TLJ Daily E-Mail Alert No. 435, May 21, 2002.

Tech Law Journal Daily E-Mail Alert

May 21, 2002, 9:00 AM ET, Alert No. 435.
TLJ Home Page | Calendar | Subscribe | Back Issues

Supreme Court Rules on Federal Jurisdiction In Suits Against State PUCs

5/20. The Supreme Court of the U.S. issued its opinion [PDF] in Verizon Maryland v. Maryland Public Service Commission, holding that federal courts have jurisdiction over suits brought by telecommunications carriers against state public utility commissions regarding whether their orders pertaining to reciprocal compensation for telephone calls to ISPs violate the Communications Act.

The underlying dispute involves reciprocal compensation rights under telecommunications interconnection agreements. However, the Supreme Court did not address the merits of this issue. Rather, the Court addressed the procedural question of whether the federal courts have jurisdiction to hear cases against state PUCs that involve these disputes. The outcome is significant, in part because state PUCs have a home court advantage in their states' courts, while telecommunications carriers are more likely to prevail in federal courts than in state courts.

Justice Scalia, writing the opinion for a unanimous Supreme Court, rejected Maryland's arguments that federal question jurisdiction is absent, and that the suit is barred by the Eleventh Amendment.

Eleventh Amendment. "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."

Background. Verizon Maryland (then known as Bell Atlantic Maryland), which is an incumbent local exchange carrier, informed WorldCom that it would no longer pay reciprocal compensation for telephone calls made by Verizon's customers to the local access numbers of ISPs, claiming that ISP traffic is not local traffic subject to the reciprocal compensation requirements of 47 U.S.C. § 251. WorldCom complained to the Maryland Public Service Commission (MPSC), which issued an order in which it sided with WorldCom.

District Court. Verizon Maryland then filed a complaint in U.S. District Court (DMd) against the MPSC and others challenging the MPSC order; it sought declaratory and injunctive relief. The District Court dismissed the action on jurisdictional grounds.

Appeals Court. A three judge panel of the U.S. Court of Appeals (4thCir) affirmed, 2-1. It issued its opinion on February 14, 2001, in Bell Atlantic Maryland v. MCI WorldCom, 240 F. 3d 279. It held that the action against the MPSC and its individual members in their official capacity is barred by the Eleventh Amendment. Judge Niemeyer wrote the opinion; Judge Widener joined; Judge King dissented.

Supreme Court. The Supreme Court reversed the lower courts, and remanded. It held that the District Court does have jurisdiction over this case. It held that there is federal question jurisdiction under 28 U.S.C. § 1331 and 47 U.S.C. § 252. It also held that the doctrine of Ex Parte Young, 209 U.S. 123 (1908), permits Verizon's suit to go forward against the state commissioners in their official capacities.

However, the Court did not address the issue of whether Maryland waived its Eleventh Amendment immunity. It wrote that "Whether the Commission waived its immunity is another question we need not decide, because -- as the same parties also argue -- even absent waiver, Verizon may proceed against the individual commissioners in their official capacities, pursuant to the doctrine of Ex parte Young ..."

Justice Kennedy wrote a concurring opinion. Justice Souter wrote a concurring opinion in which Justices Ginsburg and Breyer joined. He wrote "to question whether these cases even implicate the Eleventh Amendment."

Related Supreme Court Actions

5/20. The Supreme Court also issued a short per curiam opinion [PDF] in Mathias v. WorldCom, a case raising issues similar to those in Verizon Maryland v. MPSC. The Court dismissed its previous grant or writ of certiorari as "improvidently granted".

5/20. The Supreme Court also granted certiorari in AT&T v. Southwestern Bell. It further wrote that "The judgment is vacated and the case is remanded to the United States Court of Appeals for the Eighth Circuit for further consideration in light of Verizon Communications Inc. v. Federal Communications Commission, 535 U.S. __ (2001)." See, Order List [PDF] at page 1.

FTC Issues Final Rule Regarding Safeguarding Customer Financial Records

5/20. The Federal Trade Commission (FTC) issued its final rule governing the safeguarding of customer records and information for the financial institutions subject to its jurisdiction. See, notice [PDF] to be published in the Federal Register, and FTC release.

