/raid1/www/Hosts/bankrupt/CAR_Public/010213.MBX              C L A S S   A C T I O N   R E P O R T E R

             Tuesday, February 13, 2001, Vol. 3, No. 31


AMSOUTH BANK: Wins Again at 11th Cir in TISA Case Re Check Posting Order
BANKS: Reaches Tentative Settlement re Access to ATMs
BREVARD: FL Sch. Board to Develop Plan for Gender Equality in Athletics
CITIGROUP INC: Pays $9M for Settling Suit over Purchase of Associates
CREDIT STORE: CA Debtors Complain about Credit Card Program

CREDIT STORE: Debtors Voluntarily Dismiss Lawsuit in IL
CREDIT STORE: Granted Motions for Dismissal of Debtors’ Suits in FL & AR
CREDIT STORE: TX Suit Alleges of Improper Reporting of Debt As Bad Debt
DRYVIT SYSTEMS: A Defendant in Numerous Suits over EIFS Clad Structures
DRYVIT SYSTEMS: Appeals against Cert. of EIFS Fastrak System Case in NC

DRYVIT SYSTEMS: Intends to Defend Vigorously TN Suit over EIFS
E&Y, IKON: Federal Judge Awards E&Y Summary Judgment in Shareholder Suit
E.W. BLANCE: Chestnut & Cambronne Announces Securities Suit Filed in MN
HOLOCAUST VICTIMS: Cohen, Milstein Files Lawsuit in New York against IBM
INMATES LITIGATION: U.S. ``supermax'' prisons attract human rights furor

J.C. PENNEY: Access to Store Merchandise Is Again Raised in New Suit
NX NETWORKS: Investors Plan to Consolidate Complaints in MA
QLT, INC: Milberg Weiss Announces Securities Suit in New York
RPM INC: Believes Liability Re Asbestos Is Covered By Insurance
SOTHEBY'S CHRISTIE'S: Economics Experts Support $512 Mil Settlement

TOBACCO LITIGATION: Russian Airline Cites Smoking As Fundamental Right
WEAPONS CONTRACTORS: Government Reimburses for Legal Bills


AMSOUTH BANK: Wins Again at 11th Cir in TISA Case Re Check Posting Order
The 11th U.S. Circuit Court of Appeals recently affirmed the U.S.
District Court, Southern District of Alabama's order denying class
certification to consumers challenging AmSouth Bank's posting order
policy. The court also affirmed, without opinion, the District Court's
decision to grant the bank summary judgment. The bank argued in its
motion the Truth in Savings Act does not require financial institutions
to disclose their order for posting transactions to consumers. (Shelley,
et al. v. AmSouth Bank (11th Cir. 1/11/01).) (See Consumer Financial
Services Law Report, Aug. 18, 2000, p.1). (Consumer Financial Services
Law Report, February 5, 2001)

BANKS: Reaches Tentative Settlement re Access to ATMs
How can a bank make its automated teller machines accessible to customers
with visual impairments? To date, the most common answer has been to
install "talking" machines, which feed recorded instructions through
audio jacks. A tentative settlement reached in Pennsylvania last month
proposes an alternative solution, pursuant to which bank customers with
visual impairments can talk live to trained bank representatives via
cellular telephones.

The tentative agreement was reached in an attempt to end a lawsuit filed
in Pennsylvania against PNC Bank by a class of plaintiffs, led by
Christine S. Hunsinger and Mark Senk. The plaintiffs are individuals with
visual impairments who have PNC bank accounts and wish to use ATM
services. They alleged in the suit that PNC's ATMs are not accessible to
and independently useable by people with visual impairments.

Essentially, the proposed settlement contemplates the creation of a
toll-free telephone line that eligible customers can call to obtain live
assistance from trained PNC representatives in completing common ATM
transactions. Customers will have the option of using their own phones or
phones provided by PNC.

The innovative program will be implemented in three stages. Following
preliminary court approval, a development and testing phase calls for an
initial test run at two ATMs in the Pittsburgh area, to be used by
Hunsinger, Senk and up to three other customers with visual impairments.
PNC will then implement a pilot project at approximately 250 existing ATM
locations in the Pittsburgh and Philadelphia areas, and the parties will
evaluate the effectiveness of that project after six months or 1,500
successful ATM transactions. If all goes well, PNC will thereafter
conduct a rollout program that will result in the provision of the
service at "substantially all" of its ATM locations. PNC presently has
approximately 2,800 ATM locations.

"This proposed solution with PNC is an innovative step forward in the
quest to ensure real accessibility for persons with vision impairments,"
said Mark J. Murphy of the Pittsburgh's Disabilities Law Project, counsel
for the plaintiffs. "PNC is to be commended for taking action to address
this very important issue."

Other major banks, including Bank of America and Citibank, resolved
similar disputes by agreeing to install talking ATMs at branch locations.
Those ATMs have been installed at several locations in Florida and
California. (Disability Compliance Bulletin, February 9, 2001)

BREVARD: FL Sch. Board to Develop Plan for Gender Equality in Athletics
The Title IX lawsuit against the School Board of Brevard County in
Florida began in the summer of 1997, when the American Civil Liberties
Union agreed to accept a case involving the girls' softball team at
Merritt Island High School, as previously reported in the CAR.

                            Long History

The softball team had a long history of unequal treatment for girls when
compared with boys' baseball.

The lawsuit was filed in federal court on Oct. 6, 1997. In December, the
district court found numerous inequalities at Merritt Island High School
and preliminarily ordered the school board to install lights, share the
batting cage, provide equal signs for the girls' softball team and ensure
equal access to the restrooms.

                          Punish the Boys

In response, the school board threatened to provide "equality" by taking
away facilities from the boys rather than provide equal facilities for
the girls.

