/raid1/www/Hosts/bankrupt/CAR_Public/010409.MBX               C L A S S   A C T I O N   R E P O R T E R

               Monday, April 9, 2001, Vol. 3, No. 69


AUTO INSURANCE: IL Appellate Court Upholds $1.05B Verdict Vs State Farm
BANK ONE: $45M Offer to Shareholders Answers 2nd Hit re First USA Unit
BUY COM: Faces CA Suits Filed in 2000 over Consumer Privacy
BUY COM: Settles Consumers' Lawsuit Filed in 1999 in CA
CENDANT CORP: Two Plead Not Guilty to Wire Fraud and Conspiracy

COUNCIL: Parents Lose Suit for Further NJ Pro Bono Lawyer Assignments
DAVID DEBAENE: President of Open Door Online Faces Securities Suit in NJ
E STAMP: Intends to Vigorously Denfend Consumer Lawsuit in NY
HOLOCAUST VICTIMS: Polish P.M. Urged Germany for Interim Solution
HOLOCAUST VICTIMS: Schroeder Rules Out Payments Before US Settlement

HOLOCAUST VICTIMS: US Judge To Present Lawsuit By April 13
IBP, INC: US Merger May Affect Molson's Sale of Montreal Canadiens
INMATES LITIGATION: Suit Vs CA over Medical Needs Says Lives Are At Risk
LERNOUT & HAUSPICE: KPMG Charges Former L&H Officials Of Blocking Audit
PACER LOGISTICS: Both Sides to Appeal in CA Suit over Business Practices

PINNACLE HOLDINGS: Sued for Securities Fraud, Schiffrin & Barroway Says
ROCK HILL: Countersues 6 Investors Who Claimed Scam Investment Program
ST. CHARLES: Mold To Keep School Shut for Testing and Remediation
SUN PIPE, SUNOCO: Sued in PA over Luzerne County Pipeline Rupture
TOBACCO LITIGATION: Ex-Flight Attendant Loses Suit in Miami

TOXIC WASTE: Lawsuit Blames New York Landfills For Health Woes
U OF ILLINOIS: Can't Stifle Anti-Illiniwek Talk with Potential Athletes
U-M: Court Rules Law School Can Resume Admitting New Law Students
U.S. BUREAU: Ruling Bars Delivery of Water to Farmers at CA-OR Border

* The American Banker Publishes Article re Overdraft Coverage Preys


AUTO INSURANCE: IL Appellate Court Upholds $1.05B Verdict Vs State Farm
In a class action lawsuit pitting 4.7 million auto insurance
policyholders across the United States against the nation's largest
insurer, State Farm Mutual Automobile Insurance Company, the Illinois
Court of Appeal, in a unanimous opinion, upheld a $1.05 billion award for
consumer fraud and breach of contract involving State Farm's practice of
specifying imitation crash parts in auto repairs.

Upholding the verdict issued in October of 1999 on behalf of the class,
the court's 40-page opinion found no error in either the trial of the
action as a class action or the conduct of the trial. The court, however,
reduced the original $1.18 billion judgment entered by the trial court by
$130 million to subtract an overlapping award on the two separate counts.
The total remaining award of $1,050,000,000 is one of the largest
verdicts every upheld on appeal. The award is on average approximately
$223.40 for each of the 4.7 million members of the class.

Elizabeth J. Cabraser of Lieff, Cabraser, Heimann & Bernstein, LLP, one
of the trial and appellate counsel for the class, noted that "the appeals
court opinion was a victory for consumers who are unable to obtain
meaningful relief from large corporations on their own and a vindication
of the class action device."

The team of attorneys involved in the appeal included lead trial counsel
Don Barrett of the Barrett Law Offices of Lexington, Mississippi; and Tom
Thrash of Little Rock, Arkansas. Plaintiff counsel at trial, and on
appeal, also included Patricia Littleton of Marion, Illinois; Elizabeth
Cabraser, Morris A. Ratner and Scott P. Nealey of Lieff, Cabraser,
Heimann & Bernstein, LLP of San Francisco, California; Michael Hyman,
William H. London and Melinda J. Morales of Much, Shelist, Freed,
Denenberg, Ament & Rubenstein of Chicago, Illinois, and Ted Kionka of
Carbondale, Illinois.

If any further appeals by State Farm are unsuccessful, consumers will be
notified by the Court of the claims process by which the monetary award
will be distributed, and allowed to participate in that process.

The affected members of the class who can share in the consumer fraud
verdict are U.S. residents (except people residing in Arkansas and
Tennessee) who were insured by a vehicle casualty insurance policy issued
by State Farm and who made a claim for vehicle repairs under their policy
and had non-factory-authorized and/or non-OEM "crash parts" installed on
their vehicles, or received monetary compensation determined in relation
to the cost of such parts. "Crash parts" are vehicle components typically
repaired or replaced as a result of crash damage, rather than as a result
of normal vehicle usage. Excluded from sharing in the award are employees
of State Farm, its officers, its directors, its subsidiaries, or its
affiliates, and persons who resided in California when these policies
were issued/executed prior to September 26, 1996. The class period for
purposes of the consumer fraud award starts on July 28, 1994 and ends on
February 23, 1998. Individuals who received estimates containing non-OEM
crash parts during this period of time will be eligible to participate in
any eventual award. The Avery team will follow up to attempt to obtain
damages for more recent policyholders affected by State Farm's fraudulent
practices. Members of the class need take no action at this time, as no
claim process will be established until any appeal in State Farm has been

Contact Lieff, Cabraser, Heimann & Bernstein, LLP Plaintiffs' Class
Counsel Press Only: Elizabeth Cabraser, 415/956-1000 Morris A. Ratner,
415/956-1000 Scott P. Nealey, 415/956-1000 http://www.lchb.com

BANK ONE: $45M Offer to Shareholders Answers 2nd Hit re First USA Unit
Bank One Corp.'s $45 million offer to settle a shareholder class action
is the second such hit the bank has taken recently in connection with its
First USA card unit.

In December the company agreed to pay $40 million to settle a class
action over card fee policies. The more recent settlement offer, which
came to light recently in a letter to Bank One shareholders and must
still be approved by a judge, was made in response to a lawsuit filed in
December 1999 that charged some former officers and directors of Bank One
and First USA with making "false and misleading statements" about
financial performance -- statements that artificially inflated the stock
price, the lawsuit further charges.

If approved at a June 1 hearing, the settlement offer will be paid to
shareholders who bought Bank One shares between Oct. 22, 1998, and Nov.
10, 1999. About 396 million shares were purchased in that period,
according to the plaintiffs. The proposed settlement will come to 11
cents per share before the deduction of attorney's fees and expenses. In
their suit, the plaintiffs had asked for $148 million, or 37 cents a

Oct. 22, 1998, was the date of the first earnings report and telephone
briefing for analysts after the merger of Bank One and First Chicago NBD.
John McCoy, who was chief executive officer of Bank One at the time,
conducted the proceedings.

Nov. 10, 1999, was the date of a second earnings warning released by Bank
One as its financial performance suffered.

