,
generators and smoke detectors. Computer-based preventive maintenance
programs are at risk as well.

To avoid Y2K liability, a building owner, manager, landlord or other
potential defendant should perform a Y2K audit that includes a review of
all embedded systems and attendant software. In addition, a contingency
plan should be in place in the event of unanticipated problems.

                  Employment Discrimination Claims

An employer's response to an employee's health problem is a delicate
matter at any time, but even more so when the potential cause of the
problem is related to the work itself. Employment discrimination claims
are rising, with IAQ concerns adding another potential source of
liability. For example, employees at the Ohio Department of
Administrative Services complained that indoor air pollution made them
sick. As a result, they were transferred to a satellite office. When one
worker refused the transfer, he was terminated. He filed a
discrimination suit claiming that his employer had not made a
"reasonable accommodation" to adapt the work environment to his handicap
and that only "sick building handicapped" employees were assigned to the
satellite office, thus discriminating against that group of handicapped

The trial court ruled that the employer had made a reasonable attempt to
accommodate the plaintiff's handicap and that the employer did not
discriminate against that group of employees. This decision was upheld
on appeal with a finding that the employer had a reasonable
justification for discriminating against the employees: to protect their
health. Martinez v. Ohio Dept. of Admin. Services, 1997 Ohio App. Lexis
894 (Ct. of Appeals, 10th Dist.). If the employer had not taken
extraordinary steps to respond to its employees' complaints, the result
would likely have been a finding of discrimination and an award of

                       Lead In Candle Wicks

Media reports about potential health hazards are becoming as ubiquitous
as the potential health hazards themselves. Products and practices
previously thought to be safe are now being linked to both common and
rare health problems. For example, our firm is defending an indoor air
quality case in which an attorney alleges she is permanently partially
blind from excessive amounts of dust and low humidity in a high rise
office building. For months, those involved in the candle manufacturing
and indoor air quality arenas have been hearing about excessive candle
soot from fragranced candles. The most recent progression of these
concerns into the legal arena has related to candle wicks that contain

A proposed national class action has been filed in Dallas, Texas,
against the Gap and its supplier of candles with lead-containing wicks.
The wicks in these candles allegedly contain lead and antimony, another
toxic metal, and emit poisonous gases when they are burned. The
complaint alleges breach of implied warranty for marketing, selling and
distributing a defective and unsafe product. It seeks damages for the
purchase of the candles, as well as injunctive relief. The class action
petition refers to the enhanced bio-availability of lead that is inhaled
rather than ingested. Mealey's Emerging Toxic Torts, September 22, 1999,

Given the ubiquity of lead in the environment and the fact that every
person in the United States has some lead burden in his or her body, it
is not irrational to think that personal injury claims from lead in
candle wicks will not be far behind. Children, for whom lead exposure
can be a major problem, are sympathetic plaintiffs. Moreover, with the
recent focus on toxic tort and other legal transgressions against
children as a group, there appears to be plenty of interest within the
plaintiffs' bar. One only has to look at the EPA's recent banning of two
long-used pesticides as an indication of the heightened awareness of
childhood exposures. The EPA, for the first time, used a model based
upon the pesticides' potential effect on children to decide against
their continued use. Groups such as Greenpeace and the Environmental
Defense Fund have publicized concerns over childhood issues, including
endocrine disruption due to common plasticizers, to which children are
potentially at risk. The American Public Heath Association has recently
addressed the issue of childhood exposure to mercury. Life-saving
vaccines containing small amounts of mercury as a preservative have been
implicated as potentially causing adverse health effects.

                   Expansion of Insurance Coverage

On August 30, 1999, the California Supreme Court issued a decision that
affects all CGL policies implicated in claims in that jurisdiction.
Vandenberg v. Superior Court (No. SO67115 CA) concerned underground
waste oil storage tanks which had leaked, thereby causing pollution. The
property owners sued the lessee who had installed and operated the
tanks. The lessees had obtained CGL insurance coverage from several
insurers over the years. The significance of this decision is that the
court held that damages which can be considered "property damage" are
covered by CGL policies even where the cause of action lies in breach of
contract and not tort, and regardless of how the language in these
policies traditionally has been interpreted.


The spectre of indoor air quality liability is now a reality even for
those only marginally associated with buildings. Risk of claims has
spread beyond the traditional targets. Insurance products that were
developed to handle traditional claims will be stretched to try to cover
these previously unheard of claims. But even those building owners,
managers, contractors, designers and maintenance professionals who
expect to face IAQ claims now need to prepare for new types of claims.
The uniqueness of each building and the varying demands of the occupants
challenge those responsible for preventing IAQ problems. As liability
expands, it is critically important that all participants in the process
protect themselves from claims by anticipating their sources and by
reviewing their insurance programs. (Mealey's Litigation Report:
Emerging Toxic Torts, Vol. 8; No. 13, Oct-6-1999)


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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