/raid1/www/Hosts/bankrupt/CAR_Public/000214.MBX                C L A S S   A C T I O N   R E P O R T E R

               Monday, February 14, 2000, Vol. 2, No. 31


ADAPTEC INC: Reports on Settlement for Derivative Securities Suit in CA
AML COMMUNICATIONS: Reaches Agreement to Settle Securities Suits in CA
CHOLESTECH CORP: Plans Vigorous Defense of Securities Lawsuit in CA
DUNHILL STAFFING: Long Island Franchisee Sues over Direct Competition
ELITE INFORMATION: Aust Solution 6 Extends Bid for FTC to Review Merger

HOLOCAUST VICTIMS: EU Is Asked to Help in NY Suit over Land in Poland
KENETECH CORP: Intends Vigorous Defense of Securities Suits in DE
MASTEC INC: Resolves Shareholder Lawsuits Filed in DE in 1990
NETOPTIX CORP: Files Motion to Dismiss Shareholders' Complaint
NOVELL INC: Intends to Vigorously Defend Federal Securities Lawsuit

PAYDAY LENDER: Edelman, Combs Sues Indiana Lender Koach's Kash Station
ST JOHN KNITS: ContestS CA Suit Alleging Fiduciary Breach Re Merger
ST JOHN KNITS: Reaches Agreement to Settle Securities Fraud Suit in CA
SUNNYVALE'S CYLINK: Judge Appoints Innelli & Molder As Lead Counsel
TOBACCO LITIGATION: CA Consumers Sue for Damages from Price Fixing

TOBACCO LITIGATION: MI Smokers Sue for Damages from Price Fixing
TOBACCO LITIGATION: Philip Morris Loses appeal of 1998 Gag Order in FL
TOBACCO LITIGATION: Women Claim Fraud in Marketing Of Light Cigarettes
U S WEST: Agency Orders Refund Re Service Quality; Won't Sue for Fines
VALENCE TECHNOLOGY: Announces Settlement Reached for Securities Lawsuit

VALUE AMERICA: Schiffrin & Barroway Files Securities Lawsuit in VA
VALUE AMERICA: Wolf Haldenstein Files Securities Lawsuit in VA

* Bush Proposes Reforms: Curb Frivolous Suits; Large Ones in Fd Courts


ADAPTEC INC: Reports on Settlement for Derivative Securities Suit in CA
As previously reported in the CAR, a class action lawsuit is pending in
the United States District Court for the Northern District of California
against the Company and certain of its officers and directors. The class
action lawsuit alleges that the Company made false and misleading
statements at various times during the period between April 1997 and
January 1998 in violation of federal securities laws. The complaint does
not set forth purported damages. The Company believes the class action
lawsuit is without merit and intends to defend itself vigorously.

The Company also discloses in its report to the SEC that a derivative
action was filed in the Superior Court of the State of California
against the Company and certain of its officers and directors, alleging
that the individual defendants improperly profited from transactions in
the Company's stock during the same time period referenced by the class
action lawsuit. In July 1999, the Company entered into an agreement to
settle the derivative action. Under the terms of the agreement, the
Company will reimburse the fees and costs incurred by the plaintiff's
attorney in an amount to be approved by the court up to a maximum amount
of $600,000. The settlement is subject to approval by the court, and
does not affect the class action lawsuit still pending. The potential
liability is included in "Accrued liabilities" in the Condensed
Consolidated Balance Sheet at September 30, 1999.

AML COMMUNICATIONS: Reaches Agreement to Settle Securities Suits in CA
Two purported class action lawsuits are pending in federal and state
court against the Company and certain of its current and former officers
and directors. While the federal action asserts claims under the federal
securities laws and the state action asserts claims under California's
securities laws, the complaints are substantially identical.

The complaints allege that in order to profit from insider trading at
artificially inflated prices during the purported class period of April
10, 1996 to March 25, 1997, the defendants engaged in a scheme to
artificially inflate and maintain the Company's stock price by
disseminating materially false and misleading information. Generally,
plaintiffs allege that the Company failed to disclose adverse business
trends, increasing competition and difficulties associated with the
development of new products.

In the federal action, Sussman v. AML Communications, Inc., et al.,
U.S.D.C. Case No. 98-2010 CAS (Ex) (C.D. Cal.), four lead plaintiffs and
co-lead counsel were appointed on June 29, 1998 pursuant to The Private
Securities Litigation Reform Act of 1995. On September 3, 1998,
plaintiffs filed an amended complaint. The Company responded to the
amended complaint by filing a motion to dismiss the case. A hearing on
the motion to dismiss was held on February 8, 1999. The court took the
motion under submission. On August 2, 1999, in light of the Ninth
Circuit's decision in In re Silicon Graphics Sec. Litig., 183 F.3d 970
(9th Cir. 1999), the court ordered plaintiffs to show cause why their
amended complaint should not be dismissed. On September 3, 1999, in
response to plaintiffs' motion for a stay of any determination of the
motion to dismiss until after a petition for rehearing in Silicon
Graphics was decided, the court stayed the action against the Company
for 90 days. On October 27, 1999, the Ninth Circuit denied the petition
for rehearing in Silicon Graphics. All discovery is stayed unless and
until it is determined that plaintiffs have stated an actionable claim.

