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/raid1/www/Hosts/bankrupt/CAR_Public/000103.MBX C L A S S A C T I O N R E P O R T E R Monday, January 3, 2000, Vol. 1, No. 232 Headlines ACCEPTANCE INSURANCE: Affirms Receipt of Securities Suit in Nebraska ACCEPTANCE INSURANCE: Milberg Weiss Files Securities Suit in Nebraska ACTION PERFORMANCE: Lowey Dannenberg Files Securities Suit in Arizona ARCE: TX Ruling Says Atty Fees May Be Forfeited If Client Not Satisfied BANK ONE: Weiss & Yourman Files Securities Suit in Illinois BERGER KING: Silber-Pearlman Files Suit Over Dangerous Pokemon Toys CONSOLIDATED RAIL: ADA Claims Must 1st Be Filed With Appropriate Agency DYNAMEX INC: Updates on Securities Suit in TX; SEC Filing Is Delayed FEN-PHEN: Ct of Appeals in Fl. Grants Patients Right to Seek Free Exams FEN-PHEN: Interneuron Discusses with AHP upon Ct Approval of Settlement HMO: 40 NJ Retirees Sue Cigna over Misleading Limited Partnerships HMO: Conn. Sues Physicians Health for Limiting Access to Prescriptions HMO: ERISA Suit Seeks Cigna=92s Disclosure on Restrictions on Doctors HMO: Magellann Health Tells of Antitrust Suit Transferred to NY from NJ HOLOCAUST VICTIMS: Survivor Sues Swiss for Parents' Death HOUSTON GREENSHEET: EEOC Sues Advertising Newspaper for Racial Bias INS: Advocates for Poor Immigrants Sue to Seek Waive of Citizenship Fee LASER TECHNOLOGY: Reports on Expenses Re Settlement of Shareholder Suit LASON INC: Weiss & Yourman Files Securities Suit in New York MARK L. NICHTER: Lawyers Collecting Debt to Tell of Right To Challenge MCKESSON HBOC: East Coast Firms Win Designation As Lead Counsel METLIFE: Says Ct Approves Settlement for MDL over Sales Practices NAVIGANT CONSULTING: Finkelstein & Krinsk Files Securities Lawsuit NY STATE: Sued over Denial of Treatment to Mentally Ill Youngsters PRISON REALTY: Shareholder Suit in Tennessee Challenges Revamping PRISON REALTY: Steven E. Cauley Files Securities Suit in Tennessee SAFETY COMPONENTS: Finkelstein & Krinsk Files Securities Suit STATER BROS: Has Entered Settlement for CA Lawsuit over Milk Pricing STATER BROS: Intends to Vigorously Defend CA Suit over Employment Bias SYSTEMS & COMPUTER: PA. Ct Approves Settlement for Securities Complaint SYSTEMS & METHODS: Contractor Sued for Delays in Child Support System TYCO INT=92L: Gold Bennett Files Securities Suit in New Hampshire TYCO INT=92L: Weinstein Kitchenoff Files Securities Lawsuit TYCO INT=92T: Berman DeValerio Files Securities Suit in New Hampshire VERITY INC: Weiss & Yourman Files Securities Lawsuit Y2K LITIGATION: Stores Blame Bug For Sales Loss, Threaten to Sue HSBC * New Airport Scanners Offer X-Ray Image ********* ACCEPTANCE INSURANCE: Affirms Receipt of Securities Suit in Nebraska -------------------------------------------------------------------- Acceptance Insurance Companies Inc. (NYSE:AIF) acknowledged that it = received a Summons and Complaint on December 30, 1999 initiating a = purported federal court class action lawsuit in Omaha, Nebraska. The = suit alleges federal securities laws required the Company to provide = more accurate information about its possible future losses and = implementation of its restructuring plans. J. Michael Gottschalk, General Counsel and Secretary of the Company = said, "Our Company and its officers and directors consistently acted in = good faith and in accordance with applicable guidelines in disclosing = financial and other information. We categorically deny the accusations = made in the lawsuit and will defend our actions vigorously in court." Acceptance Insurance is a specialized insurance company providing crop, = property and casualty insurance products throughout the United States.=20 ACCEPTANCE INSURANCE: Milberg Weiss Files Securities Suit in Nebraska --------------------------------------------------------------------- The following was announced December 30 by the law firm of Milberg Weiss = Bershad Hynes & Lerach: Notice is hereby given that a class action lawsuit was filed on December = 29, 1999, in the United States District Court for the District of = Nebraska, on behalf of all purchasers of the common stock of Acceptance = Insurance Companies, Inc. ("Acceptance" or the "Company") (NYSE: AIF ) = between March 10, 1998, through November 16, 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, at Milberg Weiss Bershad Hynes & Lerach ("Milberg Weiss"), = Steven G. Schulman or Samuel H. Rudman at One Pennsylvania Plaza, 49th = Floor, New York, New York 10119-0165, by telephone 1-800-320-5081 or via = e-mail: endfraud@mwbhlny.com or visit our website at = http://www.milberg.com The complaint charges Acceptance and certain of its senior officers and = directors with violations of Sections 10(b) and 20(a) of the Securities = Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder. The = complaint alleges that defendants issued a series of materially false or = misleading statements concerning the adequacy of the Company's loss = reserves and the successful implementation of its restructuring plans. = In particular, the complaint alleges that the defendants misled = investors by materially understating prior period loss reserves by as = much as $44.0 million. Because of the issuance of a series of false or = misleading statements the price of Acceptance common stock was = artificially inflated during the Class Period. Contact: Milberg Weiss Bershad Hynes & Lerach LLP Shareholder Relations = Dept. E-Mail: endfraud@mwbhlny.com 1-800-320-5081 ACTION PERFORMANCE: Lowey Dannenberg Files Securities Suit in Arizona --------------------------------------------------------------------- The following was released December 30 by Lowey Dannenberg Bemporad & = Selinger, P.C.: Notice is hereby given that Lowey Dannenberg Bemporad & Selinger, P.C. = ("Lowey Dannenberg") has filed a securities class action lawsuit in the = United States District Court for the District of Arizona against Action = Performance Companies, Inc. ("Action Performance" or the "Company") = (Nasdaq: ACTN) and certain officers and directors of the Company on = behalf of purchasers of Action Performance common stock during the = period July 27, 1999 through December 16, 1999, inclusive (the "Class = Period"). Plaintiff's complaint alleges that defendants violated the federal = securities laws by misrepresenting or failing to disclose material = information concerning the Company's business and the shipment of = certain of the Company's products to Home Depot. Specifically, the = complaint alleges that defendants issued false and misleading press = releases and financial statements to the investing public concerning = Action Performance's financial results that inflated the price of Action = Performance's stock purchased by investors during the Class Period. On November 4, 1989, Action Performance disclosed that the Company's = fourth quarter fiscal 1999 results would be worse than defendants had = represented, principally due to the fact that an $8 million sale to Home = Depot had not occurred as of September 30, 1999, which was contrary to = defendants' prior representations about this sale. Following this = disclosure, Action Performance's stock price lost more than 50% of its = value, declining almost $25 on extraordinary volume of 9.8 million = shares to close at $12-1/4 per share. Contact: David Harrison or Richard Bemporad Lowey Dannenberg Bemporad & = Selinger, P.C. The Gateway, 11th Floor One North Lexington Avenue White = Plains, NY 10601-1714 Telephone 914-997-0500 Telecopier 914-997-0035 = e-mail at dharrison@ldbs.com ARCE: TX Ruling Says Atty Fees May Be Forfeited If Client Not Satisfied ----------------------------------------------------------------------- Ten years ago, a series of explosions ripped through a Houstonarea = chemical plant, killing 23 workers and injuring hundreds more. A second = shock wave a decade later from the ensuing litigation has rattled the = Texas legal community and threatens to reverberate far beyond the Lone = Star State. A unanimous Texas Supreme Court held this summer that lawyers who breach = their fiduciary duties to their clients can be required to forfeit their = fees -- even if the clients suffer no actual damages. Burrow v. Arce, = No. 98-0184 (July 1). In doing so, the court lowered the already dropping bar for malpractice = actions, effectively eliminating the usual requirement that a plaintiff = prove the underlying case would have succeeded had it not been for the = lawyer's bungling. At least in theory, the decision also sets up a = potentially perverse scenario in which a client can reap big bucks in a = settlement or jury award, then go after the lawyer's fees if the client = believes the lawyer's conduct wasn't on the up-and-up. Theory Ignites The effect in Texas was immediate. "I get a call about every week on = this thing, and I have ... for about two years" since the case was = decided by a Texas appeals court, says Houston lawyer David M. Gunn, who = represents the defendant attorneys. "It's taken off like wildfire." Gunn = says it's simply a question of when -- not if -- similar actions break = out in other states. "Watch out," he says. "Visualize standing on the = edge of a dry forest with a lighted match." Already in Texas, Attorney General John Cornyn has suggested Arce may = play a role in his efforts to get back $ 3.3 billion in fees paid to a = team of private lawyers who represented the state in a lawsuit against = the tobacco industry. Coincidentally, some of the tobacco lawyers were = defendants in Arce. The case also may figure prominently in a class action filed against = Houston lawyer John M. O'Quinn -- also a member of the state's tobacco = team -- on behalf of 2,000 breast implant clients who claim O'Quinn = cheated them out of $ 23 million in deducting expenses from their = settlement awards. "Hold onto your hats on that suit, too," says Gunn. And the state supreme court is poised to decide yet another case = involving claims of fiduciary breach and overcharges by lawyers that = could flesh out Arce's reach. At issue is the amount to be forfeited. = While two members of a Texas Court of Appeals panel allowed forfeiture = of only the $ 750,000 in overcharges, dissenting Justice Sarah B. Duncan = would have socked the lawyers for their entire $ 6.75 million fee. Lopez = v. Munoz, Hockema & Reed, 980 S.W.2d 738 (1998). "To do otherwise, in my view, constitutes yet another example of the = special rules made by lawyers for lawyers, and it will further erode = public confidence in the legal profession as a whole and the elected = Texas judiciary in particular," Duncan wrote. Gunn also represents the defendant lawyers in that case. But lawyers = elsewhere also should worry, he says, because the cases don't involve = obscure quirks in Texas law. Looking to New Restatement Indeed, the Texas Supreme Court in Arce relied heavily on Section 49 of = the proposed Restatement (Third) of the Law Governing Lawyers. The = provision allows for full or partial fee forfeiture by "a lawyer = engaging in clear and serious violation of duty to a client," and = considers both "threatened or actual harm to the client." That part of the Restatement only has been cited in a handful of other = cases, but its extensive treatment by the Texas court may signal that = it's ready for a national coming out. "I think you can expect to see = Section 49 pick up steam," Gunn says. "I think it's just a matter of = time before you see a majority of the states fall in line." Houston lawyer Steven M. Smoot, who represents the former clients of = O'Quinn, agrees that Arce could sweep broadly across the landscape. But = he adds that economics likely will deter an all-out conflagration. = "Handling a legal malpractice claim is like handling a medical = malpractice claim," Smoot says. "I reject the vast majority of them = because there's not enough money involved. It has to be at least six = figures before I'll do it." Plenty of money is at stake in Arce. The case, filed for 126 plaintiffs, = was one of numerous lawsuits lodged in the wake of the Oct. 23, 1989, = blasts at a Phillips 66 plant in the Houston suburb of Pasadena. The case settled for about $ 190 million, leaving the lawyers with a = contingent fee of more than $ 60 million. Then 49 of the plaintiffs = turned around and sued their lawyers, mainly beefing that the lawyers = had settled with Phillips without their approval. The