---

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

                Tuesday, September 21, 1999, Vol. 1, No. 160

                                 Headlines

ASBESTOS: MALC Seeks In Penn To Join Fibreboard In Maritime Cases
ATLANTA CITY: Fulton Residents Sue For Water Rate Adjustment
CANADIAN GOVT: Former Soldier Building Suits On Toxin Exposure
CBIZ: Shepherd & Geller Files Securities Suit In Ohio
CERBERUS CAPITAL: Hughes & Luce Files Securities Suit In New York

CLEARLY CANADIAN: Announces Litigation and Corporate Update
HARBINGER: Announces Intention to Vigorously Defend Securities Suit
HOLOCAUST VICTIMS: U.S. Attorney Says WJC Intimidates Survivors
ILLINOIS POLICE: ACLU Drops Claims Of Racism In Traffic Stops
INDIAN TRUST: ABA Journal Reviews On the Big Case Re American Indians

ISLE OF CAPRI: Casino Vows To Defend Rico Claims Re Gaming In Las Vegas
ISLE OF CAPRI: Property Owners Not Having Gaming Nearby File Suit In MI
JUSTICE DEPT: Former Prosecutor Tells Why He Doesn't Join Class On OT
NATIONAL HEALTHCARE: Heather Hill Nursing Home Again Named In Lawsuit
SEATTLE SUPERSONICS: FLSA Prohibits Retaliation For Complaints

SHALALA: HMO Case Bounced Back To CA Judge After 2 Years
SHONEYS INC: Fl Ct Denies Class On Pay; Voluntary Dismissal At Ap Ct
SHONEYS INC: Settles Claims In Tenn Re OT Pay & Pay For Hourly Workers
SHONEYS INC: Waitress' Claim Over Pay Not Given Class Status In Alabama
SIDNEY DORSEY: Hearing On Jail Conditions Scheduled Before Superior Ct

STORAGE TECHNOLOGY: Denies Former Staff ADEA & ERISA Claims In Colorado
TRENTON: Students Trained For Jobs In Computer Sue School For Closing
WHITTENBURG GROUP: Texas Lawyer Says Shareholders Case Like Soap Opera

                              *********

ASBESTOS: MALC Seeks In Penn To Join Fibreboard In Maritime Cases
-----------------------------------------------------------------
The Maritime Asbestosis Legal Clinic (MALC) filed a motion on Aug. 13
with the U.S. District Court for the Eastern District of Pennsylvania
seeking to join Fibreboard Corp. to its cases filed on behalf of MDL 875
maritime docket plaintiffs (In re: Asbestos Products Liability
Litigation [No. VI], No. MDL 875, E.D. Pa.).

MALC filed the motion with the court and U.S. Judge Charles R. Weiner
pursuant to the U.S. Supreme Court's decision in Ortiz v. Fibreboard
(525 U.S., 1999, WL 412604 [June 23, 1999]; See 7/2/99, Page 3), which
lifted the stay on filing claims against Fibreboard for asbestos
personal injuries. MALC argued that there is prior precedent for
granting such a motion, pointing to the addition of Prudential Lines as
party-defendant to a large number of MARDOC (Maritime Docket) cases when
a bankruptcy court lifted a stay against suing the company.

Specifically, MALC seeks to join Fibreboard to all cases filed by the
clinic between Sept. 9, 1993, and Aug. 8, 1999. Also, the clinic
provided a list of 17,907 addition MALC cases its seeks to join
Fibreboard to.

The clinic argued that the only reason it stopped filing claims against
the company was because U.S. Judge Robert Parker of the Eastern District
of Texas entered a temporary stay Sept. 9, 1993, against suing
Fibreboard when Ahearn v. Fibreboard Corp. (See 11/14/97, Page 7) was
filed in the Texas court. The clinic added that if it had continued to
file claims against the company, it would have risked a contempt
citation or other sanction by the Texas court. The stay applied to all
courts, state and federal.

                         17,574 MARDOC Cases

The additional cases attached to the clinic's court filing including
17,574 MARDOC cases from the Northern District of Ohio which were filed
during the period the injunction was in effect. Also, the clinic seeks
to include 333 cases which were filed prior to the time counsel was
notified that the Ahearn injunction had been dissolved. The injunction
was dissolved Aug. 3.

"The filing of a class action suspends the running of the applicable
statute of limitations," the clinic said, citing American Pipe &
Construction Co. v. Utah (414 U.S. 538, 554, 94 S.Ct. 756, 766, 38
L.Ed.2d 713 [1974]). "While the moving parties contend that the
existence of an injunction positively prohibiting them from suing
Fibreboard equitably estops Fibreboard from raising a defense of
time-bar, counsel undersigned wish to avoid any litigation over that
question by simply joining Fibreboard to the existing MARDOC cases as
soon as possible."

The MARDOC plaintiffs are represented by Michael J. Connor, Robert E.
Swickle and Donald A. Krispin of the MALC, a division of the Jacques
Admiralty Law Firm in Detroit. (Mealey's Litigation Report 8-20-1999)


ATLANTA CITY: Fulton Residents Sue For Water Rate Adjustment
------------------------------------------------------------
The Committee for Sandy Springs and five individual north Fulton
homeowners have signed on to a class-action lawsuit against the city of
Atlanta over water rates.

These plaintiffs join William Bracey, the Fulton County resident who
filed the suit in April in Fulton Superior Court. The lawsuit charges
that the city has been overcharging water customers who live outside the
city for years. It calls for an immediate reduction in rates Atlanta
charges nonresidents and repayment for as much as 15 years of excessive
charges.

"I think there is widespread interest in seeing a rate adjustment," said
David H. Pope, the homeowners' attorney. "We've had many calls from
people who've expressed support for this."

The city bills more than 33,000 water accounts outside the city limits,
which means that about 250,000 people beyond the city's borders use
water treated at one of its three water plants.

The plaintiffs cite a consultant's report that concluded the city has
been charging nonresidents 34 percent more for water than resident
customers, but could justify charging only 5 percent more.

State law prohibits the city from charging more for its services than it
costs to provide them. Any charge that cannot be reconciled with what
the city pays to provide the service is considered a tax.

Eva Galambos, president of the Committee for Sandy Springs, estimates
Sandy Springs residents are being overcharged $ 2 million a year. "We're
tired of paying a 34 percent penalty for every gallon of water, and
we've been doing this since 1950 when the agreement was first
developed," said Galambos, who oversees the committee that is working to
make Sandy Springs a city. "Our aim is to stop this differential from
being levied and to recoup some of the money we've spent that was not
justified."

If the court finds against the city, the Atlanta water system could be
liable for overcharges of $ 75 million. However, the number of years for
which the charges can be collected may be limited to as few as four
years under the law, according to a letter Pope wrote to city officials.
If this statute of limitations applies, the city's liability could be $
20 million.

A city spokesman has said Atlanta intends to "vigorously defend itself"
against the suit. The city has said the study by Virginia-based
consultants Black and Veach isn't reliable because the records of the
water systems' assets, on which the study relied, were incomplete.

Pope has said since the city was involved in hiring Black and Veach that
they should have had access to all the information the city used in
setting its water rates for nonresident customers. (The Atlanta Journal
and Constitution 9-16-1999)


CANADIAN GOVT: Former Soldier Building Suits On Toxin Exposure
--------------------------------------------------------------
The former soldier at the centre of a toxic-substance scandal is
building two lawsuits against the Department of National Defence.
Retired warrant officer Matt Stopford is encouraging soldiers who want
more compensation from Ottawa for injuries or ailments they sustained
during service to join him in a class-action breach of contract suit.

Stopford said soldiers are promised by the DND that they and their
families will be taken care of if they're killed or injured on the job.
But he said the government broke its promise to him and others by not
providing disability pensions that cover basic living expenses.
"You shouldn't have to downgrade to poverty because you got sick or
hurt," Stopford said.

Stopford is getting $ 432, or 25% of his disability pension. His service
pension is about $ 1,000 a month.

His second, more personal, lawsuit accuses the DND of attacking his
credibility through a letter stating that his health problems are caused
by the subordinates who tried to poison him in Croatia.

Stopford has been bedridden for the past few weeks - due to illnesses he
blames on exposure to toxins in Croatia - but he's now preparing his
cases with lawyer James Cameron. "It's going to put more pressure on the
federal government to take care of us," said Stopford, adding he doesn't
want a million-dollar settlement, only enough for fellow soldiers to
live out their remaining years with dignity.

Stopford is at the centre of three ongoing military investigations into
the removal of a memo from the personal medical files of about 1,000
soldiers who served in Croatia between 1993 and 1995. The note stated
that they were exposed to PCBs and bauxite while filling sandbags for
bunkers, providing proof for disability pension claims. A board of
inquiry is expected to submit an interim report next month. (The
Edmonton Sun 9-16-1999)


CBIZ: Shepherd & Geller Files Securities Suit In Ohio
-----------------------------------------------------
The Law Firm of Shepherd & Geller, LLC announced that it has filed a
class action in the United States District Court for the Northern
District of Ohio on behalf of all individuals and institutional
investors that purchased Century Business Services, Inc. (Nasdaq:CBIZ)
common stock between February 6, 1998 and November 23, 1998, inclusive
(the "Class Period").

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by issuing false and
misleading statements about the Company's true acquisition costs,
revenue run rates and goodwill amortization periods, and the effects
these adverse undisclosed conditions would ultimately have on Century's
operations, liquidity, and stock price. When the truth about the Company
was revealed, the stock price fell sharply.

Shepherd & Geller, LLC is working closely with The Law Offices of Steven
E. Cauley, P.A., in prosecuting this case. If you would like to consider
serving as one of the lead plaintiffs in this lawsuit, you must take
appropriate action by November 16, 1999. Contact Shepherd & Geller, LLC,
Boca Raton Paul J. Geller, 561/750-3000 Toll Free: 1-888-262-3131
E-mail: pgeller@classactioncounsel.com or Shepherd & Geller, LLC, Media,
Pa. Scott R. Shepherd, 610/891-9880 Toll Free: 1-877-891-9880 E-mail:
sshepherd@classactioncounsel.com TICKERS: NASDAQ:CBIZ


CERBERUS CAPITAL: Hughes & Luce Files Securities Suit In New York
-----------------------------------------------------------------
If you purchased certain debt securities from Livent, Inc. anytime after
August 10, 1998, a current class action lawsuit pending in the United
States District Court for the Southern District of New York, could
affect your rights, according to Hughes & Luce L.L.P. Livent, a Canadian
corporation, produced several well-known theatrical productions,
including "Phantom of the Opera," "Ragtime," "Showboat," and "Fosse."
The Company filed for bankruptcy in the United States on November 19,
1998.

The class action lawsuit referenced above has been brought on behalf of
Cerberus Capital Management, L.P., Tri-Links Investment Trust and all
others similarly situated. The lawsuit currently defines the class as
all "persons or entities who purchased 9 3/8% Senior Unsecured Notes Due
2004 from Livent, Inc. during the period from August 10, 1998 to the
present." Excluded from the class are the defendants, their immediate
families, any entity in which any defendant has a controlling interest
or is a parent or subsidiary of or is controlled by Livent, Inc.,
including the officers, directors, affiliates, legal representatives,
heirs, predecessors or assigns of any Defendant.

The complaint also names all of the following persons as defendants:
Garth Drabinsky, Myron Gottlieb, Gordon Eckstein, Robert Topol, Jerald
M. Banks, Conrad M. Black, Joseph Rotman, Scott M. Sperling, H. Garfield
Emerson, Martin Goldfarb, A. Alfred Taubman, Estate of Andrew Sarlos,
Thomas H. Lee, James Pattison, Lynx Ventures, L.P., Lynx Ventures,
L.L.C., Micheal S. Ovitz, Ronald W, Burkle, Robert M.D. Cross, Quincy
Jones, Heather Munroe-Blum, Jerry I. Speyer, Furman Selz, Inc., Roy
Furman, PaineWebber Incorporated, Deloitte & Touche, L.L.P., and
Deloitte & Touche Chartered Accountants.

