/raid1/www/Hosts/bankrupt/CAR_Public/991228.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Tuesday, December 28, 1999, Vol. 1, No. 229


ALLSTATE INSURANCE: Will Appeal against Full Med. Payment for Accidents
BAUSCH & LOMB: MDA Does Not Preempt Lens Solution Case, NY Ct. Rules
CARROLL & GRAF: Authors’ Royalty Claims Require Individualized Proof
CARTER-WALLACE: SD NY Dismisses Securities Fraud Suit Re Felbatol
CNA INSURANCE: Insured in Car Fire Cite Intent To Insure in La. Appeal

COMPAQ COMPUTER: Wolf Haldenstein Announces TX Sustains Securities Suit
EMBRYO DEVELOPMENT: Settles for Lawsuit over IPO Pending Ct Approval
ETHICON INC: NJ Fd Ct Oks Transfer of Contaminated Suture Case to CA
HK GOVT: Immigrants from Mainland China Sue for Residency in Hong Kong
IBERVILLE COATINGS: La Ct Will Hear Coverage for Georgia Gulf Poisoning

I.I.S. INTELLIGENT: Announces Settlement of Securities Suit Re ’93 Acts
LASON INC: Schiffrin & Barroway Files Securities Suit in Michigan
LATEX GLOVES: CA Judge Dismisses Suits Filed After Limitations Period
NCAA: Ap Ct Overrules & Oks Current Criteria for Athletic Scholarships
NY OFFICIALS: Ct Oks Challenge of Handling of Termination of Benefits

PETSMART INC: Ct Orders for Mediation for Fl. Claims over OT Pay
PUBLISHERS CLEARING: Report on Plight from Sweepstakes Brought Refund
RENT-TO-OWN COS: Lawyers See Growth in Debt collection litigation
TYCO INT’L: Marc S. Henzel Files Securities Suit in Florida
TYSON FOODS: Contests Iowa Claims under RICO by Sellers of Beef Cattle

TYSON FOODS: Denies Failure in Paying All Work Hours Charged in Alabama

* Enormous Use of Online Shopping Could Lead to Lawsuits, Experts Say
* Reflections at Eve of Millenium on Expanding Reach of Civil Rights


ALLSTATE INSURANCE: Will Appeal against Full Med. Payment for Accidents
Allstate Insurance Co. said it would appeal a Florida judge's ruling
that the company failed to pay the full medical claims of policyholders
involved in no-fault accidents. Miami-Dade Circuit Judge Margarita
Esquiroz issued a summary judgment on Dec. 21. The class-action case,
Chaple vs. Allstate Insurance Co., involves medical bills filed with
Allstate on personal injury protection benefit claims.

A published report quotes John Ruiz, the attorney who represents the
Allstate policyholders, as saying that Allstate was continuously failing
to pay as required by law by either not paying at all or reducing the
amounts. He estimated that more than 200,000 claims filed since October
1992 could be affected.

But the Northbrook, Ill.-based company argues that it does not have to
pay for independent medical examinations in personal injury cases. The
lawsuit "alleges that an independent medical examination must be
obtained by Allstate whenever, in the course of adjusting personal
injury protection benefit claims, Allstate seeks to withdraw PIP benefit
payments on the grounds that the medical charges at issue are not
reasonable, related or necessary," Allstate spokeswoman April Hattori
said. "Allstate has contended throughout this litigation that there is
no such requirement imposed by Florida law." Legal issues implicated in
the judge's ruling "are largely matters which have not been ruled on by
either the Florida Supreme Court or any Florida District Court of
Appeal," Hattori said. Allstate has an appeal pending in the case before
the Third District Court of Appeal, Hattori said. This appeal challenges
whether there is any basis for class-action treatment of the claims
asserted in the lawsuit, including the question of whether there is any
requirement with regard to independent medical examination reports. Once
Judge Esquiroz's order has been entered, Allstate expects to seek
appellate review of the ruling, Hattori said.

Allstate has an A+ (Superior) rating from A.M. Best Co. and trades on
the New York Stock Exchange as "ALL." For the first half of 1999,
Allstate Insurance Co. wrote $9.1 billion in net premiums and had $13.5
billion in policyholder surplus, according to A.M. Best Co. data.

BAUSCH & LOMB: MDA Does Not Preempt Lens Solution Case, NY Ct. Rules
Claims that the marketing of certain contact lens solutions misleads
consumers are not preempted by the Medical Device Amendments (MDA) of
1976, according to a decision by a New York state appellate court. The
class action suit alleges that Bausch & Lomb Inc. is selling the same
chemical solution as three different eye care products and recommending
that they be used in combination with one another. Kramer v. Bausch &
Lomb Inc., No. 1484 (NY Sup. Ct., App. Div., 1st Dept., Sept. 16, 1999).

The company manufactures three groups of eye care products. In each
group, the "a" line of products is identified as a saline solution
intended for cleansing and conditioning contact lenses while they are
not being worn. The "b" line of products consists of a "rewetting"
product designed to administer drops to the eye while the lenses are
being worn. One of the groups also contains a "c" product, which is an
eye wash designed to cleanse the eye and relieve irritation while the
lenses are not being worn.

The "a" line products are sold in containers ranging in size from four
to 10 ounces, and the "c" product is sold in a four-ounce container. The
"b" line products are sold in small eye-drop dispensers ranging in size
from 10 to 30 milliliter.

The ingredients of all these solutions are chemically identical,
although the wholesale prices of these products contrast dramatically,
according to the opinion filed Sept. 16, 1999.

Plaintiffs, led by Evelyn Kramer, allege that the labeling of these
products disguises the interchangeability of the ingredients, and
misleads the consumer into believing that the products are different.
The suit claims that Bausch & Lomb created the impression that these
products should be used in conjunction with each other, despite the
redundancy in ingredients.

Bausch & Lomb produced a document written by a Food and Drug
Administration (FDA) official, stating that the FDA would "not approve
labeling of contact lens care products indicated for in-eye use that
would state such products are chemically identical and/or
interchangeable with contact lens products intended for in-eye use." The
FDA feared that marketing the products in the same fashion would cause
consumers to overuse the in-eye products, which could lead to injury.

The company moved for summary judgment, arguing that the suit was
preempted by the MDA, which prohibit states from adding to its
requirements. Some courts have interpreted the MDA as preempting common
law claims against medical devices. The Supreme Court of New York County
granted the motion.

The Supreme Court of New York, Appellate Division, First Department,
reversed and remanded, ruling that there is nothing in the MDA that
expressly preempts such a lawsuit.

The state court noted that in several U.S. Supreme Court cases, the high
court recognized the purpose of the MDA was to monitor a product's
safety and effectiveness, not its marketing under allegedly unfair trade
practices. The FDA official may have been correct in his assessment, but
he does not have the ju risdiction to decide what the public ought and
ought not to know, the court found. The question is more properly
answered by a trier of facts, the court concluded. (Medical Devices
Litigation Reporter November 18, 1999)

CARROLL & GRAF: Authors’ Royalty Claims Require Individualized Proof
2375N. CAROLYN BANKS, et al., plf-res, v. CARROLL & GRAF PUBLISHERS,
INC., def - ap QDS:12111919 – Order, Supreme Court, New York County
(Barry Cozier, J.), entered May 18, 1999, which, inter alia, granted
plaintiffs' motion for class certification, unanimously reversed, on the
law, the facts, and in the exercise of discretion, without costs, the
motion denied, and the class decertified.

In this action, plaintiffs are authors who have had their books
published by defendant, a small independent publisher. In general it is
alleged that defendant engaged in a pattern of conduct in which it
underpaid royalties, paid royalties in an untimely manner, and withheld
royalties by setting reserves for the return of books in excess of
standard publishing industry practice. After some discovery was
conducted, plaintiffs moved to have the action certified as a class
action. Supreme Court granted plaintiffs' motion. We reverse.

In order to demonstrate entitlement to proceed as a class action,
plaintiffs were required to prove, inter alia, that "there are questions
of law or fact common to the class which predominate over any questions
affecting only individual members" (CPLR 901 [a][2]). This they have
failed to do.

We note that, on their face, plaintiffs' claims do appear to have a
semblance of commonality since they are based on allegations that
defendant engaged in a general pattern of fraudulent conduct with
respect to its authors. However, close examination shows that, because
each of the claims would require individualized proof concerning the
various bases of liability and are subject to individualized defenses,
commonality is lacking notwithstanding any pattern of conduct (see,
Mitchell v. Barrios-Paoli, 253 AD2d 281, 291).

For example, plaintiffs' claim that defendant held unreasonable reserves
for returns is fact-specific for each book and each author since it
would require examination of, among other things: the popularity of the
particular author, the number of books to be printed and distributed,
the type of book and its market, the amount of promotion and publicity
supporting the sale of the book, and the book's past history of returns.

Regarding the alleged underpayment of royalties, this, like the reserve
issue, would require individual review of the gross sales of each
individual book, the number of books returned, and the royalty
percentage under each contract. To the extent that the issue of the
timeliness of royalty payments might be common to the class, i.e., that
defendant had a pattern of paying all of its authors in a tardy manner,
we cannot say that it predominates the issues to be litigated.
Accordingly, we find that plaintiffs failed to meet their burden of
establishing that class certification is appropriate (see, Small v.
Lorillard Tobacco Co., 252 AD2d 1, 6, affd  NY2d, 1999 NY LEXIS 3441).

This constitutes the decision and order of the Supreme Court, Appellate
Division, First Department. (New York Law Journal December 13, 1999)

SMITH BARNEY: Ct Clarifies Female Employee Opt-outs’ Chance to Rejoin
Martens V. Smith Barney, Inc. QDS:02761887

A class OF female employees at a securities brokerage firm sued,
alleging gender discrimination and challenging mandatory arbitration of
statutory discrimination claims. Two named plaintiffs opted out of the
class action, and defendants filed a motion to compel arbitration of
their claims. The court reserved its decision on the motion and
clarified the implications of an opt-out by named plaintiffs. The court
noted that the status of named plaintiffs was not so clear because they
filled a claim on behalf of themselves as well as the class action
members, and it was unclear whether the individual claims survived or
merged into the action. However, the court clarified that named
plaintiffs who opted out no longer remained in the class, and if they
wished to pursue their cases they had to do so separately from the
class. So the court granted plaintiffs a chance to rejoin.


