/raid1/www/Hosts/bankrupt/CAR_Public/990914.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Tuesday, September 14, 1999, Vol. 1, No. 155


BILLING CONCEPTS: Announces Dismissal of Securities Lawsuit In Texas
BMJ MEDICAL: Settles Securities Fraud Claim In CA Arising Out Of MSA
BMJ MEDICAL: Will Defend Securities Fraud Claims In Florida Re MSA
BOEING NORTH: CA Ap Ct Bars Rocketdyne Facilities Contamination Claims
BUCS: Ticket Lawsuit To Continue; Ct To Hear If This Is A Class Case

BUFFETS INC: Decries Merit Of Securities Suit In Minnesota
CHICAGO AREA: Council Of Boy Scouts Not Hiring Gays, Okays Ill. Ap. Ct.
COCA-COLA: Federal Judge In Bias Case Widely Regarded As Smart And Fair
ELF ATOCHEM: Personal Claims Re Arsenic Not Redressed; 5th Cir. Texas
EQUITABLE LIFE: Wins Case On Bonus Rates; Policyholders Vow To Appeal

FEN-PHEN: Question Looms Over Drug Maker’s Honesty Of Test Results
J.D. EDWARDS: Milberg Weiss Files Securities Suit In Colorado
METROPOLITAN TRANSPORTATION: Judge Certifies Class Of 119 Ex-Officers
NATIONAL PARTNERSHIP: REIT Shortchanged Investors, CA Woman Sues
NETWORK ASSOCIATES: NYLJ Discusses Recruiting Of Securities Plaintiffs

NY POLICE: 14 Minority Officers Sue Over Bias in Disciplinary Practices
PAYDAY LENDERS: Sued Over Use Of Deceptive Practices In Illinois
SILKFIELD PTY: Australian High Court Oks Unit Buyers’ Class action
SILKFIELD PTY: Aussi Ct Oks Class Of Buyers; Co Vows To Recover Damages
SIMWARE INC: NY Sp Ct Approves Settlement For Complaint Over IPO

SYPRIS SOLUTIONS: Contests Suit In Louisiana Over Coker Plant Explosion
SYSTEMSOFT CORP: Faces Securities Suit Filed In Massachusetts
VITAMIN PRICE-FIXING: Makers Face Separate Claims From Corporates
WATER COMPANIES: CA Ct Dismisses Suits Over Contaminated Water
Y2K LITIGATION: New Jersey Lawyer Says Federal Statute Limits Damages


BILLING CONCEPTS: Announces Dismissal of Securities Lawsuit In Texas
Billing Concepts Corp. (Nasdaq: BILL) announced that the U.S. District
Court for the Western District of Texas entered an order and judgment
dismissing the plaintiff's proposed securities litigation class action
lawsuit alleging violations of the federal securities laws by the
Company and certain of its officers and directors. The lawsuit was filed
initially in December 1998. The plaintiffs have the right to appeal the
Court's ruling.

Billing Concepts is a provider of LEC billing clearinghouse and
information services to the communications industry.

BMJ MEDICAL: Settles Securities Fraud Claim In CA Arising Out Of MSA
On October 20, 1998, a litigation action entitled Tri-City Orthopedic
Surgery Medical Group, Inc. et al. V. BMJ Medical Management, Inc. Case
No. 98-CV-1903-JM-LAB was filed. In this action, which was brought in
the United States District Court for the Southern District of
California, plaintiffs have asserted claims for breach of contract,
common law fraud and securities fraud arising out of the Management
Services Agreement (MSA) between plaintiffs and the Company. This action
is currently stayed pursuant to the automatic stay provisions of Section
362 of the United States Bankruptcy Code. This litigation was settled
subsequent to December 31, 1998.

In June and July 1999, the Company closed on settlement transactions
with five of its affiliated physician practices involving 52 physicians.
Under terms of the settlements agreements, the Company received
$17,903,000 in cash and 5,613,000 shares of its common stock from the
physician practices and transferred ownership of the accounts receivable
and furniture fixtures and equipment to the physician groups.
Additionally, the MSA's with the physician practices were terminated. As
a result of these settlement transactions, the Tri-City litigation
against the Company was terminated and the STSC and Valley Sports
proceedings were also terminated. The Company used the proceeds of these
transactions to repay a portion of its secured indebtedness. The loss
related to these settelments amounted to approximately $9,900,000 of
which approximately $8,000,000 was recognized and included in the three
months ended December 31, 1998 as loss on impairment of long lived
assets. The remaining $1,900,000 will be recognized in the month of

The Company is principally a Physician Practice Management Company
("PPM") that provides management services to its affiliated practices
and ancillary service facilities. The Company focuses on musculoskeletal
care, which involves the medical and surgical treatment of conditions
related to bones, muscles, joints and related connective tissues. The
broad spectrum of musculoskeletal care offered by the Physician
Practices ranges from acute procedures, such as spine or other complex
surgeries, to the treatment of chronic conditions, such as arthritis and
back pain. As of December 31, 1998, the Company had affiliated With
physician practices operating in Arizona, California, Florida,
Pennsylvania, New Jersey, Nevada, and Texas by entering into Management
Services Agreements ("MSA's").

The Company was incorporated in Delaware in January 1996 and affiliated
with its first Practice in July 1996. As of December 31, 1998, the
Company had entered into 36 MSA's with physician practices compromising
146 physicians. The Company had also acquired an independent physician
association with 42 physicians. Additionally, the Company had assisted
with several affiliated practices in adding new physicians to the
existing practice and in facilitating the combination, where
appropriate, of certain solo practices into larger existing practices.

BMJ MEDICAL: Will Defend Securities Fraud Claims In Florida Re MSA
On December 10, 1998, a litigation action entitled Lighthouse Orthopedic
Associates, Inc. and Orthopaedic Surgery Associates, Inc. et al. v. BMJ
Medical Management, Inc. was filed. In this action, which was brought in
the Circuit Court of the Fifteenth Judicial Circuit in and for Palm
Beach County, Florida, plaintiffs have asserted claims for breach of
contract, common law fraud and securities fraud arising out of the MSA
between plaintiffs and the Company. This action is currently stayed
pursuant to the automatic stay provisions of Section 362 of the United
States Bankruptcy Code. The Company intends to defend against this
action vigorously.

On December 11, 1998, a litigation entitled Gold Coast Orthopedics v.
BMJ Medical Management, Inc. was filed. In this action brought in the
Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach
County, Florida, plaintiffs have asserted claims for breach of contract,
common law fraud and securities fraud arising out of the MSA between
plaintiffs and the Company. This action is currently stayed pursuant to
the automatic stay provisions of Section 362 of the United States
Bankruptcy Code. The Company intends to defend against this action

BOEING NORTH: CA Ap Ct Bars Rocketdyne Facilities Contamination Claims
A California appeals court on June 29 ruled in a partially published
opinion that contamination claims against Boeing North American Inc.
were not sufficient to invoke the delayed discovery rule and, therefore,
the claims are barred (Barbara A. McKelvey, et al. v. Boeing North
American Inc., et al., James K. Aurness, et al. v. Boeing North American
Inc., et al., Boeing North American Inc., et al. v. The Superior Court
of Los Angeles County v. Cecil Adams, et al., and Boeing North American
Inc., et al. v. The Superior Court of Los Angeles County v. Aaron Davis,
et al., Nos. B125285, B125298, B130137 and B130146, Calif. App., 2nd
Dist.). Text of Decision in Section D. Mealey's Document #

In 1997, Barbara A. McKelvey and John Walakavage filed a class action
suit against Boeing North American Inc., Rockwell International Corp.,
Rocketdyne Inc., Atomics International Inc., Hughes Aircraft Co. and
others. McKelvey claims that beginning in the 1940s and continuing into
the 1980s, Boeing systematically contaminated soil and water around four
of its Southern California facilities (the Rocketdyne facilities).

In a separated action filed in 1997, James Aurness and others filed a
direct action against Boeing, claiming the same facts asserted by
McKelvey. The difference between the two suits is status, with Aurness
alleging that the plaintiffs live and work in Los Angeles and Ventura
counties and, at the time they sustained the injuries, were the owners,
lessees and occupants of certain property near the Rocketdyne

Boeing demurred to all causes of action alleged in the McKelvey and
Aurness first amended complaints, maintaining that the claims were
barred by limitations. The trial court sustained most of the demurrers
without leave to amend. Plaintiffs' motions for reconsideration were
denied, as were there motions to file a second amended complaint.

                           1998 Actions

In 1998, Cecil Adams and several hundred others sued Boeing, alleging
the same facts asserted in Aurness. There are two additional
allegations: (1) certain plaintiffs worked at the Rocketdyne facilities
to perform a particular industry related to the Rocketdyne Facilities
and (2) the plaintiffs became aware of their contamination exposure when
a report by the University of California on the Los Angeles Rocketdyne
workers' health was published.

A second complaint was filed in 1998 by Aaron Davis and three others
which is indistinguishable from the Adams action.

Boeing demurred to the Adams and Davis complaints on the same grounds
asserted in McKelvey and Aurness. However, the trial court denied the
requests for judicial notice and overruled most of the demurrers.

Boeing then filed a petition for a writ of mandate in which it asked the
Second District California Court of Appeal to compel the trial court to
vacate the Adams and Davis orders and sustain the demurrers without
leave to amend. The appeals court issued an order to show cause so that
it could consider all four cases at the same time.

                      Delayed Discovery Rule

The appeals court rejected the plaintiffs' argument that the allegations
in their complaint were sufficient to invoke the delayed discovery rule.

