8/29. The U.S. Court of Appeals (7thCir) issued its opinion in Autotech Technologies v. Integral Research & Development Corporation, vacating the judgment and writ of execution of the District Court.

The Court of Appeals held that the District Court properly exercised jurisdiction over a claim by a U.S. company against a commercial semiconductor manufacturer that is owned by a foreign government. However, it vacated the judgment against the foreign semiconductor maker on other procedural grounds.

Integral is a semiconductor maker owned by the Belarusian government. Autotech and Integral litigated a dispute ten years ago in U.S. District Court and state court. (Autotech held the exclusive rights to sell Integral products in the U.S., but Integral still sold to third parties.) The parties settled, the District Court incorporated the settlement in an order, and retained jurisdiction. Autotech promptly returned to court asserting contempt for breach of the order.

The court ordered Integral to pay sanctions of $5,000 per day. Integral recently obtained a judgment for over $18 Million for unpaid sanctions. Integral brought the present appeal.

The Court of Appeals vacated the judgment. It first held that the District Court had jurisdiction. It held that Integral does not have immunity under the Foreign Sovereign Immunities Act (FSIA), which is codified 28 U.S.C. §§ 1602-11, because it falls under both the waiver exception, which is codified at 28 U.S.C. § 1605(a)(1), and the commercial activity exception, which is codified at 28 U.S.C. § 1605(a)(2).

The Court of Appeals further rejected the argument that the FSIA does not authorize federal district courts to enter monetary contempt sanctions against foreign sovereigns.

However, the Court of Appeals vacated because of flaws in service, the lack of specificity of the property to be covered by the writ of execution, and the lack of evidence supporting the finding of contempt and the amount of the judgment.

This case is Autotech Technologies L.P. v. Integral Research & Development Corporation, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 06-1718, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 96 C 3193, Judge David Coar presiding. Judge Wood wrote the opinion of the Court of Appeals, in which Judge Kane and Williams joined.

8/29. The U.S. Court of Appeals (6thCir) issued its opinion [6 pages in PDF] in American Telecom v. Republic of Lebanon, affirming the judgment of the District Court the a U.S. District Court lacked jurisdiction over the government of Lebanon in a telecom dispute.

American Telecom (AT) was a bidder for a contract to manage cellular telephone networks in Lebanon. The government of Lebanon disqualified it, and awarded contracts to other companies.

AT then filed a complaint in U.S. District Court (EDMich) alleging breach of contract, fraud, promissory estoppel, and breach of quasi contract. AT obtained service, Lebanon did not answer, and AT obtained a default judgment. Lebanon then moved to set aside the judgment for lack of jurisdiction. The District Court set aside the judgment. AT brought this appeal.

The Court of Appeals affirmed. It held that the government of Lebanon is immune under the Foreign Sovereign Immunities Act (FSIA), which is codified 28 U.S.C. §§ 1602-11. Moreover, this case does not fall under the commercial activity exception, which is codified at 28 U.S.C. § 1605(a)(2).

This subsection provides that "A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case ... in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States".

The Court of Appeals reasoned that bidding for the cellular telephone management contract was a commercial activity, and that it occurred outside of the U.S., so the issue is whether it caused a "direct effect" in the U.S. within the meaning of Subsection 1605(a)(2). It concluded that there was no direct effect.

This was only a bidding process, it occurred abroad, and had AT been awarded a contract it would have been required to form a Lebanese company and deposit all revenues into a Lebanese bank account. The Court of Appeals wrote that "Therefore, we hold that the mere act of including an American company in or excluding an American company from the process of bidding on a contract, where both parties' performance is to occur entirely in a foreign locale, does not, standing alone, produce an immediate consequence in the United States, and therefore, does not ``cause a direct effect in the United States´´ for purposes of 29 U.S.C. § 1605(a)(2)."

This case is American Telecom Company, LLC and American Telecom Group-USA, LLC v. Republic of Lebanon, U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 05-2408, an appeal from the U.S. District Court for the Eastern District of Michigan, at Detroit, D.C. No. 04-72596, Judge Nancy Edmonds presiding. Judge Batchelder wrote the opinion of the Court of Appeals, in which Judges Ryan and Sutton joined.

