[T]here is no principled reason to depart
from General Telephone Company and require class certification . . . simply
because the EEOC is now author-ized to sue for damages in addition to
equitable relief [a type of nonmonetary remedy intended to restore the
party to the position he would have been in if not for the wrongful conduct
of another]. The court also rejected the clinic's argument that the total
monetary award should be limited to $ 50,000. The clinic contended that
since the EEOC was the only named party, it was the only "complaining
party" and therefore was the only one entitled to an award limited to $
50,000.

Because the particular section of the damage caps law was ambiguous,
however, the court turned to the EEOC's interpretation of the law to
determine if it was reasonable. The agency had taken the position that the
damage caps applied to each individual employee and that it could recover
up to the maximum amount for each individual. The court found that
interpretation of the law to be "eminently reasonable" and deserving of its
deference.

The Ninth Circuit held that each aggrieved employee represented by the EEOC
in a Title VII lawsuit could receive up to the maximum damages amount
without filing a separate suit or becoming a named party in the agency's
case. The appeals court affirmed the trial court's judgment in favor of the
EEOC in all respects. EEOC v. Dinuba Medical Clinic, -16454, 2000 WL
1199529 (9th Cir., Aug. 24, 2000).

                                 Lesson

This decision makes it clear that the EEOC may sue for money damages on
behalf of more than one employee or former employee without filing a class
action. The commission also may recover monetary damages for each
individual, limited to $ 50,000 each when the employer has no more than 100
employees. (Nevada Employment Law Letter, November, 2000)


ELBIT, ELSCINT: Announces Dismissal of Lawsuit and Mediation of Claims
----------------------------------------------------------------------

Elbit Medical Imaging Limited (Nasdaq: EMITF) ("EMI") announced that on
November 16, 2000 the District Court of Tel Aviv Yafo issued an order
dismissing without costs the Representative (Class Action) Claim submitted
to that court by Mr. Jonathan Aderet in September 1999 against EMI, Elbit
Medical Holdings Limited, Elscint Limited, Elron Electronics Industry
Limited and five former Directors of Elscint Limited.

The dismissal was made at the request and with the consent of all the
parties, and follows the mediation of all claims between Elscint Limited
and Mr. Aderet (a former president of Elscint Limited), including claims
relating to the termination of Mr. Aderet's employment by Elscint Limited.
Elscint Limited has informed EMI that the District Labour Court in Haifa
issued its order giving the Mediation Agreement between Elscint and Mr.
Aderet the validity of a court judgement on November 12, 2000.

Elscint Limited (NYSE: ELT), a subsidiary of Elbit Medical Imaging Limited
(Nasdaq: EMITF) ("EMI") also announced it has reached a Mediation Agreement
with its former president, Mr. Jonathan Aderet, for the settlement of all
outstanding claims between Mr. Aderet and the Company, including the
Representative (Class Action) Claim.

In 1999, Mr. Aderet claimed for certain compensation arrangements from the
Company following his termination as president of the Company in a claim
filed with the District Labor Court in Haifa. Pursuant to the terms of the
Mediation Agreement, Elscint will pay to Mr. Aderet an agreed sum, in full,
as final settlement of all claims against the Company. The Mediation
Agreement was awarded the validity of a judgement of the District Labour
Court in Haifa on November 12, 2000.

By agreement between the parties, the Representative (Class Action) Claim
submitted by Mr. Aderet to the District Court of Tel Aviv against Elscint,
EMI, Elbit Medical Holdings Ltd., Elron Electronics Industry Limited and
several former Directors of Elscint, was dismissed without an order for
costs with the consent of all parties. The court order was given on
November 16, 2000.


EMULEX HOAX: Another Suit Filed Against Wire Service Over Fake Release
----------------------------------------------------------------------
An investor filed a lawsuit Tuesday against a press release distributor
that transmitted phony information that sent a fiber-optic equipment
company's stock tumbling. Another suit, filed in Manhattan, was previously
reported in the CAR.

The suit was filed in Los Angeles County Superior Court on behalf of Steven
Simon of West Orange, N.J., said Victor Cosentino, one of his attorneys.

Simon, who is seeking class-action status for the lawsuit, claims he sold
1,500 shares of Emulex Corp. stock at cut-rate prices because of false
information distributed by Los Angeles-based Internet Wire. His suit
contends the company was negligent in sending out the release, which was
picked up by news outlets including Bloomberg and CBSMarketWatch.

Internet Wire officials could not be reached for comment. A call to the
company's office after business hours Tuesday went unanswered.

A former Internet Wire employee, Mark S. Jakob, 23, of El Segundo, was
arrested Aug. 31 and later indicted on 11 securities and wire fraud
charges. Federal authorities claim he created the phony press release and
made about $ 241,000 from the resulting stock fluctuations. He has pleaded
innocent.

Holders of Emulex stock lost a total of about $50 million the morning of
Aug. 25, after the release went out. It falsely stated that Emulex's
accounting practices were under federal investigation, that its president
had resigned and that it would restate earnings to show a big loss.

The release was found to be a hoax that day, but not before Emulex stock
plummeted from $113 a share to less than $43 in a seller's panic. The Costa
Mesa company's stock ultimately recovered, but that was no consolation to
investors like Simon, who claims he sold his stock at $45 to $75 per share.

If convicted on all charges, Jakob could be sentenced to a cumulative
prison term of 100 years, fines of $9.5 million and be ordered to pay
$600,000 in restitution in a separate lawsuit brought by the Securities and
Exchange Commission. His trial is set for early next year.

Simon wants to be reimbursed for his losses and awarded damages. His suit
also asks that Internet Wire be ordered not to distribute news releases
without verifying their contents. (The Associated Press State & Local Wire,
November 22, 2000)


GERMANY: Court Rejects Claims For Property Seized Under Communism
-----------------------------------------------------------------Germany's
highest court refused Wednesday to award further compensation for east
German property seized by the Nazis or under the communist regime that
followed, saving the government billions in likely payouts after a bitter
legal battle.

The Federal Constitutional Court's ruling is a major setback to more than
half a million plaintiffs in one of the most complicated disputes arising
from the collapse of communist East Germany and German unification in 1990.

"This is a great disappointment," plaintiff Hans-Guenter Marwitz said. "No
justice was done here."

Many of the 40 plaintiffs suing the government were descendants of
Prussia's aristocratic landowner caste known as Junkers, whose property was
seized by Soviet occupation authorities immediately after World War II.
They argued that they were unfairly treated under Germany's unification
treaty compared to other former owners who actually got their property
back.

One of the claimants was seeking higher compensation for a piece of eastern
German real estate owned by his Jewish mother that was taken over by the
Nazis during World War II, the court said. Communist East Germany never
compensated people whose property was seized under the Nazi regime.

But the court said German taxpayers had already paid heavily for
unification, with massive government aid funneled to former East Germany
over the past decade. It said the government had the right to limit
compensation claims.

The eight justices upheld 1994 legislation challenged by the plaintiffs,
parts of which cover property seized from east German Jews by the 1933-45
Nazi dictatorship. Other parts cover expropriations under Soviet occupation
and during East Germany's 41-year life span.

The government had said it could face an additional $8.6 billion in
expropriation claims if the law were overturned - just as it tries to cut
spending and balance the budget. The Finance Ministry welcomed the verdict,
noting it has already set aside $5.6 billion for such compensation over the
last decade. (The Associated Press, November 22, 2000)


HOLOCAUST VICTIMS: US Judge Ratifies $1.25B Swiss Bank Distribution Plan
------------------------------------------------------------------------
Concluding a long and contentious process, a federal judge approved a plan
to distribute $ 1.25 billion to Holocaust survivors. The ruling by U.S.
District Judge Edward R. Korman--which used a complex set of formulas for
payments--was designed as the final chapter in survivors' lawsuits against
Swiss banks.

But some lawyers said they expected an appeal. "I think the decision
certainly should be reviewed by the court of appeals. It is historic, but
it is tragically inadequate," said Samuel J. Dubbin, a Miami lawyer who
filed objections to the settlement. "There are serious questions about the
fairness of the settlement to begin with, serious questions about the
adequacy of the sums and serious questions about whether or not it was a
fair compromise for the victims," he said. Dubbin labeled "paltry" the sum
agreed upon in the settlement "relative to the theft that is known to have
taken place."

Korman presided over an emotional hearing in federal court in Brooklyn,
during which Jewish survivors rekindled bitter memories and fought over how
the settlement funds would be allocated.

But Elan Steinberg, executive director of the World Jewish Congress,
praised Korman's order. "Hopefully, after two years, the ruling will allow
for a rapid distribution of funds," Steinberg said. "The concern now is we
are going to have some frivolous appeals that would only serve to block
distribution . . . to an aging and dying survivor population," he added.

In his order, Korman stressed that while the settlement fund is
"substantial," it was insufficient to do justice to all people who suffered
and made claims. According to the plan approved by Korman and drafted by
Judah Gribetz, a former deputy mayor of New York City whom the judge had
appointed as a special master, priority for payment will be given to the
persecuted holders of Holocaust-era accounts in Swiss banks.