trial court granted summary judgment to the defendant lawyers, = finding the settlement fair and holding that the plaintiffs were not = damaged and thus could not seek fee forfeiture for any misconduct by the = lawyers. The supreme court didn't let the lawyers skate away, however, holding = that they may have to forfeit some or all of their fees if the = plaintiffs can prove misconduct at trial, expected early next year. Trust Valued Above All The court rejected the lawyers' claims that forfeiture without damages = encourages renegotiation of fees through extortion after the = representation concludes. Tracking the restatement, Justice Nathan L. = Hecht stated that forfeiture protects the trust inherent in the = attorney-client relationship instead of compensating for damages. "Fee forfeiture for attorney misconduct is not a windfall to the = client," Hecht wrote. "An attorney's compensation is for loyalty as well = as services, and his failure to provide either impairs his right to = compensation." That may not mean a slamdunk for the former clients, however. The Texas = justices noted that the restatement is flexible in determining the = amount of any fee forfeiture. Considerations include: * Seriousness of the violation. * Whether the misconduct is repeated and continuing, or a single=20 incident. * Whether the misconduct is intentional. * Threatened or actual harm to the client. * Sufficiency of other remedies. The court added that great weight should be given to the public interest = in the integrity of attorney-client relationships, which it described as = "the heart of the fee forfeiture remedy." Perhaps more significant for the defendant lawyers is that a jury would = determine the factual issue of whether misconduct occurred, while a = judge would decide the amount forfeited. "How many judges are going to hammer them?" asks Smoot, who filed the = case against the lawyers for the Phillips 66 plaintiffs on Halloween = 1992. Smoot and the defendant lawyers should know soon enough who gets = tricked and who gets treated. (ABA Journal November, 1999) Y2K LITIGATION: Act Excludes Claims But Leaves Debate Open ---------------------------------------------------------- The enactment of federal Y2K legislation has certainly been a cause for = celebration among those who were worried about a flood of litigation = relating to failed computer systems. But any serious partying should be = put on hold until some months after the New Year. The reason for delaying the party is that the Year 2000 Readiness and = Responsibility Act not only excludes a number of claims from its = coverage, but it also leaves open to debate what exactly constitutes a = Y2K claim -- a fact that many people will hope to litigate to their = benefit. The act sets forth contract- and tort-law rules and procedures that will = apply to all federal and state court civil actions and agency board of = contract appeal proceedings in which a plaintiff alleges actual or = potential harm from a year-2000 date-related failure in any device or = computer system. It should be noted that the act does not apply to cases involving = personal injury or wrongful death and generally does not apply to = private securities cases. Rather, it focuses on the enforcement of = contractual rights between buyers and sellers of software and hardware = and process-control equipment that contains date-sensitive = microprocessors and microcontrollers. The Y2K Act covers all actions brought after Jan. 1, 1999, and it = "sunsets" on Jan. 1, 2003. Among other things, it requires prelitigation = notice of a claim before a lawsuit can be filed; provides that written = contractual terms, including a limitation or exclusion of liability or a = disclaimer of warranty, shall be "strictly enforced"; codifies the = "economic loss rule," which provides that claims for economic or = consequential damages (e.g., lost profits) must be governed by contract = law; requires plaintiffs to take steps to mitigate damages; makes it = tougher to obtain punitive damages; and limits joint liability and class = actions. Unclear Definition Unanswered in all of this is what exactly constitutes a "Y2K action." = Because many actions will involve "mixed" disputes -- containing Y2K and = non-Y2K issues the legislation is liable to be seen by many as a useful = shelter in a litigation storm. A company facing a massive lawsuit or = class action might find it advantageous to identify a Y2K angle. So = whether the act will be a punch for defendants or a mere poke may depend = on the willingness of courts to declare many commercial disputes Y2K = actions. The impact of the new law may also depend on judicial acceptance of = provisions that freeze contract and tort law as of Jan. 1, 1999. = Congress chose to freeze state law in some areas in the belief that this = would facilitate early and less costly resolution of Y2K claims. The = lawmakers believed that this sound public policy goal would be thwarted = if courts or state legislatures could change the legal rules midstream. That said, it is unusual for courts to be told to apply old law to a new = dispute. It is an open question whether courts will remain faithful to = the letter and spirit of the act. What about unconscionability, for example? The act provides that written = contractual terms must be "strictly enforced" unless enforcement would = "manifestly and directly contravene" state statutory law or the state = common-law doctrine of unconscionability, including adhesion, as of Jan. = 1, 1999. Thus, a court may be asked to decide whether to enforce a clause in a = contract that excludes liability for consequential damages and limits = the buyer's remedies to repair or replacement of the component that was = not year-2000 compliant. If it is honored, this provision should mean that unconscionability = arguments will rarely succeed, as courts have generally been reluctant = to undo contractual arrangements under such amorphous equitable = principles. And yet, the intent of Congress may be frustrated if the = courts decide that sellers should be held responsible for year-2000 = problems and use the unconscionability hook to topple contract = disclaimers and warranty limitations. Unpredictable Days It is difficult to gauge the amount of resistance that the courts will = demonstrate to Congress' decision to freeze the development of state law = for the duration. If the resistance turns out to be strong, the narrow = unconscionability loophole could swallow many of the protections that = were intended to be put into place by the act. So, all in all, it is premature to rejoice. No one can really predict = whether the Y2K Act will work or not. Our hope and belief is that judges = will remain faithful to the intent of Congress by allowing legitimate = Y2K claims to proceed, but will, at the same time, act to keep the year = 2000 from becoming an unnecessary economic boon to trial lawyers. (The = National Law Journal December 6, 1999) BANK ONE: Weiss & Yourman Files Securities Suit in Illinois ----------------------------------------------------------- The following is an announcement by the law firm of Weiss & Yourman on = December 29: A class action lawsuit against Bank One Corp. ("Bank One" or the = "Company")(NYSE:ONE) was commenced in the United States District Court = for the Northern District of Illinois on behalf of purchasers of Bank = One securities. If you purchased Bank One securities between October 22, = 1998 and November 10, 1999, your rights may be affected. The complaint charges defendants with violations of the Securities = Exchange Act of 1934 and the Securities Act of 1933. The complaint = alleges that defendants issued a series of false and misleading = statements that falsely inflated the Company's earnings and caused the = Company's stock price to plummet. If you purchased Bank One securities during the period of October 22, = 1998 and November 10, 1999, you may move the court no later than = February 15, 2000, to serve as a lead plaintiff of the class. In order = to serve as a lead plaintiff, you must meet certain legal requirements. = You do not need to seek appointment as a lead plaintiff in order to = share in any recovery. Contact: James E. Tullman or David C. Katz at (888) 593-4771 or (212) = 682-3025 or via Internet electronic mail at wynyc@aol.com or by writing = Weiss & Yourman, The French Building, 551 Fifth Avenue, Suite 1600, New = York City 10176. BERGER KING: Silber-Pearlman Files Suit Over Dangerous Pokemon Toys ------------------------------------------------------------------- Infant Death in California Leads to Nationwide Recall Silber-Pearlman announced on December 30, 1999 a Dallas woman has filed = a nationwide class-action lawsuit against Burger King Corp. on behalf of = the tens of millions of consumers who have purchased potentially deadly = Pokemon toys at Burger King restaurants since November. Attorneys for Jennifer Winder filed the claim Dec. 29 in Judge David = Gibson's Dallas County Court at Law no. 1. According to the lawsuit, Ms. = Winder bought several kids meals for her son at a Dallas area Burger = King restaurant solely for the Pokemon toys that were included in the = meals. Burger King recently acknowledged that the toys contain a = hazardous defect. Burger King issued a recall of the popular toys on Monday, Dec. 27, = following the suffocation death of a 13-month-old girl in Sonoma, = Calif., on Dec. 11. The young girl died after a piece from a Pokemon toy = covered her mouth and nose, causing her to suffocate. All the toys sold = by Burger King include round plastic balls that come apart in two = halves. A press release issued by the restaurant chain acknowledges that = either half of the ball can become stuck on a child's face, causing = possible suffocation among children under three years old. On Friday, Dec. 24, a Kansas man reported that he found his 18-month-old = daughter with half of a Pokemon ball covering her mouth and nose. The = man pulled the toy from his child's face before she was injured. Jeff Rasansky, a partner in the Dallas law firm of Silber-Pearlman -- = who filed the nationwide lawsuit, says that all parents who purchased = the toys for their children should be concerned. "It's pretty obvious = that these toys pose a significant risk to young children," Mr. Rasansky = says. "I must strongly recommend that all parents take great caution in = keeping these dangerous items away from their children in order to = prevent other deaths or injuries." The U.S. Consumer Products Safety Commission has accused Burger King of = purposely delaying the recall of the toys following the child's death in = California until after the second incident was reported. The USCPSC also = says Burger King should be recalling some 70 million toys instead of the = company's plans to recall only 25 million. Burger King is offering to = exchange the defective Pokemons for a small order of fries. "I think it = is appalling that Burger King has used this promotion to market and sell = millions of dollars worth of dangerous toys to children," Mr. Rasansky = says. "The fact that they're offering a small order of fries in return = just makes it worse." If you would like more information on this lawsuit, please call Jeff = Rasansky direct at 214/874-7000, or call Bruce Vincent at 214/559-4630 = or pager 888/361-8452. Contact: Silber-Pearlman, Dallas Jeff Rasansky, = 214/874-7000 or Androvett Legal Media, Dallas Bruce Vincent, = 214/559-4630 or pager 888/361-8452 CONSOLIDATED RAIL: ADA Claims Must 1st Be Filed With Appropriate Agency ----------------------------------------------------------------------- A person with a disability believes he is being discriminated against = and threatens to sue under the ADA. While his threat should be taken = seriously, remember the person must first file his complaint with the = appropriate agency. Depending on the nature of the complaint, an agency such as the Office = for Civil Rights or the Equal Employment Opportunity Commission must be = notified of the allegations and conduct its own investigation. Only then = can an institution expect to be hailed into court. The requirement to = file the claim with an agency is known as "exhausting administrative = remedies." Some federal laws require plaintiffs to exhaust administrative remedies = while others, such as Section 504, do not have that requirement. The = following case demonstrates the difference. A former police officer with a herniated disk alleged that a railroad = violated the ADA and Section 504 when it "disqualified" him from working = as a police officer and in other positions for which he was qualified. = The railroad moved to dismiss. Koban v. Consolidated Rail Corp., 16 NDLR = 119 (E.D. Pa. 1999) (No. Civ.A. 98-5872). A federal district court in Pennsylvania rejected the ADA claim because = the officer failed to file a charge with the EEOC. The filing = requirement did not apply to the employee's Section 504 claim. The court rejected the argument that the officer satisfied the EEOC = filing requirement because he was a member of a certified class in a = class action suit against the railroad for alleged violations involving = employees with disabilities. Since the class had been decertified and = because the officer failed to file an EEOC charge, the court found that = he could not pursue his ADA claim. However, the court concluded that the = officer could pursue his Section 504 claim because a plaintiff who files = suit under Section 504 is not required to file an administrative charge. = (Disability Compliance for Higher Education December 13, 1999) DYNAMEX INC: Updates on Securities Suit in TX; SEC Filing Is Delayed -------------------------------------------------------------------- Dynamex Inc. (Amex:DDN) on December 30, 1999 provided an update on a = number of issues relating to the ongoing audit of the Company's = financial statements, preliminary first quarter 2000 results, and = related topics. On October 14, 1999, plaintiffs filed a second amended class action = complaint in the pending shareholder class action in the United States = District Court for the Northern District of Texas. The complaint alleges = that the defendants issued a series of materially false and misleading = statements and omitted material facts concerning the Company's financial = condition and business operations in violation of the Securities Act of = 1933 and the Securities Exchange Act of 1934. The complaint names as = defendants the Company, certain of its current and former officers, the = underwriters of the Company's 1998 secondary equity offering, and = Deloitte & Touche (Canada). The plaintiffs seek unspecified damages on = behalf of all other purchasers of the Company's common stock during the = period of September 18, 1997 through and including September 17, 1999. = At this date, no class has been certified nor has any discovery = commenced. On December 8, 1999, Dynamex moved to dismiss the complaint = in its entirety on the grounds that plaintiffs' complaint fails to meet = the required pleading standards and that the claims are deficient as a = matter of law. The Special Committee of the Board of Directors has kept the SEC = apprised of the status of its inquiry and the restatement process. The = Company now has received an informal request for information from the = Staff of the Commission for documents concerning the circumstances of = the proposed restatement of the Company's prior period financial = statements. The Company is cooperating with the Commission in connection = with this inquiry. Dynamex is a leading provider of same-day delivery and logistics = services in the United States and Canada. Additional press releases and = investor relations information as well as the Company's internet = e-commerce services package, dxNow(TM), is available at = http://www.dynamex.comand http://www.dxnow.com FEN-PHEN: Ct of Appeals in Fl. Grants Patients Right To Seek Free Exams ----------------------------------------------------------------------- Patients who filed a state-wide class action suit against the = manufacturers and sellers of the diet drugs, Fenfluramine and = Phentermine (Fen-Phen) won a landmark ruling by the Florida Third = District Court of Appeals. The December 22 ruling allows former Fen- = Phen patients the right to pursue free follow-up exams to check for = possible health problems related to the use of those drugs even if they = currently exhibit no signs of illness. One of the attorneys for the = patients, former judge Jonathan Colby, said, "This case is a great = victory for our clients and will give them increased peace of mind in = the coming years." The ruling, the first of its kind in the state, = provides plaintiffs the opportunity to receive a "no cost" = court-supervised medical monitoring and testing program if they can = establish a causal relationship between their use of Fen-Phen and a = possible medical condition. Although the patients currently have no physical injuries as a result of = having used these medicines, they claim that ingesting the combinations = of these two drugs has placed them at a substantially increased risk of = developing serious cardiac and circulatory ailments, including heart = valve damage. The patients sought an injunction requiring Defendants, = A.H. Robins Company and Zenith Goldline Pharmaceutical, to fund a = court-supervised medical monitoring program which provides for medical = testing, monitoring, and study of Plaintiffs and others who are former = consumers of Fen-Phen. The pharmaceutical giants fought back filing a = Motion for Judgment on the Pleadings. The patients filed an appeal when = trial Judge Norman Gerstein ruled against the former patients, stating = that Florida law does not recognize a pre-injury claim for future = expenses of medical diagnosis. Attorney Ervin Gonzalez, co-counsel for = the plaintiffs, argued the appeal before the 3rd District Court of = Appeals of Miami. The appellate court reversed Judge Gerstein's ruling = establishing that it was entirely proper for a court to create and = supervise a fund for the purpose of monitoring the condition of = plaintiffs when it has been shown that such monitoring is reasonably = necessary. The opinion written by Appellate Judge J. Nesbitt states, = "such a claim is viable and necessary to do justice." For the thousands of former Fen-Phen patients across the state, this = decision means a greater sense of security regarding access to medical = testing. "I feel better already, just knowing that the justice system = really does work," says one former Fen-Phen user. Colby is confident = that his client's need for health monitoring will be proven as medically = necessary because of the vast amount of research supporting his claim. This ruling will open the doors to the thousands more who were victims = of exposure to products known to be dangerous, such as Thalidomide and = asbestos, providing access to free testing. "Now the financial = responsibility of health monitoring will shift to the manufacturers = rather than the victims," says Colby. "Overall this preventive measure = will be more effective since it tests before a health problem develops = rather than waiting to treat the patient after the problem is = full-blown." Preventive Medicine has been touted to save millions of = dollars a year in health care nationally and has been successful with = such programs as "well baby care." However, in order to win free health = monitoring from the product manufacturer, patients will still be = required to prove a causal relationship with the medical product used = and a need for testing. For more information, contact Jonathan Colby at the law firm of Leeds & = Colby at (305) 567-1200, cell phone number of 305-710-1236 or on the = internet at http://www.leedsandcolby.comor contact Ervin Gonzalez at = the law firm of Robles & Gonzalez at 305 371-5944 or via e-mail at = info@robles-gonzalez.com FEN-PHEN: Interneuron Discusses with AHP upon Ct Approval of Settlement ----------------------------------------------------------------------- Report by Interneuron Pharmaceuticals Inc. to the Securities and = Exchange Commission on Form 10-K405 filed as of December 28, 1999: On September 15, 1997, the Company announced a market withdrawal of its = first prescription product, the weight loss medication Redux = (dexfenfluramine hydrochloride capsules) C-IV, which had been launched = by AHP, the Company's licensee, in June 1996. Simultaneously, = Wyeth-Ayerst Laboratories ("Wyeth- Ayerst"), a division of AHP, = announced withdrawal of the weight loss medication Pondimin = (fenfluramine hydrochloride tablets). Following the withdrawal, = Interneuron has been named, together with other pharmaceutical = companies, as a defendant in approximately 1,965 product liability legal = actions, many of which purport to be class actions, in federal and state = courts involving the use of Redux and other weight loss drugs. On September 27, 1999, the U.S. District Court for the Eastern District = of Pennsylvania (the "District Court") rejected a proposed agreement = preliminarily approved by the District Court in September 1998 to settle = all product liability litigation and claims against Interneuron related = to Redux, finding that the proposed agreement did not meet the = requirements for limited fund class actions, as recently described by = the United States Supreme Court in Ortiz v. Fibreboard Corp.=20 The District Court also vacated the stays of pending and future = litigation that were previously in effect. The Company filed a petition = with the U.S. Court of Appeals for the Third Circuit on October 12, = 1999, seeking review of the District Court's ruling. That petition is = still pending. On November 23, 1999, the District Court preliminarily approved a = proposed nationwide settlement of AHP's product liability litigation = related to Redux and Pondimin. The Company is in discussions with AHP = and the Plaintiffs' Management Committee (consisting of attorneys = designated to represent plaintiffs in nationwide multidistrict = litigation) regarding avenues for the Company to reach a comprehensive = resolution of its outstanding Redux-related litigation. The Company = cannot predict whether any settlement will be reached or the terms of = any settlement. HMO: 40 NJ Retirees Sue Cigna over Misleading Limited Partnerships ------------------------------------------------------------------ A group of 40 New Jersey retirees sued Cigna Corp. on December 30, 1999, = alleging the Philadelphia company duped them into putting their life = savings in risky investments that lost millions of dollars. In the suit, which seeks class-action status, the plaintiffs say they = were persuaded to invest in limited partnerships that supposedly = guaranteed returns of 100 percent to 200 percent over seven to 10 years, = plus regular interest payments. The plaintiffs, most of whom retired = from RCA in the late 1980s, contend they lost money on their investments = and that the "interest" payments they received were their own principal = being returned to them. "These retirees just want Cigna to honor the = promises made to them when they invested their money," said their = lawyer, John W. Trimble Jr. Cigna spokesman Ken Ferraro would not comment. The retirees were "victims of an investment scam," the suit said. "As a = result of this investment fraud, [the) plaintiffs have lost many = millions of dollars." Trimble contends in the suit that Cigna, through Cherry Hill, N.J.