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/raid1/www/Hosts/bankrupt/CAR_Public/000330.MBX C L A S S A C T I O N R E P O R T E R Thursday, March 30, 2000, Vol. 2, No. 63 Headlines AETNA INC: Law Firms Announce Pendency of Securities Litigation in PA ARGONAUT GROUP: Faces 15 Lawsuits over Worker's Compensation Insurance ASBESTOS LITIGATION: Loews Reports on Agreement Re Continental Casualty AVT CORPORATION: Milberg Weiss Files Securities Suit in Washington CITIZENS UTILITIES: Appeals against Penalties in VPSB Probation Order CITIZENS UTILITIES: Argument for CT Securities Suit Set for April CITIZENS UTILITIES: Settles Securities Suit in Connecticut CITIZENS UTILITIES: Will Defend Vigorously LA Lawsuits over Rates COCA-COLA: Jesse Jackson to Meet Workers, May Back 'Justice' Ride COREL CORPORATION: Wolf Haldenstein Files Securities Lawsuit in PA FARMERS INSURANCE: Damages Awarded to Ex-Adjuster Fired for Speaking up FEN-PHEN: Deadline Approaches for Users to Decide on AHP Settlement IMPERIAL CREDIT: Stanbury Fishelman Files Securities Suit in California LOS ANGELES SHERIFF'S: Workplace Harrassement at Dept. Decried MICROSOFT CORP: Verdict Put off Until April 7 for Settlement Talks ORCHARD OWNERS: Mexicans in WA Allege Conspiracy with Employment Agency POSSUM VALLEY: AL Residents to Fight Poor Condition of Cemetery PUBLIC WELFARE: PA ADA Suit Settled with Placement for Mental Patients REVLON, INC: Filing of Consolidated Securities Complaint Imminent TECH COMPANIES: More Firms Falsify under Pressure to Boost Stocks TOBACCO LITIGATION: Smokers' Lawyer Criticizes on Lack of Research TRANSCRYPT INTERNATIONAL: Settlement with Shareholders Finalized VISX, INC: Dreier Baritz Files Securities Suit in California VITAMIN PRICE-FIXING: Judge OKs $242M Settlement over Feeds & Foods WIN MANAGEMENT: Brake Shop Chain Sued over Fraud Probe and Pricing ********* AETNA INC: Law Firms Announce Pendency of Securities Litigation in PA --------------------------------------------------------------------- The following was released on March 29 by Savett Frutkin Podell & Ryan, P.C., Milberg Weiss Bershad Hynes & Lerach, LLP, and Law Office Bernard M. Gross, P.C. : UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA In re: AETNA INC. SECURITIES LITIGATION Civil Action MDL Docket No. 1219 (All Cases) SUMMARY NOTICE OF PENDENCY OF CLASS ACTION TO: ALL PURCHASERS OF COMMON STOCK OF AETNA INC. ON THE OPEN MARKET DURING THE PERIOD MARCH 6, 1997 THROUGH AND INCLUDING 7:00 A.M. SEPTEMBER 29, 1997. This Summary Notice is to advise you of the pendency of this litigation, which has been certified as a class action and may affect certain rights you have with respect to your purchase of Aetna ("Aetna") common stock. The plaintiffs are seeking damages on behalf of the Class alleging that, throughout the Class Period, defendants made a series of public misrepresentations and omissions about Aetna operations, financial condition and business prospects, misled investors about successfully integrating operations with the operations of U.S. Healthcare following their merger and issued false and misleading financial statements for the first and second quarters of 1997, artificially inflating the market price of Aetna's common stock throughout the Class Period, causing damage to the Lead Plaintiffs and the Class, in violation of the Securities Exchange Act of 1934. Defendant Compton has also been sued based upon his sale of over 90,000 Aetna shares on May 8, 1997, obtaining insider selling proceeds of more than $8.5 million while in the possession of material non-public information concerning Aetna. Defendants Aetna Inc., Ronald E. Compton and Richard L. Huber have filed answers to the Complaint, denying all allegations of the Complaint asserting they are liable to plaintiffs, and asserting affirmative defenses. If you have not received a copy of the Notice of Pendency of Class Action setting forth in greater detail the nature of the litigation and your rights pertaining thereto as a Class Member, you may obtain one by writing to: In re: Aetna Inc. Securities Litigation, P.O. Box 1387, Blue Bell, PA 19422. PLEASE DO NOT CALL OR WRITE THE COURT OR THE CLERK'S OFFICE. Dated: March 29, 2000 Clerk of the Court United States District Court Eastern District of Pennsylvania Contact: Aetna Inc. Securities Litigation, Blue Bell Notice Administrator, 800/222-2760 ARGONAUT GROUP: Faces 15 Lawsuits over Worker's Compensation Insurance ---------------------------------------------------------------------- The Company has been sued in fifteen referenced lawsuits brought on behalf of alleged classes of purchasers of retrospectively rated worker's compensation insurance, alleging that the defendants, including other compensation insurers, charged the purported class unlawful premiums. The lawsuits are Bristol Hotel Asset Company, et al.; v. The Aetna Casualty and Surety Company, et al.; Civil Action No. 97-92-I, pending in the Chancery Court for Davidson County, Tennessee, filed on January 8, 1997; El Chico Restaurants, Inc. v. The Aetna Casualty and Surety Company, et al.; Civil Action File No. 97-RCCV-28, pending in the Superior Court of Richmond County, Georgia, filed on January 10, 1997; Bristol Hotel Management Corp., et al. v. Aetna Casualty & Surety Co. A/K/A Aetna Group, et al.; Civil Action No. CL 9700727A, pending in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida, filed on March 18, 1997; Bristol Hotel Management Corp., et al. v. Aetna Casualty & Surety Co. A/K/A Aetna Group, et al.; Civil Action No. 97-2240, pending in the United States District Court for the Southern District of Florida, Miami Division, filed on July 17, 1997; Foodarama Supermarkets, Inc. et al.; v. Aetna Casualty & Surety Co., et al.; Docket No. L-3556-97, pending in the Superior Court of New Jersey Law Division, Morris County, filed on November 17, 1997; CR/PL Management Co., et al. v. Allianz Insurance Company, et al.; Civil Action No. 98-01635; pending in the Circuit Court of Cook County, Illinois County Department, Chancery Division, filed February 6, 1998; American Freightways, Inc. et al.; v. The American Insurance Company, et al.; Case No.982-00338; pending in the Circuit Court of the City of St. Louis, State of Missouri, filed on February 17, 1998; Foodrama Supermarkets, Inc., et al. v. The American Insurance Company, et al.; Civil Action No. 001138; pending in the Court of Common Pleas, Philadelphia County, Civil Division, filed on April 8, 1998; Sandwich Chef of Texas, Inc., et al. v. Reliance National Indemnity Insurance Company, et al., Case No. 98-01631; In the District Court of Harris County, Texas, 295th Judicial District, was filed on May 6, 1998; AARP, et al. v. National Surety Corp., et al., No. 98-820589-CZ; Wayne County Circuit Court, State of Michigan, was filed on June 30, 1998; Alumax, Inc., et al. v. Allianz Insurance Company, et al., Case No. CV98032222; In the Circuit Court of Jefferson County, Alabama, was filed on May 21, 1998; Burnham Service Corp., et al. v. NCCI, Inc., et al., Case No. 9800321; Supreme Court of the State of New York, County