Despite New Health Law, Some See Sharp Rise in Premiums

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Bob Chamberlin/Los Angeles Times

Dave Jones, the California insurance commissioner, said some insurance companies could raise rates as much as they did before the law was enacted.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

 In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.

The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.

While Mr. Jones has not yet weighed in on the insurers’ most recent requests, he is pushing for a state law that will give him that authority. Without legislative action, the state can only question the basis for the high rates, sometimes resulting in the insurer withdrawing or modifying the proposed rate increase.

The California insurers say they have no choice but to raise premiums if their underlying medical costs have increased. “We need these rates to even come reasonably close to covering the expenses of this population,” said Tom Epstein, a spokesman for Blue Shield of California. The insurer is requesting a range of increases, which average about 12 percent for 2013.

Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.

“There’s no question that review of rates makes a difference, that it results in lower rates paid by consumers and small businesses,” said Larry Levitt, an executive at the Kaiser Family Foundation, which estimated in an October report that rate review was responsible for lowering premiums for one out of every five filings.

Federal officials say the law has resulted in significant savings. “The health care law includes new tools to hold insurers accountable for premium hikes and give rebates to consumers,” said Brian Cook, a spokesman for Medicare, which is helping to oversee the insurance reforms.

“Insurers have already paid $1.1 billion in rebates, and rate review programs have helped save consumers an additional $1 billion in lower premiums,” he said. If insurers collect premiums and do not spend at least 80 cents out of every dollar on care for their customers, the law requires them to refund the excess.

As a result of the review process, federal officials say, rates were reduced, on average, by nearly three percentage points, according to a report issued last September.

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Reviving brands that aren't quite forgotten

Twenty-five years ago, a new kind of sparkling water called Clearly Canadian hit store shelves.

In flavors such as Orchard Peach and Western Loganberry, the drink soon was raking in $150 million a year in sales. But when faced by growing competition, Clearly Canadian began to fade. By the early 2000s it had all but disappeared.

Enter Mark Thomann.

Early last year, the Chicago investor bought the Clearly Canadian name, hired a marketing team, contracted a bottler and hammered out a distribution deal to get the drinks back into U.S. supermarkets starting in March.

Thomann is making a bet that enough people remember Clearly Canadian to try it again. He's one of a growing group of entrepreneurs who specialize in digging through the graveyard of consumerism in search of zombie brands that can be revived.

"We believe we can make Clearly Canadian valuable again," said Thomann, chief executive of River West Brands, whose stable of resuscitated brands includes Coleco games and Underalls pantyhose.

Rebooting old names makes sense in a market crammed with products vying for consumers' attention; building a new brand can cost millions in advertising and there's no guarantee of success. But for as little as a $275 fee to the U.S. Patent & Trademark Office, one can buy a brand that, albeit dusty, is already familiar to millions of potential customers.

"It's very difficult to get a new brand established in today's marketplace," said Tim Calkins, a professor of marketing at Northwestern University's Kellogg School of Management. "So if you start with some brand awareness, it can be an advantage."

These trademark trolls scour brand registration databases, clip old magazine ads and interview consumers about beloved brands of their youth. Such efforts have brought back Polaroid, Eagle Snacks and the Sharper Image in recent years.

Attorney Kenny Wiesen revived Bonomo's Turkish Taffy because he missed his favorite childhood candy. He discovered that the trademark was held by Tootsie Roll, which quit making the thin, chewy bars in the 1980s. It took several years, a lawsuit and about $100,000, but eventually Wiesen snagged the Bonomo's Turkish Taffy brand.

That was the easy part. Wiesen and a partner then spent several years tracking down the recipe, relying in part on the memories of an 89-year-old candy chemist. Then they had to find a factory to produce it.

The candy finally hit the market in 2010. Today Wiesen produces about 8 million bars a year distributed to 10,000 stores nationwide.

"It's profitable," said Wiesen, of Carle Place, N.Y., who has acquired other brands he wants to bring back, including Regal Crown Sours hard candies. "But it's not explosively profitable."

Experts say old candy and soft drinks hold particular appeal for defunct brand specialists; consumers are nostalgic for foods they ate as kids. But that can also be a pitfall.

"You have to make the product relevant today," said Ellia Kassoff, chief executive of candy maker Leaf Brands in Newport Beach. "I don't want to sell to the dead."

Kassoff, an executive recruiter, has made a full-time business of buying and updating defunct brands, including Leaf, which he purchased in 2011 with the idea of reviving a full lineup of classic candies.

Last summer, the company reintroduced Astro Pop, a cone-shaped lollipop invented in the 1960s by a pair of California rocket scientists that went out of production in 2004. To appeal to today's kids, Leaf now makes the suckers in two sizes, as well as Astro Pop soda in a variety of flavors. It's also selling David's Signature Beyond Gourmet Jelly Beans, another brand Kassoff rescued.

Although Kassoff has purchased some old brands, others he has acquired for almost nothing thanks to a process known as abandonment. Under federal law, a trademark is considered abandoned if it hasn't been used for three years. After that, anyone can argue that they should be able to use it exclusively and receive legal trademark protection benefits that once belonged to the previous owner.

Kassoff used that strategy two years ago when he applied for trademarks to a suite of extinct department stores, including Abraham & Strauss, Filene's, the Bon Marche, Joseph Magnin and Robinson's. His plan was to license the brands to existing retailers, perhaps for in-house accessory lines.

But when Kassoff won government approval to take over the brands, Macy's Inc., the previous owner, filed a federal lawsuit in late 2011 to stop him. The department store said that it had never abandoned those chains, which it had purchased over the years, even though it had rebranded them all as Macy's. Kassoff counter-sued, saying Macy's was infringing his trademarks.

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Legislators vow to change law on rape by impersonation

California legislators and the state's top prosecutor said Friday that they would work to overhaul a law that makes it a crime to obtain sex by impersonating another only if the victim is a married woman.

The 19th century law required a state appeals court on Wednesday to overturn the rape conviction of a Los Angeles County man who entered a darkened bedroom where a woman was sleeping and had sex with her.

The 18-year-old woman said she initially mistook the defendant for her boyfriend, who had left earlier, but resisted when she realized it wasn't him. Police said the defendant admitted the woman probably wrongly assumed he was her boyfriend.

The Los Angeles-based 2nd District Court of Appeal said it had ruled reluctantly and appealed to the Legislature to change the law. Another court also put the Legislature on notice of the law's anomaly 30 years ago, but legislators failed to act.

Assembly Speaker John A. Pérez (D-Los Angeles) said changing the law would be a top priority for the lower house in this year's legislative session.

"We've got to fix this," said Pérez, who has authored proposals to address similar legal loopholes for victims of domestic violence. "The goal here is to make sure we have a set of laws that are consistent with what our values are."

Assemblyman K.H. "Katcho" Achadjian (R-San Luis Obispo) said prosecutors in Santa Barbara asked him to change the law in 2011 because of their difficulty in prosecuting a man for rape.

But his bill to overhaul the law died in the state Senate Public Safety Committee. Lawmakers said they were following a policy to shelve legislation that could exacerbate the state's prison overcrowding crisis by creating new felonies.

The current law says sex by trickery is rape only if the victim is married and the man pretends to be her husband.

Legal analysts said Wednesday's unanimous ruling by three Republican-appointed justices, two men and one woman, applied the law correctly.

"Californians are justifiably outraged by this court ruling, and it is important that the Legislature join together to close whatever loopholes may exist in the law and uphold justice for rape victims," Achadjian said Friday.

Assemblywoman Bonnie Lowenthal (D-Long Beach) said she would join Achadjian in introducing a new bill that would expand the definition of rape to include those impersonating the victim's boyfriend, fiance or significant other.

"The current definition in state law is a relic from the 1870s," Lowenthal said. "Allowing this to stand in the 21st century would be like applying horse and buggy standards to our freeways."

State Sen. Noreen Evans (D-Santa Rosa), chairwoman of the Senate Judiciary Committee, also vowed to act.

"Having sex with an unconscious person is rape. Period," she said.

Atty. Gen. Kamala D. Harris said the Los Angeles case clearly involved a "non-consensual assault that fits within the general understanding of what constitutes rape.

"This law is arcane, and I will work with the Legislature to fix it," she said in a statement issued to reporters.

maura.dolan@latimes.com

michael.mishak@latimes.com

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The Death of E-Readers Is All Your Fault

So there’s a reading gadget and a reading gadget with Angry Birds Star Wars. Which do you pick? Well, you, cultured person that you are, would select the dedicated e-reader, of course, just like you would rather watch Frontline instead of Honey Boo Boo, or pick up Vanity Fair instead of Us Weekly on the checkout line. Or at least that’s what the ideal version of yourself would do. But as Amazon and Barnes & Noble are quickly discovering this year, the highbrow ideal all too often gives way to the mass-market realities. Sales of the Kindle and especially the Nook fell this holiday season, despite lower prices than more fully functioning tablets, which are distinctly on the rise. And market researchers estimate that these divergent paths will continue — The Wall Street Journal reports that e-readers sales will be cut in half, from 14.9 million per year to just 7.8 million, by 2015. But the death of the e-reader has less to do with the iPad than what’s inside of it: from tablets to TV shows and everything in between, the most high-minded of ideas for cultural consumption always seem to devolve toward mindless entertainment.

RELATED: Gordon Brown Predicts the Future; Cormac McCarthy Doesn’t Tweet

Take Bravo, the once completely enlightened — and completely failing — network that, like Arts & Entertainment and The Learning Channel before they became A&E and TLC, once devoted itself to being a slightly less boring knockoff of PBS. In 1985, five years after its founding, The New York Times‘s Steve Schneider described Bravo’s success, measured then by its 350,000 subscribers, as follows: 

What has kept things afloat for the past five years has been an evolving mix of cultural programming. Nowadays, a spokesman said, approximately 70 percent of the premium service’s schedule is devoted to films, nearly all of which are either from abroad, from the fringes of American production or from times past. The remainder of the schedule is given over to the performing arts -jazz concerts, ballet, opera, modern dance and the like. From Woody Allen films to documentaries about Latin America to performances by the Pina Bausch dance troupe, the offerings range from the challenging to the downright esoteric.

All that changed when NBC bought Bravo in 2002 and gave it a makeover almost completely motivated by ratings. It started with Queer Eye for the Straight Guy, which in its first year delivered 3.3 million viewers per episode. Then came the much acclaimed era of Top Chef and Project Runway, which are still considered highbrow in their own way, but only in the context of their fellow reality shows like The Real Housewives. And let’s face it: Bravo is pretty much all Housewives all the time. Well, that and a show about Silicon Valley that features no computer programming at all.

RELATED: Barnes & Noble CEO Is Done with Books; 43 Famous Writers Walk into a Cafe

And remember The Learning Channel? It was founded by the Department of Health, Education and Welfare, along with NASA. Really! Then in came Discovery as the new boss, and with it American Chopper and, eventually, TLC’s Toddlers & Tiaras, which birthed Honey Boo Boo — not to mention major ratings. Arts & Entertainment has long been a corporate entity, but it gave way from highbrow post-Nickelodeon fare and devolved into, you know, Dog the Bounty Hunter and whatever Gene Simmons is up to these days.

RELATED: The New Kindles We’ll Probably See at Today’s Amazon Event

It’s all a little reminiscent of the days when Us magazine was actually a glossy movie magazine that Hollywood stars loved to pose for. The New York Times started it! Then came a partnership with Disney, and J.Lo, and on and on to the supermarket tabloid you now know as Us Weekly, one of the most successful print publications on Earth.

RELATED: Ebook Juggernaut John Locke Coming Soon to a Bookstore Near You

So, in the slowly dwindling technological world of the e-reader and its advanced brethren, Amazon‘s Kindle is like old-school TLC and the B&N Nook is maybe a little younger and cooler, like Bravo, but still failing; the iPad, however, has Here Comes Honey Boo Boo written all over it. Not that there’s anything wrong with what Amazon and Barnes & Noble were trying to do — a small audience might enjoy a device that has novels and long biographies and maybe some newspapers and little more. But the majority of people these days want to spend their downtime with HBO Go and Netflix apps, with games and email and other ways to relax their entire brains… not just the fancy parts of it. With tablet prices falling to more affordable levels — Amazon sells a Kindle Fire for $ 159 and a Kindle Paperwhite for $ 119 — of course today’s readers are going to choose the thing that helps them go beyond boring old reading. It might not have that easy-on-the eyes screen, but the majority of time spent on tablets isn’t spent reading books but answering emails, reading the news (a shorter reading experience than an entire book), and playing games, according to Pew. Plus, the iPad has its own Kindle app, for those times when you do, after all, feel like indulging in something a bit more highbrow. Because people do, still read a lot of books. They just like doing everything else a lot more. If the death of the e-reader is nigh, maybe the age of the straight-and-narrow, undistracted smartypants isn’t far from ending, either.

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'McDreamy' says he beat Starbucks for coffee chain

SEATTLE (AP) — "Grey's Anatomy" star Patrick Dempsey may be the real "McSteamy."

The actor, who was dubbed "McDreamy" as a star of the hospital drama while his co-star was called "McSteamy," may soon be serving hot, steaming cups of Joe.

Dempsey won a bankruptcy auction to buy Tully's Coffee, a small coffee chain based in Seattle. Among those he beat out is Tully's much bigger Seattle neighbor, Starbucks Corp., which is known for its ubiquitous white cups with a circular green mermaid logo.

Dempsey, whose company Global Baristas LLC plans to keep the Tully's name, declared victory on the social media site Twitter: "We met the green monster, looked her in the eye, and...SHE BLINKED! We got it! Thank you Seattle!

The win for Dempsey deals a rare setback for Starbucks on its home turf. Starbucks has long been both praised for bringing "coffeehouse culture" to the U.S. and criticized for crushing smaller chains. The coffee giant, which had planned to convert the Tully's cafes to its own brand, last month announced plans to expand its global footprint to 20,000 cafes over the next two years, up from the current 18,000.

Dempsey said in an interview on Friday that as the underdog in Seattle, Tully's will need to find its identity.

"It's a much smaller chain that has a lot of potential that hasn't been given the proper care," he said.

But in a statement shortly after the auction on Thursday, Starbucks insinuated that Dempsey shouldn't celebrate just yet.

Starbucks, which wanted to convert the Tully's cafes to its own brand, said that a final determination on the winning bid won't be made until a court hearing on Jan. 11. Starbucks said it's in a "backup" position" to buy 25 of the 47 Tully's cafes, with another undisclosed bidder making an offer for the remainder.

The combined bids of Starbucks and the undisclosed bidder come to $10.6 million, above the $9.2 million Dempsey's company is offering to pay through his company, which was formed in order to purchase Tully's. The other investors in Global Baristas aren't being disclosed.

Tully's Coffee, which is known for serving Joe with a milder taste than Starbucks brand, filed for Chapter 11 bankruptcy protection in October, citing lease obligations and underperforming stores. Tully's wholesale business, which includes Tully's Coffee in bags and single serve K-cup packs that are sold in supermarkets and other stores, is owned separately by Green Mountain Coffee Roasters Inc.

TC Global Inc., the parent company of Tully's, said in a release Friday that it was "encouraged and excited" about Dempsey's commitment to the chain.

Tully's President and CEO Scott Pearson called the deal a "great match" and that the goal is to make sure creditors get paid and to keep as many people employed as possible.

A bankruptcy court document signed late Friday by Pearson and Dempsey said TC Global had determined that Global Baristas submitted the successful bid.

"With this court filing, it's official - our group has been chosen as the successful bidder," Dempsey said in a statement. "We look forward to the court's final approval on Jan. 11."

Earlier in the day, Dempsey said he planned to be very involved in the running of the company, adding that the immediate challenges were to address bookkeeping issues, staff morale and sprucing up the coffee shops. Once the business is stabilized, Dempsey said the long-term goal would be to take the chain national.

"We can pull this off. We just have to take steps that are slow and smart," he said. "I'm going to get behind the counter. I'm going to serve coffee...I'm going to give the company a boost of energy."

Although Dempsey lives in Los Angeles, he plans to spend more time in Seattle, the city where "Grey's Anatomy" is set in. Dempsey said he believed there is room in the city for Tully's and the much larger Starbucks; he noted there might be people who are rooting for the underdog.

"In a society where there are so many big corporations that swallow the little guy, we thought, let's not let this happen to this company," he said.

Dempsey made an appearance Friday morning at a Tully's near Pike Place Market, shaking hands with workers and greeting customers before visiting other stores. Several dozen people, mostly women, came into the store.

Patrease Estelle, 45, works nearby, and came in with a small group from her office.

"I will take whatever I can get. A photo, a hug, a 'hey, how you doing,' a wink," said Estelle, who got a picture and handshake with the actor.

___

Blankinship reported from Seattle and Choi from New York.

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F.D.A. Offers Rules to Stop Food Contamination

The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, which has sickened tens of thousands of Americans annually in recent years.

Nicole Bengiveno/The New York Times

Checking the temperature of lettuce at an Arizona farm. Safety measures would start at farms.

The proposed rules represent a sea change in the way the agency polices food, a process that currently involves taking action after contamination has been identified. It is a long-awaited step toward codifying the food safety law that Congress passed two years ago.

Changes include requirements for better record keeping, contingency plans for handling outbreaks and measures that would prevent the spread of contaminants in the first place. While food producers would have latitude in determining how to execute the rules, farmers would have to ensure that water used in irrigation met certain standards and food processors would need to find ways to keep fresh food that may contain bacteria from coming into contact with food that has been cooked.

New safety measures might include requiring that farm workers wash their hands, installing portable toilets in fields and ensuring that foods are cooked at temperatures high enough to kill bacteria.

Whether consumers will ultimately bear some of the expense of the new rules was unclear, but the agency estimated that the proposals would cost food producers tens of thousands of dollars a year.

A big question to be resolved is whether Congress will approve the money necessary to support the oversight. President Obama requested $220 million in his 2013 budget, but Dr. Margaret Hamburg, commissioner of the F.D.A., said “resources remain an ongoing concern.”

Nonetheless, agency officials were optimistic that the new rules would protect consumers better.

“These new rules really set the basic framework for a modern, science-based approach to food safety and shift us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine, said in an interview. The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.

One in six Americans becomes ill from eating contaminated food each year, the government estimates; most of them recover without concern, but roughly 130,000 are hospitalized and 3,000 die. The agency estimated the new rules could prevent about 1.75 million illnesses each year.

Congress passed the Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.

But it took the Obama administration two years to move the rules through the regulatory agency, prompting complaints that the White House was more concerned about protecting itself from Republican criticism than about public safety.

Mr. Taylor said that the delay was a function of the wide variety of foods and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.

The first rule would require manufacturers of processed foods sold in the United States to come up with ways to reduce the risk of contamination. Food companies would be required to have a plan for correcting problems and for keeping records that government inspectors could audit.

An example might be to require the roasting of raw peanuts at a temperature guaranteed to kill salmonella, which has been a problem in nut butters in recent years. Roasted nuts would then have to be kept separate from raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.

“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”

The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat bacterial contamination like E. coli, which is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.

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FDA proposes sweeping new food safety rules

The Food and Drug Administration has proposed sweeping rules to curtail food-borne illnesses that kill thousands of Americans annually — and, in the process, to transform itself into an agency that prevents contamination, not one that merely investigates outbreaks.

The rules, drafted with an eye toward strict standards in California and some other states, enable the implementation of the landmark Food Safety Modernization Act that President Obama signed two years ago in response to a string of deadly outbreaks of illness from contaminated spinach, eggs, peanut butter and imported produce.

The first proposed rule would require domestic and overseas producers of food sold in the U.S. to craft a plan to prevent and deal with contamination of their products. The plans would be open to federal audits. The second rule would address contamination of fruit and vegetables during harvesting.

One in six Americans suffers from a food-borne illness annually, a "substantial burden" on the country, according to the FDA. Of those who get sick, about 130,000 end up hospitalized and 3,000 die.

A salmonella outbreak in peanut butter last fall prompted the FDA to shut down a New Mexico production facility of Sunland Inc. and initiate a mass recall from retailers such as Trader Joe's. A listeria outbreak in several states last year also killed dozens of people.

"The FDA Food Safety Modernization Act is a common-sense law that shifts the food safety focus from reactive to preventive," Health and Human Services Secretary Kathleen Sebelius said Friday in releasing the proposals.

The outbreaks of the last several years pushed consumer advocates and much of the food industry to back more stringent standards.

Many welcomed the proposed rules, although consumer advocates pointed out that the standards were delayed in the White House a year past their congressionally mandated due date, giving rise to concerns that the Obama administration sought to avoid any political fallout in an election year.

The 2011 food safety act, the most comprehensive overhaul of the food industry in 70 years, was to be built on three sets of regulations, not just the two issued Friday, said Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest, a Washington consumer advocacy group.

The third rule, which has yet to be issued, would establish how food importers would verify that the products they bring in meet U.S. standards.

Last year more than 800 cases of illness were caused in the U.S. by contaminated imported tuna flakes, cantaloupes, mangoes and ricotta cheese, DeWaal said, citing data from the Centers for Disease Control and Prevention.

"It's supposed to be a three-legged stool in terms of consumer protection," DeWaal said, "and one leg is still missing."

The FDA said developing the complex new rules took time as it consulted "consumers, government, industry, researchers and many others," and "studied, among many other sources, the California leafy greens marketing agreement." Additional rules will "follow soon," the agency said.

The California Leafy Green Products Handler Marketing Agreement, formed in 2007 after an E.coli outbreak tied to spinach crops, mandates that farmers fund government audits of their food safety processes. Melon growers in California have a similar agreement and last year made it mandatory, said Stephen Patricio, president of Westside Produce in Firebaugh, Calif., which grows, packs and ships melons.

"California has the most stringent requirements," Patricio said. "It's the culture of food safety that is important, and California farmers have been working on the culture of food safety for a decade."

As a result, the proposed federal regulations aren't expected to force substantial changes in the way many crops in California are handled. Melons in the state also have a mandatory code on every box that is shipped that would allow authorities to track where the fruit came from and when it was harvested, a policy that was proposed in the new regulations.

Eric Hanagan already has implemented some of the policies suggested in the proposed guidelines.

Hanagan's 1,500-acre farm, which grows melons and vegetables in the Rocky Ford area of Colorado, was hit hard when a nearby farm was blamed for a 2011 listeria outbreak that killed 25 people. In response, Hanagan and other farmers adopted rules that they hoped would restore the region's reputation.

His vegetables are now shipped with codes that allow them to be tracked, and every winter he and other regional farmers go to classes about food safety. Hanagan's farm is inspected twice a year by the state, one of the inspections unannounced. Inspectors talk to each worker individually and regulate what kind of shoes, clothes and jewelry they can wear.

Hanagan estimates that the regulations cost medium-sized farms about $5,000 to $7,500 a year, which includes the cost of time for training workers and attending classes. But, he said, it's worth every penny.

"We need to have safe food, because if you get a consumer sick, you're done," he said. Jensen Farms, the Colorado farm blamed for the listeria outbreak, filed for bankruptcy in May.

The FDA will gather public comment for 120 days before finalizing the rules. Large farms would have 26 months to comply with most of the new requirements after the final rules are published; smaller farms would have longer.

neela.banerjee@latimes.com

alana.semuels@latimes.com

Times staff writer Tiffany Hsu contributed to this report.

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Court voids rape conviction in impersonation ruling

A man who impersonates someone in order to have sexual intercourse may be guilty of rape only if the victim was married and the man was pretending to be her husband, a state appeals court has ruled.

The unanimous ruling, from an admittedly reluctant court, overturned the rape conviction of Julio Morales, who entered a sleeping woman's dark bedroom after her boyfriend walked out and began having intercourse with her. The woman screamed and resisted when she awoke and realized Morales was not her boyfriend, the court said.

"A man enters the dark bedroom of an unmarried woman after seeing her boyfriend leave late at night, and has sexual intercourse with the woman while pretending to be the boyfriend," the Los Angeles-based 2nd District Court of Appeal said in Wednesday's ruling. "Has the man committed rape? Because of historical anomalies in the law and the statutory definition of rape, the answer is no, even though, if the woman had been married and the man had impersonated her husband, the answer would be yes."

The court urged the Legislature to change the archaic law to "correct the incongruity that exists when a man may commit rape … when impersonating a husband, but not when impersonating a boyfriend."

The justices noted that prosecutors advanced two legal theories — that the defendant raped by tricking the victim, which applies only to married women, and that he committed rape by having sex with a sleeping person.

Because it was unclear under which theory the jury convicted Morales, the court overturned the conviction. If Los Angeles prosecutors retry Morales, they may prevail only under the sleeping person theory and only if they prove Morales knew the woman was sleeping when he had sex with her, the court said.

Los Angeles prosecutors said they were reviewing the ruling Thursday and had not decided whether to retry Morales or appeal to the California Supreme Court. A spokeswoman for Atty. Gen. Kamala D. Harris said her office was also studying the decision and had no immediate comment.

An attorney for Morales said the appeals court decision was legally correct and speculated that the Legislature might change the law as a result.

Santa Clara University law professor Gerald Uelmen called the ruling "bizarre" and likely to spark outrage, but predicted that the California Supreme Court would probably not review it because it was legally sound.

"I think the ball is in the Legislature's court," he said.

Uelmen said he found it "ironic" that a judge had spotted the anomaly in the law 30 years ago, yet the Legislature failed to change it. The ruling indicated there was "pretty solid" evidence the woman was sleeping during the sex, "so this guy isn't going to get off scot free," the law professor said.

The appeals court relied on a criminal code enacted in 1872 that defined rape as an act of sexual intercourse "with a female not the wife of the perpetrator."

The law was amended a couple of years later to specify that such sex would be rape if the victim "submits, under the belief that the person committing the act is her husband, and this belief is induced by any artifice, pretense, or concealment practiced by the accused."

Wednesday's ruling was written by Justice Thomas L. Willhite Jr., appointed to the appeals court by former Gov. Arnold Schwarzenegger, joined by Justices Norman L. Epstein, appointed by Gov. George Deukmejian, and Justice Nora M. Manella, another Schwarzenegger appointee.

"We reluctantly hold that a person who accomplishes sexual intercourse by impersonating someone other than a married victim's spouse is not guilty of the crime of rape of an unconscious person," Willhite wrote in the precedent-setting decision.

The alleged rape occurred in February 2009, when an 18-year-old woman went to a party with her boyfriend. The woman's brother and his friends, including Morales, also attended.

All of them returned to the woman's house. She and her boyfriend went to bed but did not have sex. She fell asleep and the boyfriend left.

She said she woke up and realized that the man with her was not her boyfriend and began to yell and cry. Morales left, and she said she locked the door and called her boyfriend. He summoned police.

A sheriff's deputy said Morales admitted that the woman might have been asleep and probably thought he was her boyfriend.

maura.dolan@latimes.com

Times staff writer Lee Romney contributed to this report.

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Google emerges from FTC probe relatively unscathed

SAN FRANCISCO (AP) — Google has settled a U.S. government probe into its business practices without making any major concessions on how the company runs its Internet search engine, the world’s most influential gateway to digital information and commerce.

Thursday’s agreement with the Federal Trade Commission covers only some of the issues raised in a wide-ranging antitrust investigation that could have culminated in a regulatory crackdown that re-shapes Internet search, advertising and mobile computing.

But the FTC didn’t find any reason to impose radical changes, to the relief of Google and technology trade groups worried about overzealous regulation discouraging future innovation. The resolution disappointed consumer rights groups and Google rivals such as Microsoft Corp., which had lodged complaints with regulators in hopes of legal action that would split up or at least hobble the Internet’s most powerful company.

Google is still trying to settle a similar antitrust probe in Europe. A resolution to that case is expected to come within the next few weeks.

After a 19-month investigation, Google Inc. placated the FTC by agreeing to a consent decree that will require the company to charge “fair, reasonable and non-discriminatory” prices to license hundreds of patents deemed essential to the operations of mobile phones, tablet computers, laptops and video game players.

The requirement is meant to ensure that Google doesn’t use patents acquired in last year’s $ 12.4 billion purchase of Motorola Mobility to thwart competition from mobile devices running on software other than Google‘s Android system. The products vying against Android include Apple Inc.’s iPhone and iPad, Research in Motion Ltd.’s BlackBerry and Microsoft‘s Windows software.

Google also promised to exclude, upon request, snippets copied from other websites in capsules of key information shown in response to search requests. The company had insisted the practice is legal under the fair-use provisions of U.S. copyright law. Nonetheless, even before the settlement, Google already had scaled back on the amount of cribbing, or “scraping,” of online content after business review site Yelp Inc. lodged one of the complaints that triggered the FTC investigation in 2011.

In another concession, Google pledged to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.

Google, though, prevailed in the pivotal part of the investigation, which delved into complaints that the Internet search leader has been highlighting its own services on its influential results page while burying links to competing sites. For instance, requests for directions may turn up Google Maps first, queries for video might point to the company’s own site, YouTube, and searches for merchandise might route users to Google Shopping.

Although the FTC said it uncovered some obvious instances of bias in Google‘s results during the investigation, the agency’s five commissioners unanimously concluded there wasn’t enough evidence to take legal action.

“Undoubtedly, Google took aggressive actions to gain advantage over rival search providers,” said Beth Wilkinson, a former federal prosecutor that the FTC hired to help steer the investigation. “However, the FTC’s mission is to protect competition, and not individual competitors.”

Two consumer rights groups lashed out at the FTC for letting Google off too easily.

“The FTC had a long list of grievances against Google to choose from when deciding if they unfairly used their dominance to crush their competitors, yet they failed to use their authority for the betterment of the marketplace,” said Steve Pociask, president of the American Consumer Institute.

John Simpson of frequent Google critic Consumer Watchdog asserted: “The FTC rolled over for Google.”

David Wales, who was the FTC’s antitrust enforcement chief in 2008 and early 2009, said the agency had to balance its desire to prevent a powerful company from trampling the competition against the difficulty of proving wrongdoing in a rapidly changing Internet search market.

“This is a product of the FTC wanting to push the envelope of antitrust enforcement without risking the danger of losing a case in in court,” said Wales, who wasn’t involved with the case and is now a partner at the law firm Jones Day.

FTC Chairman Jon Leibowitz said the outcome “is good for consumers, it is good for competition, it is good for innovation and it is the right thing to do.” Before reaching its conclusion, the FTC reviewed more than 9 million pages of documents submitted by Google and its rivals and grilled top Internet industry executives during sworn depositions.

The Computer & Communications Industry Association, a technology trade group, applauded the FTC for its handling of the high-profile case.

“This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age,” said Ed Black, the group’s president.

The FTC has previously been criticized for not doing more to curb Google‘s power. Most notably, the FTC signed off on Google‘s $ 3.2 billion purchase of online advertising service DoubleClick in 2008 and its $ 681 million acquisition of mobile ad service AdMob in 2010. Google critics contend those deals gave the company too much control over the pricing of digital ads, which account for the bulk of Google‘s revenue.

If Google breaks any part of the agreement, Leibowitz said the FTC can fine the company up to $ 16,000 per violation. Last year, the FTC determined that Google broke an agreement governing Internet privacy, resulting in a $ 22.5 million fine, though the company didn’t acknowledge any wrongdoing.

Google‘s ability to protect its search recipe from government-imposed changes represents a major victory for a company that has always tried to portray itself as force for good. The Mountain View, Calif., company has portrayed its dominant search engine as a free service that is constantly tweaking its formula so that people get the information they desire more quickly and concisely.

“The conclusion is clear: Google‘s services are good for users and good for competition,” David Drummond, Google‘s top lawyer, wrote in a Thursday blog post.

Google‘s tactics also have been extremely lucrative. Although Google has branched into smartphones and many other fields since its founding in a Silicon Valley garage in 1998, Internet search and advertising remains its financial backbone. The intertwined services still generate more than 90 percent of Google‘s revenue, which now exceeds $ 50 billion annually.

Throughout the FTC investigation, Google executives also sought to debunk the notion that the company’s recommendations are the final word on the Internet. They pointed out that consumers easily could go to Microsoft‘s Bing, Yahoo or other services to search for information. “Competition is just a click away,” became as much of a Google mantra as the company’s official motto: “Don’t be evil.”

Microsoft cast the FTC’s investigation as a missed opportunity.

“The FTC’s overall resolution of this matter is weak and — frankly —unusual,” Dave Heiner, Microsoft‘s deputy general counsel, wrote on the company’s blog. “We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address.”

FairSearch, a group whose membership includes Microsoft, called the FTC’s settlement “disappointing and premature,” given that European regulators might be able to force Google to make more extensive changes.

“The FTC’s inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators,” FairSearch asserted.

Yelp also criticized the FTC’s handling of the case, calling “it a missed opportunity to protect innovation in the Internet economy, and the consumers and businesses that rely upon it.”

Investors had already been anticipating Google would emerge from the inquiry relatively unscathed.

Google‘s stock rose 42 cents Thursday to close at $ 723.67. Microsoft, which is based in Redmond, Wash., shed 37 cents, or 1.3 percent, to finish at $ 27.25.

In a research note Thursday, Macquarie Securities analyst Benjamin Schachter described the settlement as “the best possible outcome” for Google. “We believe that the terms of the agreement will have very limited negative financial or strategic implications for the company.” Schachter wrote.

___

AP Technology Writer Barbara Ortutay in New York contributed to this story.

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Adele's 2011 holdover '21' still tops in 2012

NASHVILLE, Tenn. (AP) — Turns out Adele ruled 2012, too — and set a record while she was at it.

The British singer's "21" was the highest-selling album in the U.S. for the second consecutive year, according to 2012 sales figures released by Nielsen SoundScan on Thursday. That's a first in the SoundScan era.

Adele sold 4.4 million copies of the album in 2012 after selling 5.8 million in 2011. She crossed the 10 million threshold in November and was only rivaled by Taylor Swift, whose "Red" was second on the list. If her album sales continue apace in 2013, '21' will move into the top 10 list for sales since 1993, when SoundScan began current tracking methods.

Gotye scored the year's top-selling song with "Somebody That I Used To Know" featuring Kimbra. The song was downloaded a record 6.8 million times. Carly Rae Jepsen's "Call Me Maybe" was next at 6.5 million. Both songs are the first to cross the 6 million digital sales mark, while fun. came close with 5.9 million downloads of "We Are Young" featuring Janelle Monae.

Forty-one songs crossed the 2 million download mark, helping drive digital and overall sales to a new high even as album sales began to drop again after a momentary gain.

A record 1.65 billion music units — combining physical albums, digital albums and digital songs — were sold in 2012, fueled by an increase of 9.1 percent in total digital sales and a 14.1 percent increase in digital album sales.

Overall, however, album sales declined 4.4 percent. That continues a downward trend since 2004 that was only briefly halted by last year's 3 percent gain — mostly due to the surprise success of "21." Only two genres showed album sales gains in 2012. Rock gained by 2 percent and country, fueled by the format's assault on the top 10, jumped 4.2 percent.

Swift led a record five country artists into the top 10, selling 3.1 million copies of "Red" in just over two months. Other country artists on the list included Carrie Underwood's "Blown Away" at No. 7 (1.2 million) followed by Luke Bryan's "tailgates & tanlines" (1.1 million), Lionel Richie's duets album "Tuskegee" (1 million) and Jason Aldean's "Night Train" (1 million).

One Direction nearly matched Swift's sales total, but did it by placing two 2012 releases in the top 10 — "Up All Night" placed No. 3 with 1.6 million sold and "Take Me Home" was fifth with 1.3 million.

Mumford & Son's "Babel" at No. 6 (1.4 million) and Justin Bieber's "Believe" at No. 6 (1.3 million) round out the top 10. Only 10 albums reached 1 million in sales.

Katy Perry received the most radio airplay for the second year in a row with 1.4 million spins, while Swift was the most streamed artist at 216 million streams.

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