Korman praised Gribetz for his "deep understanding of all issues related to
the Holocaust."

The first step will be publication of names and identifying information
connected to about 26,000 World War II-era accounts related to Holocaust
victims. The largest settlement sum, $ 800 million, was set aside to ensure
that the owners of these accounts are paid in full, including interest. Any
unused funds in this category will be distributed to other classes of
beneficiaries. The additional $ 450 million will be divided among refugees
who were refused entry to Switzerland, people who were forced into slave
labor for companies with Swiss accounts and Holocaust victims whose
possessions were stolen by the Nazis and ended up in Switzerland.

In the plan he crafted, Gribetz recognized that it would be impossible to
pay all the heirs of slave laborers who died, because the cost of locating
them would be too high and the sums distributed would be nominal.

Thus, the decision was made to primarily pay survivors. It is estimated
that the survivors will receive about $ 1,000 each.

Refugees who were denied entry or who were expelled from Switzerland can
receive up to $ 2,500. Plans call for publishing the names of 4,000 people
known to have been refused entry because they were Jewish.

In his court order, Korman said that his decision to appoint Gribetz to
propose a distribution plan was motivated by a desire to spare Holocaust
survivors from being forced into an adversarial relationship. "It was hoped
that a neutral special master, acting with the guidance of the affected
community, could . . . propose a plan of allocation and distribution that
would do non-adversarial justice to the claims of all class members," the
judge said.

As part of the process, the proposed plan was translated into 21 languages
and sent to 675,541 people and organizations throughout the world.

Korman said that more than 99% of the Holocaust victims or their survivors
did not submit any comments, and presumably had no objection.

In August 1998, after months of often-bitter negotiations between lawyers
for the Holocaust victims and their heirs and the banks, Credit Suisse and
UBS, Korman played a major role in crafting a settlement.

The agreement ended threats of sanctions against the Swiss banks by about
20 states and 30 municipalities throughout the United States.

During the entire process, the pressure of the ticking clock was evident.
Many of the Holocaust survivors were elderly and frail. Some who filed the
original suits died before they could see the settlement concluded.

The clock also apparently was on the judge's mind.

In his order approving the plan to distribute funds, Korman said he wanted
to proceed as expeditiously as possible. (Los Angeles Times, November 23,
2000)


HOUSING AUTHORITY: Injunction Protects Tenants' Privacy
-------------------------------------------------------
A federal judge in Orlando has given four tenants of the Sanford Housing
authority a preliminary injunction, preventing housing authority employees
and Sanford police officers from using a clause in tenants' leases to enter
residences without a warrant.

Treena Kaye, managing attorney at Central Florida Legal Services Inc., and
Robert Hornstein, a public interest lawyer with a private practice in
Gainesville, went to federal court on behalf of tenants Mary Noble, Sabrina
Conyers, Rosetta Horne and Trumella James.

Because of the involvement of a legal services attorney, federal
regulations prevented the lawyers from seeking class-action status.
However, Kaye said any tenant should be able to easily obtain a similar
injunction after Tuesday's ruling. The judge ordered the tenants and the
housing authority to a January mediation hearing.

The decision comes six months after another tenant was awarded $77,000 from
the housing authority and its director, Timothy Hudson, in state court. A
jury concluded Tanisa Comer's rights were violated when Hudson entered her
apartment without a warrant or her consent. He began eviction proceedings
after finding drugs in the apartment.

Hudson's testimony in the Comer case weighed heavily in the decision to
file the federal court case, Kaye said.

In the Comer case, Hudson testified that he called police to her apartment
"to assist me as I inspect alleged allegations that there's drug activity,
drug usage going on."

In a deposition given prior to the Comer trial, Hudson said that as
landlord he did not need a search warrant to enter apartments.

"If it's believed, OK, or suspected that something happening in that unit
around that unit is a threat to the head of household or to other
residents' right for a peaceful enjoyment, I don't need a signed search
warrant by a magistrate," Hudson said in the sworn testimony.

Hudson has used an emergency entry clause in tenants' leases to enter
apartments, Kaye said.

The clause reads: "The Authority may enter Tenant's dwelling unit at any
time without advance notification when there is reasonable cause to believe
that an emergency exists."

U.S. District Judge Gregory A. Presnell ruled that paragraph cannot be used
in place of consent or a search warrant. He did not prevent police from
carrying out legal obligations and duties.

"We're complying [with] the law and we have been since I took over," said
Sanford Police Chief Brian Tooley. Tooley said he issued a memo to his
employees shortly after he took the job in August 1999 telling them they
were to treat the apartments of tenants living in public housing the same
as the homes of any other resident. (The Orlando Sentinel, November 23,
2000)


INMATES LITIGATION: Ct Holds PA Liable for Unconstitutional Conditions
----------------------------------------------------------------------
On November 21 the Commonwealth Court held the City of Philadelphia
responsible in the latest round of appeals in Jackson v. Hendrick, a
30-year-old case over unconstitutional prison conditions. The court ruled
against the city after reconsidering an appeal it previously quashed and
was ordered to revisit by the Supreme Court.

With trial court evidence that the prison system was "disgusting," that
inmates were doing their laundry in sinks with clogged drains and that the
city repeatedly opted to pay a fine rather than fix things, Judges James
Flaherty and Rochelle S. Friedman, along with Senior Judge Emil E. Narick,
affirmed the $ 1 million fine against the city."Half-hearted measures, or
sham claims of compliance do not address the problems [or] conditions
within prisons, and are inadequate to satisfy the agreements which the City
has made," wrote Friedman, quoting the trial court.David Rudovsky of Kairys
Rudovsky Epstein Messing & Rau represented the plaintiffs. Richard Feder
and Marcia Berman of the City Solicitor's Office represented Phildelphia.

                            History

With 30 years of litigation baggage, the history of Jackson is "tangled,"
the court said. In 1971, five prisoners in the city's prison system filed a
class action in equity, seeking injunctive relief from cramped conditions
at the prison they alleged violated their constitutional and statutory
rights. Then-Mayor James Tate was a named defendant that's how old the case
is.A 1972 trial court decision went in favor of the prisoners, and the city
was ordered to take immediate action to improve prison conditions.
According to the trial court, conditions at the prison amounted to cruel
and unusual punishment under both the state and U.S. constitutions. The
parties later entered into a series of consent decrees, culminating with a
1991 agreement by which the city is still bound. That consent decree
imposes obligations on the city with respect to "virtually every aspect of
prison life," and allows the trial court to impose fines for noncompliance,
the opinion said.In 1995, the plaintiff-prisoners filed a motion for
contempt of court against the city for failure to comply with the consent
decree. After a series of hearings, the trial court found the city in
violation of the decree and imposed a fine of $ 2,252,500. After a motion
for reconsideration, that fine was lowered to $ 1,095,000. The city
appealed to the Commonwealth Court. It was now March 1997.The court quashed
the city's appeal for lack of jurisdiction in 1998. This February, however,
the Pennsylvania Supreme Court vacated the Commonwealth Court's order and
remanded the appeal to Commonwealth Court for reconsideration of the city's
appeal. While this gave the city a second bite at the apple, it ultimately
lost the battle over contempt fines.

                        No 'Criminal Contempt'

The city argued in its appeal that the fine imposed was a criminal contempt
fine, rather than a civil contempt fine, and that the city was therefore
entitled to all the safeguards of a criminal proceeding. The court
disagreed."The courts have always possessed inherent powers to enforce
their orders and decrees by imposing sanctions," wrote Friedman. "If the
dominant purpose of the court is remedial, to coerce compliance ... and in
some cases, to compensate the complainant for losses suffered, the contempt
proceeding is classified as civil." (Emphasis in original.) Since the trial
court would place the fine money in its escrow fund for the benefit of the
prisoners, it was compensatory and remedial and therefore was a civil
sanction, she said.

                        Arbitrary Maximum Fines

Another challenge by the city was over the fines imposed under the 1995
stipulation. It was an abuse of discretion to impose the maximum allowable
amount $ 1,500 per day without stating the reasons for doing so, the city
said."The trial court's reason is apparent to us," said Friedman.She quoted
the trial court's record, which stated that the Philadelphia prisons
"'remain dangerously overcrowded, while conditions remain, in many
respects, cruel, disgusting and degrading.'" She noted the trial court has
also said the city "repeatedly opted to pay a fine for contempt rather than
comply" with its court-approved agreements."Quite obviously, the trial
court imposed the maximum penalty because it found that, despite many
opportunities to satisfy the requirements of the consent decree in the
areas that concerned the trial court here, the City preferred to pay a fine
and allow the 'cruel, disgusting and degrading' conditions to continue,"
said Friedman.

