/raid1/www/Hosts/bankrupt/CAR_Public/030725.mbx            C L A S S   A C T I O N   R E P O R T E R
            Friday, July 25, 2003, Vol. 5, No. 146


CALIFORNIA: State Moves Closer to Recall Process V. Gov. Davis
CATHOLIC CHURCH: Official Report Reveals 800 Sex Abuse Victims
ENRON CORPORATION: Employees Ask For Bonus Returns Before Fall
EPHEDRA: House Testimony Reveals Ephedra Users' Health Problems
FREDDIE MAC: Report Reveals Accounting Fraud, Stock Manipulation

GEICO CALL CENTER: Texas Court Certifies Overtime Wage Lawsuit
GUN FIRMS: Fight Looms Over Gun Control After Lawsuit Dismissal
INDIANA: Four Entrepreneurs Commence Lawsuit Over Bad Tax Advice
LAKIN LAW FIRM: Civil Rights Groups Drop Sanction Request
LEARNING CHANNEL: Reality Show Subjects Launch Suit in NJ Court

MEDIA OWNERSHIP: FCC Allegedly Used Flawed Measurement For Rules
MICHIGAN: 11 Persons Injured in Detroit Hot Air Balloon Mishap
NATIONAL SEMICONDUCTOR: Discovery Starts in Personal Injury Suit
OHIO: Hudson Residents Mull Lawsuit For Severe Damage To Homes
POLARIS INDUSTRIES: CA Jury Says No Design Defect in Boss ATV

PPA LITIGATION: Canada Court Allows Study as Evidence in Lawsuit
RSA SECURITY: Settles SEC Cease-and-Desist Securities Complaint
SOUTH CAROLINA: Judge To Decide To Allow Autism Suit To Proceed
SOUTH KOREA: New Securities Suit System To Take Effect July 2004
TACO BELL: Second Damages Trial Begins in OR Overtime Wage Suit

TICKET TRACK: WA Court Says $30 Parking Violation Fine "Illegal"

                      Asbestos Alert

ASBESTOS LITIGATION: Asbestos Victims Soon to Get Compensation
ASBESTOS LITIGATION: ABB Says No Deal Approved Before August
ASBESTOS LITIGATION: Allegheny, Lloyd's Scuffle Over Claims
ASBESTOS LITIGATION: Ampco-Pittsburgh Says Asbestos Hurt Profit
ASBESTOS LITIGATION: Celotex To Pay NY City for Asbestos Cleanup

ASBESTOS LITIGATION: Halliburton Gets Stay on Asbestos Claims
ASBESTOS ALERT: Judge Upholds Asbestos Ruling, BIW to Pay Widow
ASBESTOS ALERT: Worker Sues University, Tyco Unit for Asbestos

                   New Security Fraud Cases

CREE INC.: Kaplan Fox Commences Securities Fraud Suit in M.D. NC
LEHMAN BROTHERS: Kaplan Fox Lodges Securities Lawsuit in S.D. NY
MATRIA HEALTHCARE: Marc Henzel Lodges Securities Suit in N.D. GA
PEDIATRIX MEDICAL: Marc Henzel Lodges Securities Suit in S.D. FL
READ-RITE CORPORATION: Kirby McInerney Lodges Stock Suit in CA

RECOTON CORPORATION: Wolf Haldenstein Files Stock Lawsuit in FL


CALIFORNIA: State Moves Closer to Recall Process V. Gov. Davis
The State of California is set to declare an unprecedented vote
on whether to recall current Governor Gray Davis, after the
Secretary of State certified 792,177 of the 897,158 voter
signatures needed to put a vote of confidence in Gov. Davis onto
the ballot as soon as September, Reuters reports.

Gov. Davis, a Democrat, was once considered a potential
presidential candidate, and was reelected in November.  However,
his popularity numbers fell after the state struggled with a
record deficit following an energy crisis in his first term in

Gov. Davis said he is not taking the recall effort sitting down.  
"Am I delighted that I have a recall? No. Is it a lot of fun?
No," Davis told a news conference in the playground of a
preschool in San Francisco, Reuters states.  "Do I get much free
time these days?  No.  But am I going to run away from it?
Absolutely not . I am going to fight like a Bengal tiger."

"I wasn't thrilled about serving my country in Vietnam in '68
and '69 but I did it, it was my duty and I am proud I did. I am
not thrilled about this (recall), it is not a lot of fun but I
do not shirk from the fight," Gov. Davis continued.  "One of my
greatest strengths is that people have underestimated me since I
was born.  Every time they say "roadkill" I continue to win."

Once the recall vote is certified, state officials will set an
election within 60 to 80 days.  A formal green light to the
election is expected to come today at p.m. local time (9 p.m.
EDT) at a scheduled news conference with the Secretary of State,
who serves as chief elections officer.

Republican candidates are expected to emerge for the job.  
Popular Austrian-born actor Arnold Schwarzenegger is considered
the front-runner, as he has strong advantage in name recognition
and personal charisma.

Allies of the Governor intend to file a class action in the Los
Angeles Superior Court relating to the signature gathering
process for the recall.  The Lawyers for Taxpayers Against the
Governor's Recall, stated that there were widespread
illegalities in the Republican-led signature drive, including
the use of signature gatherers who were not registered to vote
in California, according to an earlier Class Action Reporter
story.  The signature gatherers allegedly paid $1 per signature
and collected signatures without witnessing the signing, as
required.  They asserted that two signature circulators already
admitted in signed affidavits to being convicted felons, they

CATHOLIC CHURCH: Official Report Reveals 800 Sex Abuse Victims
A report by Massachusetts Attorney General Tom Reilly revealed
that nearly 800 people alleged they were sexually abused as
children in the Archdiocese of Boston since 1940, Reuters

The report criticized the church's "misguided devotion to
secrecy."  It is the first-ever official tally of the
accusations against the Archdiocese, after a 16-month
investigation.  Atty. General Tom Reilly said in the report the
archdiocese's history of clergy sexual abuse was "staggering."

Records produced by the archdiocese showed that at least 789
victims had complained of being abused by some 250 priests and
church workers over the years.  "When information from other
sources is considered, the number of alleged victims who have
disclosed their abuse likely exceeds 1,000," the report said.

The investigation and the report were not enough, however, to
bring criminal charges against the archdiocese or Cardinal
Bernard Law.  Cardinal Law, the head of the diocese, resigned
last year after documents showed that he and other former top
archdiocesan officials covered up for offenders and moved them
from church to church without notifying parishioners.

The attorney general failed to bring criminal charges because
the child abuse reporting law in Massachusetts was not expanded
to include priests until 2002, Reuters reports.  Atty. General
O'Reilly, however, criticized Boston church leaders for the way
they handled the situation.

"There is overwhelming evidence that for many years Cardinal Law
and his senior managers had direct, actual knowledge that
substantial numbers of children in the archdiocese had been
sexually abused by substantial numbers of its priests," the
report said.

The archdiocese said it would examine the report before making a
response.  In a church statement, the Archdiocese reiterated
"its commitment that the archdiocese will treat sexual abuse of
a child as a criminal matter, that it will end any culture of
secrecy in the handling of such matters."

Bishop Sean Patrick O'Malley, Bishop Law's successor, is set to
be installed as the head of the Boston Archdiocese on July 30,
Reuters states.  O'Malley is currently bishop of Palm Beach,

ENRON CORPORATION: Employees Ask For Bonus Returns Before Fall
Enron Corporation faces a lawsuit initiated by the committee
representing its former employees in its bankruptcy case,
seeking to recover $72 million in bonuses paid to employees,
officers and executives right before it filed for bankruptcy,
the Associated Press reports.

