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October 30, 2002, 9:00 AM ET, Alert No. 538.
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District Court Holds ADA Does Not Apply to Web Site
10/18. The U.S. District Court (SDFl) issued its Order Granting Defendant's Motion to Dismiss in Access Now v. Southwest Airlines, holding that the Americans with Disabilities Act (ADA) ban on discrimination in public accommodations does not apply to Southwest's web site.

Background. Plaintiff, Access Now, is a non profit corporation that engages in advocacy under the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101, et seq. Defendant, Southwest Airlines, maintains a web site the enables users to check airline fares and schedule and book airline and hotel reservations. Plaintiff filed a complaint in U.S. District Court (SDFl) against Southwest alleging the Southwest has not made its web site accessible to blind persons using a screen reader, in violation of Title III of the ADA.

Statute. 42 U.S.C. § 12182(a) provides that "No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation."

42 U.S.C. § 12181(7) then provides a long lists of things that constitute public accommodations, including "an inn, hotel, motel, or other place of lodging ... restaurant, bar, or other establishment serving food or drink ... a motion picture house, theater, concert hall, stadium, or other place of exhibition or entertainment auditorium, convention center, lecture hall, or other place of public gathering". This list continues. Yet, all of the items in the list are physical places. There is no reference to the Internet or web.

Holding. The Court dismissed the complaint for failure to state a claim, pursuant to FRCP 12(b)(6). The Court wrote that this was a case of first impression, and reached its decision on the basis of statutory construction. It held that "the plain and unambiguous language of the statute and relevant regulations does not include Internet websites among the definitions of ``places of public accommodation´´".

The Court also applied the "rule of ejusdem generis" which provides that "where general words follow a specific enumeration of persons or things, the general words should be limited to persons or things similar to those specifically enumerated." (Citations omitted.)

The Court elaborated that "Where Congress has created specifically enumerated rights and expressed the intent of setting forth "clear, strong, consistent, enforceable standards," courts must follow the law as written and wait for Congress to adopt or revise legislatively defined standards that apply to those rights. Here, to fall within the scope of the ADA as presently drafted, a public accommodation must be a physical, concrete structure. To expand the ADA to cover "virtual" spaces would be to create new rights without well-defined standards."

Justice Department. While the Department of Justice (DOJ), which has enforcement responsibilities under the ADA, has been silent on this issue for some time, it did write a short letter six years ago stating that the ADA does apply to the web. The then Assistant Attorney General in charge of the Civil Rights Division, Deval Patrick, wrote a letter on September 9, 1996 to Sen. Tom Harkin (D-IA) in which he stated that "The Americans with Disabilities Act (ADA) requires ... places of public accommodation to furnish appropriate auxiliary aids and services where necessary to ensure effective communication with individuals with disabilities ... Covered entities under the ADA are required to provide effective communication, regardless of whether they generally communicate through print media, audio media, or computerized media such as the Internet. Covered entities that use the Internet for communications regarding their programs, goods, or services must be prepared to offer those communications through accessible means as well." Patrick wrote that web site operators could comply by providing audio tapes and braille copies of their web sites.

Policy Arguments. The Court's opinion addressed only statutory construction and the little case law related to the issue. It did not address policy arguments against extending the ADA to the Internet. However, the House Judiciary Committee's Subcommittee on the Constitution held a hearing on this issue on February 9, 2000. See, TLJ story titled "Do Web Sites Violate the Americans with Disabilities Act?", February 10, 2000.

Walter Olson, a Senior Fellow at the Manhattan Institute, offered policy arguments against ADA based regulation of web sites. He testified that if web sites had to comply with the ADA it would have disastrous effects on the Internet. "Hundreds of millions of existing pages would be torn down. Some of these would eventually be put back up after being made compliant. Countless others never would." "The posting of new pages, by the tens of millions, would screech to a near halt." "Amateur publishing, as by the owner of a small business or a community group that relied on volunteers, would become more of a legal hazard." "Many widely used and highly useful features on websites would be compromised in functionality or simply dispensed with for reasons of cost, delay or cumbersomeness." "Parties subject to the ADA will feel pressure to use government approved authoring tools". See prepared testimony of Olson.

See also, article in the Reason Online May 2000 edition by Olson titled "Access Excess: The Americans with Disabilities Act goes online".