The ACLU argued it was unconstitutional to eliminate the boys' facilities
just because they were male. The court agreed and did not permit the
school board to punish the boys' athletic program in order to comply with
Title IX regulations.

After the lawsuit was filed, but prior to the court issuing its order,
the school administration allocated 40,000 to install the lights and
asked the school board to approve the expenditure.

Since the court's order, the board has provided equal access for the
girls to the batting cage and the restrooms. Lights were installed. The
girls also now have an electronic scoreboard.

                          Class Action Suit

This lawsuit became a class action for all girls who play softball in
Brevard County. The school board, however, refused to settle the case
until the end. In December, U.S. District Judge Anne Conway delivered a
19-page opinion that stated: "Title IX is the law; it must be followed.
Plaintiff correctly notes that the School Board has had decades to make
the changes by Title IX, yet it has not done so."

The board is now under court order to develop a plan to remedy the
inequalities between the boys' and girls' athletic programs.

Source: American Civil Liberties Union (Your School and the Law, February
8, 2001)

CITIGROUP INC: Pays $9M for Settling Suit over Purchase of Associates
After purchasing Associates First Capital Corp., Citigroup Inc. settled
class actions filed by Georgia subprime borrowers against Associates for
9 million. The class of borrowers alleged Associates, one of the nation's
largest consumer finance companies, sold single-premium credit life
insurance in violation of state law.

                     State Insurance Regulations

The borrowers in Wood, et al. v. Associates Financial Life Ins. Co., et
al., filed in the Superior Court of Cobb County, Ga., and in Darden, et
al. v. Ford Consumer Finance Co. Inc., et al., filed in the Superior
Court of Fulton County, Ga., charged that Associates did not obtain the
state's permission to sell credit life insurance policies, the total cost
of which was added to the consumers' loan balances and financed by

William Brennan of the Legal Aid Society of Atlanta, who is familiar with
consumers' complaints against Associates, told Consumer Financial
Services Law Report Associates' application for selling credit life
insurance was turned down by Georgia in 1993. In 2000, the Georgia Office
of Insurance and Safety Fire Commissioner fined Associates 147,000 for
selling credit life on loans with terms more than 10 years. The
commissioner banned the subprime lender from subsequently selling forms
of the insurance product.

                         Settlement Terms

The settlement, which has yet to be approved by the court, comes days
before the matter was scheduled to go to trial on the borrowers' Georgia
Racketeer Influenced and Corrupt Organization Act claims. Class counsel
Howard D. Rothbloom in Marietta, Ga., told Consumer Financial Services
Law Report under the settlement terms, "Class members with in-force
coverage who elect to cancel the coverage will receive a check in the
amount of their entire premium, earned and unearned, plus 300. In
addition, each will receive a reduction in the interest rate on their
loan of 50 basis points."

Rothbloom, whose co-counsel was Georgia Governor Roy Barnes before he was
elected, also explained, "Class members with canceled coverage, who
received a refund of the unearned portion of the premium in the ordinary
course of business, will receive a check for 30 percent of the earned
(unrefunded) portion of the premium." Rothbloom noted the 9 million is
exclusive of attorney's fees and costs.

Associates no longer sells single premium credit life insurance in
Georgia on loans of more than 10 years. However, it is under
investigation for other alleged consumer abuses.

Herbert D. Shellhouse of Troutman Sanders in Atlanta represents
Associates. (Consumer Financial Services Law Report, February 5, 2001)

CREDIT STORE: CA Debtors Complain about Credit Card Program
On October 20, 2000, the Company was named in an action on behalf of
California debtors filed in Superior Court for the State of California,
San Diego County, styled Maugeri v. The Credit Store, Inc., et al. The
suit seeks damages and injunctive relief barring the Company from
offering its credit card program to debtors whose debt is out-of-statute
and/or cannot be reported on a credit bureau as bad debt. Claims are
asserted against the Company under the California Business and
Professions Code and related state statutes.

CREDIT STORE: Debtors Voluntarily Dismiss Lawsuit in IL
As previously reported in the CAR, in February 2000, the Company and
certain officers and directors were sued in United States District Court
for the Northern District of Illinois in an action entitled Greene v.
Burke, et al. The suit was brought on behalf of a class of certain
Illinois debtors alleging violations of the Fair Debt Collection
Practices Act, the Federal Credit Repair Organization Act, and the
Illinois Credit Services Organization Act arising out of the Company's
attempts to collect out-of-statute debts. The complaint seeks actual,
statutory and punitive damages on behalf of the class.


The plaintiff has subsequently agreed to voluntarily dismiss the claim
and the court has approved the dismissal.

CREDIT STORE: Granted Motions for Dismissal of Debtors’ Suits in FL & AR
As previously reported in the CAR, on May 27, 1999, the Company was sued
on behalf of a class of Florida debtors in the United States District
Court for the District of Florida in an action entitled McIntyre v.
Credit Store Inc. On May 21, 1999, the Company was sued on behalf of
class of Arizona debtors in the United States District Court for the
District of Arizona in an action entitled Bingham v. The Credit Store,

Both actions allege that communications sent by the Company to class
members violate the Fair Debt Collection Practices Act and similar state
laws in connection with attempts to collect out-of-statute debt. Both
complaints seek monetary damages and declaratory judgments that the
Company's mailers violate statutory provisions.


The Company's motions to dismiss these cases have been granted and the
suits have been dismissed. The time for appeal for the cases has not yet

CREDIT STORE: TX Suit Alleges of Improper Reporting of Debt As Bad Debt
On August 25, 2000, the Company was named as a co-defendant in an action
brought on behalf of a class of debtors in the United States District
Court for the Eastern District of Texas in an action entitled Barnett v.
Experian Information Solutions, et al. The plaintiffs claim that their
debt had been improperly reported as a bad debt on a credit-reporting
bureau, Experian Information Solutions, Inc., which was also named as a
defendant. Plaintiffs asserted claims against the Company under RICO and
sought unspecified actual damages.