The class action, which alleges that the company's financial statements
did not comply with Generally Accepted Accounting Principles, grew out of
a lawsuit first filed Dec. 14, 1999, in U.S. District Court for the
Northern District of Illinois, Eastern Division. In January and February
2000, a number of similar complaints were also filed in the court, each
seeking class action status. On Feb. 18, 2000, the court consolidated the

Bank One and First USA filed a joint motion to dismiss the complaint,
which was denied. In its offer to settle, Bank One denied the allegations
of the complaint and did not acknowledge "fault, wrongdoing, or

Bank One Corp. spokesman Tom Kelly said the proposed settlement would
have no impact on earnings. He declined to comment on the litigation.
(The American Banker, April 6, 2001)

BUY COM: Faces CA Suits Filed in 2000 over Consumer Privacy
On March 13, 2000 a class action suit was filed against the company in
the U.S. District Court for the Central District of California alleging
that the company collects, uses and discloses personally identifiable
customer information to its third party advertising server and other
advertisers without first informing customers or seeking their permission
in violation of several federal statutes. The complaint seeks damages of
up to $10,000 per class member per violation, actual and punitive
damages, restitution, attorneys' fees and costs plus injunctive and other
equitable relief.

On April 7, 2000 a companion lawsuit was filed in the Superior Court of
the State of California, County of Orange alleging violations of state
statutory and common law based upon the same facts and federal causes of
action as alleged in the federal class action. The state complaint seeks
statutory damages of up to $5,000 per class member per violation, plus
actual and punitive damages or restitution, attorneys' fees and costs and
injunctive and other equitable relief.

On April 25, 2000 a third class action suit was filed in the United
States District Court for the Central District of California alleging
violation of the same federal statutes as those in the federal class
action filed on March 13, 2000. As with the first two class actions, the
complaint alleges that the company collects, uses and discloses
personally identifiable information of consumers without first informing
them or obtaining their consent. The complaint seeks unspecified
statutory damages, compensatory damages, punitive damages, attorneys'
fees and costs, plus declaratory, injunctive and other equitable relief,
including disgorgement of all profits and restitution of all monies
acquired by means of any act or practice declared to be unlawful.

The classes have not yet been certified in any of these actions and such
actions are in their early stages.

BUY COM: Settles Consumers' Lawsuit Filed in 1999 in CA
In March 1999, a class action suit was filed against the company in the
Orange County, California Superior Court alleging breach of contract,
fraud and violation of consumer protection laws based on an error in the
pricing of a computer monitor that was offered for sale on our Web site.
Shortly thereafter in March 1999, a similar class action case was filed
in Camden County, New Jersey. Both actions claimed that Buy Com Inc.
intentionally mispriced the monitors as a scheme to cause more people to
visit its site. Plaintiffs also claimed that Buy Com attempted the same
scheme with other products. The plaintiffs were seeking compensatory and
punitive damages in addition to injunctive relief. Neither action set
forth the amount of damages sought by the plaintiffs.

In September 2000, the company received preliminary approval from the
Orange County Superior Court to settle both lawsuits for an aggregate of
$575,000. Final approval of the settlement was granted by the Orange
County Superior Court in December 2000.

CENDANT CORP: Two Plead Not Guilty to Wire Fraud and Conspiracy
   Newark, N.J. (AP) -- Two former executives pleaded not guilty April 5
to charges they falsely inflated the value of a Connecticut company
involved in the merger that created Cendant Corp. One of the defendants
sought to have a new judge chosen for the case.

Cendant's disclosure three years ago of the accounting fraud led to a
one-day, $14 billion stock meltdown and triggered a huge class-action
lawsuit by aggrieved shareholders.

Walter Forbes, former chairman of Cendant, and E. Kirk Shelton, a former
executive vice president, both face one conspiracy charge and one count
of wire fraud, from a Feb. 28 indictment, as previously reported in the

COUNCIL: Parents Lose Suit for Further NJ Pro Bono Lawyer Assignments
Most lawyers in New Jersey can breathe a collective sigh of relief -- at
least for now.

A federal judge dismissed Pasqua v. Council, a class-action suit that,
had it prevailed, might have flooded lawyers here with pro bono
assignments for hundreds of deadbeat parents. U.S. District Judge Garrett
E. Brown Jr. in essence said that because there was not ample evidence
the state denied counsel to parents accused of reneging on child support
payments, he found no need to order state courts to supply lawyers to
indigents facing jail time. "New Jersey law appears amenable to
adjudicating plaintiffs' claims," Brown said in a recent memorandum

Still, the issue isn't going away.

David Perry Davis, the Princeton lawyer representing the plaintiffs,
maintains New Jersey violates the 14th Amendment rights of indigent
deadbeat parents sent to jail without being afforded a lawyer. He plans
to appeal on grounds the judge's cited cases don't apply to the Pasqua

In addition to asking the judge to release jailed indigents in the class,
Davis also had petitioned the judge to order New Jersey courts to begin
appointing counsel whenever an indigent defendant faces incarceration.

If Brown had so ruled, the number of court-ordered pro bono assignments
might have dramatically increased.

Although it's unknown how many of the annual 50,000 deadbeat parent
enforcement cases involve defendants unable to afford a lawyer, Davis
said at any given point there are 20 to 80 people -- who never had the
advice of an attorney -- held in county jails for failing to make timely
child support payments.

He maintained the ruling does not explain why the name plaintiffs -- Anne
Pasqua, Ray Tolbert and Michael Anthony -- were not offered lawyers. He
said he is preparing to file a reconsideration motion with Brown and, if
that is unsuccessful, he will appeal to the 3rd U.S. Circuit Court of
Appeals. "Personally, I believe the decision is illustrative of a federal
judiciary that has been progressively closing the doors of the federal
courthouse to civil rights claims over the past 25 years," Davis said.

The judge, however, noted the plaintiffs did not produce evidence that
New Jersey denied them representation. "There is no evidence that the New
Jersey courts would not fairly provide an opportunity for (alleged
deadbeat parents) to raise and adjudicate all of their constitutional
claims, both state and federal," in the course of proceedings, Brown

Brown cited Younger v. Harris, a 1971 U.S. Supreme Court case that
"espouses a strong federal policy against federal court interference with
pending state judicial proceedings absent extraordinary circumstances."

Federal interference is appropriate, Brown said, if the plaintiff can
establish that either the state proceedings are conducted in bad faith or
to harass, or some other extraordinary circumstances exist, such as
proceeding under a flagrantly unconstitutional statute.

Davis said his appeal, in part, will claim the Younger decision applies
only to ongoing cases, not those in which defendants already are jailed.

Under a procedure established after the 1992 New Jersey Supreme Court
decision in Madden v. Delran, private attorneys must represent certain
clients not covered under the public defender mandate. To date, that has
not included the representation of indigent defendants who owe
court-ordered child support.

New Jersey is the only state with mandatory pro bono and lawyers here
have grumbled about it for years.

In filing Pasqua -- and naming as defendants everyone from Chief Justice
Deborah T. Poritz to Judge Richard J. Williams, director of the
Administrative Office of the Courts -- Davis emphasized the suit is not
aimed at letting deadbeats off the hook. "It's about making sure the
system works," he said. "The constitution has to be enforced, and child
support has to be enforced and they are not mutually exclusive. We can do

Currently, it appears indigent deadbeat parents fall through the cracks.
The public defender usually doesn't get involved in child support cases
because they are civil matters. And Legal Services offices do not
represent deadbeat parents because they generally serve parents owed the
support payments.

Deputy Attorney General Barbara J. Stoop moved to dismiss the case,
arguing the defendants -- including Mercer County Judges Gerald J.
Council and F. Lee Forrester -- are covered by judicial immunity.