of New York, was filed on June 30, 1998; FFE Transportation Services, Inc., et al. v. NCCI, et al., Case No. 98-RCCV-509; Superior Court of Richmond County, State of Georgia, was filed on June 11, 1998; Payless Cashways, Inc., et al. v. National Surety Corp., et al., Case No. 9812388; Fayette Circuit Court, Division 1, Commonwealth of Kentucky, was filed on June 30, 1998; and Albany International Corp., et al. v. American National Fire Insurance Co., et al., Case No. CV98-11695; Superior Court of the State of Arizona, County of Maricopa, was filed on June 26, 1998. The Company intends to vigorously defend these lawsuits. The insurance subsidiaries of the Company are parties to other various legal proceedings which the Company considers routine and incidental to their business and are not material to the Company's financial condition or results of operations. ASBESTOS LITIGATION: Loews Reports on Agreement Re Continental Casualty ----------------------------------------------------------------------- Loews Group reports to the SEC that an agreement between Continental Casualty Company, Pacific Indemnity and Fibreboard Corporation (the "Trilateral Agreement") has obtained final court approval and its implementation has substantially resolved Casualty's exposure with respect to asbestos claims involving Fibreboard. The Trilateral Agreement calls for payment by Casualty and Pacific Indemnity of an aggregate $2,000.0, of which Casualty's portion is approximately $1,460.0, to Fibreboard to resolve (i) all claims by Fibreboard and (ii) all filed but unsettled asbestos claims as of August 23, 1993, and all future asbestos claims against Fibreboard. Casualty has paid all amounts required under this obligation of the Trilateral Agreement. Casualty is also obligated to pay asbestos claims settled as of August 23, 1993. Through December 31, 1999, Casualty, Fibreboard and plaintiff attorneys had reached settlements with respect to approximately 133,000 claims, for an estimated settlement amount of approximately $1,630.0 plus any applicable interest. Approximately $1,720.0 (including interest of approximately $184.0) was paid by Casualty through December 31, 1999. Such payments have been partially recovered from Pacific Indemnity. Loews says that while there does exist the possibility of further adverse developments with respect to Fibreboard claims, management does not anticipate subsequent reserve adjustments, if any, to materially affect the equity of Loew. Management will continue to monitor the potential liabilities with respect to Fibreboard asbestos claims and will make adjustments to claim reserves if warranted. AVT CORPORATION: Milberg Weiss Files Securities Suit in Washington ------------------------------------------------------------------ Milberg Weiss (http://www.milberg.com/avt/)announced that a class action has been commenced in the United States District Court for the Western District of Washington on behalf of purchasers of AVT Corporation (NASDAQ:AVTC) publicly traded securities during the period between January 20, 2000 and March 17, 2000 (the "Class Period"). The complaint charges AVT and certain of its officers and directors with violations of the Securities Exchange Act of 1934 for making materially false and misleading statements concerning the Company's business, operations and foreseeable growth prospect. AVT classifies its businesses into two categories: Computer Telephony Products Group and the Fax Products Group. Specifically, the complaint alleges that despite the representations made by defendants, that the Company was well poised to capitalize on Y2K opportunities and that the Company's core business remained strong and was growing according to Company-sponsored expectations, by the beginning of the Class Period the Company was experiencing a severe slow-down in its core businesses caused, in part, by a reduction in information technologies spending by large- and medium-sized businesses. Insiders at the Company knew that these factors were limiting the Company's revenue and earnings growth in 2000, however, rather than disclosing these known adverse trends, defendants instead rushed to exercise options and sold over 1.4 million shares, or $30+ million worth, of their privately held AVT stock on unsuspecting investors in open-market sales. When defendants finally did disclose the true financial condition of the Company, on March 17, 2000, the last day of the Class Period, the price of the Company's stock declined as low as $9-1/2 per share, an approximate 60% decline from the prior day's trading high of $28 per share, on enormous volume of over 19.6 million shares. Contact: Milberg Weiss William Lerach, 800/449-4900 wsl@mwbhl.com CITIZENS UTILITIES: Appeals against Penalties in VPSB Probation Order --------------------------------------------------------------------- In November 1995, the Company's Vermont electric division was permitted an 8.5% rate increase. Subsequently, the Vermont Public Service Board (VPSB) called into question the level of rates awarded the Company in connection with its formal review of allegations made by the Department of Public Service (the DPS), the consumer advocate in Vermont and a former Citizens employee. The major issues in this proceeding involved classification of certain costs to property, plant and equipment accounts and the Company's Demand Side Management program. In addition, the DPS believed that the Company should have sought and received regulatory approvals prior to construction of certain facilities in prior years. On June 16, 1997, the VPSB ordered the Company to reduce its rates for Vermont electric service by 14.65% retroactive to November 1, 1995 and to refund to customers, with interest, all amounts collected since that time in excess of the rates authorized by the VPSB. In addition, the VPSB assessed statutory penalties totaling $60,000 and placed the Company on regulatory probation for a period of at least five years. During this probationary period, the Company could lose its franchise to operate in Vermont if it violates the terms of probation prescribed by the VPSB. The VPSB prescribed final terms of probation in its final order issued September 15, 1998. In October 1998, the Company filed an appeal in the Vermont Supreme Court challenging certain of the penalties imposed by the VPSB. The appeal has been fully briefed and argued and the Company is awaiting the Court's decision. CITIZENS UTILITIES: Argument for CT Securities Suit Set for April --------------------------------------------------------------------- In March 1998, a lawsuit was filed in the United States District Court for the District of Connecticut (Ganino vs. Citizens Utilities Company, et al.), against the Company and three of its officers, one of whom is also a director, on behalf of all purchasers of the Company's Common Stock between May 6, 1996 and August 7, 1997, inclusive. The complaint alleges that the Company and the individual defendants, during such period, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making materially false and misleading public