-based = agent John M. Oxley, misrepresented the investments' level of risk to = his clients. And the suit contends that Oxley and Cigna misled the = plaintiffs with the promise of large, guaranteed returns in order to = obtain the "extremely high" commissions paid to brokers of investments = in limited partnerships. Oxley also would not comment. One of the investors, Raymond W. D'Andrea, 70, of Water Works, N.J., = said Oxley had been a vice principal at his son's high school before = joining Cigna as an investment adviser. He said Oxley approached him 11 = years ago with investment advice after D'Andrea retired early from RCA = and received a lump-sum payment of $183,000. D'Andrea said Oxley guaranteed that his investments would double or = triple and that he would get interest payments every quarter. When D'Andrea questioned Oxley about account statements that appeared to = show the value of the investments declining, he said Oxley replied that = everything was fine and the statements were confusing, but that the = numbers were "just information required by law." "We were just misled, we were lied to, and all of our money was taken = away from us," D'Andrea said. For example, D'Andrea said, the $50,000 he = invested in one limited partnership was reduced to $7,000 by 1997. Trimble said Oxley and Cigna took advantage of his clients, who were not = experienced investors, costing them their retirement savings and = financial security. "At a time when you should be able to sit back and = enjoy the fruits of your lifelong labor, these people were faced with = going back into the work force and cutting corners just to make ends = meet," he said. (The Orlando Sentinel December 31, 1999) HMO: Conn. Sues Physicians Health for Limiting Access to Prescriptions ---------------------------------------------------------------------- On December 14, 1999, Connecticut Attorney General Richard Blumenthal = charged Physicians Health Services with allegedly using a drug formulary = to limit enrollees' access to prescriptions recommended by their = physicians (State of Connecticut vs. Physicians Health Services, = 399-CV-2402-SRU, USDC (D. Conn.), filed Dec. 14, 1999). The class-action suit on behalf of eight enrollees seeks to force the = plan to reform its formulary system and provide enrollees with written = denial information. "Through a variety of tactics - coercing doctors, = complicating appeals, concealing information - PHS has cut access to = ...drugs," Blumenthal said. But the plan has procedures in place to make sure enrollees get needed = prescriptions, whether they're on the formulary or not, said Lisa = Haines, spokeswoman for Foundation Health Systems, Inc., parent of = Physicians Health Services. Enrollees are entitled to a 30-day supply = while the prescription goes through the review process and plan and = physician come to agreement.=20 "Our job as a health plan is to manage drug costs," Haines said. "This = suit threatens our ability to provide drug benefits for our members." = The state had approved the plan's benefit design that said it was going = to include a formulary," said Epstein Becker & Green's Kanwit. "So what = exactly is the plaintiff's beef?" Call Harvard Pilgrim Health Plan at = (617) 731-8240, or Foundation Health Systems, Inc. at (818) 676-7912. = (Managed Care Week December 20, 1999) HMO: ERISA Suit Seeks Cigna=92s Disclosure on Restrictions on Doctors ------------------------------------------------------------------- Cigna Corp. has been hit with a class action ERISA suit brought by = members of its HMO programs who claim they were never told about the = numerous restrictions imposed on their primary care doctors that are = designed to discourage referrals to specialists. Attorneys H. Laddie = Montague, Jerome M. Marcus and Jonathan Auerbach of Berger & Montague = filed the suit on behalf of anyone who subscribed to a CIGNA-operated = HMO since December 1993.=20 "These primary care doctors are given the power of gatekeeper over = subscribers' access to virtually all types of medical care other than = that rendered by the primary care physicians themselves," the suit says. = CIGNA handbooks and other literature "represent or imply" that the = primary care doctors will rely on their own "independent medical = judgment" when exercising their gatekeeping function, the suit says. "In = fact, however," the suit alleges, "[CIGNA's contracts with primary care = doctors] impose an array of restrictions which are designed to, may in = fact, and in certain circumstances do in fact, discourage the physicians = from referring their patients for, and from prescribing for their = patients, the optimal form of medical care which would be dictated by = the physician's independent medical judgment."=20 The suit also alleges that others under contract with CIGNA who also = have decision-making power that affects the nature of health care = provided are given "a financial incentive to provide or approve a level = of care ... other than that which would be dictated solely by the = independent medical judgment of the subscriber's treating physician." = Under ERISA, the suit says, HMO subscribers have a right to know of such = restrictions and incentives because they have a "direct and significant = impact" on the decisions made by doctors. If all such restrictions and = incentives were disclosed, subscribers would be able to "weigh their = physician's recommendations more accurately, to investigate treatment = options more aggressively, and to exercise more intelligently their = right to pay out of their own pocket for medical care such as = hospitalization, medication or a specialist's examination."=20 The suit seeks an injunction barring CIGNA from "continuing to omit" = information about the restrictions and incentives in the materials it = provides to subscribers. It also demands monetary damages to reimburse = the subscribers for the amount they overpaid, as well as "disgorgement" = of the amount by which CIGNA was "unjustly enriched" as a result of its = ERISA violations. Joining the Berger Montague lawyers on the plaintiffs' team are Kenneth = M. Dubrow of Kelly Dubrow & Herron; David Boies, Stephen R. Neuwirth and = William Savitt of Boies Schiller & Flexner in Armonk, N.Y.; and Richard = Drubel of the Boies firm's Hanover, N.H., office. CIGNA spokesman Wendell B. Potter said the company has not yet seen the = suit and therefore cannot comment on the specific allegations in it."As = we've said in the past about these suits in general, they appear to be = an orchestrated effort on the part of a small group of attorneys to use = the court system to create enormous fees for themselves while doing = nothing to improve the nation's healthcare system," Potter said. Potter = added that CIGNA is "committed to delivering quality services at = affordable prices," and believes that "litigation is not a path to = quality healthcare." (The Legal Intelligencer December 22, 1999) HMO: Magellann Health Tells of Antitrust Suit Transferred to NY from NJ ----------------------------------------------------------------------- Report of Magellann Health Services Inc. to the Securities and Exchange = Commission on Form 10-K filed as of December 27, 1999: On May 26, 1998, a group of eleven plaintiffs purporting to represent an = uncertified class of psychiatrists, psychologists and social workers = brought an action under the federal antitrust laws in the United States = District Court for the District of New Jersey against nine behavioral = health managed care organizations, including Merit, CMG, Green Spring = and HAI (collectively, the "Defendants").=20 The complaint alleges that the Defendants violated Section I of the = Sherman Act by engaging in a conspiracy to fix the prices at which the = Defendants purchase services from mental healthcare providers such as = the plaintiffs. The complaint further alleges that the Defendants = engaged in a group boycott to exclude mental healthcare providers from = the Defendants' networks in order to further the goals of the alleged = conspiracy. The complaint also challenges the propriety of the = Defendants' capitation arrangements with their respective customers, = although it is unclear from the complaint whether the plaintiffs allege = that the Defendants unlawfully conspired to enter into capitation = arrangements with their respective customers. The complaint seeks treble = damages against the Defendants in an unspecified amount and a permanent = injunction prohibiting the Defendants from engaging in the alleged = conduct which forms the basis of the complaint, plus costs and = attorneys' fees.=20 Upon joint motion by the Defendants, the case was transferred to the = United States District Court for the Southern District of New York, the = same court where a previous similar case (the "Stephens Case") was = dismissed for failure to state a claim upon which relief can be granted. = On March 15, 1999, the Defendants filed a joint motion to dismiss the = case for substantially the same reasons as in the Stephens Case. On June = 16, 1999, the court denied the motion to dismiss. The case currently is = in discovery. On October 14, 1999, the Plaintiffs filed a motion seeking = class certification for a class that would include approximately 200,000 = providers. The court has not yet heard argument on that motion. The = Company does not believe this matter will have a material adverse effect = on its financial position or results of operations. The healthcare industry is subject to numerous laws and regulations. The = subjects of such laws and regulations include, but are not limited to, = matters such as licensure, accreditation, government healthcare program = participation requirements, reimbursement for patient services, and = Medicare and Medicaid fraud and abuse. Recently, government activity has = increased with respect to investigations and/or allegations concerning = possible violations of fraud and abuse and false claims statutes and/or = regulations by healthcare providers. Entities that are found to have = violated these laws and regulations may be excluded from participating = in government healthcare programs, subjected to fines or penalties or = required to repay amounts received from the government for previously = billed patient services. The Office of the Inspector General of the = Department of Health and Human Services and the United States Department = of Justice ("Department of Justice") and certain other governmental = agencies are currently conducting inquiries and/ or investigations = regarding the compliance by the Company and certain of its subsidiaries = and the compliance by CBHS and certain of its subsidiaries with such = laws and regulations. Certain of the inquiries relate to the operations = and business practices of the Psychiatric Hospital Facilities prior to = the consummation of the Crescent Transactions in June 1997. The = Department of Justice has indicated that its inquiries are based on its = belief that the federal government has certain civil and administrative = causes of action under the Civil False Claims Act, the Civil Monetary = Penalties Law, other federal statutes and the common law arising from = the participation in federal health benefit programs of CBHS psychiatric = facilities nationwide. The Department of Justice inquiries relate to the = following matters: (i) Medicare cost reports, (ii) Medicaid cost = statements, (iii) supplemental applications to CHAMPUS/TRICARE based on = Medicare cost reports, (iv) medical necessity of services to patients = and admissions, (v) failure to provide medically necessary treatment or = admissions and (vi) submission of claims to government payors for = inpatient and outpatient psychiatric services. No amounts related to = such proposed causes of action have yet been specified. The Company = cannot reasonably estimate the settlement amount, if any, associated = with the Department of Justice inquiries. Accordingly, no reserve has = been recorded related to this matter. HOLOCAUST VICTIMS: Survivor Sues Swiss for Parents=92 Death --------------------------------------------------------- The sister of a Jewish refugee who demanded 100,000 Swiss francs ($ = 625,000) to compensate for the death of his parents in Auschwitz has = also filed for damages, reports said December 28. It represents the third claim for damages made against the Swiss = government for turning back refugees into Nazi-controlled territory = during the World War II era and effectively sending many of them to = their death. Finance Ministry spokesman Daniel Eckmann confirmed media reports that = the claim had been received late November but declined to give further = details. The newspaper Le Temps said it was made in the name of Sabine Sonabend. = She, her brother Charles and her parents fled to neutral Switzerland = from Nazi-occupied Belgium in 1942 but they were arrested and deported = to France. The parents later died at the Auschwitz concentration camp. The Swiss government last February rejected the compensation claim by = Charles Sonabend, now 66 and living in London. The Supreme Court has = still to rule on his appeal, as well as an appeal by another refugee, = Joseph Spring. The claims are separate from the $ 1.25 billion class action settlement = reached between the two big Swiss banks and lawyers of Holocaust = survivors in 1998. This is meant to cover claims of victims and their = heirs in return for them dropping any other compensation demands. According to Le Temps newspaper, Sonabend indicated he would withdrew = his claim against the Swiss government in order to be eligible