In contrast, seven other witnesses at this hearing argued for application of the ADA to the Internet. See, prepared testimony of Charles Cooper, Peter Blanck, Dennis Hayes, Gary Wunder, Steven Lucas, Judy Brewer, and Susyn Conway.

7th Circuit Reverses Judgment Against Cable Pirates
10/29. The U.S. Court of Appeals (7thCir) issued its opinion [15 pages in PDF] in CSC Holdings v. Redisi, reversing and remanding the District Court's judgment against a cable pirate for selling illegal cable television decoders.

Background. CSC is a cable provider that does business in Chicago as Cablevision. Defendents, Redisi, father and son, make and sale of cable television decoders that enable purchasers to view all of CSC's premium or pay per view programming without paying for it.

District Court. CSC filed a complaint in U.S. District Court (NDIll) against the Redisis, alleging violation of the Cable Communications Policy Act of 1984, 47 U.S.C. § 553. The District Court granted CSC a judgment that included a restraining order, asset freeze, and an award of over $29 Million in damages. The Redisis appealed.

Appeals Court. The Appeals Court reversed and remanded, on the issues of statute of limitations, calculation of damages, and discovery. For example, the Redisis, notorious cable pirates, asked for CSC's customer lists in pre-trial discovery. The District Court ruled that CSC need not produce them. The Appeals Court reversed. Diane Wood wrote the opinion.

Microsoft Discusses Regulatory Treatment of Internet Services with FCC
10/28. Representatives of Microsoft met with officials of the Federal Communications Commission's (FCC) Office of Plans and Policy (OPP) and Office of Engineering and Technology (OET) to discuss several FCC proceedings pertaining to regulatory treatment of high speed access to the Internet.

Scott Harris, attorney for Microsoft, wrote in an ex parte communications filing [PDF] that Microsoft "pointed out that the Internet has been characterized -- and its growth fueled -- by the ability of consumers to reach an unprecedented array of content, services, and applications through an ever-increasing diversity of electronic devices. Microsoft urged the Commission to prevent the essence of the Internet from being lost in the transition to broadband. Specifically, Microsoft indicated that the Commission, in these proceeding, must use its authority to ensure that consumers can continue to access the content and applications of their choosing through devices of their choosing."

DOJ Recommends Approval of SBC Long Distance Application for California
10/29. The Department of Justice's (DOJ) Antitrust Division release its evaluation [19 pages in PDF] of SBC's Section 271 application to the Federal Communications Commission (FCC) to provide in region interLATA service in the state of California. It recommended approval. This is WC Docket No. 02-306.

Charles James, Assistant Attorney General in charge of the Antitrust Division stated in a release that "The available evidence suggests that generally, SBC has succeeded in opening its local telecommunications markets in California ... Competitors have made progress in penetrating the business markets, and the Department believes there are no longer any material non-price obstacles to residential competition."

The DOJ wrote in its evaluation that "SBC’s application demonstrates that it has succeeded in opening its local markets in California to competition in many respects." However, it added that the DOJ "defers to the Commission's ultimate determination of whether the prices supporting this application are appropriately cost-based."

The DOJ also wrote that "According to SBC’s data, SBC and CLECs serve a total of approximately 20,112,000 lines in SBC's California service area as of July 2002. Of the total lines in SBC’s service area in California, 43.5 percent, or approximately 8,745,000, serve businesses, and 56.5 percent, or approximately 11,367,000, serve residential customers. For business and residential customers combined, SBC estimates that CLECs using all modes of entry serve approximately 2,602,000 lines, or approximately 12.9 percent of all lines in SBC’s service area in the state." (Footnotes omitted.)

The DOJ further noted that CLECs serve about 20.8% of business lines, mostly with their own networks, and about 6.9% of residential lines, again, mostly with their own networks. The DOJ wrote that "most CLEC service to residential customers in California is facilities based, provided primarily over the cable television facilities of AT&T Broadband and Cox Communications."

9th Circuit Rules on SLUSA Pre-emption of State Fraud Claims
10/29. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Falkowski v. Imation, a class action case involving federal pre-emption under the SLUSA of state law fraud claims regarding employee stock options.

Background. Mark Falkowski, and other plaintiffs, are former employees and contractors of Imation who held stock options. Imation Corporation is a publicly traded company that makes magnetic and optical data storage products. Imation acquired Cemax, a medical information management business, along with its employees, who make up the plaintiffs in this case. A year later Imation sold Cemax to Kodak, and transferred Cemax employees to Kodak.