Plaintiffs filed this action on behalf of a class of female employees at
Smith Barney. Smith Barney is a securities brokerage firm engaged in
brokerage, investment banking, and asset management services. Defendant
NASD operates the Nasdaq Stock Market. Defendant NYSE maintains and
provides facilities for NYSE members to purchase and sell securities.
Both NASD and NYSE are corporations that serve as self-regulatory
organizations subject to review by the Securities and Exchange
Commission (SEC). Both organizations enforce standards of conduct for
member securities firms and oversee securities arbitrations. All other
defendants are entities or individuals affiliated with Smith Barney
(along with Smith Barney, collectively referred to as the "Smith Barney

                         The Allegations

The plaintiffs have alleged that the Smith Barney defendants committed
gender discrimination, sexual harassment, and pregnancy discrimination
in violation of Title VII of the Civil Rights Act of 1964, as amended,
42 U.S.C. @@ 2000e et seq. ("Title VII") (Counts I, III, IV); paid women
lower wages for their work in violation of Title VII and the Equal Pay
Act of the Fair Labor Standards Act, 29 U.S.C. @@ 206 - 207, 215
("FLSA") (Count II); mandated arbitration, to the exclusion of a
judicial forum, of any statutory claims in violation of Title VII and
the Due Process Clause of the Fifth Amendment of the United States
Constitution ("the Due Process Clause") (Counts VI, VII); denied leave
time for the birth of a child in violation of the Family and Medical
Leave Act, 29 U.S.C. @ 2601 et seq. ("FMLA") (Count VIII); retaliated
against protected Title VII, FLSA, and FMLA complaints in violation of
those statutes (Count V, IX); and also violated various state statutes,
city statutes, and common law protections with the above actions (Counts

Only Count VII of plaintiffs' complaint names NASD and NYSE as
defendants. In Count VII, plaintiffs seek a declaratory judgment that
mandatory arbitration of discrimination claims constitutes a denial of
due process of law by depriving the plaintiffs of their rights under the
United States Constitution and Title Smith Barney requires its
employees, as a condition of employment, to register with securities
exchanges, including NASD and NYSE. Prospective registrants were
required to sign the Uniform Application for Securities Industry
Registration ("Form U-4"), a provision of which requires arbitration for
certain employment disputes, including Title VII claims. The SEC
similarly requires brokers, traders, and certain other securities
industry employees to register with securities exchanges. Plaintiffs
allege that, in order to satisfy these registration requirements,
prospective employees were required to consent to mandatory arbitration
of employment discrimination claims.

                        Procedural History

The NASD and NYSE defendants moved to dismiss under Fed. R. Civ. P.
12(b)(1) ("Rule 12(b)(1)") for lack of subject matter jurisdiction and
Fed. R. Civ. P. 12(b)(6) ("Rule 12(b)(6)") for failure to state a claim.
Before decision on those motions, the plaintiff class reached a proposed
settlement with the Smith Barney defendants. The court first rejected
the proposed settlement in June of See Renerall Martens, et al. v. Smith
Barney, et al., 181 F.R.D. 243 (S.D.N.Y. 1998). The court then approved
a modified settlement in July of 1998, Martens, et al. v. Smith Barney,
et al., 96 Civ. 3779 (CBM) (S.D.N.Y. July 24, 1998) (final order and
judgment approving class action settlement and dismissing claims against
the Smith Barney defendants) ("Settlement Order").

In approving the class settlement by order dated July 24, 1998, the
court dismissed all the Smith Barney defendants, but not NASD and NYSE,
from this class action. This settlement afforded plaintiffs the right to
opt out of the settlement. Pamela K. Martens and Judith P. Mione
exercised this opt out right. The only class claim remaining before the
court is the Count VII claim against NASD and NYSE for their policy and
practice of requiring arbitration of statutory discrimination claims. In
Count VII, the plaintiffs argue that this policy and practice violates
the Due Process Clause and violates Title VII. The court now grants the
motions by NASD and NYSE to dismiss Count VII.

     Distinction Between Rule 12(b)(1) and 12(b)(6) Dismissal

NASD and NYSE have moved to dismiss under both Rule 12(b)(1) for lack of
subject matter jurisdiction and Rule 12(b)(6) for failure to state a
claim upon which relief can be granted. "A case is properly dismissed
for lack of subject matter jurisdiction under Rule 12(b)(1) when the
court lacks the statutory or constitutional power to adjudicate the
case. In contrast, a dismissal under Rule 12(b)(6) is a dismissal on the
merits of the action - a determination that the facts alleged in the
complaint fail to state a claim upon which relief can be granted." Nowak
v. Ironworkers Local 6 Pension Fund, et al. 81 F.3d 1182, 1187 (2d Cir.
1996). Granting a motion under 12(b)(6) would dismiss a claim with
preclusive effect; denying a motion under 12(b)(6) necessarily implies
that a claim is properly within the court's jurisdiction. Accordingly,
under the circumstances of this case, the court agrees that "the
preferable practice is to assume that jurisdiction exists and proceed to
determine the merits of the claim pursuant to [Rule 12b(6)]." Nowak, 81
F.3d at 1188 (internal citations omitted).

               Standards for Rule 12(b)(6) Dismissal

A motion to dismiss for failure to state a claim upon which relief can
be granted should be granted under Rule 12(b)(6) only if it "appears
beyond doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief." Conley v. Gibson, 355 U.S.
41, 45 - 46 (1957). See also Mills v. Polar Molecular Corp., 12 F.3d
1170, 1174 (2d Cir. 1993). "The court's function on a Rule 12(b)(6)
motion is not to weigh the evidence that might be presented at a trial
but merely to determine whether the complaint itself is legally
sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir. 1985).
Therefore, "this court must accept the factual allegations of the
complaint as true and must draw all reasonable inferences in favor of
the plaintiff." Brown v. Coach Stores, Inc., 163 F.3d 706, 709 (2d Cir.
1998) (internal citations omitted). "The issue is not whether a
plaintiff is likely to prevail ultimately, but whether the claimant is
entitled to offer evidence to support the claims. Indeed it may appear
on the face of the pleading that a recovery is very remote and unlikely
but that is not the test." Gant, et al. v. Wallingford Bd. of Educ., et
al., 69 F.3d 669, 673 (2d Cir. 1995) (internal citations omitted).

                            Count VII

In Count VII the plaintiffs seek declaratory judgment that mandatory
arbitration of discrimination claims pursuant to the form U-4 deprives
them of due process of law. At the time this lawsuit was filed in 1996,
the Second Circuit had not yet ruled on this issue and the plaintiffs
had some chance of success in pursuing their argument. However, as is
often the case in lengthy and complex litigation, the legal landscape
has been significantly altered since the inception of this case. The
Second Circuit's recent decision in Desiderio v. NASD. 191 F.3d 198 (2d
Cir. 1999) foils plaintiffs' attempt to pursue Count In Desiderio, a
bank had offered the plaintiff employment as a securities broker,
contingent upon her registration with NASD. NASD required prospective
registrants to sign the Form U-4, a provision of which required
arbitration for certain employment disputes, including Title VII claims.
The Desiderio plaintiff unsuccessfully sought a declaratory judgment to
invalidate the mandatory arbitration provision. While the Desiderio case
was pending, NASD, with SEC approval, amended its rules to remove the
mandatory arbitration provision. This voluntary rule change did not
render the controversy moot because both NASD and NYSE might later amend
their rules to revert to the mandatory arbitration policy. See Desiderio
v. NASD, 191 F.3d 198, 202 (2d Cir. 1999). In Desiderio the Second
Circuit deflated plaintiffs' Title VII claim by ruling that the statute
does not preclude mandatory arbitration of Title VII claims.

The Second Circuit's holding in Desiderio similarly hampers plaintiffs'
constitutional claims by ruling that NASD, like NYSE, is not a state
actor as regards the type of activities relevant to both that and this
case. A threshold problem with the plaintiffs' constitutional due
process claim is that the defendants are private, not public, entities.
While "most rights secured by the Constitution are protected only
against infringements by governments," they also are protected against
infringements by private entity actions "fairly attributable" to the
government. Lugar v. Edmonson Oil Co., 457 U.S. 922, 936 (1982). As
private organizations exercising exclusive regulatory authority pursuant
to federal law, NASD and NYSE straddle the border between the private
and public realms. In a statement that applies equally to the NYSE, it
has been noted that "the exact status of the NASD is unsettled: it is
granted governmental-type powers for some functions while maintaining
its private nature for others." Ross, et al. v. Bolton, et al., 106
F.R.D. 315, 316 (S.D.N.Y. 1984) (rejecting NASD's claim of law
enforcement privilege against discovery of investigative files). This
dual public/private status requires caution in reading precedents
because a ruling that an exchange is private for a particular purpose
does not necessarily mean that it is private for all purposes, as the
Second Circuit noted in United States v. Solomon, 509 F.2d 863 (2d Cir.
1975). In Desiderio the Second Circuit held that although NASD may be
subject to substantial governmental regulation, it remains a private
actor and cites a previous holding that NYSE is a private actor as well.
Since Desiderio involved precisely the same type of NASD and NYSE
actions as are relevant in the case before this court, the ruling

In light of the governing precedent set by Desiderio, the court now
grants defendants' motion to dismiss Count VII under Rule 12(b)(6).
Accepting as true all of the factual allegations of the complaint,
plaintiff has absolutely no possibility of prevailing on Count VII.
There is no possible evidence which plaintiffs could proffer which would
persuade this court to grant the declaratory judgment plaintiffs seek
when the Second Circuit so recently denied such a judgment in a nearly
identical scenario.

                Clarification of the Effect of Opt-Out

The Smith Barney defendants currently have a motion pending to compel
arbitration of the employment discrimination claims of Pamela K. Martens
and Judith P. Mione, two named plaintiffs who had previously worked in a
Smith Barney sales office in New York. Alternatively, Smith Barney's
motion seeks to dismiss or stay the action regarding these two
plaintiffs. Prior to ruling on these pending motions the court now takes
this opportunity to offer clarification on the effect of a decision to
opt out of the court-approved settlement.

It is undisputed that in registering with the NYSE and NASD, both
Martens and Mione signed forms purporting to offer their consent to
arbitrate employment related disputes. Smith Barney now seeks to enforce
these mandatory arbitration provisions. As explained above, plaintiffs'
challenges to mandatory arbitration in general are destined to fail.
However, this court has not yet addressed the lawfulness of the specific
arbitration procedures proposed by Smith Barney. Prior to ruling on
Smith Barney's motions, this court must first determine whether Martens
and Mione, as opt-out plaintiffs, properly have any individual claims
remaining before this court. This court now recognizes that given the
timing of approving a class settlement, usually soon after certifying
the class, some opt-out plaintiffs may not have fully understood the
effect of a decision to reject the settlement. This was the case with
Martens and Mione, who appeared at the hearing to object to the
settlement prior to its approval by this court as if they were still
members of the class. The claimed right to object to the proposed
settlement was denied at the time.

