2/17. A class action law firm filed a complaint [30 pages PDF scan] in Santa Clara County Superior Court against eBay alleging violation of California statutes and common law in connection with an alleged shill bidding scheme.

The class action law firm of Lerach Coughlin Stoia Geller Rudman & Robbins filed the complaint. The one named plaintiff is Glenn Block. The complaint seeks class action status.

The complaint states that "This action revolves around EBay's use of unlawful, unfair, fraudulent, and unconscionable ``shill´´ bidding which artificially inflates the bids of EBay buyers. Shill bidding is the practice of bidding on the seller's behalf, with no intention of purchasing the product, for the sole purpose of increasing the bid price of real bidders. This inflation occurs because eBay acts as a ``shill´´ or a ``puff´´ against the current high bidder to artificially inflate a winning bidder's offer when he accedes to eBay's request to increase his maximum bid. Alternatively, this inflation can be seen as an undisclosed fee imposed for the use of eBay's proxy bidding tool."

The complaint continues that eBay's "use of shill bidding serves at least three purposes: First, it creates an artificially inflated price for eBay's primary clients -- large sellers -- and is undertaken on their behalf. Second, as a result of these inflated prices, eBay receives larger transaction fees from these transactions. And third, as a result of these inflated prices, eBay obtains larger transaction fees from its financial subsidiary PayPal."

It further alleges that "eBay's scheme goes beyond the mere inflation of bids, however. eBay also acts as an auctioneer and auction house in California, without complying with the terms of Cal. Civ. Code §§ 1812.600, et seq. eBay's illegal behavior deprives plaintiff, and all those similarly situated, of the specific protections requires of auctioneers and auction house in California, including failing to maintain a bond with the California Secretary of State and failing to post and provide auction terms, among others."

The seven count complaint pleads only state law claims. It seeks injunctive relief for violation of the Auction Act (California Civil Code § 1812.602) and restitutionary relief for violation of the Auction Act (California Civil Code § 1812.603). It also alleges violation of the Auction Act (California Civil Code § 1812.600), violation of the Consumers Legal Remedies Act (California Civil Code § 1750, et seq.), violation of the Unfair Competition Law (California Business and Professions Code § 17200, et seq.), unjust enrichment and common law restitution, and a common law count for money had and received.

See also, Lerach release. This case is Glenn Block v. eBay, Inc., and Does 1-100, Superior Court for the State of California, Santa Clara County, Sup. Ct. No. 105 CV 035930.

2/14. A class action law firm filed a complaint [PDF scan] in Superior Court for San Francisco County against Dell and others alleging violation of California statutes and common law in connection with an alleged bait and switch scheme, and financing practices.

The class action law firm of Lerach Coughlin Stoia Geller Rudman & Robbins filed the complaint. The two named plaintiffs are Rosemary Weber and Jonathan Holtzman. The complaint seeks class action status. The defendants are Dell Inc., Dell Financial Services L.P., and CIT Bank.

The nine count complaint pleads various state common law claims, statutory claims of unlawful, unfair and fraudulent business practices, and statutory claims of false advertising, both with respect to sales practices and financing practices.

The complaint states that "Although Dell promotes itself as a high-tech company with award winning customer service, in reality, Dell uses it high-tech advertising and sophisticated inventory control system to perpetrate unlawful bait and switches on unsuspecting customers. Dell's bait and switch is simply a technology-aided variant of an illegal practice in existence for generations. Dell baits consumers with advertisements for computers and computer products at rock-bottom prices. Then, when the consumer contacts Dell to purchase a Dell product via the internet or telephone, Dell makes the switch, substituting lesser quality components, increasing the purchase price without notice, canceling orders Dell is unwilling to honor, or steering the unsophisticated consumers to other higher priced computer systems which Dell wants to unload, based on inventory control considerations ..."

