8/29. Susan Schwab, the U.S. Trade Representative (USTR), gave a speech in Beijing, People's Republic of China, in which she discussed Doha round trade talks, China's role in these talks, China's compliance with its World Trade Organization (WTO) obligations, the possibility of more WTO enforcement actions against China, and growing protectionism in the US Congress and around the world.

Schwab (at right) said that "There are dozens of bills in the U.S. Congress proposed by members who want us to ``get tough´´ or ``stand up to China.´´ Many of these bills would not create or save a single American job. In fact, some would both kill jobs and limit consumers' choices as prices increase. Still, these Members of Congress reflect the very real concerns of many Americans about the impact of China's dramatic entry into the trading system. Responsible actions and leadership by China can help allay those concerns. Certainly, economic isolationism and protectionism are not the answer."

In addition, she warned that "a failed Doha Round could foster greater protectionism around the world."

She spoke at length about Doha trade talks. "The breakdown of the Doha Round trade talks late last month was a major disappointment for all who believe in the power of trade to promote economic development, to expand opportunities and to facilitate cooperation among nations. Indeed, the Doha Round is our generation's best opportunity to lift millions of people out of poverty and to raise living standards for millions more."

She stated that "President Bush has directed me to continue our collective quest for an ambitious, robust and balanced agreement that meets the objectives that WTO members adopted as part of the Doha Development Agenda."

"The Doha Round is also an important reason why I am in China today", said Schwab. "It is my strong hope that China will carry out a clear-eyed assessment of the costs and benefits of a successful Doha Round and conclude that it is in China’s long-term self-interest to play an active role in ensuring the Round’s ultimate success. And that ultimate success requires an outcome that truly opens markets and generates new trade flows."

She also addressed "China’s failure to honor certain commitments, including its failure to adequately enforce intellectual property rights, its efforts to protect and support certain domestic industries, and its delay in fulfilling certain market opening obligations."

She elaborated that "We are discussing additional WTO-related concerns with China related to IPR enforcement and subsidies, and are closely monitoring China’s fulfillment of commitments in other areas as well, including in financial services."

She said that "We do not enjoy bringing WTO enforcement cases", but that "when good faith dialogue does not yield positive results, we cannot stand by and allow commitments to go unobserved. We will use the dispute settlement mechanisms available to us."

She added that "Legal action should not be seen as a hostile act. Dispute settlement provides an objective means for trade partners to resolve disputes that otherwise might fester and color the entire trade relationship. It also provides helpful leverage to government agencies that are trying to convince other agencies within their own government to abide by WTO rules. Indeed, the entire global trading system benefits from fair and rational options for resolving differences."

She argued that "If the Doha Round is unsuccessful, it will be tempting for countries to rely on litigation rather than negotiation to achieve new market opportunities. In such a scenario, China's commerce could be particularly vulnerable to legal challenges over its compliance with global trade rules."

9/29. The Office of the Solicitor General (OSG) filed an amicus brief in Bell Atlantic v. Twombly, a case involving the pleading requirements for an action under Section 1 of the Sherman Act against regional bell operating companies (RBOCs). The OSG urges reversal.

The legal is issue is whether a complaint that alleges parallel or similar behavior, and conspiracy to limit competition, but includes no allegations in support other than the similar or parallel conduct, is sufficient to survive a motion to dismiss.

The class action law firm of Milberg Weiss Bershad & Schulman filed the complaint in U.S. District Court (SDNY) against Bell Atlantic and three other RBOCs. The lead named plaintiff is Twombly. See also, story titled "Milberg Weiss Indicted for Paying Illegal Kickbacks to Class Action Plaintiffs" in TLJ Daily E-Mail Alert No. 1,375, May 22, 2006. The District Court dismissed the complaint for failure to state a claim. The U.S. Court of Appeals (2ndCir) vacated and remanded. See, October 3, 2005, opinion [43 pages in PDF] and story titled "2nd Circuit Vacates in Twombly v. Bell Atlantic" in TLJ Daily E-Mail Alert No. 1,226, October 4, 2005.

The Supreme Court granted certiorari in June. See, story titled "Supreme Court Grants Cert in Bell Atlantic v. Twombly" in TLJ Daily E-Mail Alert No. 1,399, June 26, 2006.

Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1, provides, in part, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished ..."

The OSG argued that "The Federal Rules of Civil Procedure provide that a complaint must set forth a claim showing that the plaintiff is entitled to relief, and require that the complaint provide fair notice to the defendant of the nature of the plaintiff's claim and the grounds upon which the claim is based. To meet those criteria, a complaint must allege, at a minimum, a sufficient factual predicate to provide meaningful notice to the defendant and to demonstrate a reasonable basis for inferring that the alleged conduct may be wrongful."

The OSG continued that principles governing pleadings "demand more than mere allegations of parallel conduct and conclusory allegations of an agreement or conspiracy in the context of a complex antitrust suit. To be sure, evidence of parallel conduct may at times provide important circumstantial evidence supporting an inference of agreement in a suit alleging a violation of Section 1 of the Sherman Act. But parallel conduct is to be expected even in fully competitive markets and, standing alone, provides an insufficient basis for inferring an illegal agreement."