With respect to the state action, all proceedings have been stayed until
the stay of discovery is lifted in the federal action.

In November, 1999, the parties reached a settlement in principle which
is intended to resolve fully both the federal and state actions. Counsel
for the parties currently are in the process of preparing settlement
documents, which shall be submitted to the federal court for preliminary
approval of the settlement.

CHOLESTECH CORP: Plans Vigorous Defense of Securities Lawsuit in CA
On February 5, 1999, a complaint entitled Ree v. Pinckert, et al., No.
C99-0562 (MMC) was filed in the United States District Court for the
Northern District of California. The Action is a putative class action
and the complaint alleges that Cholestech and an officer, Mr. Pinckert,
violated the federal securities laws by misleading investors during the
time period of July 30, 1997 - June 26, 1998, concerning the Company's
business and its future prospects.

On June 24, 1999, plaintiffs filed an amended complaint, which expanded
the putative class period to June 28, 1996, through June 26, 1998. The
amended complaint's substantive allegations and purported causes of
action remain based on allegations that the Company misled shareholders
concerning the Company's business and its future prospects. The
complaint does not specify alleged damages.

The Company intends to defend the case vigorously. The action is in its
preliminary stages and a trial date has not been set.

DUNHILL STAFFING: Long Island Franchisee Sues over Direct Competition
Claiming a serious breach of its franchise agreement by directly
competing for business, Dunhill Staffing Systems of Massapequa, Long
Island, has filed a lawsuit against its Hauppauge, New York based
corporate franchisor Dunhill Staffing Systems, Inc. that could
result in millions of dollars in damages. The franchisor company is
owned by Florida based Watsco, Inc.

According to Dunhill of Long Island President Philip N. Missirlian,
who has successfully operated a Dunhill franchise since 1987, the
franchise agreement specifically precludes Dunhill corporate
franchisor from competing with his temporary services business
anywhere from Long Island. Missirlian believes there is strong
evidence that Dunhill corporate has been violating the non-compete
agreement for more than two years.

"Over the past 12 years I've built my business from scratch into the
top producer of Dunhill with more than 2,000 employees. Now Dunhill
corporate is trying to take my business away from me out of sheer
jealousy and greed," Missirlian said. "I realize it's a David versus
Goliath situation, but I will do everything legally possible to win
this battle and protect what I have built."

According to Missirlian, things were going great between him and
Dunhill corporate until he rejected an offer in 1995 to sell his
franchise back.

"When I refused to sell, another franchisee warned me to watch my
back, but I never expected the turnaround in attitude and actions
would be so severe."

Through research, Missirlian indicated he has discovered a pattern
where Dunhill corporate has used similar competition tactics against
other successful franchisees. He added that discussions are taking
place among other franchisees concerning a possible class action
lawsuit against the franchisor. Missirlian alluded to one case where
Dunhill corporate launched a new operation to compete with a 20-year
franchisee owner who had fallen ill.

It is known that the publicly traded Watsco has considered selling
or spinning off Dunhill Staffing Systems, Inc. in a separate stock
offering, which would likely precipitate a desire to boost revenue.
According to Missirlian, one way to accomplish that would be to
capture high revenue producing franchises and bring them back under
the corporate umbrella or to take away business through direct

Since Watsco's purchase of Dunhill corporate in May 1988, the
selling of franchises has ceased and the number of active franchises
has decreased from 332 to 72.

"Owning a franchise is touted as being part of the American Dream
and Dunhill corporate has been one of the most aggressive in
soliciting this type of ownership," Missirlian said. It's a sad
state of affairs when a franchisee has to worry that its own
franchisor may destroy it. What I want to know is why, on one hand,
are they strongly seeking new investors, while on the other, they
are trying to pull the rug out from under those that succeed by
trying to force them to sell or trying to force them out of business
by directly violating an agreement not to compete? Our franchise
laws were made to protect small businessmen like me and I won't let
them get away with it," Missirlian concluded.

ELITE INFORMATION: Aust Solution 6 Extends Bid for FTC to Review Merger
Accountancy software group Solution 6 advised it had extended its bid
for US-based technology firm Elite Information Group Inc for a second
time to give the US Federal trade Commission more time to review the
merger, a report on AAP Newsfeed says.

The $ 11.00 per share cash offer, which is being put forward by the
group's subsidiary - EIG Acquisition Corp - will now expire at 5.00 pm
New York City Time on Thursday, March 2, 2000, the company said.