The Complaint charges that the Defendants violated federal securities
laws, as well as New York state law, by, among other things, misleading
investors regarding the financial condition of the Company, as presented
by the company's financial statements for fiscal years 1996 and 1997 and
the first quarter of fiscal year 1998. Plaintiffs contend that the
Defendants engaged in various schemes to defraud investors by
overstating Livent's financial condition and by participating in an
ongoing scheme to cover up the impact of such overstatements on the
Company's financial position. For example, Plaintiffs allege that the
Defendants understated preproduction costs of the shows Livent produced
by transferring preproduction costs from currently running shows to
shows that had not yet opened and/or improperly recording preproduction
costs to the Company's fixed asset accounts. Plaintiffs further allege
that Defendants also allowed Livent to enter into financial arrangements
that, as disclosed to the investing public, appeared to be
revenue-generating transactions when, in fact, undisclosed side
agreements required repayment of the sums advanced. Plaintiffs allege
that such false disclosures resulted in the overstatement of the
revenues and the understatement of the liabilities of the Company.

Plaintiffs claim that Defendants also allowed Livent to violate
generally accepted accounting practices, and then, when even these
violations became apparent, continued to overstate Livent's financial
condition by understating the effect of Livent's accounting
manipulations and by failing to disclose the full extent of the
manipulations and their impact on the Company. Plaintiffs allege that
Defendants' statements, actions and omissions in this regard led the
Company into bankruptcy and destroyed the value of Plaintiffs'
investments. Specifically, the complaint charges that various Defendants
violated sections 11, 12, and 15 of the Securities Act, violated
sections 10(b) and 20(a) of the Securities Exchange Act, committed
common law fraud and misrepresentation, and tortiously interfered with
Plaintiffs' contract.

The law firm of Hughes & Luce, L.L.P., based in Dallas, Texas, will be
acting as class counsel in this lawsuit and will represent the interests
of the class. Any class member who wishes to serve as lead plaintiff in
place of those already named in the complaint may request by motion that
the court appoint them lead plaintiff no later than sixty (60) days from
the date of this notice. Contact Hughes & Luce L.L.P. Jim McCarthy Esq.,
214/939-5500 mccartj@hughesluce.com Craig Budner Esq., 214/939-5500
budnerc@hughesluce.com Beth Bivans Esq., 214/939-5500
bivansb@hughesluce.com Web site: http://www.hughesluce.com


CLEARLY CANADIAN: Announces Litigation and Corporate Update
-----------------------------------------------------------
Clearly Canadian Beverage Corporation (TSE: CLV; NASDAQ: CCBC) wishes to
provide an update to certain litigation matters that the Company has
been involved in:

                    Final Settlement of Dispute with
              Coronation Insurance and Class Action Lawsuit

The Company and Coronation Insurance have entered into a settlement
agreement under which Coronation is required to pay Clearly Canadian
Cdn$ 1.8 million as reimbursement for certain settlement funds and
defence costs previously paid by the Company. In connection with the
settlement, the Company maintained director and officer liability
insurance coverage with Coronation.

In February 1996, Coronation commenced an action in the British Columbia
Supreme Court which sought to allocate certain settlement and defence
costs to the Company. In April 1997, the British Columbia Supreme Court
decided that there could only be allocation of the settlement amount to
the extent that Coronation could establish that liability of the Company
was not entirely concurrent with any liability that could be established
against the directors and officers.

Coronation filed a notice of appeal in the British Columbia Following
the hearing of the appeal in December 1998, the Court of Appeal issued
Reasons for Judgment in January 1999 dismissing Coronation's appeal. As
a result, the Company and Coronation have now entered into a settlement
agreement under which Coronation is required to pay Clearly Canadian
Cdn$ 1.8 million as reimbursement for the settlement funds and defence
costs incurred by the Company. Under the settlement with Coronation, the
Company is required to obtain judicial approval to indemnify the
directors and officers and such approval is expected within 30 days.

By way of background, the settlement and defence costs referred to
above, were incurred by the Company in connection with certain class
action lawsuits which were commenced in 1993 in the United States
District Court. The allegations raised by the plaintiffs in the
Complaint were denied and defended. The plaintiffs did not establish or
prove any of their allegations of wrongdoing or liability against the
Company or its officers and directors. The plaintiffs were initially
suing for the sum of US$ 38.0 million, however, in November 1995, the
parties entered into a settlement of the Complaint for US$ 2.5 million.
In connection with the settlement of the Complaint, the Company was
required to obtain certain class member and court approvals. On
September 3, 1999, final approval for the settlement was obtained from
the United States District Court.


HARBINGER: Announces Intention to Vigorously Defend Securities Suit
-------------------------------------------------------------------
Harbinger Corporation (NASDAQ:HRBC), a worldwide supplier of Electronic
Commerce software, services and solutions, announced that a shareholder
class action has been filed in the United States District Court for the
District of Georgia against the Company and certain of its current and
former officers and directors. The Company believes that the action is
without merit and intends to defend it vigorously. "I have reviewed the
Complaint," said C. Tycho Howle, Harbinger Chairman and Chief Executive
Officer. "None of the allegations suggest that the Company did anything
wrong. All of the statements made by the Company in the relevant period
were true. I have provided a few additional comments on the suit in a
letter to employees and shareholders in the Investor Relations section
of our Web site at www.harbinger.com."

                            About Harbinger

Harbinger Corporation is a leading worldwide provider of
business-to-business Electronic Commerce software, services and
solutions. The company maximizes its customers' business potential with
comprehensive, scalable E-Commerce solutions that help streamline
operations, increase profitability and build electronic trading
communities. Harbinger's objective is to serve more customers using
Internet Protocols (IP) than any other provider and to establish
harbinger.net(SM) as the preferred transaction portal for E-Commerce
information and mission-critical, business-to-business E-Commerce
transactions. Headquartered in Atlanta, Georgia, Harbinger provides
worldwide support to its customer community from multiple International
operations facilities.

This letter contains statements which may constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. Those statements include statements
regarding the intent, belief or current expectations of Harbinger
Corporation and members of its management as well as the assumptions on
which such statements are based. Prospective investors are cautioned
that litigation includes certain inherent risks and the outcome can not
be predicted with certainty. Important factors currently know to
management that could cause actual results to differ materially from
those in forward-looking statements include misapprehension of the
pertinent facts or applicable law by courts or jurors, evidentiary
rulings, inability to present evidence at trial and other factors beyond
the control of the litigants. Additional factors are set forth in the
Safe Harbor Compliance Statement for Forward-Looking Statements included
as Exhibit 99.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998. The Company undertakes no obligation to update
or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results.


HOLOCAUST VICTIMS: U.S. Attorney Says WJC Intimidates Survivors
---------------------------------------------------------------
A U.S. attorney accused the World Jewish Congress of pressuring
Holocaust survivors against accepting a compensation deal he clinched
with an Austrian bank holding their pre-World War II assets.

Attorney Ed Fagan asserted that the WJC was putting pressure on Austrian
survivors who want to make their restitution claims on the basis of an
agreement he reached with the Bank Austria-Creditanstalt group.

The World Jewish Congress had rejected as too small the compensation sum
of $ 40 million and is threatening to launch a boycott campaign against
the Austrian banks. ''They are trying to influence and intimidate''
those involved in the deal, Fagan reportedly told a news conference with
reference to the WJC. He said he had informed the court about
interference in a pending case.

In New York, WJC director Elan Steinberg did not respond directly to the
accusations but said, ''The World Jewish Congress and the Austrian
Jewish community does not accept the settlement proposed by some lawyers
and ... Bank Austria for $ 30 million restitution and $ 10 million in
lawyers' fees.''

Steinberg said Holocaust survivors across the United States asked him to
oppose the settlement.

Fagan reiterated his only objective was to financially indemnify the
Holocaust survivors, accusing the WJC of not having done anything in
favor of the victims, the Austria Press Agency reported.

Fagan, who had earlier initiated class-action suits against Austrian
banks and companies, on Aug. 31 said in Jerusalem he had uncovered fresh
evidence that several German banks, including Deutsche and Dresdner
Bank, were withholding crucial documents relating to assets of Holocaust
victims and profits from World War II-era labor. But Deutsche
Bank, Germany's largest, denied a day later it was withholding such
documents.

The Austria Press Agency quoted Fagan as saying the World Jewish
Congress had not even passed a ''penny'' on to the survivors, citing
what he said was a tax return signed by WJC director Elan Steinberg for
the fiscal year 1997.

Fagan claimed the document shows that the WJC had available a sum of
more than $ 3.8 million for private investments but that no money had
been set aside for financially supporting Holocaust victims.

Steinberg, who was contacted by The Associated Press in New York, said
the charge was ridiculous, since that amount of dlrs 3.8 million had
nothing to do with reparations. He also said the WJC will take not ''a
penny'' of any reparations deal, unlike some lawyers. (AP Worldstream
9-16-1999)


ILLINOIS POLICE: ACLU Drops Claims Of Racism In Traffic Stops
-------------------------------------------------------------
The American Civil Liberties Union voluntarily dismissed the remaining
claims in its federal lawsuit accusing the Illinois State Police of
unfairly targeting Hispanics and African-Americans for traffic stops.

Although lawyers for the state police declared victory in the
long-standing litigation, the ACLU said dropping the damage claims by
the three named plaintiffs cleared the way for appeals of previously
adverse rulings by a federal judge in the suit that alleged "racial
profiling" by the state police's drug interdiction unit.

Harvey Grossman, the ACLU's legal director, contended that the real
issue remains the claim that about 30 "rogue" troopers continue to
blatantly discriminate against minority motorists. Citing three pages of
statistics he handed out to reporters, Grossman argued that the state
police's own data show that Hispanic drivers in cars with license plates
from border states are pulled over by the troopers far more often than
their percentage of the population.

But Jeremy Margolis, former state police director and acting as the
agency's attorney in the suit, called the statistics "bogus" creations
of "junk-science experts" that have been rejected by courts here and
across the country. Referring to Grossman's comments as "Alice in
Wonderland rhetoric," Margolis claimed "complete and total vindication"
in the hard-fought lawsuit, filed in 1994.

U.S. District Judge Blanche Manning ordered the ACLU to pay for the
legal costs of the defense. Margolis said he didn't know what those
costs would total. Over the last year, in a series of rulings, Manning
abided by the recommendations of a federal magistrate and rejected the
suit's equal-protection claim after finding the ACLU failed to show that
whites were treated differently than minority motorists.

Manning also refused to impose an injunction on the state police, saying
the ACLU hadn't shown that the plaintiffs were likely to be stopped
again by troopers.

In addition, Manning wouldn't classify the lawsuit as a class-action,
limiting its scope.

The rulings gutted the heart of the ACLU's case, leading to the decision
to dismiss the remaining damage claims of the three named plaintiffs,
Grossman said.

But Margolis and co-counsel Robert Andalman and Darren Watts contended
the ACLU didn't want to go to trial with three plaintiffs who each had
their own set of problems. According to Andalman, plaintiff Peso Chavez
was a private investigator who was paid by a drug dealer to drive back
and forth on Interstate 80 until he was pulled over by the state police;
after two days he was, Andalman said. Plaintiff Joe Gomez is serving a
prison sentence for a cocaine conviction, while no record exists that
plaintiff Gregory Lee was ever stopped by troopers, Andalman said.

Even though the judge gave the ACLU opportunities to strengthen its
case, it was unable to find better plaintiffs to prove its claim of
racial profiling, Andalman said. "It suggests the problem isn't there,"
he said.

