/raid1/www/Hosts/bankrupt/CAR_Public/990512.MBX            C L A S S   A C T I O N   R E P O R T E R

            Wednesday, May 12, 1999, Vol. 1, No. 69


ASSOCIATES FIRST: Home-Equity Lender To Settle Suits
BELL ATLANTIC: Garage Workers File $100 Million Bias Suit
COCA-COLA: Jews Seek to Recover Confiscated Arab Property
CURATIVE HEALTH: Pomerantz Haudek Reports Additional Details
DISABLED NEW MEXICANS: State Argues Immunity from Class Action

FORD MOTOR: One Fraud Charge Dropped in Defective Ignition Case
FVC.COM: Stull Stull Files Complaint in California
GENERAL CHEMICAL: Class Action Denied for Crypto Water Bill Suits
GUN MANUFACTURERS: Insurer Braces itself for Litigation Onslaught
INAMED CORP.: Makes Final Breast Implant Settlement Payment

IRIDIUM WORLD: Anemia Sets In as Customer Count Falls to 10,294
KEYSPAN ENERGY: Settles 13 Class Actions for $7.9 Million
MCKESSON HBOC: Greenfield Firm Files Complaint in California
MCKESSON HBOC: Wolf Haldenstein Files New Complaint in California
MCKESSON HBOC: Lowey Dannenberg Expands Shareholder Class

MEDICAL MANAGER: NJ Court Approves Settlement of Y2K Suits
MICROSOFT CORPORATION: FoxPro Y2K Compliance Suit Dismissed
NETWORK ASSOCIATES: Wechsler Harwood Files Complaint in New York
ORBITAL SCIENCES: Investors Rattled by News of $15.9 Million Loss
POLK AUDIO: Baltimore Court Declines to Enjoin Tender Offer

QUALCOMM: HSR Clearance Obtained; 94% of Employees Don't Sue
Y2K LITIGATION: Alabama Sued Over Welfare Program Readiness
Y2K LITIGATION: Hyde Says Bill May Reach Floor Next Week


ASSOCIATES FIRST: Home-Equity Lender To Settle Suits
One of the nation's largest home-equity lenders has agreed to  
settle two lawsuits by implementing a new mortgage policy that
will lower  annual interest rates for clients who make monthly
payments on time.  Associates First Capital Corp., also known as
The Associates, agreed to the move after meeting with Boston-
based Neighborhood Assistance Corporation of America.    

Although the two class-action lawsuits were filed Friday on
behalf of two dozen plaintiffs in Massachusetts and California,
about 2,000 Massachusetts  borrowers could be affected by the new

"It will absolutely restructure this $300 billion industry of
sub-prime  lending," said Bruce Marks, executive director of
Neighborhood Assistance Corporation of America.  "It's a
significant victory."    

The sub-prime lending industry provides high-interest loans to
people who  have debt or bad credit.  

"We came to a meeting of the minds," Joseph Stroop, The
Associates'  spokesman, told The Boston Globe from the company's
headquarters in Irving,  Texas.    

Lending specialists said consumers may not save huge amounts of
money, but  the deal comes at a time when sub-prime lenders have
been increasingly  criticized for taking advantage of the
vulnerable.  Some of the Massachusetts plaintiffs in the lawsuit
alleged that loans from The Associates bankrupted them after the
company surprised them with "balloon payments," which are huge
lump sums due halfway through the loan.  The borrowers said they
were told they would have to refinance the loan at an even higher  
monthly rate to avoid the charge.  Some also allege that The
Associates failed to report their positive  payments to credit
bureaus, keeping them chained to their bad credit histories.    
Stroop said the company stopped charging "balloon payments" four
years ago.  Under the new policy, each new loan would
automatically be refinanced at a lower rate three times in its
first three years. The rate would drop by 0.5 percent at the
close of the first year, an additional 0.75 percent the  
following and 1 percent the last.  (Associated Press 10-May-1999)

BELL ATLANTIC: Garage Workers File $100 Million Bias Suit
A group of current and former employees of Bell Atlantic  Corp.
filed a $100 million federal lawsuit against the company Monday,
charging  that a racially hostile environment led to the suicides
of three employees who  worked at a company garage.  The lawsuit
filed in U.S. District Court in Philadelphia alleges that company
executives did  not do enough to stem the discrimination
allegations lodged by 10 plaintiffs  against two men who were
supervisors at the garage at which the suicide victims worked.  
The three workers, all black males, died between 1994 and 1997.    
The alleged harassment by white supervisors Thomas Flaherty and
Nick  Pomponio was so harsh that some workers considered "taking
the law into their  own hands," the lawsuit said.    

"But (they) opted to endure the suffering instead, believing that
Bell  Atlantic would take the action it promised to take (to
investigate complaints  and take corrective action)," court
documents said.    

Both Flaherty and Pomponio have since been transferred out of the
garage,  plaintiffs' attorney John Hermina said. Flaherty,
reached by phone, referred  comment to corporate attorneys.    
Joan Rasmussen, a Bell Atlantic spokeswoman in Arlington, Va.,
said Hermina had tried to file a similar lawsuit in federal court
in Washington seeking class-action status but a judge "denied
their claim of a pattern of  discrimination."  

Ms. Rasmussen declined to comment specifically on the
Philadelphia lawsuit  because she had not seen it, but said,
"Discrimination is totally unacceptable  in the workplace at Bell

The lawsuit charges the company with racial discrimination and
retaliation,  negligence, breach of contract, and intentional
infliction of emotional  distress.    

"Bell Atlantic knew this was going on," Hermina said. "It's a
culture of  neglect, because apparently Bell Atlantic felt that
these African-American  employees don't matter."  (Associated
Press 10-May-1999)

COCA-COLA: Jews Seek to Recover Confiscated Arab Property
Raphael Bigio remembers Coca-Cola fondly. He used to  run through
the plant  as a boy in Heliopolis, where his family made trays
bearing the distinctive  company logo.  As a young man, he signed
contracts with the soft-drink multinational to produce bottle
caps.  For a generation, Coca-Cola was both a customer and   
tenant of the Bigio family of Cairo.

"We had excellent relations with Coca-Cola, since the 1930s,"
said Bigio.  

But his fond reminiscences have been replaced by betrayal.  
Bigio, whose family were once proud Egyptian landowners, is suing
Coca-Cola in a US federal court for illegal acquisition of his
family's  confiscated property.  He contends that the company
built its expansion in the Middle East by  knowingly buying
stolen property, and, moreover, that the property was stolen  
specifically because his family was Jewish.

"They knew exactly who we were.  They knew they were buying
nationalized and stolen assets," Bigio says.  "Coca-Cola wanted
the Egyptian market at any price.  Bigio was not important. They
wanted to beat Pepsi."  

