/raid1/www/Hosts/bankrupt/CAR_Public/991015.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Friday, October 15, 1999, Vol. 1, No. 178


2THEMART.COM INC: Keller Rohrback Files Securities Fraud Suit
BLUE CROSS: Doctors May Seek Class Arbitration Re CA Health Plan Fees
COLMAR BELTING: Rhode Island Sp Ct Rules Part Distributor Liable
CORPORATE EXPRESS: Agrees To Settle Outstanding Shareholder Litigation
DIGITAL LINK: Milberg Announces Santa Clara Prelim. Injunction Hearing

HOLOCAUST VICTIMS: Bill Would Free Victims From Tax On Settlement
HOLOCAUST VICTIMS: Jewish Group May Pressure Insurers With Asset List
IBARAKI PREFECTURE: Japanese Ct Rules On Payment For Wrongful Transfer
IDPA: Authorized Official's Word To Settle Binds Ill. Public Aid Dept.
INAMED CORP: Announces Payment For Settlement Of Breast Implant Suit

INTERNATIONAL RECTIFIER: Securities Suit In CA Will Be Heard In 2000
LEAD PAINT: Rhode Island Files First State Suit; Other States May Sue
N.Y. LIFE: Louisiana Sp Ct Decertifies Class For Lack Of Common Issues
ATIONAL PARTNERSHIP: CA Suit Says REIT Statement Shortchange Investors
OMTOOL LTD: Announces And Decries Merit Of Securities Suit In New Hamp.

OMTOOL LTD: Kaplan Kilsheimer Files Securities Suit In New Hampshire
PENNSYLVANIA ELECTRIC: Super Ct Oks Dismissal Of Staff Sex Bias Case
PSE&G CO: U.S. Labor Dept Sues Utility In Camden Over Unpaid OT
RAYMOND SCHOOL: Ap Ct Lets Maine Bar Subsidy To Religious Sch. Students
SKINNER ENGINE: Retirees' Benefits May Be Changed, 3rd Cir Rules

TENNESSEE VALLEY: Utility Sued For Over-Billing Industrial Users
TOBACCO LITIGATION: Aussie Lawyers Say Industry's Admission "Too Late"
UCAR INT'L: Settles Connecticut Securities And Derivative Suits
U.S. LIQUIDS: Whittington, von Sternberg Files Securities Suit In Texas
W.R. GRACE: NY Sp Ct Oks Settlement; CalPERS Recoups Shareowners' Money

* MI Is Contemplating Bills For Increasing Prison Sex Penalty


2THEMART.COM INC: Keller Rohrback Files Securities Fraud Suit
Keller Rohrback LLP announced that it is investigating securities fraud
claims of shareholders who purchased or otherwise acquired 2TheMart.Com
Inc. (OTCBB:TMRTE) common stock between January 19, 1999 and August 26,

On September 13, 1999, 2TheMart's ticker symbol was changed from TMRT to
TMRTE indicating that the company is delinquent in its filings and may
face removal from the OTC Bulletin Board. 2TheMart is an Internet-based
electronic commerce company which claims to be developing an auction web
site in which parties will be brought together to buy and sell a variety
of goods. Once fully functional, 2TheMart web site users will be able to
browse through all items in a fully automated, topically arranged online
service that is expected to be available 24 hours a day, seven days a

2TheMart.com shares increased 25-fold in January, after the company
announced that its web site was in final development and expected to be
up and running before the end of the second quarter 1999. 2TheMart
shares subsequently lost approximately 84% of their value after the
Company revealed that the inauguration of its web site would be delayed
and that it would need additional capital to remain viable. Shareholders
are asserting that 2TheMart and certain officers and directors violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10-b(5) established thereunder. They charge that defendants rendered
false and misleading statements and/or omissions concerning the present
and future financial condition and business prospects of the Company, as
well as the financial benefits that would flow to 2TheMart and its

If you wish to discuss this announcement, have information relevant to
the case, wish to learn about your rights to seek to serve as a lead
plaintiff, or have any questions on how to join as a class
representative in any securities class action, you may contact Keller
Rohrback L.L.P. (Lynn L. Sarko or Elizabeth Leland, Esq.) toll free at
800/776-6044, or via e-mail at investor@kellerrohrback.com TICKERS:

BLUE CROSS: Doctors May Seek Class Arbitration Re CA Health Plan Fees
Doctors challenging changes in the fee schedule for one of Blue Cross's
most popular California health plans may seek arbitration as a class,
the Ninth U.S. Circuit Court of Appeals ruled. In an opinion by Judge A.
Wallace Tashima, the panel held that the Employee Retirement Income
Security Act of 1974 doesn't preempt California law permitting class

The dispute concerns 1993, 1994, and 1995 amendments to the fee
schedules under the 2 million-member Prudent Buyer Plan. Over 60 percent
of the plan members are enrolled by private employers as a job benefit.

A group of doctors, all of whom had private-employer-enrolledand thus
ERISA covered patients in the plan, requested class-wide arbitration of
their objections to the fee amendments in March 1997.

Blue Cross responded that it was amenable to individual arbitrations
only. It filed actions against each of the named claimants in the U.S.
district courts for the Northern, Central, and Eastern districts seeking
to compel individual arbitrations under the Federal Arbitration Act.

The doctors reacted with a class action complaint in San Francisco
Superior Court charging Blue Cross with breach of contract and bad
faith. Blue Cross removed the action to federal court. U.S. District
Judge Maxine Chesney sided with the doctors, remanding their action to
the Superior Court and dismissing Blue Cross's petitions to compel
individual arbitrations with claimants in the Northern District.

Judges Garland Burrell of the Eastern District and Consuelo Marshall of
the Central District likewise dismissed Blue Cross's petitions to compel
individual arbitrations with the claimants in those districts.

A San Francisco Superior Court judge last year granted the doctors'
petition to compel class arbitration, but reserved jurisdiction over
class certification and administration issues while the federal appeal
went forward.

Tashima agreed with the district judges that federal courts lack
jurisdiction under the Federal Arbitration Act, which governs disputes
involving a federal question or diversity of citizenship. ERISA does not
provide a basis for federal jurisdiction over the dispute, Tashima

"We hold that the Providers' claims are not preempted by ERISA;
therefore, that the district courts properly dismissed Blue Cross'
petitions for lack of subject matter jurisdiction," Tashima said.

Blue Cross argued that ERISA applies because the dispute concerns the
interpretation of the terms of the plan, but Tashima disagreed:

"[T]he Providers' claims arise from Blue Cross' alleged breach of the
provider agreements' provisions regarding fee schedules, and the
procedure for setting them, not what charges are 'covered' under the
Prudent Buyer Plan. The Providers' claims, therefore, do not rest upon
this term of the Prudent Buyer Plan. Where the meaning of a term in the
Plan is not subject to dispute, the bare fact that the Plan may be
consulted in the course of litigating a state-law claim does not require
that the claim be extinguished by ERISA's enforcement provision."