Furthermore, Andalman said, an expert in criminology hired by the ACLU
concluded that the drug interdiction program succeeded in both
vigorously enforcing the laws and recognizing the constitutional rights
of drivers who were stopped. (Chicago Tribune 9-17-1999)


INDIAN TRUST: ABA Journal Reviews On the Big Case Re American Indians
---------------------------------------------------------------------
After the government's bungling of a land allotment program for hundreds
of thousands of Indians, all eyes are now on a federal judge trying to
sort out the mess.

The case was big, really big, and Kevin Gover knew it. After all,
300,000-plus American Indians just don't come waltzing into court every
day alleging that the federal government has lost as much as $ 10
billion held in trust for them.

But it wasn't until after Gover became the assistant secretary for
Indian affairs at the Department of the Interior in late 1997 that he
realized just how badly government lawyers had botched the most
significant Indian case ever brought, which also is one of the largest
law-suits ever filed against the United States.

Gover really started to feel queasy after he learned that government
lawyers had agreed to give the plaintiffs thousands of records relating
to Indian trust accounts dating as far back as 1887. After the lawyers
had stalled on producing the records for more than two years, a federal
judge was about to hold defendants Gover, Interior Secretary Bruce
Babbitt and then-Treasury Secretary Robert E. Rubin in contempt last
winter.

As a lawyer and an Indian, Gover knew it would be impossible for the
government to produce the records, even though they only involved the
five named plaintiffs in the massive class action. Some of the documents
had been lost or destroyed by fire or flooding over the years. Some of
the remaining documents had been stored in wooden sheds, exposed to the
weather, and they were strewn loosely among discarded tires and other
rubbish. Many documents never had been cataloged.

The government had fallen asleep at the wheel, and the case was spinning
out of control. "As I got reports about what was going on out there, I
got more and more uncomfortable," Gover recalls. "I looked at the
[production] order, and I just said, 'Holy cow.'"

The mammoth case has been hanging around for three years since it was
filed in 1996. Despite nearly unfathomable complexity, Interior
Department officials admit the case either could have been settled or
dismissed long ago had it not been for the government's initial failure
to take it seriously. The Justice Department only assigned two lawyers
to it at first.

Compounding the problem, Justice Department lawyers and their superiors
got in over their heads when they started monkeying around with
unfamiliar Indian law. In the meantime, Justice initially ignored
routine but key legal strategies that could have pressured the tenacious
plaintiffs into resolving the case sooner. Worsening the government's
predicament even further was lax oversight of the litigation by the
client agencies.

"They misunderstood the breadth of the issues and the political
environment that surrounds them," says Gover, a member of the Pawnee
tribe of Oklahoma. "It requires so much specialized knowledge that the
attorneys on the case didn't have. But they also needed a client to fill
them in, and that wasn't done."

                             Roots Run Deep

In 1877, Chief Joseph of the Nez Perce finally laid down his arms. Just
one year after the Sioux and Cheyenne victory over Custer at Little
Bighorn, he eloquently surrendered in what has become one of the most
widely quoted Indian speeches of all time: "Hear me, my chiefs! I am
tired; my heart is sick and sad: From where the sun now stands, I will
fight no more forever."

A few years later, Chief Joseph said he never would have surrendered had
he known how the whites would treat his people. Today some Indians say
he would rise from the dead if he saw the way the government handled a
land allotment program that was supposed to make individual Indians
break away from their ancient tribal culture.

Elouise C. Cobell is one of those Indians. The 53-year-old banker from
the Blackfeet reservation in northwest Montana is the lead plaintiff in
the trust case. She can't forget her parents' constant complaining about
the government owing them money from income produced by land held in
trust for them and hundreds of thousands of other Indians. "Somebody had
to stand up and make them do the right thing," says Cobell, a founder of
the nation's first Indian-owned bank. "Somebody has to fix this. I don't
want my grandchildren to have to deal with this."

                    Tearing Up the Tribal System

The problems of Cobell and other Indians date to the 1887 General
Allotment Act. The act was supposed to break up the tribal system and
make Indians financially independent by doling out parcels of land,
usually in 80- to 160-acre chunks, and allowing them to reap the rewards
from leases for oil and gas wells, logging and other activities. Today
the allotments total about 11 million acres, nearly all scattered on or
near reservations west of the Mississippi River.

But few Indians spoke English in 1887 or were educated enough to manage
their land. So the government stepped in as trustee and was supposed to
pay them income the land produced.

The system quickly became a nightmare that continues today. The Bureau
of Indian Affairs and other agencies in the Interior Department
administer the trusts, and accounts maintained by the Treasury hold up
to $ 500 million at a time from the lease payments. But a Byzantine
record-keeping system makes it impossible for the government to keep
track of what it owes each Indian, meaning billions may have disappeared
over the last century.

To make matters worse, many Indians just don't understand the situation.
Consider 78-year-old Jim Little Bull and his wife, Mabel, 74, who've
lived all their lives on the Blackfeet reservation. Little Bull tries to
keep track of an allotment owned by his 98-year-old mother, Mary, who
lives in a nursing home. Instead of government royalty checks, he keeps
getting water bills for irrigation that's supposedly going on at the
property. One bill from May claims his mother owes $ 1,583. Little Bull
says he doesn't know where the land is. But he learned one thing when he
went to the local Indian agency office and asked about the charges. "The
land wasn't leased. It's not farming land, and there's no water on it,"
Little Bull says.

Besides the slipshod record-keeping, thousands of government checks are
returned to the Treasury because the intended recipients either have
died or can't be found. A glacial probate system takes so long to wrap
up deceased Indians' financial affairs that the ownership of allotments
splinters into minute portions, sometimes leaving hundreds of heirs with
an interest in a single parcel. Cobell says it took 14 years for her
father's estate to go through probate. "These are stories you hear over
and over again on every Indian reservation," Cobell says.

Gover says 60 percent of accounts in question are worth less than $ 25 a
year. But determining how much, if any, money is missing has proved
elusive, if not impossible.

The Indians say the case is worth $ 10 billion or more. The judge
presiding over the litigation has valued it at $ 4 billion. In 1989 the
accounting/consulting firm Arthur Andersen could only partially
reconcile tribal trust accounts not at issue in the current litigation,
and determined that it would cost up to $ 280 million to figure out how
much the individual accounts were supposed to hold. Congress abandoned
the reconciliation attempt after that.

"There's not a person among us who has a fact-based idea about what the
government's liability really is," Gover acknowledges.

Even the size of the plaintiff class remains in dispute. The government
estimates it at 300,000 members, while the Indians say the number is
closer to 500,000.

The Indian Affairs Bureau, today part of the Interior Department, and
its predecessor agencies have not escaped the attention of Congress and
other authorities since the early 19th century, when the government's
guardian-ward relationship with the Indians began.

In 1828, treaty negotiator Henry Rows Schoolcraft reported that the
government's care of Indian money was so slovenly that "one would think
that the appropriations had been handled with a pitchfork." A 1992 House
report titled Misplaced Trust complained that officials at the Indian
Affairs Bureau "have utterly failed to grasp the human impact of its
management of the Indian trust fund."

                          The Case From Hell

After decades of frustrated attempts at trying to find out what they
were owed, the Indians filed the lawsuit on June 10, 1996.

Plaintiffs lawyers say the government's mismanagement of the trusts
suggests it really hasn't changed all that much since the 1890 massacre
at Wounded Knee, S.D., placed a bloody coda on the nomadic Indian way of
life and ushered in an era of government stewardship of Indian lands.

Equally sloppy lawyering in the trust case over the last three years
hasn't done much to help the government redeem itself in the Indians'
eyes. Interior Solicitor John D. Leshy, who has been on the case since
the beginning, concedes that his office shares part of the blame with
the Justice and Treasury departments. "It has been an ugly case all the
way around," Leshy says. "It's the case from hell. What can I say?"

U.S. District Judge Royce C. Lamberth of Washington, D.C., has had
plenty to say. A former government lawyer himself, Lamberth has become
known during his 12 years on the bench as one of the toughest judges
around when it comes to public officials. He was more than a little
annoyed in February when he held Gover, Babbitt and Rubin in contempt
for the bungled document production.

"The federal government here did not just stub its toe," Lamberth wrote.
"It abused the rights of these plaintiffs to obtain these trust
documents, and it engaged in a shocking pattern of deception of the
court. I have never seen more egregious conduct by the federal
government." Cobell v. Babbitt, 37 F. Supp. 2d 6 (D.D.C.).

The case also saw the government mount a schizophrenic defense, first
trying to bargain with the Indians, then appearing to defy gravity with
arguments that it somehow shouldn't have to pay for the 100-year-old
trust mess.

Indecision from their superiors left the lone pair of Justice Department
lawyers initially assigned to the matter feeling hogtied in the
courtroom. "They didn't know whether to litigate or capitulate," says
one source familiar with the case.

That was just the warmup. The case grew curiouser and curiouser by the
time it went to trial on the merits in Lamberth's courtroom on June 10
-- the third anniversary of its filing. Before opening statements, the
government defendants admitted in court what everyone had known all
along: The trust system was in shambles and the government was unable to
account for what it owed the Indian beneficiaries. "They threw the
case," lead plaintiffs lawyer Dennis M. Gingold of Washington said
later.

Gingold wasn't far off. Although it probably sent shudders down the
spines of some Justice Department lawyers defending the government, the
"guilty plea" was their only choice at that point.

"That was initiated from Interior," Gover says. "There was no case to be
made that the system is working properly. We were not going to get up on
the stand and lie to the judge."

Babbitt eventually admitted that the government had breached its
fiduciary duty to the Indians, and that he shouldered a large part of
the blame. And, acknowledging that he was "skating on thin ice in the
view of many in my department and many in the Justice Department,"
Babbitt told Lamberth he would welcome limited court oversight of the
trust program.

The object, Gover says, was to force reform of a system that has been
the target of one scathing investigation and one steamed politician
after another but nevertheless has rolled along for decades in
bureaucratic inertia. If that meant an adverse court ruling, so be it.
"We just don't care about winning or losing the case," Gover says. "The
definition of victory is not to get them thrown out of court or win on
appeal. It's to fix the system."

                         Setting Things Right

The first phase of the trial on the merits ended in late July, with the
Indians alleging that the government breached its duty to them as
trustee and demanding an overhaul of the system through a
court-appointed special master separate from the oft-criticized Indian
Affairs Bureau.

Besides representing the defendant cabinet secretaries, Justice is
working with another special master, trying to straighten out the
document production that resulted in the contempt citations.

In the second phase, expected to begin this fall or winter, the Indians
are asking for a reconciliation of their accounts, which could cost more
than the Interior Department's entire yearly budget of $ 8 billion.

The case was fraught with potential political perils from the beginning.
Interior, with no money and no legal defense, needed a court order to
fix the system and to force the issue with a skeptical Congress beyond
the end of President Clinton's term in January 2001.
"The current environment for reform in the Congress could change and the
administration could change, but there's one player who won't change,
and that's Judge Lamberth," Gover says. "It helps us in dealing with
Congress to say we're under a court order."

Moreover, the Indian Affairs Bureau occupies a unique place vis-a-vis
the plaintiffs. While Justice must defend the interests of the United
States, the trust beneficiaries are the bureau's clients, and it must
defend their interests. "These people are not our enemies," Gover says.

                      Justice Wakes Up In A Jam

Justice, on the other hand, faced two daunting prospects. At one extreme
lay the possibility of opening the courthouse doors to other potentially
massive plaintiff classes with gripes about being shortchanged. At the
other lurked the risk of playing legal hardball in public with hundreds
of thousands of Indians sympathetic plaintiffs with a 500-year history
of being stepped on, first by European conquerors and later by the U.S.
government.

Lois J. Schiffer, the assistant attorney general responsible for the
case, would only say that it eventually became clear that two lawyers
weren't enough to do the job. Treasury Department officials did not
respond to repeated requests for interviews on their role.

Privately, senior officials at Justice bristle at suggestions that they
underestimated the magnitude of the litigation and did not pursue it
vigorously.

