/raid1/www/Hosts/bankrupt/CAR_Public/991214.MBX                 C L A S S   A C T I O N   R E P O R T E R

                Tuesday, December 14, 1999, Vol. 1, No. 220


ALLIED SIGNAL: Settles Case on Age Bias at Layoff at 2 Arizona Plants
AMERICAN REALTY: Settles Lawsuit over Partnership Ė Moorman Litigation
APAC TELESERVICES: Fd. Securities Suit Okayed; Prospectus Is Faulted
ASBESTOS LITIGATION: CA Ct Rejects OC's Appeal on Allocation Re Kaylo
BAKER HUGHES: Steven E. Cauley Files Securities Suit in Texas

BAKER HUGHES: Whittington, von Sternberg Files Securities Suit in Texas
BAKER HUGHES: Wolf Haldenstein Files Securities Suit in Texas
BRISTOL TECHNOLOGY: NY Ct Approves Settlement for Common Stock Lawsuit
CA AMPLIFIER: 9th Cir Oks Dismissal of Securities Case on Ct Sanction
COCA-COLA: African-American Employeesí Lawsuit over Bias Awaits New CEO

DELOITTE & TOUCHE: Founders of Philip Services File Suit in Toronto
DIGNITY PARTNERS: 9th Cir. Rejects Plea to Rehear Viatical Ruling
FEN-PHEN: More About What Goes on After AHP Offers $4.8B Settlement
FORD, MITSUBISHI: EEOC Pursues Work Place Harassment Claims
GUN MANUFACTURERS: Responses to Fed. Involvement in the Bulletinís

HERNANDEZ: Sp Ct Oks Class of Children Remanded to NSD But Housed in SD
HMO: Il. Class Action Pending; Ap Ct Remands Fees Case V. Meyer Medical
I.C. ISAACS: Finkelstein & Krinsk File Securities Suit
INTíL GAME: Sued for Inducing People to Play Video Poker, Slot Machines
J CREW: Settles Conn. Suit over Discrimination against Male Applicants

KEYSPAN CORP: Agrees to Settle NY State & Fd. Suits over Acquisition
KEYSPAN CORP: Settles Long Island Lightingís RICO Suit; Will Pay Users
MODERN ACOUSTICS: Conn Case on Employee Benefit Plans Survives Sanction
NAVIGANT CONSULTING: Entwistle & Cappucci File Securities Suit in Il.
NAVIGANT CONSULTING: Pomerantz Haudek Files Securities Suit

OCCIDENTAL PETROLEUM: 9th Cir. Affirms $2M Cut for Attys. in Fraud Case
PERVASIVE SOFTWARE: Wolf Haldenstein Files Securities Suit in Texas
PLAINS ALL: Keller Rohrback Files Securities Lawsuit
PLAINS ALL: Scott & Scott File Securities Suit in Texas
PLYMOUTH, MA: Sued for Inaccessibility of Ct Facilities to the Disabled

STARNET COMMUNICATIONS: Shareholders Fight Lawsuits, Canadian News Says
TYCO INTíL: Bernstein Liebhard Files Securities Suit in Florida
TYCO INTíL: Dennis J. Johnson Files Securities Suit in New Hampshire
TYCO INTíT: Shepherd & Geller File Securities Suit in Florida
TYCO INTíT: Wechsler Harwood Files Securities Suit in Florida

UNITED SHIPPING: Sued by Former CA Employee Drivers over OT & Other Pay
VALLEN CORP: Decries Merit of TX Securities Suit over Merger Agreement
VITAMIN PRICE-FIXING: Fd Ct Denies BASF Removal & Remands Case to Penn
WAR VICTIMS: S. Koreans in S. Korea File Suit in U.S. against Japanese
Y2K: A Survival Guide For Human Resource Managers

* Asbestos Litigation Reform Effort Postponed Until Next Session
* New EEO Regulations on Handling Discrimination Complaints Take Effect


ALLIED SIGNAL: Settles Case on Age Bias at Layoff at 2 Arizona Plants
Phoenix AlliedSignal Inc. agreed to pay $ 8 million to more than 350
former workers to settle an age discrimination lawsuit against the
defense contractor. The agreement, approved by a federal judge,
compensates employees who were 40 or older when they were laid off in
1993 and 1994 at AlliedSignal's engines plants in Phoenix and suburban
Tempe. Half the money will come in cash and half in increased pension

"We are very happy that this has been successfully concluded," said
Douglas Culy, a senior engineer who was laid off from the Tempe plant at
age 56 after working for the company for 28 years. "This is a very
handsome reward for us." The Morristown, N.J.-based company denies any
wrongdoing, blaming the layoffs on a downturn in the commercial and
military aerospace markets. Company spokesman Bill Reavis said
AlliedSignal agreed to the settlement to avoid the cost of litigation.

As part of sweeping company-wide staff reductions, AlliedSignal laid off
800 workers in 1993 and 600 more the following year at the two Arizona
plants. About half of those affected employees were 40 or older. A group
of 48 workers filed age discrimination charges against the company, and
the Equal Employment Opportunity Commission included about 800 other
workers as part of a class action suit filed in August 1998. Under the
consent decree, $ 6 million will go to the original group of 48
ex-workers and the remaining $ 2 million to 303 other workers. More than
500 people had already settled with the company or had been rehired,
Reavis said. AlliedSignal is one of the largest employers in the Phoenix
area, with 9,000 workers. (The Legal Intelligencer November 12, 1999)

AMERICAN REALTY: Settles Lawsuit over Partnership Ė Moorman Litigation
American Realty Trust Inc. owns a 96% limited partner interest in Syntek
Asset Management, L.P. ("SAMLP"). Until December 18, 1998, SAMLP was the
general partner of National Realty, L.P. ("NRLP") and National
Operating, L.P. ("NOLP"), the operating partnership of NRLP
(collectively the "Partnership"). Gene E. Phillips, a Director and
Chairman of the Board of the Company until November 16, 1992, is also a
general partner of SAMLP. As of September 30, 1999, the Company owned
approximately 56% of the outstanding limited partner units of the

The Partnership, SAMLP and Gene E. Phillips were among the defendants in
a class action lawsuit arising from the formation of the Partnership
(the "Moorman Litigation"). An agreement settling such lawsuit (the
"Settlement Agreement") for the above named defendants became effective
on July 5, 1990. The Settlement Agreement provided for, among other
things, the appointment of the Partnership oversight committee for the
Partnership and the establishment of specified annually increasing
targets for five years relating to the price of the Partnership's units
of limited partner interest.

The Settlement Agreement provided for the resignation and replacement of
SAMLP as general partner if the unit price targets were not met for two
consecutive anniversary dates. The Partnership did not meet the unit
price targets for the first and second anniversary dates.

On July 15, 1998, the Partnership, SAMLP and the Partnership oversight
committee executed an Agreement for Cash Distribution and Election of
Successor General Partner (the "Cash Distribution Agreement") which
provided for the nomination of an entity affiliated with SAMLP to be the
successor general partner of the Partnership, for the distribution of
$11.4 million to the plaintiff class members and for the resolution of
all related matters under the Settlement Agreement. On October 23, 1998,
the Court entered an order granting final approval of the Cash
Distribution Agreement. The Court also entered orders requiring the
Partnership to pay $404,000 in attorney's fees to Joseph B. Moorman's
legal counsel, $30,000 to Joseph B. Moorman and $404,000 in attorney's
fees to Robert A. McNeil's legal counsel.

Pursuant to the order, $11.4 million was deposited by the Partnership
into an escrow account and then transferred to the control of an
independent administrator. The distribution of cash was placed under the
control of the independent settlement administrator. On March 24, 1999,
the initial distribution of cash was made to the plaintiff class

The proposal to elect NRLP Management Corp. ("NMC"), a wholly-owned
subsidiary of ART, as the successor general partner was submitted to the
unitholders of the Partnership for a vote at a special meeting of
unitholders held on December 18, 1998. NMC was elected by a majority of
the Partnership unitholders. The Settlement Agreement remained in effect
until December 18, 1998, when SAMLP resigned as general partner and NMC
was elected successor general partner and took office.

Under the Cash Distribution Agreement, NMC assumed liability for SAMLP's
note for its original capital contribution to the Partnership. In
addition, NMC assumed liability for the note which requires the
repayment of the $11.4 million paid by the Partnership under the Cash
Distribution Agreement, plus the $808,000 in court ordered attorneys'
fees and $30,000 paid to Joseph B. Moorman. This note requires repayment
over a 10--year period, bears interest at a variable rate, currently
7.3% per annum, and is guaranteed by ART. The liability assumed under
the Cash Distribution Agreement was expensed as a litigation settlement.
An additional $184,000 was expensed as a litigation settlement in the
first quarter of 1999.

As of December 31, 1998, ART discontinued accounting for its investment
in the Partnership under the equity method upon the election of NMC as
general partner of the Partnership and the settlement of the Moorman
Litigation. The Company began consolidation of the Partnership's
accounts at that date and its operations subsequent to that date.

APAC TELESERVICES: Fd. Securities Suit Okayed; Prospectus Is Faulted
Plaintiffs brought a federal securities class action seeking recovery on
behalf of themselves and a "class" consisting of all persons who
purchased defendants' common stock during the "class period" and a
"subclass" consisting of individuals who purchased common stock pursuant
to the registration statement and prospectus statement in connection
with defendants' public offering of common stock.

The court concluded that plaintiffs stated actionable claims under @
10(b) of the Securities Act of 1934 because they properly alleged that
defendants' statement in the prospectus was materially false and
misleading; scienter, the motive, was strongly inferred because one
defendant conducted inside trading during the class period (sale by only
one defendant did not defeat scienter); and plaintiffs were injured by
defendant's conduct.

Judge Jones

IN RE APAC TELESERVICES, INC. QDS:02761840 - Before [the] Court is a
federal securities class action brought under @@ 11 and 12 of the
Securities Act of 1933 (the "1933 Act") and @ 10(b) of the Securities
Act of 1934 (the "1934 Act"). Plaintiffs seek recovery on behalf of
themselves and: (1) a "Class" consisting of all persons who purchased
APAC Teleservices, Inc. ("APAC") common stock between September 19,
1996, and April 21, 1997, inclusive (the "Class Period"); and (2) a
"Subclass" consisting of all persons who purchased APAC common stock
pursuant to, or traceable to, the registration statement and prospectus
issued in connection with the Company's public offering of 4 million
shares of APAC common stock at a price of $ 42.00 per share in November
1996 (the "November Offering").

Defendants: (1) APAC Teleservices, Inc.; (2) Theodore G. Schwartz, Marc
S. Simon, and Morris R. Schectman (collectively the "individual
defendants"); and Merrill Lynch & Co., Lehman Brothers,. Smith Barney,
Inc. and William Blair & Company, L.L.C. (collectively the "Underwriter
Defendants"), move to dismiss the First Consolidated and Amended
Complaint (the "Amended Complaint") pursuant to Fed. R. Civ. P. Rules
9(b) and 12(b)(6); Section 27A of the 1933 Act, 15 U.S.C. @ 77z-2; and
Sections 21D and 21E of the 1934 Act, and 15 U.S.C. @@ 78u-4, 78u-5.

For the purposes of the defendants' motion to dismiss, the following
allegations made in the plaintiffs' Amended Complaint are accepted as

Since 1985, APAC has been in the business of providing telephone-based
sales and marketing services through call centers located primarily in
the Midwest. In 1993, APAC started its "Services Solutions" unit,
offering "inbound" teleservices such as "help-line" support, direct-mail
response and catalog order processing. The Company's largest client was
United Parcel Service ("UPS"), purportedly representing 35.7% of APAC's
total corporate revenues and 75.7% of its Service Solution net revenues
in the first 26 weeks of 1996. Plaintiffs allege that, at all times
relevant to the Amended Complaint, the defendants knew that APAC's
relationship with UPS was critical to the Company's financial condition
and business prospects.

In March 1995, APAC announced that it had entered a four-year contract
with UPS (the "UPS Contract") under which APAC would provide inbound
telemarketing services for UPS at four call centers to be located in
Virginia, Texas, North Carolina and Florida. Under the terms of the
Contract, which became effective on July 10, 1995, APAC telephone
operators would be required, after an initial ramp up period, to meet
stringent performance requirements established by UPS at each of the
four UPS call centers. The UPS Contract provided that APAC would "meet
or exceed each of the applicable UPS requirements." Failure to do so
would give UPS the right to seek all available legal or equitable
remedies. In exchange for meeting the requirements, the UPS Contract
provided that APAC would be "paid a fixed fee for each hour that it
provides a telephone service representative under the UPS agreement
regardless of the number of calls handled."

As early as 1995, APAC had been unable to meet the requirements mandated
by the UPS contract. See P 55. Plaintiffs allege that APAC's call center
operators did not know how to track UPS packages, did not know UPS
pickup procedures and schedules and consistently gave UPS customers
inaccurate information. APAC's failure to perform under the contract led
initially to particular invoices being cut, and thus at first no uniform
enforcement of the requirements was implemented by UPS for an entire
call center or for the entire contract. In June 1996, however, UPS began
enforcing the requirements at the Virginia facility. This meant that UPS
would no longer pay APAC for every hour of telephone operator service
provided, but instead would only pay for "productive" time. This change
in payment method resulted in lost revenue and income at the Virginia
call center, causing profit margins to decline.

Also in or about June 1996, UPS performed an audit of APAC's Texas call
center. In that audit, which reviewed billing information from September
1995 through May 1996, UPS found that APAC had been overbilling for its
services by hundreds of thousands of dollars. In response, UPS voiced
dissatisfaction with APAC's performance and threatened to cut its
invoices even further.

Because of APAC's inability to perform as required under the contract at
all four call centers, UPS repeatedly cut APAC's invoices, resulting in
lost revenues and income and causing profit margins to decline. In
August 1996, UPS informed APAC that it would begin to uniformly enforce
the requirements at all four call centers. Also in August 1996, as a
result of UPS's decision to enforce the requirements on a system-wide
basis, APAC senior management planned reductions in call center
personnel, which would take place immediately after the 1996 Christmas

APAC's failure to comply with the requirements was extensively
documented in daily, weekly, and monthly reports detailing the
performance inadequacies of APAC's operators. For example, operator time
was recorded and reported on daily time sheets and on the Delivery
Information Weekly Operation Report based upon computer use at each

Moreover, at monthly meetings held between APAC senior management, the
four APAC site directors, the four UPS site directors, and UPS
management, as well as other regular meetings, APAC's performance
deficiencies were discussed, and UPS repeatedly communicated its
dissatisfaction with APAC's services, even going so far as to raise the
possibility that it would take its business to Teletech International,
Inc., one of APAC's significant competitors.

Plaintiffs allege that prior to September 19, 1996, the first day of the
Class Period, it was clearly documented that APAC had been unable to
meet the mandated UPS contract requirements for months. They state that
as a result of UPS's decision to enforce these requirements at all four
call centers, APAC's invoices had been repeatedly slashed, causing APAC
to lose revenue and plan staff reductions, and causing APAC's profit
margins to decline.

Plaintiffs contend that the APAC defendants continued to conceal this
information and issued falsely positive statements touting APAC's
expansion and its purportedly documented ability to satisfy the needs of
its clients. Plaintiffs allege that at this point in time, UPS was
already clearly dissatisfied with APAC's work, leading UPS to withhold
payments due APAC.

On October 15, 1996, APAC announced that defendants Schwartz and Simon
would sell their personal stock in connection with the November
Offering. Specifically, defendant Schwartz and his family trusts sold 4
million shares of APAC common stock in the November Offering for an
estimated $ 161 million in proceeds.

Despite APAC's alleged inability to perform under the UPS contract and
UPS's alteration of its method of payment as a result, which had taken
place before the Offering, plaintiffs contend that substantial portions
of the November Prospectus concerning APAC's relationship with UPS and
the UPS contract were repeated nearly verbatim from the Company's
Initial Offering prospectus and its February Offering prospectus.
Plaintiffs allege that the materially false and misleading statements
contained in the November Prospectus included:

    (1) The Company is paid a fixed fee for each hour that it provides
        a telephone service representative under the UPS agreement
        regardless of the number of calls handled."

    (2) The number of "current" workstations in operation at the four
        UPS call centers had increased dramatically from 1,794 in
        February 1996 to 2,630 in November 1996, a 46.6% increase.

    (3) APAC and its customers closely monitored APAC's telephone
        representatives in order to maintain "efficiency" and the
        Company's "reputation for quality."

    (4) UPS was a "significant" client of APAC's, with which the
        Company maintained a four year contract that could only be
        terminated if it was materially breached by APAC or by a change
        in control. This contract was unusual in that it could not be
        terminated on short notice, unlike most of APAC's other

    (5) APAC operated 8000 workstations in 57 call centers.

    (6) APAC's "innovative approach to providing quality service
        distinguished it from its competitors and had led to the
        Company's rapid growth rate and its retention of key clients,"
        and further APAC's services were a "seamless extension of each
        client's business."

    (7) APAC's Service Solutions unit would continue to grow
        significantly through 1996 and 1997 as certain contracts came
        "fully on-line."

    (8) APAC had experienced significant net revenue increases from
        1995 to 1996 "primarily as a result of the commencement of
        services under the Company's agreement with UPS."

    (9) UPS accounted for 75.7% of APAC's Service Solution net revenue
        in the first twenty-six weeks of fiscal 1996.

Further, plaintiffs allege that the defendants omitted to include
material information in the November Prospectus, which rendered numerous
other statements materially false and misleading. For example, they
state that while APAC listed the number of current workstations in
operation at the four UPS call centers and Company-wide, the defendants
did not disclose that by August 1996 APAC had already planned extensive
call center layoffs scheduled to take place after the 1996 Christmas
season. Similarly, plaintiffs allege defendants failed to disclose: (1)
that for months APAC had been unable to meet the performance
requirements mandated by the UPS contract; (2) that UPS had repeatedly
slashed APAC's invoices; and (3) that UPS had registered significant
dissatisfaction with APAC's services. Plaintiffs also contend that the
underwriter defendants negligently repeated phrases that had appeared in
earlier offering documents concerning the UPS contact and APAC's
relationship with UPS, and failed to perform the required due diligence
necessary to ensure that the information contained in the November
Prospectus was accurate and complete.

Plaintiffs allege that even after the November Offering, the APAC
defendants continued to offer positive assessments of APAC's performance
and its ability to satisfy its customers. On December 10, 1996, APAC
announced the expansion of its business in the Midwest accompanied by
the hiring of 300 additional employees, without disclosing that the
Company was planning call center lay-offs to take place after the 1996
Christmas season. Then, in the beginning of April 1997, defendant
Schectman began selling off his own APAC holdings. Between April 11,
1997 and April 16, 1997, defendant Schectman sold over 60% of his APAC
common stock for proceeds of over $ 464,580.

On April 20, 1997, only days after defendant Schectman had sold a
majority of his APAC common stock, APAC announced that the Company's
financial results for the quarter ended March 31, 1997 "were affected by
a mutual decision that resulted in its absorbing certain costs incurred
in the first quarter related to staffing requirements of a large
outsourcing client." A report carried over the Dow Jones News Service
the following day stated that: "UPS wants to modify its help-desk
service agreements toward paying outsourcing agencies only for
'productive' help-desk time... as opposed to billing simply for total
help-desk billable hours." It was further revealed in this report that
this cutback would "be retroactive to Jan. 1 so the entire first quarter
will be affected." As APAC later revealed, the UPS cutbacks resulted in
a 20% reduction in the Company's billable service.

Plaintiffs contend that the market reacted swiftly to this negative
news, causing the price of APAC's stock to fall from $ 21.50 per share
on Friday, April 18, 1997, to $ 11.13 per share on April 21, 1997, a 52%
drop. The next day, the price continued to fall, closing at $ 9.88 on
April 22, 1997.

      Pleading Requirements under Section 10(b) and Rule 9(B)

To state a claim under @ 10(b) of the Exchange Act and Rule l0b-5, "a
plaintiff must plead that in connection with the purchase or sale of
securities, the defendant, acting with scienter, made a false material
representation or omitted to disclose material information and that
[the] plaintiff's reliance on the defendant's action caused [the]
plaintiff injury." Stevelman v. Alias Research Inc., 174 F.3d 79, 83 (2d
Cir. 1999) (quoting Chill v. General Electric Co., 101 F.3d 263, 267 (2d
Cir. 1996)).

An allegation of securities fraud under Section 10(b) and Rule 10b-5 is
also subject to the pleading requirements of Fed. R. Civ. P. 9(b). See
Stevelman, 174 F.3d at 84; Shields v. Citytrust Bancorp, Inc., 25 F.3d
1124, 1127 (2d Cir. 1994). Rule 9(b) states: "In all averments of fraud
or mistake, the circumstances constituting fraud or mistake shall be
stated with particularity." To satisfy the particularity requirements of
Rule 9(b), a plaintiff alleging securities fraud "must: '(1) specify the
statements that the plaintiff contends were fraudulent, (2) identify the
speaker, (3) state where and when the statements were made, and (4)
explain why the statements were fraudulent.'" Stevelman, 174 F.3d at 84
(quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir.
1993)) (citation omitted). Although Rule 9(b) states that "malice,
intent, knowledge, and other conditions of mind of a person may be
averred generally," a plaintiff is nonetheless required to allege facts
that give rise to a "strong inference" of fraudulent intent. See
Stevelman, 174 F.3d at 84; Mills, 12 F.3d at 1176; Chill, 101 F.3d at
267. In this Circuit, a strong inference of fraudulent intent is shown
"either (a) by alleging facts that constitute strong circumstantial
evidence of conscious misbehavior or recklessness, or (b) by alleging
facts to show that defendants had both motive and opportunity to commit
fraud." Stevelman, 174 F.3d at 84. See also Shields, 25 F.3d at 1128; In
re Time Warner Inc. Securities Litigation, 9 F.3d 259, 268 69 (2d Cir.

