CAR_Public/991201.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Wednesday, December 1, 1999, Vol. 1, No. 211

                                 Headlines

ALEXEI YASHIN: Lawsuit by Season-ticket Holder Is ALive and Kicking
AUTOZONE INC: Agrees to Settle with CA Hourly Workers over Rest Periods
AUTOZONE INC: Vigorously Defending CA Workers' Suit over OT Pay
BABY FORMULA: Sp Ct to Study Prices in Louisiana Case against 3 Cos.
ECO SOIL: Denies Allegations in Securities Lawsuit

FEN-PHEN: New Studies Show Fewer Problems
HCA HEALTHCARE: DOJ Tries Consolidating Cases To Facilitate Settlement
HOLOCAUST VICTIMS: Dutch Companies; Lawyers’ Fees – Reports from London
HOLOCAUST VICTIMS: Survivors & Organizations Ok Swiss Bank Settlement
JEFFERSON PILOT: Intends to Vigorously Defend Carol. Suits Re Policies

LEAD PAINT: Maryland Homeowners' & Children's Suits Filed V. Industry
MICROSOFT CORP: Journal Cites New Incentives To Settle Antitrust Suit
MICROSOFT CORP: Journal Opins stiff Hurdles on Appeal against Antitrust
MONSANTO CO: Lawyers Plan to Sue over Plant Patents & Marketing
ONEOK INC: Reports on Contest with Southern Union over Southwest Merger

PESTICIDE MAKERS: Seller Asks CA Sp Ct to Hear Dispute over Settlement
SUMMIT TECHNOLOGY: Faces Fed & State Antitrust Suits Re Price-Fixing
SUMMIT TECHNOLOGY: Faces Shareholders' Class & Derivative Suits in MA
SUMMIT TECHNOLOGY: Fla. Suit over RICO Violations Dismissed & Amended
TOBACCO LITIGATION: Makers Plan to Say Products Are Too Deadly for FDA

WILLIAM SWEET: MA Jury Awards $ 8 Mil In Radiation Experiment Case

* CCAA Court Approves Philip Services' Financial Reorganization
* The Danger Of Misclassifying Workers

                           *********

ALEXEI YASHIN: Lawsuit by Season-ticket Holder Is ALive and Kicking
-------------------------------------------------------------------
Like the Simple Minds song, a breach of contract lawsuit launched by an
Ottawa businessman against Alexei Yashin is Alive and Kicking.

The delay in the class action suit filed by lawyer Arthur Cogan on
behalf of season-ticket holder Len Potechin was largely due to the fact
that it can be difficult to serve a person who is hiding out in
Switzerland. At last, he has been found -- and served.

The statement of claim names as defendants Alexei Yashin, Mark Gandler
and International Sports Advisors Co. and seeks total damages, against
all parties, in the amount of $ 27.5 million.

According to the claim, Yashin now has 60 days to file a statement of
defence. Should the Senators holdout continue his laissez-faire attitude
and choose to ignore the summons, he runs the risk of having a judgment
made against him in his absence "without further notice." Expect that to
be the case, since Yashin never was one much for defence. (The Ottawa
Sun Nov-30-1999)


AUTOZONE INC: Agrees to Settle with CA Hourly Workers over Rest Periods
-----------------------------------------------------------------------
Chief Auto Parts Inc. is a defendant in a class action lawsuit entitled
"Doug Winfrey, et al. on their own behalf and on behalf of a class and
all others similarly situated, v. Chief Auto Parts Inc. et al.," filed
in the Superior Court of California, County of San Joaquin in August
1995 and then transferred to The Superior Court of California, County of
San Francisco, in October 1995. In the complaint, the plaintiffs allege
that Chief had a policy and practice of denying hourly employees in
California mandated rest periods during their scheduled hours of work.
The plaintiffs are seeking damages, restitution, disgorgement of
profits, statutory penalties, declaratory relief, injunctive relief,
prejudgment interest, and reasonable attorneys' fees, expenses and
costs.

On November 1998, the Superior Court certified the class as to all
persons considered by Chief to be non-exempt hourly employees who, from
August 1991, to the present, either work or did work in one of Chief's
California retail stores, in excess of total work time of three and
one-half (3.5) hours in any one work day and who were denied an off-duty
rest break. In September 1999, the parties agreed to settle the suit.
The settlement is subject to approval of the court and grants an option
to each class member to exclude himself or herself from the class and
allows each of them to file an independent action.


AUTOZONE INC: Vigorously Defending CA Workers' Suit over OT Pay
---------------------------------------------------------------
AutoZone, Inc., is a defendant in a purported class action lawsuit
entitled "Melvin Quinnie on behalf of all others similarly situated v.
AutoZone, Inc., and DOES 1 through 100, inclusive" filed in the Superior
Court of California, County of Los Angeles, in November 1998. The
plaintiff claims that the defendants failed to pay overtime to store
managers as required by California law and failed to pay terminated
managers in a timely manner as required by California law. The plaintiff
is seeking injunctive relief, restitution, statutory penalties,
prejudgment interest, and reasonable attorneys' fees, expenses and
costs. The case is in early stages of pre-class certification discovery
and therefore we are unable to predict the outcome of this lawsuit at
this time. We are vigorously defending against this action.

AutoZone, Inc., and Chief Auto Parts Inc. are defendants in a purported
class action lawsuit entitled "Paul D. Rusch, on behalf of all other
similarly situated, v. Chief Auto Parts Inc. and AutoZone, Inc." filed
in the Superior Court of California, County of Los Angeles, in May 1999.
The plaintiffs claim that the defendants have failed to pay their store
managers overtime pay from March 1997 to the present. The plaintiffs are
seeking back overtime pay, interest, an injunction against the
defendants committing such practices in the future, costs, and
attorneys' fees. In September 1999, the Court denied our motion to
strike the complaint's request for class certification based on a prior
case of Chief based on similar facts in which the class certification
was denied. We appealed the Court's decision and the decision of the
trial court was sustained and has been returned to the trial court. We
are unable to predict the outcome of this lawsuit at this time, but
believe that the potential damages recoverable by any single plaintiff
against us are minimal. However, if the plaintiff class were to be
certified and to prevail on all of its claims, the aggregate amount of
damages could be substantial. We are vigorously defending against this
action.


BABY FORMULA: Sp Ct to Study Prices in Louisiana Case against 3 Cos.
--------------------------------------------------------------------
The Supreme Court agreed on November 29 to study a lawsuit that accuses
three companies of illegally conspiring to raise the price of baby
formula. The justices said they will use the Louisiana case to clarify
when some lawsuits filed in a state court can be moved to a federal
court. Those who filed the Louisiana case in a state court say it
wrongly was transferred to a federal court, where it then was dismissed.

Robin and Renee Free sued in Louisiana court in 1993, accusing Abbott
Laboratories, Bristol-Myers Squibb and Mead Johnson & Co. of conspiring
to raise the price of baby formula. The lawsuit was filed as a class
action and sought up to $20,000 in damages for each person affected by
the higher prices.

The three companies had the case moved to federal court, but the Frees
argued that the amount of their claim did not meet the $50,000 minimum
required at the time for federal court jurisdiction in such cases. The
minimum has since been raised to $75,000.

The 5th U.S. Circuit Court of Appeals ruled in 1995 that the case
belonged in federal court. Because the Frees would be entitled under
Louisiana law to collect any attorneys' fees awarded in the case, they
could recover more than $50,000, the appeals court ruled. A 1990 federal
law lets federal courts rule on the other class members' claims even
though they did not meet the $50,000 minimum, the appeals court added.
Both sides later reached a $4.3 million settlement, but a federal judge
threw it out on grounds the settlement had not been proven fair to most
class members.

The federal trial judge then dismissed the case, saying Louisiana
antitrust law did not allow price-fixing lawsuits by people who only
indirectly bought a product from a manufacturer. The 5th Circuit court
earlier this year upheld that ruling.

In the appeal acted on November 29, the Frees' lawyers argued that the
5th Circuit court's 1995 ruling would shift many cases from state courts
to federal courts even though they do not meet the minimum dollar
figure. The appeal said the 1990 federal law did not change a
longstanding requirement that each person meet the minimum before cases
involving parties from different states can be handled in federal court.

The baby formula companies' lawyers said the 5th Circuit court correctly
ruled that the 1990 law allows federal courts to rule in such cases even
when some claims do not meet the minimum. The case is Free vs. Abbott
Laboratories, 99-391. (AP Online Nov-29-1999)


ECO SOIL: Denies Allegations in Securities Lawsuit
--------------------------------------------------
Eco Soil Systems Inc. (Nasdaq:ESSI) announced on November 29 that it
categorically denies the material allegations in the purported
securities class action filed last week against it and three of its
officers by Edward Wissinger.

The lawsuit states that Wissinger purchased 800 shares of Eco Soil
common stock on July 15, 1999, at $8.125 a share and sold such shares on
Sept. 14, 1999, at $7.687 a share, thereby incurring approximately $350
of investment loss.

The suit is allegedly brought by Wissinger on behalf of all purchasers
of Eco Soil common stock during the period from April 13, 1999 (the date
Eco Soil filed its Annual Report on Form 10-K with the Securities and
Exchange Commission), and Nov. 3, 1999 (the date on which Eco Soil
issued its quarterly earnings release for the three months ended Sept.
30, 1999).

During this period, none of the three officers named in the complaint
sold any Eco Soil common stock, and instead collectively acquired
235,500 shares in open market transactions and upon exercises of options
and warrants. Eco Soil believes the case is without merit and will
vigorously defend itself and its officers against the suit.

Eco Soil develops, markets and sells proprietary biological and
traditional chemical products that provide solutions for a wide variety
of turf and crop maintenance problems in the golf and agricultural
industries. Its proprietary products are distributed through the
BioJect(R), a patented and EPA-approved device that cultures and
dispenses biological products through irrigation systems.

These products, along with standard turf maintenance products, are sold
to nearly 40 percent of America's golf courses through Eco Soil's Turf
Partners subsidiary, and are sold to the agricultural market, along with
irrigation products, through its Agricultural Supply subsidiary.


FEN-PHEN: New Studies Show Fewer Problems
-----------------------------------------
A popular diet drug that was withdrawn from the market after being
linked to serious heart problems may cause less significant damage than
health officials first suspected--and in some cases the damage may be
reversible, according to a study published last week.

Researchers at 15 medical centers around the country tracked 223
patients who took dexfenfluramine, also known as Redux. Redux was pulled
from the market in 1997, along with its chemical cousin fenfluramine, a
drug sold under the brand name Pondimin. Pondimin was typically taken
along with phentermine, a combination known as fen/phen.

Two years ago the Food and Drug Administration, which approved Redux in
1996, reported that about 30 percent of 290 patients who took the drugs
showed signs of heart valve problems. Several of these patients died
after taking the drugs.

But the latest study, published last week in the journal Circulation and
funded by Redux's Massachusetts-based manufacturer, Interneuron, found
that 7.6 percent of 223 Redux users had valve problems compared with 2.1
percent of women who did not take the drug. The study also found that
none of the cases of heart valve disease in the patients who took Redux
was serious.

In addition, echocardiograms taken less than eight months after patients
stopped taking Redux were twice as likely to reveal valve problems than
were tests conducted eight months or more after discontinuation of the
drug. This finding suggests that in some patients, valve damage may be
reversible, said Bruce K. Shively, a cardiologist at Oregon Health
Sciences University and the lead author of the study. But Shively
cautioned that no study has examined the long-term effects of Redux.

Patients in Shively's study, who were matched with a control group of
people who had not taken any diet drug for the previous five years, were
moderately obese middle-aged women. One-third of them had hypertension
and one-quarter were diabetic.

The characteristic that seemed clearly associated with valve problems
was age, the researchers noted. Women over 60 were more likely to have a
valve problem, while none of those under 60 did so.

This is not the first study to suggest that the risk posed by Redux and
fenfluramine may be less severe and less common than previously
believed. More than 18 million prescriptions for the drugs were written
before they were withdrawn. Last year Massachusetts researchers reported
that two of 46 patients taking the drugs developed valve problems, but
neither case was life-threatening. A study of 1,000 patients by
researchers at the University of California at Irvine found only mild
valve damage among patients who took Redux or fen/phen.

It is not clear why these recent results are at variance with the 1997
report of cardiologists from the Mayo Clinic, whose finding of heart
valve damage in 24 fen/phen patients triggered withdrawal of the drugs.
A spokesman for Mayo, based in Rochester, Minn., said its cardiologists
were "not available" to discuss their findings or subsequent studies.

Shively said that he suspects that one reason for the difference may be
selection bias in the Mayo patients--18 of whom were first treated at a
clinic in Fargo, N.D. "I think there is a tendency to over-report these
things unless you take a random sample of the population," Shively said.
"When you have millions of people who have taken these drugs, then
anyone in that population who has a valve problem may be attributed to
it." "There is a definite risk to taking these drugs," Shively added,
"but I think it's small and that serious problems are rare."

A little-noticed study by researchers at the University of Pennsylvania
published in the August issue of the American Journal of Cardiology may
shed some light on the Fargo cases. Stephen E. Kimmel and his colleagues
examined the records of the 18 patients and found that seven of them had
taken other drugs, such as a popular class of antidepressants, that
could cause or contribute to heart valve problems. Four of the 18 had
clinically documented heart murmurs before they began taking fen/phen,
Kimmel wrote.

Since the withdrawal of the drugs, Redux and fen/phen have been the
subject of frenzied litigation. Several months ago a Texas jury awarded
$ 23 million to a woman who suffered serious heart problems after taking
fen/phen; the case was settled for $ 2 million.