Tashima also rejected the argument that the doctors' claims would impose
economic burdens on ERISA plans and their beneficiaries, and were thus
subject to the express preemption of ERISA Sec. 514(a). The provision
generally preempts "any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan " governed by ERISA.

While the claims may affect ERISA plans by increasing the costs of the
pland and/or the co-payments made by patients, Tashima wrote, those
effects don't trigger preemption.

"Only where the indirect economic impact of the state law is 'acute,' so
as to force an ERISA plan to adopt a 'certain scheme of substantive
coverage or effectively restrict its choice of insurers' might a state
law imposing only economic effects on ERISA plans be preempted under S
514(a)," Tashima wrote, citing a pair of U.S. Supreme Court cases.

The case is Blue Cross of California v. Anesthesia Care Associates, 99
S.O.S. 7023. (Metropolitan News-Enterprise 8-30-1999)

COLMAR BELTING: Rhode Island Sp Ct Rules Part Distributor Liable
Part Distributor Can Be Held Liable. The Rhode Island Supreme Court has
held that if a component part distributor "substantially participated"
in integrating its part into a final product, the distributor may be
held liable for injuries caused by the final product. Buonanno v. Colmar
Belting Co., No. 98-21 (R.I. July 12).

The plaintiff was working with a conveyor belt when he lost his balance
and fell into the machine; his arm was severely crushed. Represented by
Donna M. DiDonato and Howard Klein of Providence, R.I.'s Decof & Grimm,
the plaintiff sued two component makers and a welder involved in making
the conveyor system, alleging that they had been negligent in not
recommending, supplying or installing a shield to prevent such

The manufacturers, represented by Jonathan Bruno of Boston's Schwartz,
Shaw & Griffith and by Harrison Richardson of Portland, Maine's
Richardson, Whitman, Large & Badger, moved for summary judgment, arguing
that as makers and distributors of component parts, they had no duty to
ensure that the final product was safe.

The trial court granted summary judgment to both; the plaintiff
appealed. The high court upheld the award of summary judgment to the
maker of a wing pulley, finding that it was not involved in integrating
its part into the final conveyor system. However, it reversed summary
judgment for the belt system manufacturer, finding that it had worked
closely with the plaintiff's employer in assembling the conveyor system,
and thus could be held liable. (Product Liability Law & Strategy,
September 1999)

CORPORATE EXPRESS: Agrees To Settle Outstanding Shareholder Litigation
On September 27, 1999, the Company issued a press release announcing
that on September 24, 1999, the Company entered into the First Amendment
to Agreement and Plan of Merger among Buhrmann NV, North Acquisition
Corporation and the Company as well as the following events: (i) the
setting of an October 22, 1999 date for the Company's special
shareholders' meeting; (ii) the consummation of the sale of the
Company's same-day courier delivery business; and (iii) the execution by
the Company of an agreement to settle all outstanding shareholder

Corporate Express filed its definitive proxy materials with the
Securities and Exchange Commission on September 27, 1999, and has
scheduled a special shareholders meeting on October 22, 1999 for the
purpose of voting on the merger between the Company and Buhrmann. All
shareholders as of the record date of September 13, 1999 will be mailed
notice of the special meeting and proxy materials and must submit their
proxies by October 22, 1999.

The Company also announced its September 24, 1999 closing of the sale of
its subsidiary. Corporate Express Delivery Systems, Inc. ("Delivery
Systems"), to United Shipping & Technology, Inc., (Nasdaq: USHP), a
logistics company based in Minneapolis, Minnesota. The sale of Delivery
Systems has no effect on the daily delivery of Corporate Express' office
and computer products and services, which will continue to be delivered
via Corporate Express' fleet of more that 900 delivery vehicles.

In addition, Corporate Express entered into an agreement to settle all
outstanding class action shareholder litigation in connection with the
proposed merger. As a part of the settlement, the Company agreed to make
certain additional disclosures in its proxy statement, obtain an updated
fairness opinion from one of its financial advisors and agreed to pay
certain legal fees of counsel to the plaintiffs. The settlement is
subject to confirmatory discovery and court approval.

Other than the shareholder vote to be taken at the special shareholders
meeting, the Company said it has satisfied most of the conditions
precedent to closing the Buhrmann merger, and currently anticipates that
the transaction will close by the end of October.

DIGITAL LINK: Milberg Announces Santa Clara Prelim. Injunction Hearing
The Santa Clara Superior Court has issued an order setting a preliminary
injunction hearing in connection with the proposed buy-out of Digital
Link (Nasdaq:DLNK) by DLZ Acquisition Corporation, which is owned and
controlled by Digital Link CEO Vinita Gupta.

Although it denied a temporary restraining order ("TRO") sought by
several Digital Link shareholders who filed suits challenging the
allegedly unfair Tender Offer/Merger, the Court set a preliminary
injunction hearing for December 2, 1999.

If you wish to discuss this action or have any questions concerning this
notice or your rights or interests, please contact plaintiff's counsel,
William Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via
e-mail at wsl@mwbhl.com TICKERS: NASDAQ:DLNK

HOLOCAUST VICTIMS: Bill Would Free Victims From Tax On Settlement
Holocaust victims will not have to pay state income tax on reparations,
returned assets and settlements from class-action lawsuits under a bill
that overwhelmingly passed the state House. Bill sponsor Rep. Marc
Shulman, R-West Bloomfield, says he expects about 2,500 survivors and
benefactors would be eligible for the deduction. The bill would apply to
assets owned by Holocaust victims from 1920-45 which were not returned
to them before January 1994. The bill now goes to the Senate for
consideration. (The Detroit News 10-14-1999)

HOLOCAUST VICTIMS: Jewish Group May Pressure Insurers With Asset List
A nonprofit Jewish group said Wednesday that it hoped to pressure
European insurers to make good on Holocaust claims with the posting on
the Internet of a Nazi registry of seized assets.

Negotiations between Jewish survivors and European insurance companies
hit a setback at a meeting of the International Commission on Holocaust
Era Insurance Claims last month, when German insurer Allianz AG refused
to reveal its list of unpaid policyholders.

A negotiating team is hoping to resolve the issue before the next
commission meeting Oct. 21 in Washington, D.C. ''We want to encourage,
to enforce, to do whatever's necessary to get the insurance companies to
provide those names,'' Rabbi Abraham Cooper, associate dean of the Simon
Wiesenthal Center, said at a press conference in London.

Launched last month, the Web site www.LivingHeirs.com contains an
independent list of 50,000 Austrian Jews whose bank accounts and
insurance policies were seized by the Gestapo in 1938. In some cases,
the documents reveal that insurance policies were paid out to the
Austrian government instead of Jewish policyholders or heirs. The
information was retrieved from government archives in Vienna, among
other sources. Efforts are under way to access further records in
Germany, Italy, the Netherlands and Poland. The Web site is designed to
let visitors find their relatives, obtain copies of records that
document confiscated assets, and try to establish their status as
rightful heirs.