The Court of Appeals has explained that the Private Securities
Litigation Reform Act of 1995, "heightened the requirement for pleading
scienter to the level used by the Second Circuit," Press v. Chemical
Investment Services Corp., 166 F.3d 529, 537 - 38 (2d Cir. 1999), and
the Court has recently reiterated that fraud may be inferred from motive
and opportunity, see Stevelman, 174 F.3d at 84.


The APAC defendants', individual defendants', and Underwriters
defendants' motion to dismiss the First Consolidated and Amended
Complaint pursuant to Fed. R. Civ. P. Rules 9(b) and 12(b)(6); Section
27A of the 1933 Act, 15 U.S.C. @ 77z-2; and Sections 21D and 21E of the
1934 Act, and 15 U.S.C. @@ 78u-4, 78u-5 is denied. The parties are
ordered to submit a proposed stipulated case management plan on or
before November 29, 1999. So Ordered. (From New York Law Journal,
November 30, 1999)

ASBESTOS LITIGATION: CA Ct Rejects OC's Appeal on Allocation Re Kaylo
A California appellate court has held that apportionment of liability
based on comparative fault of various asbestos manufacturers and
distributors applies to separate products only. On this basis, the court
refused to allocate fault with respect to exposure to Kaylo as between
Owens Corning (OC) and Owens-Illinois Corp. (OI), the two manufacturers
of the product, ascribing total allocation for exposure to the product
to OC. Hopson et al. v. Owens Corning, No. A080530/A08179 (CA Ct. App.,
1st App. Dist., Div. 5, Sept. 27, 1999).

In so holding, the panel found that a jury instruction stating that "no
separate allocation of fault should be made to other manufacturers,
sellers, suppliers or distributors of the same product" was appropriate.
The court rejected OC's claim that OI, the manufacturer of Kaylo from
1953-1958, should share in OC's liability arising from the plaintiffs'
asbestos personal injury claims.

The action involved the consolidated claims of nine plaintiffs against
numerous asbestos manufacturers and distributors, all of whom settled
prior to trial, with the exception of OC. In reviewing the issues on
appeal, the court limited its evaluation to the claims of two
plaintiffs, Dan Cirgliano and Kenneth Copp.

Cirgliano worked as a merchant seaman from 1942 through 1974, and
performed maintenance duties that included sweeping insulation dust from
the engine rooms of ships. At trial, Cirgliano presented evidence of
exposure to OC's Kaylo by tracking his ship assignments and reviewing
insulation installation and repair records for each ship.

Copp was a ship yard worker at Bethlehem Steel in San Francisco between
1960 and 1983, where he installed and removed sheet metal from engine
rooms and other ship areas. While the ship yard primarily used
Johns-Manville Corp. products, Copp presented evidence establishing that
it used Kaylo at various times when Johns-Manville products were

Both Cirgliano and Copp presented medical evidence and supporting expert
testimony in order to establish that their workplace exposure to
asbestos caused them to develop asbestos pleural disease and asbestosis.

At the close of trial, the jury awarded compensatory and punitive
damages to Cirgliano and Copp in the amount of $531,000 and $279,200,
respectively. OC appealed the judgments on the following three grounds:

-- There was insufficient evidence to establish that Cirgliano and Copp
were actually exposed to OC's products;

-- The jury instruction precluding relative allocation of fault with
respect to exposure to Kaylo only was improper; and

-- Punitive damages were excessive as a matter of law based on
consideration of past punitive damages awards against the company.

Writing for the appellate panel, Judge Barbara J.R. Jones initially
dismissed OC's challenges as to general product identification issues.
The court looked to its 1995 ruling in Linweaver v. Plant Insulation Co.
to evaluate the sufficiency of evidence of the plaintiffs' exposure to
OC's products. In Linweaver, the court articulated the following factors
for consideration in determining whether a defendant's
asbestos-containing product was a substantial factor in causing a
plaintiff's asbestosis: (1) frequency of exposure, regularity of
exposure, (3) proximity of the product to the plaintiff, type of
asbestos product, (5) type of injury, and (6) other possible sources of
the plaintiff's injury.

Noting that Linweaver represents a "lenient" standard with respect to
product identification issues, the court concluded that there was
sufficient evidence to support a reasonable inference that Cirgliano and
Copp were exposed to OC's products.

Judge Jones then considered OC's challenge to the trial court's
comparative fault jury instruction. The court acknowledged that under
California Proposition 51 (Civ. Code, Secs. 1431.2-1431.5) and cases
interpreting the law, non-economic damages are to be apportioned based
on comparative fault; however, the statute does not shield defendants in
vicarious liability or strict liability situations.

Judge Jones noted that in the asbestos context, the appellate court
addressed the applicability of Prop. 51 in Arena v. Owens-Corning
Fiberglas Corp. (1988). There the court stated, "Defendants who are in
the same chain of distribution of a specific defective product remain
jointly and severally liable for all harm caused by that product."
Accordingly, Judge Jones concluded that the trial court's jury
instruction ascribing full liability to OC for the plaintiffs' exposure
to Kaylo was proper.

The court then rejected OC's claims regarding punitive damages, holding
that the jury's award was not excessive in light of past punitive awards
against the company. The court also concluded that the trial court did
not err in allowing evidence of past punitive awards against OC.

OC was represented by Thomas M. Peterson of Brobeck, Phleger & Harrison
in San Francisco. Cirgliano and Copp were represented by Brice Anderson
of San Francisco. (Asbestos Litigation Reporter, Vol. 21; No. 19; Pg. 6,
November 5, 1999)

BAKER HUGHES: Steven E. Cauley Files Securities Suit in Texas
The Law Offices of Steven E. Cauley, P.A. announced on December 13 that
a Class Action has been commenced in the United States District Court
for the Southern District of Texas on behalf of all persons or entities
who purchased or otherwise acquired Baker Hughes, Inc. (NYSE: BHI)
common stock ("Baker" or the "Company") securities during the period
between May 3, 1999 and December 8, 1999, inclusive (the "Class Period")

The lawsuit alleges that during the Class Period, defendants issued an
inflated financial statement in violation of generally accepted
accounting principles. On December 8, 1999, after the close of the U.S.
securities markets, defendants announced that its internal accounting
department had discovered "various accounting issues" at its Inteq
drilling services which could have a cumulative pretax effect "in the
range of $40 million to $50 million, including the possible restatement
of prior periods." Baker Hughes acknowledged in public press reports
that these "accounting issues" were "irregularities," which are
generally defined as intentional misstatements or omissions of amounts
or disclosures in financial statements. On this news, the price of BHI
common stock dropped $3-3/8 to $19-1/4 per share, after falling as low
as $15 per share earlier in trading on December 9, 1999.

Contact: Steven E. Cauley, Scott E. Poynter, Gina M. Cothern, 2200 N.
Rodney Parham Road, Suite 218, Cypress Plaza, Little Rock, AR 72212,
1-888-551-9944 - toll free or E-mail: CauleyPA@aol.com

BAKER HUGHES: Whittington, von Sternberg Files Securities Suit in Texas
The Houston, Texas law firm of Whittington, von Sternberg, Emerson &
Wilsher, L.L.P. announced on December 10 that a Class Action has been
commenced in the United States District Court for the Southern District
of Texas here in Houston on behalf of all persons or entities who
purchased or otherwise acquired Houston-based Baker Hughes, Inc. common
stock ("Baker" or the "Company") (NYSE:BHI) securities during the period
between May 3, 1999 and December 8, 1999, inclusive (the "Class

The lawsuit alleges that during the Class Period, defendants issued
inflated financial statement in violation of generally accepted
accounting principles. On December 8, 1999, after the close of the U.S.
securities markets, defendants announced that its internal accounting
department had discovered "various accounting issues" at its Inteq
drilling services until which could have a cumulative pretax effect "in
the range of $40 million to $50 million, including the possible
restatement of prior periods." Baker Hughes acknowledged in public press
reports that these "accounting issues" were "irregularities," which are
generally defined as intentional misstatements or omissions of amounts
or disclosures in financial statements. On this news, the price of BHI
common stock dropped $3-3/8 to $19-1/4 per share, after falling as low
as $15 per share earlier in trading on December 9, 1999.

WILSHER LLP 2600 S. Gessner, Suite 600 Houston, Texas 77063 Telephone:
713/789-8850 Facsimile: 713/789-0033 E-Mail: je-mlaw@worldnet.att.net

BAKER HUGHES: Wolf Haldenstein Files Securities Suit in Texas
The following is an announcement of December 10 by the law firm of Wolf
Haldenstein Adler Freeman & Herz LLP:

Wolf Haldenstein Adler Freeman & Herz LLP, announce that a class action
is being commenced in the United States District Court for the Southern
District of Texas on behalf of purchasers of Baker Hughs, Inc ("BHI")
[NYSE: BHI - News]] common stock during the period between may 3, 1999
and December 8, 1999 (the "Class Period").

The complaint charges BHI and an officer and director with violations of
the Securities Exchange Act of 1934. BHI services the oil and gas
industry, providing reservoir-centered products, services, and systems
to the worldwide oil and gas industry, provides products and services
for oil and gas exploration, drilling, completion and production, and
manufactures and markets a variety of roller cutter bits and fixed
cutter diamond bits. The complaint alleges that during the Class Period,
defendants reported favorable earnings and represented that there were
no accounting issues at the company, which caused its stock to trade at
artificially inflated levels. On 12/1/99, BHI announced it expected 4thQ
99 earnings to be short of expectations. Then on 12/8/99, Baker
announced it might restate its past results due to accounting issues in
its Inteq unit that would require charges of $40-$50 million be taken.
On these disclosures, BHI's stock declined as much as 26% to as low as
$15 on volume of 28 million shares. As a result of the defendants' false
statements, BHI's stock price traded at as high as $36-1/4 during the
Class Period.

If you purchased the Company's stock during the Class Period, you have
until February 7, 2000, to participate in the case and ask the Court to
appoint you as one of the lead plaintiffs for the Class. Contact Wolf
Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York,
New York 10016, by telephone at (800) 575-0735 (Michael Miske, Gregory
Nespole, Esq., via e-mail at classmember@whafh.com, whafh@aol.com,
nespole@whafh.com, Gnespole@aol.com, or our website at www.whafh.com
(all e-mail correspondence should make reference to BHI.)

BRISTOL TECHNOLOGY: NY Ct Approves Settlement for Common Stock Lawsuit
SUMMARY U.S. District Court: S.D.N.Y. Civil Practice

Plaintiffs applied for approval of a proposed settlement and for an
award of of attorneys' fees and reimbursement of costs and expenses. The
action was initiated by a class of plaintiffs who purchased the common
stock or warrants of defendant company. They alleged violations of the
Securities Act of 1933 and the Securities and Exchange Act of 1934.
About two years after litigation, the parties reached a proposed
settlement of a $ 975,000 cash payment by defendants. The court approved
the settlement because it was fair, since the nine Grinnell factors had
been satisfied and the settlement was achieved in good faith and at
arm's length by experienced counsel. The court also approved 33 percent
of the settlement for attorneys' fees by using the percentage of the
fund method set out in In re NASDAQ Market-Makers Antitrust Litig.

Judge Sweet

ADAIR v. BRISTOL TECHNOLOGY SYSTEMS, INC. QDS:02761826 - Plaintiffs have
applied for approval of a proposed settlement in this action and for an
award of attorneys' fees and reimbursement of costs and expenses. For
the reasons set forth below, approval of the settlement will be granted
and attorneys' fees will be set at 33 percent of the settlement. In
addition, costs of $ 13,008.12 will be awarded.

This action was initiated on August 7, 1997. Plaintiffs, a class of
persons (the "Class") who purchased the common stock or warrants of
Bristol Technology Systems, Inc. ("Bristol") between November 13, 1996
and May 2, 1997, alleged violations of the Securities Act of 1933 and
the Securities Exchange Act of The facts and prior proceedings are set
forth in an opinion of this Court, Adair v. Bristol Technology Systems,
Inc., 179 F.R.D. 126 (S.D.N.Y. 1998), familiarity with which is assumed.

After approximately two years of litigation, the parties have reached a
proposed settlement (the "Settlement") consisting of a cash payment of $
975,000 by Bristol (the "Settlement Fund"). By order dated June 1, 1999,
this Court preliminarily approved the Settlement and directed that
notice of the Settlement and Hearing thereon, set for September 15,
1999, be disseminated to members of the Class.

As of the date of the Hearing, no objections had been filed with respect
to either the Settlement or Plaintiffs' counsel's intention to apply for
an award of attorneys' fees in an amount up to 33 percent of the
Settlement Fund and the reimbursement of expenses.

                 The Settlement Will Be Approved

Fed. R. Civ. P. 23(e) provides that "[a] class action shall not be
dismissed or compromised without the approval of the court." The
decision to grant or deny such approval lies within the discretion of
the trial court, see In re Ivan F. Boesky Sec. Litig., 948 F.2d 1358,
1368 (2d Cir. 1991); Newman v. Stein, 464 F.2d 689, 692 (2d Cir. 1972),
and this discretion should be exercised in light of the general judicial
policy favoring settlement. See Weinberger v. Kendrick, 698 F.2d 61, 73
(2d Cir. 1982); In re Michael Milken & Assoc. Sec. Litig., 150 F.R.D.
46, 53 (S.D.N.Y. 1993); Chatelain v. Prudential-Bache Sec., Inc., 805 F.
Supp. 209, 212 (S.D.N.Y. 1992).

It is well-established that courts' principal responsibility in
approving class action settlements is to ensure that such settlements
are fair, adequate, and reasonable. See e.g., Weinberger, 698 F.2d at
73; In re PaineWebber Ltd. Partnerships Litig., 171 F.R.D. 104, 124
(S.D.N.Y. 1997).

This determination "involves consideration of two types of evidence."
Weinberger, 698 F.2d at 73. The Court's primary concern is with "the
substantive terms of the settlement compared to the likely result of a
trial," Malchman v. Davis, 706 F.2d 426, 433 (2d Cir. 1983), and to that
end "the trial judge must apprise himself of all the facts necessary for
an intelligent and objective opinion of the probabilities of ultimate
success should the claim[s] be litigated." Weinberger, 698 F.2d at 74.
(internal citations omitted).

The Second Circuit has indicated nine factors to consider in determining
the fairness of a proposed settlement:(1) the complexity, expense and
likely duration of the litigation, (2) the reaction of the class to the
settlement, (3) the stage of the proceedings and the amount of discovery
completed, (4) the risks of establishing liability, (5) the risks of
establishing damages, (6) the risks of maintaining the class action
through the trial, (7) the ability of the defendants to withstand a
greater judgment, (8) the range of reasonableness of the settlement fund
in light of the best possible recovery, (9) the range of reasonableness
of the settlement fund to a possible recovery in light of all the
attendant risks of litigation.

City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974).

The Court's second concern is with the "negotiating process by which the
settlement was reached," Weinberger, 698 F.2d at 74, which must be
examined "in light of the experience of counsel, the vigor with which
the case was prosecuted, and the coercion or collusion that may have
marred the negotiations themselves." Malchman, 706 F.2d at 433 (citing
Weinberger, 698 F.2d at 73). The court has a fiduciary duty to ensure
that the settlement is not the product of collusion. See In re Warner
Communications Sec. Litig., 798 F.2d 35, 37 (2d Cir. 1986). So long as
the integrity of the arm's length negotiation process is preserved,
however, a strong initial presumption of fairness attaches to the
proposed settlement, see Chatelain, 805 F.Supp. at 212, and great weight
is accorded to the recommendations of counsel, who are most closely
acquainted with the facts of the underlying litigation. See id.

           The Grinnell Factors Have Been Satisfied

First, continued litigation in this action would be complex, costly, and
of substantial duration. Significant discovery, trial preparation, and
the trial itself still lie ahead. A judgment favorable to Plaintiffs
would likely be subject to post-trial motions and appeal, delaying any
payment to the Class.

Second, as indicated above, no objections to the Settlement or Plan of
Allocation have been received.

Third, Plaintiffs have engaged in sufficient discovery to fully evaluate
the merits of their claims and obstacles to success. Further discovery
is not likely to provide Plaintiffs with additional leverage to obtain a
larger recovery.

Fourth, there were substantial risks of establishing liability in this
action; Plaintiffs would have to prove that Defendants acted with
scienter, a difficult burden to meet, and that there were material
misstatements or omissions in the Prospectus.

Fifth, Plaintiffs faced substantial risks in proving damages. They would
have to show a causal connection between the drop in Bristol's stock or
warrant price and the purported omissions from the Prospectus, which
Defendants would have vigorously disputed with expert testimony.

Sixth, the Class was only conditionally certified pursuant to the
Stipulation of Settlement, and certification would have been contested
by Defendants.

Seventh, Bristol, whose cash and cash equivalents as of June 30, 1999,
totaled $ 785,000, would not be likely to withstand a greater judgment
at this time or in the foreseeable future. In addition, the underwriters
have ceased operations.

Eighth and Ninth, the Settlement is over 25 percent of the maximum
estimated damages, well within the range of reasonableness, particularly
when weighed against the expense and uncertainty of achieving a more
favorable, collectable result at trial that is sustained through the
appeals process. Thus, the Grinnell factors have been met.

  The Settlements Were Achieved in Good Faith and at Arm's Length

A fair settlement should be the result of good faith, arm's length
bargaining undertaken by experienced counsel. See Weinberger, 698 F.2d
at 74; Grinnell, 495 F.2d at 463 -66. Counsel for the Plaintiffs
specialize in the field of securities class action litigation, and
Defendants' counsel included one of New York's leading firms.

As demonstrated by this Court's previous opinion on Defendants' motion
to dismiss cited above, the parties strenuously litigated the issue of
the adequacy of the complaint.

The process by which the parties reached the Proposed Settlement was
arms-length and hard fought by skilled advocates and negotiators, and is
presented to the Court after the completion of substantial discovery.
For all these reasons, the Settlement merits the approval of the Court.

      Attorney's Fees of 33 percent Will Be Awarded

Just over a year ago, this Court approved a percentage of the fund
method for calculation of attorney's fees. See In re NASDAQ
Market-Makers Antitrust Litig., 94 Civ. 3996, 1998 WL 782020, at *15
(S.D.N.Y. Nov. 9, 1999). That opinion noted that while the Second
Circuit had previously given its express approval to the lodestar method
of determining fees, but not to the percentage of the fund method, the
"judicial tide" was changing, and many district courts in the circuit
had utilized the percentage method. See id.

Since the NASDAQ opinion, the Circuit has acknowledged more explicitly
the trend towards utilizing the percentage of the fund method. See
Savoie v. Merchants Bank, 166 F.3d 456, 460 - 61 (2d Cir. 1999); see
also Polar Int'l Brokerage Corp. v. Reeve, 187 F.R.D. 108, 120 (S.D.N.Y.
1999). This Court, for all the reasons previously given in the NASDAQ
opinion, continues to find that the percentage of the fund method is
more appropriate than the lodestar method for determining attorney's
fees in common fund cases.

Plaintiffs' counsel has requested a fee of 33 percent of the Settlement
Fund. Courts in this District have previously awarded fees at or
exceeding this level on numerous occasions. See, e.g., Berchin v.
General Dynamics Corp., 1996 WL 465752, at *2 (S.D.N.Y. Aug. 14, 1996)
(33 percent of first $ 3,000,000); Vladimir v. Deloitte & Touche, LLP,
95 Civ. 10319 (S.D.N.Y. Aug 14, 1996) (33 percent).

As the previous discussion regarding the fairness of the settlement
indicates, this Court has carefully considered the efforts of
Plaintiffs' counsel in this action. For the reasons aforementioned,
Plaintiffs' request for fees of 33 percent is reasonable and fair. This
conclusion is reinforced by evidence that the percentage fee would
represent only a multiplier of 1.4 of the lodestar, had that approach
been used. The lodestar of $ 229,313, submitted as part of counsel's
affidavit in support of this application for fees, appears to represent
a reasonable number of hours and the hourly rates used to calculate the
figure represent normal rates in Manhattan.

Finally, costs of $ 13,008.12 are relatively insignificant and
reasonable and will be awarded as well.


For the reasons set forth above, the Settlement of $ 975,000 is
approved. Plaintiffs' counsel will be awarded $ 321,750, representing 33
percent of the Settlement Fund, in addition to $ 13,008.12 in costs. It
is so ordered. (New York Law Journal, November 24, 1999)

CA AMPLIFIER: 9th Cir Oks Dismissal of Securities Case on Ct Sanction
The dismissal of a securities class action case served as a setting for
a thorough discussion of Federal Rule of Civil Procedure 41(b) as a
sanctioning device for a party's failure to comply with a court order.
(Yourish, et al. v. California Amplifier Inc., et al., No. 98-56932 (9th
Cir. Oct. 8, 1999).)

The representative plaintiffs in the case, Norman and Kenneth Yourish,
sued California Amplifier Inc. and certain of its officers and directors
- as "top insiders" - for allegedly making false and misleading
statements in an effort to inflate the price of the company's common
stock. The plaintiffs sought damages under three separate sections of
the Securities and Exchange Act of 1934.

The U.S. District Court for the Middle District of California dismissed
the case on motion made by the defendants. However, District Judge
Consuelo Marshall allowed the plaintiffs to file an amended complaint
within 60 days of entry of a dismissal order in the clerk's civil

The plaintiffs failed to refile their complaint within the 60 days
permitted by the District Court and the defendants filed a motion for
entry of an order of final dismissal based upon plaintiffs' failure to
comply with Judge Marshall's previous minute order. The District Court
granted the dismissal motion on the authority of Rule 41(b). The
plaintiffs then appealed the final dismissal order to the 9th Circuit.

The 9th Circuit first addressed the issue of whether an oral minute
order, duly noted in the clerk's docket, could support a "failure to
obey" sanction under Rule 41(b). The court concluded it could, and then
directed its attention to the separate issue of reviewing the lower
court's dismissal order for an abuse of discretion.

