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

                Tuesday, November 23, 1999, Vol. 1, No. 205

                                 Headlines

ABBOTT LAB: Bernstein Liebhard Files Securities Suit in Illinois
BENCHMARK ELECTRONICS: Kirby McInerney Files Securities Suit in Texas
BREAST IMPLANT: Fla. Appeals Court Affirms Verdict in Rupture Case
CHASE MOTORS: RICO Suit Re Ponzi Scheme Barred by PSLRA, 3rd Cir Rules
COCA-COLA: Notice of Georgia Class Certification and Pending Settlement

GAF BUILDING: Settles NJ Suit on Boycott of Materials Distributors
GIULIANI: A Homeless Man Challenges New York City Crackdowns
HOLOCAUST VICTIMS: Lufthansa To Participate In Slave Labor Fund
JUST FOR: Ritchie & Rediker File Securities Suit in Ala; Auditors Named
MERRILL LYNCH: Amended Suit over Securities Fraud & Pricing Filed in MI

MICROSOFT CORP: Cable News Network Coverage on Antitrust Litigation
MICROSOFT CORP: Poll Says DOJ Hurts Software Industry More Than the Co.
MICROSOFT CORP: San Francisco Suit Will Be Filed for CA Windows Buyers
QUALCOMM INC: 2nd Amended Complaint Filed in CA Re Breach of Fid. Duty
RATIONAL SOFTWARE: 9th Cir. Vacates Discovery Order on Insider Trading

RAYTHEON COMPANY: Bernstein Liebhard Files Securities Suit in MA
SHOLODGE INC: Appeals Against Tennessee Suits Alleging Securities Fraud
SUSA PARTNERSHIP: Maryland Suit Seeks to Recover Late Fees
TOBACCO LITIGATION: Big Plans for Big Tobacco's Big Payout of $246 Bil

* Congress OKs Clearer Contest Rules on Sweepstakes Sponsors
* Lawyer Says Letter Commentary May Be Misleading on Class Actions

                              *********

ABBOTT LAB: Bernstein Liebhard Files Securities Suit in Illinois
----------------------------------------------------------------
The following was released on November 19, 1999by Bernstein Liebhard &
Lifshitz, LLP:

A securities class action lawsuit was commenced on behalf of purchasers
of the common stock of Abbott, Inc. (NYSE:ABT), between March 17, 1999
and September 29, 1999, inclusive, (the "Class Period"), in the United
States District Court for the Northern District of Illinois.

The complaint charges Abbott and certain of its directors and executive
officers with violations of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. The complaint alleges that the defendants
issued materially false and misleading statements about the Company's
business, finances and prospects. Additionally, defendants failed to
disclose that in the FDA had warned the Company that certain products
manufactured at its Illinois Diagnostic Products Division were not
manufactured in compliance with FDA quality assurance regulations and
that Abbott had not taken any measures to bring its processes into
compliance.

As a result of these misrepresentations and omissions, the price of
Abbott's common stock was artificially inflated throughout the Class
Period.

If you purchased or otherwise acquired Abbott securities during the
Class Period, and either lost money on the transaction or still hold the
stock, you may wish to join in the action to serve as lead plaintiff. In
order to do so, you must meet certain requirements set forth in the
applicable law and file appropriate papers no later than December 20,
1999.

Plaintiff has selected Bernstein Liebhard & Lifshitz, LLP to represent
the Class. If you would like to discuss this action or if you have any
questions concerning this Notice or your rights as a potential class
member or lead plaintiff, you may contact Mr. Mark Punzalan, Director of
Shareholder Relations at Bernstein Liebhard & Lifshitz, LLP, 10 East
40th Street, New York, New York 10016, (800) 217-1522 or 212-779-1414 or
by e-mail at ABT@bernlieb.com


BENCHMARK ELECTRONICS: Kirby McInerney Files Securities Suit in Texas
---------------------------------------------------------------------
The following is an announcement on November 19, 1999 by the law firm of
Kirby McInerney & Squire, LLP:

Please take notice that a class action lawsuit has been commenced in the
United States District Court for the Southern District of Texas on
behalf of all purchasers of Benchmark Electronics, Inc. (NYSE:BHE)
securities between Aug. 10, 1999 and Oct. 21, 1999 (the "Class Period").
The action asserts a claim against Benchmark and certain of its officers
for violations of Sections 10(b) and 20(a) of Securities Exchange Act of
1934 by reason of material misrepresentations and omissions.

On Oct. 22, 1999, the company announced third quarter earnings that were
some 70% below consensus analyst estimates. The company attributed the
poor earnings, in part, to component defects and delays in delivery of
certain components during the third quarter. During that quarter, the
company completed a $75 million private placement, and, thereafter, used
some of the proceeds of the private placement as well as Benchmark stock
to finance a major acquisition.

Plaintiffs, institutional investors that invested more than $10 million
in Benchmark securities during the class period, have retained Kirby
McInerney & Squire, LLP, as counsel, and are also represented by Claxton
& Hill. More information about Kirby McInerney & Squire can be obtained
from the firm's website at www.kmslaw.com

If you are a member of the class described above, you may, not later
than sixty days from Nov. 19, 1999, move the Court to serve as lead
plaintiff of the class, if you so choose. In order to serve as lead
plaintiff, however, you must meet certain legal requirements. If you
wish to discuss this action, or have any questions concerning this
notice of your rights, please contact: Ira M. Press, Esq. Robert
Feinstein, Paralegal KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue 10th
Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free
(888) 529-4787 E-mail: kms@kmslaw.com or Roger F. Claxton, Esq. Robert
Hill, Esq. CLAXTON & HILL 3131 McKinney Avenue LB 103 Suite 700 Dallas,
Texas 75204-2471 Telephone: (214) 969-9099 E-mail: rhill@airmail.net


BREAST IMPLANT: Fla. Appeals Court Affirms Verdict in Rupture Case
------------------------------------------------------------------
After finding a verdict setoff inappropriate, a Florida appeals court on
Sept. 13 affirmed a verdict in favor of a woman who claimed that an
automobile collision caused her silicone gel breast implants to rupture
(John Caddell Construction Co., et al. v. Kim Vega Mendez, No. 98-3031,
Fla. App., 3rd Dist.). (Text of Order in Section C. Mealey's Document #
18-991013-103.)

Kim Mendez was injured in an automobile collision with Edward Cain, who
was employed by John Caddell Construction Co. She sued Cain and Caddell
Construction for injuries caused when her silicone breast implants
ruptured during the collision.

Following a verdict for the plaintiff, the defendants sought to amend
the verdict by requesting setoffs for the plaintiff's previously
received benefits and for a $ 50,000 prior settlement in the plaintiff's
class action suit against the implant manufacturer.

The Third District Florida Court of Appeal held that the trial court's
denial of the defendants' request for a $ 10,000 setoff was proper.
"Additionally, the trial court properly denied a setoff based on the $
50,000 settlement the plaintiff had received pursuant to a class action
suit. The class action defendant and the instant defendants were not
joint tortfeasors, and the damages (injuries) claimed in the two cases
were not the same; thus, in our view, a setoff under section 768.041(2),
Florida Statutes, was not appropriate," the court said. "Therefore, we
affirm the trial court's denial of the defendants' request for these
setoffs, and affirm the verdict."

Mendez is represented by Jane Kreusler-Walsh in West Palm Beach, Fla.
The defendants are represented by Gilbert E. Theissen of Heinrich Gordon
Hargrove Weihe & James in Fort Lauderdale, Fla. (Mealey's Litigation
Report: Breast Implants, New Publication, Vol. 7, No. 17, October 1999)


CHASE MOTORS: RICO Suit Re Ponzi Scheme Barred by PSLRA, 3rd Cir Rules
----------------------------------------------------------------------
A panel of the Third Circuit U.S. Court of Appeals has upheld the
dismissal of a $70 million class action Racketeer Influenced and Corrupt
Organizations Act (RICO) suit filed by the victims of an alleged Ponzi
scheme. The appeals court determined that the Private Securities
Litigation Reform Act (PSLRA) amended the federal RICO Act to bar such
claims that could be brought under the securities law. Bald Eagle Area
School District et al. v. Keystone Financial Inc. et al., No. 99-3119
(3rd Cir., Aug. 31, 1999).

                              Background

In the suit, two school systems, South Butler and Bald Eagle, blamed a
central Pennsylvania bank for losses from investments made by their
financial a dvisor. The complaint alleged that Mid-State Bank and Trust
Co. of Hollidaysburg, PA, knew that John Gardner Black was mishandling
investments in an alleged Ponzi scheme. The school systems lost nearly
$70 million which they had invested with Black and his companies, Devon
Capital Management and Financial Management Services Inc (FMS). The
school districts had retained Devon as their investment advisor for the
investment of proceeds from bonds sold to finance school construction.
Though the companies were eventually closed down by the Security and
Exchange Commission (SEC), the investors received only a small fraction
of their original investments.

The RICO complaint alleged that although Black's Ponzi scheme became
public knowledge in September 1997, Mid-State had actually discovered it
years before the SEC uncovered it. Hoping that Black could recover the
huge losses he had incurred and to avoid any claims against the bank,
Mid-State chose not to reveal the scheme and joined in its furtherance,
the complaint alleged.