The company, which last month extended the offer to February 10 2000,
said it has been extended again to allow the US Federal trade Commission
(FTC) more time to complete its review of the proposed merger.

The FTC review followed a move by United States legal firm Milberg
Bershad Hynes and Lerach LLP to file a class action bid in a San Diego
court in January this year. The law firm said that Elite directors, by
entering into an agreement with Solution 6 were violating their
fidiciary duties to Elite shareholders. The FTC then requested to review
additional information and documents relating to the takeover offer.

Solution 6 said that the expiration date would be extended further if
necessary to provide the FTC time to complete the review. (AAP Newsfeed,
February 11, 2000)

HOLOCAUST VICTIMS: EU Is Asked to Help in NY Suit over Land in Poland
Holocaust survivors and European Parliament members called on Poland to
settle a compensation suit of property seized by the Nazis during World
War II, then taken over by the Communist government. ''Polish
governments have come and gone, but nothing has happened,'' said Peter
Koppenheim, a 69-year-old survivor of the Holocaust and a plaintiff in a
lawsuit seeking compensation and the return of property that once
belonged to Polish Jews.

A $ 7 billion class action lawsuit, filed in June in New York, accuses
the Polish government and treasury of illegally seizing and sometimes
selling Jewish properties after the war. The suit, launched on behalf of
11 plaintiffs and about 300,000 claimants worldwide, says Polish
archives contain proof that Holocaust survivors are the rightful owners
of thousands of parcels of land in Warsaw, Krakow and other parts of the
country. Polish Jews numbered 3.5 million in 1939 and 500,000 when the
war ended.

Holocaust survivors and their heirs met with European Parliament
representatives to discuss their case and to ask for help in pressuring
the Polish government to act quickly. ''Property rights are an issue of
human rights, we must ensure that wrongs are righted,'' said Gary
Titley, a British Labor member of the European Parliament.

Titley said the Polish government knows it must resolve the issue before
an agreement to let Poland join the 15-member European Union can be
ratified. He said the European Parliament along with other EU
institutions would continue to put pressure on Poland.

Mel Urbach, a lawyer representing the survivors in the lawsuit, said the
average age of the claimants is 83. ''Their lives are in a twilight, a
year is a lifetime,'' he said, stressing the need for a quick resolution
of the case.

Koppenheim is originally from Breslau, then in Germany now the Polish
city of Wroclaw. He was forced to flee with his family to Britain when
the Nazis came. His grandfather died in the Jewish ghettos there. After
the war, Breslau became part of Poland and all property belonging to his
family was confiscated by the Communist government. Successive Polish
governments since the fall of Communism have failed to pass legislation
to compensate those whose property was taken.

The Polish parliament is debating a draft ''re-privatization'' bill that
would restrict compensation claims to Polish citizens who have been
resident in the country for the past five years. Poland's government
says it would scrap the residency qualification, which was added to its
bill by a parliamentary committee.

Koppenheim called the Polish position unacceptable. Every other Eastern
European nation under Soviet rule ''has paid up or is doing so,'' he
said. (AP Worldstream, February 9, 2000)

KENETECH CORP: Intends Vigorous Defense of Securities Suits in DE
On February 2, 2000, plaintiffs Robert L. Kohls and Louise A. Kohls
filed two actions in the Court of Chancery of the State of Delaware In
and For New Castle County, against defendants KENETECH Corporation (the
"Registrant"), Angus M. Duthie, Mark D. Lerdal, Gerald R. Alderson and
Charles Christenson.

Plaintiffs allege that they were beneficial owners of Preferred
Redeemable Increased Dividend Equity Securities, 8-1/4% PRIDES,
Convertible Preferred Stock, par value $0.01 per share (the "PRIDES") of
the Registrant, that mandatorily converted, on May 14, 1998, into common
stock, par value $0.0001 per share ("Common Stock"), of the Company.

The first action is purportedly brought as a class action on behalf of
the named plaintiffs and all other persons who owned the PRIDES as of
May 13, 1998, and plaintiffs allege, among other things, that defendants
breached the terms of the Registrant's Certificate of Designations,
Preferences, Rights and Limitations under which the PRIDES were issued
and breached their fiduciary duty to protect the interests of the
holders of the PRIDES prior to the PRIDES mandatory conversion.
Plaintiffs are seeking, among other things, certification of the action
as a class action and a declaration that the holders of PRIDES are
entitled to be paid a liquidation preference of up to $1,012.50 per
share of PRIDES or, in the alternative, a judgment in the amount that
would have otherwise been attributed to the PRIDES up to $1,012.50 per

The second action is purportedly brought as a derivative action on
behalf of the Company and plaintiffs generally allege that the purchase
of the Company's Common Stock by defendant Mark D. Lerdal in December
1997 was a corporate opportunity and that such Common Stock should have
been instead purchased by the Company. Plaintiffs are seeking, among
other things, a declaration that the purchase of the Common Stock by
defendant Lerdal constituted the taking of a corporate opportunity and
is null and void and an order requiring Defendant Lerdal to transfer the
Common Stock to the Company for the consideration he paid or, to the
extent the Common Stock may not be transferred to the Company, damages
for the fair value of the Common Stock.

