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             C L A S S   A C T I O N   R E P O R T E R

             Friday, November 3, 2000, Vol. 2, No. 215

                             Headlines

ABDELHAK: E.D. Pa. Throws Out RICO Claims against Bankrupt Allegheny
AUTO FINANCING: Lawsuit Says Ford Motor Credit of Charging Blacks More
BENEFICIAL CORP: AL Judge Certifies Suit over Non-Filing Insurance Fees
BREVARD COUNTY: School Girls' Sports Suit Heads to Court
BRIDGESTONE/FIRESTONE, FORD: Begin To Count Cost After Tyre Recall

BROWARD COUNTY: Homeowners Get Fund to Replace Trees in Canker Program
CANADA CHURCHES: Indian Suits on School Abuse Pose Threat of Bankruptcy
COLUMBIA ENERGY: Agree to Merge and Settle with NiSource & Shareholders
COMPAQ COMPUTER: Defends Lawsuits over Floppy Disks in Different States
COMPAQ COMPUTER: Defends Securities Suits Filed in 1998 and 99 in TX

COMPAQ COMPUTER: Discovery Goes on for Digital's Securities Suit in MA
CREDIT CARDS: New Rules Require Holders' Chargeback Dispute in Writing
EMCOR GROUP: Lawsuit Accuses of Holding JWP Stock in Retirement Plan
EMULEX HOAX: Lawsuit Charges Internet Wire, Bloomberg with Fraud
ERIE COUNTY: 3rd Cir Holds ADEA Applies to Retirees in Health Plan Case

INCO LIMITED: Lowey Dannenberg Announces Settlement for VBN Shareholders
MATSUSHITA ELECTRIC: Suit Accuses Peachtree City Plant Of Racial Bias
MINNEHAHA COUNTY: Sued for Strip Search of Girl Caught in Curfew
NAPSTER INC: RIAA Says Bertelsmann Deal Will Not End Lawsuits
PA DEPT: 3rd Cir Denies Incarcerated Youths Suit over Equal Education

PASMINCO LTD: Asks Court To Dismiss Group Claims Over Smelters

                             *********

ABDELHAK: E.D. Pa. Throws Out RICO Claims against Bankrupt Allegheny
--------------------------------------------------------------------
A Philadelphia federal judge has dismissed the civil RICO class action
brought against the principals of the now-bankrupt Allegheny Health
Education and Research Foundation over the alleged raiding of restricted
endowment funds brought on behalf of those individuals who donated the
funds and those intended to benefit from them. Browne et al. v. Abdelhak et
al., No. 98-6688 (E.D. Pa., Aug. 23, 2000).

U.S. District Judge Clarence S. Newcomer concluded that neither subclass
suffered an injury to a protected property interest; therefore, each lacks
standing to sue under the Racketeer Influenced and Corrupt Organizations
Act.

The complaint, which named the officers and trustees of the charitable
foundation/health system that at one time controlled many of the state's
prominent hospitals and medical schools, was brought soon after the
Allegheny Health Education and Research Foundation filed for bankruptcy
protection in July 1998. The debtor owed an estimated $1.3 billion to its
creditors at the time of filing.

The complainants contended that the defendants wrongfully seized and
misappropriated millions of dollars in funds and grants that had been held
in AHERF's custody. The defendants utilized these funds, the plaintiffs
alleged, for unauthorized purposes, including granting themselves
exorbitant raises and bonuses, and repaying an $89 million loan from the
co-defendant Mellon Bank. The class members deemed this misuse part of a
larger scheme to keep AHERF afloat as long as possible so that the
defendant's looting of the system could continue.

In arguing for dismissal, the defendants asserted that none of the
plaintiffs possessed a property interest that could have been injured for
the purposes of RICO.

In his analysis, Judge Newcomer addressed the subclass of donors first.
While noting the dearth of case law on the issue, he noted that a donor's
property interest in a donation is only recognized if the donor retains a
right of reverter, right to modify, or right to redirect. While the terms
of the endowment agreements gave the donors the right to restrict how their
donations would be used, the judge found this insufficient to show that the
plaintiffs retained any right to reverter.

"Without sufficient allegations of a property interest in the donated
funds, the donor plaintiffs have failed to establish any standing under
RICO to sue the Defendants in the instant action because they have failed
to allege any injury to a business or property interest," the court
concluded.

As to the subclass of beneficiary researchers, the defendants argued that
they were only the instruments through which AHERF's research mission would
be carried out, and the real beneficiaries were those patients who stood to
benefit from the research.

Judge Newcomer concluded that the beneficiaries could sue for enforcement
of the grant terms, but not for damages. " T he allegations sufficiently
show that AHERF had a duty to pay the Beneficiary Plaintiffs from the
funds. However, AHERF's duty to pay was not unconditional; rather, it was
restricted to the particular uses for which the money was granted," he
wrote. "While the Beneficiary Plaintiffs clearly had an interest in the
funds, their interest was limited to the conditions and restrictions set
forth by the grants and was not alienable without valid restraint upon
alienation."

Beyond failing to allege a protected property interest, the judge found the
donor class's claimed injuries too remote from the alleged racketeering
activity to confer RICO standing, as per the Supreme Court's doctrine of
Holmes v. SIPC, 503 U.S. 258, 117 L. Ed. 2d 532, 112 S. Ct. 1311 (1992).

The judge did deem the beneficiary class's injuries sufficiently direct to
satisfy Holmes.

The plaintiffs are represented by Sherrie R. Savett of Philadelphia and
Michael T. Fantini of Berger & Montague in Philadelphia.

The defendants are represented by George E. McGrann of Sweeney, Metz, Fox,
McGrann & Schermer in Pittsburgh; Judith F. Olson of Schnader, Harrison,
Segal & Lewis in Pittsburgh; Amy L. Ronallo, Kevin K. Douglass and Amy L.
Wetterau of Babst, Calland, Clements & Zomnir in Pittsburgh; Robert A. King
of Buchanan Ingersoll in Pittsburgh; Laurence L. Smith of Neil A. Morris
Associates in Philadelphia; S al Cognetti Jr. of Foley, Cognetti &
Comerford in Scranton, Pa.; Jeffrey B. McCarron of Philadelphia; Jeffrey B.
Balicki, Jeffrey R. Lalama and Francis C. Rapp Jr. of Feldstein, Grinberg,
Stein & McKee in Pittsburgh; Michael J. Holston, John F. Schultz, Mary
Catherine Roper, Amy E. Pizzutillo and Kirke D. Weaver of Drinker, Biddle &
Reath in Philadelphia; William F. Manifesto and Ellen M. Viakley of
Manifesto & Donahoe in Pittsburgh; Allen D. Black and Jeffrey Istvan of
Fine, Kaplan & Black in Philadelphia; Robert L. Byer, David L. McClenahan,
Wendy E. Smith, Nicholas P. Vari and John T. Waldron III of Kirkpatrick &
Lockhart in Pittsburgh; William J. O'Brien and Andrew Hanan of Conrad,
O'Brien, Gellman & Rohn in Philadelphia; and Jay H. Calvert Jr. of Morgan,
Lewis & Bockius in Philadelphia. (Civil RICO Litigation Reporter, September
2000)


AUTO FINANCING: Lawsuit Says Ford Motor Credit of Charging Blacks More
----------------------------------------------------------------------
Ford Motor Credit Co., the financing arm of the world's second-largest
automaker, is being sued by four black motorists for allegedly
discriminating against them and others by charging too much to finance
loans. The lawsuit, which seeks class-action status in federal court,
claims Ford dealers use a subjective "mark-up policy" to increase the cost
of borrowing for blacks after first performing an objective credit
analysis. The suit seeks to represent all black customers who got financing
from Jan. 1, 1990, to the present. (The Detroit News, November 2, 2000)


BENEFICIAL CORP: AL Judge Certifies Suit over Non-Filing Insurance Fees
-----------------------------------------------------------------------
An Alabama federal judge has certified a class action brought under RICO
and the Truth in Lending Act against Beneficial Corp. and its subsidiaries
over the lender's alleged practice of assessing fees for non-filing
insurance (NFI) and applying those fees to other ends. The court concluded
that the representative plaintiff satisfied the requirements of Fed. R.
Civ. P. 23(a) in conditionally certifying the matter as a Fed. R. Civ. P.
23(b)(2) class suit. In re Consolidated "Non-Filing Insurance" Fee
Litigation, MDL No. 1130 (M.D. Ala., Aug. 24, 2000); Christ v. Beneficial
Corp. et al., No. CV-98-CL-859-N (M.D. Fla., Aug. 24, 2000).

The assessment of NFI fees by lenders, a practice authorized by the TILA
and most states, is done to cover the risk that the lender will fail to
perfect a prioritized security interest in the borrower's collateral.
Multiple challenges to Beneficial's practices have been consolidated in a
multidistrict litigation proceeding in the Middle District of Alabama
before Judge U.W. Clemon.

Among those actions is a 1998 complaint originally filed in the Middle
District of Florida by Kenneth Christ, a restaurant manager who procured a
$1,954 consumer loan from the subsidiary Beneficial Florida Inc. (BFI) in
September 1994. The amount financed in the loan included an NFI fee of $14,
and the loan document indicated that the loan had been secured by Christ's
car and certain household goods.

In October 1995, Christ took out a second loan from BFI to refinance the
initial loan; while the loan was again secured by Christ's goods and car,
no NFI fee was assessed. Christ refinanced with BFI a second time in June
1998, and assumed that there would be no NFI fee; however, another $14 fee
was disclosed on a page separate from the two pages which he signed.

In his complaint, Christ asserted that the NFI fees were not used to
purchase valid NFI insurance, but default insurance instead. He alleged
that the fees collected by Beneficial's subsidiaries were being returned to
Beneficial in one form or another, and that he sought to have the practice
enjoined.