Plaintiffs had held Cemax stock options. When Imation acquired Cemax the options were amended. When Cemax was sold to Kodak the employees were given 30 days to exercise their options granted under the Cemax plans that had vested; any unvested Cemax options and any new Imation options were deemed forfeited.

Plaintiffs allege that Imation knew at the time of the Imation Cemax merger that there would be a large earnings write off, but concealed it from employees to induce them to stay. The subsequent write off then made the options worth far less at the time of the Imation Kodak deal.

District Court. Plaintiffs filed a complaint in Superior Court in California against Imation and certain executives alleging breach of contract, fraud (fraudulent inducement and negligent misrepresentation), and violation of the California Labor Code. Imation removed to the U.S. District Court (NDCal). The District Court held that the fraud claims were completely preempted by the federal Securities Litigation Uniform Standards Act (SLUSA), and thus that removal was proper. The District Court dismissed the remaining claims without leave to amend because the contracts on their face foreclosed the breach of contract claims and the stock options were not wages under the California Labor Code. The employees then filed an amended complaint with five federal securities fraud claims, which the District Court dismissed as time barred.

Appeals Court. The Appeals Court affirmed in part and reversed in part. It held that state law fraud claims relating to employee stock options are preempted because the alleged fraud took place "in connection with the purchase or sale of a covered security" under the SLUSA.

The Appeals Court also affirmed the dismissal of the state labor law claim. It also affirmed the dismissal of the federal claims, but on different grounds -- that they were not detailed with sufficient particularity. However, the Appeals Court reversed the District Court's dismissal of the state contract claims.

NIST Releases Guidelines for Federal Cyber Security
10/28. The National Institute of Standards and Technology (NIST) released a draft publication [78 pages in PDF] titled "Guidelines for the Security Certification and Accreditation of Federal Information Technology Systems".

Phillip Bond, the Department of Commerce's Under Secretary for Technology, stated in a release that "Once final, these guidelines will serve as a critical computer security tool and will further the President's commitment to a safe and secure cyberspace ... This is a very significant step toward making the federal government's computer systems more secure. It gives agencies a comprehensive, yet flexible way to ensure that their computers are as safe as they should be".

The publication states that "This special publication establishes a standard process, general tasks and specific subtasks to certify and accredit IT systems supporting the executive branch of the federal government. It provides a new approach to certification and accreditation (C&A) that uses the standardized process to verify the correctness and effectiveness of security controls employed in an IT system to ensure adequate security is maintained."

This is NIST Special Publication 800-37. It was written by Ron Ross and Marianne Swanson in the NIST's Information Technology Laboratory's Computer Security Division, with input from others.

The deadline to submit comments to the NIST is January 31, 2003. Send comments to

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Wednesday, October 30
POSTPONED TO APRIL 30, 2003. The FCC will hold Auction No. 46. This is the 1670-1675 MHz band auction. See, notice of postponement in Federal Register.

9:00 AM - 12:00 NOON. The Telecommunications Service Priority (TSP) System Oversight Committee will hold a meeting. The agenda includes TSP/WPS program update, TSP sponsorship policies, and OSS concept. For more information, contact Deborah Bea at 703 607-4933. See, notice in the Federal Register. October 11, 2002, Vol. 67, No. 198, at Page 63452. Location: National Communications System (NCS), second floor conference room, 701 South Court House Road, Arlington, VA.

10:00 AM - 12:00 NOON and 2:00 - 4:00 PM. The FTC and the DOJ's Antitrust Division will hold the final workshops in their joint series titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy" on October 25 and 30 and November 6. The October 30 event is titled "Competition, Economic, and Business Perspectives on Substantive Patent Law Issues: Non-Obviousness and Other Patentability Criteria". Location: FTC, Room 432, 600 Pennsylvania Ave., NW.

12:00 NOON. Deadline to submit comments to the USTR regarding the acts, policies, and practices of trading partners of the U.S. that are relevant to the decision as to whether they should be identified under Section 182 of the Trade Act of 1974 (19 U.S.C. § 2242). Section 182, which is commonly referred to as the "Special 301" provisions in the Trade Act, requires the USTR to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. The USTR also requests comments on the U.S. Government's 1998 Memorandum of Understanding with Paraguay on intellectual property matters, including enforcement. See, notice in the Federal Register

12:30 PM. The FCBA's Online Communications Committee will hold a brown bag lunch. The topic will be the role of ISPs in security and law enforcement compliance. The speakers will be Christopher Bubb (AOL Time Warner) and Betty Ellen Shave (Associate Chief for International Matters, Computer Crime and Intellectual Property Section, Department of Justice). Location: Cole Raywid & Braverman, 1919 Pennsylvania Ave., NW, No. 200.