Four suits were initially filed and later consolidated in the
Federal Bankruptcy Court in Houston, Texas.  The suit states
that the individual bonuses, which ranged from $200,000 to $5
million, infuriated laid-off employees who received small
severance payments.

"We intend to hold 11th-hour bonus recipients accountable for
their self-dealing as Enron fell into bankruptcy," Richard D.
Rathvon, co-chair of the employees' committee told the
Associated Press.  "Even as thousands of regular Enron employees
and retirees were facing the loss of life savings, health
benefits, their jobs or pensions, these favored few were
scheming to get millions more for themselves."

The Company faces a federal class action in the United States
District Court in Houston, Texas, seeking compensation for
employees' 401(k) losses.  The retention bonus suits are
different because they seek funds handed out as Enron was
collapsing.  According to the employees' committee, the payments
did not clear the Company's account until after the bankruptcy,
and thus were not authorized by the bankruptcy court.  Thus, the
bonuses should be returned.

Enron spokesman Mark Palmer did not immediately return a call
Wednesday to The Associated Press seeking comment.

One suit named Jeffrey McMahon, who became chief financial
officer after Andrew Fastow stepped down in October 2001.  He
reportedly signed a contract on October 2001 and received a
$300,000 payment in exchange for a commitment to stay at Enron
for six months.  He received $1.5 million to remain 90 days with
Enron, through February.

Another lawsuit names James Fallon, former president and CEO of
Enron Broadband Services, who also received a $1.5 million
payment November 30.  Enron's broadband unit was never
profitable, and Enron laid off broadband employees when
downsizing the unit months before the bankruptcy, AP reports.  A
third lawsuit names 56 commodity traders and the final legal
action names 228 traders and other employees.

EPHEDRA: House Testimony Reveals Ephedra Users' Health Problems
Congressional investigators have discovered that many users of
the herbal stimulant ephedra still experienced health problems,
the Associated Press reports.  

In a testimony prepared for a hearing on dietary supplements
before the House Energy and Commerce oversight committee, the
General Accounting Office (GAO) acting director of health care -
public health and science issues Marcia Crosse revealed that
many users under thirty filed health complaints against drug-
maker Metabolife International.  These complaints include heart
attacks, strokes and seizures, as well as five deaths.

In February, Baltimore Orioles minor league pitcher Steve
Bechler died after taking a diet supplement with ephedra.  Last
week, Kiley Bechler, the pitcher's widow, filed a suit in
federal court against Cytodyne Technologies, the manufacturer
and distributor of the supplement that was found in her
husband's locker.  The suit also names Company president, Robert

An autopsy of Mr. Bechler's body revealed that ephedra in the
weight-loss supplement Xenadrine RFA-1 contributed to the
heatstroke that killed the pitcher, Medical Examiner Joshua
Perper of Florida, told the Associated Press.  Toxicology tests
confirmed that "significant amounts" of the over-the-counter
supplement and other factors led to the attack.  As a result,
the House is holding two days of hearings on ephedra.

Ms. Crosse told AP the Food and Drug Administration has received
more reports of problems from taking supplements with ephedra
than any other ingredient.  She asserted that the problems
reported to Metabolite "are consistent with the types of adverse
events reported to FDA and with the documented physiological
effects of ephedra."  Records of calls to the Company further
"contain reports of serious adverse effects in consumers who
were young and among those who used the product within the
recommended guidelines."

In 1994, the US Congress severely limited oversight of dietary
supplements.  Presently the FDA is examining 16,000 comments
responding to its proposal to put warning labels on ephedra
bottles in March.  However, it has not banned the product.

In a statement submitted to the subcommittee, Metabolite said
the company "strongly believes in the science supporting the
safety and efficacy of dietary supplements that contain ephedra
when used as directed."

Cytodyne officials on the other hand showed a letter from from
forensic pathologist and former New York City chief medical
examiner Dr. Michael Baden, who says that ephedra didn't cause
Mr. Bechler's death, the Associated Press reports.  The letter
states that the ephedra that Mr. Bechler took was still in his
stomach and had not entered his bloodstream when he collapsed
from heat stroke, thus ephedra could not have caused his death.

"Based on all the evidence we have seen, the industry has not
adequately addressed the safety of ephedra-based diet products,"
Ken Johnson, a spokesman for House Energy and Commerce Committee
Chairman Billy Tauzin, R-Louisiana told AP.

In May, Illinois Gov. Rod Blagojevich signed the nation's first
statewide ban on ephedra.  Ephedra is also banned by the
National Collegiate Athletic Association, the National Football
League and the International Olympic Committee but not major
league baseball.

FREDDIE MAC: Report Reveals Accounting Fraud, Stock Manipulation
An independent report, written by former Securities and Exchange
Commission General Counsel James Doty, revealed that Freddie Mac
executives artificially manipulated earnings and practiced
fraudulent accounting, Reuters reports.

The mortgage finance company is facing several class actions in
the United States District Court in the Eastern District of
Virginia, charging it with violations of 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 April 18, 2000 and June
6, 2003, thereby artificially inflating the price of Freddie Mac
securities, an earlier Class Action Reporter story states.

The report stated that prior senior management suppressed
information that would interfere with the company's reputation
of having consistent, predictable earnings.  "It was well
understood throughout the organization that the tone of 'steady
Freddie' came from its chief executive officer," said the
report, written by former Securities and Exchange Commission
General Counsel James Doty.

The report further stated the executives maintained a public
corporate image that was not in line with good management
practices and effective internal controls.  Managers allegedly
knew about the Company's questionable transactions under
accounting principles standard for US companies, but failed to
fix problems when accountants raised concerns and tried to cover
up missteps.

As board members became worried about Freddie Mac's accounting
quality, starting in the fall of 2001, CEO Leland "Brendsel and
(former Vice Chairman David) Glenn failed to take prompt
corrective action," the report said, according to Reuters.  The
Company later fired Mr. Glenn and Mr. Brendsel retired.

Greg Parseghian replaced Mr. Brendsel as CEO in June after the
accounting scandal became public.  Mr. Parseghian had signed off
on transactions Freddie Mac now admits were designed to defer
earnings.  However, Mr. Doty defended Mr. Parseghian, saying
that Mr. Parseghian, he said, had been told by internal and
external accountants that they were legitimate.

"He was aware that the objective of some of the transactions was
to defer earnings," he told analysts and reporters on a
conference call, Reuters states.  "We believe he relied in good
faith on corporate accounting and/or Arthur Andersen to provide
the necessary accounting advice and to ensure the transactions
were accounted for in accordance with GAAP (Generally Accepted
Accounting Principles)."

On the same conference call, Shaun O'Malley, installed last
month as Freddie Mac's chairman, told Reuters the release of the
report marked "a painful day for Freddie Mac."  He added that
despite these problems, the firm is strong financially.

A spokesman for Mr. Brendsel had no comment while Mr. Glenn's
lawyer Thomas Vartanian said he needed to review the report
before commenting.  However, he told Reuters Glenn had depended
on the advice of accountants.

GEICO CALL CENTER: Texas Court Certifies Overtime Wage Lawsuit
The United States District Court in Houston, Texas conditionally
certified a nationwide class of current and former GEICO call
center employees seeking to be compensated for unpaid overtime,
a press statement by law firm Edwards & George, LLP stated.

According to the May 20, 2003 court order by Judge Barbara Lynn,
all current and former hourly paid, telephone-dedicated
employees who worked in GEICO's call centers as Sales
Associates, Customer Service Representatives, Direct Handlers,
Billing Associates, or PBX employees who worked at GEICO between
March 25, 2000 and the present are eligible to receive notices
of the case.  This includes all hourly paid, telephone-dedicated
employees in the sales, customer service, claims, billing, or
PBX departments, regardless of precise job title. The potential
class has approximately 21,000 members.