8/28. The Securities and Exchange Commission (SEC) filed a civil complaint [13 pages in PDF] in U.S. District Court (NDCal) against Juniper Networks that charges violation of Section 10b of the Securities Exchange Act of 1934 and other federal securities laws in connection with Juniper's alleged backdating of employee stock option grants and failing to properly disclose and account for its true compensation expenses.

The SEC announced that it simultaneously settled with Juniper. It stated in a release that "Without admitting or denying the allegations, Juniper has consented to a permanent injunction against violations of the antifraud and other provisions of the federal securities laws." See also, Juniper release.

Juniper is a Sunnyvale, California, based company that that sells Internet Protocol networking solutions.

This case is SEC v. Juniper Networks, Inc., U.S. District Court for the Northern District of California, San Jose Division, D.C. No. C 07 4430 JW RS.

The SEC filed a second civil complaint [22 pages in PDF] in the same court against Lisa Berry, a former General Counsel of Juniper Networks and KLA-Tencor Corporation that also charges violation of Section 10b and other federal securities law in connection with backdating of stock options.

This case is SEC v. Lisa Berry, U.S. District Court for the Northern District of California, San Jose Division, D.C. No. C 07 4430 RMW HRL.

KLA-Tencor is a San Jose, California, based company that makes semiconductor equipment. The SEC release added that KLA-Tencor "previously settled charges brought by the Commission."

8/28. The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins announced in a release that William Lerach "is retiring from the law firm ... as of August 31st." The new firm will be known as Coughlin Stoia Geller Rudman & Robbins.

Lerach, who was previously a partner in a predecessor Milberg Weiss law firm, was a leading class action litigator who brought many class action securities cases against information technology and communications companies.

Some in the tech sector who have advocated legislative and judicial reform of class action litigation procedure have viewed him as a personification of the deficiencies of the class action system.

Former Rep. Rick White (R-WA) once recited a poem about Lerach during debate at a mark up of the Securities Litigation Uniform Standards Act (SLUSA) in 1998. See, story titled "House Subcommittee Approves Securities Litigation Reform Bill", Tech Law Journal, June 11, 1998.

Last month, David Bershad, a former partner of Lerach, agreed to plead guilty in a criminal action arising out of the payment of kickbacks to named plaintiffs in class action lawsuits filed by law firm of Milberg Weiss Bershad & Schulman (MWBS). Moreover, Bershad agreed to cooperate with prosecutors.

See, story titled "Bershad Agrees to Cooperate with Prosecutors" in TLJ Daily E-Mail Alert No. 1,607, July 9, 2007. 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 firm added in its August 28 release that "For the past seven years, Lerach's name has been associated with an ongoing investigation by the United States Attorney’s Office into allegations of improper payments to clients by the Milberg Weiss law firm. Lerach noted that stepping aside from the daily practice of law will allow him to focus his time and energy on this matter, and allow the firm to move forward with its work."

Lerach stated in this release that "I have appreciated the opportunity to fight for the victims of corporate fraud; however, I realize that my success has made me a target ... These allegations have proven to be personally time-consuming, and I have decided to focus single-mindedly on putting the matter behind me once and for all."

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Notices & Disclaimers
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The House will not meet due to the August District Work Period. See, House 2007 calendar. The House will next meet at 2:00 PM on September 4, 2007.

The Senate will not meet due to the August District Work Period. The Senate will next meet at 1:00 PM on September 4. See, Senate 2007 calendar.

Day two of a three day conference hosted by the National Institute of Standards and Technology's (NIST) titled "Performance Metrics for Intelligent Systems (PerMIS) Workshop". See, notice. Location: Courtyard Gaithersburg Washingtonian Center, 204 Boardwalk Place, Gaithersburg, MD.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding rule changes related to the DTV transition. The FCC adopted this NPRM on April 25, 2007, and released the text [93 pages in PDF] on May 18, 2007. It is FCC 07-70 in MB Docket No. 07-91. See, notice in the Federal Register, July 9, 2007, Vol. 72, No. 130, at Pages 37309-37344, and Public Notice [PDF] (DA 07-3518) extending deadlines.