This rule is required by section 501(b) of the Gramm Leach Bliley Act to establish standards relating to administrative, technical and physical information safeguards for financial institutions subject to the Commission’s jurisdiction. The FTC's notice states that it is intended to "ensure the security and confidentiality of customer records and information; protect against any anticipated threats or hazards to the security or integrity of such records; and protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer."

Science Committee to Mark Up NSF Bills

5/20. The House Science Committee announced that it will meet on Wednesday, May 22, to mark up several bills, including HR 4664, the Investing in America's Future Act of 2002, and HR 3130, the Undergraduate Science, Mathematics, Engineering and Technology Improvement Act (Technology Talent Act of 2001).

HR 4664 would authorize the appropriation of $5.5 Billion for fiscal year 2003 for the National Science Foundation (NSF). Including in the funding authorization is $704 Million for networking and information technology research, $238 Million for the Nanoscale Science and Engineering Priority Area, and $60 Million for the Mathematical Sciences Priority Area. This bill is sponsored by Rep. Nick Smith (R-MI).

HR 3130 would authorize the appropriation of $25,000,000 for fiscal year 2002 for the NSF for a grant program. It provides that the NSF "is authorized to award grants, on a competitive basis to institutions of higher education with science, mathematics, engineering, or technology programs to enable the institutions to increase the number of students studying and receiving associates or bachelor's degrees in established or emerging fields within science, mathematics, engineering, and technology." It is sponsored by Rep. Sherwood Boehlert (R-NY), the Chairman of the Committee.

People and Appointments

5/20. The Federal Communications Commission's (FCC) Wireless Telecommunications Bureau announced several staff changes. Barry Ohlson was named Chief of the Policy Division. Blaise Scinto was named a Senior Deputy Division Chief. Jared Carlson was named a Deputy Division Chief.

5/15. Michael Marinelli and Bruce Barker joined the Washington DC office of the law firm of Gray Cary Ware & Freidenrich as partners in the firm's intellectual property and technology group. Barker focuses on intellectual property transactions and patent litigation; he was previously a partner in the Washington DC office of the law firm of Pennie & Edmonds. Marinelli focuses on international trade regulation; he was previously a partner in the Austin, Texas office of the law firm of Verner Liipfert. GCWF opened its Washington DC office in January when it merged with the former Washington DC law firm of Blumenfeld & Cohen. See, GCWF release.

5/16. Craig Gelfound and Daphne Burton joined the Los Angeles office of the law firm of McDermott Will & Emery as partners in the firm's intellectual property practice. Also, Krista Venegas joined the firm as an associate. Burton focuses on intellectual property, commercial litigation and transactional law. Venegas focuses on biotechnology patent prosecution. See, MWE release.

5/13. Lucent Technologies elected Robert Denham and Daniel Goldin to its board of directors. Betsy Atkins resigned from the board. Denham is a partner in the law firm of Munger Tolles & Olson. Goldin is a senior fellow at the Council on Competitiveness. See, Lucent release.

5/20. Giovanni Barbarossa was named Chief Technology Officer and SVP of Product Development at Avanex. See, Avanex release.

More News

5/20. The Supreme Court of the U.S. denied certiorari in Echostar Communications v. CBS Broadcasting. See, Order List [PDF] at page at page 3.

5/20. The Supreme Court of the U.S. announced that it will take a recess from until Tuesday, May 28, 2002.

5/16. The U.S. District Court (NDIll) sentenced Robin Rothberg to 18 months in federal prison for violation for the No Electronic Theft (NET) Act. Rothberg is one of 17 defendants indicted in May of 2000 for conspiring to pirate copyrighted software as part of a group that called itself "Pirates with Attitudes". The NET Act, passed by the Congress in 1997, has rarely been enforced. See, CCIPS release.

5/20. The Federal Communications Commission (FCC) released a Notice of Apparent Liability proposing that AT&T Wireless Services be held liable for a $2.2 million fine for violating the Enhanced 911 Phase II rules with respect to its Global System for Mobile Communications/ General Packet Radio Service network. See, FCC release.