None of the complaints (not the proposed second amended complaints in
McKelvey and Aurness or the third amended complaints filed in Adams and
Davis) are sufficient because none of them disclose the time or manner
of discovery by any plaintiff," the court said. "All they say is that
they had no actual knowledge or suspicion about the full nature of their
injuries or Boeing's responsibility for those injuries, and that they
did not 'believe they were entitled to recourse.' They do not allege
that they were not aware of facts sufficient to make a reasonably
prudent person sufficiently suspicious to investigate further. . . . In
light of the facts they do allege, these omissions are fatal."

The court added that the plaintiffs' amended complaints acknowledge the
publicity surrounding Boeing's operation of the Rocketdyne facilities,
yet nevertheless failed to explain how they managed to ignore the
publicity. The court noted that the plaintiffs do not allege that they
did not read, hear or see the articles and broadcasts they admit were

"Plaintiffs have had four bites at the apple, and they do not suggest on
appeal or in opposition to Boeing's writ petitions that there are
additional facts they could plead to satisfy the discovery rule.
Instead, they assert an abstract right to amend yet again, and they
demand the opportunity to take a fifth bite. They have no such right,"
the court said.

                           Truth Irrelevant

Although the court decided that the plaintiffs' argument that the trial
court improperly took judicial notice of the truth of a disputed issue
of fact - the time and manner each plaintiff discovered his cause of
action - is moot, the court noted that the truth of the facts reported
is irrelevant.

"The 117 documents . . . were offered to show the extent of the
widespread publicity about the problems at the Rocketdyne facilities.
They were offered to show that, at a time outside the statute of
limitations, plaintiffs had notice of or information of circumstances
sufficient to put a reasonable person on inquiry. They were offered to
show that anyone living in Los Angeles County, and certainly anyone
living or working in the vicinity of the Rocketdyne facilities, would
have read or heard about the contamination at and around the Rocketdyne
facilities. The accuracy of the reporting is irrelevant," the appeals
court said.

Therefore, the court affirmed the McKelvey and Aurness judgments. The
court ruled that the Adams and Davis judgments will be vacated, and
directed the court to issue new orders sustaining the demurrers without
leave to amend. The appeals court further held that Boeing is entitled
to costs of both the appeal and the writ of proceedings.

Boeing is represented by Brad D. Brian, Stephen M. Kristovich and
Bernardo Silva of Munger, Tolles & Olson in Los Angeles. Plaintiffs'
counsel include Walter J. Lack, Gary A. Praglin and Jennifer R. Schrack
of Engstrom, Lipscomb & Lack in Los Angeles and Thomas V. Girardi and
James B. Kropff of Girardi & Keese in Los Angeles. (Mealey's Litigation
Report: Emerging Toxic Torts 7-23-1999)

BUCS: Ticket Lawsuit To Continue; Ct To Hear If This Is A Class Case
After listening to an hour of arguments, a Hillsborough County Circuit
judge denied a motion to dismiss a class-action lawsuit alleging the
Bucs unfairly and deceptively assigned season tickets.

"Certainly, the allegations in the complaint are sufficient," Judge Sam
D. Pendino said. "There's going to be a hearing on whether this is a
class case or not and that's all the Court has said," Bucs attorney Ben
Hill said. "We would have loved to have had it dismissed to start with,
but if we have to have a hearing ... I believe the Court is very
conscious of the cases we cited."

Jonathan Alpert, the attorney representing four longtime season
ticket-holders who say the Bucs failed to follow a stated method for
prioritizing seat assignments in Raymond James Stadium, said this was an
important first step. "It's important for this community and it's
important for Tampa that promises be honored and commitments be kept,"
he said. "We're at the end of the first quarter and it's 14-0 in our
favor. We hope the Bucs do better on the field this coming Sunday."

"You said we were in the the first quarter," Hill playfully chimed in.
"I think we're at the kickoff and the other team has not been called
onsides." Hill, who maintained that the allegations are untrue, raised
technical points of law to convince the judge that the lawsuit was
"deficit" and should not be "permitted to stand" as a class action.

Pendino asked Alpert to explain why there wouldn't be "mini trials" for
each individual, each of whom would have a different priority based upon
his unique profile (consecutive years as a season ticket-holder, the old
seat location in Houlihan's Stadium and when a charter-seat deposit was
sent in). "It's about honoring the terms of a process," Alpert said.

Pendino ordered Alpert to slightly amend the language of the complaint,
striking a claim of unjust enrichment. (St. Petersburg Times 9-10-1999)

BUFFETS INC: Decries Merit Of Securities Suit In Minnesota
The Company and seven of its present and/or former directors and
executive officers have been named as defendants in a Corrected, Third
Amended, Consolidated Class Action Complaint (the "third complaint")
brought on behalf of a class of all purchasers of common stock of the
Company from October 26, 1993 through October 25, 1994 in the United
States District Court for the District of Minnesota.

The third complaint alleges that the defendants made misrepresentations
and omissions of material fact during the class period with respect to
the Company's operations and restaurant development activities, as a
result of which the price of the Company's stock allegedly was
artificially inflated during the class period. The third complaint
further alleges that certain defendants made sales of common stock of
the Company during the class period while in possession of material
undisclosed information about the Company's operations and restaurant
development activities. Plaintiffs allege that the defendants' conduct
violated the Securities Exchange Act of 1934 and seek damages of
approximately $90 million and an award of attorneys fees, costs and

The defendants have answered the third complaint, denying all liability
and raising various affirmative defenses. Discovery has been taken and
was substantially completed as of February 26, 1999. By Order entered on
June 17, 1999, as amended by Order dated August 18, 1999, the District
Court certified the proposed plaintiff class.

Management of the Company continues to believe that the action is
without merit and is vigorously defending it. On May 28, 1999, the
defendants served their motion for summary judgment on all claims.
Plaintiffs also moved for partial summary judgement against the Company
and Mr. Hatlen for a portion of class period. The motions have not yet
been scheduled for hearing. The defendants have given notice of the
plaintiffs' claim to its insurance carrier. The insurance company is
reimbursing the defendants for a portion of the costs of defense under a
reservation of rights.

CHICAGO AREA: Council Of Boy Scouts Not Hiring Gays, Okays Ill. Ap. Ct.
The Chicago Area Council of Boy Scouts won a temporary victory when the
Illinois Appellate Court ruled that its anti-homosexual hiring policy
could remain intact--at least until the court issues a decision.

Carla Kerr, an attorney representing the Chicago Area Council, said the
council hadn't been sure where it stood on its hiring policy while it
appealed a Cook County Circuit Court judge's ruling nearly a month ago.

"We were kind of in limbo, but now we know that the Boy Scouts have the
right to enforce their policy until the Appellate Court rules on the
appeal itself," Kerr said.

Circuit Court Judge Stephen A. Schiller ruled Aug. 12 that the council
could not discriminate against gay applicants solely on the basis of
sexual orientation.

Keith Richardson filed a class-action suit against the council in May
1992, charging the Boy Scouts discriminated against him when he was told
he could not apply for employment because he is gay.

Schiller's decision upheld a February 1996 ruling by the Chicago
Commission on Human Relations, which said such a hiring practice
violates a city ordinance prohibiting employment discrimination based on
sexual orientation.

However, Schiller also said the Scouts council retains the right to deny
employment to anybody it "reasonably believes" is using the organization
to "discuss issues regarding sex." (Chicago Tribune 9-9-1999)

COCA-COLA: Federal Judge In Bias Case Widely Regarded As Smart And Fair
U.S. District Judge Richard W. Story strode to the bench in the
cavernous downtown courtroom and took his seat. Facing him were nine
high-powered lawyers wearing thousands of dollars in worsted wool and
ready to argue one of the most high-profile cases in Atlanta.

As the first hearing in the racial discrimination lawsuit against
Coca-Cola Co. got under way, Story quickly caught the attorneys by
If you plan to argue what you have already submitted in hundreds of
pages of court motions, don't bother, the judge advised the lawyers
before a packed courtroom. "I have read your briefs, each of the cases
cited in your briefs," Story said. "I feel thoroughly familiar with the
positions of each of the parties, and unless you are just compelled by
the need to say that to me, I promise you, I have read every word of it,
most of it more than once."

A bit deflated, knowing their showcase arguments were no longer
necessary, the attorneys sank back in their seats and answered questions
from the judge.

That initial hearing May 13 at the Richard B. Russell Federal Building
on Spring Street moved along without a hitch. Lawyers who have practiced
before Story expressed no surprise at the readiness of Atlanta's newest
federal judge. Appointed to the bench in 1997 by President Clinton,
Story has gained a reputation for intense preparation, decisiveness and
fairness. He will need all three assets in handling the Coca-Cola case.
The lawsuit is, after all, against the world's largest maker of soft
drinks and the company most commonly identified with Atlanta.

Four current and former workers claim the beverage giant has engaged in
a companywide practice of discriminating against its African-American

The company has strongly denied the allegations in the suit, which seeks
class-action status on behalf of an additional 1,500 black salaried
employees in the United States.

So far, lawyers for both parties have kept the judge busy, and Story has
shown sensitivity to arguments raised by each side. The judge, who often
makes the 60-mile commute to Atlanta unless he can hold court at the
small federal courthouse near his home in Gainesville, declined to be
interviewed for this article, saying he had chided lawyers involved in
the Coca-Cola case enough for talking to the media. In the spring,
plaintiffs' lawyers asked Story to rebuke Coca-Cola for e-mails Chairman
and Chief Executive Officer M. Douglas Ivester sent to employees,
defending the company against the allegations. The e-mails could
inappropriately dissuade potential black plaintiffs from joining the
case, the lawyers argued.