In Pasqua, the primary plaintiff is Anne Pasqua, who shared custody of
her two sons with her ex-husband. But she says she had psychiatric
problems that worsened and two years ago she lost custody. She was
ordered to pay $ 160 a week in child support, Davis said. After she fell
behind, she was arrested May 15. When Pasqua appeared before Forrester,
the judge told her she had to come up with $ 3,400 as a release amount.
Pasqua alleges nothing was said about an attorney. When she couldn't pay,
the judge sent her to jail. She was released two weeks later without
having made any payments. The Pasqua suit names the two other plaintiffs
and asserts it represents "all persons similarly situated." (New Jersey
Lawyer, March 26, 2001)

DAVID DEBAENE: President of Open Door Online Faces Securities Suit in NJ
In the Superior Court of New Jersey, Bergen County, Camille M. Barbone
and Tom Carley, individually and as a class and derivatively on behalf of
the corporation filed an amended complaint and expanded their lawsuit
against David DeBaene as President, CEO/Director, the officers and the
Directors of Open Door Online, Inc.

The amended complaint names the following defendants: David DeBaene,
Norman Birmingham, individually and as a director and CFO of Open Door
Online, Randolph E. Biemel, individually, Peter Cohen, individually,
Edmond Lonergan, individually and as President of Corporate Architects,
Jennifer Hanson, individually and as president of Mission Bay
Consultants, Mission Bay Consultants, a Florida based business, Richard
Greene, attorney at law in the State of Florida and counsel to Open Door
Online, Steev Panneton, individually and as a director of Open Door
Online, Corporate Architects, an Arizona corporation and Renee Garcia,
individually and as a principal of Florida Atlantic Stock Transfer and
Florida Atlantic Stock Transfer, a Florida corporation.

The suit alleges that DeBaene and the Board of Directors have committed
fraud by substituting, without consent or authorization, securities in
lieu of payment on account of promissory notes given by ODOL in exchange
for loans from investors. It also alleges that the acts of DeBaene and
his co-defendants constitute crimes in the nature of "racketeering"
including, but not limited to, theft, forgery, fraudulent practices and
fraud in the offering, sale or purchase of securities. Further
allegations describe misrepresentations made by DeBaene and Biemel,
through Mission Bay, when raising capital for ODOL whereby they solicited
loans for ODOL through the guise of no risk, high interest promissory
notes. Other counts allege the sale of unregistered securities, the sale
of unregistered or registered securities by unlicensed persons, the
solicitation of investments through false representations, the creation
of false debt on ODOL's books, the issuance of shares to DeBaene and his
co-defendents without any valid consideration with the intent to hinder,
delay and/or defraud the creditors and shareholders of ODOL and the
interference with the property rights of the Plaintiffs.

The Plaintiffs are also seeking a motion to block the shareholders'
meeting called by Defendants for April 10th, 2001 on the grounds that the
Proxy issued is incomplete, misleading, and was not solicited in
accordance with the rules and regulations of the Securities Exchange
Commission and the Corporate laws of New Jersey. Open Door Online, Inc.
is a New Jersey corporation that is publicly traded over-the-counter on

For further information, please contact the attorneys for Camille M.
Barbone and Tom Carley: Milazzo, Fortunato, McCann & Murray, LLC 15
Warren Street, Suite 20 Hackensack, New Jersey 07601, (201) 343-7070
(Telephone), (201) 343-7916 (Facsimile) E-Mail: MFMLAWYERS@cs.com

E STAMP: Intends to Vigorously Denfend Consumer Lawsuit in NY
On March 16, 2001, a plaintiff filed a purported consumer class action
suit against E Stamp Corp. in the Supreme Court of the State of New York,
County of Kings. The suit alleges that the company breached its contracts
with plaintiff and other customers. The plaintiff seeks compensatory
damages and disgorgement of monies received in connection with the sale
of Internet postage products. The company is currently investigating the
claims against it and intends to vigorously defend this action.

HOLOCAUST VICTIMS: Polish P.M. Urged Germany for Interim Solution
Polish Prime Minister Jerzy Buzek urged Germany on April 6 to find an
''interim solution'' so hundreds of thousands of elderly victims of
Nazi-era slave labor can receive compensation soon, but he was rebuffed
by Chancellor Gerhard Schroeder.

''We have nearly reached the final round,'' Buzek said, referring to
delays in payments from the 10 billion mark (dlrs 4.6 billion) German
government-industry fund.

''But it's that 'nearly' that has a very important meaning,'' he said
after talks with Schroeder in Berlin, pointing out that a victim dies
every 11 minutes.

Schroeder, however, rejected changing German laws to release money before
U.S. class-action lawsuits against companies that used slave labor during
World War II are dismissed and German industry says it feels secure from
potential future claims.

Buzek said he discussed an ''interim solution'' with Schroeder, given
that it doesn't appear the lawsuits will be dismissed soon. He gave no
further details, but many critics have called on the foundation in recent
weeks to start payments as a good-will gesture.

Trying to remedy the problem, the Polish foundation handling Nazi labor
claims is paying 1,400 zlotys (dlrs 350) to victims older than 80. So
far, 50,000 checks have been sent and the group is still accepting new

Class-action lawsuits in the United States prompted leading German
companies to establish the fund initiative in 1999 and thousands of other
companies have since joined. Although problems with industry gathering
their 50 percent of the fund persisted for months, the companies now have
pledged their entire share and say they will release money when all
existing lawsuits are dismissed.

In addition, a German law requires parliament to confirm legal security
for companies before the government can hand over its half of the fund.
On April 5, the parliament passed a resolution urging U.S. courts to
dismiss the cases so payments to victims can begin.

Some victims' groups have suggested changing that law to allow
preliminary payments before the lawsuits are dismissed. Schroeder flatly
rejected that proposal. ''There is no such possibility,'' he said.
''Every attempt to unravel the entire package won't help the victims.''

Differences over the Nazi labor issue aren't the only strains in the
Polish-German relationship. Neighboring Poland is also the largest
candidate from former communist eastern Europe seeking entry into the
European Union, a prospect that has Germans worried about a flood of
cheap labor given their persistently high unemployment.

Although Schroeder stressed that ''Germany sees itself as an advocate for
Poland's entry into the EU,'' he has also proposed a transition period of
up to seven years before Poles would be allowed to work in other member
countries. Poland hopes to join the economic bloc in 2003.

Buzek said that plans for the transition period ''still must undergo very
many negotiations and need further work.''

Still, Schroeder said he hoped Poland would participate in the next
European Parliament elections in 2004 and stressed that his proposals for
a transition period were flexible. (AP Worldstream, April 6, 2001)

HOLOCAUST VICTIMS: Schroeder Rules Out Payments Before US Settlement
German Chancellor Gerhard Schroeder on April 6 ruled out beginning
compensation payments to former Nazi slave laborers before a legal
settlement is reached with US courts.

Polish Prime Minister Jerzy Buzek had proposed beginning payments
immediately when he met in Berlin with Schroeder on April 6. He pointed
out that the average age of the some million former slave and forced
laborers is over 80 and "every 11 minutes, a former forced laborer under
the Nazis dies. Time is of the essence."

But Schroeder repeated his backing of German industry's demands for
guarantees against further lawsuits from the former slave laborers. He
said the delay was caused by court cases in the United States.

US judge Shirley Kram, whose refusal to dismiss a lawsuit filed by
Nazi-era slave laborers is holding up compensation for the victims, has
until April 13 to present vital written arguments to a New York Appeals
Court, Otto Graf Lambsdorff, the German negotiator in the case to
compensate the World War II victims, said in Berlin last Friday April 6.
He said the plantiffs, former slave and forced laborers, had until April
18 to submit their arguments and that a ruling was expected in early May
though no date had been set.

Kram last month caused a new hitch in long-running efforts to compensate
victims of Nazi labor camps when she refused to dismiss a class-action
suit against German and Austrian banks, saying she doubted whether a
German foundation set up last July to compensate the victims would ever
hand out the payments.

