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August 19, 2005, 9:00 AM ET, Alert No. 1,198.
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8th Circuit Addresses District Court's E-Mail Service Failures

8/16. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in American Boat Company v. Unknown Sunken Barge. The underlying action pleads negligence by the U.S. in maintaining navigable rivers. The appeal issue concerns the consequences of incompetence of the District Court in fulfilling its duties to serve papers by e-mail or regular mail. The plaintiff missed the deadline to file an appeal because the District Court neglected to serve its final order on the plaintiff's attorneys. The District Court then denied a motion to extend time. The Court of Appeals reversed.

This case involves a dispute about liability for damage to a barge on the Mississippi River cause by a submerged sunken barge. American Boat Company sued the United States for failure to maintain the navigable channel of the lower Mississippi River. The District Court entered judgment for the U.S. However, the present appeal has nothing to do with collisions with sunken barges. It is about the consequences of the District Court's failure to provide notice by e-mail, or by paper mail, to the parties.

The District Court operates an electronic case filing and case management system. Litigants can register to receive e-mail notice of case filings, in which case they are not entitled to service of paper copies. Alternatively, litigants can receive paper copies. At the relevant time, American Boat's trial counsel had not registered to receive e-mail notice. However, its local counsel, and his secretary, had registered to receive e-mail notice. Counsel for the U.S. were similarly split, with some not electing to receive e-mail service, but some electing the e-mail method.

None of the attorneys for American Boat, or the U.S., who elected to receive paper service, actually received service of the key order. With the one exception of the local U.S. Attorney, the Attorneys for American Boat, and the U.S., who elected to receive e-mail service, did not receive service. That is, the defense counsel, who are adverse to American Boat, corroborated the testimony of the attorneys for American Boat.

Since no one at American Boat knew of the District Court's final order, it did not file a notice of appeal within the 60 day time limit set by Rule 4(a)(1)(B) of the Federal Rules of Appellate Procedure (FRCP) [66 pages in PDF].

When it learned of the final order, from PACER, it filed a motion to reopen the time to file an appeal, which the District Court denied. It then filed a motion for reconsideration, which the court also denied. During the pendency of this motion, some of the attorneys for American Boat registered to receive e-mail service, but still did not receive notices from the District Court. American Boat filed a second motion to reconsider. The evidence in support of these motions included affidavits from attorneys, law office staff, a computer technician, and a network operations director for an internet service provider. The Court received no sworn testimony from the office of the clerk of the court. The Court denied a request for an evidentiary hearing.

Rule 4(a)(6) of the FRAP provides that the District Court may extend the time for filing a notice of appeal. It provides that "The district court may reopen the time to file an appeal for a period of 14 days after the date when its order to reopen is entered, but only if all the following conditions are satisfied:
  (A) the motion is filed within 180 days after the judgment or order is entered or within 7 days after the moving party receives notice of the entry, whichever is earlier;
  (B) the court finds that the moving party was entitled to notice of the entry of the judgment or order sought to be appealed but did not receive the notice from the district court or any party within 21 days after entry; and
  (C) the court finds that no party would be prejudiced.

The District Court relied solely upon a clerk's docket entries. It held that there is a presumption of delivery if the docket entries say so. It held that American Boat is not entitled to an extension of time under Rule 4(a)(6).

However, the docket entries, even if true, did not state that service has been made. Rather, the docket stated that "Notice will be electronically mailed to", and then listed four e-mail addresses. It also stated that "Notice will not be electronically mailed to”, and then listed four names. Both of these entries are written in the future tense. They state that service "will" be made, not that service has been made.

American Boat appealed. The Court of Appeals reversed, and remanded to the District Court for an evidentiary hearing.

The Court of Appeals wrote that "We agree with the district court that a presumption of delivery should apply to e-mails." However, it held that "the appellants have made a sufficient showing to at least be entitled to an evidentiary hearing on the issue of whether they have adequately rebutted the presumption."