statements concerning the Company's relationship with a purported affiliate, Hungarian Telephone and Cable Corp. (HTCC), and by failing to disclose material information necessary to render prior statements not misleading. The Company and the individual defendants believe that the allegations are unfounded and filed a motion to dismiss. The plaintiff requested leave to file an amended complaint and an amended complaint was served on the Company on July 24, 1998. The Company's motion to dismiss the amended complaint was filed on October 13, 1998 and the Court dismissed the action with prejudice on June 28, 1999. The Plaintiffs filed a notice of appeal with the Court of Appeals for the Second Circuit, briefing has been completed and oral argument has been scheduled for April 10, 2000. CITIZENS UTILITIES: Settles Securities Suit in Connecticut ---------------------------------------------------------- In August 1997, a lawsuit was filed in the United States District Court for the District of Connecticut (Leventhal vs. Tow, et al.) against the Company and five of its officers, one of whom is also a director, on behalf of all persons who purchased or otherwise acquired Series A and Series B shares of Common Stock of the Company between September 5, 1996 and July 11, 1997, inclusive. On February 9, 1998, the plaintiffs filed an amended complaint. The complaint alleged that Citizens and the individual defendants, during such period, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based upon certain public statements made by the Company, which are alleged to be materially false or misleading, or are alleged to have failed to disclose information necessary to make the statements made not false or misleading. The Company and the individual defendants believed the allegations are unfounded and filed a motion to dismiss on March 27, 1998 and on March 30, 1999 the Court dismissed the action. On April 29, 1999 the plaintiffs filed a notice of appeal with the Court of Appeals for the Second Circuit. The parties have entered into a settlement stipulation which is subject to the District Court's approval. CITIZENS UTILITIES: Will Defend Vigorously LA Lawsuits over Rates ----------------------------------------------------------------- In November 1998, a class action lawsuit was filed in state District Court for Jefferson Parish, Louisiana, against the Company and three of its subsidiaries: LGS Natural Gas Company, LGS Intrastate, Inc. and Louisiana General Service Company. The lawsuit alleges that the Company and the other named defendants passed through in rates charged to Louisiana customers certain costs that plaintiffs contend were unlawful. The lawsuit seeks compensatory damages in the amount of the alleged overcharges and punitive damages equal to three times the amount of any compensatory damages, as allowed under Louisiana law. In addition, the Louisiana Public Service Commission has opened an investigation into the allegations raised in the lawsuit. The Company and its subsidiaries believe that the allegations made in the lawsuit are unfounded and the Company will vigorously defend its interests in both the lawsuit and the related Commission investigation. COCA-COLA: Jesse Jackson to Meet Workers, May Back 'Justice' Ride ----------------------------------------------------------------- The Rev. Jesse Jackson is scheduled to meet in Atlanta on March 29 with former and current Coca-Cola employees who have been trying to pressure the company to settle a racial discrimination lawsuit quickly. The meeting between Jackson, president of the RainbowPush Coalition, and the group organizing a "ride for justice" to Coca-Cola's annual shareholders meeting next month is another signal that the case is gaining national attention. After the get-together, Jackson may announce his support for the protest ride, which will hold rallies in Greensboro, N.C., Richmond and Washington, before arriving at the annual meeting in Wilmington, Del., on April 19. Organizers say more than 50 people have already signed up for the three-bus convoy, which will transport about 150 former and current employees to the shareholders meeting. Jackson will hold talks with Larry Jones, a former Coca-Cola manager and chief organizer of the bus trip, as well as a small group of former and current employees, said Joe Beasley, regional director of RainbowPush. The 9 a.m. meeting will be held at RainbowPush's office at the Atlanta Life Insurance building on Auburn Avenue. Jackson will hold a news conference at 9: 30, Beasley said. The lawsuit and bus trip have gained considerable attention in the national media lately. The federal suit, filed by eight current and former employees, alleges that Coca-Cola has discriminated against African-Americans in pay, promotions and performance evaluations. The plaintiffs are seeking class-action status so they can represent about 2,000 current and former black salaried employees in the United States. The company has denied the suit's allegations and opposed the plaintiffs' efforts to make it a class-action case. Settlement talks, facilitated by a court-ordered mediator, are currently scheduled to take place on April 17 and 18 --- in the middle of the bus trip and right before the shareholders meeting. (The Atlanta Journal and Constitution, March 29, 2000) COREL CORPORATION: Wolf Haldenstein Files Securities Lawsuit in PA ------------------------------------------------------------------ On March 28, 2000, Wolf Haldenstein Adler Freeman & Herz LLP and the Law Offices of Lawrence E. Feldman & Associates filed a class action lawsuit in the United States District Court for the Eastern District of Pennsylvania on behalf of investors who bought Corel Corporation (Nasdaq: CORL) stock between December 7, 1999 and December 21, 1999, inclusive (the "Class Period"). The lawsuit charges Corel and its CEO, Michael C.J. Cowpland, with violations of the securities laws and regulations of the United States. The complaint alleges that defendants issued a series of false and misleading statements concerning the Company's fourth quarter 1999 results. Specifically, Corel is alleged to have misled the market concerning the fact that it had sustained large losses. Upon the announcement that results for the fourth quarter of 1999 would be significantly below estimates, the Company's stock price plunged 28% on extraordinarily heavy trading volume. Contact: Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at 800-575-0735 (Michael Miske, Gregory Nespole, Esq., Fred Taylor Isquith, Esq. or Shane T. Rowley, Esq.), via e-mail at classmember@whafh.com or whafh@aol.com or visit website at http://www.whafh.com FARMERS INSURANCE: Damages Awarded to Ex-Adjuster Fired for Speaking up ----------------------------------------------------------------------- A former adjuster who claimed Farmers Insurance fired him for speaking out against the company's policies in the wake of the Northridge quake was awarded $12.5 million in punitive damages. The money, added to the $5 million in compensatory damages ex-district manager Phillip Alexander was awarded last