"We believe that GEICO does not pay its employees for all of the
time they spend working for the company," J. Derek Braziel, an
Edwards &George LLP partner who oversees the firm's wage and
hour practice said.  "We are aware that employees at the GEICO
call centers are paid according to their shift times or phone
log times as opposed to when people actually get to work and
start doing work tasks.  This is a violation of the federal wage
and hour laws."

The deadline for joining the case is August 21, 2003.

In addition to the federal case, a class action has been filed
against GEICO in California.  The suit alleges that GEICO failed
to pay wages in accordance with California law for GEICO
employees who worked in California.  The violations alleged in
the California case are not limited to overtime claims because
California law provides for more favorable remedies for
California residents.

In an important development in the federal case, GEICO told the
Court that it will not release the names of those who join the
lawsuit to its Regional Office employees.  This means that
supervisors and other management will not be alerted when GEICO
employees join the case.  Additionally, GEICO has instructed its
field office employees to refrain from discussing the case with
class members.

For more details, contact J. Derek Braziel of Edwards &George,
LLP by Phone: 1-214-749-1400 by Fax: 1-214-749-1010 or
jdbraziel@edwards-george.com or Richard J. Burch by Phone: 1-
713-877-8788 by Fax: 1-713-877-8065 or by E-mail:

GUN FIRMS: Fight Looms Over Gun Control After Lawsuit Dismissal
US District Judge Jack B. Weinstein recently dismissed a lawsuit
by the National Association for the Advancement of Colored
People (NAACP) that claimed gun manufacturers endangered
minorities in New York by irresponsibly marketing firearms, The
Washington Times reports.  

While agreeing there is "clear and convincing evidence" that gun
dealers are guilty of "careless practices," Judge Weinstein
ruled that members of the NAACP were not "uniquely harmed" by
the illegal use of firearms.  The NAACP's suit accused major gun
makers of not acting to prevent dealers from selling firearms to
criminals in black and Hispanic neighborhoods.

Judge Weinstein wrote in his ruling that the NAACP proved its
members suffered "relatively more harm from the nuisance created
by the defendants through illegal availability of guns in New
York."  However, he added, the civil rights group did not "show
that its harm was different in kind from that suffered by other
persons in New York. "

Gun-control advocates said the ruling that the NAACP lacked
legal standing was based on a "technicality;" while the gun
owners' groups said the decision showed that Congress must act
to stop "frivolous" lawsuits against firearms makers.

Judge Weinstein's decision follows a trial in May, in which an
advisory jury cleared 45 manufacturers and distributors of
negligence for illegal, violent acts carried out with handguns.  
In his conclusion to a case that began in 1999, and which cost
gun makers an estimated $10 million to defend, Judge Weinstein
wrote that courts should create "new legal solutions . to
overriding social problems even when other branches of the
government are heavily involved in attempting to solve the

Supporters of a pending Senate bill that would protect gun
manufacturers from class actions, said Judge Weinstein's ruling
demonstrates the need for congressional action.  The House in
March overwhelmingly approved a bill to block lawsuits against
gun makers.  A spokesman for Senator Larry E. Craig, Idaho
Republican, said a Senate version has 54 co-sponsors, six short
of the votes needed to overcome a promised filibuster led by
Senator Frank Lautenberg, New Jersey Democrat.

The bill is not expected to come up for a vote on the Senate
floor until after the August recess, at the earliest.

"We are getting pretty close," said Will Hart, spokesman for Mr.
Craig, the measure's chief sponsor.  Several senators have told
Mr. Craig that they will vote for his bill, but have not joined
as co-sponsors, Mr. Hart said.  

Democrats pledge to fight Mr. Craig's bill to the end.  "If the
Republicans want to go down that road, Senator Lautenberg and a
number of Democrats will make it as tough a road as possible,"
said Alex Formuzis, Senator Lautenberg's spokesman.

The Democrats will offer amendments, said Mr. Formuzis, that
will make for "some of the toughest votes the senators will face
this year."

Mr. Lautenberg said Judge Weinstein's ruling proves that
"Congress needs to do more to address the gun industry's
reckless activities."

"A federal judge has found that corrupt gun dealers are a menace
to a safe, peaceful society," Mr. Lautenber said.  
"Unfortunately, a legal technicality prevented the court from
ruling against these reckless gun dealers."

Lawrence Keane, general counsel of the National Shooting Sports
Foundation, said the judge "slapped the jury in the face by
blaming the gun makers, referring to the fact that an advisory
jury had absolved the gun makers and distributors from
negligence for the "illegal, violent acts carried out with

"We will be sure to make legislators aware of what Judge
Weinstein has done here," said Mr. Keane.

Blaine Rummel, spokesman for the Coalition to Stop Gun Violence,
called the ruling a victory.  "The decision clearly demonstrated
that gun makers hold a responsibility for gun violence," Mr.
Rummel said, adding that his group is "very close" to convincing
41 senators to filibuster Mr. Craig's bill.

(The reader may find additional information about this subject
in the Wednesday, July 23, 2003 issue of the Class Action

INDIANA: Four Entrepreneurs Commence Lawsuit Over Bad Tax Advice
Four Indianapolis entrepreneurs, former owners together of a
computer company they sold in the 1990s, have amended their
complaint, which alleges their advisers gave them bad tax
advice, to seek class action status.  These entrepreneurs are
the first to bring a tax-shelter case as a class action, among
the recent wave of tax-shelter lawsuits filed by individuals,
The Wall Street Journal reports.

In the original lawsuit, the individuals alleged that audit firm
Ernst & Young LLP and lawyers at the firms of Jenkens &
Gilchrist and Brown & Wood LLP marketed a transaction to help
them avoid paying potentially millions of dollars in taxes on
more than $70 million from the sale of their computer company in
the late 90s.  The Internal Revenue Service questioned the
appropriateness of the tax shelter, according to the lawsuit
filed in the United States District Court in Manhattan in

In seeking class action status, the plaintiffs allege hundreds
of similar transactions were sold to other clients.  The amended
complaint also has added investment bank Deutsche Bank AG as a

Ernst, Jenkens & Gilchrist and Brown & Wood, now Sidley Austin
Brown & Wood, say the suit is without merit; and Deutsche Bank
declined to comment.  In a statement, Jenkens & Gilchrist said
the allegations were "unfounded, particularly as it relates to
our tax advice," a position the firm said it will advance in
pleadings it plans to file in court or in arbitration.

The recently filed amended complaint alleges that Dallas-based
Jenkens & Gilchrist, a major law firm, developed the strategy,
which involved use of currency options.  All the lawyers then
teamed up with Deutsche Bank to execute the deal, with Ernst to
market the transaction to its wealthy clients, and Brown & Wood
to provide a second legal opinion, the lawsuit alleges.

Class actions by shareholders alleging fraud are common; tax-
related cases are not that common.  A crucial question, the
legal specialists say, will be the degree to which the clients -
- typically entrepreneurs or other sophisticated wealthy
individuals -- relied on their advisers' advice.  Another
challenge will be "whether there are a sufficient number of
common questions that warrant resolving these disputes en
masse," said John Goldberg, a professor at Vanderbilt University
Law School in Nashville, Tennessee.

David Deary, a Dallas lawyer representing the plaintiffs, said
the tax-shelter clients entered into similar transactions and
received similar legal opinions blessing the deals.  So-called
opinion letters from law firms, vital to tax shelter sales, may
help taxpayers who are challenged by the IRS to avoid penalties,
but they are no guarantee, according to the report by the Wall
Street Journal.

LAKIN LAW FIRM: Civil Rights Groups Drop Sanction Request
Two groups, the Illinois Civil Justice League and the United
States Chamber of Commerce, dropped their request for sanctions
against the Lakin Law Firm, located in Wood River, Madison
County, Illinois, the St. Louis Post-Dispatch reports.