Although Story warned Coca-Cola executives not to go too far in
intra-office communications, he declined to penalize the company for
Ivester's e-mails. The suit "causes, I'm sure, discussions in the break
rooms and all throughout the company, as well as concerns about
shareholders and the rest," Story said. "As a CEO, if he did not respond
in some fashion, my guess is he would not be doing his job."

During a hearing on a Coca-Cola motion to block the case from becoming a
class action, Story expressed concerns about how a case of such
magnitude and complexity could be handled if hundreds of new plaintiffs
are added. Coca-Cola's lead attorney, William Clineburg, argued that a
case of that size would be impossible to control and declared
unconstitutional on appeal.

But Story was unconvinced. He said he was concerned about employees with
a "lower-paying job who may not be able to hire a high-powered lawyer.
... If they could join together with 20 other people, or 1,499 other
people, they might could get that representation. They might could get
the issues to the table more easily. That's of concern to the court."

During the July hearing, Story heard arguments on Coca-Cola's motion to
dismiss and asked numerous questions. He then asked for a 10-minute
recess and, true to form, returned to the bench and issued his order
denying the company's motion and keeping alive -- for now -- the
class-action claims.

It is Story's preference to resolve issues as quickly as possible. "He's
always been known for his promptness in getting out orders," said Julius
Hulsey, a Gainesville lawyer and one of Story's former law partners.
"He's made it his habit to force himself to make a ruling that day, if
he could, not having to take an issue home with him at night."

                       The road to the courtroom

Story was raised in Harlem, 20 miles west of Augusta. His father, Buck
Story, once operated a gas station and dabbled in politics, serving on
the Columbia County Commission. He currently is chairman of the county's
Democratic Party.

As a boy, "Rick" Story campaigned for his father, attending political
rallies and handing out fliers. While his father influenced Story to be
civic-minded and to get involved, his late mother, Erline, gave him a
strong sense of justice. "She had a tremendous role in molding him as a
judge," said Kenneth Brown, Story's childhood friend and now Georgia
Southern University's campus police chief. "She, just like he can now,
could talk you into doing the right thing and make you think it was your
idea." Erline Story, a radiology lab receptionist who once owned a
florist shop, died four years ago in an auto accident. "Losing her was
terrible for the judge," Brown said. "It was extremely devastating for
him." A high school salutatorian, Story left Harlem to attend LaGrange
College. He earned his law degree at the University of Georgia.

Story has always kept busy, and his years at LaGrange were no exception,
his father recalled. His son had numerous part-time jobs around campus.
At tax time during one school year, Buck Story said, he took his son's
W-2 tax forms along with his own to his accountant. "He charged me more
for Richard's tax return than he did for mine, because he worked so many
jobs," the father said.

Even today, the judge keeps a hectic schedule. "If I want to talk to
him, I call at 11 o'clock at night," his father said. Story's favorite
form of recreation appears to be a round of golf. Although he declined
to be interviewed, he made one exception after learning his father had
said his son was a "scratch" golfer, meaning he shoots even par. Story
called to set the record straight: He typically shoots 15 or 16 strokes
over par. "I couldn't believe it when Daddy told me that," he said with
a chuckle.

Story began his law career working for an 85-year-old Gainesville firm
whose members have included a former Georgia Supreme Court justice.
Julius Hulsey, one of Story's former partners at the firm, remembers
Story as a lawyer who could handle any sort of case. "A lot of people
might think he's just a good old boy from Harlem, Ga.," Hulsey said.
"But, shoot, he's got more between the eyes than anyone I've run into."

Once Story got it in his mind that he wanted to be a judge, there was no
stopping him, Hulsey said. He first served as a part-time juvenile judge
in Hall County. In 1986, then-Gov. Joe Frank Harris made Story, at age
33, the state's youngest Superior Court judge at that time.

For more than a decade, he presided over the Northeastern Judicial
Circuit, where former colleagues gush with praise about his performance.
"He's always impressed me as a judge who tries very hard to give
everyone involved in a trial a full and fair hearing and an opportunity
to present their case fully," said Georgia Court of Appeals Judge J.D.
Smith, who once served with Story on the Superior Court bench.

Story, who is active in his church and helps coach basketball and
baseball, has no agenda on the bench, said Brown, his childhood friend.
"He's not a right-wing conservative; he's not a left-wing liberal,"
Brown said. "He's what we all want judges to be -- right down the

Dan Summer, a Gainesville lawyer and former prosecutor who tried more
than 50 cases before Story, said even if the judge issued a ruling
against him he could not get upset about it. "It's because he bends over
backwards to listen to people," Summer said. "You walk away knowing you
had a fair hearing, no matter whether it's win, lose or draw."

After presiding over a medical malpractice case, Story slashed a
punitive damages verdict of $ 14 million to $ 1 million. Columbus trial
lawyer Jim Butler appealed that decision to the Georgia Supreme Court,
which unanimously upheld Story's decision. "His decision was
reasonable," Butler said. "He's one of those rare people who seem to
have been born with the temperament of a judge. He's very bright, very
patient, but also very decisive without being harsh about it when he
doesn't need to be."

On the federal bench, he has a reputation of being a tough sentencing
judge. He also has shown signs of independence, most recently in his
decision not to follow a federal magistrate's recommendation to dismiss
a sexual harassment case against Douglas County District Attorney David

The lawsuit, filed in 1995 by six former employees, all women, claims
that McDade threw coins down the front of employees' blouses, required
women workers to wear swimsuits at parties at his house and used lewd
expressions when referring to women in his office.

In his order, Story wrote that although the women "willingly joined in"
McDade's conduct on occasion, they also found the district attorney's
behavior "demeaning." Either way, a jury should decide whether the
conduct inside the "extremely complex office environment" constituted
unlawful sexual harassment, Story said. McDade is now appealing.

In the Coca-Cola case, the judge's big decision, not expected for
months, will be whether to grant class certification. If the plaintiffs
prevail on that issue, the stakes for Coca-Cola grow almost

So far, Story, has given both parties' lawyers a good deal of leeway.
"My approach to people is that I trust you and I count on you to do the
right thing, until you prove otherwise," he said during the hearing in
July. "Then I treat you appropriately. So I'm going to assume that you
will conduct yourselves in the fashion that is appropriate in the case,
and when we start crossing over the lines and getting out of bounds,
then we'll tighten the restrictions." He also asked the attorneys, as
has become his routine, not to try the lawsuit in the news media. "I
don't think anything is gained in this case by trying it in the media."
(Atlanta Journal And Constitution 9-10-1999)

ELF ATOCHEM: Personal Claims Re Arsenic Not Redressed; 5th Cir. Texas
A non-opt-out class action settlement in an arsenic contamination and
exposure case cannot be affirmed on appeal because the class members'
personal injury claims are "individualized" and cannot be redressed
through "group remedy," certain objectors argue in a July 14 brief to
the Fifth Circuit U.S. Court of Appeals (Lillian Hayden, et al. v. Elf
Atochem America Inc., et al. v. Ricardo Davis, et al., No. 99-20249, 5th
Cir.; See 9/1/95, Page 5).

The arsenic contamination allegedly was caused by an agrichemical plant
in Bryan, Texas. The contamination occurred from 1973 to 1992 and
involved air, soil, surface water and groundwater in the surrounding

Claimants asserted in their April 3, 1992, action that property values
diminished; they also put forth claims for personal injuries. They later
moved to certify the medical monitoring and property damage class action
on Sept. 8, 1992.

The class was certified on Jan. 31, 1994, as an opt-out class action.
However, on April 5, 1995, the parties reached a proposed settlement
which converted the action to a non-opt-out class. Under the terms of
the settlement, the defendants are prohibited from producing or handling
arsenic at the facility and defendants must remove attic dust from
residential properties in certain areas. The settlement provides a
10-year medical monitoring program and establishes a $ 55 million
settlement fund. Certain parties objected to the settlement.

The trial court has not yet considered whether the terms of the
settlement are fair, adequate and reasonable. Rather, at the settling
parties' request, it held only that the case could proceed as a
non-opt-out class action and then certified the action for interlocutory

                          Appellant's Brief

Timothy Marshal and others, as intervenors and objectors to the class,
argue in their July appellant's brief to the Fifth Circuit that the
trial court misapplied Federal Rule of Civil Procedure 23.

"The class members' personal injury claims are highly 'individualized,'
and cannot be redressed through 'group remedy.' Rather, each plaintiff
would have to prove that he or she suffered from a disease that can be
caused by arsenic, that the disease was caused by arsenic in his or her
particular case, the extent of the individual damages suffered . . . and
a host of other matters specific to that plaintiff's claims," Marshal

Marshal adds that the trial court misunderstood the purpose of Rule
(b)(1)(A) certification when it held that the rule's requirements were
met simply because, without mandatory treatment of all claims, some
plaintiffs might lose and others might win their individual cases.
Marshal maintains that the trial court's reasoning does not support
mandatory certification of damages actions because it would apply to any
situation in which more than one plaintiff sued a defendant for damages
arising out of the same event, thus destroying the carefully constructed
differences among the subdivisions of Rule 23(b).

Additionally, Marshal maintains that the multitude of individual legal
and factual issues raised by the proposed class members' personal
damages claims also preclude this court from affirming the trial court's
conclusion that the typicality and adequacy of representation
requirements have been satisfied.

"Moreover, there are also serious conflicts within each subset of the
class that render the class representation inadequate. For example, a
presently-injured skin cancer victim, whose cancer is currently in
remission, but who faces a high risk of future reoccurrence, would argue
for a different structure than a present victim of terminal lung
cancer," Marshal reasons.