In the interest of equity, prior to ruling on the pending motions this
court now chooses to clarify the effect of opting out of the settlement
and offer the named plaintiffs who opted out the opportunity to rejoin
the class.

In 1996, various named plaintiffs, including Pamela K. Martens and
Judith P. Mione, filed the original complaint on behalf of themselves
and all others similarly situated. Plaintiffs filed this complaint
seeking to pursue a class action. Their subsequent motion to certify a
class was granted. The required notice was given to prospective class
members notifying them of their right to opt out of the certified class.
Martens and Mione exercised their right to opt out.

This court's subsequent order approving the final settlement effectively
ended the action and this court's jurisdiction over it, with one
exception not relevant here.

It is not entirely clear, however, that Martens and Mione fully
understood the effect of their decision to opt out. Martens and Mione
took no action to assert individual claims before this court for the
remainder of 1998 or the first five months of 1999. However, in June of
1999 counsel for Martens and Mione sought to pursue discovery in this
effectively concluded action. In August of 1999 the Smith Barney
defendants moved to compel arbitration and to dismiss or alternatively
stay the action regarding Martens and Mione. This motion represents
Smith Barney's first attempt to compel arbitration as the original
complaint filed by plaintiffs was styled as a class action and thus
exempt from mandatory arbitration by NASD and NYSE policy.

Prospective plaintiffs who opt out of a class settlement effectively opt
out of the entire class litigation. See generally In re Del-Val
Financial Corp. Securities Litigation, 162 F.R.D. 271 (S.D.N.Y. 1995).
Del-Val involved a securities fraud class action in which some
plaintiffs excluded themselves from the class settlement with one
defendant and unsuccessfully sought to participate in the class
settlement with remaining defendants. In that case the court opined, "It
is axiomatic that an individual who requests exclusion from a class
certified for the purposes of litigation is opting out of the entire
litigation... the putative class members' request for exclusion from the
class had the effect of excluding them from the entire litigation."
Del-Val, 162 F.R.D. at 275. The court further asserted "no precedent
exists for permitting class members to opt out of a class, whether
certified for purposes of settlement or otherwise, with respect to some
defendants or claims but not others". Del-Val, 162 F.R.D. at 276. Of
particular interest to this court, the Del-Val court recognized that
some opt-out plaintiffs might have operated under good faith
misunderstandings of the effect of opting out and the court exercised
its discretion to temper the effect this would exert on these opt-out
plaintiffs. The Del-Val court clarified the implications of opting out
and then employed its equity powers to afford opt-out plaintiffs a short
window of opportunity during which to reenter the class if they so

Like the court in Del-Val, this court harbors some concerns that the
named plaintiffs who opted out of the settlements may have misunderstood
the full implications of their decision. It is particularly important to
offer clarification here because opting out by named plaintiffs is an
unusual enough occurrence that its discussion in the case law is quite
limited. When plaintiffs file a suit as a class action, judicial
approval of any settlement is required to ensure that a proper balance
is struck between the rights of the named plaintiffs who have brought
the case forward and the remaining class members they purport to
represent. If an opt-out right is provided, then it is clear that
non-named class members who opt out have no further business before the
court hearing the class action. Such class members are free to file
separate individual claims or seek to intervene to the extent the
procedural rules permit, but they have no right to pursue individual
claims before the court hearing the class action at the same advanced
stage of litigation to which the class has moved the case. Such a policy
would allow opt out plaintiffs to benefit from the work the class had
done to move the case forward without being subject to any of the
constraints which bind class members.

The status of named plaintiffs who opt out of a class is somewhat less
clear. When named plaintiffs initially file a suit styled as a class
action, they file a claim on behalf of themselves and all others
similarly situated. It is not clear whether any individual claims
survive class certification or if certification effectively merges all
claims before the court into the class claim. The efficiency afforded by
the class action procedure would be poorly served if numerous class
members were permitted to opt out of the class and then remain in the
litigation with supposedly resurrected individual claims. It is clear
that named plaintiffs, like non-named plaintiffs, who opt out of a
settlement no longer remain in the class in any capacity and if they
they wish to pursue their unique cases they must actively do so separate
from the class. In order to temper the effect of any possible good faith
misunderstanding by certain opt-out plaintiffs, the court will now grant
named plaintiffs who opted out of the settlement thirty days to rejoin
the plaintiff class. The court will reserve decision on Smith Barney's
pending motions until this thirty day period has expired.


For the reasons outlined above, the court now grants defendant NYSE's
and defendant NASD's motions to dismiss. The Due Process Clause claim
against the NASD and NYSE is dismissed because these two organizations
exercise insufficient state action to trigger constitutional due process
protections. The Title VII gender discrimination claim against NASD and
NYSE is dismissed in keeping with the Second Circuit's ruling that Title
VII does not preclude NASD or NYSE from seeking mandatory arbitration of
brokers' Title VII claims.

The court also now clarifies the consequences of named plaintiffs'
opting out of the court-approved settlement. Opting out of the
settlement excludes such plaintiffs from the terms of the settlement and
removes such plaintiffs from the class litigation. This court now
chooses to follow the precedent set by another court within this
district and allow named plaintiffs who opted out a brief period of time
during which to reconsider their opt-out decision in light of this
clarification. Thus, the court now allows Pamela K. Martens and Judith
P. Mione to elect to rejoin the plaintiff class and participate as named
plaintiffs as per the terms of the court-approved settlement agreement.
Martens and Mione may exercise this option by submitting such request in
writing to the court within thirty days of the date of this opinion and
attached order. (New York Law Journal December 13, 1999)

CARTER-WALLACE: SD NY Dismisses Securities Fraud Suit Re Felbatol
The Southern District of New York has dismissed a securities fraud class
action against Carter-Wallace Inc., concluding the allegations of fraud
against the company were too generic and it did not mislead the public
in its advertisements of Felbatol. In re Carter-Wallace Inc. Securities
Litigation, No. 94 Civ. 5704 (SD NY, Nov. 10, 1999).

Felbatol was approved by the Food and Drug Administration (FDA) in July
1993 for the treatment of epilepsy. Carter-Wallace began to market the
drug in August 1993, but reports that several users developed aplastic
anemia began to surface in the beginning of 1994.

By August 1994, Carter-Wallace, in conjunction with the FDA, determined
that the link between the drug and the blood condition was statistically
significant. In a letter to physicians, Carter-Wallace recommended
suspension of Felbatol's use pending further studies. The drug is still
available today, but with modified warnings.

The securities fraud class action, originally filed in 1994, alleged
certain officers and directors made false and misleading statements
regarding the drug's efficacy between January and July 1994 in violation
of Sec. 10(b) of the Exchange Act and Rule 10b-5 thereunder. Plaintiffs
also alleged the company failed to disclose material information about
Felbatol's safety. They also contended the company overstated earnings
by not accounting for the hazardous side effects in the valuation of its

As part of their claims, plaintiffs asserted the company made misleading
statements in two medical journal advertisements. The allegedly false
statements said that "no life-threatening liver toxicities or blood
dyscrasias have been attributed to Felbatol monotherapy" and the drug
had an "unprecedented safety profile."

In 1997, the district court concluded the adverse side effects were not
established prior to August 1994, and Carter-Wallace did not have a duty
to disclose every "conjecture, rumor or adverse claim" regarding

The court dismissed the complaint, determining that the advertisements
could not support a claim for securities fraud because they were not
intended to influence stock prices.

On appeal, the Second Circuit U.S. Court of Appeals remanded the case on
the sole issue of the advertisements, stating they can be considered a
"statement" for securities fraud.

Initially, District Judge Kevin Thomas Duffy noted that under the Second
Circuit's standards, a strong inference of fraudulent intent can be
established by pleading either (1) facts constituting a strong
circumstantial evidence of recklessness or conscious behavior, or (2)
facts demonstrating motive and opportunity to commit fraud.

"Whether reported adverse side effects had been confirmed or were
statistically likely is definitely probative of the mental state of the
defendants ," stated the court.

The statistical link did not exist at the time of the advertisements,
continued Judge Duffy, and it is understandable that the company would
not cancel or alter an ad on the "mere hint" of a problem. The court
concluded the defendants' actions or inactions did not rise to the level
of recklessness.

The court also analyzed the alleged motive and opportunity of one
insider, stating his stock sales in June 1994, after his retirement in
May, were a normal and expected transaction. According to the opinion,
plaintiffs allegations were too generic and had failed to even assert
that the former vice president was involved with the placement of the

Accordingly, the complaint was dismissed for failure to state a claim
upon which relief could be granted under Federal Rules of Civil
Procedure 12(c). The court also denied leave to amend.

Carter-Wallace was represented by Eric M. Nelson of Whitman Breed Abbott
& Morgan in New York.

The shareholder plaintiffs were represented by Frederic S. Fox of
Kaplan, Kilsheimer & Fox in New York, and by Ralph M. Stone of Milberg
Weiss Bershad Hynes & Lerach in New York. (Securities Litigation &
Regulation Reporter November 24, 1999)

CNA INSURANCE: Insured in Car Fire Cite Intent To Insure in La. Appeal
Case Gaylord Container Corp., et al. v. CNA Insurance Cos., et al., No.
99 CA 1795, La. App., 1st Cir.; See 11/3/99, Page 16.

Appellant's Brief Filed Oct. 25 by Gaylord Container Corp. and Gaylord
Chemical Corp.

Gaylord Chemical Corp. seeks coverage for an underlying class action
that resulted from the explosion of a railcar containing nitrogen
tetroxide. Upon delivery to Gaylord, it was discovered that the
railcar's contents were contaminated with water. Gaylord's attempt to
unload the car's contents was unsuccessful. The car exploded and its
contents were released in a cloud and onto surrounding soil.

The Washington Parish (La.) District Court found that a hostile fire
exception in an absolute pollution exclusion applies because it was a
risk which all parties contemplated would be insured and for which
substantial premiums were paid.

The exception to this holding was for third-level excess carrier
Reliance National Insurance Co. Although finding that the chemical fire
occurred inside the railcar, the District Court held that the Reliance
exclusion did not cover fires that arose out of efforts to contain or
neutralize pollutants. As the court interpreted "pollutants" - which is
undefined in the Reliance policy - to include the contents of the
railcar prior to the explosion, Gaylord was denied coverage.

Insurers have appealed, arguing that the trial court erred when it found
that the explosion was preceded by a fire in the technical sense of the
term because it failed to apply the ordinary meaning of the word "fire."


The District Court correctly found that the parties' common intent was
to insure against catastrophic losses such as fires and explosions.
Gaylord expected it would have coverage for fires and explosions.