The request for sanctions by the League and the Chamber of
Commerce arose out of a news conference held recently by these
two groups and two additional groups, the Illinois Chamber of
Commerce and the American Tort Reform Association, at the
Madison County Courthouse, in which the four groups protested
the legal system in Madison County and called for tort reform.  
Madison County has gotten a reputation for the number of class
actions filed at that courthouse and the large settlements and
judgments that have resulted in some of those cases.

The Lakin Law firm responded to the news conference by filing a
complaint and delivering subpoenas to the leaders of the four
groups demanding information about each group's membership and
finances.  Thereupon, the League and the Chamber of Commerce
instituted an action for sanctions against the law firm.

When the law firm withdrew its subpoenas of the four groups, the
League and Chamber of Commerce dropped their request for
sanctions against the Lakin Law Firm.  Gordon Broom, attorney
for these two groups, said his clients "felt that once the
matter had been dropped by the plaintiffs' attorneys, there
wasn't more to be gained by going to court.  Punishing the
lawyers wasn't on their agenda."

Richard Burke, a lawyer for the Lakin Law Firm, said he was not
surprised that the groups dropped their request for sanctions.

LEARNING CHANNEL: Reality Show Subjects Launch Suit in NJ Court
The Learning Channel's reality show "Trauma: Life in the ER"
faces a national class action from hospital patients who claim
the televisions producers fraudulently obtained their consent to
film their injuries, law.com reports.  

Lawyers Gerald Clark of Lynch Martin and Raymond Gill of Gill &
Chamas filed the suit in Monmouth County Court in New Jersey,
against the show's producers and the Jersey Shore Medical Center
in Neptune, New Jersey.

The lawyers proceeded with the suit, even though the court
dismissed a similar suit last year.  The previous suit was filed
against NYT Television, a subsidiary of the New York Times, over
a video it took of plaintiff Joseph Kinsella while he was being
treated at Jersey Shore for severe injuries suffered in a fall.

The court upheld the show's film unit's rights under the New
Jersey Shield Law.  Judge Stephen Skillman wrote for the
unanimous court that the footage is information covered by the
Newsperson's Privilege Law, N.J.S.A. 2A:84-21, which is designed
to protect news organizations from intrusive inquires that
hamper the free flow of information.  The appeals court affirmed
the decision, rejecting Mr. Kinsella's assertion that
sensational and gory TV shows, which he says include "Trauma:
Life in the ER," are not news programs under the Shield Law

This ruling made it difficult for Atty. Clark to obtain the
evidence he wants to buttress the fraud and invasion of privacy
claims against the producers.

The named plaintiffs in the suit filed June 24 are Monmouth
County residents Michael Castro, who was stabbed, and Julio
Costa, whose hand was severed in an accident.  Like Mr.
Kinsella, they were filmed in July 2001 for "Trauma: Life in the

The suit alleges that the hospital and the show's producers told
patients that the filming was to be used for doctor training
when it was really "free material for a shock cable TV show."  
The suit further stated that "the TV show has grossed hundreds
of millions of dollars by exploiting emergency room hospital
patients who are typically vulnerable and who are paid nothing
for being subjected to intrusions into their private, intimate

A spokesman for Jersey Shore declines to comment, saying the
hospital had only recently been served with the complaints,
law.com reports.

If the allegations in the class action are true, however, the
patients' consent is obtained under false pretenses.  The suit
says a class action is required because thousands of patients
may have been filmed for the show, too numerous a group to file
as individuals, yet all subject to common legal issues.

MEDIA OWNERSHIP: FCC Allegedly Used Flawed Measurement For Rules
The Federal Communications Commission used a flawed measurement
tool to skew its new media-ownership rules in favor of large
companies such as Tribune Co. and Gannett Co., a consumer group
that plans to sue the agency said, according to a report by the
South Florida Sentinel.

The Consumer Union's 39-page study of the FCC's use of a so-
called "diversity index" in preparing the new rules will form
the basis for a lawsuit that Consumers Union plans to file in
the next few months, said Gene Kimmelman of Consumers Union

The lawsuit will seek to overturn the rules, alleging that they
will lead to media consolidation that reduces diversity in news
and entertainment.  The new rules, approved June 2 by the FCC,
ease curbs on companies' ownership of television stations and

Tribune Co. is the parent of the Sun-Sentinel Co.

MICHIGAN: 11 Persons Injured in Detroit Hot Air Balloon Mishap
11 people were injured in a hot air balloon accident in Oakland
County's Highland Township, about 50 miles northwest of Detroit,
the Associated Press reports.  

The balloon got caught by wind as it landed and was dragged 100
yards across a rural area, injuring the pilot and 10 passengers
who were aboard for a birthday celebration.  Some of the
passengers were thrown from the basket, township Fire Chief Jim
Crunk told the Associated Press, and at least six were taken to
a hospital.

The balloon trip, a present given to one of the passengers, had
originated about 20 miles north in Fenton.  The Federal Aviation
Administration was called to investigate, sheriff's Sgt. Arthur
Cockrell told AP.

NATIONAL SEMICONDUCTOR: Discovery Starts in Personal Injury Suit
Discovery is proceeding in a class action filed against the
National Semiconductor Corporation and a number of its suppliers
in California Superior Court by James Harris and other former
and present employees claiming damages for personal injury.  

The complaint alleges that cancer and/or reproductive harm were
caused to employees as a result of alleged exposure to toxic
chemicals while working at the company.  Plaintiffs claim to
have worked at sites in Santa Clara and/or in Greenock,

In addition, one plaintiff claims to represent a class of
children of company employees who allegedly sustained   
developmental harm as a result of alleged in utero exposure to
toxic chemicals while their mothers worked at the company.

Although no specific amount of monetary damages is claimed,
plaintiffs seek damages on behalf of the classes for personal
injuries, nervous shock, physical and mental pain, fear of
future illness, medical expenses and loss of earnings and
earnings capacity.  

Right now, the court is requiring the Scottish employees to seek
their remedies in Scottish courts.  Plaintiffs are presently
seeking to certify a medical monitoring class, which the Company  

OHIO: Hudson Residents Mull Lawsuit For Severe Damage To Homes
The town of Hudson, Ohio's residents are considering the filing
of a class action, after their homes incurred severe water
damage, after the city's worst flooding in 35 years, wkyc.com
reports.  Homeowners along Aterbury Boulevard in Hudson blamed
the town's officials, saying their decision to open the
floodgates contributed to the mess.

Hudson's moderately sized retention basins flooded during this
week's Monday night storm, causing a sudden flash flood.  City
officials admit the decision to open the flood gates was tough
to make.  They were fearful that the dam was going to break, so
they opened the valve to an eight-inch pipe in order to release
some of the pressure.  They say if the dam had broken, there'd
be an even bigger water problem, wkyc.com reports.

POLARIS INDUSTRIES: CA Jury Says No Design Defect in Boss ATV
A central California jury returned a unanimous defense verdict
in favor of Polaris Industries, after deliberating 10 minutes
following a four-week trial, finding no design defect in the
rear brake system of the 1993 Polaris Trail Boss 250 ATV, as
plaintiff Dennis Theriot claimed.

The lawsuit stemmed from a June 25, 2000 accident near Pismo
Beach, when Mr. Theriot lost control of his ATV and skidded off
the road.  Mr. Theriot claimed the rear brakes in his 1993
Polaris Trail Boss 250 ATV did not operate in neutral, resulting
in an inability to stop the vehicle when it suddenly popped out
of gear and forcing him and his wife to jump from the ATV,
leaving his left hand severely broken.

He alleged the accident could have been prevented had his ATV
been designed with rear brakes in neutral.  He claimed that
Polaris could have easily designed an ATV with rear brakes in
neutral by installing a mechanical foot brake.  In addition, he
claimed Polaris was the only ATV manufacturer to have a design
with no rear brakes in neutral.