Nevertheless, after the contempt trial ended, the two original lawyers
were removed and Justice substantially beefed up its team to include as
many as two dozen law-yers by some counts. "After the contempt
proceeding, it was very clear that we had to pay full attention to the
interests of the United States," one official says.

Justice officials also acknowledge that they never took a possibly
crucial deposition from lead plaintiff Cobell before the class was
certified. Thus, they never fully exploited potential conflicts of
interest involving Cobell, lead plaintiffs lawyer Gingold and the
government's trustee for the accounts. Those issues could have affected
Lamberth's decision to certify the class.

And Justice only belatedly challenged Lamberth's jurisdiction and tried
to have the case sent to the Court of Federal Claims, which can award
money damages but lacks power to grant the broad equitable relief the
plaintiffs seek.

Lamberth is expected to rule on phase one by Labor Day, but the
government still stands a good chance of coming out ahead in spite of
itself.

The judge has expressed concern that injecting the court into an
executive agency's business would raise serious separation-of-powers
issues. And though the government admitted fault, it presented more than
a month of testimony on a new $ 60 million computer system it claims
will clean up the mess.

Despite the misgivings about the system's ability by the General
Accounting Office and some members of Congress, the judge appeared to be
impressed with those efforts. Some observers doubted Lamberth would
force the government to tear down the new system and start over from
scratch.

But intentionally or otherwise, it appeared that the government had done
its best to lose the case from Day One. Lawyers for the government and
the Indians agree that both sides entered the litigation in a spirit of
cooperation. The two sides agree on little else. "Everybody recognized
that this was a big mess and was interested in solving it," recalls
plaintiffs lawyer Keith M. Harper of the Boulder, Colo.-based Native
American Rights Fund.

Realizing that many of the records for the accounts were either missing
or in poor condition, the sides tried to negotiate a way to draw a
statistical sample to calculate how far out of balance the books were.
Those talks began to falter by late 1996. "This cooperative effort was
seeming more like a scam to delay," says Harper, a member of the
Cherokee Nation of Oklahoma.

So the case started getting nasty, with the Indians pressing for class
certification and production of trust documents relating to the five
named plaintiffs. Government lawyers helped draft a stipulated document
production order in November 1996 -- a move that would return to haunt
them.

In the meantime, however, the government's response to the plaintiffs
appeared less than spirited. Justice Department lawyers didn't oppose
class certification for the first phase of the case, in which the
Indians sought a declaratory judgment that the government violated their
rights as trust beneficiaries and an injunction forcing the government
to fix the system. Justice merely asked the court to delay certification
for the second part, which seeks the accounting that potentially could
cost billions.

The department, however, all but ignored Cobell. She had chaired an
advisory board to Paul M. Homan, another banker appointed by the
president under 1994 reform legislation as a quasi-independent trustee
over the Indian accounts.

Experts generally suggest taking limited depositions from named
plaintiffs to assure that they and their lawyers are conflict-free and
can adequately represent the class. But Justice lawyers failed to depose
Cobell to further explore her relationship with Homan and only mentioned
it in a footnote to their brief on certification. Cobell's participation
was crucial because she may be one of the few Indians with the
education, sophistication and resources to wage such a complex legal
war. Given that and significant disagreement within Indian country on
how to fix the system, Cobell's disqualification as a plaintiff could
have been a major blow.

                          Trial and Error

Missed altogether by Justice was Homan's later acknowledgment at trial
that he and lead plaintiffs lawyer Gingold had been "personal friends
and professional associates on a number of matters" since the late
1970s, when both worked for the comptroller of the currency. Homan
recommended Gingold, a trust law specialist, to Cobell when the idea of
suing the government first arose.

Homan abruptly quit his job in January, claiming Babbitt had stripped
him of the authority and money he needed to repair the system. The
government already had missed an early chance to put Homan's credibility
as a witness at issue. He gained instant credibility with Lamberth.

The judge later would call Homan's testimony at the contempt trial
"especially credible," citing his "vast experience in trust management
and with [turning around] failing financial institutions." When the case
reached the merits, Homan became a key plaintiffs witness, telling
Lamberth that before the administration got boxed in by the lawsuit, it
had planned to put off trust reform until after Clinton left office.
"It's a little bit sleazy how this case came about from inside the
department from a guy who couldn't get his way," Gover says. Homan
declined a request for an interview.

Justice also took its time in trying to get out from under the heavy
equitable thumb of the District Court and into the claims court, which
typically handles Indian suits for damages. Besides lacking the broad
equitable jurisdiction of a District Court, the claims court is
notoriously stingy with Indians. "The Indians can't win in the court of
claims, so the government always tries to get the case moved into the
court of claims," explains Nell Jessup Newton, dean of the University of
Denver College of Law, who has written extensively on the subject.

Although the first lawyers on the case drafted a motion to move it to
the claims court within weeks after it was filed, their superiors
rejected it. Justice didn't formally try to get it into claims court
until two years later.

Then Lamberth sliced and diced the government's argument, holding that
the accounting the Indians wanted did not add up to a claim for damages
in the strict sense: "In the plaintiffs' view, they only seek to balance
the checkbook, not to add any money to the checking account." 30 F.
Supp. 2d 24 (1998). In a footnote Lamberth casually cut from the
complaint passages, suggesting the Indians really were seeking damages,
including one demand that the defendants "restore trust funds wrongfully
lost, dissipated or converted."

Although the government at first tried to cut a deal with the Indians,
Justice Department lawyers eventually decided the plaintiffs had no
remedy, anyway, under a common-law breach-of-trust theory that helped
keep them in District Court. Treasury took it one step further, arguing
as late as May that Rubin owed the Indians no trust duty at all.

Again, Lamberth was not impressed. In denying a motion for summary
judgment, he noted that the 1994 trust reform act and earlier statutes
formally bestowed long recognized common-law trust rights on the Indians
and gave them remedies against the United States as a whole, including
Treasury. Lamberth also pointed to United States v. Mitchell (Mitchell
II), 463 U.S. 206 (1983), the last major Indian trust case decided by
the U.S. Supreme Court. Mitchell came from the claims court, and the
government then took the opposite stance that the Indians could indeed
seek remedies such as declaratory judgments and injunctions. "Of course,
the government had no problem accepting this position in Mitchell
because the equitable jurisdiction required for such ... remedies did
not lie with the court of claims, as it does with this court," Lamberth
wrote.

Gover chalks it up to amateurs dabbling in Indian law and his own
agency's failure to adequately keep tabs on the lawyers from Justice.
"That's where more client supervision would have been helpful," Gover
says. "We can't deny that we owe a responsibility to these people. It's
straight out of the Justice playbook. When you have guys who don't have
any background, they do what they usually do in a case against the
United States."

But the government's failed pledge to supply the named plaintiffs with
documents relating to their trust accounts really made the hair stand up
on the back of Lamberth's neck. Even largely unapologetic Justice
Department officials admit blowing that call.

                          The Document Drama

Growing tired of the defendants' informal promises to deliver the
materials, the Indians finally persuaded the government's lawyers to
stipulate to court-ordered production in November 1996. The effort was
doomed before it began.

The documents, some dating back to the formation of the first trusts in
1887, were stored at Treasury facilities, at different Interior
Department offices, and at more than 90 Indian agencies throughout the
country.

Besides the disarray of the records themselves, the government faced
other obstacles. A major warehouse in Albuquerque, N.M., contained
hundreds of boxes stacked on pallets. But they couldn't be immediately
inspected because the building was contaminated with deadly rodent-borne
hantavirus. Moreover, Lamberth read the production order to cover not
only the five named plaintiffs but their predecessors in interest, which
meant untold thousands of files would have to be analyzed. It could cost
as much as $ 80 million to give the plaintiffs everything they want,
Gover says. It was no wonder the government couldn't comply, but its
lawyers never told that to the court.

After two years of meager results, Lamberth finally ordered the
defendants last December to show cause for why they shouldn't be held in
contempt. The different agencies started casting about blame.

Justice shoved its two lone lawyers into the background and eventually
kicked them off the case, replacing them with a virtual army of
attorneys.

Justice's new top kid on the block, Phillip A. Brooks, cast one of the
first stones at Willa B. Perlmutter, the Interior Department lawyer who
negotiated the production order. "Ms. Perlmutter obviously didn't
understand what she had just agreed to," Brooks told Lamberth.

Joe Christie, an Interior official trying to run down the named
plaintiffs' documents, testified that Perlmutter told him to hold off on
production until they figured out how to do it simultaneously with the
larger statistical sample still being sought. Christie said he never
heard anything else about the plan. It turned out Perlmutter had left
Interior for private practice at the end of June 1997. She testified
that the conversation with Christie never happened.
Perlmutter declined comment. "I've been burned on this too many times
before," she says.

There was more. Treasury officials contended they at first didn't
believe that the production order applied to them. Lamberth called that
story "breathtaking," considering that Rubin was a named defendant and
that a Treasury lawyer had attended nearly all the court proceedings.

The government also couldn't even tell what materials it had turned over
to the Indians because it never kept a consistent log. And testimony
later indicated that the defendants didn't discover the hantavirus
problem in Albuquerque until July 1998 -- well after the production
order was issued and the deadline had passed.

On yet another occasion, government lawyers repeatedly told Lamberth a
tribal court in Winnebago, Neb., had stopped them from taking trust
documents from the Indian agency there. Lamberth later determined that
the tribal court order had expired long before.

                             The Fallout

In the end, about all government lawyers could do was apologize and hope
for the best. But they did wriggle free of personal responsibility. With
the plaintiffs' consent, the government lawyers managed to get
themselves and other employees off the hook by removing everyone but
Gover, Babbitt and Rubin from the show-cause order.

Lamberth let the secretaries off relatively easy, only ordering them to
pay the Indians' attorney fees and expenses, and appointing a special
master to oversee the document production. He warned, however, that
future violations wouldn't be treated so lightly.

Although the secretaries were left holding the bag, the contempt
proceedings did have other consequences for some government employees.
Christie, two years short of retirement, was transferred away from his
home and family in Albuquerque to Washington after he began to cooperate
with the plaintiffs. Besides being reassigned, the original Justice
Department lawyers, Andrew M. Eschen and Lewis Wiener, were subjected to
a required internal investigation by the department's Office of
Professional Responsibility. The pair's Washington lawyer, Peter R.
Ginsberg, says he expects the probe to wrap up this month.

Although he wasn't held in contempt, Wiener also has gone to the
District of Columbia U.S. Circuit Court of Appeals, claiming Lamberth's
criticism of his conduct was unwarranted and damaged his professional
reputation. "We just think the judge got it wrong," Ginsberg says.

Leshy, the Interior solicitor, says he has no plans to internally
investigate his office's conduct. The case is just too strange to draw
meaningful conclusions from it, Leshy says. But Leshy and Gover say
they've learned one lesson: Don't make promises you can't keep. "The
magnitude of this thing didn't really hit us or the Justice Department
at first," Leshy says. "We should have been back before the judge much
sooner, saying, 'Wait a minute.' That clearly was a huge mistake, and
we're paying for it."

The plaintiffs also didn't walk away unscathed. Gover testified later
that he had learned plaintiffs lawyers had lobbied congressional
staffers against supplemental appropriations the Indian bureau needed to
get the document production rolling and to kickstart the computer system
the bureau hopes will put its house in order. "It was a cynical attempt
to handcuff us," Gover says.

Plaintiffs lawyers say it didn't happen that way; they say they were
just trying to keep the government from blowing the money on something
else.

Although he inherited two miserable situations -- the trust system and
the conduct of the litigation -- Gover says he should have paid closer
attention once he got the Indian affairs job. "I never talked to the
lawyers," Gover says. "I only talked to my staff, and they said the
lawyers say this and the lawyers say that. I was not the client I should
have been." Gover says he's pleased with the new team of lawyers from
Justice and, perhaps more importantly, Lamberth also has complimented
them.