                      5 factors to be considered

The court noted its own precedential requirements a District Court must
consider in deciding whether to dismiss a case as a sanction for a
party's failure to obey the court's order. Five factors are to be
considered in such a case, although affirmance by the 9th Circuit can be
supported by as few as three of the factors - if they strongly support

The five factors are: 1) the public's interest in having litigation
expeditiously resolved; 2) appropriate docket management by the court;
3) prejudicial impact upon the defendant; 4) public policy
considerations favoring disposition on the merits; and 5) whether less
drastic measures might be available.

The appellate court noted that the record on appeal reflected a careful
evaluation of each of the five factors by the District Court. After its
own careful review, the 9th Circuit concluded that three of the five
factors did in fact strongly support dismissal. (Only the fourth and
fifth factors failed to provide such support, the court concluded.)

While acknowledging that dismissal was harsh, the court affirmed the
dismissal sanction, saying it could not definitely and firmly conclude
that the District Court reached its decision on the basis of a clear
error of judgment. Attorney for Appellant: Eric A. Isaacson, Milberg,
Weiss, Bershad, Hynes & Lerach, San Diego. Attorney for Appellees:
Daniel S. Floyd, Gibson, Dunn & Crutcher, Los Angeles. (Federal
Discovery News, Rule 41; Vol. 5, No. 12, November 15, 1999)

COCA-COLA: African-American Employeesí Lawsuit over Bias Awaits New CEO
One of the challenges facing Coke's incoming CEO Douglas Daft will be a
racial bias lawsuit filed by current and former employees. The attorney
leading the lawsuit says he hopes the transition from Douglas Ivester to
Daft in April will have a "positive impact." "I hope that new management
will be responsive to the needs of its African-American employees." says
H. Lamar Mixson, a partner at Bondurant, Mixson & Elmore in Atlanta,
which filed the lawsuit in April.

They hope to expand the lawsuit from the four plaintiffs into a class
action on behalf of the 1,500 African-Americans among Coke's 10,000 U.S.

The lawsuit claims that Coke discriminates in pay, promotions and
evaluations. "It is our position in the lawsuit that there's a systemic
pattern of discrimination," Mixson says. No damages have been specified.

Coke denies the allegations. Says spokesman Ben Deutsch, "We will
demonstrate that Coca-Cola has not, does not and will not tolerate
discrimination of any kind."

The lawsuit has generated plenty of fireworks so far. The plaintiffs
accuse Coke of possibly shredding documents relating to the case, a
charge Coke vehemently denies. The plaintiffs also accuse Coke of
violating court orders to fork over key materials. Coke argues that
compiling so many documents so quickly is virtually impossible. A
federal judge stepped in recently and set a deadline of Dec. 16.

Deutsch says Coke will meet the deadline and adds that Coke has already
handed over more than 45,000 pages of documents and databases for all
salaried U.S. employees.

Race has become a hot button issue at Coke. In addition to the lawsuit,
Coke's ranking African-American, Senior Vice President Carl Ware,
announced plans to retire last month after being passed over in a
management reorganization launched by outgoing CEO Douglas Ivester.

The departure of 25-year veteran Ware will leave Coke with an all-white
and all-male team at the highest level and with four African-American
vice presidents among the top two dozen executives. Ware's loss is
doubly difficult because he co-chairs the recently formed Diversity
Advisory Council with U.S. boss Jack Stahl. Ware will be "very involved"
in naming his Council replacement, Deutsch says.

A high-ranking executive at Coke says Daft is trying to get Ware to
change his mind about leaving.

About racial issues at Coke, Deutsch says: "Are we where we want to be
from a diversity standpoint? Quite frankly, no. We want to set the gold
standard in everything we do and that includes having a well-diversified
management team." (USA Today, December 13, 1999)

DELOITTE & TOUCHE: Founders of Philip Services File Suit in Toronto
Allen and Philip Fracassi, the brothers from Hamilton who founded Philip
Services Corp. and built it into the world's biggest scrap company, have
launched a lawsuit against the Canadian and U.S. branches of Deloitte &
Touche, the accounting giant that resigned early December as Philip's
longtime auditors.
The Fracassis have retained Joseph Groia of Heenan Blaikie, a
high-profile Bay Street securities lawyer, for their suit, filed in the
Superior Court of Justice in Toronto.

Philip stock crashed last year, wiping out more than $3-billion in
equity, after the company said three years of financial statements had
been wrong. The company has long blamed its troubles squarely on Bob
Waxman, former head of its metals division, and has sued him for
$150-million (US). Mr. Waxman has denied the allegations, saying that in
fact he worked as part of a team of top brass to make money-losing
operations appear profitable.

The new suit suggests the brothers now believe Deloitte, as 'auditors,
advisors and consultants' to Philip, is also to blame for the troubles
that decimated the firm. Deloitte was unavailable for comment.

'Despite the obligations owed to them by the plaintiffs, Deloitte and
Deloitte U.S. provided the plaintiffs and [Philip] with audit reports,
reports, financial statements and advice which were materially
misleading, inaccurate or incomplete,' reads the notice of action, the
legal document that precedes a statement of claim in a lawsuit.

The 40 banks and other lenders who control Philip, and Philip itself,
have also said they are contemplating suits against Deloitte. A source
close to Carl Icahn, the New York corporate raider who controls the
largest chunk of Philip, recently said, 'One of the major assets of this
company is the lawsuit against Deloitte.'

Deloitte had been auditor at Philip since 1990, overseeing the rise of
what was then Philip Environmental from a scrap and waste-hauling firm
plying the gritty streets of Hamilton to a corporate behemoth with 200
operations in Canada, the United States and England.

But now the Fracassis will seek 'damages arising out of the defendants'
negligence, breach of contract, breach of fiduciary duty [and]
misrepresentation.' The Fracassis will seek damages both as officers and
directors, and as shareholders. They did not specify an amount of

Deloitte has already been named in class-action suits by shareholders in
both the United States and Canada. The Fracassis have been named in the
U.S. class-action suit, which was thrown out last year when a New York
judge said it should be heard in Canada. The U.S. shareholders are
appealing that decision. (National Post (formerly The Financial Post),
December 13, 1999)

DIGNITY PARTNERS: 9th Cir. Rejects Plea to Rehear Viatical Ruling
The Ninth Circuit U.S. Court of Appeals has refused to reconsider its
decision restoring a suit by viatical settlement shareholders against
Dignity Partners Inc. over its offering of interests in the life
insurance policies of persons with AIDS and other terminal ailments.
Hertzberg et al. v. Dignity Partners Inc. et al., No. 98-1694 (9th Cir.,
petition for rehearing denied Nov. 1, 1999); see AIDS LR, Nov. 8, 1999,
P. 8.

The denial was announced in a two-page order which said that neither
Judge William A. Fletcher, who wrote the August decision, nor the other
two judges who concurred in the ruling had voted to accept Dignity
Partner's petition for rehearing en banc. It added that although the
entire Ninth Circuit had been advised of the petition, no member
requested that a vote be taken on the motion.

In the challenged decision, the Ninth Circuit reversed U.S. District
Court Judge Charles Legge's 1997 dismissal of the allegations of
prospective class member Howard Hertzberg and others because they bought
their viatical shares from Dignity Partners on March 14, 1996, 28 days
after an initial public offering (IPO) was registered with the
Securities Exchange Commission.

The appeals court said that remedies are available under Sec. 11 of the
Securities Act of 1933 (1933 Act) to "any person acquiring such
security" and that given the fact that all Dignity Partners shares in
dispute were made available through only one IPO, and were bought based
on its allegedly misleading registration statement, the date of purchase
was irrelevant.

Seeking rehearing, Dignity Partners maintained the decision conflicts
with the U.S. Supreme Court's ruling in Gustafson v. Alloyd Co. (1994)
and made the Ninth Circuit the first circuit in "the more than 60 years
since the enactment of the security laws to confer standing under Sec.
11 upon individuals who do not participate in a public offering but who
can merely trace shares acquired by them in the aftermarket so such an

The appeals court, said Dignity Partners, had shown no evidence to
support the "tracing" theory adopted in the decision. "Distinguishing
between purchasers of stock based upon traceability simply introduces an
arbitrary and unfair distinction into Sec. 11," it added, noting that
nothing in the legislative history of the law supports such a reading.

"By extending the draconian remedies of Sec. 11 to a large class of
aftermarket purchasers, the panel's opinion dramatically alters the
balance between class action plaintiffs (and their lawyers) and
defendants, thereby raising issues of exceptional importance to the
economy and the nation as a whole," the company said.

Last month, the appeals court granted the Securities Industry
Association's leave to file an amicus curiae brief in support of Dignity
Partners' petition for rehearing.

The plaintiffs are represented by William S. Lerach, Patrick J.
Coughlin, Helen Hodges, Eric A. Isaacson, Amber L. Eck, and Joseph D.
Daley of Milberg Weiss Bershad Hynes & Lerach in San Diego; Allison M.
Tattersall of Milberg Weiss' San Francisco office; and Stephen T. Rodd,
James J. Seirmarco, and Peter D. Bull of Abbey, Gardy & Squitieri in New

Gerald W. Palmer of Jones, Day, Reavis & Pogue in Los Angeles and Robert
C. Micheletto of the firm's Chicago office, represent Dignity Partners.
The Securities Industry Association's amicus brief was submitted by
Senior Vice President and General Counsel Stuart J. Kaswell, Vice
President and Associate General Counsel Fredda L. Plesser of New York,
and by William F. Alderman of Orrick, Herrington & Sutcliffe L.L.P. in
San Francisco. (AIDS Litigation Reporter, November 22, 1999)

FEN-PHEN: More About What Goes on After AHP Offers $4.8B Settlement
American Home Products Corp.'s (AHP) offer to settle the vast majority
of diet drug lawsuits around the country for an eventual total of $4.8
billion has received mixed reviews from many of the plaintiffs'
attorneys. The general consensus seems to be that the medical monitoring
portion of the proposal, covering currently uninjured plaintiffs, may
fly, but that plaintiffs with significant heart valve damage can get a
better deal by opting out and taking their chances before hometown
juries. In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine)
Products Liability Litigation , MDL No. 1203 (ED PA, memorandum of
understanding signed Oct. 7, 1999).

The negotiators signed a 75-page memorandum of understanding detailing
AHP's offer to provide medical monitoring to diet drug users who have
not yet developed any disease symptoms and to provide monetary
settlements to plaintiffs who have suffered heart valve injuries after
taking the drugs.

The company reportedly plans to set aside $500 million to $1 billion to
individually settle with plaintiffs who have developed primary pulmonary

The negotiators have 45 days from Oct. 7 to work out their differences
and finalize the details of the settlement proposal for submission to
MDL Judge Louis C. Bechtle sitting in the Eastern District of
Pennsylvania. Judge Bechtle is expected to hold a fairness hearing on
the proposal sometime this winter.

In the meantime, plaintiffs' attorneys are already raising various
objections to the proposal. They point out that the largest payments in
heart valve cases would go to plaintiffs aged 24 and younger, while the
vast majority of plaintiffs who have suffered valvular disease are
middle-aged and older.

At the moment, the proposal also changes little in the ongoing diet drug
litigation around the country. Middlesex Superior Court Judge Marina
Corodemus has stayed the first class action trial taking place in New
Jersey, but trial is underway in one Texas case and several more are
scheduled to begin within the next two weeks. Suits in California and
Massachusetts are also scheduled to go to trial in November, December,
and January, and pre-trial proceedings are continuing in those cases.

One of the provisions of the memorandum of understanding is that AHP
reserves the right to walk away from the settlement within 60 days of
the initial opt-out period if too many plaintiffs choose to opt out.

                        Texas Attorneys React

Several of the Texas plaintiffs' attorneys, whose personal injury suits
are going or have gone to trial or individual settlements, are drafting
objections to the proposed settlement.

Attorney Kip Petroff in Dallas, who won the only jury verdict in a diet
drug case to date ($23.4 million later reduced to the neighborhood of $2
million), pointed out that his client would have qualified for only
$21,000 under the proposed settlement according to the grid proposed by

Michael P. McGartland, of McDonald, Clay, Crow & McGartland in Dallas
and Ft. Worth, as well as other plaintiffs' attorneys around the
country, say they object primarily to the heart valve injury provisions
of the settlement proposal. "They're going to try to certify a
nationwide personal injury class and we're opposed to it because we've
already got our cases set for trial. We're all of one mind with regard
to that," McGartland said of a group of Texas attorneys who have been
cooperating with one another to bring their cases to trial and who are
drafting a joint memorandum of objections.

Charles Parker of Hill & Parker in Houston, the lead attorney in the
Texas class action ( Earthman v. American Home Products Corp. et al. TX
Dist. Ct., 1997 ), has also been involved in the settlement
negotiations. Parker said that he will recommend to the court in the
Earthman case that the plaintiffs should participate in the proposed
nationwide medical monitoring portion of the settlement so long as any
remaining problems are worked out to the benefit of the Texas
plaintiffs. In addition, he said that he will not join the other Texas
attorneys in filing objections to the settlement, but he will simply opt
out all of his personal injury cases. "The Texas cases are far down the
road and I believe the Texas courts will handle the individual personal
injury cases more efficiently and more fairly than they would be handled
in a nationwide class settlement," he said.

Parker has three heart valve cases set for trial in January, February,
and March of next year. Parker also pointed out that there is no
settlement in place yet, only the memorandum of understanding, and that
once the settlement is submitted to the MDL court, finalization is at
least a year or more away. "Everyone's getting worked up too soon," he

                          Other Objections

Other plaintiffs' attorneys question whether the settlement offer can
pass muster under Amchem Products Inc. v. Windsor, a 1997 U.S. Supreme
Court decision overturning a $1.3 billion global settlement proposal in
asbestos litigation because the future asbestos claimants -- those who
had been exposed to asbestos but had not filed any claim or lawsuit --
could not be properly certified under Rule 23(a)(4) or 23(b)(3) of the
Federal Rules of Civil Procedure, two of the rules governing the
certification of a federal class action.

In that ruling, the Supreme Court found that individual issues
predominated over common issues because of individual differences in the
plaintiffs' exposure to asbestos, their smoking histories, and in the
kinds and severity of diseases they had contracted or might suffer in
the future. The court held that as a result, the named plaintiffs in
that case could not adequately represent the interests of the class,
including claimants with injuries and claimants with no manifest

Here, plaintiffs' attorneys also question whether AHP's proposal would
unfairly exclude certain plaintiffs, such as those with mild pulmonary
hypertension, whether the five subclasses would get around the Amchem
roadblocks, and whether the MDL court even has jurisdiction to
administer the settlement, since the medical monitoring portion is
unlikely to meet the $75,000 floor of likely damages per plaintiff
needed to confer federal jurisdiction.

One attorney who asked not to be identified said he did not think the
settlement proposal would succeed unless the medical monitoring part was
severed from the heart valve provisions because too many personal injury
plaintiffs are likely to opt out. "What they're doing is insane!" he
said. (Consumer Product Litigation Reporter, Vol. 10; No. 8; Pg. 3,
November 1999)

FORD, MITSUBISHI: EEOC Pursues Work Place Harassment Claims
Ohio Employment Law Letter says that the EEOC is aggressively pursuing
"class action" harassment claims involving allegations by many employees
of large employers and has recently extracted large sums from two
carmakers. According to the publication, the size of these settlements
should be enough to make any employer take notice.

                  Automakers' Conciliation Agreements

In a recent conciliation agreement with the EEOC, Ford Motor Company has
agreed to distribute up to $ 7.5 million to current and former female
employees of two Chicago-area plants who can show they were racially or
sexually harassed. In addition, Ford has agreed to establish a
comprehensive investigation and resolution mechanism for handling
complaints of harassment. Ford will also provide (at a cost of nearly $
10 million) sensitivity training for employees at the Chicago plants and
has agreed to "undertake good faith efforts" to fill 30 percent of its
future supervisory openings at the two plants with women.

This settlement/conciliation agreement comes on the heels of harassment
charges claiming that Ford permitted a racially and sexually harassing
environment at two of its plants in the Chicago area. The charges
complained of pornographic and sexually explicit posters and graffiti
and claimed that women were subjected to catcalls, vulgar language, and
groping. According to the allegations, both co-workers and supervisors
participated in the harassment.

The conciliation agreement protects Ford only from having to defend a
lawsuit by the EEOC. Seventeen women have filed independent lawsuits.
Additionally, any of the approximately 900 current or former female Ford
employees can choose not to participate in the conciliation agreement
and file a civil action in court for damages.

The Ford agreement follows last year's similar agreement between the
EEOC and Mitsubishi Motor Manufacturing of America, Inc. That agreement
resulted from a class action lawsuit claiming that Mitsubishi had
permitted a corporate culture where inappropriate sexual conduct ran
rampant and was tolerated. The agreement established a $ 34 million fund
that was then used to compensate nearly 500 affected employees.

                         Bottom Line

The price of harassment and discrimination claims is getting higher.
Ford and Mitsubishi might have avoided these costly settlement
agreements, however, by staying vigilant. Had either company taken
action when the behavior began, instead of letting it spiral out of
control, it might have avoided the costly result. The lesson for
employers is clear: Monitor your workplace for sexually or racially
harassing behavior. If you find it, stop it. (Ohio Employment Law
Letter, November, 1999)

GUN MANUFACTURERS: Responses to Fed. Involvement in the Bulletinís
The Wall Street Journal (12/13, Barrett, O'Connell) reported, "Just what
might a settlement of the gun lawsuits look like? The White House jolted
the firearm controversy last week by threatening to add its own
class-action suit to legal actions by 28 municipalities against gun
companies. The surprising thing about the gun-foe wish list is that it
contains a number of demands that industry officials concede they would
be willing to agree to. Other proposals, however, have sparked ferocious
industry opposition.

While many gun executives condemn the new White House threat to sue on
behalf of violence-ridden public housing projects, others tentatively
welcome the administration joining nascent settlement talks. That is
because they see President Clinton and federal officials as more likely
than antigun activists to cut a deal." Housing Secretary Andrew Cuomo
"has invited municipal officials to a strategy session in Washington but
insisted that outside attorneys be excluded."


The Wall Street Journal (12/13) wrote in an editorial, "After seven
years in office, the Clinton Administration last week unveiled its
program to improve the lot of people living in the nation's
public-housing projects: Sue the nation's gun manufacturers. The Housing
and Urban Development Secretary, Andrew Cuomo, announced the threat of a
class-action lawsuit on behalf of 3,200 public housing authorities
around the country. We've come along way since the days when Jack Kemp
was trying to free the residents of these public-housing plantations by
making them property owners." The Journal continued, "In short, the
culture of the underclass, and the values that shape that culture, ought
to be the focus, and it is no longer controversial to hold this view.

But the Clinton Administration wants us to believe that the problem
isn't mom and dad; it's Smith & Wesson. This isn't progress. Indeed, a
look at where many well-known black leaders have been spending their
energies suggests a drift away from the central issues. While 14% of
black kids drop out of school and black 17-year-olds are reading at the
level of white 13-year-olds, NAACP President Kweisi Mfume appears more
disturbed that those 17-year-olds (who incidentally watch nearly twice
as much TV as white kids), don't see more black characters on, say,
'Friends.'" The Journal added, "We have noted for several years now how
Bill Clinton annually vetoes a bill that would introduce a voucher
program for the incompetent District of Columbia school system. Huge
numbers of black parents in D.C. want that voucher program for their
children. But by and large the Clinton veto is a non-story. Hardly any
well-known black leaders will devote real time to the cause of the D.C.
parents desperate to rescue their failing children from failing schools.
Meanwhile endless attention and energy will go into these quixotic gun
lawsuits. Some day, we suspect, a leader is going to emerge from the
younger generation of black Americans to say that his elders'
fascination with Bill Clinton's and Andrew Cuomo's windmills is getting
them nowhere." (The Bulletin's Frontrunner, December 13, 1999)

HERNANDEZ: Sp Ct Oks Class of Children Remanded to NSD But Housed in SD
Justice York

JAMIE B. v. HERNANDEZ QDS:22310871 - Plaintiff brings this action on
behalf of himself and a proposed class consisting of all children who
are or will be either (1) remanded by a Family Court judge to non-secure
detention ("NSD") or given an "open" remand by a Family Court judge and
determined by the New York City Department of Juvenile Justice ("DJJ")
to be eligible for non-secured detention. Defendants DJJ and Tino
Hernandez as its commissioner operate secure and non-secure detention
facilities for juveniles. Defendants the Office of Family and Children's
Services and its commissioner John Johnson are responsible for ensuring
that those facilities comply with all applicable laws and regulations.
According to plaintiffs, dozens of children who have been remanded or
determined eligible for NSD are housed in secure detention facilities
although they are entitled to be placed in NSD group homes. Plaintiffs
allege that in failing to furnish an adequate number of NSD space,
defendants have violated their duty under County Law 218-a(B), the New
York City charter, Chapter 28 Section 677(c); Executive Law Sections 501
and 503; Social Services Law 462-b; and 9 N.Y.C.R.R. Section 180.5.
Plaintiffs further allege that defendants Hernandez and Johnson have
violated their rights under Due Process Clause Article I, Section 6 of
the New York State Constitution by confining plaintiffs in secure
detention rather than the non-secure detention which they have been
ordered remanded or to which plaintiffs are deemed entitled.


Pursuant to New York delinquency proceedings, when a youth makes his or
her initial appearance before a Family Court judge, the judge must
determine whether to release the juvenile from police custody-or, if the
juvenile has not been detained by law enforcement, whether to remand him
or her to the custody of DJJ. See Family Court Act ("F.C.A.") 320.5. The
Family Court Act states that the juvenile should not be detained unless
the court finds either: 1) there is a substantial probability of
flight-that is, that the respondent will not appear in court on the
return date; or, 2) there is a serious risk that before the return date
the respondent may commit an act which if committed by an adult would
constitute a crime. F.C.A. @ 320.5(3). Absent these findings, the judge
releases the youth from custody and sets the terms of release. See
F.C.A. @ 320.5.