As to the Reliance policy, its hostile fire language does not bar
coverage. The Reliance exclusion contains two restrictions to the
hostile fire exception not found in the other eight policies - most
notably failing to define "pollutant." As was demonstrated at trial, the
contents of the railcar prior to the fire and explosion were not
pollutants as the term was understood by Gaylord or Reliance.

The trial court erred in applying a broad definition of "pollutant" when
the term is undefined in the policy and such a definition is contrary to
the parties' common intent. Further, the District Court erred in finding
that the hostile fire arose from Gaylord's efforts to contain or
neutralize the contents of the railcar.

The District Court's finding that coverage is restored under the hostile
fire exception in the other policies is not erroneous.

"Conversely, the district court erred as a matter of law in construing
the word 'pollutants' so broadly so as to include the contents of the
railcar prior to the fire and explosion. The term pollutants is not
defined by the Reliance policy. It is susceptible [to] at least two
reasonable meanings. In light of this ambiguity, the district court's
factual finding - that the parties' intent was to insure against the
risk of a chemical fire - should control and coverage should be restored
under the Reliance policy," Gaylord argues.

              Brief Of Intervening Appellants Filed Oct. 25
                   by the Plaintiffs' Liaison Committee.

The intervenors are plaintiffs in a class action lawsuit against Gaylord
and its insurers for damages sustained as a result of the railcar


The trial court erred in finding that Gaylord's attempts to purge the
railcar was not an attempt to neutralize pollutants as contemplated by
the Reliance policy's limitation on its hostile fire exception. As the
railcar's contents could not be considered pollutants until after they
had escaped, Gaylord's treatment of the contents of the railcar prior to
the release cannot be considered an "attempt to neutralize pollutants."

"Therefore, the hostile fire exception in the Reliance policy should -
as was the case with the other eight insurance policies at issue -
operate to restore coverage the court found excluded by a literal
application of the pollution exclusion. Alternatively, if the
limitations on the application of the hostile fire exception are
interpreted to exclude coverage, then the trial court erred by not
conducting the conflicts-of-law analysis required by the Louisiana Civil
Code to determine whether Illinois law should be applied to resolve this
contract dispute. Had the trial court conducted the required choice of
law analysis, it would have found that Illinois law, which undoubtedly
affords coverage for the subject incident, would apply to this contract
dispute," according to the intervenors.

Attorneys Gaylord is represented by Thomas O. Kuhns, Andrew R. Running
and James C. Joslin of Kirkland & Ellis of Chicago and Richard F. Knight
of Talley, Anthony, Hughes, Knight of Bogalusa, La.

The Plaintiffs' Liaison Committee is represented by Stephen B. Murray of
The Murray Law Firm of New Orleans, James F. Farmer of Farmer, Cheatham
& Tate of Bogalusa, La., Gerald E. Meunier of Gainsborough, Benjamin,
David, Meunier & Warshauer of New Orleans and Reginald J. Laurent of
Slidell, La. (Mealey's Insurance Supplement November 17, 1999)

COMPAQ COMPUTER: Wolf Haldenstein Announces TX Sustains Securities Suit
The following was released on December 27 by Wolf Haldenstein Adler
Freeman & Herz LLP:

Wolf Haldenstein Adler Freeman & Herz LLP announces that on December 22,
1999, the Honorable Vanessa D. Gilmore of the United States District
Court for the Southern District of Texas, sustained the consolidated
amended class action complaint (the "Complaint") filed by shareholders
of Compaq against the Company and certain of its present and former
officers and directors, when it denied defendants' motion to dismiss in
its entirety.

The Complaint, brought on behalf of all purchasers of Compaq stock and
options between July 10, 1997, and March 6, 1998, charges Compaq and
certain of its officers and directors with violations of sections 10(b)
and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges
that defendants issued a series of materially false and misleading
statements concerning Compaq's financial results and the success of its
ODM build-to-order business. According to the Complaint, these
statements falsely omitted that defendants artificially inflated their
results by channel stuffing and factoring receivables. The Complaint
also alleges that certain of the Company's senior executives sold over
$120 million worth of their own Compaq stock at artificially inflated
prices during this time, and the plaintiffs assert a claim under section
20A of the Exchange Act for unlawful insider trading as a result.

In response to Judge Gilmore's decision, Daniel W. Krasner, Senior
Litigation Partner at Wolf Haldenstein, one of plaintiffs' co-lead
counsel, stated: "We are obviously pleased with the Judge's opinion.
Shareholders have lost hundreds of millions of dollars due to
defendants' misconduct and they deserve to have their day in Court. We
intend to prosecute this case vigorously on their behalf." Wolf
Haldenstein has extensive experience in the prosecution of securities
class actions and derivative litigation in state and federal trial and
appellate courts across the country. Wolf Haldenstein's reputation and
expertise in shareholder and other class litigation has been repeatedly
recognized by the courts, which have appointed it to major positions in
complex securities, multi-district and consolidated litigation.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison
Avenue, New York, New York 10016, by telephone at (800) 575-0735
(Michael Miske, Daniel W. Krasner, Esq., Michael Jaffe, Esq. or Neil L.
Zola, Esq.), via e-mail at classmember@whafh.com or whafh@aol.com or
Jaffe@whafh.com or through website at http://www.whafh.com(All e-mail
correspondence should make reference to Compaq.)

EMBRYO DEVELOPMENT: Settles for Lawsuit over IPO Pending Ct Approval
In November 1998, it was announced that Michael Lulkin, a director and
Chairman of the Board of Directors of Embryo Development Corp. at the
time of the Company's initial public offering, had plead guilty to,
among other things, conspiracy to commit securities fraud. The charges
to which Mr. Lulkin plead were premised on allegations that Mr. Lulkin,
Sterling Foster, and others had entered into an undisclosed agreement
pursuant to which, upon conclusion of the Company's initial public
offering, they would (a) cause Sterling Foster to release Mr. Lulkin and
others who owned Embryo stock prior to the offering from certain "lock
up" agreements restricting them from selling such stock; and (b) cause
Mr. Lulkin and such other persons to sell their Embryo stock to Sterling
Foster at prearranged prices to enable Sterling Foster to use such stock
to cover certain short positions it had created.

In August 1999, an agreement of principle was entered into providing for
settlement of the consolidated class action against the Company, Mr.
Lulkin and Steven Wasserman, who was also a member of the Company's
Board of Directors at the time of the Company's initial public offering.
Under the agreement in principle, all claims in the action against the
Company, and against Mr. Lulkin and Mr. Wasserman insofar as they were
members of the Company's Board of Directors, would be dismissed in
exchange for a payment of $400,000, of which $100,000 would need to be
paid by the Company and $300,000 would be paid by an insurance company
under a directors and officers liability policy of insurance. The
settlement is contingent upon, among other things, execution of the
definitive documentation and approval by the court. There can be no
assurance that the settlement will be concluded.

ETHICON INC: NJ Fd Ct Oks Transfer of Contaminated Suture Case to Ca.
A New Jersey federal court has ruled that a proposed national class
action filed against makers of allegedly contaminated sutures can be
transferred to a court in California, where the majority of alleged
injuries occurred (Sandra Lawrence v. Ethicon, Inc., No. 99-3056, D.
N.J.; See 9/17/99, Page 6).

In an order issued Oct. 22 in the U.S. District Court for the District
of New Jersey, Judge Anne E. Thompson denied attempts to have the case
against Ethicon Inc. thrown out on forum non conveniens grounds, but
said the case could be transferred to the District of Northern
California, a request Ethicon had made in the alternative.

"It is presumed that defendant is subject to personal jurisdiction in
California because it is moving to transfer a case there and because it
is currently defending similar suits in that judicial district," Judge
Thompson said.

Ethicon is defending allegations it withheld knowledge that one of its
suture sterilization systems in San Angelo, Texas, was malfunctioning
and produced millions of contaminated sutures, which plaintiffs say were
the cause of countless post-operative infections. Ethicon issued a
recall of 3.6 million packages of the sutures in 1994.

                     California, Nevada Residents

The New Jersey complaint, though a putative nationwide class action, was
filed June 29 on behalf of residents who live and were allegedly injured
in California and Nevada. Three other California state actions were
filed along with the class action filed in New Jersey and have also been
removed to federal court.

Judge Thompson said that while New Jersey is a proper venue for the
complaint, it has "little connection with operative facts of the
lawsuit," with the exception that Ethicon's corporate headquarters are

Several issues, the judge said, weigh in favor of a transfer, including
the closeness of plaintiffs and witnesses to a California venue. Ethicon
noted in its motion to dismiss or transfer the case that it would make
all necessary witnesses and documents available wherever the case was
eventually filed.

"Local interests do not persuade this Court to retain jurisdiction,"
Judge Thompson wrote. "To be sure New Jersey has an interest in
regulating its corporations and the burden of jury duty may be placed
upon New Jersey citizens when they have the closest ties to the action.
However, the alleged injuries occurred in California and Nevada to
citizens of those respective states. . . . In order to promote judicial
efficiency, the Court will transfer this case to California."

Ethicon is represented by Susan M. Sharko and Jennifer La Mont of
Shanley & Fisher in Morristown, N.J. Lawrence is represented by William
W. Robertson of Robertson, Freilich, Bruno & Cohen in Morristown, N.J.,
Wendy C. York of Sacramento, Calif., William A. Kershaw and Mark T.
Gallagher of Kronick, Moskovitz, Tiedemann & Girard of Sacramento,
Calif., and C. Brooks Cutter of Friedman, Collard, Cutter & Panneton of
Sacramento. (Text of Opinion and Order in Section D. Mealey's Document #
28-991112-104, Mealey's Emerging Drugs & Devices November 12, 1999)

HK GOVT: Immigrants from Mainland China Sue for Residency in Hong Kong
Los Angeles Times of December 24 reports on the class action case by
immigrants from mainland China over residency in Hong Kong.

The report says that on Dec. 3, the Court of Final Appeal issued a
ruling that essentially reversed an earlier decision in which the court
had claimed broad powers to interpret the Basic Law, the
mini-constitution governing Hong Kong since its reversion to Chinese
rule 2 1/2 years ago. In the new ruling, the court in effect apologized
for overstepping its bounds, agreeing instead that ultimate,
"unqualified" authority to interpret the Basic Law lay a thousand miles
away: with the Chinese Communist Party's rubber-stamp parliament in

Days of protests erupted after the ruling because the decision sealed
the fate of thousands of immigrants from the mainland, whose push to be
granted legal residency was doomed. Democracy and human rights activists
accuse the justices of kowtowing to Beijing and putting at risk the "one
country, two systems" formula that was designed to give Hong Kong
autonomy over its domestic policies for 50 years after the 1997

According to Los Angeles Times, democracy activist Martin Lee, who is
also a Hong Kong legislator and lawyer, declared that "The court has
lost credibility."