                    No General Causation Issues

Marshal continues that there are no general causation issues applicable
to all class members because different class members suffer from
different disease. According to Marshal, the epidemiological and
toxicological literature regarding the extent to which arsenic exposure
causes lung cancer is specific to that disease or category of diseases.
Therefore, Marshal says, general causation evidence with respect to lung
cancer necessarily differs from evidence regarding whether arsenic
causes skin cancer, which in turn differs from whether arsenic causes
birth defects.

Furthermore, Marshal maintains that the trial court erred by certifying
the mandatory class because due process mandates that class members with
individualized claims for personal injury damages must be provided
meaningful notice and an opportunity to exclude themselves from the
class. This settlement-only mandatory class undermines the deep-rooted
historic tradition that everyone is entitled to his own day in court,
Marshal says, citing Ortiz v. Fibreboard Corp. (1999 WL 412604 [U.S.
S.Ct. June 23, 1999; See 6/25/99, Page 3]).

"The class definition is also objectionable to the extent that it has
been interpreted to include personal injury claims that flow from a
fetus' exposure," Marshal adds. "A child whose only exposure is in
utero, and who otherwise does not live, work, or own property within the
proposed zones, is not a class member because, under Texas law, a fetus
is not a 'person.'"

The brief was filed by Steve R. Baughman of Baron & Budd in Dallas,
Brian Wolfman and Allison Zieve of Public Citizen Litigation Group in
Washington, D.C., Dana Gareth Kirk of the Law Offices of Dana Gareth
Kirk in Houston and Thomas Harkness of Whitehurst, Harkness, Ozmun &
Archuleta in Austin, Texas. (Mealey's Litigation Report: Emerging Toxic
Torts 7-23-1999)

EQUITABLE LIFE: Wins Case On Bonus Rates; Policyholders Vow To Appeal
Equitable Life triumphed in the High Court after a year-long row over
pensions sold to 90,000 people, in a victory the company hopes will put
an end to months of speculation about its future.

The mutual insurer was accused by some policyholders of acting illegally
by cutting bonus rates on pensions which promised to pay a minimum
amount in retirement - so-called guaranteed annuities.

In a landmark ruling, the judge Sir Richard Scott told the court that
the power to award bonus rates as they saw fit was "well within the
discretion" of the directors. He rejected suggestions that Equitable had
behaved irrationally or unfairly.

The decision appears to have dashed the hopes of thousands of people who
have retired or who are near to doing so of securing a higher income
than they now get for the rest of their life.

Alan Nash, the managing director of the society, which has assets of
pounds 28bn, said the judgment was a "ringing endorsement" of his stance
and hoped it would put an end to the "misinformation and ill considered
comment" the company has endured since the issue emerged last August.

"The society holds just one pot of money on behalf of its with-profits
policyholders and it is the fair and rightful division of that pot that
is and has always has been our concern," he said. He repeated his pledge
that Equitable would not sell-out to a predator and would retain its
mutual status.

Equitable brought the test case against itself in an attempt to resolve
the row, paying the legal costs of both sides. One customer with five
guaranteed policies, David Hyman, was chosen as representative.

The judge granted leave for an appeal against the decision, the costs of
which Equitable would also have to fund. Speaking outside the court
about the insurer's methods, Mr Hyman said: "It was not the way the
policies had been sold to me."

The guaranteed annuity schemes were sold in the 1960s, '70s and '80s,
when interest rates were high, offering a minimum annual income for life
of around 11pc of the pension fund. As annuity rates have plunged to
around 6pc the policies have become very valuable. Equitable's response
has been to cut final bonus rates to pay for the guarantees. Action
groups for angry policyholders said the fight was far from over.
Solicitor Leon Kaye Collin & Gittens is still planning to bring a class
action against the society and has got the support of 700 policyholders.

Leon Kaye said: "We are still very much alive. The case that has been
decided is not our case, which brings in wider issues of the whole sales
process and what policyholders believed they could be getting." Stuart
Bayliss, the independent financial adviser co-ordinating the action
group, said: "They have won the home leg but there are wider issues
here." The ruling raises the possibility that other insurers that sold
similar schemes and have been paying full bonus rates could change their

Steve Muir, marketing manager at Axa Sun Life, said: "We think all of
their get-out-of-jail-free cards have been used at once. We will honour
the commitment to our policyholders; we have no reason to change our

Equitable Life had set aside pounds 1.5 billion to fund possible bills
from the guaranteed annuity debacle but always insisted it would not
have to pay out more than pounds 50m. The total cost to the industry of
paying out on the schemes has been put as high as pounds 11 billion.

Equitable, founded in 1762, is the oldest mutual insurer in Britain.
Standard & Poor's, the ratings agency, removed Equitable Life from its
"credit watch" list and reaffirmed its A rating. (The Daily
Telegraph(London), 9-10-1999)

FEN-PHEN: Question Looms Over Drug Maker’s Honesty Of Test Results
Two years after the diet drug Redux was pulled from pharmacy shelves
because of its potential to cause heart-valve problems, questions are
being raised anew about whether its manufacturer, the American Home
Products Corporation of Madison, N.J., may have withheld damaging safety
information about the drug in an effort to obtain Government approval of

At least two lawyers in Texas, both of whom represent plaintiffs in
civil suits against the manufacturer, have been contacted by agents of
the Federal Bureau of Investigation seeking information about the
drug-approval process, one of the lawyers said. Speaking on condition of
anonymity, the lawyer said: "I think they are looking into whether or
not the approval process was above board. I have some stuff that they
want, some documents."

The existence of a preliminary inquiry by the F.B.I. was first reported
in The Wall Street Journal. Quoting an unidentified Federal agent, the
newspaper said that since last month, bureau investigators had been
questioning employees of the Food and Drug Administration who were
involved in the agency's 1996 decision to approve Redux, in an effort to
determine whether there was enough evidence to start a formal criminal

Officials at both the F.B.I. and the drug agency declined comment on the
report, and officials at American Home Products denied any wrongdoing.
"The company acted responsibly and did not withhold anything from the
agency," said Douglas Petkus, a spokesman for Wyeth-Ayerst, the
company's pharmaceutical division. "That's the bottom line."

The question of whether American Home hid evidence that its diet drug
might cause heart-valve damage and primary pulmonary hypertension, a
lung disorder, is at the center of thousands of civil lawsuits, as well
as class-action suits in New Jersey and a Federal court in Philadelphia
on behalf of healthy patients seeking money for medical checkups.

Reports only added fuel to the fire. A lawyer for the company, Marc
Farley, said American Home promptly reported all information about Redux
to the F.D.A. But plaintiff's lawyers cite documents showing that the
company knew of 31 cases of heart-valve damage among Belgian patients
taking Pondimin, a close chemical cousin of Redux. The lawyers said the
company knew of more than 100 cases of primary pulmonary hypertension
among patients taking Pondimin, even though the drug's label said there
had been only four cases.

Mr. Farley said American Home made the F.D.A. aware of the additional
cases before Redux's approval. But the plaintiffs' lawyers said the
company played down the information about Pondimin because they were
concerned that it would jeopardize the approval of Redux.

"The whole approval process of Redux stinks," another Texas plaintiff's
lawyer, Tommy Fibich, said in a telephone interview. Mr. Fibich, who
said he had not been contacted by the F.B.I., settled a case with
American Home in June in which he represented the husband and young
children of Mary Smith, who died of primary pulmonary hypertension after
taking Redux for 11 months. "If they had been candid and up front" about
Pondimin, Mr. Fibich said, "that would have killed Redux."

Redux, whose chemical name is dexfenfluoramine, is an improved version
of Pondimin, which had been marketed by American Home Products since the
early 1970's. It was most often prescribed in combination with another
drug, phentermine, in a combination known popularly as fen-phen. In the
17 months that Redux was on the market, more than six million
prescriptions were written for the drug.

Approval of the drug by the F.D.A., however, did not come without a
fight. Redux was discovered by Interneuron Pharmaceuticals Inc. of
Lexington, Mass., which sought approval from the agency to market it in
conjunction with American Home Products. In September 1995, an advisory
panel to the F.D.A., concerned about evidence that it caused brain
damage in animals, recommended rejecting Redux by a 5-to-3 vote. Later
that year the panel reversed itself and, by a vote of 6 to 5,
recommended approval, saying the drug's benefits outweighed its risks
for its intended market: people who are clinically obese.

Redux was approved by the F.D.A. in April 1996 and was withdrawn, along
with Pondimin, in September 1997 after reports that patients were
experiencing heart-valve damage. Three months after the withdrawal, the
agency conducted an inspection of American Home Products to determine
how quickly the company had reported these "adverse drug events."

Reports are required within 15 days after an event is documented. A copy
of the inspection report, obtained from Public Citizen's Research Group,
an advocacy organization in Washington, shows that American Home missed
the 15-day deadline, by as much as 74 days, on 27 separate occasions
with respect to Pondimin and Redux.

Mr. Farley, the company's lawyer, said the F.D.A. took no action -- "not
even a warning letter" -- as a result of the inspection. "At the end of
it," he said, "they were satisfied that American Home acted properly."
(The New York Times 9-10-1999)

J.D. EDWARDS: Milberg Weiss Files Securities Suit In Colorado
Milberg Weiss announces that a class action has been commenced in the
United States District Court for the District of Colorado against J.D.
Edwards & Company (Nasdaq:JDEC) and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.

