---

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

                Thursday, September 16, 1999, Vol. 1, No. 157

                                 Headlines

COLLEGE LIFE: Sued In Texas Over Selling Annuities With Cafeteria Plans
DAMSON BIRTCHER: Partners Suit Dismissed In Phil; Included In Del. Suit
FEN-PHEN: Distributor Golden Pharmaceuticals Has 1 Suit In CA Dismissed
FIRST UNION: Alabama Court Certifies Class Challenging YSPs
HOLOCAUST VICTIMS: NY Times Says Legal Setbacks Could Mar Formal Talks

INSIGHT COMMUNICATIONS: Sued Over Excessive Late Fees For Cable TV
METROMEDIA INT'L: Discovery Continues For Derivative Suit In Delaware
METROMEDIA INT'L: Settles For Suit In CA Over Samuel Goldwyn Merger
METROMEDIA INT'L: Will Contest Suit In Georgia Over Bankruptcy Of RDM
MITCHAM INDUSTRIES: Moves For Dismissal Of Securities Suit In Texas

NATIONAL GYPSUM: 5th Cir Texas Bars Appeal For Intervention In Fee Case
NEW YORK: Fd Judge Bars Working Family Preference In Housing Projects
ORACLE CORP: Intends To Defend Vigorously Shareholders Fraud Suit In CA
ORACLE CORP: Shareholder Derivative Suit In CA Dismissed Voluntarily
PHILIP SERVICES: Canadian Court Gives More Time For Restructuring

RELIASTAR MORTGAGE: 11th Cir Georg To Rule On Volume-Based Compensation
RUTGERS COLLEGE: Sued Over Differences In Admission For 2 NJ Campuses
SALANT CORP.: Texas Suit On Mexico Bus crash Ends In $30 Mil Settlement
VITAMIN PRICE-FIXING: Food Makers Opt Out Of $1 Bil Proposed Settlement
UNISYS CORP.: Labor Union Included in Suit In N.Y. Over Age For Layoff

                              *********

COLLEGE LIFE: Sued In Texas Over Selling Annuities With Cafeteria Plans
-----------------------------------------------------------------------
A lawsuit has been filed charging College Life Insurance Company and
affiliated companies with unlawfully selling annuities to school
employees at several districts in Texas by marketing them with cafeteria
plans. The lawsuit says that College Life and the other defendants
engaged in fraud, breach of duty of good faith, and negligent
misrepresentation. Specifically, the suit charges that school employees
were misled into purchasing under-performing annuity products from
College Life agents, said plaintiff attorney G. Wade Caldwell, a partner
at Martin, Drought & Torres, Inc., San Antonio.

College Life's defense attorney Edwin DeYoung, a partner at Locke,
Liddell & Sapp, LLP, in Dallas, said, "We categorically deny the
allegations. . and we will vigorously defend them."

The suit states that College Life won contracts to provide cafeteria
plan third-party administration services and 403(b) plan administration
to school districts in Texas by offering extremely low fees. In exchange
for the low fees, College Life got to sell its annuity products directly
to teachers and other school employees, the suit alleges.

The school employees were allegedly told about the annuities at
mandatory cafeteria plan enrollment meetings and may have been led to
believe the College Life agents they were dealing with were actually
counselors for the cafeteria plans, said Mr. Caldwell. Cafeteria plans
let employees pay for benefits they choose, such as medical, dental and
vision insurance, through pre-tax payroll deductions.

The suit seeks to have the court void the contracts that the school
districts signed and let the school workers move their money elsewhere.
The lawsuit, which seeks class action status, was filed July 2 in Texas
State District Court for Webb County in Laredo, Texas.

Other companies named in the suit include United Fidelity Life Insurance
Company, which owns College Life; Americo Life, Inc., which owns United
Fidelity; NAP Life Insurance Company, one of College Life's reinsurers;
Financial Assurance Insurance Company, another reinsurer; and Pension
Consultants and Administrators, Inc., which provided administration
service. (National Underwriter (Life/Health/Financial Services)
7-19-1999)


DAMSON BIRTCHER: Partners Suit Dismissed In Phil; Included In Del. Suit
-----------------------------------------------------------------------
Bigelow Diversified Secondary Partnership Fund 1990 litigation

On March 25, 1997, a limited partner named Bigelow/Diversified Secondary
Partnership Fund 1990 filed a purported class action lawsuit in the
Court of Common Pleas of Philadelphia County against Damson/Birtcher
Partners, Birtcher Investors, Birtcher/Liquidity Properties, Birtcher
Investments, L.F. Special Fund II, L.P., L.F. Special Fund I, L.P.,
Arthur Birtcher, Ronald Birtcher, Robert Anderson, Richard G. Wollack
and Brent R. Donaldson alleging breach of fiduciary duty and breach of
contract and seeking to enjoin the Consent Solicitation dated February
18, 1997. On April 18, 1997, the court denied the plaintiff's motion for
a preliminary injunction. On June 10, 1997, the court dismissed the
plaintiff's complaint on the basis of lack of personal jurisdiction and
forum non conveniens.

On June 13, 1997, the Partnership, its affiliated partnership, Real
Estate Income Partners III, and their general partner,
Birtcher/Liquidity Properties, filed a complaint for declaratory relief
in the Court of Chancery in Delaware against Bigelow/Diversified
Secondary Partnership Fund 1990 L.P. The complaint seeks a declaration
that the vote that the limited partners of the Partnership and Real
Estate Income Partners III took pursuant to the respective consent
solicitations dated February 18, 1997 were effective to dissolve the
respective partnerships and complied with applicable law, that the
actions of the General Partner in utilizing the consent solicitations to
solicit the vote of the limited partners did not breach any fiduciary or
contractual duty to such limited partners, and an award of costs and
fees to the plaintiffs. The defendant has answered the complaint. The
parties have initiated discovery. No motions are pending at this time.

In September 1998, Bigelow/Diversified Secondary Partnership 1990
informed the Partnership that it was filing suit in the Delaware
Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
Birtcher, Robert Anderson, Richard G. Wollack and Brent R. Donaldson
alleging a purported class action on behalf of the limited partners of
Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
Fund-II and Real Estate Income Partners III alleging breach of fiduciary
duty and incorporating the allegations set forth in the previously
dismissed March 25, 1997 complaint filed in the Court of Chancery of
Philadelphia County. Plaintiff has engaged in preliminary discovery and
the parties have held settlement discussions. No motions are pending at
this time.


FEN-PHEN: Distributor Golden Pharmaceuticals Has 1 Suit In CA Dismissed
-----------------------------------------------------------------------
Quality Care Pharmaceuticals, Inc. ("QCP"), a wholly-owned subsidiary of
the Company, along with multiple other parties, including the
manufacturers of the drugs, has been named as a defendant in
approximately forty-seven lawsuits brought by numerous plaintiffs
relating to personal injury claims caused by the use of phentermine
and/or fenfluramine, collectively known as Phen-Fen. To date, QCP has
been named in forty-five California lawsuits; however, it has been
served in only fifteen. Of the fifteen, the plaintiff from one lawsuit
has recently dismissed QCP.