                            Burdens of Proof

The city argued the trial court's requirement for the city to be in "full
compliance" rather than "substantial compliance" with the consent decree
amounted to error. It was clear that the trial court did not err, Friedman
wrote, because two civil contempt fines had been imposed on the city for
noncompliance one for failure to provide sufficient social workers, and
another for failure to provide prisoners with sufficient clothing, supplies
and laundry access.Friedman said the city agreed in 1995 that it would be
subject to a noncompliance fine if it were not in "full compliance"
regarding the social workers. Regarding the clothing and laundry, the court
acknowledged that the city had agreed to only a "substantial compliance"
standard, but she said the trial court found that the city had failed to
meet even that lower burden. "The large majority of inmates did not have
the required two sets of blues (prison clothing), sheets or pillowcases ...
[and] the majority of inmates did not have access to adequate laundry
facilities to wash their clothing, sheets, pillowcases or towels ... the
City admitted this serious problem," she quoted. If all that was true,
Friedman said, the city did not substantially comply with the consent
decree or a subsequent stipulation.The city also challenged how a
"preponderance of the evidence" burden was met by the plaintiffs, but
Friedman said there was no error at trial. The testimony of one credible
social worker was enough to prove by a preponderance of evidence that, in
addition to other things, the city had failed to ensure a 72-hour response
time to all social services requests, she said.

                     Consent Decree Interpretation

The city further contended that the trial court misunderstood several
provisions of the consent decree, including those related to social
services, laundry access and vocational training. Laundry and food-service
positions at the prison did not teach marketable skills to inmates, and
thus failed to meet the vocational training requirement. Laundry access was
guaranteed by the consent decree, which required that medical personnel
work in "safe, clean areas." "The City cannot provide a clean and safe area
for the medical staff if there are not sufficient laundry facilities to
clean bloody and infectious linens in the [detention center's] hospital,"
wrote Friedman, who said a witness testified inmates were doing their
laundry in sinks and showers with lye soap. Friedman said the trial court
did not err in imposing a contempt fine on the city with respect to the
laundry and vocational training issues.On the basis of evidence of social
service abuses by the city at trial, the Commonwealth Court declined to
consider allegations the trial court misunderstood provisions in the
consent decree regarding social service caseloads. (The Legal
Intelligencer, November 22, 2000)


INS: 9th Cir Gives Immigrants Go Ahead to Sue for Citizenship
-------------------------------------------------------------
With the citizenship of possibly a quarter of a million people hanging in
the balance, the Ninth Circuit U.S. Court of Appeals gave a class of
immigrants the go-ahead to sue the Immigration and Naturalization Service.

In doing so, the divided en banc panel threw open the courthouse door by
placing statutes of limitation for subsequent classes on ice as long as the
original complaint remains intact.

In Catholic Social Services v. Reno, 00 C.D.O.S. 9301, the majority said a
second class of illegal aliens could challenge an INS ruling that it was
ineligible for a 1986 amnesty program, even though it filed suit long after
the six-year statute of limitations had run.

Plaintiffs lawyers argued that the first suit tolled the statute of
limitations, while government attorneys argued that it was a new class with
new claims for which time had run out. But Judge William Fletcher, writing
for the 7-4 majority, said that since the first class action is still
viable, a second class did not mean lawyers were taking a second swing at a
flawed case, and therefore could continue.

"Plaintiffs in this case are thus in a fundamentally different posture from
plaintiffs in which subsequent class actions were not allowed," Fletcher
wrote. "Plaintiffs in this case are not attempting to relitigate an earlier
denial of class certification, or to correct a procedural deficiency in an
earlier would-be class."

Judge Alex Kozinski wrote one of the dissents.

"I disagree with that characterization of this case," he wrote. "In my
view, plaintiffs are seeking to relitigate the propriety of their proposed
class. That is, even if the majority's distinction were theoretically
valid, it has no application here."

In 1986, Congress created an amnesty program to grant citizenship to
illegal aliens living continually in the United States since 1982. The
program would be unveiled the next year and last for 12 months.

Congress wanted interpretation of the program to be "generous" and wrote a
provision into the law clearly stating that brief absences from the country
would not bar citizenship.

But Immigration and Naturalization Service officials turned away applicants
who had left the country, however briefly, after passage of the law but
before the program began -- unless they had obtained permission to leave,
or " advance parole," from the INS. As many as 250,000 immigrants were
denied residency, according to plaintiffs lawyers, and thus began what the
Ninth Circuit on Tuesday called a case with a "long and unhappy history."

Seven amended complaints were filed before Eastern District Senior Judge
Lawrence Karlton. The case has even been to the U.S. Supreme Court, which,
in part, is where the trouble began.

The cases now are referred to as CSS I through CSS VI, with an earlier
Ninth Circuit panel decision in CSS VI overturned with Tuesday's opinion.

Thousands of applicants were turned away by clerks at the INS before being
allowed to file an application. The Supreme Court said members of this
group, so-called "constructive front-deskers," would be able to show their
case was ripe only after further development of the record.

In 1996, the seventh amended complaint included claims by plaintiffs who
said they were "front-desked" without ever being allowed to fill out an
application. About the same time, Congress enacted the Illegal Immigration
Reform and Immigrant Responsibility Act, which contained a provision
attempting to decide the ripeness issue for the courts.

Specifically, the statute said that no court shall have jurisdiction over
claims of citizenship under the 1986 amnesty law unless the immigrant
actually filed, or attempted to file, a completed application.

That created a second class action, which challenged the constitutionality
of the IIRIRA provision. Several law professors later joined in that
challenge, filing an amicus curiae brief after the Ninth Circuit's
three-judge panel appeared to rule that it had no jurisdiction to decide
whether the provision was constitutional.

Judge Fletcher pointed out that members of the second class clearly had
their individual claims preserved while the first suit was fought at
virtually every whistle-stop in the federal judiciary.

"The only question in this case is whether those same plaintiffs should be
permitted to aggregate their individual actions into a class action,"
Fletcher wrote. "Strictly speaking, this is not a statute of limitations
question at all."

But Kozinski, in a dissent joined by Stephen Trott, Thomas Nelson and
Ferdinand Fernandez, accused the majority of digging a bottomless well from
which class action lawyers can draw cases, trying them over and over no
matter what the statute of limitations says.

"The majority raises a conflict with the law of every circuit that has
decided a question of national significance," Kozinski wrote, adding that
the decision undermines the principles of class litigation.

"Instead of performing the normal en banc function of clarifying the law,
the majority leaves it in total disarray," Kozinski later added.

Judge Susan Graber, writing separately, agreed with the majority that "
constructive front-deskers" could form a separate class, since their
claims, she reasoned, arose from the 1996 law that denied them standing.
But she would deny the claims of litigants whose new claims did not arise
from IIRIRA. (The Recorder, November 22, 2000)


MCKESSON HBO: NY Times Reviews On Questions On Who Knew What In Deal
--------------------------------------------------------------------
Is it really possible that one company would buy another after learning
that the company being bought had fudged its accounting to increase profits
in ways that the Securities and Exchange Commission would never approve if
it learned of them?

That is the charge made by one of the country's largest institutional
investors against the McKesson Corporation, whose acquisition of HBO &
Company, a software concern, last year ended with allegations of fraudulent
accounting at HBO. Those allegations caused the stock price of the merged
company to plunge. Two former officials of HBO have been indicted on fraud
charges and McKesson HBOC, as the company is now known, has restated its
earnings to far lower levels. But until now, McKesson has been viewed as a
victim that had no knowledge of the fraud until after the merger.

In a statement, McKesson dismissed the latest allegations as
"preposterous," but the suit filed by the New York State Common Retirement
Fund, the state pension fund, quotes from what it says are internal
documents from Bear, Stearns, the McKesson investment banker in the deal,
detailing the accounting problems said to have been uncovered by Deloitte &
Touche, McKesson's auditors.

It turned out that the Deloitte qualms about HBO's accounting practices
were well justified, although Deloitte did not know of the scope of the
problem. A few months after the merger was completed in January 1999, the
company disclosed the need for a major restatement of earnings. The share
price fell from $65.75, to $34.50, on April 28, the day that announcement
was made.

McKesson said that the suit "contains factual inaccuracies, distortions and
erroneous conclusions," including the "preposterous allegation in the
complaint that the McKesson Corporation board and its officers conspired
deliberately to overpay for HBOC and to ignore accounting irregularities."

Bear, Stearns, whose officials are said to have written the memorandums,
declined to comment, other than to say the suit's "allegations are
unsubstantiated." There was also no comment from Deloitte or from Arthur
Andersen, the firm that had certified HBO's books and that is also named as
a defendant in the class-action suit.

Daniel L. Berger, a partner in the firm of Bernstein Litowitz Berger &
Grossman, which filed the suit on behalf of the pension fund, declined to
provide copies of the memorandums cited in the suit.

According to the suit, in July 1998, while a merger of the two companies
was being considered, McKesson asked Deloitte, which audited its books, to
review those of HBO. Deloitte did not do its own audit but instead relied
on the work papers of Arthur Andersen auditors.

The Deloitte auditors concluded that in 1996 and 1997, HBO had improperly
recorded sales before customers had approved the transactions. The Bear,
Stearns memorandum says that "did not accord with G.A.A.P.," as generally
accepted accounting principles are known. Deloitte was said to have
concluded that Andersen knew of the incorrect accounting but "apparently
did not challenge" it on the basis that the amounts involved, $5 million or
more a year, were not material to the company.