The complaint adds that "since every consumer purchasing a Dell computer cannot negotiate Dell's terms, Dell also unlawfully and unfairly restricts the consumers' avenues to challenge the bait and switch, if they happen to discover it. Indeed, in order to do business with Dell, a consumer cannot negotiate Dell's terms and conditions of sale, including provisions such as ``[p]ayment terms are within Dell's sole discretion, and, unless otherwise agreed to by Dell, payment must be made at the time of purchase ... Your order is subject to cancellation by Dell, at Dell's sole discretion.´´ Dell's unconscionable contract terms violate California law and are not enforceable against consumers."

The complaint alleges violation of the Consumers Legal Remedies Act (Civil Code § 1750, et seq.), fraud and deceit, and breach of contract. It also alleges violation of Business & Professions Code § 17200, both with respect to sales and advertising.

It also alleges violation of the Business & Professions Code § 17500, et seq., violation of the Unruh Act (Civil Code § 1801 et seq.), violation of the Consumer Legal Remedies Act (Civil Code§ 1750 et seq.), and false advertising in violation of the Business & Professions Code § 17500.

See also, Lerach release. This case is Rosemary Weber and Jonathan Holtzman v. Dell Inc., Dell Financial Services L.P., CIT Bank, and Does 1-100, Superior Court for the State of California, San Francisco County, Sup. Ct. No. CGC 05 438648.

2/23. The Federal Communications Commission (FCC) released an Order and Notice of Proposed Rulemaking [30 pages in PDF] pertaining to universal service fund (USF) payments, access charges, and prepaid calling cards. It orders AT&T to make USF payments and pay access charges on certain prepaid calling cards. It defers decision on related issues by initiating a rulemaking proceeding. AT&T said that it will seek judicial review. See also, FCC release [PDF].

The FCC denied AT&T's May 15, 2003 request for a declaratory ruling that intrastate access charges do not apply to calls made using its prepaid calling cards when the calling card platform is located outside the state in which either the calling or the called party is located. The FCC did not rule on AT&T's November 22, 2004 petition. The FCC issued a notice of proposed rulemaking (NPRM) to consider the classification and jurisdiction of new forms of prepaid calling cards.

The Order and NPRM describes AT&T's prepaid calling card. "AT&T offers what it calls an ``enhanced´´ prepaid calling card service. During call set-up, the customer hears an advertisement from the retailer that sold the card. Only after the advertisement is complete can the customer dial the destination phone number. Other than the communication of the advertising message to the caller, there is no material difference between AT&T’s ``enhanced´´ prepaid calling cards at issue in this Order and other prepaid calling cards." (Footnotes omitted.)

AT&T argued in its 2003 petition that this calling card service is jurisdictionally interstate, and therefore exempt from intrastate access charges. AT&T also argued that this service is an information service, and therefore not subject to universal service subsidy requirements.

The FCC's order states that "We find that the ``enhanced´´ calling card service described in AT&T’s original petition is a telecommunications service as defined by the Act. AT&T offers ``telecommunications´´ because it provides ``transmission, between or among points specified by the user of information of the user's choosing, without change in the form or content of the information as sent and received.´´ And its offering constitutes a ``telecommunications service´´ because it offers ``telecommunications for a fee directly to the public.´´" (Footnote omitted.)

FCC Chairman Michael Powell wrote in a separate statement [PDF] that "Companies cannot engage in misdirection or word games to avoid their universal service obligations. And they certainly cannot unilaterally decide when and where they pay their universal service charges. These payments are the law of land -- and they apply to all calling cards that offer telecommunications services. Today we reject any ambiguity created by these companies’ efforts to duck their universal service responsibilities."

Powell also attacked AT&T for its advertising and Congressional lobbying campaign. He wrote that "AT&T has engaged in a campaign to suggest that consumer rates would rise 20 percent or more if carriers are required to pay their fair share. They have gone so far as to take the extraordinary step of conscripting consumers into a lobbying effort directed at this Commission and members of Congress. Shamelessly, they trumpet the impact of this decision on our soldiers serving in Iraq. What is remarkable about this allegation is that other carriers are offering comparable rates to people serving in the military – some have even offered to donate free service -- without taking funds from our rural universal service program or programs designed to help low-income individuals."