Further, QCP is a third-party defendant in class action lawsuits in both
Nevada and West Virginia. QCP's involvement in each of these lawsuits is
limited to its distribution or repackaging of these drugs. Based on the
recent dismissal, QCP's limited involvement with these Phen-Fen drugs
and the defense being provided by the Company's insurance carrier, the
Company currently believes that the outcome of these lawsuits will not
have a material adverse effect on its business, financial condition,
results of operations or prospects.


FIRST UNION: Alabama Court Certifies Class Challenging YSPs
-----------------------------------------------------------
The U.S. District Court for the Northern District of Alabama recently
certified a class action against First Union Mortgage Corp. involving
the payment of yield spread premiums to a mortgage broker. The court
held the question of whether the YSPs constituted improper referral fees
did not require the court to individually evaluate and inspect each
class member's loan transaction. Heimmermann, et al. v. First Union
Mortgage Corp., No. CV-98-J-2357 (N.D. Ala. 8/13/99).

Daniel and Emily Heimmermann filed suit against First Union Mortgage
Corp. under the Real Estate Settlement Procedures Act alleging that the
financial institution paid an illegal YSP to the mortgage broker,
Tennessee Valley Funding. The plaintiffs claimed that the YSP
constituted a referral fee. Furthermore, they alleged that the amount of
the YSP was based on the difference between the mortgagee's par rate and
the rate at which the broker obtained the loan above par. The
Heimmermanns argued that First Union did not link the payment of the YSP
to the performance of additional services by the broker. The plaintiffs
estimated that First Union included improper YSPs in approximately
22,000 loans.

                        Rule 23 Requirements

When the Heimmermanns moved for class certification, First Union
conceded that the proposed class satisfied the numerosity requirement of
Fed. R. Civ. P. 23(a)(1). First Union did, however, contest that the
class met Rule 23(a)'s prerequisites of commonality, typicality and
adequacy of representation because under Culpepper v. Inland Mortgage
Corp., 144 F.3d 717 (11th Cir. 1998), YSPs are not illegal per se and
under the Department of Housing and Urban Development's Policy
Statement, 64 Fed. Reg. 10080, the District Court would have to examine
each class member's loan to determine if the YSP was reasonable payment
for services rendered. This "reasonableness test" set forth by HUD
prevented the proposed class from fulfilling Rule 23's typicality and
commonality requirements, argued First Union.

The District Court, however, ruled that First Union's interpretation of
HUD's "reasonableness test" was erroneous. The policy statement does
employ the "reasonableness test" regardless of how the YSP is generated
or calculated, said the court. Additionally, the court held that First
Union's reasoning was inconsistent with RESPA and Culpepper, which
require that YSPs must relate to the services provided by the broker.
Writing for the District Court, Judge Inge P. Johnson opined that if the
defendant's position was correct "a mortgage company [could] provide
'yield spread premiums' based solely on the difference between the par
rate and the rate obtained and then when challenged, simply argue the
referral fee was reasonable compensation in light of the actual service
provided."

The District Court found the loan transactions, which constituted the
basis for the class action, did not require individual evaluation and
inspection. The question of whether the YSPs were referral fees was a
question common and typical to the class. The court stated that First
Union's arguments pertained to the merits of the case and not to the
elements of Rule 23. The District Court also ruled that the adequacy of
representation requirement was satisfied despite the fact that the class
representatives signed a disclosure form regarding the YSP charged by
First Union.

                     Fair, Efficient Adjudication

Next, the court addressed whether a class action was maintainable under
Fed. R. Civ. P. 23(b). Because the District Court found that Rule
23(b)(3) was applicable to the litigation, it then determined if a class
action was superior to other available methods for the fair and
efficient adjudication of the controversy. It concluded that there would
be no advantage to litigating the 22,000 cases separately and that it
could not foresee any difficulties in the management of the class.
Furthermore, Judge Johnson opined that a common question predominated -
whether the YSP paid by First Union was compensation for services.

Finding that a class action was the superior method of adjudication
based on the numerous claims, common issues and the nature of the
action, the District Court granted the plaintiffs' motion for class
certification.

David R. Donaldson and Tammy McClendon Stokes of Donaldson, Guin & Slate
LLC in Birmingham, Ala.; Earl P. Underwood Jr. of Underwood & Associates
P.C. in Anniston, Ala.; and C. Neal Pope of Pope, McGlamry, Kilpatrick &
Morrison LLP in Columbus, Ga., represent the plaintiffs. Peter A.
Grammas and Harlan A. Winn III of Burr & Forman LLP in Birmingham, Ala.,
and Russell J. Pope of Pope & Hughes in Towson, Md., represent the
defendants. (Consumer Financial Services Law Report 9-7-1999)


HOLOCAUST VICTIMS: NY Times Says Legal Setbacks Could Mar Formal Talks
----------------------------------------------------------------------
The dismissal Monday of five Federal lawsuits filed against German
companies by survivors of Nazi labor and concentration camps could have
its biggest impact not on judicial proceedings but on a series of
negotiations the State Department has been coordinating in the last
year, officials involved in the talks said.

Those formal talks have involved the German Government, lawyers for the
plaintiffs in more than two dozen lawsuits and representatives of more
than 30 German businesses, as well as the Governments of Poland,
Czechoslovakia, Ukraine, Belarus, Russia and Israel. They have been
aimed at determining what payments, if any, are due to 1.5 million to
2.4 million survivors, mostly non-Jews, who were forced to work without
pay during the war for companies that fueled and profited from the Nazi
war effort.

Presided over by the Deputy Treasury Secretary, Stuart E. Eizenstat, the
talks have ground on slowly since being convened last fall. But with the
dismissal rulings in four cases by Judge Dickinson R. Debevoise of
Federal District Court and in one other class-action suit, plaintiffs'
lawyers feared that German companies would not only scale back their
participation in the talks, but also reduce the sums they are willing to
pay former workers.

Both judges ruled that the issues involved were political, not legal,
and more properly the business of the executive branch of government.
"The ability or inability to have a litigated solution will have a
direct bearing on the amount available for survivors," said Robert A.
Swift, a Philadelphia lawyer for some former slave laborers. "It's not
beneficial for the leading court system in the world to defer these
kinds of human rights decisions to another branch of government."

Melvyn Weiss, another plaintiff lawyer, added that using the standard
that any settlement should be large enough to hurt a bit, some, but not
all, of the plaintiffs' lawyers had proposed restitution of $30 billion.
But without the weapon of costly litigation in United States courts, he
said, there was little likelihood of getting such an amount.

In a statement released in Berlin, the consortium of German companies
that have participated in the talks and have offered so far to make an
unspecified amount of "humanitarian payments" to certain groups of slave
and forced laborers signaled that they were eager for a quick agreement
in light of the dismissals. The group, the German Enterprises Foundation
Initiative, which proposed to make those payments once an amount is set,
said in a statement that it was still looking to the talks convened by
Mr. Eizenstat for that settlement. "It must be in the interest of all
participants, and especially of the affected former forced workers, to
conclude these discussions about the creation of the foundation as soon
as possible," read the statement.