The school districts contended the bank ignored its obligations to the
investors because it "became embroiled in, and participated in, a Ponzi
scheme that depended upon the unauthorized pooling of class members'
funds, the investment of those funds in risky, impermissible investment,
the fraudulent reporting of market values, and the infusion of more
money to keep the scheme going." The complaint stated that since neither
Devon nor FMS was licensed as a broker or dealer in securities, Black
had to use Mid-State as the "back office" for Devon, and the bank
"essentially acted as the intermediary which processed the securities
trades that were directed by Black."

The complaint alleged that because school districts' and other
governmental entities' bond proceeds and other funds must be deposited
only with custodian banks such as Mid-State, Black could not have
continued his Ponzi scheme, once disclosed and fully understood, without
the knowing participation and assistance of Mid-State.

The district court found the plaintiff's own descriptions of the claims
against Mid-State clearly illustrated that they could not be brought
under the RICO statute as amended by the PSLRA since they could be
brought as securities claims. It accordingly dismissed the complaint.

                        Third Circuit Decision

"The School Districts' own words show that Mid-State's 'role in the
Ponzi scheme was essential to its existence and continuation'.
Therefore, the alleged conduct is 'conduct that would have been
actionable as fraud in the purchase and sale of securities,' and it
cannot constitute predicate acts of a RICO violation," wrote the Third
Circuit panel, affirming the district court's judgment.

The appellate panel explained that prior to 1995, a private plaintiff
could assert a civil RICO claim for securities law violations sounding
in "garden variety" fraud. Since "fraud in the sale of securities" was a
predicate offense in both criminal and civil RICO actions, plaintiffs
regularly elevated fraud to RICO violations because RICO offered the
potential benefit of recovering treble damages. Then in 1995, Congress
enacted the PSLRA, which amended RICO by narrowing the type of conduct
that could qualify as a predicate act. The so-called RICO amendment
eliminated "fraud in the purchase or sale of securities" as a predicate
act.

The Third Circuit has held that the RICO amendment eliminated "any
conduct actionable as fraud in the purchase or sale of securities" as a
predicate act, the panel wrote. It noted that through the RICO
amendment, Congress sought to completely eliminate the so-called "treble
damage blunderbuss of RICO" in securities fraud cases.

The panel cautioned that a plaintiff cannot avoid the RICO amendment's
bar by pleading mail fraud, wire fraud, and bank fraud as predicate
offenses in a civil RICO action if the conduct giving rise to those
predicate offenses amounts to securities fraud.

The school districts are represented by Richard A. Finberg and Rudy A.
Fabian of Malakoff, Doyle & Finberg and by Richard R. Nelson II and
Nancy Heilman of Cohen & Gribsby, both in Pittsburgh.

Mid-State and the other appellees are represented by Andrew B. Weissman,
Charles E. Davidow, and William K. Shirey of Wilmer, Cutler & Pickering
in Washington, DC, and by William M. Wycoff and Michael H. Wojcik of
Pittsburgh. (Civil RICO Litigation Reporter, Vol. 16; No. 1; Pg. 10,
September 1999)


COCA-COLA: Notice of Georgia Class Certification and Pending Settlement
-----------------------------------------------------------------------
SUMMARY NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT,
SETTLEMENT HEARING AND RIGHT TO APPEAR

TO: ALL PERSONS AND ENTITIES IN THE UNITED STATES WHO PURCHASED
DEFENDANT COCA-COLA'S MINUTE MAID FROZEN CONCENTRATED ORANGE JUICE,
BEARING A STATEMENT ON THE LABEL THAT IT CONTAINED 200% RDI VITAMIN C,
DURING THE PERIOD FROM APRIL 1, 1996 THROUGH AUGUST 20, 1999 (THE
"SETTLEMENT CLASS"):

THIS NOTICE CONTAINS INFORMATION THAT MAY AFFECT YOUR RIGHTS.

An action is now pending in Fulton County Superior Court of Atlanta,
Georgia entitled In re Minute Maid Frozen Orange Juice Litigation,
Master File No. E-58922 (the "Action"), in which Plaintiffs claim that
The Coca-Cola Company ("Coca-Cola"), through its Minute Maid division,
manufactured, marketed, and sold Minute Maid Frozen Concentrated Orange
Juice products ("MMFCOJ") advertised to contain 200% of the recommended
daily intake ("RDI") of vitamin C per serving, but that actually
contained amounts of vitamin C roughly equivalent to those found in
other non-premium or generic-priced brands of frozen orange juice
concentrate, i.e., amounts below 200% RDI vitamin C. Coca-Cola
vigorously denies any and all liability for these claimed allegations.
Nonetheless, the parties propose to settle this Action in order to limit
further expense, inconvenience and distraction and permit the operation
of Defendant's business without further diversion related to the
litigation. Plaintiffs and Plaintiffs' counsel believe that the claims
asserted in the Action have merit; however, given the expense and
duration of any trial and/or appeal, the inherent problems of proof, and
the uncertain outcome and risks of litigation, they have concluded that
the Settlement is in the best interest of the Settlement Class.

This Notice is solely to inform members of the Settlement Class of the
pendency of this Action and of the proposed Settlement and to describe
what to do if you are a member of the Settlement Class and want to be
excluded from or object to the proposed Settlement.

The following Settlement Class has been conditionally certified:

All persons and entities in the United States who purchased MMFCOJ
bearing a statement on the label that it contained 200% RDI vitamin C,
during the period from April 1, 1996 through August 20, 1999.

Coca-Cola has changed its MMFCOJ labels to reflect a vitamin C content
of 160% RDI. Coca-Cola acknowledges that this litigation was one of the
primary reasons for the label change and that the litigation expedited
consideration of the change. The Settlement provides that for a period
of two years from the Court's approval of the Settlement, Coca-Cola
shall cause inspectors from the United States Department of Agriculture
("USDA") to test MMFCOJ products for vitamin C content using a certain
testing methodology approximately every two hours during the production
process. In addition, for two years following Court approval of the
Settlement, the USDA inspectors will randomly select three samples per
day of MMFCOJ during the production process to be tested internally
using a more sophisticated testing methodology. Coca-Cola shall bear the
costs of the foregoing testing. For a period of two years, Coca-Cola
will consider the USDA vitamin C test results and the internal test
results on a proportionately equal basis with the test results obtained
from Coca-Cola's other in-house testing should Coca-Cola implement a
label change to state that MMFCOJ has greater than 160% RDI vitamin C.
If Coca-Cola should implement such a label change, Coca-Cola will
provide to Plaintiffs' lead counsel a summary of the evidence and test
results upon which Coca-Cola is relying.

In addition, as part of the Settlement, Coca-Cola has agreed to pay
Plaintiffs' attorneys' fees, expert fees, court costs, and other
expenses as ordered by the court in an amount not to exceed $490,000.
Plaintiffs are responsible for costs of publishing this notice. The
terms of the proposed Settlement are set forth in detail in the parties'
Stipulation and Agreement of Settlement, which is available for review
at the office of the Clerk of the Fulton County Superior Court, 185
Central Avenue, Atlanta, Georgia, 30303.

This proposed Settlement is a compromise of disputed claims and is not
to be taken as an indication of liability or that damages would be found
against Coca-Cola. This Notice is not to be construed as an admission or
concession of liability by Coca-Cola. The Court has not expressed any
opinion on the merits of any claims or defenses asserted by any of the
parties in this Action or the suitability of this Action as a class
action.

If the Court approves the proposed Settlement, it will enter a judgment
that will dismiss this Action with prejudice on the merits as to all
members of the Settlement Class. If the Settlement is approved by the
Court, unless individual members of the Settlement Class exclude
themselves from the Settlement Class, they will be barred from bringing
their own lawsuits for recovery on any Released Claims. Class members
who do not validly and timely request exclusion from the proposed
Settlement shall be forever barred from prosecuting and shall be deemed
to have released Coca-Cola and all other Released Persons from all
claims, rights (including rights to reimbursement or restitution),
demands, actions, causes of action, suits, matters, issues, debts,
liens, contracts, liabilities, agreements, costs, expenses or losses of
any nature, accrued or unacrrued, fixed or contingent, direct or
derivative, of every nature and description, including unknown claims
(or claims that a Settlement Class member does not now know or suspect
to exist in his favor that, if known, might have affected his release of
Coca-Cola, or might have affected his decision not to object to the
Settlement) whether under Federal law or regulation, or the laws or
regulations of any and all states or subdivisions, that (a) are alleged
in the Action, or that could or might have been alleged by any member of
the Settlement Class against the Defendant, or that arose out of or are
related to the matters referred to in the Action; provided however,
claims for personal injury that arise out of or are related to the
matters referred to in the Action are NOT released; or (b) are related
to distribution of the Settlement proceeds, including the payment of
Plaintiffs' attorneys' fees and expenses, without regard to the possible
subsequent discovery of facts in addition to or different from those now
known.

If you are a member of the Settlement Class, you have the following
options:

If you agree with the Settlement, you need do nothing at all. Coca-Cola
will undertake to satisfy the terms of the Settlement upon final
approval of the Settlement by the Court. You will be bound by the final
judgment and the release described above. You will be represented by
Plaintiffs' lead counsel, Martin D. Chitwood.