While a Family Court judge has authority to set the terms of release,
the Act does not give the judge the explicit authority to set the terms
and conditions of a respondent's remand. Historically, however, Family
Court judges have specified whether a child should be remanded to a
secure facility or to a nonsecure facility ("NSD"). Consistent with its
statutory obligations, the court directs "the least restrictive
available alternative" consistent with "the interests of the juvenile
and the community." F.C.A. 352.2(2). By specifically remanding the child
to a non-secure detention facility, the Family Court judge orders DJJ to
place that youth in an NSD group home; according to plaintiffs'
uncontroverted statement, neither DJJ nor the Office of Children and
Family Services have the authority to modify a judge's specific remand.
See In re Anthony N., 106 Misc.2d 213, 430 N.Y.S.2d 1012 (Fam. Ct.
Richmond County 1980) (finding legislative intent to give judges
authority to direct placement; and ordering agency to comply with court

Alternatively, a Family Court judge might order an "open" remand,
directing DJJ to make the determination. Pursuant to an open remand
order, the Family Court judge directs DJJ to determine the appropriate
type of detention facility for the child. DJJ's discretion is not
unbridled, however, for the statutory requirement that the juvenile be
placed in "the least restrictive alternative," F.C.A. 352.2(2), remains

Following the issuance of an open remand order, DJJ transports the child
to a secure detention facility where intake workers assess the child's
candidacy for NSD. Using standard forms created by DJJ, intake workers
evaluate the youth's behavior in the community, prior DJJ experiences,
and other criteria to determine whether the youth poses a risk of
further delinquency or flight. According to DJJ's stated policy, a youth
screened eligible for NSD must be moved to an NSD facility. Commissioner
Hernandez testified before the City Council on February 23, 1998 that
his goal was to move NSD eligible open remanded children into actual NSD
homes as quickly as possible.

It is not disputed that there is a substantial difference between the
two types of facilities. Secure detention facilities are not unlike
adult jails. The children must wear uniforms and remain behind barbed
wire fences and secured doors with bolts. When transported from the
facility, they wear handcuffs and leg chains. The children may meet only
with a few family members and only for a limited amount of time. They
rarely go outdoors, and engage in few educational or recreational
activities. Furthermore, guards escort and monitor them during
inherently private behavior such as using the bathroom and taking a

In stark contrast, non-secure facilities provide more homelike
environments where children enjoy significantly more personal freedom
and responsibilities. House parents rather than guards supervise the
children. The children regularly attend school; engage in sporting,
cultural, and social activities; and, have counseling services available
to them. Through the completion of chores, successful home visits,
educational progress, and adherence to the rules and procedures of the
non-secure facilities, a point system tracks appropriate behavior and
enables children to "prove themselves." This opportunity to exhibit good
behavior in NSD can be critical to the disposition or sentencing of
their cases.

In October of 1997, the then DJJ Commissioner testified that all NSD
spaces were occupied and that 28 NSD children lived at the Spofford
secure facility. In February 1998, due to the fiscal irregularities of
some of their contractors, DJJ cancelled two NSD contracts, thereby
further decreasing NSD bed capacity by 24 beds. Since March 1998, DJJ
has opened three new group homes; and, as of December 1998, it has had
115 NSD spaces authorized in NSD facilities. However, more recent
numbers indicate that DJJ has been less successful in complying with
Family Court orders. During early 1999, DJJ held an average of four
children with NSD specific remands in secure detention per day, in
addition to the hundreds of children with open remands eligible for NSD.

Defendants acknowledge the need to resolve this bed shortage; however,
they have not set forth a permanent solution to the problem. Rather than
furnishing additional NSD space, DJJ's remedial plan has been to ask
Family Court judges to change remands that would otherwise have been
NSD-specific to open-which, according to DJJ, gives it more discretion
regarding placement. During February and March of last year, defendant
Hernandez contacted all the Family Court judges in New York City by
telephone and letter unilaterally requesting they cease remanding to NSD
because "complete compliance with all NSD-only remands citywide is
currently a physical impossibility." DJJ's latest effort has been to
obtain budget approval to solicit contracts on an expedited basis for
three additional group homes for 36 beds.

However, according to plaintiffs, defendants' plan will not resolve the
problem. First, plaintiffs vehemently object to the practice of asking
judges to alter their rulings that children should be placed in NSD.
Second, because plaintiffs estimate that hundreds of children who are
NSD eligible are detained in secure facilities, 36 more beds will not
provide a permanent solution.

Normally, if a child is not placed in NSD in compliance with a Family
Court order, plaintiffs' course of action is to move for contempt in his
or her case. However, plaintiffs assert that, in an attempt to moot out
individual claims, defendants engage in a shell game, removing one child
from an NSD group home to make room for another. For example, DJJ
transferred Lashawn B., issued an open remand and screened for NSD, from
a group home to a secure facility to make room for an NSD specific
remand. In March, 1999 a Family Court judge granted Lashawn B.'s motion
to change his open remand to NSD-specific and ordered that Lashawn be
returned to NSD without further disruption in his placement. A similar
situation arises when plaintiffs attempt to protect their rights on an
individual basis, plaintiffs contend; when one child moves for contempt
based on noncompliance with a Family Court Judge's order, DJJ moves that
child into an NSD facility at the expense of another child who is or
otherwise would be placed in NSD.

Furthermore, plaintiffs assert that when a Family Court judge orders an
open remand, defendants have an obligation to expeditiously determine
whether to place the child in NSD or secure detention, and to place the
child promptly in accordance with its determination. Plaintiffs also
contend that DJJ should base its assessment on the statutory criteria.
Defendants, on the other hand, argue that an open remand vests in it
discretion to apply whatever criteria it deems proper; and, that failure
to place children in NSD in accordance with its own determinations does
not place it in violation of any Family Court orders. Furthermore, by
its own admission, DJJ stopped screening open remanded children at all
when its NSD facilities became too full to accommodate them. For these
reasons, plaintiffs argue a class action lawsuit is needed. As there is
no mechanism for doing so in Family Court, plaintiffs instituted the
lawsuit in this court.

                     Class Certification

First, plaintiffs seek to proceed as a class. This issue is particularly
significant in this case because the individual plaintiffs are alleging
noncompliance with Family Court orders. As stated, individual challenges
to these orders must be brought before the proper Family Court judge
rather than here in Supreme Court. Unless it is appropriate for
plaintiffs to proceed as a class, therefore, the entire lawsuit is
improper and must be dismissed.

Traditionally, the class action has been considered a way to induce
socially responsible, ethical behavior by institutions and to deter
institutions from engaging in policies and conduct that harm large
numbers of individuals. Pruitt v. Rockefeller Center Properties Inc.,
167 A.D.2d 14, 23, 574 N.Y.S.2d 672, 677 (1st Dept. 1991). To obtain
certification, plaintiffs must satisfy the five requirements set forth
in CPLR 901(a). Meraner v. Albany Med. Ctr., 199 A.D.2d 740, 742, 605
N.Y.S.2d 442, 444 (3d Dept. 1993). Pursuant to the statute, plaintiff
must show that:

* the class is so numerous that joinder of all the members, whether
  otherwise required or permitted, is impracticable;

* common questions of law or fact predominate over any questions a
  affecting individual members;

* the representative parties' claims or defenses are typical of the
  claims or defenses of the other class members;

* the representative parties will fairly and adequately protect the
  interests of the class; and

* a class action is superior to other available methods for the fair
  and efficient adjudication of the controversy.

The trial court has broad discretion to review applications for class
certification. Lauer v. New York Telephone Co., 231 A.D.2d 126, 659
N.Y.S.2d 359 (3d Dept. 1997). Furthermore, courts liberally construe the
applicable criteria in favor of allowing class actions. Brown v. State,
250 A.D.2d 314, 320, 681 N.Y.S.2d 170, 174 (3d Dept. 1998); Friar v.
Vanguard Holding Corp., 78 A.D.2d 83, 91, 434 N.Y.S.2d 698, 709 (2d
Dept. 1980). This is "not only because of the general command for
liberal construction of all CPLR sections... but because it is apparent
that the Legislature intended [the rule] to be a liberal substitute for
the narrow class action legislation which preceded it." Friar, 78 A.D.2d
at 91, 434 N.Y.S.2d at 709.

As to the first criterion, no mechanical test exists to determine
numerosity; furthermore, it is unnecessary to be able to ascertain the
specific number of class members in order to have certification. Friar,
78 A.D.2d at 96, 434 N.Y.S.2d at 706. Instead of applying a mechanical
formula, courts consider the specific facts before them, drawing
"reasonable inferences and commonsense assumptions." Friar, 78 A.D.2d at
96, 434 N.Y.S.2d at 706. Thus, if the number of persons in the class is
unknown but for other reasons joinder is impracticable, certification
still may be proper. See Darns v. Sabol, 165 Misc.2d 77, 82, 627
N.Y.S.2d 526, 530 (Sup. Ct. N.Y. County 1995), modified on other
grounds, 239 A.D.2d 192, 657 N.Y.S.2d 170 (1st Dept. 1997).

The manner in which defendants shift the children into and out of secure
and NSD facilities creates a transitory group. Therefore, the size of
the affected population is difficult to ascertain, as is the identity of
the individuals affected. For this reason, proceeding as a class is more
practical than joinder, and is a superior way to protect the children's
rights. Furthermore, joinder is an impracticable alternative because
future members enter and leave the class on a daily basis. See id.
Current class members are periodically removed from Spofford to NSD
facilities and other children. who allegedly belong in NSD are brought
to Spofford to replace them. Some, like Lashawn B., are shuffled back
and forth between facilities. Requiring individual suits or joinder
would ignore these realities and would be oppressively burdensome.
Lamboy v. Gross, 126 A.D.2d 265, 274, 513 N.Y.S.2d 393, 399 (1st Dept.

Defendants contend that because remands change, and children transfer
facilities or get released, individual claims for relief have become
moot. Since institution of this action, the named plaintiff, Jamie B.,
was transferred to an NSD group home. However, class certification can
still be proper if the action raises questions of public importance
which are "likely to recur and yet evade review." Lamboy, 126 A.D.2d at
273, 513 N.Y.S.2d at 398; see also Jane B. v. New York City Dep't of
Social Serv., 117 F.R.D. 64, 67 (S.D.N.Y. 1987) (mootness of named
plaintiff's claim need not render controversy moot). In Lamboy, the
court certified a class consisting of homeless families eligible for
emergency housing even though the named plaintiff and other class
members were already provided with emergency housing. Lamboy is replete
with similarities to this case. Analogous to plaintiffs' challenge here,
in Lamboy the plaintiff argued that the City of New York did not comply
with an administrative directive obligating it to provide emergency
housing to the homeless. Just as defendants here allegedly violated
numerous Family Court orders, the defendants in Lamboy repeatedly failed
to provide adequate housing pursuant to court order. See also People v.
Dennison, 209 A.D.2d 200, 618 N.Y.S.2d 289 (1st Dept. 1994) (under this
principle, First Department reviewed appeal of order denying juvenile's
habeas corpus application although he had already been released from

In addition, "even if the named plaintiff[] [is] no longer suffering the
harm alleged, since others similarly situated are, the controversy is
not moot." Brown v. Giuliani, 158 F.R.D. 251, 265 (E.D.N.Y. 1994). To
avoid declaring that the entire controversy is moot, certification can
be deemed to relate back to the date the complaint was filed. Id.

Second, CPLR 901(a)(2) requires that common questions of law or fact
predominate over questions affecting only individual members. See.
Friar, 78 A.D.2d at 98, 434 N.Y.S.2d at 708. "The statute... does not
require that all issues be common," Ode v. Smith, 118 Misc.2d 617, 623,
461 N.Y.S.2d, 684, 668 (Sup. Ct. N.Y. Co. 1983), as differences
inevitably exist among class members. In this case, the common issue of
law is whether defendants are required to provide a sufficient number of
nonsecure detention beds to accommodate the plaintiff class. This issue
is paramount to each member, thus satisfying the second prong of the
certification test.

Furthermore, commonality is satisfied when the named plaintiffs
challenge a practice of defendants rather than defendants' conduct with
respect to the individual plaintiffs. Ray M. v. Board of Educ. Sch.
Dist. of the City of New York, 884 F. Supp. 696, 700 (E.D.N.Y. 1995). In
Ray M., class certification was proper for present and future New York
City disabled pre-school students with limited English proficiency for
whom defendants failed to provide the proper evaluations and/or special
education services. Here, DJJ systematically placed children entitled to
NSD into secure detention facilities, and even distributed letters to
judges requesting that they stop issuing orders granting juveniles NSD
status. Because the activity complained of involves one set of operative
facts from which plaintiffs' claim arise, commonality is established.
See also Ackerman v. Price Waterhouse, 252 A.D.2d 179, 200-01, 683
N.Y.S.2d 179, 194 (1st Dept. 1998) (finding investors' claims typical
despite some differences).

Defendants also note that intake workers consider the particular factual
circumstances of each child when determining the appropriate level of
supervision. They argue that if the court grants the requested relief,
it will have to make case-by-case determinations based on these
previously considered facts about which children should remain at
Spofford, which should be placed in NSD and which should be released.
This, they state, bars certification.

Here, however, the common factual question is whether defendants have
provided a sufficient number of NSD beds. The specific circumstances
considered by the intake workers do not alter plaintiffs' eligibility
for NSD once the finding of eligibility has been made. See Santana v.
Hammons, 177 Misc.2d 223, 673 N.Y.S.2d 882 (Sup. Ct. N.Y. County 1998)
(in action brought by workfare participants deemed employable with
limitations, challenging agency's failure to accommodate class members'
physical limitations, certification was proper although members had
distinct disabilities). Because of this, "the unique circumstances of
each child do not compromise the common question of whether, as
plaintiffs allege, defendants have injured all class members by failing
to meet their... obligations." Marisol A. v. Giuliani, 929 F. Supp. 662,
690 (S.D.N.Y. 1996), aff'd, 126 F.3d 372 (2d Cir. 1997). This is true
even if there are variations in the types of irreparable injury suffered
or the length of the delay prior to a juvenile's placement in NSD. See
Brown, 158 F.R.D. at 251 (regarding benefits due to AFDC and EAF

Third, the claims or defenses of named plaintiff must be typical of the
claims or defenses of the class. Jamie B. claims that defendants
violated their obligation to provide him a space in non-secure
detention. This claim is identical to that of the other members of the
class. All of them face the same compelling circumstance: that of being
housed in secure detention facilities although they were entitled to be
in NSD group homes. Thus, plaintiffs satisfy the typicality requirement.
Friar, 78 A.D.2d at 99, 434 N.Y.S.2d at 708.

Fourth, the representative plaintiff must adequately represent the
interests of the class. Thus, if a conflict of interest exists between
Jamie B. and the other children, the court must deny certification. In
considering the adequacy of the representative, a court evaluates
whether there are any conflicts between the representative and the class
members; the representative's familiarity with the case, the
representative's financial resources; and the competence of class
counsel. Ackerman, 252 A.D.2d at 202, 683 N.Y.S.2d at 194-95.

Defendants do not challenge the competence or the experience of
plaintiffs' counsel. However, they assert that counsel might experience
a conflict of interest in the future, if defendants are found in
contempt of court and the court directs them to release any children for
whom they cannot find proper housing. In this case, they contend, the
Legal Aid Society, which represents the proposed class, will need to
determine which children should be released from DJJ custody. However,
defendants' argument fails for two reasons. First, the court does not
intend to direct the release of any of the sentenced juveniles. The role
of the judiciary is to direct the administrators to comply with their
legal obligations-not to supplant the role of the Family Court or of
DJJ. In cases in which courts have ordered the release of inmates or
similarly drastic remedies, the defendants had repeatedly failed to
comply with judicial directives to follow their legal duties. This court
anticipates that defendants in this case will not conduct themselves in
such a fashion. At any rate, the scenario that defendants posit is too
remote and speculative to cause this court to deny plaintiff's
application for class certification.

Moreover, even if, as defendants suggest, the court did order the
release of some of the class members, that would not necessarily pose a
conflict of interest. In that instance, the court would have to monitor
the process; it would not entrust the decision-making to the counsel for
the plaintiff class. At that juncture, instead, the court might direct
that a neutral special master be appointed to make the determination.

Fifth, the class action must be the best method for adjudicating the
controversy. The court concludes that a class action is clearly the best
means to proceed in this situation. As explained earlier, plaintiffs
have attempted to proceed on an individual basis, but to no avail.
Indeed, one juvenile's relief often comes at the expense of another
child. Moreover, by writing to judges and asking them to change their
sentencing policies on a wholesale basis, defendants are already
treating the juveniles as a class. In light of this, it is more fitting
to address the problem in the context of a class action.

In addition, practical considerations militate in favor of adjudicating
the controversy in a class action. As discussed in more detail below,
the indigence of some of the juveniles makes it more appropriate to
enable them to obtain class-wide relief rather than proceed
individually. See Tindell v. Koch, 164 A. 2d 689, 695, 565 N. Y. S. 2d
789, 792 (1st Dept. 1991); Brown v. Wing, 170 Misc.2d 554, 560, 649
N.Y.S.2d 988, 991 (Supp. Ct. Monroe County 1996), aff'd, 241 A.D.2d 956,
663 N.Y.S.2d 1025 (4th Dept. 1997). The judicial economy of resolving
the issues in a class action rather than in numerous contempt
proceedings also weighs in favor of certification. Another consideration
is the desire to prevent inconsistent rulings on the issues. See Butler
v. Wing, 170 Misc.2d 779, 784, 677 N.Y.S.2d 216, 219 (Sup. Ct. N.Y.
County 1998). Finally, a class action will enable the implementation of
procedural safeguards that will protect the rights of juveniles before
they have been violated rather than after the fact.

Thus, the five prerequisites for class action have been satisfied.
Nonetheless, defendants argue that certification is unnecessary because
subsequent claimants will be adequately protected by stare decisis. See
Williams v. Bum, 93 A.D.2d 755, 461 N.Y.S.2d 311 (1st Dept. 1983);
Thrower v. Perales, 138 Misc.2d 172, 523 N.Y.S.2d 933 (Sup. Ct. N.Y.
County 1987). However, the principle, called "the government operations
rule," does not bar certification. Instead, the rule only "cautions
against class certification where governmental operations are involved,
since any relief granted to the named plaintiffs would adequately flow
to protect others similarly situated under the principles of stare
decisis." Coalition to End Lead Poisoning v. Giuliani, 245 A.D.2d 49,
51, 668 N.Y.S.2d 1, 3 (1st Dept. 1997) ("Coalition"). Where the
governmental entity repeatedly has failed to comply with court orders,
class certification is proper. Id. Here, plaintiffs have shown that
there has been a repeated and serious problem; and, indeed, the City
defendants' own letters and papers indicate that at regular intervals,
there has been failure to comply with NSD specific remands. Stare
decisis has been of no avail.

Recently, the government operations rule did not preclude class
certification where there was a continued failure to propose a remedial
plan. Chalfin v. Sabol, 247 A.D.2d 309, 669 N.Y.S.2d 45 (1st Dept.
1998). In that case, defendants did not propose a plan for remedying the
problems stemming from a Medicaid regulation declared void by Seittleman
v Sabol, 158 Misc. 498, 601 N.Y.S.2d 391 (Sup. Ct. N.Y. County 1993), a
prior decision. In another action, challenging the Social Services
Department's decision to terminate home hearings for disabled
applicants, "defendants' demonstrated reluctance to extend the...
injunctive relief to individuals other than the named plaintiffs"
justified the certification of the class. Varshavsky v. Perales, 202
A.D.2d 155, 156, 608 N.Y.S.2d 184, 185 (1st Dept. 1994). For reasons
similar to those set forth in Chalfin and Varshavsky, certification is
proper here.

In addition, when plaintiff's ability to defend a suit on the merits is
compromised, it is easier for courts to find an exception to the
government operations rule. Coalition, 245 A.D.2d at 51, 668 N.Y.S.2d at
3; Lamboy, 126 A.D.2d 265, 513 N.Y.S.2d 393 (1st Dept. 1987); Santana v.
Hammons, 177 Misc. 2d 223, 673 N.Y.S.2d 882 (Sup. Ct. N.Y. County 1998).
Jamie B. and the class he represents consist of incarcerated, indigent
children who would confront extreme difficulties if they were to
initiate individual actions. Many lack the resources, understanding or
awareness to enforce their right in separate individual lawsuits. To
further complicate matters, a representative would be required to
initiate each one of the litigations because infants lack the capacity
to sue. CPLR @ 1201 et. seq. Due to these circumstances as well, it is
proper to apply the exception to the government operations rule.

Finally, the government operations rule is not applied "where the
condition sought to be remedied by the plaintiffs poses some immediate
threat that cannot await individual determinations." Coalition, 245
A.D.2d at 51, 668 N.Y.S.2d at 3 (citing Lamboy v. Gross, 126 A.D.2d 265,
513 N.Y.S.2d 393 (1st Dept. 1987)). In Coalition, for example, the First
Department affirmed the certification of a class despite the government
operations rule because the class members, subject to lead paint
problems in their residences, were exposed to "serious health hazard[s]
requiring immediate action." Coalition, 245 A.D.2d at 52, 668 N.Y.S.2d
at 3. As stated, plaintiffs have shown that exigent circumstances exist;
if prior to sentencing they remain in secure detention rather than NSD,
the juveniles' sentences, and lives, can be negatively affected.

Not only is a class action appropriate for these reasons; in addition,
it will further the goal of "inducing socially and ethically responsible
behavior" on DJJ's part. Pruitt, 167 A.D.2d at 23, 574 N.Y.S.2d at 677;
accord Friar, 78 A.D.2d at 94, 434 N.Y.S.2d at 705. Between June, 1998
and the start of 1999, DJJ was able to accommodate most of the NSD
specific remands. However, in court conferences, it made clear that it
did not feel statutorily obliged to do the same with open remands, and
it did not report any statistics relating to compliance with open remand
order. Moreover, because there have been recent surges in the number of
NSD remands, and numerous youths with open remands deemed eligible for
NSD are in secure detention, hundreds of children being housed in
conditions more restrictive than those which Family Court judges and DJJ
deem necessary. Failure to provide adequate NSD space results in
defendants' failure to comply with court orders.

