/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/000703.MBX C L A S S A C T I O N R E P O R T E R Monday, July 3, 2000, Vol. 2, No. 128 Headlines ACXIOM CORP: Contests Consolidated Securities Lawsuit in Arkansas AETNA LIFE: James, Hoyer File Suit over Deceptive Sales Practices ASBESTOS LITIGATION: W.R. Grace Denies Allegations Re Attic Insulation AZTEC CATALYST: Judge OKs $21.5M Settlement against Ohio Chemical Plant BRANCH DAVIDIAN SIEGE: Ex-Reporter Testifies in Waco Case CITY OF PA: Rersidents Paying for Trash Removal Sue over Dwelling Tax COCA-COLA: Lawyers in Settlement Negotiation over Racial Bias Squabble FEDERAL-MOGUL: Wolf Haldenstein Files Securities Suit in Michigan FORD MOTOR: Texas App. Ct. Affirms Class Cert. in Seat Belt Case FULTON SHELTER: GA Suit Alleges of Rushing Stray Pets to Their Death GREAT AMERICAN: Agrees to Settle GALIC Policyholders' Suit in Ohio HARMONIC INC: Barrack Rodos Files Securities Lawsuit in California HARMONIC INC: Wolf Popper Charges of Securities Violations HMOs: Herdrich Survives Charge against Physician Incentive in High Ct HMOs: Senate OKs Patients' Restricted Right to Sue LASERVUE EYE: Eye Surgery Patients Angry at Company's Letter LEND LEASE: Prepared to Pay for Thredbo Landslide; Govt Makes Offer RELIANCE GROUP: Wolf Haldenstein Files Securities Suit in New York TOBACCO LITIGATION: Internal Dissension Erupts As Both Sides in FL Rest VITAMIN PRICE-FIXING: Australian Subsidiaries Face $100 Mil Case WAR VICTIMS: Chinese sue Japanese Firms in CA Court over WW II Labor WESTERN RESERVE: Insurer Alleged of Deceptive Sales Practices in Ohio ********* ACXIOM CORP: Contests Consolidated Securities Lawsuit in Arkansas ----------------------------------------------------------------- On September 20, 1999 Acxiom and certain of its directors and officers were sued by an individual shareholder in a purported class action filed in the United States District Court for the Eastern District of Arkansas. The action alleges that the defendants violated Section 11 of the Securities Act of 1933 in connection with the July 23, 1999 public offering of 5,421,000 shares of our common stock. In addition, the action seeks to assert liability against Company Leader Charles Morgan pursuant to Section 15 of the Securities Act of 1933. The action seeks to have a class certified of all purchasers of the stock sold in the public offering. Two additional suits were subsequently filed in the same venue against the same defendants and asserting the same allegations. The plaintiffs have now filed a consolidated complaint. The cases are still in the initial phase of litigation, with the defendants having filed their initial response to the lawsuit. We believe the allegations are without merit and the defendants intend to vigorously contest the cases, and at the appropriate time, seek their dismissal. AETNA LIFE: James, Hoyer File Suit over Deceptive Sales Practices ----------------------------------------------------------------- Lawsuit filed by James, Hoyer alleging that Aetna Life Insurance and Annuity Company engaged in deceptive and misleading sales practices; Richard and Helen Reese, Villere Bergeron, and Allan Eckert on Behalf of Themselves and All Others Similarly Situated, vs. Aetna Life Insurance and Annuity Company; Case No. 8:00-CV-1343-T-23F. The law firm of James, Hoyer, Newcomer and Smiljanich, P.A. has filed a class action lawsuit on behalf of four former policyholders of Aetna Life Insurance and Annuity Company. The lawsuit was filed in Tampa, Florida on June 30, 2000, based upon deceptive and misleading insurance sales practices in the sale of life insurance policies. Former policyholders Villere Bergeron and Allan Eckert allege in the lawsuit that Aetna induced them to replace cash-rich interest-paying Aetna whole life insurance policies with Aetna flexible premium adjustable policies on which they would pay a limited number of premiums. They were told that after the limited number of premiums that the premiums would "vanish" and the policies would be "paid up." Former policyholders Richard and Helen Reese each purchased universal life contracts on the promise that their premiums would never increase and that, after regular payments for a certain number of years, their paid up policies would fund their retirement. The policyholders were led to believe that the cash balances in the old policies, in conjunction with the high illustrated interest that would accrue on the Aetna policies, would eliminate the need for further "out-of-pocket" premium payments. Aetna also miscast the nature of the insurance products as investments. When the policies did not perform as promised, Aetna then informed the policyholders that the premium obligations would continue, possibly for the duration of their lifetimes. The policyholders were then forced to choose among paying continued unanticipated premiums, having the cash value of their policies eaten up by loans on the policies to pay the premiums, or canceling their policies and looking for new insurance at higher rates for retirees. It is further alleged in the complaint that when making the sale of the products to the policyholders, the Aetna agents intentionally failed to disclose that high commissions and administrative charges would be assessed from the funds removed from the older policies, that the interest rates upon which the promises were based were not guaranteed, that the cost of insurance would be higher because of the policyholders' increased ages, and that premiums were due for the life of the policyholder. The complaint also alleges that Aetna knew that it could not sustain the interest rates illustrated and that it was a certainty that additional significant premium outlays would be required. The complaint alleges counts of: breach of fiduciary duty, negligent misrepresentation, fraudulent inducement, common law fraudulent concealment and deceit, and negligent supervision. The class action plaintiffs are residents of Florida who seek to represent all persons nationwide who were victimized by the fraudulent, overreaching, and misleading sales practices of Aetna. John Yanchunis, an attorney with James, Hoyer, Newcomer & Smiljanich, P.A., a Tampa firm that represents victims of corporate fraud, stated: "We filed this class action suit not only for the named plaintiffs but to seek a remedy for all policyholders who were victims of the deceptive and fraudulent activities." Contact: John Yanchunis, jyanchunis@jameshoyer.com or Mike Peacock, mpeacock@jameshoyer.com, both of James, Hoyer, Newcomer & Smiljanich, P.A., 813-286-4100 ASBESTOS LITIGATION: W.R. Grace Denies Allegations Re Attic Insulation ---------------------------------------------------------------------- W.R. Grace & Co. has answered a complaint filed in Massachusetts federal court on behalf of homeowners nationwide who purchased Zonolite attic insulation and say that the company knew that the product was hazardous. Lindholm v. W.R. Grace & Co., No 00 CV 10323 PBS (D. Mass., Apr. 20, 2000); see Asbestos LR, March 3, 2000, P. 5. The complaint alleges that the company aggressively promoted and sold hundreds of millions of cubic feet of Zonolite from 1963 through 1984, even though it secretly possessed information indicating that the insulation contained tremolite asbestos. Homeowner Edward M. Lindholm asserts claims of fraud, negligence, breach of implied warranties, violations of deceptive trade practices statutes, nuisance, strict liability for ultra-hazardous activities, and unjust enrichment. He is seeking compensatory and punitive damages, including prejudgment interest. In addition, the plaintiff seeks equitable relief, asking the court to order Grace to