If you do not wish to be included in the Settlement Class, you must send
a letter or postcard, postmarked no later than December 29, 1999,
stating your name, address, telephone number, the name of the case (In
re Minute Maid Frozen Orange Juice Litigation, Master File: E-58922),
the reason you are a Settlement Class member, and that you wish to be
excluded. Your request must be personally signed by you and notarized or
state that it was signed under penalty of perjury. Your request should
be sent to Christi C. Mobley, Chitwood & Harley, 2900 Promenade II, 1230
Peachtree Street, N.E., Atlanta, GA 30309 (Counsel for Plaintiffs). To
be considered valid, a request for exclusion must set forth all of this
information and must be timely received. If you validly and timely
request exclusion from the Settlement: (i) you will be excluded from the
Settlement Class; (ii) you will not be permitted to object to the
Settlement; (iii) you will not be bound by the final judgment entered in
this Action; and (iv) you will not be precluded from otherwise
prosecuting any individual claim, if timely, that you may have against
Coca-Cola related to the matters referred to in the Action.

If you are a member of the Settlement Class and you do not request to be
excluded from the Settlement Class, you may object to the terms of the
Settlement. If you object, you will be barred from bringing your own
individual lawsuit asserting claims related to the matters referred to
in the Action, and you will be bound by the final judgment and the
release and by all orders and judgments entered by the Court. You may,
but need not, enter an appearance through counsel of your choice. If you
do, you will be responsible for your attorneys' fees and costs. If you
object to the Settlement, you must both: (1) file with the Court (at the
address in Paragraph 5); and (2) serve upon (a) Christi C. Mobley at the
address identified above in paragraph 8(b), (b) M. Robert Thornton, King
& Spalding, 191 Peachtree Street, N.E., Suite 4900, Atlanta, GA
30303-1763 (Counsel for Coca-Cola), and (c) The Honorable Cynthia D.
Wright at Fulton County Justice Center, 8th floor, 185 Central Avenue,
Atlanta, Georgia 30303, by no later than December 29, 1999 a written
notice of your intention to appear, together with all supporting papers
and a statement personally signed by you under penalty of perjury or by
your counsel that you are in fact a member of the Settlement Class.
Class members who do not timely make their objections in this manner
will be deemed to have waived all objections and shall not be heard.

A hearing will be held before the Honorable Cynthia D. Wright of Fulton
County Superior Court, Civil Division at the address listed in paragraph
5 above, on January 18, 2000 at 8:30 a.m. The purpose of the hearing is
for the judge to decide whether the proposed Settlement is fair,
reasonable and adequate and should be approved. The time and date of
this hearing may be continued or adjourned without further notice.

Any inquiries concerning this notice should be made in writing to
Christi C. Mobley at the address given in paragraph 8(b) above. No
inquiries on this subject should be directed to the Court.

Dated: November 1999 By Order of Superior Court of Fulton County, State
of Georgia THE HONORABLE CYNTHIA D. WRIGHT FULTON COUNTY SUPERIOR COURT
JUDGE

Contact: Chitwood & Harley Christi Mobley, 404/873-3900


GAF BUILDING: Settles NJ Suit on Boycott of Materials Distributors
------------------------------------------------------------------
Plaintiffs Joseph Rossi, Rossi Florence Corp. and Rossi Roofing Inc.
filed a complaint in the United States District Court for the District
of New Jersey on December 24, 1992 against several roofing and siding
manufacturers, including GAF Building Materials Corporation, several
roofing and siding distributors and one national purchasing cooperative,
alleging that defendants participated in a group boycott against
plaintiffs to keep plaintiffs from competing in the Northern New Jersey
roofing and siding distribution market in violation of the Sherman Act,
15 U.S.C. section 1, et seq., and state antitrust laws. Plaintiffs also
asserted a tortious interference claim against defendants under New
Jersey state law. Plaintiffs sought unspecified damages, including
treble and punitive damages, and attorney's fees. The District Court
entered summary judgment in favor of GAF Building Materials Corporation
and four other defendants in March The United States Court of Appeals
for the Third Circuit reversed the District Court's judgment with
respect to GAF Building Materials Corporation and two other defendants.
In October 1999, this matter was settled without admission of liability
by any party.


GIULIANI: A Homeless Man Challenges New York City Crackdowns
------------------------------------------------------------
Even before New York's police commissioner pledged last week to arrest
homeless people who persist in sleeping on sidewalks, a homeless Army
veteran who has improvised a bed on the city's streets for a decade was
quietly trying to stop him through the courts.

In some ways the veteran, Augustine Betancourt, 33, is an unlikely legal
adversary. But nobody knows better that the announced police tactic is
not new. Nobody more clearly illustrates its mixed results.

Almost three years ago, on the cold night of Feb. 27, 1997, Mr.
Betancourt tucked himself into cardboard and fell asleep on a bench in a
small park across the street from the Criminal Courts building in Lower
Manhattan. About 1:30 a.m., he was awakened by two police officers. And
for the first time in his life, he was arrested. "Direct order from
Giuliani," an officer told Mr. Betancourt before taking him to jail,
according to court affidavits. "You're not supposed to be sleeping
here."

Mr. Betancourt, a slight, soft-spoken man who has shunned most social
interaction since his honorable discharge in 1987, was strip-searched,
held for 27 hours and handed a summons. The ticket, on an obscure
sanitation code violation -- one of several ordinances typically used by
the police to arrest or ticket the homeless -- turned out to be invalid.

But in Betancourt v. Giuliani, a little-noticed 1997 federal
class-action lawsuit now nearing a conclusion, Mr. Betancourt and the
lawyer he found in a soup kitchen's legal clinic have mounted a small
but significant challenge to police crackdowns on the homeless.

The lawsuit contends that he and all 25 others in the park area the same
night were falsely arrested in a police sweep for violating a sanitation
ordinance that was impermissibly vague, and only a pretext for punishing
the homeless. It asks that the police be barred from using the ordinance
as a tool for making targets of the homeless.

The city argues that the arrests were legitimate and necessary to
reclaim the area near the Criminal Courts building from debris left by
homeless people who had rejected earlier offers of shelter.

Mr. Betancourt is still homeless. But now he sleeps in an alley not far
from the park, hidden in a cardboard box. And since he was dropped from
the welfare rolls three years ago for failing to appear for a work
assignment, he will not qualify for a shelter bed if Mayor Rudolph W.
Giuliani succeeds in his other effort to tackle homelessness: enforcing
state regulations that make work and all other welfare rules conditions
of shelter. "The years I spent out in the street, people watch me
collect cans or kids laugh when they see me at night getting into a
cardboard box, I've never felt insulted or less than human," Mr.
Betancourt, who won a merit award as a soldier, said in a deposition.
"But incarcerated, I felt deprived of humanity."

Even if it was a mistake to arrest Mr. Betancourt under a sanitation
statute that makes it unlawful to leave "any box, barrel, bale of
merchandise or other movable property" in a public place -- the district
attorney declined to prosecute the case -- the city contends that he
still could have been legitimately arrested for other reasons.

A 1996 police manual for carrying out such sweeps, "Quality of Life
Enforcement Options: A Police Reference Guide," lists 35 offenses that
can prompt an arrest, including camping in the park without a permit and
being present after the official 1 a.m. closing time.

Last week, after a Midtown office worker was left in critical condition
by a random attack that may have been committed by a homeless man, Mayor
Giuliani promised to renew such crackdowns. He dismissed any civil
liberties opposition to his plan as romanticism that did the homeless no
favors. "Streets do not exist in civilized societies for the purpose of
people sleeping there," the mayor said. "Bedrooms are for sleeping."
Police Commissioner Howard Safir seconded his remarks, declaring that if
homeless people sleeping on the sidewalks refuse help from the police
and then "don't obey, we're going to arrest them."

For city lawyers defending against the Betancourt suit, the remarks came
at an awkward moment. Mr. Betancourt's lawyer Doug Lasdon, who directs
the nonprofit Urban Justice Center, with lawyers at Paul, Weiss,
Rifkind, Wharton & Garrison who are donating their time, have argued
that the Giuliani administration has transformed administrative
ordinances into anti-vagrancy laws in a bid to outlaw homelessness.

The city has responded in legal papers that there is no police policy
aimed at the homeless. In September 1997, the city successfully opposed
the plaintiffs' demand for a preliminary injunction that would have
temporarily barred such enforcement of the sanitation ordinance, arguing
in part that Mr. Betancourt and his fellows had not established that
they were at risk of being arrested again.

Last week, the plaintiffs asked the court to bar the city immediately
from such enforcement of the ordinance. Judge John S. Martin of Federal
District Court in Manhattan could rule early next year.

Police depositions in the case open a rare window on the broad
discretion an ordinance can afford. One officer testified that a person
sitting on a park bench with a coat around the shoulders would be in
violation of the section, but would not be in violation if the coat were
zipped.

Another testified that a person sitting beside a newspaper that was
"touching their body" would not violate the code, but the person could
be arrested if the same newspaper was "one inch away."