The Deloitte accountants are also said to have concluded that HBO was
recognizing too much revenue when it sold software that it was required to
maintain and that it abused merger reserves to hide costs that should have
been treated as ordinary expenses. The lead Deloitte accountant on the
review, Theresa Briggs, is quoted as saying the likelihood of a required
restatement of profits, if the S.E.C. learned of the details, was "high."

All of those issues figured in the later restatement of HBO's profits, but
the amounts were much larger.

Soon after the memorandums say that Deloitte's conclusions were presented
to the McKesson board in July 1998, the tentative deal with HBO collapsed
after it was prematurely disclosed and HBO's share price fell. The Wall
Street reaction was that HBO was getting the worst deal.

But in October, McKesson revived the talks and a new deal was quickly
reached on terms more favorable to McKesson than were those of the earlier
deal. The McKesson board approved it, and so did shareholders, after
receiving a favorable opinion from Bear, Stearns.

The Bear, Stearns statement, as provided to shareholders, concluded that
the deal was fair to McKesson and included the statement that "McKesson did
not provide specific instructions to, or place any limitations upon, Bear,
Stearns with respect to the procedures to be followed or factors to be
considered by Bear, Stearns" in determining whether the merger agreement
was fair.

That would appear to be contradicted by a Bear, Stearns internal memorandum
quoted in the suit. That memorandum, dated Jan. 29, 1999, reviewed what it
said were Deloitte's concerns that HBO profits were substantially
overstated and said that those concerns had been discussed by McKesson's
board, which decided to go ahead with the transaction. In preparing the
fairness opinion, according to the memo from Alan Schwartz and Michael
Offen of Bear, Stearns, "we were instructed by McKesson to rely only on the
information provided to us by McKesson and HBOC and not to adjust any of
this information based on questions raised by Deloitte."

If that is accurate, the question is how and why it could happen. As
McKesson said in its statement on the suit, "nowhere does the complaint
suggest any reason" that the board would go ahead with the merger after
learning of accounting irregularities.

But the suit does suggest that McKesson, a distributor of health care
products, believed it badly needed to expand into a more rapidly growing
field, and thought HBO could provide that.

If the memorandums prove to be accurate and the suit's quotations from them
have not been wrenched so far out of context as to distort their meaning,
there could be an explanation for the behavior -- one that speaks badly
about prevailing attitudes in corporate America. Perhaps boards and
managements have grown so used to managing earnings, using methods that are
sometimes perfectly legal and sometimes go near or even over the lines set
by accounting rules, that the discovery that another company was doing that
-- even to the extent of breaking the rules -- was not deemed in itself a
deal-breaker.

According to the suit, the Bear, Stearns memorandum said Deloitte told
McKesson that HBO would need to take a $40 million to $55 million hit to
earnings to address the problems that Deloitte had found but that McKesson
had decided instead to take the hit gradually, raising "reserves to a
proper level over an 18-month period." In that way, the memorandum said,
McKesson could still meet Wall Street earnings expectations.

In the end, the merger was done, and nearly everyone involved suffered. A
much larger write-off left no doubt that earnings estimates could not be
met. The chief executive and chief financial officers of McKesson departed,
blamed for arranging a disastrous merger. HBO officials were indicted, and
now this suit challenges whether McKesson's officers and directors knew
what was happening before the merger was approved. (The New York Times,
November 22, 2000)


MISSISSIPPI: offers $400M for College Desegregation Suit; $800M Sought
----------------------------------------------------------------------
The state of Mississippi has offered a $400 million settlement to
plaintiffs in a college desegregation lawsuit. A chief plaintiff says they
can do better.U.S. Rep. Bennie Thompson, D-Miss., confirmed Wednesday that
the College Board's offer is $400 million, about half of what plaintiffs
are seeking to improve education at Mississippi's three historically black
colleges.

The two sides are scheduled to sit down next Monday in Jackson in a closed
door meeting to discuss progress toward a settlement.

The plaintiffs' proposal is $800 million. Attorney General Mike Moore
called it substantial.

"The perception that the board is doing all it can to enhance black
colleges is subject to interpretation," Thompson said. "I think they are
about halfway there."

The college desegregation case originated in 1975 when the late Jake Ayers
Sr. of Glen Allan sued the state, accusing Mississippi of neglecting its
black universities for decades. Plaintiffs successfully demanded that more
money be put into the historically black institutions to end
discrimination.

In the eight years since the U.S. Supreme Court in 1992 ruled that colleges
in Mississippi were segregated, new admission policies have been adopted.
Since 1995, Mississippi has poured $60 million into its historically black
universities in an effort to respond to court orders. The bulk of the funds
are for new programs, facilities and other-race scholarships. Gov. Ronnie
Musgrove has opened settlement discussions among the plaintiffs, the
College Board and the state.

Thompson lamented that "facilities on the campuses of the black colleges
are substantially less or different" than they are on white college
campuses and that "faculty salaries at most black colleges are
significantly different than at white colleges."

Moore said the College Board's offer to improve conditions at Alcorn State,
Jackson State and Mississippi Valley State universities is a solid effort
to "correct the wrongs of the past." "This proposal is substantial ... in
its dollar amount and programs," Moore said.

Issac Byrd, a Jackson attorney who represents plaintiffs in the suit, said
the board's offer was less than he had hoped for. "It came in substantially
below it," Byrd said. "It's not where I think it should be." (The
Associated Press State & Local Wire, November 23, 2000)


MITEK SYSTEMS: Milberg Weiss Expands Period for Securities Suit in CA
---------------------------------------------------------------------
Milberg Weiss (http://www.milberg.com/mitek/)announced that a class action
has been commenced in the United States District Court for the Southern
District of California on behalf of purchasers of Mitek Systems, Inc.
("Mitek") (Nasdaq:MITK) publicly traded securities during the period
between December 27, 1999 and September 29, 2000 (the "Class Period").

The complaint charges Mitek and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Mitek is involved in
character recognition technology, products, and services for the document
imaging markets. The complaint alleges that during the Class Period,
defendants represented that Mitek recorded revenue in compliance with the
applicable accounting standard for software revenue recognition, AICPA
Statement of Position ("SOP") 97-2, and reported favorable but false
financial results. As a result, Mitek's stock traded at artificially
inflated levels. Defendants took advantage of these inflated prices,
selling more than $3.2 million worth of their own Mitek stock. On 9/29/00,
Mitek announced that the Company will restate its third quarter 2000
financial statements as a result of accounting misstatements that will
require eliminating $1.4 million in revenue to be removed from the quarter
for failing to comply with AICPA Statement of Position 97-2.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP William Lerach,
800/449-4900 wsl@mwbhl.com


NX NETWORKS: Abbey, Gardy Files Securities Suit in Virginia
-----------------------------------------------------------
A class action has been commenced in the United States District Court for
the District of Virginia on behalf of all persons who purchased or acquired
shares of Nx Networks, Inc. (Nasdaq: NSWX), common stock from July 27, 2000
through November 2, 2000 and who were damaged thereby. The class action
Complaint charges that Nx Networks, Inc., and certain of its officers and
directors violated the federal securities laws.

The Complaint alleges, among other things, that defendants publicly
misrepresented the Company's true financial results throughout the Class
Period and improperly recognized revenue in the second quarter of 2000
ended June 30, 2000 in violation of Generally Accepted Accounting
Procedures.

Contact: Nicholas Gilbo, ngilbo@a-g-s.com, or Maria Criscitiello,
mcrisciti@a-g-s.com, both of ABBEY, GARDY & SQUITIERI, LLP, 800-889-3701
(toll free) or 212-889-3700


PACIFICARE HEALTH: Shareholders Accuse of Delaying Bad Earnings News
--------------------------------------------------------------------
A shareholder has sued PacifiCare Health Systems Inc., alleging that the
biggest operator of Medicare health plans delayed disclosing bad earnings
news so that officials could sell shares at a premium.

The shareholder lawsuit, which seeks class-action status, accuses
PacifiCare of misleading investors between Oct. 27, 1999, and last Oct. 10,
when the company said it would report a surprise third-quarter loss and
miss its per-share earnings target for 2000. The shareholder claims that
officials issued false positive statements about company finances and sold
$ 5.73 million in shares between December 1999 and last August.
PacifiCare shares fell 52% to $ 15.69 after the company's warning. The
shares hit a 52-week high of $ 72.31 on June 16.

The Santa Ana-based company "knowingly, or with conscious and deliberate
recklessness, failed to disclose adverse material information," shareholder
Michael Russ claims in the suit filed Tuesday in U.S. District Court in Los
Angeles. The lawsuit alleges that the company and its officials were aware
that PacifiCare's earnings would be hurt as it shifted its business away
from capitation. Under that practice, the company paid doctors and
hospitals a fixed fee per patient, allowing them to keep any amount
remaining after treatment costs. The shift led to a rise in the use of
medical services, causing companies such as PacifiCare to lose much of
their control over costs.