remove and abate existing Zonolite from all residences containing the insulation. Lindholm contends that in 1973, Washington state health officials advised the company to place a warning label on the Zonolite product, but Grace refused. He also says that Grace secretly considered halting Zonolite sales in March 1977, but the company decided not to pull the insulation from the market due to concerns about the dangers associated with Zonolite and the substantial exposure to legal liability. Lindholm also asserts that a vice president in the company's Cambridge Construction Products Division drafted an internal memorandum in May 1977, which was circulated to Grace's top man agement. The memorandum allegedly acknowledged the high mortality rates of employees at the company's Montana facility and the severe risks of lung disease among workers. Despite this knowledge, Grace continued to refuse to place warning labels on products because the company con cluded that a warning label would result in substantial sales losses, the complaint states. The plaintiff says that Grace acknowledged the health risks associated with Zonolite when it established a medical monitoring program to screen residents who lived near its Lincoln County, Mont., vermiculite mine. In its answer, the defendant says that a company memo explained that Grace decided not to affix warning labels on products that did not expose customers to fiber levels above those permitted by the Occupational Safety and Health Administration. Grace also says that it admits it stopped selling Zonolite Attic Insulation in 1984, but denies that it did anything to conceal any alleged health risks to homeowners using the product. Grace asserts 23 affirmative defenses in its answer, including the failure of the complaint to allege physical harm, which is required for recovery in tort. Grace asks that the suit be dismissed with prejudice. Grace is represented by Robert A. Murphy and Douglas K. Mansfield of Casner & Edwards in Boston. Lindholm is represented by Kenneth G. Gilman of Gilman & Pastor in Boston. (Asbestos Litigation Reporter, June 22, 2000) AZTEC CATALYST: Judge OKs $21.5M Settlement against Ohio Chemical Plant ----------------------------------------------------------------------- A judge approved a $21.5 million settlement in a class-action lawsuit against a chemical plant for explosions that spread hydrochloric acid fumes over the city in 1993. About 6,000 people were evacuated from their homes 25 miles west of Cleveland after two explosions at Aztec Catalyst Co., which made chemicals used in the manufacture of plastics. Many complained of eye and respiratory irritation after the explosions, which destroyed two buildings. In the agreement approved last Thursday June 29, Aztec denies that residents suffered any damage. The company settled with several residents outside of this case, some weeks after the explosions happened. The five main plaintiffs in the lawsuit will receive at least $15,000 each. Others can receive up to $62,500 or two times their medical bills, depending on how many people file for claims. Anyone seeking a claim has two years to file.(The Associated Press, June 30, 2000) BASF: Tomato Growers Seek Refund from Herbicide Maker ----------------------------------------------------- A lawsuit against the maker of an herbicide seeks reimbursement for losses incurred by 250 tomato growers who say their crops were damaged. The group of south Arkansas farmers filed a federal class-action suit in Little Rock against BASF AG, maker of Facet. The lawsuit also seeks unspecified punitive damages. A similar lawsuit was filed earlier this year against BASF and a number of cropduster companies. Facet often is sprayed on rice fields to control barnyard grass, but the spray sometimes drifts. Commercial tomato growers have tried since 1996 to get the state Plant Board to ban the chemical. In addition to tomatoes, the herbicide damages watermelon, cantaloupe and other crops, said Ples Bradley, a pesticide assessment specialist at the Cooperative Extension Service. (The Associated Press State & Local Wire, June 30, 2000) BRANCH DAVIDIAN SIEGE: Ex-Reporter Testifies in Waco Case --------------------------------------------------------- A former television news reporter who witnessed most of the gun battle between Branch Davidians and federal agents during a failed raid Feb. 28, 1993, testified that the shooting erupted as soon as he arrived. ''It just seemed to all start at once. I saw some of the law enforcement officers ... they were running for cover ... as they were running they appeared to be returning fire at the building,'' testified John McLemore, a former reporter for Waco television station KWTX. Taking cover behind a bus on the property, McLemore watched the gun battle between agents and the Davidians. He saw agents run toward the building with a ladder, climb onto the roof and enter the complex by smashing through a window on an upper floor. ''After three of the agents had gone in the window, there was one agent left on the outside there, and I saw gunfire come through the building wall and one or two shots came up through the roof at the agent,'' McLemore said. McLemore's testimony came as the second week of trial came to close in the $675 million wrongful death lawsuit filed by surviving Davidians and family members against the federal government. McLemore, who was on the property for the entire 21/2-hour ordeal, called for help from his news vehicle. Three of the injured agents were carried off the compound in the media vehicle. ''We were the last ones off the property,'' said McLemore. Plaintiffs' attorneys wrapped up their case last Thursday June 29, and government lawyers began presenting their case. Four agents were killed and 16 were wounded during the gunfight, which broke out as Bureau of Alcohol, Tobacco and Firearms agents tried to serve search and arrest warrants on sect leader David Koresh. Six Davidians also died as a 51-day standoff began. Koresh and about 80 followers perished as a fire destroyed the compound near Waco on April 19, 1993. Plaintiffs say the agents, who raided the complex to search for illegal weapons and arrest Koresh, fired indiscriminately into the building. Government attorneys say the agents were ambushed by sect members and were defending their lives. Lead plaintiffs' attorney Michael Caddell asked McLemore if he ever saw any guns or Davidians at the compound, to which he answered no. McLemore also said he never heard anyone yell ''police'' or ''ATF'' until after the gunfire already had started. Plaintiffs also claim federal agents violated an approved plan on the standoff's final day, when they used tanks to punch holes in the building, contributed to or caused at least some of the three fires that engulfed the compound, and failed to have firefighting equipment at the scene. A five-member jury will act only as an advisory panel to U.S. District Judge Walter Smith, who will deliver the verdict in the case. Separately, Smith will consider the question of whether federal agents shot at Davidians during the siege's fiery end. (AP Online, June 30, 2000) CITY OF PA: Rersidents Paying for Trash Removal Sue over Dwelling Tax --------------------------------------------------------------------- Class action challenges new city 'dwelling tax' and lack of trash pick-up. Forced to pay for their own trash removal, a coalition of apartment and condominium owners has filed a class action civil rights suit against the City of Philadelphia claiming that multi-family dwellings are unfairly denied city services. The suit also challenges the city's recently enacted "dwelling tax" that imposes a licensing fee of $ 25 per