The Company intends to vigorously defend each of these actions.

MASTEC INC: Resolves Shareholder Lawsuits Filed in DE in 1990
In its report to the Securities and Exchange Commission, the Company
states that it entered into a stipulation of settlement in the fourth
quarter of 1999 regarding two shareholder class action and derivative
lawsuits first filed in 1990. The two Delaware state court lawsuits
alleged, among other things, that various former fiduciaries of ours
breached their duties in approving certain transactions including the
acquisition of control of MasTec in 1994, and that these former
fiduciaries engaged in mismanagement, waste and breach of fiduciary
duties in managing our affairs prior to the acquisition of control. The
settlement, which must be approved by the court, calls for the payment
of certain amounts by another defendant, a dismissal of the actions with
prejudice and full release of all parties. The Company is not required
to make any payments or to contribute to any amounts paid by other

NETOPTIX CORP: Files Motion to Dismiss Shareholders' Complaint
In November of 1998 four separate class action complaints were filed by
shareholders of NetOptix against NetOptix. In June of 1999 such
complaints were consolidated into one action (Civil Action No.
98-12129-RCL). NetOptix has filed a Motion to Dismiss which has not been

The plaintiffs allege that NetOptix, and two of its former officers,
violated the federal securities laws by knowingly making false or
misleading statements concerning the company's financial condition. The
plaintiffs' claim that the disappointing financial results for the third
quarter of 1998, made public on July 23, 1998, resulted from business
difficulties which should have been disclosed, or otherwise acted upon,
sooner. [NOTE: Documents not provided to Purchaser.]

NOVELL INC: Intends to Vigorously Defend Federal Securities Lawsuit
In February 1998, a suit was filed against Novell and certain of its
officers and directors, alleging violation of federal securities laws.
The lawsuit was brought as a purported class action on behalf of
purchasers of Novell common stock from November 1, 1996, through April
22, 1997. The case is in its preliminary stages. Novell believes that
the case is without merit and intends to defend vigorously against the

PAYDAY LENDER: Edelman, Combs Sues Indiana Lender Koach's Kash Station
The Chicago law firm of Edelman, Combs & Latturner and Indiana attorney
Lemuel Stigler have filed a class action lawsuit against another Indiana
"payday lender," Koach's Kash Station.

The complaints in this and the prior cases allege violation of the Truth
in Lending Act and Indiana law in connection with "payday loans." The
Koach's Kash Station case was filed in the federal district court in
South Bend. Roberts v. Koach's Kash Station 3:OOCV77 (N.D.Ind.).

One of the Indiana laws alleged to have been violated is the Indiana
Uniform Consumer Credit Code. The Code (i) prohibits lenders from
charging interest of more than 36% per annum interest, (ii) allows a
flat fee not exceeding $33, and (iii) prohibits lenders from using
multiple agreements to obtain more finance charges than would otherwise
be permitted. Plaintiffs allege that by imposing a finance charge that
purports to be justified by the $33 exception to the general 36%
limitation on a series of two-week loans -- producing finance charges in
the hundreds of dollars and an effective annual percentage rate in
triple digits -- the lenders violated the rate restrictions in the
Indiana Uniform Consumer Credit Code.

A survey conducted by the Indiana Department of Financial Institutions
disclosed that the average payday loan borrower "rolls over" her loan
about 10 times, so that the loan actually remains outstanding for 5-6
months (5,350 borrowers obtained 54,508 loans and rollovers, with the
average loan/rollover lasting 13.67 days). The average annual percentage
rate was 498.73%, or more than 10 times the 36% maximum. The average
finance charge was $27.29 for each loan or rollover, showing that the
lenders tried to use the $33 exception on each loan/rollover. One
borrower "rolled over" her loan 66 times, or for about three years. A
survey conducted by the Illinois Department of Financial Institutions
produced similar results. "Payday lenders" are thus well aware of the
fact that borrowers generally cannot pay their loans off in two weeks.

The complaints also allege violation of another Indiana statute that
makes it unlawful to charge more than 72% interest in any case. Ind.
Code section This statute was the subject of the Attorney General's
recent opinion.

Finally, each lawsuit alleges failure to comply with the disclosure
requirements of the federal Truth in Lending Act and the Indiana Uniform
Consumer Credit Code.

