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GOVERNMENT County must pay legal costs over halted plan Los Angeles (AP)-Los Angeles County supervisors approved a settlement that keeps a rehabilitation center open for at least three more years and scales back plans to cut 100 beds at a medical center. Two lawsuits were filed after the county Board of Supervisors approved a proposal in 2003 to shutter Rancho Los Amigos National Rehabilitation Center in Norwalk, Calif., and cut 100 beds at the Los Angeles County-USC Medical Center in a bid to save about $75 million a year. A federal judge halted that plan, however, ruling that it would illegally deprive poor and disabled residents of vital medical services. The deal calls for the county to pay plaintiffs’ legal costs of $451,000 in one suit and $1.75 million in the other. INTERNET LAW Spammer pays Microsoft $7 million to settle suit Seattle (AP)-A man once accused of being one of the world’s top three spammers has agreed to pay $7 million in a settlement with Microsoft Corp. The money from Scott Richter and his company, OptInRealBig.com of Westminster, Colo., will be used to boost efforts to combat the illegal sending of unsolicited and misleading e-mail known as spam and other computer misuse, said Microsoft’s chief counsel, Brad Smith. “After covering our legal expenses for the case, Microsoft will then reinvest every penny from this settlement,” he said. “We’ll dedicate $5 million to increase our Internet enforcement efforts and expand technical and investigative support to help law enforcement address computer-related crimes.” The settlement is conditional upon dismissal of bankruptcy petitions Richter and his four-year-old company have pending in U.S. bankruptcy court in Denver. Richter and his affiliated businesses have also agreed to comply with federal and state laws, including CAN-SPAM, the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act, and will not send spam to anyone who has not confirmed a willingness to receive it. PERSONAL PROPERTY Dispute over Nazi-looted Picasso settles for $6.5M Los Angeles (AP)-A Chicago woman will settle a legal dispute over her Pablo Picasso painting by paying $6.5 million to the grandson of a Jewish woman who lost it to Nazis during World War II. Marilynn Alsdorf decided she would rather pay Thomas Bennigson of Oakland, Calif., than continue a costly and complicated legal dispute over the 1922 oil, her attorney Richard Chapman said. She will keep the painting, now valued at more than $12 million, and will be allowed to sell it after the settlement is approved by a federal judge. Alsdorf and her late husband bought the painting, known as “Femme en blanc,” for $375,000 from a New York gallery in 1975. When Alsdorf tried to sell the painting in 2002, experts notified the Art Loss Register in London, which investigated its history. Bennigson’s Jewish grandmother, Carlota Landsberg, entrusted the painting to a Paris art dealer for safekeeping when she fled Berlin in the late 1930s. When Nazis reached Paris, they took the Picasso. Its whereabouts were unknown until New York art dealer Stephen Hahn purchased it in France in 1975 and sold it to the Alsdorfs. Hahn recently settled a separate suit by agreeing to pay Bennigson, Landsberg’s only living heir, an amount equal to his profit from that sale. The federal government in October claimed jurisdiction over the case and custody of the painting, but allowed it to remain in a safe in Alsdorf’s home. PATENTS Amazon.com pays $40M to settle infringement suit Washington (AP)-Amazon.com Inc. announced that it has paid $40 million to Soverain Software LLC to settle a patent infringement lawsuit. Soverain, a small Chicago-based company, had alleged that Seattle-based Amazon’s Web site infringed several Soverain patents on network sales systems and Internet server access control and monitoring systems. The suit was originally filed in January 2004 in a Texas federal court. An amended lawsuit filed in October 2004 by Soverain alleged that Amazon.com infringed on two additional patents. REGULATORY ACTION Tommy Hilfiger to pay $18M to end tax probe New York (AP)-Tommy Hilfiger Corp. has said that it will pay $18.1 million in taxes and interest as part of an agreement to end an investigation by federal prosecutors into tax-related issues. The probe concluded that criminal charges were not warranted over payments the company made related to office commission rates between 1990 and 2004. The investigation was closed under a nonprosecution agreement between the two sides. Tommy Hilfiger agreed to file amended U.S. federal income tax returns for the fiscal years 2001 through 2004 to reflect reduced buying office commission rates. The company will also adopt recommendations of its special committee reporting to the board of directors, and will implement an ethics and compliance program. Tommy Hilfiger said it will pay about $15.4 million in additional federal income tax, plus $2.7 million of interest, as part of the investigation. Last September, Tommy Hilfiger USA received a grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York seeking documents related to domestic and/or international buying office commissions. Certain current and former company employees also received subpoenas. Following the subpoena, several shareholder class actions were filed against the company, as well as certain current and former officers and directors, alleging that Tommy Hilfiger stock was artificially inflated by understating the company’s tax liability and tax rate. SEX ABUSE Calif. Catholic diocese settles suits for $56M San Francisco (AP)-A Roman Catholic diocese in California has agreed to pay $56 million to settle lawsuits filed by 56 alleged victims of priest sexual abuse. The agreement is a series of individual settlements with each remaining victim who alleged abuse by priests in the city of Oakland. Negotiations took more than four months and were overseen by an Alameda County Superior Court judge. WHISTLEBLOWER LAW City told to pay painter who complained $1.5M Honolulu (AP)-A federal jury ordered the city and county of Honolulu to pay $1.5 million in damages to a city painter who claimed that he was the target of retaliation after he complained of dangerous conditions on the job. Howard Tom Sun, 51, had been a painter in the Department of Enterprise Services for 18 years. In 1997, he complained that employees and the public were being exposed to dust from lead-based paint and asbestos at a work site at the Blaisdell Arena. He also said hazardous materials were stored and disposed of improperly and that other workers didn’t have the proper training or equipment. After he went public with his concerns he was written up by his supervisor, isolated and denied leave. WRONGFUL TERMINATION State Farm agents who spoke out receive $20M Kansas City, Mo. (AP)-A Missouri state jury has awarded five former State Farm Insurance agents $20 million, ruling that they were improperly terminated for criticizing the way the company treated its policyholders. The agents, whose contracts were terminated in January 2000, were awarded $9 million in actual damages and $11 million in punitive damages. One of the plaintiffs, Joseph J. Kelly of Joplin, Mo., testified that he was frequently concerned about the company’s treatment of its policyholders. In December 1999, the five agents allowed their names to be used in a letter critical of State Farm sent to the Texas insurance commissioner. The letter alleged that the company overcharged for homeowner’s insurance, engaged in sales discrimination and attempted to defraud accident victims of the full amount they were due. The letter alleged that State Farm specified the use of substandard replacement auto parts-an issue that prompted a class action in 1999 and a $1.18 billion verdict against the company.

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