Friday, March 24, represents the second multimillion-dollar judgment against the insurer in the last six weeks. On Feb. 22, a jury found that Farmers should pay an ex-adjuster more than $10 million in compensatory and punitive damages for firing him for refusing to underpay Northridge earthquake claimants. Kermith Sonnier worked as a commercial claims adjuster for Farmers from January 1994 to August 1997. He handled the largest of the Northridge earthquake losses, including apartment complexes and condominiums. The jury found that Sonnier was fired for urging that a loss estimate at a condominium complex, where asbestos was found, be raised. And on March 6, the insurer settled with the residents of a North Hills condominium complex 3 miles from the Northridge epicenter for $20 million. The plaintiffs in that case alleged that representatives from Farmers' Truck Insurance Exchange subsidiary fraudulently refused to pay quake-related claims. In the most recent case, Alexander claimed Farmers ''used lies, open hostility and intimidation'' to get rid of him when he complained of the company's supposedly racist policies. ''Farmers basically drove this man to illness and disability, and then fraudulently used that as a basis for termination,'' said Alexander's attorney $ % Gary Paul. As an example, said Alexander, during a meeting after the Northridge earthquake ''someone commented on the large number of people sleeping in the streets.'' Another Farmers employee responded that ''it did not matter because they were primarily Mexican and Central American - 'Not the people Farmers insures,''' Alexander claimed. Alexander, who is half Native American, said he tried to speak up, but was cut off by a supervisor and ordered to ''shut up and sit down.'' (City News Service, March 28, 2000) FEN-PHEN: Deadline Approaches for Users to Decide on AHP Settlement ------------------------------------------------------------------- March 30 is the deadline for former dieters to decide to apply for benefits from a class action lawsuit filed on behalf of an estimated six million Americans who took the weight loss drugs fen-phen, Pondimin or Redux. The case, the AHP Settlement Pact and related issus have been reported in the CAR. The settlement is subject to final federal court approval, with fairness hearings scheduled for the first week of May in Philadelphia. AHP has the right to pull out of the settlement before those hearings begin if too many claimants "opt out" to pursue individual lawsuits. So far, attorneys across the U.S. have filed lawsuits on behalf of more than 11,000 individual plaintiffs, and some juries have awarded more than $ 20 million to patients diagnosed with "FDA-positive" cardiac valve damage. It is not necessary to retain an attorney to apply for AIO benefits from the settlement, which was announced five months ago by AHP. "The former patients who are choosing to opt-out and are represented by counsel tend to be those with the most serious heart valve damage or those who want to reserve the right to collect compensation in the future if cardiac or pulmonary health problems develop over the long term, " Elmore says. "Many law firms had cut-off dates in January or February for accepting individual cases for litigation." When juries award compensation to plaintiffs in such cases, typically the prevailing law firm keeps one-third of the money as its fee. Also excluded from the class action are people who developed a usually-fatal lung disease called Primary Pulmonary Hypertension from fen-phen, clearing the way for them to pursue individual claims against drug manufacturer AHP. (Asheville Citizen-Times (Asheville, NC), March 27, 2000) IMPERIAL CREDIT: Stanbury Fishelman Files Securities Suit in California ----------------------------------------------------------------------- Stanbury Fishelman Wisner & Adsit announced on March 28 that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Imperial Credit Commercial Mortgage Investment Corp. ("ICCMIC") (Nasdaq:ICMI) common stock during the period between Oct. 22, 1997, and Oct. 21, 1999 (the "Class Period"). The complaint charges ICCMIC and certain of its directors with violations of the Securities Exchange Act of 1934. ICCMIC is an investment fund specializing in real estate investments. ICCMIC filed a Registration Statement and Prospectus with the Securities and Exchange Commission on or about Aug. 1, 1997. The complaint alleges that Prospectus contained false statements, including a variety of false statements related to the compensation paid to a management entity hired to operate the investment fund and undisclosed conflicts of interest. As one example, the complaint alleges that misrepresentations about the costs associated with terminating the management entity have cost ICCMIC investors nearly 10% of the current fund value, which was the single greatest operating loss sustained by ICCMIC after its inception. Contact: Stanbury Fishelman Wisner & Adsit Bruce C. Fishelman or Alec B. Wisner, 310/278-1800 LOS ANGELES SHERIFF'S: Workplace Harrassement at Dept. Decried -------------------------------------------------------------- The Los Angeles County Sheriff's Department has an entrenched culture that tolerates racial and sexual harassment of its employees, and a civilian commission should be created to review all complaints, an independent assessment of the department has concluded. The report by Management Practices Group of San Francisco, commissioned jointly by the sheriff's department and lawyers representing female deputies, found that the department does not value diversity and resists change. A "wall of silence . . . certainly exists with respect to gender and racial equity," said the report, which was released at an ACLU press conference Tuesday. The report proposes that Sheriff Lee Baca establish a five-member civilian Equity Oversight Commission, which would be empowered to issue findings not subject to review or change, except by the County Civil Service Commission or the courts. The commission would have the final say on discipline for sexual harassment and would decide whether complaints had been properly investigated, said Janet Herold, a lawyer representing the department's 1,180 sworn female officers in a class-action suit. The report follows six months of focus groups and interviews with Sheriff's Department personnel, a review of the department's documents on harassment complaints and observations at work stations. It noted that even among top-ranking officials, there is denial "that the department has a serious problem related to workplace equity." Employees who report being harassed because of race or gender are tagged as disloyal "for complaining about the conduct of fellow officers, rather than commended for attempting to set the department on the right track," the report said. It said complaints have been followed by retaliation "ranging from the merely annoying to the extremely serious, such as being 'accidentally' left without backup in dangerous situations." But when complaints are investigated, officers profess to know nothing about