DRYVIT SYSTEMS: A Defendant in Numerous Suits over EIFS Clad Structures
As previously reported, Dryvit Systems, Inc., a wholly-owned subsidiary
of RPM Inc., is a defendant or co-defendant in numerous lawsuits seeking
damages for structures clad with exterior insulated finish systems
("EIFS") products manufactured by Dryvit and other EIFS manufacturers. As
of January 11, 2001, Dryvit was a defendant or co-defendant in
approximately 650 single-family residential cases, the vast majority of
which are pending in North Carolina, South Carolina and Alabama. Dryvit
also has several EIFS lawsuits involving condominium complexes and office
buildings. While the vast majority of Dryvit's EIFS lawsuits claim water
intrusion and related property damages, plaintiffs in a few EIFS lawsuits
also claim respiratory-based personal injuries from alleged exposure to
mold. Dryvit is vigorously challenging these mold allegations and does
not believe there is adequate scientific basis to sustain such a personal
injury action against Dryvit.

Dryvit settled the North Carolina class action styled Ruff, et al. v.
Parex, Inc., et al. As of January 11, 2001, a total of 441 claims have
been submitted to the claims administrator for verification and
validation. Of these 441 claims, 43 have been approved for payment.
Approximately $600,000 has been paid to date on these 43 claims. The
remaining claims are currently under review and investigation by the
claims administrator. Dryvit continues to believe that it has adequate
insurance commitments to cover its obligations under the Ruff settlement.

DRYVIT SYSTEMS: Appeals against Cert. of EIFS Fastrak System Case in NC
Dryvit was named in an attempted class action, Lienhart, et al. v. Dryvit
Systems, Inc., et al. (5:99-CV-4700-BR(3)), in the Eastern District of
North Carolina seeking a class comprised of owners of structures clad
with a direct applied EIFS-type product known as Fastrak System 4000
("DEFS"). Dryvit challenged class certification and has joined numerous
third parties for indemnification and contribution.

On December 18, 2000, the U.S. District Court certified a class of
"homes, condominiums, apartment complexes or commercial buildings which
have been constructed after January 1, 1992, using an exterior cladding
system known as Fastrak System 4000." Dryvit estimates there are less
than 500 DEFS-clad homes in North Carolina. The class certification was
limited to two issues: (1) whether Dryvit's product was defectively
designed and (2) whether Dryvit had breached a duty to warn homeowners of
hazards inherent in the use of their products.

Dryvit's third-party claims were severed and stayed for all purposes
until after the plaintiff's case is tried. In addition to existing
cost-sharing arrangements with its insurers to cover defense and
indemnity on these DEFS claims, Dryvit has a cost-sharing arrangement
with the manufacturer of the substrate upon which the DEFS was applied.
Dryvit has filed an interlocutory appeal with the U.S. Court of Appeals
(Fourth Circuit) requesting the appellate court to exercise its
discretion and permit an immediate appeal of the district court's class
certification ruling.

DRYVIT SYSTEMS: Intends to Defend Vigorously TN Suit over EIFS
On December 1, 2000, Dryvit received a class action Complaint filed in
Jefferson County, Tennessee styled William J. Humphrey, et al. v. Dryvit
Systems, Inc. (Case No. 17,715-IV). The Humphrey case is an attempted
state-wide class action which seeks various types of damages on behalf of
all similarly situated persons who paid for the purchase of a Dryvit
EIFS-clad structure in the State of Tennessee during the period beginning
November 14, 1990 to the date of the Complaint. Dryvit intends to
vigorously oppose class certification in Humphrey.

Dryvit, the Company's captive insurer, First Colonial Insurance Company,
and one of Dryvit's umbrella carriers, are parties to various
cost-sharing agreements which are currently providing defense and
indemnity for Dryvit's EIFS and DEFS lawsuits. Dryvit believes that the
damages sought by the plaintiffs in these cases are covered by its
existing insurance and that such insurance is presently adequate. Based
on the continuation of its existing insurance arrangements, the Company
continues to believe that this litigation will not have a material
adverse effect on the Company's consolidated financial position or
results of operations.

E&Y, IKON: Federal Judge Awards E&Y Summary Judgment in Shareholder Suit
& Young LLP has announced that it has been awarded summary judgment in
the U.S. District Court for the Eastern District of Pennsylvania in the
securities class action lawsuit brought by shareholders of its former
client, IKON Office Solutions, Inc. (NYSE: IKN). The decision upheld the
financial audit opinion Ernst & Young provided IKON on accounting issues
pertaining to the company's 1997 fiscal year. In his decision, Judge
Marvin Katz noted that "neither analysts' reports nor plaintiffs' expert
analysis indicate that the stock decline was caused by anything other
than business conditions and operational and management problems
(decision, page 12)." Plaintiffs were seeking more than $800 million in
damages from Ernst & Young.

"This legal vindication marks the end of a long and principled effort by
Ernst & Young to vigorously defend itself against an unwarranted and
meritless lawsuit that challenged the quality and integrity of our
professional services," said Kathryn A. Oberly, General Counsel for Ernst
& Young. "Settlement was never an option for us, and we hope that the
decision sends a strong message to plaintiffs' attorneys who view large
accounting firms as convenient victims of scapegoat lawsuits."

In their rejected complaint, plaintiffs alleged that Ernst & Young knew
of, or must have been aware of, supposed overstatements made by IKON in
its FY97 financial statements. Specifically, plaintiffs alleged that
Ernst & Young violated Section 10(b) of the Securities Exchange Act, 15
U.S.C. sec. 78j(b), and Rule 10b-5, 17 C.F.R. sec. 240 when it issued its
opinion that IKON's financial statements complied with Generally Accepted
Accounting Principles (GAAP). Plaintiffs sought to impose liability on
Ernst & Young for lost value in their IKON stock. Their theory of
liability was based upon two documents: Ernst & Young's "clean" audit
opinion on the FY97 financial statements and an October 15, 1997 IKON
earnings press release that Ernst & Young allegedly approved.