The case before the justices centered on 17 mainland immigrants who had
applied for residency in Hong Kong on the basis of having at least one
parent who was a legal resident.

The court in January ruled in the immigrants' favor and asserted wide
authority to interpret the Basic Law, even to the extent of striking
down legislation from the central Chinese government.

The Hong Kong government painted scenarios of a sudden flood of 1.6
million immigrants if the January ruling were honored. According to Los
Angeles Times, the Hong Kong government asked the National People's
Congress in Beijing to step in. In June, the congress concluded that the
Court of Final Appeal did not have the final say after all -- and voided
the decision. In its new opinion, the court conceded that the congress
was right.

Regina Ip, Hong Kong's secretary for security, defended the government's
appeal to Beijing. "It's not the case of us inviting interference or
kowtowing to pressure from Peking," she said in an interview. "They were
there to listen to us, really. We invited their help." Ip noted that
Hong Kong would only appeal to Beijing in extraordinary circumstances,
such as the prospect, in this case, of "masses of humanity" pouring
across the border and straining the territory's resources. The Hong Kong
government has refused to spell out what would qualify as an
extraordinary situation.

Still hanging in the balance are the fates of people such as a
bespectacled, earnest young man surnamed Lo, an immigrant who asked that
his full name not be used. Lo's parents and younger brother live in Hong
Kong legally, but he does not. Lo is one of thousands hoping to stay in
Hong Kong by arguing that the government should have granted him
residency under the January decision in the five months before it was
overturned. That class-action case is still pending before the court.
(Los Angeles Times December 24, 1999)

IBERVILLE COATINGS: La Ct Will Hear Coverage for Georgia Gulf Poisoning
The U.S. District Court for the Eastern District of Louisiana has
ordered the transfer of a declaratory judgment action brought by North
American Specialty Insurance Co., which claims it has no duty to defend
Iberville Coatings Inc. in underlying mustard gas poisoning personal
injury suits. Because those suits are still pending in the Middle
District of Louisiana, the coverage dispute also should be heard there,
the Eastern District of Louisiana concluded. North American Specialty
Insurance Co. v. Iberville Coatings Inc. et al. , No. 99-1805 Section
"K"(4) (ED LA, Oct. 5, 1999).


Georgia Gulf Corp. operates a plant in Louisiana located for
jurisdictional purposes in the Middle District of Louisiana for the U.S.
District Court. Iberville Coatings Inc. is located in Baton Rouge, also
in the Middle District. North American is a New Hampshire corporation
that is authorized to do business in Louisiana.

In August 1995, Georgia Gulf contracted with Harmony Corp. to provide
labor, materials, and equipment to construct an expansion at Georgia
Gulf's Louisiana plant. Harmony subcontracted with Iberville to provide
"field touch-up painting" at the expansion. The subcontract allegedly
included an indemnity clause requiring Iberville to indemnify Harmony
and Georgia Gulf for damages arising out of Iberville's performance of
the subcontract.

In September 1996, mustard gas was released at the Georgia Gulf
facility, with allegedly hundreds of people sickened by exposure to the
agent. That release spawned multiple-plaintiff/multiple-suit state court
litigation, in which cases were removed and consolidated under the lead
case, Acosta v. Master Maintenance (No. 98-1065-A2), in the Middle
District of Louisiana.

Iberville contended that it was not named as a defendant in the suits
and there are no allegations that it caused or contributed to the
damages alleged by the plaintiffs. Georgia Gulf, however, sought
indemnity from Iberville pursuant to the indemnity clause in the
subcontract. Georgia Gulf contended that it was entitled to indemnity
and/or a defense of those claims asserted by employees of Iberville in
the underlying litigation.

Iberville made formal demand on its insurer, North American , seeking
coverage and/or defense under its policy. North American denied coverage
and defense allegations with respect to the indemnification claims by
Georgia Gulf.

In June 1999, North American filed the present declaratory judgment
action, seeking a determination that the commercial general liability
(CGL) policy it issued to Iberville does not provide coverage for claims
arising out of the subject release.

             The Eastern District of Louisiana's Decision

According to the district court, Georgia Gulf sought dismissal of the
North American declaratory judgment action on the basis of improper
venue and of no controversy existing between North American and Georgia
Gulf. It also sought dismissal or transfer of Iberville's cross-claim.

However, the district court decided the entire matter should be
transferred and consolidated with the pending case in the Middle
District. It said the Fifth Circuit adheres to the general rule that the
court in which an action is first filed is the appropriate court to
determine whether subsequently filed cases involving substantially
similar issues should proceed.

While the present action is not identical to the pending consolidated
cases in the Middle District, the court noted that it is unquestionable
that it is inexorably tied to the Acosta case as the claims of the
Georgia Gulf employees are apparently included therein. Cases need not
be identical for consolidation, the court said; they must have
substantial overlap.

"Considering the long history of this case in the Middle District and
the fact that the claims that are the subject of this coverage issue are
or have been litigated or resolved in the context of that suit, the
Court finds that it must transfer this case based on this doctrine. It
is up to the Middle District court to decide whether this declaratory
judgment suit should be dismissed," the Eastern District court wrote.

Factors calling for the transfer, the court said, included that the
contracts upon which the indemnity claim was based dealt with a project
located in the Middle District of Louisiana, as did the occurrence that
North American claims is excluded from coverage. Further, both Georgia
Gulf and Iberville, as well as most of the non-party witnesses, reside
in the Middle District. The court said the only apparent nexus to the
Eastern District is the practice of counsel for North American, which is
not a factor to be considered.

Representing North American Specialty were Dominic J. Ovella, W. Evan
Plauche, and Danny Neil Bowz of Hailey, McNamara, Hall, Larmann & Papale
in Metairie, LA.

Representing Iberville Coatings were Richard Franklin Zimmerman Jr. and
Randal J. Robert of Kantrow, Spaht, Weaver & Blitzer in Baton Rouge.

Representing Georgia Gulf Corp. were Rance L. Craft of King & Spalding
in Atlanta and Reginald R. Smith of the firm's Houston office.
(Insurance Industry Litigation Reporter November 17, 1999)

I.I.S. INTELLIGENT: Announces Settlement of Securities Suit Re ’93 Acts
I.I.S. Intelligent Information Systems Limited (NASDAQ:IISLF) announced
on December 27 that it had entered into a stipulation of settlement of a
securities action filed on behalf of a proposed class against it and
other defendants relating to alleged acts and omissions in 1993 and
early 1994.

The settlement of the action, entitled Ernst Seewald v. I.I.S.
Intelligent Information Systems Limited, et. al., 93 Civ. 4252 (the
"Seewald Action"), is subject to court approval following a settlement
hearing, as well as other conditions.

The Company also announced that it had entered into a stipulation of
settlement of two private plaintiff securities actions filed against it
and other defendants relating to the same alleged acts and omissions.

The settlement of those actions, entitled Tibon Veal Holdings, Ltd. v.
IIS, et. al., 95 Civ. 824 and D.S.P. Ltd. v. IIS Intelligent Information
Systems Limited, et. al., 94 Civ. 3603 (the "Tibon/DSP Actions" ), is
conditioned on, among other things, court approval of the Seewald Action

The Seewald stipulation of settlement provides for a release of all
claims against all defendants (including the underwriters of the
Company's 1993 public offering), in exchange for (i) a cash payment
of$380,000 by IIS and certain other defendants into an insured interest-
bearing escrow fund, and (ii) delivery to the plaintiff class by IIS of
newly issued freely tradable warrants with rights to purchase, in the
aggregate, an amount of as yet unissued ordinary shares of IIS
equivalent to 10% of the number of ordinary shares of IIS that are
outstanding on the date the stipulation of settlement is submitted for
court approval.

The exercise price of the warrants is $0.30 per share (which reflected a
discount of 50% of the market price of IIS shares at the time that an
agreement in principle was reached on settlement terms). IIS will also
bear certain costs of administering the settlement. The settlement
amount will be allocated among the members of the plaintiff class

The Seewald settlement, if consummated, will conclude all class-action
litigation now pending against the Company. The settlement of the
Tibon/DSP Actions provides for a release of all claims against all
defendants (including the underwriters of the Company's 1993 public
offering). The amount of the cash payments in the settlements were
previously reserved for in the Company's financial statements.

Robi Hartman, Vice Chairman and Jacob Herbst, Chairman of the Board of
IIS stated: "We are pleased that we have been able to resolve these
litigation claims against the Company and the other defendants and to
bring these time-consuming and extended suits to a close.

"As stated in the stipulations of settlement, the Company and the other
defendants deny violating any laws and are entering into the above
described stipulations solely to eliminate the burden and expense of
future litigation.

"Resolving these claims will enable IIS to focus, without further
distraction and expense, on maximizing shareholder value and on its
future growth potential, particularly that which may result from the
operations of its subsidiary, StoreAge Networking Technologies Ltd.
("StoreAge") in SAN/Fibre Channel technology."

LASON INC: Schiffrin & Barroway Files Securities Suit in Michigan
The following statement was issued on December 27 by the law firm of
Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in the
United States District Court for the Eastern District of Michigan on
behalf of all purchasers of the common stock of Lason, Inc. (Nasdaq:
LSON ) from July 27, 1999 through December 17, 1999, inclusive (the
"Class Period").

If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, please
contact Schiffrin & Barroway, LLP (Stuart L. Berman, Esq.) toll free at
888/299-7706 or 610/667-7706, or via e-mail at info@sbclasslaw.com

The complaint charges Lason and certain of its officers and directors
with issuing false and misleading statements and failing to disclose
material information concerning the Company's deteriorating financial
condition that resulted from the Company's inability to integrate its
many acquisitions.

Contact: Schiffrin & Barroway, LLP, Bala Cynwyd Stuart L. Berman, Esq.,
888/299-7706 (toll free) or 610/667-7706 info@sbclasslaw.com

LATEX GLOVES: CA Judge Dismisses Suits Filed After Limitations Period
The judge presiding over the California consolidated latex allergy
lawsuits has dismissed two cases in which the plaintiffs filed
complaints long after the state's one-year statute of limitations period
had expired. The court also denied a motion to compel arbitration in a
third suit. Morson v. Baxter Healthcare Corp. et al., No. JCCP 4003-007;
Armenta v. Baxter Healthcare Corp. et al. , No. JCCP 4003-009; and
Jakpor v. Baxter Healthcare Corp et al., No. JCCP4003-028 (CA Super.
Ct., San Diego Cty., Nov. 3, 1999).