                         Treasury Misery

But the magnitude of the case apparently hadn't quite hit the Treasury
Department as of June. A few days before the merits trial began, yet
another Justice Department lawyer stood up in Lamberth's courtroom and
told the judge that Treasury workers had destroyed 162 boxes of uncashed
checks that might have been related to the case. Some documents had been
shredded in January, during the contempt trial and after Treasury
officials had assured Lamberth that they would preserve potentially
relevant materials.

Treasury officials hadn't even bothered to tell Justice about the
destruction for another three months. And when the special master sent
lawyers from Justice to investigate, they reported that Treasury lawyers
told so many different stories that they couldn't be sure why the
reporting delay occurred.

Lamberth was one unhappy camper. "I don't know what else a court can do
to ever get a handle on this," Lamberth said. "I had the very people
before me, and I can't get a handle on it. What's the court going to do
with all this now?" "I don't know what to say, your honor," replied
Justice Department lawyer John R. Tyler. He then whipped out the
proverbial 10-foot pole and distanced himself from the other lawyers who
already had provoked so much judicial ire. "I'm not responsible," Tyler
said. "I don't appear here on behalf of the defendants."

                       Struggles Over the Future

Whether the trust system ever can be fixed to everyone's satisfaction
may be the most difficult question of all.

Congress did enact significant reform legislation in 1994, spelling out
the Interior Department's long-recognized duties to the Indians and
calling for the appointment of a special trustee -- Homan -- to oversee
the accounts and fix the system.

As trustee, Homan encountered resistance from some tribal leaders with a
proposal to privatize the program. A similar proposal now pending in
Congress also has encountered opposition.

Gover and others attribute the resistance to a love-hate relationship
between the tribes and the Indian bureau. As federally recognized
sovereign entities, the tribes view the bureau more as their agent in
Washington than as a service agency. Despite their vehement criticism of
the bureau, many Indian leaders see any proposed changes as the first
step toward its dismantlement and the end of federal recognition.

Moreover, Gover says, trust means much more in the Indian world view
than it does in the black-letter law of treatises and hornbooks. Trust
includes treaties, case law, statutes, and, most of all, a moral
obligation. "When a tribal leader uses the term 'trust responsibility,'
he's talking about everything from soup to nuts," Gover says.

Chief Joseph evidently understood that kind of trust. When he died in
1904, the Indian agency physician reported the cause as a broken heart.
(ABA Journal, September, 1999)


ISLE OF CAPRI: Casino Vows To Defend Rico Claims Re Gaming In Las Vegas
-----------------------------------------------------------------------
One of the subsidiaries of Isle of Capri Casinos Inc. has been named,
along with numerous manufacturers, distributors and gaming operators,
including many of the country's largest gaming operators, in a
consolidated class action lawsuit pending in Las Vegas, Nevada. These
gaming industry defendants are alleged to have violated the Racketeer
Influenced and Corrupt Organizations Act by engaging in a course of
fraudulent and misleading conduct intended to induce people to play
their gaming machines based upon a false belief concerning how those
gaming machines actually operate and the extent to which there is
actually an opportunity to win on any given play. The suit seeks
unspecified compensatory and punitive damages. A motion for
certification of the class is currently pending before the court and no
discovery as to the merits of the alleged claims has begun. We are
unable at this time to determine what effect, if any, the suit would
have on our financial position or results of operations. However, the
gaming industry defendants are committed to defend vigorously all claims
asserted in the consolidated action.


ISLE OF CAPRI: Property Owners Not Having Gaming Nearby File Suit In MI
-----------------------------------------------------------------------
In February 1998, the Isle-Vicksburg was named as a defendant in an
action brought by an individual who owns property adjacent to the Big
Black River in the eastern part of Warren County, Mississippi and
several other parties. Also named as defendants in the action are two
other operators in the Vicksburg market and one of the largest banks in
the State of Mississippi. The amended complaint alleges that the
defendants entered into an agreement to conduct a campaign opposing a
gaming application for a site next to property owned by the plaintiffs.
The plaintiffs allege that because of this agreement trade was
improperly restrained and competition in the gaming business was
reduced. The plaintiffs further allege that the defendants conspired for
the purpose of injuring the plaintiffs' property rights. The plaintiffs
seek compensatory and punitive damages in the amount of $238.0 million.
We have denied the allegations contained in the amended complaint and
intend to vigorously defend all claims and allegations in the action. A
trial date has been set for October 18, 1999.


JUSTICE DEPT: Former Prosecutor Tells Why He Doesn't Join Class On OT
---------------------------------------------------------------------
Having served as a federal prosecutor from 1987 to 1994, I apparently am
eligible for recovery of overtime pay for those many hours I labored
past 5 on the government's cases. Federal labor laws require overtime
pay for employees working more than 40 hours a week and -- somewhat
surprisingly -- Department of Justice lawyers are not exempt. A
well-known criminal defense firm, Williams & Connolly in Washington,
D.C., as part of its new labor law practice, has decided to champion the
claims of those poor downtrodden federal attorneys whose rights were
trampled. A class action has been filed, and the Department of Justice's
own internal memoranda appear to acknowledge liability.

But while the sum might be considerable (although proof could be a
problem; the U.S. attorney's library where I worked was usually deserted
at one in the morning), I won't be joining the class.

When I was offered a job with the United States Department of Justice, I
was honored to be allowed to work on behalf of the people of the United
States in the federal courts. Sure I took a pay cut from my private firm
job; it seemed worth it to me then, and it still does now. I took the
job as public service, to further, if only for a few years, the ideals I
had gone to law school to pursue.

I knew when I took the job that I could make at least twice as much at a
downtown law firm. I also knew that I wouldn't be paid overtime, and
that there would be overtime aplenty. Indeed, it was the attraction of
those overtime hours the mythic image of laboring mightily, often alone
and outnumbered, on behalf of Good against the forces of Evil -- that I
hungered for.

I wasn't disappointed. Working around the clock and on weekends to
prepare for criminal trials was common. Depositing my appellate briefs
at midnight in the mailbox across from the federal building was a
regular routine. Lack of resources and support personnel in the
government often contributed to these late hours -- yet the same
government seemed to be spending millions for military planes that
didn't work and exotic drug eradication campaigns in foreign countries.
I did at times feel taken advantage of, unsupported and undercompensated
compared to my law school classmates working for the big firms. And --
the nerve! -- Mother Justice still nickel-and-dimed me on vacation
hours: use your leave to attend a bar association meeting or take your
child to soccer!

But then I'd get together with my big firm colleagues and trade, as
young lawyers do, war stories. Surprise -- they seemed to be envious of
my low-paying, overworked position. I was actually getting into court?
Arguing the briefs I wrote myself? Trying real cases, in Hawaii and
California, on my own? Putting drug dealers and money launderers in
jail? Full adult responsibility and achieving results that were "good
for the community?" Hey - - can you help us get a job at the U.S.
attorney's office? Who cares what you get paid!

I consider it an honor to have been permitted to stand up in court and
say " Rory Little for the United States." I was privileged to tell
juries that "the people of the United States" ought not have to suffer
the conduct that the Department -- my Department -- was working hard to
prosecute. I am happy to have had the job, which former prosecutors
uniformly describe as "the best job of my life." I took it with eyes
wide open, knowing exactly how little I would be paid, how hard I would
work -- and how much I wanted it over higher paying jobs downtown. (And
by the way, $60,000 to $100,000 a year is hardly peanuts; prosecutors
working for such salaries are far from downtrodden employees at the
minimum wage level being cheated of fair overtime compensation.)

So when Williams & Connolly comes calling, I won't be joining the class
of former federal lawyers who now claim they should have been paid more.
I don't deny the legal validity of the claim nor can I criticize other
DOJ lawyers who feel they are entitled to what the law seems clearly to
demand. But I am a professional, and I can exercise my free will. Public
lawyers hold and serve the public trust. They were, and are,
professionals who should be proud to work as hard as it takes to achieve
the best results. If they don't like the compensation, well, those
high-paying dog-eat-dog private sector jobs are still calling their
siren song. On this lawsuit, at least, I'll be happy to be a potted
plant.

Rory Little is a former federal prosecutor who teaches law at Hastings
College of the Law in San Francisco. (The Recorder 9-15-1999)


NATIONAL HEALTHCARE: Heather Hill Nursing Home Again Named In Lawsuit
---------------------------------------------------------------------
National Healthcare, which operates Heather Hill Nursing Home, faces
another negligence lawsuit. The same nursing home that a jury slammed
with a $ 6.5-million negligence verdict earlier this year is being sued
by a Port Richey man who says the facility allowed his wife to develop a
fatal bedsore.

The April case against Heather Hill Nursing Home and National Healthcare
actually cost the company $ 10-million. Officials decided to settle the
lawsuit for an additional $ 3.5-million before the jury could debate
punitive damages.

The new case against National Healthcare, which operates Heather Hill,
involves allegations similar to the previous one. The first case
involved Marion Heide, 89, who was neglected by the nursing home and
developed a bedsore. The sore festered and led to the amputation of
Heide's leg.

In the case filed by Ray S. Kelly, Heather Hill is again accused of
allowing a patient to develop a bedsore. The sore on 84-year-old Zelda
Kelly's back appeared after she checked into the New Port Richey nursing
home in May 1997, according to the lawsuit.

Just two months after she arrived at Heather Hill, Kelly was transferred
to the hospital with an infection so widespread that it plunged her body
into shock, the lawsuit said. Kelly died two weeks after leaving the
nursing home. Ray Kelly declined to comment on the case, citing the
advice of his lawyer. The lawyer, Steven Ruth of St. Petersburg, did not
return telephone messages from the Times.

Tennessee-based National Healthcare's spokeswoman also did not want to
comment on the lawsuit.

Mrs. Kelly was from Pennsylvania. She moved here 41 years ago and worked
as head cook for Dixie Hollins High School in St. Petersburg.

National Healthcare, one of Florida's largest operators of nursing
homes, faces a number of legal challenges in addition to Kelly's.
The company is the target of a billing-fraud lawsuit brought by a former
employee and the U.S. government in Tampa's federal district court.

Also pending is a $ 100-million lawsuit filed by the law firm of Wilkes
& McHugh, well-known for suing nursing homes. The firm has asked for
class-action status to sue on behalf of all of the residents of several
homes run by National Healthcare. (St. Petersburg Times 9-17-1999)


SEATTLE SUPERSONICS: FLSA Prohibits Retaliation For Complaints
--------------------------------------------------------------
When the management of the Seattle Supersonics basketball team halted
overtime payments for ticket sales account executives, two
employees-Laura Lambert and Chuck Viltz complained internally to the
management on behalf of all but one co-worker. Lambert also called the
Department of Labor, and was threatened with termination by the team's
controller. Although Lambert's claim was settled, all of the ticket
executives were fired except the one who had refused to join in group
complaints. Six of the ex-employees sued, alleging retaliation in
violation of the Fair Labor Standards Act (FLSA).

A federal district court jury awarded damages for wages, emotional
distress and $ 12 million punitive damages, which were later reduced to
nearly $ 1.4 million per plaintiff. The full U.S. Court of Appeals for
the 9th Circuit ruled 9-2 to uphold the judgment. The ruling matches the
position of seven other circuits; only the 2nd Circuit holds
differently. Lambert vs. Ackerly, 9th Cir. (en banc), No. 96-36017,
6/10/99.

                              Impact

Employers may not retaliate against employees who complain about the
employer's pay practices, even if such grievances merely involve
internal complaints to management. Employers should remember that a
single employee complaining about wages may also be seen as a protected
activity under the National Labor Relations Act. wasn't required to
arbitrate and could sue in civil court. So not only was the agreement
buried within the text of the employee handbook, it was difficult to
understand. Those two things together make it procedurally
unconscionable. Then the court must decide if the terms shock the
conscience, and here they said they did.