Moreover, the OSG wrote, "a conclusory assertion of a conspiracy or agreement does not suffice to convert allegations of parallel conduct into a sufficient claim of a Section 1 violation. Because an agreement is the critical factor distinguishing innocuous parallel conduct from a Section 1 violation, courts must insist on more than mere conclusory allegations of that element. The court of appeals' standard -- which would appear to require nothing more than allegations of parallel conduct and a conclusory allegation of conspiracy -- is clearly insufficient."

This case is Bell Atlantic Corporation, et al. v. William Twombly, et al., Sup. Ct. No. 05-1126, a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 03-9213. Judge Sack wrote the opinion of the Court of Appeals, in which Judges Raggi and Hall joined. The Court of Appeals heard an appeal from the U.S. District Court for the Southern District of New York, Judge Gerald Lynch presiding.

See also, Supreme Court docket.

Bell Atlantic and the other petitioners are represented by Michael Kellogg of the Washington DC law firm of Kellogg Huber.

8/29. President Bush announced his intent to nominate Robert Howard to be Assistant Secretary of Veterans Affairs (Information and Technology). See, White House release.

The House will next meet at 2:00 PM on Wednesday, September 6. See, Republican Whip Notice.

The Senate will next meet at 11:00 AM on Tuesday, September 5.

Deadline to submit comments to the Internal Revenue Service (IRS) in response to its notice of proposed rule making pertaining to the application of 26 U.S.C. § 199, which provides a deduction for income attributable to domestic production activities, to certain transactions involving computer software. See, notice in the Federal Register, June 1, 2006, Vol. 71, No. 105, at Pages 31128-31129.

11:00 AM. The Cato Institute will host a panel discussion titled "Prospects for Reform of U.S. Agricultural Policy --With or without Doha". The speakers will include Mike Johanns (Secretary of Agriculture), former Rep. Cal Dooley (D-CA) (head of the Food Products Association), and Robert Thompson (University of Illinois). See, notice and registration page. The event will be webcast by Cato. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its draft [ZIP] of Special Publication (SP) 800-69, titled "Guidance for Securing Microsoft Windows XP Home Edition: A NIST Security Configuration Checklist. See also, summary. This document provides guidance to telecommuting employees and those who maintain home offices and use Windows XP Home Edition.

Effective date of the Federal Trade Commission's (FTC) final rule amending Section 310.8 of its Telemarketing Sales Rule (TSR) by revising the fees charged to entities for accessing the National Do Not Call Registry. See, notice in the Federal Register, July 31, 2006, Vol. 71, No. 146, at Pages 43048-43054.

Deadline to submit initial comments to the Federal Communications Commission (FCC) for its 2006 biennial review of telecommunications regulations. See, FCC notice [10 pages in PDF] and notice in the Federal Register, August 23, 2006, Vol. 71, No. 163, at Pages 49400-49401. This is CG Docket No. 06-152, EB Docket No. 06-153, IB Docket No. 06-154, ET Docket No. 06-155, WT Docket No. 06-156, WC Docket No. 06-157, and FCC 06-115.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the initial regulatory flexibility analysis of the FCC's Second Further Notice of Proposed Rule Making in its proceeding titled "In the Matter of Children's Television Obligations of Digital Television Broadcasters" and numbered MM Docket No. 00-167. See, notice in the Federal Register, August 25, 2006, Vol. 71, No. 165, at Pages 50380-50382.

Labor Day.

There will be no issue of the TLJ Daily E-Mail Alert.

The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays.

The Senate will return from its August recess at 11:00 AM. It will resume consideration of HR 5631, the Department of Defense FY 2007 appropriations bill. See, 2006 Senate calendar.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Business Objects v. Microstrategy, App. Ct. No. 05-1540. Location: Courtroom 201, 717 Madison Place, NW.

1:00 - 3:00 PM. The U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office (CO) will hold a public roundtable discussion regarding World Intellectual Property Organization's (WIPO) Standing Committee on Copyright and Related Rights' (SCCR) work on a proposed Treaty On the Protection of the Rights of Broadcasting Organizations. See, notice in the Federal Register, August 17, 2006, Vol. 71, No. 159, at Page 47489. Location: Atrium Conference Room, USPTO, 600 Dulany Street, Madison West, 10th Floor, Alexandria, VA.

Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding whether major beneficiaries of the Generalized System of Preferences (GSP) program have expanded exports or have progressed in their economic development within the meaning of the statute to the extent that their eligibility should be limited, suspended, or withdrawn, pursuant to section 502(d) of the Trade Act of 1974, which is codified at 19 U.S.C. § 2462(d). See, notice in the Federal Register, August 8, 2006, Vol. 71, No. 152, at Pages 45079-45080.

The House will return from its August recess.

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