Pivotal in this case was the plaintiffs' failure to prove to any intent
on the part of Ernst & Young with regard to the charges set forth in the
complaint. The court found that "The evidence in this case indicates
Ernst did not fail to respond to the red flags it encountered, but that
it received reasonable assurances that the top management at IKON was
informed of all potential problems...a jury could not reasonably infer
[intent] on Ernst and Young's part (decision, page 23-4, 26)."

Marking a clear line in the sand, Judge Katz's decision may signal a
change in climate for shareholder suits, many of which have been an
abusive source of profiteering for an entire segment of the legal
community. "This victory marks an important milestone for accounting, and
the professional services field generally, against those who routinely
claim that poor market performance and fraud go hand-in-hand," said Barry
Melancon, President and CEO of the AICPA, the national association for
CPAs in the United States.

"Ernst & Young should be commended for taking a stand against such
unmeritorious claims. Those of us in the accounting profession hope that
the court's decision to deny a trial will act as a signal to plaintiff
lawyers as to how courts will react to knee-jerk shareholder claims
against auditors based on unfavorable business conditions," said


IKON is a Valley Forge, Pennsylvania-based office equipment and service
provider. Throughout IKON's fiscal year ending September 30, 1997 (FY97),
Ernst & Young performed certain internal audit functions for IKON. Ernst
& Young also served as an independent auditor of IKON's FY1997
consolidated year-end financial statements. On October 15, 1997, IKON
issued a FY97 press release and on December 24, 1997, Ernst & Young
publicly issued its unqualified or "clean" audit opinion stating that the
FY97 financial statements fairly represented IKON's financial position in
accordance with professional accounting standards.

On April 22, 1998, IKON announced its second-quarter earnings and warned
that its third- and fourth-quarter earnings would fall below
expectations. The stock dropped significantly and experienced further net
decline over the remainder of the spring and summer of 1998.

On May 31, 1998, IKON engaged Ernst & Young to assist in a detailed
review of all significant balances on the books of certain IKON units, an
undertaking known as "Special Procedures." On August 14, 1998, after the
conclusion of the Special Procedures, IKON announced a $110 million
change to earnings. These charges were applied to fiscal year 1998.

Plaintiffs brought a shareholder suit against IKON and Ernst & Young in
Federal court. IKON settled in November 1999, agreeing to pay$111
million. Ernst & Young defended its audit and opinion and was awarded
summary judgment on February 6, 2001.

The name "Ernst & Young" refers to the U.S. firm of Ernst & Young LLP and
other members of the global Ernst & Young organization.

E.W. BLANCE: Chestnut & Cambronne Announces Securities Suit Filed in MN
Chestnut & Cambronne, P.A. commenced a class action suit on February 12,
2001, in the United States District Court for the District of Minnesota
against E.W. Blanch Holdings, Inc. (NYSE:EWB) and various corporate
officers and directors. The action is brought on behalf of Andrew Baur
and all others who purchased shares of the Company during the period of
October 19, 1999, through March 20, 2000, inclusive.

The defendants named in the complaint are E.W. Blanch Holdings, Inc.; E.
W. Blanch Co.; Edgar W. Blanch, Jr., Chairman and Chief Executive Officer
of the Company; Chris L. Walker, President and Chief Operating Officer of
the Company; Frank S. Wilkinson, Jr., Executive Vice President; and Ian
D. Packer, the former Executive Vice President and Chief Financial
Officer of the Company. Walker and Wilkinson were also on the Company's
Board of Directors during the class period.

The complaint states that during the proposed class period, the Company
misled investors by stating that it would not likely experience any
adverse impact in connection with Unicover. Ultimately, the Company
revealed that it would be negatively impacted by the Unicover reinsurance
scandal and that its earnings per share in the first quarter of 2000
would fall well below projected earnings. The complaint further alleges
that during the class period, E. W. Blanch recognized revenue from its
Unicover related brokerage business based on one or more reinsurance
contracts that were not in force.

The market price of the Company's shares plummeted over 60 % throughout
the day on March 20, 2000, causing significant losses to persons who
purchased shares during the class period. The individual defendants sold
over $24.7 million in the Company's stock during the proposed class

Contact: Chestnut & Cambronne, Minneapolis Karl Cambronne (612)339-7300

HOLOCAUST VICTIMS: Cohen, Milstein Files Lawsuit in New York against IBM
Five Holocaust victims from the United States, the Czech Republic and the
Ukraine on February 10 filed a class action lawsuit against International
Business Machines, Inc., (IBM), in New York, on behalf of all
concentration camp survivors of the Holocaust.

The lawsuit, filed in federal court for the Eastern District of New York,
targets IBM, the largest computer company in the world, for aiding and
abetting crimes against humanity and violations of human rights.
Plaintiffs assert that IBM provided the technology, products and services
that catalogued concentration camp victims and substantially aided the
persecution, suffering and genocide experienced in the camps before and
during World War II. As well, information about Jews and others was
recorded, tabulated and sorted by IBM equipment for purposes of
perpetuating slave labor and extermination. Plaintiffs also assert that
not only did the company profit from this conduct, it has refused to
permit historians and others access to archival records evidencing its
complicit role in the Holocaust.

The lawsuit asks that IBM USA admit to their violation of human rights,
that they open their corporate archives and business records to
historians, and that they disgorge all profits made from their service to
the Nazis during WWII to a Holocaust relief fund.