                           How was that?

The big thing for this court was that Kinney was forced to waive all her
rights to the benefits and protection of suing in court, but United
Healthcare retained those rights. There was also a cap on recovery-a
limitation to the amount she could recover. Again that's something we
see more of in older arbitration agreements; there might be a statement
that no punitive damages or emotional distress can be recovered. They
also actually had a provision in the agreement that Kinney's employment
was at-will-she could be terminated at any time with or without cause,
and the arbitrator could not find to the contrary. So they actually
prohibited her from pursuing a cause-of-action type of claim. The courts
said you can't do this. You can't have someone stipulate that they are
at-will and will not sue to the contrary.

                  How Indicative Are These Cases Of
              What's Wrong With Agreements In General?

Most of the errors these companies made are not that unusual. If
someone's arbitration agreement is five years old or even three years
old, they should take a look at it. There are plenty of arbitration
agreements that have caps on recovery or punitive damages. And there are
plenty of agreements that say the employer can sue in civil court for
misappropriation of trade secrets, unfair competition and similar
claims. And when you think about it, when an employer sues an employee
-- that's probably what they're going to be suing for. What that's
saying is the employee has to use arbitration, but the employer can sue
in civil court.

         What Advice Would You Give In Light Of These Cases?

First look at the agreement and consider how fair it is. Try to put
yourself in the perspective of the employee. Is it comprehensible, is
the employee going to understand it and what it means? Are the terms too
difficult for the employee to understand or read in legalese, or is it
in plain English? Are the terms fair? From the perspective of what's
literally there, does it provide the same protections, equally and
fairly for the employee and employer in its terms? Then go beyond to
look at it in practice. Is it going to be fair?

                            What Next?

Once you've got an arbitration agreement and are happy with it, think
how you're going to distribute it to employees. If you're a
sophisticated company, when someone comes in for a job interview, you
might mention at that point that there's an arbitration agreement that
employees sign. Then when you make an offer, give the agreement at that
time, so when the candidate is considering the offer he or she can
consider whether to sign the arbitration agreement and whether to
discuss it with you or make any changes. Don't wait until someone's
already quit their job and accepted employment with you.

Can signing an agreement ever be a condition of employment?

Yes, because even if it's considered procedurally unconscionable, it may
not be thrown out as long as the terms are fair.

What about things like short statutes of limitations for filing a claim?

Before instituting a shorter statute of limitations than those that are
statutorily imposed, I'd consider the risks of doing it. If the normal
statute of limitations in your state is a year, I'd think twice before
drafting a six-month statute in your agreement. It might be upheld, it
might not. The same thing with limits on discovery. A lot of older
agreements have those because we used to think it made things go more
quickly and inexpensively. Now courts are saying a severe restriction on
discovery could be unconscionable. Keep in mind that the more limits
there are, the more likely it's to be held unconscionable.


SHALALA: HMO Case Bounced Back To CA Judge After 2 Years
--------------------------------------------------------
San Francisco Lawyers for the elderly and disabled are headed back to
Arizona, where they hope a federal judge doesn't change his mind in a
case that affects millions of Medicare beneficiaries.

Two years ago, U.S. District Judge Alfredo Marquez held that Medicare
patients have a constitutional right to go to court if HMOs deny
treatment or other services. Specifically, he said such denials
constitute a "state action" invoking constitutional protections because
HMOs are acting as agents of the government when they contract to
provide Medicare benefits. Marquez's ruling ordered the federal
government to improve the process by which beneficiaries could appeal
denials and to enforce the rules on their behalf.

Earlier this year, however, the U.S. Supreme Court bounced the case back
to the 9th Circuit U.S. Court of Appeals, which had shocked the
government last year by upholding Marquez's ruling. Two weeks ago, the
9th Circuit remanded the case back to Marquez. Both courts want the
Phoenix-based judge to re-evaluate Grijalva v. Shalala in light of
Medicare-related appeal process changes that went into effect on Jan.

More importantly, though, they want the case compared with American
Manufacturers Mutual Insurance Co. v. Sullivan, a 6-month-old Supreme
Court ruling that elaborates on what constitutes "state action."

Plaintiffs lawyers insist that HMOs are "state actors" because they are
regulated by the government and are providing benefits on behalf of the
government. If they're correct, then disputes between HMOs and
beneficiaries could be decided in court rather than at the discretion of
Health and Human Services Secretary Donna Shalala, whose agency
contracts with HMOs for Medicare services.

Federal lawyers feel that would usurp Shalala's authority and are
confident they can prove that HMOs aren't acting as government agents
when they provide Medicare benefits. "Instead," Solicitor General Seth
Waxman wrote in papers filed with the Supreme Court, "HMOs responding to
treatment requests by Medicare enrollees exercise their own private
judgment."

A lot rests on Marquez's decision. Nearly seven million people currently
receive Medicare benefits through health maintenance organizations, and
that number is expected to increase exponentially. Many of them find the
current appeal process confusing or just plain unresponsive. "We have
hundreds of declarations from the highest educated to the lowest
educated, and none of them could break down the barriers," said
co-plaintiffs' lawyer Lenore Gerard, of San Francisco's Legal Assistance
to the Elderly.

At its core, Grijalva is fairly simple. Medicare patients sued as a
class, arguing that they had no fair, clear process for appealing HMO
decisions denying treatment. They also contended that Shalala's HHS
Department wasn't enforcing federal rules aimed at assuring timely
appeals or providing adequate notice explaining denials. "If you're
dissatisfied [with an HMO decision], you can't start the appeal process
until you get an official denial from the [health] plan," says Mary
Ellen Bliss, a spokeswoman for the Washington, D.C.-based American
Association of Retired Persons, which filed as an amicus curiae along
with 17 other agencies for the elderly and disabled. "But often [HMOs]
take no action," she added. "That initial step gets delayed or never
gets done at all."

The 9th Circuit, which last year spelled out several specific
improvements to the appeal process, remanded the case to the Arizona
trial court to determine whether it was mooted by appeal process changes
enacted by the Balanced Budget Act of 1997. It also asked for a
comparison with Sullivan, which held that treatment denials issued by a
private insurer on behalf of Pennsylvania's workers' compensation system
did not constitute "state action" and, therefore, weren't entitled to
heightened constitutional protections. Sally Hart, who represents
Tucson, Ariz.'s Center for Medicare Advocacy Inc. in the case, called
the remand "a setback." And S.F. lawyer Gerard admitted that things seem
to be going against the plaintiffs after having looked so favorable only
a year ago. "It's going against us in the sense that we filed the class
action six years ago," she said. "It's going against us in terms of
getting a final judgment that will be helpful to our clients."

                      Different Circumstances?

Justice Department lawyers representing Shalala refused to comment. So
did an HHS spokeswoman on the lawyers' advice. But in 9th Circuit papers
requesting a remand, Justice Department lawyers argued that Sullivan
could undermine the court's original ruling in Grijalva and that appeal
process revisions enacted through the Balanced Budget Act more than
address the changes requested by the court last year.

"Circumstances are considerably different now," Washington, D.C.-based
Justice Department lawyers Barbara Biddle and Jeffrey Clair wrote. "The
regime challenged by plaintiffs in district court and reviewed by this
court has been replaced by new appeal and grievance protections that
significantly enhance the procedural rights afforded Medicare
beneficiaries." For example, they and Solicitor General Waxman wrote in
court documents, the new procedures, among many things, require HMOs to
ensure that their denial decisions are understandable and to make
decisions within 72 hours for urgent services and 14 days for
non-emergency cases. "Given the extensive procedural protections now
afforded Medicare beneficiaries," Biddle and Clair wrote, "the reviewing
court might well conclude that plaintiffs receive all the process 'due'
under the Constitution."

But plaintiffs' lawyers Gerard and Hart say that's not true, that the
changes made by HHS don't comply with the demands requested by the 9th
Circuit. For example, they said, the new rules don't comply with the
court's request for a five-day turnaround in written denial notices,
fail to provide for an independent non-HMO decision-maker in expedited
reviews, and do not follow the court's mandate that the government stop
contracting with HMOs that do not abide by the law. Furthermore, Gerard
says, the Justice Department had argued before the trial court and the
9th Circuit that the changes in the Balanced Budget Act had no effect on
the case. "Then," she said, "they changed their mind." As for Sullivan,
Gerard says the case is apples to Grijalva's oranges." Unlike Sullivan,
where the state action inquiry focused on private decisions to withhold
payment for medical care based on professional standards, with no state
obligation to pay or provide benefits," she wrote in a Supreme Court
brief, "the state action inquiry in the present case turns on HMO
coverage determinations which are based on federal law and the
governmental obligation to provide benefits. That is the critical
difference."

In his Supreme Court papers, though, Waxman argued otherwise. "[The
plaintiffs] assert that Sullivan is 'vastly different' because 'the
state action finding' in this case is 'predicated on a comprehensive
federal statutory scheme establishing the Medicare program,'" he wrote.
"But the benefits scheme at issue in Sullivan workers' compensation was
no less comprehensive or statutory than Medicare."

Bliss of the AARP says that while the government has taken some steps
toward bettering the appeal process, there is still work to be done. "We
would like to see what's on the books carried out the way it's supposed
to be," she said.

For their part, Gerard and Hart don't believe they'll have to start the
case completely from scratch once they get back to Arizona federal court
because, they say, Judge Marquez is well-versed on the case. But any
delay makes them worry about the health and welfare of their clients.
"The people who are the sickest and the oldest and the most
unsophisticated about demanding their rights are those who fall by the
wayside," said Hart, an associate at Tucson's Bogutz & Gordon. "The
people who are hit the hardest are those with chronic conditions who
need to be in nursing homes." This story originally appeared in The
Recorder. (The Legal Intelligencer 9-16-1999)


SHONEYS INC: Fl Ct Denies Class On Pay; Voluntary Dismissal At Ap Ct
--------------------------------------------------------------------
Baum

On April 17, 1998, five former TPI hourly and/or fluctuating work week
employees filed the case "Deborah Baum, et al. v. Shoney's, Inc. f/k/a
TPI, Inc." ("Baum") in the U.S. District Court for the Middle District
of Florida. TPI was the Company's largest franchisee and was acquired by
the Company in September 1996. Plaintiffs purported to represent
themselves and a class of other similarly situated former and current
employees of TPI. Specifically, plaintiffs allege that defendant failed
to compensate properly certain employees who were paid on a fluctuating
work week basis, failed to compensate employees properly at the required
minimum wage, and improperly required employees to work off the clock.
Plaintiffs allege that such acts deprived plaintiffs of their rightful
compensation, including minimum wages, overtime pay, and bonus pay.

On December 3, 1998, the Court denied plaintiffs' motion to
provisionally certify the class and issue notice to putative class
members. On January 4, 1999, plaintiffs filed a notice of appeal
regarding the Court's ruling denying class certification. On February
18, 1999, the plaintiffs filed a motion in the Court of Appeals to
voluntarily dismiss their appeal with prejudice, and on February 23,
1999, the parties filed a joint stipulation in the District Court to
dismiss the plaintiffs' complaint with prejudice. On March 16, 1999, the
District Court granted the parties joint stipulation to dismiss the
plaintiffs' complaint with prejudice, and on March 17, 1999 the case was
closed. On July 21, 1999, the Court of Appeals entered an order
dismissing the plaintiffs' appeal.

In December 1997, plaintiffs' counsel in Belcher I, Belcher II, and
Edelen indicated that it may file a lawsuit that would involve the
Captain D's concept and would purportedly involve allegations similar to
those in Belcher To date, plaintiffs' counsel has not served the Company
or the Company's counsel with such a suit, nor has plaintiffs' counsel
provided any further indication that it may file such a suit. The
Company is presently unable to assess the likelihood of assertion of
this threatened litigation.


