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BAD FAITH $52.5M award to firm insurer failed to defend St. Paul, Minn. (AP)-A Minnesota state jury has awarded $52.5 million to a Minnesota construction company, API Inc., that sued its insurer, OneBeacon America Insurance Co., for failing to defend it against hundreds of personal injury and wrongful death claims tied to asbestos exposure. The jury awarded API $27.5 million for breach of contract, $10 million for operating in bad faith and $15 million for breach of duty. API installed and distributed building insulation materials that included asbestos. Starting in the 1980s, API was hit with more than 700 lawsuits alleging wrongful death and injury due to asbestos exposure. API discovered records indicating that it was covered by General Accident Insurance Co. API filed claims with General’s successor, OneBeacon of Boston, which denied the existence of the insurance policies and then disputed the extent of the coverage. API filed for Chapter 11 bankruptcy in January, claiming that OneBeacon’s denial of coverage had forced it to pay out $41 million to settle asbestos claims. CONSUMER PROTECTION DirecTV to pay $5.34M for ‘do not call’ breaches Washington (AP)-DirecTV Inc. will pay $5.34 million to settle charges that its telemarketers called households listed on the national “do not call” registry to pitch satellite TV programming. The DirecTV complaint, filed by the Department of Justice at the request of the Federal Trade Commission (FTC), alleged that DirecTV violated do-not-call rules beginning in October 2003, the month the registry debuted. The FTC arrived at the $5.34 million penalty by multiplying the $11,000 maximum it can assess per call by the 485 days between the onset of consumer complaints about DirecTV and when the company entered settlement talks. The registry, which contains more than 110 million phone numbers, was designed to prevent consumers from receiving unwanted calls from telemarketers. DirecTV, states settle marketing complaints Las Vegas (AP)-DirecTV Inc. has promised to reimburse unhappy customers and to make its advertised offers clearer, according to a settlement that the satellite broadcaster has reached with 22 states over deceptive marketing complaints. The company will repay the states $5 million for the costs of a task force that has tracked consumer complaints about DirecTV contract fees and small print provisions since 2000. Some customers had complained that DirecTV didn’t provide local channels, while others were dissatisfied with installation, activation and reception problems, and with fees charged for delayed activations and terminations. FRAUD Enron traders ordered to return $20M of bonuses Houston (AP)-About 40 former Enron Corp. traders have been ordered by a Texas federal bankruptcy judge to return $20 million of bonuses they received just before the company went bankrupt. The money will go to employees fired around the same time. The judge ruled that the bonuses in question were fraudulent and improperly preferential. MUTUAL FUNDS Bear Stearns settles with SEC, pays $250M fine New York (AP)-Bear Stearns Cos. said it has reached a tentative settlement with the U.S. Securities and Exchange Commission and the New York Stock Exchange over improper mutual fund trading practices. The company agreed to pay $250 million in fines and said it will hire independent consultants to review its trading procedures. TORTS $10B class action against Philip Morris is tossed Springfield, Ill. (AP)-The Illinois Supreme Court threw out a $10 billion verdict against Philip Morris USA Inc., ruling that the company didn’t defraud customers in its marketing of “light” cigarettes. The class of smokers alleged that Philip Morris knew when it introduced light cigarettes in 1971 that they were no healthier than the regular kind, but hid that information and the fact that light cigarettes actually had a more toxic form of tar. Madison County, Ill., Judge Nicholas Byron had ruled that Philip Morris misled customers into believing they were buying a less harmful cigarette. In March 2003, he ordered the company to pay $10.1 billion-$5 billion in compensatory damages, $3 billion in punitive damages and $2.1 billion in interest. The state high court reversed, ruling that the Federal Trade Commission specifically allowed companies to characterize their cigarettes as “light” and “low tar,” so Philip Morris, a unit of Altria Group Inc., did not mislead customers about the health impact of its cigarettes. TOXIC TORTS DuPont settles charges of hiding Teflon information Dover, Del. (AP)-E.I. du Pont de Nemours & Co. has agreed to pay $10.25 million in fines and $6.25 million for environmental projects in a settlement with the Environmental Protection Agency over allegations that it hid information about the dangers of a toxic chemical used in the manufacture of Teflon. The settlement involves action taken against DuPont by the EPA for allegedly withholding information about the potential health and environmental risks posed by perfluorooctanoic acid or PFOA.

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