In weighing Christ's bid to certify a national class of BFI borrowers,
Judge Clemon first found the evidence to show that the numerosity
requirement of Fed. R. Civ. P. 23(a) had been satisfied. "Plaintiffs reside
in all of the 50 states; the proposed class consists of thousands or tens
of thousands of Plaintiffs; and joinder of such a large number of claims is
clearly impracticable," he wrote.

The judge also found multiple common questions of law and fact raised by
the complaint: "Is NFI, as utilized by the Defendants, really NFI Is the
Defendant's NFI really default insurance Was the purpose of the Defendants'
use of NFI to increase their income and profits Was the Defendants' use of
NFI a scheme and artifice to defraud"

Judge Clemon was unmoved by the defense contention that Christ's claims
were based on Florida law, and that a class suit would implicate the
insurance laws of fifty states. "Plaintiff's claims and those of the
putative class turn on federal laws: TILA and RICO," he stated. " F ederal
law controls the claims alleged by the putative class, and it supersedes
the laws of the individual states."

As to the typicality requirement, the court noted that "Christ's incentive
and motivation to litigate the absent class members' claims is co-extensive
with his own." The defense asserted that Christ is current with his
payments, and therefore atypical of class members who are in default; Judge
Clemon responded that the class definition "specifically excludes
transactions which are in substantial default."

With respect to whether Christ would adequately represent the absent class
members' interests, the judge found him to have "no interests which
conflict with or are antagonistic to the interests of the absent class
members," and his attorneys to be "eminently qualified, thoroughly
experienced, and uniquely capable of representing their clients in this
action."

Judge Clemon then found the matter properly certifiable as a Fed. R. Civ.
P. 23(b)(2) action. " T he relief that Christ seeks is quintessentially
declaratory and injunctive, rather than damage-oriented," the court wrote.
"Individual damages for the TILA and RICO violations pale into
insignificance when compared with the declaratory and injunctive relief to
which the class would be entitled, should it prevail. While acknowledging
the weight of precedent rejecting the availability of injunctive relief
under RICO, the judge found the class "would at a minimum be entitled to a
declaration that the Defendants' conduct violates that statute."

The plaintiffs are represented by Lanny S. Vines of Birmingham, Ala.

The defendants are represented by Douglas Campbell of McGuire Woods in
Atlanta; Clarence Small of Christian & Small in Birmingham; James C.
Huckaby Jr. of Haskell, Slaughter in Birmingham; J. Mark White of White,
Dunn & Booker in Birmingham; Fenton Erwin Jr. of Erwin & Bernhardt in
Charlotte, N.C.; and John W. Denney of Denney, Pease, Allison & Kirk in
Columbus, Ga. (Civil RICO Litigation Reporter, September 2000)


BREVARD COUNTY: School Girls' Sports Suit Heads to Court
--------------------------------------------------------
The girls' softball teams at Titusville High School and Astronaut High
School drive miles to play at a public park with dirty bathrooms and
dugouts that barely offer shelter. On the other hand, the boys' baseball
teams have on-campus fields with refrigerated water coolers and at one
school lights for night games. The discrepancies between the teams'
facilities is at the heart of a federal trial scheduled to get underway
Thursday.

''They are making girls play on substandard fields off campus, miles from
campus,'' said Mark Tietig, an attorney for the plaintiffs. ''The boys have
their baseball fields on campus with better fields that come up to the
standards and specifications that the girls don't have.''

The Brevard County School Board is accused of violating federal and state
laws that guarantee boys and girls equal facilities and opportunities to
play sports.

The class-action lawsuit asks U.S. District Judge Anne C. Conway to force
the school district to build softball fields at Titusville and Astronaut
high schools. Studies estimate that could cost $30,000 to $275,000 for each
school.

Mike Bowling, attorney for the school board, said the district can't afford
to build the fields at this time. Even the boys' football teams at the two
schools have to play off campus, school officials note.

''Brevard County is no worse and probably better than most counties in
Florida,'' Bowling said. ''The school board, like all government entities,
has financial constraints. There are other priorities, such as teachers'
salaries and facilities.''

The lawsuit was originally filed in 1997 by twins Jessica and Jennifer
Daniels, who complained the softball field was inferior to the baseball
field at Merritt Island High School. The lawsuit later was expanded to all
of Brevard's 11 high schools.

In 1997, Conway ordered the district to install lights, provide bathroom
access and improve bleachers so the girls wouldn't be treated as
''second-class citizens.''

Astronaut and Titusville high schools are the two Brevard schools still out
of compliance with the law, Tietig said.

At the park where the softball teams play, transients sleep in the dugout
at night, leaving behind garbage and bottles. And, the bases have to be
realigned for fastpitch softball each time the girls play.

The non-jury trial, expected to last at least three days, could have
far-reaching implications for school districts around Florida.

The U.S. Department of Education's Office of Civil Rights has investigated
complaints of gender discrimination in high school sports at schools in
Jackson, Okaloosa, Orange and Washington counties in Florida, and at the
Florida High School Athletics Association. (AP Online, November 2, 2000)


BRIDGESTONE/FIRESTONE, FORD: Begin To Count Cost After Tyre Recall
------------------------------------------------------------------
How deep are Fordand Firestone going tohave to dig to pay for the Firestone
tyre recall debacle?

To date, each of the companies has produced only one firm figure.
Bridgestone, Firestone's Japanese parent company, took a Dollars 350m
charge against third-quarter earnings to cover the immediate costs of
recalling 6.5m tyres, which have been linked to more than 100 deaths in
accidents involving Ford Explorer sports utility vehicles.

Yoichiro Kaizaki, Bridgestone president, said last month that the company
had no current plans to take a further charge, and it was still too early
to tell how much the recall would ultimately cost.

Meanwhile, Ford last month estimated its costs for the recall at about
Dollars 500m, a figure that significantly dented its third-quarter profits.
Much of this stemmed from temporary production halts at three assembly
plants in order to release replacement tyres on to the market.

Estimating the eventual litigation costs is made difficult by the raft of
personal injury cases being settled out of court, and the approximately 60
cases that are in federal court.

The federal cases, which include both class action lawsuits and individual
suits, have been consolidated for discovery purposes (the
evidence-gathering process ahead of a possible trial) in an Indiana court
and are awaiting the scheduling of a hearing.

In lawsuits in the mid-1990s involving rollovers of the earlier Ford Bronco
II model (though this was not related to tyres), victims received an
average of Dollars 335,000. In the current case, Tab Turner, an attorney
who has about 20 personal injury suits pending against Ford and Firestone,
believes the average case could be settled for anywhere between Dollars 2m
and Dollars 5m.

As for the larger cases seeking class action status - where lawyers aim to
represent an entire category of people - some estimate that the bills could
set the companies back substantially.

"It certainly could cost millions, if not hundreds of millions of dollars,"
says Alex Barnett, a lawyer at Washington-based Cohen, Milstein Hausfeld
and Toll, which is filing a class action lawsuit.

Henry Wallace, Ford chief financial officer, refused to discuss
liability-related expenses with analysts last month, though he noted the
company had both reserves and insurance.

However, some analysts have tried to be more specific. UBS Warburg has
drawn up a range of projections for the total bill, including recall and
litigation costs, based on other similar experiences in the vehicle
industry.

Their calculations put the range at anywhere between Dollars 855m and
Dollars 2.84bn. The higher figure would include not only a class action
settlement, but also the costs of a widened recall, which alone could add
more than Dollars 1bn to the bill.

Based on Firestone's litigation experience in 1978, when the tyremaker
recalled 14.5m tyres, Warburg estimates the range slightly lower, at
Dollars 772m to Dollars 2.11bn. In those law suits, Firestone settled about
two-thirds of the cases and won approximately one-quarter. (The analysts
caution that these figures are based on some assumptions made immediately
after the recall, and are accordingly therefore approximate.)

Despite the far-reaching possibilities of class action lawsuits, however,
lawyers say plaintiffs will first have to prove that the tyre itself was
faulty.

Firestone has said that while there is a safety issue with some tyres, no
actual defect has yet been found that completely connects the tyre to the
accidents.

In order to prove a defect, plaintiffs' lawyers will first have to show
that there is an unacceptable rate of failure - but there are millions of
tyres in use that have not failed.

Second, they will have to find evidence of a specific pattern of failure -
but it could be argued that other factors such as heat, speed or
underinflation caused the accidents. "It shouldn't produce the kind of
broad, debilitating litigation you have had in other cases," says David
Bernick, a lawyer who has served as trial counsel in various product
liability cases such as the recent wave of tobacco litigation. Discussion
forum at: http://forums.ft.com(Financial Times (London), November 2, 2000)



BROWARD COUNTY: Homeowners Get Fund to Replace Trees in Canker Program
----------------------------------------------------------------------
Miami-Dade and Broward counties will receive an infusion of $ 8 million
from the state to help homeowners plant new greenery in place of citrus
trees lost to the controversial war on canker, Gov. Jeb Bush and
Agriculture Commissioner Crawford said.

The money will be in addition to the $ 100 Wal-Mart voucher program, which
has been widely criticized as inadequate. Precisely how the money will be
spent remains to be worked out.The state has asked both counties and all
municipalities to come up with proposals.

"As we conclude our eradication program in South Florida, we want to do
everything we can to restore the area to its original state," Crawford said
in a statement. He added that he expects crews to finish cutting down all
infected or exposed trees "in the next four to five weeks."

The announcement came as state officials attempt to allay criticism of the
canker-eradication program amid growing public indignation, legal
challenges and a political backlash from local governments in both
counties.

On Tuesday, agriculture officials temporarily halted tree-cutting in
Miami-Dade while they finalize a settlement of a lawsuit by the cities of
South Miami and Pinecrest. The agreement provides for better public
notification of the location of infected or exposed trees. It also grants
homeowners a limited opportunity to challenge a diagnosis of an infected
tree by obtaining a second opinion from a certified plant pathologist.