During trial, Polaris attorneys and their experts demonstrated
to the jury that Mr. Theriot's ATV could have been stopped at
the accident scene by applying the front brakes gradually,
instead of locking them.  Plaintiffs' own expert demonstrated
this in a video, and was subsequently withdrawn by plaintiffs,
but Polaris was able to play its video for the jury.

Second, Polaris showed through a computer simulation created by
another plaintiff's expert that had the ATV been equipped with
front and rear brakes in neutral, it would have stopped only
0.18 seconds faster -- and in either case would still have gone
off the road.  Throughout the trial, Polaris attorneys
maintained Mr. Theriot should not have been riding the single-
rider vehicle with his wife, as the additional rider interfered
with his ability to operate the controls and ultimately caused
him to panic and jam the brakes by applying too much pressure.

Plaintiff requested an award between $300,000-500,000 for loss
of earning capacity, plus future surgery costs for three or more
operations, past medical expenses and wage loss, and pain and

For more details, contact Amanda Walsh of Bowman and Brooke,
Minneapolis by Phone: 612-672-3248 or by E-mail: awalsh@bowman-

PPA LITIGATION: Canada Court Allows Study as Evidence in Lawsuit
The Superior Court in New Brunswick, Canada allowed a study
linking drug ingredient phenylpropanolamine (PPA) to strokes as
evidence in a class action filed against major drug companies,
including Wyeth, Novarties, Bayer and Schering Plough, the Star-
Ledger reports.

Three years ago, these products were recalled at the urging of
regulators. The controversy over PPA, however, has existed for
years.  PPA is used in various over-the-counter medicines as a
way to suppress appetites or relieve runny noses. Those products
included such popular items as Alka-Seltzer Plus, Contac and
Dexatrim, Dimetapp and Tavist-D.  Until the recall in 2000,
about 6 billion doses of PPA were reportedly sold each year in
the United States.

However, reports of strokes prompted congressional hearings in
1991.  Regulators proposed additional warning labels on products
in 1996 and a comprehensive safety study, which was conducted by
Yale University researchers and appeared in The New England
Journal of Medicine.  The Companies said the 2000 study used
faulty science to link PPA to an increased risk of strokes and
opposed using it as evidence.

Judge Marina Corodemus disagreed, saying the study dramatically
strengthens the plaintiffs' argument that their expert testimony
be admitted because it supports and complements other scientific

Lawyers for the 300 New Jersey residents who filed lawsuits
praised the decision, the Star-Ledger reports.  "This was a
pivotal study and their big hope in defending this litigation
was to keep the study out," said Ellen Relkin, a lawyer who
represents more than 100 New Jersey residents.  "Now these
people will be able to have their day in court."

A spokeswoman for Novartis told the Star-Ledger the drug maker
is "disappointed the court has decided to admit the study into
evidence" and vowed to contest the issues at trial.  A trial is
scheduled for October.  A Schering-Plough spokesman declined to
comment and a Bayer spokeswoman couldn't be reached.  A
spokesman for Wyeth said the ruling only permitted some evidence
to be submitted but not everything the plaintiffs sought.

RSA SECURITY: Settles SEC Cease-and-Desist Securities Complaint
The United States Securities and Exchange Commission (SEC)
instituted and simultaneously settled cease-and-desist
proceedings against RSA Security, Inc.  

The Commission's Order found that RSA violated Section 10(b) of
the Securities Exchange Act of 1934 by making misleading
statements in an April 10, 2001, press release and corresponding
conference call with analysts and others.  The Order found that
RSA stated that it had achieved analysts' earnings expectations
for the first quarter of 2001 in a "difficult economic
environment" and compared its net income, operating income, and
earnings with its performance for the first quarter of 2000.  

The Order further found that these statements were misleading
because, during the quarter, RSA experienced a material one-time
increase in operating income, net income, and earnings that
resulted from a change in the way it recognized revenue from
sales to distributors.  In addition, the Order found that,
although the accounting change itself complied with generally
accepted accounting principles, RSA's statements created the
misleading impression that its ability to meet analysts'
earnings expectations for the quarter resulted solely from its
operations, rather than, in part, the accounting change.

RSA agreed to settle the charge without admitting or denying the
Commission's findings.  The Commission's Order orders RSA cease
and desist from committing or causing any violations, and any
future violations, of Section 10(b) of the Exchange Act and Rule
10b-5 thereunder.  

SOUTH CAROLINA: Judge To Decide To Allow Autism Suit To Proceed
South Carolina Federal Magistrate Judge Thomas Rogers has yet to
decide whether he will allow a lawsuit filed over the Horry
County School District's autism program to proceed to federal
court, the Sun News reports.

Eva Ballentine filed the suit in October on behalf of her 14-
year-old son Shawn.  The suit alleges that the district does not
provide enough staff or training for services required by the
federal Individuals with Disabilities Education Act.   The suit
further states that necessary services, materials, transpor-
tation and supervision for children with autism have not been

Several parents have shown their support for the suit.  "These
parents want to change the system for everybody," Ms.
Ballentine's attorney, David Gundling told the Sun News.

The school district earlier asked the court to dismiss the suit
because Ms. Ballentine has not taken the case through the proper
channels of due process.  A refusal by the judge to accept the
case would probably send the action through alternative

Mr. Gundling argued that if Ms. Ballentine to took her
complaints through the normal administrative process, it would
not help others thought to have similar problems.  "They're
fighting a system that they cannot individually beat," he said.

SOUTH KOREA: New Securities Suit System To Take Effect July 2004
South Korea's new litigation seeking the implementation of a
securities class action system is set to take effect in July
2004, the Chosun Ilbo reports.  The bill will cover a total of
1,543 listed firms, and will hold 65 firms with assets of more
than 2 trillion won.  The rest of the firms will be included in
July 2005.

Under the new legislation, a shareholder may file a class action
against the Company and if he wins, other similar shareholders
will be awarded the same compensation.  The government proposed
the system to protect minority shareholders from losses caused
by accounting fraud and illegal internal transactions.  If the
suit is taken over alleged stock price manipulation, all the
listed firms regardless of their asset value, will be subject to
the new bill.

The Legislation and Judiciary Committee of the National Assembly
announced on Wednesday that it passed the bill, Chosun Ilbo
reports.  Ham Seung-heui, a ruling Millennium Democratic Party
member on the committee, said that the ruling and opposition
parties reached an agreement on the class-action bill so that
the business sector would enhance its management transparency.

An official at the committee said that in a bid to rein in
reckless class actions, more than 50 minority shareholders would
be required to file a suit, and the 50 minority shareholders
must possess among them 10,000 shares or W100 million worth of
the defendant's shares.

TACO BELL: Second Damages Trial Begins in OR Overtime Wage Suit
The second damages trial for the remaining claimants in the
class action filed against Taco Bell Corporation has commenced
in the Circuit Court of the State of Oregon of the County of

The lawsuit was filed by two former Taco Bell shift managers
purporting to represent approximately 17,000 current and former
hourly employees statewide.  The lawsuit alleges violations of
state wage and hour laws, principally involving unpaid wages
including overtime, and rest and meal period violations, and
seeks an unspecified amount in damages.

Under Oregon class action procedures, Taco Bell was allowed an
opportunity to "cure" the unpaid wage and hour allegations by
opening a claims process to all putative class members prior to
certification of the class.  In this cure process, Taco Bell
paid out less than $1 million.

In January 1999, the court certified a class of all current and
former shift managers and crewmembers who claim one or more of
the alleged violations.  A court-approved notice and claim form
was mailed to approximately 14,500 class members on January 31,
2000. Trial began on January 4, 2001.

