/raid1/www/Hosts/bankrupt/CAR_Public/991215.MBX                  C L A S S   A C T I O N   R E P O R T E R

                Wednesday, December 15, 1999, Vol. 1, No. 221


ASBESTOS: Loui Ap Ct Reinstates Personal Claims Based on Class Reversal
BAKER HUGHES: Berman, DeValerio Files Securities Suit in Texas
BAKER HUGHES: Day Edwards Files Securities Suit in Texas
BAKER HUGHES: Entwistle & Cappucci File Securities Suit in Texas
CASH-BALANCE PLANS: Older Workers Sue As They See Their Pensions Erode

CHITTENDEN TOWN: No Subsidy for Religious School Pupils, Sp Ct Upholds
CONTIFINANCIAL CORP: Berger & Montague File Securities Suit in New York
DRUG TESTING: Fed. Judge Stalls MI Program For Welfare Applicants
FOOD LION: 4th Cir. Affirms Dismissal of Shareholder Action
GUN MANUFACTURER: CA Ap Ct Restores Claim V. Navegar over Mass Shooting

HARVARD PILGRIM: Ellis & Rapacki File Fd Suit over Co-payment for Drugs
HMOs: Some See Legal Threat; Some Say Suits Should Mostly Fail
HOLOCAUST VICTIMS: Disputes Go on; German Envoy Sees Agreement on Amt.
JACK IN: Fights Appeal by Franchisees in CA over Business Practices
MONSANTO: Farmers, Environmentalists Sue On Genetically Modified Seeds

OAKLAND COLISEUM: Settles CA Suit over Accessibilty to the Disabled
PLAINS ALL: Berger & Montague File Securities Suit in Texas
S.T. HUDSON: Pa. Consulting Firm Indicted for Allegedly Inflating Bills
SUNGLASS HUT: Faces Claims over Wage and Overtime in Missouri
TOBACCO LITIGATION: Atty. For Black Farmers to Sue for Tobacco Farmers

TYCO INTíL: Rabin & Peckel File Securities Suit in New Hampshire
TYCO INTíL: Wolf Haldenstein Files Expanded Securities Suit in N.H.
TYCO INTíL: Wolf Popper Files Securities Lawsuit
US OFFICE: Contests Securities Suits Transferred from NY to Columbia
US OFFICE: Intends to Vigorously Contest Securities Suit in Delaware

XEROX CORP: Milberg Weiss Announces Expanded Period in Securities Suit
XEROX CORP: Spector and Roseman File Securities Suit in Connecticut
Y2K LITIGATION: Insurance Companies Targetted In Legal Battleground
YIELD-BURNING: Fla. Clerk Wants Lissack's Suit Unsealed; Hearing Dec 29

* More Workers Choosing Less Restrictive Health Plans, Survey Says


ASBESTOS: Loui Ap Ct Reinstates Personal Claims Based on Class Reversal
The Louisiana Court of Appeal has held that claims asserted on behalf of
asbestos personal injury plaintiff Loveless R. Nelson against W.R. Grace
& Co. were not barred by the applicable statute of limitations. The
court ruled that the claims remained timely because they were filed
within one year of the U.S. Supreme Court's 1997 ruling in Amchem
Products Inc. v. Windsor. Nelson et al. v. Armstrong World Industries et
al. , No. 98 CA 1746 (LA Ct. App., 1st Cir., Nov. 5, 1999).

Reviewing the matter based on a limited factual record, the appellate
court noted that Nelson was diagnosed with asbestos-related lung cancer
in January 1993, and filed suit against GAF Corp. in Louisiana shortly
thereafter, in March 1993. Nelson died in November 1993, and his wife
continued with the action on his behalf.

The court noted that GAF, as a member of the Center for Claims
Resolution (CCR), was subject to the ruling of the U.S. District Court
for the Eastern District of Pennsylvania in Georgine v. Amchem Prods.
Inc.(1994), certifying an asbestos personal injury class action against
GAF and other member companies, and precluding class members from
pursuing asbestos personal injury litigation in any other court. Because
Nelson's wife was considered a class member, her state court action was
then dismissed without prejudice.

In 1996, the Third Circuit U.S. Court of Appeals held that class
certification in Georgine was not appropriate, reversing the Eastern
District's ruling. In 1997, the U.S. Supreme Court affirmed the Third
Circuit's ruling sub nom in Amchem.

Nelson's wife filed the complaint in this matter approximately five
months after the high court's Amchem ruling, asserting that the 1993
suit against GAF had survived, and naming W.R. Grace as an additional
defendant. The company moved to dismiss the complaint before the trial
court, contending that under Louisiana law, Nelson's one-year period for
the filing of the complaint had elapsed. The trial court agreed, and
Nelson appealed.

In evaluating the application of the Louisiana statute of limitations,
the appellate court noted that the Eastern District's order effectively
tolled all state asbestos personal injury actions. The court implied
that Nelson could not have attempted to file suit against W.R. Grace in
state court, had the plaintiff intended to sue during the period that
the Eastern District's order remained in effect.

The court went on to conclude that because Nelson filed shortly after
the U.S. Supreme Court ruling in Amchem, the action fell within the
limitations period and could, therefore, proceed. "Because prescription
runs anew from the last day of interruption under La. C.C. art. 346 and
La. C.C. art. 3492 the operative prescriptive period in this case is one
year, plaintiff's petition in this matter filed approximately six months
after the U.S. Supreme Court's decision (affirming the decree that
vacated the federal injunction which had precluded plaintiffs from
maintaining the state court suit) timely asserts their claims against
Grace & Co., whom they alleged to be a solidary obligor with GAF," the
court noted. The appellate court then reversed the trial court and
remanded the matter.

Nelson is represented by Sean D. Fagan and George R. Covert of Baton
Rouge, LA. W.R. Grace is represented by Mark E. Hanna and Michael R.
Sistrunk of Metairie, LA. (Asbestos Litigation Reporter, Vol. 21; No.
20; Pg. 11, November 19, 1999)

BAKER HUGHES: Berman, DeValerio Files Securities Suit in Texas
Baker Hughes, Inc. (NYSE: BHI) was sued by a shareholder in a lawsuit
filed in the United States District Court for the Southern District of
Texas on December 9, 1999. The lawsuit, which seeks class action status,
is brought for violations of sections 10(b) of the Securities Exchange
Act of 1934. The class consists of all persons who purchased the common
stock of Baker Hughes during the period May 3, 1999 through December 8,

"The action charges that Baker Hughes issued false financial statements
as a direct result of the improper accounting activities at its INTEQ
drilling unit," said Jeffrey C. Block, one of the partners at Berman,
DeValerio & Pease LLP which is representing the plaintiff. According to
the lawsuit, Baker Hughes was caused to report false financial
information for its 1999 first, second and third fiscal quarters due to
the fraudulent accounting practices at INTEQ. The amount of the
accounting irregularities is expected to be approximately $40 to $ 50
million. Baker Hughes' common stock price was artificially inflated as a
result of this conduct and plummeted approximately 33% in reaction to
the disclosures.

Contact: lawyers at Berman, DeValerio & Pease LLP, Jennifer Finger, Esq.
Jeffrey C. Block, Esq. Berman, DeValerio & Pease LLP One Liberty Square,
Boston, MA 02109, (800) 516-9926, website: http://www.bermanesq.com
E-Mail: bdplaw@bermanesq.com

BAKER HUGHES: Day Edwards Files Securities Suit in Texas
Day Edwards Federman Propester & Christensen, P.C., announced on
December 13 that it has filed a securities class action lawsuit against
Baker Hughes, Inc. (NYSE: BHI), accusing it of violating the federal
securities laws by misrepresenting the company's financial situation
through improper and misleading accounting practices at its Inteq Unit.
The price of Baker Hughes stock dropped as much as 26% when it revealed
that it might need to restate its past results due to the accounting
issues at Inteq.

The Complaint particularizes how Baker Hughes and its management
violated the Securities Exchange Act of 1934 and specifies the company's
false statements and omissions of material facts. The Complaint was
filed in the United States District Court for the Southern District of

Contact: William B. Federman of Day Edwards Federman Propester &
Christensen, P.C., at (405) 239-2121, extension 1104, or Internet
electronic mail at wfederman@oklawyer.com

BAKER HUGHES: Entwistle & Cappucci File Securities Suit in Texas
Pursuant to Section 21(D)(a)(3)(A)(i) of the Securities Exchange Act of
1934 (the "Exchange Act"), Entwistle & Cappucci LLP, a prominent New
York law firm specializing in securities litigation, hereby gives notice
that a class action lawsuit for violations of the federal securities
laws has been filed against Baker Hughes Inc. ("Baker Hughes" or the
"Company") (NYSE: BHI) and certain of its officers and directors in the
United States District Court for the Southern District of Texas. The
lawsuit was brought on behalf of all persons who purchased Baker Hughes
common stock between May 3, 1999 and December 8, 1999, inclusive (the
"Class Period").

The complaint charges Baker Hughes and certain of its officers and
directors with violations of the Exchange Act. Baker Hughes services the
oil and gas industry, providing reservoir-centered products, services,
and systems to the worldwide oil and gas industry, provides products and
services for oil and gas exploration, drilling, completion and
production, and manufactures and markets a variety of roller cutter bits
and fixed cutter diamond bits.

The complaint alleges that during the Class Period, defendants reported
favorable earnings and represented that there were no accounting issues
at the Company, which caused its stock to trade at artificially inflated
levels. On December 1, 1999, Baker Hughes announced it expected 4th
Quarter 1999 earnings to be short of expectations. Then on December 8,
1999, Baker Hughes announced it might restate its past results due to
accounting issues in its Inteq unit that would require charges of
$40-$50 million be taken. On these disclosures, the Company's stock
declined as much as 26% to as low as $15 on volume of 28 million shares.
As a result of the defendants' false statements, the Company's stock
price traded at as high as $36 1/8 during the Class Period.