On February 13, 1999, after non-compliance with an NSD remand order for
a class member, a Brooklyn Family Court judge refused to grant DJJ's
application to change the youth's remand status to open. Then, on
February 26, after refusing to grant DJJ's second application for
changing the child's remand to open, the judge released the child. On
March 12, 1999 after DJJ's continued non-compliance with an NSD specific
remand order, a Family Court judge directed DJJ to move Juanita J. into
an NSD group home. In their submission dated March 15, 1999, plaintiffs
document additional instances in which Family Court judges have
expressed their frustration with the City defendant, scheduling contempt
hearings and even holding the City in contempt in the case of Shanetta
W. Yet, for the reasons already set forth in great detail, the situation
cannot be remedied simply by proceeding in the individual Family Court
cases. Thus, this class action is necessary.

Because of this strong social purpose and because of the importance of
resolving the obvious problems and confusion regarding the placement of
the juveniles, the class action is a method "superior to other available
methods for the fair and efficient adjudication of the controversy."
Altman v. Commodity Exchange, Inc., County Court of New York, July 5,
1996 (available at 1996 WL 523532) (citing statute). Furthermore, the
behavior of DJJ "in seeking to moot the claim of each named plaintiff
without addressing the underlying [problem]... demonstrates why a class
action is needed here." Brown v. Giuliani, 158 F.R.D. 251, 269 (E.D.N.Y.
1994). Scope of Lawsuit

                    Plaintiffs in Class

For the foregoing reasons, that prong of plaintiff's motion seeking
class certification is granted. Furthermore, the court certifies the
class as including those juveniles deemed eligible for NSD pursuant to
open remands. In opposing certification, defendants repeatedly attempt
to differentiate the status of these juveniles from those with NSD
specific remands. According to defendants, when a judge issues an open
remand, defendants have the discretion to place the juveniles wherever
they choose, pursuant to whatever standards they deem appropriate. When
they have provided the court with information regarding their compliance
with NSD orders, defendants have discussed only the NSD specific
remands; for, they have been unrelenting in their position that they
cannot be found out of compliance with the open remands. Moreover, in
court conferences they have intimated that it would be equally
appropriate for them to simply place the open remands in secure
detention-or, at least, to significantly tighten or otherwise alter the
criteria governing placement of juveniles subject to open remands.

The court rejects defendants' argument in its entirety. One of the
fundamental precepts of the juvenile justice system, with its strong
rehabilitative purpose, is that even sentenced juveniles must be placed
in the least restrictive alternative consistent with the well being of
society. F.C.A. 352.2 (2); see In re Eddie M., 196 A.D.2d 25, 30, 607
N.Y.S.2d 682, 685 (2d Dept. 1994), lv denied, 83 N.Y.2d 757, 615
N.Y.S.2d 874 (1994) (table). It defies credulity to think that either
the legislature or the courts intend for a lesser set of standards to
apply to juveniles before they have been adjudicated as guilty; that
juveniles should be treated with less regard when judges issue open
remand orders than when they specify the place of confinement; or that
the Family Court would be bound to follow rational guidelines and to
provide juveniles with the least restrictive alternative, but that these
standards would not apply to DJJ in the face of an open remand.

Moreover, the Family Court Act empowers the court to direct the terms of
sentencing and to specify the type of detention appropriate for the
child. See In re Eddie M., 196 A.D.2d at 30, 607 N.Y.S.2d at 685; In re
Anthony N., 106 Misc.2d 313, 216, 430 N.Y.S.2d 1012, 1016 (Fam. Ct.
Richmond County 1980). Though section 320.5 of the Family Court Act is
not explicit on this issue, virtually all provisions regarding the
detention, sentencing and placement of juveniles confer the power on the
court. See, e.g., F.C.A. 302.5(1), (2); 352.1; 352.2; 353.3; 353.4;
353.5. In particular, F.C.A. 353.3 shows the "remarkable flexibility
[the Legislature has] granted to the Family Court" in placing a juvenile
following his or her fact finding hearing. The court in Anthony N. noted
that not just in delinquency but in other proceedings involving
juveniles, the legislature has granted the Family Court broad judicial
discretion so that its judges can safeguard the best interests of the
children before them. See id. at 217, 430 N.Y.S.2d at 1014-15. Because
of this, and because the provision at issue is otherwise silent, it is
implicit that the Family Court is the entity which should determine the
place of a juvenile's pretrial detention especially as this detention
raises constitutional issues by "imping[ing] on the right to liberty."
In re Anthony N., 106 Misc. 2d at 217, 430 N.Y.S.2d at 1016. This is a
responsibility that courts should and do take seriously; and one judges
cannot relinquish without ensuring that the rights of the juveniles will
not be disregarded.

Necessarily implicit in an open remand order, therefore, is the
directive to DJJ to place the children using proper standards consistent
with the statute. Specifically, this requires DJJ to reach prompt
determinations regarding the least restrictive alternatives for the
juveniles and to place the juveniles accordingly. Therefore, the
juveniles determined eligible for NSD following open remands and kept in
secure detention are properly a part of this class action. Furthermore,
because the same standards must be followed once DJJ determines these
juveniles should be placed in NSD, defendants' numerous efforts to
distinguish their situation from those of the other class members are
unpersuasive. Cf. Doe v. The New York City Dep't of Social Serv., 670 F.
Supp. 1145, 1152 (S.D.N.Y. 1987) (class included children adjudicated as
abused, neglected, juvenile delinquents or persons in need of
supervision, because claims stemming from night-to-night placement
related to the same allegedly improper policies and practices developed
by the defendants).

     Appropriateness of Proceeding Against State Defendant

The State defendant has not moved to dismiss; but, in his answer he
asserts that he is not a proper party to this lawsuit. Before this court
can determine whether it should direct a preliminary injunction against
him, it must determine the validity of his objection to the lawsuit.

Previously, this court visited the issue in a similar context. In
Santiago v. Board of Educ., 5/8/97, p.28, col. 5 (Sup. Ct. N.Y. County),
the plaintiffs challenged state and local enforcement of lead paint laws
as they relate to day care centers, pre-school, kindergarten or other
facilities. The State defendant, the Department of Education, moved to
dismiss. In that action, the court granted the motion because the
Department had only "broad and general regulatory authority over the
schools" and had no specific responsibilities with respect to lead paint
levels in school facilities. Id. " 'The Supreme Court can only direct a
state agency to determine a matter within his administrative
discretion....' " Id. (quoting Santiago v. Riccio, 170 A.D.2d 340, 341,
566 N.Y.S.2d 44, 45 (1st Dept. 1991), lv dismissed, 77 N.Y.2d 989, 571
N.Y.S.2d 914 (1991) (table)). In Santiago v. Board of Education, the
court concluded that it would be exceeding its authority by issuing any
directives to the state defendant. Id.

This case is distinguishable from Santiago v. Board of Education. The
State defendant, as head of the office of Children and Family Services,
is required to "ensure and certify" that the City defendant provides
adequate non-secure detention facilities. County Law @ 218-a (B). Not
only is the State responsible for monitoring the adequacy of NSD
facilities, but it will only reimburse the city for constructing or
improving secure detention facilities if there are or will be adequate
and accessible NSD facilities in the locality. 9 NYCRR @@ 180.20(b),
180.20(b)(5)(i), (ii). Because the legislation imposes upon the State
defendant an affirmative duty to insure that the City satisfies its duty
to provide sufficient NSD housing, the matter is justiciable against the
State and the State is a proper defendant. See Liebowitz v. Dinkins, 176
A.D.2d 666, 667, 575 N.Y.S.2d 827, 828 (1st Dept. 1991).

At conferences and in various papers submitted to the court, defendants
have made the scope of the State defendant's involvement even clearer.
When space shortages occur in NSD, DJJ can add a limited number of beds
to a particular group home until the crisis passes-but only with the
issuance of a "waiver" by the State defendant. This further shows that
the State defendant has sufficient involvement here to be a proper party
to this lawsuit. To resolve the dispute, the court will not make broad
policy choices or otherwise determine how the State should exercise its
discretion. Instead, it will only address plaintiffs' contention that
both the State and City must ensure that NSD housing is provided in the
manner in which it was legislated. See Natural Resources Defense
Council, Inc. v. New York City Dep't of Sanitation, 83 N.Y.2d 215, 221,
608 N.Y.S.2d 957, 959 (1994). The City's arguments against
justiciability of this matter are also invalid for these reasons.

                   Injunctive Relief

Having determined the scope of the class, and decided that all
defendants are properly in this case, the court now turns to the rest of
the application. In the underlying action, plaintiffs ultimately seek a
permanent injunction. However, in this order to show cause, they have
applied for preliminary injunctive relief. Defendants opposed any
suggestion that the court transform the application to one for permanent
injunction. As plaintiffs did not ask for a permanent injunction in
their initial application, therefore, the court will address only the
preliminary relief in this decision.

"The Supreme Court has the power, as a court of equity, to grant an
injunction mandating conduct by municipal agencies" so long as the
plaintiff seeking the injunction makes the necessary showing. Doe v.
Dinkins, 192 A.D.2d 270, 275, 600 N.Y.S.2d 939, 942 (1st Dept. 1993).
For this court to grant a preliminary injunction, plaintiffs must show
likelihood of success on the merits; irreparable injury in the absence
of injunctive relief; and a balancing of the equities in its favor. The
Gramercy Company v. Benenson, 223 A.D.2d 497, 498, 637 N.Y.S.2d 383, 384
(1st Dept. 1996). A court's determination will be upheld unless there is
an abuse of discretion. Doe, 192 A.D.2d at 275, 600 N.Y.S.2d at 942.

As the parties here are seeking a preliminary injunction against state
and municipal entities, plaintiffs bear a particularly high burden of
proof. See Council of the City of New York v. Giuliani, 248 A.D.2d 1, 4,
679 N.Y.S.2d 14, 16 (lst Dept. 1998), lv dismissed in part, denied in
part, 92 N.Y.2d 938, 680 N.Y.S.2d 902 (1998). However, a permanent
injunction will protect future juveniles, but only preliminary and
immediate relief will be effective to protect the rights of those
presently detained. Accordingly, "the proof required for a finding of
likelihood of success on the merits is reduced." Doe, 192 A.D.2d at 275,
600 N.Y.S.2d at 943. At any rate, the court has carefully considered the
materials before it and concludes that plaintiffs have satisfied even
the heightened standard.

First, plaintiffs have shown a likelihood of success on the merits. As
already discussed, this court has concluded that, as a matter of law,
the Family Court has the power to direct presentencing placement; and
that, when a Family Court judge issues an open remand, that judge
implicitly is directing DJJ to place the juvenile in the proper form of
detention promptly and in accordance with the considerations set forth
in the statute. Therefore, when DJJ fails to comply with either an open
remand or an NSD specific remand, it is violating the Family Court
judge's order. Furthermore, the failure of a county to place a juvenile
in a nonsecure detention facility prior to sentencing has been held to
allege a legally cognizable claim against that county. Himes v. County
of Chautauqua, 175 A.D.2d 656, 656 (4th Dept. 1991).

The relevant provisions of the state statute and code unequivocally
require defendants to provide adequate NSD facilities. Under County Law
218-a (B), the State must certify that DJJ has "provide[d] or assure[d]
the availability of conveniently accessible and adequate non-secure
detention facilities...." The Court of Appeals has held that this law
"both authorizes and requires a county to provide adequate facilities of
the type described despite any conflicting law or local ordinances."
People v. St. Agatha Home, 47 N.Y.2d 46, 49, 416 N.Y.S.2d 577, 578
(1979), cert. denied, 444 U.S. 869 (1979).

The regulation effectuating the County Law, NYCRR 180.5, further
clarifies the duties of defendants. Pursuant to the regulation,
"agencies responsible for administering detention shall assure the
availability of conveniently accessible adequate detention care for each
day of the year," NYCRR 180.5 (4). More specifically, it provides that
the City "should take reasonable steps to provide conveniently
accessible and adequate nonsecure detention care." NYCRR
180.5(a)(3)(iv). The section further states that if the City "does not
have conveniently accessible and adequate nonsecure detention care in
conformance with the requirements of section 218-a of the County
Law,..., a formalized arrangement may be made with another county." Id.
By requiring the City to take "reasonable steps" to provide NSD care,
then, the regulation also envisions that the City will succeed in
providing ample NSD housing, either within or without the county.

Defendants assert that unanticipated increases in juvenile arrests and
other allegedly exigent circumstances have caused, and justify, the
occasional deficiencies in NSD housing space. However, as plaintiffs
argue, these excuses are inadequate. Arguably, one of the cited
circumstances, the closing of two group homes, might have justified some
brief period of crisis. Defendants used the circumstance to explain that
there would be inadequate housing for months, until they entered into
contracts for and opened new NSD facilities. This conduct was improper
under the law. Instead, the regulations required the City to make a
formalized arrangement with another county to provide "conveniently
accessible and adequate nonsecure detention care in conformance with the
requirements of section 218-a of the County Law," NYCRR 180.5(a)(3)(iv),
until New York County itself was able to house the juveniles.

In addition, the regulations stress that there should be adequate
facilities "for each day of the year." NYCRR 180.5(4).

This language emphasizes each county's duty to comply with the law in
all seasons and under all foreseeable circumstances. Thus, an unforeseen
and unaccountable epidemic of crime and arrests might justify a brief
and temporary shortage in NSD housing; but, normal periodic surges of
the type at issue here do not excuse defendants' failure to provide
adequate NSD housing. Instead, defendants must have sufficient NSD
housing to house all class members during these times.

Next, defendants argue that even if open and NSD specific remands
require them to place the juveniles in the least restrictive
confinement, they are statutorily entitled to balance the juvenile's
interest against "the interests of... the community." F.C.A. 352.2(2).
Defendants assert that this provision enables them to consider DJJ's
budgetary and space limitations in making a placement-constraints which,
the City states, makes it impossible for it to provide additional NSD
housing. However, the language in the County Law and in the NYCRR is
unequivocal and makes no mention that budgetary constraints justify a
failure to place juveniles in NSD.

Moreover, as plaintiffs point out, defendants found approximately $ 7
million in funds to repair and re-open Spofford, a secure facility, when
it became necessary. See Lambert, "City to Reopen Juvenile Center That
Symbolized Neglect," New York Times, 12/5/98. Under the relevant law,
defendants cannot prioritize by establishing sufficient secure detention
facilities while neglecting their duties with respect to NSD housing. On
the contrary, to obtain state aid for constructing or improving secure
detention facilities, for example, the City must "provide or assure the
availability of conveniently accessible and adequate nonsecure detention
facilities,... as resources for the Family Court...." 9 NYCRR
180.20(b)(5)(i). For the purposes of the section, "adequate nonsecure
detention facilities... shall mean that there shall be a sufficient
range of nonsecure detention programs to meet the needs of all youth in
need of nonsecure detention care..." 9 NYCRR 18 0.20(b)(5)(ii).

Repeatedly, in other contexts, courts have held that the defense of lack
of resources does not justify noncompliance with legislative duties
affecting the rights and welfare of individuals. E.g., Liebowitz v.
Dinkins, 176 A.D.2d 666, 575 N.Y.S.2d 827 (1st Dept. 1991) (regarding
inability to carry out statutory duty to examine and immunize school
children); Varshavsky v. Perales, 202 A.D.2d 155, 156, 608 N.Y.S.2d 184,
185 (1st Dept. 1994) (regarding Department of Social Services' decision
to cancel home hearings for physically and mentally unable to travel);
Doe, 192 A.D.2d at 276, 600 N.Y.S.2d at 943 (government's failure to
cure overcrowding of homeless shelters, where overcrowding resulted in
fire code violations). Indeed, the Court of Appeals has stated that
space shortages and overcrowding in adult prisons do not constitute
exigent circumstances justifying the delay in transferring inmates into
custody. Avers v. Coughlin, 72 N.Y.2d 346, 351, 533 N.Y.S.2d 849 (1988)
n1; see also Crespo v. Hall, 56 N.Y.2d 856, 453 N.Y.S.2d 392 (1982)
(regarding unambiguous obligation of State Division for Youth to provide
sufficient secure facilities to house juvenile offenders). In light of
the above, defendants' excuse is insufficient to override its mandatory
duty to provide sufficient NSD housing.

n1 Young v. Goord, 178 Misc.2d 913, 915, 682 N.Y.S.2d 342, 344 (Sup. Ct.
Albany County 1998), states that Correction Law @ 95 provides an
alternative to the type of placement originally mandated by statute and
interpreted by the court in Avers. However, this does not alter the
principle for which Ayers is cited. Moreover, the statutes and
regulations at issue in the current lawsuit are still in effect.

Second, plaintiffs must show that, in the absence of injunctive relief,
they will suffer irreparable injury. Here, the affidavits of Jamie B.
and his mother, among others, attest to the greater restrictions on
those in secure incarceration. The statutory and regulatory scheme
explicitly provides for greater constraints and more limited privileges
in secure detention; and, defendants do not contest this issue. In
Mitchell v. Cuomo, 748 F.2d 804, 806 (2d Cir. 1984), the Second Circuit
found that allegations of overcrowding in adult prisons could constitute
irreparable harm. A State Court of Appeals decision, Avers v. Coughlin,
implicitly reached this conclusion when it upheld an injunction
compelling the Department of Corrections to accept State-ready inmates
into custody within 10 days after notification of State-readiness. Avers
v. Coughlin, 72 N.Y.2d at 346, N.Y.S.2d at 849. Here, where the rights
and futures of juveniles are at issue, the possibility of harm is even

Nonetheless, defendants argue that the allegations of individual harm
are speculative, and are based primarily on hearsay statements regarding
the poor conditions and abusive treatment the juveniles receive while in
secure detention. Defendants' arguments are irrelevant. For one thing,
many of the disputed contentions relate to the E7 wing of Spofford,
which is no longer used to house extra NSD remanded juveniles. More
significantly, this court is not prepared to review the record to
determine whether violence and other forms of abuse occur in secure
detention facilities. It would be improper to do so or to investigate
these charges further; for, the alleged mistreatment of juveniles in
secure detention, however troubling, is not the subject of this lawsuit.
Instead, plaintiffs must show that the condition of being improperly
restrained in secure detention instead of NSD is on its face an
irreparable injury. The court finds that they have satisfied this
standard, based on the additional and unwarranted restraints on
plaintiffs' liberty and the potential adverse impact on their ultimate
sentences. They have adequately supported their contentions by the
affidavits of the class members regarding their sentences and the facts
of their confinement; and, by the affidavits of their counsel and of the
social workers to the extent that they attest to court proceedings,
factors considered in sentencing and the length of their clients'
confinement in secure facilities-facts with which they are personally
familiar. For this reason, the court need not reach defendants' argument
that plaintiffs' allegations of emotional harm is speculative and does
not support injunctive relief. However, it notes that potential
emotional harm has been held to be "irreparable" and sufficient to
warrant the issuance of an injunction. E.G., Bingham v. Struve, 184
A.D.2d 85, 89-90, 591 N.Y.S.2d 156, 158 (1st Dept. 1992); The Mental
Health Information Serv. v. Schenectady County Dep't of Social Serv.,
128 Misc.2d 282, 290, 488 N.Y.S.2d 335, 340 (Sup. Ct. Albany County

Third, plaintiffs have shown that the balance of equities are in their
favor. Many of defendants' arguments to the contrary are based on their
contention that plaintiffs' claims are not meritorious. However, as
shown, plaintiffs have stated viable claims. In addition, they have
demonstrated that only an immediate injunction will protect the rights
of those presently detained. The serious harm these current detainees
may suffer weighs heavily in favor of issuing the injunction. See
Mitchell v. Barrios-Paoli, 253 A.D.2d 281, -, 687 N.Y.S.2d 319, 327 (1st
Dept. 1999). An injunction here is particularly proper in light of the
rehabilitative goals of the juvenile justice system. See F.C.A. @
352.2(2). In this respect, it facilitates both judicial and legislative

Furthermore, to the extent that defendants object based on their alleged
difficulties in properly placing the children, these objections are
unavailing because defendants have long been aware of this fluctuating
problem and have not definitively resolved it. See Doe v. Dinkins, 192
A.D.2d 270, 276, 600 N.Y.S.2d 939, 943 (1st Dept. 1993). Moreover,
defendants have repeatedly asserted that they do not have a duty to
anticipate some of the types of space problems at issue here and that
they do not have a duty to promptly place open remands. Thus, absent a
court directive they will not comply with their statutory duties to
provide sufficient NSD housing.

Finally, defendants state that the equities lie in their favor, not only
necessitating the denial of the injunction but barring the lawsuit,
because plaintiffs seek to affect the administration of the government
and require it to alter its decisions regarding the allocation of its
resources. Neither plaintiffs nor the court should embroil itself in
such matters, they contend. See Jones v. Beame, 45 N.Y.2d 402, 407, 408
N.Y.S.2d 449, 451 (1978). However, class actions have been certified in
similar situations. E.g., Coalition to End Lead Poisoning v. Giuliani,
245 A.D.2d 49, 51, 668 N.Y.S.2d 1, 3 (1st Dept. 1997); Lamboy v. Gross,
126 A.D.2d 265, 543 N.Y.S.2d 393 (1st Dept. 1987). For, although "the
judicial process may not be designed to assume the management and
operation of an executive enterprise or to correct broad legislative and
administrative policy... justiciability hardly can be denied when what
is at stake is... the enforcement of clear, nondiscretionary and easily
definable statutes and rules..." Bruno v. Codd, 47 N.Y.2d 582, 588, 419
N.Y.S.2d 901, 904 (1979). Here, the court has held that by failing to
place the class members in NSD, defendants are violating their clear and
nondiscretionary duties pursuant to statutes and rules. To the extent
possible, the court will avoid involving itself in administrative
decisions, and merely direct defendants to comply with their unequivocal


It is not for either the court or for the plaintiffs to direct
defendants how to comply with their statutory and regulatory duties.
Instead, the court declares that there has been a violation of these
duties for the reasons set forth above; and, it directs defendants to
come up with a plan within 45 days of the settlement of this order.


