SAUK RAPIDS, Minn. (AP) - Federal authorities have dropped an attempt to block a Minnesota man from marketing merchandise poking fun at the National Security Agency for its surveillance of citizens.

Dan McCall, of Sauk Rapids, operates He's claiming victory against the NSA and the Department of Homeland Security.

His merchandise includes T-shirts with the NSA's official seal paired with the slogan: "The only part of the government that actually listens." The federal agencies issued cease-and-desist orders, and McCall sued last fall.

The settlement was filed in federal court in Maryland on Tuesday. The NSA agreed to formally retract its claim that McCall's merchandise violated federal law, and to pay him $500 in court costs, McCall agreed to drop the lawsuit.

McCall tells reporters it's a victory for free speech.