Bigio's case, which also exposes the weakness of the Egyptian
legal system  in resolving property claims, is expected to be the
first of many court battles in the US brought by Jews seeking to
recover confiscated property  from Arab countries.  If he
prevails in the American court, Bigio's case may set a precedent  
that could be used to recover Nazi-looted assets. Attempts in
recent years to  recover such assets have been class-action
suits, not suits by individuals.  The case also raises, for the
first time in American courts, the question  of whether religious
discrimination is a human rights violation under American law.    
"At a minimum, a private corporation that acts in concert with a
foreign government is liable for violations of international
law," said Grant Vinik, a Washington attorney who, along with
Nathan Lewin, is representing the Bigio family.

The suit against the multinational was filed in US federal court
under the  Alien Tort Claims Law, which gives foreigners the
right to sue in American  courts for violations of international
law, or when they have been injured by such violations, said
Matthew Kaliff, the  executive director of the  American section
of the International Association of Jewish Lawyers and  Jurists.   
A "tort" is an injury.  In essence, this American law recognizes
that in   international law there  are certain crimes that are so   
egregious that foreigners are permitted to sue in U.S. courts,
even though the crimes happened overseas.    

THE BIGIO family settled in Egypt in 1901. In 1932, they built a
factory  on land they owned in Heliopolis and began to produce
serving trays,  insecticide spray guns and   portable coolers.  
Coca-Cola, which was a neighbor and tenant of the   Bigios,
became a  customer in 1938, buying trays and coolers   with the
company's logo.  In 1955, the family built a second plant and,   
operating as the National  Crown Cork Company, made bottle   caps
for the beverage industry, including  Coca-Cola,   according to
court documents.    Their business ties stopped in 1962, when the
Nasser   government  confiscated the land and factories,
transferring   the properties to state- owned companies. Coca-
Cola   continued to do business with the Egyptian state  company.    
Having lost their property and their livelihood, the   Bigios,
using refugee  travel documents, fled in 1965.    

"When we left Egypt, we left with $5 each," said  Bigio, who runs
a  successful textile business from Montreal.  

After Nasser's death, privatization began. This did  not
necessarily mean  that the assets would be restored to   their
owners; it meant they could be  sold on the market.  Officially,
the Egyptian government is receptive to claims regarding the  
recovery of confiscated property.  In 1980, Bigio won a decree
from the  Finance Ministry that said his assets should be
returned.  However, the state company that had possession of the
assets refused to comply.  Bigio turned to the Egyptian courts,
trying to get them to enforce the  reversal of the expropriation.
That these cases have yet to be concluded,  indicates, Bigio's   
lawyers said, that there is no remedy through the Egyptian    

In 1993, Bigio learned that the state company had found a buyer
of his  assets: Coca-Cola, which was prepared to pay $100
million, according to court  documents.  It is believed that the
company subsequently paid nearly $150 million.  He wrote to Coca-
Cola's directors in Atlanta to advise them that the  
nationalization of the property had been reversed, and that he
was suing to recover the property in Egypt.  Bigio said he
scheduled a meeting with Coca-Cola officials in Atlanta, to be
held in early 1994, before the company finalized the acquisition.    
Before the appointed time, however, "they called to say they had
finished the purchase," Bigio said in an interview.  

"I was stunned. I approached them, thinking that they were the
same people  I knew before when I was a kid, and that they would
never act in such a  fashion; so I didn't take any action in the
US to block the acquisition.  So I have lost that opportunity."    
Coca-Cola's lawyer in New York, Richard Hans, did not   return
calls for  comment.  However, the company had argued before the
lower court that the case  should be dismissed because the court
lacked jurisdiction.  It also argued that the case was old, as
the  family had left the factory and the land some 25 years   
before.  According to Bigio's lawyers, Coca-Cola has not said   
it was unaware of  Bigio and his claim. Instead, the company   
consummated the sale with full knowledge that the expropriation
had been nullified.    

"They have acquired stolen assets, assets taken from a family
classified as refugees by the Egyptian government,"  Bigio said.    
"They may claim all they want that they bought them from the
government.  Certainly they bought them from the government --
but where did the government  get them from?  "Coca-Cola has no
defense," Bigio said, adding that the company has not proposed a
settlement.  "They said you cannot sue in the United States. Not  
once did they say that Bigio has no rights."    

A Federal court in New York last year dismissed the case,
agreeing with Coca-Cola that there was no jurisdiction to hear
the case in American courts.  Bigio appealed, and the case may be
heard as early as next month before the Second Circuit Court of
Appeals.   The Second Circuit has a string of very progressive
rulings on human  rights.  The association of Jewish lawyers
filed a brief on behalf of the Bigios, arguing that the family
lost the property as a direct consequence of the Nasser regime's   
state-sponsored persecution of Jews.  It called on the court to
recognize that Egypt was not taking private  property for some
valid public purpose, but that the Bigios had lost their  
citizenship, their property and their livelihood precisely
because they were  Jews.  The case also got support from human
rights lawyers, who filed a brief in  support of the Bigio
family.  The Bigio case is believed to be the first time that a   
claim of religious  discrimination is being made under the   
Alien Tort Claims Law, but since it is  also making a claim on
expropriated property, "it is, in a word, a mess,"  said   
attorney Gregory H. Fox of the Orville H. Schell Center for    
International Human Rights at Yale Law School.  Previous rulings
regarding property appear to uphold the right of developing
countries to treat the property of their own citizens as they  
wish.  If the court is not sympathetic to the property claim,   
because it doesn't  want to interfere in the relations between a
sovereign state and its  citizens, it could toss out the
religious discrimination aspect as well.  Fox thus fears that a
ruling in the Bigio case may  curtail--not expand--human-rights

"There are all kinds of dangers here.  [The ruling] could be
written in language that is broad enough to knock  out all claims
of religious  discrimination," Fox said.  "A lot of human rights
violations around the world have a religious  component, like
Bosnia," Fox said.  "This could potentially shut off an  
important set of claims and really contravene the very clearly
stated  interest of the U.S. government in preventing religious

Egyptian sympathy presumably rests with Coca-Cola, which is
thought to employ 9,000 people in Egypt and has said it will
invest another $300 million in the country.  Bigio also is
aggravated with Cairo, which has yet to address the question of
compensation for the property of the 50,000 Jews who were forced
to flee.  

"Egypt has not dealt in a righteous way with the owners of assets
it is now selling for billions of dollars," he said.  Although
there has been international pressure on European governments and  
institutions to return Jewish property looted by the Nazis, there
has been no  serious effort to assist the Jews of Arab countries
whose property was confiscated.  One reason for this may have
been the fear that if Jews start pushing for  Arab property, the
Palestinians will start making counterclaims on Israel. In  any
case, the Bigio family has had virtually no assistance from any
major  Jewish organization.  But the Egyptian property
confiscations are parallel to those of Germany,  and the legal
claims of Egyptian Jews are as solid as those of European  Jewish
victims, according to Bigio's advocates.  They cite a 1957 study
by the World Jewish Congress that called "Egyptianization" a
sinister replica of Hitler's "Aryanization."  In the mid-1960s, a
German-Jewish family named Dreyfus turned to the American courts
under the Alien Tort Claims Law in an attempt to get compensation
for property that had been expropriated by the Nazis.  At that
time, an appellate court ruled against the family, saying that  
international law does not cover the relations of a government to
its  citizens.  However, if Bigio wins his suit by using the new
twist of religious discrimination, his case could set a precedent   
that might be helpful to Nazi  victims.    