for the = class action payout. His 68-year-old sister would ursue the case in his = place, he said. (AP Worldstream December 30, 1999) HOUSTON GREENSHEET: EEOC Sues Advertising Newspaper for Racial Bias ------------------------------------------------------------------- The newspaper you read to buy was slapped with a class-action lawsuit by = the Equal Employment Opportunity Commission December 29 for allegedly = refusing to hire black workers. The agency alleges that Houston Greensheet and Helen Gordon Interests, = which produce the advertising newspaper, refused to hire black = applicants as press helpers in its warehouse on Main Street and McGowen. Greensheet, through its attorney Shira Yoshor of Baker & Botts, denied = the allegations and said it had a "strong policy" of equal employment = opportunities. This is the first lawsuit filed since the agency created a special = taskforce in August to protect low-wage earners in Houston, Dallas and = San Antonio, said H. Joan Ehrlich, the EEOC's Houston district director. The agency's workers plan to concentrate on jobs typically filled by = illegal aliens, migrant workers and low-wage earners. "We do get a lot = of complaints in the office, but they tend to be from certain segments = of the population," Ehrlich said. "There's a whole lot of discrimination = we don't touch. The big difference is what we're doing, instead of being = feds in an ivory tower. We're going out into the community." In this case, allegedly, a third of the applicants for these = minimum-wage jobs available between 1993 and 1995 were black, but the = newspaper hired Hispanics for the positions. The agency seeks back wages and a permanent injunction prohibiting the = company from continuing the alleged discrimination. (The Houston = Chronicle December 30, 1999) INS: Advocates For Poor Immigrants Sue to Seek Waive Of Citizenship Fee ----------------------------------------------------------------------- The U.S. Immigration and Naturalization Service is thwarting the ability = of poor and disabled immigrants to become American citizens by refusing = to waive naturalization fees, according to a federal court suit. Three organizations that represent poor people and immigrants are = seeking class-action status for their Dec. 22 suit filed in U.S. = District Court in Miami. They allege that hundreds of people have been = harmed by the INSs defiance of its own policies that allow fee waivers = for people who cant afford them. The fees now total $ 250, an amount well out of the reach of many people = seeking to become citizens, said Randall Berg, executive director of the = Miami-based Florida Justice Institute. It is a major complaint that has been heard throughout South Florida, = Berg said. Something needed to be done. INS spokeswoman Maria Elena Garcia said INS officials have not seen the = suit. Garcia said she could not comment because the INS does not discuss = pending litigation. The 38-page complaint, filed by lawyers with Florida Legal Services = Inc., the Florida Immigrant Advocacy Center as well as the Justice = Institute, contends the INS has maintained a systematic and Miami = district-wide policy of refusing to grant or, in some instances, even = acknowledge requests for fee waivers. The INS also is not explaining to = applicants why the waivers were denied, the suit claims. The issue has become more critical since increases in naturalization = fees took effect Jan. 15. The boost was substantial, to $ 225 from $ 95. = Applicants also must pay a $ 25 fingerprinting fee. As a result, poor, disabled and elderly people are denied the = opportunity to become United States citizens solely because of their = poverty, the suit alleges. The fee increase apparently was intended to help cover the cost of = providing services at no charge to immigrants who cant afford to pay. = The suit says that about $ 28 of the new $ 225 fee goes for this = purpose. One of the named plaintiffs, 62-year-old Nildo Diaz, a lawful permanent = U.S. resident since 1980, served a 10-year jail sentence in Cuba as a = political prisoner. After arriving in the U.S., he made his living = repairing watches, but quit in 1997 because of permanent tremors in his = hand. He now lives on $ 220 a month in Social Security benefits. Although he = wants to become a U.S. citizen, he cant afford the $ 250 in fees, the = suit says. In September, Diaz completed an application for naturalization, = submitted information on his income and asked for a fee waiver. On Nov. = 1, his application was returned with a letter saying it could not be = accepted because the fee had not been paid. The suit seeks no money damages for the plaintiffs. Rather, it requests = a court injunction compelling the INS to follow existing guidelines and = policies for granting fee waivers, and to re-evaluate waiver requests = that have been denied since Jan. 15. (Broward Daily Business Review = December 30, 1999) LASER TECHNOLOGY: Reports on Expenses Re Settlement of Shareholder Suit ----------------------------------------------------------------------- Laser Technology, Inc. (Amex: LSR), a leading designer, manufacturer and = marketer of pulse laser measuring systems for a variety of commercial = and consumer applications, reported on December 30 its financial results = for the quarter and fiscal year ended September 30, 1999. For the fiscal year ended September 30, 1999, the Company reported a net = loss of $2,386,105, or ($0.48) per diluted share, on record net sales of = $ 11,814,654. These results compared with net income of $896,499, or = $0.15 per diluted share, and net sales of $11,801,293 in FY1998. For the = three months ended September 30, 1999, net sales totaled $3,093,910, = versus net sales of $3,723,267 in the fourth quarter of the previous = fiscal year. The fourth quarter of FY1998 benefited from a large sale to = an OEM customer and a one-time sale of certain inventory parts which was = unrelated to the Company's normal customer shipments. The Company = reported a net loss of $ 1,519,097, or ($0.30) per diluted share, in the = fourth quarter of FY1999, compared with net income of $157,991, or $0.03 = per diluted share, in the corresponding period of the prior year. Net sales of Traffic Safety products increased 1.2% during FY1999, to = approximately $7.2 million (vs. $7.1 million in the prior year), = reflecting a 6.5% increase in domestic sales and a 4.7% decline in = international sales. Survey and Mapping product sales increased 2.0% to = approximately $4.1 million in FY1999, compared with approximately $4.0 = million in the year ended September 30, Domestic Survey and Mapping = product sales declined 15.8%, while international sales of such products = increased 39.7%. Royalty income from the Company's licensees declined approximately 25% = during FY1999, to $926,796, versus $1,2452,732 in FY1998. The decrease = in royalty income was primarily related to a disruption in sales by the = Company's largest licensee, Bushnell, due to a transition to new models = of consumer laser rangefinders and the liquidation of inventories at = heavily discounted prices by one of Bushnell's competitors which exited = the market during 1999. Financial results for the quarter and fiscal year ended September 30, = 1999, were significantly impacted by accruals for settlement expenses = and legal costs related to (1) the legal defense and proposed settlement = of all previously disclosed shareholder class-action and derivative = litigation and (2) a related Securities and Exchange Commission = investigation. The litigation and SEC matters were substantially = resolved during FY1999, and such costs are not expected to recur in = FY2000. The Company's income statement for FY1999 reflects non-recurring = "Restructuring and Litigation Costs" totaling approximately $2.1 = million, including approximately $620,000 in non-cash expense related to = the issuance of additional shares of common stock as part of the pending = litigation settlement. Approximately $1.1 million of non-recurring costs = were also included in the Company's Operating Expenses for the fiscal = year. Such non-recurring costs were largely associated with the re-audit = of fiscal years 1993-1997; increased allowances for doubtful accounts; = writedowns of selling samples and equipment; writedowns of obsolete = plant, property and equipment; and pre-restructuring salary expenses. LASON INC: Weiss & Yourman Files Securities Suit in New York ------------------------------------------------------------ The following is an announcement by the law firm of Weiss & Yourman on = December 29: A class action lawsuit against Lason, Inc. ("Lason" or the = "Company")(NASDAQ:LSON) was commenced in the United States District = Court for the Eastern District of New York on behalf of purchasers of = Lason securities. If you purchased Lason securities between August 14, = 1998 and November 17, 1999, your rights may be affected. The complaint charges defendants with violations of the Securities = Exchange Act of 1934 and the Securities Act of 1933. The complaint = alleges that defendants issued a series of false and misleading = statements that falsely inflated the Company=3Ds earnings and caused the = Company's stock price to plummet. If you purchased Lason securities during the period of August 14, 1998 = and November 17, 1999, you may move the court no later than February 19, = 2000, to serve as a lead plaintiff of the class. In order to serve as a = lead plaintiff, you must meet certain legal requirements. You do not = need to seek appointment as a lead plaintiff in order to share in any = recovery. Contact: Mark D. Smilow or David C. Katz at (888) 593-4771 or (212) = 682-3025 or via Internet electronic mail at wynyc@aol.com or by writing = Weiss & Yourman, The French Building, 551 Fifth Avenue, Suite 1600, New = York City 10176. MARK L. NICHTER: Lawyers Collecting Debt to Tell of Right To Challenge ---------------------------------------------------------------------- Lawyers must notify debtors of their right to challenge an outstanding = debt or risk owing damages for unfair debt collection, a federal court = has ruled. Southern District Judge Colleen McMahon, in Barrientos v. Law Offices of = Mark L. Nichter, 99 Civ. 2522(CM)(MDF), granted summary judgment in = favor of the plaintiff and instructed a magistrate to determine damages. The plaintiff, Guadalupe Barrientos, complained that the Law Offices of = Mark L. Nichter, which was attempting to collect a debt on behalf of a = Westchester County cardiologist, acted in a deceptive way by not = including the required notice under the Fair Debt Collection Practices = Act. An independent debt collector such as the Nichter firm must produce a = detailed validation notice including not only the amount in question, = the name of the creditor and of the debtor, but also that the debt will = be assumed valid unless disputed by the consumer within 30 days. But a letter from the law firm, sent to Ms. Barrientos before the = running of the 30-day "validation period," demanded "immediate payment." The FDCPA, Judge McMahon pointed out, imposes a strict liability = standard and does not require that the intent to deceive be shown by the = plaintiff. The court also noted that in the Second Circuit, the required = notice must be interpreted as it would be understood by the "least = sophisticated consumer." The letter demanding immediate payment would be understood as excluding = the possibility of a challenge to the debt. Furthermore, under the "least sophisticated consumer" standard, dunning = letters sent to Ms. Barrientos by the Nichter firm may be viewed as = vague and confusing because of the contradictions between them. The court turned aside a defense raised by the law firm that the failure = to mention the 30-day challenge period was the result of a bona fide = error. Even though the firm presented evidence that its debt collectors are = trained to know the FDCPA requirements, the court said, that only raises = a question of fact as to one element of the bona fide error defense: the = existence of procedures designed to prevent violations of the act. On = the other two elements that the violation was unintentional and the = result of a bona fide error - there is only a bare-bones assertion by = defendant, which cannot be credited, Judge McMahon said. Judge McMahon denied class certification, allowing