Recently American Home Products, which marketed Redux and Pondimin,
agreed to pay $ 3.75 billion to settle class-action lawsuits brought by
dieters who took the drugs. That settlement, which would be a record for
the pharmaceutical industry if it is approved, is now pending. Last week
a federal judge in Philadelphia gave preliminary approval to the
class-action settlement. (The Washington Post Nov-30-1999)


HCA HEALTHCARE: DOJ Tries Consolidating Cases To Facilitate Settlement
----------------------------------------------------------------------
The Department of Justice is once again trying to consolidate the
approximately two dozen False Claims Act suits pending against
Columbia/HCA Healthcare Corp., in what appears to be an effort to hasten
the settlement of the litigation.

Arguments are scheduled for Nov. 19 in federal court in Miami before
seven judges assigned to the Judicial Panel on Multidistrict Litigation.
An earlier DOJ motion to consolidate the cases was denied on procedural
grounds.

"Our goal is to streamline the process by providing a single judicial
forum in which to resolve multiple cases and sort out problems posed by
overlapping claims made by whistleblowers," says Chris Watney, a Justice
Department spokeswoman. She does not go as far as some of the lawyers in
the case, who say that consolidation would facilitate settlement.
"Getting this motion resolved is the first major step towards beginning
the settlement process, at least in a global sense, because it would
allow both Columbia and the Justice Department to get its arms around
what are the real claims and what are the real dollars," says Marlan
Wilbanks, of Atlanta's Harmon, Smith, Bridges & Wilbanks, who represents
a client suing Columbia for Medicare fraud in federal court in Atlanta.

Nashville, Tenn.-based Columbia -- the largest U.S. health care
provider, with 215 hospitals and 185,000 employees -- is the target of
what some say is the largest health care fraud investigation in the
country's history. This includes a federal criminal investigation and a
probe by the Securities and Exchange Commission. The potential damages
have been estimated to be as high as $ 1 billion.

So far, nine suits claiming that Columbia defrauded the government by
submitting false claims have been unsealed; the government has chosen to
intervene as a plaintiff in five. At least another 17 whistleblower
suits against Columbia, filed around the country, remain sealed as the
government tries to decide whether to intervene, according to lawyers
familiar with the cases.

A majority of the whistleblowers support the motion, as does Columbia.
"We believe it's a positive step in getting the suits in a process that
will help resolve them in a more straightforward fashion," says company
spokesman Jeff Prescott.

Although the cases against Columbia are not of the kind that are
typically consolidated -- class actions involving products liability,
securities fraud, antitrust, copyright and plane crash suits are more
common -- lawyers involved say that consolidation makes sense. The
attorneys point to overlapping issues that give the cases common
threads.

Although highly complex, the 26 or so lawsuits primarily deal with five
broad allegations of fraud against Columbia. They involve overcharging
Medicare and other federal programs for patient treatment, known as
"upcoding"; overcharging for patient laboratory tests; submitting
fraudulent cost reports; violating anti-kickback laws through
arrangements with doctors; and illegally billing for home health care
services.

Attorneys say that consolidation would help the parties sift through the
overlapping issues, simplifying discovery and allowing resources to be
used more efficiently. Doing this in one court before one judge, they
say, would increase settlement chances.

"If there's going to be a global settlement, there's a lot of sorting
out to do," says Ralph Mello, a Brentwood, Tenn., solo practitioner who
represents a whistleblower suing Columbia. "The value of all the cases
out there might be 100 times more than what Columbia's willing to pay,
so what do you do? How do you settle that?"

There is precedent. Six false claims cases against SmithKline Beecham
Clinical Laboratories were consolidated before a Philadelphia federal
judge (although not through a multidistrict litigation). They settled in
1997 for $ 325 million. Marc Raspanti, of Philadelphia's Miller, Alfano
& Raspanti, who represented one of the whistleblowers in that case, says
that consolidation "worked out very efficiently, and it did facilitate
settlement."

But Professor Thomas Rowe, of Duke University Law School, who studies
complex civil litigation, cautions that the court will analyze whether
the cases have enough in common, adding that the court could decide to
create subgroups or consolidate only some of the cases. Consolidation
will not be granted, he says, simply because most of the participants
support consolidating a large number of the cases. But both he and Roger
Trangsrud, associate dean of George Washington University Law School,
who also specializes in complex litigation, say that if the Columbia
cases are consolidated, settlement chances increase, because most
consolidated cases settle.

The Justice Department's first attempt to consolidate, in February, was
rejected because of a procedural quirk: Because many of the cases are
sealed, the government was unable to serve all of the parties. The
government apparently has fixed that problem in the pending motion,
which seeks consolidation in federal court in Washington, D.C. But that
motion remains sealed, as do most of the related documents. The one
document that has been unsealed is DOJ's request that the motion for
consolidation be conducted under seal.

The secrecy is tied to the False Claims Act, which requires
whistleblowers to file suits under seal; the suits must remain sealed
until the government decides whether it will intervene.

The fact that these are False Claims Act cases provides another reason,
lawyers say, to consolidate the suits. False claims cases involve
potentially huge payouts: the damages paid to the government and the
share of those damages paid to the whistleblower.

With at least 26 whistleblowers -- or relators, as they are formally
known -- vying for a piece of a potentially huge pie, each will want to
convince the government and a judge that he or she was the first to
bring the allegation to light and played an important role in the
success of the case.

If the litigation is resolved and Columbia pays a settlement to the
government, at least some of the whistleblowers will get a share. But
which ones, and how much they receive, would need to be resolved. Under
the law, when the government intervenes, a whistleblower is entitled to
15% to 25% of the settlement, "depending upon the extent to which the
person substantially contributed to the prosecution of the action." But
the court may award considerably less, or nothing, if it finds that the
whistleblower was not one of the original sources of information on
which any settlement is based. (The National Law Journal Nov-15-1999)


HOLOCAUST VICTIMS: Dutch Companies; Lawyers’ Fees – Reports from London
-----------------------------------------------------------------------
Within the next two weeks, Aegon, the Dutch insurance group, will be
taking a stand on its record during the second world war that has
far-reaching implications for the future of its worldwide business.
Unless it signs up by mid-December to a voluntary, US-based commission
on insurance claims from the Holocaust era, Aegon faces the threat of a
boycott by the World Jewish Congress (WJC).

The commission, which was set up last year to investigate policies left
unpaid, often because entire families had perished, is headed by
Lawrence Eagleburger, a former US secretary of state. Among the European
companies that have joined - anxious to make their peace, and avoid the
threat of multi-billion-dollar class action suits - are Allianz of
Germany and Generali of Italy.

Aegon, however, refuses to have its second world war record judged
alongside that of its German counterparts. It says it is willing to join
the commission, but only if it is granted a special category of
membership based on two provisos: that "Dutch people were victims of the
Nazi regime" and recognition of "the role of the Dutch government and
insurance industry in dealing fairly with the issue of Holocaust claims
for over 50 years". "Our country suffered," says Kees Storm, Aegon's
chairman. "We are in a totally different position from other insurers."

Given that Mr Eagleburger's commission already includes Axa of France -
another country occupied by the Nazis - it is unlikely that he will
grant Aegon special status. The Dutch group says it will stick to its
principles.

Aegon, one of the world's top 10 insurers, derives well over half its
profits from the Americas, primarily the US, where it has just spent $
10.8 bil in acquiring Transamerica, an insurer based in San Francisco.
If Aegon refuses to co-operate with the commission, it might soon face a
boycott similar to the one imposed on Swiss banks last year, which ended
in a $ 1.25 bil settlement.

"In the case of the Swiss banks, we reduced their business activities
(in the US) within two months by 22 per cent," Elan Steinberg, WJC
executive director, says. "The insurance companies will be even easier
(to target)." Mr Steinberg says the importance of Aegon's US interests
makes it particularly vulnerable. "This is where the leverage is
clearest," he says.

Mr Steinberg claims that, compared with other countries that came under
Nazi occupation, the Netherlands did not restore a large amount of
seized assets to the families of Holocaust victims. There was a reason
for this: more than three-quarters of Dutch Jews did not survive the
Nazi occupation - a much higher proportion than elsewhere in western
Europe. "Where a large part of the community came back, there was an
element of restitution," he says. "The record of Holland was the worst."

Should Aegon refuse to join Mr Eagleburger's commission, the WJC plans
to send 1m letters to its members by January, and is drafting a
resolution to urge public finance officials to stop using the services
of the Dutch group and "ultimately divest Aegon stock", he says. The
boycott is to be "both broad and incremental".

US state authorities, represented on the commission, are also
investigating the war records of European insurers. California's state
insurance regulator has summoned Aegon and other insurance groups this
week to give evidence on insurance policies sold between 1929 and 1945
in Europe. The information is required by California's Holocaust
registry law, which comes into force next April, and unlike Mr
Eagleburger's commission, attendance before the state insurance
regulator is compulsory.

Aegon will tell the California hearing that it knows of no outstanding
obligations from that period. To which Mr Steinberg retorts: "If they
have no unpaid claims, why are they afraid of joining the international
commission?"

Commission members have to accept Mr Eagleburger's findings on how to
value policies from that era - at about 10 times their nominal worth -
and to whom they should be paid out.

In return, the insurers are to be protected from class action suits and
sanctions, such as the withdrawal of operating licences, that could be
imposed by industry regulators in states like California. Aegon's
stance, however, does not mean the issue has been resolved within the
Netherlands. Only this month, the Dutch association of insurers reached
agreement with local Jewish groups on a Fl 50m (Euros 22.7m) settlement
to cover any outstanding unpaid claims, and to create a Jewish
foundation.

Aegon is funding a quarter of the total, based on the previous market
share of the five companies that formed the group. Aegon's Mr Storm
says: "We are confident that, with the support of the Dutch Jewish
organisations, we can convince the American interest groups that we have
done justice in a rightful way."

Mr Steinberg says he has no objection to national settlements but adds:
"If Aegon believes it can settle this with a payoff to any of our
affiliates, it has severely miscalculated." The Nazi occupiers in 1941
commandeered Lippmann Rosenthal (Liro), a Jewish- owned Amsterdam bank,
and turned it into the collection point for the valuables of Dutch Jews.
There the Jewish population had to surrender savings, shares, property
documents, precious metals, jewellery, artworks and other collections.

They were required to cash in their life assurance policies and hand the
proceeds over to the bank. Insurance companies were then ordered to pay
Liro the value of the estimated 22,000 Jewish policies remaining on
their books.

After the war, the Dutch government sought to restore the seized assets,
and the intervening years brought a steady trickle of insurance claims.
Joop Sanders, secretary of the CJO, the Dutch Jewish grouping which
reached this month's accord with the industry, says the country's
pre-war community was relatively poor, adding: "We are absolutely sure
it is enough for all claims that might come."

Their lack of wealth also meant few could flee abroad. That, rather than
any Dutch collaboration, was a main reason a high percentage died, says
Mr Sanders. "And it was difficult to hide. We do not have mountains."

But a country that brought the world Anne Frank's Diary - the chronicle
of an Amsterdam family first sheltered and then betrayed - is still
having to come to terms with the aftermath of occupation. Only two years
ago, for example, it was revealed that finance ministry officials in the
late 1960s had been allowed to buy unclaimed valuables in the Liro
vaults at knock-down prices.

In New York, Mr Steinberg promises to release next month "reams of
documents of what we believe is owed" by Aegon. "I think they are
getting bad advice, certainly from a moral point of view," he says.

The Dutch insurer says it is sure of its moral ground. The question is
whether, in refusing to join the commission, it is putting principles
before prudence.

        Lawyers Criticised for Fees in Swiss Bank Settlement

Holocaust survivors on November 29 criticised in court several of the
class action lawyers behind last year's historic $ 1.25 bn settlement
with Swiss banks. Citing several lawyers' requests for up to $ 25 m in
fees, the survivors' groups repeated their long-standing arguments that
the attorneys had no moral right to a portion of the compensation for
dormant accounts and laundered Nazi gold.

However, all sides voiced their public support for the settlement, which
was reached last year after a bitter dispute between Jewish groups, US
lawyers and three Swiss banks - Credit Suisse, Union Bank of Switzerland
and Swiss Bank Corporation. The US government on November 29 backed the
deal as fair and equitable, as well as in the interests of US foreign
policy. (Financial Times (London) Nov-30-1999)


HOLOCAUST VICTIMS: Survivors & Organizations Ok Swiss Bank Settlement
---------------------------------------------------------------------
Attorneys for Holocaust survivors and Jewish organizations around the
world on Monday urged a federal judge to approve a $ 1.25 billion
settlement between their clients and Swiss banks. An overwhelming
majority of the roughly half million plaintiffs in the class-action
lawsuit against the banks support the settlement, the attorneys told
U.S. District Judge Edward Korman.

Hundreds of people, including Holocaust victims and their heirs, packed
the Brooklyn courtroom for the so-called fairness hearing on the suit,
which claims that the banks withheld money deposited by Holocaust
victims for safekeeping from Nazis during World War II. ''The moral
question is going to be dealt with outside this courtroom,'' said
attorney Burt Neuborne. ''We did the best we could with the legal
claims.''

The hearing expected to last into Monday evening and possibly continue
Tuesday was called by Korman to allow plaintiffs to comment on whether
they think the settlement is fair. ''A billion sounds like a lot to
me,'' testified Greta Beer, daughter of a Romanian businessman. ''But
how is it going to be distributed? Who is going to think of us human
beings? ... I hope some justice will be done. We have fought for a long
time.''

If Korman rules that the settlement is fair, the next step will be for
the court-appointed special master, Judah Gribetz, to circulate a draft
plan for the distribution of the funds to claimants responding to a
massive global campaign in 29 languages. The date expected for that
proposal to be made public is Dec. 28.