Once the settlement is finalized, it will be offered to both county
governments and all municipalities, state agriculture officials said.
Although the moratorium was set at seven days, officials said it could be
extended if necessary.

Tree-cutting crews in Broward remain sidelined until recently, when a judge
will hold a hearing on a lawsuit by Pompano Beach and several other towns.

Angry residents and politicians have accused the state of devastating South
Florida's citrus tree population at the behest of citrus growers in the
central part of the state. The state has justified eradication by arguing
that further spread of canker, a bacterial infection that blemishes fruit
and injures trees, would jeopardize the $ 8.5 billion commercial industry.

Although state officials have argued that delaying tree-cutting could
foster the spread of the canker infestation, citrus industry leaders said
the moratorium did not worry them.

"Seven days isn't going to make or break us," said Dan Richey, chairman of
the Florida Citrus Commission and a Vero Beach grower. "Let's figure out a
way to better inform the residents of South Florida. People have every
right to an explanation of what is happening."

Richey defended the eradication program, saying that like thousands of
South Florida homeowners, commercial growers have lost thousands of trees.

"The eradication of the trees is the only way to eradicate the disease,"
Richey said. "When you have an $ 8 billion industry at risk because of no
fault of its own, this action has to be taken."

While making it clear that they intend to finish the eradication job,
agriculture officials have agreed to the main demands of South Miami and
Pinecrest officials, who were concerned that citizens were losing trees
without adequate notification or due process.

One element still under negotiation concerns who would pay if the owner of
a tree diagnosed as infected decides to seek a second opinion from an
independent expert, said Liz Compton, an agriculture department
spokeswoman. The right to appeal will be available only to owners of newly
diagnosed trees that trigger creation of a new 1,900-foot kill radius, she
said.

Another issue still to be settled is a demand by municipal leaders that the
state place an ad in The Herald and hold a news conference detailing the
terms of the settlement and explaining the appeals process.

South Miami City Manager Charles Scurr said that the state has agreed to
pay for the ad and hold the conference, but details hinge on the final form
of the settlement.

"We're working on the wording for the newspaper ad," Scurr said. "Every
time you clarify something in the agreement, the newspaper ad changes. A
lot can happen between the lip and the cup, but we're working real hard on
it and we hope to get it finalized tomorrow."

Some towns were not waiting for the state, however. The city of Plantation
issued a statement asking residents to add their names to a list for
potential class-action litigation against the state. The statement also
detailed how individual residents can challenge tree-condemnation orders in
court.

There was little immediate reaction to the latest compensation program from
the state because of the dearth of details.

The state estimates that about 800,000 residential trees will be destroyed
by the time the program concludes, out of a total casualty list expected to
reach 1 million.

That means that the $ 8 million would work out to about $ 10 per felled
tree. But the state hopes the amount will prove sufficient to replace lost
backyard trees as well as some citrus trees cut down in public parks and
roadways. But citrus trees cannot be planted as replacements.

"We think you will get a fair number of trees with this money," said Terry
McElroy, spokesman for the agriculture department in Tallahassee. "The
intent is to replace trees that were lost." (The Miami Herald, November 2,
2000)


CANADA CHURCHES: Indian Suits on School Abuse Pose Threat of Bankruptcy
-----------------------------------------------------------------------
Lawsuits filed by thousands of former Indian boarding school students in
Canada, claiming sexual, physical and "cultural" abuse, threaten to swamp
the financial resources of four mainstream Christian churches that ran the
schools until 1970.

"I simply see us going broke," Duncan D. Wallace, the Anglican bishop of
Qu'Appelle, which encompasses Regina, said of his diocese. With
resignation, he added, "When you get down to it, all we need is a bottle of
wine, a book and a table, and we are in business."

Settlements could snowball into billions of dollars, devastating the
financial resources of Canada's four old-line Christian churches: Anglican,
Roman Catholic, Presbyterian and United Church. By the end of next year,
the Canadian government forecasts, 16,000 Indians will have entered some
form of claim; that number is equal to 17 percent of the living alumni of
the boarding schools.

Already there are four class-action suits against the churches and the
government, which had the churches run schools in distant communities under
contract.

Indian plaintiffs have won all five boarding school abuse trials held in
the last two years -- two in Saskatchewan and three in British Columbia. In
the Saskatchewan cases, both involving sex abuse, and both filed against
the government, one plaintiff won $54,000 and the other $114,000. In the
British Columbia cases, lawyers for the government and the churches
negotiated secrecy over damage awards.

Auditors for the Anglican Church of Canada predict that legal fees alone
will push the church into bankruptcy next year.

"There is a lot of denial, people thinking this is a bad dream," Bishop
Wallace said of the responses of priests and parishioners to the claims. "I
told a priest recently, 'When your rectory gets sold out from underneath
you and you are living in the street, maybe you will understand this is for
real.' "

Parishioners have proposed selling the oldest church in Alberta to raise $2
million for legal costs and settlements faced by the United Church of
Canada. In Manitoba, the Missionary Oblates of Mary Immaculate, a Roman
Catholic order, want to hand over to the federal government virtually all
their property in the province in return for Ottawa's assuming liability
for about 2,000 claims against the order. The Oblates fear that legal bills
will eat up their assets before any money can flow to legitimate claimants.

In British Columbia, some members of the now bankrupt Anglican diocese of
Cariboo, embittered with the government, propose complying with a
government order to inventory church art for auction by sending their
Sunday school drawings to Ottawa.

Behind the suits is the real pain of many Canadian Indians who were rounded
up and forced into the schools.

In the late 19th century, Canada's government turned to established
churches to carry out federal obligations to educate the new nation's
Indians. With few civil servants willing to work in remote areas, churches
agreed to run a network of aboriginal boarding schools, which numbered
about 100 at its peak.

In a forced assimilation popular in North America a century ago, children
as young as 5 were taken from their families to faraway boarding schools
where their hair was cropped short, they were often dressed in uniforms and
they were forbidden to speak their native languages or learn their
traditional arts, religion and dances.

"How do you get 6-year-olds who only speak Sioux, who only speak Lakota,
who only speak Cree to speak English?" asked Anthony Merchant, head of a
group here that represents about 4,000 claimants. "You use Gestapo-type
tactics to punish this 6-year-old. Punishment becomes increasingly
barbaric, sadistic."

Mr. Merchant, who said there were no statutes of limitations for sex abuse
cases, said that about one-third of his clients charged such abuse. With
the pace of trials picking up, he estimated that his firm would handle half
of the roughly 70 cases scheduled for trial next year.

"You couldn't say one word or you would get slapped," said Jerry Shepherd,
a plaintiff from the White Bear Nation, recounting in an interview his days
at Gordon School, about 65 miles north of here, in the mid-1960's.

With parents often forbidden to visit, boarding schools sometimes became
places where pedophiles freely preyed on defenseless, disoriented children,
Indians say.

"The sexual perverts went all over the West," Mr. Merchant said. "We have
some that were in six or seven schools."

School defenders say that for aboriginal Canadians to survive in the modern
era, it was essential for them to learn English, to adopt Western-style
dress and to learn vocational skills.

Anger over the schools surfaced in suspicious fires that decimated the
buildings, most recently an arson attack last summer that destroyed a
boarded-up building that once housed the Edmonton Indian Residential School
in Alberta.

Some Indians remember that their abusers were fellow Indians. Edmund
Gordon, 39, a former student at the Gordon School, recalls that the
supervisor who gave him marijuana and then tried to rape him was "an
aboriginal, he taught powwow." Mr. Gordon, a claimant who now runs a
residence for H.I.V.-positive Indians here, said that he blamed the supply
of free drugs and alcohol for derailing his boyhood goals of becoming a
policeman or professional hockey player.

According to "Sins of the Fathers," a report on the schools published by
The Anglican Journal, the church's monthly newspaper, last May, eight
Indian men committed suicide after they were subpoenaed to testify about
their sexual abuse at the boarding school in the Cariboo diocese.

"When they got handed a piece of paper, they knew their secret was out,"
Fred Sampson, a former student of St. George's Indian Residential School,
said about friends called to testify in an abuse suit that went to trial
last year. "They thought, 'Everybody's going to know that I let this guy do
it to me for candy.' "

Robert Desjarlais, 53, a Saskatchewan Indian, walked 1,500 miles from here
to Ottawa last summer, demanding educational programs to restore lost
languages. Walking the last 100 miles barefoot, Mr. Desjarlais said that in
the mid-1950's he was regularly abused by a Catholic priest at a church
school.

The Royal Canadian Mounted Police, which once was charged with enforcing
mandatory school laws for Indians, started a task force in 1995 to
investigate allegations of boarding school abuse. Since then, the Mounties
have received 3,400 complaints against 170 suspects. So far, only five
people have been charged, with crimes like sexual abuse, a low tally that
the police attribute to faulty memories and deaths of teachers.

Seeking redress through civil suits, lawyers believe that the British
Columbia judge in the Cariboo case set a national precedent when she
assigned a 60 percent share of liability to the Anglican Church and 40
percent to the federal government.

The churches protest that they ended their involvement in the schools
around 1970, though the government took them over and did not close the
last one for two more decades. Anglicans say their primate, Archbishop
Michael Peers, made a full apology to Indians for abuses at the schools in
1993, five years before Canada's government made a similar apology.

Faced with selling churches, rectories, women's shelters and soup kitchens,
churches say that settlements should be mediated outside the courts, that
the federal government should pay the greatest part of the claims, and that
a fact-finding panel similar to South Africa's post-apartheid Truth and
Reconciliation Commission should be set up.

Blurring battle lines, Canada's Anglican Church today has four aboriginal
bishops and 130 aboriginal priests. Some tribal leaders have banned from
their reserves lawyers working on contingency fees seeking claimants.

Rejecting charges of "cultural genocide," John Clarke, the Anglican bishop
of Athabasca in northern Alberta, told The Anglican Journal, "There's a
whole pile of upper-middle-class guilt here that's running the show, not
much common sense."