Mr. Eizenstat, speaking in an interview and during testimony today
before the House Banking Committee on Holocaust-related subjects, said
that it was too early to tell what impact the two rulings would have. He
said he was cheered by the willingness of the consortium of German
companies to continue the talks but delivered sharp warnings to both
sides about what they had to do to arrive at a solution. He said "it is
now time" for the Germans to make a proposal to settle the suits "in a
fashion consistent with their moral responsibility," as opposed to any
legal liability that they have consistently disavowed when it comes to
the slave and forced laborers.

By the same token, he cautioned the plaintiffs' lawyers that their
"initial monetary demands are not considered realistic by German
industry or the German Government," which do not believe that they can
get public support for such an amount. He did not disclose the amount,
but Mr. Weiss has put it at $30 billion. Noting that many of the
plaintiff-survivors are in their 80's and do not have unlimited time, he
urged both sides to be flexible, adding: "Despite the wide disagreement
over payment, I feel we have nevertheless come far in this process. If
the remaining differences can be resolved, agreement could be achieved
in principle on all slave-forced labor issues before the end of this
year."

Since the end of the war, the German Government has paid restitution or
compensation of more than $53.2 billion to Jewish survivors of the
Holocaust. During that time, German companies have paid $53.2 million to
those who were forced to work in wartime factories.

Efforts to get damages from these companies intensified last year, said
Martin Mendelsohn, one of the lawyers for the plaintiffs, after a group
of Swiss banks agreed to settle claims against them for unreturned
deposits to Holocaust victims and their families. "We reasoned that
anyone forced to go through this degradation is entitled to some form of
relief," he said. "But these cases have been as complicated a bramble
bush as anyone has seen."

So far, the talks have come up with two categories of survivors entitled
to payments: slave laborers who were inmates of concentration camps and
ultimately destined for execution, and forced laborers who were
"detained" in other facilities.

The parties have agreed that whatever payments are made will be one-time
payments. But much else, including the German companies' demand that the
agreement satisfy all legal claims in courts around the world, is not
yet worked out. (The New York Times 9-15-1999)


INSIGHT COMMUNICATIONS: Sued Over Excessive Late Fees For Cable TV
------------------------------------------------------------------
Certain of Insight Communications Co Inc.'s individual systems have been
named in purported class actions in various jurisdictions concerning
late fee charges and practices. Certain of the Company's cable
television systems charge late fees to subscribers who do not pay their
cable bills on time. Plaintiffs generally allege that the late fees
charged by such cable television systems are not reasonably related to
the costs incurred by the cable television systems as a result of the
late payment. Plaintiffs seek to require cable television systems to
provide compensation for alleged excessive late fee charges for past
periods. These cases are at various stages of the litigation process.


METROMEDIA INT'L: Discovery Continues For Derivative Suit In Delaware
---------------------------------------------------------------------
In Re Fuqua Industries, Inc. Shareholder Litigation, Del. Ch.,
Consolidated C.A. No. 11974, plaintiff Virginia Abrams filed a purported
class and derivative action in the Delaware Court of Chancery on
February 22, 1991 against Fuqua Industries, Inc. (former conformed named
of Metromedia International Group Inc.), Intermark, Inc., the
then-current directors of Fuqua Industries and certain past members of
the board of directors. The action challenged certain transactions which
were alleged to be part of a plan to change control of the board of
Fuqua Industries from J.B. Fuqua to Intermark and sought a judgment
against defendants in the amount of $15.7 million, other unspecified
money damages, an accounting, declaratory relief and an injunction
prohibiting any business combination between Fuqua Industries and
Intermark in the absence of approval by a majority of Fuqua Industries'
disinterested shareholders. Subsequently, two similar actions, styled
BEHRENS V. FUQUA INDUSTRIES, INC. ET AL., Del. Ch., C.A. No. 11988 and
FREBERG V. FUQUA INDUSTRIES, INC. ET AL., Del. Ch., C.A. No. 11989 were
filed with the Court. On May 1, 1991, the Court ordered all of the
foregoing actions consolidated. On October 7, 1991, all defendants moved
to dismiss the complaint. Plaintiffs thereafter took three depositions
during the next three years.

On December 28, 1995, plaintiffs filed a consolidated second amended
derivative and class action complaint, purporting to assert additional
facts in support of their claim regarding an alleged plan, but deleting
their prior request for injunctive relief. On January 31, 1996, all
defendants moved to dismiss the second amended complaint. After the
motion was briefed, oral argument was held on November 6, 1996. On May
13, 1997, the Court issued a decision on defendants' motion to dismiss,
the Court dismissed all of plaintiffs' class claims and dismissed all of
plaintiffs' derivative claims except for the claims that Fuqua
Industries board members (i) entered into an agreement pursuant to which
Triton Group, Inc. (which was subsequently merged into Intermark,) was
exempted from 8 Del. C. 203 and (ii) undertook a program pursuant to
which 4.9 million shares of Fuqua Industries common stock were
repurchased, allegedly both in furtherance of an entrenchment plan. On
January 16, 1998, the Court entered an order implementing the May 13,
1997 decision. The order also dismissed one of the defendants from the
case with prejudice and dismissed three other defendants without waiver
of any rights plaintiffs might have to reassert the claims if the
opinion were to be vacated or reversed on appeal.

On February 5, 1998, plaintiffs filed a consolidated third amended
derivative complaint and named as defendants Messrs. J.B. Fuqua, Klamon,
Sanders, Scott, Warner and Zellars. The complaint alleged that
defendants (i) entered into an agreement pursuant to which Triton was
exempted from 8 Del. C. 203 and (ii) undertook a program pursuant to
which 4.9 million shares of Fuqua Industries common stock were
repurchased, both allegedly in furtherance of an entrenchment plan. For
their relief, plaintiffs seek damages and an accounting of profits
improperly obtained by defendants.

In March 1998, defendants J. B. Fuqua, Klamon, Sanders, Zellars, Scott
and Warner filed their answers denying each of the substantive
allegations of wrongdoing contained in the third amended complaint. The
Company also filed its answer, submitting itself to the jurisdiction of
the Court for a proper resolution of the claims purported to be set
forth by the plaintiffs.

Discovery is ongoing. Motions to disqualify Abrams and Freberg as
derivative plaintiffs and certain discovery motions have been fully
briefed and argued, but no decision has been rendered with respect to
these motions.


METROMEDIA INT'L: Settles For Suit In CA Over Samuel Goldwyn Merger
-------------------------------------------------------------------
On May 20, 1996, a purported class action lawsuit, Michael Shores V.
Samuel Goldwyn Company, Et Al., Case No. BC 150360, was filed in the
Superior Court of the State of California. Plaintiff Michael Shores
alleged that, in connection with the merger of the Samuel Goldwyn
Company, Samuel Goldwyn Company's directors and majority shareholder
breached their fiduciary duties to the public shareholders of Samuel
Goldwyn Company.