1:00 PM. The U.S. Chamber of Commerce will host an event titled "press briefing on the upcoming Asia-Pacific Economic Cooperation (APEC) meetings and the broader trade agenda". Press contact: press at uschamber dot com or 202-463-5682. Location: U.S. Chamber, 1615 H St., NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response its Public Notice [32 pages in PDF] regarding the competitive bidding procedures for the 700 MHz band auction. The FCC released the Public Notice on August 17, 2007. It is DA 07-3415 in AU Docket No. 07-157. This auction is Auction No. 73. It is scheduled to commence on January 16, 2008. See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48272-48285. See also, story titled "FCC Adopts 700 MHz Band Order" in TLJ Daily E-Mail Alert No. 1,619, July 31, 2007, and story titled "FCC Sets Date for 700 MHz Auction" in TLJ Daily E-Mail Alert No. 1,624, August, 20, 2007.

Deadline to submit Form 477, titled "Local Telephone Competition and Broadband Reporting", to the Federal Communications Commission (FCC). See, Form 477 [MS Excel] and FCC document [17 pages in PDF] titled "Instructions for Local Telephone Competition and Broadband Reporting Form (FCC Form 477)".

Deadline to submit nominations to the U.S. Patent and Trademark Office (USPTO) for membership on the Patent Public Advisory Committee (PPAC) or Trademark Public Advisory Committee (TPAC). See, notice in the Federal Register, June 20, 2007, Vol. 72, No. 118, at Pages 33981-33982.

Labor Day. The Federal Communications Commission (FCC) and other federal offices will be closed. See, Office of Personnel Management's (OPM) list of federal holidays and 5 U.S.C. § 6103. The National Press Club will be closed.

5:00 PM. Deadline to submit prepared testimony to the Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Deemed Export Advisory Committee (DEAC) for the DEAC's meeting of September 10, 2007. See, notice in the Federal Register, August 16, 2007, Vol. 72, No. 158, at Page 46035.

The House will return from its August recess at 2:00 PM. See, House 2007 calendar.

The Senate will return from its August recess at 1:00 PM. It will begin consideration of HR 2642 [LOC | WW], the Military Construction and Veterans Affairs Appropriations bill, Fiscal Year 2008. See, Senate 2007 calendar.

9:00 AM - 5:00 PM. Day one of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). Section 508 of the Rehabilitation Act of 1973, as amended, provides at 29 U.S.C. § 794d that each federal agency "developing, procuring, maintaining, or using electronic and information technology" must provide comparable access to disabled federal employees, and to disabled members of the public who have access to and use of information and data of that agency; it further provides that each agency must comply with disability access regulations written by the ATBCB. See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48252-48253. For more information, contact Timothy Creagan at 202-272-0016 or creagan at access dash board dot gov. Location: National Science Foundation, Room 555, 4121 Wilson Boulevard, Stafford Place II, Arlington, VA.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Maurice Mitchell Innovations LP v. Intel Corporation, App. Ct. No. 2007-1108, an appeal from the U.S. District Court (EDTex), D.C. No. 2:04-CV-450, a patent case. Location: Courtroom 201, 717 Madison Place, NW.

Deadline to submit comments to the Copyright Office (CO) regarding it interim rules pertaining to online registration of claims to copyright and recording of documents pertaining to copyright. See, notice in the Federal Register, July 6, 2007, Vol. 72, No. 129, at Pages 36883-36889.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding whether to license Vehicle-Mounted Earth Stations as an application of the Fixed-Satellite Service in the conventional and extended Ku-band frequencies. The FCC adopted this NPRM on May 9, 2007 and released the text on May 15, 2007. This item is FCC 07-86 in IB Docket No. 07-101. See, notice in the Federal Register, July 18, 2007, Vol. 72, No. 137, at Pages 39357-39370.

EXTENDED TO SEPTEMBER 11. Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding Section 612 of the Communications Act, which is codified at 47 U.S.C. § 532, which requires cable operators to set aside channel capacity for commercial use by video programmers unaffiliated with the operator, and Section 616 of the Communications Act, which is codified at 47 U.S.C. § 536, which prohibits a cable operator or other multichannel video programming distributor (MVPD) from requiring a financial interest in any program service as a condition for carriage of such service, from coercing a programmer to grant exclusive carriage rights, or from engaging in conduct that unreasonably restrains the ability of an unaffiliated programming vendor to compete fairly by discriminating against such vendor on the basis of affiliation or nonaffiliation. The FCC adopted this item on March 2, 2007, and released the text on June 15, 2007. This NPRM is FCC 07-18 in MB Docket No. 07-42. See, notice in the Federal Register, July 18, 2007, Vol. 72, No. 137, at Pages 39370-39377. See also, Public Notice [PDF] (DA 07-3736) extending comment deadlines.