In addition to insurance policy holdings, the list includes
Nazi-confiscated real estate, bank accounts, art, jewelry and other
valuables. ''To see these figures for the first time is both emotional
and shocking,'' said Peter Weil, a London-based businessman who is
investigating whether his grandfather's property and insurance policies
were seized by the Third Reich.

In the past few years, Holocaust victims have launched a class-action
lawsuit against Swiss and German banks, insurance companies and other
corporations. As a result, Swiss and Austrian banks have offered
separate settlements to families who lost assets during the Holocaust.
The deadline to file claims for the $ 1.25 billion Swiss fund is Oct.
22. (AP Worldstream 10-13-1999)

IBARAKI PREFECTURE: Japanese Ct Rules On Payment For Wrongful Transfer
In a sign of the ongoing recession, more and more employees are filing
lawsuits against their companies alleging unfair labor practices. The
number of lawsuits filed by salaried employees at district courts
nationwide swelled last year to a 10-year high of about 1,800.

Meanwhile, lawyers at the Labor Lawyers Association of Japan in Tokyo
reportedly received 858 calls in one day when they conducted a telephone
counseling session in June this year.

According to Kenji Tokuzumi of the lawyers union, conventional disputes
between management and labor unions have now given way to disputes
between management and individual employees. "Therefore, as we try to
solve these cases as quickly as possible, we have to come up with
various approaches to each case," he said.

One day in October 1996, a 44-year-old employee at a food container
manufacturing plant in Ibaraki Prefecture was informed point-blank by
his department chief that he was to be transferred to the company's main
factory in Fukuyama, Hiroshima Prefecture. "I want you to tell me
whether you will go by yourself or with your family," the chief
announced. When the employee asked why he had not been consulted about
the transfer beforehand, the chief answered coolly, "The company doesn't

The employee, a former canoe manufacturer, had joined the company three
years earlier. At the time, he had been assured that he would not be
transferred to another plant.

Moreover, on the day he was informed of the transfer, the nature of his
work at the Ibaraki factory changed. In the room where he had previously
processed plastics, he was now required to manually weed out defective
products on the assembly line. His colleagues reportedly expressed
sympathy over his demotion.

A few days later, the employee again talked to the department chief,
reminding him of the company's initial promise that he would not be
transferred. The chief reportedly replied, "As long as you work for the
company, the situation can change at the company's convenience."

When the employee protested that he could not move to Hiroshima for
family reasons, he was bluntly told: "If you can't go, you should resign
by the end of the year." The company never changed its stance. With
plans afoot to set up a new subsidiary, it was apparently trying to
carve up its manufacturing division by recruiting employees for the new
venture. The employee recalled, "Since I didn't want to go, I seemed to
have become expendable." Nine other workers were also told by the chief
that they would be moved to other plants.

Lawyer Tetsuro Kamoda, who the employee consulted over the telephone in
November 1996, immediately suspected that the company's decision was
aimed at forcing workers to quit. After interviewing the employee,
Kamoda submitted a petition to a court in December requesting a
temporary termination of the company's order.

But the company insisted that it had not announced the order and
therefore had never forced the man to leave because of his refusal to be
transferred. The court decided that it was not necessary to put a
temporary freeze on the order.

The employee was then transferred to another section at the factory
where most workers were female part-time employees. Full-time employees
rarely spoke to him and his senior officers reportedly bullied him by
saying sarcastically: "What, you're still here?" "I couldn't stand it
any more," he said. The employee handed in his resignation in April

It is often said that salaried workers should never resign while
fighting against alleged unfair labor practices because leaving
voluntarily can undermine their cases.

While Kamoda did not stop the employee from tendering his resignation,
he filed a damages suit against the company for the 44-year-old employee
and five others who also quit the company for similar reasons.

"They don't want to work for such a company anymore. But they are not
satisfied with the way they were forced to quit. This lawsuit reflects
the feelings of these employees," Kamoda said.

Although the plaintiffs formally quit the company of their own accord,
they demanded redundancy payment, compensation money and additional
salaries that would have been paid to them if they had been employed by
the company for one more year.

In June this year, the Shimozuma branch of Mito District Court ruled
that the company must pay a total of 20 million yen to the plaintiffs,
saying, "The plaintiffs, who were employed in the local area and not
obliged to move to other places, were forced to quit by the company's
bullying or harassment."

Kamoda spoke highly of the court's ruling, saying it sent a strong
message to companies that they must abide by the rules when discharging

The plastic container manufacturer appealed to the high court,
insisting: "We just persuaded our employees to move to other plants in
order to avoid discharging them. We never forced them to quit." The
company also asked, "If workers employed in specific local areas cannot
be transferred to other places, how can a company deal with surplus
workers?" (The Daily Yomiuri (Tokyo) 10-13-1999)

IDPA: Authorized Official's Word To Settle Binds Ill. Public Aid Dept.
A state may not be bound by an agreement unless the agency official who
enters into the agreement has actual authority when the agreement is
made, the U.S. Court of Appeals for the 7th Circuit held on Sept. 1.
King v. Walters, No. 98-2086.

Remanding, Judge Diane P. Wood rejected the state of Illinois'
contentions that only its governor may approve a consent decree, but she
remanded the case for a hearing on the issue of whether the agency
official who agreed to the decree had authority to bind the state.

A class action was filed in 1992 against the director of the Illinois
Department of Public Aid (IDPA) and the administrator of IDPA's Division
of Child Support Enforcement (DCSE) program to force the state to comply
with federally mandated child support laws. After long delays, the court
ordered the parties to appear with an official possessing the authority
to decide whether to settle or litigate. Robert Lyons, DCSE's deputy
administrator, appeared in response and indicated that the state
intended to settle. The judge nevertheless set a trial date.
Negotiations intensified. A date was set to present a signed consent
decree to the court. The day before, the defendants backed out of the
consent decree, stating that they had decided to litigate.

The district judge, relying heavily on the fact that Illinois sent Mr.
Lyons to court as someone with decision-making authority, held the state
to its agreement. (The National Law Journal 9-20-1999)

INAMED CORP: Announces Payment For Settlement Of Breast Implant Suit
In its Report on Form 8-K for the Conformed Period of Report 19991010,
Inamed Corporation (formerly First American Corp, date of name change:
19860819) includes the press release issued May 10, 9999 announcing that
an equity financing had been completed which enabled the Company to make
the final payment of monies owed to the court-appointed escrow agent in
the mandatory class action settlement of the breast implant
litigation against the Company.