Just as Bigio is determined to recover his property, experts say
Coca-Cola is unlikely to let go of its substantial Egyptian
business.  So it appears  there will be a certain appeal to the
US Supreme Court, no matter how the Second Circuit rules in the
Bigio case.  

"I have been very active for all these years in an effort to
recover my assets," Bigio said.  "I happened to be a son who
worked with his father.  I know everything about the assets.    
"I was there.  I witnessed everything.  This issue is  not going
away."  (Jerusalem Post 07-May-1999)

CURATIVE HEALTH: Pomerantz Haudek Reports Additional Details
"More details of the 'whistleblower' action, naming both Curative
Health Services, Inc. (Nasdaq: CURE) and Columbia/HCA Healthcare
Corp. ("Columbia/HCA"), have been revealed," says Pomerantz
Haudek Block Grossman & Gross LLP.   

As previously reported, the Department of Justice announced on
April  9, 1999, that it had joined in a "whistleblower" action,
naming both Curative  and Columbia/HCA and accusing Curative of
Medicare fraud. The action was filed  by the chief financial
officer of one of Columbia/HCA's southwest Florida  hospitals
who, reportedly, had notified Columbia/HCA officials about
potential  problems with Columbia/HCA's contracts with Curative.  

According to the  Department of Justice, the action accuses
Curative of amending its contracts with Columbia/HCA after
Medicare decided not to pay for certain wound  treatments.  The
lawsuit says that Curative was given the benefit of excessive  
management fees for managing 42 of Columbia/HCA's wound treatment
centers in  exchange for the lower wound treatment payments and
that Curative received an  illegal referral fee of $400 per
patient, for which Columbia/HCA then sought  reimbursement from

In a Complaint filed by Pomerantz Haudek Block Grossman & Gross
LLP, Curative and certain of its officers are charged  with
falsely portraying the Company as operating in compliance with
Medicare  regulations, when it had actually:

      (i) improperly disguised non-allowable fees  as
          "management fees" and

     (ii) accepted illegal kickbacks in exchange for  patient
          referrals in connection with services rendered to

The  Complaint alleges that Curative's publicly reported revenues
and earnings were  inflated through defendants' scheme to defraud
the Medicare reimbursement  system.  

The case was filed on behalf of purchasers of Curative's common
stock  during the Class Period June 16, 1996 through April 12,
1999, inclusive.

Contact Julian P. Carr or Mildred C. Frazzitta, Esq. of the
Pomerantz firm at 888-476-6529 (or 888-4-POMLAW), toll free, or
at mcfrazzitta@pomlaw.com by e-mail.  

DISABLED NEW MEXICANS: State Argues Immunity from Class Action
New Mexico state lawyers have gone back to federal court in a
massive disabilities  rights suit to make the same argument they
lost more than a decade ago in the  same case.    Lawyers from
the New Mexico Attorney General's Office argued this week  before
U.S. District Judge James A. Parker that the state should be
relieved from federal court oversight in what has become known as
the Jackson lawsuit.    

To the state, it would mean fewer legal fees and more autonomy to
do what it  has pledged to do.  For people with disabilities, it
could mean no one is watching the state to  ensure it delivers as

The state argues that a change in federal case law merits the

Lawyers for the developmentally disabled counter that the request
is based  on the "radical and unprecedented proposition" that
using a class action to reform an institution violates states'

Judge Parker heard several hours of argument Tuesday and said he
would issue a  written opinion in the matter.  He didn't say

The class-action litigation, named for lead plaintiff Walter S.
Jackson, was filed in 1987 on behalf of people with developmental
disabilities living in two large state institutions.  Following a
trial that lasted weeks, Parker ruled in 1990 that the civil  
rights of the most severely disabled residents of the state were
being  violated. His order ultimately resulted in more than 500
residents of the  institutions in Fort Stanton and Los Lunas,
including Jackson, being moved into  the community.  Some live
with their families, others more independently with services that  
make that possible. Jackson, for instance, lives with two friends
in a home he  purchased near his family, and has round- the-clock
care.  And both institutions are closed.    

In 1997, the parties reached an agreement for "disengagement."  
It called for  the state to implement a plan of corrective action
covering everything from hiring more personnel to devising ways
to respond to complaints in exchange for reduced court oversight.  
Since the agreement was reached, the parties have met regularly
to hash out details.  Now the state is asking to be freed from
both the 1990 judgment and the 1997  deal, saying a U.S. Supreme
Court case supports the proposition.  The focus is sovereign
immunity, an issue the state raised and lost early in the case.    
But the state's lawyers contend that a controversial 1997 Supreme
Court case, Idaho vs. Coeur d'Alene Tribe, which they say limited
class actions seeking reform of state-funded institutions,
changed all that, and warrants a new look by Parker.    

Assistant Attorney General Jack Clough said at Tuesday's hearing
that the impact of the case wasn't immediately obvious and that's
why the state hadn't raised the issue before now.  It has not
made Idaho an issue in other class actions, however.  

Lawyers for the disabled, including Protection and Advocacy
System, the Center for Public Representation and the Arc of New
Mexico, say the state's legal analysis is faulty.  By asking for
dismissal of the lawsuit, the state in reality is "challenging  
the authority of the federal courts to enter systemic injunctive
relief in any class action against state officials.    

"This wholesale attack is unprecedented and without merit," the
plaintiffs said in response.  Plaintiffs' attorneys compare the
Jackson litigation to school desegregation suits.  Both target
acts of state officials that violate the U.S. Constitution,
require substantial restructuring of a public system, have
implications for state funding and result in ongoing judicial
oversight to redress violations, they said in written arguments.  
And a majority of the Supreme Court, plaintiffs say, "clearly
subscribes to the proposition that the 11th Amendment doesn't
bar" federal courts from ordering relief in such cases.
(Albuquerque Journal 07-May-1999)

FORD MOTOR: One Fraud Charge Dropped in Defective Ignition Case
Lawyers suing Ford Motor Co. for allegedly covering up a
defective ignition  part they say could cause dangerous stalling
in millions of cars dropped one  count of fraud from their case.
But they proceeded with two other claims  accusing Ford of
deceptive business practices and false advertising.  The move was
announced Thursday as lawyers on each side of the case prepared  
for opening statements May 11 before Alameda Superior Court Judge
Michael E.  Ballachey, in the largest-ever class-action suit to
go to trial against an  automaker.    