Under an agreement brokered last year by the United States the plaintiffs
were to drop lawsuits targetting Germany. In return, the foundation
funded by German business and industry would pay out compensation of some
five billion dollars to the around one million survivors of the Nazi work
camps. German businesses were to receive immunity from any future suits,
such as the one Kram has refused to dismiss.

The Nazi-era victims want Kram's decision overturned as they are anxious
for the payment of compensation to begin. (Agence France Presse, April 6,

HOLOCAUST VICTIMS: US Judge To Present Lawsuit By April 13
US judge Shirley Kram, whose refusal to dismiss a lawsuit filed by
Nazi-era slave laborers is holding up compensation for the victims, has
until April 13 to present vital written arguments to a New York Appeals
Court, German officials said.

Otto Graf Lambsdorff, the German negotiator in the case to compensate the
World War II victims, said the plantiffs, all former slave laborers, had
until April 18 to submit their arguments and that a ruling was expected
in early May though no date had been set.

Kram last month caused a new hitch in long-running efforts to compensate
victims of Nazi labor camps when she refused to dismiss a class-action
suit against German and Austrian banks, saying she doubted whether a
German foundation set up last July to compensate the victims would ever
hand out the payments.

Under an agreement brokered last year by the United States the plaintiffs
were to drop lawsuits targetting Germany. In return, the foundation
funded by German business and industry would pay out compensation of some
five billion dollars to the around one million survivors of the Nazi work

German businesses were to receive immunity from any future suits, such as
the one Kram has refused to dismiss.

The Nazi-era victims want Kram's decision overturned as they are anxious
for the payment of compensation to begin. (Agence France Presse, April 6,

IBP, INC: US Merger May Affect Molson's Sale of Montreal Canadiens
Molson Inc. is confident its sale of the Montreal Canadiens and their
arena will be completed despite a report that prospective buyer George
Gillett Jr. was having financial problems. "Right now, we are in the
process of negotiating the final terms of the purchase agreement," John
Paul MacDonald, Molson's vice-president of corporate affairs, said. "We
feel it will be finalized in the weeks ahead. "We are negotiating with
Mr. Gillett and we expect it to be closed."

The Globe and Mail reported that the deal may be in trouble due to the
collapse of a $3.2-million US merger at the end of March involving a
meat-packing company in which Gillett holds a substantial interest.

The report said Gillett hoped to finance his $250-million purchase of
80.1% of the Canadiens and 100% of the Molson Centre with proceeds from
the sale of his shares in IBP Inc., the largest meat packer in the United

IBP, which is facing a class-action lawsuit from shareholders, was to
have merged with Tyson Foods Inc.

Molson agreed to sell majority interest in the team to Gillett on Jan.
31. Molson would retain a 19.9% interest and become the main sponsor.
(The Edmonton Sun, April 6, 2001)

INMATES LITIGATION: Suit Vs CA over Medical Needs Says Lives Are At Risk
California prisoners suffer needlessly and are at risk of death because
state corrections officials are ill-trained, underfunded and indifferent
to inmates' medical needs, according to a class-action lawsuit filed
April 5.

The suit follows years of persistent complaints about health care in
state prisons, and the recent deaths of eight female inmates.

Filed in federal court in San Francisco, it alleges that deficient care
by Gov. Gray Davis' administration subjects prisoners to
unconstitutionally cruel and unusual punishment.

"When inmates are denied the medical care they need, it can amount to a
death sentence," said Don Specter, director of the Prison Law Office, a
nonprofit firm handling the case with a team of private lawyers donating
their time. "Gov. Gray Davis . . . knows the care is substandard and he
has failed to take action," Specter said.

Though it was filed on behalf of all 160,000 California inmates, the
lawsuit names nine plaintiffs scattered at prisons around the state. One,
Raymond Stoderd, has advanced AIDS and claims that his pain medication
was consistently interrupted, causing suffering and damaging side

A second plaintiff, Gilbert Aviles, is a paraplegic who claims that his
urinary catheter--which doctors ordered changed every 14 days--was left
unchanged for two months, causing infections that required

Officials at the Department of Corrections would not discuss individual
cases, calling inmate medical files confidential.

But spokeswoman Margot Bach, while describing prison health care as
"compassionate and adequate," acknowledged that the system has a shortage
of doctors and that inmates do not always receive prompt treatment. She
added, however, that "these problems aren't confined to the prison
system. My mother has cancer, and she waits for weeks for approval from
her HMO to get something her doctor has said will help her. "We aren't
perfect, but we're striving mightily to provide quality medical care for
inmates, many of whom come into prison with ongoing health issues," Bach

April 5s legal action comes seven years after another lawsuit by the
Prison Law Office prompted a federal court to order sweeping reforms in
how the state treats mentally ill inmates.

Specter and his associates also have filed suits attacking medical care
at several individual penitentiaries. The class action, Specter said,
marks the largest ever against a statewide prison system.

Inmate lawyers say they tried for 18 months to settle the lawsuit, but
that negotiators for the governor cut off talks in January. State
officials would not comment on that claim, saying negotiations were to be
kept secret. But they characterized the Prison Law Office demands as
excessive. "They seem to think we should have Cadillac treatment for
inmates that is far beyond the treatment available to you and I who have
medical insurance," said Steve Green, assistant secretary of the Youth
and Adult Correctional Agency. "We provide treatment that is comparable
to that available in the community."

Specter disagrees, and the lawsuit claims deficiencies ranging from a
shortage of medical staff to delays in treatment and laboratory tests,
poor health screening of incoming inmates, and a lack of protocols for
dealing with chronic illnesses such as diabetes, heart disease and AIDS.

The suit also charges that inmate medical records are "disorganized and
incomplete," a problem compounded when prisoners are transferred from one
institution to another.

Green agreed that corrections record-keeping--both for medical purposes
and basic tracking of inmates' lives behind bars--is "a nightmare." "Most
of our record-keeping is on paper, and that's a big problem," Green said.
"We want to automate our system and we're working on that. But it's

Though Davis has not freed up funding for that project, Green said the
governor has made significant increases in spending on medical care in
recent years.

In the 1999-2000 fiscal year, spending on inmate health care was $ 566
million. The governor's budget for 2001-2002--which may change, given the
energy crisis--calls for $ 724 million.

Specter said the increases are like "offering a Band-Aid for a condition
that requires major surgery." He added that although the public may not
view state spending on inmate care as a high priority, most prisoners
will return to society and pose potential public health problems if their
diseases--many of them infectious--are not treated.

Among those cheering the filing of the lawsuit is Mary Kelly, who teaches
high school history in Simi Valley. Kelly's son, James, died of tongue
cancer that she says went untreated while he served a two-year drug

Kelly said that her son's lesion was visible but that prison doctors
claimed he was injuring himself by biting his tongue. That assessment led
to a months-long delay in treatment and allowed the cancer to spread to
his neck, she said. By the time he completed his sentence and was
released, he had lost 60 pounds and could scarcely eat, his mother said.
He was immediately hospitalized, but his cancer was too advanced to halt
and he died four months later. "This was a cancer that was totally
treatable, but it wound up killing him because nobody would listen,"
Kelly said. "My son was a drug addict, but he was not a bad person. I
never dreamed something like this could happen in America. Until you have
a loved one in the system, you have no idea what goes on."

Corrections spokeswoman Bach would not comment on the Kelly case, but
Specter said the family sued the state and received a settlement, the
details of which are private.