SHONEYS INC: Settles Claims In Tenn Re OT Pay & Pay For Hourly Workers
----------------------------------------------------------------------
Belcher I

On December 1, 1995, five current and/or former Shoney's Restaurant
managers or assistant restaurant managers filed the case of "Robert
Belcher, et al. v. Shoney's, Inc." ("Belcher I") in the U.S. District
Court for the Middle District of Tennessee claiming that the Company had
violated the overtime provisions of the Fair Labor Standards Act. The
Court granted provisional class status and directed notice be sent to
all former and current salaried general managers and assistant
restaurant managers who were employed by the Company's Shoney's
Restaurants during the three years prior to filing of the suit.
Approximately 900 potential class members opted to participate in the
suit as of the cutoff date set by the Court. After the cutoff date set
by the Court, approximately 240 additional potential class members opted
to participate in the suit.

On or about April 7, 1998, the plaintiffs filed a motion for partial
summary judgment in Belcher I. The plaintiffs moved for summary judgment
on the issue of liability based on the Company's alleged practice and
policy of making allegedly improper deductions from the pay of its
general managers and assistant restaurant managers.

In April 1998, plaintiffs made a demand to settle the case for $45
million plus costs and attorney's fees, which the Company rejected. On
December 21, 1998, the Court granted plaintiffs' motion for partial
summary judgment on liability, dismissed 192 plaintiffs who did not
satisfy the provisional class definition established by the Court (which
included 120 of the roughly 240 opt-in plaintiffs who failed to timely
file their consents), and set the case for a trial on damages to
commence on June 1, 1999. On January 21, 1999, the Court denied the
Company's motion to reconsider or certify the order for interlocutory
appeal.

As a result of the Court's ruling on liability, the Company recorded a
charge of $3.5 million in the fourth quarter of fiscal 1998,
representing an estimated amount of potential damages, fees, and costs
that it might be required to pay if the Court's December 21, 1998 ruling
on liability ultimately had been upheld and damages awarded. On January
21, 1999, the Court also ordered the parties to mediate in an attempt to
determine whether this case, Belcher II and Edelen (discussed below)
could be resolved through settlement.

On March 20, 1999, the parties agreed to the material terms of a global
settlement of Belcher I, Belcher II and Edelen. Under the agreement, in
exchange for the dismissal of the three cases with prejudice and a
release by the plaintiffs relating to the subject matter of the cases,
the Company agreed to pay $18 million in three installments as follows:
$11 million upon Court approval of the settlement and dismissal of the
cases, $3.5 million on October 1, 1999 and $3.5 million on March 1,
2000. The settlement required the Company to record an additional charge
of $14.5 million for the first quarter ended February 14, 1999 (in
addition to the $3.5 million previously recorded in the fourth quarter
of fiscal 1998).

On July 7, 1999, the Court dismissed with prejudice the 34 persons who
were not properly in the case and entered final judgment approving the
settlement and dismissing with prejudice the Belcher I action against
the Company. In accordance with the approved settlement of Belcher I,
Belcher II and Edelen, the Company paid $11 million into a qualified
settlement fund on July 14, 1999.

Belcher II

On January 2, 1996, five current and/or former Shoney's hourly and/or
fluctuating work week employees filed the case of "Bonnie Belcher, et
al. v. Shoney's, Inc." ("Belcher II") in the U.S. District Court for the
Middle District of Tennessee claiming that the Company violated the Fair
Labor Standards Act by either not paying them for all hours worked or
improperly paying them for regular and/or overtime hours worked. The
Court granted provisional class status and directed notice be sent to
all current and former Shoney's concept hourly and fluctuating work week
employees who were employed during the three years prior to filing of
the suit. Approximately 18,000 potential class members opted to
participate in the suit as of the cutoff date set by the Court. After
the cutoff date set by the Court, approximately 1,800 additional
potential class members opted to participate in the suit.

On or about July 10, 1998, plaintiffs filed a motion to amend their
complaint to add state law class action allegations of fraud, breach of
contract, conversion, and civil conspiracy; add the Company's Senior
Vice President and Controller and certain unnamed individuals as
defendants; and include a prayer for $100 million in punitive damages.
That motion was granted by the Court on January 4, 1999, and trial was
scheduled to commence on January 4, 2000.

As noted above in the description of Belcher I, on March 20, 1999, the
parties agreed to a global settlement of this case, Belcher I and
Edelen. On July 7, 1999, the Court dismissed with prejudice the claims
of three persons who were not properly in the case and entered an order
preliminarily approving the settlement with respect to the Belcher II
plaintiffs. The order also authorized the issuance of notice to members
of the class having state law claims informing them of their right to
file written objections to the settlement or requests to be excluded
from that portion of the settlement. The Court established an August 19,
1999 hearing date to resolve objections (if any) filed with the Court
and determine whether final judgment should be entered in the case. On
July 8, 1999, notice was sent to the class members having state law
claims. No written objections to the settlement or requests to be
excluded were filed with the Court on or before the August 12, 1999
cutoff date established by the Court. A hearing was held on August 19,
1999, and on August 20, 1999, the Court entered an order for final
judgment approving the settlement and dismissing with prejudice the
Belcher II action against the Company. In accordance with the approved
settlement of Belcher I, Belcher II and Edelen, the Company paid $11
million into a qualified settlement fund on July 14, 1999.

Edelen

On December 3, 1997, two former Captain D's restaurant general managers
or assistant managers filed the case "Jerry Edelen, et al. v. Shoney's,
Inc. d/b/a Captain D's" ("Edelen") in the U.S. District Court for the
Middle District of Tennessee. Plaintiffs' claims in this case are very
similar to those made in Belcher I.

On March 28, 1998, the Court granted provisional class status and
directed notice be sent to all former and current salaried general
managers and assistant general managers who were employed at the
Company's Captain D's concept restaurants during the three years prior
to the filing of the suit. Notice was issued to potential class members
on or about July 28, 1998. Approximately 250 potential class members
opted to participate in the suit as of the cutoff date set by the Court.
After the cutoff date, approximately 90 additional potential class
members opted to participate in the suit. On December 21, 1998, the
Court transferred 11 persons who filed consents in Belcher I from that
case to Edelen.

As noted above in the description of Belcher I, on March 20, 1999, the
parties agreed to a global settlement of this case, Belcher I and
Belcher II. On July 7, 1999, the Court entered final judgment approving
the settlement and dismissing with prejudice the Edelen action against
the Company. In accordance with the approved settlement of Belcher I,
Belcher II and Edelen, the Company paid $11 million into a qualified
settlement fund on July 14, 1999.


SHONEYS INC: Waitress' Claim Over Pay Not Given Class Status In Alabama
-----------------------------------------------------------------------
Griffin

On August 5, 1997, an hourly employee filed the case of "Regina Griffin
v. Shoney's, Inc. d/b/a Fifth Quarter" ("Griffin") in the U.S. District
Court for the Northern District of Alabama. Plaintiff claimed the
Company failed to pay her minimum wages and overtime pay in violation of
the Fair Labor Standards Act, and claimed to be entitled to an
injunction, unpaid wages, interest, and expenses. On February 24, 1998
the plaintiff served the Company with a Motion for Leave to Amend
Complaint with an accompanying proposed Amended Complaint for Violation
of Fair Labor Standards Act seeking to pursue the case as a class action
on behalf of plaintiff and "all persons who have performed the services
of waiter or waitress for Shoney's (d/b/a Fifth Quarter)."

On August 24, 1998, the Company filed a Motion to Dismiss or, in the
Alternative, for Summary Judgment as to the plaintiffs' claims. Prior to
a decision on that motion, plaintiff filed a motion to amend her amended
complaint, in order to substitute Shoney's and TPI as defendants in the
case. The Court granted plaintiff's motion and on November 23, 1998,
Shoney's and TPI filed a consolidated answer to plaintiff's second
amended complaint.

On April 9, 1999, plaintiff moved for collective action certification,
which the Company opposed. At this time, the Court has denied, without
prejudice, plaintiff's motion to proceed on a collective action basis.
The plaintiff, however, has been permitted to conduct discovery on this
issue, with leave to refile a request for collective action
certification at a later date. Although plaintiff's counsel has stated
orally that they intend to renew the certification issue, to date, no
relevant motion has been served on the Company and the only additional
discovery sought by plaintiff has been the deposition of one of
plaintiff's general managers.

On July 30, 1999, the Company filed a motion for Summary Judgment,
requesting dismissal of all plaintiff's claims. Plaintiff's response is
due four days prior to the hearing date on the motion, which presently
has not been scheduled by the Court. If the Company's pending motion for
Summary Judgment is denied, the trial, which is scheduled to commence on
or after September 1, 1999, would involve only the claims of the single
named plaintiff under the Court's present rulings. Management believes
it has substantial defenses to the claims made in this case and intends
to vigorously defend the case.


SIDNEY DORSEY: Hearing On Jail Conditions Scheduled Before Superior Ct
----------------------------------------------------------------------
Nearly two months before 14 inmates filed suit against DeKalb County
Sheriff Sidney Dorsey alleging brutality and poor medical care, a top
jail official warned Dorsey that staffing levels at the jail were "well
below" necessary safety requirements and could be constitutionally
challenged.

In a memo from Maj. Dennis Cheatham to Dorsey dated July 14, Cheatham
said the jail's staffing shortage was quickly becoming critical, adding
that morale among jail personnel was declining. "Our responsibility of
operating a safe and secure facility for the community at large, our
staff and inmates, is falling way short," Cheatham wrote. "We continue
to fall below the mandated staffing needs to supervise our inmate
population."

Dorsey said that Cheatham wrote the memo to respond to his idea of
staggering staff personnel to high peak times and areas in the jail.
"It wasn't anything initiated by him," Dorsey said. "I directed I was
looking at ways to manage our present situation. That was simply his
reply."

Dorsey said he explained the staffing situation to the grand jury when
jurors visited the jail and offered them a copy of the memo. "We were
operating the jail in spite of (Cheatham's) comments or opinion . . . in
an efficient manner," Dorsey said. "This was truly during a time when we
had just frozen 60 of our positions. Sure he was rather frustrated and
we all were."

The class action lawsuit against Dorsey, filed Sept. 7 in Superior
Court, alleges short-staffed shifts at the jail often led to 22-hour
lock-downs and substandard medical care. The suit alleges that inmates
were beaten by guards and fed inedible food. "Understaffing often causes
many inmates to miss doctor or clinic appointments, when there are
insufficient personnel to provide the necessary transportation to all
such inmates," the suit alleges.

Dorsey said inmates did not suffer due to the understaffed condition of
the jail and said he was paying guards to work overtime during the
shortage.

Dr. Roderick Edmond, director of medical services at the jail, said
allegations of medical mistreatment made by the suit are untrue. "The
majority of plaintiffs listed in the suit have been seen over and over
by medical staff," he said. "One of the motivating parties behind this
suit has received over a half million dollars in health care from the
state and has been seen in the clinic more than 80 times." Edmond said
that although he doesn't deny that there have been some mistakes made in
medical treatment at the jail, inmates receive "far superior" care while
in the jail than when they were free.

The chief of jail operations, Linda Smith, said the suit's allegations
of brutality, including what the suit calls a "goon squad," are
unfounded. "We are extremely humane and careful to follow all procedures
when it comes to disciplining our inmates," she said.

Dorsey said DeKalb County commissioners approved measures to increase
the jail staff by 33 detention officers at a meeting on Aug. 23.

A hearing on the lawsuit is scheduled for Monday before Superior Court
Judge Joseph Fuller. (The Atlanta Journal and Constitution 9-16-1999)


STORAGE TECHNOLOGY: Denies Former Staff ADEA & ERISA Claims In Colorado
-----------------------------------------------------------------------
On September 1, 1999, at a hearing before the U.S. District Court for
the District of Colorado (Court), the Court vacated the trial date
scheduled for October 1999 in connection with a suit filed by certain
former employees of the Storage Technology Corp. alleging violations of
the Age Discrimination in Employment Act (ADEA) and the Employee
Retirement Income Security Act (ERISA). The Court has scheduled oral
arguments on a number of pending motions filed by the parties for
November 1999. A trial date will not be scheduled until the Court has
ruled on the pending motions.