The suit claims Ford withheld information from federal regulators
and the  public about alleged defects in its Thick Film Ignition
module, which was  mounted on the distributors of 22 million
vehicles nationwide.  The suit was brought on behalf of 3 million
Californians who own or owned  1983 to 1995 Ford vehicles. It
seeks more than $3 billion in fines, and an  order that Ford give
back money to consumers who had to pay for module  problems.  
Ford has acknowledged the module was flawed, but denies it posed
a safety  risk. The firm said it fixed some cars under warranty,
others under a service  campaign and improved the module in newer

In pretrial sparring, Ford on Thursday issued a press release
saying the plaintiff's lawyers "have dropped charges of fraud."  
Jeff Fazio, one of the lawyers bringing the case, called the
public relations release "blatantly misleading." He said the one
count was dropped for "strategic reasons," but added that "each
and every claim in this case is based on fraud."  Ford also
claimed the plaintiff's lawyers had admitted they "cannot prove a
single accident or injury" due to the module.    Fazio called the
statement "ridiculous," adding, "We know that Ford had a (module)
failure rate that was unacceptably high.  We'll stand or fall on
the evidence."  (San Francisco Examiner 07-May-1999)

FVC.COM: Stull Stull Files Complaint in California
Stull, Stull & Brody announces that a class action lawsuit was
filed on May 6, 1999, in the United States District Court for the
Northern District of California on behalf of all persons who  
purchased the securities of FVC.COM, Inc. (Nasdaq: FVCX), from
January 21, 1999 through April 6, 1999, inclusive.  

The Complaint alleges that, during the Class Period, FVC and
certain of its  top officers and directors knowingly or
recklessly overstated FVC's financial  condition and results of
operations for the Company's fourth quarter for fiscal  1998,
among other things, in violation of Sections 10(b) and 20(s) of
the  Securities Exchange Act of 1934. The complaint alleges that
defendants  knowingly or recklessly overstated sales from its
software unit, in violation  of generally accepted accounting
principles. The Complaint further alleges that  certain
defendants used their insider knowledge taking advantage of the  
Company's inflated share price to sell their own shares of FVC
common stock for  proceeds of more than $3 million.  

Contact Stull, Stull & Brody at 1-888-388-4605 toll-free or at
secfraud@secfraud.com via e-mail.

GENERAL CHEMICAL: Class Action Denied for Crypto Water Bill Suits
People who paid water bills during the Cryptosporidium crisis in
1993  lost  the chance to recoup those payments through a class
action lawsuit,  based on a  judge's decision Thursday.  Circuit
Judge Francis Wasielewski denied class action status for the  
suit  filed against General Chemical Corp. on behalf of about
141,000  customers of  the Milwaukee Water Utility.    

Because the customers' individual awards would fall between $2
and  $10, Wasielewski's ruling denying class action status
essentially dooms  legal  attempts to recoup the money from
General Chemical, said Michael  A. Pollack,  the attorney who
filed the suit.    

"This is telling people of Milwaukee they can't collectively sue
the  people  who are truly responsible for this outbreak,"
Pollack said after  Thursday's  hearing. "The judge is telling
people the court system doesn't  work in that  way."    

In his ruling, Wasielewski said the plaintiffs simply did not
have  a viable legal claim against General Chemical to recoup the
money they  paid  for water in early April 1993.  

The New Jersey-based corporation provided a coagulant used to
treat   Milwaukee's drinking water in 1992 and 1993. The lawsuit
alleged that  the  coagulant failed to purify the water, which
became contaminated with Cryptosporidium.  More than 400,000
people became sick.  Personal injury lawsuits filed against
General Chemical and the City  of  Milwaukee by about 300
residents are still pending in Circuit Court.  Those  suits also
failed to win class action status. (Milwaukee Sentinel & Journal

GUN MANUFACTURERS: Insurer Braces itself for Litigation Onslaught
Gun manufacturers and  distributors may find it harder to get
insurance coverage as insurers react to  the recent wave of
lawsuits against gun makers, according to an article in the  May
property/casualty edition of "Best's Review."   

The gun industry is being challenged in court on several fronts.  
Cleveland, New Orleans, Bridgeport, Conn., and Newark, N.J. have
filed suit against the  industry, as have Miami-Dade County in
Florida and Chicago and Cook County in  Illinois. The
municipalities hope to recover the expenses they say are caused  
by gun violence. Those include costs related to police
protection, emergency  services, enforcement of local gun-control
ordinances and, in the Miami-Dade  case, treating gunshot victims
at the county's public hospital.  Gulf Insurance Group -- a
subsidiary of Travelers Property Casualty Corp. --  has said it
no longer will insure shooting ranges that also sell guns, the  
"Best's Review" article says. In addition, Sporting Arms
Insurance Ltd.,  Hamilton Bermuda has told Hi-Point Firearms -- a
defendant in a lawsuit filed  by Chicago and Cook County -- that
it would not pay for any claims.  Opinion about the impact of gun
litigation on the insurance industry is  divided, "Best's Review"
says. Many in the industry believe that, as a product- liability
issue, the gun suits present a weaker case than other class
actions,  such as those related to asbestos and silicon breast
implants. Some industry  observers, however, say insurers are
likely to take a large hit in light of the  recent successes
against the tobacco industry and the current cultural  
inclination to sue.  

"The tobacco industry spent $600 million a year defending
lawsuits," Robert  Carter, an attorney with the Washington, D.C.-
based law firm of McKenna &  Cuneo, told "Best's Review."  "You
have more gun manufacturers than tobacco  companies, so it is not
unreasonable to conclude that defense costs could  exceed what
the tobacco industry has to pay."  Mr. Carter went on to say,
"Gun litigation will have a significant impact on  the insurance
industry. Regardless of the merits of the lawsuits brought by the  
cities, the bottom line is that the gun manufacturers are facing
an army of  well-financed and well-thought-out plaintiff's
attorneys who have the resources  to take these cases to trial."  

"Best's Review" is published monthly by A.M. Best Co. The full
article --  titled "Gun Makers Targeted" -- can be read at  
http://www.bestreview.comon the Internet.   

A.M. Best Co., established in 1899, is America's oldest and most
widely  recognized insurance rating and information source.  
Visit A.M. Best's Web site at http://www.ambest.comfor more  

INAMED CORP.: Makes Final Breast Implant Settlement Payment
INAMED Corp. (OTC BB:IMDC) announced that it has completed a
$31.1 million equity financing, in which 5.4 million new shares
of common stock were issued to various warrant holders in
exchange for the payment of $20.4 million of cash and the
surrender of $10.7 million of the company's 11% notes.  Virtually
all of the holders of warrants who were eligible to exercise at
this time participated in the financing.  The company also
received $3 million of cash from its noteholders, which was used
to purchase on their behalf the 426,323 shares of common stock
held by the  court-appointed escrow agent.  All of the 5.8
million shares of common stock  purchased by the warrant holders
and noteholders contain a legend which  restricts transferability
absent an exemption under Rule 144 (after the one  year holding
period) or an effective registration statement. As a result of
this equity financing, the company now has approximately 16.9  
million shares outstanding and approximately 20 million shares on
a fully  diluted basis.

The company's debt has decreased from $27.6 million to $16.9  
million. Cash on hand, which fluctuates based on regular working
capital needs,  is currently more than $12 million. The company's
tangible net worth is now approximately $22 million, as compared  
with the significant deficit position of the past few years.
Finally, due to an  incentive fee which was paid as part of the
equity financing, the company  expects to record a non-operating
charge for accounting purposes of  approximately $1.9 million in
the second quarter of 1999.