To win the class-action case, the inmates must prove that state officials
have shown "deliberate indifference" to their medical needs. The suit
asks the court to issue an injunction requiring the Department of
Corrections to improve its health care system and award monetary damages
to the nine named plaintiffs. (Los Angeles Times, April 6, 2001)

LERNOUT & HAUSPICE: KPMG Charges Former L&H Officials Of Blocking Audit
Accounting giant KPMG accused former officials of troubled high-tech firm
Lernout & Hauspie Speech Products NV of obstructing its efforts to audit
the company by giving false information.

In a civil lawsuit filed in Ieper, where L&H is based, KPMG charged it
was deliberately given ''false, inaccurate or incomplete information''
while trying to prepare a court-ordered report on restated financial
statements for 1998, 1999 and the first half of 2000.

The report was ordered after L&H admitted it had misstated revenues
during that period, sending the once high-flying company's stock crashing
and forcing it to seek bankruptcy protection in Belgium and the United

L&H, which also has offices in Burlington, Massachusetts, also is under
investigation on both sides of the Atlantic for alleged fraud.

KPMG did not publicly identify the individuals who it charges lied or
pressed others to make false statements, but a spokesman, speaking on
condition he not be identified, said they were ''senior former management
officials'' at L&H.

A statuatory auditor is required under Belgian law to file a lawsuit in
such a situation, he added.

KPMG still intends to present its report as ordered, but with notes that
certain figures were not provided, he said.

At a news conference, L&H's new chief executive, Philippe Bodson, said
KPMG was provided a copy of an internal report prepared by another
accounting firm, PricewaterhouseCoopers. That report found that that most
of the sales reported by L&H's South Korean unit for that period were a
sham, and that several major South Korean banks were involved, he said.
He said L&H is considering declaring its South Korea unit bankrupt and
also may bring legal action against the head of L&H Korea, Joo Chul Seo,
and possibly the banks and others as well, he said. ''We feel they have
some responsibilities.'' He said he did not know whether his predecessor,
Gaston Bastiaens, was aware of what was going on at the unit.

Bastiaens resigned last year following the discovery of accounting
irregularities, including a dlrs 100 million cash shortfall at L&H's
Korean unit. Chairman Jo Lernout was forced to resign and he and
co-founder Pol Hauspie also were ousted from the board of directors.

John Duerden was brought in as the new CEO last August from U.S.-based
Dictaphone, which L&H had bought the previous March. But Duerden was
ousted by the board in January, with no explanation given.

Bodson said he was working to ensure that when L&H emerges from
bankruptcy protection, it is shielded from claims linked to the former
management including class-action lawsuits filed by shareholders in the
United States. ''The past is the past,'' he said. (AP Worldstream, April
6, 2001)

PACER LOGISTICS: Both Sides to Appeal in CA Suit over Business Practices
Two subsidiaries of Pacer Logistics, Interstate Consolidation, Inc. and
Intermodal Container Service, Inc., were named defendants in a class
action filed in July 1997 in the State of California, Los Angeles
Superior Court, Central District, alleging, among other things, breach of
fiduciary duty, unfair business practices, conversion and money had and
received in connection with monies allegedly wrongfully deducted from
truck drivers' earnings.

The defendants entered into a Judge Pro Tempore Submission Agreement
dated as of October 9, 1998, pursuant to which the plaintiffs and
defendants have waived their rights to a jury trial, stipulated to a
certified class, and agreed to a minimum judgement of $250,000 and a
maximum judgement of $1.75 million.

On August 11, 2000, the Court issued its Statement of Decision, in which
Interstate Consolidation, Inc. and Intermodal Container Service, Inc.
prevailed on all issues except one. The only adverse ruling was a Court
finding that Interstate failed to issue certificates of insurance to the
owner-operators and therefore failed to disclose that in 1998, the
Company's retention on its liability policy was $250,000. The court has
ordered that restitution of $488,978 be paid for this omission.

Plaintiff's counsel has indicated he intends to appeal the entire ruling.

Defendants will be appealing the restitution issue. Based upon
information presently available and in light of legal and other defenses
and insurance coverage, management does not expect these legal
proceedings, claims and assessments, individually or in the aggregate, to
have a material adverse impact on the Company's consolidated financial
position or results of operations.

PINNACLE HOLDINGS: Sued for Securities Fraud, Schiffrin & Barroway Says
A class action lawsuit was filed in the United States District Court,
Middle District of Florida, Tampa Division, on behalf of all purchasers
of the common stock of Pinnacle Holdings, Inc. (Nasdaq: BIGT) from
January 18, 2000 through March 17, 2001, inclusive (the "Class Period").

The complaint charges Pinnacle Holdings and certain of its officers and
directors with issuing false and misleading statements concerning the
Company's business and financial condition. During the Class Period,
Defendants repeatedly issued press releases highlighting the Company's
increasing financial "strength" through its numerous acquisitions of
wireless tower sites in its financial results. At one point during the
Class Period, the Company announced that the SEC was investigating
Pinnacle Holdings' accounting for certain aspects of its recent
acquisition of certain assets from Motorola. The Complaint alleges that,
in an effort to continue the fraud on the market, the Company stated that
its financial results were reported in conformity with applicable
accounting guidelines and that the SEC's investigation was nothing more
than a "political" issue. On March 17, 2001, the Company shocked the
market by announcing that its previously issued financial statements for
the fiscal year ended December 31, 1999 and its quarterly reports for the
three-month periods ending September 30, 1999, March 31, 2000, June 30,
2000 and September 30, 2000, would have to be revised. Additionally,
despite defendants' statements to the contrary during the Class Period,
Pinnacle also disclosed that the restatements would be necessary to
properly account for the Motorola acquisition.

Contact: Marc A. Topaz, Esq. or Robert B. Weiser, Esq., both of Schiffrin
& Barroway, LLP, 888-299-7706, 610-667-7706, info@sbclasslaw.com

ROCK HILL: Countersues 6 Investors Who Claimed Scam Investment Program
A small South Carolina bank has countersued six customers who claimed it
duped them with a scam investment program. Rock Hill Bank and Trust says
that it is the victim, and has accused the customers of conspiring with
two other people to damage it.

In its suit, filed with the U.S. district court in Columbia, S.C., the
$200 million-asset bank said that the investors' lawsuit has affected its
stock and may have cost it a "profitable merger opportunity."

The bank's share price has plunged more than 25%, to $11.75, since the
customers' suit was filed Feb. 16, and a month ago it suspended merger
plans with Ridgeway Bancshares of Ridgeway, S.C.

Rock Hill Bank has asked for trial fees, special damages, and punitive
damages but did not specify a figure.

The investors' lawsuit alleges that the bank and its loan officer, Robert
M. Yoffie, promoted a fraudulent investment program that cost them $9.5
million -- the amount of their deposit. Lawyers on both sides declined to
discuss the case.

Both of the claims stem from the deposit, which lead plaintiff Samuel R.
Anthony and five other investors made in an agency account at Rock Hill
Bank last year. Their lawsuit says that the bank promoted a program that
promised returns of at least 15% a month for 10 months, and that Mr.
Yoffie told them 18 to 20 other people had been involved in a similar
program at the bank and had made the expected returns.

However, the plaintiffs claim they saw little return and have been unable
to access their money.

Rock Hill Bank denies that it ever had such a program or that Mr. Yoffie,
who quit the bank in early February, was involved in it. In court
documents the bank says that it returned some of the original funds and
that some or all of the rest were returned through other channels,
including the two others it is pursuing in its lawsuit: Donald E. Hughes,
who introduced the investors to the program, and Douglas J. Smith, who
had power of attorney over the account.