FCC Commissioner Michael Copps wrote in a separate statement [PDF] that "By starting a Notice of Proposed Rulemaking, the Commission suggests that going forward the boundary between calling cards subject to universal service and those that are not is whether they feature an automated voice that coos on the line “press 1 for more information.” There may be a bright line out there between services subject to regulatory authority and those that are not. But I doubt this is it. And by initiating a proceeding based on this distinction, the Commission all but ensures that calling card confusion from the past is perpetuated in the future."

FCC Commissioner Jonathan Adelstein also wrote a separate statement [PDF].

AT&T responded in a release that "We are deeply disappointed in today's decision. In order to reach its desired outcome, the FCC has reversed years of precedent and re-regulated enhanced prepaid calling card services. To justify applying its new requirements retroactively, the FCC would have us believe that it is simply interpreting existing rules. But this is clearly not the case."

AT&T also stated that it "will appeal this decision because it is unfair, legally flawed, and harmful to servicemen and women, rural residents, low-income consumers, senior citizens and others who rely on low-cost prepaid calling cards as one of their primary means of communication."

AT&T added that "despite the Chairman's protestations to the contrary, today's Order does not create a level playing field nor does it result in a legal rule by which all providers of prepaid cards will be required to contribute to universal service and pay access charges. As we pointed out in this proceeding, there are dozens of companies offering prepaid cards that do not appear to be contributing to universal service or paying access charges (given the rates that have been placed in the market) based upon those companies' interpretation of Commission rules. This ruling does nothing to change that. Two years after we sought clarity on the rules to ensure a level playing field in the enhanced prepaid calling card market, the Commission has instead dodged the difficult issues and opened another in its long line of rulemakings. By doing so, this Commission continues its legacy of asking many questions but answering very few."

The U.S. Telecom Association issued a release praising the FCC action.

Sen. Ted Stevens (R-AK), the Chairman of the Senate Commerce Committee, stated in a release that "I am pleased that the FCC voted unanimously to protect the Universal Service Fund."

He praised the FCC "for protecting rural America and the nation’s schools, libraries, and health clinics. It is my understanding that the FCC will undertake a new rulemaking to consider how calling cards will be treated in the future. As this process goes forward, I urge the Commission to consider what can be done to keep calling cards costs low for those serving in our Armed Forces overseas."

Sen. Daniel Inouye (D-HI), the ranking Democrat on the Committee, stated that "While I agree with today's decision by the FCC requiring AT&T's contribution to the Universal Service Fund, I am concerned by reports that its further notice may unwittingly invite the creation of a ‘loophole’ that will allow future communications service providers to avoid their Universal Service obligations. The obligation to contribute to Universal Service should not hinge on whether the customer presses or does not press certain buttons to hear an advertisement. In addition, I agree with Senator Stevens that any additional costs should not fall on the men and women serving us overseas in our Armed Forces. I pledge to work with him to ensure that result."

This order and NPRM is FCC 05-41 in WC Docket No. 03-133 and WC Docket No. 05-68.

2/23. President Bush announced his intent to designate Harvey Rosen to be Chairman of the Council of Economic Advisers (CEA). Rosen is already a Member of the CEA. Before that, he was a professor of economics at Princeton University. See, White House release.