PacifiCare officials said they were served with the lawsuit Wednesday and
had not fully examined it. "Until we get a closer look at it, we really
won't have much to say," said spokesman Ben Singer.

PacifiCare's stock fell 50 cents to $ 14.63 a share Wednesday in Nasdaq
trading. The shares have lost more than 72% of their value this year.

                            Ailing Stock

PacifiCare Health Systems' stock has tumbled since hitting a 52-week high
in June. Daily closing prices:

      JUNE 16 -- Rating agency upgrades outlook

      OCT. 10 -- PacifiCare warns of surprise quarterly loss

      Wednesday's close: $ 14.63

Source: Bloomberg News (published in Los Angeles Times, November 23, 2000)


PRESIDENTIAL ELECTION: Legal Times Reports on Varied Lot in Litigation
------------------------------------------------------------------------
Palm Beach County has been one of the hottest litigation spots in the
country this week. As of last Friday afternoon, 13 different lawsuits had
been filed in the County Courthouse stemming from the presidential
election. The cases, the citizens who brought them, and the lawyers
representing these citizens are a varied lot.

Many of the cases fall into one category: Palm Beach voters asking for the
court to declare the Palm Beach ballot illegal and confusing, and call for
a revote in the county. Those cases, so far, are: Fladell v. Palm Beach
County Canvassing Board; Horowitz v. LePore; Elkin v. LePore; Rogers v. The
Elections Canvassing Commission of the State of Florida; HABIL v. Palm
Beach County Canvassing Board; Lichtman v. Bush; and Green v. LePore.

Each case has a different set of lawyers, makes subtly different arguments,
and relies on slightly different evidence. Rogers, for one, has relied the
most on statistical data to demonstrate problems with the Palm Beach
ballots. The team of Fort Lauderdale lawyers working on that case have six
statisticians they hope to bring as witnesses.

The HABIL case is also fairly unique because it is brought on behalf of a
number of Haitian Americans who say they were particularly impacted by the
confusing design of the ballot because many of them are first-time voters.
The HABIL case asks that if a revote is not possible, that the court
instead direct the Florida electoral college members to vote for Gore.

Gibbs v. Palm Beach County Canvassing Board and Adrien v. Department of
Elections are both cases in which the citizens bringing the suits are
representing themselves. Both suits seek revotes in Palm Beach County.
Gibbs is a class action filing, and in addition to seeking a new vote, the
group of voters filing the case are asking for $ 250,000 in declaratory and
injunctive relief.

Crum v. Palm Beach County Canvassing Board and Gottfried v. LePorte (sic)
are pro se cases seeking to stop hand recounts in Palm Beach county and
have the results of the machine vote certified.

The Florida Democratic Party v. Palm Beach County Canvassing Board was one
case that actually got resolved early in the week. The Democrats were
asking that "voters' intent" be considered in counting ballots in Palm
Beach County, and as such, that dimpled chads be counted in the hand
recounts.

Judge Jorge Labarga found that the Palm Beach regulations refusing to count
dimpled ballots appeared to violate the law and that the canvassing board
had the right to assess these ballots.

Rhodes v. Harris is another Palm Beach voter case, but the case asks only
that a hand recount be conducted and that those results count for the final
tally of the county's election results. It does not seek a revote or a
declaration that the ballots are illegal.

Boswell v. Bush was filed earlier this month. Brought pro se by a resident
of Texas and West Palm Beach, the suit also seeks a Palm Beach revote. But
the suit is pretty wide-ranging, accusing George Bush of misconduct in
several matters not related to the Florida recount, such as retaliating
against a whistleblower on the state of Texas' payroll. (Legal Times,
November 20, 2000)


PRESIDENTIAL ELECTION: NLJ Says Civil Rights Cited As Key Reason
----------------------------------------------------------------
The most contentious presidential election in modern history may come down
to the interpretation of Florida statutes governing -- of all things -- the
design of paper election ballots.

As the campaigns of Vice President Al Gore and Texas Governor George W.
Bush exchanged volleys over voting irregularities, attention turned to a
handful of state lawsuits filed in Palm Beach County.

The first suit, Fladell v. Palm Beach County Canvassing Board, filed Nov. 8
on behalf of three Palm Beach County voters who claim that they voted for
Reform Party candidate Patrick J. Buchanan by mistake, is similar to five
others also filed in Palm Beach County's 15th Judicial Circuit Court. The
suits, seeking a new election, allege that state laws governing ballot
design invalidate the ones used by Palm Beach County on Nov. 7.

In the election, Mr. Gore lost Florida by less than half of a percentage
point, triggering a recount. Lawyers took notice when poll results showed
that, despite its entrenched elderly Jewish Democratic residents, Palm
Beach County gave Mr. Buchanan 3,704 of his 17,356 Florida votes. Another
19,120 ballots were disqualified because voters punched their ballots for
two candidates. That was 4% of the ballots cast in the county and double
the average ballot disqualification rate in neighboring counties.

Palm Beach County was the only county to use paper "butterfly" ballots.
Candidates were listed on facing pages, and between their names was a
vertical row of circles meant to be punched by the voter. Small arrows
directed voters to each candidate's circle.

Florida statutes @ 101.151(4) and @ 101.191 require that "the names of the
candidates of the party which received the second highest vote for Governor
shall be second under the heading for each office."

The plaintiffs in the suits, and Mr. Gore's supporters, claim that the
layout of the ballot led many would-be Gore voters to punch the circle
actually intended for Mr. Buchanan. Republicans have countered that the
ballots were approved by a Democratic appointee before Nov. 7.

The lawsuit, however, says that since the Democratic Party came in second
behind the Republicans when Governor Jeb Bush was last elected governor,
the county violated the law simply by placing the circle for Mr. Buchanan
higher than that reserved for Mr. Gore.

Supervisor of Elections and Canvassing board member Theresa LePore "had no
discretion to change the statutorily mandated position of the Democratic
candidates on the ballot," the Fladell complaint says. "As a result, many
voters, and in particular, many senior citizens, intending to vote for Al
Gore and Joe Lieberman, mistakenly punched the punch hole on the ballot
card designated for Pat Buchanan."

A second lawsuit, filed on Nov. 9, seeks class action status for the
600,000 Palm Beach County residents who voted on Nov. 7. Horowitz v. LePore
alleges federal and state civil rights violations caused by the confusing
ballot. Attorney Mark A. Cullen of Boca Raton, Fla.'s Szymoniak Firm, who
brought the Horowitz suit, claims that "the balloting promulgated by the
defendant was in violation of Florida law in that it failed to allow the
voter to mark an 'X' or to utilize a punch strip to the right of the
candidates name," a reference to the requirements of state statute @
101.011(1).

Some legal experts have predicted that state court judges are unlikely to
overturn a presidential election based on ballot design flaws. But Patrick
W. Lawlor, of Deerfield Beach, Fla.'s Young & Lawlor, points to the 1974
Florida Court of Appeals ruling in Nelson v. Robinson, 301 S.2d. 508. It
says that a court is justified in voiding an election if there exists a
"reasonable probability that the results of said election would have been
changed except for such irregularities." Mr. Lawlor, who represents three
plaintiffs in another voter suit, Elkin v. LePore, declares, "We have met
our burden."

Nova Southeastern University law professor Robert M. Jarvis adds that a
temporary injunction issued on Nov. 9 by judge Kathleen Kroll in another
voter suit is a good sign for the plaintiffs and may result in the
consolidation of all of the cases before a Nov. 14 hearing.

                            The legal test

Fladell lawyer Howard Weiss of Boca Raton's Weiss & Handler says that the
test is "whether reasonable doubt has been created as to whether the
results reflect the will of the voters." Mr. Weiss adds that his firm is
seeking an expedited trial where experts may testify as to the ballot's
poor design. "It's not an IQ test -- a lot of people were confused," he
said.

Ronald G. Meyer of Tallahassee, Fla.'s Meyer and Brooks, a Democratic
election lawyer attempting to coordinate the voter suits, says that he
persuaded one plaintiff to drop a federal suit Nov. 9 after it was assigned
to a "conservative" judge. He claims that the suits will likely be unified
into one class action but warns there is limited time to litigate because
once electoral votes are counted Dec. 18 and sent to Congress, "you'll get
into separation-of-powers problems." (The National Law Journal, November
20, 2000)


QUINTUS CORP: Kirby McInerney May Expand Period in Securities Suit
------------------------------------------------------------------
Kirby McInerney & Squire LLP intends to expand the class action lawsuit it
previously commenced against Quintus Corporation (NASDAQ:QNTS) and certain
of its officers.

In light of new revelations and admissions concerning the scope and nature
of accounting irregularities at Quintus, first announced on November 22,
2000, the Class Period will be extended to include those who purchased or
otherwise acquired Quintus shares between and including January 19, 2000
through November 14, 2000.

The previous complaint charged Quintus and certain of its officers and
directors with violations of the Securities Act of 1934. Specifically, the
complaint alleged that Quintus issued materially false and misleading
financial information concerning the Company's revenues and earnings.