Arguing that the most effective therapy is counseling, apologies and
moderate settlements, church leaders say that additional steps like
teaching lost languages could be paid out of a $240 million "healing fund"
the federal government set up in 1998.

Most suits did not originally name the churches. Instead, Ottawa drew the
churches into the legal wrangles by naming them as third-party defendants.
The Anglican Church is urging parishioners to write Prime Minister Jean
Chretien using lines like, "Your Department of Justice is literally driving
my church into bankruptcy."

Compounding bureaucratic caution, clouds were recently cast over one of
Canada's largest school abuse settlements, in Nova Scotia. A provincial
justice department report in September on the $25 million that the province
paid in the late 1990's to 1,237 reported victims at a boys' reform school
concluded that, in retrospect, "most of the allegations are either
unsustainable or implausible."

With a national election scheduled for Nov. 27, some Christian commentators
are urging people to vote against Mr. Chretien's Liberal Party and for the
Canadian Alliance, a conservative party led by Stockwell Day.

"Jean Chretien and the Liberals have basically announced it's open season
on our nation's mainstream churches," Paul Jackson, a columnist, wrote in
The Calgary Sun.

Mr. Chretien recently asked Herb Gray, Canada's deputy prime minister, to
find a negotiated solution. Without setting a timetable, Mr. Gray said he
sought a solution "that is fair to all, that primarily does not involve
litigation."

But with no solution near, church leaders nervously await a court test here
in December of a new legal concept: "cultural abuse," or loss of language,
oral traditions and spiritual beliefs. (The New York Times, November 2,
2000)


COLUMBIA ENERGY: Agree to Merge and Settle with NiSource & Shareholders
-----------------------------------------------------------------------
During the course of NiSource's tender offer for Columbia, Columbia
shareholders filed five class action lawsuits, which were later
consolidated into a single action in the Delaware Chancery Court, and an
action in federal court. NiSource also commenced two lawsuits in Chancery
Court and one action in federal court.

Taken together, the Chancery Court's actions alleged that Columbia and its
directors acted improperly by not negotiating with NiSource, by
implementing a share repurchase program, by adopting change in control
agreements with Columbia executive officers and by failing to elect the
number of directors prescribed in Columbia's certificate of incorporation.

The federal court actions alleged that Columbia and its directors had
violated federal securities laws in their statements in response to
NiSource's tender offer. The claim relating to the number of directors was
dismissed. In October 1999, NiSource and Columbia agreed to stay all
litigation between them pending the outcome of certain meetings between
Columbia and NiSource.

Following the execution of the merger agreement, NiSource dismissed with
prejudice all of its claims. In September 2000, shareholder plaintiffs and
Columbia executed a Settlement Agreement and Stipulation of Dismissal. This
agreement has been mailed to all shareholders of record. On November 14,
2000, the Chancery Court is scheduled to hold a hearing to consider
approval of the Settlement Agreement and Stipulation of Dismissal.


COMPAQ COMPUTER: Defends Lawsuits over Floppy Disks in Different States
-----------------------------------------------------------------------
Compaq is vigorously defending seven consumer class action lawsuits
alleging various defects in computers sold by Compaq. These lawsuits are
pending in Texas, North Carolina, Illinois, California and Washington. All
of these cases are in the discovery stage. Three of these class actions
(Thurmond v. Compaq, LaPray v. Compaq, and Sprung v. Compaq) are part of a
series of similar lawsuits filed against other major computer
manufacturers, involving claims that the computer industry sold computers
with allegedly defective floppy disk controllers. Thurmond is pending in
federal district court in Beaumont, Texas; LaPray in Texas state court in
Beaumont; Sprung in Colorado federal district court. No class has been
certified in any of these cases. Compaq is also providing information to
the federal government and state attorneys general in California and
Illinois in response to inquiries regarding floppy disk controllers in
computers sold to government entities.


COMPAQ COMPUTER: Defends Securities Suits Filed in 1998 and 99 in TX
--------------------------------------------------------------------
Compaq and certain of its current and former officers and directors are
named in two consolidated class action lawsuits pending in the United
States District Court for the Southern District of Texas, Houston
Division.  One lawsuit was filed in 1998 and the other in 1999.

The 1998 litigation consolidates five class action lawsuits, brought by
persons who purchased Compaq common stock from July 10, 1997 through March
6, 1998. It asserts claims under Section 10(b) of the Exchange Act and Rule
10b-5 promulgated thereunder and Section 20(a) of the Exchange Act.
Allegations in the 1998 lawsuit include the claim that the defendants
withheld information and made misleading statements about channel inventory
and factoring of receivables in order to inflate the market price of
Compaq's common stock and further alleges that certain of the individual
defendants sold Compaq common stock at the inflated prices.

The 1999 litigation also consolidates a number of class action lawsuits.
The litigation is brought on behalf of purchasers of Compaq common stock
between January 27, 1999 and April 9, 1999. It asserts claims for alleged
violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder; Section 20(a) of the Exchange Act; and Sections 11 and 15 of
the Securities Act. Allegations in the 1999 litigation include the claim
that certain defendants and Compaq issued a series of materially false and
misleading statements concerning Compaq's prospects in 1999 in order to
inflate the market price of Compaq's common stock and further alleges that
certain of the individual defendants sold Compaq common stock at the
inflated prices.

Lead counsels for the plaintiffs have been appointed in both the 1998 and
1999 litigation. The plaintiffs seek monetary damages, interest, costs and
expenses in both the 1998 and 1999 litigation. In the 1998 litigation, the
court entered an order granting class certification on July 18, 2000.
Compaq has appealed class certification and is awaiting a decision. In the
interim, the 1998 case is proceeding with discovery and is subject to being
called to trial in September 2001. In the 1999 litigation, Compaq has filed
a motion seeking to have the complaint dismissed and is awaiting a ruling.
Compaq is vigorously defending both lawsuits.


COMPAQ COMPUTER: Discovery Goes on for Digital's Securities Suit in MA
----------------------------------------------------------------------
Several purported class action lawsuits were filed against Digital during
1994 alleging violations of the Federal Securities laws arising from
alleged misrepresentations and omissions in connection with the issuance
and sale of Series A 8 7/8 percent Cumulative Preferred Stock by Compaq's
acquired company Digital Equipment Corporation and Digital's financial
results for the quarter ended April 2, 1994. During 1995, the lawsuits were
consolidated into three cases, which were pending before the United States
District Court for the District of Massachusetts. On August 8, 1995, the
Massachusetts federal court granted the defendants' motion to dismiss all
three cases in their entirety. On May 7, 1996, the United States Court of
Appeals for the First Circuit affirmed in part and reversed in part the
dismissal of two of the cases, and remanded for further proceedings. The
parties are proceeding with discovery.


CREDIT CARDS: New Rules Require Holders' Chargeback Dispute in Writing
----------------------------------------------------------------------
Travelers, as a general rule, enjoy the convenience afforded by their
ability to guarantee a hotel room with a credit card. Accommodation
providers, on the other hand, tend to be less enthusiastic. Since many
customers reserve rooms but then never arrive or call to cancel, hotels
usually reserve the right to charge a fee to no-shows.

However, hoteliers often have trouble collecting that fee, as guaranteed
reservations are usually made over the telephone without a customer's
signature. As a result, the cardholder in most cases can simply claim the
reservation was never made, walk away, and leave the merchant holding the
chargeback.

On Oct. 13, MasterCard International implemented new rules designed to
minimize such chargebacks and the financial losses they cause merchants.
Merchant-acquiring experts hail the change as a step in tilting the
chargeback scales back toward the merchant, scales they see today as
heavily tilted in favor of the cardholder.

Under MasterCard's new policy, the cardholder initiating the chargeback
request must now do so in writing rather than verbally over the telephone.
Furthermore, lodging providers now have a right to dispute a chargeback and
make a second presentment of the transaction if a customer denies making a
guaranteed reservation. If the card issuer does not respond to the second
presentment within 45 days, the transaction stands.

The move is a response to lodging providers' concerns that MasterCard was
not sufficiently responsive to the industry's chargeback problems, says
Jeffrey Glazer, MasterCard's program director for travel-market acceptance
in North America. "They felt, on a no-show billing, that their rights were
not protected in terms of disputes with cardmembers," he says.

Under the new policy, MasterCard will give the merchant a chance to prove
his or her case by providing information showing the merchant received the
relevant card number, expiration date, embossed name on the card, and
billing address. The hotel operator can also give MasterCard the
confirmation number for the reservation in question. "They will be able to
re-present (the transaction) to their acquirer, which in turn will go to
the issuer and bill the member," Glazer says. "That doesn't guarantee that
the hotel is going to prevail. It gives them rights to re-present where
they had none before."

Although Glazer calls the change "a big step forward, a very giant step,"
he agrees that guaranteed-reservation chargebacks will remain a problem for
the simple reason that the card is not present when the reservation is
made. "With a card-not-present transaction, it's always 'he said, she
said,'" Glazer says. "So the cardmember still retains their rights" and on
the second go-around can continue to deny the transaction took place.

                              Think Twice

While the new rules don't mark a sea change in policy from a hotelier's
perspective, the fact that consumers must put their claim in writing does
hold some significance, says Paul R. Martaus, president and chief executive
of Mountain Home, Ark.-based consulting firm Martaus & Associates. Noting
that a written document can be introduced as evidence in court, Martaus
says that manipulative cardholders may think twice about making false
chargeback requests in order to shake off a no-show penalty. "They're much
more likely to be reticent about lying if they have to swear to it in
writing," he says.