2/23. President Bush announced his intent to name 25 people to the Advisory Committee for Trade Policy and Negotiations. The 25, in alphabetical order, are James Berges (President of Emerson Electric Co.), JoAnn Brouillette (President of Demeter LP, an Indiana agribusiness), Thomas Donohue (P/CEO of the U.S. Chamber of Commerce), former Rep. Calvin Dooley (D-CA), former Rep. Jennifer Dunn (R-WA), Edward Emma (Jockey International, Inc.), John Engler (President of the National Association of Manufacturers), former Rep. William Frenzel (R-MN), Allen Gant, Jr. (P/CEO of Glen Raven, Inc., and Chairman of the National Council of Textile Organizations), Nicholas Giordano (Affinity Group), Terry Growcock (Ch/CEO of Manitowoc Company), Herbert Fisk Johnson, former Rep. Scott Klug (R-WI), Charles Kruse (President of the Missouri Farm Bureau Federation), Larry Liebenow (P/CEO of Quaker Fabric Corp. and former Chairman of the U.S. Chamber of Commerce), Tracy Mullin Moroney, James Winston Morrison (Small Business Exporters Association), Edward Joseph Perkins, Kevin Rollins (CEO of Dell), Lea N. Soupata (UPS), Jose Antonio Villamil (Spanish Broadcasting System), Joseph P. Ward, Wythe Willis Willey (cattle industry), and Wendell L. Willkie, II.

2/23. The U.S. Court of Appeals (8thCir) issued its opinion [18 pages in PDF] in Kemp v. Bumble Bee Seafoods, a dispute between food businesses involving the trademark issues of likelihood of confusion and dilution. The Appeals Court reversed the judgment of the District Court. This case is Louis E. Kemp, et al. v. Bumble Bee Seafoods, Inc., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 02-3797, an appeal from the U.S. District Court for the District of Minnesota.

The House will not meet. It will return from its Presidents Day recess on Tuesday, March 1, at 2:00 PM.

The Senate will not meet. It will return from its Presidents Day recess on Monday, February 28, at 2:00 PM.

10:00 - 11:00 AM. Jeffrey Carlisle, Chief of the Federal Communications Commission's (FCC) Wireline Competition Bureau will hold a news conference. For more information, contact Mark Wigfield at 202 418-0253 or Mark dot Wigfield at fcc dot gov. Location: FCC, Room TW-C488.

10:30 AM. Sen. Arlen Specter (R-PA), the Chairman of the Senate Judiciary Committee, will hold a news conference to discuss the accomplishments and priorities of the Committee. Press contact: Blain Rethmeier at 202 224-5225. Location: Senate Radio/TV Gallery, Capitol Building.

12:15 PM. The Federal Communications Bar Association (FCBA) Young Lawyers Committee will host a brown bag lunch. The topic will be "A Bird's-Eye View of Developments in Satellite Communications". The scheduled speakers include Bill Bailey (XM Radio), Susan Eid (Directv), Jennifer Warren (Lockheed Martin), and a representative of the FCC's International Bureau. For more information, contact Natalie Roisman at natalie.roisman@fcc.gov or 202 418-1655. Location: Mintz Levin, 701 Pennsylvania Ave., NW.

Day two of a two day meeting of the Homeland Security Science and Technology Advisory Committee (HSSTAC). This meeting is closed to the public. See, notice in the Federal Register, January 31, 2005, Vol. 70, No. 19, at Page 4881. Location: Booz Allen Hamilton, Virginia Square Plaza, 3811 Fairfax Drive, Arlington, VA.

12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Practice Committee will host a brown bag lunch on the Federal Communications Commission's (FCC) latest order on remand regarding the unbundling requirements of incumbent local exchange carriers. The speakers will be Tom Navin (Chief of the FCC's Wireline Competition Bureau's Competition Policy Division), Jason Oxman (ALTS), Melissa Newman (Qwest Communications), and Paul Feldman (Fletcher Heald & Hildreth). RSVP to Cecilia Burnett at cmburnett at hhlaw dot com or 202 637-8312. Location: Litigation Center, Hogan & Hartson, 555 13th Street NW. (This is beneath the building's main lobby.)

The National Institute of Standards and Technology's (NIST) Computer Security Division is scheduled to issue its FIPS 201. See, public draft [91 pages in PDF] titled "Federal Information Processing Standard 201 (FIPS 201), Personal Identity Verification for Federal Employees and Contractors".