The company also announced that it has made the final payment of
all of the  monies owed to the court-appointed escrow agent on
behalf of the plaintiffs in the mandatory class action settlement
of the breast implant litigation.  The payment was $29.9 million
in cash, and included $25.5 million as full  payment of the 6%
promissory note which was issued in June 1998 at the time the
settlement received preliminary approval, $1.4 million of accrued
interest on that note, and $3 million to repurchase the 426,323
shares of common stock which were also issued in June 1998 to the
escrow agent. As a result of this payment, the $30 million of
liabilities relating to the  settlement which was recorded on the
company's balance sheet as of Dec. 31,  1998, has now been

The settlement fund for the benefit of the plaintiff class now
has on hand over  $33 million to distribute to claimants and pay
administrative expenses. A  distribution plan will be formulated
under the supervision of Judge Pointer in  proceedings which are
expected to occur in the next few months. Under the terms of the
final order and judgment entered by Judge Pointer in  February
1998, all of the thousands of cases and claims arising from the  
company's breast implant products which were implanted before
June 1, 1993 were  consolidated into a mandatory class action
settlement and dismissed. Individual plaintiffs cannot opt-out of
the settlement, and there is a  permanent injunction prohibiting
class members from commencing or prosecuting  new federal or
state court lawsuits, as well as a bar against lawsuits by  
certain persons and entities with indemnification and
contribution claims.

IRIDIUM WORLD: Anemia Sets In as Customer Count Falls to 10,294
Troubles continue to confound Iridium, and prospects for aspiring
mobile satellite telephony provider seemed grim to many observers
we spoke to.  Latest developments included departures of  3 of
top executives and first-quarter results that were well below
company's projections -- and lenders' requirements.

Iridium has 10,294 customers, it said April 26 in its first-
quarter financial report -- 7,188 satellite telephony, 1,031
cellular extension, 2,075 satellite paging.  Under covenants
established late last year by company and its lenders, Iridium
was to have had more than 52,000 subscribers by now.  Company
can't provide any demographics on who's buying its products
because that information is owned by Iridium's distribution
partners and "they're very protective of it," said Leo Mondale,
exec. vp-strategic planning.  
For quarter, Iridium had revenue of $1.45 million with net loss
of $505 million.  Under debt covenants, it was to have had $30
million revenue at that point.  Iridium also has only $195,000 of
$4 million cash it was required to have by end of quarter.  
Company must renegotiate its bank facility with lenders by end of
May, Mondale said.  Iridium will have to establish new milestones
without permanent CEO or CFO in place.  Analysts said absence of
key management and finance figures puts lenders and company
borrowing funds under even more pressure than usual.  "Who's
going to be giving the banks the assurances they want?" one

Iridium CEO Edward Staiano resigned abruptly April 22 and company
named John Richardson, CEO, Iridium Africa, as interim
replacement.  Board said it would begin selection process for
permanent replacement for Staiano.  Company didn't offer reason
for his leaving.  Staiano's departure followed similarly abrupt
resignation of Iridium CFO Roy Grant, who left for "personal
reasons."  At time of Grant's departure, general speculation was
that he was "fall guy" for Iridium's lackluster performance.  It
was suggested that because company fell so far short of debt
covenants established by Iridium's financial backers, someone had
to go to assuage unhappy lenders.  Shortly after Grant left,
Iridium announced it had received 60-day waiver from lenders,
during which time new set of covenants related to number of
subscribers and revenues would be signed.       

"It's not customary for banks to dictate management changes,"
said John Bensche, satellite industry analyst with Lehman Bros.  
"Banks say 'your financial ratios must meet these criteria.'  How
the company gets there is usually its own business."  C.E.
Unterberg Towbin analyst Armand Musey agreed:  "The facts aren't
consistent with a bank-forced resignation.  In that sort of
scenario, you'd expect to see them announce a permanent
replacement right away."  Another analyst said Staiano's surprise
resignation compounds company's search for new CFO:  "They
apparently had a new CFO waiting in the wings and were ready to
announce him last week and then didn't... quite possibly because
[new CFO] was hand-picked by Staiano.  With Staiano gone,
his candidacy is in jeopardy."

Iridium announced another senior-level departure April 26, saying
Mauro Sentinelli, exec. vp-mktg., already had left company.  
Interim CEO John Richardson chose not to renew Sentinelli's
contract, which was to expire this month, Mondale said.  
Sentinelli has taken annual leave and won't return.  What are
presumed to be board-forced departures of Staiano, Grant and
Sentinelli didn't sit well with some analysts, who said
company's problems run deeper than personnel choices.  Decision
to drop Sentinelli is "unfair," said Robert Kaimowitz, managing
dir., ING Barings Satellite Research Group.  "The problem hasn't
been marketing.  Everybody knows who Iridium is and what they do.  
The problem has been the market -- they haven't got one," he said
at meeting of Washington Space Business Roundtable at which
Iridium's troubles were prominent topic.

Kaimowitz said it's "mathematically impossible" for Iridium to
succeed: "They've got too much debt, too much overhead and too
little capacity." Company, whose $5 billion, 66-satellite
network, will need to be replenished within 5 years, is "doomed,"
he said:  "It's difficult to imagine them being in business 2
years from now."  However, Kaimowitz didn't write off entire
mobile satellite services industry.  He praised ICO and
Globalstar, which he said have simpler, cheaper systems with more
capacity and, as result, will be able to offer service at much
lower prices than Iridium.

But Riyad Said, satellite industry analyst with Friedman,
Billings, Ramsey, said it was "too early to throw in the towel"
on Iridium.  Motorola is likely to take more active role in its
operations, he said.  Increased backing from Motorola would help
company bring about "dramatic" lowering of cost of its services
necessary to drive sales, he said.

Iridium hinted it may be lowering price of its handsets (which
start at around $3,000, but move nearer to $4,500 when cellular
cassettes are taken into account) and air-time charges, which run
as high as $11 per min.  "We'll be adjusting the pricing as
necessary" to stimulate sales, Mondale said, but he declined to
go into specifics.  He also said Iridium will step up training
efforts for sales staff and distributors.  Although company has
little demographic data to go on, Mondale said vertical markets
such as commercial fishing and pipeline construction are proving
to be earlier adopters of Iridium's products, rather than
"international business travelers" originally targeted.

Meanwhile, Iridium stockholders filed class action suit against
company for failing to disclose extent of its woes, company said.  
Iridium shares had traded as high as $72 in last year, but
disappointingly slow rollout dropped prices to $14-$16 range in
recent weeks.  (MOBILE COMMUNICATIONS REPORT 03-May-1999)

KEYSPAN ENERGY: Settles 13 Class Actions for $7.9 Million
KeySpan Energy has settled 13 class action lawsuits with Long
Island Lighting (Lilco) and Brooklyn Union shareholders, possibly
ending a long-running dispute stemming from $67 million in
questionable payments to former Lilco and KeySpan officials.