Claimants will be able to comment on the proposal in writing, and then
Gribetz is to present a proposed distribution plan to Korman around the
end of February. Two months after that, Gribetz is to present his final
proposal to the judge.

Korman is to hold a final hearing on May 30, and officials hope to begin
distributing money in the second half of next year, more than 55 years
after the end of World War II.

At the same time the panel headed by Paul A. Volcker, former chairman of
the U.S. Federal Reserve, is in the final days of wrapping up a search
for missing assets of Holocaust victims in Swiss banks.

Its report will be released Monday in Zurich, the committee said. The
report is to disclose what 420 international accountants found in 63
Swiss banks. Tens of thousands of additional unclaimed accounts from the
Nazi era have been turned up, commission insiders say. It has yet to be
revealed how much money has been found and what percentage belonged to
victims of the Nazis in neighboring Germany.

The campaign for sharing the $ 1.25 billion settlement, reached in
August 1998, began last June. Full-page advertisements were taken out in
500 newspapers in 40 countries. The money covers Jews and other
Holocaust victims who deposited assets in Switzerland during the Nazi
era and never got them back, as well as those whose belongings were
plundered by the Nazis and apparently wound up in Switzerland, a wartime
depository for gold and other treasures.

Hundreds of thousands of Holocaust survivors around the world, plus
their relatives, are potential beneficiaries, according to Elan
Steinberg, executive director of the World Jewish Congress.

In addition to the newspaper ads appearing this week, Jewish
organizations sent out claims packages to as many as 400,000 survivors.
The fund was established in a deal with the two biggest Swiss banks,
Credit Suisse and UBS AG.

Holocaust victims deposited money in Swiss banks as the Nazis gained
power in Europe, expecting to retrieve it later. But after the war, many
of the heirs ran into a stone wall in trying to claim the assets. They
lacked detailed account information, and some bankers even demanded
impossible-to-obtain death certificates of people killed in Nazi
concentration camps. (AP Worldstream Nov-29-1999)


JEFFERSON PILOT: Intends to Vigorously Defend Carol. Suits Re
Policies----------------------------------------------------------------------JP
Life is a defendant in a proposed class action suit, Romig v.
Jefferson-Pilot Life Insurance Company, filed on November 6, 1995 in the
Superior Court of Guilford County, NC. AH Life is a defendant in a
separate proposed class action suit, Hallabrin et al vs. Alexander
Hamilton Life Insurance Company et al, filed on November 10, 1998 in the
Circuit Court for Wayne County, MI.

Both suits allege deceptive practices, fraudulent and negligent
misrepresentation and breach of contract in the sale of certain life
insurance policies using policy performance illustrations which used
then current interest or dividend rates and insurance charges and
illustrated that some or all of the future premiums might be paid from
policy values rather than directly by the insured. The claimant's actual
policy values exceeded those illustrated on a guaranteed basis, but were
less than those illustrated on a then current basis due primarily to the
interest crediting rates having declined along with the overall decline
in interest rates in recent years. The Hallabrin suit also alleges a
conspiracy among our subsidiary and three unaffiliated insurance
companies. Unspecified compensatory and punitive damages, costs and
equitable relief are sought. While management is unable to make a
meaningful estimate of the amount or range of loss that could result
from an unfavorable outcome, management believes that it has made
appropriate disclosures to policyholders as a matter of practice, and
intends to vigorously defend its position.


LEAD PAINT: Maryland Homeowners' & Children's Suits Filed V. Industry
---------------------------------------------------------------------
A pair of multi-count Maryland class action suits seek compensatory
damages from 17 white lead pigment and paint manufactures and industry
trade groups on behalf of homeowners and children who have suffered
physical injury and monetary losses due to what the plaintiffs say is a
decades-old conspiracy among the defendants to promote the use of
lead-based paint despite knowledge of its fatal flaws since at least the
1920s. Smith et al. v. Lead Industries Assoc. et al.; Cofield et al. v.
Lead Industries Assoc. et al. , Nos. 24-C-99-004490 and 24-C-99-004491
(MD Cir. Ct., Baltimore Cty., Sept. 20, 1999).

The first of the suits is a 12-count action by six homeowners on behalf
of all Maryland homeowners alleging that three lead and paint industry
trade associations and 14 current or former paint manufacturers "acted
in concert and aided and abetted each other to promote, market and place
toxic lead products into the stream of commerce."

Despite possessing knowledge of the dangers of lead to humans,
especially women and children, as early as shortly after the turn of the
century, the trade associations allegedly conspired to "promote and
maintain a market for toxic lead paint products when safe and lead-free
alternatives were available."

The homeowners say that, to that end, the defendants:

"a) falsely denied and knowingly concealed the inherent dangers of
    their own, and each other's lead pigments and lead paint products;
b)  promulgated arbitrary, ineffective and dangerous standards for
    allegedly 'safe' lead pigments and paint products;
c)  sponsored biased scientific research designed to support the
    promotion and marketing of each other's processed lead and lead
    pigments, concealing their knowledge of the true hazards of these
    lead paint products; and
d)  combined, conspired, aided and abetted each other and/or acted in
    concert to engage in a common scheme or plan which caused the toxic
    lead contamination of housing in Maryland."

                           Children's Suit

The companion action was filed on behalf of six Baltimore-area children
alleged to have tested positive for high blood lead content due to
exposure to the lead pigments, lead paints, and tetraethyl lead (TeL)
gasoline additive manufactured by the defendants, as well as TeL exhaust
lead dust.

The children's suit argues, in a fashion similar to the wording found in
the homeowners' complaint, that the defendants, knowing that safer
substitutes were available, campaigned and marketed for the public's
continued use of their products for nothing "other than their own
economic gain."

"To create, promote and maintain a market for their inherently dangerous
lead products, they practiced a continuing campaign of deception
cozenage and prevarication, creating the belief that their products
could be used safely in motor vehicles and in and around residential
settings, and that there were 'safe' levels for lead in their lead
products, although they were well aware of the inherently dangerous
nature of their lead products and that thousands of children, were and
would continue to be injured by their inexcusable conduct."

Both suits name as defendants Atlantic Richfield Co., Sherwin-Williams
Co., SCM Corp., Glidden Corp., Eagle-Picher Industries Inc., E.I. DuPont
de Nemours & Co., Fuller-O'Brien, American Cyanamid Co., Asarco Inc.,
Ethyl Corp., The Anaconda Co., St. Joe Minerals Corp., PPG Industries
Inc., Bruning Paint Corp., plus three trade organizations: Lead
Industries Association Inc., NL Industries Inc., and National Paint and
Coatings Association.

The causes of action alleged in the suits include negligent product
design, negligent failure to warn, supplier negligence, strict products
liability/defective design, strict products liability/failure to warn,
nuisance, indemnification, fraud and deceit, conspiracy, concert of
action, aiding and abetting, and enterprise liability.

"The purpose of the two actions is to hold accountable and obtain
maximum legal and equitable relief from the industry that is responsible
for the catastrophic insult to the health of our children and the
contamination of our private housing stock," said attorney Peter G.
Angelos, whose Baltimore law firm filed the actions.

Angelos says that in 1996, with only 13 percent of Maryland's children
aged six and under being tested for blood lead levels, 1,830 children
were diagnosed as "lead poisoned."

"That number in and of itself is outrageous, but is no more than the tip
of the iceberg," says Angelos. "There is no doubt that tens of thousands
of children in this state are being afflicted on an annual basis."

Ted Flerlage, who assisted Angelos in the preparation of the suits, says
he would like the Baltimore Circuit Court to "fast track" the children's
suit and hopes that the class certification procedures in the
homeowners' action will proceed quickly.

Replies from the defendants, many of which are located out of state, are
not expected to be filed until late November. (Toxic Chemicals
Litigation Reporter, Vol. 17; No. 10; Pg. 3, Oct-18-1999)


MICROSOFT CORP: Journal Cites New Incentives To Settle Antitrust Suit
---------------------------------------------------------------------
The Microsoft antitrust case is quietly slipping into Chicago on
Tuesday. Lawyers from Microsoft Corp. and the government are expected to
meet with Richard Posner, chief judge of the U.S. Court of Appeals in
Chicago who was appointed recently as a mediator, to restart
negotiations for an out-of-court settlement of the software giant's
case.

Judge Thomas Penfield Jackson of U.S. District Court in Washington, who
is hearing the Microsoft case, pushed the parties to resolve matters
raised by his recent findings of fact, which said Microsoft is a
monopoly and its actions have harmed consumers. A string of potential
class-action lawsuits against Microsoft were filed in the wake of
Jackson's findings.

Those civil suits "certainly increase Microsoft's incentive to settle,"
said Randy Picker, a professor at the University of Chicago Law School.
Whether Microsoft--or the Justice Department and states suing it--is
considering a settlement is unknown.

The parties have periodically met to discuss ways to end the case,
without success. Tuesday's meeting has been arranged very quietly, with
representatives from Microsoft and the government declining to say who
will represent their sides at the meeting, when it will occur and if the
discussions will take place in Posner's 27th-floor chambers in the
Dirksen Federal Building in the Loop.

A government spokeswoman declined to confirm that any discussions were
even scheduled to take place Tuesday.

Another unanswered question is what impact a settlement would have on
suits seeking class-action status that have been filed in Ohio, Florida,
California, Alabama and Louisiana. These suits claim Microsoft took
advantage of monopoly power and overcharged for its Windows operating
system.

Stanley Chesley, a prominent product-liability attorney in Cincinnati,
filed a suit in Ohio, alleging that Microsoft charged consumers an extra
$40 for each copy of Windows. Chesley said the overcharges cost
consumers a total of $10 billion.

To win his case, Chesley will have to prove that Microsoft is a monopoly
and took advantage of that position to harm consumers. A verdict against
Microsoft in the antitrust case would provide a major boost to the
plantiffs' attorneys in a class-action suit, while a settlement at this
point would leave those lawyers with a less-desirable position. As part
of the settlement, the parties and judge could decide to dismiss the
findings of fact, leaving in doubt their use in future hearings. "The
legal status of such an order is less than clear," Picker said.

Judgments have been dismissed in previous cases, including disputes in
which insurance companies could have been opened up to more claims if a
legal decision stood. Chesley said he believes, though, that any
Microsoft settlement wouldn't include the dismissal of Jackson's
findings.

"When the public is injured, as we have here, it's very seldom that a
court will withdraw its opinion," Chesley said. "The toothpaste is out
of the tube, and I would be very surprised if Judge Jackson would be
willing to do that."

Jim Cullinan, a Microsoft spokesman, said his company's decision about
whether to settle the antitrust case will not be affected by the civil
suits. "These lawsuits are driven by plaintiffs' attorneys and driven by
one thing, and it's not helping consumers," Cullinan said.

Chesley said even if the present findings are disregarded, he will be
able to follow the same trail paved by the government to show Microsoft
is a monopoly by asking the company to produce the same reports and
e-mails. "They'd be a little hard-pressed to claim they don't have these
documents," Chesley said. (Chicago Tribune Nov-30-1999)


MICROSOFT CORP: Journal Opins stiff Hurdles on Appeal against Antitrust
-----------------------------------------------------------------------
Mammoth litigation often works like a war of attrition, with combatants
wearing each other down until a victor eventually emerges. But the
landmark antitrust case against Microsoft Corp. may be more like a war
played on a computer -- one whose screen says, "Game Over."

U.S. District Judge Thomas Penfield Jackson tilted the game for the
government when he labeled Microsoft a predatory monopolist in his Nov.
5 findings of fact. He used his 207-page findings to steer past
obstacles raised in a June 1998 decision by the U.S. Court of Appeals
for the District of Columbia Circuit that all but directed him not to
meddle in Microsoft's technological decisions.

Judge Jackson's findings seem to have been crafted to bulletproof his
decision on appeal. He wrote in the last paragraph, "Through its conduct
toward Netscape, IBM, Compaq, Intel, and others, Microsoft has
demonstrated that it will use its prodigious market power and immense
profits to harm any firm that insists on pursuing initiatives that could
intensify competition against one of Microsoft's core products."

The language signals that, when he issues his conclusions of law next
year, the judge will find that Microsoft has wielded its monopoly power
broadly and relentlessly for the better part of the past decade. Among
antitrust lawyers, this type of "pattern and practice" case is
considered the mother lode of Sherman Act violations.

                            Breakup Talk

The findings have set off a frenzy of speculation about the potential
breakup of Microsoft -- a scenario that seemed inconceivable during the
trial. Since Judge Jackson's findings were made public, a suit has been
filed seeking class action status to recover antitrust damages on behalf
of Microsoft's customers. Filed on Nov. 9 in New York state court, it is
the first in an expected torrent of private antitrust suits seeking to
capitalize on the judge's finding that Microsoft possesses monopoly
power.

Microsoft's legal team, led by its general counsel, William H. Neukom,
and John L. Warden, of New York's Sullivan & Cromwell, went underground
after Judge Jackson's decision. The company's public position has not
budged from the comments Mr. Neukom made at a press conference in
Redmond, Wash., an hour or so after Judge Jackson issued his findings in
the case.

"There's a fundamental principle here, which we do not think we can
compromise," Mr. Neukom said. "It's not just in Microsoft's interest;
it's in all of the technology industry's interests that we continue to
be able to meet consumer demand by innovating our product." That has
been the company's position since 1997, a fact that may render
settlement impossible even though both sides have powerful incentives to
deal.