Throughout the city's history, officials have periodically enforced
vagrancy laws that blurred the line between poverty and criminality. In
"Gotham: A History of New York City to 1898" (Oxford University Press,
1999), Mike Wallace and Edwin G. Burrows describe how early in the 19th
century, vagrancy laws were used for street roundups "at the behest of
merchants and shopkeepers determined to improve New York's business
climate by scouring away peddlers, scavengers, beggars and potential
criminals."

In the 1870's and again in the 1890's, an increase in street begging and
pauperism that historians attribute to economic dislocations led
reformers to discontinue or tighten municipal poor relief, and to step
up enforcement of vagrancy statutes, arresting and locking up "tramps"
and sending them to workhouses.

A series of high court rulings from the 1950's through the 1970's
invalidated the old vagrancy laws. In a recent case, in 1995, the United
States District court in Manhattan ruled that people arrested or ejected
from Pennsylvania Station by the Amtrak police for "hanging out" there
had been deprived of their constitutional rights.

Like people in cities around the country, many New Yorkers went from
compassion to exasperation about the homeless in the 1980's. Despite the
city's uniquely far-reaching right to shelter, established by advocates
through court rulings in 1981, there seemed to be disheveled figures
huddling on every Manhattan sidewalk grate in 1987, when Mr. Betancourt
returned to New York after three years in the Army. He soon stopped
contact with his elderly immigrant parents, who were unaware, he said,
of the deep depression and anxiety attacks that had overwhelmed him in
adolescence. His jobs as kitchen helper or stock clerk grew scarcer
after the stock market crash, and in 1988 he lost his room in a cheap
hotel.

Turning to the city's shelter system, he was placed in the Franklin
Armory in the Bronx, where about 600 men, many mentally ill or addicted
to drugs, slept on a drill floor. He found the street less frightening.
Someone helped him obtain public assistance in 1992, about $100 every
two weeks. But he was one of thousands dropped from the rolls when the
city instituted a strict workfare requirement in August 1996.

In a sense, Mr. Betancourt did become more self-reliant, though not as
city welfare officials had envisioned: he dug himself deeper into a
solitary groove of life bound by the schedules of soup kitchens and
shower programs, coping with his constant anxiety by killing time in
libraries and bookstores, paring down his needs to what would fit in a
small book bag, and hunting nightly for cardboard to make his bed. "It's
the people that you don't see that are actually most vulnerable to these
anti-homeless laws and ordinances, because they're most reluctant to
seek help," Mr. Betancourt, who does not smoke or drink, said in a
recent interview, unobtrusive in his plain black baseball cap, white
T-shirt, checked shirt and khakis.

The mayor's first round of sweeps in 1996 were welcomed by many New
Yorkers. But though they broke up major encampments of homeless people
and offered services, their limitations quickly became apparent. In
monthly spread sheets laid out by location, internal reports by the
Department of Homeless Services reflect that homeless people routed from
one place showed up somewhere else, or ebbed back to the old spot over
time.

Issued summonses, many homeless people failed to show up in court,
resulting in bench warrants later used to arrest them. Many spent time
in jail on Rikers Island, where mental health unit beds cost $91,000 a
year, compared with $20,000 for a city shelter bed and $12,000 for the
supervised apartments that have been the greatest success for the
mentally ill homeless, but remain in short supply. Annual admissions at
the jail reached an all-time high of 133,300 in 1997, up from 106,000 in
1993. Admissions are now about 127,000 a year.

The Franklin Avenue shelter that frightened away Mr. Betancourt in 1988
was cut to 200 beds through lawsuits brought by advocates for the
homeless. More than 70 percent of the shelter system is now run by
private nonprofit agencies.

But through shelter regulations Mr. Giuliani himself sought from the
state, the legal right to shelter underpinning this improved system is
now under challenge as never before.

On a recent Friday night, no one was sleeping in the park where Mr.
Betancourt was arrested. But about 11 p.m., homeless people began
slipping out from the chilly shadows of the surrounding streets one by
one, until more than a dozen stood in the dim light of a street lamp as
a small yellow truck pulled up.

Soon a small caravan of volunteers from a New Jersey group called
Bridges was distributing hot soup, toiletries and blankets to the men.
Mr. Betancourt withdrew to his cardboard box, set in the shadows between
lofts and sweatshops. When he was most fearful of being arrested again,
he said, he never slept in the same place twice. He sought out recessed
crannies in the financial district and moved on before the rumble of
garbage trucks at dawn.

"My motivation in this lawsuit doesn't have anything to do with money or
some kind of vendetta against the city,' he said. "My motivation is to
avoid any further disruption and living like a fugitive." (The New York
Times Nov-22-1999)


HOLOCAUST VICTIMS: Lufthansa To Participate In Slave Labor Fund
---------------------------------------------------------------
Lufthansa, the German national airline, is to participate in the joint
fund of the German government and industry for payment to Nazi-era slave
laborers, The Jerusalem Post learned.

The decision by Lufthansa to participate in the fund was made last week,
after the company had been named as one of 29 German companies which had
refused to take part in the compensation fund. Army Radio had indicated
that the airline was one of the companies on the list which did
extensive business with Israel. At that time, the airline had not issued
a response.

However, in answer to a query from the Post, Lufthansa's Israel
spokesman, Yitzhak Zaroni, said that the airline felt morally obliged to
participate in the fund, although he could not say what the financial
extent of Lufthansa's contribution would be. "Without binding legal
aspects, Deutsche Lufthansa AG feels morally obliged to participate in
the fund. The executive board of the Deutsche Lufthansa AG favors the
initiative," Zaroni said.

The board, he said, had decided to join the fund. It would discuss the
details with the fund and these would be made public at a later date.
According to aviation sources, Lufthansa was taken over by the Third
Reich at the outbreak of World War II. By 1943, it had virtually ceased
operations as a civilian carrier. The airline did not exist from 1945
until April, 1955, when it was again formed as Lufthansa AG. With its
participation in the fund, the company is expected to take part in the
negotiations concerning its size. Last week, the German government
increased its offer for payment to the former slave laborers from from
DM 2 billion to DM 3b., however the German industries participating in
the fund have made no move to increase the DM 4b. which they originally
offered. The original combined offer of the German government and German
industry was DM 6b., a sum that was dismissed as too low by lawyers
representing victims.

The German fund was proposed last February, in part to counter
class-action lawsuits filed in US federal courts. The first five of
those lawsuits were dismissed in September, in favor of German industry.
The victims' lawyers have appealed. Earlier this year, some two million
former slave and forced laborers, most of them from Central and Eastern
Europe, were counted as potential beneficiaries.

The decision by Lufthansa to participate in the fund is in keeping with
its efforts to generate goodwill in Israel and among world Jewry. The
airline has sponsored major art exhibits in Israel, brought the Berlin
Philharmonic to perform in Israel, and has even planted a Lufthansa
Forest in Israel. Last week in New York, the Anti-Defamation League
honored the airline and presented its chairman, Juergen Weber, with its
"1999 Champion of Liberty Award" and Weber said he saw the airline as a
participant in the reconciliation process. "An airline is a natural
bridge-builder. We at Lufthansa see ourselves as a vital element in the
reconciliation process between Germany and Israel," Weber said at the
gathering. (The Jerusalem Post Nov-22-1999)


JUST FOR: Ritchie & Rediker File Securities Suit in Ala; Auditors Named
-----------------------------------------------------------------------
Ritchie & Rediker, L.L.C., combined with Kilborn & Roebuck and David
McDonald, Esq., announced that a securities class action lawsuit was
filed November 19 in the United States District Court for the Northern
District of Alabama, Southern Division, against certain key officers and
controlling personnel of Just for Feet, Inc. (Nasdaq:FEET) and the
Company's auditors, Deloitte & Touche, L.L.P., on behalf of purchasers
of the Company's common stock during the period April 1, 1997, through
and including November 1, 1999 (the "Class Period"). This action is not
brought against the Company, who announced on November 2, 1999, that it
was seeking Chapter XI bankruptcy protection.

If you have not already done so, you may wish to contact the undersigned
in order to participate in this case. If you already contacted Ritchie &
Rediker, you need do nothing further.

The securities class action complaint charges the defendants with
violations of the federal securities laws (specifically, sections 10(b)
and 20 of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder by the Securities Exchange Commission) by, among
other things, misrepresenting and/or omitting material information
concerning the Company's net earnings. The complaint further charges
that these misrepresentations were the result of the combined defendants
actions in, among other things, creating false billings for advertising
and fixed asset costs to its vendors, understating its cost of sales
through acquisition accounting, capitalizing inventory costs that should
have been recorded as expenses, overstating inventory by failing to
account for missing or obsolete inventory, and creating fictitious
postings to both the inventory and expense accounts. The price of Just
for Feet's shares were thereby artificially inflating during the Class
Period.