them, the report said. "The department's files are full of statements from sworn personnel who saw or heard 'absolutely nothing,' " it said. Paula Perlman, an attorney with the California Women's Law Center, praised the report and asked: "What is it going to take until we address these issues in law enforcement? It's a travesty that we allow this level of sex discrimination to exist with impunity." The report's author, D. Jan Duffy, president of Management Practices Group, said she hadn't expected the American Civil Liberties Union to release the report Tuesday March 28. "I'm concerned because I want to be sure that this constructive work continues," she said, referring to Sheriff's Department efforts to come to grips with sexual and racial harassment. "That the Los Angeles Sheriff's Department has had problems with gender equity in the past is not news," Duffy said in a statement. "The news is that the department is working so proactively to do something about it." Race and sex discrimination in the department has long been a contentious issue. A study by retired Superior Court Judge James Kolts in 1992 found that the department was not addressing racial problems, and female deputies complained of retaliation when they filed harassment complaints. A 1993 consent decree resulting from the class-action suit by female deputies mandates that the department develop and implement a lawful sexual-harassment policy. But the assessment released on March 28 found that the department has failed to live up to its own commitments to achieve equity. (Los Angeles Times, March 29, 2000) MICROSOFT CORP: Verdict Put off Until April 7 for Settlement Talks ------------------------------------------------------------------ The federal judge overseeing the Microsoft antitrust trial on March 28 postponed his verdict, giving the two sides more time to settle details of a possible out-of-court settlement. U.S. District Judge Thomas Penfield Jackson warned lawyers that he would announce his final ruling as early as March 28 if they failed to make significant progress toward reaching a settlement. A recording issued by the federal courthouse confirmed that the verdict would not be issued Tuesday but 1 NEW3 offered no additional information. Sources close to the case said a new mediation schedule gives attorneys for Microsoft and the Justice Department up to 10 days, or until April 7, to negotiate a last-minute deal. At issue is a lawsuit filed by the federal government and 19 states alleging that Microsoft repeatedly engaged in illegal anti-competitive behavior by using monopoly power. Judge Jackson agreed with nearly all the allegations in an initial finding in November. Negotiations between the two sides are being handled by a court-appointed mediator, Richard Posner, a federal appeals judge in Chicago. The last-minute talks are nothing new to participants in the case. Microsoft officials, including company founder Bill Gates, negotiated with government attorneys just days before the Justice Department filed its original complaint in 1998. An agreement appeared likely until government lawyers complained that Gates had reconsidered details in an offer he made. The deal fell through, and the government filed suit. Several more attempts to reach a deal have been made, each with strong encouragement from Jackson, said Steve Houck, the former lead attorney for the 19 states suing Microsoft and one of the attorneys who took a deposition from Gates for the antitrust trial. "There have been communications off and on throughout the case," said Houck, now a private lawyer in New York. Both sides have reason to reach a settlement outside the courtroom. For Microsoft, a harsh ruling could be used against the company in dozens of class-action lawsuits its faces from rivals and clients. The government, meanwhile, would have a long wait before Microsoft was forced to change its behavior. Once Jackson issued a verdict, he would have to hold additional hearings to determine what kind of sanctions to impose. Microsoft probably would appeal any decision, possibly tying up the case for several years in a court that could ultimately overturn parts, if not all, of Jackson's initial judgment. For now, the government is considering Microsoft's latest proposal, which offers the most concessions made so far by the company but has been deemed inadequate and unenforceable by the government. Under the proposed deal, which was first reported Monday by the Wall Street Journal, Microsoft would allow computer makers to modify the blueprints to all current and future versions of its Windows software to embed the technology of Microsoft competitors. The offer would also limit the company in using different prices for Windows to reward or punish computer makers. William Kovacic, an antitrust expert at George Washington University, said the two sides will 1 NEW3 need every minute of the 10 day-extension granted to them. "Even after they have shaken hands on the basic framework, the government's going to look at the detailed language that Microsoft drafts and examine it for escape hatches, trap doors, and revolving bookcases with magic stairways to ensure there is no way around the basic commitment," he said. "So even if they agreed today on the basic framework, it would still take a week to write this document." Shares of Microsoft, which fell 7 percent Monday on worries that a verdict might come shortly, stabilized Tuesday, increasing 25 cents to $ 104.31 1/4 in trading on the Nasdaq Stock Market. ORCHARD OWNERS: Mexicans in WA Allege Conspiracy with Employment Agency ----------------------------------------------------------------------- A group of legal immigrants residing in Washington state's apple-producing Yakima Valley filed a class action lawsuit on March 29 against three orchard owners, charging that the orchard owners conspired with an employment agency to depress farmworkers' wages by hiring large numbers of illegal workers to set low wage standards for orchard work. The class action lawsuit was filed in United States District Court, Eastern District of Washington in Spokane, under the state's Racketeer and Corrupt Organizations Act. The proposed class, if approved, could include hundreds of legal immigrants who work or previously worked for the defendants and were paid hourly or piece rate wages. The lawsuit is the first of its kind in the U.S. where legal workers have sued agricultural employers about intentional wage depression through the use of illegal labor. Seattle attorney Steve Berman filed the lawsuit on behalf of two plaintiffs who are the proposed representatives for a class of all legal aliens who were hired by any of the defendants. "By hiring illegal laborers, the orchard companies have exploited undocumented workers while keeping legal farmworker wages low," Berman said. According to the lawsuit, defendants Matson Fruit Co. and Zirkle Fruit Co. each conspired through joint venture agreements with Selective Employment Agency to hire large numbers of illegal immigrants who would work at below prevailing wage standards. The orchards used Selective