Judge Jackson's stunning findings make it hard to remember that the
Justice Department's original case against Microsoft amounted to a
simple tie-in claim.
Its May 18, 1998, complaint accused the company of illegally bundling
its Internet Explorer Web browser with its monopoly product, the Windows
operating system, to crush Netscape Communications Corp.'s Navigator,
the rival browser that Microsoft viewed as a threat to its monopoly. The
claim might never have been brought had Microsoft been able to resolve
its in-your-face dispute with the Justice Department over the meaning of
a single term -- "integrated products" -- in a 1995 settlement with
Justice.

At the outset of the 76-day trial, when Judge Jackson took the bench on
Oct. 19, 1998, to hear opening statements, it seemed that Microsoft was
already well on its way to winning its endgame with the government.

The appeals court decision, issued on June 23, 1998, found that Judge
Jackson had been wrong to issue a preliminary injunction ordering
Microsoft to stop forcing computer manufacturers to take Internet
Explorer along with its Windows 95 operating system.

Judge Jackson had issued the order without a hearing or notice to
Microsoft, and the judges who heard Microsoft's appeal could have simply
noted this basic lack of due process in overturning him. But D.C.
Circuit Judge Stephen F. Williams, the author of the 2-1 panel ruling,
didn't stop there.

Judge Williams, a 1986 Reagan appointee, embarked on an extensive review
of the relevant antitrust case law and treatises, noting the
"institutional incompetence" of the courts to assess technological tying
cases.

Then he issued an ultimatum to be heeded if Judge Jackson entertained
any further consideration of whether Microsoft violated the law by
bundling Internet Explorer into Windows. "The question is not whether
the integration is a net plus but merely whether there is a plausible
claim that brings some advantage," Judge Williams wrote. He concluded
that Microsoft had "clearly met the burden" on the facts presented.

Judge Williams had signaled a win for Microsoft, with a standard caveat:
"The ultimate sorting out of any factual disputes is a different
question, and one we of course cannot resolve on the limited record
before us," he wrote.

Judge Jackson will forward his ample factual findings to the appeals
court, should the dispute ever get there. In paragraph after paragraph,
the judge found "no technical justification" for Microsoft's refusal to
"meet consumer demand for a browser-less version" of Windows. "What the
findings demonstrate is that this is not a case about technology," says
David Boies, the outside lawyer hired by the Justice Department to lead
the case. "This is about the abuse of monopoly power...entirely done to
prevent consumer choice."

Who doesn't want a browser?

In the findings, Judge Jackson granted the possibility that integrating
the browser into Windows is beneficial. "As an abstract and general
proposition, many -- if not most -- consumers can be said to benefit
from Microsoft's provision of Web-browsing functionality with its
Windows operating system at no additional charge," he acknowledged. He
then laid into Microsoft's actual conduct, finding "no consumer benefit"
in the company's refusal to offer Windows 95 or Windows 98 without
Internet Explorer. "There is no technical justification for Microsoft's
refusal to meet consumer demand for a browser-less version of Windows
98," he wrote.

That such a consumer demand exists seems to strain reality. But Judge
Jackson found that it's out there. He cited corporate users as one
example: "[If] a consumer has no desire to browse the Web, he may not
want a browser taking up memory on his hard drive or slowing his
system's performance."

                          Trying too Hard?

William E. Kovacic, an antitrust professor at George Washington
University Law School, says that Judge Jackson's effort to bulletproof
his decision may have failed. In effect, he says, the judge might have
tried too hard. "It's the consistency with which he says, 'no
justification, no justification, no justification,' " Prof. Kovacic
says. "He has to say that to get around the appeals court." The appeals
court, he says, could well find Judge Jackson's logic to be strained.
The findings on consumer demand for browserless operating systems
"contradicts other evidence in the case that is far more persuasive," he
says, adding that the appeals court may be tempted to overturn this part
of Judge Jackson's findings as clearly erroneous.

Throughout his findings, Judge Jackson ignored or discounted the
explanations Microsoft offered. A telling example involves restrictions
Microsoft placed on PC makers to prevent them from customizing the first
screen consumers see when they boot up Windows. Microsoft asserted that
the restrictions were meant to prevent computer makers "from
compromising the quality and consistency of Windows."

But Judge Jackson focused on an e-mail from Microsoft Chairman Bill
Gates to Joachim Kempin, complaining that some PC makers were featuring
non-Microsoft browsers in "a FAR more prominent way" than Microsoft's.
Three weeks later, Mr. Kempin put "control over start-up screens" on his
list of neglected tasks.

The restrictions raised hackles among Microsoft's PC customers. The
judge quoted at length from an angry letter by a Hewlett-Packard
executive that he found "emblematic" of the reaction among PC makers.
"If we had a choice of another supplier," the executive wrote, "I assure
you [that you] would not be our supplier of choice." Judge Jackson
accepted the government's explanation for Microsoft's actions. They were
"necessary to ostracize Netscape."

Mr. Gates seemed to defy Judge Jackson's findings on the screen
restrictions in comments to shareholders at Microsoft's Nov. 10 annual
meeting. "If we can't define the user interface of Windows so all
Windows machines operate the same way, then the Windows brand becomes
absolutely meaningless," he said, according to a Wall Street Journal
account.

Mr. Gates' hardball comments strike Microsoft's opponents as familiar.
"Microsoft tries to characterize conduct that, in fact, restricts others
as being innovation. If they continue with warped definition, it's hard
to imagine how any settlement would occur," says Kevin J. Arquit, of New
York's Rogers & Wells L.L.P., a legal consultant to ProComp, an
anti-Microsoft group.

Microsoft's lawyers are preparing for a long fight, and they may not get
the chance to present their case to the sympathetic Washington, D.C.,
appeals court. A little-known law, the Antitrust Expediting Act, would
allow Judge Jackson to certify the case for immediate review by the U.S.
Supreme Court at the Justice Department's request.

When Judge Williams issued his decision, it seemed to spell doom for the
Justice Department. But that may have been the government's luckiest
break. It scrambled to find witnesses from Apple, Intel and IBM Corp. to
testify about Microsoft's bullying tactics, testimony Judge Jackson
found credible.

Meanwhile, Microsoft has failed to persuade another court to adopt Judge
Williams' approach. Allowing Caldera Inc.'s claims against Microsoft to
proceed, U.S. District Judge Dee Benson, of Salt Lake City, observed
that "innovation can be stifled" if a company can "escape antitrust
liability simply by claiming a 'plausible' technological advancement."
Microsoft's lawyers could well be in for a long fight.(The National Law
Journal Nov-22-1999)


MONSANTO CO: Lawyers Plan to Sue over Plant Patents & Marketing
---------------------------------------------------------------
If anyone symbolizes the growing battle over patenting plant life, it's
Palo Alto's Loren Miller. Twenty-five years ago, Miller traveled into
the Amazon rain forest looking for plants with medicinal value. An
Ecuadorean acquaintance gave him a cutting from the ayahuasca vine, and
several years later Miller obtained a patent for the plant. Though
Miller never used ayahuasca for commercial purposes, indigenous groups
saw it as a blatant act of theft. For centuries, ayahuasca has been an
ingredient in a hallucinogenic brew used by indigenous peoples of South
America in religious and healing ceremonies.

When an organization of Amazon tribes learned of Miller's patent, they
filed a petition with the U.S. Patent and Trademark Office to get it
revoked. "It's like getting a patent on the Christian cross or the
Eucharist. They interpret it as an assault on the core of their
culture," said Glenn Wiser, an attorney at the Washington, D.C.-based
Center for International Environmental Law who represented the
indigenous group.

Miller and others like him are at the center of a war being waged over
the patentability of plants. It's a multifaceted problem that ranges
from cases of "biopiracy" such as Miller's, to seed companies forcing
farmers to adhere to stringent growing practices to protect their
intellectual property.

Representatives at this week's World Trade Organization meeting in
Seattle are likely to tussle over plant patent and IP issues. Developing
countries want to protect native plants from being patented by
foreigners. Meanwhile, corporations advocate strong IP rights as a way
to ensure their investments in plants for food and drug development.

The matter is also making its way to the courts. Ten U.S. law firms are
preparing a class action against Monsanto Co. over its marketing
practices and requirements it has placed on farmers who purchase the
company's seeds. Joseph Saveri, a partner at San Francisco's Lieff,
Cabraser, Heimann & Bernstein, said the suit against Monsanto may assert
claims of misrepresentation and antitrust violations. "There are
concerns about competition and whether companies have too much market
power or are abusing market power," said Saveri, one of the attorneys
involved in preparing the suit.

Disputes over patenting plant life are nothing new. A few years ago, the
PTO pulled the plug on a patent for the turmeric root. But the conflict
has escalated as IP rights have become a focus of international trade
negotiations and as science has allowed companies to genetically modify
plant life.

                          Rewriting The Rules

As an international trade matter, the conflict over plant patents is far
from being resolved. The Trade-Related Aspects of Intellectual Property
Rights agreement of 1994, part of the General Agreement on Tariffs and
Trade, sets parameters for patenting life-forms, but provisions of the
treaty are under dispute.

At issue is whether alternatives to U.S.-style patents for plant life
will be acceptable. The discussion is focusing on a provision in the
so-called TRIPS agreement that says WTO member countries must protect
plant varieties either by patents or their own "effective" sui generis
system, or a combination of the two. Some developing countries are
advocating for the right to create their own systems of intellectual
property protection. But they worry the United States and others won't
allow them to do so. "The question is 'effective for whom?'" said Pat
Mooney, executive director of Rural Advancement Foundation
International. "Does the system help farmers in Ethiopia or Monsanto?"

According to Mooney, U.S. officials have said the only acceptable _sui
generis_ standard is that set forth in the 1991 convention of the Union
for the Protection of New Varieties of Plants. An intergovernmental
organization in Geneva, UPOV has adopted rules to protect plant breeders
but which fall short of actually issuing a patent to the breeder.

Under the TRIPS agreement, developing countries must adopt legislation
to implement the accord by 2000; the deadline for least developed
countries is 2006.

While the Clinton administration has said the text of the agreement is
not open for discussion, numerous proposals have been introduced by
developing countries. Included in draft ministerial text to be taken up
at the Seattle WTO meeting, the proposals are to be hammered out in
negotiations over the next three years.

Participants in Seattle may also take up a 1992 international treaty --
the Convention on Biological Diversity -- which says IP rights shouldn't
be in conflict with the protection of natural resources.

A proposal to the WTO says TRIPS should ensure that "all living
organisms and their parts cannot be patented; and those natural
processes that produce living organisms should not be patentable." The
United States, however, is unlikely to agree to the proposal. It did not
sign the 1992 biological diversity treaty. WTO ministers also may
examine the scope of IP protection for so-called " traditional
knowledge" of indigenous peoples.

Kristin Dawkins, a director at the Institute for Agriculture & Trade
Policy based in Minneapolis, said the Organization of African Unity has
drafted model legislation that would guarantee community control over
resources -- including plants. India, Thailand and the Philippines have
drafted similar measures, she said. Such legislation may have prevented
Loren Miller from winning a patent on ayahuasca and could stand in the
way of pharmaceutical and life sciences companies. These industries want
to take a "public resource that belongs to and is used by people in
developing countries, privatize it, and make it a monopoly- controlled
commodity" that the people will have to pay to use, Dawkins said.

                          Monsanto's Fight

Another issue on the WTO's agenda is already a source of controversy in
the United States: agribusiness efforts to control farmers' use of
seeds.

Developing countries are proposing that the TRIPS agreement ensures that
farmers have the right to save and exchange seeds. They say the
agreement also should be amended to "prevent anti-competitive practices
which will threaten food sovereignty of people in developing countries."

At least one U.S. multinational -- Monsanto -- requires farmers that
purchase any of the company's genetically modified seeds to sign a
contract stating the seeds will not be saved or reused. The policy has
infuriated farmers.

"Farmers feel like they are becoming serfs on their own land because
they can't use crops as they wish," said Elizabeth Cronise, an associate
at Washington, D.C.'s Cohen, Milstein, Hausfeld & Toll.

Cohen, Milstein is the lead firm preparing a class action against
Monsanto and other manufacturers of genetically modified seeds on behalf
of farmers. Nine other firms are involved in the suit, including San
Francisco's Lieff, Cabraser; Boies & Schiller in Washington; the
Philadelphia firms Spector Gadon & Rosen and Meredith Cohen Greenfogel &
Skirnick; and New York's Pomerantz Haudek Block & Grossman. They plan to
file a complaint by the end of the year.

"We see the suit as a signal that there is serious concern over the
monopoly control of the food supply" by multinationals and life science
companies, said Kathy Ozer, director of the National Family Farm
Coalition, which initiated the suit with the Foundation on Economic
Trends, a Washington, D.C.- based group led by Jeremy Rifkin.

Monsanto provides an enticing target for a class action. The giant life
sciences company had more than $8 billion in revenues last year. Cronise
said the class action may include claims that the St. Louis company has
attempted to gain control over the market for both genetically modified
and non-genetically modified seeds, committed misrepresentation and
fraud, and caused potential harm to farmers from "genetic drift" of
their seeds onto bordering fields. Farmers contend that Monsanto falsely
promised them an increased crop yield and a reduction in the amount of
pesticide needed if they used the company's genetically-modified seeds.

But Monsanto spokeswoman Lori Fisher said that farmers using the
company's seeds have had a 40 to 80 percent reduction in pesticide use
for potatoes and about a 40 percent drop in use of cotton insecticide.
As to the issue of genetic drift, Cronise said farmers whose crops are
cross- pollinated with Monsanto seeds growing in neighboring fields can
be accused of stealing the seeds. Monsanto's Karen Marshall said such a
situation would be very rare. She added that since pollen generally is
blown a short distance, farmers wouldn't get much seed from
cross-pollination anyway.