If you purchased J.D. Edwards common stock between Jan. 22, 1998 and
Dec. 3, 1998, and wish to serve as lead plaintiff, you must move the
court no later than 60 days from Sept. 2, 1999. If you wish to discuss
this action or have any questions concerning this notice or your rights
or interests, please contact plaintiff's counsel, William Lerach or
Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at

METROPOLITAN TRANSPORTATION: Judge Certifies Class Of 119 Ex-Officers
A Superior Court judge certified a class-action lawsuit by 119 former
Metropolitan Transportation Authority officers, who allege that their
seniority and qualifications were overlooked when they started working
for the Sheriff's Department.

The MTA's police force was merged into the Sheriff's Department and the
Los Angeles Police Department in 1997. Officers who chose to become
deputies allege they have been treated like "new hires," which violates
the terms of the merger, said the plaintiffs' attorney, Erik Gunderson.

Although MTA officers are trained for public transit patrol, once they
went to work as deputies they were assigned to courthouses and jails,
Gunderson said. "They are being treated like second-class citizens,"
Gunderson said. "My guys are sick of it."

The lawsuit also alleges that the department has diverted money
allocated for policing the public transit system, which includes buses
and the Metrorail. As a result, fewer officers are on patrol, the suit

The suit was filed last October on behalf of three former MTA officers
and the class of 119 was certified Thursday by Superior Court Judge
Edward Ferns.

Sheriff's officials declined to comment, saying they do not discuss
pending litigation. (Los Angeles Times 9-10-1999)

NATIONAL PARTNERSHIP: REIT Shortchanged Investors, CA Woman Sues
Claiming she was deceived by a Real Estate Investment Trust (REIT)
solicitation statement that contained false and misleading statements, a
California woman has filed a proposed class action seeking "tens of
millions of dollars" the REIT allegedly concealed from investors. Field
v. National Partnership Investments Corp. et al., No. 99-CV-07963 (CD
CA, complaint filed Aug. 4, 1999).

Sheila L. Field was the holder of one share or unit in Housing Programs
Ltd., a real estate limited partnership, when Housing was purchased by
the Casden Investment Corp. REIT. The purchase was part of a major real
estate partnership acquisition.

At the time, Casden was the managing general partner of Housing and
eight other limited partnerships known as the REAL Partnerships. The
Casden REIT, a Casden spin-off, purchased a controlling interest in all
nine REAL limited partnerships.

The nine partnerships all held residential properties, most of which
qualified for housing assistance payment contracts (HAPS) under the U.S.
Housing Act. Earnings to investors are derived from streams of income
generated by mortgage and rent payments.

Under HAPS, mortgage notes are insured or payable to the U.S.
government, which also subsidizes a portion of rent for qualifying

The Housing Act does not permit all HAPS revenue to be returned to
investors, in this case the REAL Partnerships. Instead, a portion must
be held in reserve for capital improvements, mortgage escrow
reimbursements, and undistributed cash flow.

"As a result of this requirement, the local limited partnerships owning
such properties accumulated and held undisclosed reserves which
Plaintiffs estimate to be in the tens of millions of dollars and which,
at the maturity of the mortgage or termination of the HAPS contracts,
may become available for distribution, in whole or in part, to the REAL
Partnerships (or their successors)," the complaint asserts.

Field's suit claims that 18,807 investors spent $300 million for shares
in the partnerships, and when the Casden REIT wanted to purchase
controlling interests in all nine REAL partnerships, it was required to
explain the impact on investors in a solicitation statement.

The proposed class action alleges the Casden REIT painted a rosy picture
of the acquisition for investors while concealing the "tens of millions
of dollars" in earnings the REAL Partnerships made as a result of HAPS
revenues. The Casden and Casden REIT partners allegedly reaped the
benefits of the HAPS earnings.

The suit further says the solicitation statement allegedly misstated the
acquisition earnings by failing to account for tax liabilities. Many
investors found they owed more in taxes than earnings received as part
of the Casden REIT acquisition.

The suit makes claims for violation of the false statement provisions
contained in Sec. 14(a) of the Securities Exchange Act, and for breach
of fiduciary duty and breach of trust. The action asks the court to
restore the investors to their financial position before the
acquisition, and makes claims for expert witness fees, court costs, and
attorneys' fees. (Derivatives Litigation Reporter 8-19-1999)

NETWORK ASSOCIATES: NYLJ Discusses Recruiting Of Securities Plaintiffs
Those cries of "eureka" heard at the Los Angeles plaintiffs firm Weiss &
Yourman last week were prompted by a federal judge approving a novel way
of getting clients in securities class actions: paying brokerage houses
for the costs of sending notice to their stock-buying clients.

Weiss & Yourman's method has the potential to be incredibly lucrative
for plaintiffs firms needing to sign up the most clients in order to be
named lead counsel in such cases, a position long dominated by Milberg
Weiss Bershad Hynes & Lerach. It almost certainly will be mimicked by
other plaintiffs firms in the field. That includes San Diego- and New
York-based Milberg Weiss, whose objection to the practice as unethical
and illegal failed last week. "There was a little bit of jealousy," said
Reed Kathrein, a San Francisco partner at Milberg Weiss, who now terms
the practice "entrepreneurial."

Here is what Weiss & Yourman is doing: When it sues a publicly traded
company for stock fraud, it gets giant brokerage houses -- such as
Prudential Securities to send out mass mailings on Weiss & Yourman
letterhead informing investors in the targeted company of the class
action. Weiss & Yourman then reimburses the brokerage houses for the

The gambit, which appears to have been implemented earlier this year,
has already paid off handsomely for Weiss & Yourman. According to Mr.
Kathrein, the mailings apparently netted the firm two foreign
institutional investors as clients in its suit against Network
Associates Inc. -- clients that have given the firm a strong basis to
seek lead counsel status.

Weiss & Yourman's clients have "combined damages in excess of $ 120
million and must be presumed the most adequate" plaintiffs to lead the
litigation, the firm argued before Northern District Judge Saundra Brown
Armstrong in Knisley v. Network Associates, 99-1729.

In April, the Securities and Exchange Commission uncovered numerous
accounting irregularities at Network Associates, which resulted in a
dramatic income restatement. As a result, the company's stock on April 7
closed slightly below $ 17 a share, down more than $ 50 a share from its
high in December 1998. Two dozen suits were subsequently filed against
the anti-virus software maker, alleging stock fraud. On Monday, the
stock closed at $ 16.38.

Weiss & Yourman also employed the technique in its class action against
McKesson HBOC Inc., where it is competing with a dozen other firms to be
named lead counsel. Some 48 cases were filed against McKesson earlier
this year after the health care giant announced a radical financial
restatement, promising to rival in size the Cendant Corp. class action
that tentatively settled for $ 350 million earlier this year in Newark,

Neither case has been certified yet as a class action, though that is
expected to occur. Lead counsel has not been appointed in either case.

                        Wrongdoing Alleged

In Knisley, Milberg Weiss accused Weiss & Yourman of paying brokers to
send them clients -- a violation of the Private Securities Litigation
Reform Act of The firm accused Weiss & Yourman of violating rules of
professional conduct and asked Judge Armstrong to bar it from serving as
lead counsel.

Milberg Weiss partner Alan Schulman also accused Weiss & Yourman of
misleading the brokerage houses into doing the mass mailings. "It
induced back offices of such [brokerages], accustomed to assist in mass
mailings of court-approved class notices and claims forms, to believe
that it was distributing like materials," Mr. Schulman wrote in his June
17 motion. "Investors who received mailings under cover of a brokerage
firm letter or official brokerage firm labels tended to suppose that
they must take action to participate in a settlement fund."

Weiss & Yourman conceded that it sends the brokerage houses money, but
only as compensation for the mass mailings, which can cost upwards of $
150,000. Moreover, Weiss & Yourman partner Kevin Yourman argued before
Judge Armstrong that the firm is merely sending notice to class members
as required by the PSLRA.

While Judge Armstrong scoffed at Mr. Yourman's notice argument, she
still found no evidence the mailings violated any laws or ethical
canons.  More important, Armstrong also disagreed with Mr. Schulman's
argument that Weiss & Yourman was illegally paying brokers to send out
their letters. Instead, Armstrong found that Weiss & Yourman was
reimbursing the brokerage houses -- not the brokers directly. "There is
no prohibition in the [PSLRA] regulating the conduct of attorneys,"
Judge Armstrong wrote in her Aug. 16 order. "Therefore, even if [Weiss &
Yourman] provided remuneration to brokerage houses, the court is not
persuaded that [the firm has] violated any provision of the securities
law in doing so." In a footnote, Armstrong added that the "court's
comments should not be construed as categorically sanctioning the
methods utilized by Weiss & Yourman."

A receptionist at the firm, in declining to transfer a telephone call to
Mr. Yourman, said "It's our policy not to comment on our cases."

But Stanford Law School Professor Joseph Grundfest had plenty to say
about the practice, especially as it related to how lead counsel is
selected. "There is a fundamental flaw in what's happening with how lead
plaintiffs are chosen," said Professor Grundfest, a securities
litigation expert. Judge Armstrong's order, Professor Grundfest
predicted, will only heighten "this macho game of my client is bigger
than your client" that the reform act inadvertently created.

When Congress passed the act in 1995, it included a provision on how
lead counsel should be selected. The act states that the plaintiff
alleging the biggest loss should be designated "lead plaintiff." That
plaintiff, in turn, then picks a firm to serve as lead counsel.

Congress intended that institutional investors such as giant government
pension funds -- which historically remained silent during securities
litigation would end up controlling the cases.

In theory, judges designate a "lead plaintiff," who in turn chooses a
lead counsel with the judge's blessing. But in practice, judges receive
little -- or no -- input from the plaintiffs.