If you are a member of the class described above, you may seek to join
in the above class action on or no later than sixty days from November
19, 1999. Plaintiffs is represented by, among others, the law firm of
Ritchie & Rediker, L.L.C., web site at www.ritchie-rediker.com and
another firm participating in this action is Kilborn & Roebuck,, which
can be contacted at 1810 Old Government Street, PO Box 66710, Mobile,
Alabama 36660, 334/479-9010. Also participating is David McDonald, Esq.,
who can be contacted at 203 South Warren Street, Mobile, Alabama 36602,
334/434-0045. If you would like to receive an information packet, you
may call toll-free or otherwise contact the undersigned, who will be
pleased to assist: Ritchie & Rediker, L.L.C. 800/251-1127


MERRILL LYNCH: Amended Suit over Securities Fraud & Pricing Filed in MI
-----------------------------------------------------------------------
Lawyers for a wealthy eye surgeon in Michigan have amended and refiled a
potentially costly suit against Merrill Lynch & Co., charging the firm
violated the Municipal Securities Rulemaking Board's Rule G-30 on fair
pricing as well as the securities fraud laws by taking excessive markups
on municipal bonds.

In the amended complaint -- which seeks class action status and still
must be approved as a filing in the case by Judge Shirley Wohl Kram, a
federal judge in New York City -- the law firm of Lovell & Stewart
claims that Merrill, under Rule G-30, should have charged markups of
substantially less than 1% in four separate sales of municipal bonds to
Dr. Stanley Grandon and his family trust.

In one transaction, Merrill sold Grandon $45,000 of triple-A rated,
insured Garden City, Mich., sewer disposal system bonds on Aug. 25,
1995. Merrill claims it purchased the bonds at $95.36 one day before it
sold them to Grandon for $97.414, for a markup of about 2.15% -- an
appropriate markup level.

But the amended complaint claims the price was actually 3.7% to 9.74%
above the true market price, based on yields quoted in the Wall Street
Journal for similar municipal securities and Merrill's Aug. 31
end-of-month statement to Grandon. That statement showed the price of
the bonds was $88.78. Grandon was perplexed at the decline because
interest rates had fallen and other bond prices were rising. He believed
the only explanation for the decline was that the firm took an excessive
markup on the sale.

The "criterion under MSRB Rule G-30 indicates that the markup on the
bond should have been substantially less than 1%," the complaint said.

Rule G-30 requires broker-dealers to sell municipal securities to
customers at a price that is "fair and reasonable, taking into
consideration all relevant factors." These factors include: "the best
judgment" of the dealer as to the fair market value of those securities
at the time of the transaction; the expense involved in executing the
transaction; the fact that the dealer is entitled to a profit; and the
total dollar amount of the transaction.

Grandon's lawyers said that the Garden City bonds were issued recently
in a large amount, were insured and of the highest credit, and were
actively trading in the secondary market.

Merrill's standard clearing charge was $25.00, the complaint said. "This
amount was sufficient to cover Merrill's expenses in effecting each
municipal bond transaction" and a markup of 1% or almost $500 would have
produced "ample profits," it said.

In addition, the complaint charges Merrill misled investors by leaving
blank the box in the confirmation labeled "charge or mark-up/down" after
putting a number in the box marked "processing fee." The blank box
indicated no markup was charged, they said. The suit also claims Merrill
should have disclosed it was acting as principal when selling the bonds
to Grandon and that the profits from the transactions were substantially
greater than they would have been if the firm was acting as agent.

Grandon's lawyers are seeking class action for the suit, claiming
Merrill routinely took excessive markups on municipal securities from
late 1992 through part of 1993.

The complaint claims that Merrill's officers and traders felt that
"Merrill Lynch had built up sufficient goodwill and loyalty among its
customers such that the customers constituted what they called a
'captive market' which could be charged excessive markups in the opaque
secondary market for municipal bonds."

The amended complaint comes after Kram dismissed the Grandon case last
month, ruling Grandon failed to analyze whether Merrill's prices for the
municipal bonds were excessive under the MSRB's Rule G-30. But in her
ruling, Kram gave Grandon until mid-November to file an amended
complaint addressing the G-30 issues.

Kram first dismissed the case in July 1997, claiming Merrill had no duty
to disclose the markups on the municipal bonds. But the Second Circuit
Court of Appeals vacated her ruling, concluding that there is an implied
duty to disclose markups on municipal securities when they are excessive
and that investors can sue broker-dealers for alleged undisclosed
excessive markups. However, the appeals court did not rule on the merits
of the case and remanded it back to the U.S. District Court for the
Southern District of New York. (The Bond Buyer Nov-22-1999)


MICROSOFT CORP: Cable News Network Coverage on Antitrust Litigation
-------------------------------------------------------------------
Broadcast November 22, 1999 on Cable News Network

Transcript # 99112206FN-l01

    * DEBORAH MARCHINI, CNN ANCHOR: The judge in the Microsoft antitrust
trial has appointed a mediator to find a resolution in the landmark
case. Judge Richard Posner of the United States Court of Appeals in
Chicago will lead an effort to bring both sides closer to a settlement.
Microsoft said the company was looking forward to working with him.

    * JOHN DEFTERIOS, CNN ANCHOR: Well, it raises the question this
morning: What's more important, is it getting that settlement with the
U.S. Justice Department in those states, or this class-action lawsuit
that may emerge? That's the story in "The New York Times" this morning
about the state of California.

    * MARCHINI: And it's one of the things we are looking at this
morning with Greg Valliere. He is the political economist at Charles
Schwab Washington Research Group.

And Greg, you predicted that one of the problems with the judge's
findings is that it would lead to a flood of lawsuits. The prediction
seems to be coming true. What, now, is the appointment of a mediator?

    * GREG VALLIERE, POLITICAL ECONOMIST: Well, I recall two weeks ago I
was ranting and raving about class-action lawsuits after everything,
tobacco, HMOs, guns, and, now, Microsoft. And I think because of that
threat, it increases the chances that we will get a settlement, not
right away, but I think sometime maybe by late winter you could get a
deal.

    * MARCHINI: How does a settlement in the federal case keep people
from bringing class-action suits?

    * VALLIERE: Well, I think a settlement in the federal case will not
involve any admission of guilt by Microsoft, and I think that's the key
element, Deborah, to getting a deal; that they admit no wrongdoing at
all, but, at the same time, they settle.

    * MARCHINI: So, no ammunition for the people who want to sue.

    * VALLIERE: Exactly, right.

    * DEFTERIOS: The dust settling on this latest chapter in Congress,
and it's amazing, when you look back, they say they did a great job on
the budget because they reached a consensus here, financial services did
get through, which is major legislation, but they really missed a lot of
opportunity considering how strong the economy is right now and how
great the revenues are.

    * VALLIERE: They could have done more. And as Congress leaves town,
I gather they are hours away from leaving, they'll leave, probably,
today for good, they could have done more on tax reform, especially on
Social Security, a big disappointment.

But I'll take a contrarian view this morning that we'll all be talking
years for now about two things they did do: number one is financial
services reform, getting a bill that will lead to tremendous
consolidation in the industry; and number two, on the budget, even
though there was some pork and every year they have pork, I think they
have now walled off Social Security for a decade.

So the big story coming up in the next decade on the budget is not a big
tax cut or big new spending, the big story is debt reduction.

    * MARCHINI: What's the implications for Treasury bond yields?

    * VALLIERE: Well, that's a very interesting question, Deborah. Could
Treasury yields start to fall, because we will see tremendous debt
reduction? A lot of economists point out there are other factors, like
inflation, there's other debt, federal, state debt, municipal debt,
foreign debt, corporate debt. But at the same time, I don't think it's
fully in the markets, in the Treasury markets, just how different this
environment is in Congress.

    * DEFTERIOS: They really missed an opportunity with getting tax
cuts. It was on the table, the Republicans didn't present it very well,
and it died very, very quickly. There doesn't seem to be a huge desire
out there for it.

    * VALLIERE: Well, you know, the economy in the third quarter grew by
4.8 percent, and it may grow by four percent or more in this quarter. I
think if you saw the economy soften, then, yes, you could get tax
relief; but barring that, I don't see it coming.

    * DEFTERIOS: The other one I was so surprised at -- excuse me, Deb
-- is gun control. With all the demand and all the tragedies we've had,
I thought they would at least emerge with something out of that, and the
Republicans stood tall. Was that a good decision for them, knowing what
may happen to them politically in the year 2000?

    * VALLIERE: Well, I take a cynical view on a lot of that
legislation, John. I think that both sides are preparing their very best
sound bites for the 2000 election. They're going to use all of this
stuff as campaign issues, really.

    * MARCHINI: Another campaign issue that seems to be arising is John
McCain's temper. Your latest thoughts on a that?

    * VALLIERE: Well, there was an extraordinary column in the
"Washington Post" on Friday by Elizabeth Drew, the famous author, who's
talked about leading Republicans who are spreading a rumor that he's
mentally unstable; this is pretty strong stuff. And she named names,
Trent Lott and others, she said are spreading the rumor. They all denied
it.

I personally think you could have a backlash of sympathy for McCain.
I'll be in New Hampshire for Thanksgiving, I'm dying to hear what people
up there are saying. I think that both McCain and Bradley are doing
quite well up there.

    * MARCHINI: What about George W. Bush, missed another debate the
other night?

    * VALLIERE: He did, and I thought he did a pretty good job with Tim
Russert yesterday on "Meet the Press." He still is the favorite, I still
think he'll be the nominee, but you have to say, both Gore and Bush are
no longer shoe-ins.

    * DEFTERIOS: Very interesting stuff.