The Court noted that proving a negative, such as non-service, is difficult. It wrote that "In cases involving lack of notice, there is often little a party can do except swear he or she did not receive the communication. Here, where several intended recipients, most of whom are officers of the court, all said they did not receive notice, there is enough evidence to warrant an evidentiary hearing on the rebuttal of the presumption of delivery and receipt."

This case is American Boat Company, Inc., et al. v. Unknown Sunken Barge et al., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 04-3388, an appeal from the U.S. District Court for the Eastern District of Missouri, D.C. No. 1:01-cv-21. Judge Melloy wrote the opinion of the Court of Appeals, in which Judges Bright and Murphy joined.

FCC Releases Text Of NOI on Whipsawing

8/15. The Federal Communications Commission (FCC) released the text [PDF] of its Notice of Inquiry (NOI) regarding whipsawing conduct by foreign carriers, including "instances in which foreign carriers used circuit disruptions or threats of circuit disruptions to force U.S. carriers into settlement rate increases".

The NOI states that the current problem concerns the nations of Ecuador, Jamaica and Nicaragua. It states that "Recently, certain foreign carriers of Ecuador, Jamaica and Nicaragua have blocked international phone circuits, in some instances with the alleged support and endorsement of their respective governments and regulators, as a negotiating tactic to obtain higher interconnection rates from U.S. carriers. According to AT&T, U.S.-to-Ecuador mobile terminating traffic has been disrupted since March 2005 because U.S. carriers would not agree to mobile termination rate increases. Nicaraguan carriers began blocking circuits in early December 2004 and maintained the blockage for over three months until the U.S. carriers agreed to pay higher rates. Jamaican carriers began blocking circuits in June 2005 and maintained such blockage until U.S. carriers acceded to the demands of Jamaican carriers." (Footnote omitted.)

The NOI seeks comments on "ways to improve our existing procedures in order to better respond to threats of circuit disruptions and to petitions and complaints submitted by U.S. carriers that allege anticompetitive or ``whipsawing´´ behavior on the part of foreign carriers."

Michael Gallagher, head of the National Telecommunications and Information Administration (NTIA), stated in a release [PDF] that "I commend the FCC for its investigation of foreign carriers who cut circuits to the U.S. Blocking circuits to extract higher rates from U.S. consumers is not acceptable. Circuit blocking is contrary to the best practices of growing digital economies and the expansion of e-commerce."

The FCC adopted this NOI on August 5, 2005. It released it on August 15, 2005. It is FCC 05-152 in IB Docket No. 05-254. Initial comments will be due within 30 days of publication of a notice in the Federal Register. This publication has not yet taken place. Reply comments will be due within 50 days of publication.

FTC Takes Action Against Deceptive Online Marketing of Credit Monitoring Service

8/15. The Federal Trade Commission (FTC) filed a complaint [PDF] in U.S. District Court (CDCal) against Experian Consumer Direct in connection with its unfair and deceptive marketing of a credit monitoring service by offering a free credit report, and then charging consumers' credit cards for the credit monitoring service. The FTC simultaneously settled with the defendant.

The complaint alleges violation of Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45(a), and violation of Section 211 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which is Public Law 108-159. Section 211 amended 15 U.S.C. § 168(j).

The defendant is, Inc., which does business under the names Experian Consumer Direct, QSpace, Inc., and Iplace, Inc. It is represented in this case by the law firms of Jones Day and Hudson Cook.

The settlement agreement states that Experian does not admit liability. Also, Experian stated in a release that it "denies that its sites were ever misleading to consumers".