Michael Hausfeld will be available to the media on Monday morning
(2-12-01) at 10:00 A.M. EST in the Washington, D.C. office of the firm,
or via phone, regarding the IBM case filed this weekend. The domestic
call-in number is 800/752-1361, the international number is 415/217-0050.
The call can be referenced under the "Hausfeld" call. A copy of the
complaint will be on the law firm's website Monday morning, www.cmht.com

Contact: Media Relations, Inc. Deborah Schwartz, 301/897-8838 Fax,
301/897-9143 Mob, 240/355-8838 dschwartz@mediarelationsinc.com

INMATES LITIGATION: U.S. ``supermax'' prisons attract human rights furor
According to Reuters news, supermax prisons are under increasing scrutiny
in lawsuits and official investigations probing persistent allegations of
serious human rights excesses.

“Imagine being locked alone in a small, bare cell for 23 hours a day.
Your meals are slid through a slot in the metal door. You cannot see or
talk to another human being. You cannot see out the window. You cannot
make telephone calls or have direct contact with visitors. When you do
briefly leave your cell for showers or solitary exercise, you must strip,
permit a visual search of your body, including bending over and spreading
your buttocks. Your legs are shackled, your arms cuffed and you are led
by two guards, one of whom presses an electric stun gun against your body
at all times.” That’s the scenario presented in the Reuters new report.

Such conditions are typical in so-called ``supermaximum security
prisons'' -- the hottest trend in the U.S. prison system which now house
at least 20,000 inmates, the report says.

Supermax prisons are designed for what corrections officials call the
``worst of the worst'' -- prisoners so violent, so disruptive, so
incorrigible that they cannot be kept in regular custody. Politicians who
want to be seen as ''tough on crime'' have championed the construction of
such facilities which cost considerably more to build and operate than
regular prisons. But human rights organizations and a growing number of
independent experts say many of those locked up are not violent or
dangerous criminals but seriously mentally sick individuals. Sometimes,
nonviolent offenders who have never made trouble can get shunted into
supermax facilities because it would be embarrassing to the authorities,
having constructed such expensive prisons, to leave them half empty.

                   ``Psychologically Destructive''

According to Reuters, a report by Human Rights Watch said, ``The
conditions of confinement impose pointless suffering and humiliation. The
absence of normal human interaction, of reasonable mental stimulus, of
almost anything that makes life bearable, is emotionally, physically and
psychologically destructive.''

The Justice Department is investigating conditions in Virginia supermaxes
after two prisoners transferred from Connecticut died under suspicious
circumstances, the report says. One, a young drug offender, committed
suicide seven months before his release date. The other, a diabetic, went
into convulsions after allegedly being denied his medication. Guards
reacted by firing their stun guns at him and he later died.

According to the news report, the Virginia Department of Corrections said
an investigation found that the firing of the stun guns had nothing to do
with his death and the guards had acted properly.

In another lawsuit 108 prisoners from New Mexico who were sent to the
Wallens Ridge supermax in Virginia alleged they were systematically
beaten, shocked with stun guns and terrorized by guards who taunted them
with racial epithets. The FBI was looking into these charges, the report

In June 2000 Corrections Commissioner Ron Angelone testified before a
Virginia Commission, ``I'm a little angry with all of this,'' he said.
''This is the same garbage that I heard from New Mexico -- lies from
convicted felons who don't like being locked up in tough prisons.'' He
said that since Virginia opened its two supermaxes, assaults on staff and
other inmates dropped by nearly half in the state's other prisons.

                         Eating His Own Flesh

In Illinois, four prisoners at the Tamms supermax who say they are
seriously mentally ill have brought a class action lawsuit alleging cruel
and unusual punishment through ``sensory deprivation based on near-total
isolation,'' Reuter reports.

One inmate, Ashoor Rasho, became so desperate and disturbed that,
according to the court complaint, ``on Aug. 20, 1998, with his arms
already infected from self-inflicted wounds, Mr. Rasho again cut his arm
and began eating small pieces of his own flesh in front of a correctional
officer.''  The officer allegedly ignored the medical emergency and also
ignored Rasho's plea to speak to someone from the mental health unit.''
He was eventually stitched up and returned to the same cell where he cut
himself again, pulled his stitches out and lost more than half a pint of
blood. A spokesman for the Illinois Department of Corrections said he
would be eager to respond to written questions. A week after they were
submitted, he had not done so.

In Ohio the American Civil Liberties Union filed a federal civil rights
action citing conditions that led to at least three inmate suicides in
the Youngstown supermax, where psychotherapy is conducted with prisoners
chained to a pole, the Reuters report says. The Ohio Corrections
Department says those in Youngstown are, ``the predators, the guys who
have attacked inmates or guards, the people who need to be separated from
the rest of the system.''

Chase Riveland, who headed the Washington state prison system for 11
years and Colorado for four years said he was extremely concerned at the
proliferation of supermax prisons.  ``We don't know what we're doing to
these people and what they will do to us when they return to their
communities which most of them eventually will do,'' he said.

                          Long-Term Effects

According to the Reuters report, Indiana State University criminologist
Robert Huckabee, who conducted a study of supermaxes for the state of
Indiana, said there had been little scientific study of the long-term
effects of such incarceration on inmates. While generally defending the
use of supermaxes for extremely dangerous or disruptive prisoners,
Huckabee said the heavy presence of the mentally ill was an ``issue of
concern.'' ``If we don't want mentally ill people in our prisons, we need
to ask our judges to stop sending them and our legislatures to provide
the money for other facilities,'' he said. (Reuters)

J.C. PENNEY: Access to Store Merchandise Is Again Raised in New Suit
Joining other major retailers such as Macy's and Burdines, J.C. Penney is
the latest target of a suit claiming that it is violating the law by
failing to arrange merchandise so that it can be accessed by people with

Laurence W. Paradis, Alison Aubry and Caroline Jacobs, of Disability
Rights Advocates in Oakland, Calif., allege in the new suit that
California J.C. Penney locations unlawfully deny people with mobility
impairments access to goods and services. The suit names wheelchair users
Janet Abelson, Suzie Janda and Ben Rockwell as plaintiffs, and it is
brought as a class action. "People take it for granted that they can walk
through a store," Janda said. "All I want to do is go through the store
and look at the merchandise to find what I want just like any shopper

Filed in a county court in California last month, the suit relies
entirely on state law to support its legal claims. The suit says that
defendant locations fail to maintain pathways wide enough to permit
wheelchair users to independently access merchandise. Rest rooms and
fitting rooms also include unlawful access barriers, the suit claims. The
plaintiffs are seeking injunctive and declaratory relief, as well as
damages, attorney's fees and costs.