In amended complaints, plaintiff subsequently added claims that the
Company had aided and abetted other defendants' fiduciary breaches and
had negligently misrepresented and/or omitted material facts in the
Company's prospectus issued in connection with the merger.

The Company successfully demurred to the first and second amended
complaints and plaintiff filed a third amended complaint, which included
only the negligent misrepresentation claim against the Company.

The plaintiff agreed to settle the action in exchange for a payment by
defendants in the amount of $490,000, which payment constitutes a
complete and final satisfaction of the claims asserted by the plaintiff
and a plaintiff class certified solely for the purposes of the
settlement. The settlement and the settlement class were approved by the
court on October 8, 1998. Members of the class have been notified of the
settlement and were able to file proofs of claim until February 15,
1999, which claims are now being processed. At a hearing on July 7,
1999, the court approved the final distribution of the settlement fund.

On October 29, 1997, Samuel Goldwyn, Jr., the former chairman of Samuel
Goldwyn Company, filed Samuel Goldwyn, Jr. V. Metro-Goldwyn-Mayer Inc.,
Et Al., Case No. BC 180290, in Superior Court of the State of
California, alleging that the Company fraudulently induced him and the
Samuel Goldwyn, Jr. Family Trust to enter into various agreements in
connection with the merger of the Samuel Goldwyn Company (since renamed
Goldwyn Entertainment Company); breached an agreement to guarantee the
performance of Goldwyn Entertainment Company's obligations to the Trust;
and used, without permission, the "Goldwyn" trademark. The action also
alleged that the Company and other defendants breached Mr. Goldwyn's
employment agreement and fiduciary duties owed to him and the trust,
both before and after the sale of Goldwyn Entertainment Company to
Metro-Goldwyn-Mayer Inc.

After the Company successfully demurred to the trademark and the breach
of fiduciary duty claims, the plaintiffs amended their pleading,
revising and reasserting the trademark and breach of fiduciary duty
claims. Following a period of discovery, the Company reached a
settlement with the plaintiffs. The court ordered the plaintiffs' claims
against the Company dismissed with prejudice on January 11, 1999.


METROMEDIA INT'L: Will Contest Suit In Georgia Over Bankruptcy Of RDM
---------------------------------------------------------------------
The Company owns approximately 39% of the outstanding common stock of
RDM Sports Group, Inc. In August 1997, RDM and certain of its affiliates
filed a voluntary bankruptcy petition under chapter 11 of the Bankruptcy
Code. The chapter 11 trustee is in the process of selling all of RDM's
assets to satisfy its obligations to its creditors and the Company
believes that its equity interest will not be entitled to receive any
distribution. The Company also holds certain claims in
the RDM proceedings, although there can be no assurance that the
company will receive any distributions with respect to such claims.

On August 19, 1998, a purported class action lawsuit, Theoharous V.
Fong, Et Al, Civ. No. 1:98CV2366, was filed in United States District
Court for the Northern District of Georgia. On October 19, 1998, a
second purported class action lawsuit with substantially the same
allegations, SCHUETTE V. FONG, ET AL., Civ. No. 1:98CV3034, was filed in
United States District Court for the Northern District of Georgia. On
June 7, 1999, plaintiffs in each of these lawsuits filed amended
complaints. The amended complaints allege that certain officers,
directors and shareholders of RDM, including the Company and current and
former officers of the Company who served as directors of RDM, are
liable under federal securities laws for misrepresenting and failing to
disclose information regarding RDM's alleged financial condition during
the period between November 7, 1995 and August 22, 1997, the date on
which RDM disclosed that its management had discussed the possibility of
filing for bankruptcy. The amended complaints also allege that the
defendants, including the Company and current and former officers of the
Company who served as directors of RDM, are secondarily liable as
controlling persons of RDM. Plaintiffs in these lawsuits seek the
following relief: unspecified compensatory damages, reasonable costs and
expenses, including counsel fee and expert fees, and such other and
further relief as the court may deem just and proper.

On December 30, 1998, the chapter 11 trustee of RDM brought an adversary
proceeding in the bankruptcy of RDM, HAYS, ET AL. v. FONG, ET AL., Adv.
Proc. No. 98-1128, in the United States Bankruptcy Court, Northern
District of Georgia, alleging that former officers or directors of the
Company, while serving as directors on the board of RDM, breached
fiduciary duties allegedly owed to RDM's shareholders and creditors in
connection with the bankruptcy of RDM. On January 25, 1999, the
plaintiff filed a first amended complaint. The official committee of
unsecured creditors of RDM has moved to proceed as co-plaintiff or to
intervene in this proceeding, and the official committee of bondholders
of RDM has moved to intervene in or join the proceeding. Plaintiffs in
this adversary proceeding seek the following relief against current and
former officers of the Company who served as directors of RDM: actual
damages in an amount to be proven at trial, reasonable attorney's fees
and expenses, and such other and further relief as the court deems just
and proper.

On February 16, 1999, the creditors' committee brought an adversary
proceeding, The Official Committee Of Unsecured Creditors Of Rdm Sports
Group, Inc. And Related Debtors V. Metromedia International Group, Inc.,
Adv. Proc. No. 99-1023, seeking in the alternative to recharacterize as
contributions to equity a secured claim in the amount of $15 million
made by the Company arising out of the Company's financing of RDM, or to
equitably subordinate such claim made by Metromedia against RDM and
other debtors in the bankruptcy proceeding. On March 3, 1999, the
bondholders' committee brought an adversary proceeding, The Official
Committee Of Bondholders Of Rdm Sports Group, Inc. V. Metromedia
International Group, Inc., Adv. Proc. No. 99-1029, with substantially
the same allegations as the above proceeding. In addition to the
equitable and injunctive relief sought by plaintiffs described above,
plaintiffs in these adversary proceedings seek actual damages in an
amount to be proven at trial, reasonable attorneys' fees, and such other
and further relief as the court deems just and proper.

The Company believes it has meritorious defenses and plans to vigorously
defend these actions. Due to the early stage of these proceedings, the
Company cannot evaluate the likelihood of an unfavorable outcome or an
estimate of the likely amount or range of possible loss, if any.


MITCHAM INDUSTRIES: Moves For Dismissal Of Securities Suit In Texas
-------------------------------------------------------------------
On or about April 23, 1998, several class action lawsuits were filed
against the Company and its chief executive officer and then chief
financial officer in the U.S. District Court for the Southern District
of Texas, Houston Division. The first-filed complaint, styled Stanley
Moskowitz v. Mitcham Industries, Inc., Billy F. Mitcham, Jr. and
Roberto Rios, alleged violations of Section 10(b), Rule 10b-5 and
20(a) of the Securities Exchange Act of 1934 and Sections 11 and
12(a)(2) of the Securities Act of 1933. On or about September 21,
1998, the complaints were consolidated into one action. On November 4,
1998, the plaintiffs filed a consolidated amended complaint ("CAC"),
which seeks class action status on behalf of those who purchased the
Company's common stock from June 4, 1997 through March 26, 1998, and
damages in an unspecified amount plus costs and attorney's fees. The
CAC alleges that the Company made materially false and misleading
statements and omissions in public filings and announcements
concerning its business and its allowance for doubtful accounts. On or
about January 15, 1999, the Company filed a motion to dismiss the CAC.
The motion is now fully briefed and the Company is awaiting a ruling
by the Court.


