TOP STORIES -- March 21-26
European Officials Fine Microsoft $613 Million
European regulators fined Microsoft Corp. a record $613 million and imposed broad restrictions on the way it develops and sells software -- a stinging defeat for a company that has spent nearly two decades battling accusations of anti-competitive behavior.
If it survives Microsoft’s promised appeal, the unanimous ruling by the European Commission would mete out significantly harsher penalties than the 2002 settlement the company reached with the Justice Department to end similar antitrust litigation in the United States.
The fine in Europe was the highest levied against a company by the commission, but the practical implications of the ruling could take years to sort out as the case moves through the European court system.
But the commission gave Microsoft 90 days to offer a version of its Windows operating system without multimedia software for playing digital video and music. Microsoft was told it had 120 days to share “complete and accurate” details about the inner workings of Windows so competitors could make products more compatible with the operating system.
*
Divided Tyco Jurors to Resume Deliberations
Jurors deciding the fate of two former Tyco International Ltd. executives reported that they were bitterly divided but agreed to resume deliberations Monday in a final effort to stave off a mistrial in the high-profile corporate fraud case.
The squabbling jurors indicated in a note to the judge Friday that their personal divisions had hardened and that they might not reach a verdict. “This is a jury that has ceased to be able to conduct respectful, open-minded, good-faith deliberations,” they wrote.
That seemed to increase the likelihood of a hung jury, and New York State Supreme Court Judge Michael Obus indicated at one point that he would declare a mistrial.
But jurors asked him in a follow-up note for permission to recess for the weekend and to reconvene Monday. Obus quickly granted the request.
L . Dennis Kozlowski, Tyco’s former chief executive, and Mark Swartz, his onetime finance chief, are accused of looting the company by taking enormous bonuses and other payments that prosecutors say were never authorized by Tyco’s board. The men have pleaded not guilty.
*
Chevron Must Go to Trial in Nigeria Suit
A federal judge has ordered ChevronTexaco Corp. to stand trial for the actions of a subsidiary that allegedly worked closely with Nigerian military personnel who killed villagers protesting the oil giant’s operations.
Chevron, the second-largest U.S. oil company, is one of several multinationals being sued in U.S. courts over alleged human rights abuses overseas.
A group of Nigerian villagers filed suit against ChevronTexaco in San Francisco in May 1999, accusing the company and its subsidiary Chevron Nigeria Ltd. of responsibility for a series of deadly skirmishes involving the African nation’s military.
ChevronTexaco disputes the accounts laid out in the lawsuit. The company has said it didn’t authorize the military actions in Nigeria and wasn’t involved in deciding how Chevron Nigeria would react to the protest.
U.S. District Judge Susan Illston cleared ChevronTexaco and unit ChevronTexaco Overseas Petroleum of direct liability. But she ruled there was enough evidence to convince a reasonable juror that ChevronTexaco might have indirect culpability and be liable for unspecified damages due to its “extraordinarily close relationship” with Chevron Nigeria.
*
Pension Funds Move to Oust Safeway Chairman
Several state pension funds launched a campaign to oust Safeway Inc. Chairman Steven Burd and two other directors of the supermarket company, the owner of Vons and Pavilions.
In a protest similar to what occurred this month at Walt Disney Co., officials of five major public-pension funds, including the California Public Employees’ Retirement System, said they hoped to persuade other investors to withhold their votes for the three directors at Safeway’s annual meeting May 20 at the company’s Pleasanton, Calif., headquarters.
Safeway charged that organized labor was behind the pension fund initiative. The pension funds denied the claim, saying their complaints centered on Safeway’s depressed stock price and what fund officials called mismanagement.
The pension funds together own about 7 million Safeway shares, or 1.6% of its total common stock outstanding.
*
Illinois Fund to Trim Its Holdings at Pimco
An Illinois pension fund said it planned to withdraw $250 million from Pacific Investment Management Co. to show its concerns about improper-trading allegations against the big Newport Beach bond shop.
But Pimco will retain most of its business with the Illinois State Universities Retirement System, which has about $2.3 billion of its $12.5 billion in assets with Pimco.
“We feel we need to send a signal to Pimco because our trustees are concerned about these allegations in the media,” said Jim Hacking, executive director of the pension fund.
Hacking characterized the board’s decision to pull the $250 million as a “one-time reduction.” The fund has invested with Pimco since the early 1980s, he noted, and trustees are hoping to meet with Pimco executives, including Managing Director Bill Gross, to discuss the allegations.
Two Southern California companies, Western Asset Management in Pasadena and Metropolitan West Asset Management in Los Angeles, will receive large portions of the assets transferred from Pimco, Hacking said.
Pimco declined to comment on the Illinois action.
*
California Legislators Target High Gas Prices
State legislators assailed California’s high gasoline prices, pledging to expose the cause and fix the problems with new legislation, if necessary.
As average pump prices hovered well above $2 a gallon statewide, pressure mounted for someone to help boost gasoline supplies and steady California’s volatile fuel markets, according to state Assemblywoman Jenny Oropeza (D-Long Beach), who hosted Friday’s hearing on fuel prices.
The statewide average price for self-serve regular hit a record high of $2.18 a gallon on March 6, and has since fallen only slightly, to $2.132 on Friday, according to the Automobile Club of Southern California.
Oropeza did not endorse any specific plan, but she noted that the state could control or influence the mix of company-owned and independent gas stations, the timing of planned refinery shutdowns and vast fluctuations in retail pump prices from neighborhood to neighborhood.
*
Grower Is Ordered to Give Workers Back Pay
One of the largest vegetable farms in California must pay workers for the time they spent traveling in company vans to and from fields in the Salinas Valley, a federal judge has ruled.
The judgment is the largest of its kind -- both in potential dollar damages and in number of workers affected -- since the California Supreme Court ruled in a precedent-setting case four years ago that farmworkers must be paid for compulsory travel time, said Paul Strauss, a Chicago attorney who represented the plaintiffs in the class-action lawsuit.
The summary judgment handed down March 16 by U.S. District Judge Jeremy Fogel of San Jose says that D’Arrigo Bros. Co. of Salinas owes an unspecified amount of money to 3,000 workers who picked the company’s broccoli, lettuce and other crops from 1996 to 2000.
The exact size of the award, which by some estimates could top $10 million, will be determined after a court review of employee pay and work records.
John Snell, D’Arrigo’s labor relations manager, suggested the company may appeal. “This case is far from over,” he said.
*
Lawmakers Seek to End an on State Nurseries
Sen. Barbara Boxer (D-Calif.) and two other lawmakers urged the U.S. Department of Agriculture to hasten negotiations with nine states to end bans of all or some of California-grown nursery plants.
Boxer, with Reps. Anna G. Eshoo (D-Atherton) and Sam Farr (D-Carmel), contend the bans are unnecessary because growers are abiding by federal regulations to ensure that products are free of a disease known as sudden oak death, which was found this month at two California nurseries.
Florida, West Virginia and Louisiana have banned all California plants. Six other states have halted shipments to varying degrees. Growers say the bans could cost the California plant industry $100 million in lost sales this spring.
USDA officials were unavailable for comment.
Cultivating nursery plants is a $2.35-billion business in California, with plants trailing only dairy products and grapes in commodity value. The state is the nation’s largest provider of nursery crops.