Effective date of most of the provisions of the Federal Communications Commission (FCC) Second Report and Order and Order on Reconsideration regarding reducing barriers to secondary markets for spectrum rights. See, notice in the Federal Register, December 27, 2004, Vol. 69, No. 247, at Pages 77521 - 77559. The FCC adopted this item at its July 8, 2004 meeting, and released the text [PDF] of this item on September 2, 2004. See, stories titled "FCC Adopts Second Secondary Markets Report and Order" in TLJ Daily E-Mail Alert No. 934, July 9, 2004, and "FCC Releases Second Secondary Markets Report and Order" in TLJ Daily E-Mail Alert No. 969, September 3, 2004. This second report and order is FCC 04-167 in WT Docket No. 00-230.

Deadline to submit comments, and Notices of Intent to Participate, to the Copyright Office in response to its notice of proposed rulemaking (NPRM) regarding a proposed settlement of royalty rates for analog television broadcast stations retransmitted by satellite carriers under statutory license. See, notice in the Federal Register, January 26, 2005, Vol. 70, No. 16, at Pages 3656 - 3658.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding reserve prices or minimum opening bids and other procedures for Auction 61, the auction of of ten Automated Maritime Telecommunications System (AMTS) licenses scheduled to commence on August 3, 2005. See, notice in the Federal Register, February 11, 2005, Vol. 70, No. 28, at Pages 7270-7274.

The Senate will return from its Presidents Day recess at 2:00 PM. It will take up S 256, the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". See, Senate calendar.

2:00 - 3:00 PM. The National Science Foundation (NDF) will host a lecture titled "What's New in Nanoscale Structures: Fluctuations and Entropy". The speaker will be Ellen Williams (Professor of Physics at the University of Maryland). See, NSF schedule of public events. Location: NSF, 4201 Wilson Blvd., Room 375, Arlington, VA.

6:00 - 8:15 PM. The DC Bar Association will host a continuing legal education (CLE) program titled "What You Need to Know About the Digital Millennium Copyright Act and Its Application". The speakers will be Peter Jaszi (American University Washington College of Law), Robert Kasunic (U.S. Copyright Office, invited), Stacey King (Howrey Simon), and Alan Lewine (Litman Law Office, invited). See, notice. Prices vary from $70 to $115. For more information, call 202 626-3488. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

Extended deadline to submit comments to the Internet Corporation for Assigned Names and Numbers (ICANN) regarding its three year Strategic Plan [73 pages in PDF]. See, ICANN's November 16, 2004 notice setting January 15 deadline. See also, ICANN's web page with information about the Strategic Plan.

Deadline for the submission of DART claims for 2004 DART royalty funds to the Copyright Office. See, notice in the Federal Register, November 29, 2004, Vol. 69, No. 228, at Pages 69288 - 69290.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the progress made by the states in implementing E911 solutions for multi-line telephone systems (MLTSs). See, notice in the Federal Register, January 13, 2005, Vol. 70, No. 9, at Pages 2405 - 2406.

Deadline to submit comments to the National Institute of Standards and Technology (NIST) regarding new or revised requirements for Federal Information Processing Standard (FIPS) 140-3, which pertains to security for cryptographic modules that are utilized by federal agencies. See, notice in the Federal Register, January 12, 2005, Vol. 70, No. 8, at Pages 2122 - 2123.

The House will return from its Presidents Day recess at 2:00 PM.

9:30 AM. The Senate Judiciary Committee will hold a hearing on judicial nominations. Press contact: Blain Rethmeier (Specter) at 202 224-5225, or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

2:00 PM. Public Knowledge will hold a news conference regarding the filing of briefs in MGM v. Grokster. The Supreme Court will hear oral argument on March 29. For more information, contact Art Brodsky at 202 518-0020 ext 103. Location: 1875 Connecticut Ave., NW, Suite 650.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Report and Order and Further Notice of Proposed Rulemaking (FNPRM) [54 pages in PDF] regarding the children's programming obligations of digital television broadcasters. This item is FCC 04-221 in MM Docket 00-167. See, story titled "FCC Adopts Report and Order Re Children's Programming Obligations of DTV Broadcasters" in TLJ Daily E-Mail Alert No. 975, September 13, 2004.