Contact plaintiff's counsel, Vincent R. Cappucci, Esq. of Entwistle &
Cappucci LLP, 400 Park Avenue, 16th Floor, New York, New York 10022.
Telephone: 212-894-7200 E-mail: mboyle@entwistle-law.com

CASH-BALANCE PLANS: Older Workers Sue As They See Their Pensions Erode
IBM Corp.'s recent change in its pension plan generated publicity
nationwide when employees flooded the company with e-mails and
threatened litigation.

The change from a defined-benefit plan to a cash-balance plan drew the
most protest from long-time employees, who discovered they would collect
less at retirement because of the conversion. "Everything I found out
about the new plan made me madder and madder," says Janet Krueger, a
23-year IBM employee in software consulting who quit her job as a
result. When she left, she says, she was paid 44 percent less in an
immediate annuity than she would have received before the plan change.

Krueger, of Rochester, Minn., formed a group to try to get IBM to
restore the benefits. Her campaign apparently had some success. The
company announced in September that it will allow some 35,000 additional
workers the option to continue under their old plan. Yet tens of
thousands of employees still don't have that choice, Krueger says.

Her group has not filed a lawsuit. But in other cases, switches to
increasingly popular cash-balance plans have spurred groups of older
workers to file class action lawsuits alleging age discrimination and
other violations of the law.

                      Big Players Challenged

Among the companies facing lawsuits are communications giants AT&T and
Bell Atlantic, building products company Georgia-Pacific Corp., and Onan
Corp., a subsidiary of Cummins Engine Co.

Meanwhile, both the Internal Revenue Service and the Equal Employment
Opportunity Commission are considering whether cash-balance plans
violate the Age Discrimination in Employment Act of 1967. While
investigating, the IRS is refusing to act on new applications that seek
preferred tax treatment for these plans.

Under the more traditional defined-benefit plan, employees' benefits are
based upon a formula, typically a percentage of the employee's final
salary, multiplied by years of service. These plans favor older workers
who are near retirement. "You tend to earn the largest share of your
benefit at the end of your career," says David Mustone, a pension and
benefits attorney with Reed Smith Shaw & McClay in Washington, D.C.
"Your pay should theoretically be at its highest and it should cause
your benefit to kick up."

Cash-balance plans are treated as a defined-benefit plan under the law,
but they are different. The employer determines the amount of opening
balance credited to the account. Then, each year the company credits the
account with a set amount of money, usually a percentage of the
employee's salary as well as a credit for interest accrued. Often the
interest is tied to an index such as the one for 30-year Treasury bonds.
When an individual retires, the benefit accrued is converted to an
annuity. If an individual leaves before retirement, he or she can take a
lump sum determined by a plan formula.

Employers favor these plans because they can cost less and can help lure
younger workers, who get large cash payments if they move to new
employers. Reportedly, more than 300 firms have converted to such plans.
The trend is expected to continue if federal agencies investigating the
potential discriminatory impact of conversions conclude there is no
violation of the law. Some groups, such as the American Association of
Retired Persons, contend that these changes could cost employees up to
50 percent of their pension benefits.

                    Fiduciary Fallures Alleged

While several court challenges allege that converting to cash-balance
plans discriminates based upon age, there are other claims as well.

Some lawsuits allege that the fiduciaries who administer these plans
have violated their duties under the Employee Retirement Income Security
Act in failing to properly disclose the impact of conversion on
employees. Other cases contend companies did not properly follow IRS
guidelines for figuring the lump sum benefit to be distributed to plan

The age discrimination claims focus on two issues, says William K. Carr
of Denver, who has brought two significant cases for plaintiffs in this
area. The first is how a conversion affects already accrued pension
benefits. The second issue is the amount older workers will be paid when
they retire.

When a conversion is made to a cash-balance plan, the opening balance of
the account may be set lower than the amount an employee has already
accrued under the old plan. As a result, that employee's accrued
benefits may be frozen until the account balance under the new plan
catches up. While these older workers are not accruing new pension
benefits, younger workers often continue to accrue them. Carr contends
the process, called "wearaway," amounts to age discrimination.

Carr also sees bias in the way some companies calculate benefit amounts.
Some use one formula to determine the amount paid to employees who leave
before retirement and another formula to set the retirement benefit. The
difference may disproportionately affect older workers, he charges.

The ADEA claims will not fly, counters Nell Hennessy, a Washington,
D.C., pension consultant who is the former deputy executive director and
chief negotiator for the Pension Benefit Guaranty Corp. She admits that
these plans benefit younger workers because they will have more years
for their accounts to grow.

"The underlying dispute is that [older workers] thought they were going
to get a particular benefit at some time in the future and it is not
fair to change the game," says Hennessy. "That is not the law in the
United States." Mustone agrees. "One of the foundations of the pension
system is that employers can change or terminate a plan based on
business decisions," he says.

Employers must protect benefits earned to date, but they are free to
change them going forward. "Most of the claims involve the fact that the
employer is changing future benefits," says Hennessy.

Donald J. Myers, also an attorney with Reed Smith Shaw & McClay, says
Congress was aware that cash-balance plans can adversely impact older
workers, but it did not bar such plans when it enacted the ADEA.

Congress could take action now, however. The Senate Health, Education,
Labor and Pensions Committee conducted hearings recently on how to
respond to the controversy surrounding cash-balance plans.

                        Legislative Action

Meanwhile, other legislators, many of whom have administration backing,
are introducing bills that would require forecasts of workers' benefits
under both old and new formulas. Current law does not provide
fiduciaries with guidance as to what information must be disclosed.

Another bill would bar companies from allowing younger workers to accrue
benefits in a new cash-balance plan while older workers' benefits are
temporarily frozen.

Many say the practical impact of an increase in notice regarding change
of pension plans will not be significant for the employees and could be
costly for employers. "It is no real protection for employees because
employers can do this," says Kathryn J. Kennedy, a professor and
director of the employee benefit graduate program at John Marshall Law
School in Chicago.

But Krueger, the ex-employee who is fighting IBM's switch to a
cash-balance plan, says even tougher legislation is needed. "There are
other companies looking at doing similar things," she says. "I think
this can be a campaign issue in the year 2000 elections."

                         Changed Plans

As more companies are switching from defined-benefit pension plans to
cash-balance plans, more older workers are complaining.

Generally with defined-benefit plans:

* The retirement benefit is determined by average pay over the final
  years of work.

* It is difficult to determine the benefit before retirement.

* The plan would benefit long-term employees more than younger workers
  who change jobs.

Generally with cash-balance plans:

* The account grows based on a flat percentage of pay.

* The accrued retirement benefit can be calculated at any time.

* The plan would benefit younger employees who change jobs more than
  long-term employees.

(Source: Employee Benefit Research Institute, published in ABA Journal,
November, 1999)

CHITTENDEN TOWN: No Subsidy for Religious School Pupils, Sp Ct Upholds
Washington (AP) reports that for the second time in five weeks, the
Supreme Court let Vermont continue subsidizing children who attend some
private schools while denying the same tuition help for those who go to
religious schools. The Vermont Supreme Court ruled that state tuition
payments for children attending religious schools would violate the
constitutionally required separation of church and state. The report
says that the court, without comment, rejected an appeal in which
parents of religious-school pupils argued that Vermont violates their
freedom of religion by denying them the same financial help given to
parents whose children attend private, nonreligious schools. The case is
Andrews vs. Chittenden Town School District, 99-628.

The justices rejected in early November a similar appeal from parents of
religious-school pupils in Maine. But, as in the Maine case, the
justices' action set no legal precedent and did little to resolve the
national debate over tuition vouchers and other financial help for
families whose children attend parochial schools, according to the
report. Politically charged battles over vouchers still are being fought
in several lower courts.  ``Across the nation, from Arizona to Florida,
states are acting boldly ... to enact a variety of charter-school,
tax-credit, school-choice and other educational reform programs,'' the
justices were told. ``These initiatives have often been hamstrung and
delayed by baseless ... challenges that reflect policy disagreements
more than sound constitutional doctrine.''

The appeal said some Vermont families have been denied an educational
benefit ``solely because they have chosen a religious school.''  But
state Attorney General William Sorrell urged the justices to reject the
appeal. ``The right to send one's child to a sectarian school does not
include the right to have the government pay for religious education,''
he said.

The nation's highest court has one church-state dispute on its decision
docket. In a Louisiana case, it is expected to say by summer whether
religious schools can receive computers and other instructional
materials paid for with taxpayer money under a federally funded program.
That decision may give some insights into the justices' views on the
validity of tuition vouchers and similar governmental help.

Vermont's tuition-reimbursement program, which dates back 130 years, is
aimed at high school students whose local school districts do not
operate a public high school. State law allows such school districts to
pay tuition for students to attend a public or private high school. Of
Vermont's 290 school districts, 88 paid tuition for all or some of their
high school students in the 1995-96 school year.

The appeal acted on was filed by Chittenden, Vt., residents who want
their local school district to pay tuition for their children to attend
Mount St. Joseph, a Catholic school in nearby Rutland. The local school
board agreed but the state Board of Education objected. Those seeking
the tuition help sued, and the Vermont Supreme Court ruled last June
that taxpayer-funded tuition payments for pupils attending Mount St.
Joseph's would violate the state's constitution.

That ruling condones a discriminatory violation of the ``free exercise''
of religion, lawyers for the religious-school pupils' parents argued.
Their appeal was supported in a friend-of-the-court brief filed by the
Christian Legal Society, Union of Orthodox Jewish Congregations and
National Association of Evangelicals. (Washington (AP), December 13,

CONTIFINANCIAL CORP: Berger & Montague File Securities Suit in New York
Berger & Montague, P.C. (http://home.bm.net),Levy and Levy, P.C. and
Harold B. Obstfeld, P.C. announced that on December 10, 1999, they filed
a class action lawsuit for violations of the federal securities laws in
the United States District Court for the Southern District of New York,
against ContiFinancial Corp. (NYSE: CFN) and others, on behalf of all
persons who purchased ContiFinancial Corp. common stock between January
29, 1998, and July 21, 1999, inclusive. The case number is 99-CV-5333.

