ENTERTAINMENT

JUDGE APPROVES SETTLEMENT IN NETFLIX CASE Customers of a popular DVD rental service, Netflix, are to receive extra movies or a free month of service under a legal settlement approved by a California judge.

In an order issued Friday, Judge Thomas Mellon Jr. concluded that the proposed deal is a fair and reasonable resolution of a class action lawsuit brought in connection with Netflix’s practice of giving frequent users of its service lower priority when requesting films that are in high demand.

Judge Mellon also awarded $1.3 million in legal fees to the two San Francisco attorneys who brought the case,Adam Gutride and Seth Safier. The amount, which will be paid by Netflix, was well below the $2.5 million the pair sought for fees and expenses, but the judge said he might increase the award somewhat if more Netflix users register for the benefits.

An early version of the settlement was torpedoed by objections from the Federal Trade Commission and attorneys for various Netflix customers, but the judge said yesterday that the private lawyers who objected played little role in the outcome of the case. He awarded them a total of $60,000 in fees.

Appeals could delay delivery of the free services for a year or more.

– Staff Reporter of the Sun

ENERGY

FRIST DROPS OIL TAX PROPOSAL Senate Majority Leader Frist dropped a proposal to increase taxes on oil companies that would also have hit industries including retailers and automakers.

The proposal, to raise taxes by repealing an accounting measure worth $5 billion to oil companies, will be taken out of legislation to offset higher gasoline prices and instead will be considered at Senate hearings, Dr. Frist said.

Republicans including Dr. Frist and Senator Domenici of New Mexico proposed giving a $100 rebate to consumers to offset high gasoline prices and paying for it by eliminating an accounting method known as last-in, first-out, or LIFO, which gives a tax advantage to oil companies and other industries.

– Bloomberg News

TECHNOLOGY

BALLMER PLEDGES TO CONTROL COSTS AFTER STOCK PLUNGE The CEO of Microsoft, Steve Ballmer, pledged to keep costs under control after a decision to increase spending surprised investors and sent the stock plunging.

In a memo to employees last week, Mr. Ballmer said he and senior executives will “redouble our efforts on business execution and financial discipline.” The stock drop, the biggest in more than five years, was “a lesson that the entire leadership team at Microsoft will learn from,” Mr. Ballmer wrote. He made it clear he will spend to catch rivals such as Google and Sony, even as he pledged the company will “make the best use of existing resources.”The investments come as Microsoft, the world’s biggest software maker, falls further behind Google in Internet search and advertising and struggles to grow its aging Windows and Office businesses.

– Bloomberg News

IN THE COURTS

QUATTRONE CASE IS ASSIGNED A NEW JUDGE, AGAIN For the second time in a week, a new judge has been assigned to oversee the case of Frank Quattrone, the former powerful investment banker whose obstruction-of-justice conviction was tossed out in March. The new judge assigned to the case was U.S. District Judge George B. Daniels. He replaces Lewis A. Kaplan, who was briefly assigned to the case last week. Prosecutors have not yet indicated whether they intend to retry Mr. Quattrone.

– Associated Press

HOMEBUILDERS

HOVNANIAN CUTS EARNINGS FORECASTS Hovnanian Enterprises cut its second-quarter and full-year earnings forecasts late yesterday amid production delays, slower sales, and other issues that suggest the homebuilder is feeling the effects of a cooling housing market in America.

– Dow Jones Newswires