Instead, judges invariably grant lead plaintiffs counsel status to the
firm or, in bigger cases, a consortium of firms that link arms -- that
represents the clients with the biggest losses. The way things are
handled now "ignores the reality of what is going on," Professor
Grundfest said.

According to Professor Grundfest, the plaintiffs lawyers are still
completely driving the litigation, and judges should start questioning
the lead plaintiffs closely about how they chose their lawyers. For
instance, he said, judges should hold hearings where they ask lead
plaintiffs about whether or not they did comparison shopping before
deciding to hire a certain firm. "The lead plaintiff owes a fiduciary
duty to the rest of the class," Professor Grundfest said. "Part of that
duty is to obtain proper representation at a proper price."

San Jose plaintiffs attorney Allen Ruby, who represents a single client
who allegedly lost $ 23,500 in the Network Associates case, argued the
same thing last month when he insisted his client be named lead
plaintiff. He argued that the fight between Milberg Weiss and Weiss &
Yourman rendered both incapable of "most adequately representing" the
class. "This conduct does not inure to the benefit of the class," Mr.
Ruby wrote. "On the other hand, plaintiff Robert A. Vatuone will fairly
and adequately represent the interests of the class. He will not engage
in time-consuming, antagonistic, expensive, peripheral and delaying
litigation." Mr. Ruby's motion was denied. (New York Law Journal

NY POLICE: 14 Minority Officers Sue Over Bias in Disciplinary Practices
A group of city police officers filed a lawsuit against the New York
Police Department yesterday, charging that black and Hispanic officers
are more harshly disciplined than white officers and asking that a
Federal judge order sweeping changes in the way the department polices

The suit was filed by 14 officers and the Latino Officers Association,
an advocacy group that has been a harsh critic of Police Department
policies, and has sued the department in other cases.

The group's president, Sgt. Anthony Miranda, who is among the plaintiffs
named in the suit, said that the case would soon be expanded to a total
of 30 officers. The suit also asks that a judge declare it a class
action on behalf of the more than 5,000 Hispanic and 6,000 black
officers on the police force, which has almost 39,000 officers.

"The Police Department is famous for saying, 'This is an isolated case,'
" Sergeant Miranda said at a news conference, referring to disciplinary
actions against black and Hispanic officers. "But when we bring the
total of all these isolations together, we have systemic discrimination,
systemic retaliation."

Police Commissioner Howard Safir refused to discuss the suit yesterday.
"The N.Y.P.D. does not comment on the merits of pending litigation," he
said in a statement.

Mr. Safir added: "It is well known, however, that the Latino Officers
Association has filed numerous lawsuits against the department. This is
a group with a political agenda primarily interested in media

The 43-page lawsuit, filed in United States District Court in Manhattan,
asks a judge to remove the police discipline process from the
department's control and to appoint a Federal monitor to oversee the
process. It also seeks compensatory and punitive damages,

The discipline of black and Hispanic officers brought up on departmental
charges has been a simmering issue in New York for years, spurred in
part by the Latino Officers Association's complaints of a double
standard. Last year, a task force appointed by Mr. Safir concluded that
minority officers were more likely than white officers to face
punishments in the police discipline process, but that the disparity was
not the result of discrimination. The department has contended that more
minority officers have been disciplined because they were involved more
often in serious infractions that carry mandatory penalties.

At the time, Mr. Safir cited the task force report as evidence that
"there is no pattern of discrimination" in the department.

But the suit filed yesterday cites repeated examples of what it called
such disparate treatment.

The suit says that one Hispanic officer, Reuben Malave, a 15-year
veteran, was dismissed from the force last October after he was charged
with being unfit for duty, allegations that included being intoxicated
and soliciting a prostitute while off duty. Officer Malave was dismissed
even though he entered an alcohol rehabilitation program, the suit says.

The suit claims that white officers who had engaged "in much more
egregious conduct" had not been dismissed. They included officers who
were caught on videotape having sex with prostitutes while on duty, an
officer who beat up a cab driver while intoxicated, and officers who had
been involved in drunken driving accidents.

Another Hispanic officer, Clifford Muniz, lost 10 vacation days, the
suit says, after an incident in which he, while off duty, had assisted
some neighbors who had been assaulted. When police officers who had
responded to the scene refused to make any arrests, Officer Muniz told
his neighbors to take the officers' badge numbers and file a complaint,
the suit says.

Officer Muniz was charged with interfering with an investigation and
investigating a crime while unarmed, an offense that had never
previously been filed against a city police officer, the suit contends.

Sergeant Miranda, the Latino Officers Association president, said in his
own claim that he was subjected to continued retaliation even after he
was awarded $96,000 in damages in an earlier Federal discrimination case
against the city.

Richard A. Levy, a lawyer representing the officers on behalf of the
Center for Constitutional Rights, a legal advocacy group, said the
evidence uncovered so far "showed an overwhelming pattern of
discrimination" against minority officers, "a terribly hostile
environment of threats, harassment, slogans, a lot of bad words used."

"The worst part," Mr. Levy said, "is that when Latino and
African-American officers have raised the issue, they have been terribly
ostracized and retaliated against."

The suit comes at a time when lawyers for the city and the United States
Attorney's office in Brooklyn are in talks over a possible settlement of
a contemplated Federal lawsuit against the city for its handling of
police brutality cases. (The New York Times 9-10-1999)

PAYDAY LENDERS: Sued Over Use Of Deceptive Practices In Illinois
Strapped with car payments and struggling to buy groceries and clothes
for her 7-year-old daughter, Nicole Solano in April 1998 turned to the
one place she knew she could get money--a payday-lending agency about
four blocks from her North Side home. She quickly accepted the terms: a
$35 fee for a $175, two-week loan.

But when Solano missed a payment for the first time several months
later, after refinancing the loan several times, she said she started
getting letters threatening her with arrest for writing bad checks. And,
she said, her relatives started to get calls from the lending agency
saying she was about to be arrested.

Cook County State's Atty. Richard Devine and the Illinois Department of
Financial Institutions filed a civil suit against St. Louis-based
Nationwide Budget Finance, the payday-lending agency, alleging it used
illegal and deceptive tactics in its efforts to collect late payments
from Solano and other borrowers.

Although payday loan operations have been challenged in court
previously, prosecutors said the action marked the first time the
government has filed such a suit.

The suit, filed in Cook County Circuit Court, charges the company with
at least 16 violations of the Consumer Fraud Act and at least 24
violations of the Illinois Consumer Installment Loan Act, said Assistant
State's Atty. Thomas A. Rieck.

A lawyer for Nationwide Budget Finance, Gene Murphy, said he didn't
consider what the company was doing "deceptive." He said it was merely
"not real clear" in its communication with borrowers. He said the
company's board of directors already has addressed some of the issues
touched upon in the new suit: Executives who implemented the practices
were pushed out; a new training manual was written; and a new computer
system was installed. "Do I feel we're being made an example of?
Absolutely," Murphy said.

Payday loan businesses have been the subject of scrutiny in recent
months, as legislators consider toughening regulations on the burgeoning
industry. Critics argue the operations too often end up charging people
without financial savvy exorbitant interest rates.

But operators say they provide a useful service, notably short-term
loans for people who otherwise couldn't get money. Industry
representatives also said Thursday that the activities alleged by
Devine's office are not typical of the businesses. Rieck said his office
had not had time to look into other companies' practices.

In addition to charging Nationwide Budget Finance with heavy-handed
collection tactics, Devine called for new laws to cap interest rates for
all payday-lending agencies. Solano, he said, ended up paying more than
$700 in interest on a loan that never exceeded $250 and spanned fewer
than six months--working out to an annual rate of about 521 percent.
"You may think that 500 percent interest would be a crime . . . but it's
not," Devine said, adding that he had not yet determined what an
appropriate cap would be.

The suit accuses Nationwide Budget Finance of four deceptive business
practices: telling delinquent borrowers they would be arrested if they
didn't pay up; threatening to have borrowers' wages garnisheed until
their debt was paid off; asking the borrowers for references under the
pretense that the names would be used to establish credit, when in
reality the company used the references to harass the delinquent
borrower; and telling borrowers who had filed for bankruptcy that their
payday loans weren't subject to protection.

Rieck said the investigation of Nationwide Budget Finance began when
city officials gave his office a threatening postcard that the company
routinely sent to delinquent borrowers.

Catherine Williams, president of the Consumer Credit Counseling Service
of Greater Chicago, said she has received many complaints about
payday-lending agencies throughout the Chicago area using aggressive
collection tactics, and that many of those complaints were directed at
Nationwide Budget Finance.

Bob Wolfberg, president of the Illinois Small Loan Association, a payday
lenders' group, condemned the use of deceptive tactics to force
borrowers to pay off their loans. He said his group has worked to
eliminate such practices in the industry. But, he said, it would be
foolish to impose stiff regulations on payday-lending agencies just
because one agency acted improperly. He said that a 521 percent annual
interest rate may sound outrageous, but the loan is only intended for a
week or two. And for many people, he said, a payday loan is the only way
to get money. "Just like a rental car, we're a vehicle for a short time
period," he said.

Chicago attorney Daniel Edelman filed a class-action suit against
Nationwide Budget Finance, alleging that many of the practices mapped
out in the state's attorney's suit also violate federal statutes, he
said. "I'm glad that some public officials are finally getting around to
doing something about this," he said. (Chicago Tribune 9-10-1999)

SILKFIELD PTY: Australian High Court Oks Unit Buyers’ Class Action
Twenty-six investors who bought units in a Gold Coast tower will be
allowed to proceed with a class action against the developer following a
unanimous decision today by the High Court.