Lawyers at Disability Rights Advocates have played an important role in
developing this still-nascent area of the law. In 1999, they gained an
important ruling in a similar case involving a flagship Macy's store in
San Francisco. That decision, Lieber v. Macy's West, Inc., 16 NDLR 239
(N.D. Calif. 1999), held that the defendant violated the ADA and state
law by, among other things, failing to undertake adequate efforts to
ensure to provide access to its merchandise. Although the defendant has
removed some architectural barriers at the San Francisco store, said DRA
attorney Melissa Kasnitz, the court is still considering how best to
implement injunctive relief. The degree to which the store must create
more space between moveable merchandise displays is still a big question,
Kasnitz said. The issue is what level of barrier removal can properly be
deemed to be readily achievable, she explained.

DRA also has two other cases pending against Macy's stores.
Significantly, the other two cases are before the same judge who issued
the plaintiff-friendly ruling as to liability in October 1999. DRA also
has lawsuits pending against retailers Mervyn's and Robinsons-May, and it
acted as co-counsel in a Florida suit against retailer Burdine's.
(Disability Compliance Bulletin, February 9, 2001)

NX NETWORKS: Investors Plan to Consolidate Complaints in MA
As previously reported in the CAR, in November 2000 the company was
served with complaints in purported class action proceedings. The action
is captioned Tracy Reese and Christine Joyce v. Bryan Holley, Steven T.
Francesco and Nx Networks, Inc., Civil Action No. 00-CV-11850-JLT, and
Marc Jacobsen v. Bryan Holley, Steven T. Francesco and Nx Networks, Inc.,

Civil Action No.00-CV-11999-JLT. Each complaint was originally filed
September 2000 in the United States District Court for the District of
Massachusetts. The complaints allege violation of the federal securities
laws in connection with statements and disclosures made by the named
defendants between December 8, 1999 and April 24 2000. The complaints
seek unspecified damages. We believe the allegations in the complaints
are without merit, and we intend to vigorously defend ourselves in this

In November 2000, the company was served with a complaint in a purported
class action proceeding captioned Roy Werbowski v. Nx Networks, Inc.,
Steven Francesco and Peter Kendrick, Civil Case No. 00-1967-A. The
complaint was originally filed in November 2000 in the United States
District Court, Eastern District of Virginia. The complaint alleges that
between July 27 and November 2, 2000 we breached securities laws in
connection with the circumstances that led us to restate our financial
statements for the quarter ended June 30, 2000. The complaint seeks
unspecified damages. We believe we have meritorious defenses in this
litigation, and we intend to vigorously defend ourselves.

The company has been advised that the plaintiffs are planning to
consolidate their claims into a single complaint and a single action.
Pending this event, the company has not filed responses with the courts
addressing the substantive allegations of the complaints. The company
tells investors it believes that the outcome of the foregoing actions
will not result in liability that would have a material adverse effect on
the company's financial condition or results of operations.

On November 8, 2000, the Enforcement Division of the SEC requested NX
Network to voluntarily provide documents related to the restatement of
the company's financial statements for the quarter ended June 30, 2000.
The SEC request advised NX Network that the fact the SEC has made a
request should not be taken as an indication that the SEC believes there
has been a violation of law. NX Network tells investors it responded to
the SEC request on November 20, 2000 and has not been subsequently

QLT, INC: Milberg Weiss Announces Securities Suit in New York
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on February 9, 2001, on behalf of
purchasers of the securities of QLT, Inc. (NASDAQ: QLTI) between August
1, 2000 and December 14, 2000, inclusive.

A copy of the complaint filed in this action is available from the Court,
or can be viewed on Milberg Weiss' website at:

The action, numbered 01 CV 1041, is pending in the United States District
Court, Southern District of New York, located at 500 Pearl Street, New
York, NY against defendants QLT, Julia Levy and Kenneth Galbraith. The
Honorable Sidney H. Stein is the Judge presiding over the case.

The Complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by issuing materially false and misleading statements to the
market. Specifically, throughout the Class Period, defendants repeatedly
issued statements indicating continued strong demand for its top-selling
drug, Visudyne. On December 14, 2000, however, defendants shocked the
market by announcing that their sales expectations for Visudyne would not
be met because demand had slowed after retinal physicians began
experiencing difficulties in securing reimbursement for the drug from
insurance carriers and governmental agencies, both in the United States
and in Europe. In response to this announcement, the Company's common
stock fell approximately 31% from its closing price on the previous day.

Contact: Milberg Weiss Bershad Hynes & Lerach LLP, New York Steven G.
Schulman or Samuel H. Rudman, 800/320-5081 qltcase@milbergNY.com

RPM INC: Believes Liability Re Asbestos Is Covered By Insurance
As previously reported, the Company, its wholly-owned subsidiaries,
Bondex International, Inc. and Republic Powdered Metals, Inc., are each
defendants or co-defendants in asbestos-related bodily injury lawsuits
filed on behalf of various individuals in various jurisdictions including
Illinois, Missouri, Texas, New York and Pennsylvania. These cases seek
damages for asbestos-related diseases based on alleged exposures to
asbestos-containing products previously manufactured by RPM, Bondex or

In many cases, the plaintiffs are unable to demonstrate that any injuries
they have incurred, in fact, resulted from exposure to Bondex, Republic
or Company products. Bondex, Republic or RPM are generally dismissed from
those cases.

With respect to those cases where compensable disease, exposure and
causation are established, Bondex, Republic and the Company generally
settle for amounts each considers reasonable given the facts and
circumstances of each case. Settlement demands vary for specific cases in
particular jurisdictions depending on (1) the seriousness of each case,
(2) the number of co-defendants in the case, and (3) the higher risk of
an adverse verdict in certain jurisdictions.

The amounts paid to defend and settle cases filed against Bondex,
Republic and the Company continue to be substantially covered by product
liability insurance.

As of August 31, 2000, Bondex, Republic and the Company had a total of
715 active asbestos cases. As of November 30, 2000, Bondex, Republic and
the Company had a total of 826 active asbestos cases. Bondex, Republic
and the Company secured dismissals and/or settlements, the total cost of
which collectively to Bondex, Republic and the Company, net of insurer
contributions, amounted to $814,000 for the quarter ended August 31, 2000
and $77,080 for the quarter ended November 30, 2000.

Bondex, Republic and the Company continue to vigorously defend all
asbestos-related lawsuits. Under a cost-sharing arrangement among the
Company, Bondex, Republic and its insurers, the insurers are responsible
for payment of a substantial portion of defense costs and indemnity
payments with the Company, Bondex and Republic each responsible for the
balance. Recent developments including the bankruptcy filings of various
other asbestos litigation defendants could, however, result in higher
future settlement demands for certain cases in certain jurisdictions. The
Company continues to believe that its existing asbestos litigation will
not have a material adverse effect on the Company's consolidated
financial position or results of operations.

SOTHEBY'S CHRISTIE'S: Economics Experts Support $512 Mil Settlement
Economics experts have endorsed a $512 million class action settlement by
Christie's and Sotheby's, court papers filed late last Friday showed.
Their report is a major step toward final court approval of the antitrust
lawsuit brought last year by more than 130,000 auction house customers
who said they were cheated in a price-fixing scheme dating from 1992.

The structure of the settlement, the experts concluded, would help stave
off insolvency for both companies, especially the publicly held
Sotheby's, which trades on the New York Stock Exchange. They calculated
the chance of a default by Sotheby's over the next five years at 9.16
percent, a probability that would more than double if the company's
bonds, now rated at junk status, were downgraded further.

The experts, hired by Judge Lewis A. Kaplan of Federal District Court in
Manhattan, gave crucial backing to a provision that had been a sticking
point: the distribution of part of the money in the form of discount
certificates rather than cash. Class members can use the certificates
against future sales fees, and the auction houses will have to pay out
less cash initially.

But the experts -- Kenneth G. Elzinga, an economics professor at the
University of Virginia, and Denise Neumann Martin of National Economic
Research Associates Inc. in New York -- concluded that the $100 million
in certificates $50 million from each company -- were not worth their
face value and should be increased to up to $118 million.

Late last month, under pressure from David Boies and Richard Drubel, the
lawyers for the buyers and sellers, the auction houses agreed to increase
the value of the coupons to $125 million and make them redeemable in cash
after four years.

At the insistence of both auction houses, certain information, like the
percentage of repeat sellers that make up the class, was stricken from
public versions of the experts' report, which was obtained by The New
York Times.

Commenting on the report last night, Matthew Weigman, a spokesman for
Sotheby's, said, "We are very pleased that the report of the
court-appointed financial experts strongly supports the certificate
element of the settlement." Christie's has repeatedly declined to comment
about the settlement and the investigation it grew out of.

For four years, the Justice Department's antitrust division has been
investigating price-fixing and other collusive practices that raised
costs to the auction houses' customers.

In October, Sotheby's and its former chief executive and president, Diana
D. Brooks, pleaded guilty to violating antitrust laws. Sotheby's was
fined $45 million. Ms. Brooks has yet to be sentenced and has agreed to
testify against Sotheby's former chairman and major stockholder, A.
Alfred Taubman.

Mr. Taubman, now the sole focus of the investigation, has denied any
wrongdoing. But because Sotheby's professed collusion happened under his
leadership, and in order to settle potential claims against him, he
agreed to pay $156 million of the company's $256 million obligation.

About a year ago, Christie's turned over crucial documents to the
government in exchange for conditional amnesty from prosecution and does
not have pay any criminal fines.

The $512 million settlement was reached on Sept. 25, but on Dec. 13,
Judge Kaplan ordered the experts to study the plan to issue certificates.

In their report to the judge, Professor Elzinga and Dr. Martin concluded
that because 80 percent of the settlement would be in cash, and because
the certificates would be acceptable to both companies and could be sold
in a secondary market, they posed no anti-competitive risk and would not
force people to be locked into buying at either Sotheby's or Christie's.

"The certificates constitute a large tail, but they are far from being
the whole dog," they wrote.

In addition, the experts sought to evaluate the economic impact of the
settlement on both houses. In the court documents, they wrote that the
two houses, particularly Sotheby's, "may have a cash flow problem should
they be required to pay the full amount ($512 million) upfront in cash,
or were the case tried successfully to judgment." So, they said, the
certificates were a useful remedy. (The New York Times, February 12,

TOBACCO LITIGATION: Russian Airline Cites Smoking As Fundamental Right
Aeroflot, the Russian airline, has forced the US transport department to
back down from its strict anti-smoking policy.

Earlier this month, the Russian airline gained a waiver from the American
laws which ban smoking on all international flights to and from the US -
allowing the carrier to maintain its practice of allowing smoking on
flights of more than three hours. To pursue its action, Aeroflot has
cited smoking as a "sovereign and fundamental right under a UN charter".

Curiously, Aeroflot's UK office said that they had not yet heard of the
ruling. But a backlash against anti-smoking appears to be under way. The
decision comes hard on the heels of smokers' rights group Forest's annual
awards ceremony, in which the millionaire publisher Felix Dennis won the
"Smokers Champion of the Year" gong for agreeing to finance a legal
action to allow smokers back on-board international flights.

Simon Clark, director of Forest, said: "Dennis told me that he'd be able
to finance a class action against the US government, and he was very
bullish about it." Clark admits that he didn't hold out much hope until
the Aeroflot initiative. "It may change everything," he said. "Prior to
this, I thought we'd get a judicial review." He believes that a
potentially huge market for smokers is untapped by the airlines. "We have
maintained for some time that if British Airways had one flight a day to
New York that allowed smoking, it would be overbooked," said Clark. "The
technology is there to make flights with a smoking section that disperses
the air so that no one would notice. But airlines are put off by the
threat of legal action."

However, there is a faint possibility of smoker-friendly charter flights.
"I've been approached by an entrepreneur to start a smokers' flying club,
and we're looking seriously at charter flights to destinations like Spain
and Cuba, where smokers can get back the price of their flights in cheap
tobacco," said Clark. He is certain that these would succeed, although
Freedom Air, a smoker- friendly airline in the US launched several years
ago, quickly closed.

The Civil Aviation Authority in the UK is sanguine about the in- flight
smoking issue. "We prohibit it in aircraft toilets for obvious safety
reasons," said a spokesman. "Otherwise, we leave it to the airlines to
make their own commercial decisions about whether to allow smoking." (The
Independent - London, February 11, 2001)

WEAPONS CONTRACTORS: Government Reimburses for Legal Bills
When ailing workers or their survivors sue federal contractors over
exposure to deadly chemicals or radioactive material at weapons plants,
taxpayers routinely get the company's legal bill.

The arrangement often frustrates those whom former Energy Secretary Bill
Richardson liked to call Cold War veterans.

"It's terrible," said Corrilla Kelly, the widow of a 27-year veteran of
the Fernald uranium processing plant in southwest Ohio. "How do you fight
all the money of the government?"

Her late husband, Herbert Kelly, spent eight years trying to get workers
compensation for lung cancer he blamed on his workplace. He was
challenged at every turn by government-reimbursed lawyers who suggested
his illness was caused by cigarettes he had given up 15 years before
getting sick.

David Norgard, who worked at Brush Wellman Corp.'s Elmore, Ohio, plant
and is suing the beryllium maker, said "it really did hit hard" to learn
the government reimburses the company for legal fees.

"It's very upsetting," he said. "I think the company was responsible and
the company ought to pay."

Workers suing Brush contend the company could have done more to protect
them from an incurable lung disease blamed on exposure to beryllium, a
metal used in nuclear weapons production.

Brush maintains that, through the years, it tried to protect the health
of its workers based on what was known at the time. It also said it has
helped employees with confirmed Chronic Beryllium Disease get state
workers compensation.

"To our knowledge, there is no current or former Brush Wellman employee
with confirmed CBD who have not been successful in establishing a
workers' compensation claim," said Hugh D. Hanes, the company's vice
president for government relations.

Some of the workers suing say that's not enough.

Brush spokesman Patrick Carpenter said it was company policy not to
discuss litigation, but that it defends lawsuits aggressively and pursues
indemnification from the government whenever allowed by its contracts.

For decades, military contracts have allowed companies that handle
dangerous or radioactive material to be reimbursed for responding in
court or before state workers compensation boards to employees who blame
their illnesses on workplace exposure. Taxpayers also pick up the tab for
lawyers to fight claims by weapons plant neighbors.

How much the government has reimbursed Brush, other vendors, and the
companies that ran its weapons plants during the Cold War era has not
been documented.

The Energy Department has no estimate, and because of the transition to
the new administration could not make an official available to discuss
the issue.

The last time congressional auditors looked at the issue, in 1994, the
General Accounting Office found that reimbursing contractors for the cost
of litigation - not including the cost of fighting workers compensation
claims - was $40 million in fiscal year 1992.

Documents obtained under the Freedom of Information Act by lawyers for
some of the workers showed that in just a handful of large cases,
including a class action suit against the former operators of the Hanford
Nuclear Reservation in Washington state, the government has paid outside
lawyers more than $94 million.

"In a normal lawsuit, the cost of litigation is part of the reasoning
that goes into settling," said Louise Roselle, a Cincinnati lawyer who
represents weapons plant workers and neighbors in lawsuits against the

"These lawyers have no incentive to settle, and the government doesn't
seem to care. We have four cases in this firm that are 10 years old or
older. All four involve weapons plants," she said. "They could have
settled a lot of cases for the money they've already spent."

"It gives the contractors essentially unlimited resources to fight
individual workers," agreed David Michaels, the Energy Department's top
health official under Richardson.

"But I could make the argument either way. The companies were paid lots
of money to do this work, but their specifications were set by the
federal government, which assumed a responsibility for what happened," he

Some of the companies involved in the Manhattan Project, which developed
the first atomic bomb, worked for $1 a year but insisted on
indemnification from lawsuits.

Subsequent contractors were better paid for the dangerous, secretive
work, but also were indemnified.

In recent years, the Energy Department's legal office has reined in
reimbursements for fighting workers with illness claims, Michaels said. A
new law passed late last year also ordered the government to stop
fighting claims from workers with specific illnesses that are easily
connected to on-the-job exposure at a weapons plant.

For others, the new law instructs the government to stop fighting the
claims if special medical boards rule in the workers' favor. Those boards
have not yet been set up. (The Associated Press State & Local Wire,
February 12, 2001)


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

Class Action Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc.,
Washington, DC. Theresa Cheuk, Managing Editor.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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