The jury later reached verdicts on the substantive issues in
this matter.  A number of these verdicts were in favor of the
Taco Bell position; however, certain issues were decided in
favor of the plaintiffs.  In April 2002, a jury trial to
determine the damages of 93 of those claimants found that Taco
Bell failed to pay for certain meal breaks and/or off-the-clock
work for 86 of the 93 claimants.  However, the total amount of
hours awarded by the jury was substantially less than that
sought by the claimants.

In July and September 2002, the court ruled on several post-
trial motions, including fixing the total number of potential
claimants at 1,037 (including the 93 claimants for which damages
have already been determined) and holding that claimants who
prevail are entitled to prejudgment interest and penalty wages.  

The second damages trial for the remaining 944 claimants began
on July 7, 2003.  Taco Bell intends to appeal the April 2002
damages verdict, as well as the March 2001 liability verdict.

Although the outcome of this case cannot be determined at this
time, the Company believes the ultimate cost in excess of the  
amounts already provided will not be material to its annual  
results of  operations, financial condition or cash flows.  

TICKET TRACK: WA Court Says $30 Parking Violation Fine "Illegal"
The United States District Court in Seattle, Washington ruled in
favor of plaintiffs in a class action filed against Ticket
Track, which collects fines for eight parking companies across
the state, the Seattle Times reports.

The Company allegedly collected $30 violation fees to people who
failed to pay parking tickets on time.  Judge Marsha Pechman
ruled that thousands of people were illegally charged a
collection fee along with their parking tickets at various
parking lots across the state.  
Under the ruling, an estimated 130,000 people could be eligible
for refunds, Seattle attorney Harish Bharti, who brought the
class-action lawsuit against Ticket Track, told the Times.

Ticket Track's lawyer did not immediately return phone calls,
the Seattle Times reports.

                      Asbestos Alert

ASBESTOS LITIGATION: Asbestos Victims Soon to Get Compensation
Richard Spoor, a law specialist says victims of asbestos-related
diseases in the Northern Cape and North West would soon get the
money due them.  Those living in other countries and the former
Transkei will have to wait longer as a process gets under way to
not only diagnose asbestos-related diseases but also to register
them for compensation.

The trustees of the Asbestos Relief Trust will take charge of
the distribution of payouts.  The five-man team will determine
whether one is qualified for payment and how much each claimant
will get.

The trust was set up after Gencor agreed to pay R460,500,000 as
full and final settlement, and without admission of liability,
for any damages arising from asbestos-related diseases.

ASBESTOS LITIGATION: ABB Says No Deal Approved Before August
ABB does not expect a ruling on its asbestos settlement package
before August.

U.S. District Judge Alfred Wolin will hear the appeal of the
opposition on July 31 in Newark, New Jersey wherein the
$1,300,000,000-settlement will either be granted or denied.  His
ruling can be appealed in a higher court.

The Swiss engineering firm is eyeing the approval of the
settlement because it would ease its plan to sell its oil, gas
and petrochemical unit.

Lummus Global, its OGP arm will not go unharmed by the asbestos
issue, according to investors.

ASBESTOS LITIGATION: Allegheny, Lloyd's Scuffle Over Claims
Allegheny Energy Inc. and Lloyd's of London are in a legal
tangle over loads of asbestos-related claims.  The Hagerstown-
based energy company says the insurer owes it $355,900,000 for
more than 18,000 outstanding asbestos-related claims that
originated in West Virginia.

Lloyd's on its part declares it should not have to pay any
asbestos-related claims or other future environmental claims to
which it could be exposed.  The insurer says Allegheny told its
insurers there are current or possible future insurance claims
to be made for pollution cleanup at as many as 28 sites in West
Virginia, Pennsylvania, Maryland - including Hagerstown - and

James T. Boggs, a claims manager and senior attorney for
Allegheny, said in his affidavit that while lawsuits continue to
be filed, Monongahela Power has been sued by about 10,000
individuals, Greensburg, Pa.-based West Penn Power by about
4,500 and Fairmont, W.Va.-based Potomac Edison by more than

In late 2001 or early 2002, Boggs said Lloyd's and Allegheny
began talks to come to terms over the asbestos suits.  On April
30, Lloyd's and Allegheny had planned to finalize their
agreement but such meeting never materialized.  The energy
company and the insurance giant hurled lawsuits against each
other on May 2.

ASBESTOS LITIGATION: Ampco-Pittsburgh Says Asbestos Hurt Profit
Ampco-Pittsburgh Corporation reports that legal fees on
asbestos-related lawsuits hurt its profit in the second quarter.  
The producer of metals and plastic products said the fall was
the result of $700,000 in pretax legal costs for case management
and insurance recovery related to the said lawsuits.

Ampco-Pittsburgh said its sales were off, too at $51,700,000 and
that the manufacturing environment continues to be difficult but
added that it was heartened to report results that were in the

ASBESTOS LITIGATION: Celotex To Pay NY City for Asbestos Cleanup
A federal bankruptcy judge finally ruled in favor of New York
City against Celotex Corporation after the City filed claims in
Tampa, Florida, in 2000.  Celotex, which manufactures and
distributes building supplies and asbestos-laden vinyl flooring
installed in more than 400 city buildings, including public
schools, may have to shoulder the cost of asbestos cleanup, eyed
at $40,000,000.

Lawyers for the City argued that asbestos in the building
supplies could go airborne through normal wear and tear or
through damage.  Celotex filed for Chapter 11 Bankruptcy
protection in 1990, but company trustees battled the city's
attempts to access its nearly $1 billion in assets.  The City
did received more than $9 million in payments for 73 claims, but
hundreds of others went unpaid.

The money won from the Celotex will cover roughly a third of the
costs to clean and remove the asbestos-laden materials from the
buildings, city officials said.

ASBESTOS LITIGATION: Halliburton Gets Stay on Asbestos Claims
The US bankruptcy court ruled in favor of the agreement among
DII Industries, Harbison-Walker Refractories Co. and the
Official Committee of Asbestos Creditors that extends the
court's temporary restraining order through September 30,
according to Halliburton Companies.

The parties to the agreement, however, retain the right to
request the bankruptcy court to extend the stay beyond September
30. Should the stay expire, the court established that discovery
on the stayed claims cannot begin until November 1, and trial
dates cannot be set before January 1, 2004.  The court's
temporary restraining order, which was originally entered on
Feb. 14, 2002, stays more than 200,000 pending asbestos claims
against DII Industries.

It is the third time the Houston-based company has sought an
extension since agreeing to a settlement worth about
$4,000,000,000 in December last year.  Most of the claims landed
on Halliburton four years ago when they acquired Dresser
Industries Inc. for $7,700,000,000.

The case is tried in Pittsburgh because most of the asbestos
claims were filed against a former Dresser subsidiary,
Pittsburgh-based Harbison-Walker Refractories Co.  That company
filed for Chapter 11 bankruptcy last year.

A lawsuit against Harbison-Walker was filed by oilfield
services, engineering and construction conglomerate, which
claims that the company promised to take responsibility for all
asbestos claims filed against it after 1992.  Harbison-Walker
ended the practice in 2001.

ASBESTOS ALERT: Judge Upholds Asbestos Ruling, BIW to Pay Widow
Bath Iron Works received a blow when a federal judge ruled that
the wife of William Knight is entitled to worker's compensation
benefits from the company.  Mr. Knight, who died of an asbestos-
related disease, worked at the BIW shipyard for 45 years.  He
was diagnosed with cancer ten years after his retirement.