The investors say Mr. Yoffie was on the board of directors of Mr. Hughes'
construction company; the bank says that the investors had a series of
business relationships with Mr. Hughes.

Though the bank denies nearly every claim in the investors' lawsuit,
including those related to Mr. Yoffie and his relationship with Mr.
Hughes, it has asked for indemnification from Mr. Yoffie for any
"resulting damages suffered by the bank" if he is found liable. (The
American Banker, April 6, 2001)

ST. CHARLES: Mold To Keep School Shut for Testing and Remediation
Faced with the discovery of more potentially dangerous mold, school
officials said that St. Charles East High School will be closed
indefinitely for further environmental testing and remediation.

Testing for mold could take two to three months, Kane County Regional
Supt. Clem Mejia said. All of the school, including indoor athletic
facilities and the Norris Cultural Arts Center, will be shut down.

"I do not anticipate us going in there before the end of the school
year," District 303 Supt. Francis Kostel said during a news conference at
the district's administrative offices.

"The building will not be reopened until we receive a report from the
state Board of Education and the Illinois Department of Public Health
assuring me that the building will be safe," Mejia said.

Beginning April 16, East's 2,300 students will be shifted to newly opened
St. Charles North High School, where there are about 900 freshmen and
sophomores. That building can hold about 2,000 students, so classes will
likely be held in morning and afternoon shifts, officials said. Some
classes and extracurricular activities might have to be located in other
district buildings.

The district has about 11,000 students in 15 buildings.

AAA Environmental, which is doing the testing, found mold earlier this
month in the main part of the building. That discovery came after mold
was found during a routine check during spring break in an older portion
of the school. Officials then suspended classes.

The environmental testing had been scheduled as part of a school district
plan to examine the building for potential health hazards, officials
said. Parents and teachers, while applauding the school's closing, said
it was high time that district officials did extensive testing.

Earlier this month, a class-action lawsuit was filed by a student
alleging that he is suffering a variety of symptoms from exposure to mold
at the school. In March, a former student had filed suit charging that
the school had made her sick.

Students, teachers and parents have complained of air-quality problems in
the 1970s-era building since at least the mid-1980s. Reported symptoms
include sinus infections, sore throats and bronchial irritation. Some
contend that the district has dragged its feet in finding and fixing the

At least two students said they had seen mold in the school. Sophomore
James Kelly, who attended the briefing last Thursday (April 5), wondered
why it took so long for school officials to act. "I feel lied to by this
school board and this administration," Kelly said.

But Kostel said the school has been repeatedly tested over the years and
found to be safe. "This school has been examined six times by a variety
of groups. Getting to the bottom of this has always been our goal," he

Some are skeptical. "They keep repeating the same thing over and over.
Like why don't they tell us something we don't know," said junior Joe

Although students will have to make up two weeks of classes, officials
said graduation will take place as scheduled June 3.

"Our primary concern right now is the students, and that is the reason we
want to get them back in school," Kostel said.

School officials said they have contacted the governor's office and may
try to acquire some portable structures. In addition, local churches have
offered space for student use.

Kostel said, "This will be a scheduling challenge, but I know we're up
for it."

The district already has spent about $5.6 million in remodeling,
including a new ventilation system, new carpeting and floor tiles, to try
to improve conditions at the school.

The remodeling was done in the wake of a critical 1998 report by the
National Institute of Occupational Safety and Health that noted several
problems, including mold, a lack of fresh air, high carbon dioxide levels
and water leakage.

Recently, three types of dangerous mold were discovered at the school,
stachybotrys, aspergillus, and penicillium. The mold can cause illness if
inhaled by susceptible people, such as those with impaired immune
systems, allergies or lung disease.

In an effort to keep the community informed about the mold and its
dangers, as well as the work at the school, the district has been posting
updates on its Web site. (Chicago Tribune, April 6, 2001)

SUN PIPE, SUNOCO: Sued in PA over Luzerne County Pipeline Rupture
Tina Wall and Christopher Deleur, Luzerne County residents, filed a class
action complaint on April 6 in the Pennsylvania Court of Common Pleas for
Luzerne County, claiming damages for personal injuries and property
damages caused when a pipeline owned and operated by Sun Pipe Line Co.
and Sunoco, Inc. ruptured on January 19, 2000 in Jackson Township,
Luzerne County, Pennsylvania.

The lawsuit is on behalf of all residents and property owners who were
damaged when gasoline was released after a pipeline valve ruptured.
Thousands of persons live or own property in the area affected by the
rupture. The suit alleges that the pressurized pipeline spewed a geyser
of gasoline at least sixty feet high for several hours. The complaint
alleges that the toxic components of the gasoline were carried downwind
as far as Swoyersville and exposed thousands of people to benzene, a
known carcinogen contained in gasoline.

According to the complaint, the spill released noxious chemicals into the
atmosphere, forcing some residents to evacuate their homes. The spill
also contaminated groundwater around the surrounding area, forcing
residents to abandon their drinking water wells.

Tina Wall, a named plaintiff, said she was in her home the morning the
pipeline burst. She said, "I smelled an overwhelming smell of gasoline,
ran outside in a blanket, and saw the gasoline spraying from the
pipeline. I wasn't able to return to my home for three weeks," she said.
Wall continued, "Even weeks later, we could still see the rainbow of
gasoline in a glass of water from our well." Four law firms have joined
forces to litigate the class action: Gregory E. Fellerman of Fellerman
Law Offices in Wilkes-Barre, Dianne M. Nast, Michael G. Nast and Daniel
N. Gallucci of Roda & Nast, P.C., in Lancaster, Pennsylvania, Daniel E.
Becnel, Jr. of The Law Offices of Daniel E. Becnel, Jr., in Reserve,
Louisiana and Richard J. Arsenault of Neblett, Beard & Arsenault, in
Alexandria, Louisiana.

Contact: Dianne M. Nast, Michael G. Nast or Daniel N. Gallucci, all of
Roda & Nast, P.C., 717-892-3000; or Gregory E. Fellerman of Fellerman Law
Offices, 570-822-3500

TOBACCO LITIGATION: Ex-Flight Attendant Loses Suit in Miami
A flight attendant awaiting a lung transplant is not entitled to money
from the tobacco industry for illnesses she blames on cigarette smoke in
jetliner cabins, a jury decided. The jury found the tobacco industry was
not liable for the lung disease that made Marie Fontana cough up blood on
the witness stand during her testimony in the three-week trial. Fontana's
request for compensatory damages is the first of 3,100 claims prompted by
the industry's $349-million settlement of a national class-action suit by
nonsmoking attendants. (The Detroit News, April 6, 2001)

TOXIC WASTE: Lawsuit Blames New York Landfills For Health Woes
More than a dozen companies -- including major U.S. manufacturers, three
landfill owners and a limestone quarry -- are named in a $400 million
lawsuit filed on behalf of nearby Cheektowaga residents who claim toxic
waste is making them sick.

Attorneys for 39 residents and former residents of the neighborhood
southeast of Buffalo filed the claim in New York Supreme Court in
mid-March against companies that at one time owned or disposed of waste
at three area landfills. The lawsuit says those landfills and a nearby
limestone quarry are responsible for illnesses and deaths in the region.

The lawsuit claims that hazardous waste disposed of in the Schultz
landfill, the Land Reclamation landfill and the Old Land Reclamation
landfill are leaching into the surrounding soil and water. The lawsuit,
which has yet to be served to all the defendants, seeks compensatory and
punitive damages of $10.1 million per plaintiff.