Deadline to submit initial comments to the Federal Communications Commission (FCC) to assist it in preparing the report required by Section 208 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). The SHVERA requires the FCC to "complete an inquiry regarding the impact on competition in the multichannel video programming distribution market of the current retransmission consent, network nonduplication, syndicated exclusivity, and sports blackout rules, including the impact of those rules on the ability of rural cable operators to compete with direct broadcast satellite industry in the provision of digital broadcast television signals to consumers. Such report shall include such recommendations for changes in any statutory provisions relating to such rules as the Commission deems appropriate." See, FCC notice [4 pages in PDF]. This Public Notice is DA 05-169. See also, notice in the Federal Register, February 8, 2005, Vol. 70, No. 25, at Pages 6593-6595.

10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "Competition in the Communications Marketplace: How Technology Is Changing the Structure of the Industry". See, notice. The hearing will be webcast by the Committee. Press contact: Jon Tripp (Barton) at 202 225-5735 or Sean Bonyun (Upton) at 202 225-3761. Location: Room 2123, Rayburn Building.

2:00 - 4:00 PM. The Department of State's International Telecommunication Advisory Committee (ITAC) will meet to prepare for the International Telecommunications Union's (ITU) Telecommunication Standardization Advisory Group (TSAG) meeting. See, the ITU's calendar of meetings. See, notice in the Federal Register, December 20, 2004, Vol. 69, No. 243, at Page 76027. For more information, including the location, contact Julian Minard at minardje@state.gov. Location: undisclosed.

Day one of a three convention hosted by the Center for Homeland and Global Security titled "4th Annual Homeland and Global Security Summit". See, notice. Location: Washington Convention Center.

8:30 AM - 4:00 PM. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Manufacturing Research and Development Interagency Working Group (IWG) will hold a one day public forum on manufacturing research and development in nanomanufacturing, manufacturing for the hydrogen economy, and intelligent and integrated manufacturing systems. See, notice in the Federal Register, February 1, 2005, Vol. 70, No. 20, at Page 5181. Location: auditorium, Department of Commerce, 1401 Constitution Ave., NW.

4:00 PM. David Nimmer (Irell & Manella) will present a draft paper titled "Codifying Copyright Comprehensively". See, notice of event. This event is part of the Spring 2005 Intellectual Property Workshop Series sponsored by the Dean Dinwoodey Center for Intellectual Property Studies at the George Washington University Law School (GWULS). For more information, contact Robert Brauneis at 202 994-6138 or rbraun at law dot gwu dot edu. The event is free and open to the public. Location: GWULS, Faculty Conference Center, Burns Building, 5th Floor, 716 20th St., NW.

TIME? There will be a meeting of the Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Committee on Science's Subcommittee on Research Business Methods. The meeting is closed to the public. For more information, contact Megan Columbus at 301 435-0937. Location: undisclosed.

6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "FCBA Biennial Congressional Reception". The price to attend ranges from $25 to $75. See, registration form [PDF]. Location: Room HC-5, Capitol Building.

Day two of a three convention hosted by the Center for Homeland and Global Security titled "4th Annual Homeland and Global Security Summit". See, notice. Location: Washington Convention Center.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding BellSouth's and Sprint's petition for reconsideration of the FCC's schools and libraries Fifth Report and Order. The FCC adopted this 5th R&O at its August 4, 2004 meeting, and released it on August 13, 2004. See, FCC Public Notice (DA 05-103). This 5th R&O is FCC 04-190 in CC Docket No. 02-6.

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