Employment as a front, buffering them from liability with the U.S. Immigration and Naturalization Service (INS), the suit claims. Selective Employment recruited illegal immigrants, primarily from Mexico, while knowing that many workers were providing false documentation to prove their work status, according to the lawsuit. Through regular contact, the orchard owners dictated to Selective Employment how many illegal workers they needed and instructed them to reject job candidates who were known to be legal aliens or U.S. citizens, the lawsuit claims. The lawsuit also alleges a mail fraud scheme, stating that Selective Employment falsely certified Employment Eligibility (I-9) Forms under penalty of perjury and mailed them to the INS, while knowing that individuals were ineligible for employment. "It is unthinkable that Selective actively recruited illegal aliens and passed over legal job candidates, when legal workers toil everyday to make a fair living in America's orchards," said Berman. "It's not fair to the immigrant workers who have taken the legal channels to work here -- making sacrifices at every step of the way to create a better life for their families." Both Zirkle and Matson have been targeted for raids and inquiry by the INS, according the lawsuit. In 1999, the INS conducted "Operation Snowbird," a crackdown on illegal immigrant hiring, and concluded through audits of I-9 forms that Matson employed hundreds of illegal immigrants. In 1998, the INS determined that 74 percent of employees working in Matson's orchard and warehouse were hired using fraudulent documents. The U.S. General Accounting Office estimates more than 600,000 farmworkers across the country are employed illegally. About 52,000 workers work illegally in Washington on all types of jobs, according to estimates by the INS. Berman is managing partner of Hagens Berman in Seattle. He represented 13 states in lawsuits against Big Tobacco, and was one of the prime architects of the groundbreaking Liggett settlement. Other well known class actions handled by the firm include cases involving The Boeing Company, the Exxon Valdez oil spill, Morrison Knudsen; Piper Jaffray, Nordstrom, Boston Chicken, Noah's Bagels, Louisiana Pacific and Washington Public Power Supply. Contact: Hagens Berman Steve Berman, 206/623-7292 steve@hagens-berman.com or Firmani & Associates Mark Firmani, 206/443-9357 mark@firmani.com POSSUM VALLEY: AL Residents to Fight Poor Condition of Cemetery --------------------------------------------------------------- Residents of Brighton, Ala., are gearing up for a fight, as they try to certify a class action lawsuit against the owner of the Possum Valley Cemetery. A judge has given the lead plaintiffs until mid-April to get the 30 plaintiffs needed to bring the case as a class action lawsuit, according to Clifford Hardy, the plaintiff's lawyer. Hardy said he has asked people to come forward, and will know by the deadline whether enough interest exists for a class action. The main accusation is that the cemetery owners brought a bulldozer into the property last year and cleared the land. The landowners deny there is a cemetery at the site that was bulldozed. They are asking that the lawsuit be dismissed. The land is actually controlled by a trust. Representatives of the trust say they checked the site for graves before it was cleared, and found only a few, which were marked off and not touched by the bulldozers. The plaintiffs disagree, and are asking for punitive damages and compensatory damages for all living descendents of those buried at the site. At the same time, the plaintiffs have yet to answer the legal question of how to determine who is buried at the site, and who can represent those persons who do not have any living relatives. Cemetery Dates to Mid-1800s Historians say the cemetery was originally a burial ground for slaves that was established in 1843. Jefferson County records show there is a cemetery on the property and the tax records show there is a 10-acre cemetery at the site. A 1941 survey of all cemeteries in the county taken by the county's Health Department also revealed a cemetery at that site. Hardy said his research led him to the now defunct Jacobs Funeral Home in Bessemer, Ala. The records of the funeral home show that it conducted services for many people who were buried in the Possum Valley Cemetery. The Alabama Department of Vital Statistics also has death certificates for people buried at the cemetery earlier this century. While there are only three marked graves on the site, a state archaeologist doing research for road construction through the county counted 728 graves at the site. Hardy said older residents have said there were many more marked graves on the site in the past. Ultimately, a judge will decide, assuming the necessary plaintiffs can be collected in time and can prove they are connected to someone buried in the cemetery. (Death Care Business Advisor, March 22, 2000) PUBLIC WELFARE: PA ADA Suit Settled with Placement for Mental Patients ---------------------------------------------------------------------- After two years of contested litigation, a federal District Court in Pennsylvania approved a settlement agreement designed to implement community placement for individuals with mental illness who had previously been institutionalized. Kathleen S. v. Department of Pub. Welfare, 17 NDLR 93 (E.D. Pa. 1999) (No. CIV A 97-6610). Five individuals on behalf of themselves and others with mental illness, who had been hospitalized in a state-operated psychiatric hospital, alleged that a state department of public welfare and others violated the ADA by failing to provide them with services in the most integrated setting appropriate to meet their needs. Specifically, the plaintiffs alleged that the state continued to institutionalize those plaintiffs who had been found to be eligible for community placement. The District Court certified a plaintiff class, which it divided into three subclasses. Following a bench trial, the court entered a judgment in favor of all plaintiff subclasses. The defendants filed an appeal. Following the recommendation of the Appeals Court, the parties executed a settlement agreement. The parties then filed a joint motion for partial remand to transfer jurisdiction to the District Court for approval of the proposed settlement agreement. In reviewing the settlement agreement, the court noted that certain members of two of the subclasses would not be placed in community settings as quickly as they would have been under the court's order. Further, the court found that this delay was more than minimal with respect to its impact on the individual class members. However, the court determined that the benefits of the agreement outweighed the delay in placing the class members affected by the terms of the agreement. The court found that the settlement agreement was in the best interests of the class and that it would avoid any uncertainty and delay that would result were the case to proceed at the appellate level. In addition, the reaction of the plaintiff class to the