5/20. The U.S. Patent and Trademark Office (USPTO) announced that "Effective immediately, the USPTO has established Box CONVERSION as a new Special Box for utility patent applicants who wish to file a conversion request under either 37 CFR 1.53(c)(2) or 37 CFR 1.53(c)(3). Applicants who wish to file a conversion request under either § 1.53(c)(2) or § 1.53(c)(3) by mail should designate Box CONVERSION as part of the USPTO address." See, USPTO notice.

About Tech Law Journal

Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for entities with multiple subscribers. Free one month trial subscriptions are available. Also, free subscriptions are available for law students, journalists, elected officials, and employees of the Congress, courts, and executive branch, and state officials. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert and news items are not published in the web site until one month after writing. See, subscription information page.

Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Privacy Policy
Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.

Tuesday, May 21

The House will meet at 9:00 AM for morning hour and at 10:00 AM for legislative business. The House will consider a number of measures under suspension of the rules, including HR 3833, the Dot Kids Implementation and Efficiency Act of 2002, and HR 1877, the Child Sez Crimes Wiretapping Act of 2002.

9:00 AM - 2:00 PM. Day two of a two day public workshop hosted by the FTC to explore issues relating to the security of consumers' computers and the personal information stored in them or in company databases. See, notice to be published in the Federal Register. The FTC previously announced that this event would be held on May 16 and 17. See, notice in Federal Register. Location: 600 Pennsylvania Ave., NW.

9:00 AM. The Annenberg Center will host a meeting titled "Drawing Voters to Political Information Online". For more information, call Lorie Slass at 202 879-6701. Location: Holeman Lounge, National Press Club, 529 14th St. NW, 13th Floor.

11:30 AM. Rep. Fred Upton (R-MI), Rep. John Shimkus (R-IL), Rep. Ed Markey (D-MA), and others, will hold a press conference regarding HR 3833, the "Dot Kids Implementation and Efficiency Act of 2002". This bill provides that "The NTIA shall require the registry selected to operate and maintain the United States country code Internet domain to establish, operate, and maintain a second level domain within the United States country code domain that provides access only to material that is suitable for minors and not harmful to minors". The House may pass the bill on May 21. Press contact: Mike Waldron 292 225-3761. Location: House Radio & TV Gallery, H-315, Capitol.

12:00 NOON - 1:00 PM. Howard Beales, Director of the FTC's Bureau of Consumer Protection, will speak at the conference titled "Personal Privacy in the Digital Age: The Challenge for State and Local Governments". Location: Hilton Crystal City, Arlington, VA.

12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch. Steve Berry (VP for Government Affairs at the CTIA) will address Wireless Issues on the Hill. Location: Hogan & Hartson, Conference Room 9E-407, 555 13th Street, NW (east tower).

2:00 - 4:00 PM. The Department of State's U.S. International Telecommunication Advisory Committee will meet to debrief the just completed International Telecommunication Union Council meeting. Persons intending to attend the meeting should send a fax to the State Department with security related information. See, notice in Federal Register. Location: Room 1408, State Dept.

Day three of a three day conference titled "Personal Privacy in the Digital Age: The Challenge for State and Local Governments". See, agenda. For more information, contact 202 347-3190 Ext. 3005 or spandy @napawash.org. Location: Hilton Crystal City, Arlington, VA.

Day four of a five day annual conference of the International Trademark Association (INTA). See, agenda. Location: Washington Convention Center, 900 9th Street NW.

Wednesday, May 22

The House will meet at 10:00 AM for legislative business.

9:00 AM - 4:30 PM. The Antitrust Division of the Department of Justice and the FTC will hold another in their series of hearings on antitrust and intellectual property. This event is titled "An International Comparative Law Perspective on the Relationship Between Competition and Intellectual Property, Part I". The DOJ requires that attendees provide their name and date of birth 24 hours in advance to Kathleen Leicht at kathleen.leicht @usdoj.gov or 202 514-7018. For more information, contact Gina Talamona in the Office of Public Affairs at 202 514-2007, or Frances Marshall in the Antitrust Division at 202 305-2520. See, FTC notice. Location: Great Hall, Department of Justice, Main Building, 950 Pennsylvania Avenue, NW.