                        The Morson Suit

San Diego County Superior Court Judge William C. Pate granted summary
judgment to the defendants in the case of plaintiff Kelly K. Morson. He
found that she suspected that latex gloves were causing her allergic
reaction at least by June 1992 and possibly as far back as 1980 when she
first began to experience a rash and itchiness on her hands while
wearing latex gloves. Because she did not file suit until Dec. 8, 1995,
she clearly exceeded the state's one-year limitations period. Under
California's discovery rule, the limitations period begins to run from
the date that the plaintiff knows or could reasonably discover through
investigation of sources available to her that her injuries were caused
by a defendant's wrongdoing.

In Jolly v. Eli Lilly & Co. et al. (1988), the state supreme court made
it clear that the plaintiff does not have to be able to prove that she
was injured by a wrongdoer, but that the limitations period begins to
run when she suspects or should suspect that someone has done something
wrong to her. "So long as a suspicion exists, it is clear that the
plaintiff must go find the facts; she cannot wait for the facts to find
her," the court said in Jolly.

Judge Pate rejected Morson's argument that the statute of limitations
did not begin to run until February 1995 when her doctor advised her to
file suit against the manufacturers of latex gloves. She had argued that
the limitations period should not have begun to run until she received
an "informed diagnosis" of latex allergy reaction, but Judge Pate noted
that she had received just such an informed diagnosis in August 1993,
when her treating physician at the time advised her to use only
non-latex gloves and to obtain a medic alert bracelet warning of her
allergy to latex.

                           The Armenta Suit

Judge Pate also granted summary judgment to the defense in the case of
Vivianne D. Armenta.

Armenta, a respiratory therapist, began experiencing allergy symptoms to
latex gloves in 1990. As a result, she tried to avoid using latex
gloves, but she suffered a serious reaction requiring emergency room
treatment in 1993 and again in 1994. In June 1994, Armenta saw an
allergist who diagnosed her latex allergy, but she did not file her
complaint until Aug. 2, 1996. Thus, she received an informed diagnosis
more than two years before she filed suit, Judge Pate found.

In both the Morson and Armenta decisions, the court ruled that the two
plaintiffs misplaced their reliance on three precedents, Velasquez v.
Fibreboard (CA Ct. App., 1979), Ward v. Westinghouse (9th Cir., 1994),
and Tucker v. Baxter Healthcare Corp. (9th Cir., 1998). In each
instance, the facts were widely divergent from those presented in the
Morson and Armenta suits, Judge Pate found.

In Velasquez, the plaintiff had no physical complaints at the time of
his asbestosis diagnosis and was urged to continue working in an
asbestos environment.

Ward involved a case in which the plaintiff did not know that his
repetitive stress injury was caused by a third party and that he
reasonably assumed it was caused by his own overuse of his computer over
the course of 10 years.

In Tucker, the court found that the autoimmune disorder developed by the
plaintiff was unrelated to her first difficulties with her breast
implants. In addition, the plaintiff in that case probably would not
have been able to locate any information regarding silicone implants and
autoimmune disease at the time of her problems with the devices, Judge
Pate noted.

Here, Judge Pate found, timely investigation by the plaintiffs "would
have disclosed numerous articles concerning latex allergies, as well as
a 1991 Food and Drug Administration Medical Alert advising health care
workers of reports of severe allergic reactions to common latex
containing medical devices."

                           The Jakpor Suit

Judge Pate also issued a ruling rejecting the bid of various Kaiser
Permanente-affiliated defendants in Jakpor v. Baxter Healthcare Corp. et
al. to compel arbitration. "Plaintiffs are correct that the complaint
does not include any medical malpractice claims. Consequently,
Plaintiffs' claims are not subject to arbitration under the KFHP Group
Medical and Hospital Service Agreement," wrote the judge.

The court also reviewed the Southern California Permanente Medical
Group's regulations and the terms of its Partnership Agreement, "and was
unable to find any reference to safety issues. As there is no evidence
before the Court that Plaintiffs' claims regarding the fraudulent
concealment of the dangers of latex gloves, Defendants' failure to warn
of those dangers, or their negligence in supplying them were intended by
either party to be within the scope of the Partnership Agreement or the
referenced dispute resolution procedures, Defendants failed to meet
their burden to establish that arbitration is appropriate in this case."

Plaintiffs' liaison counsel is Steven Kazan of Kazan, McClain, Edises,
Simons & Abras in Oakland, CA, and Peter H. Crossin of Rose, Klein &
Marias in Los Angeles.

Defense liaison counsel is Robert M. Mitchell of Seyfarth, Shaw,
Fairweather & Geraldson in San Francisco. (Latex Allergy Litigation
Reporter November 1999)

NCAA: Ap Ct Overrules & Oks Current Criteria for Athletic Scholarships
In a decision with wide-ranging ramifications, a federal appeals court
in Philadelphia reversed on December 22 a lower court ruling and decided
the NCAA could use its current criteria for standardized test scores to
determine who is eligible to compete, practice and receive athletic
scholarships as college freshmen.

The majority of the 3rd U.S. Circuit Court of Appeals three-judge panel
ruled the NCAA was not a recipient of federal funds in this case, and
thus was not subject to standards set by the Civil Rights Act of 1964.
The majority ruling did not address the substantive issue held by a
federal district court judge: that the standardized test-score provision
of the NCAA's eligibility rules had a disparate effect on black
student-athletes. "They went off on a technicality, but the battle is
not over," said Adele Kimmel, an attorney for Washington-based Trial
Lawyers for Public Justice, which brought the class-action lawsuit in
early 1997 on behalf of Tai Kwan Cureton and three other named

Pending appeal, the ruling generally means the NCAA will not be subject
to any federal civil rights laws in cases involving sex discrimination
(Title IX), ethnic or racial discrimination or discrimination against
the disabled.

Judge Morton I. Greenberg wrote that under the regulations of the Civil
Rights Act, the federal funds the NCAA receives for its National Youth
Sports Program (NYSP) do not subject the NCAA to the law unless the
lawsuit is specifically brought against the NYSP. The NYSP is a youth
enrichment program that provides summer education and sports instruction
on campuses of both NCAA-member and nonmember institutions. It receives
about $ 16 million annually in federal funds.

He also dismissed the claim that the NCAA was a recipient of federal
funds because the member schools that receive federal funds cede their
authority on intercollegiate sports to the NCAA. He wrote, "The fact
that the institutions make . . . decisions cognizant of NCAA sanctions
does not mean the NCAA controls them, because they have the option,
albeit unpalatable, of risking sanctions or voluntarily withdrawing from
the NCAA."

Kimmel called the ruling "a travesty and a complete injustice for the
NCAA to run college athletics and be immune from the civil rights laws.
The practical effect is that the NCAA is allowed to discriminate and
there is nothing anyone can do about it, and we believe that is wrong."
Elsa Cole, the NCAA's general counsel, said, "We think it's a sound

The appeals panel had stayed the lower court's ruling pending the
outcome of this appeal, so the eligibility criteria pertaining to the
rule first known as Proposition 48, and now known as Proposition 16,
remain unchanged. The NCAA is reviewing those standards, a spokesman

The NCAA requires freshmen to have a high school diploma, a minimum
standardized-test score and a minimum grade-point average in 13 core
academic courses to compete. The test score and GPA requirements are
based on an indexed, sliding scale. Students scoring less than 820 (out
of a possible 1,600) on the Scholastic Assessment Test or 66 (out of
120) on the American College Test cannot participate in sports as
freshmen, regardless of their GPA.

Kimmel said Cureton's attorneys will file a motion in January seeking a
review by the full 3rd Circuit appeals court. Both sides expect the
appeal process to reach the Supreme Court. (The Washington Post December
23, 1999)

NY OFFICIALS: Ct Oks Challenge of Handling of Termination of Benefits
A class action challenging the way state officials handle the
termination of benefits under the Food Stamp, Medicaid and Cash
Assistance programs will be allowed to proceed following a decision by
Southern District Judge Allen G. Schwartz.

Rejecting a series of challenges brought by New York State, Judge
Schwartz found that recipients have a private right of action to dispute
the fairness of hearings conducted to terminate or reduce their benefits
under the programs at issue in Meachem v. Wing, 99 Civ. 4630.

Under the statutory scheme for all three programs, recipients must meet
periodically with a city employee to verify their benefit eligibility
and determine whether they should be enrolled in an employment program.

If a recipient misses an appointment, benefits cannot be terminated
unless the recipient receives a notice informing them of their right to
a fair hearing and the right to continue receiving benefits pending a
decision by the hearing officer.

The lawsuit, filed in June, sought to enjoin officials from conducting
hearings in a manner that violated the due process clause of the
Fourteenth Amendment and the regulations promulgated for the three

The State moved to dismiss on several grounds. First, it argued that the
availability of "post-deprivation" relief, in this case an Article 78
proceeding in state court to challenge the findings of fair hearing
officers, prevented Judge Schwartz from finding the State had violated
due process rights.

But Judge Schwartz found that, because plaintiffs allege that they are
"entitled to certain pre-deprivation remedies under federal
constitutional and statutory law, the availability of post-deprivation
relief is not relevant."

Next, the State charged that the Eleventh Amendment's bar to prosecuting
an action in federal court against a state should lead the court to
dismiss the action.

Judge Schwartz said that plaintiffs' claims under the Federal
Constitution, federal statutory law as well as their claims under state
law must all be analyzed separately.

On the constitutional claims, he said, "This action is not against New
York State itself, but rather is an action for injunctive relief against
State officers acting in their official capacities," and the U.S.
Supreme Court in Ex Parte Young, 209 U.S. 123 (1908) makes it clear that
State officials can be sued in federal court to enjoin action that
violates the Constitution.

As to the federal statutory claims, he said, the Second Circuit extended
the reasoning of Ex Parte Young to federal statutes in Kostok v. Thomas,
105 F.3d 65, (1997).

Judge Schwartz did rule in New York State's favor on its motion to
dismiss the plaintiffs' state claims under the Cash Assistance program,
saying the claims were barred in federal court by the Eleventh

"The doctrine of Ex Parte Young does not apply to a suit against state
officials based on state law because such a suit is not necessary to
'vindicate the supreme authority of federal law' and 'conflicts directly
with the principles of federalism that underlie the Eleventh
Amendment.'" Pennhurst State School & Hospital v. Halderman, 465 U.S. 89

Nonetheless, Judge Schwartz found that plaintiffs can still proceed on
these claims to the extent they allege the officials’ conduct of fair
hearings violates the due process clause.

                       Private Right of Action

The State then contended that the federal statutes at issue (The Food
Stamp Act and the Medicaid Act) do not provide for private rights of
action that are enforceable pursuant to 42 U.S.C. Section 1983.

However, Judge Schwartz said that provisions of the Food Stamp Act
requiring states to conduct fair hearings "are plainly intended to
accord a recipient the opportunity to be heard and to prevent a
recipient from losing benefits" to which they are entitled.

