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Lohan settles E*Trade "milkaholic" suit

By Jonathan Stempel

NEW YORK (Reuters) - Lindsay Lohan has settled her $100 million lawsuit accusing E*Trade Financial Corp of modeling a "milkaholic" baby girl in a television commercial after her without permission, a lawyer for the actress said.

Lohan withdrew her lawsuit against the New York-based online brokerage on Monday, court records show. The lawsuit was withdrawn with prejudice, meaning it cannot be brought again. The terms of a settlement were not immediately available.

E*Trade spokeswoman Allison Jeannotte said in a statement: "It was a simple business decision. We always have to consider the cost and time involved in litigation, and we are pleased to have the matter behind us."

Lohan sued E*Trade on March 8, alleging its use of a baby girl named Lindsay in an ad violated her privacy.

In the ad, a baby boy apologizes to his girlfriend through a video chat for not calling her the night before because he was on E*Trade. The camera switches to the girl, who asks suspiciously, "And that milkaholic Lindsay wasn't over?"

It then switches back to the boy, who uneasily replies "Lindsay?" before another baby girl, presumably Lindsay, moves into the frame and asks, "Milk-a-what?"

E*Trade's ad was part of a series featuring babies who play the markets. It was shown in this year's Super Bowl, which Nielsen media said drew a record 106.5 million U.S. viewers.

Lawyers for Lohan argued that, while other famous women are named "Lindsay" or "Lindsey," like skier Lindsey Vonn and actress Lindsay Wagner, by "process of elimination" it was their client whom E*Trade used to model the baby girl and her pronunciation of milkaholic "in a drunken state of mind."

Separately on Monday, Lohan was ordered to appear in a Los Angeles court on September 24 after admitting she failed a court-ordered drug test following her release from jail and a stint in drug rehabilitation.

Friday's hearing is expected to determine whether Lohan, 24, returns to jail.

The New York case is Lohan v. E*Trade Securities LLC et al, New York State Supreme Court, New York County, No. 601016/2010.

(Reporting by Jonathan Stempel in New York; editing by Andre Grenon)

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