NATIONAL GYPSUM: 5th Cir Texas Bars Appeal For Intervention In Fee Case
----------------------------------------------------------------------
The National Gypsum settlement trust on June 14 was barred from
appealing a district court's refusal to allow it to intervene in a case
involving financial advisors Donaldson, Lufkin & Jenrette Securities
Corp. (DLJ) by the Fifth Circuit U.S. Court of Appeals (In re National
Gypsum Company, No. 390-37213-SAF-11; Donaldson, Lufkin & Jenrette
Securities Corp. v. National Gypsum Co., et al., No. 3:94-CV-2452-R,
N.D. Texas, Dallas Div.; See 1/22/99, Page 9).

On Jan. 11, the U.S. District Court for the Northern District of Texas
ruled the New NGC Settlement Trust and other interested parties will not
be allowed to intervene in a final fee application determination case
involving DLJ because they failed to timely file their motions. On
appeal, the Fifth Circuit agreed to grant DLJ's motion to dismiss the
appeal. The appeals court also denied DLJ's motion for an award of
attorneys' fees but granted the request for costs.

                          Res Judicata Asserted

The proposed intervenors, the trust and Jeff P. Prostock, sought leave
to intervene because DLJ allegedly attempted to use a determination on
its final fee application as a basis for asserted res judicata or
collateral estoppel defenses to their claims against the company in a
class action lawsuit. The proposed intervenors also sought to vacate an
agreed order entered in this court in March 1998 awarding DLJ $ 2.4
million for services rendered to National Gypsum Co. (NGC) and Aancor
Holdings Inc.

DLJ was a financial advisor to NGC and Aancor, which were forced into
bankruptcy because of asbestos liability and three levels of publicly
traded debt from a 1986 leveraged buyout. The reorganization plan
created a trust for resolving and paying victims of NGC's asbestos
liability and transferred remaining assets to a new corporation (New
NGC) and distributed varying levels of securities in New NGC to holders
of publicly traded debt and other creditors, the court said. New NGC
also assumed the responsibility to pay DLJ's fees.

Under the confirmation order, final fee applications were to be filed no
later than 90 days after the entry of the order and any objections filed
no later than 150 days after the entry of the order. DLJ filed its fee
application on June 7, 1993. The Asbestos Committee, New NGC, the Bond
and Trade Creditors Committee and the legal representative all objected
to DLJ's fee application; however, no objection was filed. DLJ instead
negotiated with the parties and agreed to reduced its final fee from $
2.8 million to $ 2.4 million in exchange for the parties' withdrawal of
their objections.

DLJ presented its application to the Northern District of Texas
Bankruptcy Court, but the court elected to hold an evidentiary hearing
and in August 1994 issued an order setting the fees at $ 2 million. The
District Court affirmed the order, but DLJ appealed to the Fifth
Circuit, which reversed and remanded the issue.

Prostok filed a class action suit in October 1995 against DLJ and others
in Texas state court alleging fraud, gross negligence and breach of
fiduciary duties while advising NGC and Aancor in their bankruptcy
proceedings. Prostok also filed a declaratory judgment action in the
Bankruptcy Court seeking a declaration that a unique fee shifting
provision in the confirmation order did not apply to his state class
action. The trust filed a motion in September 1997 in Prostok's
declaratory judgment action seeking the same fee-shifting provision
sought by Prostok, the court said, adding that the trust also filed a
lawsuit in the Bankruptcy Court against DLJ and others in October 1997
alleging similar claims as Prostok, the court said.

DLJ argued in the declaratory judgment action that the confirmation
order and the May 1994 final fee application constituted res judicata or
collateral estoppel barring the intervenors claims against it.

                         Argument Rejected

In January 1998, the Bankruptcy Court issued an opinion and order
holding that the fee shifting provision did not apply to the state class
action and rejected DLJ's res judicata argument because it found that
the Fifth Circuits reversal of the District Court's order on the final
fee rendered the matter not final. Later that month, the proposed
intervenors filed an objection to DLJ's fee application in the
underlying NGC bankruptcy case, alleging that DLJ's fraud, gross
negligence and breach of fiduciary duties justified a complete
forfeiture of its fees, the court said.

In March 1998, DLJ filed an unopposed motion in the District Court to
enter an order awarding the company its fees as mandated by the Fifth
Circuit. The court approved the award of $ 2.4 million.

DLJ is represented by Gregory M. Gordon and Barbara J. Oyer of Jones Day
Reavis & Pogue in Dallas. Edward P. Perrin Jr. of Crouch & Hallett of
Dallas, John E. O'Neill of Clements O'Neill Pierce & Nickens in Houston
and Larry A. Levick of Gerard Singer & Levick of Dallas represent the
trustees. J. Robert Arnett of Sopuch Nouhan Higgins & Arnett in Dallas
represents Prostok. (Mealey's Litigation Report 7-16-1999)


NEW YORK: Fd Judge Bars Working Family Preference In Housing Projects
---------------------------------------------------------------------
New York City's Housing Authority may not implement a preference for
working families in municipal housing projects that have the greatest
concentrations of white residents, a federal judge has ruled.

In doing so, U.S. District Judge Robert W. Sweet, of the Southern
District of New York, made permanent an injunction he granted two years
ago barring the change in policy in 21 of the city's 322 housing
projects.

In Davis v. New York City Housing Authority, 90-Civ.-0628, Judge Sweet
declared that the Working Family Preference (WFP) "significantly
perpetuates segregation" in the projects in which more than 30 percent
of the residents are white.

The decision came in a nine-year-old class action brought by minority
tenants and applicants who alleged the housing authority was favoring
white applicants.

New York's Housing Authority implemented its working family preference
policy in 1998 in all projects other than the so-called
"disproportionate projects" -- the 21 buildings with higher than average
white tenants -- to reverse the concentration of the welfare-dependent
residents in its buildings.

Judge Sweet had ruled the preference for working families would not have
an adverse impact on minority applicants, but would perpetuate past
segregation in the "disproportionate projects."

Earlier this year, the U.S. Court of Appeals for the Second Circuit
vacated Judge Sweet's opinion, but it left the preliminary injunction
intact while remanding the case to him for clarification of the experts'
facts and methodology supporting the conclusion that segregation would
be perpetuated.

After a hearing in June and consideration of the experts' data, Judge
Sweet concluded last week that although the working family preference
"has numerous benefits, but with respect to the Disproportionate
Projects, these are outweighed by its adverse effects. The WFP markedly
inhibits the rate at which desegregation will occur, adversely affects
the ratios at the Disproportionate Projects and contravenes the purposes
of the [1992] consent degree."

