Metro Atlanta started the week under the threat of a court order that could have shut off its main water source for 3 million people, making Georgia the needy neighbor in legal negotiations with neighboring Alabama and Florida.

It ends the week holding some of the best cards at the table.

A ruling Tuesday from a three-judge panel on the 11th U.S. Circuit Court of Appeals struck down an lower court order that would have severely curtailed Atlanta's access to water from Lake Lanier on the Chattahoochee River starting in July 2012 unless the three states struck a deal.

Then the appeals court went even further, saying that Georgia has a legal right to water from the lake.

Those involved in the dispute say the ruling fundamentally strengthens Georgia's hand in the long-running fight with its neighbors over how much water metro Atlanta can take from a watershed serving all three states. Georgia officials have been negotiating under the gun for the last two years because of the looming water cutoff.

"We're in a better position because the court has now removed the 2012 deadline," said Georgia Gov. Nathan Deal, who said he still wants to negotiate a final agreement. Alabama has already said it will appeal the ruling to the full court, while Florida Gov. Rick Scott's office was still reviewing it Wednesday.

Federal prosecutors moved Tuesday to dismiss a 1994 racketeering indictment against mob boss James "Whitey" Bulger to focus on a later indictment that charged the newly captured fugitive of participating in 19 murders.

But U.S. District Judge Mark Wolf told prosecutors during a court hearing that dismissal of the indictment is "not automatic" and that he would give Bulger's provisional attorney, Peter Krupp, a day to consult with Bulger to see whether he objects to the dismissal.

The earlier indictment, which charged Bulger with extortion, loan sharking, witness tampering and conspiracy, prompted Bulger to flee Boston just before it was handed up in early 1995. He remained a fugitive until last week, when he was apprehended in Santa Monica, Calif., with his longtime girlfriend, Catherine Greig.

Krupp told Wolf the decision to drop the first indictment appears to be "forum shopping" on the part of prosecutors, an apparent reference to the fact that Wolf — who has presided in that case since 1995 — would no longer be the judge overseeing the Bulger prosecution. U.S. District Judge Richard Stearns is assigned to the 1999 indictment, which includes the murder charges.

Prosecutors declined to comment on allegations of "forum shopping." Spokeswoman Christina DiIorio-Sterling said, "Our submission speaks for itself."

Wolf is the judge who in the 1990s held hearings that exposed the Boston FBI's corrupt relationship with Bulger and his cohort, Stephen "The Rifleman" Flemmi.

A man convicted of attempting to burglarize Paris Hilton's home has been sentenced to two years in state prison.

City News Service reported that Los Angeles Superior Court Judge Michael Kellogg also recommended during Wednesday's hearing that Nathan Lee Parada undergo mental health counseling.

A jury took less than an hour in April to convict the 32-year-old of felony attempted residential burglary for trying to break into Hilton's house in August.

The socialite testified during Parada's trial about being awoken early Aug. 24 to the sound of Parada banging on Hilton's window with a knife. Parada told a detective he planned to steal as much as he could carry and move to a deserted island.

His defense attorney argued that Parada had not taken antidepressant medication for days before his arrest.

Prosecutors have asked a judge to dismiss state charges against Elizabeth Smart's kidnapper after the man was convicted in federal court and sentenced to life in prison.

Brian David Mitchell was sentenced May 25 to two life sentences without parole for the 2002 kidnapping and rape of Smart. He was convicted in U.S. District Court in Salt Lake City in December.

Federal prosecutors moved to take over the state case in 2008 after it stalled over questions about Mitchell's mental health.

In papers filed this week, Salt Lake County District Attorney Sam Gill seeks the dismissal of all state charges against Mitchell, citing his federal conviction and life sentences.

Smart was 14 when she was taken at knifepoint from her Salt Lake City bedroom.

Bank of America Corp. is close to finalizing a deal to pay $8.5 billion to settle claims by a group of investors that the bank sold them poor-quality mortgage-backed securities that went sour when the housing market tanked, according to a person familiar with the settlement talks.

The Charlotte, North Carolina, bank was continuing talks late Tuesday with the group, which includes the Federal Reserve Bank of New York, Pimco Investment Management, the world's largest bondholder, and Blackrock Financial Management. It is expected to announce an agreement as early as Wednesday, the person said on condition of anonymity because the matter was still developing.

The deal comes eight months after the group fired off a letter to Bank of America demanding that it repurchase $47 billion in mortgages that its Countrywide unit sold to them in the form of bonds. The investors have argued that Countrywide's practice of modifying loans found to have faulty paperwork or those written outside of normal underwriting standards breached signed agreements with the investors. By continuing to service bad loans rather than speeding up foreclosures, the group has claimed that Countrywide ran up servicing fees, enriching itself at the expense of investors. The New York Fed is involved because it took over assets held by American International Group Inc., which faltered under the weight of bad home loans that it insured.

Bank of America, which paid $4 billion for Countrywide in 2008, has dismissed suggestions that its handling of loan modifications and other efforts to prevent foreclosure have violated the terms of the mortgage-backed securities that the investors hold. In November, CEO Brian Moynihan said he was in day-to-day "hand-to-hand combat" with investors' demands.