the plaintiff to go = forward only as an individual. Ms. Barrientos was represented by Gregory G. McStay, of Sotomayor & = McStay. The Law Offices of Mark L. Nichter were represented by Diane K. = Kanca and Andrew G. Tretter, of McDonough Marcus Cohn Tretter Heller & = Kanca. (New York Law Journal December 20, 1999) MCKESSON HBOC: East Coast Firms Win Designation As Lead Counsel --------------------------------------------------------------- Two East Coast plaintiffs firms elbowed out Lieff, Cabraser, Heimann & = Bernstein and its co-counsel to win the much-coveted designation as lead = counsel in a securities class action that could settle for as much as $1 = billion. If it does settle for $1 billion, the attorneys would reap at = least $100 million and up to $200 million in fees. On Dec. 22, U.S. District Judge Ronald Whyte of San Jose chose the New = York State Common Retirement Fund to serve as lead plaintiff in the = massive case against McKesson HBOC Inc., which got hit with 50 separate = stock fraud suits after it admitted in April that a company it had = bought committed massive accounting fraud. The April 28 admission sent = the company's stock tumbling $35 a share to less than $20 per share. = Last year, the stock hit an all-time high of $89.75 a share. In picking the New York state fund, represented by Philadelphia's = Barrack, Rodos & Bacine and New York's Bernstein Litowitz Berger & = Grossmann, Whyte ruled that it appears to have suffered more losses than = New York City Pension Funds -- the state's rival for lead plaintiff = status. Whyte said it looks like New York state lost $39 million while = New York City took a $36 million hit because of the financial = shenanigans. Lead plaintiff status typically goes to the plaintiff who = has alleged the greatest losses. The two funds had engaged in a months-long fight over who had the = largest losses. "Accordingly, the court determines that NYS has shown a greater = financial interest in the outcome of the litigation," Whyte wrote, = adding that "the court believes that NYS has selected experienced lead = counsel who will vigorously assert the interest of the class. Thus, the = court will not disturb NYS's selection of lead counsel." In allowing New York state to choose its own counsel in _In re McKesson = HBOC Inc. Securities Litigation_, 99-20743, Whyte parted company with = fellow Northern District Judge William Alsup, who insisted in an = unrelated securities fraud case that the lead plaintiff must put the = lead counsel position out to bid. But Whyte did agree with Alsup and dozens of other federal district = court judges in ruling that bundling of individual plaintiffs into one = group -- so- called "aggregation" -- is not allowed under the seminal = Private Securities Litigation Reform Act. That anti-aggregation ruling = knocked several plaintiffs firms, including Milberg Weiss Bershad Hynes = & Lerach, from lead counsel contention in the McKesson case. New York City's lawyers at Lieff, Cabraser and the White Plains, N.Y., = firm of Lowey Dannenberg Bemporad & Selinger came tantalizingly close to = landing the golden goose, and even Whyte acknowledged that a $3 million = difference is not much given the enormity of the case and the differing = ways to figure damages. "Given the large dollar amounts involved, this is a close margin," Whyte = wrote. And the judge also said that figuring out who lost exactly what = was " difficult at this early stage of the litigation, given the = complexity of the case." Still, Whyte said he needed to give "speedy = consideration of the lead plaintiff question so as not to delay further = proceedings." Just last year, the two New York pension funds were allied as lead = plaintiffs in a class action against Cendant Corp., the biggest = securities fraud case ever, which recently settled for $3 billion. Both = funds agreed to retain Bernstein Litowitz as lead counsel in the case = against Cendant. Attorneys fees have yet to be awarded in that case. But according to a New York City pension fund official quoted in the New = York Law Journal in July, the two funds had a falling out over which = firm would control the McKesson case. (The Recorder December 30, 1999) METLIFE: Says Ct Approves Settlement for MDL over Sales Practices ----------------------------------------------------------------- MetLife announced on December 29 that a U.S. District Court Judge in = Pittsburgh has approved the settlement of its nationwide class = litigation involving alleged improper sales practices in connection with = individual life insurance policies and annuity contracts and = certificates issued by MetLife. MetLife and lead attorneys for plaintiffs representing the class agreed = to the settlement on August 18. A fairness hearing was held before the = court on the proposed settlement on December 2. "We are pleased that the court has ruled that our settlement is fair, = adequate and reasonable," said MetLife Senior Executive Vice President = and General Counsel Gary A. Beller. "Throughout its history, MetLife has = always strived to deal fairly with its customers. We firmly believe that = our policies and annuities have always delivered significant value to = our customers. This settlement provides a forum for redress for any of = our customers who may feel that they have been treated unfairly." The class action settlement covers approximately seven million current = and former policyholders and annuity contractholders who purchased = MetLife products between 1982 and 1997. The total value to class members = of the settlement is at least $1.7 billion, based on analysis provided = by actuarial experts retained by the parties. Headquartered in New York City since 1868, MetLife is a leading provider = of insurance and financial products and services to a broad spectrum of = individual and group customers. The company, with approximately $366.6 = billion of assets under management as of September 30, 1999, provides = individual insurance and investment products to approximately 9 million = households in the U.S. MetLife also serves approximately 33 million = people by providing group insurance and investment products to = corporations and other institutions.=20 NAVIGANT CONSULTING: Finkelstein & Krinsk Files Securities Lawsuit ------------------------------------------------------------------ An announcement on December 31, 1999 says that Navigant Consulting, Inc. = (NYSE: NCI) is accused in a class action lawsuit filed by Finkelstein & = Krinsk of violating the federal securities laws by misrepresenting the = Company's true business condition in order to inflate the price of the = Company's stock.=20 According to the Complaint, the Company and its controlling insiders = issued a series of false and misleading statements to the market or = omissions to disclose facts regarding, amongst other things, that the = Company and certain of its insiders participate in a scheme to = improperly obtain large loans from the Company and thereafter used these = funds to purchase NCI stock, artificially inflate the value of the stock = and, in at least one case, repaid such loans by using a large portion of = NCI holdings. Additionally, the Complaint alleges that the Company = misrepresented its financial results for the first three quarters of = 1999 by using improper accounting methods to artificially inflate both = the Company's earnings and growth rate. Defendants' statements and conduct were improper and caused the = Company's stock to trade at artificially inflated levels during the = Class Period (May 6, 1999 - November 23, 1999). When the truth about = defendants' misrepresentations and omissions became known to investors, = the price of NCI stock dropped dramatically from Class Period prices of = over $53 per share to less than $10 per share. For any inquiries or to discuss this lawsuit and alternatives, contact: = Jeffrey R. Krinsk at Finkelstein & Krinsk, the Koll Center, 501 West = Broadway, Suite 1250, San Diego, CA 92101 by calling toll free = 877-493-5366 or E-Mail - fk@class-action-law.com or fax 619-238-5425. NY STATE: Sued over Denial of Treatment to Mentally Ill Youngsters ------------------------------------------------------------------ They are not usually part of our consciousness, these children. They = shiver and tremble and act out to the awful imperatives of mental = illness. Sometimes they shut down. Sometimes they lash out, attacking = others, or they turn their fury on themselves. Often they are the = victims of terrible crimes. We do a lousy job of reaching them. The Legal Aid Society went into federal court and filed a class action = suit against New York State's mental health system, charging that = youngsters who are known to be severely mentally ill are being denied = treatment because the state has refused to provide the mental health = facilities they require. Nearly 400 children are on waiting lists for admittance to residential = treatment facilities but cannot be admitted because the existing = facilities are filled to capacity. So the kids, according to the suit, = have been left to languish in hospitals, foster care or jail. These are children like the 12-year-old boy identified in the suit by = the pseudonym Alexander A. According to the suit, cocaine and heroin = were detected in Alexander's system at birth and he was physically = abused before he was four months old. He was later placed in a foster = home where he and his two sisters were physically and sexually abused. In the dry language of court papers, the suit said: "Alexander A.'s = mental health condition worsened sharply in 1999 when one of his younger = sisters in the home was beaten to death, allegedly by his adoptive = mother. Alexander A. became suicidal and was psychiatrically = hospitalized for several weeks, during which he was maintained on = psychotropic medications." In July the boy was transferred to Geller = House, a diagnostic reception center on Staten Island, for evaluation. = "While at Geller House," the suit said, "Alexander A. has consistently = engaged in self-mutilating, self-destructive behavior, and provocative = and physically aggressive behavior toward others, whom he views as = 'bad.' " It was decided at Geller House that this youngster required = long-term residential treatment and his case was referred to the State = Office of Mental Health. Officials there agreed. But instead of being = admitted to a residential treatment facility, Alexander was promptly = placed on a waiting list. He is still at Geller House. Youngsters remain on the waiting lists for months, sometimes more than a = year. And while they wait, they often deteriorate. It's a cruel and = wasteful and frequently tragic situation. Monica Drinane, the lawyer in charge of the Legal Aid Society's juvenile = rights division, described these children as "some of the most gravely = mentally ill young people imaginable." She said, "If we do not intervene = in their lives at this point, then we're putting ourselves in a = self-defeating mode because without these critical services many of = these children will become the people that you see talking to themselves = on the street corners. They will not be able to become productive = members of society." The suit asks the court to compel the state to place children in = residential treatment facilities within 30 days of the determination = that they are eligible for such services. "Nobody is in disagreement = that these children need serious psychiatric intervention right now -- = today," said Ms. Drinane. Until the plight of these youngsters is taken more seriously by public = officials and the public at large, they will continue to suffer and = cause harm to themselves and others. Many will be condemned to the kind = of nightmarish world that has settled over a 14-year-old girl identified = in the lawsuit as Bernadette B. For three years, according to the suit, = she was subjected to "severe verbal, physical and sexual abuse, = including sodomy, by her father, beginning when she was eight or nine." = She considered suicide and had to be hospitalized for depression. The = suit said her condition currently "is characterized by frequent episodes = of extreme shaking and crying and intense flashbacks of her father's = abuse." She is subject to violent mood swings and has assaulted at least = one person. At 14, her life is a mess. Everyone involved