Press Release of INAMED Corporation dated May 10, 1999

INAMED "Innovation and Medicine"                    INAMED CORPORATION
700 Ward Drive
Santa Barbara, CA
(805) 692-5400 Telephone
(805) 692-5441 Facsimile

Company Contacts:               Jeff Barber
                                (805) 692-5400

                                Ilan K. Reich
                                (212) 626-6800


May 10, 1999 - Santa Barbara, CA - INAMED Corporation (OTCBB: IMDC)
announced  hat it has completed a $31.1 million equity financing, in
which 5.4 million new shares of common stock were issued to various
warrant holders in exchange or the payment of $20.4 million of cash and
the surrender of $10.7 million of the Company's 11% notes.  Virtually
all of the holders of warrants who were eligible to exercise at this
time participated in the financing.

The Company also received $3 million of cash from its noteholders, which
was used to purchase on their behalf the 426,323 shares of common stock
held by the court-appointed escrow agent.  All of the 5.8 million shares
of common stock purchased by the warrant holders and noteholders contain
a legend which restricts transferability absent an exemption under Rule
144 (after the one year holding period) or an effective registration

As a result of this equity financing, the Company now has approximately
16.9 million shares outstanding and approximately 20 million shares on a
fully-diluted basis. The Company's debt has decreased from $27.6 million
to $16.9 million. Cash on hand, which fluctuates based on regular
working capital needs, is currently more than $12 million.

The Company's tangible net worth is now approximately $22 million, as
compared to the significant deficit position of the past few years.
Finally, due to an incentive fee which was paid as part of the
equity financing, the Company expects to record a non-operating charge
for accounting purposes of approximately $1.9 million in the second
quarter of 1999.

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

The settlement fund for the benefit of the plaintiff class now has on
hand over $33 million to distribute to claimants and pay administrative
expenses. A distribution plan will be formulated under the supervision
of Judge Pointer in proceedings which are expected to occur in the next
few months.

Under the terms of the final order and judgment entered by Judge Pointer
in February 1998, all of the thousands of cases and claims arising from
the Company's breast implant products which were implanted before June
1, 1993 were consolidated into a mandatory class action settlement and
dismissed. Individual plaintiffs cannot opt-out of the settlement, and
there is a permanent injunction prohibiting class members from
commencing or prosecuting new federal or state court lawsuits, as well
as a bar against lawsuits by certain persons and entities with
indemnification and contribution claims.

INAMED is engaged in the development, manufacturing and marketing of
medical devices for the plastic and reconstructive, bariatric and
general surgery markets.

INTERNATIONAL RECTIFIER: Securities Suit In CA Will Be Heard In 2000
The Company and certain of its directors and officers have been named as
defendants in three class action lawsuits filed in Federal District
Court for the Central District of California in 1991. These suits seek
unspecified but substantial compensatory and punitive damages for
alleged intentional and negligent misrepresentations and violations of
the federal securities laws in connection with the public offering of
the Company's common stock completed in April 1991 and the redemption
and conversion in June 1991 of the Company's 9% Convertible Subordinated
Debentures due 2010. They also allege that the Company's projections for
growth in fiscal 1992 were materially misleading. Two of these suits
also named the Company's underwriters, Kidder, Peabody & Co.
Incorporated and Montgomery Securities, as defendants.

On March 31, 1997, the Court, on the Company and the individual
defendants' motion for summary judgment, issued the following orders:
(a) the motion for summary judgment was granted as to claims brought
under Sections 11 and 12(2) of the Securities Act of 1933; (b) the
motion was denied as to claims brought under Section 10(b) of the
Securities Exchange Act of 1934 and the Securities and Exchange
Commission Rule 10b-5; and (c) the motion was granted as to the common
law claims for fraud and negligent misrepresentation to the extent said
claims are based on representations contained in the offering prospectus
and was denied as to other such claims. The Court also granted the
summary judgment motion brought by the underwriters. The plaintiffs'
motion for reconsideration or certification of an interlocutory appeal
of these orders was denied.

On January 28, 1998, the Court decertified the class pursuing common law
claims for fraud and negligent misrepresentation and granted the
defendants' motion to narrow the stockholder class period to June 19,
1991 through October 21, 1991. Plaintiffs' motion for reconsideration or
certification of an interlocutory appeal of these rulings was denied.

On June 14, 1999, the Court approved a notice of the pendency of the
class action and a proof of claim form for dissemination to class
members. Such dissemination took place in June 1999. Trial is scheduled
for March 14, 2000.

Although the Company believes that the remaining claims alleged in the
suits are without merit, the ultimate outcome cannot be presently
determined. A substantial judgment or settlement, if any, could have a
material adverse effect on the Company's results of operations,
financial position or cash flows. No provision for any liability that
may result upon adjudication of these matters has been made in the
Consolidated Financial Statements.

LEAD PAINT: Rhode Island Files First State Suit; Other States May Sue
Rhode Island is suing manufacturers of lead paint for allegedly
conspiring to market a dangerous product that poisons children, the
first suit by an American state over lead paint. Encouraged by the
multi-state tobacco settlement, state Attorney General Sheldon
Whitehouse sued eight paint manufacturers and called upon the industry
to ''take responsibility and clean up its mess.''

The lawsuit, filed Tuesday in Superior Court, seeks damages from big
paint companies like Glidden Co. and Sherwin Williams Co. for treatment
of children with lead paint poisoning and abatement of lead paint from
homes and other buildings. ''We know now that this industry knew lead
paint was toxic dating back as early as 1904, yet it promoted its uses
and profited by that use,'' Whitehouse said.

At least a dozen other states are also considering lawsuits against
makers of lead paint, said John J. McConnell, a lawyer for Rhode Island
who is also pursuing a class-action lawsuit on behalf of 30,000
lead-poisoned children in Cleveland, Ohio.

Rhode Island has one of the highest lead-poisoning rates in the nation.
Nearly 20 percent of children entering kindergarten last month showed
high levels of lead paint poisoning. State health officials say dust and
flakes from the old paints have poisoned one of three children in
Providence and cost Rhode Islanders millions of dollars for health care,
special education programs and building repairs.

The lawsuit accuses paint and pigment makers and the Lead Industries
Association, their trade group, of conspiring from the 1920s to downplay
the danger and keep selling their products. European countries began
banning lead in residential paint in the 1920s.

Defendants include Atlantic Richfield Co. of Los Angeles; DuPont Co. of
Wilmington, Deleware; Sherwin-Williams Co. of Cleveland; and NL
Industries Inc. of Houston.

NL Industries lawyer Timothy S. Hardy said the paint industry shouldn't
be held responsible, and it is up to landowners, landlords and the
government to remove lead paint from buildings.

Also named were Glidden Co., a unit of Imperial Chemical Industries PLC
in England; O'Brien Corp., which was bought by ICI; and SCM Chemicals
Inc. and American Cyanamid Co., whose paint liabilities were assumed by
Cytec Industries Inc. of West Paterson, N.J.

Lead has been banned from paint in the United States since 1978. But
children in older buildings are still at risk of learning disabilities
and behavioral problems if they eat or inhale older paint as it flakes
off door jams and window sills. At high levels, lead can cause kidney
damage, seizures, coma and death.