The complaint alleges that Experian's "advertisements and promotional materials offer consumers the opportunity to obtain a credit report free of charge through Consumerinfo's websites located at,, and other Internet addresses. Consumers who order their free report are automatically enrolled in a credit monitoring service (``Credit Check Monitoring Service´´), a service that allows consumers to access their credit report and determine if inquiries, negative information, public record information, new accounts, or address changes have been added to the consumers' credit files. Consumers who order the free credit report receive a 30-day ``free´´ trial membership in the Credit Check Monitoring Service. If the consumer does not cancel his membership within the trial period, he is charged an annual fee of $79.95 (prior to December 2003) or a monthly fee of $12 (since January 2004). The fee is automatically charged to the consumer's credit or debit card, which the consumer is required to provide to obtain his free credit report, and renews each period without further notice to the consumer or the need for further action on the consumer's part." (Parentheses in original.)

The FTC's complaint further alleges that "Through at least December 2003, none of Consumerinfo's advertisements for the Credit Check Monitoring Service disclosed the $79.95 annual membership fee. Instead, Consumerinfo's advertisements stated that "there's no obligation and no commitment."

It further alleges that "All of Consurnerinfo's Internet advertisements and webpages ultimately link to Consurnerinfo's online order form. The online order form is the only means through which consumers can request the "free" credit reports from Consumerinfo."

The complaint also alleges that Experian collected credit card information, and that "The charge was made to the credit card account numbers that Consumerinfo had assured consumers were needed only to ``establish [their] account.´´" (Brackets in original.)

The complaint concludes that "Many consumers were thus unaware when signing up for their free credit report that they were also automatically signing up for Consumerinfo's Credit Check Monitoring Service, and would incur a $79.95 charge unless they cancelled within 30 days."

The FTC and Experian also jointly filed a Stipulated Final Judgment and Order for Permanent Injunction [PDF]. In this settlement, Experian admits nothing. It requires Experian to change the way it markets its monitoring service. Experian stated in its release that "Many of today's announced changes were completed in September 2003 based on initial discussions and approval by FTC staff."

The settlement agreement does, however, require Experian to make refund payments to certain consumers, and requires Experian to "pay nine hundred and fifty thousand dollars ($950,000) to the Commission".

This case is FTC v., Inc., doing business as Experian Consumer Direct, QSpace, Inc., and Iplace, Inc., U.S. District Court for the Central District of California, D.C. No. SACV05-801 AHS(MLGx).

10th Circuit Construes Removal Provisions of Class Action Fairness Act

8/18. The U.S. Court of Appeals (10thCir) issued its amended opinion [15 pages in PDF] in Pritchett v. Office Depot, another case involving interpretation of the removal provisions of the Class Action Fairness Act (CAFA).

Earlier this year, the Congress enacted the CAFA in response to the large number of meritless class action lawsuits being brought in class action friendly state courts. It allows certain cases, that are "commenced" after February 18, 2005, to be removed to federal court. See, S 5, the "Class Action Fairness Act of 2005", which is now Public Law No. 109-2. See also, story titled "Bush Signs Class Action Reform Bill" in TLJ Daily E-Mail Alert No. 1,080, February 18, 2005.

The present case is a class action, filed in state court in Colorado, in 2003, against Office Depot, alleging violation of Colorado law regarding payment of overtime wages. After February 18, 2005, and just before the beginning of the trial in state court, Office Depot removed the action to the U.S. District Court (DColo). This appeal addresses whether the District Court does have removal jurisdiction under the CAFA.

Office Depot advanced the imaginative argument that its removal of the action commenced an action in the federal court, and that this constitutes an action "commenced" after February 18, 2005, within the meaning of the CAFA. The Court of Appeals rejected this argument.

Office Depot's argument is contrary to the understanding of members of Congress who drafted and voted for the CAFA. Also, this argument, if adopted by the courts, would render the statutory cut off date meaningless. Finally, allowing removal of cases that have advanced to the trial stage, such as this one, would result in litigation chaos.

This case is Romia Pritchett v. Office Depot, Inc., U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 05-0501, an appeal from the U.S. District Court for the District of Colorado. Judge Ebel wrote the opinion of the Court of Appeals, in which Judges O'Brien and McConnell joined.