Similar lawsuits are pending against Ace Cash Express, E-Z Payday Loans,
Advance America, Hoosier Check Cashing of Ohio, Ltd., Check 'n Go of
Indiana, Inc., Fast Cash USA, Check Into Cash, All Checks Cashed, and
GRT, Inc. (A-1 Payday Loans and Castleton Cash Advance) in the federal
courts in Indianapolis, South Bend and Hammond. Rowings v. Ace Cash
Express, Inc., IP 99-1887-C-B/S (S.D.Ind.); Livingston v. Fast Cash USA,
Inc., IP99-1226-C-B/S (S.D.Ind.); Rowings v. DSA, Inc., d/b/a E-Z Payday
Loans, IP 00-0060-C-B/S (S.D.Ind.); Wallace v. Advance America,
2:OOCV123JM (N.D.Ind.); Wilson v. Check Into Cash of Indiana, LLC,
IPOO-0166C-H/G (S.D.Ind.); Smith v. All Checks Cashed, Inc.,
IPOO-0165-C-T/G (S.D.Ind.); Hudson v. GRT, Inc. IPOO-0163-C-M/S
(S.D.Ind.); Bonds v. Hoosier Check Cashing of Ohio, Ltd., 3:OOCV70
(N.D.Ind.); Niblack v. Check 'n Go of Indiana, Inc., 3:OOCV72

Contact: Daniel A. Edelman of Edelman, Combs & Latturner, 312-739-4200,
800-644-4673, or fax, 312-419-0379

ST JOHN KNITS: Contests CA Suits Alleging Fiduciary Breach Re Merger
St John Knits International Inc. says in its report to the Securities
and Exchange Commission that the Company is a party to six lawsuits that
allege claims against some of its current and former directors for
breach of fiduciary duty alleged to have arisen in connection with the
mergers consummated in July 1999. All of these lawsuits were filed in
the Superior Court of the State of California for the County of Orange.
The principal relief sought in the six actions is certification of the
putative class and a rescission of the mergers and damages and
attorneys' fees in an unspecified amount. These six lawsuits were
consolidated into one action on February 24, 1999, and the court has set
a March 6, 2000 trial date.

On September 9, 1999, three of the plaintiffs filed another lawsuit in
the Superior Court of the State of California, County of Orange, naming
SJKI, Pearl Acquisition Corp., Vestar/Gray Investors LLC, SJK
Acquisition, Inc., Vestar Capital Partners III, L.P., Vestar Capital
Partners and Merrill Lynch, Pierce, Fenner & Smith, Inc. The plaintiffs
claim that each of the defendants aided and abetted the breach of
fiduciary duties alleged in their earlier actions against St. John, Bob
Gray and Kelly Gray. Since the claims in this litigation are based
exclusively on secondary liability and are completely contingent upon
the success of the claims in the earlier action, on November 16, 1999,
at the request of several defendants, the court stayed all proceedings
in this litigation pending the outcome of the earlier action.

The Company says it intends to contest these lawsuits vigorously if the
plaintiffs elect to proceed with their actions.

ST JOHN KNITS: Reaches Agreement to Settle Securities Fraud Suit in CA
On January 23, 2000 St John Knits International Inc. reached an
agreement in principle to settle a case filed in 1998 by Binary Traders,
Inc. for $5 million, an amount the company's insurance carrier has
agreed to pay. On October 13, 1998, Binary Traders, Inc. had filed a
complaint on behalf of purchasers of publicly traded securities of St.
John during the period of February 25, 1998 to August 20, 1998 (the
"Class Period") against St. John, Bob Gray, and Kelly Gray in the United
States District Court, Central District of California, Southern Division
(Binary Traders, Inc. v. St. John Knits, Inc. et al.).

The complaint, which sought class action certification, alleged that the
defendants violated federal securities laws by allegedly making
fraudulent statements during the Class Period and sought an unspecified
amount of compensatory damages. The settlement is subject to court
approval, which is expected to occur in the spring.

SUNNYVALE'S CYLINK: Judge Appoints Innelli & Molder As Lead Counsel
For the second time since November, a U.S. district judge from
California has thrown a major curveball at firms seeking lead counsel
status in a class action.

Judge Vaughn Walker appointed Philadelphia's two-lawyer Innelli & Molder
to lead the case -- a relatively minor class action against Sunnyvale's
Cylink Corp. The firm, which had no prior interest in the suit, trumped
Los Angeles' Weiss & Yourman and New York's Abbey, Gardy & Squitieri in
the bidding for lead counsel status.

Walker's decision piggybacks on what many called a landmark ruling by
U.S. District Judge William Alsup in In re Network Associates, 99-1729,
where Alsup closely examined the qualifications of shareholders seeking
to be lead plaintiff.

Where judges once routinely awarded lead counsel status to plaintiffs
with the biggest losses, Alsup's November order held that judges now
have the discretion to hand out that crown -- and the financial rewards
that come with it as they see fit.