N.Y. LIFE: Louisiana Sp Ct Decertifies Class For Lack Of Common Issues
Finding too many individual issues affecting liability, the Louisiana
Supreme Court on July 2 reversed its prior affirmation of class
certification for New York Life Insurance Co. policyholders who alleged
the carrier misled them about life insurance policies and engaged in
churning (Major Banks, et al. v. New York Life Insurance Co., et al.,
No. 98-C-0551, La. Sup.). On rehearing, the high court affirmed the
First Circuit Louisiana Court of Appeal's decision overturning the class
certification. (Text of Opinion in Section A. Mealey's Document #

In 1996, Major Banks and Charles Edwards filed a seven-count complaint
against New York Life on behalf of all Louisiana policyholders who opted
out of a settlement in a New York class action (Willson v. New York Life
Insurance Co., No. 94-127804, N.Y. Sup., N.Y. Co. [Nov. 8, 1995], aff'd
228 A.D.2d 368, 644 N.Y.S.2d 617 [App. Div. 1996], cert. dismissed sub
nom., Zoller v. New York Life Ins. Co., 521 U.S. 1112, 117 S.Ct. 2500
[1997]). The complaint alleges unfair and deceptive practices regarding
a "premium offset proposal," bad faith, material misrepresentation,
negligent misrepresentation, fraud and negligence.

                     Trial Court Certification

The 18th Judicial District Court certified the class of all people who
purchased universal or whole life from New York Life between 1982 and
1994 and opted out of the Willson settlement while living in Louisiana.
The class was approximately 1,849 people.

The appeals panel found class certification was inappropriate on the
grounds the claims lacked a common character because the alleged
misrepresentations were made by individual agents.

The high court initially disagreed in its December 1998 opinion, finding
the insurer's corporate structure was the common source of the alleged


In its most recent opinion, the Supreme Court found the trial court
abused its discretion. The allegations of the seven representative class
members involves a myriad of individualized complaints "that ultimately
will require plaintiff-by-plaintiff adjudication of liability issues
thereby militating against a finding of predominance of common character
and the superiority of the class action procedure," the high court said.

Further, the high court found it questionable whether two plaintiffs
suffered any injury - their policies are still in effect and they have
not paid any out-of-pocket premiums.

"We conclude in the instant case that causation and injury-in-fact will
be difficult if not impossible to prove on a class-wide basis since each
member of the class must prove that the alleged fraud or
misrepresentation and not some other cause resulted in an injury to
him," the Supreme Court said.

Finally, the high court noted that New York Life may assert affirmative
defenses such as comparative fault and prescription. At least two of the
policy purchasers were knowledgeable about insurance, others admitted
they failed to read their policies and some failed to take timely

                          Too Many Issues

"In sum, we conclude that there are too many individual issues affecting
New York Life's and its agents' liability in this case to find that
common issues predominate," the Supreme Court said. "While we realize
the expense to class members in having to pursue their claims in
individual lawsuits, nevertheless, we cannot find a class action which
would result in a multitude of mini-trials to be superior under the
circumstances of this case."

Counsel to New York Life are C. Jerome D'Aquila, Charles Sterling
Lambert, Jules Burton LeBlanc III and Randy J. Ungar of LeBlanc, Maples
& Waddell in Baton Rouge, La., Robert M. Johnston and Debra B. Hayes of
Adams & Johnston in New Orleans and Christopher A. Kesler of Fleming &
Associates in Houston.

Eugene R. Preaus and Maura Zivalich Pelleteri of Preaus, Roddy & Krebs
in New Orleans and Phillip A. Wittman, Stephen Henry Kupperman and
Patrick W. Pendley of Stone, Pigman, Walther, Wittman Hutchinson in New
Orleans represent the plaintiffs.

Clare Frances Jupiter of Bryan & Jupiter in New Orleans, Stephen J.
Goodman of Jones, Day, Reavis & Pogue in Washington, D.C., and Phillip
E. Stano of Jorden, Burt, Boros, Cicchetti, Berenson & Johnson in
Washington, D.C., represent amicus curiae American Council of Life
Insurance. (Mealey's Litigation Report: Insurance Bad Faith August 3,

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

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

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

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

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

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

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

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

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

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

The suit makes claims for violation of the false statement provisions
contained in Sec. 14(a) of the Securities Exchange Act, and for breach
of fiduciary duty and breach of trust. The action asks the court to
restore the investors to their financial position before the
acquisition, and makes claims for expert witness fees, court costs, and
attorneys' fees. (Bank & Lender Liability Litigation Reporter 9-1-1999)

OMTOOL LTD: Announces And Decries Merit Of Securities Suit In New Hamp.
Omtool Ltd. (Nasdaq:OMTL - news) announced that it has been named as a
defendant in a purported securities class action lawsuit filed in United
States District Court for the District of New Hampshire allegedly
brought on behalf of purchasers of the Company's common stock during the
period August 8, 1997 to October 6, 1998.

The complaint also names as defendants among others, certain of the
Company's directors and officers. The complaint alleges, among other
things, that the defendants made misstatements in the Company's initial
public offering registration statements and prospectus.

The Company believes the allegations in the complaint are without merit
and intends vigorously to contest them.

Omtool, headquartered in Salem, N.H. is a provider of client/server
software, delivering solutions that automate and integrate communication
throughout the enterprise.

OMTOOL LTD: Kaplan Kilsheimer Files Securities Suit In New Hampshire
The following is an announcement by the law firm of Kaplan Kilsheimer &
Fox LLP:

Kaplan, Kilsheimer & Fox LLP has filed a Class Action lawsuit against
Omtool, Ltd. ("Omtool") (NASDAQ: OMTL) and certain of its officers and
directors in the United States District Court for the District of New
Hampshire. The suit is brought on behalf of all persons or entities who
purchased or otherwise acquired the common stock of Omtool between
August 8, 1997 and October 6, 1998, inclusive.

The Complaint charges Omtool and certain of its top officers and
directors with violations of the securities laws and regulations of the
United States. The complaint alleges that the defendants knowingly or
recklessly misled investors. During the Class Period, defendants caused
or permitted Omtool to issue and sell, by means of a public offering, 4
million shares (including over-allotments) of Omtool common stock at a
price of $ 9 per share throughout the Class Period, which allowed the
Company to report materially inflated revenue and earnings. After the
IPO, Omtool's stock traded as high as $ 14-3/4 per share. The Class
Period ends on October 6, 1998, the day the Company stunned the
financial community by announcing that its financial results for the
quarter ended September 30, 1998 would be poor and the stock declined to
$ 1.6875 per share on the day following the disclosure. Defendants'
false and misleading statements artificially inflated the price of
Omtool common stock during the Class Period.