The complaint charges ContiFinancial, certain of its officers and
directors and its controlling shareholder with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule
10b-5 promulgated thereunder. The complaint alleges that ContiFinancial
and certain of its officers and directors issued a series of materially
false and misleading statements regarding the Company's financial
condition and the level of prepayments the Company was experiencing. As
a result of these materially false and misleading statements, plaintiff
alleges that the price of ContiFinancial common stock was artificially
inflated during the Class Period. Before the disclosure of the
aforementioned adverse facts, certain ContiFinancial insiders sold
thousands of shares of ContiFinancial common stock to the public and the
Company completed several acquisitions.

Contact: Todd S. Collins, Esq., Jacob A. Goldberg, Esq., Susan Kutcher,
Investor Relations Manager, Berger & Montague, P.C., 1622 Locust Street,
Philadelphia, PA 19103, Phone: 888-891-2289 or 215-875-3000, Fax:
215-875-5715, Website: http://home.bm.nete-mail: InvestorProtect@bm.net
or Levy and Levy, P.C., Stephen G. Levy, Esq., 245 Park Avenue, New
York, NY 10167, 212-792-4343, Harold B. Obstfeld, P.C., Harold B.
Obstfeld, Esq., 260 Madison Avenue, New York, NY 10016, 212-696-1212

DRUG TESTING: Fed. Judge Stalls MI Program For Welfare Applicants
Michigan's plan to test new welfare applicants for drug use will have to
wait, as a federal judge this month imposed a temporary injunction
against the effort. Substance abuse field leaders around the country are
watching the case because it likely will set a precedent for whether
states with aggressive welfare-to-work programs can test residents for
substance abuse when they apply for public aid.

Michigan began the pilot testing program in October as part of its
larger welfare reform effort. But on Nov. 10, U.S. District Judge
Victoria Roberts ruled that the testing program, which requires new
applicants for public assistance to undergo urinalysis, is "likely

The American Civil Liberties Union (ACLU) of Michigan, on behalf of a
group of welfare recipients, requested the temporary injunction. The
ACLU argues that the testing program violates participants' Fourth
Amendment protections against illegal search and seizure.

Under the program, welfare applicants who refuse to be tested would be
denied benefits. Clients testing positive for drug use would be required
to complete a specified treatment plan; if they refused, their benefits
would decrease by 25 percent.

Despite the injunction, Michigan officials hope to continue the testing
program following a formal hearing scheduled for mid-December when the
judge will decide whether to grant class-action status to the
plaintiffs' claim and/or issue a preliminary injunction against the
testing program.

Douglas E. Howard, director of the Michigan Family Independence Agency,
the state agency overseeing the testing program, said, "We look forward
to returning to this program which was allowed by federal legislation,
enacted by the Michigan legislature and supported by our customers and
the general public. The drug testing pilot is an opportunity to help
individuals find employment and to strengthen families."

Karen Sorbet, a spokeswoman for the Michigan Family Independence Agency
said that the state will comply with the judge's order and cease all
testing of welfare applicants.

                         Extent of Drug Use

Legal issues aside, some question the necessity of screening welfare
applicants for drug use, since only about 8 percent of the participants
in the Michigan pilot tested positive. This usage rate is comparable to
that typically found in the general population. Of the 268 people tested
under the Michigan program, only 21 tested positive for drug use. Of the
21, all but three were found to have used marijuana.

But supporters of the program say it is necessary because substance use
poses a significant barrier to employment.

Oregon tried a similar program to Michigan's, but discontinued it after
determining that client anger over testing impeded treatment and that
testing for illegal drugs did little to address alcohol problems.
Efforts to link welfare benefits to drug use status also have waned in
Florida and Louisiana. (Alcoholism & Drug Abuse Weekly, No. 45, Vol. 11;
Pg. 3, November 22, 1999)

FOOD LION: 4th Cir. Affirms Dismissal of Shareholder Action
By a 2-1 margin, the Fourth Circuit U.S. Court of Appeals has upheld a
federal judge's ruling that dismissed the shareholder action brought
against Food Lion Inc. in the wake of the 1992 ABC news report revealing
labor law violations and unsanitary practices at several of the
supermarket chain's locations. The panel agreed that the alleged labor
violations at the core of the allegations were known to the market at
the relevant times. (Longman v. Food Lion Inc.) (Corporate Officers and
Directors Liability Litigation Reporter, Vol. 15; No. 1; Pg. 1, November
8, 1999)

GUN MANUFACTURER: CA Ap Ct Restores Claim V. Navegar over Mass Shooting
In the first such ruling of its kind by any state appellate court, the
California Court of Appeal has reversed a trial court and ruled that the
victims, or survivors of victims, of the 1993 mass shooting at 101
California Street in San Francisco can pursue an ordinary negligence
claim against the manufacturer of the prime weapon used in the crime.
Merrill v. Navegar Inc. (Consumer Product Litigation Reporter, November

HARVARD PILGRIM: Ellis & Rapacki File Fd Suit over Co-payment for Drugs
A class action lawsuit was filed in Federal District Court on December
14, 1999 alleging that Harvard Pilgrim Healthcare has been secretly
profiting from the $5.00 co-payment most members pay for prescription

The suit alleges that, for many commonly prescribed drugs, such as
penicillin, Harvard Pilgrim pays only an average of approximately $3.00
a prescription, further reduced by volume discounts given to Harvard
Pilgrim by pharmaceutical companies, yet the customer is charged a $5.00
"co-payment" for the prescription. As a result, the suit alleges,
Harvard Pilgrim has illegally reaped millions of dollars of excess
profits. Attorney Fredric L. Ellis, Plaintiff's lead counsel, said
"Harvard Pilgrim has misrepresented to consumers that they are making a
co-payment on a prescription and that health insurance is covering the
rest; in reality Harvard Pilgrim is secretly making a profit on the
customer's co-payment. With Harvard Pilgrim increasing the co-payment to
$10 on many drugs beginning in 2000, the solution to Harvard Pilgrim's
financial problems should not be found in fraudulently overcharging
consumers for prescription drugs."

Stuart T. Rossman, Director of Litigation at the National Consumer Law
Center, which serves of counsel in the case, added: "we are particularly
concerned that this scheme has the greatest impact on the most
vulnerable consumers in our community who rely upon Harvard Pilgrim to
meet their basic, but critical, daily medical needs -- the elderly and
low-income working families."

The suit seeks a permanent injunction to prevent Harvard Pilgrim from
continuing the practice and a return of the fraudulently earned profits.
The case has been assigned to Federal District Court Judge Patti B.

Source from Ellis and Rapacki says that the National Consumer Law Center
("NCLC") is a non-profit corporation founded in 1969 and dedicated to
the interests and legal representation of elderly and low-income
consumers. NCLC works closely with lawyers representing elderly and
low-income consumers, and with federal and state officials, the press
and the courts to promote justice for consumers. NCLC maintains offices
in Boston, Massachusetts and Washington, D.C.

Contact: Attorney Fredric L. Ellis of Ellis & Rapacki, 617-523-4800

HMOs: Some See Legal Threat; Some Say Suits Should Mostly Fail
In one corner are the for-profit managed health-care organizations, the
frequent butt of consumer complaints. In the other corner hover
class-action attorneys -- disaster chasers, to their detractors --
champing at the bit to pursue lawsuits against the health-care industry
while standing to collect millions of dollars in fees. There isn't much
public sympathy for either party. But the legal threat is real,
according to the Ventura County Star, and HMOs are drafting defense
strategies to contain potential liability, a liability that could result
in higher premiums.

HMO executives consider the fraud allegations contained in the lawsuits
unfounded, frivolous and a nuisance. But plaintiffs' attorneys involved
in various class-action lawsuits say the industry has invited this kind
of inquiry upon itself. "It's mind-boggling," said Randy Hopper, with
the Minneapolis law firm of Zimmerman Reed. "So many claims were being
denied that it gave the appearance that decisions were being made by
formula and policy" rather than medical need. So far, only a dozen or so
fraud lawsuits have been filed throughout the country.

Hopper, whose firm has been part of the tobacco action but has not yet
jumped into the health-care fray, said the perception of collusion by
health-care providers and insurers to contain costs is the underpinning
of the legal claims against it. "By denying claims, you drive up
profits," Hopper said. "At some point, you have antitrust potential."

Attorneys and professionals within the health-care industry see a
serious downside, both financially and in terms of care, if the
class-action lawsuits become a new wave of legal activity against HMOs.
"If resources are going to defense lawyers to defend your organization,
then that's money not going into health care," said Margo Struthers,
head of the health group practice for Oppenheimer Wolff & Donnelly.

Why the potential for more lawsuits now? According to health
professionals, part of it is frustration by patients, part of it is
changing medical technology and part of it is the work of innovative

"It's very attractive to an attorney to bring lawsuits in the
health-care sector in particular," said Michael Scandrett, an attorney
and executive director of the Minnesota Council of Health Plans. He
noted that a case often is determined by a jury of lay people who must
decide which party's expert witness was more believable. "A trial
attorney can make the case that a physician used new technology and he
shouldn't have, or he used an existing treatment when a new one was
available," Scandrett said. "There's very little predictability of the
outcome. ... The impact is, you lose a couple of these cases and
everyone's premiums go up."

But placing the blame for increased litigation on greedy attorneys can
be disingenuous, said Barbara Colombo, director of the Center for Health
Law and Policy at the William Mitchell College of Law.

"The HMOs say this will hurt the consumer, not help them. They say the
only winners will be the trial lawyers. That will be an unsuccessful
strategy," said Colombo, assistant Minnesota Health Department
commissioner. "They have to convince consumers to trust them.

"The equation is very simple: The more services you want, the more it
will cost. Consumers view health care as an entitlement, like education.
It is not."