There was no issue of the TLJ Daily E-Mail Alert on Thursday, August 18, 2005.
Washington Tech Calendar
New items are highlighted in red.
Friday, August 19

The House will not meet on Monday, August 1 through Monday, September 5. See, House calendar and Republican Whip Notice.

The Senate will not meet on Monday, August 1 through Monday, September 5. See, Senate calendar.

The Supreme Court is between terms. The opening conference of its October 2005 Term will be held on September 26, 2005.

Deadline to submit comments in response to, and notices of intent to participate in proceedings on, the Copyright Office's (CO) settlement proposal for the adjustment of certain royalty rates for use of the cable statutory license. See, notice in the Federal Register, July 20, 2005, Vol. 70, No. 138, at Pages 41650 - 41652.

Monday, August 22

Deadline to submit initial comments to the Copyright Office in response to its notice of proposed rulemaking (NPRM) regarding preregistration of unpublished works provision under the Artists' Rights and Theft Prevention Act (ART Act). See, notice in the Federal Register, July 22, 2005, Vol. 70, No. 140, at Pages 42286 - 42292. See also, story titled "Copyright Office Commences Rulemaking on Preregistration of Unpublished Works" in TLJ Daily E-Mail Alert No. 1,181, July 25, 2005.

Deadline to submit comments to the Internal Revenue Service (IRS) in response to its notice of proposed rulemaking (NPRM) regarding the filing of information returns by donees relating to qualified intellectual property contributions. See, notice in the Federal Register, May 23, 2005, Vol. 70, No. 98, at Pages 29460 - 29461.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking (NPRM) regarding changes to the rules of practice to implement the provisions for refunding the search fee for applicants who file a written declaration of express abandonment before an examination has been made of the application. See, notice in the Federal Register, June 21, 2005, Vol. 70, No. 118, at Pages 35571 - 35573.

EXTENDED TO SEPTEMBER 1. Deadline to submit initial comments to the Copyright Office regarding its first report to the Congress required by the Satellite Home Viewer Extension and Reauthorization Act of 2004. See, original notice in the Federal Register, July 7, 2005, Vol. 70, No. 129, at Pages 39343 - 39345. See also, notice extending deadlines in the Federal Register, August 15, 2005, Vol. 70, No. 156, at Page 47857.

EXTENDED TO SEPTEMBER 21. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to it notice of proposed rulemaking (NPRM) regarding low power FM rules. The FCC adopted its order and NPRM on March 16, 2005, and released it on March 17, 2005. It is FCC 05-75 in MM Docket No. 99-25. See, original notice in the Federal Register, July 7, 2005, Vol. 70, No. 129, at Pages 39217 - 39227. See also, FCC notice [PDF] extending the deadlines.

Tuesday, August 23

Time: undisclosed. The Department of Homeland Security's (DHS) Homeland Security Science and Technology Advisory Committee (HSSTAC) will hold a meeting that is closed to the public. See, notice in the Federal Register, August 9, 2005, Vol. 70, No. 152, at Pages 46182 - 46183. Location: undisclosed.

Wednesday, August 24

2:00 - 4:00 PM. The Department of States' (DOS) International Telecommunication Advisory Committee (ITAC) will meet to prepare for ITU-T Study Group 3's Working Party on Charging and Accounting Principles. See, notice in the Federal Register, July 13, 2005, Vol. 70, No. 133, at Page 40414. Location: undisclosed. The DOS states that "Access to these meetings may be arranged by contacting Julian Minard at minardje at state dot gov.

Time: undisclosed. The Department of Homeland Security's (DHS) Homeland Security Science and Technology Advisory Committee (HSSTAC) will hold a second meeting that is closed to the public. See, notice in the Federal Register, August 9, 2005, Vol. 70, No. 152, at Pages 46182 - 46183. Location: undisclosed.