Plaintiff is represented by Kaplan, Kilsheimer & Fox LLP. If you are a
member of the Class, you may move the Court, no later than 60 days from
today to serve as a lead plaintiff for the Class. In order to serve as a
lead plaintiff, you must meet certain legal requirements. Contact Robert
N. Kaplan, Esq. Adrienne L. Valencia, Esq. Donald R. Hall, Esq. Kaplan,
Kilsheimer & Fox LLP (800) 290-1952 (212) 687-1980 E-mail address:
mail@kkf-law.com Fax: (212) 687-7714 805 Third Avenue - 22nd Floor New
York, NY 10022 or Richard B. Drubel, Esq. Kimberly Schultz, Esq. Boies &
Schiller 26 South Main Street Hanover, NH 03755 (603) 643-9091 Fax:
(603) 643-9009 TICKERS: NASDAQ:OMTL

PENNSYLVANIA ELECTRIC: Super Ct Oks Dismissal Of Staff Sex Bias Case
Sex Discrimination * PHRA * Disparate Treatment * Disparate Impact *
Legitimate Non-Discrimatory Reason

Campanaro v. Pennsylvania Electric Co., PICS Case No. 99-1751 (Pa.
Super. Sept. 8, 1999) Lally-Green, J. (15 pages).

Female clerical workers who were subject to a wage freeze failed to
establish a prima facie case of sex discrimination under the theories of
disparate treatment and disparate impact, because the wage freeze was
based upon job classification rather than gender distinctions. Affirmed.

Plaintiffs' union ratified a new collective-bargaining agreement that
increased compensation for members who were not in plaintiffs' job
classification. Approximately 92 percent of those receiving wage
increases were male. The collective-bargaining agreement froze wages for
workers in the clerical classification, janitorial classification and
two unskilled-labor classifications. The clerical classification is
comprised primarily of females. Plaintiffs, employees in the clerical
classification, brought a class action against defendant under the
Pennsylvania Human Relations Act (PHRA), alleging sex discrimination on
the basis of disparate treatment and disparate impact.

The trial court granted defendant's motion for summary judgment, and
plaintiffs appealed.

The Superior Court affirmed. The court found that plaintiffs had failed
to establish a prima facie case of disparate treatment under the PHRA.
Plaintiffs argued disparate treatment because a study defendant had
commissioned from the Hay Management Group did not include
male-dominated job classifications.

The court found, however, that plaintiffs did not oppose or contradict
the many other surveys and studies upon which defendant had based its
decision to freeze their wages. All of these studies had concluded that
wage rates paid to defendant's clerical employees were significantly
higher than market wage rates for the same positions. Consequently, the
mere fact that defendant did not commission the Hay Management Group to
perform a similar study of male-dominated job classifications did not
establish a discriminatory motive.

Moreover, given that over 31 percent of defendant's female employees
were not in the clerical classification and thus were not subject to the
wage freeze, and that other job classifications subject to the wage
freeze included male employees, the court concluded that the wage freeze
was based upon job classification rather than gender distinctions.

Even assuming, arguendo, that plaintiffs had established a prima facie
case, the court opined that defendant had articulated a legitimate,
nondiscriminatory reason for the wage freeze, i.e., that their clerical
employees were significantly overpaid. Because plaintiffs did not
demonstrate that defendant's reasons were pretextual, defendant was
entitled to summary judgment on plaintiff's theory of disparate
treatment. The court also held that plaintiffs had not demonstrated that
a facially neutral policy or practice caused a disparate impact on a
protected group. Accordingly, the court affirmed the trial court's grant
of summary judgment in favor of defendant on plaintiff's theory of
disparate impact. (Pennsylvania Law Weekly 9-27-1999)

PSE&G CO: U.S. Labor Dept Sues Utility In Camden Over Unpaid OT
The U.S. Labor Department is suing the Public Service Electric and Gas
Co., saying the utility owes about 80 workers at three nuclear power
plants $ 500,000 in unpaid overtime, a department spokesman said
Tuesday. Workers at the plants, in Salem County, were not paid overtime
for hours worked during initial training or requalification training
since 1996, the Labor Department said.

The allegations, on behalf of nuclear-control and nuclear-equipment
operators at the Salem I, Salem II, and Hope Creek plants in Lower
Alloways Creek Township, were made in a lawsuit filed last week in U.S.
District Court.

Newark-based PSE&G will have no comment on the pending litigation, said
company representative Josephine V. Anderson.

A different group of non-union workers at the plants sued PSE&G about
overtime last year, charging that the utility has systematically cut
overtime to engineers, schedulers, and quality-control personnel.

In response, PSE&G issued a statement last year acknowledging that
modification of overtime policy in 1996 affected engineers and others.

That class-action lawsuit is pending in U.S. District Court in Camden.
(The Record (Bergen County, NJ) 10-13-1999)

RAYMOND SCHOOL: Ap Ct Lets Maine Bar Subsidy To Religious Sch. Students
Dodging the debate over school vouchers, the court let Maine subsidize
children attending private, nonreligious schools while refusing to spend
state money for those who go to religious schools. The court, without
comment, rejected an appeal in Bagley v. Raymond School Department and
Strout v. Albanese in which parents of religious-school students said
the state violates their rights by withholding from them the same
financial help received by parents whose children attend nonreligious
private schools. The court's action set no legal precedent and is not
expected to lessen the furious political dispute over vouchers.

In Maine, many public school districts in sparsely populated areas do
not operate their own schools, but instead pay tuition to send children
to neighboring public or private schools of their choice. Since 1981,
the state has barred the use of that money to send children to religious
schools. State officials say such aid would violate the constitutionally
required separation of church and state. Both the Maine Supreme Judicial
Court and the 1st U.S. Circuit Court of Appeals upheld the ban on using
state funds to send children to religious schools.

In another case involving church and state issues, the court refused to
let state officials in New York resurrect a public school district for a
community of Hasidic Jews. The court, by a 6-3 vote, turned away the
state's argument that its third attempt to create a district for
disabled children in the Kiryas Joel community does not breach the
constitutionally required separation of church and state. (The Legal
Intelligencer 10-13-1999)

SKINNER ENGINE: Retirees' Benefits May Be Changed, 3rd Cir Rules
Circuit Split Widens; Third Circuit Rules Retirees' Benefits May Be
Changed. The U.S. Court of Appeals for the Third Circuit joined the
Fifth and Eighth Circuits in rejecting a precedent established in the
Sixth Circuit, adopted in the First, Fourth and Eleventh Circuits, and
known as the "Yard-Man inference," which requires courts to presume that
the parties to a collective bargaining agreement intended retirees'
welfare benefits to continue for life. See International Union, United
Automobile, Aerospace, and Agricultural Implement Workers of America v.
Yard-Man Inc., 716 F.2d 1476 (6th Cir. 1984)

A group of retired union workers brought a class action suit against
their former employer after certain medical and life insurance benefits
were either eliminated or modified. The plaintiffs relied on the
"Yard-Man inference" in support of their claims. Also, that the plain
language of the CBA provided for lifetime benefits or was ambiguous.
Because retiree benefits are not mandatory subjects of collective
bargaining and are merely permissive, the Yard-Man court found retiree
benefits to be ordinarily vested. The Yard-Man court reasoned that these
benefits are normally understood to be a form of delayed compensation or
a reward for past services and therefore would not likely be the subject
of future negotiations. Yard-Man further stood for the proposition that
retiree benefits should be viewed as "status" benefits, meaning that
they would continue as long as the prerequisite status of the parties

The Third Circuit rejected the "Yard-Man inference," holding that there
is no presumption of lifetime benefits in the context of employee
welfare benefits. Further, the court stated that retiree benefits are
not "status benefits." "Congress explicitly exempted welfare benefits
from ERISA's vesting requirements. It, therefore, seems illogical to
infer an intent to vest welfare benefits in every situation where an
employee is eligible to receive them on the day he retires."