For all the reasons set forth above, the court grants the portion of the
motion seeking class certification; declares that defendants have
violated their statutory and regulatory duties as stated above; and
directs defendants to devise a plan for adequate and accessible
placement of all juveniles in the class. The court does not reach the
constitutional issues raised as it was able to decide the controversy on
other grounds. See Fosmire v. Nicoleau, 75 N.Y.2d 218, 226, 551 N.Y.S.2d
876, 880 (1990). All parties are directed to settle order within 20
days. (New York Law Journal, September 14, 1999)

HMO: Il. Class Action Pending; Ap Ct Remands Fees Case V. Meyer Medical
An Illinois appeals court on Oct. 21 reversed a trial court ruling
granting summary judgment to a medical services company and its agent,
saying the ruling was premature due to the plaintiffs' pending motion
for class certification (Carmen Hillenbrand, et al. v. Meyer Medical
Group S.C., et al., No. 1-98-4433, Ill. App., 1st Dist., 4th Div.; See
8/20/97, Page 15).

The First District Illinois Appellate Court held that a federal employee
and her attorney were not equitably estopped from bringing a common fund
claim and that the common fund claim was not preempted under the Federal
Employees Health Benefits Act (FEHBA). The appeals court also held that
the trial court's entry of summary judgment in favor of the Meyer
Medical Group S.C. and its agent, Health Cost Controls of Illinois
(HCC), was premature while the plaintiff's motion for class
certification was pending. (Text of Opinion in Section H. Mealey's
Document # 31-991028-108.)

Carmen Hillenbrand, a federal employee, received health care benefits
from Chicago HMO under the FEHBA. The benefits were administered by the
U.S. Office of Personnel Management through a contract with Chicago HMO.
In turn, Chicago HMO entered into a service agreement with Meyer to
provide services to members for set capitation fees.

                         Physician's Lien

After Hillenbrand was injured in an accident, she received medical
treatment from Meyer through her Chicago HMO plan totaling $ 1,779.64.
HCC subsequently sent Hillenbrand's personal injury attorney, James
Uzzell, a notice of physician's lien of $ 1,779.64.

Uzzell negotiated a $ 6,744 settlement of Hillenbrand's tort claim
arising from her accident and later brought a class action against
Meyer, HCC and Chicago HMO, alleging that Meyer and HCC asserted an
invalid and unauthorized physician's lien against the third-party

Chicago HMO was dismissed from the action by the lower court. A
subsequent motion for summary judgment and clarification of the service
agreement between Chicago HMO and Meyer also resulted in the stipulated
dismissal of three of the four counts alleged in the class action,
leaving only the allegation that Meyer and HCC would be unjustly
enriched if they were not required to pay a proportionate share of the
attorney fees Hillenbrand incurred in negotiating the settlement.

In an effort to settle the matter, Meyer sent Uzzell a letter offering
to pay one-third of the amount that should be reimbursed to the company
under the plan, plus reasonable interest. That tender of payment went
unanswered, the court said, adding that Meyer filed a motion for summary
judgment arguing that Hillenbrand's remaining claim was moot as a result
of the tender of payment, leaving Hillenbrand and Uzzell without
standing to represent the class, and that equitable principles prevented
the plaintiffs from collecting fees from Meyer.

The trial court - the Cook County Circuit Court - entered summary
judgment in favor of HCC and Meyer, without specifying its basis for
doing so, the appeals court said.

                           Equitable Estoppel

Meyer argued, citing United States v. Tobias (935 F.2d 666 [4th Cir.
1991]), that Hillenbrand and Uzzell are not entitled to collect fees
from the common fund created as a result of the settlement because they
opposed the company's right to subrogration. Meyer reasoned that
Hillenbrand and Uzzell should not be able to recover fees because they
sought to deny the company its rightful share of the fund. In Tobias,
the Fourth Circuit U.S. Court of Appeals held that a "party may not
recover and try to monopolize a fund, but then, failing in the attempt,
declare it a 'common fund' and obtain his expenses from those whose
rightful share of the fund he sought to appropriate."

The court, however, said that the Tobias ruling was not controlling.
First, the court said, Meyer and HCC were not represented by their own
attorneys in any litigation leading to the recovery of the fund and,
second, although the Tobias court said that the parties' adversity was a
sufficient basis upon which to deny an award of fees from the fund, "it
is clear that the court's holding is based on equitable principles of

When Meyer and Chicago HMO amended their agreement, the plaintiffs
stipulated to the dismissal of all other claims which were predicated
upon the assertion that Meyer was not entitled to reimbursement from the
proceeds of Hillenbrand's settlement, the appeals court said.

"Under these circumstances, we find no justification for invoking the
doctrine of estoppel to prevent the plaintiffs from asserting a claim
for fees under the common fund doctrine," the court said.


The appeals court also reviewed whether summary judgment in favor of
Meyer was proper on the basis that Hillenbrand's claim was preempted
under Section 8902(m)(1) of FEHBA.

Meyer argued that the common fund doctrine is inconsistent with the
subrogration provisions in Hillenbrand's medical benefits plan because
its application would result in reimbursement of less than the full
value of the services provided. Therefore, the company said, relying on
MedCenters Health Care v. Ochs (854 F. Supp. 589 [E.D. Minn. 1994],
aff'd 26 F.3d 864 [8th Cir. 1994]), the common fund doctrine was

In MedCenters, the Eighth Circuit held that Minnesota's "full recovery
rule," which prohibits subrogation in circumstances where an insured's
total loss exceeds his recovery, was preempted by FEHBA. Here, however,
the appeals court said that the full recovery rule is an
anti-subrogation provision, while the common fund doctrine is not.
Instead, it is a quasi-contractual right to payment in favor of an
attorney for services rendered, the appeals court said.

"Rather a common fund claim, which is wholly independent of the benefit
plan, is brought by a third party, the attorney who represented the
participant, to enforce a quasi-contractual right to payment for
services rendered in recovering the plan's subrogation lien," the court
said. Therefore, the court found the common fund doctrine is not
preempted under FEHBA.


While the appeals court did find that the plaintiffs' claim was rendered
moot when Meyer tendered the recoverable damages, it still reversed the
trial court decision. The court explained that on the surface, Meyer
offered to pay Uzzell's attorney fees and that offer has never been
withdrawn. "The plaintiffs cannot perpetuate the controversy by merely
refusing Meyers' tender," the court said.

However, the appeals court held that the trial court could not render
the claim moot by entering summary judgment in favor of Meyer while
Hillenbrand's motion for class certification was still pending. "It is
clear that if a defendant tenders payment to the named plaintiffs in a
class action after a class has been certified, the tender does not
render the case moot as to the remaining class members," the court said.
Here, Meyer's tender to the plaintiffs occurred prior to class

However, the appeals court said that was not the case here because a
motion for class certification was pending at the time the tender was
made. The Seventh Circuit in Susman v. Lincoln American Corp. (587 F.2d
866, 870 [7th Cir. 1978]) held that "when a motion for class
certification has been pursued with reasonable diligence and is then
pending before the district court, a case does not become moot merely
because of the tender to the named plaintiff of their individual money

To find otherwise, the appeals court said, would allow a party to avoid
ever defending a class action simply by tendering payment to the named
plaintiffs. The trial court here was required to rule on the pending
class certification motion before considering the effect of Meyer's
tender, the appeals court held, concluding that the judgment must be
reversed and remanded. (Mealey's Litigation Report: Managed Care, Vol.
3; No. 20, October 28, 1999)

I.C. ISAACS: Finkelstein & Krinsk File Securities Suit
I.C. Isaacs & Company, Inc. (Nasdaq:ISAC) is accused in a class action
lawsuit filed by Finkelstein & Krinsk of violating the federal
securities laws in order to artificially inflate the price of the
Company's stock by misrepresenting the Company's true business
condition, products and the Company's ability to achieve profitable

According to the Complaint, the Company and its controlling insiders
issued a series of false and misleading statements to the market
regarding, amongst other things, the Company's position to expand its
distribution channels and product offerings, while omitting to disclose
adverse facts that the Boss line of clothing was not profitable and had
no potential for near term profitability; that the Beverly Hills Polo
Club line was rapidly losing market acceptance; and that the Company
lacked sufficient infrastructure to operate at its promised level.
Defendants' statements were false and caused I.C. Isaacs' stock to trade
at artificially inflated levels during the Class Period (December 17,
1997 - November 11, 1998). When the truth became known to investors, the
price of I.C. Isaacs shares dropped dramatically as the market digested
the adverse revelations.

Contact: Finkelstein & Krinsk Jeffrey R. Krinsk, Esq., 877/493-5366 or

INTíL GAME: Sued for Inducing People to Play Video Poker, Slot Machines
Along with a number of other public gaming corporations, International
Game Technology is a defendant in three class action lawsuits: one filed
in the United States District Court of Nevada, Southern Division,
entitled Larry Schreier v. Caesar's World, Inc., et al;, and two filed
in the United States District Court of Florida, Orlando Division,
entitled Poulos v. Caesar's World, Inc., et al. and Ahern v. Caesar's
World, Inc., et al., which have been consolidated into a single action.
The Court granted the defendants' motion to transfer venue of the
consolidated action to Las Vegas.

The actions allege that the defendants have engaged in fraudulent and
misleading conduct by inducing people to play video poker machines and
electronic slot machines, based on false beliefs concerning how the
machines operate and the extent to which there is an opportunity to win
on a given play. The amended complaint alleges that the defendants' acts
constitute violations of the Racketeer Influenced and Corrupt
Organizations Act, and also give rise to claims for common law fraud and
unjust enrichment, and seeks compensatory, special, consequential,
incidental and punitive damages of several billion dollars. In December
1997, the Court denied the motions that would have dismissed the
Consolidated Amended Complaint or that would have stayed the action
pending Nevada gaming regulatory action. The defendants filed their
consolidated answer to the Consolidated Amended Complaint on February
11, 1998. At this time, motions concerning class certification are
pending before the Court.

J CREW: Settles Conn. Suit over Discrimination against Male Applicants
A Consent Decree was entered on October 8, 1999, settling the class
action lawsuit by the Equal Employment Opportunity Commission in the
U.S. District Court, District of Connecticut, against the Company
alleging that the Company, through its Popular Club Plan subsidiary
(which was sold in fiscal year 1998), engaged in hiring conduct which
violated Title VII of the Civil Rights Act of 1964 and Title I of the
Civil Rights Act of 1991 by discriminating against male applicants for
customer service and assistant manager positions at its service centers
in New England. The settlement of this action is not an admission of any
wrongdoing or liability by the Company. As part of the settlement,
Popular Club Plan agreed to certain training programs. The settlement
also provided for the payment of monetary damages in an amount not
material to the Company.

KEYSPAN CORP: Agrees to Settle NY State & Fd. Suits over Acquisition
MarketSpan Corporation d/b/a KeySpan Energy (the "Company") is the
successor to Long Island Lighting Company ("LILCO"), as a result of a
transaction with the Long Island Power Authority ("LIPA") (the "LIPA
Transaction") and following the acquisition (the "KeySpan Acquisition")
of KeySpan Energy Corporation ("KSE"). The Company is a "predominately
intrastate" public utility holding company exempt from most of the
provisions of the Public Utility Holding Company Act of 1935, as
amended. As a result of the transaction with LIPA, LILCO became a
wholly-owned subsidiary of LIPA, a public authority and a political
subdivision of New York State. KSE, a wholly-owned subsidiary of the
Company and also an exempt utility holding company under the Public
Utility Holding Company Act of 1935, as amended, is no longer a
registrant under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended.

On May 28, 1998, the Company completed two business combinations as a
result of which it (i) became the successor operator of the non-nuclear
electric generating facilities, gas distribution operations and common
plant formerly owned by LILCO and entered into long-term service
agreements to operate the electric transmission and distribution system
acquired by LIPA; and (ii) acquired KSE, the parent company of The
Brooklyn Union Gas Company ("Brooklyn Union"). (See Note 2, "Sale of
LILCO Assets, Acquisition of KeySpan Energy Corporation and Transfer of
Assets and Liabilities to the Company.")

With the exception of a small portion of Queens County, the Company's
subsidiaries are the only providers of gas distribution services in the
New York City counties of Kings, Richmond and Queens and the Long Island
counties of Nassau and Suffolk. Brooklyn Union provides gas distribution
services to customers in the New York City boroughs of Brooklyn, Queens
and Staten Island, and KeySpan Gas East d/b/a Brooklyn Union of Long
Island ("Brooklyn Union of Long Island"), a Company subsidiary, provides
gas distribution services to customers in the Long Island counties of
Nassau and Suffolk and the Rockaway Peninsula of Queens County.

On September 10, 1998, the Company's Board of Directors authorized
filings to permit the Company to conduct its business under the name
KeySpan Energy. The Company will propose a formal name change for
shareholder approval at its 1999 Annual Meeting of Shareholders. On
October 20, 1998 the Company's symbol for its common stock and preferred
stock Series AA listed on the New York and Pacific Stock Exchanges was
changed to "KSE."

Subsequent to the LIPA Transaction and KeySpan Acquisition, former
shareholders of LILCO commenced 13 class action lawsuits in the New York
State Supreme Court, Nassau County, against each of the former officers
and directors of LILCO and the Company. These actions were consolidated
in August 1998. The consolidated action alleges that in connection with
certain payments LILCO had determined were payable in connection with
the LIPA Transaction and KeySpan Acquisition to LILCO's chairman, and to
former officers of LILCO ("Payments"): (i) the named defendants breached
their fiduciary duty owed to LILCO and KSE former and/or current Company
shareholders as a result of the Payments; (ii) the named defendants
intended to defraud such shareholders by means of manipulative,
deceptive and wrongful conduct, including materially inaccurate and
incomplete news reports and filings with the Securities and Exchange
Commission ("SEC"); and (iii) the named defendants recklessly and/or
negligently failed to disclose material facts associated with the

In addition, three shareholder derivative actions have been commenced
pursuant to which such shareholders seek the return of the Payments or
damages resulting from among other things, an alleged breach of
fiduciary duty on the part of the former LILCO officers and directors.
One action was brought on behalf of LILCO in federal court. The Company
moved to dismiss this action in September 1998. The other two actions
were brought on behalf of the Company in New York State Supreme Court,
Nassau County. In one of these state court actions, the Company's
directors and the recipients of the Payments are also named as

Finally, two class action securities suits were filed in federal court
alleging that certain officers and directors of LILCO violated the
federal securities laws by failing to properly disclose that the LIPA
Transaction and KeySpan Acquisition would trigger the Payments. These
actions were consolidated in October 1998.

On March 17, 1999, the Company signed a Memorandum of Understanding to
settle the above-referenced actions, except the federal court derivative
action, in exchange for (i) $7.9 million to be distributed (less
plaintiffs' attorneys fees) to former LILCO and KSE shareholders and
(ii) the Company's agreement to implement certain corporate governance
and executive compensation procedures. The entire $7.9 million
settlement commitment will be funded from insurance. The parties intend
to submit the settlement to the Nassau County Supreme Court for its
review and approval. If that Court approves the settlement, the parties
will then make an application to the federal court for an order and
final judgment, dismissing the three federal court actions, including
the federal court derivative action, based, among other things, on the
binding effect of the state court judgment.

In addition to the above mentioned actions, a class action lawsuit has
also been filed in the New York State Supreme Court, Suffolk County, by
the County of Suffolk against LILCO's former officers and/or directors.
The County of Suffolk alleges that the Payments were improper, and seeks
to recover the Payments for the benefit of Suffolk County ratepayers.
The Company moved to consolidate this action with the above-mentioned
consolidated action in October 1998.

In October 1998, the County of Suffolk and the Towns of Huntington and
Babylon commenced an action against LIPA, the Company, the NYPSC and
others in the United States District Court for the Eastern District of
New York (the "Huntington Lawsuit"). The Huntington Lawsuit alleges,
among other things, that LILCO ratepayers (i) have a property right to
receive or share in the alleged capital gain that resulted from the
transaction with LIPA (which gain is alleged to be at least $1 billion);
and (ii) that LILCO was required to refund to ratepayers the amount of a
Shoreham-related deferred tax reserve (alleged to be at least $800
million) carried on the books of LILCO at the consummation of the LIPA
Transaction. In December 1998, the plaintiffs amended their complaint.
The amended complaint contains allegations relating to the Payments and
adds the recipients of the Payments as defendants. In January 1999, the
Company was served with the amended complaint.

Finally, certain other proceedings have been commenced relating to the
Payments and disclosures made by LILCO with respect thereto. These
proceedings include investigations by the New York State Attorney
General, the NYPSC and LIPA, joint hearings conducted by two committees
of the New York State Assembly, and an informal, non-public inquiry by
the SEC. In December 1998, the Company settled with LIPA and the NYPSC.
The agreement included a payment of $5.2 million by the Company to LIPA
that will be used by LIPA to supply postage-paid bill return envelopes
to customers for the next three years. The Company also agreed to fully
reimburse and indemnify LIPA for costs incurred by LIPA, amounting to
approximately $765,000, for attorneys and other consultants involved in
the investigation. Such amounts are not covered by insurance. The
Company is cooperating fully with the investigations of the New York
State Attorney General and the SEC. To date, no action has been taken
either by the New York State Attorney General or the SEC.

At this time the Company is unable to determine the outcome of the
ongoing proceedings, or any of the remaining lawsuits described above.

KEYSPAN CORP: Settles Long Island Lightingís RICO Suit; Will Pay Users
The Class Settlement, which became effective in June 1989, resolved a
civil lawsuit against LILCO brought under the federal Racketeer
Influenced and Corrupt Organizations Act. The lawsuit, which the Class
Settlement resolved, had alleged that LILCO made inadequate disclosures
before the NYPSC concerning the construction and completion of nuclear
generating facilities.

The Class Settlement provided electric customers with rate reductions of
$390.0 million that were being reflected as adjustments to their monthly
electric bills over a ten-year period which began on June 1, 1990. Upon
its effectiveness, a liability was recorded for the Class Settlement on
a present value basis at $170.0 million. The Class Settlement obligation
of approximately $75.0 million at December 31, 1998 reflects the present
value of the remaining reductions to be refunded to customers. The
reduction in the present value of this liability has been included in
the accompanying Consolidated Income Statement. As a result of the LIPA
Transaction, LIPA will reimburse the remaining balance to its electric
customers as an adjustment to their monthly electric bills. The Company
will then, in turn, reimburse LIPA on a monthly basis for such
reductions on the customer's monthly bill. The Company remains
ultimately obligated for the refund of the Class Settlement.

MODERN ACOUSTICS: Conn Case on Employee Benefit Plans Survives Sanction
Before a District Court can sanction a party with case dismissal under
Federal Rule of Civil Procedure 37 or 41 for failure to prosecute, a
dilatory party must be given prior notice. (Loubier, et al. v. Modern
Acoustics Inc., et al., No. 3:97-CV-1200 (D. Conn. Aug. 10, 1999).)

District Judge Goettel of the U.S. District Court for the District of
Connecticut considered this consistent requirement of the 2nd Circuit in
ruling on an employer's motion to dismiss the federal and state
statutory claims of the trustees of several state-wide employee benefit
plans. The trustees alleged in their complaint that the employer and
related parties, failed to make contributions to the trust funds for
almost two years, in violation of the Employee Retirement Income
Security Act and Connecticut's Uniform Fraudulent Transfer Act. The
trustees had earlier filed two lawsuits in state court - both dismissed
for failure to prosecute. In addition, before considering the
defendants' dismissal motion, the federal court dismissed an earlier
filing by the plaintiffs for lack of subject matter jurisdiction, and
the plaintiffs voluntarily dismissed a second federal court filing.

Approximately two years after plaintiffs filed their case for a third
time in federal court, the defendants moved to dismiss under Rule 41(b)
for plaintiffs' failure to prosecute the action. Plaintiffs responded
that the court could only consider dismissal under Rule 37 - for a
party's failure to obey a discovery order.

Judge Goettel did not get bogged down with deciding which of the two
rules should control his ruling, since both required advance notice to
the offending party. He wrote: "Because we find that plaintiffs have not
been given a clear warning that their continued, dilatory conduct would
result in dismissal, we find it unnecessary to address whether dismissal
would be appropriate under Rule 37 or Rule 41(b)."

The court then reviewed the record of the case, reminding itself that
the plaintiffs had indeed dragged their feet during what the court
described was a "long and tortious history." During that history, the
court even remarked that the plaintiffs had "'more than one bite at the
apple' [with] one mistake after another in the pleadings, all of which
have been at a cost to the defendants."

But, Judge Goettel observed, the District Court never adopted
defendants' contention that the plaintiffs' action during the course of
the litigation "'sounded the death knell for this action,'" and - more
importantly - the court never clearly advised or warned the plaintiffs
that their actions could lead to dismissal of the case.

Without such prior notice and in keeping with the law of the 2nd
Circuit, the District Court denied the defendants' motion to dismiss,
but issued a clear-cut warning about further dilatory conduct: "Over the
past five years, the court system has patiently allowed plaintiffs to
correct their numerous errors. We will tolerate no more." (Federal
Discovery News, Vol. 5, No. 12, November 15, 1999)

NAVIGANT CONSULTING: Entwistle & Cappucci File Securities Suit in Il.
Pursuant to Section 21(D)(a)(3)(A)(i) of the Securities Exchange Act of
1934 (the "Exchange Act"), Entwistle & Cappucci LLP, gave notice on
December 8 that a class action lawsuit for violations of the federal
securities laws has been filed against Navigant Consulting, Inc.
("Navigant" or the "Company") (NYSE: NCI) and certain of its officers in
the United States District Court for the Northern District of Illinois.
The lawsuit was brought on behalf of all persons who purchased Navigant
common stock between July 15, 1999 and November 22, 1999, inclusive (the
"Class Period").