unit on all buildings with more than two dwelling units, up to a maximum of $ 10,000 per building. Attorneys Gary A. Krimstock of Fineman & Bach and Robert D. Greenbaum of Robert D. Greenbaum & Associates filed the suit in U.S. District Court claiming that the city's policies violate both the Equal Protection Clause of the U.S. Constitution and the Uniformity Clause of the Pennsylvania Constitution. The lead plaintiffs in the suit are The Philadelphian Owners Association, the governing body of the 776-unit "Philadelphian" condominium across from the Philadelphia Museum of Art, and Welsh Walnut Associates, the owners of the 132-unit Manchester Apartments on Welsh Road. They seek to represent a class of apartment and condominium owners with more than six units in their buildings who are subject to the city's policy of not providing waste removal. The members of the first class are also included in a second, larger class that challenges the dwelling tax. Krimstock said the city's refusal to pick up trash at condos and apartments can be very costly to owners. For example, he said, Society Hill Towers pays more than $ 50,000 per year for its trash removal. Since all property owners pay real estate taxes, Krimstock argues, they should get equal services for their tax dollars.But condo and apartment owners get nothing, Krimstock says, and have now been forced to pay an added tax on top of the existing real estate tax bill. The state of New Jersey recently rectified a similar unfairness toward its apartment and condo owners by passing a state law the Municipal Services and Tax Fairness Act that required local governments to refund significant sums, Krimstock said.Krimstock said the Philadelphia owners are challenging the dwelling tax on equal protection grounds as well as arguing that it violates a long-standing state law that limits such fees to an aggregate of just $ 2 for buildings with less than 10 units or up to $ 5 for buildings with more than 10 units.Under that law, Krimstock says, the Philadelphia dwelling tax is grossly excessive and must be declared invalid. The case, Philadelphian Owners Association et al v. City of Philadelphia, 00-cv-3181, has been assigned to U.S. District Judge Jay C. Waldman. (The Legal Intelligencer, June 27, 2000) COCA-COLA: Lawyers in Settlement Negotiation over Racial Bias Squabble ---------------------------------------------------------------------- One group of plaintiffs' attorneys in the Coca-Cola discrimination case is accusing another of illegal conduct. Regardless of who is right, the issue highlights a serious division that has festered on the plaintiffs' side of the case. Lawyers representing the class of 2,000 current and former Coke employees alleged last Thursday June 29 that prominent attorney Willie Gary is soliciting fee agreements from class members in violation of a local federal court rule. Gary and his Stuart, Fla., law firm do not represent the class, but they do represent at least eight individual members of the class. "The Gary firm is soliciting fee contracts that require class members to fork over 25 percent of their settlement shares for nothing," said the motion, which seeks to stop Gary's firm from continuing the practice. The motion, filed by the legal team headed by Cyrus Mehri, also asks U.S. District Judge Richard Story to invalidate any agreements that already have been reached between Gary's firm and individual class members. But Gary's firm said it has not done anything wrong. "We did not solicit. We were asked to come and talk to people," said F. Shields McManus, one of the attorneys in Gary's office. What's more, McManus said, his firm is not trying to take any money received by a class member as a result of work performed by Mehri's team. "That's not true," he said. "Our contract has nothing to do with what Cyrus Mehri is doing. It only has to do with individual actions we file or with actions where our clients are the representative of the class. We do not have a contract for fees for this class action." McManus said Gary's firm will file a formal response to the allegations. The dispute comes only two weeks after Mehri's team reached an agreement in principle with Coca-Cola to settle the suit, which alleged that the company has discriminated against African-Americans in pay, promotions and performance evaluations. Gary's firm did not participate in the settlement talks. Instead, he and noted attorney Johnnie Cochran represent four of the eight plaintiffs in the case. Those four plaintiffs hired Gary's firm in April, about a year after the suit was filed. Gary and Cochran also represent at least four class members who recently filed a separate lawsuit against Coke, alleging that the company created a hostile and discriminatory work environment. Before Gary entered the picture, Mehri's team represented all of the plaintiffs, as well as all of the class members. Mehri's team is now alleging that Gary has a "glaring conflict of interest" that prevents him from representing the class. The alleged conflict centers on Gary's majority ownership of Major Broadcasting Cable, an Atlanta-based network focusing on African-American family entertainment. The cable network recently signed a multiyear advertising agreement with Coca-Cola. "There can be no doubt that Mr. Gary's business dealings with Coca-Cola constitute a conflict of interest in any action he purports to prosecute against the company," Mehri's team contended in its motion. But McManus said Gary's firm disclosed the advertising deal to its prospective clients. "It's certainly an apparent conflict, and that's why we disclosed it," McManus said. "We don't think it's a real conflict." In the motion, Mehri's team accused Gary's firm of actually helping Coca- Cola by soliciting individual class members. That is allegedly because Coke stands a better chance of defeating individual claims than one involving an entire class of employees, the motion said. "Indeed, the desire to pick off employees' claims one by one is the reason employers oppose class certification," the motion said. Again, McManus disagreed. "That's their opinion," he said. "Coke apparently wants this settlement. If they want it, why would individual suits benefit Coke?" (The Atlanta Journal and Constitution, June 30, 2000) FEDERAL-MOGUL: Wolf Haldenstein Files Securities Suit in Michigan ----------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP announces that a class action lawsuit has been commenced in the United States District Court for the District of Michigan on behalf of purchasers of the securities of Federal-Mogul Corp. (NYSE: FMO) between October 22, 1998, through and including May 25, 2000, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein website at http://www.whafh.com. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between October 22, 1998 and May 25, 2000. For example, as alleged in the complaint, on October 22, 1998, Federal-Mogul issued a press release announcing solid third quarter results and praised the Company's continued progress in its acquisitions. This statement was materially false and misleading because it did not disclose that the Company's rapid expansion was causing serious operational difficulties in that the numerous smaller companies acquired by Federal-Mogul were proving much more difficult to integrate into Federal-Mogul's ongoing concern. These acquisition integration problems were negatively impacting earnings margins and caused the Company to miss revenue expectations. On May 25, 2000, after the market closed, Federal-Mogul announced that its second quarter 2000 and full-year 2000 financial results would be dramatically lower than the market had been led to believe. The next trading day, May 26, 2000, the price of Federal-Mogul plummeted by more than 20%. Contact: Fred Taylor Isquith, Esq., Gregory M. Nespole, Esq., Brian S. Cohen, Esq., or Michael Miske, all of Wolf Haldenstein Adler Freeman & Herz LLP, 800-575-0735, whafh@aol.com, nespole@whafh.com, Gnespole@aol.com FORD MOTOR: Texas App. Ct. Affirms Class Cert. in Seat Belt Case ---------------------------------------------------------------- A Texas state appellate panel has affirmed a lower court's grant of class certification to plaintiffs in an economic damages case involving alleged seat belt defects in 1987--1995 Nissan vehicles. Nissan Motor Co. Ltd. et al. v. Fry et al., No. 13-99-199-CV (Tex. Ct. App., 13th Dist., May 25, 2000). The plaintiffs sued Nissan Motor Co. in the 138th District Court, Cameron County, citing defects in certain two-point motorized seat belt systems. They claimed the systems were unfit for the ordinary purpose intended, were defective and inadequate, and violated the implied warranty of merchantability. Specifically, the plaintiffs said Nissan failed to warn that the separate manual lap belt must be used to avoid injury in an accident. Unless the lap belt is properly engaged, the plaintiffs alleged, the restraint system will not perform its intended function of protecting occupants from injury and can, in itself, cause serious injury to the occupant it is intended to protect. The plaintiffs also contended that the snugness of the automatic shoulder belt creates an express warranty that the user is safely restrained without engagement of the lap belt, leading to a sense of false security, and that the accompanying warnings and instructions are inadequate to overcome this problem. The suit seeks monetary compensation for all actual, special and consequential damages, and pecuniary losses including, but not limited to, repair and/or replacement costs, the cost of alternative transportation during repairs and the value of the loss of use of each vehicle during this process. Cameron County District Court Judge Robert Garza said the claims were based on an alleged common course of conduct of manufacturing and selling a defective product, which was allegedly marketed through a common course of similar misrepresentation. The judge ordered certification of a class consisting of "all residents in the State of Texas who own a Nissan vehicle equipped with a two-point passive restraint system equipped with a separate manual lap belt." This system was installed in various Nissan vehicles manufactured between 1987 and 1995, with more than 153,000 such vehicles currently registered in Texas. The Appeals Court Affirmance The 13th District Texas Court of Appeals found the requisite commonality in the claims, noting: -- Plaintiffs stated a viable breach of warranty claim; -- The trial court will be able to create subclasses for purchasers of new and used Nissan vehicles; -- The warnings and instructions received by all plaintiffs were substantially similar; -- The express warranty claim, while "novel," was lodged by all plaintiffs; and -- The misrepresentation claim was also lodged by all plaintiffs. The appeals court next considered whether common issues predominated over individual allegations, and concluded that common issues of substantive law control the case. Further, the panel held, class counsel is not required to submit a plan for dealing with individually determined issues at the initial certification stage. The appeals court also noted that evidence on common issues was disputed by the parties, but that a trial court does not abuse its discretion when it bases a decision on conflicting evidence. On typicality, the panel found a "critical nexus" between the interests and injuries of the class representatives and those of the purported class. Finally, the appeals court said a class action was the superior method of adjudicating the dispute, rejecting Nissan's argument for a recall by the National Highway Traffic Safety Administration. "This matter has already been rejected by that agency," the opinion states. "All monetary damages would not necessarily be eliminated by a NHTSA-ordered recall, and NHTSA is not empowered to grant monetary damages." The plaintiffs are represented by Andrew C. Schirrmeister III of Schirrmeister Ajamie in Houston; Norman Jolly of Houston; and Tony Martinez of Martinez, Barrera & Robles in Brownsville, Texas. Nissan is represented by S. Vance Wittie and W. Richard Davis of Strasburger & Price in Dallas; Mark Bradley Blackburn of Strasburger & Price in Austin, Texas; and Eduardo R. Rodriguez and Allison Kennamer of Rodriguez, Colvin & Chaney in Brownsville. (Automotive Litigation Reporter, June 20, 2000) FULTON SHELTER: GA Suit Alleges of Rushing Stray Pets to Their Death -------------------------------------------------------------------- The people who should be protecting Fulton County's stray pets are instead conspiring to kill them faster than the law allows, a federal lawsuit filed last Thursday June 29 alleges. The suit, filed in U.S. District Court in Atlanta, claims that employees of the county's animal shelter not only kill pets without waiting the three days required by law, but forge owners' signatures to skip the waiting period. "They do this all the time to healthy dogs," said Atlanta lawyer Ralph Goldberg, who filed the suit. "I've heard explanations, but none of them satisfies me. I really don't know why." The suit is filed on behalf of Kathy Hawkins of southeast Atlanta. She alleges an animal control officer twice came to her home on Hutchins Road in February and seized three small mixed breed dogs --- Max, Ashley and Y2K. The dogs were not leashed. Hawkins went to the shelter two days later to retrieve them and found they already had been killed, Goldberg said. The lawyer said after Hawkins complained to him he sent an investigator to the shelter on Marietta Boulevard and found routine violations of the county- required three-day holding period. Many of the signatures approving the killings were in the same handwriting, he said. Goldberg also said the seizure violated Hawkins' right for protection from unlawful search. The suit is filed as a class action and seeks others who may have had similar complaints. It seeks $ 6,000 in damage per class member. "This isn't about making a lot of money," Goldberg said. "It's about stopping them killing pets." Bill Garrett, director of the Humane Society, which operates the shelter, said animals are killed in less than three days only with the owner's permission or upon approval by a veterinarian. He denied employees falsify documents to kill dogs more quickly at the chronically crowded shelter. "We have accusations all the time," Garrett said. "False swearing is a felony. If anyone's doing that, we want to know." Hawkins said she was traumatized by the capture and loss of her beloved dogs. "I thought if your dog was walking down the street or they bite somebody, they could pick them up," Hawkins said. "I didn't know they could come into your yard and pick them up." The Atlanta Humane Society operates two shelters under a contract with Fulton County. The facility on Marietta Boulevard is used to hold animals that are picked up as strays, running loose or by owner's request. An adoption center is nearby on Howell Mill Drive. Shirley Jenkins, staff administrator, said the population on Marietta Boulevard is about 146 dogs a day. She estimated 70 percent of those brought in are put to sleep. Only those sick or injured are euthanized on arrival and only then with a veterinarian's permission, she said. (The Atlanta Journal and Constitution, June 30, 2000) GREAT AMERICAN: Agrees to Settle GALIC Policyholders' Suit