The judge rejected the Housing Authority's argument that the consent
decree which revised the authority's tenant selection and assignment
systems -- had achieved its purpose, and that the preference policy
should be extended throughout the system.

The WFP policy gives preferences to families based on their income,
giving priority to those who can pay the most, regardless of their
housing need. Weighing the statistical evidence, Judge Sweet noted the
cumulative effect of the preference, if implemented in the disputed
projects, would be striking.

"After five years, there would be approximately 514 additional white
families at these 21 projects, and after 10 years there would be more
than 1,023 white families," he said in granting the plaintiffs' request
to make his preliminary injunction permanent. (New York Law Journal
8-19-1999)


ORACLE CORP: Intends To Defend Vigorously Shareholders Fraud Suit In CA
-----------------------------------------------------------------------
Shareholder class actions were filed in the Superior Court of the State
of California, County of San Mateo against the Company and its Chief
Financial Officer and Chief Operating Officer on and after December 18,
1997. A nearly identical class action was filed against the same
defendants in the United States District Court for the Central District
of California on December 7, 1998. The class actions are brought on
behalf of purchasers of the stock of the Company during the period April
29, 1997 through December 9, 1997. Plaintiffs allege that the defendants
made false and misleading statements about the Company's actual and
expected financial performance, while selling Company stock, in
violation of state and federal securities laws. Plaintiffs further
allege that the individual defendants sold Company stock while in
possession of material non-public information. The Company believes that
it has meritorious defenses to these actions and intends to vigorously
defend them.


ORACLE CORP: Shareholder Derivative Suit In CA Dismissed Voluntarily
--------------------------------------------------------------------
A shareholder derivative lawsuit was filed in the Superior Court of the
State of California, County of San Mateo on November 17, 1998. The
derivative suit was brought by Company stockholders, allegedly on behalf
of the Company, against certain of the Company's officers and directors.
The derivative plaintiffs allege that these officers and directors
breached their fiduciary duties to the Company by making or causing to
be made alleged misstatements about the Company's revenue, growth and
financial status while certain officers and directors sold Company stock
and by allowing the Company to be sued in the state shareholder class
actions. The derivative plaintiffs seek compensatory and other damages,
disgorgement of compensation received, and temporary and permanent
injunctions requiring the defendants to relinquish their directorships.
On January 15, 1999, the Court entered a stipulation and order staying
the action until further notice.

By order dated July 30, 1999, the federal court approved plaintiffs'
application for voluntarily dismissal of the federal class action and
dismissal of the class action without prejudice was entered on August 4,
1999.


PHILIP SERVICES: Canadian Court Gives More Time For Restructuring
-----------------------------------------------------------------
Philip Services Corp. of Hamilton, Ont., won an extension of court
protection from its creditors until Nov. 30, as the company continues to
work toward a restructuring deal. David Byers, a lawyer for the troubled
scrapd waste giant, told the court Philip will file a new plan by the
end of the week to replace the plan tossed out by the court late last
month. 'There's progress being made in agreements with significant
creditors,' Mr. Byers told the court.

Also, Mr. Justice Robert Blair of the Superior Court of Justice in
Toronto okayed the appointment of Tony Fernandes, an oil company
executive from Los Angeles, as the new chief executive at Philip.
Mr. Fernandez is being hired for a two-year term at a base salary of
$500,000 (US) a year, plus three groups of options totalling 4% of the
outstanding shares of Philip. He said the options must still be approved
by the Toronto Stock Exchange. 'The options will become valuable
depending on the success of Mr. Fernandes in turning Philip back into a
profitable corporation,' Mr. Byers told the court.

The judge raised his eyebrows at one clause in Mr. Fernandes' contract,
which grants him $2-million (US) in severance in the event of a change
of control at Philip. 'Where does this golden parachute rank in terms of
the going rate?' the judge asked. 'The terms of the agreement are
commercially sensible,' Mr. Byers replied. 'I assume it's the going
rate.'

In a third ruling, the judge approved a notice directed to Canadian
shareholders of Philip who bought shares in an offering in November,
1997. The notice of certification, to be published in newspapers across
Canada, posted on the Internet and mailed to shareholders of record,
will inform them that Joseph Menegon, a retired Hamilton schoolteacher,
has been certified by the court as representative plaintiff in a class
action against Philip.

Mailing out the notice is the first step in a settlement between the
shareholders and the company. Under a proposed settlement, the
shareholders will receive 1.5% of the stock in the reorganized Philip.
The deal only becomes binding when the court approves the overall
restructuring plan. Philip has said it hopes to have the deal done by
the end of November. (National Post (formerly The Financial Post)
9-14-1999)


RELIASTAR MORTGAGE: 11th Cir Georg To Rule On Volume-Based Compensation
-----------------------------------------------------------------------
Volume-based compensation may prove to be the newest line of attack on
fees paid by lenders to mortgage brokers. Lenders and consumer advocates
await the 11th U.S. Circuit Court of Appeal's ruling on McBride v.
Reliastar Mortgage Corp., et al., No. 1:98-CV-215-TWT (N.D. Ga.
4/29/99), in which the plaintiff class challenged, under the Real Estate
Settlement Procedures Act, a lender's alleged payment of volume-based
bonus fees to brokers supposedly to influence the direction of future
loan business.

Scott McBride Jr. retained the services of Kingston Mortgage, a mortgage
broker. Kingston then contacted Reliastar Mortgage Corp. about
table-funding McBride's mortgage. Reliastar agreed to fund the loan at
an above-par interest rate.

At closing, McBride received a settlement statement that indicated
Kingston would receive a 1,520 yield spread premium from Reliastar.
McBride subsequently sued Kingston and Reliastar under the RESPA,
contending the YSP was not based on services actually performed by
Kingston. McBride moved for class certification on two fronts: the issue
of the payment of the YSP to Kingston and Reliastar's practice of paying
volume based bonus fees as a further incentive for the broker to send it
prospective loans. The plaintiff also moved for summary judgment.

                    Individual Issues Predominate

The U.S. District Court for the Northern District of Georgia first
addressed McBride's motion for class certification. It concluded that
the class satisfied Fed. R. Civ. P. 23(a)'s requirements of numerosity,
commonality, typicality and adequacy of representation. However, Judge
Thomas W. Thrash Jr. opined that it did not meet Fed. R. Civ. P. 23
(b)(3)'s predominance requirement "because the alleged RESPA violation
[could not] be determined without analyzing the specific facts of each
loan transaction, regardless of whether the Defendant purportedly used
uniform forms and procedures." In particular, the District Court found
that individual questions predominated as to whether the YSP or
volume-based bonus was intended as an additional payment for Kingston's
services and if the payment was reasonably related to the market value
of the services provided.

                         Petition For Review

Finding that individual issues predominated, the court denied McBride's
motion for certification and summary judgment. McBride petitioned the
11th Circuit for immediate review of the denial of his motion for
certification pursuant to Fed. R. Civ. P. 23(f). He cited the ruling in
Dujanovic v. Mortgage America Inc., No. CV-98-TMP-0235-S (N.D. Ala.
3/26/99), in which class certification was granted, as the reason why
the 11th Circuit should clarify the important issue of class
certification in a RESPA class action.