Keith Halleland, of the Minneapolis firm Halleland Lewis Nilan Sipkins &
Johnson, agrees that health-care providers need to improve their
relationships with patients. "There's been a disconnect between the
health provider and the customer," said Halleland. "The underlying
debate about medical care is a tension between controlling costs and the
people's belief that they are entitled to the best care in the world."
Halleland, whose 41-member firm has a 15-lawyer health practice, said
care providers need to have better programs for sharing information and
data with their customers.

Several moves have been taken in the past year to improve relations
between insurers and the insured. Minnetonka, Minn.-based United
HealthCare, which faces a lawsuit in Alabama and covers 14.5 million
people, last month announced a policy change that gives doctors, not
administrators, final say over treatment procedures.

To Colombo, both the managed care industry and the public served by it
have to examine what they want to achieve. "It's incumbent upon the
industry to not only educate consumers, but to be straight with them,"
she said. "If they want more, they're going to have to pay more."
(Ventura County Star (Ventura County, Ca.), December 14, 1999)

While industry is said to be trying to ward off the growing legal
threat, it has been reported that some experts say that lawsuits
targetting HMOs should mostly fail. It has been reported that the
majority of a recent spate of class-action lawsuits against health
maintenance organizations have "no chance" of succeeding, according to
William H. Lash III, professor of law at George Mason University. Lash
was one of four experts to speak at a legal forum sponsored by the
nonprofit Washington Legal Foundation.

Fourteen law firms have filed class-action lawsuits against seven HMOs,
alleging that the HMOs misrepresent their coverage and treatment and
violate the civil Racketeer Influenced and Corrupt Organizations Act and
the Employee Retirement Income Security Act. The lawsuits claim the HMOs
unfairly give doctors financial incentives to limit treatment, and
mislead consumers about the quality of care they deliver.

"I thought racketeers were the ones who broke bones, not the ones who
mended them," Lash said. "There is extortion in this case: by the
plaintiff's attorneys." Lash said the intent of the RICO statute was to
crack down on organized crime, not punish legitimate businesses, such as
HMOs. George L. Priest, professor of law and economics at Yale Law
School, said the "lawsuits are remarkable. There is no injury shown to
anyone at all." He said it will be difficult for the plaintiffs to gain
class-action status, but warned that if the lawsuits are successful, the
managed-care industry will be eliminated. "It ought to be dismissed, but
we would have said that about the tobacco litigation," Priest said.
Lonie Hassel, an attorney with the Washington, D.C.-based Groom Law
Group, said the lawsuits' claims under ERISA should be thrown out
because ERISA doesn't prohibit financial incentives. "On a strictly
legal matter, these cases should fail," Hassel said. However, she noted
the cases have already depressed the stock value of publicly traded
HMOs, who may be willing to settle. Barbara Wheeler, the vice president
of legislation with the Civil Justice Association of California, said
the ERISA and RICO federal charges should be dismissed, but said the
similar lawsuits filed under California state law aren't so clear. She
said the California law is broader and favors consumers.

Cigna Corp., Foundation Health Systems Inc., Humana Inc., PacifiCare
Health Systems Inc. and Prudential Insurance Company of America--whose
health-care operations were recently acquired by Aetna Inc.--and Aetna
have been sued in federal court by the same group of attorneys.
PacifiCare and Aetna have also been sued in state court in California.

In October, a federal judge in Philadelphia threw out a RICO suit
against Aetna. The company said the judge in the case ruled "a vague
allegation that quality of care may suffer in the future is too
hypothetical an injury" and "the complained cost-containment provisions
are disclosed to prospective members." The plaintiffs' attorneys, who
have also filed tobacco and asbestos litigation, include: Scruggs
Millette Bozeman & Dent; Ness Motley Loadholt Richardson & Poole;
Provost Umphrey Law Firm; Minor & Associates; Williams Bailey Law Firm;
Langston Langston Michael Bowen & Tucker; Wayne D. Blackmon; Eastland
Law Offices; George Chandler; Furth Fahrner & Mason; Harry Potter; David
O. McCormick; Nix Patterson & Roach, and Langston Frazer Sweet & Freese
(BestWire, Nov. 24, 1999)

HOLOCAUST VICTIMS: Disputes Go on; German Envoy Sees Agreement on Amt.
Germany's envoy to compensation talks for Nazi-era slave and forced
laborers predicted that an agreement will be reached this week on how
much money to pay the victims. ''We will all agree shortly,'' a report
on AP Worldstream quotes Otto Lambsdorff as saying in an interview on
German ZDF television.

On Monday, lawyers representing the victims asked for $5.7 billion to
compensate those who were in ''work-to-death'' programs in concentration
camps and others forced to work to fuel Hitler's war machine. The
lawyers also want compensation from American companies in addition to
German industry and government.

Lambsdorff refused to set a figure he thought would be acceptable to all
sides in the negotiations. But he said that German industry wouldn't be
raising its contribution to the fund, now at $2.6 billion. The German
government is contributing $1.6 billion.

Negotiators in the talks include the German and U.S. governments,
class-action lawyers, German industry, Jewish groups, Israel, Ukraine,
Poland, Russia, Belarus and the Czech Republic.

U.S. attorney Michael Hausfeld said Monday that another opposing offer
also had been made by survivor groups. He said that offer was relayed
over the weekend to Germany by the office of U.S. envoy Stuart
Eizenstat, creating some confusion as to the victims' actual demands.

While some attorneys are representing victims who have called their
offices, others are representing the eastern European countries whose
citizens stand to benefit from the fund.

Even if an agreement is reached on the money, Lambsdorff said there
would still be negotiations to decide how to split it up among
foundations that will handle its distribution. He was hopeful, however,
that all this could be accomplished by next summer.

On Monday, spokesmen for Ford of Germany in Cologne and Opel, the German
subsidiary of General Motors Corp., said they were considering joining
the compensation fund. Ford spokesman Paul Schinhofen said company
representatives in the United States are among those from about 200
American companies with operations in Germany discussing the possibility
of joining the fund.

Although Germany has already given about $60 billion in payments,
pensions and other programs for war crimes, there has never been
compensation for the estimated 12 million people put to work to help
Nazi Germany's war effort. Anywhere from 1.5 million to 2.3 million
people are still alive today, mostly non-Jews living in eastern Europe.

Even once the question of money is resolved, there are still critical
questions that could prevent survivors from seeing compensation any time

A Nazi victims' group made public Tuesday the proposed German law that
lays the groundwork for the fund, criticizing the strict requirements
for survivors to actually receive compensation. Their criticism comes as
class-action lawyers involved in the talks say there has been some
disagreement over distribution of the funds among the various lawyers
and survivor groups.

Lothar Evers, head of a German group representing Nazi victims, said the
narrowly defined categories laid out in the foundation proposal will
mean that only 20 percent to 30 percent of survivors will actually
receive compensation. At the same time, negotiations would give industry
total legal immunity, he noted. ''There's been so many hurdles built to
people getting compensation,'' Evers said. ''This is an unbelievable
process.'' The proposed law would require survivors to submit at least
two documents proving they were forced into continuous labor under
constant guard for at least two months. Evers said documentation in many
cases doesn't exist or would not meet the proposed law's standards
meaning many legitimate forced labors would never receive money. He also
said forced workers should be eligible for the fund no matter how long
they labored, and criticized a six-month limit on the time people could

The proposed law must be passed by the German parliament in order to
create the foundation that will administer the joint industry-government

Germany's chief envoy to the compensation talks, Otto Lambsdorff, also
acknowledged that there are still more issues, including legal immunity
to resolve after the size of the fund is worked out. (AP Worldstream,
December 14, 1999)

According to the New York Times, the German subsidiary of General Motors
said on December 14 that it would probably contribute to a fund to
compensate forced laborers in the Nazi era, a move that could make G.M.
the first American company to accept responsibility for those abuses.
The subsidiary, Opel, made its statement as lawyers for the former
workers appeared close to a final multibillion-dollar accord with the
German government and industry. An accord would safeguard the companies
from legal claims. In Detroit, the general counsel of G.M., Thomas
Gottschalk, said that the company was "open and seriously willing to
consider participation in the fund," but that it was awaiting the final
outcome of negotiations.

G.M. bought the German car maker, Adam Opel, more than 70 years ago.
General Motors's long-held view has been that because the German
government took command of Opel factories in the war, compensation was
its responsibility. Opel employed at least 2,000 forced laborers in the

Big German companies, which also clung to that view, decided more than a
year ago that they would be wiser to negotiate a friendly settlement
than endure a nightmarish court battle.

Lawyers, the German government and industry are negotiating a fund of 10
billion marks, or $5.3 billion, participants in the talks said.

Under a plan that has been floated by Stuart Eizenstat, the American
deputy treasury secretary who is trying to mediate a pact, G.M. and up
to 200 other American companies with German subsidiaries would create a
separate fund with 1 billion marks, roughly $500 million. German
government and industry officials remain adamantly opposed to a separate
American fund, arguing that all companies that used forced labor should
pay into the same effort. It is not clear how this issue will be

People on both sides of the negotiations say an overall agreement could
come together in a few days. German officials have publicly refused to
increase their latest offer, a total of 8 billion marks, or $4.1
billion, with 5 billion from industry and 3 billion from the government.
But people close to the negotiations say they are becoming resigned to
paying 10 billion marks. "There seems to be a kind of consensus around
the 10 billion number," said one person involved in the talks, which
include American class-action lawyers, Jewish organizations, American
and German companies and the two governments. "We will know within the
next 24 hours if it works," said Burt Neuborne, a lead lawyer.

Executives at Adam Opel said they were speaking up because the
negotiations were at a crucial stage. "Now is the moment when it will be
determined whether the negotiations are a success or not," said Bruno
Seifert, a spokesman for Opel in nearby Russelsheim.

Ford Motor, one of the first companies to be cited in a class-action
suit over Nazi-era forced labor, said it is considering whether to take
part in a fund.