says she needs = intensive therapy in a residential treatment facility. Instead, she's in = a juvenile jail upstate. (The New York Times December 30, 1999) PRISON REALTY: Shareholder Suit in Tennessee Challenges Revamping ----------------------------------------------------------------- A deal to restructure the world's largest for-profit prison company is = being challenged in court by a shareholder. The lawsuit, filed December 29 in Tennessee, accuses the management of = Prison Realty Trust of trying to dilute the value of the company's = common stock. It also accuses the company's board of directors of = breaching their fiduciary responsibilities. Prison Realty Trust, of Nashville, announced an agreement on December 27 = that would bring in up to $ 359 million in investment money. The deal = would give more than 30 percent ownership in the company to new = investors: Fortress Investment Group, the Blackstone Group and Bank of = America. A newly configured company would be created through the merger of Prison = Realty Trust and the companies collectively operating under the name = Corrections Corporation of America, which managed prisons it leased from = Prison Realty Trust. The deal would also eliminate the real estate trust structure of the = company, which would eliminate dividends on common stock. Prison Realty = would revert to the Corrections Corporation name. ''If I was an income-oriented investor, I would be disappointed because = I am holding a paper that no longer pays a dividend and has lost a = considerable amount of its face value,'' said industry analyst Robert = Norfleet of Davenport & Co. Prison Realty Trust officials have not commented on the lawsuit, which = was filed by shareholder Hilda Bernstein of California. She is seeking = class- action status. The lawsuit names as defendants Prison Realty = Trust's chief executive, Doctor Crants, his son and former Prison Realty = Trust President Robert Crants, other company officials and the = investment groups. The company's stock has dropped 75 percent this year amid investors' = concerns about management credibility, high-profile prison escapes and = difficulty raising money because of a low stock price and a tough market = for REITs. Under the agreement announced on December 27, Doctor Crants and other = top company officials would leave their jobs. Crants helped found = Corrections Corporation of America in 1983, then created and spun off = Prison Realty Trust in 1997 to build and buy prisons that Corrections = Corporation of America manages. In January, the two companies merged as = a real estate investment trust. Prison Realty Trust owns nearly 50 prisons in 17 states, the District of = Columbia and the United Kingdom. Corrections Corporation of America has = contracts to manage more than 80 prisons with more than 70,000 beds. = (The Atlanta Journal and Constitution December 31, 1999) PRISON REALTY: Steven E. Cauley Files Securities Suit in Tennessee ------------------------------------------------------------------ The Law Offices of Steven E. Cauley announced on December 30 that = securities fraud lawsuit has been filed in the United States District = Court for the Middle District of Tennessee on behalf of purchasers of = Prison Realty Trust, Inc. ("Prison Realty" or the "Company") (NYSE: PZN) = common stock during the period between June 23, 1999 and December 27, = 1999, inclusive (the "Class Period"). The complaint charges Prison Realty and certain of its officers and = directors with violations of the Securities Exchange Act of 1934. The = complaint alleges that, throughout the Class Period, the defendants = falsely represented that Prison Realty would be able to pay the = approximately $1.50 per share special dividend necessary for the Company = to maintain its status as a Real Estate Investment Trust. As a result, = the complaint alleges that Prison Realty stock was artificially inflated = throughout the Class Period. However, on December 27, 1999, the Company = announced that it would not pay the one-time special dividend, that it = would suspend payment of its regular dividends, and that Doctor Crants = and Robert Crants would no longer manage the Company. Upon this = announcement, the price of Prison Realty shares collapsed in value, = falling far below the prices at which it traded during the Class Period. Contact: Steven E. Cauley, Scott E. Poynter, Gina M. Cothern, 2200 N. = Rodney Parham Road, Suite 218, Cypress Plaza, Little Rock, AR 72212, = E-mail: CauleyPA@aol.com Toll free: 1-888-551-9944=20 SAFETY COMPONENTS: Finkelstein & Krinsk Files Securities Suit ------------------------------------------------------------- An announcement on December 31, 1999 says that Safety Components = International, Inc. (NASDAQ:ABAG) is accused in a class action lawsuit = filed by Finkelstein & Krinsk of violating the federal securities laws = by misrepresenting the Company's true business condition in order to = inflate the price of the Company's stock. According to the Complaint, = the Company and its controlling insiders issued a series of false and = misleading statements to the market or omissions to disclose facts = regarding, amongst other things, the nature of the Company's operations = and financial statements. Defendants' statements and conduct were = improper and caused the Company's stock to trade at artificially = inflated levels during the Class Period (August 14, 1997 - November 9, = 1999). The Complaint particularizes plaintiff's allegations of how the = Company's management violated the Securities Exchange Act of 1934, and = specifies the Company's false statements and omitted material facts. The = Complaint has been filed in United States District Court for the = District of New Jersey and represents a class comprised of all = individual and institutional investors for the pertinent time period. For any inquiries or to discuss this lawsuit and alternatives, contact: = Jeffrey R. Krinsk at Finkelstein & Krinsk, the Koll Center, 501 West = Broadway, Suite 1250, San Diego, CA 92101 by calling toll free = 877-493-5366 or E-Mail - fk@class-action-law.com or fax 619-238-5425. STATER BROS: Has Entered Settlement for CA Lawsuit over Milk Pricing -------------------------------------------------------------------- Report by Stater Bros Holdings Inc. on Form 10-K405 filed with the = Securities and Exchange Commission as of date December 22, 1999: On May 2, 1993, the Company was named as a defendant along with all of = the other major supermarket chains located in the Los Angeles County = area in a class action complaint filed in the California Superior Court = in Los Angeles, California, alleging among other things that the milk = pricing policies of each of the defendants violate certain antitrust = laws and regulations under California law. In this class action lawsuit, = Barela et al. v. Ralphs Grocery Co. et al., plaintiffs sought = unspecified damages. The Company has entered into a settlement agreement = of this case which did not involve payment of monetary damages and such = settlement did not have an adverse material effect on the results of = operations or financial condition of the Company. STATER BROS: Intends to Vigorously Defend CA Suit over Employment Bias ---------------------------------------------------------------------- On June 19, 1997, Stater Bros. Markets was named as a defendant in the = case of Ufondu, et al. vs. Stater Bros. Markets filed in the Superior = Court of the State of California for the County of San Bernardino. The = complaint filed by twelve employees seeks unspecified damages alleging = racial discrimination in the Company's employment practices. The Company = believes the complaint is without merit and intends to vigorously defend = the case. There can be no assurances, however, as to the outcome of this = case. SYSTEMS & COMPUTER: PA. Ct Approves Settlement for Securities Complaint ----------------------------------------------------------------------- On November 22, 1999, the Court approved the settlement of the class = action lawsuit filed on October 4, 1995 by John J. Wallace in the United = States District Court for the Eastern District of Pennsylvania against = Systems & Computer Technology Corp; Michael J. Emmi, Chairman of the = Board, President and Chief Executive Officer of the Company; Michael D. = Chamberlain, Senior Vice President and a director of the Company; and = Eric Haskell, Senior Vice President, Finance & Administration, = Treasurer, and Chief Financial Officer of the Company alleging = violations of certain provisions of the federal securities laws. Under = the terms of the settlement the Company paid $750,000. SYSTEMS & METHODS: Contractor Sued for Delays in Child Support System --------------------------------------------------------------------- With the backing of a national advocacy group, a Winston-Salem lawyer is = seeking to bring a class-action lawsuit against the contractor who = developed North Carolina's new child-support collection system. A lawsuit was filed in the last week of 1999 in Forsyth County on behalf = of two women who say they have been hurt by the new system, which state = officials blame for widespread delays in routing support checks to = parents. Randolph James, a lawyer for the two women, said he will seek to certify = the matter as a class-action case for parents who haven't received = payments on time and parents who sent money to the centralized = collection system but weren't given credit for doing so. On December 30, 1999, a lawyer for the Association for Children for = Enforcement of Support said her group is also interested in joining the = lawsuit as a plaintiff. "There are many, many families in the state who = have been harmed seriously," said Melanie Snider, national legal = services director for the Toledo, Ohio-based group. "This is absolutely = unacceptable." Snider said that about 1,800 families belong to the = association in North Carolina but that any damages would be shared among = all parents hurt by the system. Officials from Systems & Methods Inc., the Georgia contractor who = designed North Carolina's new collection system, did not return phone = calls on December 30, 1999. Officials at the state Department of Health and Human Services, which = oversees child-support collections, declined to comment on the specifics = of the lawsuit. But DHHS spokeswoman Debbie Crane said that the new system "is really = functioning quite well now," despite a very rocky start. In recent days, = about 99.9 percent of payments have been processed correctly, she said. James said he has no intention of taking action against the state at = this point. "At this juncture, all my information is that it's SMI's = fault," he said. Snider, however, said that action against the state remains a = possibility. "People are suffering. We will do whatever we need to do," = she said. "If that means suing the state, we'll sue the state." Under the new system, which was launched in October, parents send = support checks to a centralized location in Raleigh instead of clerks of = court offices across the state. After the state processes the money, = checks are supposed to be sent to custodial parents within 48 hours. = DHHS officials acknowledge that in the weeks after the system debut, at = least half of the roughly 315,000 families who receive checks each month = faced delays of up to 10 days. The two women who filed suit are Deborah Caudill of Guilford County and = Wilma Lee Harris of Surry County. (The News and Observer (Raleigh, NC) = December 31, 1999) TYCO INT=92L: Gold Bennett Files Securities Suit in New Hampshire --------------------------------------------------------------- Gold Bennett & Cera LLP announced on December 30 that a class action was = filed in the United States District Court for the District of New = Hampshire (C-99-610-JD) on behalf of all persons who purchased the = common stock of Tyco International Ltd. ("Tyco") (NYSE: TYC) between = October 1, 1998 and December 8, 1999, inclusive (the "Class Period"). The plaintiff is represented by the San Francisco law firm of Gold = Bennett & Cera LLP. For over 30 years, Gold Bennett & Cera LLP and its = predecessors have successfully engaged in commercial litigation, = including shareholder, consumer and antitrust class actions, in federal = and state courts throughout the United States, recovering hundreds of = millions of