The court further stated that "it is not at all inconsistent with labor
policy to require plaintiffs to prove their case without the aid of
gratuitous inferences." The court concluded that, generally, an employer
is free to adopt, modify or terminate a welfare plan "for any reason, at
any time." Although vesting can occur, it is only where an employer
relinquishes its right to unilateral termination of benefits and
specifically provides for lifetime vesting. That situation, the court's
analysis revealed, was not present here. Inter-national Union, United
Automobile, Aerospace & Agricultural Implement Workers of America,
U.A.W. v. Skinner Engine Co., No. 98-3461 (Aug. 10).
(The Corporate Counsellor, September 1999)

TENNESSEE VALLEY: Utility Sued For Over-Billing Industrial Users
The Tennessee Valley Authority over-billed industrial customers for
surplus power but did not reap the windfall alleged in federal lawsuit,
according to a review by the agency's inspector general. In recent
weeks, hundreds of TVA's industrial customers claimed that the agency
overcharged them between $70 million and $100 million. But TVA's
inspector general, in a recent report, found the agency only overcharged
by about $1.6 million.

The overbilling involved less than 1 percent of the agency's sales
during June and July 1998, TVA spokesman Gil Francis said. TVA is
crediting the overpaid amounts, which officials blamed on a computer
programming error. Rep. Bob Clement (D-Tenn.) asked for the review in
March after customers complained they were greatly overcharged and that
TVA would not give refunds.

The inspector general's report said TVA sold about $107 million of power
on the open market, in June and July of 1998. Based on complaints about
overcharges, TVA earlier gave rebates of about $9 million. Lawyers in a
class-action lawsuit against TVA may get to double-check the inspector
general's findings. Alleging $100 million in overcharges for hundreds of
industrial customers in the summer of 1998, Birmingham Steel Corp. filed
a federal lawsuit against TVA in Birmingham. That case is pending. (The
Electricity Daily 10-5-1999)

TOBACCO LITIGATION: Aussie Lawyers Say Industry's Admission "Too Late"
Lawyers for thousands of former Australian smokers who are suing for
damages dismissed as window dressing an admission by the world's biggest
tobacco company that cigarettes are harmful.

Melbourne law firm Slater and Gordon is representing up to 60,000
Australians who claim they have developed serious health problems as a
result of their former smoking habits.

The admission comes from the Philip Morris company, which has launched a
website which says "there is no 'safe' cigarette" and "cigarette smoking
is addictive. The company, which for years disputed research that found
smoking contributed to health problems, also acknowledged that smokers
faced tremendous health hazards.

Senior partner Peter Gordon said the change of heart by Philip Morris Co
Inc is too late. "It took until 13 October, 1999 to make admissions
about facts they have known about but denied for 40 years," he said in a
statement. "If they wish the community to change their perception of the
company, the appropriate step is to apologise, to admit liability and to
compensate the families of generations of Australians whose lives they
have wrecked," Mr Gordon said.

"As recently as a month ago Philip Morris has been challenging us to
prove addiction and identify health problems that we claim are
tobacco-related." "As recently as three months ago Philip Morris was
relying upon the evidence of a so-called health expert who argues that
there is no such thing as addiction."

"Suddenly the truth is out - and tragically, for tens of thousands of
Australian families it is too late," Mr Gordon said.

Slater and Gordon has mounted a class action against Philip Morris, WD &
HO Wills and Rothmans. (AAP Newsfeed 10-14-1999)

UCAR INT'L: Settles Connecticut Securities And Derivative Suits
UCAR International Inc. (NYSE: UCR) announced that it has entered into
agreements settling the securities class action and shareholder
derivative lawsuits which have been pending against it since 1998.

"These settlements mark a major milestone and turning point for UCAR in
resolving our remaining contingencies," commented Mr. Gilbert E.
Playford, Chairman and Chief Executive Officer. "We are now able to move
forward on our plans for the future, with a new management team and new
growth strategies, without the overhang of these lawsuits. Our legal and
finance staffs have done an outstanding job in managing stage by stage
the containment and resolution of these contingencies. Since the
inception of the antitrust investigation, we have paid out about $ 200
million in fines and customer settlements and today our total debt level
is lower than the second quarter 1998, all during a time of difficult
market conditions for our major product lines."

Under the settlements, $ 40.5 million will be contributed to one or more
escrow accounts for the benefit of former and current stockholders who
are members of the class for whom the securities class action was
brought, as well as plaintiffs' attorney's fees. UCAR will contribute $
11 million and the insurers under UCAR's directors and officers
insurance policies at the time the lawsuits were filed will contribute
the balance of $ 29.5 million. UCAR expects to incur about $ 2.0 million
of unreimbursed expenses related to the lawsuits. These expenses,
combined with the $ 11.0 million, will be recorded as a one-time special
charge to operations of $ 13.0 million in the third quarter ending
September 30, 1999. The impact on net income will be approximately $ 8.5
million, or $ 0.18 per diluted share.

UCAR has not made any provisions for these lawsuits since they were in
their early stages and no estimable evaluation of liability was
determinable. In addition, a new outside director, acceptable to both
UCAR and the lead securities class action plaintiff, the Florida State
Board of Administration, the eighth largest state employees' pension
fund, will be added to UCAR's Board of Directors by May, 2000.

The class is expected to consist of all purchasers of UCAR common stock
during the period from August 10, 1995 through March 31, 1998 other than
UCAR, the other defendants and certain related parties. The settlements
provide for a full release of UCAR, the other defendants and certain
related parties from all claims and liabilities arising out of public
disclosures, failures to make public disclosures and breaches of
fiduciary duty during the class period.

The settlements are subject to court approval, court certification of
the class, customary notice and termination provisions, and other terms
and conditions. Satisfaction of all conditions and completion of
judicial and statutory procedures are expected to take about 120 days.

The securities class action is pending in the U.S. District Court for
the District of Connecticut. The shareholder derivative action is
pending in the Connecticut Superior Court. Full details of the
settlements will be set forth in filings with the courts.

