Okla. court favors state in tax collection lawsuit

OKLAHOMA CITY (AP) -- The Oklahoma Supreme Court on Tuesday ruled that the state can require cities to use the Oklahoma Tax Commission to collect city sales taxes.

The decision overturns a lower court ruling in a lawsuit filed by the city of Tulsa.

Tulsa spokeswoman Michelle Allen said attorneys for the city planned to meet later with Mayor Dewey Bartlett to discuss the ruling.

"The legal department is reviewing it and we don't have a comment this time," Allen said.

The state attorney general's office did not immediately respond to phone calls seeking comment.

The state Legislature, on the final day of its 2010 session, approved the bill that was later signed into law that required the Tax Commission to collect municipal sales taxes in what was called an effort to streamline tax collections statewide.

On June 1, 2010, one month before the law went into effect, Tulsa contracted with Alabama-based Revenue Discovery Systems to collect its taxes. Officials estimated the city would save about $700,000 from the $2 million a year it paid the Tax Commission in collection fees.

The city's lawsuit, filed in August 2010, claimed the law unconstitutionally impaired the city's contract and infringes on the city's powers granted under the state constitution and the city charter.

An Oklahoma County District Court judge ruled in favor of the city in May 2011 and the state appealed.

The state Supreme Court's unanimous ruling said the Legislature has the authority to develop a uniform tax collection system and that the Legislature's authority supersedes the city charter.

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US Supreme Court won't review Ponzi scheme case

MINNEAPOLIS (AP) -- The U.S. Supreme Court says it won't take up the case of Minnesota businessman Tom Petters.

In documents made public Tuesday, the nation's highest court denied Petters' request to review his 2009 conviction on charges he orchestrated a $3.65 billion Ponzi scheme.

Petters' attorney Jon Hopeman says he wasn't surprised by the court's decision, which marks the end of the direct appeals process.

Hopeman says Petters is optimistic and doesn't give up easily, and he may pursue other legal remedies.

Petters is serving a 50-year sentence at a federal prison in Leavenworth, Kan. He says he's innocent.

His attorneys had argued that the trial judge barred them from presenting evidence about the criminal past of a key prosecution witness who they say was the scheme's real mastermind.

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US Supreme Court won't review Petters' conviction

MINNEAPOLIS (AP) -- The U.S. Supreme Court says it won't take up the case of Minnesota businessman Tom Petters.

In documents made public Tuesday, the nation's highest court denied Petters' request to review his 2009 conviction on charges he orchestrated a $3.65 billion Ponzi scheme.

This means the lower court decision upholding his conviction will stand.

Petters is currently serving a 50-year sentence at a federal prison in Leavenworth, Kan. He continues to proclaim his innocence.

His attorneys argued on appeal that the trial judge barred them from presenting evidence about the criminal past of key prosecution witness Larry Reynolds, who they say was the real mastermind of the scheme.

They also said Petters' sentence was disproportionate to those of his counterparts.

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Ukrainian high court postpones Tymoshenko appeal

KIEV, Ukraine (AP) -- Ukraine's highest court on Tuesday postponed hearing former Prime Minister Yulia Tymoshenko's appeal of her conviction and seven-year sentence on charges of abusing her powers in signing a gas deal with Russia.

Prosecutors argued that the appeal should be postponed because Tymoshenko is undergoing medical treatment for a back condition in a hospital in Kharkiv, the city where she is imprisoned, and would be unable to appear in court in Kiev, the capital.

In ruling in favor of the prosecution, the High Specialized Court for Civil and Criminal Cases set a new date of June 26, which falls near the end of the European soccer championship.

Some European Union officials and governments have vowed to boycott the games in Ukraine over Tymoshenko's imprisonment, which the EU and U.S. have condemned as politically motivated.

Tymoshenko has accused President Viktor Yanukovych, her longtime rival who narrowly defeated her in the 2010 presidential election, of throwing her into jail to prevent her from posing a challenge in October parliamentary elections.

Tymoshenko's lawyer Serhiy Vlasenko condemned the postponement.

"Today's decision is complete nonsense on the level of the country's highest court," he told reporters. "Today, Yanukovych has again spat in the face of Europe."