To date, the company has filed a handful of suits against farmers,
primarily for saving seeds or selling it to their neighbors as new seed.
Marshall said the company has investigated 100 to 250 reports of seed
piracy and usually either found that growers were not at fault or
negotiated a settlement with them.

                        The 'Terminator' Seed

Farmers and environmentalists won a major battle against Monsanto when
the company announced in October that it would not market the so-called
" Terminator" technology. The technology, which consists of a gene that
prevents seeds from germinating, was jointly developed and patented by
Delta & Pine Land and the U.S. Department of Agriculture. Monsanto
signed a merger agreement with Delta & Pine Land last year under which
it will acquire the technology.

Farmers and a variety of consumer organizations contended that the
technology could be disastrous for food supplies and could undermine
traditional methods of farming. The Rockefeller Foundation also threw
its weight behind the anti- Terminator movement. In a speech to
Monsanto's board of directors in June, Gordon Conway, the president of
the foundation, urged Monsanto to drop the technology.

While Monsanto conceded to this pressure, the company said it may pursue
other "gene protection" technology. For example, the company holds
patents on technology that potentially could enable Monsanto to shut off
genes for a particular crop trait; farmers would have to buy a Monsanto
chemical to activate a specific gene.

Mooney, of Rural Advancement Foundation International, said this
technology would give the United States an ultimate weapon in trade
negotiations. If a country had to import a herbicide to turn on a gene
vital to the survival of a crop, the U.S. could threaten to block
exports as a way of enforcing its rules, he said.

"It's a form of trait, or trade, sanction," Mooney said. "It's a fast
way to bring a country to its knees." Under TRIPS discussions, countries
are saying they should be able to ban this technology, he added.

Loren Miller's case over ayahuasca pales in comparison to the potential
free- for-all over Monsanto. Though it's unlikely to change PTO policy,
efforts to overturn Miller's patent have the potential to stand as a
landmark purely for symbolic reasons. Miller's patent "symbolizes for
indigenous people the problem of northern companies coming in and
expropriating their traditional knowledge," said the Center for
International Environmental Law's Wiser.

Wiser represented the Coordinating Body for the Indigenous Organizations
of the Amazon Basin in its petition for re-examination of the ayahuasca
patent to the PTO. The group, which Wiser said represents about 400
different tribes in 11 countries, won an initial victory earlier this
month when the PTO issued a "first office opinion" on the patent saying
Miller's variety of ayahuasca is not new and distinct.

Miller, who runs International Plant Medicine Corp., a Palo Alto-based
research and development company, declined to say if he would respond to
the PTO decision. A reluctant personification of the plant patent
controversy, Miller said he doesn't understand what all the fuss is
about. "If this patent was causing any harm to the indigenous people I
would have cancelled it myself," he said. "I don't care about the
patent. It's worthless. It's useless. It's just sitting in a drawer."
(The Recorder Nov-29-1999)


ONEOK INC: Reports on Contest with Southern Union over Southwest Merger
-----------------------------------------------------------------------
The following is the report by Oneok Inc. filed with the Securities and
Exchange Commission as of November 23, 1999:

On December 14, 1998, the Company entered into a merger agreement with
Southwest Gas Corporation subject to shareholder and regulatory
approvals. The Company agreed to pay $28.50 per share of common stock in
cash. On February 1, 1999, Southern Union Company (Southern Union) made
an unsolicited offer to purchase the Southwest shares for $32.00 in
cash. Southern Union then signed a Confidentiality and Standstill
Agreement with Southwest and completed its due diligence investigation.
On April 25, 1999, the Board of Directors of Southwest rejected Southern
Union's proposal as not being a superior proposal. Thereafter, the
Company increased its price to $30.00 per share and the merger agreement
was amended. Southern Union then increased its offer to $33.50 per share
and intervened in a shareholders lawsuit in California state court in an
effort to block the holding of a meeting of the Southwest shareholders
to consider the merger with the Company. Southern Union brought an
action in Nevada federal court to block the meeting and to block
proceedings before the Arizona regulatory commission. Southern Union
also intervened in the regulatory proceedings in California and Nevada.

After Southern Union made statements in the public press that it
intended to solicit proxies in opposition to the Company/Southwest
merger in breach of the Confidentiality and Standstill Agreement, the
Company (as third party beneficiary) filed an action in the Oklahoma
federal courts. The court entered a temporary restraining order against
Southern Union. It was later converted to a preliminary injunction
requiring Southern Union to abide by terms of the Agreement. The
issuance of the injunction is on appeal and efforts of Southern Union to
have it lifted have been unsuccessful.

On July 19, 1999, Southern Union filed an action in the federal district
court of Arizona in its further effort to block regulatory approval of
the merger. Named as defendants in the case are the Company, Southwest,
certain officers of the companies (including the Company's Eugene N.
Dubay and John A. Gaberino, Jr.), a member of the Arizona Corporation
Commission and a former employee of the Commissioner's staff. Southern
Union alleges a scheme of "fraud and racketeering" by the companies and
the individual defendants to block Southwest shareholders from voting on
the Southern Union proposal and ensuring that only the merger with the
Company would be considered. It also alleges a "secret campaign of
deception, corruption and misrepresentation" by the defendants to
influence the vote of the Arizona regulatory commission on the merger
and to "mislead" the Board of Directors of Southwest. Southern Union
further alleged that it was "fraudulently induced" to enter into the
Confidentiality and Standstill Agreement. The complaint asks for $750
million to be trebled for racketeering and unlawful violations,
compensatory damages of not less than $750 million and rescission of the
Confidentiality and Standstill Agreement. On October 12, 1999, Southern
Union filed an amended complaint asserting essentially the same claims
as in the earlier complaint and named additional individual defendants
(including the Company's Larry W. Brummett and James C. Kneale). The
Company intends to file a motion to dismiss.

On August 5, 1999, both the California state court and the Arizona
federal court denied Southern Union's motions for temporary restraining
orders. On August 10, 1999 the shareholders of Southwest approved the
merger.

On July 1, 1999, the Public Utility Commission of Nevada issued an order
approving the merger transaction. On July 30, 1000, a settlement
conference was held and a settlement document filed in the merger
approval proceeding before the Public Utility Commission of California.
No comments were received during the 30-day comment period. The Company
anticipates the California settlement will be considered for approval by
year end.

Upon approval by the California Commission, the only remaining
regulatory commission required to approve the merger is the Arizona
Corporation Commission where Southern Union is now directing its primary
efforts to block the merger.

At the Arizona Corporation Commission, consideration of the merger is in
the procedural and discovery stage. Testimony has been filed and the
staff is reviewing materials. At staff's request, the Arizona
Corporation Commission ("ACC") issued a procedural schedule on October
22, 1999 setting the application for merger approval for hearing on
February 11, 2000. ONEOK, Southwest, the ACC staff and Arizona's
consumer advocate have filed a stipulation and agreement recommending
that the transaction be approved.

Initially operating on the theory that the Company had funneled money
through an Arizona law firm to a member of the Arizona Commission in
order to influence improperly the Arizona regulatory proceedings,
Southern Union attempted through discovery and other means to support
their theory. Being unable to substantiate such claim, it was withdrawn
in the Arizona federal court case. Southern Union has now shifted to a
new theory that the Company intended to enter into an arrangement with a
large national investment banking firm to funnel money to an individual
who was formerly on the Commission's staff.

The Company has denied that it has done anything illegal or improper in
its efforts to obtain approval of the merger. It has categorically
denied all substantive allegations against the Company in the complaint
filed in the federal district court in Arizona. The Company intends to
continue to defend vigorously the Company and its good reputation and
continues to pursue regulatory approval for the merger.

It is possible that Southern Union will continue its litigation against
the Company, Southwest and the individual defendants claiming
substantial damages. The merger cannot be consummated without all
regulatory approvals. If such approvals are not obtained, or if not
obtained in a timely manner, the merger agreement could be terminated by
either the Company or Southwest which could result in further
litigation. If, at the time of consummation of the merger, there are
still outstanding claims against Southwest, those claims will become
claims against the Company, as successor in the merger. If any of the
plaintiffs should be successful in any of their claims against the
Company or Southwest and substantial damages are awarded, it could have
a material adverse effect on the Company's operations, cash flow and
financial position. The Company believes the Southern Union allegations
are without merit and is defending itself vigorously against all claims.



PESTICIDE MAKERS: Seller Asks CA Sp Ct to Hear Dispute over Settlement
----------------------------------------------------------------------
The California Supreme Court has been asked to review a trial court's
finding that a pesticide seller was bound by the terms of a settlement
reached by three former codefendants, all pesticide manufacturers, in a
groundwater contamination suit and barred from independently seeking
indemnity from the manufacturers for the amount it had previously paid
to settle. Britz Inc. v. Dow Chemical Co. et al., No. S081159 (CA Sup.
Ct., respondent's joint answer to petition for review filed Aug. 23,
1999; petition for review filed Aug. 4, 1999).

Britz Inc. challenges a ruling by a Fresno County Superior Court judge,
affirmed in June by a state appellate court, that said that it could not
pursue fraud claims against the manufacturers because the company had
received notice of and had an opportunity to challenge the good faith
settlement separately reached a year later between the manufacturers and
four cities who said their drinking water had been contaminated by
pesticides.

"That Britz was not a party at the time of the determination is
irrelevant so long as it was given notice and an opportunity to
challenge the determination," said the state's Fifth Appellate District
in an opinion written by Judge James F. Thaxter.

In its petition for California Supreme Court review, Britz maintains
that because it had already reached a $1.3 million settlement with the
plaintiff cities in 1994, it had become a non-party by the time those
cities reached a joint settlement with defendants Dow Chemical Co.,
Shell Oil Co., and Occidental Chemical Corp. in 1995.

The good faith settlement by the defendants with the California cities
Fresno, Clovis, Dinuba and Reedley, argues Britz, did not bind it, nor
prevent it from filing its own fraud and negligent misrepresentation
indemnification action against the manufacturers.

In their joint answer to the Britz petition for review, the
manufacturers have told the supreme court that the appellate panel's
ruling was consistent with state law (C.C.P. Sec. 877.6 c ), which
provides that "a good faith settlement determination bars 'any further
claims' by 'any other joint tortfeasor,' not 'any other party.'" The
manufactures say that if Britz's position were to be adopted, it would
mean that only the first party to settle a lawsuit could achieve the
finality which is essential to encouraging settlements. "All other
parties would be faced with relitigating the good faith of their
settlements again and again against parties who settled and were
dismissed earlier," the manufacturers maintain.

Ted R. Frame of Frame & Matsumoto of Coalinga, CA, represents Britz. Dow
is represented by Gennaro A. Filice III and Nicholas D. Kayhan of
Hardin, Cook, Loper, Engel & Bergez of Oakland, CA. Occidental is
represented by Stephen C. Lewis of Landels, Ripley & Diamond in San
Francisco. Shell is represented by Stephen W. Jones, Kirk C. Jenkins,
and Anthony J. Anscombe of Sedgwick, Detert, Moran & Arnold in San
Francisco. (Hazardous Waste Litigation Reporter, Vol. 19; No. 21; Pg.
12, Oct-15-1999)


SUMMIT TECHNOLOGY: Faces Fed & State Antitrust Suits Re Price-Fixing
--------------------------------------------------------------------
Summit Technology Inc., VISX, and certain of their affiliates (including
Pillar Point Partners, a partnership between affiliates of the Company
and VISX) are involved in a number of antitrust lawsuits which, among
other things, allege price-fixing in connection with per-procedure
patent royalties charged by the Company and VISX. These suits are
pending in both federal and state court, on behalf of both direct
purchasers from the Company and VISX and patients/consumers, and include
both purported class actions and individual actions. Most of the federal
lawsuits have been transferred for pretrial purposes to the U.S.
District Court for the District of Arizona by the Judicial Panel on
Multidistrict Litigation as In re: Pillar Point Partners Antitrust and
Patent Litigation.

   Federal Antitrust Cases Consolidated for Pre-Trial Proceedings

In April 1998, The Eye Professionals, P.A. commenced an action in the
U.S. District Court for the District of New Jersey against the Company
and VISX. The case purported to be a class action on behalf of all
individuals or entities that have paid a per-procedure fee directly to
either defendant for use of a Summit or VISX laser to perform laser
vision correction surgery at any time after November 1, 1995. The
complaint alleged, inter alia, price-fixing in violation of Section 1 of
the Sherman Act. The action sought treble damages, costs of suit,
attorneys' fees, and various forms of declaratory and injunctive relief.

Similar actions were also filed in May 1998 by Metropolitan Eye Center
and Outpatient Surgical Facility, Inc. in the U.S. District Court for
the Northern District of California against the Company, VISX, Summit
Partner and VISX Partner and by New England Laser Vision, Inc. in the
U.S. District Court for the District of New Jersey against the Company
and VISX.

In August 1998, David R. Shapiro, M.D., filed another similar purported
class action against the Company and VISX in the U.S. District Court for
the District of Arizona. Plaintiffs in these cases have agreed to
consolidation of the four purported class actions and filed a single
consolidated amended complaint in the U.S. District Court for the
District of Arizona. It purports to be a class action on behalf of all
persons and entities (excluding governmental entities, defendants,
subsidiaries and affiliates of defendants) in the United States who paid
a per-procedure royalty to any defendant or any alleged co-conspirator
or any subsidiary or affiliate thereof, at any time after September
1995.

The Consolidated Amended Class Action Complaint seeks, among other
things, unspecified treble damages on behalf of plaintiffs and the
alleged class, along with attorneys' fees, costs, and injunctive and
declaratory relief.