And despite the State's arguments to the contrary, he said, the fair
hearing provisions are mandatory and clearly establish a private right
of action.

Judge Schwartz said that by the same reasoning, a private right of
action exists for enforcing the fair hearing provisions of the Medicaid

Finally, New York State asked Judge Schwartz to refrain from exercising
jurisdiction under the abstention doctrines articulated in Younger v.
Harris, 401 U.S. 37 (1971) and Burford v. Sun Oil Co., 319 U.S. 315

Under Younger and its progeny, however, there "is no state proceeding
pending-criminal or civil, that require abstention," he said.

The State argued that under the holding in Burford, Judge Schwartz
should abstain because the plaintiffs' action threatened to disrupt New
York State's efforts to establish a coherent administrative scheme.

But Judge Schwartz said that Meachem was hardly "the extraordinary case
that requires federal abstention under Burford." "This action involves
issues that are not 'essentially local' but rather involve federal funds
and federal regulation in an area in which the federal government has
taken a keen interest," he said.

Judge Schwartz also found that plaintiffs had stated a claim upon which
relief can be granted when they challenged the way the state handles
"mailing affidavits" at the hearings.

Assistant Attorney General Jose Velez represented the defendants.

The plaintiffs were represented by Richard E. Blum, Ian Feldman, Steven
Godeski, Esperanza Colon and Susan Sternberg, of The Legal Aid Society;
Henry Ricardo, of Dewey Ballantine; Marc Cohan, of the Welfare Law
Center; Matthew Schneider, of the New York Legal Assistance Group, and
Patrick Horvath with jthe Urban Justice Center. (New York Law Journal
December 13, 1999)

PETSMART INC: Ct Orders for Mediation for Fl. Claims over OT Pay
On March 28, 1998, a lawsuit was filed in Federal District Court in the
Middle District of Florida entitled Cavucci et al v. PETsMART, Inc.
(Case No. 98-CV-340). This class-action complaint alleges unspecified
damages based on various alleged violations of the Fair Labor Standards
Act (FLSA), including alleged failures to pay overtime premiums. On May
12, 1998, the Company answered the complaint denying all material
allegations. The court entered an order of procedure and schedule for
trial on July 20, 1998 which outlines all discovery and trial dates. On
November 30, 1998, PETsMART filed four motions for partial summary
judgment on Plaintiffs claim that four in-store management positions
were improperly classified as exempt under FLSA. These motions were
denied. On or about July 30, 1999, Plaintiffs filed a motion seeking
Class Certification and Court-Supervised Notice to Potential Collective
Action Members. The Court denied this motion on September 28, 1999.
Plaintiffs filed a motion seeking Class Certification and
Court-Supervised Notice to Potential Collective Action Members in the
Company's four Orlando area stores on November 23, 1999. The Company
opposed the motion and the Court has the matter under review. The Court
ordered the parties to participate in a mediation, which will be held on
December 15, 1999. Trial on this matter is currently scheduled for
February 1, 2000, and the Company intends to continue to defend itself

PUBLISHERS CLEARING: Report on Plight from Sweepstakes Brought Refund
According to St. Petersburg Times of December 27, Publisher's Clearing
House refunds nearly $ 5,600 to an 80-year-old man who spent thousands
on his dream of winning millions.

Joffre Leggett spent a lot of time and money waiting for last year's $
31-million Publisher's Clearing House Sweepstakes. He was sure he would
win because letters from the company all but assured the 80-year-old
that he already had the prize money. He also was confident that because
he had placed so many orders, he was sure to win. But the van with the
balloons never showed up and after spending almost $ 6,000 for magazines
piled to the ceiling of his sparse north Tampa home, he was without
heat, food or a car.

St. Petersburg Times says that it learned of Leggett’s plight from
Calvary Community Church in Town 'N Country, and after the story
appeared, the company said it was making amends.

According to Christopher Irving, consumer affairs director for
Publisher's Clearing House, the company refunded more than $ 5,600 for
magazines Leggett had purchased. The money was sent to Leggett's niece,
Carolyn Lineer. "Of course, this amount was refunded due to the
difficulties that his family expressed he was having," Irving said.

The company also contacted the mail preference service and had Leggett
taken off the mailing list of other sweepstakes companies such as
Readers Digest and American Family Publishers. "We put a block on the
orders and had outstanding balances canceled and removed," Irving said.

Leggett's situation is common among the elderly, according to fraud

Sweepstakes giant American Family Enterprises, hoping to avoid a
protracted legal battle, agreed early this month to return as much as $
33-million to consumers who were misled by the company's contest

Publishers Clearing House, meanwhile, has been settling its own
class-action lawsuit and negotiating with state attorneys general. (St.
Petersburg Times December 27, 1999)

RENT-TO-OWN COS: Lawyers See Growth in Debt collection litigation
In a suit that defense lawyers say is representative of a growing trend,
a local attorney has been named as a defendant in a complaint about
alleged illegal collection practices.

A class action filed in the U.S. District Court for the Northern
District of Illinois by Daniel A. Edelman of Edelman, Combs & Latturner
contends four rent-to-own furniture companies, represented by their
counsel, Kevin J. Hermanek, obtained hundreds of Cook County Circuit
Court no-prior-notice replevin orders under questionable circumstances.

The suit alleges that hundreds of complaints charging fraud by
rent-to-own customers were filed under questionable circumstances to
obtain ex parte replevin orders allowing seizure of rented furniture.
The orders and the resulting entry into customers' homes to execute the
orders violated both customers' civil rights and the federal Fair Debt
Collection Practices Act, the complaint contends. It seeks compensatory
and punitive damages in an undetermined amount, plus attorney fees.

Hermanek said he has been advised by counsel not to comment on the
allegations. But lawsuits filed against lawyers alleging violations of
the statute have become more and more common in the last three or four
years, following a U.S. Supreme Court decision that interpreted the term
debt collector" in the Fair Debt Collection Practices Act to include
attorneys, says Thomas P. McGarry. A partner of Hinshaw & Culbertson who
handles a lot of attorney malpractice matters, he is not involved with
the Hermanek case.

In fact, one of his partners at the 400-attorney firm known for its
insurance defense work now focuses his practice on attorneys named as
defendants in suits brought under the statute, and represents a very
large clientele of debt collectors and lawyers who are collection
lawyers," McGarry says.

Because the Fair Debt Collection Practices Act creates a fairly
lucrative industry for lawyers who sue debt collectors, particularly in
federal court actions, there's a lot of activity like this. If you're
doing collection work, it's not that remarkable that someone might make
a claim against you under the Fair Debt Collection Practices Act."

Strictly enforced, particularly in the 7th Circuit, this statutory
scheme is so onerous and so difficult that it is a trap for the unwary,"
McGarry continued. The so-called pure-heart-and-empty-head defense
doesn't apply. It's a very strict statutory scheme, and I think in some
ways it's unfairly targeted at lawyers."

Typical scenarios that get collection lawyers in trouble under the
statute include inadequate supervision of staff and assuming, as an
out-of-state lawyer, that you know the rules, not realizing that the 7th
Circuit takes a very strict approach to the statute, McGarry said.

However, the suit against Hermanek is highly unusual in also alleging
civil rights violations under 42 U.S.C. sec1983, based on orders granted
in Cook County Circuit Court, both Edelman and McGarry agreed.

The ex parte orders at issue in the class action against Hermanek were
obtained by presenting standard-form orders containing bogus recitals,"
according to the complaint. The orders allegedly claimed renters were
trying to abscond with, sell or conceal their rented furniture and that
it was perishable.

Edelman said Illinois law has forbidden no-notice seizure orders since
the 1970s, except in very limited circumstances. These include cases in
which the owner of the property can establish that the renter is about
to leave the state with it, conceal it or sell it, or that the property
is perishable.

However, such circumstances did not apply to the replevin orders
concerned in the class action, where the debtors simply were in arrears,
not seeking to abscond with the furniture, according to Edelman.

His complaint alleges that the defendants violated 42 U.S.C. sec1983
through the routine use of no-notice replevin proceedings by defendants,
justified by bogus recitals in form orders presented by Hermanek" and
his law firm. This constituted a due-process violation under the 14th
Amendment of the U.S. Constitution, the complaint contends.

Edelman described the defendants' collection efforts as one of most
egregious collection tactics I have seen. Bogus reasons were presented
to the courts on hundreds of occasions to get authority for strong-arm
tactics that are reserved for the most extreme and unusual

The ex parte replevin orders that he has seen were approved by Circuit
Judge Glynn J. Elliott Jr., Edelman said. It is his understanding,
though, that such orders are no longer being granted.

Attorneys representing the defendant furniture rental companies said
they haven't done anything wrong and intend to defend the class action
vigorously. “We have not had a chance to carefully review the complaint,
but we do know that our activities in Illinois are in compliance with
the law," said Bradley W. Denison. He is senior vice president and
general counsel for defendant Rent-A-Center Inc., based in Plano, Texas.
“We intend to vigorously defend this case," Denison added.

Eugene J. Kelley Jr. of Arnstein & Lehr, who is representing Rent-Way
Inc., based in Erie, Pa., said his client, too, has done nothing wrong.
“I also question whether Rent-Way belongs in this case, as it's
currently constituted, because the only named plaintiff is not a
Rent-Way customer," Kelley continued.

Neal T. Goldstein of Much, Shelist, Freed, Denenberg, Ament & Rubenstein
P.C. represents another corporate defendant, Rental Management Co.,
doing business as Aaron's Rental Purchase in Cicero. He declined to

The fourth corporate defendant, Renters Choice, has merged into
Rent-A-Center, according to Edelman.

Thomas v. Hermanek, et al., No. 99 C 8267. (Chicago Daily Law Bulletin
December 23, 1999)

TYCO INT’L: Marc S. Henzel Files Securities Suit in Florida
The Law Offices of Marc S. Henzel gave notice on December 24 that a
class action complaint has been filed in the United States District
Court for the Southern District of Florida against Tyco International
Ltd. (NYSE: TYC) and certain of its officers and directors. The lawsuit
was brought on behalf of all persons who purchased Tyco securities
between December 10, 1998 and December 8, 1999, inclusive (the "Class

The complaint charges Tyco and certain of its officers and directors
with violations of Sections 10(b) and 20(a) of the Exchange Act as well
as Rule 10b-5 promulgated thereunder. The complaint alleges that
defendants issued a series of materially false and misleading statements
concerning Tyco's financial condition and future growth prospects. The
complaint charges that defendants had taken "accounting baths" related
to certain acquisitions in order to improve future period operating
results. Prior to the disclosure of the adverse facts described above,
certain insiders sold over 1.5 million shares of Tyco to the investing
public at artificially inflated prices. These sellers realized over $
170 million in proceeds from these insider trading activities.