in Ohio ------------------------------------------------------------------ Great American Financial Resources, Inc. (NYSE: GFR) announced on June 29 that it has reached a preliminary agreement to settle a class action lawsuit brought against the Company's subsidiary, Great American Life Insurance Company. In the action, which was filed in state court in Cincinnati in February 1999, the plaintiffs alleged on behalf of a group of current and former GALIC policyholders, that GALIC had not properly administered the annuitization feature on a group of policies by not permitting the tax-free transfer of the annuity value of such annuities to other product providers, without the imposition of a surrender charge, and had credited interest on policies in a manner not consistent with the terms of the policies and the marketing materials. The Company has denied that it failed to abide by any terms of its policies. In the proposed settlement, GALIC has agreed (i) to create a fund against which certain former policyowners who were not permitted to annuitize their policies can submit claims for all or a portion of their surrender charges and payment of additional interest, (ii) to make a one-time lump-sum credit of additional interest to existing policyholders holding fixed rate annuities (with certain minor exceptions) whose policies remain in force one year after the effective date of the settlement, and (iii) to make a one-time offer to certain annuity holders to allow the transfer of all or a portion of their existing two-tier annuity to a single-tier market based annuity issued by GALIC or another of the Company's subsidiaries (subject to proration). The Company expects that the total cost of the settlement will be $22 - $25 million. The settlement is subject to the parties reaching a definitive agreement and Court approval of the terms of the settlement. Policyholders will be provided with notice of the proposed settlement within the next several months. S. Craig Lindner, President and CEO of GAFRI, commented, "Although we continue to believe that GALIC's actions have consistently been in accordance with the terms of its policies and applicable law, we recognized that defending this type of action would require us to devote significant resources. We are pleased that in this settlement we are able to provide value to our policyholders through increased credits to their current annuities and through a conversion program." The Company's earnings for the second quarter will include a charge of up to $0.50 per share after tax for liabilities related to various litigation in which the Company is a defendant, most significant of which is the settlement of the above mentioned class action. The balance of the charge is for other litigation matters, including an adverse jury verdict rendered in a case in Dallas County, Texas which the Company intends to appeal. The charge represents amounts that the Company has already agreed to pay and estimates of the ultimate liability in cases not yet finalized. Through its subsidiaries, GAFRI markets traditional fixed, equity-indexed and variable annuities and a variety of life, supplemental health and long- term care insurance. The Private Securities Litigation Reform Act of 1995 encourages corporations to provide investors with information about the Company's anticipated performance and provides protection from liability if future results are not the same as management's expectations. This document contains certain forward-looking statements that are based on assumptions which management believes are reasonable but, by their nature, inherently uncertain. Future results could differ materially from those projected. Factors that could cause such differences include, but are not limited to: changes in economic conditions, regulatory actions and competitive pressures. GAFRI undertakes no obligation to update any forward-looking statements. HARMONIC INC: Barrack Rodos Files Securities Lawsuit in California ------------------------------------------------------------------ A class action has been commenced in the United States District Court for the Northern District of California on behalf of all persons who purchased the common stock of Harmonic Inc. (Nasdaq: HLIT) between March 27, 2000 and June 26, 2000, inclusive (the "Class Period"). The complaint charges Harmonic 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 concerning the revenues to be derived from Harmonic's largest customer, AT&T, and from its newly acquired C-Cube division (DiviCom), which would result in earnings per share of more than $1.19 in 2000, artificially inflated the price of Harmonic stock to a Class Period high of $102. According to the complaint, the false and misleading statements enabled Harmonic to complete the $1.7 billion acquisition of C-Cube's DiviCom business using Harmonic's overpriced stock. On June 26, 2000, after the acquisition was completed, Harmonic revealed that it was in fact suffering a huge drop in revenues and exposed the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused Harmonic's stock price to drop to as low as $22-11/16 on record volume of 21.9 million shares on June 27, causing hundreds of millions of dollars in damages to members of the Class. Contact: Counsel for Class Plaintiffs, Barrack, Rodos & Bacine, Shareholder Relations Manager, 800-417-7305, or 215-963-0600, or fax 888-417-7306, or 215-963-0838, or e-mail, msgoldman@barrack.com HARMONIC INC: Wolf Popper Charges of Securities Violations ---------------------------------------------------------- Harmonic Inc. (Nasdaq: HLIT) and certain of its senior officers have been charged with committing securities fraud by Wolf Popper LLP in a class action lawsuit brought on behalf of all persons who acquired Harmonic Inc. common stock on May 3, 2000 in exchange for shares of C-Cube Microsystems, Inc. (Nasdaq: CUBE) common stock, or who otherwise purchased or acquired Harmonic common stock during the period March 27, 2000 through June 26, 2000. The complaint charges that Harmonic and certain of its officers manipulated Harmonic's share price by issuing materially false and misleading statements concerning revenues to be derived from Harmonic's largest and most important customer, AT&T, and from the DiviCom business being acquired from C-Cube Microsystems. This series of materially false and misleading statements artificially inflated the price of Harmonic stock during the class period, enabling Harmonic to use its inflated stock as the currency to purchase DiviCom from C-Cube. Defendants made these materially false and misleading statements, among other things, to induce C-Cube's shareholders to approve the exchange of C-Cube common stock for Harmonic common stock. On June 26, 2000, Harmonic shocked the investment community by announcing that it was, in reality, experiencing a huge drop in revenues, revealing the problems Harmonic was encountering at the time of the exchange of C-Cube common stock for Harmonic common stock. This shocking announcement caused the stock of Harmonic to drop to as low as $22 11/16 per share on June 27, 2000. Harmonic common stock had traded at approximately $72 per share on May 3, 2000 -- the day of the exchange of C-Cube common stock - resulting in a dramatic $50 per share decline in the value of Harmonic shares acquired by the former C-Cube common shareholders. Contact: Robert C. Finkel Esq. or Douglas Rotela, Investor Relations Representative of Wolf Popper LLP, 212.451.9620 HMOs: Herdrich Survives Charge against Physician Incentive in High Ct --------------------------------------------------------------------- With the Supreme Court's unanimous decision to restrict the right of patients