Certain former employees of the Registrant filed suit on October 3,
1995, in the Court against the Registrant. The amended suit alleged
violations of the ADEA and the ERISA between the period of April 13,
1993, and December 31, 1996. On November 26, 1997, the Court granted the
plaintiffs' request to proceed as a class action on the ADEA claims. On
November 9, 1998, the Court granted the plaintiffs' request to proceed
as a class on the ERISA claims. On March 1, 1999, the Court denied the
Registrant's appeal on the certification of the ERISA class.
Approximately 1,300 persons are eligible members of the ERISA class,
which includes approximately 400 members of the ADEA class. The
plaintiffs seek, among other things, compensatory damages in an
unspecified amount, including the value of back pay and benefits, and
exemplary or liquidated damages. The Registrant has filed an answer
denying both the ADEA and ERISA claims.


TRENTON: Students Trained For Jobs In Computer Sue School For Closing
---------------------------------------------------------------------
A group of 42 students who sought to be trained for high-paying jobs in
the computer field are now suing their school, claiming it cost them
money and aggravation when the for-profit institution suddenly closed
its West Windsor campus last summer. In a suit filed in Mercer County
Superior Court, the students charge that the Cittone Institute and its
parent company, Lincoln Technical Institute, should pay them up to
$408,000 in "statutory treble damages" for tuition costs, plus court
expenses. The students had paid from $5,000 to $12,000 each for the
programs and Lincoln Technical refused to fully refund their money, the
suit contends.

The West Windsor campus, located on Canal Pointe Boulevard, was closed
in August 1998 after 10 years of operation. Since then, negotiations
with the school have led nowhere, said Mel Narol, whose West Windsor law
firm Pellettieri, Rabstein and Altman is representing the student group.
"We have tried to resolve this for the better part of a year. We were
left with no alternative by the school but to file the lawsuit," Narol
said. The students represent 21 percent of the estimated 200 students at
the campus when it closed.

Lincoln Technical Institute told the students they could continue their
studies at sister schools in Edison and Mount Laurel. But many students
contended it was too inconvenient to travel to those locations, due to
work or family obligations, or because they lacked a car, Narol said.
Edison is 16 miles north of West Windsor; Mount Laurel is 25 miles to
the south. Lincoln offered a $500 bonus for additional transportation
costs upon graduation, but would reimburse tuition only for the balance
of courses if students quit because of the closing. "If students
interrupted school then they were charged for the time in school,"
Deborah Ramentol, vice president of field operations for Lincoln, said.
"The fact that the other locations were so close we felt that the
commute was workable. It wasn't like we closed a school in Jersey and
said `Oh, the only other school is in Delaware,' " Ramentol said.

Cittone schools teach computer programming, personal computers and
business administration, and court reporting. Including Cittone schools,
Lincoln has 13 schools in New Jersey, Pennsylvania, Maryland, Illinois
and Indiana. The Lincoln schools teach subjects such as automotive
repairs, air conditioning and refrigeration. School officials said they
had to close the West Windsor campus because it couldn't grow without
stepping on the toes of the other Cittone schools in Edison and Mount
Laurel. At the time, many students were already well into courses that
run up to 15 months and cost more than $11,000 in tuition. Some students
who couldn't easily transfer to competing schools said they should have
received warning of the closing before they signed up for the courses.
Narol said many had taken out loans to pay for their education at the
school. "I don't think there's anyone that would have signed up for
Cittone knowing they were going to do this," said one student who has
joined the lawsuit and spoke on condition of anonymity. He transferred
to Mount Laurel and graduated in March from a full-time
computer-programming course.

Ramentol said students were told as soon as school officials decided to
close the school. "As soon as that decision was made we notified the
students, and we worked with the students in every way we could to
arrange an orderly transition," she said. Ramentol said car pools were
set up and students were able to take trains in some cases. "The
majority of students did transfer," she said. (The Trenton Times
9-14-1999)


WHITTENBURG GROUP: Texas Lawyer Says Shareholders Case Like Soap Opera
----------------------------------------------------------------------
Welcher. "One would think that after years of higher education and legal
practice lawyers could think of better words to call each other.
But the word sums up the allegations in a fee fight under way in Dallas
County, pitting two shareholders in Amarillo's Conant Whittenburg French
& Schachter against the directors of the firm.

"The Whittenburg Group welched on the deal," said plaintiffs' counsel
George Bramblett at an Aug. 16 hearing before Magistrate Judge Mark
Greenberg of Dallas.

Bramblett, a partner in Dallas' Haynes and Boone, represents name
shareholders A.B. Conant Jr. and William J. French in a bitter spat
alleging that George Whittenburg, the firm's president, orchestrated a
change in the firm's compensation structure to cheat Conant and French
out of a combined $ 1.5 million, and to further keep some $ 2.3 million
in contingent fees owed to French. Irv Terrell, a partner in Houston's
Baker & Botts, represents 17-lawyer Conant Whittenburg. Both sides have
filed breach of fiduciary duty claims, and desire accountings of each
other's income and declaratory judgments on their rights to the fees.
The recent hearing addressed motions for summary judgment on fact
issues, whether to sever part of the case and combine it with a related
action in Randall County and whether George Whittenburg violated Rule
1.14 of the Texas Disciplinary Rules of Professional Conduct by not
safeguarding millions in fees. Greenberg had not ruled on the motions by
press time.

The Dallas case plays like a soap opera, with so-called victims, French
and Conant; an alleged villain, Whittenburg, and even a conspiracy
involving the other shareholders and an 11th-hour vote to change the
compensation formula. The case is the latest in a string of five suits
involving French, the firm, his old firm and 10 million-dollar
contingent-fee cases that they all want a piece of.

None of the parties named in the suits returned repeated phone calls for
comment, but their petitions and arguments at the recent hearing shed
some light on the complex dispute.

                            In the Money

The case boils down to a contract dispute over partner compensation
formulas. Toss in $ 33 million in contingent fees and expenses to be
divided by a group of lawyers whose profits are down, according to the
petition, and you've got a suit waiting to happen.

The saga began in 1995, when French joined Conant Whittenburg as a name
partner to pursue with Conant several securities class actions, on a
contingent-fee basis, some of which Conant Whittenburg had already been
working on.

According to the petition, A.B. Conant Jr. and William J. French v.
George Whittenburg, et al., French entered into a separation agreement
with his old firm, Milwaukee's Gibbs, Roper, Loots & Williams, when he
brought the contingent-fee cases to Dallas. According to the agreement,
French allegedly purchased "all right, title and interest" in the cases
from Gibbs, Roper, the petition reads. Once the cases were disposed,
French and Conant Whittenburg would split the fees, and French would
split his portion with Gibbs, Roper and other co-counsel.

That arrangement worked with a few early cases, according to the
petition. But not well enough for French and his former firm, now known
as von Briesen, Purtell & Roper, who sought declaratory judgments and
clarifications of the separation agreement in a few cases filed in
Wisconsin, says Terry Nilles, a shareholder in von Briesen, Purtell.

Nilles says those cases were dismissed after Conant Whittenburg filed
for a declaratory judgment in Randall County against French and his
former firm in April 1998, seeking to have the court define the rights
of all the parties involved in 10 contingent-fee cases in which French
was involved. A motion for partial summary judgment is pending in that
case.

The largely objective Conant Whittenburg shareholder compensation
formula also ran smoothly for a while - from 1991 through 1997 -
according to the petition and the arguments at the hearing. That is
until January 1998, when the firm ran out of capital to continue funding
what turned out to be a gold-mine class action, Chisum v. Lehman
Brothers.

Both sides agree that Conant and French, who had both worked on Chisum
before French joined the firm, asked all of the shareholders to chip in
to raise the $ 290,000 needed to pay the experts for the case. The
petition alleges that Whittenburg sent a letter Jan. 26 suggesting a
payment plan (the "Carrying Cost Loan") that calculated what each party
should pay, based on the litigation costs the firm had been "carrying"
from Jan. 1, 1994 through Dec. 31, 1997, plus 18 percent compounded
interest. In the CCL, he also allegedly alluded to a change in the
firm's compensation system. The plan, which the defense does not
dispute, required each shareholder to pay a defined portion. Chisum
settled for $ 75 million on Jan. 27 and all the shareholders sent in
their checks for the CCL to cover the expenses by Jan. 29.

Several smaller class actions settled during 1998, and the fees were put
into a fund to split later between French, outside of the firm's
compensation formula, and von Briesen, Purtell. And by December 1998,
the major cases were completed, and the fees and expense payments were
coming in, reaching a total of $ 33 million for the 10 cases, said
Bramblett at the trial. Terrell does not dispute this sum.

By that time, von Briesen, Purtell had allegedly already started
clamoring for more than its original share, prompting Conant Whittenburg
to file the declaratory judgment in Randall County. (At the Dallas
hearing, Bramblett estimated von Briesen, Purtell's share at $ 2.5
million.) Conant Whittenburg and von Briesen, Purtell reached a
settlement May 24, 1999 for $ 2.05 million - $ 800,000 up front and a
note for the rest, says Terrell. On July 12, the parties submitted a
motion for partial summary judgment based on the settlement. Judge Pat
Pirtle, of the 251st District, has not yet ruled.

Conant Whittenburg also named French in the Randall County action; those
claims are not addressed in the settlement.

Neither Conant nor French, who both continue to practice in the firm's
Dallas office, will comment on their intentions once the litigation is
over. Bramblett also declines comment.

                             Fee-Splitting

Their intentions regarding the fee splitting are at the heart of the
Dallas case.

Conant and French allege they were swindled out of $ 1.5 million because
while they were busy settling the Chisum case, Whittenburg changed the
firm's compensation formula in his proposal for raising the funds for
the carrying cost loan. They claim they never agreed to any change in
the compensation formula, and that Whittenburg's carrying cost loan was
a suggestion, to be debated later.

At the hearing, Bramblett said his clients never responded nor accepted
that suggestion, which means it is not binding.

Terrell countered, arguing that Whittenburg's letter was a counteroffer
to the payment plan Conant and French had suggested, and that the two
shareholders ratified the change in the formula by sending in their
checks for the CCL. The firm also alleged that the partnership
compensation formula was not written in stone; rather it was a bylaw
that could be changed under Texas law by a majority vote. "No one ever
signed the formula," Terrell said at the hearing, calling it a
"guideline."

The firm's original compensation formula determined each shareholder's
portion of the firm's net income based on 50 percent personal
collections, 20 percent originations and 30 percent of an annual fixed
percentage based on historical performance in the first two criteria,
according to Conant and French's petition. At the Aug. 16 hearing,
Terrell did not dispute the formula. He did, however, dispute the notion
that the formula was unalterable, as Conant and French claim.

The two also allege that Whittenburg and the other directors voted to
change the formula in December 1998 to take approximately $ 3.4 million
off the firm's bottom line to pay back the carrying cost loan, as well
as to make it retroactive to fiscal 1997 in order to decrease Conant's
and French's share, because it would de-emphasize their 1998
collections.

Terrell argued that the shareholders, by a majority over Conant and
French's minority, voted to change the formula because they had been
carrying the burden of the class actions for four years, while Conant
and French brought in zero revenue.

As settlement seems unlikely, both sides await a ruling by Greenberg and
a November hearing date on the motion for partial summary judgment in
the Amarillo case.

Perhaps Bob Templeton, who is representing French in the Amarillo case,
sums up the situation best: "When lawyers get involved as parties, they
can complicate it beyond belief," he says. (Texas Lawyer 8-23-1999)


                               *********


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