The requirement that cardholders dispute the fee in writing is also a
modest step toward making the chargeback policy more merchant-friendly,
says Linda M. Mahy, senior vice president, global business development at
Fairfax, Va.-based CardSystems Inc., another card consultancy. While she
says consumers may find the new regulation "a pain," she views MasterCard's
shift as a welcome step toward bolstering merchants' rights. "They're
certainly making it more onerous for the cardholder to charge items back,
so they're starting to shift a little bit of the burden" from the merchant
to the cardholder, she says.

While the new regulations are designed to curry favor with hotel operators,
MasterCard's Glazer says that honest hotel customers will also benefit from
the changes. "We believe it's in the best interest of the consumers as
well, so that everyone can be assured that the hotels will all take
MasterCard for guaranteed reservations," he says.

                A Bankruptcy Triggers a Rare Event

When Richmond, Va.-based furniture maker Heilig-Meyers Co. declared
bankruptcy in August, it triggered an event rarely seen in the market for
asset-backed securities: an early payout on its $711.3 million in bonds
backed by the retailer's customer receivables.

Early amortization-the immediate payment of principal of the outstanding
debt-is designed to protect investors' principal. It is one of the
credit-enhancement features that garner card bonds and other asset-backed
securities such high credit ratings. Ratings agencies typically give
card-backed securities triple-A ratings, the highest grade available.

There have been only a few instances of early payouts since the first
securities backed by card receivables were issued in the mid-1980s. In at
least two cases, deals involving card bonds issued by RepublicBank and
Miami-based Southeast Bank, investors were repaid without a loss but
earlier than expected.

But in Heilig-Meyers' case, the major ratings agencies-Moody's Investor's
Service, Fitch IBCA/Duff & Phelps, and Standard & Poor's-have put the
retailer's asset-backed bonds on watch for possible downgrade. All three
agencies say they are concerned that the chain's closure of 302 stores,
about one-third of its store base, could result in cash-flow disruptions
during the paydown period. The retailer also says it will be outsourcing
collections.

For now, First Union Securities, the trustee of the notes, has assumed the
service and collections responsibilities from Heilig-Meyers.

Unlike most retailers, which have centralized collections, nearly 67% of
Heilig-Meyers customers make payments at their local Heilig-Meyers stores,
says William Black, a Moody's analyst. That means it will be more difficult
for the retailer to transfer debt collections and servicing to a
centralized entity. "You're not just changing the address on the payment
slip," Black says. "You're dealing with getting hold of these (customers)
as well as basically trying to change their payment behavior."

That "creates a greater unknown," he adds, especially because
Heilig-Meyers' customers are in a "lower part of the credit-quality
spectrum" than the average credit card holder.

Just whether investors will receive all their principal remains to be seen,
Black says. Right now, it appears unlikely that investors will suffer a
loss because, up to this point, Heilig-Meyers "was performing consistent
with our expectations," he says.

But because of the furniture maker's unique collections setup, "we just
don't know how bad things could deteriorate," Black says.

The impact Heilig-Meyers' early amortization ultimately will have on the
card-backed securities market also is difficult to judge, Black says. For
one thing, Heilig-Meyers' asset-backed trust is actually comprised of
installment loans rather than revolving credit card receivables, he says.

What's more, investors buying Heilig-Meyers bonds knew it was a "rather
low-rated furniture retailer that had this very unique, centralized
servicing collections operation," Black says.

                   A Busy Season For Card Lawyers

It continues to be open season on card issuers and acquirers, at least when
it comes to lawsuits. Hard on the heels of suits filed against several
major issuers over their credit practices ("Punishing the Penalizers,"
October) came three more lawsuits. Plus, two major issuers recently settled
lawsuits.

The new suits:

     -- Wilmington, Del.-based subprime card issuer Cross Country Bank is
suing Bank One Corp.'s First USA card unit and Dulles, Va.-based America
Online Inc. for allegedly electronically transferring from the issuer
"millions of dollars" of unauthorized credit card payments. First USA is
not a merchant acquirer. However, Bank One owns a majority of First USA's
former acquiring entity, Dallas-based Paymentech.

     In the lawsuit, filed last month in the U.S. District Court in
Delaware, Cross Country says First USA-acting as the acquiring bank for
AOL-automatically transferred Cross Country card holders' monthly AOL
service fees from Cross Country without contacting the issuer for
authorization. Cross Country also alleges First USA processed "hundreds of
thousands" of transactions for which Cross Country had denied
authorization. Both actions violate Visa and MasterCard rules, the suit
alleges.

     -- Cross Country is charging First USA and AOL with breach of
contract, civil conspiracy, unjust enrichment, and fraudulent
misrepresentations. The issuer also alleges First USA's and AOL's actions
violated the federal Racketeer Influenced and Corrupt Organizations Act.
Cross Country is seeking actual damages in excess of $100,000, unspecified
punitive damages, and treble damages under the RICO act.

     A First USA spokesperson declined comment on the lawsuit. An AOL
spokesperson says the company's attorneys reviewed the lawsuit and said it
focuses on a dispute between Cross Country and First USA and doesn't appear
to involve conduct by AOL.

     -- An American Express Co. Optima cardholder has filed a class-action
suit charging AmEx with unfair and misleading billing practices. The suit
was filed in U.S. District Court in Los Angeles in August. At issue is how
AmEx posts credits to accounts that offer lower interest rates for balance
transfers. The suit also challenges AmEx's practice of calculating finance
charges based on the average daily balance method.

     The plaintiff, attorney Roger M. Lindmark, alleges that when he
returned a business machine purchased with his Optima card, AmEx credited
the return to the balance-transfer portion of his bill, which carried a
3.9% interest rate. Instead, AmEx should have posted the credit to the
purchase category of his bill, which carries a 14.99% rate, he says. The
result is that Lindmark continues to pay interest in excess of 10% for an
item returned for full credit, the suit charges. "Our view of the
disclosures (on the cardholder agreement) was that only actual payments
could be applied in a discretionary manner, not credits," says Andrew W.
Hutton of the Los Angeles-based law firm of Milberg Weiss Bershad Hynes &
Lerach and lead attorney on the case.

     The lawsuit also alleges that AmEx improperly inflates cardholders'
average daily balance by accruing interest each day on outstanding
balances. Those "inflated" daily balances are then used to calculate
finance charges, according to the suit. "It's basically a compounding of
interest during the month and then using that to compute the average daily
balance and then calculating interest again," Hutton says. "They're
effectively charging interest on interest during the month."

     The lawsuit charges that AmEx didn't disclose either practice in its
cardholder agreement, in violation of the federal Truth In Lending Act, the
California Unfair Businesses Practice Act, and other federal and state laws
and regulations.

     The lawsuit seeks an injunction preventing AmEx from using both
practices in calculating finance charges. It also asks that AmEx be ordered
to return to cardholders all money wrongfully collected using both
practices. AmEx declined comment.

     -- An Alaska man in October filed suit against FleetBank charging that
the company's Horsham, Pa.-based credit card subsidiary violated its pledge
to fix interest rates on transferred balances. Fleet declined comment.

     -- In addition, two issuers recently settled lawsuits with consumers:

     Chase Manhattan Corp., the nation's fifth-largest credit card issuer,
in August agreed to pay at least $22.2 million to settle a lawsuit
challenging its penalty fees. The cardholder plaintiffs alleged that Chase
tacked on late fees and additional interest even though their monthly
payments arrived on time. Chase agreed to reimburse cardholders for some
charges and give them a grace period before imposing late fees.

     Chase denied liability in the case but in a statement said it agreed
to settle because "it is in the best interests of our cardmembers to settle
this case. The settlement enables us to avoid the expense of litigation."
Chase also said the settlement benefits some cardholders by giving them
more time to get payments to Chase, thus helping them to avoid late fees
and finance charges.

     MBNA America, the nation's third-largest credit card issuer, in
September agreed to pay $6.4 million plus legal fees to settle a
class-action suit alleging that it used "false and misleading
representations" to lure cardholders from competitors. MBNA will pay each
of the 1.8 million plaintiffs $3.74.

     In the federal lawsuit, filed in 1996, cardholder Andrew Spark said
that MBNA in 1995 offered an annual percentage rate of 6.9% to 9.9%, half
the current rates on cash advances and balance transfers. MBNA told
cardholders they would achieve a certain amount of savings. But cardholders
never did save any money because of the way MBNA allocated payments,
according to William O'Day, one of the plaintiffs' attorneys.

     An expert witness, Robert Thompson, testified that MBNA's low
introductory rate was misleading and a deception designed to induce
consumers to open credit card accounts without MBNA fully disclosing its
terms and conditions.

     MBNA officials denied the liability but declined to comment further on
the settlement.

                    Most Holders Use Cards Sparingly

While card issuers remain focused on increasing usage of their cards, a
recent survey by Auriemma Consulting Group Inc. of Westbury, N.Y. shows
that most consumers use their credit cards infrequently.

Of 366 consumers surveyed in July, 29% professed to use their most
frequently used card either once or not at all in an average month, while
30% claimed to use the card between two and four times a month. Overall,
consumers said they make seven transactions on their most frequently used
card in a typical month. That figure is up slightly from 6.8 transactions
in the year's second quarter and 6.6 transactions in the first three months
of 2000.

Scott Strumello, an associate at Auriemma, suggests that many cardholders
display a low rate of usage on their preferred credit cards because they
revolve a balance and past purchases have already taken up much of their
credit line. "It would make sense that the transaction volume on those
types of customers is going to be lower in general because most of them are
paying a balance down," he says.

In contrast, he says consumers who pay their bills off in full each month
are more likely to use their preferred credit card often. "Generally
speaking, you'll find that the lower users or the ones that use it less
frequently tend to be revolvers," he says, "and those that use it much more
frequently tend to be transactors."

Not surprisingly, the presence of reward programs stimulates transaction
volume on a card. Strumello cites American Express Co.'s Membership Rewards
program as one reason charge volume on that company's cards is higher than
that of bank cards.