In addition to stating that the District Court's decision was "wholly
contrary to the evidence, McBride argued that the alleged illegality of
the bonus fees can be proven on a classwide basis using common proof
such as the lender's "Loan Purchase Agreement." McBride added that
Reliastar admitted its uniform practice of paying YSPs to referring
brokers for the purchase of future loans.

Furthermore, McBride claimed in his petition for review that the
District Court failed to consider the Department of Housing and Urban
Development's Statement of Policy when rendering its decision because
under the statement certification is proper. McBride argued that the
lower court not only failed to consider the evidence before it when
ruling on his motion for class certification but also failed to explain
why certification could not be granted.

According to McBride, if the District Court had properly applied HUD's
two-part analysis for evaluating the appropriateness of the YSPs, it
would have concluded that the broker's fee was not permissible
consideration under RESPA because the payments were only for the
purchase of prospective loans and not goods or services actually
rendered. This issue of whether lenders may pay referring brokers
premiums for the purchase of prospective loans and serving rights is an
issue ripe for classwide adjudication, said McBride.

Barry Reed and Hart Robinovitch of Zimmerman Reed in Minneapolis and W.
Lewis Garrison of Garrison & Sumrall in Birmingham, Ala., represent the
plaintiffs. Robert Pratte, Margaret Savage and Torbjorn Svensson of
Briggs & Morgan in Minneapolis and Robert Ambler Jr., Jonathan Vogel and
Stephen Devereaux of King & Spalding in Atlanta represent the defendant.



RUTGERS COLLEGE: Sued Over Differences In Admission For 2 NJ Campuses
---------------------------------------------------------------------
To paraphrase Charles Dickens, this is a tale of two New Jersey college
campuses: one set in the inner city of Newark, the other nestled in
upscale New Brunswick.

Rutgers College School of Business has locations in both places. Though
the campuses are only about 20 miles apart, a lawsuit against the
college over its admission policy charges there is a world of difference
between the two. The class-action suit alleges the policy is
discriminatory, since it sets the bar for admissions much higher in New
Brunswick than in less desirable Newark.

RCSB is a two-year, upper-division business school. Students interested
in applying must first complete two years at one of the liberal arts
colleges in New Brunswick. They apply to the business school in their
sophomore year. RCSB-New Brunswick has a minimum grade point average
that varies from one admission cycle to the next, ranging between 3.0
and 3.4. The minimum GPA is 3.1. RCSB-Newark's minimum GPA is set at 2.5
on a 4.0 scale.

Two Rutgers sophomores, Amanda Phillips and David Rough, and junior
Michael Jones - calling themselves "scholar athletes" - filed suit after
they were denied admission to RCSB-New Brunswick. They charge that
imposing a "cap" on RCSB-New Brunswick admissions "discriminates against
its own students."

The suit names as defendants Rutgers President Francis Lawrence, and
Howard Tuckman, dean of faculty of management. In addition to damages,
the students seek a judicial order that the defendants "be directed to
take the steps necessary to make a 2.5 grade-point average uniform [and
permanent] between New Brunswick and Newark School of Business."

Donald D. Phillips, the students' attorney, believes that "if a
grade-point average of 2.5 guarantees admission to the School of
Business-Newark, it should guarantee admission to the School of
Business-New Brunswick." His daughter is one of the students filing
suit. She was rejected by RCSB-New Brunswick based on a 2.98 GPA after
her third semester. She has since raised her average to over 3.1 and
will attempt to gain admission to RCSB-New Brunswick this fall, Phillips
said.

Phillips says that applying to RCSB-New Brunswick is like playing
"Russian Roulette" - students take required courses hoping they can meet
a moving GPA in the future, but they have no idea what it will be when
they apply. As "one school with one faculty," Phillips asserts that both
campuses should have one admission standard. He claims a number of
faculty members are behind the suit, but are not willing to support it
publicly.

There is another difference of concern to student-athletes. New
Brunswick is a Division I college, while Newark plays at the Division
III level. The suit alleges that RCSB-New Brunswick "has a difficult
time inducing the best athletes to enroll" because of the admission
policy. They are concerned over the possible loss of scholarships and
National Collegiate Athletic Association eligibility.

Amanda Phillips is a discus thrower on the women's track team. Rough and
Jones are on the soccer and football teams respectively.

Pamela Blake, director of media relations and communications at Rutgers,
stated that the university "disagrees that there is any legal basis for
this lawsuit," emphasizing that from the university's perspective
"setting admissions standards is a faculty prerogative" and "a matter of
academic freedom." (Enrollment Management Report 8-24-1999)


SALANT CORP.: Texas Suit On Mexico Bus crash Ends In $30 Mil Settlement
-----------------------------------------------------------------------
American companies doing business in Mexico or Canada may be more
vulnerable to lawsuits in the United States in the wake of a $ 30
million settlement of a wrongful-death and personal injury lawsuit
involving a fiery bus crash.

The plaintiffs, all residents or the estates or heirs of residents of
Mexico, were suing an American company, Salant Corp., over an accident
that occurred in Mexico. But both the 4th District Court of Appeals in
Texas and the Texas Supreme Court rejected without comment the company's
pretrial attempts to have the case dismissed on jurisdictional grounds.

Because of Salant Corp.'s unsuccessful attempts to get the case
dismissed -- and the size of the settlement -- the case could encourage
more foreign workers to sue U.S. corporations with cross-border
operations. "If you make a decision in Texas, you will be accountable in
Texas," predicted Michael Caddell, lead plaintiffs' counsel with partner
Cynthia Chapman, both of Houston's Caddell & Chapman. As a result of the
$ 30 million settlement, he said, "There'll be more and more cases like
these."

The lawsuit stemmed from a bus crash in June 1997 outside Valle Hermosa,
a town about 35 miles south of Brownsville, Texas. Fourteen young
workers at Salant's Valle Hermosa subsidiary were killed and 12 others
escaped when a company bus crashed and overturned in a sewage ditch.

The dead workers, ranging in ages from 16 to 25, were fatally burned
when the bus caught fire, said Mr. Caddell. The other workers escaped
with minor injuries but suffered considerable mental anguish from
watching friends and co-workers burn to death, said Ms. Chapman.
Rodriguez-Olvera v. Salant Corp., NO. 97-07-14605-CV (Dist. Ct.,
Maverick Co., Texas).

The plaintiffs sued Salant, a New York-based apparel maker, charging
that its personnel had failed to maintain the bus properly and that the
bus driver was not sufficiently trained, said Mr. Caddell. "Two prior
drivers of the bus and nine eyewitnesses testified the bus had a brake
problem. This was reported to the company before the accident, but no
one did anything." Also, he said, "the driver had never driven a bus
before and had no training of any kind."