to sue health plans, attention has turned to Congress and legal actions pending in the states. The nation's high court found that HMOs could not be sued over the use of physician financial incentives to limit care. "No HMO organization could survive without some incentive connecting physician reward with treatment rationing," wrote Justice Souter for the court. In the case, Pegram v. Herdrich (98-1949), patient Cynthia Herdrich suffered a ruptured appendix after being told to wait eight days for an ultrasound to investigate abdominal pain. She won a state malpractice case, but sued her HMO under ERISA, alleging that the plan's use of physician bonuses constituted a breach of fiduciary duty The decision puts the ball in Congress' court. "For over 27 years the Congress of the United States has promoted the formation of HMO practices," Souter wrote. "If Congress wishes to restrict its approval of HMO practice to certain preferred forms, it may do so." Consumer and provider groups echoed that call. "The Supreme Court's decision is a very timely reminder that we need federal patients' rights legislation," said Families USA's Ron Pollack. Now, the industry hopes the Supreme Court's decision will take the wind from the sails of pending class-action lawsuits, some of which are based on ERISA claims. Calling it a "victory" for insurers, the American Assn. of Health Plans' Karen Ignagni said, "It is an equally resounding defeat for suit-happy trial lawyers." But the class-action bar disagreed. "The statement has been made that this is a death knell to class actions, or somehow it will adversely affect the litigation that's pending. I don't think that's the case at all," said Steven Lane, an attorney with Herman Middleton Casey Kitchens LLP, a firm active in class-action suits against HMOs. (Managed Care Week, June 19, 2000) HMOs: Senate OKs Patients' Restricted Right to Sue -------------------------------------------------- The Republican-controlled Senate voted last Thursday night June 29 for limited new patient protections, including a restricted right to sue HMOs, overriding Democratic protests that the plan was an election-year sham. The vote was 51-47, largely along party lines, and capped two weeks of intense partisanship in both the House and Senate over health care issues expected to resonate in the fall campaign. Senate GOP Whip Don Nickles, R-Okla., said the proposal marked a "significant concession" over legislation that Republicans approved last year that barred lawsuits. He also said the proposal had built on progress made in months of closed-door negotiations with Democrats on the issue of patients' rights. Sen. Edward M. Kennedy, D-Mass., countered that the bill had been "drafted solely by Republicans," and fell short of covering all 161 million insured Americans who would be covered under a rival plan backed by Democrats and the White House. The vote did little to clarify the future of patients' rights legislation, one of two major health-related measures that Congress is considering. The other, a bill to provide prescription drug coverage to Medicare recipients, cleared the House under political circumstances akin to the Senate's vote on patients' rights. On that issue, it was House Republicans exercising their majority muscle to advance a bill that Democrats said would do little to address the needs of Americans. The vote came on an amendment to a spending bill for federal agencies. The overall bill was expected to clear the Senate. The Republican plan provides several guarantees, including access to emergency room care, out-of-network physicians and specialists for an estimated 56 million insured individuals. Democrats said that wasn't nearly enough, and instead pushed a proposal requiring that any protection apply to all Americans with insurance, a group more than three times larger than the one Republicans proposed covering. The proposal was rejected 51-47. Republicans said patients would be permitted to file suit in federal court against HMOs that improperly denied care, as determined by an independent reviewer. They said the lawsuit provision would apply to 131 million insured people, who could seek unlimited economic damages and up to $ 350,000 in compensatory damages. Punitive damages and class-action lawsuits would be barred. In addition to the patient protections, the GOP measure includes several tax breaks designed to make health care more affordable. They include full deductibility for Americans who purchase their own insurance, as well as those who are self-employed. (Sun-Sentinel (Fort Lauderdale, FL), June 30, 2000) LASERVUE EYE: Eye Surgery Patients Angry at Company's Letter ------------------------------------------------------------ Although tests have shown no evidence of infectious disease being transmitted, many of the 2,700 former patients of LaserVue Eye Centers in Santa Rosa and San Francisco are angry at the company and the tone of its letter acknowledging the same cornea-cutting blades were used on multiple patients. LaserVue began sending letters in mid-May under prompting from a class action lawsuit in San Francisco Superior Court filed by eye surgery patients. The patients said they fear transmission of infectious diseases such as HIV or hepatitis because blades were reused on patients during eyesight correction procedures. "It was a bland letter and there should have been an apology," said Peter Brett, a Sebastopol an oncologist who had his eyes done at LaserVue, as did his wife. "I blame those doctors for going against all known practices just to save $40 or $50 bucks on blades." LaserVue officials referred comment about the lawsuit and the letters to their attorneys in San Francisco. Richard Abbey, the Santa Rosa attorney for Jay Bansal, a San Francisco opthalmologist and owner of several LaserVue centers including the Santa Rosa one, said LaserVue sent notices based on the recommendation of state health officials. Abbey said he and the San Francisco law firm defending LaserVue had lengthy discussions about wording the letter so as to reflect prevailing medical opinion about the low health risk to patients, including both Bansal's medical opinion and the state health department's view about whether tests were necessary. Two weeks ago, a San Francisco Superior Court judge allowed the class action suit to proceed, but LaserVue attorneys appealed that decision. The appeals court granted a stay of the proceedings during which both sides could file briefs on whether the plaintiffs can form a group legally eligible to sue LaserVue. Kevin Holl, attorney for the plaintiffs, said "scores of patients" had called his firm's San Francisco office to discuss their experience at LaserVue. He said two people had developed hepatitis after the surgery. "We are not sure yet whether it was related to the surgery," he added. "Many of them were not satisfied with the content or tone of the 'Dear Patient' letter they received," Holl said. "They felt it was a really soft sell of the severity of what occurred." Cristi McMahan of Santa Rosa, an employee for a major Sonoma County high-tech company, said she was furious when she received the letter because LaserVue's "sense of responsibility was not forthcoming." She said she had corrective surgery on both eyes in January 1999 and they had to be redone five months later. "It was simply amazing to me that they did not change blades between patients," McMahan said. "If I knew that was happening, I certainly would not have had it done, the first time nor the second." The LaserVue letter says the blade reuse practice was discontinued on May 28, 1999. It notes that the California Department of Health Services concluded the practice did not