The lawsuits, being heard before the New York State Supreme Court
in Nassau County, were brought against former officers of Lilco
and KeySpan following the merger of Brooklyn Union, a natural gas
distributor, and Lilco.  The former chair of Lilco, William
Catacosinos, was accused of funneling the money under the guise
of severance bonuses to executives at both companies.

KeySpan, formed by the merger of Brooklyn Union and Lilco, has
since severed all ties with Catacosinos, and all former Lilco
officials now employed by KeySpan have returned the disputed

The Nassau court will have to approve the settlement, under which
KeySpan has agreed to pay the shareholders $7.9 million.  If
approved, KeySpan plans to apply for dismissal of three related
filings at the U.S. District Court for New York's Eastern

New York State Attorney General Eliot Spitzer has also concluded
his investigation into the matter and will take no action against
the former executives. Spitzer recommended that the state court
accept the settlement.

KeySpan, along with its insurance carrier, agreed to shoulder the
$1.5 million cost of the state's investigation.  (The Energy
Report 03-May-1999)

MCKESSON HBOC: Greenfield Firm Files Complaint in California
The Law Firm of Harvey Greenfield announces it has filed a class
action lawsuit in the  United States District Court for the
Northern District of California on behalf  of purchasers of
securities of McKesson HBOC, Inc. (NYSE:MCK) between April 14,  
1998 and April 28, 1999.  

The action charges McKesson, its CEO and its Chairman of the
Board with making  false and misleading statements concerning the
company's operating results. On  April 28, 1999, McKesson
announced that due to improper recognition of revenue  from its
software sales, it would have to restate its 1998 fiscal year's  
earnings. Upon release of this information, McKesson's stock
plummeted from its  closing price on April 27, 1999 of $65 3/4 to
as low as $32 on April 28, 1999.  

Contact Harvey Greenfield, Esq. at the Law  Firm of Harvey
Greenfield, 60 East 42nd Street, Suite 2001, New York, NY 10165,  
telephone 212-949-5500, or toll free 877-949-5500, facsimile 212-
949-0049, or at hgreenf@banet.net by e-mail.

MCKESSON HBOC: Wolf Haldenstein Files New Complaint in California
Wolf Haldenstein Adler Freeman & Herz LLP, on behalf of:

     * All persons who purchased securities of HBOC, Inc.
       (NASDAQ: HBOC)  between April 14, 1998 and January 12,

     * All persons who purchased McKesson HBOC, Inc. (NYSE:MCK)
       securities between January 12, 1999 and  April 27, 1999
       including all persons who exchanged their HBOC shares for  
       McKesson stock pursuant to a January 12, 1999 Merger;  

     * All persons who purchased McKesson Corp. securities
       between October 19, 1998  and January 12, 1999;  

     * All former securities holders of US Servis who exchanged
       their Servis securities for securities of HBOC;  

     * All former securities holders of IMNET Systems, Inc.
       who exchanged  their IMNET securities for securities of
       HBOC; and  

     * All former securities holders of Access Health, Inc.
       who exchanged  their Access securities for securities of

announces the filing of a class  action lawsuit in the United
States District Court For The Northern District of California.

The lawsuit charges that  McKesson, and HBOC (prior to the
January 12, 1999 Merger) and certain officers  and directors of
both HBOC and the Company violated the federal securities laws  
and regulations of the United States. The Complaint alleges that
during the  Class Period, defendants failed to disclose material
facts concerning the  improper recording of certain revenues from
its software sales.  On April 28, 1999 the Company announced that
due to its improper recognition  of revenue from its software
sales, it would have to restate its 1999 fiscal  year's earnings.
Upon the release of this devastating news, the Company's stock  
dropped from its closing price on April 27, 1999 of $65 3/4 to as
low as $ 33  1/8 on April 28, 1999 i.e. almost 50%!  

Contact Wolf Haldenstein  Adler Freeman & Herz LLP at 270 Madison
Avenue, New York, New York 10016, by  telephone at (800) 575-0735
(Gregory Mark Nespole, Esq., Fred Taylor Isquith, Esq., or Shane
T. Rowley, Esq. or legal assistant Michael Miske) or at
classmember@whafh.com or whafh@aol.com via e-mail.

MCKESSON HBOC: Lowey Dannenberg Expands Shareholder Class
Lowey Dannenberg Bemporad & Selinger, P.C., has filed an expanded
class action complaint in the  United States District Court for
the Northern District of California on behalf  of (a) purchasers
of McKesson HBOC, Inc. common stock (NYSE: MCK) during the  
period October 19, 1998 through April 27, 1999, inclusive (the
"McKesson Class  Period"), and (b) purchasers of HBOC & Company
common stock (NASDAQ:HBOC)  during the period April 14, 1998
through January 12, 1999, inclusive.

The complaint charges McKesson and certain officers with  issuing
false and misleading financial statements in violation of the
federal  securities laws, which inflated the market price of
McKesson and HBOC shares  during the respective Class Periods.
HBOC shares were exchanged for shares of  McKesson at the time of
the merger of McKesson and HBOC on January 12, 1999. On April 28,
1999, McKesson announced that it was restating its earnings for  
the quarter ended March 31, 1999, the prior three quarters, and
the fiscal year  ending March 31, 1999. The restatement resulted
from the improper recording of  software sales which were subject
to certain unsatisfied contingencies, but  were treated as
completed sales, which inflated reported earnings for those  
periods.  Following the announcement of the downward restatement
of earnings,  McKesson stock dropped from $64.75 to under $35, a
loss of nearly 50% in one  day.

Contact Thomas M. Skelton, Esq., at 877-777-3581 by phone or
ldbs@westnet.com by e-mail.

MEDICAL MANAGER: NJ Court Approves Settlement of Y2K Suits
A federal magistrate in New Jersey has approved a class action
settlement that will provide free Year 2000 fixes for customers
of Medical Manager Corp., according to an announcement by two of
the law firms representing plaintiffs.  Courtney v. Medical
Manager Corp., No. 98cv03347 (NJ Super. Ct., settlement
approved March 15, 1999); see Software Law Bulletin, March 1999,
P. 68. U.S. Magistrate Judge Joel Rosen certified a settlement
class consisting of all persons or entities who purchased or
obtained versions 7 or 8 of The Medical Manager software, a
practice management system that includes patient care, clinical,
financial and management applications.  Numerous lawsuits alleged
the company was forcing users to purchase an upgrade to version 9
to achieve Year 2000 compliance; earlier versions would not
correctly process dates after Dec. 31, 1999. Under the terms of
the settlement, class members will be able to license, for free,
a new version 8.12 that is Y2K-compliant.  Class members who
already purchased version 9 can license, at no cost, one of four
add-on modules, or share in a $600,000 settlement pool, according
to the announcement from the law firms of Bernstein Litowitz
Berger & Grossman and Sherman, Silverstein, Kohl, Rose &
Podolsky.  (Software Law Bulletin May/June 1999)