9:00 AM. Microstrategy will host a press breakfast on the "state of the industry". For more information, contact Mark Brailov at 703 770-1670. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor.

9:30 AM. The Senate Commerce Committee will hold a hearing titled "Promoting Local Telecommunications Competition: The Means to Greater Broadband Deployment". Sen. Ernest Hollings (D-SC) will preside. The scheduled witnesses will be Rep. Edward Markey (D-MA), Loretta Lynch (President, California PUC), Robert Nelson (Commissioner, Michigan PSC), Mary Jo White (Pennsylvania State Senator), Paul Vassington (Chairman, Massachusetts Dept. of Telecommunications & Energy). Press contact: Andy Davis 224-6654. Location: Room 253, Russell Building.

10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property has rescheduled its hearing titled "The Accuracy and Integrity of the Whois Database". Howard Beales, Director of the FTC's Consumer Protection Bureau is scheduled to testify. Webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building. This hearing has been scheduled and postponed twice.

10:00 AM. The House Science Committee will hold a meeting to mark up several bills, including HR 4664, the Investing in America's Future Act of 2002, and HR 3130, the Undergraduate Science, Mathematics, Engineering and Technology Improvement Act (Technology Talent Act of 2001). Webcast. Location: Room 2318, Rayburn Building.

1:00 - 5:00 PM. The FCC will host a discussion of regulatory issues affecting broadband deployment. The participants with include FCC Commissioners and representatives of the governments of Canada, Korea and the United Kingdom. See, FCC notice [PDF]. For more information, contact Patricia Cooper at 202 418-0723 or Linda Haller at 202 418-1408. Location: FCC, 445 12th Street, SW, Commission Meeting Room.

1:30 - 3:30 PM. The FCC's WRC-03 Advisory Committee, Informal Working Group 7: Regulatory Issues and Future Agendas, will hold a meeting. Location: FCC, 445 12th Street, SW, Room 7-B516 (7th Floor South Conference Room).

2:30 PM. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space will hold a hearing on the National Science Foundation budget, focusing on federal research and development activities. Location: Room 253, Russell Building.

Day five of a five day annual conference of the INTA. See, agenda.

Day one of a two day conference titled "The Forrester Telecom Summit: The Impact Of Displacement". See, conference web site. The price to attend ranges from $1295 to $1495. For more information, contact events @forrester.com or 1 888 343-6786. Location: Grand Hyatt Washington.

Thursday, May 23

The House will meet at 10:00 AM for legislative business.

9:30 - 11:45 AM. The Antitrust Division of the Department of Justice and the FTC will hold another in their series of hearings on antitrust and intellectual property. This event is titled "An International Comparative Law Perspective on the Relationship Between Competition and Intellectual Property, Part II". For more information, contact Derick Rill (FTC Office of Public Affairs) at 202 326-2472 or Susan DeSanti (FTC Policy Planning Division) at 202 326-2167. See, FTC notice. Location: Room 432, FTC, 600 Pennsylvania Ave., NW.

2:00 PM. The Senate Judiciary Committee will hold a business meeting. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.

12:00 NOON. Congressional Internet Caucus Advisory Committee will host a panel discussion of online pormography, the Children's Online Protection Act, and the National Academy of Science's report to Congress titled "Youth, Pormography, and the Internet." Lunch will be served. RSVP to rsvp @netcaucus.org or call Danielle at 202 638-4370. Location: Room HC-5, Capitol Building.

2:00 PM. The Senate Judiciary Committee will hold a hearing on pending judicial nominations. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.

Day two of a two day conference titled "The Forrester Telecom Summit: The Impact Of Displacement". See, conference web site.

Friday, May 24

The House will meet at 9:00 AM for legislative business. No votes expected after 2:00 PM.

Monday, May 27

Memorial Day. The House and Senate will not be in session from Monday, May 27 through Friday, May 31, for the Memorial Day District Work Period. The FCC will be closed. The National Press Club will be closed. The Library of Congress will be closed.