It is unclear how many other American companies have German subsidiaries
that used forced laborers. But people close to the talks said they had
put together a list of nearly 200 companies that they are trying to coax
into joining the effort.

The American class-action lawyers remain in heated disagreement with
German officials on handling the compensation. A spokesman for the
German industry foundation, Wolfgang Gibowski, has insisted that all
companies contribute to the same fund. As things stand right now, Mr.
Gibowski said, the foundation has not gathered enough commitments from
German corporations to produce the 5 billion marks that business is
supposed to pay, and the foundation is worried that the number of
companies involved would diminish if some paid other funds. Negotiators
are hoping that additional German companies will join the fund after an
agreement has finally been reached, adding to the total compensation.

But "if there is a separate American fund, then that would lead to a
separate French fund and a separate British fund," Mr. Gibowski said.
"And there would be nothing left for the German fund."

Companies like Ford and G.M. have long conceded that their German
factories used forced labor. But advocates for former forced laborers,
most of whom were brought to Germany against their will from Central
European countries, say American companies had complicated relations
with their subsidiaries around the war years. "There were people in
charge of the Ford plant during the war that were promoted to the top
levels of Ford in Europe after the war," said Lothar Evers, director of
the Nazi Victims' Support Center, an association in Cologne.

Ford even asked Washington for compensation for a factory that Allied
forces bombed, Mr. Evers said. "If you can claim damages for buildings
that were destroyed by bombs, it is only fair that people whose lives
were destroyed should be able to seek claims," Mr. Evers said.

Despite repeated exhortations from the German government, only about 60
German companies have offered to make payments to the fund.

Last week, the American Jewish Committee published a list of 257 active
German companies that appear to have used forced labor and have not
agreed to pay compensation. Many are small and medium-size companies.
But they also include Philipp Holzmann A.G., a huge construction company
that was recently rescued from bankruptcy by the German government and
big banks.

The battles among groups that represent former forced laborers have been
almost as intense as the bargaining with German leaders. The players
include the World Jewish Congress and the Israeli government, as well as
a fractious alliance of class-action lawyers who represent mostly
non-Jewish workers in Central and Eastern Europe.

The lead class-action lawyers include Mr. Neuborne, a law professor at
New York University; Melvyn Weiss, who battled Swiss banks over assets
owned by Holocaust victims and who represented several states against
the tobacco industry; Michael Hausfeld, a securities lawyer who led a
landmark battle against Texaco over racial discrimination; and Edward
Fagan, who has sued the Swiss banks, scores of German companies and,
most recently, Japanese companies over wartime actions. The lawyers
stand to earn tens of millions if not hundreds of millions of dollars
from a settlement, a fact that has generated animosity among some Jewish
groups, and the lawyers have in recent days battled one another over how
hard to bargain.

The Israeli government, which has been monitoring the talks, has become
increasingly concerned that the lawyers are holding out for too much
money at the expense of Holocaust survivors who are rapidly dying of old
age, a lawyer in the talks said. Experts estimate that 240,000 slave
laborers, mostly concentration camp prisoners forced to work in
factories, are alive. About half are Jewish. In addition, as many as two
million other people were coerced into various degrees of forced labor.
Most came from Central European countries and Russia and were not

Under plans being discussed, a new German foundation would make money
available to victims primarily through bilateral groups that already
exist in most Central European nations to pursue claims against the
German government. (The New York Times, December 14, 1999)

The Financial Times (London) describes the situation as a bitter rift
between lawyers representing former Nazi slave and forced workers, as
rival groups of US attorneys sought to negotiate separate settlements to
their class action lawsuits. Although they broadly agreed with a
baseline figure of DM10bn, the formerly united group of US lawyers
collapsed over a range of disputed terms, including payment allocations
between different groups of workers and administrative costs. The base
of DM10bn remains DM2bn higher than previous offers from the German
government and industry leaders last month, and it seems unlikely both
sides can reach agreement before the deadline of the end of the year.
However US lawyers say they have received repeated indications from
government negotiators that German government and industry officials are
prepared to settle for up to DM10bn. The first indication came in
October during talks arranged by Stuart Eizenstat, deputy Treasury
secretary, in Washington. However the first offer from German
representatives was just DM6bn, although this was raised a month later
to DM8bn.

JACK IN: Fights Appeal by Franchisees in CA over Business Practices
On November 5, 1996, an action was filed by the Franchisee Association
and several of the Company's franchisees in the Superior Court of
California, County of San Diego in San Diego, California, against the
Company and others. The lawsuit alleged that certain Company policies
are unfair business practices and violate sections of the California
Corporations Code regarding material modifications of franchise
agreements and interfere with franchisees' right of association. It
sought injunctive relief, a declaration of the rights and duties of the
parties, unspecified damages and rescission of alleged material
modifications of plaintiffs' franchise agreements. The complaint
contained allegations of fraud, breach of a fiduciary duty and breach of
a third party beneficiary contract in connection with certain payments
that the Company received from suppliers and sought unspecified damages,
interest, punitive damages and an accounting.

However, on August 31, 1998, the Court granted the Company's request for
summary judgment on all claims regarding an accounting, conversion,
fraud, breach of fiduciary duty and breach of third party beneficiary
contracts. On March 10, 1999, the Court granted motions by the Company,
ruling, in essence, that the franchisees would be unable to prove their
remaining claims. On April 22, 1999, the Court entered an order granting
the Company's motion to enforce a settlement with the Franchisee
Association covering various aspects of the franchise relationship, but
involving no cash payments by the Company. In accordance with that
order, the Franchisee Association's claims were dismissed with
prejudice. On June 10, 1999, a final judgment was entered in favor of
the Company and against those plaintiffs with whom the Company did not
settle. The Franchisee Association and certain individual plaintiffs
filed an appeal on August 13, 1999. Management intends to vigorously
defend the appeal.

MONSANTO: Farmers, Environmentalists Sue On Genetically Modified Seeds
Farmers and environmentalists filed a class action lawsuit against US
agro-chemical giant Monsanto and other makers of genetically modified
seeds in December 14, claiming anti-trust violations, their lawyer,
Michael Hausfeld announced.

The suit was filed by a coalition of family farmers and an environmental
group. Hausfeld said plaintiff's lawyers plan to ask the court to
require Monsanto to conduct a series of test on the impact of new
genetically modified organisms (GOM) on human health and the

Monsanto is one of the leading developers of genetically modified seeds,
especially corn. (Agence France Presse December 14, 1999)

OAKLAND COLISEUM: Settles CA Suit over Accessibilty to the Disabled
A comprehensive settlement has been reached in a suit regarding the
accessibility of the Oakland Coliseum, a large entertainment complex
that includes an outdoor stadium as well as an indoor arena. The
facility is home to professional football's Oakland Raiders, baseball's
Oakland Athletics and basketball's Golden State Warriors. A variety of
accessibility-related improvements will be undertaken, and a 425,000
fund will be established for individuals with disabilities who have
encountered accessibility barriers at the facility.

The settlement resulted from years of negotiation, which began even
before the class action suit was filed in a California federal district
court in October 1996. The plaintiffs were represented by Arlene B.
Mayerson and Linda D. Kilb of the Disability Rights Education and
Defense Fund Inc., in Berkeley, Calif., Elaine B. Feingold, also of
Berkeley, and Michael W. Bien of Rosen, Bien & Asaro in San Francisco.
The defendants were the Oakland-Alameda County Coliseum Authority; the
Oakland-Alameda County Coliseum Financing Corp.; the Oakland-Alameda
County Coliseum Inc.; the City of Oakland; the County of Alameda; the
Oakland Athletics; the Oakland Raiders; Bill Graham Enterprises Inc.;
and Volume Services Inc., a concessionaire. "The Coliseum is one of the
Bay Area's most public spaces," Feingold said, "and this settlement
guarantees that thousands of Northern Californians with disabilities
will be able to fully enjoy this important facility."

Several provisions of the agreement relate to seating, the most
interesting and novel of which call for the introduction of elevated
platforms that will afford wheelchair users a view over standing
spectators. An elevator will be installed at the stadium, and signage
and assistive listening systems will be provided. In addition, the
agreement calls for the appointment of ADA coordinators and the
establishment of dispute resolution procedures. A total of more than
475,000 will also be paid in attorney's fees. (Disability Compliance
Bulletin, Vol. 16, No. 4, November 22, 1999)

PLAINS ALL: Berger & Montague File Securities Suit in Texas
Berger & Montague, P.C. (http://home.bm.net)announced that on December
10, 1999, it filed a class action lawsuit for violations of the federal
securities laws in the United States District Court for the Southern
District of Texas against Plains All American Pipeline LP (NYSE: PAA)
("Plains" or the "Company") and certain of its officers and directors,
on behalf of all persons who purchased Plains common units between
November 17, 1998, and November 26, 1999 (the "Class Period").

The Complaint charges that Plains violated sections 11 and 12 of the
Securities Act of 1933 and section 10(b) of the Securities Exchange Act
of The Complaint specifically alleges that Plains issued materially
false and misleading statements about its business and its internal
policies. The securities markets were shocked when the Company announced
on November 29, 1999 that it expects to take a $160 million loss as the
result of so-called "unauthorized trading" by an employee in its crude
oil trading operations. Plains' common stock price plummeted
approximately 5O% in response to the disclosure of this massive loss.

If you purchased Plains common units during the November 17, 1998,
through November 26, 1999 time period, you may wish to join the action.
You may move the court to serve as a lead plaintiff on or before January
28, 2000.

Contact: Sherrie R. Savett, Esq., Karen S. Orman, Esq., Susan Kutcher,
Investor Relations Manager, Berger & Montague, P.C., 1622 Locust Street,
Philadelphia, PA 19103, Phone: 888-891-2289, or 215-875-3000, Fax:
215-875-4604, Website: http://home.bm.nete-mail: InvestorProtect@bm.net
(Please include a mailing address, telephone number, and e-mail address
with all inquiries.)