BIW contends that his widow's claim came too late.  The judge
upheld the previous ruling declaring that Gertrude Knight had no
reason to suspect that asbestos had caused her husband's demise.  
Ms. Knight filed her case three years after the death of her


Bath Iron Works Corporation
a subsidiary of General Dynamics Corporation
700 Washington St.
Bath, ME 04530-2556
Phone: 207-443-3311
Fax: 207-442-1567

Employees   : 54,000
Revenue     : $13,829,000,000
Net Income  :    $917,000,000
Assets      : $11,731,000,000
Liabilities :  $6,532,000,000
(As of December 31, 2002 of General Dynamics Corp.)

Description: Bath Iron Works, which became a subsidiary of
General Dynamics in 1995, constructs ships for the US Navy. BIW
is the lead designer and builder for the Arleigh Burke Class
AEGIS guided-missile destroyer, and it is designing the new DD-
21 land attack destroyer. The company also is part of the team
developing the LPD-17 amphibious assault ship. BIW's Surface
Ship Support Center (opened 2000) offers design and engineering,
logistics, manpower management, fleet services, and other
support services. BIW built its first ship for the US Navy, a
gunboat called the USS Machias, in the 1890s. The company is the
largest employer in the state of Maine.

ASBESTOS ALERT: Worker Sues University, Tyco Unit for Asbestos
Michael White seeks more than $100,000 compensatory and punitive
damages for asbestos exposure at the University of Nebraska at
Kearney dormitory where he helped install an alarm system last

Mr. White, 43, claims he faces the "fear and apprehension of
devastating illness and possible death" as well as "likely
medical bills in the future" because of the alleged exposure.  
He further alleged that he was exposed to the lethal dust while
drilling ceiling holes at the Centennial Tower East dormitory.

John Wiltse, general counsel for the University of Nebraska, was
unaware of the lawsuit and declined comment Tuesday.  The
lawsuit was filed on July 21 in the US District Court in
Lincoln, Nebraska.  It named as defendants the University of
Nebraska at Kearney as well as several school officials, the
SimplexGrinnell Company and its parent company, Tyco Fire and
Security.  SimplexGrinnell, of Omaha, was hired by the school to
install the alarm system.

White claimed a SimplexGrinnell supervisor repeatedly told him
the ceilings did not have asbestos.  According to the lawsuit,
White later had some of the suspect materials tested at a state
lab.  The test results revealed the materials to be an
"extremely hazardous" form of asbestos, according to the


Tyco Fire and Security Services
1 Town Center Rd.
Boca Raton, FL 33483
Phone: 561-988-7200
Fax: 561-988-3673

Employees   : 95,000
Revenue     : $35,643,700,000*
Net Income  : $(9,411,700,000)*
Assets      : $66,414,400,000*
Liabilities : $41,623,800,000*
(As of September 31, 2002)
(*As of September 31, 2002 of Tyco International, Ltd.)

Description: Tyco Fire & Security (TFS) is one of the four
operating divisions of Tyco International Ltd. With annual
revenues of $10 billion and over 100,000 employees worldwide,
TFS brings together a global portfolio of products and life-
cycle services delivered through local representation in 60
countries. Working across a wide range of industries and
customers, TFS delivers value-added solutions that help our
customers protect their homes, businesses, families and
employees, minimizing risk while reducing costs and improving

                   New Security Fraud Cases

CREE INC.: Kaplan Fox Commences Securities Fraud Suit in M.D. NC
Kaplan Fox & Kilsheimer LLP initiated a securities class action
against Cree, Inc. (NasdaqNM:CREE) and certain of its officers
and directors, in the United States District Court for the
Middle District of North Carolina.  This suit is brought on
behalf of all persons or entities, other than defendants, who
purchased Cree common stock between August 19, 1998 and June 13,
2003, inclusive.

The complaint alleges that Cree and certain of its officers and
directors violated the federal securities laws.  During the
class period, defendants issued statements that failed to
disclose and/or misrepresented the following adverse facts,
among others:

     (1) that the Company had materially overstated its net
         income and earnings per share;

     (2) that the defendants artificially inflated Cree's
         operating income by improperly recognizing revenue on
         purported "sales" of Cree's silicon carbide crystals to
         C3 Inc., an affiliated company of Cree that was run by
         the brother of the company's former CEO;

     (3) that the defendants failed to disclose, in Cree's
         registration statements and its prospectuses, how
         proceeds from its secondary offerings would be used;

     (4) that the defendants artificially inflated Cree's
         operating income so that they could participate in the
         Company's ``discretionary incentive program'' and so
         that the Company's outside directors would qualify for
         additional Cree stock options;

     (5) that the defendants were concealing these facts in
         order to manipulate the Company's earnings so that
         defendants could unload material amounts of their Cree
         holdings for more than $68 million; and

     (6) that the false and misleading information disseminated
         by the defendants caused Cree's common stock to trade
         at artificially inflated prices.

For more details, contact Robert N. Kaplan, or Christine M. Fox
by Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by
Phone: (800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714
or by E-mail: mail@kaplanfox.com

LEHMAN BROTHERS: Kaplan Fox Lodges Securities Lawsuit in S.D. NY
Kaplan Fox & Kilsheimer LLP initiated a securities class action
against Lehman Brothers, Inc. in the United States District
Court for the Southern District of New York on behalf of all
persons or entities who purchased or otherwise acquired the
common stock of RSL Communications, Ltd. (Other OTC:RSLCF.PK)
between July 1, 1999 and September 30, 2000, inclusive.

The complaint alleges that during the class period the defendant
issued to the investing public false and misleading analyst
reports on RSL in a bid to win or maintain lucrative banking and
advisory work from the Company.  During the class period, Lehman
maintained its highest rating a (``1-Buy'' ``1-Strong Buy''), on
RSL stock, despite the fact that the stock fell to $4 per share
in August 2000.

As a result of defendant's false and misleading statements, the
market price of RSL common stock was artificially inflated,
maintained or stabilized during the class period, to the injury
of plaintiff and the other class members who purchased the stock
at the time relying on the integrity of the market price of the

On or about April 28, 2003, the SEC issued a complaint charging
Lehman with violating numerous rules of conduct of the National
Association of Securities Dealers, Inc. (NASD) and the New York
Stock Exchange, Inc. (NYSE), by issuing false and misleading
analyst reports on numerous companies, including RSL.

The complaint describes the influence and control exerted by
Lehman's investment bankers on its supposedly independent
research analysts, and details how positive ratings and research
reports on RSL issued by Defendant to the public were contrary
to Defendant's more negative assessments of the Company's true
value and prospects.

For more details, contact Frederic S. Fox, or Donald R. Hall by
Mail: 805 Third Avenue, 22nd Floor, New York, NY 10022 by Phone:
(800) 290-1952 or (212) 687-1980 by Fax: (212) 687-7714 or by E-
mail: mail@kaplanfox.com

MATRIA HEALTHCARE: Marc Henzel Lodges Securities Suit in N.D. GA
The Law Offices of Marc S. Henzel initiated a securities class
action in United States District Court for the Northern District
of Georgia on behalf of all persons who purchased or otherwise
acquired the securities of Matria Healthcare, Inc., (NASDAQ:
MATR) between October 24, 2001 and June 25, 2002, inclusive.

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 materially false
and misleading statements to the market between October 24, 2001
and June 25, 2002.

During the class period, the defendants touted the "strong
performance" of all of its diabetes businesses and repeatedly
bragged about the company's growth, noting the signing of new
contracts and anticipated contracts.  Defendants assured the
market during this time that they were ramping up the company's
infrastructure and implementing a major systems change that
would help them fulfill their goal to be the most
technologically advanced provider in their sector of the health
industry and that would significantly increase their

Citing their growth, defendants explained that the reason
expenses had exceeded anticipated revenues at certain times was
that it was difficult to time the need for additional personnel
and infrastructure with the receipt of large contracts because
"contractual negotiations can delay the anticipated start dates
for new disease management programs."