While the study found that consumers charged an average of $527 each month
on their most frequently used cards, those whose preferred card was an
American Express product charged an average of $1,885. Monthly charge
volume on Visa, MasterCard, and Discover cards was $433, $399, and $351,
respectively. (Credit Card Management, November 2, 2000)


EMCOR GROUP: Lawsuit Accuses of Holding JWP Stock in Retirement Plan
--------------------------------------------------------------------
On July 31, 1998, a former employee of a subsidiary of EMCOR filed a
class-action complaint on behalf of the participants in two employee
benefit plans sponsored by EMCOR against EMCOR and other defendants for
breach of fiduciary duty under the Employee Retirement Income Security Act.
All of the claims relate to alleged acts or omissions which occurred during
the period May 1, 1991 to December 1994. The principal allegations of the
complaint are that the defendants breached their fiduciary duties by
causing the plans to purchase and hold stock of EMCOR when it was known as
JWP INC. and when the defendants knew or should have known it was imprudent
to do so. The plaintiff has not made claim for a specific dollar amount of
damages but generally seeks to recover for the benefit plans the loss in
the value of JWP stock held by the plans. EMCOR and the other defendants
intend to vigorously defend the case. Insurance coverage may be applicable
under an EMCOR pension trust liability insurance policy for EMCOR and those
present and former employees of EMCOR who are defendants in the action.

The company says substantial settlements or damage judgements against EMCOR
arising out of these matters could have a material adverse effect on
EMCOR's business, operating results and financial condition.


EMULEX HOAX: Lawsuit Charges Internet Wire, Bloomberg with Fraud
----------------------------------------------------------------
A class action filed in Manhattan federal court makes claims for fraud
under federal securities law against Internet Wire Inc. and Bloomberg L.P.
for disseminating a fake news release that drove the price of Emulex Corp.
stock down by 60 percent. Over 2.6 million shares changed hands in 16
minutes before the Nasdaq Stock Market halted trading. Hart et al. v.
Internet Wire Inc. and Bloomberg L.P., No. 00-CV-8571, complaint filed
(S.D.N.Y., Sept. 6, 2000).

The complaint, filed on behalf of Ronald Hart and all other persons who
sold Emulex stock on Aug. 25 in the face of market volatility that
accompanied the false news release, makes claims against the two news
services for conveyance of untrue statements and fraud under Section 10(b)
of the Securities Exchange Act.

According to federal authorities, Former Internet Wire staffer Mark S.
Jakob, 23, allegedly sent the fake news release to Internet Wire in Los
Angeles from a computer at nearby El Camino Community College, where he had
been a student.

The Securities and Exchange Commission has alleged in a Central District of
California civil complaint that Jakob issued the false news release to
drive down the price of Emulex stock in order to make trading profits. The
commission alleges that he eventually made $241,000 speculating on Emulex
stock before being caught by SEC investigators and the Federal Bureau of
Investigation.

In addition to civil securities fraud claims, Jakob faces criminal charges
in the same Los Angles federal court. Bail has been set at $100,000. (See
previous article in this issue.)

The class action filed in the Southern District of New York alleges that
Internet Wire and news wire service Bloomberg News acted "recklessly" in
publishing the fake news release without first checking its validity.

The suit reports that Internet Wire posted the false Emulex release on the
Internet -- no questions asked -- even though it had never before handled
an Emulex news release.

"Given the significance of the substance of the 'press release' and the
likely devastating effect upon the price of Emulex securities, the
purported use of Internet Wire to carry the 'press release' constituted a
'red flag' concerning the authenticity of the 'press release' and the
truthfulness of the information included therein," the complaint asserts.

Bloomberg News then picked up the news release, rewrote it and published a
Bloomberg version without checking with Emulex, the complaint goes on to
say.

According to the class action, Bloomberg News' editor-in-chief Matthew
Winkler later admitted to The Wall Street Journal that "the reporter
involved should have called the company before writing the first story for
his wire. Making such calls is standard Bloomberg practice <> and
something that should be communicated better to staffers."

The plaintiffs are represented by Patrick A. Klingman of Schatz & Nobel in
Hartford, Conn. (E-Trading Legal Alert, September 29, 2000)


ERIE COUNTY: 3rd Cir Holds ADEA Applies to Retirees in Health Plan Case
-----------------------------------------------------------------------
The Third Circuit recently decided a case, Erie County Retirees Association
v. County of Erie, Pennsylvania, 220 F.3d 193, which casts serious doubt on
the validity of many retiree medical plans under the Age Discrimination in
Employment Act (ADEA).

Erie involved a class action initiated by Medicare eligible retirees
against the County of Erie, Pa. The plaintiffs alleged that the County's
retiree medical program violated ADEA's prohibition against discriminating
in the terms and conditions of employment based on age. It should be noted
that this was a case of first impression for the Third Circuit. The other
circuits have not, as of yet, addressed the issue.

The underlying facts to Erie were as follows. Until 1992 all retirees of
Erie County were offered the same medical benefits. In 1997, faced with
increasing costs of health insurance, the County required that all Medicare
eligible retirees accept SecurityBlue coverage or lose all benefits.
SecurityBlue is a federally qualified HMO that coordinates with Medicare
Part B Medical Insurance and is only available to those eligible for
Medicare. Soon after, the County required all retirees who were not
Medicare eligible to accept SelectBlue coverage. SelectBlue, in contrast,
is a hybrid point of service plan which combines the services of an HMO
with the features of a traditional indemnity plan. For the retirees, both
Medicare eligible and not, who lived outside the service areas of
SecurityBlue and SelectBlue, the County provided traditional indemnity
coverage.

The plaintiffs main argument was that the SecurityBlue coverage was
inferior to the SelectBlue coverage. This argument was based on the fact
that as an HMO, SecurityBlue was less flexible and restricted its members
medical options. The plaintiffs further argued that Medicare eligibility
was simply a proxy for age given that the main factor in Medicare
eligibility is attaining the age of 65. Given that the retirees were placed
into the different plans based on Medicare-eligibility, the plaintiffs
alleged that the County discriminatorily provided them with inferior health
coverage on the basis of age in violation of ADEA.

The County was awarded partial summary judgment on the ADEA claim at the
district court level. The district court held, based on the legislative
history of the statute and the use of the term "older worker," that ADEA
simply was not intended to apply to retirees. The district court
acknowledged, however, that Medicare eligibility was an age-based factor
and that the plaintiffs had set out a prima facie case of age
discrimination.

On appeal, the Third Circuit reversed and remanded holding that ADEA does,
in fact, apply to retirees. The Third Circuit held that ADEA applied
equally to retirees and current employees. Therefore, the County's facially
discriminatory policy should be held to be discriminatory unless the County
could prove that it fell within the safe harbor of the equal cost or equal
benefit principle. It was conceded that the SecurityBlue plan was less
costly to the County than the SelectBlue plan (in fact cost was the
motivating factor in selecting SecurityBlue). Therefore the Third Circuit
remanded the case to determine whether the equal benefit safe harbor was
satisfied. It is important to note that, although the plaintiffs claimed
that HMO's restrictions on their freedom to choose their own physicians
rendered their benefits inferior to the younger retirees, the court did not
rule directly on this issue and left it open for the district court on
remand. It is therefore still an open question as to whether mandating
Medicare eligible retirees accept coverage under an HMO while providing PPO
or POS coverage to younger retirees falls within the equal benefit portion
of the safe harbor.

                                  ADEA

The operative section of ADEA, @ 4(a)(1), states that it is unlawful for an
employer to discriminate against any individual with respect to his
"compensation, terms, conditions, or privileges of employment, because of
such individual's age." ADEA defines "compensation, terms, conditions, or
privileges of employment" to include all employee benefits. Since Medicare
eligibility correlates highly with age (most individuals only become
Medicare eligible by virtue of turning 65) it is considered an age-based
factor. Given the foregoing, discrimination in the allocation of retiree
medical benefits based upon Medicare eligibility would violate @ 4(a)(1).

ADEA also provides that in certain situations, facial discrimination based
upon age will not violate the act. This exception to the general
prohibition is found in section 4(f)(2) of the act. As originally enacted
the exception allowed employers to discriminate in order to observe the
terms of a bona fide employee benefit plan which is not "subterfuge." The
EEOC had promulgated regulations stating that a plan was not "subterfuge"
if it fell within the equal cost/equal benefit safe harbor. A 1989 Supreme
Court decision, Public Employees Retirement System of Ohio v. Betts, 492
U.S. 158, struck down the regulation. Congress responded by passing the
Older Workers Benefit Protection Act (OWBPA), which amended ADEA to
reinstate the EEOC regulation. Section 4(f)(2)(B)(i) of the amended act
states, an employer will not violate @ (a) if the action is taken "to
observe the terms of a bona fide employee benefit plan ... where, for each
benefit or benefit package, the actual amount of payment made or cost
incurred on behalf of an older worker is no less than that made or incurred
on behalf of a younger worker, as permissible under [the ADEA
regulations]."

                 Equal Cost/Equal Benefit Principle

The ADEA regulations indicate that the above exception "[permits] age-based
reductions in employee benefits plans where such reductions are justified
by significant cost considerations." 29 CFR 1625.10(a)(1). In those
situations, a benefit plan will be in compliance with the statute,
according to the regulations, "where the actual amount of payment made, or
cost incurred, in behalf of the older worker is equal to that made or
incurred in behalf of the younger worker, even though the older worker may
receive a lesser amount of benefits or insurance coverage." Id. The cost
comparisons may be made by comparing the costs for different age brackets,
rather than employee by employee. The age brackets used to make the
comparison can be at most 5 years. This section of the act and
corresponding regulations is what the Erie court referred to as the equal
cost safe harbor. The regulations state that this safe harbor is to be
construed narrowly.