Integrated Waste Systems owns the 20-acre Schultz construction and
demolition debris landfill on Indian Road. Casella Waste Management of
New York and its subsidiary, Schultz Landfill Inc., own the air space
rights to the unused section of the Schultz Landfill. Both are named. BFI
Waste Systems owns the Land Reclamation landfill that partially surrounds
the Schultz landfill. The two Land Reclamation landfills are spread over
110 acres and are listed by the state as inactive hazardous waste
disposal sites. Both are closed.

BFI, Casella Waste Management of New York and Integrated Waste are all
named in the lawsuit.

Also named in the lawsuit is Buffalo Crushed Stone, which owns a nearby
limestone quarry. According to the lawsuit, hydrogen sulfide gas produced
at the quarry exacerbated asthma and other health problems, while
blasting accentuated soil and ground water contamination from three

The list of defendants also includes major manufacturers, including
Westwood Squibb Pharmaceuticals Inc., Niagara Mohawk Power Corp., Pratt &
Lambert United, Waste Management of New York, and the Ford Motor Co.
"Simply, the defendants are the landfills, the quarry, past and present
owners and the people who hauled the waste there," said Linda Sikka, an
attorney for the plaintiffs.

As of March 19, Sikka said that she had not served defendants copies of
the lawsuit. Under New York state law, she has 120 days from the day of
filing, which was March 9, she said.

Peter Ruppar -- an attorney for Integrated Waste, Schultz landfill and
Integrated Waste -- declined comment, saying he had not yet seen the
lawsuit and that even if he had he would not comment on pending

Sandy DiSalvo, regional environmental manager for BFI Waste Systems,
declined comment, referring questions to BFI's attorney, who did not

Residents have complained for years of poor health. The lawsuit says the
contamination from the landfills is causing cancer, asthma and autoimmune
diseases. The lawsuit seeks compensatory and punitive damages for
personal illnesses as well as the contamination of property in the area.

Since the lawsuit was reported in a local newspaper, more residents have
come forward. "The list of plaintiffs is definitely growing," Sikka said.
"I have done nothing in the past four days but return phone messages from
people who want to become plaintiffs."

The lawsuit is the latest in a series of legal issues surrounding
hazardous waste deposited in the area. The Pfohl Brothers Landfill, on
Aero Drive in Cheektowaga, is about to undergo decontamination after it
was declared a Superfund site. (Waste News, April 2, 2001)

U OF ILLINOIS: Can't Stifle Anti-Illiniwek Talk with Potential Athletes
A judge told the University of Illinois last Thursday April 5 that it
could not stop faculty and students from personally trying to persuade
athletic-team prospects not to attend the school because of its
controversial symbol, Chief Illiniwek.

In a case raising the issue of free speech in academia and underlining
the divisive impact of the Illiniwek dispute on the university's flagship
campus at Urbana-Champaign, U.S. Judge Michael Mihm said a university
policy on the issue could constitute a violation of the 1st Amendment.

Reading from a 26-page ruling in U.S. District Court in Peoria, Mihm said
he would enter a temporary order restraining the university from
enforcing a directive that all contact with recruits had to be cleared
with the school athletic department. He said he also would set a
timetable for arguments on a permanent injunction.

"We're very pleased with the court for enabling us to go ahead and
exercise our right to talk to students, and we plan on doing that," said
Stephen Kaufman, a professor of cell biology, a leader in the anti-Chief
Illiniwek movement and a plaintiff in the suit.

U. of I. spokesman Bill Murphy said the school was disappointed with the
ruling but would wait to examine it fully before commenting on its

The American Civil Liberties Union had filed a class action suit on
behalf of four faculty members and three students seeking a ruling to
prevent the university from taking action against them for giving their
views on Chief Illiniwek to potential student athletes.

The immediate cause of the suit was a campuswide e-mail sent March 2 by
Chancellor Michael Aiken warning that such contact could be against NCAA
rules governing contacts between school representatives and athletic

ACLU lawyers called the message "a drastic, intimidating, draconian
response" that created a chilling effect on the speech of people opposed
to Illiniwek's appearance at sporting events.

Aiken had testified in a hearing that his policy wasn't intended to
stifle free speech but to protect the school from incurring NCAA
penalties. Lawyers for the school argued that the rules could restrict
such contacts even if they were intended to discourage potential

One purpose of the NCAA rules is to avoid having undue pressure put on
student athletes regardless of whether the purpose is to help or hurt
recruiting efforts, the university lawyers said in court documents.

NCAA spokeswoman Jane Jankowksi said the organization was watching the
case with particular interest. NCAA rules could prohibit people outside
an athletic department from contacting potential recruits even for a
"recruiting disadvantage," but it was difficult to say in advance, she

Murphy said the university would try to maintain "institutional control"
of contacts with recruits as required by the NCAA, but would have to do
so within the "constraints" of Mihm's ruling.

The university lawyers said that the plaintiffs had plenty of opportunity
to exercise their free speech rights through demonstrations, public
statements and media interviews, and indeed had often done so.

But the ACLU pleadings said that university was making a "hyper-technical
and strained interpretation of the NCAA rules--requiring [prior] approval
of all speech between all members of the university community and all
high school students in America."

Instead, the school "should be guided by the 1st Amendment's mandate to
allow robust debate," the ACLU lawyers said.

The judge "refused to allow the university to fall back on NCAA rules
without examining them for compliance with the 1st Amendment," said
Harvey Grossman, the lead ACLU lawyer in the case.

In addition to Kaufman, the faculty members who filed the suit are Brenda
Farnell, a professor of anthropology who specializes in American Indian
studies; Frederick Hoxie, a history professor specializing in Native
American history; and Philip Phillips, a physics professor.

The students are Cydney Crue, a graduate student and Illinois president
of the National Coalition Against Racism in Sports and Media; John
McKinn, a graduate student and member of Red Roots, a student advocacy
group for Native Americans; and Debbie Reese, president of Red Roots.

Kaufman said some of the plaintiffs had made contact with potential
recruits in a group setting, but that they have refrained from doing so
since Aiken's directive.

The legal battle reflects the raw feelings aroused by Chief Illiniwek,
cherished by many alumni and students as a stirring symbol honoring
Native Americans but offensive to others, including civil rights and
church groups, who consider it a demeaning caricature.

Last month the university board of trustees voted to seek a compromise in
the dispute, which has flared sporadically over many years, but grounds
for compromise may be hard to find.

Chief Illiniwek, portrayed by a student who paints his face and dons garb
and headdress representing the Oglala Lakota Sioux tribe, dances at
football and basketball games. (Chicago Tribune, April 6, 2001)

U-M: Court Rules Law School Can Resume Admitting New Law Students
A panel of federal judges put the University of Michigan Law School's
affirmative action case on the fast track last Thursday April 5 in a
ruling that also allows the school to resume extending offers to new

A trio of judges from the 6th U.S. Circuit Court of Appeals in Cincinnati
delayed the end of March decision by U.S. District Judge Bernard Friedman
from taking effect. He found the school's race-conscious admissions
system unconstitutional and ordered the Law School to immediately stop
using it while filling its incoming classes. The appeals judges did not
rule on the constitutionality issue -- only that the school should
proceed under its existing system while appeals proceed.

The judges also ruled to speed up the appeal, though it's unclear how
quickly the court will act.

Friedman's ruling came during the height of the admissions season and
prevented the school from sending out acceptance letters. U-M officials
worried that any further delay would cause students to turn elsewhere.

The higher court agreed.