Unbeknownst to the investors, however, the complaint alleges
that the company was experiencing serious known problems that
rendered defendants' class period statements false and
misleading and that defendants had a duty to disclose under Item
303(a)(ii) to Regulation S-K.

Specifically, the complaint alleges that the defendants failed
to disclose until June 25, 2002, despite a duty to do so, the
following adverse, known facts:

     (1) the company's Health Enhancement Segment was
         experiencing significant "information system
         constraints" which led to unfilled customer orders;

     (2) the company's Facet Technologies division was
         experiencing higher costs as a result of undisclosed
         inventory and supply chain management problems;

     (3) Facet's gross margins were materially and adversely
         affected by decreasing price concessions from its major

     (4) Matria's gross profit margins were being negatively
         impacted by an increase in the price of one of its key
         drugs; and

     (5) the company's Health Enhancement revenues would be
         negatively impacted by at least $800,000 due to the
         bankruptcy of a health plan whose deteriorating
         financial condition the defendants knew of or were
         severely reckless in disregarding.

The complaint alleges that the defendants were motivated to
conceal these problems in order to inflate the purchase price of
Matria common stock because defendants negotiated two
acquisitions during the Class Period, using Matria common stock
as currency.

On June 25, 2002, after the close of trading, defendants shocked
the market by revising the company's financial outlook for
fiscal 2002 and revealing the problems discussed above.  In
response to the Company's shocking news, the price of Matria's
common stock plummeted on unusually heavy volume the next
trading day, dropping from nearly $12 to $7 before closing at
$8.95 per share.  A chorus of Wall Street analysts also
downgraded the stock as a result.

For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:

PEDIATRIX MEDICAL: Marc Henzel Lodges Securities Suit in S.D. FL
The Law Offices of Marc S. Henzel initiated a securities class
action in the United States District Court for the Southern
District of Florida on behalf of all purchasers of the common
stock of Pediatrix Medical Group, Inc. (NYSE: PDX) from April
17, 2002 through June 23, 2003, inclusive.

The complaint alleges that defendants violated Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between April 17, 2002 and June
23, 2003, thereby artificially inflating the price of Pediatrix
common stock.

The complaint alleges that these statements were materially
false and misleading because they failed to disclose and
misrepresented the following adverse facts, among others:

     (1) that the defendants engaged in fraudulent ``upcoding''
         in its billing practices while telling the investing
         public that its billing practices were legitimate;

     (2) by virtue of having improperly received and recorded as
         revenue payments to which Pediatrix was not entitled,
         Pediatrix materially inflated several key indicators,
         including operating income, net inpatient revenue per
         admission, EBITDA and EBITDA margins;

     (3) that these unsafe and unsound business practices
         materially misrepresented the Company's business
         operations and financial performance by enabling the
         defendants to post better financial results; and

     (4) that as a result, the Company's stock price was
         artificially inflated.

On June 24, 2003, the Company issued a press release with the
headline: ``Pediatrix Notified of Billing Inquiry.''  Therein,
the Company announced that it had been advised by the U.S.
Attorney's Office that it was conducting a civil investigation
into Pediatrix's Medicaid billing practices nationwide.  
Additionally, the Company announced that the U.S. Attorney's
Office intended to make a document and information request,
informally or by subpoena, within the next few weeks.

Market reaction to the news was swift.  Pediatrix's shares fell
24% or $9.90 per share, on unusually high trading volume, to
close at $32.20 per share.

For more details, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202, Bala Cynwyd, PA 19004 by Phone: 610-660-8000 or
888-643-6735 by Fax: 610-660-8080 or by E-Mail:

READ-RITE CORPORATION: Kirby McInerney Lodges Stock Suit in CA
Kirby McInerney & Squire, LLP initiated a securities class
action in the United States District Court for the Northern
District of California on behalf of all purchasers of Read-Rite
Corporation (Other OTC:RDRTQ.PK) common stock during the period
from October 30, 2001 to June 6, 2003, inclusive.

The action charges certain of Read-Rite's senior officers with
violations of Sections 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934.  The alleged violations stem from the
dissemination of false and misleading statements, which had the
effect - during the class period - of artificially inflating the
price of Read-Rite's shares.

The complaint alleges that during the class period defendants
issued a series of false and misleading statements about the
Company, and as a result Read-Rite's stock traded at inflated
prices during the class period, increasing to as high as $39 on
January 9, 2002, before the Company announced it would file for

The true facts which were known to each of the defendants, but
concealed from the investing public during the class period,
were as follows:

     (1) The Company's 40 GB/platter inventory was overstated by
         $16.7 million;

     (2) The Company's Philippine real estate holdings were
         overstated by approximately $6.8 million;

     (3) The Company needed to restructure its operations and
         the associated charges would cost the Company in excess
         of $20 million and would cause an earnings shortfall in
         coming quarters;

     (4) The Company's Q2 FY03 loss was grossly understated;

     (5) The Company was experiencing massive technical problems
         associated with its 40GB/per platter programs.
         Moreover, the Company was experiencing these problems
         well before January 2002 and beyond April 2002 when
         defendants claimed such problems were fixed; and

     (6) The Company was underfunded and could not complete the
         production of its 80GB programs.

For more details, contact Ira M. Press or Elaine Mui by Mail:
830 Third Avenue, 10th Floor, New York, New York 10022 by Phone:
(212) 317-2300 or (888) 529-4787 or by E-Mail: emui@kmslaw.com

RECOTON CORPORATION: Wolf Haldenstein Files Stock Lawsuit in FL
Wolf Haldenstein Adler Freeman & Herz LLP initiated a securities
class action in the United States District Court for the Middle
District of Florida, on behalf of all persons who purchased the
common stock of Recoton Corporation (OTB: RCOTQ.PK) (Nasdaq:
RCOTQ) between November 15, 1999 and August 19, 2002, inclusive,
against certain officers and directors of the Company.

The complaint alleges that the Company violated federal
securities laws by falsely assuring the marketplace that it had
adopted a "strategic business plan designed to improve operating
efficiencies," as required by the Company's creditors as a
condition to restructuring the Company's debt.  Beginning in
November 1999, the Company repeatedly reaffirmed that it had
implemented its "strategic plan" and emphasized its success at
improving operating efficiencies.  The Company also stressed
that it had established "a more incentive-based method of
compensation" and "stringent financial controls."

On May 8, 2002, however, the Company partially disclosed that it
"did not anticipate the full implementation of the strategic
plan until the end of May 2002."  On August 19, 2002, the end of
the class period, the Company revealed information showing that,
contrary to its earlier statements on awarding only incentive-
based compensation to management, bonuses had been paid to
executives in advance of the Company's achievement of certain
goals.  The Company also revealed that it had granted additional
price concessions to customers "on products previously

The complaint alleges that defendants materially overstated
revenue during the class period and failed to timely take
material write-downs of inventory.

For more details, contact Fred Taylor Isquith, Gregory M.
Nespole, Michael J. Miske, George Peters or Derek Behnke by
Mail: 270 Madison Avenue, New York, New York 10016, by Phone:
(800) 575-0735 by E-mail: classmember@whafh.com or visit the
firm's Website: http://www.whafh.com. All e-mail correspondence  
should make reference to Recoton.


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Wednesday's edition of the Class Action Reporter. Submissions
via e-mail to carconf@beard.com are encouraged.

Each Friday's edition of the CAR includes a section featuring
news on asbestos-related litigation and profiles of target
asbestos defendants that, according to independent researches,
collectively face billions of dollars in asbestos-related
liabilities.  The Asbestos Defendant Profiles is backed by an
online database created to respond to custom searches. Go to


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
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Beard Group, Inc., Washington, D.C.  Enid Sterling, Aurora
Fatima Antonio and Lyndsey Resnick, Editors.

Copyright 2003.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
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