In September 1998, Laser Eye Center of Texas, L.L.P. and Warren D.
Cross, M.D., filed a purported class action against the Company, Summit
Partner, VISX, VISX Partner and Pillar Point Partners in the U.S.
District Court for the Southern District of Texas. The suit purports to
be a class action on behalf of all persons and entities who have paid
money to defendants, or any of their subsidiaries, on a per-procedure
basis for the ability to use defendants' laser equipment or technology
to perform laser vision correction surgery. Plaintiffs allege, among
other things, price-fixing and monopolization in violation of Sections 1
and 2 of the Sherman Act. They seek, among other things, treble damages
on behalf of the alleged class, costs of suit, including attorneys'
fees, and declaratory and injunctive relief. This case was transferred
to the District of Arizona for consolidated pre-trial proceedings.

In February 1999, Carolina Eye Associates, P.A. and Carolina-South Eye
Associates filed suit against VISX and the Company in the U.S. District
Court for the District of New Jersey. This action, like the consolidated
federal actions described above, purports to be a class action on behalf
of all persons and entities (excluding governmental entities,
defendants, subsidiaries and affiliates of defendants) in the United
States who paid a per-procedure royalty to any defendant or any alleged
co-conspirator or any subsidiary or affiliate thereof, at any time after
September 1995. The complaint alleges, among other things, price-fixing
in violation of Section 1 of the Sherman Act and seeks, among other
things, compensatory damages of at least $100,000 plus $8,300 per month
from the filing of the complaint until the date of judgment, trebling of
those damages, attorneys' fees, costs, and declaratory and injunctive
relief. This case was transferred to the District of Arizona for
consolidated pre-trial proceedings.

In June 1996, a Texas ophthalmologist, Robert G. Burlingame, sued the
Company, Summit Partner, VISX, VISX Partner and Pillar Point Partners in
U.S. District Court for the Northern District of California alleging
price-fixing in violation of Section 1 of the Sherman Act and state
antitrust laws and fraud and deceit in connection with certain of the
Company's sales and marketing activities. The plaintiff seeks, among
other things, compensatory damages of at least $30 plus $2 to $3 per
month until the date of judgment, trebling of those damages,
compensatory and punitive damages on the fraud claim against the Company
of at least $500 plus $2 to $3 per month until the date of judgment,
attorneys' fees, costs and declaratory and injunctive relief. This case
was transferred to the District of Arizona for consolidated pre-trial
proceedings.

In September 1996, a Nevada ophthalmologist, John R. Shepherd, through
his professional corporation, commenced a similar lawsuit against the
same parties, in the same court, alleging substantially similar
antitrust claims and seeking substantially similar relief, including
damages before trebling of at least $125 plus $13 per month until the
date of judgment. Plaintiff's counsel in the Shepherd case has indicated
that he intends to seek certification of the case as a class action.
This case was transferred to the District of Arizona for consolidated
pre-trial proceedings.

In November 1997, Antoine L. Garabet, M.D., Inc. and Abraham V. Shammas,
M.D., Inc., d/b/a The Laser Eye Center, sued the Company, Summit
Partner, VISX, VISX Partner and Pillar Point Partners in the U.S.
District Court for the Northern District of California seeking a
declaratory judgment that the patents held by Pillar Point are invalid
and unenforceable on account of alleged antitrust violations and
alleging fraudulent inducement and deceit in connection with certain of
the Company's sales and marketing activities. The plaintiffs sought,
among other things, compensatory damages on the fraud claim against the
Company of at least $49 plus prejudgment interest, disgorgement of
revenues and profits, a constructive trust on defendants' revenues and
profits, punitive damages of an unspecified amount, injunctions against
enforcement of the Pillar Point patents and against alleged continuing
violations of the antitrust laws, declaratory relief, attorneys' fees
and costs. This case was transferred to the District of Arizona for
consolidated pre-trial proceedings. The court has granted a motion to
dismiss. The Company had earlier filed a counterclaim for patent
infringement against the plaintiffs and Antoine L. Garabet, M.D. and
Abraham V. Shammas, M.D., individually. The counterclaim alleges that
counterclaim-defendants have infringed certain of the Company's patents
by using excimer laser systems manufactured by the Company without
having a license to do so, and seeks treble damages and injunctive
relief. The parties have stipulated to consolidate this counterclaim
with the Robert T. Lin litigation discussed below under "PATENT
LITIGATION."

In May 1999, Freedom Vision Laser Center, L.P. filed suit in the United
States District Court for the Central District of California against the
Company, Autonomous, Summit Partner, VISX, VISX Partner and Pillar Point
Partners. The complaint alleges, among other things, price-fixing,
monopolization, attempted monopolization, and conspiracy to monopolize,
in violation of Sections 1 and 2 of the Sherman Act, as well as
violations of the California Business and Professions Code. Plaintiff
seeks, among other things, damages that are alleged to be more than
$1,000 before trebling, disgorgement of alleged illegal and ill-gotten
gains, declaratory and injunctive relief, and attorneys' fees and costs.
This case has been transferred to the District of Arizona for
consolidated pre-trial proceedings.

           Cases Not Consolidated for Pre-Trial Proceedings

In April 1999, Antoine L. Garabet, M.D., Inc. and Abraham V. Shammas,
M.D., Inc., d/b/a The Laser Eye Center, filed suit in the U.S. District
Court for the Central District of California against the Company and
Autonomous. The suit alleges, among other things, that the Company's
acquisition of Autonomous may substantially lessen competition or tend
to create a monopoly in violation of Section 7 of the Clayton Act,
Section 1 of the Sherman Act, and the California Business and
Professions Code. The complaint seeks, among other things, unspecified
compensatory damages, trebling of those damages, declaratory and
injunctive relief, divestiture in the event that the acquisition of
Autonomous is consummated, restitutionary relief, including disgorgement
of alleged unlawful profits and the imposition of a constructive trust
over alleged ill-gotten gains, and attorneys' fees and costs. Plaintiffs
also threatened to seek a temporary restraining order, preliminary
injunction, and other unspecified preliminary injunctive relief directed
at the acquisition. The Company has filed a counterclaim for copyright
infringement and unfair competition against the plaintiffs and Antoine
L. Garabet, M.D. and Abraham V. Shammas, M.D., individually.

                           Counterclaims

The Company is the subject of additional Federal antitrust litigation as
a result of counterclaims to patent litigation initiated by Pillar Point
Partners. A discussion of those counterclaims is presented below under
"Patent Litigation."

                     State Antitrust Litigation

Beginning in March 1998, a number of actions brought by individuals
under the Cartwright Act and the California Business and Professions
Code were commenced against the Company, Summit Partner, VISX and VISX
Partner in Superior Court of Santa Clara County. In May 1998, these
actions were consolidated as In re PRK/LASIK Consumer Litigation. In
June 1998, plaintiffs B.J. Snyder, Donna McMahan, Paula Mobsby, Helen
Thomas, Carmen Ocariz, Martin Hermans, Ken Bartlett, Jackie Kirk, Grace
Geniusz, Jocelyn Joseph, Andrew Stoddard, and Cynthia Brubecker filed an
Amended Consolidated Master Complaint for Damages ("Amended Complaint")
in this matter against the Company, Summit Partner, VISX, and VISX
Partner.

The Amended Complaint purports to be filed on behalf of all natural
persons in the United States who underwent excimer laser surgery with a
laser manufactured by the Company or VISX during the period beginning
October 1995, and paid a per-procedure fee indirectly to a defendant,
excluding defendants, any unnamed co-conspirators of defendants,
defendants' predecessors, successors, parents, subsidiaries, affiliates,
officers and directors, governmental entities, and any and all judges
and justices assigned to hear any aspect of the litigation.

The Amended Complaint seeks unspecified compensatory damages,
restitution and/or disgorgement of alleged ill-gotten gains, prejudgment
and postjudgment interest, costs of suit, and attorneys' fees, as well
as various forms of declaratory and injunctive relief, including an
order permitting any person or entity with which the Company or VISX or
both have entered into any agreement since June 3, 1992, for the
purchase, license, or use of any of the Pillar Point Patents to withdraw
from such agreement without penalty or obligation. James Ballard filed a
similar suit against the Company, Summit Partner, VISX, VISX Partner,
Pillar Point Partners, and other individual defendants in Superior Court
of San Diego County.

This suit has been transferred to Santa Clara County and consolidated as
part of In re PRK/LASIK Consumer Litigation. The parties have stipulated
to the conditional certification of a class of natural persons in
California, Alabama, Arizona, the District of Columbia, Florida, Kansas,
Maine, Michigan, Minnesota, Mississippi, New Mexico, New York, North
Carolina, North Dakota, South Dakota, Tennessee, West Virginia, and
Wisconsin who have undergone ophthalmic refractive surgery with an
excimer laser manufactured by the Company or VISX.

In April 1998, Penny S. Marks, an individual who allegedly has had laser
vision correction surgery performed, commenced an action in Florida
state court against the Company and VISX. The case purports to be a
class action on behalf of all persons who have had a PRK procedure in
the State of Florida from October 20, 1995 up to and including the date
the class certification hearing begins. The complaint alleges various
violations of the Florida Deceptive and Unfair Trade Practices Act, the
Florida Antitrust Act and Section 5 of the Federal Trade Commission Act.
The complaint seeks unspecified compensatory damages, costs and
attorneys' fees, as well as declaratory and injunctive relief. Plaintiff
has filed a motion seeking class certification.

In June 1998, Barbara Worcester, an individual who allegedly has had
laser vision correction surgery performed, filed an action in Wisconsin
state court against the Company, Summit Partner, VISX, VISX Partner and
Pillar Point Partners. The case purports to be a class action on behalf
of all Wisconsin purchasers of refractive laser surgery procedures. The
complaint alleges violations of the antitrust laws of the State of
Wisconsin. The complaint seeks unspecified damages, trebling of those
damages, attorneys' fees and costs, and declaratory and injunctive
relief. Defendants removed this action to federal court, and it has been
transferred to the District of Arizona. Plaintiff has filed a motion
seeking class certification.

In January 1999, Karen Frankson, Virginia Harmes, and Beth Luetschwager,
three individuals who allegedly have had laser vision correction surgery
performed, filed a similar purported class action in Wisconsin state
court. Defendants removed this action to federal district court in
Wisconsin, and it has been transferred to the District of Arizona.
Plaintiffs' counsel has indicated that plaintiffs may attempt to dismiss
this case, without prejudice.

In May 1999, Linda Brisson, an individual who allegedly has had laser
vision correction surgery performed, commenced an action in Minnesota
state court against the Company, Summit Partner, VISX, VISX Partner and
Pillar Point Partners. The case purports to be a class action on behalf
of all Minnesota purchasers of refractive laser surgery procedures. The
complaint alleges, among other things, price-fixing in violation of
Minnesota antitrust law. The complaint seeks, among other things,
compensatory damages alleged to be at least in the millions of dollars,
trebling of those damages, attorneys' fees and costs, and injunctive and
other relief.


SUMMIT TECHNOLOGY: Faces Shareholders' Class & Derivative Suits in MA
---------------------------------------------------------------------
Between August 1996 and February 1997 various shareholder actions were
commenced against Summit Technology Inc. and certain of its officers in
the U.S. District Court for the District of Massachusetts (the "District
of Massachusetts") claiming, among other things, violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 arising out of
public statements made by defendants and violations of Section 20A of
the Securities Exchange Act of 1934, arising out of alleged insider
trading by certain defendants. The actions were consolidated, by order
of the Court entered December 2, 1996, as In re Summit Technology
Securities Litigation. Plaintiffs seek certification of the action as a
class action on behalf of all purchasers of Summit common stock, other
than defendants and certain affiliated persons and entities, between
March 31, 1995 and July 3, 1996. They seek unspecified damages,
interest, costs and expenses, attorneys' fees and extraordinary and/or
injunctive relief.

In October 1996, an additional class action was commenced in the U.S.
District Court for the District of Massachusetts against the Company,
its directors, certain of the Company's officers and the four
underwriters of the Company's October 1995 common stock offering
claiming violations of Sections 11, 12(2) and 15 of the Securities Act
of 1933 arising out of alleged material misstatements of fact in the
Registration Statement issued in connection with the offering. The
action was coordinated with the securities litigation by order of the
court dated December 2, 1996. It also seeks unspecified compensatory
damages, interest, costs and expenses, attorneys' fees and extraordinary
and/or injunctive relief.

In December 1996, one of the Company's shareholders filed in the U.S.
District Court for the District of Massachusetts a derivative action,
purportedly on behalf of the Company, against the Company as nominal
defendant, directors of the Company and certain present or former
officers of the Company. This action was consolidated with the
securities litigation by order of the Court entered July 22, 1997. The
complaint alleges that the conduct of the individual defendants has
exposed the Company to the expense and inconvenience of defending the
Securities Litigation and has harmed the Company's reputation, thereby
limiting its access to capital markets. It also alleges breach of
fiduciary duty, gross negligence and insider trading against individual
defendants. It seeks damages, interest, costs and expenses and
attorneys' fees.