Friday, August 26

Deadline to submit initial comments to the Interim Chief Copyright Royalty Judge in response to the request for further comments regarding rules for the delivery and format of records of use of sound recordings for statutory licenses under 17 U.S.C. § 112 and 17 U.S.C. §114. The Interim Chief Copyright Royalty Judge, on behalf of the Copyright Royalty Board, issued the notice of proposed rulemaking (NPRM) on April 27, 2005. The Board has received comments, which reflected sharp divisions among the parties. It now poses further questions. See, notice in the Federal Register, Vol. 70, No. 143, at Pages 43364 - 43368.

Monday, August 29

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Public Notice [PDF] requesting comments on Continental Airlines' Petition for a Declaratory Ruling regarding the state Massachusetts' attempt to regulate Wi-Fi hotspots. Continental has installed a Wi-Fi hotspot for internet access and telecommunications at its frequent flyer lounge at Boston Logan Airport (Logan). An issue is whether the demands of the Massachusetts Port Authority for removal of the antenna are prohibited under the FCC's Over the Air Reception Devices (OTARD) rules. This public notice is DA 05-2213 in ET Docket No. 05-247.

Federal Circuit Issues Order in Integra v. Merck

8/17. The U.S. Court of Appeals (FedCir) issued an order [PDF] in Integra LifeScience v. Merck. On June 13, 2005, the Supreme Court issued its opinion [17 pages in PDF] vacating the opinion of the U.S. Court of Appeals (FedCir). This is a case regarding the limited statutory exemption to patent infringement, codified at 35 U.S.C. § 271(e)(1), for research using DNA and genetic manipulation techniques.

The Supreme Court issued a short opinion that merely construed the statute, without engaging in any discussion of the common law research exemption, or the policy implications of allowing research exemptions.

On August 17, the Court of Appeals ordered as follows:

"(1) The mandate is hereby recalled and the appeal is reinstated.
(2) The case is returned to the original merits panel.
(3) New briefs shall be filed, with particular attention paid to the Supreme Court decision.
(4) The appellants' principal brief shall be due within 60 days of the date of filing of this order. The dates for filing the remaining briefs shall be in accordance with Fed. Cir. R. 31(a). An original and 22 copies of all briefs shall be filed, and two copies shall be served on opposing counsel. The court sua sponte allows amicus briefs."

See also, story titled "Supreme Court Rules on Research Exemption to Patent Infringement" in TLJ Daily E-Mail Alert No. 1,153, June 14, 2005, and story titled "Supreme Court Takes Case Involving Research Exemption to Patent Infringement" in TLJ Daily E-Mail Alert No. 1,053, January 11, 2005.

People and Appointments

8/18. John Doll was named Commissioner for Patents at the U.S. Patent and Trademark Office (USPTO). He has been acting Commissioner for Patents since April of 2005. He has worked for the USPTO since 1974. Doll was previously Deputy Commissioner for Patent Resources and Planning directing information processing and technology, and budget formulation and execution for patent operations. Before that, he was Special Assistant to the Under Secretary. The USPTO stated in a release that he was "a group director from 1995-2005 in the technology center responsible for examination of biotechnology, organic chemistry, and pharmaceutical patent applications. He was an integral part of the team responsible for last year's implementation of the Image File Wrapper (IFW), the USPTO’s electronic patent application processing system."

8/15. Harold Degenhardt, District Administrator of the Securities and Exchange Commission's (SEC) Fort Worth District Office, will leave the SEC in September to become a partner in the Dallas office of the law firm of Fulbright & Jaworski. See, SEC release.

More News

8/15. The Federal Communications Commission (FCC) released the text [38 pages in PDF] of its Order on Reconsideration (OR) regarding the FCC's band plan, and licensing and service rules, for Advanced Wireless Service (AWS) spectrum in the 1710-1755 MHz and 2110-2155 MHz bands. This OR pertains to spectrum reallocated for use by third generation (3G) wireless services, which are intended to bring broadband internet access to portable and fixed devices. The FCC adopted this OR on August 5, 2005. See, story titled "FCC Adopts Order Amending Service Rules for AWS" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. This OR is FCC 05-149 in WT Docket No. 02-353.

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