The complaint charges Navigant and certain of its officers during the
relevant time period with violations of the Exchange Act. Specifically,
the complaint alleges that defendants issued a series of materially
false and misleading statements concerning the substance and nature of
$17 million in loans made to Navigant senior executives who used the
monies to purchase Navigant common stock. In addition, the complaint
alleges that defendants failed to disclose that its "pooling of
interest" accounting treatment for several acquisitions completed in
1999 was at risk of being invalidated as a result of insider buying by
Navigant senior executives. As a result of these false and misleading
statements, the price of Navigant common stock was artificially inflated
during the Class period.

Contact plaintiff's counsel, Vincent R. Cappucci, Esq. of Entwistle &
Cappucci LLP, 400 Park Avenue, 16th Floor, New York, New York 10022,
Telephone: 212-894-7200; E-mail: mboyle@entwistle-law.com

NAVIGANT CONSULTING: Pomerantz Haudek Files Securities Suit
The following is an announcement of December 10 by the law firm of
Pomerantz Haudek Block Grossman & Gross LLP:

Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has
filed a class action suit against Navigant Consulting, Inc. ("Navigant"
or the "Company") (NYSE:NCI), formerly known as Metzler Group, Inc.
(Nasdaq: METZ), and several of the Company's senior officers on behalf
of all those who purchased Navigant common stock during the period
between May 6, 1999 and November 19, 1999, inclusive (the "Class
Period"). Other firms have filed similar complaints on behalf of
purchasers of Navigant common stock during the period between May 6,
1999 through November 23, 1999.

According to the Pomerantz lawsuit, Navigant issued materially false and
misleading statements during the Class Period in which the Company
failed to disclose material information about its accounting practices;
defendants are alleged to have improperly accounted for several business
combinations by failing to restate Navigant's interim 1998 financial
statements to give effect to the acquired company's contributions to
Navigant's financials.

As a result of defendants' reckless disregard for the veracity of the
Company's public statements, the market was led to believe that Navigant
was growing at a materially accelerated rate. Moreover, defendants
failed to properly disclose the nature of $17 million in loans made to
Navigant senior executives who allegedly used the monies to purchase
Navigant common stock. This was part of an alleged scheme to
artificially inflate the rate at which the company was growing in order
for the defendants to sell the company and realize large profits on
stock purchases financed with inappropriate secret loans from the

As a result of defendants' manipulative actions and false and misleading
statements, the price of Navigant's common stock was artificially
inflated during the Class Period. When the market finally learned of
Navigant's scheme, the price of Navigant common stock fell dramatically.

Contact: Pomerantz Haudek Block Grossman & Gross LLP Andrew G. Tolan,
Esq. Phone: 888/476-6529 (888/4-POMLAW) Internet: agtolan@pomlaw.com

OCCIDENTAL PETROLEUM: 9th Cir. Affirms $2M Cut for Attys. in Fraud Case
In a securities fraud class action where plaintiff attorneys were
awarded $3 million in fees but the class members received no money, the
Ninth Circuit U.S. Court of Appeals has ruled the district court had the
authority to reduce the fees by $2 million regardless of whether the
class member who objected had standing. Zucker et al. v. Occidental
Petroleum Corp. et al., No. 97-56270 (9th Cir., Oct. 19, 1999).

Prior to the suit being filed, Occidental Petroleum Corp. had a policy
of paying dividends of $2.50 per share even if it had to sell assets to
do so. Although company officials stated they remained committed to the
policy in 1990, they changed the dividend calculation the following

Shareholders alleged Occidental lulled purchasers into thinking they
were buying a $2.50 per share stream of income. The class period ran
from the date of the company's assurance regarding its policy to when
the reduction was put into effect.

The securities fraud claim was later settled by the parties, with the
proposed settlement awarding attorneys' fees paid by Occidental, but the
class members received no cash award. However, Occidental promised
shareholders that, beginning in 1997, dividends would be set according
to a new formula based on earnings. One class member, Walter Kaufmann,
objected to the merits of the settlement and the amount of attorneys'

In 1993, over his objection, the Central District of California awarded
$2,975,000 in fees to plaintiffs' class counsel Weiss & Yourman.

When Kaufmann appealed, the Ninth Circuit remanded the case, stating the
district court had not adequately articulated its reasons for approving
the fee. The lower court subsequently reduced the fee to slightly more
than $1 million. Judge James M. Ideman, writing for the district court,
rejected the attorneys' argument that their fees should be a percentage
of the increase in value in Occidental stock, stating their claim was
"unpersuasive speculation." In addition, for knocking roughly $2 million
off the plaintiff's fees, Kaufmann was awarded approximately $48,000 for
his attorney's fees.

The class action plaintiffs appealed the ruling, contending Kaufmann
lacked standing to contest the original award. Since there was not a
common fund out of which both class members and their attorneys were
paid, Kaufmann did not lose money, argued the plaintiffs.

The circuit court concluded Kaufmann's standing to sue was not an issue
because the class action plaintiffs had appealed, not Kaufmann.
Moreover, because the original $3 million award was vacated and the
district court instru cted to state the basis of any subsequent
determination, no one needed standing to sue, continued the court.

The reasonableness of attorneys' fees is within the overall supervisory
responsibility of the court in a class action, ruled Circuit Judge
Andrew J. Kleinfeld, and the lower court had the authority to determine
the fee awarded independently of any objection by a class member.

Walter Kaufmann was represented by Lawrence W. Schonbrun of Berkeley,
CA. The class action plaintiffs were represented by James E. Tullman and
Donald S. Urrabazo of Weiss & Yourman in Los Angeles. (Corporate
Officers and Directors Liability Litigation Reporter, Vol. 15; No. 1;
Pg. 12, November 8, 1999)

PERVASIVE SOFTWARE: Wolf Haldenstein Files Securities Suit in Texas
The following is an announcement on December 8 by the law firm of Wolf
Haldenstein Adler Freeman & Herz LLP:

Wolf Haldenstein Adler Freeman & Herz LLP, announce that a class action
has been commenced in the United States District Court for the Western
District of Texas on behalf of purchasers of Pervasive Software Inc.
("Pervasive") (NASDAQ:PVSW) common stock during the period between July
15, 1999 and October 21, 1999 (the "Class Period"). The complaint
charges Pervasive and certain of its officers and directors with
violations of the Securities Exchange Act of 1934.

Specifically, the complaint alleges that after its initial public
offering in September 1997, Pervasive stock traded in the $9-$15 range
as Pervasive's revenue and earnings showed little growth in the first
two quarters it reported as an independent company. By October 1998, the
Company's stock price was trading at just $8.50 per share. The Company
then began to move its focus more to Internet-related tools and saw its
stock price increase to above $18 per share. On July 15, 1999, Pervasive
reported strong revenues and earnings and strong networking revenues.

In a conference call after the release, Pervasive management discussed
its new product ("Tango"), its new focus on Internet-related products
and touted the Company's prospects. As a result of defendants'
statements, Pervasive's stock price was inflated during the Class
Period. Top officers of Pervasive took advantage of these inflated share
prices, selling 492,250 shares for proceeds of $11 million over the next
two weeks following these statements. By October 1999, Pervasive's stock
was trading at as high as $38 per share.

Pervasive's business and prospects, however, were not nearly as
favorable as defendants had represented. On October 21, 1999, Pervasive
issued a press release announcing its 1stQ F2000 results. Later that
day, Pervasive held a conference call and admitted that its results for
the 2ndQ F2000, ended December 31, 1999, would be much worse than
earlier represented and that costs of the development of Tango-related
sales would cause losses in F2000 instead of forecasted profits of $.50.
On these shocking disclosures, Pervasive's stock price declined $24-1/16
to $12 per share on enormous volume of 11.8 million shares, a 67%
decline in one day.

Contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue,
New York, New York 10016, by telephone at (800) 575-0735 (Michael Miske,
Gregory Nespole, Esq., via e-mail at, or our website at
http://www.whafh.comor Charles J. Piven at (410) 332-0030 or
pivenlaw@eros.com (All e-mail correspondence should make reference to

PLAINS ALL: Keller Rohrback Files Securities Lawsuit
Keller Rohrback LLP's Complex Litigation Group says in an announcement
December 8 it is pursuing an investigation for violation of federal
securities laws on behalf of those persons who purchased the common
limited partnership units of Plains All American Pipeline LP ("Plains"
or the "Company") (NYSE:PAA) and the common stock of Plains Resources,
Inc. ("Plains Resources") (AMEX:PLX) between November 17, 1998, and
November 26, 1999, inclusive.

Complaints charge that Plains, Plains Resources and certain of its
officers and directors violated federal securities laws by providing
materially false and misleading information about the Company's
operations, earnings growth and overall financial condition.
Specifically, it is alleged that during the Class Period, the Individual
Defendants engaged in a scheme to conceal Plains' and Plains Resources'
unauthorized oil trading activities in order to prevent the decline in
the price of Plains Units and Plains Resources stock.

On November 29, 1999, Plains revealed that it had incurred a loss of
over $ 160 million which had been concealed since the spring of 1999,
and that Plains and Plains Resources would likely restate their
previously reported financial results for each of the prior three
quarters. This revelation caused Plains Units to fall as low as $9-5/8
per Unit, a decline of 55% from its Class Period high. Plains Resources
stock immediately followed, plummeting more than 45% the same day.

Contact Keller Rohrback L.L.P. (Lynn L. Sarko, Juli E. Farris or
Elizabeth Leland, Esq.) toll free at 800/776-6044, or via e-mail at
investor@kellerrohrback.com (Those who inquire by e-mail are asked to
provide their mailing address and telephone number.)

PLAINS ALL: Scott & Scott File Securities Suit in Texas
The following is an announcement on December 8 by the law firm of Scott
& Scott LLC:

Scott & Scott LLC (nrothstein@scott-scott.com) announced that a class
action has been commenced in the United States District Court for the
Southern District of Texas on behalf of those persons who purchased the
common limited partnership units ("units") of Plains All American
Pipeline LP ("Plains" or the "Company")(NYSE:PAA) and the common stock
of Plains Resources, Inc. ("Plains Resources")(AMEX:PLX) between
November 17, 1998 and November 26, 1999, inclusive (the "Class Period"),
including those who acquired their Units pursuant to the Plains' Initial
Public Offering and Secondary Offering Registration

The complaint charges Plains, Plains Resources and certain of its
officers and directors with violations of the Securities Exchange Act of
1934. The complaint alleges that during the Class Period, the Individual
Defendants engaged in a scheme to conceal Plains' and Plains Resources'
badly flagging oil trading activities in order to prevent the decline in
the price of Plains units and Plains Resources stock in order to (i)
protect and enhance their executive positions and substantial
compensation; (ii) enhance the value of their personal Plains and Plains
Resources securties holding and options; (iii) allow Plains to sell over
$300 million of Plains Units at inflated prices to obtain large amounts
of cash to fund its acquisitions spree; (iv) compensate and pay key
employees for their participation in the defendants' plan; (v) extract
the sum of $148 million for Plains Resources, Plains' General Partner
and also a partnership in which defendants Pefanis, Armstrong and Kramer
served as officers and highly compensated executives; (vi) use Plains'
artificially inflated Units as currency to fund the Company's
acquisition of companies in units-for-stock transactions; (vii) all
Plains Resources to convert its preferred Units for Plains common Units
once Plains traded at or above $21.60 per Unit for 30 consecutive days;
and (viii) complete a$75 million debt offering for Plains Resources.

Then, on November 29, 1999, Plains revealed that it had incurred a loss
of over $160 million which had been concealed since the spring of 1999
as the result of speculative commodity trading and that contrary to its
representations in the Initial Public Offering Prospectus and the
Secondary Offering Prospectus, Plains was not monitoring its hedging
activities. It was then revealed that during the bull oil market of
1999, Plains had engaged in "shorting" crude oil throughout the year and
that it was still short 12 million barrels of crude oil for December
delivery and 1 million barrels for January delivery. Thus, contrary to
the defendants' statements during the Class Period, neither Plains nor
Plains Resources would benefit from an "increase" in crude oil prices.
In fact, Plains revealed that it would likely be restating its
previously reported financial results for each of the prior three
quarters of fiscal 1999. This in turn would for Plains Resources to
restate its financial results for the same period. This revelation
caused Plains Units to fall as low as$9-5/8 per unit, a decline of 55%
from its Class Period high. Plains Resources stock immediately followed,
plummeting more than 45% the same day.

Contact Neil Rothstein, Esq. of Scott & Scott, LLC 800/449-4900, or
800/404-7770, or 619/338/3887. E-mail at nrothstein@scott-scott.com

PLYMOUTH, MA: Sued for Inaccessibility of Ct Facilities to the Disabled
A not-for-profit advocacy organization and two individuals with mobility
impairments have filed a class action in a Massachusetts state court,
alleging that county court facilities are illegally inaccessible.

The plaintiffs in the suit are the Cape Organization for Rights of the
Disabled, an advocacy organization based in Hyannis, Mass.; Pamela
Burkley, who uses a wheelchair and is an assistant director at CORD; and
Barry Sumner, who uses a motorized wheelchair and has a prosthetic arm.
Named as defendants are Plymouth County and the Commonwealth of

Burkley, the suit says, visited the Plymouth Superior Courthouse in
August 1996 to assist a CORD consumer. When she got there, it is
alleged, there were no accessible parking spaces that she could use, and
steps blocked access to the main entrance. She was able to enter the
courthouse through a side door, the suit adds, but found that there were
no accessible restrooms inside. In addition, she claims, a meeting that
she was scheduled to attend was located in an inaccessible upstairs
location. An ADA coordinator suggested that the meeting be moved to a
separate location, but that location was inaccessible as well, Burkley

Sumner claims that he went to the Plymouth County Probate Court in June
1998, where he encountered similar access barriers. A parking space
designated as accessible was too tight, he alleges, and access to the
building's front entrance was blocked by steps. The courtroom where
Sumner's divorce proceedings were to take place was not accessible, he
claims, and an accessible restroom was not available. CORD is named
separately as a plaintiff in the suit, which says that the
organization's members are being denied their rights to equal access.
(Disability Compliance Bulletin, Vol. 16, No. 4, November 22, 1999)

STARNET COMMUNICATIONS: Shareholders Fight Lawsuits, Canadian News Says
The Starnet Investors Group announced on December 13 that it will
continue its campaign to refute charges levied by class action attorneys
against Starnet Communications International, Inc. (OTC Bulletin Board:
SNMM), a leading provider of Internet gaming technologies and services.
The Group is also pleased to announce that its ranks are growing; its
members collectively hold nearly five million shares of common stock in
Starnet Communications. If necessary, representatives of the Group will
appear in court to ensure that any class action lawsuit is defeated.

Regarding the threatened class action, the attacking law firms make two
fundamental charges: that Starnet insiders inflated the company's stock
price in order to reap illicit profits, and that company officers misled
investors regarding risks in Starnet's business model. "These charges
are demonstrably false," said James P. Lewis, spokesman for the Group.
The facts are clear. The market has driven this stock based on the
enormous growth projected for the Internet gaming industry and Starnet's
aggressive pursuit of market share. Our investigation of the matter
reveals no unusual insider selling whatsoever. In fact, such sales were
relatively insignificant and actually declined over the course of the
class period, Lewis said. Similarly, more than 1,000 shareholders have
added their names to a statement rejecting the charge that Starnet's
officers misled investors.

The international consulting firm Frost & Sullivan recently recognized
Starnet as the world's "preeminent supplier of online gambling
software." The firm identified Starnet as a potential market share
leader in Internet gaming and projected that this market will reach a
revenue total of $10.95 billion by Starnet's licensee network already
comprises 35 to 40 percent of all gaming sites and it continues to grow.

Gaming operators using Starnet's products are experiencing dramatic
increases in deposits and wagering, as well as monthly gains in casino
and sportsbook profits. "Our correspondence with licensees indicates
that they remain thoroughly satisfied with Starnet's services and
innovative technologies," Lewis said. Starnet is working with its
licensee partners to aggressively market their products and build
long-term brand awareness and loyalty among gamers and bettors. "These
collaborative efforts are contributing new and ever-increasing royalties
to Starnet's bottom line," Lewis said.

With five consecutive quarters of profitable operations, Starnet
Communications is arguably the most undervalued company in the Internet
industry today. "Our members won't be deceived by opportunistic
attorneys. In fact, many of us are increasing our positions in Starnet
Communications," Lewis concluded.

The Starnet Investors Group is an independent organization formed by
shareholders. The Group is not affiliated with Starnet Communications
International, Inc. or its officers. Shareholders wishing to join the
Group, and/or the Group's petition opposing the class action, should
contact sig@ragingbull.com . Contact: James P. Lewis of Starnet
Investors Group, 604-737-8050

TYCO INTíL: Bernstein Liebhard Files Securities Suit in Florida
Bernstein Liebhard & Lifshitz, LLP announced on December 13 that a
securities class action lawsuit was commenced on behalf of purchasers of
the common stock of Tyco International Ltd.(NYSE: TYC) ("Tyco" or the
"Company"), between December 10, 1998 and December 8, 1999, inclusive,
(the "Class Period"), in the United States District Court for the
Southern District of Florida.

The complaint charges Tyco 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 due to improper
accounting practices in connection with certain acquisitions the Company
made during the Class Period. Defendants took these improper charges and
writeoffs in order to boost Tyco's future operating results. As a result
of these misrepresentations and omissions, the price of Tyco's common
stock was artificially inflated throughout the Class Period. Tyco
insiders took advantage of this run-up in Tyco's share price to sell
over 1.5 million of their own shares to the investing public and realize
proceeds of over $170 million.

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

TYCO INTíL: Dennis J. Johnson Files Securities Suit in New Hampshire
The Law Offices of Dennis J. Johnson gives notice that a class action
complaint will be filed on December 10 in the U.S. District Court for
the District of New Hampshire on behalf of purchasers of TYC common
stock and call options during the period October 1, 1998 through
December 8, 1999 (the "Class Period").

The lawsuit alleges that TYC and certain of its top officers and
directors violated certain of the securities laws and regulations of the
United States.

The Complaint alleges, among other things, that during the Class Period,
TYC misled investors by utilizing accounting methods which made it
appear that companies TYC acquired were experiencing healthier growth
than they actually were after being acquired by TYC. On December 9,
1999, TYC announced that the Securities and Exchange Commission was
conducting an informal inquiry relating to charges and reserves taken in
connection with the Company's acquisitions.

If you purchased TYC common stock or call options during the Class
Period or have questions or information regarding this action or your
rights, please contact: Dennis J. Johnson, Esquire or Jacob B.
Perkinson, Esquire at The Law Offices of Dennis J. Johnson, 1690
Williston Road, South Burlington, Vermont 05402, toll free at
1-888-459-7855 or via e-mail at LODJJ@aol.com.

Contact: The Law Offices of Dennis J. Johnson Dennis J. Johnson, Esquire
or Jacob B. Perkinson, Esquire 1-888/459-7855 LODJJ@aol.com

TYCO INTíT: Shepherd & Geller File Securities Suit in Florida
The Law Firm of Shepherd & Geller, LLC announced on December 10 that it
has filed a class action in the United States District Court for the
Southern District of Florida on behalf of all individuals and
institutional investors that purchased the common stock of Tyco
International Limited ("Tyco" or the "Company") (NYSE:TYC) between
December 10, 1998 and December 8, 1999, inclusive (the "Class Period").

The complaint charges that the Company and certain of its officers and
directors violated the federal securities laws by providing materially
false and misleading information about the Company's financial condition
and future growth potential. As a result of these false and misleading
statements the Company's stock traded at artificially inflated prices
during the class period. Prior to the disclosure of the above mentioned
adverse facts, certain insiders took advantage of the inflated stock
price by selling 1.5 million shares of Tyco common stock to the
investing public, reaping over $170 million in insider selling profits.
When the truth about the Company was revealed, the price of the stock
dropped significantly.

Contact: Shepherd & Geller, LLC, Boca Raton Jonathan M. Stein,
561/750-3000 Toll Free: 1-888-262-3131 E-mail:
jstein@classactioncounsel.com or Shepherd & Geller, LLC, Media, Pa.
Scott R. Shepherd, 610/891-9880 Toll Free: 1-877-891-9880 E-mail:

TYCO INTíT: Wechsler Harwood Files Securities Suit in Florida
The following is an announcement by the law firm of Wechsler Harwood
Halebian & Feffer LLP:

The following was released December 12 by Wechsler Harwood Halebian &
Feffer LLP: Notice is hereby given that on December 10, 1999, a
securities class action lawsuit was filed in the United States District
Court for the Southern District of Florida against Tyco International,
Ltd. ("Tyco" or the "Company")( NYSE: TYC), and certain officers and
directors of the Company on behalf of all persons and entities who
purchased the stock of Tyco during the period December 10, 1998 and
December 8, 1999, inclusive (the "Class Period").

The complaint alleges that defendants violated the federal securities
laws, including Sections 10(b) and 20 of the Securities Exchange Act of
1934, as amended, by making false and misleading statements in press
releases and filings with the Securities and Exchange Commission,
concerning, among other things, the business, financial condition,
earnings and prospects of Tyco. Specifically, the Complaint alleges that
defendants took "accounting baths" related to certain acquisitions in
order to improve future period operating results. Prior to the
disclosure of this adverse information certain insiders sold over 1.5
million shares of Tyco to the investing public at artificially inflated
prices. These sellers realized over $170 million in proceeds from these
insider trading activities.

On December 9, 1999, the stock price of Tyco plummeted from its previous
day's close of $36.188 per share or 22.6% to close at $28.000 per share
on trading volume of almost 115 million shares.