Deadline to submit comments to the Department of Agriculture's Rural Utilities Service (RUS) regarding its proposed changes to its rules governing its Community Connect Broadband Grant Program. See, notice in the Federal Register, August 3, 2007, Vol. 72, No. 149, at Page 43199.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Digeo, Inc. v. Audible, Inc., App. Ct. No. 2007-1133, an appeal from the U.S. District Court (WDWash), D.C. No. C05-464JLR, a patent case involving digital music. Location: Courtroom 201, 717 Madison Place, NW.

10:15 AM. The House Judiciary Committee (HJC) will hold a hearing titled "Hearing on Warrantless Surveillance and the Foreign Intelligence Surveillance Act: The Role of Checks and Balances in Protecting Americans’ Privacy Rights". See, notice. Location: Room 2141, Rayburn Building.

Federal Communications Commission's (FCC) self imposed deadline to conclude its rulemaking and release an order in its video franchising proceeding. See, Report and Order and Further Notice of Proposed Rulemaking [109 pages in PDF], at ¶ 140. This item is FCC 06-180 in MB Docket 05-311. This FNPRM pertains to extending the requirements of the order to incumbent cable operators.

9:00 AM - 5:00 PM. Day two of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48252-48253. For more information, contact Timothy Creagan at 202-272-0016 or creagan at access dash board dot gov. Location: National Science Foundation, Room 555, 4121 Wilson Boulevard, Stafford Place II, Arlington, VA.

8:30 AM - 5:15 PM. Day one of a two day meeting of the Department of Commerce's (DOC) National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). The agenda includes "Computer Security Division (CSD) Update", "NIST Metrics Projects Briefing", "NIST Research Priorities for the Future", "Best Practices in Security at NSA", "Telecommuting Security Issues", "OMB Privacy Update", "Privacy Technology Update", and "ISPAB Work Plan". See, notice in the Federal Register, August 24, 2007, Vol. 72, No. 164, at Page 48619. Location: Room 400, George Washington University Cafritz Conference Center, 800 21st St., NW.

9:30 AM. The U.S. International Trade Commission (USITC) will hold a hearing in its proceeding titled "China: Description of Selected Government Practices and Policies Affecting Decision-making in the Economy". This is Investigation No. 332-492. See, USITC release. Press contact: Peg O'Laughlin at 202-205-1819. Location: USITC, Main Hearing Room, 500 E St., SW.

10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of S 1845 [LOC | WW], an untitled bill that would limit communications between the staffs of the White House and the Department of Justice (DOJ). The agenda also includes consideration of Richard Jones to be a Judge of the U.S. District Court for the Western District of Washington. It also includes consideration of Jennifer Elrod to be a Judge of the U.S. Court of Appeals for the 5th Circuit. The SJC frequently fails to obtain a quorum for its meetings. The SJC rarely follows the agendas for its meetings. Location: Room 226, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Elbex Video, Ltd. v. Sensormatic Electronics Corp., App. Ct. No. 2007-1097, an appeal from the U.S. District Court (SDNY). Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Research Corporation Technologies, Inc. v. Microsoft Corporation, App. Ct. No. 2006-1275, an appeal from the U.S. District Court (DAriz). Location: Courtroom 203, 717 Madison Place, NW.

9:00 AM - 5:00 PM. Day three of a three day meeting of the Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC). See, notice in the Federal Register, August 23, 2007, Vol. 72, No. 163, at Pages 48252-48253. For more information, contact Timothy Creagan at 202-272-0016 or creagan at access dash board dot gov. Location: National Science Foundation, Room 555, 4121 Wilson Boulevard, Stafford Place II, Arlington, VA.

Deadline to submit comments to the Department of Education (DOE) regarding its notice of proposed rulemaking (NPRM) regarding its regulations for the Academic Competitiveness Grant (ACG) and National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) programs. See, notice in the Federal Register, August 7, 2007, Vol. 72, No. 151, at Pages 44050-44065.