    * MARCHINI: Greg Valliere, fascinating analysis.

    * DEFTERIOS: A lot covered this morning, Greg, thank you very much.

    * VALLIERE: You bet.

Transcript # 99112201V11

Seventeen days after a federal judge issued a finding of fact that
Microsoft is a monopoly that used its market dominance to the detriment
of consumers, the first lawsuits are being filed on behalf of the
millions of Windows 98 users. Attorneys will file a class- action suit
in San Francisco today.

    * JEANNE MESERVE, CNN ANCHOR: More bad news today for the software
giant Microsoft. It's 17 days after a federal judge issued a finding of
fact that Microsoft is a monopoly that used its market dominance to the
detriment of consumers. The first lawsuits are being filed on behalf of
the millions of Windows 98 users. Attorneys will file a class-action
suit in San Francisco today.

For more on the impact of these suits, CNN legal analyst Roger Cossack.

Roger, what's the basis for this suit?

    * ROGER COSSACK, CNN LEGAL ANALYST: Well, the basis for this suit is
a finding that judge -- that the judge came up with about two weeks ago
when he said that one of the things that Microsoft had done was decided,
because of its market dominance, to charge consumers $98 -- $89 for
their particular Windows 98 product instead of something which they
could have sold for $49 if they wanted to.

And he said that since they have the dominance of the share, and since
they control the market, that deciding of the price was, in effect, I
guess, similar to price gouging. And that is, perhaps, the main basis of
what this expected lawsuit. Now, we haven't seen the complaint yet, but
that's pretty much what we expect the basis of it to be, as well as
other things.

    * MESERVE: If that is the basis of the suit, what is Microsoft's
defense likely to be?

    * COSSACK: Well, Microsoft is going to have at least a couple of
defenses off the top that I can think of. First of all, they're going to
look up and they're going to say: You know, most of you folks out there
didn't buy Windows 98, you had it installed with the computer that you
already purchased; and second of all, if we decide to charge $89, and
it's not an unreasonable amount of money to charge, then we're not doing
anything wrong.

I think Microsoft knew that these lawsuits -- these kinds of
class-action lawsuits were going to be filed and were probably pretty
well prepared for it, and I think they'll put up a tremendous battle. I
mean, look, if this goes through, this could cost them, you know,
hundreds of millions of dollars. But I think the other effect it does is
it pretty well pushes them to want to go ahead and settle this federal
lawsuit. The findings of fact that the judge found cannot be used
against Microsoft, and there's a question of whether or not the
conclusions of law could be used against Microsoft, and perhaps
Microsoft would like to avoid those conclusions of law.

    * MESERVE: Roger Cossack, thanks.

Transcript # 99112201V09

What Could Californians' Class-Action Lawsuit Mean for Microsoft?
In California, a class-action lawsuit is being filed against Microsoft
that could mean some money in consumers' pockets. A look at the case
against Microsoft and what Microsoft can do in its defense.

    * DARYN KAGAN, CNN ANCHOR: Let's begin with some business news and
with new legal challenges for software giant Microsoft: a huge lawsuit
that could put lots of money in the pockets of some consumers. Legal
experts say that it could be the first of many private lawsuits flowing
from the government's antitrust action. "The New York Times" reports
today that lawyers plan to file a class-action lawsuit today on behalf
of millions of Californians. The suit accuses Microsoft of overpricing
its Windows software.

Joining us now to talk about the implications is CNN legal analyst Roger
Cossack.

Roger, good morning. Thanks for joining us.

    * ROGER COSSACK, CNN LEGAL ANALYST: Daryn, I had that Windows 98,
and let me just tell you, even though they're spending -- they're filing
class actions, I don't plan on spending too much money very shortly off
of this.

    * KAGAN: You don't.

    * COSSACK: No. I...

    * KAGAN: I've heard this referred to as like the next tobacco.

    * COSSACK: Well, that's true.

Here's what this is all about. In its finding, the judge, Penfield --
Judge Thomas Penfield Jackson said that he believed that part of what
Windows had done was overcharged, because it's a monopoly have the
ability to overcharge on Windows 95 and Windows 98. Well, that may or
may not be true, but remember, most people got Windows 95 or Windows 98
indirectly because they bought a computer that already had it on them
and didn't actually go out and spend the money for Windows 95 and 98.
So, that's an issue that has to be decided, although California does
have a statute that theoretically would let consumers go ahead and
recover off of that.

It is clearly going to open up the field for a lot of class actions
against Microsoft, but I think Microsoft has been preparing for this for
a long time and probably will give Microsoft the impetus to try and go
ahead and settle its case against the -- that's going on with the
government right now, because the conclusions that the judge could come
down could be harmful to Microsoft, and they probably don't need that.

    * KAGAN: Well, and there is that whole separate federal lawsuit
that's taking place, and isn't this jumping the gun a little bit,
because in that lawsuit we're only so far as the findings of fact, and
as I understand it, you're not allowed to submit that in a private
lawsuit.

    * COSSACK: Well, that's right, and that's -- that's part -- I don't
know if it's actually jumping the gun. It would help those who are
bringing the class-action in California if the judge in that case does
come down with conclusions of law that are harmful to Microsoft. Yes,
those could be relied upon rather than where we are right now with just
some findings, but in fact I think the people are ready to go ahead and
try and prove their case one way or the other.

Look, that judge came out and said some pretty damaging things to
Microsoft. There's every reason to believe that Microsoft will go ahead
and want to settle that lawsuit any way they can. A mediator was
appointed over the weekend that was agreeable to both sides, so it's
reasonable to believe that a settlement's going to go down, and I don't
think it's going to have that much effect one way or the other on the
individual class actions.

But remember, you know, taking on Microsoft is not an easy thing to do.
They have the ability and the wherewithal to fight back, and believe me,
they knew this was coming.

    * KAGAN: Roger, how much money are we really talking about what it
would mean to each individual consumer? Let's say -- let's just say for
the sake of conversation you paid $89 for Windows, you should have been
charged $48. Even as I was reading, they're talking about triple
damages, like, don't spend your winnings all in one place?

    * COSSACK: Yes, that's what I was saying earlier. I wouldn't go out
and use this money to buy Christmas presents this Christmas.

I -- it's hard to say. They're talking, of course, the amount that
Microsoft could be -- you know, hundreds of millions of dollars. In
fact, you know, we say billions today, we say it with such ease, but in
fact it could be a billion dollars; it's hard to estimate. And it's
clearly impossible to estimate what it could mean to each individual.
You know, there's always this -- these problems with class actions that
it seems like when -- what you end up with was -- is about 10 percent of
what you actually spent. So, it's really hard to estimate, Daryn.

    * KAGAN: Still a lot to watch in this case. Roger Cossack, thanks
for shedding some light with us this morning.


MICROSOFT CORP: Poll Says DOJ Hurts Software Industry More Than the Co.
-----------------------------------------------------------------------
On the heels of the finding of fact in the Department of Justice's (DOJ)
antitrust case against Microsoft, a poll released November 22 by the
300,000-member National Taxpayers Union (NTU) shows that a significant
number of consumers believe big government, not Bill Gates, is the real
threat to the software industry.

The poll conducted by Rasmussen Research asked 1,000 likely voters:
"Which is a greater threat to the software industry, Microsoft or the
Justice Department lawsuit against Microsoft?" Among the results: 24.5
percent of the respondents answered Microsoft; 46.8 percent claimed that
the DOJ is to blame; and 28.7 percent were not sure. "What fictitious
'consumer' is the DOJ protecting if so many actual consumers clearly
think that Microsoft has been a boon to the software industry?" asked
NTU President John Berthoud. "The results of this poll suggest that the
DOJ is motivated by political interest instead of the public interest."

Sadly for investors, especially those with pension plans invested in the
S&P 500 Index and the Dow Jones Industrial Average (of which Microsoft
is a major component), the government's actions have had a chilling
effect. After the government's strongly worded finding of fact hit the
street, Microsoft opened the following Monday down seven points, a loss
of about 8 percent. DOJ thus invested $7 million in taxpayer dollars to
destroy $40 billion in private assets literally overnight. According to
Mark Schmidt, NTU's director of programs, "Even if Microsoft's stock
eventually settles down to a long-term loss of only 1 percent, the
government will have cheated shareholders out of almost $5 billion."
Possibly more startling is that the DOJ's finding of fact will promote
more frivolous suits.

The New York Times quoted antitrust litigator Stephen Axinn saying,
"This is the start of the race to get to the courthouse." However, as
Berthoud concluded, "Just as class-action lawsuit abuse has mainly
benefited rich trial lawyers, average consumers and taxpayers are likely
to get the shaft from antitrust litigation abuse as well." (U.S.
Newswire Nov-22-1999)


MICROSOFT CORP: San Francisco Suit Will Be Filed for CA Windows Buyers
----------------------------------------------------------------------
Lawyers will file a class-action lawsuit against Microsoft November 22,
in the first of what legal experts say could become a flood of private
litigation stemming from the Justice Department's antitrust action
against the company, the New York Times reported. The suit, representing
millions of Californians who use Microsoft's operating systems software,
accuses the company of using its monopoly in the field to overcharge
buyers of Windows 95 and Windows 98. The Times reported that the class
action would be filed in California Superior Court in San Francisco.