The duo from Philadelphia is now standing among the redwoods, going up
against Cylink's defense firm, Palo Alto's Wilson Sonsini Goodrich &
Rosati, and representing plaintiffs previously counseled by a who's who
of firms specializing in securities litigation. "I'm under no illusions
that I'm up against just a couple of guys," said Wilson Sonsini partner
Boris Feldman. "It's not the Pep Boys."

While Walker noted that Innelli & Molder's bid would deliver a 12-14
percent higher recovery to the plaintiffs, he added that price should
not be the only factor.

While Weiss & Yourman emphasized its experience and familiarity with
defense counsel and the court (Abbey, Gardy had dropped out of the
bidding), Innelli countered its smaller size means more focused
representation, reduced overhead and, Walker added, an "incentive to

"This case represents an opportunity for Innelli & Molder to establish a
reputation in a new and important market," Walker continued.

After noting the bids were not far apart, Walker concluded that "had
Weiss & Yourman offered a significant qualitative advantage, that could
have overcome a price disadvantage of the magnitude present here. But
Innelli appears to offer both a qualitative advantage and a price
advantage, making its selection the appropriate choice." (The Recorder,
February 9, 2000)

TOBACCO LITIGATION: CA Consumers Sue for Damages from Price Fixing
Fred Furth, senior partner in the San Francisco law firm of Furth,
Fahrner & Mason, and Walter Umphrey, senior partner in the Texas law
firm of Provost Umphrey, announced on February 10 a class action lawsuit
brought on behalf of millions of California indirect purchasers of
cigarettes against the major tobacco companies, including R.J. Reynolds
Tobacco Company, Brown & Williamson Tobacco Corporation, B.A.T.
Industries P.L.C., British American Tobacco Company, Ltd., Liggett
Group, Inc., Brooke Group, Ltd.; Philip Morris, Companies, Inc.,
Lorillard Tobacco Co., And Loews Corporation.

This suit, filed in San Francisco, alleges that defendants unlawfully
conspired and agreed to fix, raise, stabilize, and maintain the prices
of cigarettes sold to California consumers in violation of California's
Cartwright Act and Unfair Competition Act. It seeks to recover treble
damages and obtain equitable relief and is believed to be the first
state antitrust action brought against the tobacco companies for alleged

Contact: Furth, Fahrner & Mason Fred Furth, 415/433-2070 ffm@furth.com

TOBACCO LITIGATION: MI Smokers Sue for Damages from Price Fixing
A group of smokers filed a class-action lawsuit in Wayne Circuit Court
on February 8, accusing the tobacco industry of decades of price fixing.
The smokers -- from Oakland, Macomb, Wayne and St. Clair counties --
accused Philip Morris Cos.; R.J. Reynolds Tobacco Holdings Inc.; Brown &
Williamson Tobacco Corp., a unit of British American Tobacco Co. Ltd.;
Lorillard Tobacco Co., a unit of Loews Corp., and Liggett Group, a unit
of Brooke Group Ltd. The action seeks up to $ 74,000 in damages with
interest for every smoker in Michigan, along with attorneys' fees. The
figure was chosen to keep the case in a state court.

The cigarette companies "have participated in a long-running and
systematic series of agreements to fix, raise, stabilize and maintain
cigarette prices about competitive levels in violation of Michigan law,"
the lawsuit claims. "It's bad enough the tobacco makers used illegal and
deceptive marketing practices, but now we learn they were fixing prices,
too," said Troy attorney Gerard Mantese, who filed the suit on behalf of
the smokers.

The suit is similar to one filed in federal court in Washington on
February 8 on behalf of two wholesalers. In the federal suit, Buffalo
Tobacco Products of Buffalo, N.Y., and F&F Tobacco Products of Bryan,
Texas, sought triple damages for price fixing.

Both suits claim the major tobacco companies that control 99 percent of
the market fixed prices during meetings of company lawyers who
"frequently discussed and reached agreements regarding future price
increases for cigarettes."

The MI suit argued there was almost no cigarette price competition from
the 1950s until 1980, when Liggett introduced low-price "generic
discount" cigarettes.

Other companies introduced generic brands, and after a 1993 price war, a
price increase announced by Philip Morris signaled to the other
companies "that they would resume their illegal agreement not to compete
in the U.S. cigarette market on the basis of price," the lawsuit said.

The Washington law firm that filed the federal suit, Cohen, Milstein,
Hausfeld and Toll, is working with 25 firms across the country and more
suits are expected to be filed.

The tobacco industry called the suits unfounded. "These lawyers are
scurrying around in a pathetic and desperate attempt in an effort to
find first, the money, and, second, the clients," Phillip Morris
spokeswoman Laurie Guzzinati said.

The MI suit has been assigned to Judge Isidore B. Torres. No court date
has been set. (The Detroit News, February 9, 2000)

TOBACCO LITIGATION: Philip Morris Loses appeal of 1998 Gag Order in FL
Philip Morris Cos unsuccessfully appealed a gag order imposed in 1998 by
Dade County, Florida Circuit Judge Robert Kaye in a class action
smoking-related injuries case, in a bid to to be able to reassure Wall
Street investors and protect the company's stock price, the Wall Street
Journal reported, citing Judge Kaye.