On November 15, 2000, Quintus issued a press release announcing: (i) that a
special committee of the Company's Board, after discussions with auditors,
had been formed to investigate the Company's accounting practices for the
quarter ending September 30, 2000 and for earlier quarters, specifically
focusing on a receivable apparently collected from an outsourcing company;
(ii) that the Board placed Chairman and Chief Executive Officer Alan
Andersen on administrative leave and designated Paul Bartlett, the
Company's Chief Operating Officer, as the acting Chief Executive Officer of
Quintus; and (iii) that the Company could not "now determine the
quantitative affects" of the investigation. As a result of the
announcement, Quintus shares fell over 50 percent from $6.00 to as low as
$2-7/8, before trading was halted by NASDAQ. Following the November 15
announcement, Kirby McInerney & Squire filed a complaint against the
Company in the U.S. District Court for the Northern District of California,
on behalf of purchasers of Quintus securities.

On November 22, 2000 Quintus announced that the Company fired Chief
executive and Chairman Alan Anderson after the accounting investigation
"uncovered sufficient evidence to warrant his termination." The Company
also announced that it will restate $13.5 million in revenue reported
earlier on January 19,2000, after an audit showed that the previously
reported figures were predicated upon "falsified documents".

If you wish to discuss the claims described above, or have any questions
concerning this notice or your rights, please contact: Ira Press, Esq.
Gretchen Becht, Paralegal KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue,
10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free
(888) 529-4787 E-Mail: gbecht@kmslaw.com


ROCHE HOLDING: Kirby McInerney May Appeal in Securities Suit in NJ
------------------------------------------------------------------
Kirby McInerney & Squire had filed a class action lawsuit complaint in the
District of New Jersey, asserting claims against Roche Holding Ltd.
("Roche") for violations of the federal securities laws, on behalf of all
persons who purchased the American Depositary Receipts ("ADRs") of Roche
from November 15, 1996 through May 20, 1999 (the "class"). The complaint
asserted that Roche's ADRs traded at artificially inflated prices
throughout the period described above, due to Roche's engaging in illegal
price-fixing and anti-competitive practices in violation of U.S. anti-trust
laws, which artificially inflated Roche's earnings and the prices of the
ADRs. On May 19, 1999, it was announced that Roche's primary operating
subsidiary and certain of Roche's officers had pled guilty to violating
Unites States antitrust laws; Roche's operating subsidiary paid $500
million in fines.

By order dated November 13, 2000, the Court dismissed the complaint. The
dismissal was without prejudice.

Kirby McInerney & Squire is currently reviewing possible courses of action
to take with respect to the litigation - including appeals, motions for
reconsideration, and/or amendment of the complaint.

If you have any questions concerning this notice or this action, please
contact: Kirby McInerney & Squire, LLP, New York Ira Press, Esq., Alaina
Colon, 212/317-2300, 888/529-4787


SUNBEAM CORP: FL Suit Filed in April Seeks Recission of Warrants
----------------------------------------------------------------
In April 2000, a complaint was filed in the U.S. District Court for the
Southern District of Florida against the Company, certain current and
former directors, Messrs. Dunlap and Kersh and MacAndrews & Forbes
alleging, among other things, that certain of the defendants breached their
fiduciary duty when the Company entered into a settlement agreement with
MacAndrews & Forbes, and certain of the defendants breached their fiduciary
duty and wasted corporate assets by, among other things, issuing materially
false and misleading statements regarding the Company's financial
condition. The plaintiff in this action seeks, among other things,
recission of the warrants issued to MacAndrews & Forbes and an injunction
preventing the issuance of warrants and damages. Each of the defendants has
filed a motion to dismiss this complaint.


SUNBEAM CORP: Investors File Second Amended Complaint in 1998 FL Suit
---------------------------------------------------------------------
On April 23, 1998, two class action lawsuits were filed on behalf of
purchasers of the Company's common stock in the U.S. District Court for the
Southern District of Florida against the Company and some of its present
and former directors and former officers alleging violations of the federal
securities laws as discussed below. After that date, approximately fifteen
similar class actions were filed in the same court. One of the lawsuits
also named as defendant Arthur Andersen LLP, the Company's independent
accountants for the period covered by the lawsuit.

On June 16, 1998, the court entered an order consolidating all these suits
and all similar class actions subsequently filed (collectively, the
"Consolidated Federal Actions"). On January 6, 1999, plaintiffs filed a
consolidated amended class action complaint against the Company, some of
its present and former directors and former officers, and Arthur Andersen.

The consolidated amended class action complaint alleges, among other
things, that defendants made material misrepresentations and omissions
regarding the Company's business operations and future prospects in an
effort to artificially inflate the price of the Company's common stock and
call options, and that, in violation of section 20(a) of the Exchange Act,
the individual defendants exercised influence and control over the Company,
causing the Company to make material misrepresentations and omissions.

The consolidated amended complaint seeks an unspecified award of money
damages. In February 1999, plaintiffs moved for an order certifying a class
consisting of all persons and entities who purchased the Company's common
stock or who purchased call options or sold put options with respect to the
Company's common stock during the period April 23, 1997 through June 30,
1998, excluding the defendants, their affiliates, and employees of the
Company.

Defendants have opposed that motion. In March 1999, all defendants who had
been served with the consolidated amended class action complaint moved to
dismiss it and the court granted the motion only as to certain non-employee
current and former directors and a former officer, and denied it as to the
other defendants. Arthur Andersen has filed counterclaims against the
Company, and a third-party complaint against a former director of the
Company and against unnamed third party corporations. On July 31, 2000, the
court dismissed the former director from Arthur Anderson's counterclaims.

On June 30, 2000, the plaintiffs filed a second amended complaint against
most of the same defendants (although two of the Company's former outside
directors were not included as defendants in the second amended complaint)
alleging the same principal claims as the prior amended complaint described
above.

                    Texas Action Transferred to Florida

In September 1998, an action was filed in the 56th Judicial District Court
of Galveston County, Texas alleging various claims in violation of the
Texas Securities Act and Texas Business & Commercial Code as well as common
law fraud as a result of the Company's alleged misstatements and omissions
regarding the Company's financial condition and prospects during a period
beginning May 1, 1998 and ending June 16, 1998, in which the U.S. National
Bank of Galveston, Kempner Capital Management, Inc. and Legacy Trust
Company engaged in transactions in the Company's common stock on their own
behalf and on behalf of their respective clients. The Company is the only
named defendant in this action. The complaint requests recovery of
compensatory damages, punitive damages and expenses in an unspecified
amount. This action was subsequently transferred to the U.S. District Court
for the Southern District of Florida and consolidated with the Consolidated
Federal Actions.

         Lawsuit over Debentures Coordinated with Federal Action

In October 1998, a class action lawsuit was filed in the U.S. District
Court for the Southern District of Florida on behalf of certain purchasers
of the Debentures against the Company and certain of the Company's former
officers and directors. In April 1999, a class action lawsuit was filed in
the U.S. District Court for the Southern District of Florida on behalf of
persons who purchased Debentures during the period of March 20, 1998
through June 30, 1998, inclusive, but after the initial offering of such
Debentures against the Company, Arthur Andersen, the Company's former
auditor, and certain former officers and directors. The court consolidated
the two cases and the plaintiffs have filed a consolidated class action on
behalf of persons who purchased Debentures in the initial offering and in
the market during the period March 20, 1998 through June 30, 1998. The
amended complaint alleges, among other things, violations of the federal
and state securities laws and common law fraud. The plaintiffs seek, among
other things, either unspecified monetary damages or rescission of their
purchase of the Debentures. This action is coordinated with the
Consolidated Federal Actions.

              Action Filed in 1999 in AL Transferred to FL

On September 13, 1999, an action naming the Company and Arthur Andersen as
defendants was filed in the Circuit Court for Montgomery County, Alabama.
The plaintiffs in this action are purchasers of the Company's common stock
during the period March 19, 1998 through May 6, 1998. The plaintiffs
allege, among other things, that the defendants violated the Alabama
Securities Laws. The plaintiffs seek compensatory and punitive damages in
an unspecified amount. Arthur Andersen has filed a cross claim against the
Company for contribution and indemnity. The Company has filed a motion to
dismiss.

In May 2000, the plaintiffs in this action filed an amended complaint,
which added allegations of violations of the federal securities laws. This
action was transferred to and consolidated with the Consolidated Federal
Actions.


SUNBEAM CORP: Investors Sue in TX in 1998 and 2000 over Debentures
------------------------------------------------------------------
The Company has been named as a defendant in an action filed in the
District Court of Tarrant County, Texas, 48th Judicial District, on
November 20, 1998. The plaintiffs in this action are purchasers of the
debentures. The plaintiffs allege that the Company violated the Texas
Securities Act and the Texas Business & Commercial Code and committed state
common law fraud by materially misstating the financial position of the
Company in connection with the offering and sale of the Debentures. The
complaint seeks rescission, as well as compensatory and exemplary damages
in an unspecified amount. The Company specially appeared to assert an
objection to the Texas court's exercise of personal jurisdiction over the
Company, and a hearing on this objection took place in April 1999.
Following the hearing, the court entered an order granting the Company's
special appearance and dismissing the case without prejudice. The
plaintiffs appealed, which appeal was denied. The plaintiffs have appealed
to the Texas Supreme Court.