Legal experts predicted that Microsoft would be vulnerable to private
suits, following the findings of fact issued earlier this month by Judge
Thomas Penfield Jackson, in the US government's antitrust case against
Microsoft. Jackson concluded that Microsoft is a monopoly whose
anti-competitive acts have stifled innovation and harmed consumers.

The software behemoth is especially vulnerable to class actions on
behalf of the millions of users of the company's industry-standard
Windows operating system, the Times reported.

Legal experts say such suits have the potential to cost Microsoft
billions of dollars in damage claims. "This is the start of the race to
get to the courthouse," observed Stephen Axinn, an antitrust litigator
in the law firm Axinn, Veltrop et Harkrider.

Legal scholars said reducing the financial risk from such litigation
could prove to be a powerful incentive for Microsoft to seek an
out-of-court settlement of the case with the government. The chances of
a settlement appeared to improve last week, when Jackson appointed
Richard A. Posner, a federal appeals court judge and leading antitrust
scholar, as mediator in talks between Microsoft and the Justice
Department. (Agence France Presse Nov-22-1999)


QUALCOMM INC: 2nd Amended Complaint Filed in CA Re Breach of Fid. Duty
----------------------------------------------------------------------
On May 6, 1999, Thomas Sprague, a former employee of the Company, filed
a putative class action against the Company, ostensibly on behalf of
himself and those of the Company's former employees who were offered
employment with Ericsson in conjunction with the sale to Ericsson of
certain of the Company's infrastructure division assets and liabilities
and who elected not to participate in a Retention Bonus Plan being
offered to such former employees. The complaint was filed in California
Superior Court in and for the County of San Diego and purports to state
eight causes of action arising primarily out of alleged breaches of the
terms of the Company's 1991 Stock Option Plan, as amended from time to
time. The putative class sought to include former employees of the
Company who, among other things "have not or will not execute the Bonus
Retention Plan and accompanying full and complete release of QUALCOMM."
The complaint seeks an order accelerating all unvested stock options for
the members of the class. Of the 1,053 transitioning former employees
who had unvested stock options, 1,016 elected to participate in the
Retention Bonus Plan offered by QUALCOMM and Ericsson, which provides
several benefits including cash compensation based upon a portion of the
value of their unvested options, and includes a written release of
claims against the Company.

On July 30, 1999, plaintiffs filed a First Amended Complaint
incorporating the allegations set forth in the original complaint,
adding two new causes of action and expanding the putative class to also
include those former employees who chose to participate in the Bonus
Retention Plan.

In October 1999, the court sustained the Company's demurrer to the
plaintiffs' cause of action for breach of fiduciary duty. Counsel for
the putative class has filed a Second Amended Complaint, including
additional class representatives, and substantially the same allegations
as the First Amended Complaint. Although there can be no assurance that
an unfavorable outcome of the dispute would not have a material adverse
effect on the Company's results of operations, liquidity or financial
position, the Company believes the claims are without merit and will
vigorously defend the action.


RATIONAL SOFTWARE: 9th Cir. Vacates Discovery Order on Insider Trading
----------------------------------------------------------------------
The Ninth Circuit U.S. Court of Appeals has issued a writ of mandamus
vacating the Northern District of California's approval of limited
discovery in a dismissed securities fraud class action brought by
Rational Software Corp. shareholders. The suit originally alleged that
large blocks of stock were sold based on insider information provided by
Rational to SG Cowen Securities Corp. In re Rational Software
Corporation Securities Litigation (SG Cowen Securities Corp. et al. v.
Randall et al.) , Consolidated Nos. 98-71501 and 98-71503 (9th Cir.,
Aug. 30, 1999)

Under the heightened pleading standards of the Private Securities
Litigation Reform Act (PSLRA), discovery is stayed during the pendency
of a motion for dismissal. The district court's order was based on the
"undue prejudice" exception to that rule.

                            Background

On Oct. 8, 1997, Rational's CEO Paul Levy allegedly told Cowen analyst,
Rehan Syed, that earnings would be less than expected. Syed, in turn,
allegedly alerted his customers, who began dumping the stock. On the day
of the conversation, trading was five times the normal rate and the
stock price dropped from a high of $15.06 to $11.88, closing at a low of
$9 a share on the following day.

When shareholders sued for improper use of material nonpublic
information, the defendants moved to dismiss the action. They claimed
that the shareholders had failed to show that Levy had personally
benefited from the disclosure or that Syed knew Levy's disclosure was a
breach of his fiduciary duty.

U.S. District Judge Jeremy Fogel granted the dismissal but also granted
plaintiff's motion to file an amended complaint.

The shareholders subsequently moved for limited discovery, arguing that
without it the defendants would be shielded from liability, creating the
"undue prejudice" contemplated in the statute.

Judge Fogel granted the motion for particularized discovery limited to
the identity of the traders and for information regarding the
relationship between Cowen and Rational.

                      The Ninth Circuit Opinion

The circuit court initially noted that discovery accounts for 80 percent
of the total cost of litigation in securities fraud cases and that the
expense often forces innocent parties to settle unwarranted suits. The
PSLRA was passed in response to several perceived abuses in securities
litigation, said the court, including discovery abuses.

Congress intended that securities class actions should stand or fall
based on actual knowledge that the plaintiffs possess, rather than
information gathered after the action is filed, continued the court.

"Distilled to its essence, the district court granted plaintiffs leave
to conduct discovery so that they might uncover facts sufficient to
satisfy the Act's pleading requirements," wrote Circuit Judge Sidney R.
Thomas. The court concluded the lower court ruling was an impermissible
use of the exception as lifting of the stay would contravene the purpose
of the PSLRA.

The circuit court also examined the five-factor test articulated in
Bauman v. U.S. District Court (9th Cir., 1996) to determine whether the
use of its mandamus powers was proper. In addition to its findings that
the district court erred as a matter of law, the court examined the
procedural options left open to the defendants.

The court noted a discovery order is not appealable and, although the
defendants could refuse to comply and appeal a contempt citation, the
majority of the discovery was directed at third-parties who could not be
expected to dispute the order. Accordingly, issuance of the writ was
deemed appropriate by the court.

Rational was represented by Boris Feldman of Wilson Sonsini Goodrich &
Rosati in Palo Alto, CA. Cowen was represented by Lisa M. Carvalho of
Steefel, Levitt & Weiss in San Francisco. The shareholder plaintiffs
were represented by Lionel Z. Glancy of the Law Offices of Lionel Z.
Glancy in Los Angeles. (Corporate Officers and Directors Liability
Litigation Reporter, Vol. 14; No. 23; Pg. 13, Oct-11-1999)


RAYTHEON COMPANY: Bernstein Liebhard Files Securities Suit in MA
----------------------------------------------------------------
The following was released on November 19, 1999 by Bernstein Liebhard &
Lifshitz, LLP:

A securities class action lawsuit was commenced on behalf of purchasers
of Raytheon Corporation Class A (NYSE: RTNa) and Class B (RTNb) common
stock between March 30, 1998 and October 11, 1999, inclusive (the "Class
Period"), in the United States District Court for the District of
Massachusetts.

The complaint charges Raytheon and certain of its directors and
executive officers with violations of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that
the defendants issued materially false and misleading statements
throughout the Class Period about the Company's business, finances and
prospects. Raytheon also failed to disclose material information about
the problems it was experiencing integrating certain of the companies it
had acquired.

As a result of these misrepresentations and omissions, the price of
Raytheon's common stock was artificially inflated throughout the Class
Period.

If you purchased or otherwise acquired Raytheon securities during the
Class Period, and either lost money on the transaction or still hold the
stock, you may wish to join in the action to serve as lead plaintiff. In
order to do so, you must meet certain requirements set forth in the
applicable law and file appropriate papers no later than 60 days from
October 28, 1999.

Plaintiff has selected Bernstein Liebhard & Lifshitz, LLP as one of the
law firms to represent the Class. If you would like to discuss this
action or if you have any questions concerning this Notice or your
rights as a potential class member or lead plaintiff, you may contact
Mr. Mark Punzalan, Director of Shareholder Relations at Bernstein
Liebhard & Lifshitz, LLP, 10 East 40th Street, New York, New York 10016,
(800) 217-1522 or 212-779-1414 or by e-mail at Raytheon@bernlieb.com

You may also contact Joshua Lifshitz at Bull & Lifshitz, LLP,
212/869-9449.


SHOLODGE INC: Appeals Against Tennessee Suits Alleging Securities Fraud
-----------------------------------------------------------------------
In 1998, two purported class action lawsuits were filed against the
Company and certain officers of the Company, by plaintiffs who claim to
be shareholders and debt security holders of the Company, respectively,
both alleging that the Company violated certain anti-fraud provisions of
the Tennessee Securities Act of 1980, as amended, by issuing allegedly
false and misleading statements and financial information to the
investing public. The complaints seek an unspecified amount of damages
and unspecified injunctive relief. The Company filed motions to dismiss
both suits on the basis that the plaintiff's allegations failed to state
a cause of action under the applicable state statute. The trial court
denied both motions. The court's denial of the Company's motions on
these suits are currently before the Court of Appeals. One case was
argued before the Court of Appeals on May 7, 1999, but the court has not
rendered an opinion. Both cases have been set for trial on April 24,
2000. The Company believes both suits are without merit and will defend
itself vigorously. Neither management nor legal counsel can predict the
outcome at this time.