Contact: Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 210
West Washington Square, Third Floor Philadelphia, PA 19106, by telephone
at (888)643-6735 or (215) 625-9999, by facsimile at (215) 440-9475, by
e-mail at Mhenzel182@aol.com or visit the firm's website at

TYSON FOODS: Contests Iowa Claims under RICO by Sellers of Beef Cattle
On February 20, 1998, the Company and others were named as defendants in
a putative class action suit brought on behalf of all individuals who
sold beef cattle to beef packers for processing between certain dates in
1993 and 1998. This action, captioned Wayne Newton, et al. v. Tyson
Foods, Inc., et al., U.S. District Court, Northern District of Iowa,
Civil Action No. 98-30, asserts claims under the Racketeer Influenced
and Corrupt Organizations statute as well as a common-law claim for
intentional interference with prospective economic advantage. Plaintiffs
allege that the gratuities which were the subject of a prior plea
agreement by the Company resulted in a competitive advantage for chicken
products vis-a-vis beef products. Plaintiffs request trebled damages in
excess of $3 billion, plus attorney's fees and costs. The United States
District Court for the Northern District of Iowa granted the Company's
Motion to Dismiss on March 26, 1999, holding that plaintiffs lacked
standing to sue. Plaintiffs timely appealed to the United States Court
of Appeals for the Eighth Circuit. The Company is vigorously contesting
this case. Briefing of the appeal was completed in August 1999, but no
date has been set for oral argument.

TYSON FOODS: Denies Failure in Paying All Work Hours Charged in Alabama
On June 22, 1999, eleven current and/or former employees of the Company
filed the case of M.H. Fox, et al. v. Tyson Foods, Inc. in the United
States District Court for the Northern District of Alabama claiming that
the Company has violated the requirements of the Fair Labor Standards
Act. The suit alleges that the Company has failed to pay employees for
all hours worked and/or has improperly paid them for overtime hours. The
suit alleges that employees should be paid for the time it takes them to
put on and take off certain working supplies at the beginning and end of
their shifts and breaks. The suit also alleges that the use of
"mastercard" or "line" time fails to pay employees for all time actually
worked. Plaintiffs purport to represent themselves and a class of all
similarly situated current and former employees of the Company. A total
of 159 consents were filed with the complaint on behalf of persons to
join the lawsuit and, to date, approximately 3,100 consents have been
filed with the court. This case is still in the preliminary stages. The
Company believes it has substantial defenses to the claims made in this
case and intends to vigorously defend the case. However, neither the
likelihood of unfavorable outcome nor the amount of ultimate liability,
if any, with respect to this case can be determined at this time.

* Enormous Use of Online Shopping Could Lead to Lawsuits, Experts Say
With some estimating that almost 34 million Americans spent more than
$10 billion this holiday season shopping online, operators of e-commerce
sites need to follow up on delivery performance guarantees in order to
forestall potential class-action lawsuits brought by dissatisfied
customers, according to Internet law experts Marty A. Rips, Paul R. Katz
and Michael D. Scott of Perkins Coie LLP.

"It was pretty obvious that the overwhelming use of the Internet to shop
this holiday season caught some online retailers by surprise," said
Rips, a partner at Perkins Coie in the firm's Internet technology
practice. "Some of those retailers were faced with the almost impossible
task of getting gifts and products out by the agreed-upon deadline and
failing to meet it.

"You saw several Internet shopping sites having to add disclaimers
during the holiday rush, stating that they might not be able to
guarantee deliveries by Christmas. For some online shoppers, they got a
big shock on Christmas Eve with no gifts arriving, and they may take
that frustration out on the e-tailer," Rips added.

Scott, a veteran Internet law expert who authored the "Internet and
Technology Law Desk Reference," warned that companies needed to protect
themselves from possible litigation resulting from dissatisfied online

"For some e-commerce companies witnessing only their first year of
operation, many legal safeguards such as disclaimers on their Web sites
may have been overlooked. They will need to carefully review what is
currently posted on their sites and ensure that any complaints are dealt
with fairly and swiftly in order to head off potential litigation,"
Scott said. "This includes making sure their customer return policies
are in line with the expectations of their customers and are executed
exactly as represented."

"When a shopper returns a gift to a brick and mortar company, it's a
simple matter of walking up to the customer service counter, but how
does a Web site facilitate that same ease and simplicity, especially
when the shopper is already miffed about a late or missed delivery?"
Katz said.

Rips, Katz and Scott offered a five-point checklist for Web companies to
review as the New Year approaches:

* Does your Web site clearly post your policies and guarantees about
  shipment of products and gifts? Does it detail what happens in case
  of a missed deadline? Does it comply with Federal Trade Commission

* Do you have clear procedures and information in place showing
  customers what to do with gift returns or how to get a refund?

* Do your agreements with third-party vendors and fulfillment houses
  indemnify you against their failure to deliver goods or process
  transactions on time?

* If you are using a third-party Internet Service Provider or Web-
  hosting service, what safeguards do you have if the site crashes or
  if bandwidth is insufficient to meet all of your customers' needs?

* Is your customer sales support staff knowledgeable and sufficiently
  trained to handle questions and inquiries from dissatisfied

" Since Internet companies are being built and funded primarily on the
  basis of the power of their brand among consumers, it is vital they
  do everything they can to protect that brand from dissatisfied
  customers," Katz said. "The alternatives for shoppers on the Internet
  are just too numerous to become complacent. The hot Internet start-up
  of today might become the Internet chat-room joke of tomorrow."

Rips, Katz and Scott work out of Perkins Coie's Santa Monica office,
which recently relocated from Century City to accommodate the increase
in Internet companies operating along the Digital Coast. Perkins Coie
Internet clients include Amazon.com, Yahoo!, X:drive, FasTV, Panic
Entertainment Groupe and Internet Wire.

Perkins Coie's areas of expertise include Internet and e-commerce law,
intellectual property, business counseling and corporate finance,
bankruptcy, labor and employment, litigation, telecommunications, real
estate and government contracts. Perkins Coie's Los Angeles office
houses 30 attorneys.

Established in 1912, Perkins Coie's worldwide team of more than 480
attorneys offers expertise in all legal fields and serves clients from
14 offices in North America and Asia, including Anchorage, Alaska;
Seattle; Menlo Park, Calif.; San Francisco; Washington, D.C.; Denver;
Portland; Taipei, Taiwan; and Hong Kong.

For more information on Perkins Coie, visit http://www.perkinscoie.com
or contact Sara Korn at 310/788-3202 or via e-mail at

Contact: Perkins Coie, Santa Monica Sara Korn, 310/788-3202 310/788-3399
(fax) korns@perkinscoie.com or The Lee Strategy Group James Lee,
310/229-5771 310/229-5772 (fax) James Lee@leestrategy.com

* Reflections at Eve of Millenium on Expanding Reach of Civil Rights
For people who cared about civil rights and civil liberties, America at
midcentury was a forbidding place. Demagogues and cold-war politics
threatened freedom of speech. Racial discrimination was rampant,
separate-but-equal the law of the land in education. Women were equal at
the polling booth but not in the workplace. It was not uncommon for
people to be convicted on illegally obtained evidence, without the aid
of counsel. There were no class-action lawsuits to protect the
environment from commercial exploitation or consumers from dangerous

It is worth reflecting, at the eve of the millennium, on the historic
revolution in law that has made the United States a freer and more
hospitable nation. This was a revolution of attorneys, judges and
courageous ordinary citizens, all seeking to move the nation closer to
the ideals of freedom, justice and equality. It was a rapid revolution,
achieving astonishing gains in an astonishingly short span of time. It
was and is an unfinished revolution.

The Constitution and the Bill of Rights established the basic principles
of free expression, equal justice, due process and privacy, and wisely
put them beyond the reach of whatever transitory majorities should
happen to hold Congress or the White House. But these rights are not
self-enforcing. Making them a reality requires individuals with the
skill and determination to use the law's majestic machinery by bringing
cases that expose the great gulf between the high-mindedness of the
Constitution and the injustices of everyday life.

Thus it was that in the 1930's the legal arm of the National Association
for the Advancement of Colored People began plotting a litigation
strategy to force the courts to confront head-on the evils of official
racism. Propelled by Charles Houston, William Henry Hastie and Thurgood
Marshall, this effort eventually led to a momentous Supreme Court
decision, Brown v. Board of Education, that finally broke the back of
official segregation. From Brown v. Board flowed a robust civil rights
movement and, in time, a giant wave of equal rights legislation that
even a Congress disproportionately influenced by old-guard Southerners
could not resist.

Thus it was, too, that in 1920 a visionary non-lawyer named Roger
Baldwin founded the American Civil Liberties Union, the first permanent
organization dedicated to vigorous defense of the Bill of Rights,
especially freedom of speech. One of the group's early actions was to
recruit Clarence Darrow to defend John Scopes, a young Tennessee
schoolteacher who dared defy that state's law against teaching Darwin's
theory of evolution. That famous case, a legal loss but a public
relations triumph, was a precursor to current fights over the teaching
of creationism in public school science classes -- proof of the old
edict that civil liberties battles never stay won.

Inspired by the Supreme Court's new openness on civil rights, A.C.L.U.
attorneys set out to extend the reach of the Bill of Rights to new
groups and subject areas. This effort, since joined by other
organizations and other lawyers, has helped improve prison conditions,
reduce unnecessary government secrecy and achieve significant advances
for women's rights, children in foster care and the mentally ill. In a
similar spirit, public-interest law firms and conservation groups, given
new weapons by the landmark environmental statutes of the late 1960's
and early 1970's, have been instrumental in enforcing those laws, often
in the face of fierce resistance by the very government agencies
entrusted with carrying them out.

It has become fashionable to depict the proliferation of lawyers and
lawsuits as something negative -- both symptom and cause of a
self-indulgent "culture of rights." This fashion may pass. At the
moment, though, Congress and the current Supreme Court seem determined
to exploit this misconception in mischievous ways by elevating states'
rights over the legitimate power of the national government to address
national problems, or by restricting the jurisdiction of federal courts
to hear certain cases, including the habeas corpus appeals of
death-penalty inmates.

It is true, of course, that periods of social change like the one
America has been going through for half a century will produce excesses
and mistakes. Remedies may not work as intended. But such failings call
for thoughtful refinements, not retrenchment. The challenge of the new
millennium is to build upon the remarkable legal gains of the past
half-century, and to broaden access to a fair and independent court
system that made that progress possible. (The New York Times December
24, 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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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
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Additional e-mail subscriptions for members of the same firm for the
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