He said the delay was aimed at preventing Tymoshenko from appealing to the European Court of Human Rights, which can be done only after the appeals process has been exhausted at home, but Vlasenko said they would go ahead and do so anyway.

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Court refuses to delay BofA, Merrill settlement case

By Jonathan Stempel

(Reuters) - A federal judge in New York on Monday refused to delay the approval process for a controversial $20 million settlement between Bank of America Corp (BAC) directors and shareholders who accused the bank of overpaying for Merrill Lynch & Co.

U.S. District Judge Kevin Castel rejected as premature a request by another shareholder group, pursuing a similar lawsuit against Bank of America directors, to intervene in the New York case.

The second group of shareholders, who have taken action in the Delaware Chancery Court, say the New York settlement is too low and could erase its claims.

Bank of America agreed to buy Merrill on September 15, 2008, at the height of the financial crisis. Merrill's losses were a factor in the bank being forced to obtain a second federal bailout, and contributed to a 93 percent drop in its share price over six months. The takeover closed in January 2009.

The second shareholder group has complained that the New York settlement was the result of a "collusive scheme" between directors trying to avoid a big payout and lawyers hoping to win a big fee award.

They also said the payout is too low in light of the damages suffered and $500 million of insurance coverage available to the directors.

"Such arguments are best raised in the settlement approval process," Castel wrote. "At this point the parties here have executed only a memorandum of understanding.... A review of the merits of any settlement is premature."

Michael Schwartz, a lawyer for the Delaware plaintiffs, did not immediately respond to requests for comment. Bank of America spokesman Lawrence Grayson declined to comment.

The New York settlement would resolve claims that Bank of America directors breached their duties for having misled shareholders about Merrill's soaring losses and hidden how Merrill was paying $3.6 billion of bonuses despite those losses.

Among the defendants is Kenneth Lewis, the onetime Bank of America chief executive who engineered the takeover.

Earlier this month, Delaware Chancellor Leo Strine put the case before him on hold, as he denied a request by shareholders in that case to block Castel from reviewing the settlement.

Castel also oversees nationwide shareholder litigation against Charlotte, North Carolina-based Bank of America itself over the Merrill purchase, where damages could be much larger.

Lead plaintiffs in the New York case are the Hollywood Police Officers' Retirement System in Florida, and the Louisiana Municipal Police Employees Retirement System.

Both cases are derivative lawsuits brought on behalf of Bank of America. Payouts would go to the bank, not to shareholders.

The cases are: Bank of America Corp Stockholder Derivative Litigation, Delaware Chancery Court, No. CA4307; and In re: Bank of America Corp Securities, Derivative, and Employee Retirement Income Security Act (ERISA) Litigation, U.S. District Court, Southern District of New York, No. 09-md-02058.

(Reporting by Jonathan Stempel in New York; Editing by Gary Hill and Michael Perry)

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Appeals court mulls Muslims' suit over no-fly list

PORTLAND, Ore. (AP) -- A federal appeals court judge leaned forward in his chair, turned his head to the Justice Department attorney defending the government's no-fly list and posed a frank question.

"Let's say you want to fly back to Washington and you find yourself on the no-fly list," said 9th Circuit Court of Appeals Chief Judge Alex Kozinsky. "You're sitting in an airport, stranded. You think, 'my God, I went to law school, I work for (the Justice Department), in my heart I know I did nothing wrong.' What do you do?"

Fifteen Muslim men faced circumstances similar to the hypothetical one asked by Kozinsky, and are now suing the U.S. government over their placement on the no-fly list. They had tried to board flights — either domestic or returning to the U.S. — and were told they couldn't fly.

Before the judge, Justice Department attorney Josh Waldman demurred and said circumstances differ among people on the list. The answer didn't satisfy Kozinsky.

"I mean you, yourself. It's going to be future denials, you can't fly to vacations, bar mitzvahs," Kozinsky pressed, drawing laughs in the federal courtroom in Portland. "I think people here are interested."

The judge's questions were at the heart of the men's lawsuit, though the subject before the three-judge appeals court panel was a narrower question — whether a federal court in Oregon has a say in the case, since the policies of the Transportation Security Administration are not subject to district court jurisdiction.

Last year, U.S. District Court Judge Anna Brown rejected the case, saying the U.S. District Court can't rule on cases involving the TSA's policies and procedures.

