- Associated Press - Thursday, June 12, 2014

LINCOLN, Neb. (AP) - Lincoln has paid $100,000 to settle a company’s lawsuit over an ordinance that would have banned for-profit clothing donation boxes and huts.

The money covers legal fees and costs for Linc-Drop, the Lincoln Journal Star reported (http://bit.ly/1iqzZRz ). The La Vista company had sued in July, saying its rights to free speech would be violated by the ordinance, which had never been enforced. In February a federal judge said the lawsuit likely would succeed and barred the city from enforcing it.

The city later decided to settle.

In May 2013 the council banned for-profit donation boxes after Linc-Drop placed about 70 donation huts in Lincoln. That ordinance would have required that at least 80 percent of gross proceeds from donation huts go to a charity. Other charities backed the ban, saying people were being misled about how much of their donations were going to the charity and that none of the donated clothing remained in Lincoln.

Linc-Drop contracts with the local March of Dimes to collect clothing and gives the chapter 10 percent of the huts’ gross revenue, a March of Dimes officials has said.

The City Council changed the donation box ordinance in April, requiring all outdoor clothing-donation boxes and huts to list the names of every nonprofit organization and private company that benefits, monetarily or otherwise. City officials said the ordinance would provide some information without violating the First Amendment rights of nonprofits and Linc-Drop or other the companies.

The settlement, which was dated June 3, includes a gag clause that bars city and company representatives from commenting about the case to news media or to others, on pain of a $25,000 penalty.

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Information from: Lincoln Journal Star, http://www.journalstar.com

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