The buyers, mostly New Zealanders, sued Silkfield Pty Ltd for alleged
misleading and deceptive conduct in promoting sales of units in the
Phoenician North Tower at Broadbeach, built in 1997. The purchasers had
bought their units off the plan.

Queensland's Building Units Act requires developers to provide certain
information to unit buyers that could impact on the cost of ownership
and consequently on the returns on their investment.

Silkfield, a subsidiary of Gold Coast development giant the Raptis
Group, allegedly failed to disclose an agreement with another company
for lift maintenance that would be reflected in body corporate fees and
that the basement carpark was open to the public.

Under the Federal Court Act, seven or more people can take class action,
known as representative proceedings, if their claims arise from similar
circumstances and the claims give rise to a substantial common issue of
law or fact.

The Federal Court knocked back Silkfield's application to have the 26
investors take separate actions, saying they met the conditions for
representative proceedings.

But a majority of the Full Federal Court upheld Silkfield's appeal,
saying the statement about lift maintenance and the carpark were not
substantial enough for the 26 to have common issues of law or fact. They
said litigation on the statement was unlikely to resolve the claims of
all group members as it was not at the core of the dispute.

The High Court said the Full Federal Court went too far. "It was not to
the point that in the final resolution of the litigation this might not
prove to be the major or core issue," it said. "It was not necessary to
show that litigation of this common issue would be likely to resolve
wholly or to any significant degree the claims of all group members."

The decision now allows the case to proceed in the Federal Court.
Two-tiered marketing, a practice involving the sale of real estate by
high-pressure sales techniques at inflated prices, was allegedly used in
this case. The Queensland government has introduced legislation to stamp
out the practice. (AAP Newsfeed 9-9-1999)

SILKFIELD PTY: Aussi Ct Oks Class Of Buyers; Co Vows To Recover Damages
A High Court decision to grant a class action suit to defaulting buyers
in one of the Raptis Group's Gold Coast residential properties will not
dampen the company's resolve to recover damages. The legal action
involves 18 buyers who purchased a total of 39 units in the resort but
did not settle on their contracts. The defaulters' action revolves in
the main around the activity of a marketing agent, Skye Court Ltd,
trading as Chris Couper and Associates, in respect of representations
made by the agent. As the agent made the alleged representations it has
now been joined as party to the action.

Silkfield Pty Ltd, a controlled entity of Raptis Group Limited,
commenced Queensland Supreme court proceedings against the defaulting
buyers in October 1997. In defence, the defaulters then lodged a Federal
Court class action suit shortly thereafter against Silkfield. Silkfield
applied to the full bench of the Federal court to have the class action
struck out and won its appeal in November 1998. However, the defaulting
buyers lodged another appeal to continue the class action, which has now
been upheld by the High Court.

Raptis Group Chairman, Mr Jim Raptis said "This decision does not alter
the fact that these people are defaulters who should have settled on
their contracts. This has been all about whether we pursue them through
the Courts individually or as a group - and today's decision means that
we pursue them as a group". "It is significant to note that the majority
of the defaulters are experienced, offshore property investors (the
majority are from New Zealand) with one family of purchasers contracting
to buy a total of 10 apartments. Their failure to settle on their
contracts at that time put us in a financial predicament. We intend
taking this matter through the Courts to bring the whole affair to its
rightful conclusion," Mr Raptis said. "It is important to realize that
this issue is not a reflection of the property marketing debate. It is
about the representations made by one licensed real estate agent on
behalf of one of our projects." "The Raptis Group has been delighted to
be part of the Government's reform of that industry and in shaping
legislation that will correct the industry and improve the perception of
the Gold Coast." The Raptis Group has been developing property on the
Gold Coast for the past 25 years and Mr Raptis said that these
proceedings have been both unexpected and unique in the company's
history. "We are proud of our product and stand by its quality and its
perception in the market place," said Mr Raptis. (AAP Newsfeed

SIMWARE INC: NY Sp Ct Approves Settlement For Complaint Over IPO
Simware Inc. (NASDAQ: SIMW) announced that the New York State Supreme
Court has approved a settlement reached between the parties to a
purported class action brought in 1996 against the Company and the
managing underwriters of the Company's initial public offering. In
conjunction therewith, the Court issued a judgement of dismissal with
prejudice of the action as against all defendants and such judgement has
now become final by way of appeal. The settlement contains no admission
of liability, and the settlement amount is fully covered by insurance.

Simware is a provider of Internet-based Extranet solutions for the
demand chain and a publicly traded company headquartered in Ottawa,
Canada with offices in the United States, the United Kingdom, and Europe
and alliances with leading customer solution providers globally.

SYPRIS SOLUTIONS: Contests Suit In Louisiana Over Coker Plant Explosion
Tube Turns is a co-defendant in two separate lawsuits filed in 1993 and
1994, one pending in federal court and one pending in state district
court in Louisiana, arising out of an explosion in a coker plant owned
by Exxon Corporation located in Baton Rouge, Louisiana. The suits are
being defended for Tube Turns by its insurance carrier, and Sypris
Solutions Inc. intends to vigorously defend its case. The Company
believes that a settlement or related judgment would not result in a
material loss to Tube Turns or the Company.

More specifically, according to the complaints, Tube Turns is the
alleged manufacturer of a carbon steel pipe elbow which failed, causing
the explosion which destroyed the coker plant and caused unspecified
damages to surrounding property owners. One of the actions was brought
by Exxon and claims damages for destruction of the plant, which Exxon
estimates exceed one hundred million dollars. In this action, Tube Turns
is a co-defendant with the fabricator who built the pipe line in which
the elbow was incorporated and with the general contractor for the
plant. The second action is a class action suit filed on behalf of the
residents living around the plant and claims damages in an amount as yet
undetermined. Exxon is a co-defendant with Tube Turns, the contractor
and the fabricator in this action. In both actions, Tube Turns maintains
that the carbon steel pipe elbow at issue was appropriately marked as
carbon steel and was improperly installed, without the knowledge of Tube
Turns, by the fabricator and general contractor in a part of the plant
requiring a chromium steel elbow.

SYSTEMSOFT CORP: Faces Securities Suit Filed In Massachusetts
A complaint was filed on March 2, 1998, captioned THOMAS P. GORMAN, ET
AND COOPERS & LYBRAND LLP (Civil Action No. 98 CV 10367) in the United
States District Court for the District of Massachusetts on behalf of
purchasers of SystemSoft common stock during the period from January 25,
1996 through March 3, 1997, which case was consolidated with eight
additional cases filed in the District Court between March 3, 1998
through April 27, 1998.

VITAMIN PRICE-FIXING: Makers Face Separate Claims From Corporates
Some of the major corporate plaintiffs in a class-action lawsuit
accusing vitamin makers such as Roche Holding AG of price fixing in the
wholesale market say they plan to opt out of a proposed 1.1 bln usd
settlement and press cases against companies on their own, The Wall
Street Journal Europe reported.

Attorneys involved in the case said they expect to reach a final
settlement agreement with six of the world's largest vitamin makers by
the end of the month, the newspaper said. Roche Holding AG, BASF AG, and
Rhone-Poulenc SA, which together have controlled nearly 90 pct of the
vitamins market, have all pleaded guilty to price fixing.

But some of the biggest plaintiffs, including Tyson Foods Inc and Quaker
Oats Co say they believe the proposed settlement would let vitamin
makers off too cheaply, the newspaper said.

Plaintiffs' attorneys in the case say as much as a quarter of the class
-- based on volume of vitamin sales -- may drop out, it said.

The case involves an unusually large number of big companies, including
Kellogg Co, Cargill Inc and Continental Grain Co, which have the means
to pursue independent claims if they choose, the newspaper said. (Extel
Examiner 9-13-1999)

WATER COMPANIES: CA Ct Dismisses Suits Over Contaminated Water
A court ruling has pulled the plug on a series of lawsuits for American
States Water Co. of San Dimas and other private water providers. On
Sept. 2, the 1st District Court of Appeal in San Francisco dismissed
nearly a dozen lawsuits stemming back to 1997 that claimed the water
companies provided contaminated water and were responsible for
negligence and wrongful death.

The lawsuits were brought by residents of the San Gabriel Valley, the
Inland Valley and the Sacramento area. The plaintiffs seek unspecified
general and punitive damages and strict liability for allegations that
date back 40 years, said a spokeswoman for the plaintiffs' attorneys.

The court ruled that American States Water (NYSE: AWR) and other private
water companies named in the lawsuits fell under the jurisdiction of the
California Public Utilities Commission and not the courts.

The 44 alleged corporate polluters and the public water utilities named
in the lawsuits are still subject to the court's ruling, explained
Denise Kruger, vice president of water quality for American States
Water. "We've known all along this was the proper decision, because the
commission controls our rates and how we operate," Kruger said.

One of the largest cases, Adler vs. Southern California Water Co.,
involves 145 plaintiffs. The class action claimed that American States
Water's subsidiary, Southern California Water Co., provided the
plaintiffs with allegedly contaminated water from wells located in an
area of the San Gabriel Valley that had been designated a federal
environmental Superfund site. The plaintiffs allege the water was
contaminated with trichloroethylene, perchloroethene and other solvents
used by aerospace manufacturer Gencorp Aerojet in Azusa.

Although the private water companies have been released from the
lawsuits, Gencorp Aerojet's liability is still at issue, American
States' Kruger said. "It was a well-reasoned decision," said one of the
plaintiffs' attorneys, Walter Lack, a partner with Engstrom, Lipscomb &
Lack LLC in Century City.