In October 2000, the plaintiffs also filed a complaint against the
Company's subsidiary Sunbeam Products, Inc. in the District Court for
Dallas County alleging substantially the same allegations as the complaint
filed against the Company in Tarrant County.

Messrs. Dunlap and Kersh have commenced an action against the Company in
the Chancery Court for the State of Delaware seeking advancement from the
Company of their alleged expenses incurred in connection with defending
themselves in the various actions described above in which they are
defendants and the investigation by the SEC described below. The Company
has denied their claims. Discovery has commenced, and no trial date has
been set.


SUNBEAM CORP: Removes Year 2000 WI Lawsuit to Federal Court
-----------------------------------------------------------
Sunbeam Corp reports in its SEC filing that in September 2000, an action
naming the Company as a defendant was filed in the Circuit Court for
Ozaukee County, Wisconsin. The plaintiffs allege that the Company violated
the federal securities laws in connection with the offering and sale of the
Debentures. The plaintiffs seek recission and damages. The Company has
removed the action to Federal Court.


SUNBEAM CORP: SEC May Enforce Action Re Accounting Practices
------------------------------------------------------------
By letter dated June 17, 1998, the staff of the Division of Enforcement of
the SEC advised the Company that it was conducting an informal inquiry into
the Company's accounting policies and procedures and requested that the
Company produce certain documents. In July 1998, the SEC issued a Formal
Order of Private Investigation, designating SEC officers to take testimony
and pursuant to which a subpoena was served on the Company requiring the
production of certain documents. In November 1998, another SEC subpoena
requiring the production of additional documents was received by the
Company. The Company says it has provided numerous documents to the SEC
staff and continues to cooperate with the SEC staff. The Company has,
however, declined to provide the SEC with material that the Company
believes is subject to the attorney-client privilege and the work product
immunity. The staff of the SEC has informed the Company that its has
completed its investigation, and intends to recommend to the SEC that
enforcement action be taken against the Company. The Company and the staff
of the SEC are in discussions regarding the foregoing. The Company cannot
predict at this time the outcome of these discussions.


TEACHERS RETIREMENT: Teachers Prepare Appeal Of Pension Lawsuit
---------------------------------------------------------------
An attorney for 11 active and retired teachers said that he would appeal a
Ramsey County judge's dismissal of a lawsuit against the Teachers
Retirement Association over their pension plans. Judge John Van de North
ruled that the statute of limitations had expired and dismissed the lawsuit
challenging the constitutionality of changes to teacher pension law. St.
Paul attorney Joe O'Neill said he wants the Minnesota Court of Appeals to
hear the case so it can be decided on its merits, not on a technical issue.
The appeal was to be filed by November 24.

The lawsuit, which sought class-action status for several thousand of the
plaintiffs' co-workers, stems from a 1969 law that required teachers to
make an irrevocable choice between five pension plans, including some that
allowed investment in the stock market.

Previously, teachers had only one retirement plan option, called the
Improved Money Purchase (IMP) program. Teachers who didn't return a ballot
selecting one of the other four plans were left in the old IMP plan.

Later, all plans but the IMP were automatically rolled into a program -
without the teachers' consent - that has made less money over the years for
those enrolled in it.

The law was last amended in 1989. Van de North ruled that the change
started the clock on the six-year statute of limitations, which would have
required the plaintiffs to sue before 1995. "We couldn't sue then because
we didn't qualify for retirement," O'Neill said of his clients, who needed
30 years of service to retire. (The Associated Press State & Local Wire,
November 22, 2000)


TOBACCO LITIGATION: B&W Moves To Exclude Documents In Blue Cross Suit
---------------------------------------------------------------------
Brown & Williamson Tobacco Corp. filed three motions in September seeking
to exclude allegations of death threats, the admittance of certain stolen
documents and congressional testimony offered by certain tobacco executives
from the New York health plan action (Blue Cross and Blue Shield of New
Jersey Inc., et al. v. Philip Morris Inc., et al., No. 98CV3287 [JBW], E.D.
N.Y.; See previous and next stories).

In a Sept. 8 motion, B&W moved in limine to exclude any testimony, argument
or reference to the alleged death threats to Dr. Jeffrey Wigand. B&W argues
that such allegations are unsupported and immaterial to any issue in the
case, cannot be fairly cross-examined, and are unfairly prejudicial and
misleading.

(Wigand motion available. Document # 04-001030-029. 4 pages. Stolen
document motion available. Document # 04-001030-030. 25 pages. Motion on
congressional testimony available. Document # 04-001030-031. 13 pages.)

B&W notes that although Wigand alleges that he received threats from B&W,
there has never been a charge, information or indictment against B&W or any
of its employees or agents relating to such alleged threats.

                           Stolen Documents

B&W also filed a motion in limine and support memorandum to exclude the
stolen B&W documents.

B&W maintains that the plaintiffs are in possession of several hundred B&W
documents, many of which are privileged, stolen from the offices of B&W's
counsel and then disseminated.

"Despite the fact that plaintiffs have access to millions of pages of
documents that Brown & Williamson has produced in this case, it may attempt
to utilize the documents stolen from Brown & Williamson's attorneys.
Because the plaintiffs have possession of those documents only as a result
of numerous unlawful and unethical acts, this Court should not sanction
those acts by allowing the plaintiffs to use the fruits of that conduct at
trial," B&W asserts.

                     Congressional Testimony

B&W also filed a motion to exclude the congressional testimony offered into
evidence by the plaintiffs.

"The defendants move to exclude all statements made by the tobacco
executives before Congress including 'statements of fact' that in other
circumstances might constitute an admission. The manner in which
Congressional testimony is obtained lacks the safeguards afforded a
judicial proceeding," B&W maintains. "By offering these transcripts,
plaintiffs attempt to undermine the adjudicative process and shatter the
constitutional separation of legislative and judicial powers."

B&W is represented by Kimberly S. Penner of Sedgwick, Detert, Moran &
Arnold in New York. (Mealey's Managed Care Liability Report, November 10,
2000)


TOBACCO LITIGATION: FL Supreme Ct Reinstates Damages Awarded Ex-Smoker
----------------------------------------------------------------------
The Florida Supreme Court ruled that a lower court had erred in overturning
a $750,000 award for a former smoker against the nation's No. 3 cigarette
maker.

The decision reinstates the award against the Brown & Williamson Tobacco
Corporation won by the former smoker, Grady Carter, his lawyer, Floyd
Matthews, said.

The award was only the second in 40 years of antismoking litigation in
which a tobacco company was ordered to pay damages. The first, $400,000 to
the family of Rose Cipollone of New Jersey in 1988, was overturned on
appeal, and the lawsuit was later dropped.

Mr. Carter, 70, sued Brown & Williamson in 1995, blaming the company for
the lung cancer he developed after smoking for 44 years. A jury ruled that
cigarettes were a defective product and that their makers were negligent
for not warning of the danger.

An appeals court reversed the award nearly two years later, saying Mr.
Carter had waited too long to go to court. It also said that a 1969 federal
law barred lawsuits that claim the wording of the warning on cigarette
packs is inadequate.

In a 5-to-0 ruling, the Florida Supreme Court disagreed with both
conclusions and said the district court had overstepped its role.

"Accordingly, we quash the district court's decision in this case," Justice
Major B. Harding wrote for the court.

Mr. Carter, a retired air traffic controller who lives in the Jacksonville
suburb of Orange Park, called the ruling a "great decision."

"I felt all along it was a good case," Mr. Carter said. "I'm thankful that
it came out today, the day before Thanksgiving.".

Mr. Carter started smoking Lucky Strikes when he was 16 and smoked them for
25 years before he switched brands in 1972. Several efforts to quit smoking
failed, until he coughed up blood in January 1991.

A few weeks later, he learned he had cancer. So far his health has remained
good.

A Brown & Williamson lawyer said the company was considering whether to ask
the court to reconsider. The company, based in Louisville, Ky., could also
go directly to the United States Supreme Court.

The lawyer, John Finley, said in a statement that the ruling was "in direct
conflict with the United States Supreme Court decision in the Cipollone
case."

Brown & Williamson is a subsidiary of British American Tobacco P.L.C. Its
brands include Kool, Capri, Raleigh, Viceroy, Carlton, Lucky Strike and
Pall Mall.

Two years ago, a jury ordered Brown & Williamson to pay nearly $1 million
to the family of a dead smoker. It was the first time a jury awarded
punitive damages in a tobacco liability case. That verdict also was
overturned. The decision was appealed.