Contact: Wechsler Harwood Halebian & Feffer LLP: 488 Madison Avenue, New
York New York 10022 Telephone: 1-877-935-7400 (toll free) or by
e-mailing the following: Robert I. Harwood, Esq. rharwood@whhf.com or
Stuart D. Wechsler, Esq. swechsler@whhf.com or Frederick W. Gerkens,
III, Esq., fgerkens@whhf.com or Bull & Lifshitz LLP Joshua M. Lifshitz,
Esq. Peter D. Bull, Esq. 212/0869-9449 or 888/893-1844 (outside New York
State) classlaw1@aol.com or Law Offices of Kenneth A. Elan Kenneth A.
Elan, Esq. 212/619-0261

UNITED SHIPPING: Sued by Former CA Employee Drivers over OT & Other Pay
In its report to the Securities and Exchange Commission, filed as of
date December 8, 1999, United Shipping & Technology Inc. mentions
briefly that in fiscal 1998, certain current and former California
employee drivers of the Company filed a class action lawsuit against the
Company alleging various overtime wage, expense reimbursement and
minimum wage deficiencies.

VALLEN CORP: Decries Merit of TX Securities Suit over Merger Agreement
Vallen Corporation (Nasdaq: VALN) announced that it learned on December
8, 1999 that a petition was filed on November 22, 1999 in state court in
Houston by attorneys for Albert Siegel, allegedly a Vallen shareholder.
The petition names as defendants Vallen, its directors, Hagemeyer P.P.S.
North America, Inc. ("Hagemeyer") and Shield Acquisition Corp.
("Purchaser"). The petition seeks to proceed on behalf of a purported
class of Vallen shareholders other than the defendants and alleges,
among other things, that the $25 per share price under Vallen's
previously announced Merger Agreement with Hagemeyer and Purchaser is
inadequate, that the members of the Vallen board of directors breached
their fiduciary duties by approving the Merger Agreement allegedly in
order to obtain personal financial benefits, and that Hagemeyer and
Purchaser aided and abetted these alleged breaches of duty. The petition
seeks preliminary and permanent injunctive relief, unspecified damages,
and plaintiff's costs and attorneys' fees.

Vallen said it believes all of the claims in the petition are entirely
without merit, and Vallen will vigorously contest the lawsuit. Vallen
Corporation, through its operating subsidiaries, is engaged in providing
integrated safety products and related services as well as other
industrial MRO products to customers, including total safety solutions
programs in customers' working environments. Its manufacturing
facilities under Encon Safety Products, Inc. produce a variety of safety
products and other products for industrial and commercial application,
including emergency shower and eyewash fountains for industrial usage,
and a broad line of non-prescription safety eyewear distributed
throughout North and South America. Vallen operates from 162 locations,
including 69 onsite/just in time locations throughout North America and
in Chile.

VITAMIN PRICE-FIXING: Fd Ct Denies BASF Removal & Remands Case to Penn
A federal judge has ruled that a price-fixing case that presents no
federal claims must remain in Pennsylvania state court and cannot be
removed to federal court on the ground of federal preemption of the
antitrust arena, despite the fact the state has no antitrust statute of
its own. XF Enterprises Inc. v. BASF Corp. et al., No. 99-3693 (ED PA,
Nov. 2, 1999).

U.S.District Judge Ronald L. Buckwalter wrote, "Pennsylvania courts have
recognized the unlawfulness, in a civil context, of the price fixing
conspiracies and other combinations in restraint of trade. Also, the
availability of a private damage remedy for a civil conspiracy to
perform an unlawful act is recognized in Pennsylvania."


XF Enterprises Inc. manufactures and sells vitamin fortification
products for livestock and manufactures feedyard supplements for ranches
and feedlots. In June 1999, XF filed a putative class action in the
Philadelphia County Court of Common Pleas against nine defendants, major
players in the vitamin business, alleging they have conspired to fix
prices in violation of Pennsylvania antitrust law from January 1988 to
the present.

XF asserted it has been harmed by defendants as both a direct and
indirect purchaser of vitamins. Along with the state antitrust
conspiracy claim, the suit alleged state law claims of fraud, negligent
misrepresentation and violations of the Pennsylvania Unfair Trade
Practices and Consumer Protection Law.

Defendants removed the case to U.S. District Court, arguing that XF's
antitrust claim is really a federal claim pleaded so as to deprive
defendants of the benefit of a federal forum. XF moved to remand,
arguing no federal question jurisdiction existed since the complaint
asserted no federal claims.

                District Court Decision

Judge Buckwalter found that the forum dispute raised issues under both
the "well-pleaded complaint rule" and the "artful pleading doctrine."
The well-pleaded complaint rule provides that federal jurisdiction
exists only when a federal question is presented on the face of the
plaintiff's properly pleaded complaint. A corollary to the rule is that
a plaintiff may not defeat removal by omitting to plead necessary
federal questions. If a federal court concludes that a plaintiff has
"artfully pleaded" claims to avoid federal jurisdiction, the court may
uphold removal even though no federal question appears on the face of
the plaintiff's complaint. The artful pleading doctrine only allows
removal where federal law completely preempts a plaintiff's state law
claim, Judge Buckwalter counseled.

He continued that federal preemption is usually a defense, but it can
function as basis for removal once an area of state law has been
completely preempted by federal law. Any such state law claim should be
considered a federal claim from its inception, and therefore arises
under federal law.

Both sides in the case agreed that the federal antitrust laws do not
completely preempt existing state antitrust laws, the judge said. The
defense argued two points. The artful pleading doctrine is not
restricted to state law claims that have been completely preempted by
federal law. Also, defendants claim the antitrust allegations are
essentially federal because Pennsylvania does not have an antitrust

Judge Buckwalter wrote, "The controlling law of our Circuit is that the
artful pleading doctrine extends no further than to completely preempt
state claims. Therefore, the Defendants concession that antitrust law is
not completely preempted by federal law is fatal to their claim for

The defense also asked the judge to hold that XF intended to deprive
them of a federal forum by failing to state a federal claim in its
complaint. But the judge said the U.S. Supreme Court has stated that the
plaintiff is "master of his claim." He explained that XF could not have
made its "indirect purchaser" claims under federal antitrust law, so
state court was the only place it could file its claim. And since the
Supreme Court has held that federal antitrust law does not preempt state
antitrust law (see California v. ARC America Corp. 1989 ), the plaintiff
is free to bring its claims as a direct purchaser under state law only.

Judge Buckwalter said that while XF conceded that the question of
whether damages are available under Pennsylvania antitrust law is an
open one, an equitable remedy is possible. Also, he said the
availability of a private damage remedy for a civil conspiracy to
perform an unlawful act is recognized under state law.

The judge wrote, "The unsettled question of whether XF has stated a
claim upon which relief can be granted under Pennsylvania law does not
allow a federal court to exercise jurisdiction over that claim. This is
a question for a state court to decide." He added that if no such remedy
exists, then Count I of the complaint should be dismissed by the state

In conclusion, Judge Buckwalter said plaintiff XF chose to bring suit in
state court. Since its antitrust cause of action neither implicates a
federal law question nor involves a subject matter completely preempted
by federal law, defendants' removal based on federal question
jurisdiction was improper.

XF is represented by Paul R. Rosen and Timothy C. Russell of Spector,
Gadon and Rosen in Philadelphia.

Counsel for the defense include: Seth A. Abel of Pepper Hamilton for
BASF Corp.; Stephen D. Brown and Matthew R. Walker of Dechert, Price &
Rhoads for Hoffman-Roche Inc., Roche Vitamins, Rhone-Poulenc Inc.,
Rhone-Poulenc Animal Nutrition Inc., and Lonza Inc; Charles J. Reitmeyer
of Morgan, Lewis & Bockius for Degussa-Huls Corp.; David J. Creagan and
Gay Barlow Parks Rainville of Harkins Cunningham for Chinook Group Inc.;
and Carl M. Buchholtz of Blank Rome Comisky & McCauley for Ducoa LP. All
of the firms are in Philadelphia. (Antitrust Litigation Reporter, Vol.
7; No. 5; Pg. 9, November 1999)

WAR VICTIMS: S. Koreans in S. Korea File Suit in U.S. against Japanese
Some 280 South Koreans have filed a class-action suit with a U.S.
federal district court seeking damages and solatium from several
Japanese companies for forced labor during World War II, their lawyer
said in Tokyo. The case filed by the plaintiffs, who are now all living
in South Korea, follows similar suits filed in the United States by
South Korean former forced laborers residing in the U.S., said Eddie
Yoon, a legal agent for both groups.

The number of companies named in the case, which includes Nippon Steel
Corp., one of the world's largest steelmakers, could still increase if a
search yields more claimants.

Yoon said the plaintiffs belong to an association of families of South
Korean victims of the Pacific War. He also expressed optimism that
legislation in certain U.S. states allowing legal action regardless of
the statute of limitations would eventually lead to a legal victory for
the former forced laborers and reverse a current trend of court losses.

A number of lawsuits have been filed by former prisoners of war in U.S.
courts since a 79-year-old U.S. war veteran filed a suit in California
in August against the Mitsui business group, alleging he was forced to
work in a Mitsui coal mine in Fukuoka Prefecture and was beaten by his
captors. The suit is the first filed under a new California law that
allows victims of slave labor to sue multinational corporations in state

The Japanese government maintains that the 1951 San Francisco peace
treaty stipulates the final and complete resolution of the compensation
issue between Japan and the Allied nations. (Kyodo News from Tokyo,
November 26, 1999)

Y2K: A Survival Guide For Human Resource Managers
Think you've heard everything there is to know about Y2K? Not so fast.
Sure, last year when you hired all those information technology (IT)
employees and paid them exorbitant salaries to review your company's
software systems, you thought you were ready. But the U.S. Department of
Labor, the Small Business Administration, and the Team Florida 2000
committee have prepared checklists of other potential problems. But
don't worry: It's not too late to prepare your business for the
scenarios that could arise starting January 1, 2000.

                         What is Y2K?

In case you haven't been following the news reports for the past couple
of years, the year 2000 could wreak havoc on our computer systems. Old
computer programs reserved and recognized only two digits as year
designations. For example, the old computer would treat a date coded
12/12/01 as if it were December 12, 1901.

As 2000 approaches, problems are expected with computer and data
processing systems that can't read the year correctly and might generate
inaccurate data. Difficulties are expected as early as 12:01 a.m. on
January 1, 2000 or 1/1/00.

                     What is Y2K failure?

Y2K failure is defined by the federal Y2K Act to include failure by a
device or computer system to calculate, compare, sequence, display,
store, transmit, or receive year 2000 date-related data. It also
includes failure to accurately account for the fact that 2000 is a leap
year, such as recognizing and processing the correct date of February
29, 2000.

                 HR problems that might arise

Every business has to consider the financial and technological
ramifications of the Y2K problem. Any piece of business equipment that
uses a microchip is susceptible to Y2K problems. HR managers must also
consider how Y2K problems could affect workplace safety, benefits,
payroll functions, and so on. HR managers should evaluate the following
areas for potential Y2K headaches:

Workplace safety (*) alarms, including fire and smoke alarms

(*) sprinklers for fire safety

(*) elevators and escalators

(*) lighting, including warning and exit signs

(*) air monitoring or filtering devices

(*) underground storage tanks and their monitoring systems

(*) access to safety information or information on hazardous materials
    Office or retail facilities

(*) heating and air conditioning

(*) security systems, including building access systems

(*) backup and routine maintenance of electronic systems

(*) telephone systems

(*) date tickler systems

(*) computer systems

Payroll and benefit functions

(*) length of service calculations

(*) age calculations (*) retirement benefit calculations

(*) determination of eligibility for retirement plans

(*) health benefit entitlement, including prescription refills and
    well-baby visits

(*) generation of payroll checks, with appropriate withholding

(*) determination of commissions due and payable

                        Action checklist

Every business should complete a Y2K action plan. A sample plan follows:

(*) Step 1.Get organized; form a committee. Recognize the problems and
    educate others about them.

(*) Step 2.Inventory systems and equipment (hardware, software,
    automated systems, and interfaces). Review how the systems work

(*) Step 3.Prioritize systems and equipment.

(*) Step 4.Assess problems by pre-testing systems and equipment.

(*) Step 5.Establish a budget. Determine if you need outside help.

(*) Step 6.Repair, replace, or work around problem areas.

(*) Step 7.Test again; if needed, repeat steps from the beginning.

(*) Step 8.Set up a contingency plan for 1/1/00. Include steps to avoid
    contamination by outside systems or later updates.

                            Y2K legislation

Anticipating a flood of litigation, both Florida and the federal
government have implemented Y2K legislation. It is believed that
litigation will be filed against businesses for Y2K problems, possibly
resulting in extensive awards of economic damages and punitive damages.
Both the Florida and federal legislatures recognized that some mechanism
was needed to protect small businesses that made reasonable attempts to
anticipate and avoid Y2K problems.

                      Florida's Commerce Protection Act

In general, the Commerce Protection Act provides that a business will
not be liable for damages if the business took reasonable steps to avoid
Y2K problems. The law allows awards of economic damages against
businesses that made minimal or no efforts to prepare for Y2K and
prohibits awards of punitive damages or other special damages unless
allowed by contract between the noncompliant business and the company
bringing the lawsuit.

              The Commerce Protection Act specifically provides:

(*) In the absence of a contractual agreement or tariff filed by the
    business or governmental agency, the exclusive remedies against
    businesses for Y2K problems are direct economic damages. These
    include only economic damages that result immediately and
    necessarily from the failure of the business to be Y2K-compliant.
    The term excludes special damages, incidental damages, and punitive

(*) A business is deemed Y2K-compliant if its information technology
    products are capable of correctly processing date data.

(*) Damages may be reduced by any amounts that could have been
    reasonably avoided by the person or business bringing the lawsuit.

(*) Businesses that make reasonable efforts to become Y2K-compliant
    will not be liable for any direct economic damages.

(*) All actions for damages for Y2K noncompliance filed after January
    1, 2000, will be immediately referred to mediation. The time to
    file an answer will be extended for up to 60 days (as opposed to
    the usual 20 days) or until mediation concludes, whichever is

(*) Class actions cannot be filed against governmental agencies or
    businesses for Y2K noncompliance unless each member of the proposed
    class of suing individuals suffered direct economic damages in
    excess of $ 50,000.

(*) All lawsuits for Y2K noncompliance must be filed on or before March
    1, 2002.

(*) Directors and corporate officers have absolute immunity from
    liability for damages if the officer or director has received
    assurances from others or issued instructions that the business:

(*) took steps to determine if products are Y2K-compliant;

(*) developed and implemented plans to make products Y2K-compliant, and

(*) inquired about whether or not suppliers are Y2K-compliant.

(*) Alternative dispute resolution mechanisms -- such as voluntary
    binding arbitration and mediation -- are encouraged by the Act.

                 Reasonable efforts to ensure Y2K compliance

To show that reasonable efforts were made, a business should take and
document these steps:

(*) Document that the business secured an assessment by a person with
    the skills to evaluate technology products for Y2K compliance.
    (Remember all those IT employees you hired?)

(*) Document that a reasonable good-faith determination that the
    technology products used by the business are Y2K-compliant (based
    on the assessment) was made on or before December 1, 1999.

(*) Document that testing of the date data systems was conducted before
    December 1, 1999, resulting in a reasonable good-faith belief that
    the systems are Y2K-compliant.

                   Special rules for small businesses

Businesses with five or fewer employees and a net worth of $ 100,000 or
less are considered small businesses under the Commerce Protection Act.
The Act provides special rules for small businesses to show that
reasonable efforts were made regarding Y2K compliance. Failure to follow
the rules, however, will not create a legal presumption or inference of

To show reasonable efforts on behalf of a small business:

(*) Document that your small business made inquiries or conducted
    research before December 1, 1999, and formed a reasonable good-
    faith belief that its suppliers of goods and services were Y2K-

(*) Disclose in writing to other businesses either that certain
    suppliers are not Y2K- compliant or that your small business has a
    reasonable good-faith belief that the suppliers will become Y2K-

                        Federal Y2K Act

Federal legislation is also in place to stem the tide and control the
chaos of litigation related to Y2K failure.

(*) Consumers who have payment difficulties resulting from Y2K failures
    will not be subject to mortgage foreclosure proceedings, provided
    the consumer notifies the mortgage servicer within seven business d
    days of notice of Y2K failure. Foreclosure proceedings may resume
    four weeks after January 1, 2000, or the extension date provided to
    the consumer, if later.

(*) Punitive damages awarded against certain parties in Y2K actions are
    limited to the lesser of three times the amount awarded in economic
    damages or $ 250,000. The limits will not apply if it is
    established that there was a specific intent to injure. The accused
    parties protected by the limits include:

(*) individuals whose net worth does not exceed $ 500,000; and

(*) businesses with fewer than 50 full-time employees.

(*) The Y2K Act limits class actions to situations involving a
    "material defect." Under the Act, a material defect is a defect in
    any item, or in the provision of a service, that substantially
    prevents the item or service from operating or functioning as
    designed. The term "material defect" does not include defects that
    have an insignificant effect on operation or affect only a
    component of an item or program that otherwise operates or
    functions as designed.

(*) Before a Y2K lawsuit can be filed, written notice must be sent to
    the business being sued. The notice must provide specific and
    detailed information about:

(*) the type of material defect believed to have caused harm;

(*) the harm or loss suffered;

(*) how the problem might be remedied;

(*) the basis of the anticipated lawsuit (e.g., contract, fraud); and

(*) contact information for an individual who can negotiate a

The business being sued will have 30 days to respond and state whether
or not it is willing to engage in resolution. If it is willing, it will
have 60 additional days to complete resolution before the lawsuit can be
filed. If no response is made within 30 days or there is no willingness
to attempt resolution, the lawsuit may be filed immediately.

                  More information for employers

The U.S. Department of Labor Employment Standards Administration has a
survival guide on its Y2K web site at

Extensive materials are available on the web site of the Small Business
Administration at http://www.sba.gov/y2kwhich includes suggested
testing criteria and assessment information for various types of
equipment and systems.

Also see the information and links at http://www.year2000.com
For Florida-specific information, take a look at the web site of Team
Florida 2000 at http://www.tf2k.org/

* Asbestos Litigation Reform Effort Postponed Until Next Session
Rep. Henry Hyde's (R-Ill.) bill to move asbestos injury claims from the
courts to a dispute resolution board will have to wait until the next
millennium for further action.

H.R. 1283, The Fairness in Asbestos Compensation Act, made it to the
House Judiciary Committee, but that is as far as it got this session of
the 106th Congress. The measure would establish the Asbestos Resolution
Corp., which could prevent a civil action from proceeding unless the
plaintiff has a certificate of medical eligibility and a release from
mediation - both issued by the board. It would also prohibit class
action suits without the consent of the defendants.

"The bill will probably be taken up by the committee ... in January," a
Judiciary committee staffer sais. Contact: the House Judiciary
Committee, (202) 225-3951.  (Asbestos & Lead Abatement Report, November
1, 1999)

* New EEO Regulations on Handling Discrimination Complaints Take Effect
Ready or not, federal agencies are now expected to comply with new
procedures for handling discrimination complaints. The Equal Employment
Opportunity Commission's new regulations streamlining the way federal
agencies handle EEO complaints became effective on Nov. 9.

Under previous rules, agencies could make the final decision after an
EEO hearing as to whether the employee was discriminated against. Now an
administrative judge will have final authority, and agencies will be
allowed to issue an appeal. The regulations also require agencies to set
up or make available an alternative dispute resolution program for
resolving discrimination complaints by Jan. 1, 2000.

Employee groups complained the old system was unfair and inefficient and
put pressure on the EEOC to make immediate changes. Following the
long-awaited release of its new regulations in July, the EEOC rushed to
revise its Management Directive, giving agencies little time to review
and comment on the guidance document. "I think the commission was in
great haste to publish a regulation and the MD and has not paid enough
attention to federal sector practitioners in terms of what will be
effective," said Stanley Kelly, an Army EEO officer.

An interim guidance issued in October stated that "all EEO matters, new
and pending, are to be processed under the new procedures." The guide
answered basic questions about the new regulations and promised a
revised MD in the "near future."

The updated MD was officially released on Nov. 9. A draft had been sent
to agencies in late September, with comments due back by Oct. 13.
Carlton Hadden, EEOC federal operations director, said the short review
time was necessary to ensure agencies had guidance in time to comply
with the regulations. "Had we not done this, the concern would have been
that the regulations were effective with no guidance," Hadden said.

Besides, he added, the EEOC had been careful to engage agencies and
other stakeholders in an ongoing "collaborative process" before the MD
was sent out. While the document has been finalized, the EEOC will
continue to listen to comments and may provide additional guidance in
the future. "I think we view this as a static document," Hadden said.
"We're going to listen to what the stakeholders tell us about this

Besides the change in final decisions and the ADR requirement, the
EEOC's regulations include:

* Provisions that streamline the process by reducing the fragmentation
  of cases, eliminating multiple appeals in single cases, and updating
  the grounds for dismissal of cases.

* A new "Offer of Resolution" provision, modeled on the Federal Rules
  of Civil Procedure, that will encourage settlements.

* Reforms to the treatment of class actions, making it more feasible
  for class claims to be brought and resolved in the administrative

* Streamlining of the second level of appellate review.

Personnel throughout the Army have already been advised about the
changes, Kelly said, but he felt the EEOC had not "resolved a number of
the functional problems." Specifically, Kelly complained that the new MD
prohibits investigators from making recommendations on whether the
employee was discriminated against. "In the Army, that's what we thrive
on," he said. "I don't think the EEOC should micromanage us."

EEOC attorney Doug Gallegos said his agency had long ago shifted from
directing agency investigators to make recommended decisions. "The MD
under the old regulations did not call for recommended conclusions," he
said. "I'm not aware of any other agency that wanted to do that."

The new MD requires no more from investigators than a summary of the
investigation, he said. Any conclusions should be left to an
"independent fact-finder." (Federal Human Resources Week, Vol. 6, No.
30, November 23, 1999)


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