S.T. HUDSON: Pa. Consulting Firm Indicted for Allegedly Inflating Bills
Two top executives and two high-level officers at a consulting firm that
serves lawyers and insurance companies were indicted by a federal grand
jury on charges of designing a computer program that automatically
inflated the bills it sent to clients. Assistant U.S. Attorney Amy L.
Kurland said the four individuals defrauded customers of S.T. Hudson
International Inc. and several affiliated companies out of more than $
320,000 between 1989 and 1994.

Indicted were Hudson President and CEO David M. Pharis, 59, of St.
Davids; Vice President Edward J. Habina, 50, of Chester Springs; William
M. Dull, 68, of Collingswood, N.J., a Hudson associate; and Harry
Gangloff, 57, of Penllyn, Pa., the company's computer programmer.

According to the indictment, the five companies S.T. Hudson
International, Hudson Development Group, Geotech, International
Environmental Group and Hudson International Group are headquartered in
Wayne, Pa., and provide a variety of consulting services for law firms,
insurance companies and adjusting firms. Hudson consultants hold
themselves out as experts in environmental claims, business
interruption, surety, property and casualty, according to the

Often, the company hires independent consultants at set hourly rates who
submit bills and time sheets upon completion of the work. On the basis
of those time sheets, the indictment says, Hudson employees prepared
"prebills" by inputting the consultant's time and expenses into a
computerized billing program.

According to the indictment, Pharis, Habina and Dull began instructing
employees to change the prebills by inflating the hours claimed by the
consultant. In 1994, the indictment says, Pharis instructed Gangloff to
develop a computerized billing program that would automate the bill
inflation. Gangloff developed a program he called the "gooser," the
indictment says, which automatically multiplied every hour worked by a
consultant by 1.15 and then added an extra half hour to the total hours.

Prosecutor Kurland said each of the four is charged with six counts of
mail fraud and faces up to 30 years in prison and a $ 1.5 million fine
if convicted. (The Legal Intelligencer, December 1, 1999)

SUNGLASS HUT: Faces Claims over Wage and Overtime in Missouri
In September 1999, a class action lawsuit was filed against Sunglass Hut
International Inc. in the United States District Court in the Eastern
District of Missouri. The lawsuit alleges, among other things, that the
Company violated state and Federal wage and overtime laws. The Company
is in the process of investigating and responding to the charges. The
outcome or effect of this litigation on the Company's operating results
cannot be predicted at this time.

TOBACCO LITIGATION: Atty. For Black Farmers to Sue for Tobacco Farmers
A lawyer who just concluded a successful suit against the Agriculture
Department on behalf of black farmers has set his sights on the landmark
1998 tobacco settlement, the Recorder says. In a class action to be
filed later this week, Alexander Pires Jr., of Washington D.C.'s Conlon,
Frantz, Phelan & Pires, argues that the nation's tobacco companies and
46 state attorneys general, with a web of fraud and broken promises,
have produced thousands of silent victims: struggling tobacco farmers.
Pires has traveled along the East Coast for the past two months in a
push to sign up 2,000 plaintiffs for the suit, which will be brought in
the U.S. District Court for the District of Columbia. As many as 320,000
growers may one day be eligible to serve as plaintiffs, he says.

Pires hopes to play his suit off a report that will be issued by
Agriculture this week. The department is expected to announce Dec. 15
that for the third straight year, the quota, or the amount of tobacco
that growers are paid to harvest under a federally controlled pricing
system, will plunge.

Although growers' associations have been voicing their concerns for
years, the steep downturn in the demand for American-grown tobacco has
surprised even them. Within the past three years, the value of the U.S.
tobacco quota has plummeted from $18 billion to $9 billion. The drop in
value is related to, among other things, hikes in the price of
cigarettes to help tobacco companies pay for the $206 billion

At the same time, tobacco companies are exporting fewer American-grown
products and turning to other countries, which supply Burley or
flue-cured tobacco more cheaply.

Pires, a 51-year-old former Justice Department lawyer who helped 18,000
African-American farmers settle a mammoth discrimination suit against
Agriculture last April, says the tobacco growers are being burned by the
settlement. "The tobacco farmer is absolutely stunned that his best
friend big tobacco manufacturers would betray him," says Pires. "Four
groups -- Congress, the farmers, the states and the tobacco companies --
were in a room. The settlement ended up as a two-piece pie and the
farmers didn't get a piece."

                       Strange Alliances

Ironically, such natural enemies as Philip Morris Cos. Inc., public
health advocates and state politicians lauded the settlement. Among
other things, the deal ushered in changes in the advertising and
marketing of tobacco and enabled states to recover money they'd paid out
for sick smokers' health care.

But the agreement greatly troubled farmers, who have harvested tobacco
since the 1930s under a system of government price supports based on
quota, a type of license that allows its holders to grow tobacco and
pays them a certain price per pound to do so. Quota holders can also
lease their right to grow tobacco to other farmers.

Growers were not totally shut out in the settlement talks: A second
phase of the historic pact will provide $5.1 billion for tobacco-growing
states to pass along to farmers, who mostly are concentrated in
Kentucky, Tennessee, North and South Carolina, Virginia, Georgia, and
Florida. The first payments will be distributed by the end of the year.

Still, many in the agricultural community feared that they would choke
along with the demand for U.S. tobacco. In response to those worries,
Sens. Richard Lugar, R-Ind., and John McCain, R-Ariz., sponsored
separate bills that would have given farmers an additional $18 billion
to $28 billion in buyout and transition packages. The Senate failed to
act on the proposals, which died when Congress recessed in 1998.

Law professor Andrew Popper, who has not read the plaintiffs' suit but
was informed of its contents by a reporter, says the Congress, not the
judiciary, is the appropriate branch of government to redress farmers'
complaints. "The fact that it was there in Congress is an indication of
where it belongs," says Popper, a professor at American University's
Washington College of Law. "The question is, are farmers using their
energies in the most effective way? Have they picked the wrong forum?"

                       Fifth Amendment Claim

Pires bases his suit on several theories, including the claim that the
1998 settlement agreement constituted a fraud against farmers by the
tobacco industry, which sought a way to dismantle the American price
support system.

He argues that the drop in the quota, which is considered by many in the
South "like something women keep in their hope chests," is an unlawful
government taking of property under the Fifth Amendment.

Moreover, Pires maintains that by signing the 1998 settlement deal, big
tobacco firms breached their common law fiduciary duty to the farmers,
their partners and defenders for more than 60 years. He plans to ask for
$22 billion on behalf of tobacco farmers -- $18 billion that would have
been guaranteed by the failed Lugar bill, plus $4 billion more to pay
taxes on the award. The financial demand would compensate both quota
holders and tenant farmers who lease quota from others.

Professor Popper, who has spoken out against large class actions in the
past, says from what he knows about the case, it sounds "far-fetched."
"It sounds like this is an argument over the fragile nature of certain
benefits that have been provided historically to tobacco farmers," says
Popper. "The idea those benefits have been rendered a nullity because of
a settlement over health care costs is a stretch."

Taken to their logical conclusion, Popper says, the theories that Pires
plans to use would allow any producer of government-subsidized products,
like peanuts or soybeans, to sue based on a dip in their market value.
Pires, however, has bested naysayers before.

At one point in his suit against the Agriculture Department on behalf of
African-American farmers, the lawyer discovered that the statute of
limitations had expired, which would have stopped the case in its
tracks. Farmers flooded their representatives' offices and argued their
case to the media. Congress eventually stepped in to help by extending
the deadline for filing suit.

                            Next Wave

Several of the anticipated defendants in the tobacco farmers' case say
it is too early to comment on a lawsuit they have not yet seen. Brian
Smith, a spokesman for Washington Attorney General Christine Gregoire,
declined comment. Gregoire, who played a key role in the industry
negotiations, now serves as president of the National Association of
Attorneys General. Closer to home, a spokesman for Virginia Attorney
General Mark Earley says that the issue is "totally news to me" and that
Earley does not talk about complaints until he has had time to read

In addition to the 46 state attorneys general, the corporate tobacco
defendants will include Philip Morris, R.J. Reynolds, Brown & Williamson
Tobacco Co., Lorillard Tobacco Co., Liggett Group Inc. and Common-wealth
Brands Inc.

Philip Morris spokesman Brendan McCormick says the company "has
consistently worked with tobacco growers and grower leadership to try to
develop solutions to the issues which face growers, and we will continue
to do so." Seth Moskowitz, a spokesman for R.J. Reynolds, says, "It is
not our policy to comment on cases that haven't been filed or that we
haven't been served with yet."

In another signal that the next wave of the tobacco wars may be
beginning, the Campaign for Tobacco-Free Kids, a leading anti-tobacco
group, is preparing to issue a 90-page report this week called "False
Friends: The U.S. Cigarette Companies' Betrayal of American Tobacco
Growers." (The Recorder, December 14, 1999)

TYCO INTíL: Wolf Haldenstein Files Expanded Securities Suit in N.H.
Wolf Haldenstein Adler Freeman & Herz LLP announces that on December 13,
1999 it filed an expanded class action lawsuit in the United States
District Court for the District of New Hampshire on behalf of investors
who bought Tyco International Ltd. (NYSE: TYC) ("Tyco" or the "Company")
stock between October 1, 1998 and December 8, 1999 (the "Class Period").

The lawsuit charges Tyco and executive officers, Dennis Kozlowski and
Mark H. Swartz, with violations of the securities laws and regulations
of the United States. The lawsuit alleges that defendants issued a
series of false and misleading statements during the Class Period
concerning the Company's revenue growth rate. The Complaint further
alleges that defendants used deceptive and overly aggressive accounting
practices to give the market a false and misleading impression of the
Company's revenue growth rate. Meanwhile defendants Kozlowski and Swartz
used their inside knowledge regarding the Company's revenues to sell
over 2.8 million shares of their own stock at prices close to the Class
Period high for proceeds of over $281,000,000.