Judge Kaye told the company in early February, "I'm not convinced of
your argument now for immediate action for lifting the gag order at this
point," according to the report.

Under Judge Kaye's order, both sides are barred from making public
statements about the case while it remains pending.

According to the story, the case should go to the jury in the next
several weeks, and could lead to a major financial award for up to
500,000 class action members, a development likely to pressure the stock
price. (AFX European Focus, February 11, 2000)

TOBACCO LITIGATION: Women Claim Fraud in Marketing Of Light Cigarettes
Four Madison County women have joined what has become a trend over the
past 14 months: class-action suits claiming that tobacco companies'
marketing of "light" cigarettes as having less tar and nicotine was
fraudulent and deceptive.

"This is in the nature of a fraud on the consumer by virtue of being
told the cigarette does one thing and it actually does another," said
attorney Stephen Tillery of Belleville. "Many people buy them because
they believe they're less harmful to them, when in fact the studies they
did show the opposite."

The women filed suit on February 10 in Madison County Circuit Court
against Philip Morris Inc. and R.J. Reynolds Tobacco Co., claiming the
companies deceived them that Marlboro Lights, Doral Lights and Cambridge
Lights were less dangerous than regular brands.

Because of the nature of class-action suits, each woman is seeking under
$ 75,000. According to the suits, the woman bought and smoked their
brands for anywhere from 10 to 20 years.

The suit is separate from Illinois' part of a 46-state settlement with
the tobacco industry in November 1998. The $ 9.1 billion Illinois is to
receive over 25 years is to cover smoking-related health care costs. The
Madison County suits do not try to claim health-related costs.

Since March 1998, lawsuits over light cigarettes have been filed in
Pennsylvania, Florida, Tennessee, Texas, Arizona and Ohio.

Lawyers for Philip Morris and R.J. Reynolds have said those suits are
without factual merit and that most courts will not try fraud cases as
class actions. (St. Louis Post-Dispatch, February 11, 2000)

U S WEST: Agency Orders Refund Re Service Quality; Won't Sue for Fines
A report on the Communications Daily says that Colo.PUC decided not to
ask state courts to fine U S West for service quality failures. Agency
last month ordered USW to refund $12.8 million to customers affected by
late installations and repairs, action company was considering

State law would allow PUC to ask courts for fine of more than $160
million; PUC has no legal authority to fine utilities and must file
lawsuit, and it generally doesn't sue for utility fines.

USW also faces private class-action lawsuit in Colo. scheduled to go to
trial early in 2001. (Communications Daily, February 11, 2000)

VALENCE TECHNOLOGY: Announces Settlement Reached for Securities Lawsuit
Valence Technology Inc. (Nasdaq: VLNC) announced on February 10 that a
settlement has been reached in the securities class-action lawsuit that
had been pending against the company and certain of its present and
former officers and directors. Under the settlement, which is subject to
court approval and certain other ordinary contingencies, the claims
against the company and all other defendants will be dismissed without
presumption or admission of any liability or wrongdoing.

The full amount of the cash settlement and associated legal costs to
date has been either previously expensed, reserved for or fully covered
by the company's insurance carriers. Under the terms of the settlement
Valence will pay $1.3 million in cash and 950,000 shares of common stock
to the class fund. The company will take a charge for the impact of the
stock portion of this settlement during the fourth quarter ending March
26, 2000.

VALUE AMERICA: Schiffrin & Barroway Files Securities Lawsuit in VA
The law firm of Schiffrin & Barroway, LLP filed a class action
lawsuit in the United States District Court for the Western District
of Virginia on behalf of individuals and institutional investors
that purchased the common stock of Value America, Inc. in the
April 7, 1999 IPO, or between April 7, 1999 and December 28, 1999,

The complaint charges Value America and certain of its officers and
directors with issuing false and misleading statements concerning
the Company's true operating condition and financial performance.

For more details on the above-mentioned lawsuit, please contact
Stuart L. Berman, Esq. of Schiffrin & Barroway, LLP, toll free at 1-
888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com
or visit website at http://www.sbclasslaw.com

VALUE AMERICA: Wolf Haldenstein Files Securities Lawsuit in VA
Wolf Haldenstein Adler Freeman & Herz LLP filed a securities class
action lawsuit in the United States District Court for the Western
District of Virginia on behalf of investors who bought Value America,
Inc. stock in the April 7, 1999 Initial Public Offering or between April
7, 1999 and December 28, 1999.

