|Supreme Court Affirms in Sprint v. APCC
6/23. The Supreme Court issued its
opinion [51 pages in
PDF] in Sprint v. APCC Services, holding that the assignee of a legal claim for
money owed has standing to pursue that claim in federal court, even when the assignee has
promised to remit the proceeds of the litigation to the assignor.
The Supreme Court wrote that "When a payphone customer makes a long-distance call with
an access code or 1–800 number issued by a long-distance communications carrier, the customer
pays the carrier (which completes that call), but not the payphone operator (which connects
that call to the carrier in the first place). In these circumstances, the long-distance carrier
is required to compensate the payphone operator for the customer’s call." (Parentheses in
When the long distance carrier fails to pay the payphone operator, direct
litigation is inefficient, so many payphone operators assign these claims to
billing and collection firms called aggregators, who sue on their behalf.
In the present proceeding, payphone claim aggregators filed complaints in
U.S. District Courts against Sprint, AT&T and other carriers. These carriers
asserted that the plaintiff aggregators lack standing to sue because of pass
Ultimately, the lower courts allowed the litigation to proceed. And now, in a
5-4 opinion, the Supreme Court has affirmed.
Justice Breyer wrote the opinion of the Court. Chief Justice Roberts wrote a
long dissent, joined by Justices Thomas, Alito, and Scalia. He argued that
because of the pass back provision, the aggregators have no stake in the outcome
of the litigation, and hence, no standing to sue.
This case is Sprint Communications, Co. L.P., et al. v. APCC Services, Inc.,
et al., Supreme Court of the U.S., Sup. Ct. No. 07–552, a petition for writ
of certiorari to the U.S. Court of Appeals for the District of Columbia.
|IG Report Finds DOJ Engaged in
Political and Ideological Hiring Practices
6/24. The Department of Justice's (DOJ) Office of the
Inspector General (OIG) released a
report [115 pages
in PDF] titled "An Investigation of Allegations of Politicized Hiring in the
Department of Justice Honors Program and Summer Law Intern Program".
It finds that "Under the system implemented by the Attorney General’s Working Group
beginning in 2002, a Screening Committee composed primarily of politically appointed employees
from the Department’s leadership offices had to approve all Honors Program and SLIP candidates
for interviews by the components."
It continues that "The data showed that candidates with Democratic Party and liberal
affiliations apparent on their applications were deselected at a significantly higher rate
than candidates with Republican Party, conservative, or neutral affiliations."
The report states that there is evidence of political and
ideological decision making in 2002, and again in 2006, but not in the
years in between. It adds that the problem has since been addressed.
It adds that all committee members denied that they intentionally considered political
or ideological affiliations in making their deselections.
The report identifies two members of the committee by name,
Esther Slater McDonald and Michael Elston. It states that "McDonald wrote
disparaging statements about candidates' liberal and Democratic Party
affiliations on the applications she reviewed and that she voted to deselect
candidates on that basis", and that Elston "failed to take appropriate action
when he learned that McDonald was" doing this.
The report concludes that "McDonald's and Elston's conduct constituted misconduct
and also violated the Department's policies and civil service law that prohibit discrimination
in hiring based on political or ideological affiliations." However, it adds that since
neither is still working for the DOJ, neither is subject to discipline.
The report adds that "With regard to the
processes used by components for selecting candidates, we received significant
allegations that inappropriate considerations were used in selecting candidates
in the Civil Rights Division. The OIG and OPR are jointly investigating various
allegations involving the Civil Rights Division, and we will provide our
findings in a separate report when that investigation is concluded."
The report classified as liberal such groups as the ACLU and the NOW. It classified as
conservative such groups as the Federalist Society and the Heritage Foundation.
The report also classified as liberal two groups that focus on technology issues: the
Electronic Privacy Information Center (EPIC) and the
Electronic Frontier Foundation (EFF).