                           Safe Harbor Terms

The regulations define the operative terms of the @ 4(f)(2) safe harbor.
The regulations consider a plan to be "bona fide" if its terms have been
provided to all employees in writing and if it has been operating according
to those terms. The requirement that the discriminatory policy be in
"observance of the terms" of a benefit plan is to ensure that the policy
has been made explicitly clear to the employees. The regulations state that
discriminatory policies that are left to the option of the employer are not
within this safe harbor.

The regulations also describe several types of plan arrangements that would
fit into the equal cost safe harbor. An example is a plan in which the
older employee is required to pay higher premium contributions than a
younger employee, so long as the percentage of the premium cost that the
older employee is required to bear is not greater than that of the younger
employee.

In plans in which the younger employees are not required to bear any of the
premium costs, the older employees may not be required to contribute any
portion. It would also be lawful, according to the regulations, for an
older employee to be given the option of making additional contributions in
order to receive an non-reduced level of benefits so long as the
contemplated reduction in benefits is justified under @ 4(f)(2) as well.

The regulations and the Erie court made clear that cost, for the purposes
of the safe harbor, only includes costs borne directly by the employer. In
other words, the cost that Medicare pays for the portion of the retirees
benefits is not included in the equal cost calculation. Given the fact that
Medicare is usually the primary provider of health benefits for Medicare
eligible retirees, it is unlikely that an employer would ever be able to
justify a discriminatory retiree medical plan on the basis of the equal
cost portion of the safe harbor.

The equal benefit portion of the @ 4(f)(2) safe harbor is also imbedded in
the ADEA regulations. The regulations contemplate the situation where
certain benefits, that would otherwise be provided to older employees under
a plan, be provided by the government. They state that it would not be
unlawful to not provide employees with health benefits which are already
provided to the employee by Medicare, even though the availability of those
benefits is based upon age. The regulations caution, however, that the
equal benefit safe harbor will not justify an employer reducing the
employees benefits by an amount so that taken together, the employer and
government provided benefits do not equal the employer provided benefits
available to younger employees. The regulations use the example of Medicare
benefits to make clear the point that the total benefit package provided to
younger and older employees are equal.

It is worth noting that while @ 4(a)(1) prohibits discrimination against
any "individual," @ 4(f)(2) and the ADEA regulations that articulate the
equal cost and equal benefit safe harbor refer to "older workers" or "older
employees."

The Erie defendants argued that the use of the term "worker" or "employee"
indicated that the act was not meant to apply to retirees who are by
definition not workers or employees.

The legislative history of the OWBPA amendments to ADEA which codified the
equal cost/equal benefit safe harbor support this argument. The legislative
history that accompanied the OWBPA amendments included discussion about the
effects of the amended statute on retiree medical plans. According to the
Statement of Managers for the final "substitute" version of OWBPA, one of
the compromises that led its passage was to change the wording of @
4(f)(2)(B) from "individual" to "worker." The Statement of Managers went on
to say that the practice of eliminating or reducing retiree medical
benefits after the retiree becomes eligible for Medicare, even where the
level of the Medicare benefit is less than the employer-provided coverage,
would not be prohibited by the substitution. Finally, the Erie court also
noted an exchange between two senators that indicated that ADEA would only
apply when the retiree health coverage is discriminatorily structured
before retirement.

                        The Holding in 'Erie'

The Erie court held that there was no support in the language of ADEA that
supported the apparent legislative intent. This is especially true since
the ADEA regulations seem to completely contradict the legislative history.
Furthermore, the Erie court held that the plain language of the statute
controlled in the face of contradictory legislative intent. The court
reasoned that since the plaintiffs were "individuals" and that they had
shown that the defendant treated them differently with respect to
"compensation, terms, conditions or privileges of employment" because of
age, ADEA applied, regardless of the fact that @ 4(f)(2) used the term
worker as opposed to individual.

                           Compliance Manual

On Oct. 3, 2000, the EEOC issued @ 3 of the new Compliance Manual on
"Employee Benefits." The purpose of this section, was to provide guidance
in analyzing issues that arise in regard to certain employee benefits such
as retiree medical benefits. The compliance manual confirms that in certain
circumstances, an employer can provide lower benefits to its older
employees. The manual clearly states that the equal cost/equal benefit
defense is only available for certain types of benefits, including health
insurance benefits.

The manual sets out the following requirements to satisfy the equal cost
defense: (1) the benefit becomes more expensive with increasing age, (2)
the benefit is part of a bona fide employee benefit plan, (3) the plan
explicitly requires the lower benefits, (4) the actual amount of payment
made, or cost incurred on behalf of an older worker, is no less than that
made or incurred on behalf of a younger worker, and (5) the benefit levels
for older workers are reduced only to the extent necessary to achieve
approximate equivalency in cost for older and younger workers.

The manual uses the term "allowable offset" instead of "equal benefit," but
the idea is the same. The manual contemplates an employer taking an
allowable offset from the amount of certain benefits provided by the
employer with age-based benefits received by employees from sources such as
Medicare. The manual states that an offset will only be lawful if: (1) it
is specifically authorized by the ADEA, and (2) older workers are eligible
to receive benefits, in total, that are no less favorable than those the
employer provides to similarly situated younger employees.

The manual also gives specific guidance as to what employers must do to
ensure that the health insurance plans for retirees comply with ADEA. The
employer must do one of two things: (1) show either that the benefit is
equal, that when Medicare benefits are taken into account the total
benefits available to older retiree are no less favorable than those
offered to younger retirees, or (2) that the employer expends an equal cost
for benefits on both older and younger retirees and that the reduction in
benefits for older retirees are actuarially required.

The manual gives specific blessing to so called "Medicare carve-out" plans
where the employers deduct from the health benefits they provide any
Medicare benefits for which retirees are eligible. These plans are lawful,
so long as the total health coverage is the same in type and value for
retirees regardless of whether a portion of the benefit package is supplied
by Medicare or not. The manual, in fact, cites the Erie case in support of
the above analysis of ADEA. This is unsurprising since the Third Circuit in
Erie quoted liberally from the EEOC's amicus brief.

                         Future Retiree Plans

The Erie case and the EEOC compliance manual make clear that, at least in
the Third Circuit, employers can no longer simply eliminate all retiree
medical benefits for those retirees that become eligible for Medicare.

There are various ways that retiree medical plans are structured to adjust
for availability of Medicare benefits to retirees. One such plan structure
is the so-called Medicare carve-out plan. These plans, as stated above,
reduce benefits provided by the plan when a participant becomes eligible
for Medicare. As stated above, the EEOC considers these plans to be lawful
so long as the "carve-out," or reduction in benefits once the retiree
becomes eligible for Medicare, is limited to the benefits provided by
Medicare.

Another plan structure of "carve-out" type is where the plan states that
once a the participant becomes eligible for Medicare the plan becomes the
secondary provider and only continues to provide benefits that are in
excess to what Medicare provides. These plans should be lawful under Erie
and the Compliance Manual since they ensure that the total package of
benefits that the Medicare eligible retirees will be equivalent to that of
younger retirees.

One plan structure that might be unlawful under Erie and the Compliance
Manual is one where the plan, like in Erie itself, has completely separate
benefit programs for those participants eligible for Medicare and those not
so eligible. Employer's with these plans need to take a hard look to
determine if the program for Medicare eligible participants combined with
Medicare benefits, is equivalent to the program for retirees not eligible
for Medicare. According to the Erie case, courts will look into the
specific features of the programs such as the degree of freedom of choice
in making such a determination. Employer's with plans, similar to that
which the County of Erie had, in which Medicare eligible retirees are
forced to accept HMO coverage and younger retirees are not may not be
lawful under the current interpretation of ADEA. (New York Law Journal,
October 20, 2000)


INCO LIMITED: Lowey Dannenberg Announces Settlement for VBN Shareholders
------------------------------------------------------------------------
Lowey Dannenberg Bemporad & Selinger, P.C. announced on November 1 that a
class action was commenced on October 12, 2000, in the United States
District Court for the District of New Jersey on behalf of Inco's Class VBN
shareholders as of September 6, 2000 (the "Class"), the date Inco announced
a tender offer for all of its VBN Shares, for Cdn $7.50 and 0.45 of an Inco
warrant to purchase one common share of Inco common stock for Cdn $36.00 at
any time on or before August 21, 2006 (the "Tender Offer").

The complaint charges Inco and certain of its senior officers with
violations of the Securities Exchange Act of 1934 by disseminating to Class
VBN shareholders a materially incomplete and misleading Offer to Purchase
dated September 15, 2000. The Complaint sought to enjoin the Tender Offer
until corrective disclosures were made so that VBN shareholders could make
an informed decision whether to tender their shares.

Following the commencement of the lawsuit, Inco sent a supplement to VBN
shareholders in which it made additional disclosures and extended the
expiration date of the Tender Offer, which was conditioned on tenders from
90% of the outstanding VBN shares, to October 27, 2000.

On October 27, 2000, the Tender Offer expired by its terms without tenders
from 90% of Class VBN Shares. However, as Inco had indicated it might do in
its Offer to Purchase, Inco announced that it would continue its pursuit of
VBN shares by seeking shareholder approval to redeem the VBN shares for Cdn
$7.50 and 0.45 of an Inco warrant that would entitle the holder to purchase
one common share of Inco for Cdn $30.00 (the "Redemption"). The Redemption
is conditioned upon, among other things, approval of two-thirds of the
votes cast by VBN stockholders.

Lowey Dannenberg has negotiated a settlement in principle with defendants
in which plaintiff's counsel has reviewed and commented on, and defendants
agreed to make certain additional disclosures in the final proxy statement
disseminated in connection with the shareholder vote on the Redemption The
settlement will be subject to court approval upon notice to the Class.

Under the federal securities laws, any other member of the Class desiring
to serve as lead plaintiff must apply to the court no later than January 2,
2001 for appointment as such.