MICROSOFT CORPORATION: FoxPro Y2K Compliance Suit Dismissed
Microsoft's FoxPro 2.6 software functions as described in the
user manual, so a developer cannot maintain a breach of warranty
suit based on lack of ability to enter a two-digit 21st century
date, a federal judge in Illinois has ruled, dismissing the
complaint with prejudice.  Kaczmarek v. Microsoft Corp., No. 98-
C-7921 (ND IL, March 16, 1999); see Software Law Bulletin ,
January 1999, P. 14.  Software developers use FoxPro to customize
DOS and Windows database applications.  FoxPro contains setting
for "Century Off" and "Century On." The former, which is the
default setting, allows entry of only two digits for the
year and automatically treats those entries as 20th century
years.  "Century On" sets up a four-digit field for the year, but
if a user enters a two-digit year in this mode, it will still be
treated as a 20th century date. Plaintiff Ruth Kaczmarek alleges
that software she developed using FoxPro is not Y2K compliant
as a result of these alleged defects.  She sought certification
of a class  action. U.S. District Judge Ruben Castillo granted
Microsoft's motion to dismiss, finding that the software
functioned as Microsoft represented it would in the user manual.
"It appears as though Kaczmarek wants a software program
that has the twenty-first century as the default or, at least,
flashes an error message when a two-digit year is mistakenly
entered in a four-digit year field," said the judge.  "But, if
that is true, she should have returned FoxPro within the 90-day
rejection period after discovering, by reading the manual, that
these features were not included in FoxPro."  Although FoxPro has
a date validation feature, the judge said, it is designed to spot
non-existent dates (such as Feb. 30 or June 31), rather than
finding dates that are real, but might have been erroneously
entered by the user. The judge rejected Kaczmarek's assertion
that she should not have been expected to read the entire 2,200-
page FoxPro manual within the 90-day rejection period.  The
manual was part of the contract between Kazcmarek and Microsoft,
and her failure to read it does not a reason to invalidate it, he
said. "In any event, there is nothing unreasonable about
expecting computer professionals to familiarize themselves with
software -- particularly something as basic as date fields when
the Y2K problem has been so prominent -- within 90 days," the
judge concluded.  (Software Law Bulletin May/June 1999)

NETWORK ASSOCIATES: Wechsler Harwood Files Complaint in New York
Wechsler Harwood filed a class action  complaint on May 5, 1999
against Network Associates, Inc. (Nasdaq: NETA) for securities
fraud for the period of January 20, 1998 through and including
April 19, 1999.  

The action was  brought on behalf of all NETA securities
purchasers and sellers, including common  stock purchasers, call
option purchasers, and put option sellers, during the  class
period The complaint charges Network Associates and certain of
its officers and  directors with violations of the Securities
Exchange Act of 1934.

The complaint  alleges that during the Class period, the
defendants issued numerous false  statements about Network
Associates, its financial results and its business  prospects,
including that the Company was experiencing strong pricing
trends,  its business was healthy, its outlook had never been
better and, as a result,  it would earn EPS of $2.12 in 1999,
respectively.  These false statements  caused Network Associates
stock to trade at artificially inflated levels of as  high as $67
per share in December 1998 and kept it trading at over $30 per  
share through the end of the Class Period, enabling several
executive officers  of Network Associates to sell over 852,500
shares of Network Associates stock  at artificially inflated
prices ranging from $34.33 to $50.88, for almost $33  million.

Contact Robert I. Harwood, Esq., Mathew M. Houston, Esq., or
Jeffrey B. Silverstein,  Esq. at Wechsler Harwood Halebian &
Feffer LLP, at mhouston@whhf.com by e-mail or 877-935-7400 by

ORBITAL SCIENCES: Investors Rattled by News of $15.9 Million Loss
Investor faith in Orbital Sciences, shaken by $15.9 million
first-quarter loss (CD April 30 p10), may not return until end of
year or beyond, according to analysts.  Orbital last week
disclosed that it had fired accounting firm KPMG Peat Marwick in
dispute over accounting practices.  "There have been concerns
about Orbital's financial management for several months, and the
events of [late last week] were the culmination of that," said
Paul Nisbet, satellite industry analyst who tracks Orbital for
JSA Research.  He said company failed to make "realistic"
projections on its earnings and as result was "punished by the
market" in form of its share prices' dropping more than 25% to
about $20.  Orbital executives didn't return our calls.

Orbital officials "either didn't accurately calculate the  
fundamentals, or they were hoping for a miracle," Nisbet said.
Case in point is Orbital's joint venture with Hertz to install
GPS navigation devices in more than 50,000 rental cars.  Orbital
said startup costs for project were "substantially" higher than
expected and weren't disclosed early enough to assuage financial
markets.  "When you keep the Street in the dark, there are
consequences," Nisbet said.

Orbital's situation reflects overall picture for mobile
satellite services (MSS), Yankee Group satellite analyst Phillip
Redman said.  "The mobile satellite market is a long-term play
and, increasingly, investors want short-term plays," he said:
"Couple that with inaccurate financial projections and share
prices can drop.  Look at Iridium."  Latter has taken Wall St.
drubbing for falling far short of startup projections.

Orbital's problems were compounded by allegations of improper
accounting practices by its former accounting firm, KPMG Peat
Marwick, JSA's Nisbet said.  Orbital fired KPMG last week when it
advised satellite maker of "material weaknesses" in way company
kept its books, according to SEC documents.  Accountants also
told Orbital its "systems of internal controls" for recording
financial data were insufficient.  Orbital dismissed KPMG and
said it disagreed with assessment.  Spokeswoman told us Orbital
was at "acceptance review" stage with new accounting firm but
wouldn't give its name.

Key sticking point between companies was KPMG's objection to
Orbital's practice of counting revenue from long-term contracts
in its quarterly financial, source familiar with issue said.  
When KPMG told Orbital it would have to change practice, it was
let go, source said.  KPMG wouldn't comment on specifics of its
relationship with Orbital, but spokeswoman told us audit firms
are "required to uphold generally accepted accounting principals"
and to act when they find cause for concern.  KPMG will file
response to Orbital's SEC filing on dispute by middle of this
month, he said.

Dispute may shed light on class action lawsuit against
Orbital filed by shareholders earlier this year (CD Feb 23 p4).
Suit alleged that company, CEO David Thompson and CFO Jeffrey
Pirone had violated Securities Act when they "issued a series of
materially false and misleading financial statements and failed
to reveal that the company was employing fraudulent accounting
methods" that inflated its earnings.  Suit was filed in U.S.
Dist. Court for Eastern Dist. of Va.