Sen. Patrick Leahy (D-VT), Chairman of the
Senate Judiciary Committee (SJC), stated in a
release that "The
Department of Justice is not the president’s legal defense team. It houses our nation's top
law enforcement officers, and it has been crippled in the last seven years."
The report praises former Assistant Attorney General (AAG) Peter Keisler for objecting
"to the apparent use of political or ideological considerations in the hiring process".
He was AAG in charge of the large Civil Division. President Bush nominated him to be a Judge
of the U.S. Court of Appeals for the District of Columbia two years ago, and renominated him
at the beginning of the 110th Congress. However, Senate Democrats have stalled consideration
of his nomination, for political and ideological reasons.
|4th Circuit Declines to Extend Public
Forum Doctrine in Cyberspace Case
6/23. The U.S. Court of Appeals (4thCir) issued
its opinion [19
pages in PDF] in Page v. Lexington County, affirming the District
Court's summary judgment for Lexington County. This is a First Amendment free
speech case involving the public forum doctrine. The Court of Appeals declined
to extend a Constitutional doctrine that has long applied to speech in brick and
mortar public fora in a case involving a government e-mail system.
Introduction. The public forum doctrine is the principle that the government cannot
deny people access to public property and facilities for the purpose of engaging in
constitutionally protected speech if that property is either a traditional forum for speech
and assembly, or if the government has opened up that property to the speech of others.
In the present case, a local government entity engaged in a grass roots lobbying campaign
to try to influence the state legislature on a particular bill. It used a publicly funded and
owned e-mail system to send political messages to the general public. It also opened its
e-mail system to the speech of one side in the public debate over the pending bill, while
keeping it closed to the other side. The allowed speech was public to public in the sense
that it included pieces written by non-government persons, and was sent to the general public.
The other side sought access to the government e-mail system, and when rejected, filed a
complaint in federal court.
The District Court, and now the Court of Appeals, held that the excluded group does not
have access under the public forum doctrine because this case falls under a "government
This opinion relies on no opinion that is directly on point. This opinion
ignores Supreme Court precedent on point, and dissembles with some other Supreme Court cases.
While the government facilities in this case include print and ink newsletters, a web
site, and an e-mail system, this article focuses on the e-mail system.
Background. The plaintiff in the District Court, and appellant before the Court of
Appeals, is Randall Page, a resident of Lexington County in the state of South Carolina. He
supported a bill pending in the state legislature titled the "Put Parents in Charge
Act". The Court of Appeals wrote that this bill "proposed tax credits for private
and parochial school tuition and home-schooling expenses".
The defendant and appellee is the Lexington County School District One, a political
subdivision of South Carolina. Its Board of Directors, and various public school groups,
opposed the bill.
The school district maintains a web site, e-mail system, and e-mail distribution lists. It
also publishes paper and ink newsletters.
The school district used these facilities to express its opposition to the
bill. In addition, it published and sent the speech of third parties not
affiliated with the school district. This speech was available to, and
delivered to, "the public at large".
This included e-mail messages that "included information written by third parties",
including "opinion pieces". The Court of Appeals opinion also states that "The
principals of two schools" published a third party article "in their newsletters
that were sent home to students and parents."
However, the school district only published and sent its own speech, and the speech of
its supporters. It refused to publish or send the speech of its opponents. The Court wrote
that "The School District agrees that it denied Page access to the channels of
communication that it used to disseminate its opposition to the bill".
Page filed a complaint in U.S. District Court
(DSCar) against the Lexington County School District One alleging violation of 42 U.S.C.
§ 1983, asserting violation of his First Amendment free speech rights.
The District Court granted summary judgment to the school district. See,
Opinion and Order [39
pages in PDF]. Page brought the present appeal. Various groups that represent school boards
amicus curiae brief [34 pages in PDF] in support of the the school district.
Constitution and Statutes. The First Amendment provides, in part, that "Congress
shall make no law ... abridging the freedom of speech, or of the press, or the right of the
people to peaceably assemble ..."