comply with infection control recommendations, and that the risk of disease transmission was low. "The practice was to reuse a blade on a second patient if that blade proved satisfactory on the first patient and if the LaserVue surgeon felt that it was safe and appropriate to do so," the letter said. Many patients said they got tested for infectious disease, but none reported that tests turned up positive. Bansal said in court documents that the procedure carries no risk of infectious transmission. He has said he and other center surgeons sterilized equipment, including blades, and that antibiotics were applied during and after procedures. The Lasik procedure used by LaserVue is one of several methods used for corrective surgery by opthalmologists and is patented by the VISX company of Santa Clara, which estimates its surgeons have performed it on more than 1 million people in the world. In recent years, vision correction surgery has become phenomenally popular among adults. Laser vision correction generally costs from $1,800 to $2,500 per eye. According to court documents, reuse of blades was a practice from March 1, 1996, to May 27, 1999, at the Santa Rosa center and from July 1997 to May 27, 1999, at the San Francisco center. (The Press Democrat, June 17, 2000) LEND LEASE: Prepared to Pay for Thredbo Landslide; Govt Makes Offer ------------------------------------------------------------------- Angry locals abused National Parks and Wildlife Service workers after June 29's damning report into the Thredbo landslide disaster. The service said a number of staff had been verbally abused after the report named the NPWS as partly responsible for the 1997 landslide which killed 18 people. A NPWS spokesman said it was important Thredbo locals remember NPWS staff in the area were part of the mountain community. "Many of them were part of the rescue effort, and many lost friends in the tragedy," the NPWS spokesman said. There was better news for the grieving families of those killed, however, as the New South Wales government announced it would do everything in its power to settle common law compensation cases brought by families through negotiation rather than litigation. Eight families have joined a class action against the NPWS, the Roads and Traffic Authority (RTA), Lend Lease and Kosciuszko Thredbo Pty Ltd, which is currently before the NSW Supreme Court. Thredbo developer Lend Lease said it was prepared to contribute to a compensation payout, even though liability had not been determined by the coroner. However, the other party in the law suit, Kosciuszko Thredbo, which subleases Thredbo from the NPWS, said it did not believe it was liable to pay any damages. Coroner Derrick Hand blamed 40 years of government inaction, particularly on the part of the NPWS and RTA, for the disaster. Emotions spilled over as news of the scathing report reached the alpine village of Thredbo, with several National Parks and Wildlife Staff targeted by distressed locals, it was revealed. Meanwhile, the lawyer representing the families in their battle for compensation, Bernard Collaery, welcomed the government's offer of a negotiated settlement. "This is a very welcome development," Mr Collaery said. "We are prepared to meet the challenge and sit down with all parties as soon as possible. "It would be great if this issue could be put away with in the next three months," Mr Collaery said. Environment Minister Bob Debus had earlier said the government would "do everything possible to reduce continuing distress to the families involved". "We are now determined to approach the legal representatives of families with offers of negotiation," he said In other developments: Kosciuszko Thredbo said it did not believe it was liable to pay compensation and would wait and see if any legal action proceeded in the courts. The government announced Bret Walker, SC, would head its inquiry into the NPWS, which will assess the ability and appropriateness of the NPWS remaining in control of urban communities and road maintenance inside national parks. The NSW Opposition slammed the terms of reference of the inquiry and said it should be extended to other NPWS issues such as sewerage disposal, feral animal reduction and the role of the RTA in planning issues. (AAP Newsfeed, June 30, 2000) RELIANCE GROUP: Wolf Haldenstein Files Securities Suit in New York ------------------------------------------------------------------ Wolf Haldenstein Adler Freeman & Herz LLP has filed a class action lawsuit on behalf of purchasers of the securities of Reliance Group Holdings Inc. (NYSE:REL) between Feb. 8, 1999, and May 10, 2000, inclusive. The action is pending in the United States District Court for the Southern District of New York, located at 500 Pearl St., New York, N.Y., 10007 against defendants Reliance Group, Saul P. Steinberg (Chief Executive Officer and Director), Robert M. Steinberg (President and Chief Operating Officer), Howard E. Steinberg (Chief of Corporate Operations) and Lowell C. Freiberg (Chief Financial Officer and Director). The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between Feb. 8, 1999, and May 10, 2000. For example, as alleged in the complaint, on March 31, 1999, defendants, in their financial statement filed with the SEC for its fiscal 1998 operations, stated that the Company's reinsurance contracts were valid, and that it expects to recover the full amount of such coverage. This statement was false and misleading, and defendants knew, or recklessly disregarded its falsity, because the Company was notified, prior to making the statement, that several reinsurance companies terminated their obligations to the Company. Because the Company's obligations to its insureds remained intact, the Company's expected losses exceeded $150 million. Furthermore, this$150 million loss should have been reflected as a charge to income, under Generally Accepted Accounting principles, and was not, thereby masking the Company's true, and impaired, financial condition and prospects. On May 10, 2000, the Company reported that its first fiscal 2000 quarter would see an operating loss of $.31 per diluted share, which represented a greater loss than the comparable 1999 quarter. That day the price of Reliance Group stock closed at $2.625- a decline of over 400% from the class period high of $11 per share. Contact: Wolf Haldenstein Adler Freeman & Herz LLP Gregory M. Nespole, Esq. Fred T. Isquith, Esq. Michael Miske George Peters (800) 575-0735http://www.whafh.com TOBACCO LITIGATION: Internal Dissension Erupts As Both Sides in FL Rest ----------------------------------------------------------------------- Both sides rested last Friday June 30 in a landmark court fight over punitive damages for 300,000 to 700,000 sick Florida smokers as a lawyer disclosed internal feuding among the nation's five biggest cigarette makers. Philip Morris Inc. attorney Dan Webb cited the opposing defense views as he asked for as much time as possible for closing arguments in the pivotal money fight, which could set a national record. "There's been a lot of dissension over here, and I'm trying to be a peacemaker," said Webb, the lead tobacco attorney. "I don't know quite know how to say this. There's a lot of disagreement among these five companies as we go into it." For decades, the industry spoke with a single voice denying smoking caused disease. When the trial opened two years ago, Liggett Group Ltd. had broken ranks. Now, it's every Marlboro Man for himself. The industry is coming off its best financial year in history, but each company offered testimony about its money worries and told of recent changes made to discourage youth smoking. Lorillard Tobacco Co. announced