Responding to the lawsuits, the California Public Utilities Commission
in March 1998 began investigating whether the water companies were in
compliance with state regulations. Although the commission has not
issued a formal ruling, agency officials and industry analysts expect it
to rule in favor of the water companies later this fall, said Fred
Curry, chief of the water advisory branch of the commission's water

The commission may allow the water companies to pass on litigation costs
to their ratepayers. A decision is expected early next year.

American States Water and its co-defendants expect the plaintiffs to
appeal the appellate court decision to the California Supreme Court.

The decision was welcome news to industry analysts and other private
water companies. "The lawsuits were a serious irritation that chased
investors out," said Tim Winter, a utility analyst and vice president of
the investment firm A.G. Edwards in St. Louis.

Although not named in any of the lawsuits, San Bernardino-based United
Water Management Co. Inc. supported the court's decision. "Any purveyor
of water is susceptible to baseless claims. We're an easy target," said
Bruce Cash, United's president and chief executive officer.

The water industry is one of the most regulated in the United States,
Cash said.

In unrelated news, American States Water announced Sept. 8 its 1 million
customers will be able to pay their bills over the Internet. It has
teamed with TransPoint, an Englewood, Colo.-based online billing
company, to provide the service. Once enrolled in the service, customers
can review their bills and pay electronically. (AAP Newsfeed 9-13-1999)

Y2K LITIGATION: New Jersey Lawyer Says Federal Statute Limits Damages
Many lawyers have been following developments concerning the Y2K
problem, in which software systems may incorrectly read and process
dates beginning Jan. 1, 2000, potentially causing software and equipment
malfunctions, breakdowns and damage.

President Clinton this summer signed into law the Y2K Act, which
Congress drafted in an effort to make courts more "defendant-friendly."
The sweeping legislation changes the legal landscape for Y2K litigation
and attempts to address many problems that Congress perceived have been
faced by courts in connection with similar mass litigation in the recent

The act applies to any Y2K action, which is defined as any lawsuit or
agency board of contract appeal proceeding brought after Jan. 1, 1999 in
which plaintiff alleges damage arising from or related to an actual or
potential Y2K failure occurring or that could occur before Jan. 1, 2003.
The term Y2K failure is broadly defined to include any failure of a
device, system, software, etc. to handle Year 2000 date-related data.

However, the act does not apply to personal injury and wrongful death
suits. The act also does not apply to suits under securities laws,
except for one section that limits the liability of third parties (those
who do not manufacture, sell or distribute a product or provide a
service that suffers or causes the Y2K failure at issue). No new causes
of action are created by the Y2K Act, which supersedes state law
applicable to Y2K suits. On the other hand, the act is not to be
construed "to affect the applicability of any state law that provides
stricter limits on damages and liabilities, affording greater protection
to defendants in Y2K actions" than are provided in the act.

                         Limits on Damages

The act includes limitations on the type and amount of contract damages,
tort damages and punitive damages recoverable in Y2K litigation.

Punitive damages awards for Y2K actions are limited against certain
defendants to the lesser of three times the amount of compensatory
damages or $ 250,000, and plaintiff must prove entitlement to punitive
damages by the higher "clear and convincing" evidence standard. However,
punitive damages are not capped if plaintiff proves by clear and
convincing evidence that defendant acted with the intent to injure
plaintiff. The punitive damages cap applies only to defendants sued in
their individual capacity and whose net worth does not exceed $ 500,000
or defendants that are unincorporated businesses, partnerships,
associations, corporations or organizations with fewer than 50 full-time

Damages available in Y2K actions based on breach of contract are limited
to those expressly allowed by terms of the contract or, if the contract
is silent on damages, to those allowed by operation of the applicable
state law in effect when the contract was effective, or by operation of
federal law.

The act also requires plaintiffs that have suffered only economic
damages to sue to recover those damages under contract law, with all its
limitations, and not under tort law. This limitation, known as the
"economic loss rule," applies to, among others, claims of damages for
lost profits or sales, business interruption and consequential damages
under the Uniform Commercial Code. A plaintiff cannot recover economic
losses in a tort action unless the economic losses are specifically
allowed by a contract between the parties or the losses result directly
from damage to property caused by the Y2K failure, other than the
property that is the subject of the contract between the parties or,
where there is no such contract, other than damage only to the property
that experienced the Y2K failure. Economic losses may still be recovered
where intentional conduct independent of a contract is alleged against

The Y2K Act requires courts to apportion damages among the responsible
parties and eliminates joint and several liability in Y2K actions other
than contract actions. Under certain circumstances, individual
plaintiffs whose recoverable damages under a judgment are equal to more
than 10 percent of the individual's net worth and whose net worth is
less than $ 200,000, and consumers suing not as part of a class action
may still have the benefit of joint and several liability. The act also
retains joint and several liability against defendants found to have
acted with specific intent to injure the plaintiff or who committed a
knowing fraud against the plaintiff. The rules established by the act as
to who can and cannot collect damages on a joint and several basis and
how courts are to apportion damages are voluminous and complicated.

For the defendant that ultimately is required to pay more than its
proportionate share of liability, the act allows that defendant to
obtain contribution from certain other defendants or persons who, if
joined in the original action, would have been liable for the same
damages. The Y2K Act sets a six-month limit on bringing a contribution
action after entry of a final judgment.

A defendant who settles a Y2K action that is not a contract action
before verdict or judgment will be discharged by the court from all
future contribution claims either against the defendant or brought by
the defendant against any person other than a person whose liabilities
were extinguished by the settlement. Where there is a settlement between
a plaintiff and one of multiple defendants, any resulting judgment
against the non-settling defendants will be reduced by the greater of
the amount that corresponds to the percentage of responsibility for the
defendant that settled or the amount paid by such defendant.


The act imposes additional pleading requirements for plaintiffs. Along
with the complaint, a plaintiff must file a statement containing
specific information regarding the nature and amount of each element of
damage sought, as well as the factual basis for each element of damage.
Moreover, in Y2K actions where plaintiff alleges a material defect in a
product or service, plaintiff must file a statement containing specific
information regarding the manifestation of the defect and facts
supporting the conclusion that the defect is material. Finally, where
defendant's state of mind is an element of the suit, plaintiff must file
a detailed statement of facts giving rise to the "strong inference" that
defendant acted with the alleged state of mind.

The act also imposes pre-suit notice requirements on plaintiffs for all
Y2K actions, except actions seeking only an injunction. Before the
complaint is filed, plaintiff must send notice to the prospective
defendants, containing specific information about the litigation. Within
30 days of receiving the notice, defendants must return an
acknowledgment of receipt, a statement describing the actions being
taken to address the problem identified by the plaintiff and a statement
regarding the defendant's willingness to engage in alternative dispute
resolution (ADR). The defendant's statements are not evidence of
liability under the evidence rules.

If the prospective defendant fails to respond or fails to offer remedial
action, plaintiff may immediately commence the lawsuit against that
defendant. If defendant responds with a remediation proposal or offers
to engage in ADR, plaintiff is required to allow the prospective
defendant 60 days to complete the proposed remediation or ADR before
filing suit. If a contract between the parties or a statute enacted
before Jan. 1, 1999 requires a different notice or a period of delay
prior to filing suit, the contract or prior statute is controlling on
the issue.

If a defendant determines plaintiff has commenced a lawsuit without
complying with the notice provisions, defendant may treat the complaint
itself as the notice by informing both the court and plaintiff.
Thereafter, all discovery is stayed until the notice and remediation
periods have expired and the time to answer the complaint is tolled.

A Y2K action claiming a defect in a product or service may be filed as a
class action in federal or state court only if it meets the requirements
of applicable federal or state class-action rules and the court finds
the defect alleged to have caused the Y2K failure was a material defect
for a majority of class members. The act requires notice to each class
member of the nature of the action, the jurisdiction and a detailed
description of the fee arrangement with class counsel.

                        Either Jurisdiction

Y2K class actions may be brought in any federal district court. Any
class action brought in state court may be removed to federal court,
except: (1) those in which a substantial majority of class members are
from a single state, the defendant is a citizen of that same state and
the claims asserted arise primarily from the laws of that state; (2)
those in which the primary defendant is a state, state official or
governmental entity over which the federal court may be foreclosed from
ordering relief; (3) those that do not seek punitive damages and the
amount in controversy is less than $ 10 million; or (4) those in which
there are fewer than 100 members of the proposed class.

The act limits the liability of third parties for a Y2K failure. In a
Y2K action where the defendant is not a manufacturer, seller or
distributor of a product or the provider of a service, where the
plaintiff is not in "substantial privity" with the defendant and where
the defendant's state of mind is an element of the offense -- such as an
action for fraud, breach of fiduciary duty, negligent misrepresentation
or interference with contractual or economic advantage -- defendant will
not be liable unless plaintiff proves defendant actually knew or
recklessly disregarded a known and substantial risk that a Y2K failure
would occur.

Other noteworthy aspects of the act include provisions: (1) to protect
consumers from foreclosure on their residential mortgage due to a Y2K
failure; to suspend penalties on small businesses for a "first-time
violation" of a federal rule or regulation with certain significant
exceptions (regulations concerning the banking/monetary system or
national securities markets or violations resulting in actual harm or
that constitute or create an imminent threat to public health, safety,
or the environment) and conditions (i.e., penalties can be imposed where
a small business fails to correct a violation within one month after
notifying the responsible federal agency); and (3) to make clear that
the mere occurrence of a Y2K failure in an entity, facility, system,
product or component that was sold, leased, rented or otherwise within
the control of the party against whom a claim is asserted in a Y2K
action will not constitute the sole basis for recovery of damages in a
Y2K action. (New Jersey Lawyer 8-23-1999)


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

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

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

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