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BUSINESS TORTS Lucent must pay $224M to Winstar creditors Trenton, N.J. (AP)-A federal bankruptcy judge has ruled that Lucent Technologies Inc. must pay $224 million, plus other costs, to the creditors of the now-defunct Winstar Communications Inc., finding that Lucent had induced the smaller company to purchase unneeded telecommunication equipment. Herndon, Va.-based Winstar sued Lucent in 2001, charging that Lucent’s breach of contract had caused it to file for Chapter 11 bankruptcy. Some of Winstar’s allegations are related to accounting charges that the Securities and Exchange Commission brought in May 2004, accusing Lucent of fraudulently booking some $1.1 billion in revenue in 2000. Lucent allegedly influenced Winstar to buy unneeded equipment at the end of the quarter, which gave a boost to quarterly reports. CLASS ACTION BP America pays $117M to settle royalties suit Durango, Colo. (AP)-About 4,500 people in southwestern Colorado will share in a $117 million settlement over claims of unpaid royalties from the production of coal bed methane. A Colorado state judge ruled in 2003 that Amoco Production Co., now part of BP America Production Co., improperly deducted gas processing costs from payments to gas-royalty owners. In 1994, rancher Richard Parry filed a class action challenging the company’s practice of deducting the expense of gathering, treating and compressing gas from royalty payments. CONSUMER PROTECTION Cardholders’ class action against AmEx settles Miami (AP)-A Florida federal judge has approved a $75 million settlement between American Express Co. and thousands of cardholders who contended in a class action that they paid hidden transaction fees for charges made in foreign currencies. The settlement affects more than 833,000 cardholders who paid some form of transaction fee from March 28, 1997, through Oct. 15, 2004. The lawsuit claimed that American Express failed to inform cardholders that they would be charged an adjustment of up to 2% for the conversion of charges made in foreign currencies to U.S. dollars. Instead, the fee was embedded in the transaction amount that showed up on cardholders’ bills, making it invisible to customers. H&R Block pays $62.5M to settle refund lawsuits Kansas City, Mo. (AP)-Tax preparer H&R Block Inc. has agreed to pay $62.5 million to settle a number of class actions dealing with its use of “refund anticipation loans.” H&R Block said the settlement would cover more than 8 million customers who received the loans between 1989 and 2005. Under the refund anticipation loans, customers due a tax refund could receive most of the money in two or three business days by paying a fee to file the return electronically plus a loan-processing fee. Critics claim such loans prey upon low-income households, immigrants and financially unsophisticated taxpayers who weren’t adequately informed about the high interest rates. PRICE-FIXING Reliant to pay FERC $512M over energy crisis Washington (AP)-The Federal Energy Regulatory Commission (FERC) has accepted a $512 million settlement with Reliant Energy, California utilities and commission staff. The deal will resolve claims stemming from the 2000-2001 Western energy crisis. Specifically, the settlement resolves claims that the Houston-based merchant generator charged unfairly high prices for electricity during the crisis. REGULATORY ACTION DaimlerChrysler, U.S. reach $94M settlement Washington (AP)-DaimlerChrysler A.G. reached a $94 million settlement with the government to repair defective emission controls on nearly 1.5 million Jeep and Dodge vehicles. The U.S. Department of Justice and the Environmental Protection Agency said the agreement involved vehicles from the 1996-2001 model years. It settles allegations that the automaker violated the Clean Air Act by failing to disclose defective catalytic converters installed in the vehicles. As part of the deal, DaimlerChrysler will recall about 494,000 vehicles to fix a separate defect in the onboard diagnostic system installed on the vehicles and check the catalytic converters, a device installed in the engine’s exhaust system to control emissions. WAGES AND HOURS Wal-Mart workers get $172M in meal-break suit Oakland, Calif. (AP)-A California state jury awarded $172 million to thousands of employees of Wal-Mart Stores Inc., who claimed that they were illegally denied lunch breaks. The giant retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California employees for violating a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours. The class action covers former and current Wal-Mart employees in California from 2001 to 2005. Wal-Mart claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour’s wages for every missed lunch. The company also said that it had paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows. Wal-Mart said that it would appeal the decision stating “the meal-period premiums in question are penalties, rather than wages . . . .California law prohibits penalties on top of penalties.”

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