SUMMIT TECHNOLOGY: Fla. Suit over RICO Violations Dismissed & Amended
---------------------------------------------------------------------
In October 1992, Joseph Seriani brought suit against Summit Technology's
wholly-owned subsidiary Lens Express and certain of its former
shareholders in the Florida Circuit Court. The suit alleged violations
of the Florida Civil Remedies for Criminal Practices Act -- the Florida
civil RICO statute -- based on events which allegedly occurred in the
mid-1980s. Seriani's claims against Lens Express were dismissed several
times for failure to state a viable claim, but in each instance with
leave to amend and refile. On May 15, 1996, the date of the Company's
acquisition of Lens Express, Seriani and his wife Rhonda Seriani filed
an amended complaint which included the Company as an additional
defendant. On November 25, 1996, the Serianis voluntarily dismissed
their action against the Company and on March 7, 1997 voluntarily
dismissed their action against the remaining defendants, in each case
without prejudice. On March 24, 1997, the Serianis commenced a new
lawsuit against Lens Express and others in the U.S. District Court for
the Southern District of Illinois, alleging substantially similar
claims. On October 7, 1999, the Court issued an Order to Show Cause why
the case should not be dismissed for lack of prosecution.


TOBACCO LITIGATION: Makers Plan to Say Products Are Too Deadly for FDA
----------------------------------------------------------------------
After decades of downplaying smoking's dangers, cigarette makers plan to
argue before the Supreme Court this week that the Food and Drug
Administration has no right to police the industry because tobacco
products are too deadly for the FDA to regulate.

In a landmark case with sweeping public health implications, the $50
billion industry is keeping its Marlboro Man image out of the courtroom
and expressing a new corporate motto that is emblazoned on Philip
Morris's Web site: "There is no 'safe' cigarette." The turnabout is
pivotal to the industry's attempt to thwart the FDA, which claimed
jurisdiction over tobacco products in 1996 after concluding that
nicotine is a drug and cigarettes are drug-delivery devices.

With the FDA poised to alter the way cigarettes are marketed and sold in
the 21st century, the court is weighing the industry's complaint that
the Clinton administration exceeded its legal authority in permitting
the FDA to assert control over tobacco products. Both sides are
scheduled to present oral arguments Wednesday, and the court is expected
to issue a ruling early next year.

Industry lawyers plan to argue that if the FDA prevails in court the
agency will have no choice but to ban the sale of cigarettes because the
law requires the FDA to regulate only drugs that are "safe and
effective." "It all comes back to whether we are safe and effective," an
industry official said last week in a briefing with reporters on the
condition that he not be identified. "We are not safe and effective."

The industry contends that only Congress has the power to abridge the
rights of adults to buy dangerous tobacco products and has chosen
instead to require safety warnings and other restrictions short of FDA
intervention. "This is a significant issue, whether an unelected
bureaucrat of the federal government can ban a legal product of a major
American industry," said Scott Williams, a spokesman for the five
largest tobacco manufacturers.

As a sign of the industry's disdain for the FDA's proposed regulations,
Williams derided the agency's finding that cigarettes are drug-delivery
devices. "Saying a cigarette is a delivery device is like saying ketchup
is a vegetable," he said. "It doesn't make sense."

In court papers, the FDA argues that the law provides exceptions for the
agency to regulate unsafe products such as tobacco rather than ban them
if it is in the public interest. And the FDA says it has no intention of
outlawing tobacco because "the sudden withdrawal from the market of
products to which so many millions of people are addicted would be
dangerous."

Under proposed regulations that President Clinton announced in 1996, the
FDA has chiefly targeted the marketing and sales of tobacco products to
minors. Studies have shown that more than 90 percent of adult smokers
started as minors, and more than 400,000 adults die each year of
smoking-related illnesses.

Antitobacco advocates said the FDA's proposed campaign against youth
smoking is crucial to stemming what John R. Seffrin, head of the
American Cancer Society, called "the 20th century's single largest
public health disaster." He and other advocates portrayed the industry's
talk of a possible ban on cigarettes as a scare tactic. "The industry's
argument is designed to frighten the court into saying the FDA can't
act," said Matthew Myers, executive vice president of the National
Center for Tobacco-Free Kids. "Without FDA jurisdiction, we will still
not have a nationwide set of rules to make it difficult for children to
purchase and obtain tobacco products illegally."

The only FDA tobacco regulation that has taken effect requires retailers
to ask cigarette buyers who appear to be 27 or younger to show
identification proving they are at least 18.

The agency's other proposed rules would ban cigarette vending machines
and self-service displays except in adults-only locations. In addition,
the FDA has proposed broad advertising, marketing, and promotional
restrictions on tobacco products, such as bans on outdoor ads near
schools and on sponsorship of sports events.

A federal district court in Greensboro, N.C., ruled in 1997 that the
Food, Drug and Cosmetic Act of 1938 empowered the FDA to regulate
cigarettes and smokeless tobacco because nicotine is addictive.

But the US Court of Appeals for the Fourth Circuit in Richmond reversed
the finding last year in a 2-1 decision. "We do not dispute that
Congress has charged the FDA with protecting the public health and that
tobacco products present serious health risks for the public," the court
wrote in the majority opinion.

But the appeals court accepted the industry's argument that Congress
effectively has reserved the right to oversee cigarette makers and did
not intend for the FDA to regulate tobacco. "Simply put, the FDA has
appropriated Congress's constitutional authority to make major national
policy," tobacco lawyers argued in their written brief to the Supreme
Court, citing the appeals court ruling.

The Supreme Court challenge will take place a year after cigarette
makers agreed to pay 46 states more than $200 billion over 25 years to
cover smoking-related health costs. The industry also faces a $20
billion civil lawsuit by the Justice Department and numerous
class-action cases across the country.

If the Supreme Court upholds the Fourth Circuit ruling, "the case is
over and there is nothing the FDA can do," an industry official said.

Although both sides expect to take their cases to Congress if they lose
in the Supreme Court, antitobacco groups said a defeat for the FDA could
be crushing, particularly with little chance of major action on Capitol
Hill in the 2000 election year. "As a result," Myers said, "you will not
have seen the type of fundamental change that will dramatically reduce
the number of Americans who die from tobacco." (The Boston Globe
Nov-29-1999)


WILLIAM SWEET: MA Jury Awards $ 8 Mil In Radiation Experiment Case
------------------------------------------------------------------
A Massachusetts jury on Oct. 15 awarded two plaintiffs a total of $ 8
million in  compensatory and punitive damages for injuries allegedly
caused by an experimental radiation procedure on terminally ill patients
(Evelyn Heinrich, et al. v. William H. Sweet, M.D., et al., No.
97-12134-WGY, D. Mass.). (Text of Verdict Sheet in Section D. Mealey's
Document # 15-991020-107.)

Named defendants include Associated Universities Inc., which operated
Brookhaven National Laboratory in New York; the Estate of Dr. Lee Farr,
the former medical director of Brookhaven; Massachusetts General
Hospital (MGH); Dr. William Sweet, the MGH neurosurgeon who, together
with Dr. Lee, helped pioneer Boron Neutron Capture Therapy (BNCT); and
the Massachusetts Institute of Technology (MIT). The three defendants at
trial were Sweet, MGH and MIT.

This case originates out of experiments conducted on people under the
care of MGH and Brookhaven in the 1950s and 1960s. In the second amended
complaint, plaintiffs alleged that various doctors, institutions and the
U.S. government conspired to conduct extensive, unproven and dangerous
medical experiments on more than 140 terminally ill brain cancer
patients without their knowledge or consent.

                          The Procedures

Sources told Mealey Publications that the experimental procedures
involved injecting patients with boron, which was expected to
concentrate in the tumor. Certain patients were exposed to neutrons from
a nuclear reactor. The sources said that when the boron captured a
neutron, a nuclear reaction occurred that resulted in a short burst of
radiation that was intended to kill the tumor.

Sources said that all of the more than 60 patients who received the BNCT
died, and the trials were called off in 1961. According to sources, in
1995 the family members of some of these patients filed a punitive class
action, claiming that BNCT was a form of human experimentation that
injured or caused the deaths of the decedents. According to sources, the
court agreed to try the claims of the class representatives first, and
if a plaintiffs' verdict was secured, then the court would address class
certification issues.

Sources told Mealey's that Evelyn Heinrich's husband and Henry M.
Sienkewicz's mother received injections and radiation exposure.
According to sources, not all plaintiffs received both the injections
and the radiation exposure. Sources added that plaintiffs maintained
that the decedents in this case were not informed of the risks
associated with the procedures. Sources further said that plaintiffs
argued that the defendants knew that the benefits did not outweigh the
risks associated with the procedure.

                       Prior Decisions

In an Aug. 16 order, the U.S. District Court for the District of
Massachusetts denied the United States' motion to dismiss. The court
granted MIT's motion for partial summary judgment. The court further
granted in part and denied in part Brookhaven, Sweet, MGH, and MIT's
motions for summary judgment or dismissal. In that order, the court
noted that the remaining claims include: (1) Bivens' constitutional
claim against all private defendants, (2) state law claims for fraud,
failure to obtain informed consent, wrongful death, negligence, and
negligent misrepresentation premised upon conduct that occurred in
Massachusetts involving radiation treatments and (3) Federal Tort Claims
Act claims against the United States premised on all of the conduct
alleged in the complaint.

On Sept. 9, sources said that District Judge William G. Young granted
summary judgment in favor of Associated Universities and the Estate of
Dr. Farr on claims brought on behalf of the patients who were treated at
the Brookhaven reactor. Later, sources said that the trial court
directed a verdict in favor of Associated Universities and the Estate of
Dr. Farr on the remaining claim that they had conspired with MGH, Dr.
Sweet and MIT to commit fraud on patients who received BNCT at the MIT
reactor.

Sources added that certain claims against the U.S. government are still
pending at the trial court level. The sources said that the claims of
two other proposed class representatives were ruled to be time-barred by
New York law.

                             Verdict

Evelyn Heinrich was awarded $ 250,000 in compensatory damages for
negligence, $ 250,000 compensatory damages for wrongful death, $ 750,000
in punitive damages against Sweet for wrongful death, and $ 1.25 million
in punitive damages against MGH.

Sienkewicz was awarded $ 500,000 in compensatory damages for negligence,
$ 2 million in compensatory damages for wrongful death, $ 1 million in
punitive damages against Sweet for wrongful death, and $ 2 million in
punitive damages against MGH for wrongful death.

No punitive damages were awarded against MIT. Sources said that the
defense argued during trial that the doctors hoped that the experiments
would provide some therapeutic benefits and the risks would be
outweighed by those benefits. According to sources, the defense argued
that the patients knew of the risks associated with the procedures and
accepted the risk because of their terminal illnesses.

Plaintiff experts include Michael Grodin, M.D., co-director of The
Center for Medical Ethics at Boston University; Dr. Robert Veatch,
Ph.D., director of the Center for Medical Ethics at Georgetown
University; Dr. Jonathan Moreno, Ph.D., head of the Center For Medical
Ethics at the University of Virginia Medical School; and Dr. Larry
Junck, M.D., professor of Neurology at the University of Michigan.

Plaintiffs are represented by Raymond J. Heslin of Gold, Farrell & Marks
in New York, Anthony Z. Roisman of Cohen, Milstein, Hausfeld & Toll in
Washington, D.C., John K. McGuire Jr. of McGuire & McGuire in Worcester,
Mass., Anthony Z. Roisman in Lyme, N.H., Martin Freeman of Freeman &
Jenner in Rockville, Md., and John Clifford of Clifford, Lyons and Garde
in Washington, D.C.

Sweet and MGH are represented by Raymond J. Kenny, Mark Newcity and
Chris J. Maley of Martin, Magnuson, McCarthy & Kenny in Boston and Gail
A. Anderson of Martin, Magnuson, McCarthy & Kenney in Boston. MIT is
represented by Francis C. Lynch, Lori B. Silver and Constantine Athanas
of Palmer & Dodge in Boston and Owen Gallagher, Garrett Harris and Sally
A. Vanderweele of Gallagher & Gallagher in Charleston, Mass. Farr and
Associated Universities are represented by William Shields and Sarah G.
Hunt of Day, Berry & Howard in Boston and Kevin T. Van Wart, Jerome A.
Karnick and Mark J. Zwillinger of Kirkland & Ellis in Chicago. The
United States is represented by Burke M. Wong of the U.S. Department of
Justice in Washington, D.C. (Mealey's Litigation Report: Emerging Toxic
Torts, October 20, 1999)


* CCAA Court Approves Philip Services' Financial Reorganization
---------------------------------------------------------------
Philip Services Corp. (TSE:PHV.) (ME:PHV.) announced on November 26 that
Mr. Justice Blair of the Ontario Superior Court of Justice has
sanctioned the Company's Amended and Restated Plan of Compromise and
Arrangement ("the Canadian Plan") under the Companies Creditors'
Arrangement Act ("CCAA").

The implementation of Philip's Canadian Plan will occur shortly after
its U.S. Plan of Reorganization (the "U.S. Plan") is confirmed under
Chapter 11 of the U.S. Bankruptcy Code. The Company is finalizing the
terms of its exit working capital facility, which is the last step
before seeking confirmation of its U.S. Plan. Upon implementation of its
Canadian Plan, Philip will transfer ownership of its Canadian
subsidiaries as a going concern to two new Canadian companies, Philip
Services Inc. and Philip Analytical Services Inc. Philip will continue
to operate and grow its Canadian businesses under these new legal
entities.

"This is an important step for our Company and our Canadian operations,"
said Anthony Fernandes, President and Chief Executive Officer. "We have
delivered on our commitment to provide consistent quality and service to
our clients throughout this process, due to the skill and dedication of
our employees. Our new Canadian companies will be supported by a strong
balance sheet, working capital, and our steadfast commitment to their
growth."

Through the financial reorganization, Philip will reduce its secured
debt from US $1 billion to US $250 million and US $100 million in
convertible payment-in-kind notes. The Company will also eliminate over
US $140 million in unsecured debt in return for US $48 million in
payment-in-kind notes and US $18 million in convertible payment-in-kind
notes.