EXTENDED TO DECEMBER 6. Deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. See also, FCC release [PDF]. See also, Order [PDF] of October 11, 2002 extending deadlines.

Thursday, October 31
The Senate will meet at 10:30 AM in pro forma session only.

8:30 AM- 4:15 PM. Day one of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

12:00 NOON - 1:00 PM. The NTCA will host a luncheon to release the results of its 2002 Wireless Survey. RSVP to Donna Taylor at 703 351-2086 or by October 28. Location: NTCA Headquarters, 4121 Wilson Blvd., 10th floor, Arlington, VA. If traveling by Metro, go to the Ballston/MU on the orange line.

2:30 - 4:30 PM. The FCC's WRC-03 Advisory Committee will meet. See, notice in the Federal Register. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

Friday, November 1
8:30 AM - 1:00 PM. Day two of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

Deadline to submit reply comments to the FCC regarding BellSouth's Section 271 application with the FCC to provide in region interLATA service in the states of Florida and Tennessee. This is WC Docket No. 02-307. See, FCC notice [PDF].

Deadline to submit reply comments to the FCC regarding the petition for declaratory ruling in CC Docket No. 01-92 requesting that the FCC determine that wireless termination tariffs are not a proper mechanism for establishing reciprocal compensation arrangements between local exchange carriers (LECs) and commercial mobile radio service (CMRS) providers. See, FCC notice [PDF].

Monday, November 4
The Senate will meet at 10:30 AM in pro forma session only.

The Supreme Court will return from its recess, which it began on October 22.

Deadline to submit comments to the NTIA in response to its request for comments on two of the nine exceptions to the Electronic Signatures in Global and National Commerce (E-SIGN) Act. The E-SIGN Act provides for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. The two categories of exempt documents that are the subject of this request for comments are court records and hazardous materials notices. The Act tasks the NTIA with studying these exemptions, and providing reports to Congress. See also, NTIA release, notice in Federal Register, regarding court records, and notice in Federal Register, , regarding hazardous materials notices.

Deadline to submit reply comments to the FCC regarding SBC's Section 271 application with the FCC to provide in region interLATA service in the state of California. This is WC Docket No. 02-306. See, FCC notice [PDF].

Tuesday, November 5
Election Day.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in 21st Century Telesis v. FCC, No. 01-1435. Judges Randolph, Rogers and Williams will preside. Location: Courtroom 20, 333 Constitution Ave., NW.

Deadline to submit applications to the Agriculture Department's Rural Utilities Service for grants under its pilot program for the provision of broadband transmission service in rural America for fiscal year 2002. See, notice in the Federal Register.

Wednesday, November 6
9:30 - 11:30 AM and 2:00 - 4:00 PM. The FTC and the DOJ's Antitrust Division will hold the final workshops in their joint series titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy" on October 25 and 30 and November 6. The November 6 event is titled "Antitrust Law and Patent Landscapes". The 9:30 AM program is titled "Standard Setting Organizations: Evaluating the Anticompetitive Risks Of Negotiating IP Licensing Terms and Conditions Before A Standard Is Set". The 2:00 PM program is titled "Relationships Among Competitors and Incentives to Compete: Cross Licensing of Patent Portfolios, Grantbacks, Reach Through Royalties, and Non- Assertion Clauses". Location: FTC Room 432, 600 Pennsylvania Ave., NW.

10:00 - 11:30 AM. Media Security and Reliability Council (MSRC) will hold a meeting. FCC's Chairman Michael Powell will participate. The MSRC is a federal advisory committee formed after the terrorist attacks of September 11, 2001, to study ways to secure and maintain broadcast and multichannel video programming distribution (MVPD) in the face of terrorist attacks, natural disasters and other threats. See, FCC release [PDF]. Location: FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.

12:15 PM. The FCBA's Global Telecommunications Development Committee and International Practice Committee will host an event titled "What Happened in Marrakesh? A Debriefing on the 2002 ITU Plenipot". The speakers will be David Gross, Coordinator of International Communications and Information Policy at the State Department. RSVP to jhindin Location: Wiley Rein & Fielding, 1750 K St, 10th Floor.