Between October 13, 1999 and October 29, 1999, several analysts and
financial reporters revealed that the Company was engaging in overly
aggressive and deceptive accounting practices concerning its
acquisitions. Upon the release of these revelations the Company's stock
price plummeted from a Class Period high of $52.96 to as low as $35.5625
on November 1, 1999.

On December 9, 1999, the market was further rocked by the announcement
that the Securities and Exchange Commission was mounting an
investigation of the Company's accounting practices. Upon the release of
this announcement the Company's stock sank to as low as $251/2 on
extraordinarily heavy trading volume.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison
Avenue, New York, New York 10016, by telephone at (800) 575-0735
(Michael Miske, Gregory Nespole, Esq., Fred Taylor Isquith, Esq. or
Shane T. Rowley, Esq.), via e-mail at classmember@whafh.com or
whafh@aol.com or visit our website at http://www.whafh.com(All e-mail
correspondence should make reference to Tyco.)

TYCO INTíL: Rabin & Peckel File Securities Suit in New Hampshire
The following is an announcement of December 13 by the law firm of Rabin
& Peckel LLP:

A class action complaint has been filed in the United States District
Court for the District of New Hampshire on behalf of all persons or
entities who purchased or otherwise acquired the common stock of Tyco
International Ltd. ("Tyco" or the "Company")(NYSE:TYC) between Oct. 1,
1998 through Oct. 29, 1999, inclusive (the "Class Period").

The Complaint alleges that Tyco and certain of its officers violated the
Securities Act of 1934 by making a series of materially false and
misleading statements concerning the Company's financial results during
the Class Period. During the Class Period, the Company improperly
recorded acquisitions using the "pooling of interests" accounting method
which resulted in inflating the Company's financial results. In
addition, the complaint alleges that during the Class Period, defendants
Kozlowski and Swartz, sold the company's common stock while in
possession of material non-public information. At the end of the Class
Period, it was revealed that the Company had improperly accounted for
its acquisitions. In addition, on Dec. 9, the Company announced that it
had been advised by the Securities and Exchange Commission (the "SEC")
that the SEC had commenced an inquiry into Tyco's accounting practices.
The Complaint alleges that as a result of these false and misleading
statements the price of Tyco common stock was artificially inflated
throughout the Class Period causing plaintiff and the other members of
the Class to suffer damages.

Contact: plaintiff's counsel, Elana M. Bourkoff, Rabin & Peckel LLP, 275
Madison Avenue, New York, NY 10016, by telephone at (800) 497-8076 or
(212) 682-1818, by facsimile at (212) 682-1892, by e-mail at
email@rabinlaw.com or at the website at http://www.rabinlaw.com

TYCO INTíL: Wolf Popper Files Securities Lawsuit
Tyco International, Ltd. (NYSE: TYC) ("Tyco") and two of its senior
officers have been charged in a class action lawsuit with defrauding all
persons who purchased Tyco securities from October 22, 1998 through
December 8, 1999.

The Complaint charges that Tyco improperly accrued "cookie-jar"
acquisition-related reserves that were subsequently used to offset
operating expenses as a means to inflate reported operating results.

The Complaint also alleges that defendants improperly caused U.S.
Surgical, Inbrand Corp., and AMP, Inc. to take substantial charges to
income shortly before Tyco acquired those companies. Those charges were
not reflected on any SEC filings. Accordingly, when Tyco reported its
financial statements following those acquisitions, Tyco's then "current"
results were compared favorably to Tyco's historical restated results
that (unbeknownst to investors) included those huge charges. The effect
of this practice was to make Tyco's earnings growth rate appear
significantly greater than it actually was.

During the Class Period, the two Tyco senior officers named as
defendants sold Tyco shares for proceeds of over $100 million and $175
million respectively (representing over half of their Tyco holdings).

On December 9, 1999, Tyco acknowledged that the SEC had commenced an
inquiry into Tyco's accounting practices that are the subject of the
Complaint. Disclosures concerning Tyco's accounting improprieties have
caused Tyco stock to fall precipitously from its artificially inflated
levels. As recently as mid-October 1999, Tyco was trading above $50 per
share. The subsequent disclosures concerning Tyco's accounting
improprieties caused Tyco common stock to fall to as low as $25 per
share on the opening of trading on December 9, 1999.

Contact: Robert C. Finkel, Esq., Andrew E. Lencyk, Esq., or James A.
Harrod, Investor Relations Representative, WOLF POPPER LLP, 845 Third
Avenue, New York, NY 10022-6689, Telephone: 212-451-9620, 212/451-9642,
Toll Free: 877-370-7703, Facsimile: 212/486-2093, E-Mail:
wolfpopper@aol.com Website: http://www.wolfpopper.com

US OFFICE: Contests Securities Suits Transferred from NY to Columbia
Individuals purporting to represent various classes composed of
stockholders who purchased shares of US Office Products common stock
between June 5, 1997 and November 2, 1998 filed six actions in the
United States District Court for the Southern District of New York and
four actions in the United States District Court of the District of
Columbia in late 1998 and early 1999. Each of the actions named the
Company and Jonathan J. Ledecky, the Company's former Chairman and Chief
Executive Officer, and, in some cases, Sands Brothers & Co. Ltd. as

The actions claim that the defendants made misstatements, failed to
disclose material information, and otherwise violated Sections 10(b)
and/or 14 of the Securities Exchange Act of 1934 and Rules 10b-5 and
14a-9 thereunder in connection with the Company's Strategic
Restructuring Plan. Two of the actions alleged a violation of Sections
11, 12 and/or 15 of the Securities Act of 1933 and/or breach of contract
under California law relating to the Company's acquisition of MBE. The
actions seek declaratory relief, unspecified money damages and
attorney's fees. All of these actions have been consolidated and
transferred to the United States District Court for the District of
Columbia. A consolidated amended complaint was filed on July 29, 1999,
naming the Company and Mr. Ledecky as defendants. The Company intends to
vigorously contest this action.

US OFFICE: Intends to Vigorously Contest Securities Suit in Delaware
On April 14, 1998, a stockholder purporting to represent a class
composed of all the Company's stockholders filed an action in the
Delaware Chancery Court. The action names the Company and its directors
as defendants, and claims that the directors breached their fiduciary
duty to stockholders of the Company by changing the terms of the self
tender offer for the Company's common stock that was a part of the
Strategic Restructuring Plan to include employee stock options. The
complaint seeks injunctive relief, damages and attorneys' fees. The
directors filed an answer denying the claims against them, and the
Company has moved to dismiss all claims against it. The Company believes
that this lawsuit is without merit and intends to vigorously contest it.

XEROX CORP: Milberg Weiss Announces Expanded Period in Securities Suit
The following is an announcement of December 13 by the law firm of
Milberg Weiss Bershad Hynes & Lerach LLP:

Plaintiffs in the securities class action litigation against Xerox
Corporation (NYSE:XRX) ("Xerox" or the "Company") which was filed on
December 9, 1999, have filed an amended complaint which extends the
class period. The extended class period is January 25, 1999, through
December 10, 1999, inclusive. The amended complaint further alleges that
defendants misled investors concerning the declining demand for the
Company's products and services and that defendants had engaged in a
number of deceptive practices to conceal these adverse trends.

The amended complaint alleges that on December 10, 1999, after the
markets' close, defendants announced that declining product demand and
sales during the fourth quarter of 1999 will cause the Company's
earnings to be 40 percent lower than analysts' revised estimates.
Following this announcement the price of Xerox common stock fell to a
52-week low, declining more than 15% in after market trading.

Contact: at Milberg Weiss Bershad Hynes & Lerach LLP, Steven G.
Schulman, Samuel H. Rudman or Michael A. Swick at One Pennsylvania
Plaza, 49th Floor, New York, New York 10119-0165, by telephone
1-800-320-5081 or via e-mail: endfraud@mwbhlny.com or visit website at

XEROX CORP: Spector and Roseman File Securities Suit in Connecticut
Spector & Roseman, P.C., announce on December 14 that a class action
lawsuit was filed in the United States District Court for the District
of Connecticut, on behalf of all persons who purchased the common stock
of Xerox Corporation ("Xerox" or the "Company") (NYSE: XRX - news)
between January 25, 1999, through October 7, 1999, inclusive (the "Class

The complaint charges Xerox and certain of its senior officers and
directors (the "Individual Defendants") with violations of Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule
10b-5 promulgated thereunder.

The complaint alleges that defendants issued a series of materially
false and misleading statements concerning the declining demand for the
Company's products and services and had engaged in a number of deceptive
practices to conceal these trends. Prior to the disclosure of the
adverse facts described above, certain insiders sold hundreds of
thousands of shares of Xerox common stock to the investing public at
artificially inflated prices. These sellers realized over$ 51.7 million
in proceeds from these insider trading activities.

Contact: plaintiff's counsel Jeffrey L. Kodroff toll-free at
888/844-5862 or via E-mail at classaction@spectorandroseman.com

Y2K LITIGATION: Insurance Companies Targetted In Legal Battleground
Insurance companies could wind up the biggest losers in the worry over
Year 2000 computer glitches, Los Angeles (AP) says. Four big companies
and two government agencies have filed lawsuits totaling about $700
million against their insurers to recoup expenses they incurred
upgrading computer systems against Y2K problems. Others are waiting in
the wings with similar claims, attorneys say.

Insurance companies could face hundreds more lawsuits seeking repayment
of much of the estimated $100 billion spent in the United States to
prepare computers and chip-dependent devices for the flip of the
calendar at the turn of the century.  ``They're going to end up paying a
huge amount in attorneys fees, if not a huge amount in settlements,''
said Ron Weikers, a Philadelphia attorney specializing in Y2K
litigation. ``I think you're going to see a lot of these cases.''

Xerox Corp. has sued its insurer seeking reimbursement for $150 million
in Y2K remediation costs. Nike is seeking an estimated $110 million for
Y2K preparations.  Others that have sued are Unisys Corp., GTE Corp.,
the Port of Seattle and the school district in Royal Oak, Mich. The
lawsuits, filed since July, seek a total of about $700 million.