proposed settlement agreement weighed heavily in favor of approving the agreement. Therefore, the court entered an order approving the settlement agreement. (Disability Compliance Bulletin, March 24, 2000) REVLON, INC: Filing of Consolidated Securities Complaint Imminent ----------------------------------------------------------------- Finkelstein & Krinsk announced that the class action on behalf of purchasers of Revlon, Inc. (NYSE:REV) securities during the period between October 29, 1997 and October 2, 1998 (the "Class Period") continues with the imminent filing of a consolidated complaint. Plaintiffs' initial complaint charged Revlon and certain of its officers with violations of the federal securities laws by misleading the investing public and artificially inflating the value of Revlon securities. Specifically, the complaint alleges, among other things, that a 1986 hotly contested takeover battle saddled the Company with huge debt. In 1998, the Company needed to be refinanced at favorable interest rates to buy time for Revlon to appear to have increasing revenues and profits. On April 3, 1998, Revlon was able to issue and sell $900 million of senior notes at 8 5/8% and 8 1/8% interest, thereby redeeming $815 million in senior 10 1/2% and 9 3/8% notes. Noteholders who purchased in conjunction with the April 3, 1998 offering are particular victims. The amended complaint elaborates on these allegations and presents particularity and further facts. The truth began to emerge at the end of the third quarter of 1998 when Revlon disclosed on October 2, 1998 that it would miss its expected quarterly sales figure by almost $100 million and its expected earnings per share by 90%. Contact: Finkelstein & Krinsk Jeffrey R. Krinsk, Esq., 619/238-1333 Toll free: 1-877-493-5366 E-mail: fk@class-action-law.com TECH COMPANIES: More Firms Falsify under Pressure to Boost Stocks ----------------------------------------------------------------- Falsifying revenue and engaging in aggressive accounting is soaring among high-tech companies and other firms looking to juice up their stock prices. Dubbed the "revenue recognition" problem by government regulators and forensic accountants, it sacked software maker MicroStrategy. Its stock fell 62% to $ 86 3/4 after it said it must defer $ 205 million in revenue it reported for 1999. In ongoing class-action cases, technology firms accused of accounting and revenue recognition fraud include Legato Systems, 3Com, Network Associates and dozens of other companies. Last year, the Securities and Exchange Commission brought 90 accounting fraud cases against companies nationwide. More than half involved falsifying revenue, says Helane Morrison, head of the SEC's San Francisco office. Revenue recognition came up in only 20% of securities fraud lawsuits filed in 1998, says National Economic Research Associates. It shot up to 50% in the first half of 1999. "There's more financial fraud of this nature going on in Silicon Valley and elsewhere than ever before," says Steve Sidener, an attorney at Gold Bennett Cera & Sidener in San Francisco who represents investors in class-action lawsuits. "We're losing the war." Accounting experts say the problem is the most widespread in the highflying technology sector. Why? As tech stocks sizzle, firms are pressured by Wall Street to keep earnings and share prices high. Executives also have a motive: Many hold stock options and bonus packages pegged to their company's performance. The most common abuses: recording sales that never take place; shipping products before customers agree to delivery; and booking revenue upfront from long-term contracts, rather than over the three- to five-year life of a typical deal. "These cases are nightmares for companies and investors," says Paul Regan, a forensic accountant at Hemming Morse in San Francisco. Last year, sensational tech accounting cases centered on database maker Informix, chipmaker California Micro Devices, health care giant McKesson HBOC and others. In recent months, the SEC, class-action lawsuits and corporate auditors have forced firms to restate their revenue and earnings. After the SEC issued an accounting bulletin in December, 32 companies changed their accounting policies or restated their revenue, according to a report by investment house Bear Stearns. More revenue restatements are expected, as corporate accountants fully digest the SEC's recommendations, predicts Bear Stearns analyst David Zion, a co-author of the report. (USA TODAY, March 29, 2000) TOBACCO LITIGATION: Smokers' Lawyer Criticizes on Lack of Research ------------------------------------------------------------------ The tobacco industry can always find a witness to get cigarettes off the hook as the cause of disease in smokers' lawsuits, an attorney for sick smokers told jurors preparing to consider damages in a closely watched case. Reviewing the testimony of doctors called in the industry's defense, attorney Stanley Rosenblatt focused on payments reaching $140,000 and lack of experience or research on smoking-related illnesses. ''They'll blame it on anything other than cigarettes,'' he said during closing arguments on March 28. ''They can always find a witness to do that.'' Smoking industry lawyers were expected to present closing arguments on March 29. The six-member jury is being asked to order compensatory damages for three smokers represent an estimated 500,000 other Florida smokers in the first class-action case against the tobacco industry to go to trial. If jurors award compensatory damages, they then will be asked to set a dollar figure to punish the industry. Company officials fear a potentially ruinous $300 billion punitive damage verdict. The six-member jury decided last July that the industry fraudulently conspired to make a defective product. Doctors have testified that the three smokers' cancers were caused by smoking. The industry has offered evidence that bronchioalveolar cancer _ a form of lung cancer that the jury decided is not linked to smoking caused the cancers in two of the smokers. It blamed industrial wood dust as a possible cause of the throat cancer in the third. The defendants are Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Lorillard Tobacco Co., Liggett Group Inc. and the industry's Council for Tobacco Research and Tobacco Institute. (AP Online, March 29, 2000) According to Sun-Sentinel (Fort Lauderdale, FL), March 29, 2000, a lawyer representing ailing Florida smokers, calling tobacco industry lawyers "desperate," said his adversaries want a jury in a Miami Circuit Court to buy "cooked-up, phony theories" that something other than cigarettes are responsible for the plaintiffs' illnesses. Attorney Stanley Rosenblatt asked the jury to recall how, earlier in the trial, industry lawyers questioned whether Frank Amodeo, an Orlando clock maker, contracted throat cancer after decades of smoking, or whether it was caused by wood dust. "They dredged up a quarter-of-a-century old article on wood dust (possibly being linked to cancer)," Rosenblatt said. But all the board-certified doctors who examined Amodeo