SUSA PARTNERSHIP: Maryland Suit Seeks to Recover Late Fees
----------------------------------------------------------
On July 22, 1999, a purported class action was filed against the Company
in the Circuit Court of Montgomery County, Maryland, under the style:
Ralph Grunewald v. Storage USA, Inc. and SUSA Partnership, L.P., Case
No. 201546V, seeking recovery of certain late fees paid by Company
tenants and an injunction against further assessment of similar fees.
The Company filed a responsive pleading on September 17, 1999, setting
out its answer and affirmative defenses, and believes that it has
defenses to the claims in this suit and intends to vigorously defend it.
The case is currently in discovery and no trial date has been set.


TOBACCO LITIGATION: Big Plans for Big Tobacco's Big Payout of $246 Bil
----------------------------------------------------------------------
There's nothing like free money to create a feeding frenzy in state
legislatures. The imminent arrival of billions of dollars in tobacco
company payments to states has kicked off a fierce competition for the
money.

Advocates for the young and the old, for education and for health care,
are seeking a share of the historic payments. The money -- $ 246 billion
in all, payable over 25 years -- is coming mostly as the result of last
November's settlement of state lawsuits against tobacco companies.

About $ 206 billion is owed to the 46 states that settled last year,
plus the District of Columbia and five territories. Four other states
that settled cases earlier -- Florida, Minnesota, Mississippi and Texas
-- are due about $ 40 billion.

So far, health-care programs stand to get more than half the money
that's been allocated. But most states have not decided how to spend
their share of the initial $ 8.8 billion due to arrive this year and in
2000.

The spending spree that's likely to unfold during the 2000 legislative
sessions will be watched by state attorneys general who negotiated the
settlements. They want a major portion spent to combat smoking,
especially among youths. So far, they don't like what they see. "Some of
the people making the decisions were not in the fight," says Michael
Moore, the Mississippi attorney general who brought the first state
lawsuit against tobacco firms. "When they get the money, it's just like
this is free money to them."

The first $ 2.4 billion will be arriving in most states within days.
Another $ 6.4 billion is due in 2000.

Like lottery winners who elect a half-sized award in cash upfront,
several states may sell their settlements to Wall Street firms in
exchange for lump-sum payments. The brokerage firms then would sell
bonds, whose buyers would collect the annual tobacco payments as
interest.

States might make more money by waiting 25 years for all the Big Tobacco
payments, but they'd take a risk that future payments could shrink or
even vanish. Under the settlement, cigarette-makers can reduce payments
if tobacco sales decline. They also might escape settlement obligations
by filing for bankruptcy or if smokers win class-action lawsuits.

Where the money's going:

    * Anti-smoking

      Only about a dozen states will have substantial efforts to stop
      citizens from using tobacco, advocates say. None will be spending
      as much as the federal Centers for Disease Control and Prevention
      recommends for a good program. The dearth of anti-smoking
      programs has angered groups that fought for the tobacco deal. "If
      they don't invest in tobacco prevention today, they're going to
      be paying out huge Medicaid costs in the future," says Bill
      Novelli, president of the Campaign for Tobacco-Free Kids. "It's
      invest in kids today or pay the price later."

      Even the tobacco companies are urging that their money be spent
      to reduce smoking by teenagers. "The settlement provides an
      unprecedented opportunity to implement programs that can have a
      positive impact on reducing the incidence of youth smoking," says
      Ellen Merlo, senior vice president of corporate affairs for
      Philip Morris USA.

    * Health care

      No area of spending has received as much attention. Many states
      have decided to set up health trust funds. The most common
      proposals involve subsidizing health insurance, prescription drug
      coverage for seniors, rural health centers and substance-abuse
      treatment.

      Some states have decided only to protect the funds from being
      used for the day-to-day business of government. "We're not going
      to fix potholes," says Gregg Sylvester, secretary of health and
      social services in Delaware. "This money is going to go toward
      improving the health of all Delawareans."

      There's no such assurance in California, where Gov. Gray Davis
      vetoed a bill earmarking $ 12.5 billion for health care. The
      Democratic governor says he needs "flexibility" with the money in
      case recession strikes. Dismayed health groups are gathering
      voter signatures for a November 2000 ballot initiative that would
      override Davis.

    * Education

      In states planning to use the money for purposes unrelated to
      health, education is the leading alternative. Michigan was quick
      to devote 75% of its tobacco settlement dollars to college merit
      scholarships for resident students. Louisiana and Nevada have
      similar intentions. Ohio and New Hampshire must spend more in
      poor school districts to meet court mandates on equal access to
      education.

    * A grab bag of other allocations

      Virginia politicians are leaning toward spending 40% of the
      tobacco money on road improvements. Economically stagnant Hawaii
      is sequestering 40% for "economic stabilization" in case even
      harder times hit. Tobacco-growing states are spending part of
      their money to bail out tobacco farmers and communities heavily
      dependent on the tobacco industry. (USA Today Nov-22-1999)


* Congress OKs Clearer Contest Rules on Sweepstakes Sponsors
------------------------------------------------------------
Legislation that would require sweepstakes sponsors to make it plain
that contestants don't need to buy their products to win big prizes was
approved by the Senate and sent to President Clinton for his signature.
The bill, passed by voice, is aimed at protecting thousands of people
who spend millions of dollars on products, including magazine
subscriptions, they don't want or don't need in the mistaken hope they
are increasing their chances of winning sweepstakes.

Federal law already prohibits sweepstakes sponsors from charging
entrants a fee or giving a winning edge to people who make a purchase.
But advertising pitches contained in the more than 1 billion pieces of
sweepstakes mailings sent out yearly too frequently are worded in ways
that imply otherwise, enticing people to spend, said Sen. Susan Collins,
R-Maine, author of the legislation. ''Too many people think that if they
make a purchase, somehow they will improve their chances of winning, and
nothing could be further from the truth,'' Collins said.

During an investigation, Senate staff found that an 82-year-old man
bought a magazine subscription that stretched into the year 2018 in
hopes of improving his chances at a prize, Collins said.

Investigators also turned up dozens of examples of people, frequently
the elderly, who spent their Social Security checks or squandered their
savings in the belief that they were getting closer and closer to
winning million-dollar prizes, luxury cars or exotic vacations. ''Most
people aren't taken in, happily, but enough people are so that a billion
pieces of this kind of mail sweepstakes mail is sent out this year,''
said Sen. Carl Levin, D-Mich. Collins said that ''one woman postponed
needed surgery because she didn't want to miss Ed McMahon's visit.
Sadly, Ed McMahon never showed up.''

The bill requires sweepstakes sponsors to prominently display messages
that no purchase is required. ''You shouldn't have to be a lawyer ... to
figure out the rules of the game and the odds of winning,'' Collins
said.

It also imposes million-dollar fines on sweepstakes companies that
violate the law and gives the U.S. Postal Service new authority to stop
the mailings quickly.

Last month, American Family Enterprises, which runs a sweepstakes
plugged by Dick Clark and Ed McMahon, filed for bankruptcy protection to
help settle dozens of lawsuits alleging deceptive advertising over its
sweepstakes. American Family also announced that it had reached an
agreement in principle that it believes will settle several dozen
class-action lawsuits that have been consolidated in federal court in
Newark, N.J.

Also on November 19, the Senate passed a separate bill that would put a
stop to Internet gambling by closing down ''virtual casino'' World Wide
Web sites. The bill, sponsored by Sen. Jon Kyl, R-Ariz., would extend to
the Internet federal law prohibiting gambling via telephone wire. (AP
Online Nov-19-1999)


* Lawyer Says Letter Commentary May Be Misleading on Class Actions
------------------------------------------------------------------
While Ted Allen attempted a lighthearted look at the ups and downs of
some fans' devotion to their favorite sports teams, I am afraid that
readers may have wrongly concluded that class action lawsuits are
nonsensical and are filed on whim. ("Sue da Bums?," Daily Report, Nov.
2, 1999).

On the contrary, class actions play an important role in making the
courts available to all Americans. If a company has injured many
people-hundreds or thousands of individuals-and the harm done to each of
them is relatively small, a class action may be the only way for them to
seek compensation for fraud or call attention to and prevent other
people from being physically or economically injured.

The class action, in effect, enables and empowers many Davids to go up
against a corporate Goliath.

Past class actions have helped end fraudulent activities and discourage
the defrauding of loyal customers and policy holders. Such cases have
forced auto manufacturers to design minivan latches that safeguard
passengers against preventable ejections. And industries-like those that
manufactured asbestos products-have been exposed and held accountable
for hiding the deadly, known dangers of their products from workers and
consumers they knowingly injured and killed.

As for what to do about a losing sports team, my advice, as a Falcons'
fan, is: Wait til next year.

Richard H. Middleton Jr., Savannah
President, Association of Trial Lawyers of America
(Fulton County Daily Report Nov-22-1999)


                               *********


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
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Washington, DC.  Theresa Cheuk and Peter A. Chapman, editors.

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

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