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Film director Woody Allen settled his lawsuit against American Apparel Inc. just before the trial was set to begin on Monday, May 18, 2009. The case received a great deal of publicity and was to be heard in Manhattan federal court.

Allen sued the U.S. clothing company for $10 million for using the image of him dressed as a rabbi, from the movie Annie Hall, on billboards in New York and Los Angeles. After the settlement was reached, he told reporters, “I am told the settlement of five million dollars is the largest reported amount ever paid under the New York right to privacy law.”

American Apparel founder Dov Charney, who came up with the ad idea, told the media that he thought the case was really about “the dignity of ideas”. He went on to say, “I am sorry for expressing myself.”

Allen, an accomplished jazz musician, is married to Soon-Yi Previn. She is the adopted daughter of actress Mia Farrow and famous conductor Andre Previn. Soon-Yi has been estranged from her mother since it was discovered that she and Allen had been engaged in an affair – details and photos here.

See the ad that sparked the lawsuit below.