Suit also charged that Thompson and Pirone used "insider
information" on "artificial inflation" of stock price to sell
"significant amounts of their own personal Orbital holdings" for
total of more than $3 million.  Suit said Thompson sold total of
34,000 Orbital shares Dec. 16-21 and Pirone 56,000 shares in Nov.
When they sold shares, Orbital was trading in high 30s and low

Although Orbital's dispute with KPMG "seems to underscore the
validity" of suit, "it's too soon to know what its full effect
will be," said Arthur Stock, attorney with Berger & Montague, one
of law firms filing suit.  Stock wouldn't comment on dollar
amount suit will seek, but said securities law doesn't allow
plaintiffs to seek damages for financial impropriety.  However,
given drop in share prices between time Thompson and Pirone sold
shares and now, figure could rise above $100 million, sources
said.  (Communications Daily & Satellite Week 03-May-1999)

POLK AUDIO: Baltimore Court Declines to Enjoin Tender Offer
Md. Circuit Court, Baltimore, last week rejected temporary
restraining order sought by Polk Audio shareholders in class-
action suit filed April 21 that would bar company from completing
tender offer as first step in plan to take itself private.   
Tender to buy up to 860,000 shares of common stock at $12 per
share from public shareholders was set to expire April 30, unless
extended.  Polk said in SEC filing last week that it believed
suit was "without merit and intends to vigorously defend the
matter."  It said suit alleged that Polk executives breached
their fiduciary duty to minority shareholders by attempting to
freeze them out at inadequate price that didn't represent
company's fair value.  Polk has said it will delist its shares
from American Stock Exchange and terminate SEC registration of
its stock after completion of tender offer, regardless of offer's
outcome.  (Consumer Electronics 03-May-19999)

QUALCOMM: HSR Clearance Obtained; 94% of Employees Don't Sue
QUALCOMM Incorporated (Nasdaq: QCOM) announced that it was
advised on Friday, May 7, 1999 that the United States  Department
of Justice had concluded its anti-trust review of the pending
acquisition by Ericsson of QUALCOMM's terrestrial Code Division
Multiple Access  (CDMA) wireless infrastructure business and the
companion settlement agreements of the pending patent
infringement litigation between the two companies.  As a  result,
QUALCOMM expects that the transaction with Ericsson will close on
or  about May 24, 1999.

On May 6, 1999, Qualcomm commented in announcing Justice
Department clearance, a class action lawsuit was filed against
QUALCOMM by a single employee, purportedly on behalf of those
employees who are transitioning to Ericsson as part of the
acquisition.  However, 94 percent or more of the 1,053
transitioning employees who have unvested stock options,
including all of the senior management of the division, have
chosen not to join the lawsuit, Qualcomm said, explaining that
they will participate in the Retention Bonus Plan offered by
QUALCOMM and Ericsson, which provides several benefits including
cash compensation based upon a portion of the value of their
unvested options.

"We are pleased with the overwhelming acceptance of the Retention
Bonus Plan and the many positive comments regarding fair
treatment that we have received from all of our employees.  We
thank each of the transitioning employees for their many
significant contributions to QUALCOMM, and wish them great
success while participating in the worldwide growth of CDMA with
Ericsson," said Dr. Irwin M. Jacobs, Chairman and CEO of

Y2K LITIGATION: Alabama Sued Over Welfare Program Readiness
Alabama has become the first state to be named a defendant in a
Year 2000 lawsuit.  The plaintiffs allege the state has ignored
its responsibility to make its systems compliant, resulting in
delays in benefits for recipients of child support and food stamp
benefits. The case is Miller et al. v. James et al., No. CV-99-
197 (AL Cir. Ct., Montgomery Cty., complaint filed Jan. 14,
1999). The complaint was filed as a class action on behalf of
"Taxpayers, citizens and recipients of services of State agencies
who have been, and will be adversely affected by: (a) defendants'
unconstitutional delegation of spending authority to state
agencies, and (b) defendants' actions in failing to take
corrective measures regarding the Year 2000 computer problem."
Named plaintiffs Bertha Miller and Evelyn Jackson receive
(respectively) child support and food stamp benefits through the
Alabama Department of Human Resources.  They allege the
state has ignored repeated warnings from their experts and
consultants about the critical need to fix computer systems so
they are compliant.  Instead, the plaintiffs allege, the Alabama
legislature enacted Act No. 98-496, Sec. 17, which requires state
agencies to create and implement Y2K remediation plans, but
provides no funding for them to do so, despite a study that shows
the state needs $92 million for Y2K remediation work. The act
amounts to an unconstitutional, unfunded mandate and an illegal
delegation of the legislature's spending and appropriation
authority.  State agencies cannot redirect money for Y2K work
from other services and programs authorized in the state budget,
the complaint states.  The complaint seeks a court order forcing
the state to appropriate funds for Y2K remediation and develop
and implement a plan to address the problem.  The complaint also
asks the court to appoint a special master to advise the court
and oversee implementation of any relief the court orders. Named
as defendants are the state; Gov. Fob James; Jimmy Baker,
director of the Department of Finance; Tony Petolos, commissioner
of the Department of Human Resources; and Gwendolyn Williams,
commissioner of the state Medicaid Agency. Representing the
plaintiffs are Terry G. Davis and A. Wesley Pitters, both in
Montgomery, AL.  (Software Law Bulletin May/June 1999)

Y2K LITIGATION: Hyde Says Bill May Reach Floor Next Week
Legislation to limit business liability from lawsuits stemming
from year 2000 computer problems could be brought to the House
floor as soon as next week, House Judiciary Chairman Hyde
predicted Tuesday after his panel approved the bill.

The measure, which would give businesses more extensive
protection from litigation than the Senate version of the
measure, was approved largely along party lines by a 15-14 vote
in the Judiciary panel.

In two short sessions, Democrats succeeded in trimming out
proposed caps on attorneys' fees from the measure authored by
Rep. Thomas Davis, R-Va. Rep. Bob Goodlatte, R-Va., accepted
several Democratic requests to take out sections seeking to
regulate arrangements between attorneys and their clients.

Still, Goodlatte held the line against several Democratic
attempts to water down the Davis bill.

Chief among them were futile tries by Rep. Jerrold Nadler, D-
N.Y., to strike provisions that would make it difficult to pursue
class action lawsuits. A high Democratic absentee rate at the
markup did not help Nadler's effort.

Also unsuccessful were amendments by Rep. Robert Scott, D-Va.,
that would affect the joint and several liability concept dear to
attorneys, and the definition of a "material defect" in the
context of what must go wrong to sue.

Somewhat surprisingly, House opponents of the measure did not
fight to delete provisions proposing caps on punitive damages or
the concept of proportional liability, issues that have sparked
major fights in the Senate.

The only effort made to address these issues was an amendment by
Rep. Zoe Lofgren, D-Calif., that was only briefly debated before
being defeated 15-13.

Citing a National Republican Senatorial Committee handout,
Lofgren complained Republicans were politicizing the issue. The
brochure quoted NRSC Chairman Mitch McConnell of Kentucky blaming
Senate gridlock on the bill on Democrats who have "completely
hoodwinked" Silicon Valley "(into) believing they actually care
about high tech" concerns.

"We were surprised the bill got out of the Judiciary Committee so
quickly," said Jan Amundson, general counsel for the National
Association of Manufacturers, a member of the coalition
supporting the bill. She added, "It was contrary to our concern
that there would be extensive debate."

The one member who crossed party lines in his vote was Rep.
Lindsey Graham, R-S.C., who said he was concerned that the bill's
sponsors were trying to accomplish extensive tort reform rather
than treat a singular situation.

Asked if other Republicans agreed with him, Graham said, "I am an
island alone."  (National Journal's CongressDaily 05-May-1999)


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