Insurance industry attorneys say the plaintiffs are basing their cases
on a shaky legal argument rooted in 19th century maritime law that
encouraged ship owners to make emergency repairs when away from home.
Insurers were willing to bear those costs because repairs were far
cheaper than the cost of replacing a ship and cargo lost at sea. But
that principle shouldn't apply to Y2K, the industry says. Unlike an
emergency on the high seas, businesses have known for years about the
potential of Y2K computer problems, said Jack Pomeroy, general counsel
for FM Global, a Rhode Island-based insurer targeted in the Nike and GTE

The lawsuits are unique among the estimated 85 Y2K actions filed in the
United States so far. Most other lawsuits accuse software companies or
programers of providing products that are likely to fail on or after
Jan. 1. Many of those suits have stalled because no actual damage have
occurred yet and aren't likely to until after New Year's Day. Filings
also have slowed as a result of federal legislation approved in July
that gives businesses 90 days to fix computers that break down and
limits class action lawsuits.

The Y2K problem stems from the old practice of using two digits to
represent a year in computer programs. The fear is that computers and
other microprocessor-based equipment will misread the ``00'' that will
pop up to represent the year 2000 as 1900 and systems will malfunction.
``This is not a defect,'' said Dan Zielinski, a spokesman for the
American Insurance Association, which represents 370 commercial property
insurers. ``This equipment is operating as it was intended. They're
upgrading what may be obsolete equipment. That is not insurable.''

Some Y2K problems already have cropped up. In 1997, Produce Palace
International of Michigan won a $260,000 settlement after its equipment
crashed while trying to process a credit card set to expire in 2000. In
Maine, computers at the motor vehicle department classified 2000-model
cars as antique ``horseless carriages.''

More small-scale breakdowns are likely despite the best efforts of
programmers to cull through and fix computer codes, said Bernie Reiter,
a programming consultant based in Boulder, Colo. ``Jan. 1 will be quiet.
It's a holiday,'' she said. ``It's going to happen further down the
line.'' (Los Angeles (AP), December 13, 1999)

YIELD-BURNING: Fla. Clerk Wants Lissack's Suit Unsealed; Hearing Dec 29
Lawyers representing the clerk of Collier County, Fla., are urging a
federal judge to unseal the multimillion yield-burning suit that former
investment banker-turned-whistleblower Michael Lissack secretly filed
against Wall Street and other securities firms more than four years ago.

But U.S. attorneys are fighting to keep the documents sealed, arguing
that their release could undermine the federal government's ongoing
probes and settlement talks with firms over alleged yield-burning

Judge Barbara Jones, with the U.S. District Court for the Southern
District of New York in Manhattan, has scheduled a hearing for Dec. 29
for oral arguments in the dispute. But U.S. attorneys contend that the
lawyers with Goodkind Labaton Rudoff & Sucharow, which is representing
the county clerk, should be barred from the hearing room if details of
the sealed documents are discussed.

The dispute stems from a subpoena that the county clerk's lawyers filed
with the court in New York last August seeking Lissack's complaint and
related documents -- particularly those pertaining to Lazard Freres &
Co., and the former Alex. Brown & Sons & Co. and Meridian Capital
Markets Inc. These firms have each settled yield-burning charges with
the federal government and Lissack.

The Goodkind lawyers claim the documents from the qui tam suit Lissack
filed against the firms in 1995 under a federal whistleblower law, are
critical to the yield-burning suit that Dwight Brock, the county clerk,
filed against more than 15 broker-dealers in a federal court in Florida
last year. That suit, which is seeking class action status, alleges that
the broker-dealer firms engaged in a nationwide conspiracy to charge
excessive markups on the Treasury securities they sold municipal issuers
for advance refunding escrows.

Lissack, a former managing director at Smith Barney, "is the only
securities industry insider known to have come forward with factual
information regarding the details of how this nationwide conspiracy
worked," Brock's lawyers told the court in New York in an Oct. 29
filing. "Lissack set forth facts regarding the manner in which these
underwriters and broker dealers assisted one another in obtaining
excessive profits through yield burning."

Brock contends that a suit filed under the federal whistleblower law --
the False Claims Act -- is supposed to be unsealed when the government
decides whether to intervene in the suit. The act allows any private
citizen who is aware of false claims or fraudulent activities against
the government to sue on its behalf to recover treble damages and to
share in any award.

In the Lissack litigation, the government intervened with regard to each
of the three firms that settled, but has gotten the court to retain the
seal on the rest of the suit and most documents related to those firms.

While the government can ask a court to extend the time a False Claims
Act suit remains under seal, "extensions may not be granted
indefinitely," Brock's lawyers said.

"Here, more than four years after Mr. Lissack filed his yield-burning
suit , there is no longer any rationale supporting the continuation of
secrecy with respect to that filing," they said. "The government has had
more than ample time to determine whether it should intervene ...
against defendants other than Meridian and Lazard" and Alex. Brown.

But in a motion to quash the subpoena, U.S. attorneys argued that
documents in the suit should remain secret because they are
"confidential" and "were compiled in the course of a law enforcement
investigation that is currently under seal ... . In addition, a number
of the documents requested reflect information obtained or generated
during confidential settlement negotiations, including confidential
business information that was produced to this office by Lazard ... for
the sole purpose of pursuing settlement discussions."

Release of the documents "would injure the government's decision-making
by inhibiting the frank and candid discussion necessary to reach a
candid decision regarding litigation risk and the appropriateness of
settlement," Mary Jo White, the U.S. Attorney for the Southern District
of New York, told the court.

There are many reasons for sealing documents in such cases, the
attorneys said. These include ensuring that a defendant's reputation
remains intact in a non-meritorious case, and that there are "incentives
for a defendant to reach a relatively speedy and valuable settlement
with the government in order to avoid the unsealing and public
litigation," they said.

"The documents provided by Michael Lissack and his attorneys ... present
to the government selected facts and evidence that Lissack and his
counsel believed were important to his claims. The organization and
characterization of these presentations reveal assessments by Lissack
and his attorneys regarding the strengths and weaknesses of their
claims," the attorneys told the court.

But Brock's lawyers said "the government has already determined that Mr.
Lissack's qui tam suit is not meritless" by intervening with regard to
some firms. Moreover, they said, because federal agencies have been
negotiating a possible global settlement with firms for more than a
year, there should be no concern that release of the documents would
thwart a speedy settlement. (The Bond Buyer, December 14, 1999)

* More Workers Choosing Less Restrictive Health Plans, Survey Says
As politicians and plaintiffs attorneys attack health maintenance
organizations and their limitations on doctor choices, workers are
moving to less restrictive forms of health insurance, a new study
indicates. The number of workers who signed up this year for preferred
provider organizations, or PPOs, rose to 43 percent from 40 percent in
1998, according to a study to be released December 14 by the national
benefits consulting firm William M. Mercer Inc.

Meanwhile, enrollment in more restrictive HMOs and point-of-service
plans slipped to 46 percent from 47 percent in 1998. In Chicago,
employee enrollment in HMOs and point-of-service plans fell 7 percentage
points to 49 percent while the number of people who signed up for PPOs
jumped 6 points to 42 percent in 1999.

HMOs limit doctor choices to their own networks. Point-of-service plans
act like an HMO with a gatekeeper, but allow patients to go out of
network for a specialist, though at a much greater cost to the employee.

It was the second consecutive year the restrictive plans lost
enrollment, dipping 4 percentage points from a peak two years ago when
Mercer said one in two insured employees were enrolled in HMO and
point-of-service plans.

Because PPOs don't require subscribers to get referrals to specialists
from primary-care physicians, known as gatekeepers, they are taking off
in popularity at a time consumers want more choice, according to
Mercer's study of more than 3,000 companies with 10 or more employees.

"This trend is recognition about what the employee wants so the employer
doesn't have to deal with as many complaints," said Blaine Bos, a Mercer
consultant and chief author of the firm's annual Mercer/Foster Higgins
national survey of employer-sponsored health plans. "It's a combination
of the negative things they hear and employees being fed up with the
gatekeeper, which is the distinguishing feature of the more restrictive
plans. With a gatekeeper, you cannot access specialists or hospital
outpatient procedures without going through a family practitioner,
ob/gyn, internists or pediatricians."

The elimination of the primary-care gatekeeper and increased access to
specialists are key arguments being pushed by state and federal
lawmakers in so-called patients rights legislation. Furthermore,
plaintiffs lawyers who successfully took on the tobacco industry have
filed class actions against HMOs and their restrictions.

Still, HMOs say enrollments will rise again if health-care costs keep
rising. Mercer found health expenses rose by an average of 7 percent
this year and are expected to go up 7.5 percent in 2000. "Cost increases
next year are going to have an impact on getting folks to choose HMOs,"
said Robert Burger, executive director of the Illinois Association of

In fact, the Mercer study said PPOs still cost more than HMOs, which is
an indication employers are willing to pay more for employee
satisfaction during a period of low unemployment.

But Burger said more employers will choose HMOs "to the extent cost
becomes more of an issue."

Confronted with legislative crackdowns and consumer dissatisfaction,
Mercer said, more employers that offer HMOs are adding "open access"
products that do away with the need for a gatekeeper. HMOs offering
open-access plans rose in 1999 to 16 percent, from 13 percent last year.

Furthermore, the increase in PPO enrollment is likely an answer to
consumer demand for more access to specialists without the "hassle" of
getting an OK from a primary-care physician, Bos said.

Such hassles and red tape figured into Minneapolis-based UnitedHealth
Group's decision last month to give doctors, not administrators, the
final say on what treatments are medically necessary. United, parent of
United Healthcare of Illinois Inc., in effect is becoming like a PPO,
Bos said. (Chicago Tribune December 14, 1999)


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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Information contained herein is obtained from sources believed to be
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