dollars for its clients. The action charges Tyco and two of its highest ranking officers with = violations of Sections 10(b) and 20(a) of the Securities Exchange Act of = 1934, as well as Rule 10b-5 promulgated thereunder. The complaint = alleges that defendants issued a series of materially false and = misleading statements concerning Tyco's financial condition and future = growth prospects that caused Tyco's stock to be artificially inflated. = Specifically, the complaint alleges that Tyco misled the investing = public by failing to reveal that companies that had agreed to be = acquired by Tyco had slowed their revenue growth or wrote off = significant assets in the quarter immediately before being acquired by = Tyco. This allegedly permitted Tyco to report higher earnings growth in = subsequent periods. The complaint alleges that these deceptive and = overly aggressive accounting practices permitted Tyco to provide the = market with a false and misleading picture of Tyco's revenue and = earnings growth. Prior to the disclosure of the adverse facts described = above, certain Tyco insiders allegedly sold over 2.8 million shares of = Tyco to the investing public at artificially inflated prices for = proceeds of approximately $281 million. Contact: Steven O. Sidener, Esq. or Steven J. Mulligan, Esq. of Gold = Bennett & Cera LLP, 595 Market Street, Suite 2300, San Francisco, = California 94105, by telephone at 800-778-1822 or 415-777-2230, by = facsimile at 415-777-5189 or by e-mail at smulligan@gbcsf.com TYCO INT=92L: Weinstein Kitchenoff Files Securities Lawsuit --------------------------------------------------------- The law firm of Weinstein Kitchenoff Scarlato & Goldman Ltd. announced = on December 30 that a class action lawsuit has been filed on behalf of = investors who purchased Tyco International Ltd. (NYSE: TYC) common stock = between October 1, 1998 and December 8, 1999 (the "Class Period"). The = lawsuit claims that Tyco and its chief executive officer and chief = financial officer misled investors by improperly accounting for certain = acquisitions. These accounting practices made Tyco's earnings growth = rate appear significantly greater than it actually was, resulting in the = price of Tyco stock being artificially inflated during the Class Period. = Tyco's chief executive officer and chief financial officer sold 2.7 = million shares of Tyco stock during that period for proceeds of $270 = million. On December 9, 1999 Tyco representatives acknowledged that the SEC had = commenced an inquiry into its Tyco's accounting practices. If you purchased stock in Tyco between October 1, 1998 and December 8, = 1999 you may wish to serve as a lead plaintiff in the class actions = which have been filed. You may do so no later than February 7, 2000. If = you wish to discuss this lawsuit, or have any questions concerning this = notice or your rights or interests, please contact either Paul Scarlato, = Esquire, or Mark Goldman, Esquire toll free at (888) 545-7201 or by = e-mail at pscarlato@wksg.com or msgoldman@wksg.com Contact: Paul Scarlato, Esquire, or Mark Goldman, Esquire, 888-545-7201, = or e-mail, pscarlato@wksg.com or msgoldman@wksg.com TYCO INT=92T: Berman DeValerio Files Securities Suit in New Hampshire ------------------------------------------------------------------- Berman, DeValerio & Pease LLP a law firm specializing in representing = shareholders in class action lawsuits, issues the following press = release on December 30: Berman DeValerio & Pease LLP announced on December 30 that a class = action was filed in the United States District Court for the District of = New Hampshire (C-99- 610-JD) on behalf of all persons who purchased = common stock of Tyco International Ltd. (NYSE: TYC) ("Tyco") between = October 1, 1998 and December 8, 1999, inclusive (the "Class Period"). The action charges Tyco and certain of its officers with violations of = Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well = as Rule 10b-5 promulgated thereunder. The complaint alleges that = defendants issued a series of materially false and misleading statements = concerning Tyco's financial condition and future growth prospects that = artificially inflated the price of Tyco stock. Specifically, the = complaint alleges that defendants used deceptive and overly aggressive = accounting practices to give the market a false and misleading = impression of the Company's revenue growth rate.=20 The Complaint alleges that Tyco misled the investing public by failing = to reveal that companies that had agreed to be acquired by Tyco had = slowed their revenue growth or wrote off significant assets in the = quarter immediately prior to being absorbed by Tyco. This then allowed = Tyco to mislead investors by showing greater earnings growth in later = periods than it would have without the acquired company's undisclosed, = pre-acquisition actions. Prior to the disclosure of the adverse facts = described above certain insiders sold over 2.8 million shares of Tyco to = the investing public at artificially inflated prices for proceeds of = approximately $281 million.=20 Contact: Patrick Egan, Esq. or Norman Berman, Esq. at Berman, DeValerio = & Pease, LLP, One Liberty Square, 8th Floor, Boston, MA 02109, at = 800-516-9926 or 617-542-8300, or by e-mail at bdplaw@bermanesq.com VERITY INC: Weiss & Yourman Files Securities Lawsuit ---------------------------------------------------- A class action lawsuit has been filed in U.S. District Court by the law = firm of Weiss & Yourman on behalf of purchasers (the "Class") of Verity = Inc., (Nasdaq: VRTY) common stock between December 1, 1999 and December = 14, 1999 (the "Class Period"). Verity develops, markets and supports search engine software designed = for large enterprises. Verity specializes in search engines that = organize navigation of corporate intranets, extranets and e-commerce = sites. The defendants include Verity, Anthony Bettencourt, Gary J. Sbona, James = E. Ticehurst and Ronald Weissman. The complaint charges that these = insiders violated Sections 10(b) and 20(a) of the Securities Exchange = Act of 1934 and Rule 10-b(5) and profited from their actions by selling = stock worth approximately $8.8 million at artificially inflated prices = during the Class Period. The complaint further alleges that the Class = suffered damages as a result of a scheme and common course of conduct by = defendants which operated as a fraud and deceit on the Class during the = Class Period. According to the complaint, defendants' scheme included = rendering false and misleading statements and/or omissions concerning = the present and future financial condition and business prospects of the = Company, as well as the financial benefits that would enure to Verity = and its shareholders. Contact: Ronald T. Theda, Esq. of Weiss & Yourman, 800-437-7918, = wyinfo@wyca.com Y2K LITIGATION: Stores Blame Bug For Sales Loss, Threaten to Sue HSBC --------------------------------------------------------------------- A Y2K-triggered failure in credit card swipe machines caused frustrating = delays for thousands of retailers and customers trying to ring up = purchases across Britain on December 29, 1999. The machines, manufactured by Racal Electronics and supplied by HSBC, = one of Britain's four largest banks, improperly rejected credit cards = because of a failure to recognize the year 2000, a bank spokeswoman = said. The Y2K glitch appeared to be the most serious to come to light in the = days 1 leading up to the new year. Retailers claimed they have so far lost $ 5 million in sales due to the = problem, and are reportedly threatening to bring a class action lawsuit = against the bank. Linda Stryker, a public relations executive for HSBC in the United = States, said the error should not hit any U.S. credit card swiping = machines. She said it was specific to software used in machines in = Britain. The problem started December 28, 1999 when merchants tried to swipe = Mastercard and Visa cards through some 20,000 machines and found they = were improperly rejected, said HSBC's London spokeswoman Nicolette = Dawson. Lines grew as retailers were forced to telephone for further = authorization. Some merchants resorted to bringing out old manual = machines, which produced a carbon copy of the transaction. The glitch occurred because some of the bank's new swipe card terminals = are programmed to look ahead four working days in processing merchant = transactions to ensure they are registered within that time period. When the machines compared Dec. 28, 1999, with Jan. 1, 2000, they failed = to function because they read the date as Jan. 1, 1900, said Dawson. "The problem was with the terminals not the cards," said Dawson. She = said the problem was expected to disappear by Jan. 1 because the = terminals would be comparing Jan. 1, 2000, with Jan. 5, 2000, both in = the same year. Small retailers were supplied with the new swipe machines several months = ago and were the worst hit by the bug, said Dawson. (The Record (Bergen = County, NJ) December 30, 1999) * New Airport Scanners Offer X-Ray Image ---------------------------------------- With airports bracing for Y2K problems and possible terrorism, the U.S. = Customs Service has begun using new high-tech scanners that can see = through passengers' clothing and search for contraband with an X-ray = image that shows the naked body. International travelers who are suspected of smuggling drugs or carrying = weapons are being offered the body scanner as an alternative to a = physical pat-down or frisk when they pass through ports of entry at = airports across the country. The scanner can display hidden guns, knives, batteries, digital watches, = explosive materials and packages of drugs secreted under clothing. = Supporters say scanners can help in the fight against terrorism and = illegal drug importation. But privacy advocates say the technology's capability to show the full = external contours of the body, including male and female private areas, = is an "electronic strip search" that erodes constitutional protections = and is more invasive than a frisk, which is performed while a suspect is = fully clothed. Customs Commissioner Raymond W. Kelly says the body scanners give = travelers the choice of avoiding the physical contact of an external = body search at the hands of an inspector. "The option is that we can pat you physically," he said, "or you can = step in front of this machine. You don't have to do it." To ensure = privacy, no image is recorded or preserved, he said. And the scanner = operator is always the same sex as the person being scanned, Kelly said. But Gregory T. Nojeim, legislative counsel for the American Civil = Liberties Union, has been fighting the technology since it was first = proposed as a security enhancement three years ago after TWA Flight 800 = exploded off Long Island. The body scanner can show "underneath clothing and with clarity, breasts = or a penis, and the relative dimensions of each," he told an aviation = safety conference shortly after the crash. "The system has a = joystick-driven zoom option that allows the operator to enlarge portions = of the image." The image is not in photographic detail, but it provides a clear outline = of the person's body. The manufacturer of the BodySearch device says that the concerns are = excessive. "You don't get a sharp line image," said Robert Peters, vice = president of American Science & Engineering, of Billerica, Mass. = Scanning private areas is necessary because "that's one of the places = where people hide stuff," he added. The Customs Service began installing body scanners over the last several = months as part of Kelly's overhaul of inspection procedures in response = to charges of racial profiling and a congressional hearing that = followed. Black women in particular have complained that they were = singled out for pat-downs, and a group in Chicago has filed a class = action lawsuit against the agency. The Customs Service was unable to provide numbers for those who have = opted for scanning over frisks, and how many of these scans turned up = contraband. Scanners were recently installed in New York, Miami, = Atlanta, Los Angeles and Chicago at a cost of about $ 125,000 each. (The = Washington Post December 30, 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The CAR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *