Anthony Gomez, 24, admitted in court that he watched another man shoot the dog, then encouraged the man to behead the animal, a 4-year-old Australian shepherd mix named Chevy.

Three weeks after the dog disappeared in February, its severed head was sent in a package to its owner, 17-year-old Crystal Brown. Brown's family said that she had rejected Gomez's advances and that they believed he had the dog killed out of spite.

Gomez pleaded guilty to terroristic threats and is to be sentenced in November to 21 months.

After the story became known, Brown received letters of condolence, pictures of pets, dog toys and treats, gift cards, and checks from as far away as Australia.

AT&T said it would appeal the case, which was tried in the Beaumont division of the United States District Court for the Eastern District of Texas. The case centered on two patents related to activating calling cards.

"We are disappointed by this result which is contrary to the law and evidence in this case. We will seek to have it corrected by the trial court or on appeal," AT&T spokesman Michael Coe said in an e-mailed statement.

Verizon confirmed the settlement but declined to comment on details.

The financial award against AT&T could increase to $468 million, or three times the original verdict, McKool Smith P.C., the law firm representing Dallas-based TGIP, said in a statement. The law firm cited the jury's finding of willful infringement against AT&T.

McKool Smith said other defendants besides Verizon had reached settlements before the trial but it did not give details.

The lawsuit was filed against AT&T Corp. in March 2006 before the company merged with SBC to form AT&T Inc.

One of the dissenting judges said the legislature should either be required to adopt civil unions or marriage. The other two said that the case should be sent back to the lower court for a trial to see if government has a good enough reason to bar same-sex couples from marriage.

The majority opinion said that while the court agrees that marriage is a fundamental right, it says there is no fundamental right to marry someone of the same sex.

The court also said that although there has been a history of unfair discrimination against gay people, as a group gay people are not politically powerless.

"Our opinion should by no means be read to imply that the General Assembly may not grant and recognize for homosexual persons civil unions or the right to marry a person of the same sex," Judge Glenn T. Harrell Jr. wrote for the majority.

"The court refused to recognize that lesbian and gay couples form committed relationships and loving families just like heterosexual couples," said Ken Choe, a senior staff attorney with the ACLU Lesbian Gay Bisexual Transgender Project who argued the case before the court.

The suit originally was filed two years ago by the ACLU on behalf of the nine same-sex couples and a man whose partner passed away and who would like to be able to marry one day.

In January Baltimore Judge M. Brooke Murdock said that the 1973 law defining marriage as a union between one man and one woman "cannot withstand constitutional challenge."

The ruling was stayed to allow the state to appeal.

In oral arguments last December before the Court of Appeals the state argued that the matter of same-sex marriage should be decided by the legislature not the courts.

"The General Assembly is the proper forum to weigh these issues," said Robert Zarnoch, counsel to the General Assembly.

Ken Choe, a senior staff attorney with the ACLU Lesbian Gay Bisexual Transgender Project disagreed, telling the court that the issue was the state constitution and basic fairness. 

"Lesbians and gay couples, who form loving and committed relationships, and who raise children, need and deserve the critical protections that come with marriage," he said.

"The exclusion of same-sex couples from marriage violates the most fundamental guarantees of equality and liberty for all."

Equality Maryland said it was surprised by the high court ruling, given judgments in Massachusetts and New Jersey where courts have ruled same-sex couples must be accorded the same rights as opposite-sex couples.

"We will be pushing for full, legal equality in the Maryland General Assembly," Equality Maryland executive director Dan Furmansky told the Washington Post after the ruling was released.

"This is a social justice struggle. Eventually, Maryland will have civil marriage equality for same-sex couples. It's inevitable."

The issue of same-sex marriage is also before the Supreme Court in California. Oral arguments are expected to be heard late this year or early in 2008.

Two of Missouri’s biggest law firms - Blackwell Sanders Peper Martin and Husch & Eppenberger - are engaged in preliminary merger talks, both firms confirmed Monday.

The combination of the two would create a firm with 630 attorneys, ranking it second in size among Missouri-based law firms after Bryan Cave, which has about 800 attorneys worldwide.

Husch, which is based in St. Louis and has a 40-attorney office in Kansas City, has about 300 attorneys. It tallied $124 million in revenues last year, according to The American Lawyer, a legal publication.

Blackwell, which is based in Kansas City, has about 330 attorneys and grossed $116.5 million last year. About half the firm’s attorneys are based in Kansas City.

"Merger discussions are in their early stages, but our intentions are serious and the prospects for this strategic combination are exciting," said Dave Fenley, Blackwell chairman. "As with any merger talks, nothing is final until the deal is signed."

Blackwell is best known for its corporate, litigation, transactional, real estate, and labor and employment practices. Husch is best known for its litigation, commercial finance, environmental and bankruptcy practices.

Both firms have offices in multiple cities; the merged firms would have 16 locations in the United States and London.

Husch held preliminary merger discussions last year with Stinson Morrison & Hecker, another large Kansas City firm, but the talks fell through.

Its talks with Blackwell come little more than a year after eight estate planning attorneys left Husch for Lathrop & Gage, leaving a gaping hole in Husch’s estate planning practice in Kansas City.

Not long before that, four estate planning attorneys at Husch jumped ship for Blackwell, one of several instances in recent years of attorneys migrating from one firm to the other.

Although the cross-fertilization of attorneys may make a merger of the two firms easier to pull off, Fenley said that was not the impetus behind the proposed combination. Rather, he said, a consulting firm used by both firms - Hildebrandt International - recommended the marriage.

"They thought it was a very good fit," he said. "A merger would allow us to become more diverse and more sophisticated and would create greater depth. That’s what clients are looking for these days."

The Federal Open Market Committee was set to announce a decision at 1815 GMT.

The committee was widely expected to cut interest rates in a bid to ease stress in the housing and credit markets, and head off a potential recession.

Most analysts say they expect the FOMC, which has held its federal funds rate at 5.25 percent since June 2006, to cut the benchmark rate by 25 or 50 basis points, which could lead to lower borrowing costs for many consumers and businesses.

A rate cut "would reflect an effort to contain the downside risks to growth associated with the swift tightening in financial conditions this summer in an already subpar economy," said Citigroup economist Robert DiClemente, who predicts a half-point cut.

DiClemente says the current rate of 5.25 percent is "higher than neutral," or holding back economic growth, and that a failure to cut rates "could risk an undesirable breach in investor confidence and broader damage to the expansion."

"The sooner we get to 4.5 percent or thereabouts, the better the chances of stabilizing the economic outlook and the financial system that supports it," DiClemente said.

Rod Smyth at Wachovia Securities said he expects a quarter-point cut, with the possibility of more cuts later.

"We believe Fed chairman (Ben) Bernanke's reluctance to cut rates aggressively is based partly on his preference that markets work out their own problems," he said.

"Furthermore, we think he wants to discourage the view that the Fed will always come to the rescue during periods of financial turmoil."

Some analysts say that if the Fed fails to take bold action such as a half-point cut, it could trigger more turmoil in financial markets, causing more failures of home lenders and mortgage defaults and prompting a freezing up of broader credit markets.

"We strongly believe that if the Fed only cuts rates by 25 basis points even with a strongly worded FOMC statement to commit to more easing if need be, there could be a significant disappointment trade in the financial markets, especially in stocks," said Deutsche Bank economists Joseph LaVorgna and Carl Riccadonna in a note to clients.

"If policymakers move too slowly now, they run the risk that more considerable damage will be inflicted on the financial markets and the real economy, and resultantly they will have to cut rates more aggressively in the long run."

Others claim that economic conditions do not warrant a rate cut, and that such a move would simply be providing more of the easy money that fueled the boom-and-bust cycle.

"The US economy is not booming ... However, the economy is not collapsing either," argued Eugenio Aleman, senior economist at Wells Fargo, who says it would be wrong for the Fed to buckle to market pressure.

"A fed funds cut will not bring back the US housing market. A fed funds cut will not bring back the commercial paper market," he said.

The US economy expanded at a robust 4.0 percent pace in the second quarter, but many experts view that as a statistical fluke that belies soft conditions. The loss of 4,000 jobs in August, say some, point to deep problems as the housing slump and credit problems drag on growth.

Of key importance is the message sent to financial markets. Chairman Ben Bernanke wants to ease economic stress while avoiding the impression that he is bailing out speculators and hedge funds.

"As I see it, the media hype over whether the first move will be 25 or 50 basis points is overblown," said Morgan Stanley economist Richard Berner.

"What matters more than the first move is the future path for monetary policy, and both camps at the FOMC will likely agree that more is needed because like us, they've significantly lowered their sights on future growth."

However, the French foreign minister also said that "everything should be done to avoid war."

"War is the worst that could happen," he said. "Everything should be done to avoid war. We have to negotiate, negotiate, negotiate -- without cease, without rebuff."

His comments appeared aimed at quieting an uproar over his statement Sunday that the world should prepare for a possible war with Iran -- a warning Iranian President Mahmoud Ahmadinejad dismissed Tuesday as fanciful.

Kouchner blamed the media for distorting his statement that "we have to prepare for the worst, and the worst is war."

"As usual with journalists, they take one phrase and you don't know what came after," he told Russia's Echo of Moscow radio late Tuesday.

"They're saying: Bernard Kouchner wants war. But it's not true. It's a manipulation. I don't want war, I want peace."

The Russian and French ministers met ahead of a UN Security Council meeting on Friday that may impose new sanctions against Tehran for its controversial uranium enrichment activity.

Ahmadinejad dismissed talk of war in comments to journalists in Tehran on Tuesday.

"We do not take these declarations seriously. Comments to the media are different to the real positions," he said.

Tehran vehemently denies US accusations it is seeking an atomic weapon, saying its nuclear drive is aimed at generating electricity.

Russia, which is building Iran's first nuclear reactor in the southern Russian city of Bushehr, has consistently warned against attacking the Islamic republic.

In an interview published just ahead of the Kouchner-Lavrov meeting, Russian Deputy Foreign Minister Alexander Losyukov warned that a "bombing of Iran would be a bad move that would end with catastrophic consequences."

The United States has never ruled out using military strikes to punish Iran for defying UN Security Council demands that it halt its enrichment activity. US Defense Secretary Robert Gates said on Sunday that "all options are on the table."

Iran has said it would never initiate an attack but would respond with crushing force if the United States launched a strike on its territory.

Kouchner is set to fly to Washington on Wednesday to take up the issue with US Secretary of State Condoleezza Rice.

Fearing possible military action, Moscow has drawn up plans to evacuate its nuclear experts from Bushehr in the event of a conflict, deputy foreign minister Losyukov said.

He stressed in an interview with daily Vremya Novostei that the use of force would only "worsen the situation in the Middle East" and "bring a very negative reaction from the Muslim world."

On Monday, the UN atomic agency chief warned against the hasty use of force in the Iranian nuclear dispute but dismissed the French comments about possible war as "a lot of hype."

"We need always to remember that use of force could only be resorted to when ... every other option has been exhausted. I don't think we are at all there," ElBaradei told reporters at a conference of his International Atomic Energy Agency (IAEA).

"There is a UN charter and there are rules for the international use of force," ElBaradei said.

Iranian Vice President Reza Aghazadeh told the general conference of the IAEA's 144 member states that Western countries "have always chosen the path of confrontation instead of the path of understanding and cordial relations toward the great nation of Iran."