U.S. LIQUIDS: Whittington, von Sternberg Files Securities Suit In Texas
Notice is hereby given that a class action lawsuit has been filed
against U S Liquids Inc. (Amex: USL) in the United States District Court
for the Southern District of Texas. The lawsuit was filed by the
Houston, Texas law firm Whittington, von Sternberg, Emerson & Wilsher,
LLP and will protect all persons who purchased U S Liquids securities on
the March 17, 1999 secondary public offering in which U S Liquids
offered 3 million shares of common stock at $21.00 per share, as well as
all persons who purchased U S Liquids securities during the period May
28, 1998 through August 25, 1999.

The Complaint charges that defendants violated the U.S. securities laws
by issuing materially false and misleading statements and by failing to
disclose material facts required to be disclosed, in order to make the
statements issued not materially false and misleading in the Form S-3/A
Registration Statement filed with the SEC on February 24, 1999, the
Prospectus filed pursuant to Rule 424(b)(1), dated March 12, 1999, and
throughout the Class Period. In particular, the Complaint alleges that
defendants falsely represented that the Company was in material
compliance with applicable environmental laws when defendants knew, or
were reckless in not knowing, that certain of the Company's employees,
including the Vice President in charge of the Company's Detroit,
Michigan facility, had ordered and supervised an illegal hazardous waste
disposal program involving the discharge of untreated toxic liquid waste
directly into the Detroit sewer systems.

The Plaintiff is represented by two law firms, including Whittington,
von Sternberg, Emerson & Wilsher. If you are a member of the class
described above, you may, no later than sixty (60) days from August 31,
1999, move the court to serve as one of the lead plaintiffs of the
Class. If you wish to discuss this case or have any questions on how you
may be able to recover for the losses you have incurred, please e-mail,
telephone or fax one of the following: John G. Emerson, Jr. or Craig von
Gessner, Suite 600 Houston, Texas 77063 Telephone: 713-789-8850
Facsimile: 713-789-0033 E-mail: je-mlaw@worldnet.att.net

W.R. GRACE: NY Sp Ct Oks Settlement; CalPERS Recoups Shareowners' Money
The California Public Employees' Retirement System (CalPERS) announced
that the New York Supreme Court has approved a settlement of a
shareowner's lawsuit against the former officers and directors of W.R.
Grace & Co. (Grace). The settlement has recovered nearly $ 4 million of
shareowners dollars that were part of a severance package that was
alleged to have been improperly paid to J.P. Bolduc, former CEO of W.R.

"This is a clear victory for CalPERS and shareowners of W.R. Grace,"
said Charles P. Valdes, Chair of CalPERS Investment Committee. "This
settlement serves as a reminder to all corporations that shareowners
won't stand by and let their interests be taken for granted and their
capital wasted."

Additionally, Grace has agreed to adopt a strong policy on sexual
harassment which CalPERS believes can be a model for corporate sexual
harassment policies throughout the country.

In March of 1995, Grace directors awarded Bolduc approximately $ 20
million in severance benefits, consisting of the repurchase of shares
and various cash payments, when he resigned as president and CEO. The
severance package was bestowed upon Bolduc even though his employment
agreement, in effect at the time of his resignation, reportedly did not
require or provide for such payment. A March 30, 1995 New York Times
article reported that Bolduc "resigned" under pressure because of
allegations of sexual harassment against him by at least five Grace

In 1996, CalPERS intervened in an existing shareowner lawsuit against
Grace and was later named lead plaintiff in the case. In papers filed in
the Supreme Court of the State of New York, the pension fund alleged
that an agreement to pay enormous severance payments to Bolduc was a
breach of fiduciary duty by the board members and a waste of the
company's assets.

Prior to the pension fund's intervention, a settlement had been proposed
that would have returned no money to the corporation, and would have
required the adoption of a sexual harassment policy that CalPERS
believed was seriously inadequate. After CalPERS intervention, Grace
adopted a number of corporate governance reforms, including the
appointment of independent outside directors to serve on the company's
Audit, Compensation and Nominating committees.

CalPERS is one of Grace's largest shareowners, owning approximately 1.3
million shares of common stock. The System was represented in the
litigation by Robinson, Curley & Clayton, Sachnoff & Weaver of New York,
and the law office of Klari Neuwelt.

CalPERS is the nation's largest pension fund with assets of nearly $ 160
billion. The System provides retirement and health benefits to more than
one million state and public employees and their families.

* MI Is Contemplating Bills For Increasing Prison Sex Penalty
The Michigan Legislature is contemplating bills that would significantly
increase the penalties for state prison system employees who have sexual
contact with inmates. The legislation is supported by the state
Corrections Department. The bills reflect yet another "progressive"
policy gone wrong.

The bills would make sexual contact between prison workers and inmates a
15-year felony, compared with the current penalty, which is a
misdemeanor with a two-year maximum sentence. Of course, forcible rape
of an inmate by a prison worker is already a major felony.

But the legislation is receiving its impetus because of recent charges
that inmates in Michigan's three women's prisons are at particular risk
from male employees. Class-action lawsuits pending in U.S. District
Court in Detroit and before the state Supreme Court allege patterns of

The state Corrections Department denies these charges and notes that in
addition to the severe penalties that already exist for rape,
inappropriate sexual fraternization is a firing offense as well as a
high misdemeanor. The department observes that it already has a no-sex

Still, the department supports the increased penalties as a means of
enforcing its policy.

The department's job in screening possible problem employees hasn't been
made any easier by state Atty. Gen. Jennifer Granholm's recent ruling
that it is not allowed to ask job applicants and current workers about
arrests, such as for domestic abuse, that haven't led to convictions.
The ruling was made pursuant to the request of a prison guard through
his state senator -- and was one of the issues that prompted a
legislative attempt to curtail the attorney general's authority to issue

But the ultimate genesis of the department's problems stems from a
series of lawsuits and federal agency decrees that women should be
allowed to serve as guards in male prisons in Michigan. Concommitantly,
males were allowed to serve as guards in female prisons. This was the
"progressive" view of merely two decades ago.

Now, attorneys for the women are demanding that only women guard the
women -- which makes sense. And recent incidents in the Wayne County
jail and Wayne County youth home suggest that female jail workers are
also capable of misconduct with men.

But females now make up some 15 percent of the prison guard force, and
women are now senior wardens in the system. A mixed-sex guard force is
built into the state and federal laws and personnel rules governing
Michigan's prisons. It may not be good policy, but it is the law.

So Michigan is left with ratcheting up the penalties for inappropriate
behavior. Once the law disregards human nature, that is the only
remaining option.

View Of "The Detroit News"

The Legislature should adopt harsher penalties for sexual contact
between prison system workers and inmates.

Opposing views

The Legislature is unjustly penalizing all prison workers for the
misbehavior of a few. (The Detroit News 10-13-1999)


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

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

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

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

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

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

Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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