Contact: Lowey Dannenberg Bemporad & Selinger, P.C. David C. Harrison, Esq,
877/777-3581


MATSUSHITA ELECTRIC: Suit Accuses Peachtree City Plant Of Racial Bias
---------------------------------------------------------------------
Matsushita Electric Corporation of America and its Peachtree City unit,
which makes Panasonic electronics, routinely denied blacks promotions while
advancing whites with less experience, a lawsuit filed Tuesday alleges.

The suit was filed against Matsushita in U.S. District Court in Newnan by
employees Frederick Butler, Regie Stevens and Mohammed Warsame and ex-
employee Thomas Green. It seeks class-action status to represent about 650
hourly and salaried workers dating back to 1995.

"We believe there's systemic disparities between the promotions and
compensation received by African-American workers and white workers," said
Joshua Thorpe, an attorney with the Atlanta law firm of Bondurant Mixson &
Elmore. The law firm represents black employees in similar suits against
Coca- Cola Co. and Southern Co.

"The most noteworthy thing about this case is that the EEOC found that
blacks were routinely denied promotions," Thorpe added.

In December, the U.S. Equal Employment Opportunity Commission concluded
that "reasonable cause exists to believe black employees were discriminated
against because of their race with regard to promotional opportunities,"
according to the lawsuit.

Matsushita attorneys said Wednesday night they had not seen the suit and
could not comment.

The suit alleges the company:

* Failed to promote blacks to the same levels and at the same rate as
   whites.

* Used highly subjective job posting, interview and decision-making
   processes that hurt blacks' ability to get jobs and advance.

* Paid blacks less than whites for doing the same work.

* Maintained written and unwritten job performance policies and
   practices, using subjective criteria to judge blacks more harshly.

* Maintains a glass ceiling that essentially keeps blacks out of
   management.

The Peachtree City unit, Matsushita Communication Industrial Corporation of
USA, makes car audio systems and digital telephone systems. The Peachtree
City plant has about 1,400 workers.

Thorpe noted that Butler has received one promotion and a lateral transfer
in his nearly 13 years with the company.

Green, who left in 1998, was never promoted from his entry-level job,
although he applied for two higher positions.

Stevens has been promoted once in his 10 years with the company while
Warsame has never been promoted in five years though he applied for five
jobs, Thorpe said. (The Atlanta Journal and Constitution, November 2, 2000)



MINNEHAHA COUNTY: Sued for Strip Search of Girl Caught in Curfew
----------------------------------------------------------------
The family of a girl who was strip-searched after breaking curfew last year
is suing Minnehaha County. Jodie Smook, 17, and her parents, Randy and
Vicky, of Luverne, Minn., filed a lawsuit in U.S. District Court. They also
are seeking to make the case a class-action lawsuit against the county,
former Minnehaha County Regional Juvenile Detention Center director Jim
Banbury and two unnamed detention center officers.

"It just boils down to the fact that kids have rights, too," said Vicky
Smook.

The family is seeking unspecified financial damages and an injunction on
strip searches for juveniles. No trial date was set.

Unless staff members have reason to believe youths are concealing weapons
or contraband, the Smooks want a judge to forbid the detention center from
searching newly admitted juveniles.

Minnehaha County Commissioner Bob Kolbe said the county's juvenile
detention center treats juveniles fairly. "Sometimes the heat of passion
makes people feel that the case they have is far more valid than it would
be under normal light," Kolbe said.

Jodie Smook, then 16, and three friends, who had car trouble in Sioux
Falls, were caught violating curfew shortly after midnight Aug. 8, 1999.
The girls were taken to the county juvenile detention center. They went
separately into a bathroom where a female officer told each to take off her
clothes. The officer searched each girl's clothing before allowing them to
get dressed and wait in a holding facility. The girls also were asked which
church they attended and how often.

Smook's parents said they weren't notified until after their daughter had
been searched and checked into the juvenile detention center.

After media attention and public scrutiny, county officials began new
procedures for curfew violators such as Smook.

County officials say teens no longer are questioned about church attendance
or religious affiliations. Curfew violators are held separately from other
detainees unless their parents can't be reached to pick them up, said Todd
Cheever, center director. "Safety of the other students and the staff is
important," said Cheever. Marijuana and knives have been collected while
searching juveniles' clothing, he said.

The lawsuit accuses the county of violating the civil rights of Jodie Smook
and other juveniles. It also argues that the girls' rights to freedom of
religion were violated. Smook's father said he would like Minnehaha County
to take responsibility for mistreating his daughter. "Nobody came forward
and apologized to us," Randy Smook said. "They just made sure that I paid
the fine for her curfew ticket." (The Associated Press State & Local Wire,
November 2, 2000)


NAPSTER INC: RIAA Says Bertelsmann Deal Will Not End Lawsuits
-------------------------------------------------------------
The Recording Industry Association of America (RIAA) said it welcomes the
file-sharing music deal between Bertelsmann AG and Napster Inc, but that
legal proceedings will continue against Napster as Bertelsmann was not the
only plaintiff.

Under the terms of the agreement announced, Napster and Bertelsmann will
develop a person-to-person file sharing music service and Bertelsmann will
drop its copyright infringement lawsuit against Napster. RIAA president
Hilary Rosen said: "We welcome anyone's decision to become a legitimate
player in the online music industry, building a business based on licensed
uses of copyrighted works."

Legal proceedings are not over, however, Rosen added: "(The) announcement
does not bring an end to the court case. There are multiple plaintiffs in
addition to BMG; and BMG itself has said that it won't withdraw its
complaint against Napster until they actually implement a legitimate
business model."

Seagram Co unit Universal Music Group said the deal will not affect its
lawsuit that aims to shut down Napster.

"The current Napster model... continues to infringe (on intellectual
property) and, as such, (the) announcement does not affect the lawsuit,"
Universal Music said.

Bertelsmann and Napster said the deal "will provide Napster community
members with high-quality file sharing that preserves the Napster
experience while at the same time providing payments to rights holders,
including recording artists, songwriters, recording companies and music
publishers."

Napster chief executive Hank Barry said the subscription service will be
launched "as soon as we can", adding: "We think that at 4.95 usd a month,
you can generate some revenues there really compelling for artists." (AFX
European Focus, November 1, 2000)


PA DEPT: 3rd Cir Denies Incarcerated Youths Suit over Equal Education
---------------------------------------------------------------------
A group of Pennsylvania youths who said they were denied equal education
services while incarcerated lost their battle in the 3rd U.S. Circuit Court
of Appeals because of a state statute.

The youths, who were all under the age of 21, filed a class action suit
against the state Department of Education. Their suit alleged "violations
of their rights to basic and special education as guaranteed them" by the
U.S. Constitution, federal statutes and state law. while incarcerated in
county correctional facilities in 1996.

At the first trial the group asked the District Court to bar enforcement of
Pennsylvania statute Subsection A, which limits the education available to
youths convicted as adults and incarcerated in adult, county correctional
facilities.

The court denied their request. Although state law gives youths the right
to a public education until completion of high school, youths convicted as
adults and sentenced to adult, county facilities are only entitled to the
minimum education provided to expelled students. An expelled student under
the age of 17 has a right to about five hours of education a week, compared
to the usual 27.5 hours. Expelled students over the age of 17 are not
entitled to education at all.

The youths argued the statute warrants heightened scrutiny under Plyler vs.
Doe, 457 U.S. 202, 1982. In the case, the Supreme Court applied
intermediate scrutiny to a statute that prohibited the disbursement of
state funds for the education of children of undocumented aliens.

The court disagreed, saying the case reaffirmed an early decision that
"education is not a fundamental right, and therefore burdens on education
are not subject to heightened scrutiny."

It was the unique circumstances of a burden on education coupled with the
disadvantaging of children of aliens that led to the heightened scrutiny in
the case, the court said. The court also noted the Supreme Court has
declined to extend Plyler's heightened scrutiny to other education cases.

Unlike the Plyler case, the "youth covered by Subsection A are going
punished as a result of their own illegal conduct, not because of the
illegal conduct of their parents," the court said.

The DOE defendants gave four reasons why Subsection A is justified. First,
they said space limitations in county correctional facilities have
prohibited the state from providing a complete education program.

Secondly, state facilities, which provide full education programs,
generally have higher youth populations. The DOE said county facilities
have more school-aged inmates than state institutions, and if provided full
education programs, would result in an severe increase in per-student
costs.

Third, the DOE said that if full education services were curtailed in state
facilities, it would likely raise security concerns due to inmate
hostility.

Lastly, the DOE said the state legislature determined the longer-term youth
population found in the state correctional system would benefit more from
educational services than the transient population found in county jails.

The court affirmed the earlier decision, which denied the request to not
enforce Subsection A.

Brian B. through his mother, Lois B. vs. Commonwealth of Pennsylvania
Department of Education, U.S. Court of Appeals, Third Circuit, Case No.
99-1576, Oct. 12, 2000. (Correctional Educational Bulletin, October 30,
2000)


PASMINCO LTD: Asks Court To Dismiss Group Claims Over Smelters
--------------------------------------------------------------
Lead and zinc miner Pasminco Ltd on November 2 asked the Victorian Supreme
Court to dismiss a group action against it over claims of alleged
pollution, nuisance and negligence at its Cockle Creek and Port Pirie
smelters.

Pasminco said the matter should be dismissed because it believed the court
should not adjudicate over matters outside Victoria, the class action
failed to fulfil threshold requirements and the statement of claim was
unclear and inconsistent.

Pasminco has owned the companies that operate the smelters in Port Pirie,
in New South Wales, and Cockle Creek, in Victoria, since 1988.

"Pasminco believes that a group proceeding, or class action, is an
inappropriate way of dealing with diverse individual issues," it said in a
statement. "The company continues to encourage people who have concerns
about its operations to raise these directly with the company. "The company
has always worked within strict guidelines in relation to the environmental
performance of all its sites, and consults regularly with communities to
discuss expectations."

The statement said the court would resume its hearing on the matter on
November 8. (AAP Newsfeed, November 2, 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.

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