The plaintiffs brought suit in Texas, even though the accident happened
in Mexico and the workers, including the driver, were all residents of
Mexico who were working at Salant's Mexican subsidiary, Maquiladora Sur
S.A. de C.V.

Salant filed a motion to dismiss the case under the doctrine of forum
non conveniens. Salant contended, according to a statement by the
company, that "the claims, if any, asserted by the Rodriguez-Olvera
plaintiffs exist against Maquiladora, and not the company, and that the
Rodriguez-Olvera action should be tried in the courts of Mexico." A
trial in Mexico, Mr. Caddell noted, would have had limited potential for
damages.

The trial court denied the defense's motion to dismiss. The plaintiffs
contended that all of the decisions for the Valle Hermosa plant were
made by personnel at Salant's Eagle Pass, Texas, facility. "The bus was
bought in Texas. All the decision-makers lived in Texas," said Mr.
Caddell.

Salant applied for mandamus before the appellate court and the Texas
high court, contending that allowing the case to go to trial in Texas
"was not in the interest of Mexico and the United States, from a policy
standpoint," said Salant appellate counsel John Hill, of the Houston
office of Locke Liddell & Sapp L.L.P. An increasing number of U.S.
corporations have been setting up so-called maquiladora operations along
the border between the United States and Mexico, he noted, using Mexican
workers and operating under Mexican law. Trying the case in Texas, he
said, "could impact the entire maquiladora program." Salant's last
petition to the Texas Supreme Court was denied on July 23.

The trial began on July 26, and the insurers for Salant settled shortly
after the plaintiffs had rested their case. Under the terms of the
settlement, Hartford Fire Insurance Co. will pay $ 25 million, and two
other insurers will pay the rest. A special master will decide on the
allocation of the money, Mr. Caddell said; the largest shares will go to
the children of the workers who were killed. (The National Law Journal
8-30-1999)


VITAMIN PRICE-FIXING: Food Makers Opt Out Of $1 Bil Proposed Settlement
-----------------------------------------------------------------------
Several big agricultural and food companies say they will pursue their
own claims for damages and have opted out of a $ 1.1 billion proposed
settlement of a price-fixing case against vitamin manufacturers.

Six of the world's biggest vitamin makers are close to settling a
complaint that they engaged in a nine-year conspiracy that allegedly
resulted in artificially higher prices for hundreds of products,
including peanut butter and milk.

But some of the biggest food companies that could win money in such a
settlement have decided instead to go it alone. Cargill Inc. filed its
own suit last month, and Kellogg Co. filed in July. Mark Dollins, a
spokesman at Quaker Oats Co., said that the cereal maker "is in fact
opting out of the class-action" settlement. But he declined to say
whether the company will pursue its own action. ContiGroup Cos.,
formerly Continental Grain, had pulled out of the negotiations,
according to a report in The Wall Street Journal, but declined to
comment Monday.

The proposed settlement would be the largest ever paid in such a civil
case. Last May, the Justice Department won a record $ 725 million in
criminal fines from two vitamin manufacturers, Roche Holding AG of
Switzerland and BASF AG of Germany, to settle charges they colluded to
divide up markets and set wholesale prices. Those two companies, plus
Rhone-Poulenc SA of France, and Eisai Co., Daiichi Pharmaceutical Co.,
and Takeda Chemical Industries Ltd., all of Japan, are part of the
tentative civil settlement.

Michael Hausfeld, the lead attorney for the plaintiffs, said he believed
most of the companies that would be entitled to a settlement will remain
in the case"once they see the benefits of the settlement and once they
see their shareholders reaction to turning it down on the hopes that
they can get something better on their own." He said he expected a
settlement to be concluded within a few weeks.

Together, the six defendants account for about 80 percent of bulk sales
of the most popular vitamins. But under the agreement, nearly 1,000
corporate buyers of bulk vitamins would receive more than $ 1 billion,
and 50 law firms would divide an additional $ 125 million. (The Record
(Bergen County, NJ) 9-14-1999)


UNISYS CORP.: Labor Union Included in Suit In N.Y. Over Age For Layoff
----------------------------------------------------------------------
A labor union is being pulled in as a defendant in a class action age
discrimination suit brought by some of its own members over a 1993 round
of layoffs at the Great Neck, N.Y., headquarters of Unisys Corp.

In a case of first impression in the Second Circuit, Eastern District
Judge Arthur D. Spatt said that a labor union may be responsible for age
discrimination when the employer carries out a discriminatory policy
included in a negotiated contract. Spatt said that the New York Human
Rights Law provides a basis for contribution when the union has
participated in the underlying conduct that resulted in discrimination.

In Rodolico v. Unisys Corp., the employer was sued over the layoff of
232 unionized engineers. The plaintiffs allege that there was age
discrimination in the selection of engineers to be laid off. The
collective bargaining agreement between Unisys and its engineers was
negotiated by the company and Local 444 of the Engineers Union. The
bargaining agreement created a seniority system within Unisys and called
for a distribution of layoffs between three tiers of seniority, with one
senior engineer being laid off for every two middle-level engineers and
every three junior engineers. The laid-off engineers say that
decision-making in connection with the forced reduction violated the Age
Discrimination in Employment Act (ADEA) and the state Human Rights Law.

Unisys claims that its decision-making was consistent with and governed
by the collective bargaining agreement, which it entered into with Local
444. The company said that Local 444 is a necessary party to the action,
since it was an equal partner in setting the policy that the engineers
say caused their legal injury. If the layoff contingency plans or
performance reviews agreed to by the local are discriminatory, Unisys
pointed out, they were not formulated by management unilaterally. The
union, Unisys argued, should be jointly and severally liable if
plaintiffs prevail.

Violations of the state Human Rights Law are akin to torts, Spatt
observed, and New York common law is clear that a tortfeasor can be
obliged to contribute to a fellow tortfeasor who is found liable. Unlike
the ADEA, the New York Human Rights Law contemplates liability for
"aiding and abetting" discriminatory conduct, meaning that the state
anti-discrimination law provides a broader basis for liability. "If
Local 444 breached its duty of fair representation and was intentionally
involved in the procedures which Unisys used to discriminate against its
employees on the basis of their age, then they are both culpable," Spatt
said.

The plaintiffs were represented by Julian R. Birnbaum and James
Wasserman, of Vladeck Waldman Elias & Engelhard. Spatt, later in his
opinion, disqualified the Vladeck firm from the case, finding that it
was the lawyer for Local 444 at the time it negotiated the agreement on
performance reviews that is part of the case. The firm is still counsel
to the union local, and Spatt ruled that it "cannot adequately represent
the interests of both Local 444 and the putative plaintiffs." The judge
delayed a decision on class certification until new counsel can be hired
by the class members. Dean L. Silverberg, Matthew T, Miklave, Michael A.
Kalish and A. Jonathan Trafimow, of Epstein Becker & Green, represented
Unisys. This story originally appeared in the New York Law Journal. (The
Legal Intelligencer 9-1-1999)


                               *********


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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.

Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
subscription information, contact Christopher Beard at 301/951-6400.


                    * * *  End of Transmission  * * *