The Supreme Court ruled Monday that lawsuits may proceed against tobacco companies for allegedly deceptive marketing of "light" cigarettes.

In a 5-4 split won by the court's liberals, the court said that smokers may use state consumer protection laws to sue cigarette makers for the way they promote "light" and "low tar" brands.'

The decision was at odds with recent anti-consumer rulings that limited state regulation of business in favor of federal power.

The tobacco companies argued that the lawsuits are barred by the federal cigarette labeling law, which forbids states from regulating any aspect of cigarette advertising that involves smoking and health.

Justice John Paul Stevens, however, said in his majority opinion that the labeling law does not shield the companies from state laws against deceptive practices.

People suing the cigarette makers still must prove that the use of 'light' and 'lowered tar' actually violate the state anti-fraud laws, but those lawsuits may go forward, Stevens said.

He was joined by the other liberal justices, Stephen Breyer, Ruth Bader Ginsburg and David Souter, as well as Justice Anthony Kennedy, whose vote often decides cases where there is an ideological division.

Layoffs And Lawsuits

White-collar workers laid off amid the financial crisis are using the 20-year-old plant-closing law to sue for severance.

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White-collar workers laid off amid the financial crisis are using the 20-year-old plant-closing law to sue their former employers.

A federal judge has ordered Microsoft Corp. CEO Steve Ballmer to testify in a class-action lawsuit challenging the company's marketing of its Windows Vista operating system.

U.S. District Judge Marsha Pechman ruled earlier this year that consumers could pursue a class action suit against Microsoft for labeling some PCs as "Vista Capable," even though many were not powerful enough to run all of Vista's features.

Microsoft had opposed the motion to depose Ballmer. But Pechman wrote Friday that plaintiffs had shown that Ballmer may have had unique knowledge of the "Vista Capable" program.

Ballmer must give a deposition in the next 30 days.

A Microsoft spokesman says the company will comply with the order.

Google Settles with Authors

The search giant will pay $125 million to settle lawsuits stating it violated copyright law by scanning millions of books

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By Hardy Green

After more than two years of negotiation, Google (GOOG) has settled lawsuits filed by the Authors Guild and five publisher members of the Association of American Publishers against a Google program that has scanned millions of library books.

The agreement, subject to approval by the U.S. District Court for the Southern District of New York, provides for the establishment of a book-rights registry, through which scanned books can be viewed in part or in whole and payment made to copyright holders. As part of the deal, Google will pay $125 million to rights-holding plaintiffs and to cover legal fees. Of that amount, $30 million will go to set up the registry.

Google ran afoul of book publishers and authors when some of the libraries participating in its book-scanning program opted to scan full texts of copyrighted books (BusinessWeek.com, 10/20/05). Publishers argued that scanning an entire book without permission, and storing it on a Google server, violates copyrights. Google argued that because it's creating what amounts to a massive card catalog and would let users view only brief excerpts of books, it shouldn't have to get express permission to scan the books.

"A 21st-Century Solution"

All parties to the agreement expressed enthusiasm about the settlement during a conference call with reporters. "This could be the biggest book deal in U.S. publishing history," Authors Guild Director Paul Aiken said. "Millions upon millions of books will find a new home among readers online."

"This is an innovative, 21st-century solution," added Association of American Publishers Chairman and Bertelsmann Co-Chairman Richard Sarnoff. "The registry will function as an authoritative rights-holder database, distribute money, and mediate disputes."

David Drummond, Google's chief legal officer, noted that "7 million books are now searchable through Google Book Search, and we're looking forward to many times that number."

Payments Split Three Ways

The registry will manage two types of online book searches. Individuals will continue to view samples of in-copyright books much as they can today, and purchase the work online. Institutions such as colleges and universities can pay for subscriptions to the registry and have complete digital access to millions of scanned books. Participants in the conference call noted that the program will make it possible for small colleges and universities to have access to the trove of books in major research libraries at such institutions as the universities of California, Michigan, and Wisconsin, and Stanford University.

In all cases, payments will be split three ways, with Google getting 37% of the revenue and, after the subtraction of an administrative fee by the registry, the publisher and author splitting the remaining monies. Certain advertising revenues will also be shared with the rights holders, Drummond said, according to the same proportional split. But no ads will appear in the actual pages of books, he noted.

The registry is several months away from being a reality. Overall, the development seems likely to encourage the sale of books in bits and pieces, or "chunking," as the practice is coming to be known among book publishers, along with "transforming," or delivery of books in a variety of formats, including downloads to e-book readers or for print-on-demand. "The real victors are the readers," Google co-founder Sergey Brin said in a prepared statement. "The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips."

Lawsuits Date to 2005

The publisher plaintiffs, who filed suit against Google in October 2005, included Pearson Education, Penguin Group, John Wiley & Sons (JWA), Simon & Schuster, and the McGraw-Hill Companies (MHP), publisher of BusinessWeek. The Authors Guild class action was filed in September of that year.