for the first time that it has changed company policy to say smoking causes disease and is addictive. Brown & Williamson Tobacco Corp.'s falling market share was offered as a sign it could easily go under. R.J. Reynolds Tobacco Co. and industry-leading Philip Morris have not acknowledged any causal link between smoking and disease. "If there's ever been a trial where these tobacco companies have had different issues to address to the jury, you've seen it," Webb told Circuit Judge Robert Kaye. The six-member jury serving for nearly two years was told to return July 10 for closing arguments, which could take four days. The lawsuit seeks a record-breaking $200 billion, and smokers' witnesses have said the industry can afford to pay $150 billion to $157 billion. But the smokers' attorney can adjust the figure, and he hasn't yet told jurors exactly what he wants. Smokers want to penalize the industry for decades of misconduct, but the companies argue their $254 billion commitment to state lawsuit settlements is enough to pay. The national record for a jury's punitive damage verdict was $4.8 billion awarded last year against General Motors in a fiery California crash that seriously burned six people. Smokers had planned a brief rebuttal case using part of a videotaped deposition by Dr. David Burns, a public health expert, but the judge excluded it as repetitious. The six-member jury hearing the landmark smokers' class-action trial already has decided the industry makes a deadly, defective product and awarded $12.7 million in compensatory damages to three smokers with cancer. (The Associated Press, une 30, 2000) VITAMIN PRICE-FIXING: Australian Subsidiaries Face $100 Mil Case ---------------------------------------------------------------- The Australian subsidiaries of three multinational pharmaceutical companies face a $100 million class action over an alleged worldwide price-fixing conspiracy. The right to join the Asian and Australian arms of Roche Vitamins, Avantis Animal Nutrition and BASF in the class action was won by Law firm Maurice Blackburn Cashman. The decision follows a S1.2 billion (2 billion) settlement in the United States last year by seven vitamin makers, accused of a nine-year conspiracy that caused hundreds of food and beverage companies to pay artificially high prices for vitamins A, B, C and E. The higher prices were alleged passed on to consumers of products ranging from breakfast cereal to peanut butter, a spokesman for the law firm said. (AAP Newsfeed, June 30, 2000) WAR VICTIMS: Chinese sue Japanese Firms in CA Court over WW II Labor -------------------------------------------------------------------- Two Chinese nationals have filed a class-action suit with a U.S. court against Mitsubishi Corp., Mitsui & Co. and their U.S. affiliates, seeking compensation for alleged torture and enslavement during World War II, their lawyers confirmed. The case, which was filed on May 19 at the Superior Court of California in Orange County, is the first time in which Chinese nationals have sued Japanese firms over wartime labor, said Patrick Daniels, one of the attorneys. The former laborers and their heirs are seeking damages under a California law that extends the statute of limitations on such cases to 2010. Plaintiffs may bring cases to court even if they are not citizens, as long as the companies they are suing operate in the state. The plaintiffs, Aizhu Su and Yongcai Ye, were captured in China by the Japanese when they were teenagers and later transported to work in Japanese mines, according to the suit. The Japanese abducted other Chinese for the purpose of putting them to work in Japanese companies, during their occupation of China from 1931-1945. Su was interned at a Mitsubishi mine in Akita Prefecture, northern Japan, and Ye was taken to Kyushu, southern Japan, where he worked at a Mitsui coal mine. Su, Ye and other plaintiffs allege they were often starved, beaten and tortured in Japan, according to the lawsuit. The class-action suit comes on the heels of two other suits, which were filed on behalf of former Filipino and Korean laborers. Daniels expects more class-action suits to be filed against Japanese firms and plans to represent Thai and Vietnamese laborers in the near future. (Asian Political News, May 29, 2000) WESTERN RESERVE: Insurer Alleged of Deceptive Sales Practices in Ohio --------------------------------------------------------------------- Two couples allege deceptive sales practices by Western Reserve Life Assurance Co. of Ohio, says Law Firm of James, Hoyer; Robert & Cleo Kocher and Nicolas & Thelma Maragos, on behalf of themselves and all others similarly situated, vs. Western Reserve Assurance Co. of Ohio; Case No. 8:00-CV-1344-T-17F. The law firm of James, Hoyer, Newcomer and Smiljanich, P.A. has filed a class action lawsuit on behalf of four former policyholders of Western Reserve Assurance Co. of Ohio. The lawsuit alleges deceptive insurance sales practices in the sale of life insurance policies. The lawsuit was filed in Tampa, Florida, on June 30, 2000. Western Reserve is a subsidiary of AEGON, USA, and ultimately of AEGON N.V., the Dutch financial services conglomerate (NYSE: AEG). Two couples, Robert and Cleo Kocher, and Nicolas and Thelma Maragos, are the plaintiffs in the lawsuit. It is alleged that Western Reserve induced the Maragoses to replace cash-rich policies issued by other companies with Western Reserve policies using the single premium payment or vanishing premium concepts. The Kochers were induced to invest the proceeds of a real estate transaction in what they believed to be a high-yield investment. The policyholders were fraudulently led to believe that their initial investment, coupled with the high illustrated interest that would accrue on the Western Reserve policies, would eliminate the need for further "out-of-pocket" premium payments after a single payment. Western Reserve led the policyholders to believe that what they were purchasing were primarily investment products rather than mere life insurance policies. The Western Reserve agents intentionally failed to disclose that high commissions and administrative charges would be assessed from the funds initially paid as premiums, that the high illustrated interest rates upon which the promises were based were not guaranteed, that the cost of insurance would increase with the policyholders' ages, and that premiums were due for the life of the policyholder. Neither of the couples anticipated that additional premiums would become due in the future. However, the complaint also alleges that Western Reserve knew that it could not sustain the interest rates illustrated and that it was a certainty that additional significant premium outlays would be required after the Kochers' and Maragoses' anticipated single premium. The class action plaintiffs are residents of Florida who seek to represent all persons nationwide who were victimized by the fraudulent and misleading sales practices of Western Reserve. Mike Peacock, an attorney with James, Hoyer, Newcomer & Smiljanich, P.A., a Tampa firm specializing in class actions and representing victims of corporate fraud, stated: "The Western Reserve policyholders made what they believed to be investments requiring a one time payment based upon the promises made to them by Western Reserve. Rather than making an investment for their future they had merely purchased life insurance with an obligation to continue paying premiums for life." Contact: Mike Peacock, e-mail mpeacock@jameshoyer.com or John Yanchunis, e-mail jyanchunis@jameshoyer.com, both of James, Hoyer, Newcomer & Smiljanich, P.A., 813-286-4100 ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *