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

              Tuesday, February 20, 2001, Vol. 3, No. 35

                             Headlines

ASCHE TRANSPORTATION: Lionel Z. Glancy Commences Securities Suit in IL
CHRYSLER: Judge Enters Default Judgment; “Lemons” Said to Have Been Sold
COMMTOUCH SOFTWARE: Lionel Z. Glancy Commences Securities Lawsuit in CA
DELTA AIR: Lawsuit By Pilots Claims Pensions Wrongly Figured
FORD MOTOR: African Americans Seek More Top Jobs at Auto Dealerships

FORD MOTOR: Firestone MDL Speeds Along in Suspincions about Bankruptcy
FORD MOTOR: Longtime Managers Accuse of Being Forced out over Diversity
HAMILTON BANCORP: 9 Suits over Securities Fraud to Be Consolidated
HIP IMPLANT: Former Sulzer Employee Sues Over Faulty Hip Replacement
HIP IMPLANT: Physicians Race to Perform Surgery for Replacement

INMATES LITIGATION: Lawsuit Covers All Persons Confined in Supermax
LOCKFORMER CO: Cites Foes' Evidence in Fight Against Class Action Suit
MEDICARE SYSTEM: Retired Officers Fight Health Care Denial
NICE SYSTEMS: Pomerantz Haudek Announces Securities Lawsuit Filed in NJ
NICE SYSTEMS: Wolf Haldenstein Announces Securities Suit Filed in N.J.

NORTEL NETWORKS: Milberg Weiss Announces Securities Suit Filed in N.Y.
NORTHPOINT COMMUNICATIONS: Faces Securities Suit Filed in California
OXFORD HEALTH: Judge Rejects Charges of Misrepresentation Vs. Milberg
PRESIDENTIAL ELECTION: Poll Shows Support Restoring Felons' Voting Right
SCHERING-PLOUGH: Milberg Weiss Announces Securities Suit Filed in NJ

SCHERING-PLOUGH: Wechsler Harwood Commences Securities Lawsuit
SCOTT HINKLEY: Businessman Accused of Bilking Investors to Plead Guilty
SOTHEBY'S HOLDINGS: NY Ct OKs $70M Settlement with Shareholders
TOBACCO LITIGATION: Mealey's Reports Asbestos Cos. Sue for Reimbursement
TOBACCO LITIGATION: W.Va. Judge Will Issue Critical Ruling on Addiction

VIRGINIA: State Shows Regret over Eugenics; Lawsuit Thrown out in 1984
WORLDCOM INC: Intermedia Deal Sweetened for Digex Shareholders
XEROX CORPORATION: Berman DeValerio Files Securities Lawsuit in CT

                                 *********

ASCHE TRANSPORTATION: Lionel Z. Glancy Commences Securities Suit in IL
----------------------------------------------------------------------
The Law Offices of Lionel Z. Glancy commenced a Class Action lawsuit in the
United States District Court for the United States District Court Northern
District of Illinois on behalf of a class consisting of all persons who
purchased securities of Asche Transportation Services, Inc. (NASDAQ: ASHE),
between March 30, 1998 and April 7, 2000, inclusive (the "Class Period").

The Complaint charges certain former officers and directors of Asche with
violations of the federal securities laws. Asche was not named as a
defendant and has filed for bankruptcy protection under Chapter 11 of the
federal bankruptcy laws. Among other things, plaintiff claims that
defendants' material omissions and the dissemination of materially false
and misleading statements regarding the nature of Asche's revenues and
earnings caused Asche's stock price to become artificially inflated,
inflicting damages on investors.

Contact: The Law Offices of Lionel Z. Glancy, Los Angeles Lionel Z. Glancy,
310/201-9150 or 888/773-9224 Michael Goldberg info@glancylaw.com


CHRYSLER: Judge Enters Default Judgment; “Lemons” Said to Have Been Sold
------------------------------------------------------------------------
A Wake Superior Court judge entered a default judgment last Thursday
against Chrysler for failing to turn over documents to a Raleigh couple who
had sued the company for failing to disclose that the Dodge minivan they
bought was a lemon. Judge Narley Cashwell issued the ruling -- one of the
harshest sanctions a judge can impose for a defendant's failure to hand
over requested documents -- striking Chrysler's response to the suit, filed
by Peter and Frances Pleskach.

Their suit claimed that the company failed to disclose that their minivan
was a lemon, a vehicle bought back by the manufacturer because of its
persistent repairs.

The judge's order means a jury will not have to decide whether Chrysler was
obligated to disclose the vehicle's history. Instead, the jury will only
decide what, if any, monetary damages the Pleskaches should be awarded. A
damages hearing is set for June 11.

Chrysler spokesman Jay Cooney said it's embarrassing any time a default
judgment is imposed, but he defended the company's actions. "We
respectfully believe the judge exceeded his discretion," Cooney said. "The
sanctions are inappropriate because we made a good- faith effort to comply
with the orders."

Cooney said the company plans to appeal. "I'm really pleased with the
judge's order," said Frances Pleskach. She and her husband bought the
minivan at Cox Dodge in Wilson for $ 14,300 in 1999 without knowing its
history of a noisy engine and brakes and faulty door locks.

At a hearing last month, one of the Pleskaches' attorneys, Doug Abrams,
said Chrysler violated three previous judges' orders to produce documents,
including those detailing every vehicle repurchased in the state and
disclosure statements.

The couple's lawyers say nearly 1,000 repurchased Chryslers were sold to
unsuspecting buyers in North Carolina since 1997. Abrams said Chrysler's
failure to produce the documents in the Pleskach case reflects "a national
pattern of obstruction" in similar "lemon laundering" suits across the
country. "They make it a long hard road," said Dean Young, a lawyer in
Akron, Ohio, who handles many similar cases, including a $ 300,000 verdict
won against Chrysler in December 2000.

But Cooney dismissed the lawyers' contention that Chrysler has a reputation
for failing to produce documents. "That's not true," he said, but he did
not elaborate.

At the hearing last month, Chrysler attorney Jonathan Charleston told
Cashwell that the company has produced tons of documents and made a
good-faith effort to comply with the judges' orders. Charleston said he
sent at least 10 letters to the Pleskaches' lawyers to clarify what they
were requesting. Charleston said he has made every effort to comply with
document requests since Chrysler hired his law firm in November after other
judges had issued orders compelling the company to produce the documents.

The automaker contends that it requires dealers who buy repurchased cars
from auctions to disclose the cars' histories to the buyers. In the
Pleskach case, Chrysler filed a complaint blaming the dealership for
failing to tell the couple they were buying a repurchased vehicle. Cox says
in court records that it inadvertently failed to give the couple the
disclosure notice. As part of last Thursday's order, Cashwell dismissed
Chrysler's lawsuit against Cox.

Throughout this litigation, Chrysler has resisted turning over the
documents to the Pleskaches' lawyers. The company contends that one of
their lawyers, Cliff Kirkhart, used the information to solicit clients for
a possible class-action lawsuit, which Chrysler said was illegal and
unethical.

The company ended up suing Kirkhart. On Feb. 1, the N.C. Supreme Court
reinstated a judge's order that said Kirkhart had violated ethical rules by
using the information to solicit clients. The high court prohibited him
from doing so in the future.

Kirkhart has said he is entitled to track down witnesses to support his
claim that there's a pattern of misconduct. (The News and Observer
(Raleigh, NC), February 16, 2001)


COMMTOUCH SOFTWARE: Lionel Z. Glancy Commences Securities Lawsuit in CA
-----------------------------------------------------------------------
The Law Offices of Lionel Z. Glancy and the Israeli law firm Dekel-Sabo Law
Office commenced a Class Action lawsuit in the United States District Court
for the Northern District of California on behalf of a class consisting of
all persons who purchased securities of CommTouch Software Ltd. (Nasdaq:
CTCH) between April 18, 2000, and February 13, 2001, inclusive (the "Class
Period").

The Complaint charges CommTouch and certain of its officers and directors
with violations of federal securities laws. Among other things, plaintiff
claims that defendants' material omissions and the dissemination of
materially false and misleading statements regarding the nature of
CommTouch's revenues and earnings caused CommTouch's stock price to become
artificially inflated, inflicting enormous damages on investors. On
February 14, 2001, CommTouch announced that the company will restate its
financials for the first three quarters of fiscal 2000. The market reacted
swiftly as CommTouch common stock fell 28.75% on this news.

Contact: The Law Offices of Lionel Z. Glancy, Los Angeles 310/201-9150 or
888/773-9224 Lionel Z. Glancy or Michael Goldberg info@glancylaw.com


DELTA AIR: Lawsuit By Pilots Claims Pensions Wrongly Figured
------------------------------------------------------------
Two Delta Air Lines pilots have filed a lawsuit claiming the company
incorrectly calculated the value of their pensions, which reduced the
amount of retirement pay to which they were entitled.

Lawyers for the pilots are seeking class-action status for the lawsuit,
filed against Delta's pension fund. They say it could cover 17,000 pilots
and be worth up to $1.6 billion.

Delta is reviewing the suit and is confident that the structure of its
pension plan is correct, a spokesman said.

In the lawsuit, filed in the U.S. District Court for Southern Illinois,
Herbert Johnson Jr., a current pilot, and John Waeltz, who retired in 1997,
allege that changes Delta made to its pension plan during a 1996
cost-cutting effort violated Internal Revenue Service rules. The suit also
alleges that Delta, by offering pensions in lump sum distributions, also
did not fully compensate workers.

For pilots hired before 1972, Delta provided a pension based on a formula
linking the value of a pension to the return on the Standard & Poor's 500
index. Alternatively, pilots could receive a pension based on 60 percent of
their average earnings, if the value exceeded that calculated under the
formula.

In 1996 Delta changed the way it calculated pilot pensions, freezing the
value of the link to the S&P return and using that value to calculate the
pensions of retiring pilots hired before 1972. The change eliminated the
potential for growth based on rising S&P returns, according to the suit.

That part of the suit doesn't apply to pilots hired after 1972, whose
pensions are based only on 60 percent of their average earnings.

The Air Line Pilots Association, which is in heated contract talks with
Delta, hasn't taken a position on the suit but is monitoring the case, said
Karen Miller, a spokeswoman.

She said the case is similar to one filed in an Atlanta court on behalf of
four retired pilots. (The Atlanta Journal and Constitution, February 16,
2001)


FORD MOTOR: African Americans Seek More Top Jobs at Auto Dealerships
--------------------------------------------------------------------
A group of African Americans employed at Metro Detroit auto dealerships is
suing the manufacturers for alleged job discrimination.

Hearings by Judge William Giovan were scheduled in Wayne County Circuit
Court for a suit requesting class-action status filed by Blacks Speaking
Against Dealerships (BSAD).

A dismissal motion from Ford Motor Co. had also been filed. "There is no
diversity in the upper management of dealerships," said George Whitfield,
who worked at a Ford dealership for 15 years and is a leader of the new
group. "And the auto industry claims is has nothing to do with hiring
practices at dealerships. That simply is not true." Ford Motor says there
are 381 minority dealers out of nearly 5,000 nationwide, not including
those with multiple franchises. "We are sensitive to the concerns of the
minority community, and we have made a strong commitment to support the
development of minority suppliers, dealers, employment and other
initiatives," said spokeswoman Kathleen Vokes.

But Whitfield claims African Americans are scarce in upper management at
auto-selling franchises. He said he was one of the few African American
general managers among dealerships nationwide when he worked at a Mel Farr
Ford business where he began as a porter.

He currently is suing Mel Farr Automotive Group in a separate lawsuit,
alleging he was fired because Farr wanted to "change the culture to attract
white people." "When I left Mel Farr, I sent my resume out to hundreds of
dealerships with openings for general manager positions in Michigan,
Atlanta, Florida, everywhere," Whitfield said. "I live in West Bloomfield
and I received several calls from people who sounded interested initially
when they saw my address on the resume, but they never called back. One man
even had the nerve to ask my nationality over the phone."

He formed the organization after meeting with other African Americans with
similar stories. It has about 50 members, said Whitfield, who's still
jobless. Horace Sheffield, a Detroit minister who heads Michigan's chapter
of National Action Network refers to a "steel ceiling" in the industry.
(The Detroit News, February 16, 2001)


FORD MOTOR: Firestone MDL Speeds Along in Suspincions about Bankruptcy
----------------------------------------------------------------------
In a firestorm of motions to dismiss, pleadings for injunctive relief and
suspicions about a defendant filing bankruptcy, the Firestone MDL is
speeding along as most massive litigations do at a snails pace.

The MDL roared to life a mere two months ago, with the appearance that the
case would breeze along as lead attorneys on all sides of the case had
already begun meeting and organizing themselves.

Settlement talk surfaced early on, but Judge Sarah Evans Barker was miffed
during a recent conference to learn talks have stalled.

There should be a meeting scheduled and it shouldn't be postponed, the
United States District Court, Southern District of Indiana, Indianapolis
Division judge said. I don't know who to wag a finger at, nobody in
particular I guess, but I want some meetings to take place soon.

Delayed distribution of materials required by the defendants was blamed for
the slow up. Co-lead counsel for the personal injury and wrongful death
cases Victor M. Diaz took blame for that delay, but he complained that
settlements in state cases seem to be moving more quickly than talks at the
MDL level. Certain document requests from the defendants also irked him.

Judge Barker pointed out that bickering over content issues was doing
nobody any good. If you can show me that a question they ask is abusive
I’ll deal with it, she said. Get on with it and answer their questions,
even the dumb ones. There is a lethargy about this.

The judge offered herself as a solution to another part of the litigation
that may be lagging namely discovery coordination with the state courts
hearing cases.

Only litigation filed in federal courts was transferred to the MDL. There
are scores of state courts hearing cases across the country.

As could be expected, the two sides have different notions about this issue
as well. The defendants, who must produce their clients for discovery,
would like a systematic coordination of discovery between the MDL and state
courts, with Judge Barker at the helm. Plaintiffs are loathe to have the
MDL meddle much in state court business.

Judge Barker told the combatants she is striving for middle ground on this
issue and she wants to tread lightly, albeit firmly, in coordinating
discovery with state judges. She intends to send a letter with a copy of
the case management order to the state judges asking for their cooperation
and then she'll follow up with a phone call. She does not plan to issue
edicts.

Access to company records has also been a bone of contention.

Plaintiffs attorney Richard Denney, a self-proclaimed veteran of every Ford
reading room, told the judge the document depositories are a maze of
unmarked materials. He noted that you basically need a road map to actually
uncover all that lies beneath the surface of what the car maker makes
available. They have hundreds of thousands of documents in boxes with no
attribution, he said. It is so pervasive it is a huge problem.

Ford was ready for that bit of friction. At the ready was a computer guru,
ready to show and tell about Fords new user-friendly document Web site. The
parties will meet to discuss whether the document Web site will do the
trick.

With case management issues set aside, Judge Barker moved on to the meat,
the case itself. Plaintiffs in the class cases have submitted an 85-page
master complaint. In the complaint they allege the following:

* Ford discovered that the Explorer has an inherent safety defect.

* Defendants combined two defective and dangerous products into a deadly
   combination.

* Defendants forestalled federal agency action by initiating a limited
   voluntary recall.

* Defendants actively concealed the defects in their products and all
   information that would suggest the defect exists.

* Defendants furthered the objective of their conspiracy of concealment
   by disseminating false statements regarding the safety and quality of
   their defective products.

* Plaintiffs and the classes were damaged by defendants wrongful conduct.

* Plaintiffs and the classes are entitled to punitive/exemplary damages.

They ask for relief citing numerous violations:

* Violation of Magnuson-Moss Warranty Act U.S.C. 2310(d)(1).

* Violation of Civil RICO, 18 U.S.C. 1962(a) asserted on behalf of the
  Tire Class.

* Violation of RICO, 18 U.S.C. 1962 asserted on behalf of the Explorer
  Diminution Class.

* Violation of Civil RICO, 18 U.S.C. 1962(c) asserted on behalf of the
  Tire Class.

* Violation of RICO, 18 U.S.C. 1962(c) asserted on behalf of the
  Explorer Diminution Class.

* Violation of Civil RICO, 18 U.S.C. 1962(d) asserted on behalf of the
  Tire Class.

* Violation of RICO, 18 U.S.C. 1962(d) asserted on behalf of the
  Explorer Diminution Class.

* Declaratory judgment/equitable and injunctive relief.

* Restitution/disgorgement for unjust enrichment.

* Violation of all states consumer protection statutes.

* Breach of express warranty.

* Breach of implied warranty.

* Negligence.

* Breach of warranty against redhibitory defects under Louisiana law.

Plaintiffs also asked Judge Barker to rule immediately on their motion for
a preliminary injunction that would force a massive Firestone tire recall,
larger than any in history Firestone attorneys contend.

Not so fast, she said.

In response to the master complaint, Ford, Firestone and Bridgestone filed
an equally weighty motion to dismiss the class claims, based largely on the
fact that virtually none a couple plaintiffs have claimed injury of the
plaintiffs in the class cases have claimed they have been injured by Ford
or Firestone.

Judge Barker said she must first dispatch with the motion to dismiss. Both
sides are busy briefing the others arguments, so Judge Barker can consider
both the dismissal and injunctive relief motions together.

Lead counsel for the class action cases Don Barrett made the request for
simultaneous consideration, because he said settlement of one more huge
case in the state courts could push Firestone under.

What we need is an emergency preliminary injunction, he said. Firestone is
flirting with the bankruptcy, whether they do it voluntarily or Bridgestone
forces it. This court will lose jurisdiction entirely and this court ought
to rule on this.

Bridgestone-Firestone attorney and spokesman Anthony Prather dismissed the
bankruptcy notion. We’re on solid financial ground and have set aside an
adequate amount of money for this litigation, Prather said. News reports
have placed that figure at around $ 750 million for both the litigation and
tire recalls.

A recent Jury Verdict Research report compiled by LRP Publications showed
that the median injury award for transportation products was just over $ 1
million at its highest. With hundreds of plaintiffs asking for damages,
it’s anybody’s guess how high Firestones tab could go. Prather however said
that rumored amounts of $ 50 billion were not exactly realistic.

If by chance Firestone does file for bankruptcy, there would be an
immediate stay of all the litigation. The class cases if they are not
dismissed could move into bankruptcy court, said bankruptcy scholar Marlene
Reich with Sommer & Barnard. That's not exactly a good thing for the class
plaintiffs because if that happens, settlements will be decided based on
economics rather than emotions. Generally in litigation until you get into
the settlement stage you are not looking at what the defendant can afford,
you are looking at who is the guilty party and assessing damages, Reich
said. A jury isnt thinking a company can only pay this much.

As for venue, the personal injury and wrongful death cases would remain
under Judge Barkers control, Reich said. But the venue for the class cases
would be determined by the judge in whatever federal district court the
bankruptcy is filed. These days, Reich said many bankruptcy cases are filed
in Delaware. It’s become the forum of choice for large cases, she said. All
the large retailers file there. Its become sort of a cottage industry.

Since Judge Barker was pegged to manage this MDL however, Reich surmised
that any district court judge might think it would be prudent to keep all
cases in her court, regardless of where the potential bankruptcy is filed.

The next status conference for the MDL is scheduled for March 8. Special
Master Debra McVicker Lynch said it is highly unlikely given the flurry of
briefs that are certain to fly over the various motions though not
impossible that Judge Barker may rule on the motions to dismiss and the
preliminary injunction at that time. (The Indiana Lawyer, February 14,
2001)


FORD MOTOR: Longtime Managers Accuse of Being Forced out over Diversity
-----------------------------------------------------------------------
For the second time, a group of Ford Motor Co. workers filed a class-action
workplace discrimination lawsuit against the Dearborn-based automaker.

The suit, filed last Thursday February 15 in federal court in Detroit on
behalf of three Ford managers, accuses Ford and its chief executive officer
Jacques Nasser of attempting to weed older white males through negative job
reviews and replace them with minorities, women and younger workers.

The workers are seeking more than $1 million in damages.

Pinckney-based attorney James K. Fett, who represents the workers, said he
expects to add at least nine more Ford employees to the suit over the next
weeks. "Ford has changed the rules on my clients after 25 years of
service," Fett said. "It used to be merit-based promotions and now its
diversity-based. It's unethical and it's illegal."

The lawsuit cites several public statements by Nasser and other executives
on Ford's push for diversity. Nine Ford managers filed a separate
multi-million dollar class-action suit against Ford alleging age
discrimination. Both suits claim that Ford is using a controversial
evaluation process for its top 18,000 white-collar workers to sweep away
unwanted groups of employees.

Under Ford's policy instituted in January 2000, 10 percent of employees
receive A grades, 80 percent get B's and 10 percent receive C's. The policy
was altered this year so that only 5 percent of employees must receive C
grades.

Employees who receive a C rating are not eligible for a raise or bonus. A C
grade for two consecutive years is grounds for demotion or termination.

Company spokesman Edward Miller said Ford evaluates employees based on
their performance. "It is a fair and inclusive system," Miller said.

The suit -- filed on behalf of John R. Streeter, 56, of Grosse Ille, James
C. Brazin, 55, of Ann Arbor, and an unidentified 59-year-old Allen Park man
-- claims all three recently received poor performance ratings after long
careers of nothing but stellar reviews. (The Detroit News, February 16,
2001)


HAMILTON BANCORP: 9 Suits over Securities Fraud to Be Consolidated
------------------------------------------------------------------
Hamilton Bancorp in Miami, which restated five quarters of earnings in
December, is the first bank in recent memory to be targeted for an
earnings-based class action.

Nine lawsuits, all filed during the past month in the Miami Division of the
U.S. District Court for the Southern District of Florida, allege that $1.7
billion-asset Hamilton intentionally misled investors and artificially
inflated its stock price by overstating its earnings.

In mid-March the suits are to be consolidated, and a lead plaintiff and
lead attorney will be selected. The presiding judge then has a month to
determine whether the complaint will go to trial, lawyers said.

The suits aim to compensate investors who bought Hamilton shares after
April 21, 1998, when they were trading at $32.56. The suits do not specify
the sum that will be sought, but the shares were trading at $10.9375 noon
last Thursday. The company has 10 million shares outstanding.

"There is blood on the water, and the sharks are circling," said Richard X.
Bove, an analyst with Raymond James & Associates in St. Petersburg, Fla.

That blood began flowing in November, when Hamilton reported a
third-quarter loss of $5.6 million. Its stock plunged 35% the day the loss
was announced. On Dec. 22 the company restated its quarterly and annual
earnings reports for 1998 and 1999. The net change was a reduction of $14.3
million.

J. Carlos Bernace, Hamilton's president, said he was not surprised that the
restatement had produced the lawsuits. "There are many law firms that
engage in this type of business, and with the drop in our stock price and
the restatement of earnings, the bank became a target for a class action,"
he said.

An attorney for Hamilton, Pedro Martinez-Fraga with the Miami firm of
Greenberg Traurig LLP, dismissed the allegations as "completely meritless."

In December 1999 the company was ordered to restate its earnings by the
Office of the Comptroller of the Currency, which disagreed with the way
Hamilton accounted for some transactions and ordered it to increase
reserves in connection with loans in made in Ecuador. Hamilton, which
unsuccessfully appealed the order, argued that past reserves and a loss it
had taken at the end of 1999 to cover its Ecuadorian loans were sufficient.

OCC officials have made no allegations of fraud, and Mr. Bove said, "I do
not think the management willfully went out to mislead investors."

Still, Kenneth Thomas, a Miami-based bank consultant, said Hamilton's
adversarial relationship with the OCC, the precipitous decline in its stock
price, and the company's position as an international trade financier
focused on Latin America made it a prime target for a class action. The
industry has seen few earnings-based class actions since the savings and
loans crisis in the 1980s, he said. "Class actions are not that common with
banks," he said. "I have not seen a major one like this in a while."

Even some of the lawyers who are suing Hamilton have remarked about this
case's singularity.

Michael Lange, an attorney with Berman, DeValerio & Pease LLP in Boston,
said that he could not recall any bank class action involving a restatement
of earnings in recent years. Mr. Lange said his firm decided to take the
case after it was approached by some Hamilton shareholders. We have to show
that they inflated earnings intentionally and recklessly," he said. "Given
the magnitude and timing of the restatement, we have a pretty good case."

David L. Rosenstein, a spokesman for Milberg Weiss Bershad Hynes & Lerach
LLP in New York, said his firm decided to sue Hamilton because the
shareholders' complaints clearly met all the federal class-action
requirements.

Both firms, which produced similar complaints, claimed Hamilton "employed
devices, schemes, and artifices to defraud" and "made untrue statements of
material fact or omitted to state material fact" in its earnings reports
and other public documents.

Mr. Bernace said the first complaint, filed by Milberg Weiss in partnership
with another firm, came from a shareholder with 400 shares. Berman,
DeValerio & Pease, in partnership with two other law firms, issued a
complaint from a stockholder with 2,000 shares. Information about
participants in the other suits was not immediately available, press
releases from the law firms involved said all were seeking additional
shareholders as plaintiffs. (The American Banker, February 16, 2001)


HIP IMPLANT: Former Sulzer Employee Sues Over Faulty Hip Replacement
--------------------------------------------------------------------
A former employee of medical-device giant Sulzer Medica is suing a
subsidiary of his old company over an artificial hip he received, one of
thousands recalled in December.

Jack Schwartz, 72, contends he has been unable to walk without a cane and
has endured pain and sleeplessness since receiving his Sulzer Orthopedics
hip replacement part in September. Sulzer has recalled the hip parts,
acknowledging a lubricant on some parts was preventing the device from
fusing to patients' bones. "I spent 47 years working my butt off to get to
where I could retire," Schwartz told the Houston Chronicle. "My wife and I
planned to travel. I love to golf. Now I can't cross my leg." Schwartz, of
the south Houston suburb of Pearland, oversaw pacemaker sales and
operations at medical parts maker Intermedics. Sulzer bought the company in
1988.

Austin-based Sulzer Orthopedics says 17,500 patients received its Inter-Ops
hip device. Surgeons who inserted the devices will take X-rays and review
with patients whether the device is working properly, spokesman Jim Moore
said. Moore said some patients are having problems because of an oil-based
lubricant left on some of the devices.

The company has agreed to incur all out-of-pocket medical expenses,
including paying for corrective surgery if necessary, for those who
received defective parts.

But Schwartz and several others are seeking further damages. A law firm
Tuesday filed a national class-action suit against Sulzer in San Francisco.
Schwartz says he cannot sleep without taking a sleeping pill and
painkiller. "I spent 47 years working my butt off to get to where I could
retire," he said. "My wife and I planned to travel. I love to golf. Now I
can't cross my leg."

Another class-action lawsuit was filed last Thursday in Houston, where
attorney Tom Edwards filed on behalf of Kathleen Kariotis, an Illinois
woman who received a hip replacement part in November. (The Associated
Press State & Local Wire, February 16, 2001)


HIP IMPLANT: Physicians Race to Perform Surgery for Replacement
---------------------------------------------------------------
When Sulzer Orthopedics Inc. recalled thousands of faulty hip implants in
early December, Oakland orthopedist Dr. H.M. "Mac" Reynolds knew he had a
nightmare on his hands. Reynolds had unknowingly implanted defective hip
replacements in 254 of his patients, 120 of whom required immediate
surgery. "My practice is the most impacted practice in the world," said
Reynolds, whose patients account for about a quarter of all the potentially
defective implants sold by Sulzer's Northern California distributor.

Since the recall, he and his staff have been working a grueling schedule of
about 10 operations a week, six days a week. "I take this home with me
every night," said the doctor, who works as late as 11 p.m.

For Reynolds and many other surgeons, the nightmare started Dec. 8, when
Sulzer told them a mistake in the manufacturing process had affected 31,000
implants -- in a part called the Inter-Op acetabular shell -- produced
since October 1999 and possibly asfar back as 1997.

An estimated 17,500 of the defective parts were implanted in patients
nationwide. About 160,000 total hip implants are performed in the United
States each year because of arthritis, or cartilage loss.

One of Reynolds' patients, Cherie Lewis, 53, of Walnut Creek, had hip
surgery Oct. 30. Lewis knew something was wrong when even morphine failed
to relieve her excruciating pain, which she described as a 12 on a scale of
1 to 10. Lewis, who lost a job she loved selling flooring materials because
of the problem, is still recovering from her second hip replacement surgery
on Jan. 19. "I would like to have my life back, and I don't know if I ever
will," she said.

On the same day as her second surgery, Lewis filed a lawsuit against Sulzer
Orthopedics of Austin, Texas, and its parent company, Sulzer Medica of
Winterthur, Switzerland. Her suit joined numerous suits piling up against
the manufacturer around the country, most of them in such states as
California, Texas, Florida and Georgia, where the majority of the implants
were done.

                        Bay Area Concentration

In the Bay Area, more than 20 individual suits have been filed in Alameda
County, with at least five in San Francisco. Alameda County has so many
cases because Reynolds, who uses Sulzer hip implants almost exclusively,
has such a large practice.

A federal class-action lawsuit against Sulzer and its parent was filed in
U.S. District Court in San Francisco. While the individual suits involve
people who need the implant replaced, the federal suit seeks damages on
behalf of those who received the defective implant but do not know if it
will eventually fail.

Sulzer has admitted causing the defect, but many questions remain.

One is how a company with least four decades in the artificial joint
business -- and considered a leader in the industry -- could make such a
mistake. Another is whether Sulzer could have acted sooner to correct the
problem. "I believe Sulzer knew about this at the absolute latest in
September," Lewis said. "I really feel I am one of the people who never
should have had to go through this."

Sulzer officials insist the company acted as swiftly as possible once it
learned of the defect and is doing everything it can to correct the damage.
"We have admitted we have failed, and we have said we want to do what's
right," said Sulzer spokesman Jim Moore. "We would never knowingly put an
unsafe product on the marketplace."

Moore said the company first starting hearing reports of problems from
doctors in September and started to investigate immediately. The company
filed its first report with the U.S. Food and Drug Administration Nov. 8,
warning of the potential problem, and announced the recall a month later.

                     Company Pays For Surgery

Sulzer has offered to pay for the surgery when necessary, a cost that
ranges from $20,000 to $70,000 depending on the patient's age and
condition. But most patients have costs covered by their insurance or
Medicare.

The lawsuits that have been filed intend to recover damages for claims of
negligence, pain and suffering and other losses such as wages.

But how did the problem happen in the first place?

The problem can be traced to a mix-up in the way a coolant was used in the
manufacturing the shell, or the hemispherical part of the implant that is
inserted into the upper part of the hip. That cup is covered in a porous
titanium coating that needs to be cooled and then tooled.

Moore said the tooling machine is lubricated with a mineral-based oil, some
of which got into the coolant that was sprayed on the shells. When even
traces of lubricant are left and get into the shell's pores, the patient's
bone may not be able to bond with the shell. In some cases, the body reacts
to the loose shell by building up scar tissue. The loose shell can also
erode the bone. These problems can cause various symptoms, mainly severe
groin pain and the inability to bear weight on the leg on the implant side.

The surgery to replace the faulty implant part is more complicated than the
first, often taking more than three hours -- twice as long as the original
operation.

The doctor has to cut away the scar tissue, which may lead to increased
bleeding, and scrape the bone to remove all traces of the oil. Then the
shell and the ball, but not the implant stem, are replaced.

The defect might date back as far as 1997, when Sulzer started
manufacturing parts, including the shell, that it had formerly out- sourced
to a Pennsylvania company.

While Sulzer has the patent to the Inter-Op's design, the Pennsylvania firm
had proprietary rights to some of the manufacturing techniques it used to
make the parts. After the problem was disclosed, Sulzer changed the
manufacturing process with the help of outside parties. It no longer has
the porous coating on the shell while the implant is being sprayed and
cooled.

"We had great confidence in what we had done through the years, so we
figured we could do it ourselves," Moore said.

                           Change In Method

Moore said the out-sourced manufacturer was able to avoid the problem by
washing the shell so the pores were filled with water and no oil could
penetrate. "We fixed the problem, but obviously the harm has been done,"
Moore said.

"A human Firestone tire" is how San Francisco resident Helen Simon
described the feeling of knowing she had an implant on the recall list, a
reference to last summer's recall of defective Firestone tires.

A patient of Reynolds, she received the recalled implant Oct. 16. Now,
Simon, a scientist who studies hearing and speech, has to go through the
painful surgery again and endure weeks of recovery.

When Barry Moore, a 61-year-old former truck driver, had his hip surgery at
the Kaiser hospital in Redwood City on June 13, he never expected he
wouldn't be able to dance at his daughter's wedding in September.

"Walking her down the aisle limping with a cane wasn't too comfortable. And
halfway through the father-daughter dance, I had to to quit," said Moore, a
Belmont resident.

Because he was irritable from the constant pain, a grandchild had taken to
calling the normally good-natured Moore "Grumpy Grandpa." He even signed up
for an anger management class. "I'm furious. Somebody knew about this, and
they should have recalled these things a whole lot sooner," he said.

Malcolm Wain, of Alamo, had his surgery Nov. 25. The 51-year-old banking
executive and avid golfer had his second surgery Feb. 2. Wain, also a
patient of Reynolds, hopes the new Sulzer parts used to replace the
defective ones won't fail. He said he's confident in his doctor, but less
so in the parts.

                          Loss Of Confidence

"I assume it's going to be all right, but deep down inside you wonder if
it's going to break down,' he said. "You've lost confidence in the whole
thing."

While no one blames the doctors, they still feel responsible for the pain
their patients are going through.

Dr. Christopher Cox, a San Francisco orthopedist who implanted 25 defective
hips, realizes he had no way of knowing about the defect, but said he still
feels terrible. "We did this to make our patients have no pain. It's like
we sold them a bill of goods that was false," said Cox, who plans to
operate again on at least nine patients.

Sulzer's Moore said the company is trying to help the surgeons by meeting
with them across the country and providing videotapes of revision
surgeries. "The surgeons are exposed in this. They put great confidence and
trust in our product, and we let them down," Moore said. "This has had a
great impact on their practices, and we're trying to help them."

Reynolds said he prefers the Sulzer implant because the shell's plastic
lining is made from a patented material that could potentially last a
lifetime.

The type of shell in the Sulzer implant is typically used on younger
patients because it bonds naturaly with the bone and lasts longer. Other
implants are bonded with cement.

Because the porous shell has been available for several years and is
offered by other manufacturers, Reynolds said, that's why neither the
manufacturer nor the doctors were suspicious of the outer shell when the
problem first arose.

                         Great Track Record

Reynolds said he could not have imagined the defect in his wildest dreams.
"Sulzer had one of safest track records in the industry," he said.

Even though he has confidence in the new Sulzer shells, Cox has chosen to
replace the shells with non-Sulzer products in almost all his cases, "It
makes sense from an emotional standpoint to use a different company," he
said.

Reynolds, who has chosen to use the new shells from Sulzer, is concerned
about the oil's long-term effects on the bone. He said patients should know
within six weeks whether their surgery was successful, but even that's
unclear. "In all likelihood, they should be OK," he said. "We just don't
know."

                        Recalled Sulzer Implants

According to Sulzer Orthopedics, trace amounts of mineral oil used in the
manufacturing process was left on the Inter-Op acetabular shell. The shell,
which is covered by a porous titanium coating, has failed to bond with the
bone in many cases. Surgery to correct the problem requires removing scar
tissue and rescraping of the bone before the shell and the ball are
replaced.  (The San Francisco Chronicle, February 18, 2001)


INMATES LITIGATION: Lawsuit Covers All Persons Confined in Supermax
-------------------------------------------------------------------
Inmates at the state's Supermax prison can file a class- action lawsuit
over conditions there, a federal judge ruled.

The lawsuit now covers "all persons who are now, or will in the future be,
confined in the Supermax Correctional Institution in Boscobel, Wisconsin,"
according to the ruling of Judge Barbara Crabb.

The lawsuit asks for improvements in conditions and unspecified damages.

The two prisoners who originally filed the lawsuit, Dennis E. Jones 'El and
Micha'el Johnson, argued they are subjected to constant fluorescent
lighting, 24-hour confinement, a lack of sleep and inadequate recreational
facilities. "The two prisoners wanted to represent all prisoners but by law
cannot represent others since they're not lawyers," their lawyer, Ed
Garvey, said. "We will be sending teams of people in to interview all of
the prisoners." He said it will probably be a year before the case goes to
trial.

Johnson and Jones 'El's claims include:

* Constant fluorescent light in their cells causes them "excruciating
   eye aches, headaches and sleeplessness."

* Prisoners are awakened once every hour during the night and instructed
   to move.

* The prison's ventilation system "reflects the temperature outside."

* The 24-hour video monitoring policy lets female staff watch prisoners
   shower and urinate.

* Female staff members also have made comments about prisoners' genitals.

Both inmates also argued they have received inadequate medical and dental
care and were denied certain items associated with Islam, their religion,
including prayer rugs and the Qur'an.

The $43 million prison houses about 304 of the state's most violent
inmates. (Associated Press, February 17, 2001)


LOCKFORMER CO: Cites Foes' Evidence in Fight Against Class Action Suit
----------------------------------------------------------------------
A Lisle metal fabricating company accused of contaminating well water
contends that a lawsuit filed against it by a group of residents should not
be certified a class action because the residents' expert proves
Lockformer's point: that different amounts of solvent were found in their
wells.

The argument was made in documents filed in Federal District Court in
Chicago by Lockformer Co., which operates a plant at 711 Ogden Ave. where
the solvent TCE was spilled.

The class-action request was part of a seven-count federal suit filed in
November by residents who live south of the plant.

The suit came after residents had their wells tested, and TCE, a possible
carcinogen, was found in 21 of 33 homes. The suit alleges that more than
100 homes, all south of St. Joseph Creek, may be contaminated by the
man-made degreaser that was used for nearly 30 years by the company. The
chemical contaminated private wells, damaged property and permanently
diminished property values, according to the suit.

"The groundwater data [from your expert] clearly demonstrates why class
certification should be denied," Lockformer contends in its filing.

It shows the alleged levels varied "dramatically," and therefore the suit
doesn't meet federal requirements for class action, which dictates that
members of the class share a common experience.

The varying levels show the experience was not common, the company
contends.

Residents had responded last month that case law requires there only be one
common issue for all members to become a class. In this case, they say, the
harm was caused over decades by chemical spills generated by Lockformer.
The residents seeking to be part of the class-action status also live
within a specific area that is receiving bottled water, courtesy of
Lockformer, as part of an agreement between the company and the state. The
residents had said earlier their class-action request was substantiated
because those boundaries are defined in the agreement.

Lockformer claims that is a leap in logic.

Residents offered no rationale behind their argument and their own expert
defined an area which is larger than the one named in that agreement, the
company said.

The interim agreement between the company and the state came a few days
after the Illinois Atty. Gen. James Ryan and DuPage County state's
attorney's office filed a lawsuit charging the company and its former
solvent supplier with environmental infractions resulting from the chemical
spill.

Judge Harry Leinenweber is scheduled to issue a ruling Feb. 23 on the
class-action status request. (Chicago Tribune, February 16, 2001)


MEDICARE SYSTEM: Retired Officers Fight Health Care Denial
----------------------------------------------------------
When 17-year-old Thomas Pentecost enlisted in the Marine Corps in 1946, the
lifetime health benefits that the military services offered didn't mean a
thing to him. It was right after World War II, and Pentecost was, he says,
"a hard charger" who looked forward to the challenge of being a Marine.

Pentecost fought in Korea, returned home and was trained as a recruiter. It
was then that he "learned about all the benefits that were promised," said
the retired major, now 72. "I was taught that these are the things that the
government promised, and when I got into recruiting duty, I passed it on to
others. It was part of my inducements."

Now a federal appeals court panel has ruled that the free lifetime health
care that recruits and their families were promised if they served at least
20 years was an "implied-in-fact contract" that the government breached in
1956. It was then that Congress changed the rules, making health care for
military retirees available only on a "space available" basis.

In the Feb. 8 opinion, the three-judge panel unanimously ruled that "free,
lifetime health benefits are a deferred component of the retirees'
compensation" that they were promised before they entered the military.

"The retirees entered active duty in the armed forces and completed at
least 20 years of service on the good faith belief that the government
would fulfill its promises," the panel wrote. "The terms of the contract
were set when the retirees entered the service and fulfilled their
obligation. The government cannot unilaterally amend the contract terms
now."

The lawsuit was filed by two retired Air Force lieutenant colonels from
Fort Walton Beach, Fla., seeking compensation for the Medicare premiums
they say they were forced to pay after they were denied free health care
services at military installations. But their lawyer, George E. "Bud" Day,
has filed a motion to extend the court ruling to the entire class of
retirees who served 20 years and entered the military before enactment of
the 1956 law, when the free lifetime benefit promise effectively ended.

The retirees could collect as much as $ 10,000 each if the appeals court
panel ruling is upheld, Day said.

According to the Retired Officers Association, more than 1 million such
retirees and family members are still living, representing a potential
liability to the government running into the billions of dollars.

A Justice Department spokesman said the government has not decided about an
appeal, which could be made to the full appeals court or the Supreme Court.

However, a lawyer who is familiar with the case said an appeal is certain
and that the retirees may still face an uphill battle. He said last year a
different three-judge panel on the same appeals court ruled against a group
of South Carolina military retirees who made the same claims. The Supreme
Court refused to hear that case.

Day, 76, the driving force behind the lawsuit, is a retired Air Force
colonel and Medal of Honor winner who shared a cell with Sen. John McCain
(R-Ariz.) when both men were prisoners of war in Vietnam. Day said that
despite passage of the "space available" provision of the 1956 law, most
military retirees were able to get free health care at military facilities
until the mid-1990s. That changed for him and others in 1995, Day said,
forcing many of them into the Medicare system. It was then that Day began
thinking about legal action.

A Defense Department health official said retirees older than 65 are still
being treated at military facilities, but that two factors put growing
pressure on the military health care system during the 1990s. One was that
military bases and other facilities, including hospitals, were closed after
the end of the Cold War. In addition, beginning in 1995, military retirees
younger than 65 for the first time were allowed to enroll in a military
managed care system, the official said.

Many did, because this guaranteed them care that previously was available
on the "space available" basis. But that left even less room at military
health care facilities for the retirees who were older than 65 and who were
not allowed to enroll in the program because they were eligible for
Medicare.

In their lawsuit, the over-65 retirees who entered the military before 1956
argued that forcing them to pay Medicare premiums broke the free lifetime
care promise made when they enlisted. Day recruited a network of
volunteers, including Pentecost, who is not a direct party to the suit, to
spread the word about the legal action.

Day said he has the names of more than 10,000 people who are potential
plaintiffs if the case is expanded into a class action. "That number is
going up like an adding machine" since the appeals court panel ruled, Day
said. At the same time, he added, members of the class are dying at a rate
of about 1,000 a day. "I resent it like hell even now," Pentecost said
about the treatment of the retirees. "I'm very reluctant to recommend
service life for others, for my kids." Recently, he said, his nephew called
him to talk about possibly enlisting in the Marine Corps. "I told him that
unless you've got it in writing, don't believe a whole hell of a lot of
what they say. That's awful for me, to tell that to my nephew. I love my
country very much and I love my Corps." (The Washington Post, February 19,
2001)


NICE SYSTEMS: Pomerantz Haudek Announces Securities Lawsuit Filed in NJ
-----------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) is
filing a class action lawsuit against Nice Systems Ltd. (Nasdaq: NICE),
Nice Systems Inc., and the Company's Chairman Benjamin Levin on behalf of
all those persons or entities who purchased the American Depository Shares
("ADS") of Nice Systems during the period between May 3, 2000 through
February 7, 2001, inclusive (the "Class Period").

The case will be filed in the United States District Court for the District
of New Jersey (Newark), located at the Martin Luther King Building and U.S.
Courthouse, 50 Walnut Street, Newark, New Jersey 07101. The Court may be
reached by telephone at 973-645-3730. A further notice to class members
will be published forthcoming once the case has been assigned a docket
number and a presiding U.S. District Judge.

The Complaint will allege that NICE, a worldwide leader of multimedia
digital recording solutions, applications and related professional services
for business interaction management, violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 by issuing materially false and
misleading information about the Company's financial condition, and as a
result of these false and misleading statements the Company's stock traded
at artificially inflated prices during the Class Period.

As alleged in the Complaint, Nice Systems reported "record" revenues for
the first three quarters of 2000, which ended May 3, 2000 August 2, 2000
and September 30, 2000, respectively. Thereafter the Company announced on
December 28, 2000 that it was lowering revenue and earnings expectations
for the fourth quarter of 2000, which ended December 31, 2000. As a result
of the December 29, 2000 announcement, the price of NICE ADSs fell 61%.

On February 8, 2001, NICE shocked investors when it announced before the
markets opened that the Company would be restating revenue for the first
three quarters of 2000 based on a detailed analysis performed "in the
course of the year-end closing process." As a result, the Company expected
to revise revenues for the first three quarters of 2000 as follows: $34
million instead of $37.5 million, $39 million instead of $42.9 million, and
$45 million instead of $46.6 million, respectively. In addition, the
Company announced that it was revising downward its previously announced
revenue estimate for the fourth quarter ended December 31, 2000, and that
the Company's Chairman, Benjamin Levin, had resigned. As a result of these
announcements, the price of the Company's stock fell almost 28%.

Contact: Pomerantz Haudek Block Grossman & Gross LLP Andrew G. Tolan, Esq.
Phone: 888/476-6529 (888/4-POMLAW) Internet: agtolan@pomlaw.com


NICE SYSTEMS: Wolf Haldenstein Announces Securities Suit Filed in N.J.
----------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit
in the United States District Court for the District of New Jersey on
behalf of persons who purchased NICE Systems, Ltd. (Nasdaq: NICE - news)
American Depository Shares ("ADS's") between February 16, 2000 and February
7, 2001 inclusive (the "Class Period").

The complaint charges defendants with violations of the Securities Exchange
Act of 1934. The complaint alleges that during the Class Period, defendants
issued materially false and misleading financial statements for fiscal year
1999 and the first three quarters of fiscal 2000. Defendants improperly
recognized material amounts of revenue, in violation of Generally Accepted
Accounting Principles, on among other things, consignment "sales."

The complaint further alleges that defendants "cooked" NICE Systems' books
in order to report revenues, profits and growth rates, which the Company
had led the market to believe would be achieved in fiscal 1999 and 2000 and
to inflate the price of NICE Systems' ADS's, which were used in two
acquisitions during the Class Period which were both partially funded with
NICE Systems' artificially inflated ADS's.

Because of defendants' allegedly fraudulent practices, NICE Systems' ADS's
traded at artificially inflated prices throughout the Class Period. On
February 8, 2001 when the Company announced that its financial results for
fiscal year 1999 and the first three quarters of fiscal 2000 would require
restatement due to the improper recognition of revenue, the price of NICE
Systems' ADS's fell almost 30% in one day to $13.10.

Contact: Wolf Haldenstein Adler Freeman & Herz LLP Michael Miske, George
Peters, Fred Taylor Isquith, Esq., or Gregory M. Nespole, Esq. 800/575-0735



NORTEL NETWORKS: Milberg Weiss Announces Securities Suit Filed in N.Y.
----------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on February 16, 2001, on behalf of
purchasers of the securities of Nortel Networks Corp. (NYSE: NT; TSE: NT)
between January 19, 2001 and February 15, 2001, inclusive (the "Class
Period').

A copy of the complaint filed in this action is available from the Court,
or can be viewed on Milberg Weiss' website at:
http://www.milberg.com/nortel/

The action, numbered 00CV0945, is pending in the United States District
Court for the Eastern District of New York, located at 225 Cadman Plaza
East, Brooklyn NY, 11201, against defendants Nortel, John Andrew Roth (CEO,
President and Director), William F. Conner (President of Nortel's
E-Business Solutions), Chahram Bolouri (President of Nortel's Global
Operations), and Frank Dunn (Chief Financial Officer). The Honorable
Raymond J. Dearie is the Judge presiding over the case.

The complaint charges that defendants violated Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,
by issuing a series of material misrepresentations to the market between
January 18, 2001 and February 15, 2001 concerning the demand for its
products. Specifically, the complaint alleges that defendants issued a
press release on January 18, 2001, (after the close of the securities
markets) announcing record operating results for the year 2000, and
especially strong fourth quarter of 2000 performance. In the press release,
defendants represented that Nortel's "global reach and industry leading
portfolio" would allow it to "continue to outpace the market and gain
profitable market share" even in the face of the "tightening of capital
within the telecom sector." The announcement sent its stock price soaring
10% in one day. The complaint alleges that the statement was materially
false and misleading when made because the Company had no basis for
reassuring the market that demand for its products would remain robust,
given the economic slowdown that was impacting companies in general and the
telecommunications sector -- upon which Nortel relies -- in particular. On
February 15, 2001, less than a month after issuing its market moving
representations, Nortel issued a press release announcing that it was
drastically lowering its guidance for Nortel's 2001 fiscal year because of
decreased demand for its products due, in large part, to spending cuts by
telecommunications companies. Following the announcement, Nortel's stock
price plunged by 34% in one day, from $29.75 per share to $19.50 per share
(erasing $ 33 billion of Nortel's market capitalization). Prior to the
disclosure of the true state of its business, individual defendants Bolouri
and Conner collectively sold over $7 million of their personally held
Nortel stock.

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


NORTHPOINT COMMUNICATIONS: Faces Securities Suit Filed in California
--------------------------------------------------------------------
A case was filed on February 16 against NorthPoint's officers and directors
by shareholders of NorthPoint on behalf of persons who acquired NorthPoint
Communications Group, Inc. (Nasdaq: NPNT) stock between August 8, 2000, and
November 29, 2000.

The case alleges that defendants violated various federal securities laws
by, among other things, materially misrepresenting the financial condition
of NorthPoint by knowingly and/or recklessly disseminating to the
investment community false and misleading financial results.

Plaintiffs seek to recover damages on behalf of class members and is
represented by the law firm of Weiss & Yourman.

Contact: Weiss & Yourman, 800-437-7918, info@wyca.com


OXFORD HEALTH: Judge Rejects Charges of Misrepresentation Vs. Milberg
---------------------------------------------------------------------
A federal judge has rejected charges that Milberg Weiss Bershad Hynes &
Lerach, the nation's most prominent law firm representing plaintiffs in
securities class-action cases, made misrepresentations to lay claim to
control of litigation against Oxford Health Plans Inc.

The case has highlighted friction among plaintiff firms over the role of
lead counsel in securities cases -- an assignment that includes the power
to decide how legal fees are distributed in successful litigation. It also
has focused attention on claims by defense lawyers that plaintiff firms
sometimes exaggerate the damage done to their clients.

The ruling by Judge Charles L. Brieant of the Federal District Court in
White Plains was an important victory for Milberg Weiss, based in New York,
which has been the subject of unflattering reports in the legal and
business press about its tactics.

Last fall, Fortune reported that one partner quit after complaining about
the business dealings of William Lerach, who pioneered the firm's
securities class-action practice. Legal publications reported last month
that Milberg Weiss was turning its attention to patent litigation, in part
because of growing competition for shareholder suits.

Melvyn I. Weiss, senior partner, said the firm had been subjected to "a
hatchet job" by the media and that supposed worries about competition were
"nonsense." "The number of cases out there, the size of the cases is just
exploding, and that means you need more and more lawyers to handle the
cases," he said. "It's not necessarily that competition is making inroads."
Mr. Weiss said that the firm had hired 25 new lawyers in the last 18 months
and made 17 new partners in the last two years. With a total of 170
lawyers, other firms' lawyers said, Milberg Weiss is almost certainly the
biggest plaintiff firm in the securities class-action arena.

In the Oxford case, Sullivan & Cromwell, Oxford's lawyers, argued that two
individual plaintiffs selected by Milberg Weiss were unfit to represent a
class of shareholders claiming to have been defrauded by the company. The
defense firm said the plaintiffs concealed the fact that one of the
proposed class representatives had turned a profit from trading Oxford
securities and that the other lost only $315,000, not the $2.3 million
originally claimed.

The plaintiffs "submitted to this court calculations of their purported
'losses' that bore no relationship to 'economic reality,' " Oxford's
lawyers said. The plaintiffs' lawsuit contends that officers and directors
of Oxford concealed material information about the company's revenue,
earnings and performance, ultimately causing its shares to plummet in late
1997 when accurate financial information became public.

Judge Brieant rejected the defense lawyers' objections, ruling that the two
Milberg Weiss clients had suffered losses.

Making similar objections, a rival New York plaintiff firm, Abbey Gardy,
sought to be named as lead counsel, but Judge Brieant denied that request.
A lawyer for Abbey Gardy did not return phone calls seeking comment.

Whatever the state of competition among the plaintiff bar, Milberg Weiss is
certainly busy. The firm filed 149, or 73 percent, of the 204 shareholder
class-action suits brought last year, according to Woodruff-Sawyer &
Company, an insurance broker specializing in liability policies for
corporate directors and officers. For the last five years, Milberg Weiss
has filed more than half of all shareholder class-action cases, according
to Woodruff-Sawyer, even as the number of cases filed has increased.

Statistics like that do not disclose anything about how much money the firm
is taking in, but they do explain why Milberg Weiss has been a lightning
rod for politicians' criticisms of plaintiff lawyers and the object of its
rivals' jealousy.

But class-action securities litigation has changed in recent years, largely
because of a 1995 law making the size of a plaintiff's purported loss --
not just being first to the courthouse -- the key to determining who would
be the lead plaintiff, and hence which firm would be lead counsel.

This has meant new competition from law firms with big institutional
clients that can easily show substantial losses from securities trading
because of their large holdings.

Before 1995, Milberg Weiss focused on filing suits for individual
plaintiffs. With the new law, defense lawyers say it sought to aggregate
claims from a number of plaintiffs, in an effort to show larger losses.

But courts have frowned on that approach, and now Milberg Weiss says that
it is seeking institutional clients, too.

Indeed, to the surprise of defense lawyers who figured big investors would
not want to be associated with the firm, it recently has picked up a few
such clients, Mr. Weiss said, including the California Public Employees
Retirement System, or Calpers.

In addition, Mr. Weiss said, to woo potential clients the firm has "set up
a team to educate the institutional investors as to who we are and what we
really do."

The firm is also taking on highly visible cases that do not involve
suspected securities fraud. In additionto the move into patent law, the
firm said, for example, that it was representing the Connecticut State
Medical Society in litigation against six large health maintenance
organization, charging that patients were harmed by denial of care. (The
New York Times, February 16, 2001)


PRESIDENTIAL ELECTION: Poll Shows Support Restoring Felons' Voting Right
------------------------------------------------------------------------
Most polled support overturning a law that prohibits convicted felons from
voting. The disenfranchisement law disproportionately affects blacks.

Most black voters in Florida say that the state should overturn the law
that prevents a half-million people of all races from casting a ballot
because they are convicted felons, a St. Petersburg Times poll shows.

The survey says that nine of 10 black voters in Florida think that felons
who pay their debt to society should automatically have their voting right
restored.

Florida is one of nine states that deny the right to vote to all convicted
felons who have served their time. Felons can have their rights restored by
appealing to the governor and Cabinet, often a lengthy process.

Support for a change to the state law is uniformly high among men and
women, Republicans and Democrats, and all age groups, according to a survey
of 600 African-Americans conducted by Washington-based Schroth and
Associates for the St. Petersburg Times.

Florida's law has been part of the state's political landscape since the
1800s and has spurred a federal class-action lawsuit against the governor
and spawned several legislative efforts to overturn it. The law
disproportionately impacts blacks, who tend to vote Democratic. Indeed,
some research suggests that ex-felons of all races lean toward the
Democratic Party. Some experts contend a change could have a big political
effect in a state that was shown during last year's presidential race to be
closely divided between Republicans and Democrats.

The Brennan Center for Justice at New York University School of Law
estimates that 500,000 felons in Florida are affected by the law. Of those,
139,000 are black people, according to the center.

Christopher Uggen, a University of Minnesota sociologist who has studied
the political consequences of felon disenfranchisement laws, contends that
Gore would have won Florida if felons would have been allowed to vote last
year. He also speculates that Florida's retired U.S. Sen. Connie Mack
probably would not have won his close 1988 election if felons had been
allowed to vote.

However, lawyers for Gov. Jeb Bush's office have argued that the number of
people who can't vote because of the law is much lower than the 500,000
cited by opponents.

State Rep. Chris Smith, D-Fort Lauderdale, has filed two bills that would
give felons their voting rights one year after they satisfy all sentences.
Four similar bills are filed in the Senate. All are assigned to several
committees - a sign that they might have tough going in the GOP-controlled
Legislature. But Smith said House Speaker Tom Feeney has floated a
compromise that would allow ex-felons to apply to a local judge for
clemency. Feeney was not available to comment.

House Majority Leader Mike Fasano said he was unaware of any compromise
offers, adding that he thought the state's present clemency process is
adequate. The Republican caucus has not taken a stance on the bills though,
Fasano said, and he expected vigorous committee discussion on them.

Whether the bills make it to the floor of the Republican-dominated body
depends on the committee chairs, he said. "I'd like to hear the debate,"
Fasano said. "The one thing I don't do is try to support or not support
legislation based on an overnight poll."

Gov. Bush's Select Election Task Force also has identified the issue as
critical and referred it to the Legislature for review and possible action.
The task force did not recommend specific changes, co-chairman Tad Foote
said, because it was too complicated an issue to resolve on a tight time
line.

"We felt like it was important, and we needed to say it was important,"
said Mark Pritchett of the Collins Center for Public Policy, chief of staff
to the task force. "We didn't want to look like we didn't want to deal with
it."

Smith said the Times' survey results confirm what he already knew. "It's
the right thing to do," he said. "The problem is that some politicians
don't think it's the political thing to do." Smith hopes the poll helps him
persuade his colleagues to change the law. With the attention paid to the
controversy over last November's election, Smith said: "If it's going to
happen, it's going to happen this year."

According to the survey results, 72 percent of African-American men and 63
percent of African-American women strongly agreed with the statement, "The
law should be changed so that convicted felons in Florida automatically
regain their right to vote at some specific time after after they've repaid
their debt to society."

Another 20 percent of African-American men and 26 percent of
African-American women said that they agreed somewhat.

Only those who said they voted for Gov. Bush were more likely to oppose the
change. About three in 10 from that group, which represented less than 5
percent of the total survey population, said they "somewhat" or "strongly"
disagreed with changing the law.

Strong support was highest in the Panhandle, 75 percent, and lowest in
southwest Florida, 43 percent. Two in three black Democrats and three in
five black Republicans strongly backed the idea.

The telephone survey was conducted Feb. 3-5. The poll of 600 registered
voters has a margin of error rate of plus or minus 4 percentage points.
(St. Petersburg Times, February 19, 2001)


SCHERING-PLOUGH: Milberg Weiss Announces Securities Suit Filed in NJ
--------------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a
class action lawsuit was filed on February 16, 2001, on behalf of
purchasers of the securities of Schering-Plough Corporation
("Schering-Plough" or the "Company") (NYSE: SGP) between July 25, 2000 and
February 15, 2001, inclusive. A copy of the complaint filed in this action
is available from the Court, or can be viewed on Milberg Weiss' website at:
http://www.milberg.com/scheringplough/

The action is pending in the United States District Court for the District
of New Jersey, located at Martin Luther King, Jr. Federal Building and U.S.
Courthouse, 50 Walnut Street, Newark, New Jersey 07101, against defendants
Schering-Plough, Richard J. Kogan (Chairman and Chief Executive Officer of
the Company) and Thomas H. Kelly (Vice President and Controller of the
Company). The docket number for the case has not yet been assigned nor has
a presiding judge been designated. A further notice to class members will
be published when this information becomes available.

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.
During the Class Period, Schering-Plough issued three earnings releases
highlighting the Company's success and continued growth. These releases
contained statements that were materially false and misleading because they
failed to disclose certain material facts, including, inter alia:

    (a) that the Company was experiencing manufacturing difficulties at its
plants in Union, N.J., Kenilworth, N.J., Manati, Puerto Rico and Las
Piedras, Puerto Rico, such that it was distracted from producing products
at the levels budgeted for the respective plants;

    (b) that the Company's manufacturing policies and procedures at its
plants in Union, N.J., Kenilworth, N.J., Manati, Puerto Rico and Las
Piedras, Puerto Rico, did not comply with applicable FDA regulations
regarding the manufacture of pharmaceutical products;

    (c) that the Company's manufacturing problems were more widespread and
severe than the previously-announced problems at the aerosol plant;

    (d) given the Company's manufacturing difficulties, the risk that the
FDA would force the Company to curtail its operations and delay FDA
approval of desloratadine so that the Company could correct the problems
was much greater than defendants had disclosed; and

    (e) that based on past practices and policies of the FDA and the nature
and extent of the identified deficiencies, it was certain that the FDA
would conduct a follow-up inspection of the New Jersey facilities.

The Complaint further alleges that defendants' failure to disclose the
extent of its exposure to its manufacturing problems, falsely implied that
there were no known impediments to receiving approval for its
most-important new drug, desloratadine, which was in the final stage of the
FDA's review process. Desloratadine, which is to be marketed as Clarinex,
is scheduled to be the successor drug to Claritin, once the patent for
Claritin expires in December 2002.

On February 15, 2001, Schering-Plough finally disclosed the extent of the
problems it was experiencing with its manufacturing practices and announced
that it would be reducing sales and earnings expectations for the first
quarter of 2001 and for the full-year 2001. Additionally, the Company
reported that the FDA was requiring that all of its manufacturing
deficiencies be resolved before the FDA would grant final approval of
desloratadine.

The response of the market to this announcement was immediate and punitive.
In after-hours trading, the price of Schering-Plough common stock sank to
$38.75 per share after closing earlier in the day at$48.32. On February 16,
2001, the day after the announcement, the stock opened up for trading at
$38.25.

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


SCHERING-PLOUGH: Wechsler Harwood Commences Securities Lawsuit
--------------------------------------------------------------
The law firm of Wechsler Harwood Halebian & Feffer LLP announced on
February 16 that they were retained by purchasers of the securities of
Schering-Plough Corporation, who bought the securities of Schering-Plough
between July 25, 2000 and February 15, 2001, inclusive (the "Class Period")
to commence an action against defendants for violation of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.

During the Class Period, Schering-Plough issued three earnings releases
highlighting the Company's success and continued growth. These releases
contained statements that were materially false and misleading because they
failed to disclose material facts, concerning manufacturing difficulties at
certain plants; and, that given the Company's manufacturing difficulties,
the FDA would force the Company to curtail its operations and delay FDA
approval of a significant and new product, desloratadine.

It is alleged that defendants' failure to disclose the extent of its
exposure to its manufacturing problems, falsely implied that there were no
known impediments to receiving approval for its most-important new drug,
desloratadine, which was in the final stage of the FDA's review process.
Desloratadine, which is to be marketed as Clarinex, is scheduled to be the
successor drug to Claritin, once the patent for Claritin expires in
December 2002.

On February 15, 2001, after the close of the market, Schering-Plough
finally disclosed the extent of the problems it was experiencing with its
manufacturing practices and announced that it would be reducing sales and
earnings expectations for the first quarter of 2001 and for the full-year
2001. Additionally, the Company reported that the FDA was requiring that
all of its manufacturing deficiencies be resolved before the FDA would
grant final approval of desloratadine.

The response of the market to this announcement was immediate and punitive.
In after-hours trading, the price of Schering-Plough common stock sank to
$38.75 per share after closing earlier in the day at$48.32. On February 16,
2001, the day after the announcement, the stock opened up for trading at
$38.25.

Contact: Wechsler Harwood Halebian & Feffer LLP, New York Patricia Guiteau,
Shareholder Relations Department 877/935-7400 (Toll Free) pguiteau@whhf.com



SCOTT HINKLEY: Businessman Accused of Bilking Investors to Plead Guilty
-----------------------------------------------------------------------
An Iowa businessman accused of bilking hundreds of Midwestern investors
before fleeing to a Caribbean island in a $1.3 million yacht was set to
plead guilty in U.S. District Court. Scott W. Hinkley Sr. of Oskaloosa was
to accept a plea agreement, the Des Moines Register reported.

Hinkley, 52, was scheduled to appear before U.S. Chief District Judge
Ronald Longstaff for the plea agreement, said Al Overbaugh, a spokesman for
the U.S. attorney's office. "We'll be interested to find out what the terms
are to the plea agreement," said Peter Cannon, a Des Moines lawyer
representing 300 investors in a civil class-action lawsuit against Hinkley.

With the criminal charges resolved, investors will be free to move forward
with their claim, although resolution could take years, Cannon said.

Overbaugh declined to disclose terms of the agreement or the reason
prosecutors opted to forgo a trial in April on 21 charges that include
money laundering and fraud.

Hinkley was arrested Oct. 20 on the Caribbean island of St. Maarten. The
former college fund-raiser was accused of cheating approximately 500
Midwestern investors in his real estate deals by looting his Iowa and
Missouri Rural Investment companies.

Hinkley promised exceptional returns for investors who put money into his
plans to buy and sell homes to the poor at a profit. He has been accused of
operating a classic Ponzi scheme, using money from new investors to pay
earlier ones without selling the homes, as promised.

A federal judge was also expected to approve a deal that would place money
from the sale of Hinkley's 65-foot yacht, the Penny Wise Too, with the West
Des Moines trustee overseeing Hinkley's assets until the civil case is
decided. The boat is being held in storage in Miami, Fla., with fees
running roughly $1,300 a month, Cannon said.

Radio equipment, $175,000 in cash, and jewels worth $28,000 that were found
aboard the boat also would be turned over to the trustee.

Under the agreement, Hinkley would have to concede that "funds used for the
purchase of the Penny Wise Too were funds misappropriated from investors"
of both companies, according to court documents. In return, the U.S.
attorney would drop a federal forfeiture charge against Hinkley.

Cannon has moved to seize the bulk of the Hinkleys' possessions, including
a $150,000 home, a Jaguar belonging to Hinkley's wife, Deanna, and
Hinkley's $ 67,000 Mercedes.

Before the hearings, the trustee appointed in the Hinkley case had
accumulated almost $500,000 in assets, including more than $200,000 from
the sale of Hinkley's Lamborghini Diablo.

A Mahaska County judge has frozen assets of Hinkley's wife until an October
hearing. Deanna Hinkley has appealed the judge's decision to the Iowa
Supreme Court, said her lawyer, John Sandre. "She has made some efforts to
work, but she's not really employable right now," Sandre said. "She's
basically living off the goodness of family and friends." (The Associated
Press State & Local Wire, February 16, 2001)


SOTHEBY'S HOLDINGS: NY Ct OKs $70M Settlement with Shareholders
---------------------------------------------------------------
A U.S. Federal district judge in New York approved a $70 million (76.6
million euro) settlement between Sotheby's Holdings Inc. and its
shareholders, who alleged that the giant   auction house misled investors
about its earnings.

Shareholders, in a class-action lawsuit filed last year, stated that
Sotheby's, based in Bloomfield Hills, Michigan, failed to disclose that its
revenue from commissions charged art   buyers and sellers, "a material
portion of its profit margins and its net income, were derived  from an
illegal antitrust conspiracy" with its rival Christie's International PLC.

In criminal and civil lawsuits, Sotheby's and Christie's International are
charged with colluding on commissions charged to its clients from 1993
through February 2000.

Although U.S. District Judge Denise Cote approved the settlement last
Friday, the judgment doesn't become final for 30 days, barring any
last-minute appeals. Sotheby's largest shareholder of Class A stock, Baron
Capital, didn't object to the settlement. (The Wall Street Journal,
February 19, 2001)


TOBACCO LITIGATION: Mealey's Reports Asbestos Cos. Sue For Reimbursement
------------------------------------------------------------------------
Reacting to the recent bankruptcies that have hit many of the major
defendants in the asbestos industry, seven second-tier asbestos-related
companies recently filed suits against several tobacco firms in Mississippi
state court in Fayette, Miss., Mealey Publications, a Lexis-Nexis company,
informed its readers.

The companies -- Kaiser Aluminum, Asbestos Claims Management Corp.,
Combustion Engineering, T&N, Uniroyal Holdings Inc., A.P. Green Industries,
and A.P. Green Services -- all seek reimbursement for the payment of past
asbestos claims and contend the tobacco companies knew of a dangerous
tobacco/asbestos synergy, yet failed to warn the public. The suits, also on
behalf of a number of individuals, seek compensatory and punitive damages
and attorneys' fees.

The complaints were filed in Mississippi's Jefferson County Circuit Court
in December and name defendants that include R.J. Reynolds, Philip Morris
and Brown & Williamson. Other defendants include RJR Nabisco Inc.,
British-American Tobacco Co. Ltd., Liggett Group Inc., Lorillard Tobacco
Co., Batus Inc., BAT Industries PLC, The Brooke Group Ltd., American Brands
Inc., Loews Corp., The Council for Tobacco Research - U.S.A. Inc., Tobacco
Institute Research Committee, The Tobacco Institute, Corr Williams Tobacco
Co., Jackson Cigar & Tobacco Co., Capitol Tobacco & Specialty Co. Inc., New
Deal Supermarkets Inc. and J.R. Supermarket.

                             Concealment

Specifically, the complaints contend that the companies have received
thousands of claims from people who allege that they have suffered personal
injuries as a result of exposure to asbestos-containing products. The
complaints allege that the overwhelming majority of these claimants were
also smokers and that the injuries were caused, in whole or in part, by
tobacco products.

"The Tobacco Defendants knew that their tobacco products, specifically
including but not limited to cigarettes, were especially harmful to smokers
who were also occupationally exposed to asbestos. Individually and in
concert with each other, the Tobacco Defendants concealed their knowledge
of the special risks of tobacco products to such workers and distorted the
published scientific literature and the public debate about the true nature
of the health risks to asbestos workers who smoked," the complaints allege.

The asbestos companies argue that the tobacco defendants intended and
caused asbestos workers who developed lung diseases to seek compensation
from the asbestos defendants. The suits also allege that the tobacco
defendants unfairly shifted their civil liability to the asbestos companies
and that the tobacco defendants "carefully monitored the asbestos
litigation, including through the Committee of Counsel, a group of in-house
lawyers employed by the Tobacco Defendants."

                   Manipulation, Misinformation

The suits further contend that the tobacco defendants manipulated the
nicotine content of their cigarettes, engaged in targeted advertising to
ethnic minorities and blue-collar workers, thwarted attempts to design
safer cigarettes and spread misinformation to the public about the hazards
of smoking.

Claims asserted include fraud, conspiracy to defraud, fraudulent
concealment, misrepresentation, unjust enrichment and restitution, and
injurious combination. The companies seek equitable relief in the form of
restitution for unjust enrichment, unspecified compensatory damages, a
declaratory judgment determining the relative contribution of smoking to
disease and occupational exposure to asbestos and declaring the
responsibility of tobacco defendants to compensate the companies,
unspecified punitive and exemplary damages and attorneys' fees.

                       Contribution Sought

Filed prior to the mistrial earlier this month in the Johns Manville
Trust's case against the tobacco industry in New York (Robert A. Falise v.
The American Tobacco Co.), the first asbestos contribution case against
tobacco to make it to the trial phase, the complaints follow a recent
pattern of companies and people looking to the tobacco industry to help
contribute to the costs of asbestos claims.

Another case alleging the concealment of synergy against many of the same
defendants is currently pending in the Jefferson County court (Ezell
Thomas, et al. v. R.J. Reynolds Tobacco Co.). That case, brought by Owens
Corning and 22 individuals, is expected to be heard in June. In 1998, Owens
Corning and Fibreboard Corp. brought similar lawsuits against the tobacco
industry in California (Fibreboard Corp. et al. v. The American Tobacco
Co., et al.).

A source told Mealey Publications that cases like these against tobacco
companies have been expected following the recent onslaught of bankruptcy
filings by some of the larger names in asbestos litigation. The smaller
defendants are looking for any contribution to help handle their asbestos
liability without filing for bankruptcy reorganization, the source said.

The cases filed in December are Combustion Engineering Inc., et al. v. R.J.
Reynolds Tobacco Co., Kaiser Aluminum, et al. v. R.J. Reynolds Tobacco Co.,
et al., Asbestos Claims Management Corp., et al. v. R.J. Reynolds Tobacco
Co., T&N, et al. v. R.J. Reynolds Tobacco Co., Uniroyal Holdings, et al. v.
R.J. Reynolds Tobacco Co., A.P. Green Ind., et al. v. R.J. Reynolds Tobacco
Co. and A.P. Green Services, et al. v. Combustion Engineering.

The complaints were filed by Richard Forman, Walter G. Watkins Jr. and T.
Gerry Bufkin of Forman, Perry, Watkins, Krutz & Tardy in Jackson, Miss.,
and T. Mark Sledge of Grenfell, Sledge & Stevens in Jackson, Miss.

Full coverage and copies of the complaints will be in the Feb. 23 issue. In
the meantime, the Combustion Engineering complaint is available at
www.mealeysonline.com. Document 01-010223-101.

For a sample of Mealey's Litigation Reports: Asbestos or Tobacco reports,
call 1-800-MEALEYS or 610-768-7800 or email at news@mealeys.com or
www.mealeys.com for information.

In addition to asbestos and tobacco, Mealey's publishes litigation
newsletters on lead paint; Propulsid; mold litigation; diabetes drugs
(Rezulin); nursing home litigation; MTBE; attorney fees; construction
defect litigation; cyberlaw and technology insurance; drugs and medical
devices, insurance coverage; bad faith; class actions; Superfund &
pollution; toxic torts; Fen-Phen and diet drugs; insurance fraud, insurance
insolvency; latex, patents, trademarks, copyright (Nimmer Report) and
intellectual property; managed care; expert admissibility (Daubert), PPA
and Ephedra litigation and international arbitration.

Upcoming Mealey's conferences include a conference Asbestos Bankruptcy,
June 18-19 in Philadelphia. Conferences in March include: PPA/Ephedra
(12-13) in Philadelphia; Lead Paint (26-27) in Amelia Island, FL. For a
complete list, see www.mealeys.com or email seminars@mealeys.com.


TOBACCO LITIGATION: W.Va. Judge Will Issue Critical Ruling On Addiction
-----------------------------------------------------------------------
A West Virginia judge controlling the fate of a landmark class-action
lawsuit that could force cigarette makers to provide free, annual medical
tests for healthy smokers wants more time to consider what role addiction
will play.

Ohio County Circuit Judge Arthur Recht, who declared a mistrial in the case
last month, must decide whether to retry it as a lawsuit covering some
250,000 West Virginians or strip it of class-action status.

He said he will issue a ruling in writing, but he gave no specific time
line.

In arguments that lasted about two hours, R.J. Reynolds attorney Jeff Furr
and Pittsburgh smokers' attorney David Rodes offered the judge dueling
views on whether addiction compromises the cohesion that is required in
class-action litigation.

The smokers say addiction is the result of a design defect in cigarettes,
something over which smokers have no control. They concede, however, that
not all smokers are addicted - a fact that the tobacco companies say proves
that individual behaviors and reasons for smoking are relevant.

The lawsuit, which targets R.J. Reynolds, Philip Morris, Lorillard, Liggett
and Brown & Williamson, is the first of its kind in the country to make it
to trial.

A similar lawsuit is set to be tried in Louisiana in November, but Furr
said that case offers no guidance on the questions of addiction. "Addiction
is fully in that case without any restrictions," he said.

Eleven other states have denied class-action status to medical monitoring
lawsuits against the tobacco industry, citing addiction as a complicating
factor that shows there are differences among the members of the class.

In West Virginia, the class includes people who have smoked the equivalent
of a pack a day for at least five years without developing any
tobacco-related illnesses. The smokers want the tobacco industry to fund
annual medical tests that they believe would help them get earlier
diagnosis and treatment for lung cancer and emphysema.

The cigarette makers argue the tests the smokers want are unproven at
changing anyone's outcome, and that the best thing a smoker can do to
remain healthy is quit.

At the first trial, Recht had banned any reference to nicotine, nicotine
delivery, habit or any other euphemism for addiction, ruling that medical
monitoring litigation requires only "proof of significant exposure" to a
hazardous substance.

The smokers had agreed to the restriction in exchange for class
certification, but every witness struggled with the limitation and one
ultimately slipped. Recht declared the mistrial after concluding addiction
and smoking could not be separated.

He now must decide how extensively addiction can be discussed during the
trial, which is being restructured as a product liability case.

The tobacco industry ignored its promise to care for the health of its
customers by developing a safer cigarette, instead focusing only on
designing a more effective way to deliver nicotine into the smoker's body,
Rodes argued.

Whether a person quits is irrelevant because they are still more likely
than nonsmokers to develop lung diseases, he said. In countering the
tobacco companies' defense, his team will not argue that people are unable
to quit, Rodes promised.

But Furr was skeptical of that claim, calling it unworkable and
unenforceable, and predicting it would create conundrums similar to those
in the first trial.

"No court ever, anywhere, has suggested that addiction propensity evidence
could somehow be cleaved from addiction behavior and addiction status in a
way that is meaningful," he said. "It's a fiction to suggest the evidence
can be segregated that way."

Even if it could be done, Furr said it defeats the smokers' case by failing
to establish a cause-and-effect relationship between addiction and
potential injury. "The plaintiffs are attempting to rule causation out of
product liability in a way no other court has," Furr said. "They're not
talking about product design; they're talking about the consequences the
product has on smokers' behaviors," he said. "The plaintiffs want the jury
to infer that the members of the class are addicted and cannot quit ... and
deprive the defendants of the opportunity to prove that some members are
not addicted."

Recht has several options before him: He could allow addiction to be fully
argued on both sides or restrict the testimony on that issue, but allow the
case to continue. He could decertify the class, essentially breaking it
into some 250,000 individual cases. He also could break the class into two
parts - addicted smokers and unaddicted smokers - and try them separately.
(The Associated Press State & Local Wire, February 19, 2001)


VIRGINIA: State Shows Regret over Eugenics; Lawsuit Thrown out in 1984
----------------------------------------------------------------------
Virginia is saying sorry, sort of, to the thousands who were sterilised by
the state over several decades in the last century because they were deemed
"feebleminded" or otherwise unworthy of the white race.

Stopping short of a full apology, the Virginia Senate expressed "profound
regret" for the state's policy of eugenics, once considered a science and
espoused by Adolph Hitler, which advocated "improvement" of the white gene
pool by selective breeding.

Under laws passed in 1924 and repealed only in 1979, Virginia sterilised
8,000 of its citizens. The victims were selected if they displayed any
shortcoming considered hereditary, such as mental illness, retardation,
epilepsy, criminal behaviour or alcoholism.

Many were committed to the wards of the Virginia Colony for Epileptics and
Feebleminded in Lynchburg. Raymond Hudlow, a decorated Second World War
veteran and a former inmate, said he was sterilised at the colony when he
was16, in 1942.

"They treated us just like hogs, like we had no feelings," he said. He was
sent to the colony after his father told the welfare officer his son had
repeatedly run away from home and was beyond his control. Nothing was said
about his father beating him often.

"They just came and got me before I woke up one morning. They wheeled me
and throwed me up on the operating table," he added. "The only way I found
out (what had happened), was when an employee on Ward 7 told me I wouldn't
be able to father children."

Pressure on the state assembly to say something about the sterilisation
laws built after historians and reporters drew clear links between the
Virginia laws and the enthusiasm shown for eugenics by Nazi Germany. The
research also helped to illustrate the extent to which the so-called
science was nothing more than another form of white supremacy in a very
conservative state.

A further 29 US states adopted similar laws and about 60,000 sterilisations
were done. Virginia did the most, and California was second.

Efforts to get the Assembly to apologise were abandoned early because
sponsors feared some lawmakers would resist. Even the expression of regret
drew opposition. Senator Warren Barry, a Republican, referred to a "trend
in this country to try to recreate history. Now we go back and stir the pot
on history, and take the most unfortunate chapter in our history and try to
relive them for no real reason".

But Patricia Ticer, a Democrat, condemned the eugenics movement as "genetic
engineering at its very worst. In order not to repeat these past mistakes,
it is necessary and important to acknowledge them and to express regret".

A class action suit by victims was thrown out by a judge in 1984, based on
a ruling on a 1927 US Supreme Court judgment backing Virginia's eugenics
laws. Mr Hudlow, now 75, is still haunted. "I remember this just as it was
yesterday," he said. "It has always been in my mind. It has never left me."
(The Independent (London), February 16, 2001)


WORLDCOM INC: Intermedia Deal Sweetened for Digex Shareholders
--------------------------------------------------------------
The new arrangement seeks to appease angry Digex shareholders, who
complained they had been shortchanged.

Shareholders of Intermedia Communications Inc. are on the short end of a
renegotiated deal to sell the Tampa telecommunications company to WorldCom
Inc.

The companies confirmed they changed terms of their merger to settle
litigation by shareholders in Digex Inc., an Intermedia-controlled
subsidiary.

The revised deal sweetens the pot for Digex shareholders and their
attorneys, who will receive about $ 165-million in WorldCom stock in
addition to the stock they will receive under the original deal. Another $
15-million in cash will be set aside to cover expenses incurred by Digex
directors and administrative costs.

Paying the tab will be the rest of Intermedia's shareholders. The agreement
calls for cutting the exchange ratio to one WorldCom share for each share
of Intermedia from the original 1.1872 WorldCom shares per Intermedia
share.

Intermedia chief executive David Ruberg said the deal is not only the best
possible for Intermedia and Digex but the best hope that Intermedia will be
passed on to a new owner, keeping much of its work force in the Tampa Bay
area intact.

"Not only did we do what was right for our stockholders and bondholders,
but we did what was right for our employers and customers," Ruberg said in
an interview with the St. Petersburg Times. "As a result, the town, the
community, will benefit."

Intermedia shareholders will have a chance to decide for themselves. A vote
on the revised pact is expected to be held within 50 days.

It is still unclear what will happen to Intermedia's 4,500 employees,
including 1,600 in Tampa, or to its leased headquarters buildings. WorldCom
plans to retain Digex and, under a deal with regulators, sell the rest of
Intermedia to another buyer within six months after the deal closes.

The news of the revised deal was not made official until after the close of
market but early reports from CNBC and others spurred a rally in Intermedia
shares. The stock rose as much as $ 2.88 a share, or 20 percent, before
closing at $ 15.31, up $ 1.19, or 8.4 percent.

WorldCom shares closed at $ 16.19, down $ 1.31 or 7.5 percent.

WorldCom, the country's second-largest telecommunications company, was
drawn into the original deal last September not by Intermedia's
telecommunications core but by its controlling stake in Digex, a rapidly
growing Maryland company that manages Web sites for Fortune 2,000
companies.

"I believe the WorldCom-Digex business combination will be a powerful one
in the Web hosting marketplace," Ruberg said.

WorldCom initially said it would pay $ 39 a share for Intermedia's stock
and assume $ 2.9-billion in debt and preferred shares. But a less generous
payment formula was triggered after both companies' stocks fell
dramatically.

Over the past several months, Intermedia shareholders and federal
regulators approved the deal.

But Digex shareholders filed a $ 2.5-billion class-action suit. They
alleged Intermedia and Digex directors breached their fiduciary duties by
agreeing to the deal because Digex would have netted far more if it were
sold separately.

In December, a Delaware judge ruled Intermedia and WorldCom could proceed
with their merger but pointedly warned they might have to pay damages to
Digex shareholders. As part of the agreement, attorneys for Digex
shareholders agreed to settle any existing litigation.

Ruberg said he felt Intermedia did not have the time to fight for
vindication in the courts. "In the marketplace we're in with the Internet,
where speed is important and slowness is an enemy, it was important for us
to consummate this deal."

Though the new pact arguably shortchanges Intermedia shareholders, they may
not have a better option, analysts said. "On its own, Intermedia might not
even survive, so whatever they can work out with WorldCom will probably be
the best alternative," said Tom Burnett of Merger Insight, a New York
investment research firm.

The company plans to circulate an opinion from Intermedia's financial
adviser, Bear, Stearns & Co., which says the amended exchange ratio is fair
to Intermedia shareholders.

If the deal collapses, Intermedia runs the risk of running out of money.

But Ruberg said the company can weather a delay since WorldCom has agreed
to provide both Intermedia and Digex with about $ 250-million per quarter
in interim financing until the deal closes.

Since the revised deal does not have to be approved again by regulators,
WorldCom and Intermedia are hopeful of closing sometime in the second
quarter of the year. (St. Petersburg Times, February 16, 2001)


XEROX CORPORATION: Berman DeValerio Files Securities Lawsuit in CT
------------------------------------------------------------------
The law firm of Berman DeValerio & Pease LLP filed a lawsuit on February 15
that charges Xerox Corporation (NYSE: XRX) with defrauding shareholders by
illegally pumping up the company's stock price.

The class action was filed in the United States District Court for the
District of Connecticut. The complaint seeks damages for violations of
federal securities laws on behalf of all investors who bought Xerox stock
between February 15, 1998 and February 6, 2001 (the "Class Period").

The complaint says that Xerox and several of its top officers reported
false financial results during the class period, failing to adhere to the
standard accounting practices the company claimed to follow. Among other
things, Xerox is charged with:

--Improperly recognizing revenues from its leasing operations by booking
up front those lease payments attributable to future supplies and
services.

--Boosting short-term results by overstating the value of future payments
from leases originated in developing countries.

--Failing to write off mounting bad debts and improperly classifying
transactions in its Mexico operations, which resulted in $ 119 million in
charges in the second and third quarters of fiscal 2000.

Xerox issued a statement about the "irregularities" in Mexico on June 16,
2000, falsely portraying them as an aberration perpetrated by rogue
executives. But on February 6, 2001, a Wall Street Journal article reported
allegations of accounting fraud that went far beyond Mexico. Meanwhile,
Xerox shares fell from as high as $ 124 a share during the Class Period to
just $ 4.43 a share, resulting in hundreds of millions of dollars in losses
to Class members. The company's accounting practices are now the subject of
a Securities and Exchange Commission (SEC) investigation.

Contact: Sara Davis, Esq. of Berman DeValerio & Pease LLP, 800-516-9926,
bdplaw@bermanesq.com


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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
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Washington, DC. Theresa Cheuk, Managing Editor.

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

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