"The injunction now in place irreparably harms the University of Michigan
and disrupts the selection of the 2001-02 first-year Law School class,"
its order said. "This harm cannot be undone and therefore is

"The admissions office is off and running," U-M attorney Liz Barry said.
"All along, we have been confident that our policy was constitutional."

The ruling stems from a 1997 lawsuit filed by Barbara Grutter, a rejected
white applicant from Plymouth Township. The case was eventually declared
a class action suit.

"The Sixth Circuit made a poor decision, which is going to mean many more
applicants are going to be discriminated against solely because of their
skin color," said Curt Levey, spokesman for the Center for Individual
Rights, which represents Grutter.

Although some legal scholars hoped the appeals court's ruling might
reveal its leaning on this and a similar case addressing U-M's
undergraduate admissions, the court didn't tip its hand, said Robert
Sedler, a Wayne State University law professor who is watching the case.
(The Detroit News, April 6, 2001)

U.S. BUREAU: Ruling Bars Delivery of Water to Farmers at CA-OR Border
A ruling by federal Judge Saundra Brown Armstrong of Oakland aimed at
protecting endangered salmon bars the U.S. Bureau of Reclamation from
delivering water to farmers in the Klamath Basin Project until it devises
a plan for protecting coho salmon.

Farmers in the 240,000-acre Klamath Lake Basin, which straddles the
California-Oregon border, may have to struggle through the 2001 growing
season without irrigation water.

Armstrong ruled that the bureau violated the Endangered Species Act by
operating the project last year without calculating the impact of its
operations on the salmon or consulting with the National Marine Fisheries

"This really dims any hope that we had," Tessa Steudli, executive
director of the Klamath Water Users Association said yesterday. "What's
going to happen is that people will go broke and there'll be a huge dust
bowl here. Wildlife will die and cattle will be sold. It's just
devastation," she said.

In a letter to Oregon Gov. John Kitzhaber, several business leaders in
the Klamath Basin area, warned that "a federally sanctioned disaster will
overwhelm our region."

Paul Simmons, the Sacramento attorney who represents Klamath Basin
farmers who depend on Bureau of Reclamation water to irrigate, was more

If the bureau can persuade the National Marine Fisheries Service and the
U.S. Fish and Wildlife Service that its operation of the Klamath Basin
Project does not put the coho salmon -- and two other endangered species
-- in danger of extinction, the irrigation water still might flow,
Simmons said.

Commercial fishermen and the Indian tribes that fish the Klamath River
blame poor water quality caused by nitrate- and pesticide-rich runoff
from irrigated lands in the basin for a huge fish kill in the river last

To complicate the picture, farmers contend that in addition to putting
them out of business, the court's ruling will be bad for wildlife because
basin refuges, where waterfowl congregate, are dependent on tailwater
from irrigation.

Glen Spain, northwest regional director of the Pacific Coast Federation
of Fishermen's Associations, lead plaintiff in the suit by eight
organizations aimed at reviving the Klamath River salmon fishery, said he
fears that political pressure is being exercised "at the highest levels"
to negate the force of Armstrong's ruling. "They're trying to force the
agencies to back away from what science requires and cut a deal where
irrigators get some water," he said.

The Klamath Basin is in the midst of its worst drought on record, and the
snowpack that feeds its watercourses has just 29 percent of its normal
water content.

Principal crops grown in the arid basin, which receives just 6 to 8
inches of rain in a normal year, are potatoes, onions, hay and sugar
beets. All of the horseradish grown commercially in the western U.S.
comes from the Tule Lake area on the basin's southern edge.

"There's no market for most of the crops grown (in the Klamath Basin),"
Spain said. Sugar beets, for example, have become such a low-profit crop
that farmers in some parts of California where they were once a staple,
such as the Salinas Valley, have given up on them, and several refineries
have shut down. Said Spain, "The question is: Do we want to sacrifice the
lower Klamath River to provide federally subsidized water for farmers to
grow things they cannot sell. (The San Francisco Chronicle, April 6,

* The American Banker Publishes Article re Overdraft Coverage Preys
Lately the banking industry is beset by so-called "strategic consultants"
pushing a highly addictive form of overdraft banking.

These consultants are selling increasingly aggressive overdraft policies
to which some banks, under mounting earnings pressure, are succumbing but
which more reasonable people might term usurious.

The new overdraft policies are unlike reasonably priced protection plans
backed by balance transfers, unsecured credit lines, or credit card
advances. Known by oxymoronic names such as "Overdraft Courtesy" or
"Bounce Protection," these products rely on manipulative direct marketing
programs to encourage the weakest customers to write what bankers used to
term "bad checks."

Essentially, customers are told to ignore their check registers. Instead,
they are invited to write a bad check and told the bank will cover it.
The cost of this sucker's bet -- typically $30 an item and $5 a day -- is
buried in the blizzard of disclosures and paperwork given to the

To maximize the income generated by this practice, banks exhaust the
small available balance by posting the largest items first. The
consultants watch gleefully as the volume of overdrafts (and their
contingent fee for the advice) grows.

The consultant's reasoning is simple. Why wait for the intermittent
overdraft when you can entice weak-willed customers into writing checks
for more than they have in their accounts?

Apparently, the income from conventional protection plans is now
inadequate. Greed aside, the reason why is unclear. My sense is that the
more traditional protections against ruining a reputation with an
accidental overdraft require Regulation Z disclosure. However, the new
variety of overdraft protection charges fees so large a banker is
challenged to calculate the annual percentage rate, let alone disclose

Frankly, such practices are shameful. They represent psychographic
analysis used in all the wrong ways and for all the wrong reasons. These
dubious approaches do nothing to build the deep and lasting relationships
that the industry professes to cherish: multiple product-and-service
users of all stripes who look to their bankers for transaction
processing, loan and investment products, and lifelong financial advice.

And it is not as if the industry doesn't know better. On the contrary,
the trail of litigation and costly settlements paid by banks over
overdraft practices goes back to the early 1970s. More recently, Bank of
America Corp. settled a class action over posting schemes by its
Boatmen's Bancshares. In past instances, the only winners were the
lawyers with their 40% contingent fees.

Yet despite the negative public relations these practices generate and
the opportunities they create for class-action barracuda among trial
lawyers, the industry continues to risk further confrontation by
exploiting "opportunities" to generate more fee income from overdrafts.

Though disclosure might be difficult, it isn't the heart of the issue.
The complaint about predatory lending is not about noncompliance with Reg
Z or annual-percentage-rate calculation errors. It is that the practice
intentionally targets people who can't help themselves, who do not fully
understand what they are agreeing to until it is too late and foreclosure
is inevitable.

Wrapping a predatory practice in the cloak of customer service is
tantamount to arguing that the onerous terms of a predatory mortgage are
the borrower's only chance at homeownership. It's hogwash.

In all but name, most of what occurs with "Overdraft Courtesy" is no more
a service than "payday lending" -- a truly deceitful term and a worse
practice. This and its evil cousin, check-cashing stores, target folks
too uninformed, too careless, or with too few resources to make real
choices. These practices amount to bankers playing "kick the kid with one

Are these lines of business that a bank should covet? Is this how
bankers, with a community service charge built right in to their
corporate charters, want to be perceived? I can see Mike Wallace and the
"60 Minutes" editorial team planning their next expose now.

Reliance on overdraft fees to increase noninterest income is a bad idea
and certainly not a credible strategy. These fees are an addiction that
will end up haunting the banking industry.

Now would be an excellent time to stop kidding ourselves that these
practices are a legitimate banking service. We need to return to treating
overdrafts as financial mismanagement and loss risk. That is, as
something we are obliged to discourage. (The American Banker, April 6,


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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