The lawsuit charges Value America and certain officers of the Company,
with violations of the securities laws and regulations of the United
States. The lawsuit alleges that defendants issued a series of false and
misleading statements during the Class Period concerning the Company's
revenues, business model and general operating condition. The complaint
alleges that defendants' false and misleading statements artificially
inflated the price of the Company's stock during the Class Period. The
complaint further alleges that certain individual defendants took
advantage of their inside knowledge of the stock's inflated price to
sell significant amounts of their personal holdings and reaped large
profits on the proceeds.

For more information concerning this lawsuit, please contact Wolf
Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York,
New York 10016, by telephone at 800-575-0735 (Michael Miske, George
Peters, Gregory Nespole, Esq., Fred Taylor Isquith, Esq. or Shane T.
Rowley, Esq.), via e-mail at classmember@whafh.com or visit website at

* Bush Proposes Reforms: Curb Frivolous Suits; Large Ones in Fd Courts
George W. Bush rolled out on February 9 a package of proposed legal
reforms he said would discourage frivolous lawsuits and make it harder
for lawyers bringing suit to shop around for the most sympathetic
courts. Campaigning in Newberry, Bush said the ''tort reform'' proposals
were similar to legislation he signed into law in Texas in 1995. They
tied into Bush's theme in recent days that he is a political reformer
who has achieved results during two terms as governor. He contrasts that
with Sen. John McCain of Arizona, who Bush says talks about government
reform without achieving it in Congress.

McCain said he would soon unveil his proposal for a ''Veterans' Bill of
Rights,'' including geriatric care and other improved benefits. This
battleground state includes a large military population that both
candidates are courting in what has become a two-man race, with polls
showing McCain gaining on the front-runner.

McCain told a military-laden crowd in North Charleston that theirs is
''arguably the most patriotic state'' and said he wanted ''to give them
a commander in chief they can respect.''

Bush rolled out his legal plan during a meeting with business leaders at
Newberry College. He said the changes would help protect entrepreneurs
from costly and frivolous legal action. ''I want America to hear that a
tort reform can positively effect people's lives,'' Bush said. ''I
understand that small business and entrepreneurship is the backbone of
our economy.''

Bush called for ''three strikes'' legislation that would bar a lawyer
found to have filed three frivolous lawsuits from federal court for
three years. He said an attorney who rejected a pretrial settlement and
ultimately lost the case, or received a much smaller settlement, should
pay his opponents' legal fees as punishment for continuing the case.

And he called for changes to steer large class-action lawsuits to
federal court, instead of allowing ''forum shopping'' in several state
courts. Bush said he also would allow clients to challenge the
reasonableness of their attorneys' fees in federal court, and ban
federal agencies from paying lawyers with contingency fees.

The shift back to issues came after escalating character accusations
threatened to eclipse all other issues in the Republican fight for South

McCain said he hoped policy debates would replace the exchanges on
trustworthiness. ''Whatever happened to education, Social Security and
Medicare?'' he asked on his campaign bus bound for North Charleston.

Bush rejected McCain's call for a cease-fire on negative ads as coming
too late. ''Each of us needs to stand by what we're putting on TV,''
Bush said on NBC's ''Today.''

A McCain ad accuses Bush of twisting the truth and compares him to
President Clinton. Bush aired a new commercial charging the senator
''solicits money from lobbyists with interests before his committee and
pressures agencies on behalf of contributors.''

The accusations flew as Bush got a much-needed lift over McCain's
insurgent candidacy with a 51-25 percent win in Delaware. McCain did not
campaign in Delaware, bypassing it to campaign in South Carolina and

The South Carolina primary is Feb. 19, and the candidates are
crisscrossing the state in search of votes.

The Texas governor said McCain was not the political maverick he
claimed, repeatedly referring to the senator as ''the chairman'' and
saying that as head of the Senate's Commerce Committee and as a
campaigner he ''tends to say one thing and do another.''

The latest example, Bush said, was McCain's statement a day earlier that
he had always opposed public funding of elections. The Bush campaign
offered a list of five McCain votes from 1990 to 1993 in favor of a bill
that proposed partial public funding of Senate campaigns. ''Senator
McCain voted not once, not twice, but five times to support publicly
funded congressional campaigns,'' Bush told reporters after speaking to
a cheering student crowd at North Greenville College.

McCain said he couldn't recall whether he had ever voted for public
funding of federal campaigns, but that he was philosophically opposed to
the idea ''because of my view that my tax dollars should not be used to
subsidize the campaigns of another candidate.''

His spokesman, Howard Opinsky, said: ''This is the same old Washington
Clintonian politics that voters have become so cynical about, trying to
twist John McCain's 17-year record of reform and consistent opposition
to public financing to Governor Bush's advantage.''

Opinsky said all of the votes were against cloture motions, that is,
voting to continue debate to keep opponents from stifling campaign
finance reform. (AP Online, February 9, 2000)


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.   Romeo John D. Piansay, Jr., editor, Theresa Cheuk,
Managing Editor.

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

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