Upon final Plan implementation, 24 million shares will be issued by
Philip Services (Delaware), Inc. on a pro rata basis to its secured
lenders, unsecured creditors, existing shareholders, class action
claimants, and other equity claimants, as set forth in the Company's
Plan. Shareholders of the Company on the date of implementation of the
Plan will receive their pro rata share of 480,000 common shares of the
restructured Company, or one common share for every 273 common shares
held. There are currently 131 million shares of the Company issued and
outstanding.

Philip Services is an integrated metals recovery and industrial services
company with operations throughout the United States, Canada and Europe.
Philip provides diversified metals services, together with by-products
management and industrial outsourcing services, to all major industry
sectors.


* The Danger Of Misclassifying Workers
--------------------------------------
For those in the labor and employment law field and for employers
throughout the United States, Microsoft brings to mind the continuing
litigation involving that company's classification of workers as
independent contractors, and the expensive consequences of that
decision.

The classification issue has broad ramifications for corporate America.
The dangers of worker misclassification are significant. Potential tax
liability may result, since companies do not withhold income taxes or
pay Social Security taxes on behalf of independent contractors.
Liability for benefits (such as retirement, health, stock purchase plans
and other types of employee fringe benefits) is possible, both to
workers improperly classified as independent contractors and to those
employed by staffing firms. And, companies may be subject to claims
under employment discrimination, labor law, unemployment compensation,
and other statutes.

Following a decade of restructuring, reorganizations and downsizing,
millions of American workers departed the traditional workforce and
became self-employed, or went on the payroll of temporary, leasing,
payrolling or staffing companies.

The structure of these arrangements vary. Many companies continue to use
independent contractors, often entering into contracts with individual
workers to define and delimit the nature of their relationship. Others
contract with temporary employment agencies, employee leasing firms,
payrolling services, or outside contractors to provide services. A whole
new industry has emerged, known as professional employer organizations
("PEOs"), supplying companies with workforces to provide all types of
services.

Whatever the arrangement, companies are looking outside the traditional
employment box in an effort to achieve flexibility in staffing, reduce
or control labor costs, obtain help for specific, targeted projects or
for ancillary services in a way that does not expand the payroll, and
avoid the burdens and legal risks of managing employees. Often, company
management believes too simplistically that by retaining another company
to employ workers, or entering into an independent contractor
relationship, exposure to liability can disappear or be shifted to
others. Recent cases demonstrate, however, that shifting liability is
easier said than done, and that the risks of entering into these
relationships can be great. The Microsoft case is a prime example.

                          'Microsoft' Case

Prior to 1990, Microsoft entered into written agreements with hundreds
of so-called temporary workers who worked as proofreaders, software
testers, production editors, and formatters. Many were labeled
"temporary" despite years of working at Microsoft. The agreements
included the workers' signed acknowledgements that they were
"independent contractors" and not employees, and were responsible for
their own insurance, benefits, and taxes, including Social Security
taxes. The agreements specifically provided that the workers were not
entitled to the various employee benefit programs available to Microsoft
employees. The workers submitted invoices for their time which were paid
through the company's accounts payable system rather than being paid
through the payroll process. Yet, they worked side-by-side with
Microsoft employees, performing the same functions under the same
supervision, with the same access to the company's offices.

In 1989 and 1990, the Internal Revenue Service conducted an employment
tax audit and found that Microsoft either exercised, or retained the
right to exercise, control and direction over the services performed by
these individuals. Accordingly, the IRS concluded that these workers
should have been considered employees, at least for tax purposes.

Microsoft accepted the IRS determination and began to restructure its
relationship with the workers. Some of the former contractors were hired
directly onto the Microsoft payroll. Others were retained by placing
them on the payroll of an employment agency which then contracted with
Microsoft to provide the services of the workers. Microsoft's
assumption, of course, was that because these workers technically were
employed by the agency, and not on the payroll of the company, it had no
liability to them.

A few years later, the workers commenced a class action, claiming that
prior to the 1990 audit, they were really employees and thus should have
had the right to participate in all of Microsoft's employee benefit
plans, including the valuable stock purchase and 401(k) savings programs
offered to Microsoft's employee workforce. A federal district court
rejected the plaintiffs' argument, finding that regardless of their
employment status they had contractually waived their rights to
Microsoft benefits.

The plaintiffs appealed the dismissal of their claims relating to
participation in Microsoft's 401(k) plan and stock purchase plan. Siding
with the workers, the United States Court of Appeals for the Ninth
Circuit reversed the district court's dismissal. (Vizcaino v. Microsoft
Corp., 120 F.3d 1006 (9th Cir. 1997)(en banc), cert. denied, 118 S.Ct.
899 (1998).)

In an en banc decision, the court determined that as to the 401(k) plan,
the terms of the plan should, in the first instance, be reviewed by the
plan administrator to determine whether, under the plan, the workers
were covered. As to the stock purchase plan, the court held that the
workers were both common law employees and employees under the terms of
the plan and as such entitled to participate in the plan. The court
remanded the case to the district court to determine an appropriate
remedy.

On remand, the plaintiffs raised the issue of the status of those
workers who, following the IRS audit, continued to perform work for
Microsoft while on the payroll of a temporary agency. Additionally, they
sought relief for those who were hired by the temporary agency to work
at Microsoft after the 1990 audit. This issue once again made its way to
the Ninth Circuit which earlier this year ruled that all of those
performing work for Microsoft while on the payroll of the agency were
covered by the class action. (Vizcaino v. Microsoft Corp., 173 F.3d 713
(9th Cir. 1999).)

The court reasoned that "even if for some purposes a worker is
considered an employee of the agency, that would not preclude his status
as common law employee of Microsoft. The two are not mutually
exclusive." Thus, according to the Ninth Circuit, a worker is not
automatically excluded from participation in one company's benefit plans
merely because he is on the payroll of another company.

                         Cases Proliferate

If you think Microsoft was an aberration, think again. There are a
growing number of cases in which similar claims are being made. Last
year, the U.S. Department of Labor brought suit against Time-Warner in
its capacity as administrator of the company's employee benefit plans.
(Herman v. Time Warner, Inc., No. 98 Civ. 7589 (S.D.N.Y., filed October
26, 1998).)

According to the Labor Department, the entertainment and publishing
giant mistakenly classified workers as independent contractors or
temporaries, thereby depriving them of the health and retirement
benefits provided to "regular" employees. The Labor Department is
alleging that Time-Warner and its administrative committee have violated
the Employee Retirement Income Security Act, the federal employee
benefits law, and that the committee has breached its fiduciary
obligations by failing to enforce the participation rules of the plans
to include temporary workers. Time-Warner disputes the allegations.

A recent court of appeals decision reinstated a suit against
California's Pacific Gas and Electric Company by a group of workers who
worked at a PG&E office but were on the payroll of an employee leasing
agency. (Burrey v. Pacific Gas & Electric Co., 159 F.3d 388 (9th Cir.
1998).)

The workers claimed that PG&E violated ERISA by failing to include them
in the company's benefit plans, including a retirement benefit plan. The
retirement plan covered all PG&E employees but excluded "leased
employees, as defined by @ 414(n) of the Internal Revenue Code." The
plan administrator determined that because the employees were employed
by a leasing company, they were not entitled to coverage under the plan.
A district court dismissed the action, concluding that the workers were
not PG&E employees.

The appellate court refused to defer to the plan administrator's
determination, concluding that because the plan incorporated a statutory
definition of a worker's status, no deference was required. The court
remanded the case to the district court for a determination of whether
the leased employees were "common law employees" and thus entitled to
coverage.

                        Beyond Benefits

The classification issue goes beyond employee benefits. The Equal
Employment Opportunity Commission, which enforces the nation's
employment discrimination laws, has gotten into the act. It recently
issued extensive guidelines on the subject of who can be held liable for
discrimination and harassment claims, particularly in situations where a
worker is on the payroll of one company, but actually performs services
for another. According to the EEOC, liability in these cases can be the
joint responsibility of both companies (often referred to as the "joint
employer" theory). But the EEOC also would absolve the payrolling
employer in many cases where the discriminatory conduct was solely the
responsibility of the company at which the work was performed.

The EEOC's view has support among the federal courts. Under the theory
of "joint employer," both the "technical" employer and the company for
whom the work actually is performed have been held liable for
discrimination under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, and the Americans with
Disabilities Act of 1990. (See, e.g., Rivas v. Federacion de
Associaciones Pecurias de Puerto Rico, 929 F.2d 814 (1st Cir. 1991);
Poff v. Prudential Insurance Co. of America, 882 F.Supp. 1534 (E.D.Pa.
1995); Guerra v. Tishman East Realty, 52 Fair Empl. Prac. Cas. (BNA) 286
(S.D.N.Y. 1989).)

In other cases, courts have ruled that the company at which an
individual works, rather than the firm which issues the paycheck, is
liable for discrimination or harassment, particularly where the
payrolling firm has no knowledge of or involvement in the decisions or
behavior being challenged. The Labor Department also has adopted this
view in its interpretation of the requirements of the Family and Medical
Leave Act. (See, e.g., Caldwell v. ServiceMaster, 966 F.Supp. 33 (D.D.C.
1997).)

Recent Fair Labor Standards Act decisions also reinforce the need for
proper classification of workers. In those cases, individuals treated as
independent contractors sued for overtime pay violations, contending
that they should have been considered employees. Labor Department
regulations drecognize that an individual can be a statutory employee of
more than one employer at the same time for FLSA purposes. (29 C.F.R. @
791.2.) Under this theory, the company for whom the work is performed
may be liable for a staffing company's noncompliance with minimum wage,
overtime pay, child labor, and equal pay violations.

Similarly, under the National Labor Relations Act, "joint employer"
status has been found in a number of cases where both the payrolling
company and the firm for whom the work is performed exercise control
over the worker. The National Labor Relations Board has included a
staffing company's workers in the bargaining unit of the company at
which the work is performed if there is a sufficient nexus between the
staffing firm's employees and the company. (NLRB v. Western Temporary
Services, 821 F.2d 1258 (7th Cir. 1987); Continental Winding Co. and
Kelly Services, 305 N.L.R.B. 122 (1991).)

The test for determining whether an individual is an employee varies
according to the statute at issue. For purposes of the employment tax
laws, for example, the Internal Revenue Code defines "employee" to mean
"any individual who, under the usual common law rules applicable in
determining the employer-employee relationship, has the status of an
employee." IRS regulations state:

Generally such relationship exists when the person for whom services are
performed has the right to control and direct the individual who
performs the services, not only as to the result to be accomplished by
the work but also as to the details and means by which that result is
accomplished. That is, an employee is subject to the will and control of
the employer not only as to what shall be done but how it shall be done.
In this connection, it is not necessary that the employer actually
direct and control the manner in which the services are performed; it is
sufficient if he has the right to do so. (Treas. Reg. @ 31.3121(d).)

                           20 Questions

The IRS's "20 questions" test often is used as a guide to determine
whether sufficient control exists to establish an employer-employee
relationship. (REV. RUL. 87-41.) The test, which has been criticized in
recent years as too cumbersome and leading to uncertain results,
nonetheless serves as a useful guide to the factors looked at to
determine employment status. According to agency regulations, the
relevant factors are as follows:

* Instruction

  The company provides the worker with specific instructions on how the
  services are to be performed.

* Training

  The company provides the worker with training relating to the
  services to be performed.

* Integration

  The nature of the services are an integral part of the company's
  operations, rather than merely a support, staff or ancillary
  function.

* Personal services

  The individual personally performs the services for the company,
  rather than hiring his own workforce to do so.

* Hiring and paying

  The company hires and pays the worker.

* Length of relationship

  There is a continuing relationship between the worker and the
  company, similar to the continuing relationship between an employer
  and its employees.

* Hours of work

  The company establishes the hours during which the work is to be
  performed.

* Amount of time

  The worker devotes all or substantially all of his time working for
  the company, restricting his ability to sell his services to others.

* Location of work
  The work is performed on the company's premises, particularly where
  the work could be performed elsewhere.

* Order of work

  The company determines the sequence or order of the work performed,
  or sets the priority of work.

* Reports

  The company requires the worker to submit reports.

* Payment

  Rather than payment by the job, the company compensates the worker by
  the hour, day, week or month.

* Expenses

  The company reimburses the worker for expenses relating to the work,
  rather than those expenses being figured into the overall price by
  the worker.

* Tools and equipment

  The company supplies the tools and equipment necessary to perform the
  work.

* Capital investment

  The worker has made a significant investment in the business.

* Profit or loss

  The worker can realize a profit (or loss) by the investment of his
  time and effort.

* Multiple companies

  The worker can perform work during the same time frame for more than
  one company or individual, indicating that the worker is in business
  for himself and is not dependent for his income on one company.

* Making services available

  The worker engages in efforts to market his services to others, not
  merely to the company for whom he is performing work.

* Discharge

  The company retains the right to discharge the worker in the same
  manner as it does its employees.

* Terminate

  The worker can terminate his relationship with the company without
  incurring liability.

                            Review Required

Intensified Internal Revenue Service scrutiny, combined with the rise in
lawsuits and agency enforcement, mandate that companies review the
status of all workers who are being treated differently than "regular
employees" under company benefit programs. The IRS and the courts look
at a variety of factors to determine whether an individual truly is an
employee of a company, including the degree of supervision and control
which the company exercises over that individual, the regularity of the
work, the freedom of the individual to sell his services to others,
where the work is performed, who provides the tools and materials, and
how payment is made.

A word to the wise: prevention remains the best cure. A self-audit of
the company, focusing on those not classified as company employees in
the context of factors relied


                               *********


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

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

This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
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