In Business This Week: HEADLINER
STANLEY ROSENBLATT: SMOKING SETTLEMENT ALARM
When Miami plaintiffs' attorney Stanley Rosenblatt won $300 million from the tobacco industry on Oct. 10, he called it a huge win for his clients: flight attendants claiming injuries from secondhand smoke.
But the settlement money will fund research on the dangers of secondhand smoke. Not a dime goes to the plaintiffs. Meanwhile, Rosenblatt and his law partner wife, Susan, get $49 million for fees and expenses.
Rosenblatt says his settlement will help attendants sue because it forces the industry to prove secondhand smoke is not dangerous. But it bars them from bringing future class actions or suing for punitive damages.
Public Citizen Litigation Group, a Washington (D.C.) public interest group specializing in overturning settlements it deems abusive to plaintiffs, is trying to see if Rosenblatt's clients want to contest the deal. "I don't understand how anyone can think this is a good deal for the plaintiffs," says co-founder Alan Morrison.EDITED BY KELLEY HOLLAND By Mike FranceReturn to top
BARGAIN CHIPS, SHRINKING PROFITS
ARE CHEAP CHIPS DRAGGING down Intel? The company disappointed investors with third-quarter earnings that fell $72 million short of estimates, and its stock fell 5.6%, to 86 11/16, on the news. Intel earned $1.57 billion, up 20% from last year's third quarter, on revenues of $6.2 billion, up 19.7%. Not bad growth, but investors were spooked by a drop in the average selling price of Intel's microprocessors. Pentium prices are under pressure as PC makers push cheaper models at retail. The result: Intel grossed about 16% less per chip, says analyst Ashok Kumar of South Coast Capital. Making matters worse, prices for flash memory, where Intel has a 33% market share, are wilting. That could trim Intel's flash revenues by some $56 million, says analyst Alan Niebel of Semico Research.EDITED BY KELLEY HOLLANDReturn to top
A BUSY SIGNAL FOR THE FCC
THE FEDERAL COMMUNICATIONS COMMISSION was dealt a blow by a U.S. Court of Appeals in a decision that could stymie new entrants in the local-exchange phone business. On Oct. 14, the court ruled against an FCC order requiring the Baby Bells to offer rivals pieces of their network at reduced rates, and to recombine those elements for them. Potential entrants preferred this approach because it provides bigger margins. The FCC is expected to appeal the ruling to the Supreme Court.EDITED BY KELLEY HOLLANDReturn to top
AVIS: DENYING HARDER
AVIS RENT A CAR IS TAKING more heat over allegations of discrimination. On Oct. 14, Pennsylvania Attorney General Michael Fisher filed a complaint with the state's human relations commission against Avis and one of its licensees, claiming the car-rental licensee discriminated against minority customers. The suit grew out of a five-and-a-half month undercover investigation by the state AG's office. State officials contend the probe showed a "clear pattern of discrimination." Avis also faces allegations of discrimination in North Carolina and Florida. In a statement, Avis denied the allegations.EDITED BY KELLEY HOLLANDReturn to top