A company that distributes sexual material has dropped its lawsuit against former U.S. Attorney Brent Ward and assistant U.S. Attorney Richard Lambert.

"It's a relief to have it over with," Lambert said.P.H.E., a North Carolina company also known as Adam & Eve, dropped its suit against the federal government and the two Utah prosecutors as part of a deal struck with the U.S. Department of Justice.

Justice officials agreed not to prosecute P.H.E. on pornography charges in several states - as it has tried to do - if P.H.E. would drop its lawsuit against the government.

The agreement stirred up Congress. At least 50 members of Congress wrote to President Clinton earlier this month, urging him not to abandon the practice of hunting down pornographers in several states at once.

As part of the deal, P.H.E. executives pleaded guilty in Alabama to one charge of sending sexually explicit material through the U.S. mail. The charge carries a maximum fine of $250,000. "But it's unlikely the fine will be that high," said Jerome Mooney, local attorney for P.H.E.

Pornography charges filed against P.H.E. here were dropped last month.

In a written agreement, prosecutors promised not to prosecute P.H.E. or any of its officers for any pornography it may have distributed before Nov. 18.

P.H.E., in turn, agreed never to sue the government again for anything the government did before that date.

The deal sounds the death knell of multijurisdictional prosecution, Mooney said. Multi-jurisdictional prosecution - the practice of filing identical criminal charges against a company in several states at once - was Ward's brain child, according to court records.

He recommended the practice to the then-U.S. attorney general, who implemented the policy. The theory was to drive companies like P.H.E. into bankruptcy defending all the charges, Mooney said.

It worked for a couple of companies and nearly worked for P.H.E., which spent $1 million defending itself before the charges were dropped, he said.

"The government has now agreed to no longer use dirty tricks to drive people out of business."

Four dozen members of Congress - mostly Republicans - urged Clinton to stand by multi-jurisdictional prosecution. Abandoning that approach "takes the teeth out of anti-porn enforcement," said Rep. Bill Baker, R-Calif.

But Justice officials say they haven't necessarily walked away from the multi-jurisdictional prosecution. They just plan to cut back on its use.

"We want to prosecute pornographers more effectively," said Carl Stern, chief spokesman for the Justice Department.

Multi-jurisdictional prosecution wasn't always effective because companies like P.H.E. filed civil suits against the government and then obtained injunctions banning prosecutions in several states.

"We ended up using all our resources in fighting the civil suits and then we lose," Stern said.

The 10th Circuit Court of Appeals ruled that the multi-jurisdictional prosecution of P.H.E. was unconstitutional. Federal appeals Judge Ruth Green banned prosecutors from filing charges against P.H.E. in several states.

"We want to get convictions and stop pornographers," Stern said.

Prosecutors now think that federal forfeiture laws - rather than multi-jurisdictional prosecutions - may be the way to do that, he said.

Under those laws, pornography companies could be required to turn over to the government all their profits.

But prosecutors will still prosecute a company in several states if companies try to take a pornography operation from state to state.

"If we put a company on notice that we regard its conduct illegal and it then tries to set up that business in another state, we will obviously go after it in that state.

"Nobody wants to relax the battle against pornography," Stern said.