Last summer, a class-action lawsuit in Miami produced a record $145 billion
verdict, which a judge upheld two weeks ago. The case still faces appeals
in state courts by Brown & Williamson and the four other largest cigarette
companies. (The New York Times, November 23, 2000)


TOBACCO LITIGATION: OK Liability Law Allows Suits by AG, Not Citizens
---------------------------------------------------------------------
Oklahoma's Consumer Protection Act provides for lawsuits by the state's
attorney general, but not private citizens, the Oklahoma Supreme Court
says. The ruling by the state high court was in response to an attempt by a
group of cigarette smokers to sue the tobacco industry in the U.S. District
Court for the Northern District of Oklahoma, which asked the state supreme
court for an interpretation of Oklahoma's law. Walls et al. v. American
Tobacco Co. et al. , No. 99,324 (Okla., Sept. 19, 2000).

The district court certified four questions to the state court, finding
that the unresolved issues involving Oklahoma law could be dispositive in
the federal court's ruling on class certification of the plaintiffs in the
underlying suit against the tobacco industry. The federal court asked for a
resolution of the following ques tions about the Oklahoma Consumer
Protection Act, 10 Okla. Stat. @ 1601 et seq.:

1. Assuming arguendo that a product was sold in violation of other
provisions of the OCPA, may a party bring an action as an "aggrieved
consumer" under 15 Okla. Stat. @ 761.1A solely as a result of his or her
payment of the purchase price for that product

2. May an individual person bring a claim for liability under 15 Okla.
Stat. @ 761.1C against an entity based on a violation of the OCPA

3. If an action is brought under either both 15 Okla. Stat. @ 761.1A or 15
Okla. Stat. @ 761.1C, is that action limited to conduct that occurred since
1988

4. If the answer to question 1 is yes, if a class is certified under the
OCPA consisting of all persons who have purchased such an OCPA violating
product in Oklahoma solely on the basis of the purchasing price, will the
members of such a class be precluded from bringing any separate actions
sounding either in tort or contract by virtue of any Oklahoma law
prohibiting split causes of action

The Oklahoma Supreme Court answered no to questions one and two and yes to
question three. The court said it did not reach the fourth question because
the answer to the first question was negative.

In looking at the OCPA, the state court found that the law expressly vests
authority in the state attorney general to enforce the OCPA. Language in an
amendment from 1980 states, " T he Attorney General, acting in the name of
the state, or a district attorney may petition for recover of civil
penalties" under the act. A 1988 amendment provided for a private right of
action by aggrieved consumers. This amendment allows a consumer to sue for
damages, but the court pointed out that it must be a situation where actual
damages occur. Simply being a consumer in an unlawful transaction is not a
sufficient cause of action under this law, the panel found. The "aggrieved
consumer" contemplated by Oklahoma's statute, must have suffered some
detriment in order to pursue a private right of action, the high court
said.

Even though amendments to the OCPA provided for a private right of action
to recover damages, the statute does not permit private individuals to seek
the penalty referred to in the law, the court reasoned in answering the
second question. The legislature expressly finds that civil penalties are
to be collected by the state, the panel found.

The amendment which allowed private actions does not apply retroactively,
so it cannot apply to activity that occurred before 1988, the high court
said in response to the third question. Statutes that effect changes in
substantive rights are presumed to operate prospectively, absent an express
declaration from the legislature that it intends otherwise, the panel held.

The case now goes back to the U.S. district court, where the plaintiffs are
seeking damages against six tobacco companies and The Council for Tobacco
Research.

The plaintiffs are represented by Derek S. Casey of Hutton & Hutton in
Wichita, Kan.

The defendants are represented by Richard C. Ford, Leanne Burnett and
Victor E. Morgan of Crowe & Dunlevy in Oklahoma City. (Tobacco Industry
Litigation Reporter, October 20, 2000)


TWINLAB CORPORATION: Wechsler Harwood Files Securities Suit in New York
-----------------------------------------------------------------------
A class action lawsuit was filed in the United States District Court for
the Eastern District of New York on behalf of all persons who purchased the
common stock of Twinlab Corporation (Nasdaq: TWLB) between April 27, 1999
and November 15, 2000, inclusive (the "Class Period"). The Complaint
charges Twinlab and certain of it officers and directors with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as
amended, and Rule 10b-5 promulgated thereunder.

The complaint alleges that defendants violated the federal securities laws
by making false and misleading statements contained in press releases and
filings with the Securities and Exchange Commission concerning, among other
things, the Company's business, financial condition, earnings and
prospects. Specifically, the Complaint alleges that Twinlab, by overstating
its inventory through recording nonexistent and obsolete inventory,
inflated its reported financial condition and results of operations during
the Class Period by at least $16 million. The Complaint also alleges that
defendants continued to tout the Company's ability to achieve expected
sales results despite continued declining demand and the obsolescence of
certain of its products.

On November 15, 2000, after the close of trading, defendants announced that
it was unable to timely file its Form 10-Q for the quarter ended September
30, 2000 with the SEC. It was also disclosed that Twinlab would adjust its
inventory down by approximately $16 million for "missing" and "obsolete"
inventory, and that it was discontinuing the sale of certain staple product
lines and "significantly reduc[ing] its projection of herbal sales for the
year ended December 31, 2000," as a result of weak demand. It was further
reported that the Company had to obtain waivers of breaches of its debt
covenants as a result of the foregoing.

On November 16, 2000, the price of Twinlab's stock plummeted by more than
35 percent from its previous day's close of $5.00 per share to close at
$3.250 per share. The stock traded as high as $11.00 per share during the
Class Period.

Contact: Patricia Guiteau, Shareholder Relations Department of Wechsler
Harwood Halebian & Feffer LLP, pguiteau@whhf.com, 877-935-7400 (toll free),
or fax, 212-753-3630


* CA Sp Ct to Rule If Investors Who Didn't Sell Can Sue in State Court
----------------------------------------------------------------------
The California Supreme Court agreed to decide whether investors given
misleading financial forecasts can sue for securities fraud in state court
even if they didn't sell their shares.

Four months ago, the First District Court of Appeal ruled that though such
suits cannot be brought under securities statutes, they can be brought
under common law.

But defense lawyer William Alderman said that the appellate court's ruling
overextended the common law -- and could augur a wave of vexatious
securities litigation. "The risk of a rush to California's courts is
especially acute," the Orrick, Herrington & Sutcliffe lawyer wrote in his
petition for review on behalf of Fritz Companies Inc.

The case stems from Fritz's May 1995 acquisition of fellow transportation
giant Intertrans Corp. -- a merger viewed by Fritz analysts as a move in
the right direction to boost fiscal health. And a financial report issued
the following April reflected the company's optimism.

But by the following July, the company announced it was making adjustments,
explaining that it had underestimated the costs of the merger.

New York lawyer Harvey Greenfield filed a securities class action on his
own behalf and on behalf of everyone who held Fritz common stock between
April 1996 and July 1996.

San Francisco Superior Court Judge David Garcia sustained a demurrer based
on Greenfield's failure to allege specific facts showing actual and
individual reliance on the faulty report -- as well as his failure to show
that people who did nothing to either buy or sell stocks should be able to
assert claims for fraud.

But the First District, in an opinion authored by Justice Marcel Poch,
ruled that damages for fraud can be recovered even when the
misrepresentation prompts the investor to sit tight. The court acknowledged
that the question is rather novel for California but ultimately concluded
that, "We are not blazing a new trail, but merely extending a trail already
started."

Just four of the justices -- Ronald George, Marvin Baxter, Kathryn Mickle
Werdegar and Janice Rogers Brown -- voted to review Greenfield v. Fritz
Cos. Inc., S091297.

The same justices plus Stanley Mosk also granted review in another First
District case, San Remo Hotel v. City and County of San Francisco, S091757.
That case stems from the hotel's 7-year-old challenge of the city's
Residential Hotel Unit Conversion and Demolition Ordinance as a taking. The
ordinance requires residential hotel owners to build or pay for new housing
when they convert their hotels to tourist use.

The First District reversed a trial judge and said the owners of the San
Remo hotel in North Beach could move forward on its claim that the city's
ordinance -- restricting the conversion of residential hotel rooms to
tourist use -- constitutes a taking. (The Recorder, November 22, 2000)


* Consumer Group Says Toys Safer, But Small Parts Still Dangerous
-----------------------------------------------------------------
The big holiday shopping season is upon us, and a consumer group says that
toys are safer than in previous years, though hazardous toys still can be
found on store shelves. Among the playthings that the U.S. Public Interest
Research Group says are dangerous are erasers, jigsaw puzzles, balloons,
plastic insects and salamanders, small plastic balls and marbles that too
often wind up in the wrong hands and can result in choking accidents.
Sixteen children died playing with toys in 1999, and nine of them choked,
says the annual PIRG "Trouble in Toyland" report (www.toysafety.net).

The report also notes that there were 152,600 emergency room visits for
toy-related injuries in 1999. Industry representatives dispute the report,
noting that a person who was injured after tripping over a toy left on the
floor is counted as a toy-related injury. "Any toy used improperly can be
dangerous," says Pamela Johnston, spokeswoman for the Toy Manufacturers of
America. (USA TODAY, November 22, 2000)


                             *********


S U B S C R I P T I O N  I N F O R M A T I O N

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