Brown said she made her ruling based on whether the plaintiffs were arguing against the men's placement on the no-fly list by the FBI's Terrorist Screening Center or against TSA policies. The Terrorist Screening Center would be subject to district court jurisdiction.

The men sued in 2010 with help from the ACLU, which filed the lawsuit in Oregon where one of the plaintiffs is an imam at a mosque. They have never been officially told they're on the no-fly list but learned of it when they tried to fly and were told by airline employees or the FBI that they couldn't.

Several of the plaintiffs were left stranded overseas. Each was given a one-time waiver to return to the U.S. They argue that their placement on the list violates their due-process rights, and that the agency's actions are unlawful.

In defending the secrecy of the no-fly list, the FBI has said it needs to protect sensitive investigations and to avoid giving terrorists clues for avoiding detection.

In answering Kozinsky's questions, the Justice Department attorney ultimately said he would go through the redress process through the Terrorist Screening Center.

The ACLU is asking the appeals court to send the case back to U.S. District Court. But the organization also was not spared the type of barbed questions asked of the Justice Department attorney.

Judge Richard Tallman repeatedly questioned ACLU attorney Nusrat Choudhury over the reason that the 15 plaintiffs didn't go through the full process to be removed from the no-fly list.

"You want us to rule on due process," Tallman said, "yet you haven't exhausted all options through the redress process."

Choudhury said that the lawsuit was taking a broad look at the entire process. Tallman responded by continuing to question Choudhury on the matter through her 10-minute initial argument and rebuttal period.

___

Reach reporter Nigel Duara at http://www.twitter.com/nigelduara

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Court declares strike by Air India pilots illegal

NEW DELHI (AP) -- Air India said Wednesday a court has ruled that a strike by some of its pilots is illegal and ordered them back to work.

The state-owned airline's spokesman Prasad Rao said management sought the New Delhi High Court's intervention after nearly 150 of its 1,500 pilots called in sick for a second day.

The pilots are protesting unpaid salaries and what they say are a lack of opportunities to train on Boeing 787 Dreamliner jets that the airline has ordered.

Air India canceled three flights Wednesday from New Delhi to Singapore, Frankfurt and New York and one from Mumbai to New York.

The striking pilots were not immediately available for comment.

Aviation Minister Ajit Singh offered to hold talks with the pilots. "Their grievances may be genuine but this is not the way to redress them," he told reporters.

The state-owned carrier operates 50 international flights and 400 domestic flights each day. The airline sacked 10 striking pilots on Tuesday.

Air India has been losing about a billion dollars a year as it struggles with the legacy of a poorly executed 2007 merger, debt costs and a swollen staff.

Jitendra Awhad, president of the Indian Pilots Guild, the trade union of Air India pilots, said Tuesday that some pilots had not been paid for six months.

Another of the pilots' demands stems from the 2007 merger of Air India and the state-run domestic carrier Indian Airlines.

Air India's management has decided that pilots from both carriers would undergo training on the new Boeing Dreamliner aircraft.

Air India pilots have objected to this saying it would hinder their career prospects. The first of four long-haul Dreamliner aircraft are expected to be delivered to Air India by June.

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Air India: Court rules pilot strike illegal

NEW DELHI (AP) -- Air India says a court has ruled that a strike by some of its pilots is illegal.

The state-owned airline's spokesman Prasad Rao said management sought the New Delhi High Court's intervention after nearly 150 of its 1,500 pilots called in sick for a second day Wednesday.

The pilots are protesting unpaid salaries and what they see as lack of opportunities to train on Boeing 787 Dreamliner jets that the airline has ordered.

The airline canceled three flights Wednesday from New Delhi to Singapore, Frankfurt and New York and one from Mumbai to New York.

The striking pilots were not immediately available for comment.

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Ohio court: Judge erred in $2B award against Ford

CLEVELAND (AP) -- An appeals court this week has reversed a decision ordering Ford Motor Co. to pay nearly $2 billion in damages to thousands of commercial truck dealerships, sending the case back to the lower courts for a new trial.

The decision Thursday by the 8th Ohio Court of Appeals overturned last year's ruling that said the automaker had violated dealer agreements and overcharged for commercial trucks over an 11-year period. It determined that a trial judge in Cleveland had abused his discretion in excluding possible evidence in Ford's favor.

The appeals court called the contract in question "ambiguous" and said it can be interpreted in different ways. It said a jury, which originally only heard certain arguments because some were excluded, should have heard all key arguments in the case.

The appeals court also ruled that Cuyahoga County Common Pleas Judge Peter Corrigan erred in not allowing Ford attorneys to challenge expert testimony from the plaintiffs when it was determining damages in the case.

The class-action lawsuit, brought on by Westgate Ford Truck Sales of Youngstown in 2002, included dealers who purchased a series 600 truck or higher from Ford from 1987 to 1997. The lawsuit accused the automaker of violating its contract by failing to reveal that price concessions were given to some dealers.

The jury awarded $4.5 million in damages to Westgate, to which about $6.7 million in interest was added. The Dearborn, Mich.-based Ford later appealed.

The $2 billion award, which included a judgment of about $781 million and about $1.2 billion in interest, covered more than 3,000 dealerships around the country and about 474,000 trucks.

Attorney James Lowe, who represents some of the dealers, said he hadn't seen the decision and declined to comment Friday.

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Ohio court reverses $2 billion judgment against Ford

(Reuters) - The Ohio Court of Appeals reversed a $2 billion judgment against Ford Motor Co this week and ordered a new trial for a group of dealers who said the No. 2 U.S. automaker overcharged them for commercial trucks over an 11-year period.

In its Thursday ruling, the appeals court said the contract at the heart of the dealers' class-action suit was "ambiguous." It also said evidence submitted by Ford was wrongly excluded.

"We hold that the trial court abused its discretion in excluding Ford's mitigating evidence at the damages trial," the court said in its ruling.

Ford disclosed the reversal in a quarterly filing with the U.S. Securities and Exchange Commission on Friday.

The decision could potentially save the Dearborn, Michigan-based automaker a significant amount of money it would have eventually had to pay disgruntled dealers.

"We look forward to trying the case before a jury that will now consider all the evidence that was improperly excluded during the first trial," said Ford spokeswoman Marcey Evans.

The dealers can request a review by the Ohio supreme court. James Lowe, an attorney for the dealers, said they would consider their options after reviewing the court's opinion.

The dealers first sued Ford in 2002. According to the suit, Ford breached its sales and service agreement with medium- and heavy-truck dealers by offering unpublished discounts through a program that effectively overcharged some dealers.

The suit covered all Ford dealers that bought 600-series larger trucks from 1987 to 1997.

In February 2011, a jury awarded the named plaintiff in the suit, Westgate Ford Truck Sales of Ohio, $4.5 million in damages. In June 2011, the court awarded the entire class of more than 3,100 dealers nationwide nearly $2 billion.

(Reporting by Deepa Seetharaman in Detroit; editing by Matthew Lewis)

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Thai court postpones webmaster verdict to May 30

BANGKOK (AP) -- A Bangkok court has postponed its verdict in a case involving allegedly insulting comments about the monarchy that is testing the bounds of Internet freedom in Thailand.

A verdict in the case of Chiranuch Premchaiporn had been expected Monday but was pushed back to May 30. She faces up to 20 years in jail and is accused of not acting quickly enough to remove reader comments that were deemed insulting to the country's royal family.

The comments were posted on the website of her newspaper, Prachatai.

Chiranuch's case has drawn much criticism from international rights groups against Thailand's tough computer crime laws, which were enacted in 2007.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

BANGKOK (AP) -- A webmaster accused of failing to act quickly enough to remove Internet posts deemed insulting to Thailand's royalty was to learn her fate Monday in a case highlighting computer-crime laws that rights groups have decried as an assault on freedom of speech.

If found guilty in a Bangkok court, Chiranuch Premchaiporn will face up to 20 years in jail for 10 comments posted on a now-defunct web board by readers she says she does not know.

The case has drawn sharp criticism from international rights groups who have expressed deep concern over Thailand's computer-crime laws, which were enacted in 2007 under an interim, unelected post-coup government. The laws address hacking and other online offenses, but also bar the circulation of material deemed detrimental to national security, which includes defaming the monarchy.

New York-based Human Rights Watch said last week that the prosecution of Chiranuch "sends a chilling message to webmasters and Internet companies."

Chiranuch's newspaper, Prachatai, was founded by several respected journalists, senators and press freedom activists to serve as an independent, nonprofit, daily Internet newspaper. It has attracted an audience of critics of the status quo, especially on the web board where the comments at issue in the court case were posted in 2009.

Prosecutors say Chiranuch was guilty of "intentionally supporting or consenting" to post unlawful content by failing to delete the offending comments quickly enough. Her lawyers point out, among other arguments, that there are no guidelines on the matter.

Each posting carries a maximum five-year prison sentence, but since she faces 10 counts, the law limits the maximum penalty to 20 years.

Chiranuch is the first webmaster prosecuted under the law and her case could set a precedent for other online companies here.

The prosecution of Chiranuch — widely known by her nickname, Jiew — has become a cause celebre not only in Thailand but around the world.

Last year she was one of three winners of the Courage in Journalism award given by the International Women's Media Foundation, and also one of 48 global writers given grants under a Human Rights Watch program for their commitment to free expression and courage in the face of persecution.

Chiranuch was initially detained but was granted bail and the freedom to travel abroad. In most cases directly involving charges of insulting the monarchy, known as lese majeste, bail has been denied.

Chiranuch's case is inextricably linked to Thailand's fractious politics of recent years, as the country's traditional ruling class — allying big business, the military and royalists — has been desperately fighting to retain reverence for the monarchy and their influence over politics.

Most people still respect 84-year-old King Bhumibol Adulyadej, but the evident involvement of palace circles in supporting a 2006 military coup against elected Prime Minister Thaksin Shinawatra opened the royal institution up to unprecedented criticism and questioning, and the Internet allowed such doubts to circulate widely.

The Computer Crime Act has been applied where the authorities are unable or unwilling to prosecute under the country's lese majeste law, which mandates a jail term of three to 15 years for "whoever defames, insults or threatens the king, the queen, the heir to the throne or the regent." That law, believed to be the harshest of its sort in the world, has also come in for sharp criticism.

Supinya Klangnarong, a prominent media reform activist, said after Jiew's arrest that the Computer Crime Act "has become a political tool of the state" to close websites and arrest people.

Thailand's freedom of speech reputation has taken a battering in recent years, as successive governments have tried to suppress political opposition. Its standing in the Press Freedom Index issued by the Paris-based group Reporters Without Borders slid to 137th out of 179 last year from 65th in 2002, when the ratings were initiated.

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Court revives Rosetta Stone suit vs Google

By Terry Baynes

(Reuters) - A federal appeals court on Monday revived the bulk of language-software maker Rosetta Stone Inc's trademark infringement lawsuit against Google Inc.

The opinion is the first appellate decision to address whether Google's sale of other companies' trademarks for sponsored links could give rise to liability for trademark infringement.

In a lawsuit filed in 2009, Rosetta Stone accused Google of committing trademark infringement by selling the language-software maker's trademarks to third-party advertisers for use as search keywords. A Virginia district court had dismissed the case in 2010, finding that the sale of the keywords was not likely to confuse consumers.

But U.S. Court of Appeals for the 4th Circuit overturned most of the lower court's ruling, reviving claims that Google committed direct trademark infringement and diluted the Rosetta Stone brand.

"A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks," Chief Judge William Traxler wrote for the three-judge panel.

Rosetta Stone accused Google of profiting by allowing rivals to purchase trademarked keywords that generate links to their sites when users enter those search terms. Google allows advertisers to buy the top "sponsored link" ad on search result pages. Rosetta Stone argued that people searching for its products on Google were being redirected to competitors and software counterfeiters.

The language-software maker presented deposition testimony of five consumers who attempted to buy bogus Rosetta Stone software after Google started allowing use of trademarks in the text of sponsored links in 2009.

That evidence persuaded the 4th Circuit panel to revive the trademark infringement and dilution claims. The panel also cited an internal Google study finding that even sophisticated consumers were sometimes unaware that sponsored links were advertisements.

The appeals court also reinstated Rosetta Stone's trademark dilution claims. The lower court had granted summary judgment in Google's favor, finding that the Internet giant was not trying to pass off its own goods and services as Rosetta Stone's. But that fact could not defeat the dilution claims, the 4th Circuit ruled.

The panel directed the lower court to reconsider when Google first appeared to dilute the Rosetta Stone trademark, and whether that trademark was "famous" at the time.

Google and its lawyer, Margret Caruso of Quinn Emanuel Urquhart & Sullivan, did not immediately respond to requests for comment.

"We're very pleased with the opinion, and we think it is an important precedent," said Rosetta Stone's lawyer Cliff Sloan of Skadden, Arps, Slate, Meagher & Flom.

The case is Rosetta Stone Ltd v. Google Inc, U.S. Court of Appeals for the 4th Circuit, No. 10-2007.

(Reporting By Terry Baynes; Editing by Gerald E. McCormick and Tim Dobbyn)

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Md. high court hears lesbian divorce case

ANNAPOLIS, Md. (AP) -- Maryland routinely grants divorces for couples who married in other states, and same-sex couples should be no different, lawyers for a lesbian couple told the state's highest court Friday.

The case involves two women who were married in California and denied a divorce in 2010 by a Maryland judge who said the marriage was not valid in the state.

Maryland does not currently allow same-sex weddings, but lawyers for the women told the seven-member court that it would be unprecedented for the state not to recognize gay marriages performed elsewhere.

"If you're validly married somewhere else, the rule in Maryland is your marriage is going to be respected in Maryland, and that's what we're asking the court to do here," said Shannon Minter, legal director for the National Center for Lesbian Rights in San Francisco.

Judges in Maryland have been inconsistent about granting divorces for gay couples. Lawyers said judges have granted divorces for about half a dozen gay couples, but their clients and at least two other couples were denied. As a result, some couples are waiting for a ruling from Maryland's high court before filing for divorce, the lawyers said.

The Court of Appeals' ultimate decision may have limited effect because same-sex weddings, and by extension divorces, are set to start in the state in January. Opponents of the law passed this year are seeking to overturn it in a potential voter referendum.

The high court's judges asked about that potential referendum and its effect on the current case. Lawyers said the outcome of any referendum was not relevant. They said it will only address whether voters want to allow same-sex marriages in Maryland, not whether the state should recognize same-sex unions performed elsewhere. Even if voters decide not to allow same-sex marriages, state courts should grant divorces for same-sex couples, the lawyers said. They cited Wyoming and New Mexico as states with similar practices.

The case involves Maryland resident Jessica Port and District of Columbia resident Virginia Anne Cowan. Port, 29, and Cowan, 32, were married in California in 2008 during a window in which gay marriage was legal there. Almost two years later, the couple filed for divorce in Maryland, where they both then lived. Prince George's County Judge A. Michael Chapdelaine declined to grant it.

"The court finds that to recognize the alleged marriage would be contrary to the public policy of Maryland," Chapdelaine wrote.

Lawyers for Port and Cowan told the Court of Appeals that Chapdelaine was wrong. Maryland has long recognized marriages entered into in other states, they said, even if Maryland itself has barred those marriages. For example, Maryland law bars an uncle and a niece from marrying, but the state will recognize that marriage if it legally occurred in another state.

Unlike other states, Maryland has no ban on recognizing same-sex marriages from other jurisdictions. Moreover, in 2010 state Attorney General Douglas Gansler issued an opinion that said out-of-state, same-sex marriages may be recognized under Maryland law. As a result, state agencies have extended benefits to same-sex spouses of state employees and issued birth certificates that recognize the same-sex spouse of a woman who gives birth as a parent.

In recent years, judges in Nebraska, Pennsylvania, Texas and Rhode Island have refused to grant gay couples divorces.

Responding to those cases, California and the District of Columbia recently passed laws allowing gay couples married in their jurisdictions to divorce there if their home state will not dissolve the marriage.

Lawyers for Port and Cowen said they hope not to have to resort to trying to use those laws, which could cost the couple more time and money. They said they hope the Court of Appeals will make a decision in the next several months.

"We both want to move forward with our lives," Port said.

Six states and the District of Columbia currently permit gay couples to marry. Those states are Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont. Lawmakers in Washington state have also passed a law permitting gay couples to marry, but it doesn't take effect until June and could be put on hold by a proposed voter referendum seeking to overturn the law.

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