and testified about his illness said that wasn't the cause. His smoking was, Rosenblatt said. TRANSCRYPT INTERNATIONAL: Settlement with Shareholders Finalized ---------------------------------------------------------------- Transcrypt International, Inc. (OTC Bulletin Board: TRII) announced on March 29 that the Honorable Warren K. Urbom of the United States District Court for the District of Nebraska has given final approval of the settlement of the pending shareholders class action suits against the Company and certain of its former officers. The settlement also resolves an identical stockholder class action suit pending in the District Court for Scottsbluff County, Nebraska. The class is defined as individuals that purchased Transcrypt stock between January 22, 1997 and April 24, 1998. To participate in the distribution of the net settlement fund, class members need to complete and return a proof of claim and release form, available from the law firms representing the class, by May 29, 2000. Under the settlement agreement, Transcrypt will transfer 4,460,000 shares of Transcrypt common stock to a settlement fund. The settlement shares have been previously reserved and the transfer of the settlement shares will have no financial effect on the Company's current cash position. In addition, the settlement calls for the Company's Insurance Carriers to provide a cash portion to the settlement fund. Transcrypt would also pay $2,000,000 to the class if there is a purchase of a majority of Transcrypt by acquisition or merger that occurs before January 1, 2001. Transcrypt International, Inc., designs, manufactures and markets trunked and conventional radio systems, stationary land mobile radio transmitters/receivers including mobile and portable radios, and manufactures information security products that prevent the unauthorized interception of sensitive voice and data communication. VISX, INC: Dreier Baritz Files Securities Suit in California ------------------------------------------------------------ Dreier Baritz & Federman filed a securities class action lawsuit in the United States District Court for the Northern District of California on behalf of purchasers of the common stock of Visx, Inc. (Nasdaq: VISX) during the period between March 1, 1999 and February 22, 2000, inclusive (the "Class Period"). The complaint charges VISX and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants' false and misleading statements about the steady and increasing revenues the installed base of VISX's Excimer Laser systems would provide to VISX, the strong procedure and equipment royalties VISX was earning, the limited impact of competition which would allow VISX to maintain its $250 per procedure licensing fee in the United States which would lead to consistent revenue growth, and VISX's continued market share domination which would result in 2000 EPS of $1.70-$1.80, artificially inflated the price of VISX stock to a Class Period high of $103-7/8 from the just $30-1/4 per share (split adjusted) at the outset of the Class Period. This upsurge in VISX's stock enabled VISX insiders to sell 1.4 million shares of their VISX stock for $97 million in proceeds. On Dec. 10, 1999, VISX received an adverse ruling from the International Trade Commission that competitor Nidek had not infringed on VISX's patents, and its stock retreated to the $59-$60 range. This cast doubt on VISX's competitive position and the ability to maintain its prices. However, VISX continued to represent that the $250 per procedure fee was intact. Then, on Jan. 19, 2000, VISX revealed a drop in 4thQ 99 revenues versus the 3rdQ 99 and exposed the problems VISX was having growing its business. On these disclosures, VISX's stock fell by 29% in one day to $32-1/4. However, it was not until Feb. 22, 2000 that VISX admitted it would reduce its per procedure fee to $100. This announcement caused its stock price to drop to as low as $16 on huge volume on Feb. 23, 2000. Contact: William B. Federman, Dreier Baritz & Federman, 120 N. Robinson, Suite 2721, Oklahoma City, OK 73102, (405) 235-156 FAX: (405) 239-2112 Email, wFederman@aol.com VITAMIN PRICE-FIXING: Judge OKs $242M Settlement over Feeds & Foods ------------------------------------------------------------------- A federal judge approved a $242-million settlement of class-action claims that Roche Holding and five other major world drug makers fixed the prices of vitamins used to fortify animal feeds and processed foods. The approval ends the legal saga of an international price-fixing cartel. Roche, Rhone-Poulenc, BASF and three Japanese vitamin companies that admitted conspiring to illegally raise prices agreed last year to a $ 1.17-billion settlement to end the civil litigation. Rhone-Poulenc, which escaped criminal prosecution by cooperating with prosecutors, has since merged with Hoechst to form Aventis, the world's No. 1 drug company. (Los Angeles Times, March 29, 2000) WIN MANAGEMENT: Brake Shop Chain Sued over Fraud Probe and Pricing ------------------------------------------------------------------ A Metro Detroit auto repair shop chain routinely did unneeded repairs on vehicles and even charged car owners for repairs never done, officials charged on March 28. Atty. Gen. Jennifer Granholm and Secretary of State Candice Miller accused Win Management Inc. of Fraser, known as The Brake Shop, of violating the Michigan Consumer Protection and Motor Vehicle Service and Repair acts. Offenses can result in injunctions, fines and possible class-action lawsuits. "When you take a vehicle in for repairs, you are placing your safety and the safety of your family in the hands of another person," Miller said. "Businesses which violate that trust must be held accountable." Miller said the violations reportedly occured at Brake Shops in Ferndale, Royal Oak, Dearborn, Detroit, Livonia, Roseville, Shelby Township, Taylor and Warren. In some cases repaired brakes were reportedly found to be worse after the work was completed at the shops, which also defrauded through false ads, pricing schemes and the employment of uncertified mechanics, Granholm said. Some customers were even issued "V.I.P." cards which provided no special discounts on either service or repairs. Last September, four former Brake Shop franchise owners and a manager told officials how customers frequently were cheated and were sold inferior or defective parts so they would have to return for warranty work. It's not the first time the company has been investigated, officials said. In 1995 customers complained that they were lured to the business by $39.95 brake jobs that cost considerably more. Win Management has been given 10 days to answer a complaint filed by Granholm's office and 20 days to answer similar charges by the Bureau of Automotive Regulation, or face a civil lawsuit, possible disciplinary action and perhaps license revocation. (The Detroit News, March 29, 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. Theresa Cheuk, Managing Editor. 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. 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