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CLASS ACTION Insurer must pay $17M over aftermarket parts KANSAS CITY, MO. (AP)-A Missouri state jury has ordered American Family Mutual Insurance Co. to pay $17 million as part of a class action over aftermarket vehicle parts in Missouri. Jurors determined that American Family wrongly paid auto-damage claims based on the use of nonoriginal replacement parts. The verdict covers 315,000 Missouri customers who filed claims between May 1990 and December 2004. INTERNATIONAL LAW Banana giant fined $25M over protection payment WASHINGTON (AP)-Banana company Chiquita Brands International Inc. said it has agreed to a $25 million fine after admitting it had paid terrorists for protection in a volatile farming region of Colombia. The settlement resolves a lengthy Justice Department investigation into the company’s financial dealings with right-wing paramilitaries and leftist rebels the U.S. government deems terrorist groups. Federal prosecutors said the Cincinnati-based company and several unnamed high-ranking corporate officers paid about $1.7 million between 1997 and 2004 to the United Self-Defense Forces of Colombia, known as AUC. Prosecutors said the company made the payments in exchange for protection for its workers. In addition to paying the AUC, prosecutors said, Chiquita made payments to the National Liberation Army, or ELN, and the Revolutionary Armed Forces of Colombia, or FARC, as control of the company’s banana-growing area shifted. Chiquita sold its Colombian banana operations in June 2004. PRICE-FIXING French regulators fine drug maker $13.2M LONDON (AP)-GlaxoSmithKline PLC’s French unit was fined $13.2 million for hindering the use of generic drugs in hospitals through “predatory” pricing policy on an injectable antibiotic. French regulators said that in 1999 and 2000 the Glaxo laboratory sold injectable Zinnat below cost to freeze generic drug makers out of the hospital market. Oregon utility to refund California utilities $59M PORTLAND, ORE. (AP)-Portland General Electric Co. has reached an agreement to refund $59 million to California utilities, settling some payment issues from the California energy crisis of 2000-01. During the 2000 energy crisis, PGE, as a participant in the Western energy grid, sold power to California at rates set by California Independent System Operator Corp., which coordinates California’s power grid. A federal investigation into claims that the rates were excessive began in 2001. PRODUCTS LIABILITY Jurors order Merck to pay $47.5M over Vioxx TRENTON, N.J. (AP)-A New Jersey state jury has found that Merck & Co.’s painkiller Vioxx contributed to a postal worker’s heart attack, reversing the verdict in the man’s first trial and hitting Merck with a total of $47.5 million in damages. Jurors awarded Frederick Humeston and his wife $20 million in compensatory damages, and then said Merck should pay $27.5 million in punitive damages. Humeston, 61, suffered a heart attack in September 2001, several months before Merck put a stronger warning about the cardiovascular risks of Vioxx on the drug’s detailed package insert. Humeston lost his first trial against Merck in 2005, but the New Jersey trial judge granted him a second trial because new evidence surfaced that short-term Vioxx use could also be risky. REGULATORY ACTION Bank to pay $26M over bogus research reports WASHINGTON (AP)-Bank of America Corp.’s securities business agreed to pay $26 million to settle federal regulators’ charges of publishing fraudulent research reports on companies and failing to prevent advance leaks of reports that were used for improper trading. From January 1999 through December 2001, the SEC said, the firm had a “breakdown” in its internal controls designed to prevent the misuse of company research reports that had not yet been made public. WHISTLEBLOWER LAW Insurer owes $334M for pregnancy discrimination CHICAGO (AP)-An Illinois federal judge has levied more than $190 million in civil penalties against Amerigroup Corp. and its Illinois affiliate, bringing to more than $334 million the amount the insurance company and the affiliate owe in damages and penalties for discriminating against pregnant women. In October 2006, a federal jury returned a verdict against Virginia Beach, Va.-based Amerigroup, which specializes in health care for low-income patients. The jury called for $48 million in damages. This was tripled to $144 million under the federal False Claims Act. Federal and state prosecutors as well as whistleblower Cleveland Tyson, Amerigroup Illinois’ former head of government relations who originally brought the case, had said that while marketing its services in Illinois, Amerigroup avoided pregnant women and others with possibly expensive medical conditions.

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