The 14th Amendment was ratified in 1868. It provides, in part, "nor shall any State
deprive any person of life, liberty, or property, without due process of law". The Supreme
Court has long held that this clause incorporates the First Amendment protections. That is,
states and their political subdivisions are also restricted by the First Amendment speech or
press and assembly clauses.
42 U.S.C. § 1983 provides, in part, that "Every person who, under color of any
statute, ordinance, regulation, custom, or usage, of any State or Territory ... subjects, or
causes to be subjected, any citizen of the United States or other person within the jurisdiction
thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution
and laws, shall be liable to the party injured in an action at law, suit in equity, or other
proper proceeding for redress."
Court of Appeals Opinion. The Court of Appeals affirmed the judgment of the District
Court. It concluded that the public forum doctrine does not guarantee public access because
"the School District engaged in government speech".
The Court of Appeals wrote that this case "depends on whether its communications about
its opposition to the Put Parents in Charge Act were government speech or whether the School
District used its channels of communication to disseminate the viewpoints of private speakers
against the Put Parents in Charge Act to the exclusion of private speakers in favor of the bill,
thus discriminating in a limited public forum based on the speaker’s viewpoint."
"Accordingly, we begin by addressing
two connected questions: (1) whether the Lexington School District’s campaign against the Put
Parents in Charge Act was ``government speech,´´ and (2) whether the School District
created a limited public forum, by inviting private speech to be expressed through its
communications channels, to which Page was entitled access."
It began its analysis by citing the Supreme Court's 2005
opinion in Johanns v. Livestock Marketing Association for the proposition that
"the Government’s own speech ... is exempt from First Amendment scrutiny."
It then cited the Supreme Court's 2000
opinion in Board of
Regents of University of Wisconsin System v. Southworth for the proposition that "The
First Amendment protects against any governmental activity that abridges the ``freedom of
speech´´ of non-governmental persons, but it does not regulate the government’s own policies
or its speech in support of them. Government speech ``is, in the end, accountable to the
electorate and the political process for its advocacy.´´"
But, these were compelled speech cases, not public forum doctrine cases. That is, in
Johanns and Southworth, the government taxed or collected fees from the plaintiffs,
and then used those funds to engage in or sponsor speech with which the plaintiffs did not agree.
They did not seek access to any public forum for the purposes of expression. They sought to
avoid paying for the speech of others. In the present case Page does not seek to
avoid paying for the government e-mail system. He seeks equal access to it. Hence, these
cases have limited applicability to present issue. Nevertheless, these cases, and especially,
Johanns, form the basis of the Court of Appeals opinion.
See also, story regarding Johanns titled "Supreme Court Rules in Compelled Speech
Case" in TLJ Daily E-Mail
Alert No. 1,141, May 25, 2005.
The Court of Appeals then discussed the Supreme Court's 1983
in Perry Education Association v. Perry Local Educators’ Association, 460 U.S. 37. In
that case the Supreme Court held that a school district appropriately excluded persons from
its internal mail system because the school district's internal mail system was a nonpublic
The facts in that case were different from the facts in the present case on the pertinent
points. Perry involved an internal mail system that only carried mail to government
personnel. In contrast, in the present case, the school district e-mail system was used to
carry messages from non-government personnel to non-government personnel. In the Court of
Appeals' words, messages were sent to "parents", "the public at large", and
"virtually anyone who would hear it".
The Court of Appeals then discussed the Supreme Court's 1985
opinion in Cornelius v. NAACP Legal Defense & Education Fund,
473 U.S. 788, a case regarding the concept of "limited public forum". That
case pertained to the federal government's creation of the Combined Federal Campaign (CFC), a
charity drive aimed at federal employees. It allowed charities, but not others,
to solicit contributions. Political advocacy groups argued the under the public
forum doctrine they must be permitted to solicit funds through the CFC. The
Supreme Court held that the government could create a public forum for a limited
purpose, and the political advocacy groups fell outside of this purpose.
The facts in that case were different from the facts in the present case. In Cornelius
the government allowed a federal facility (CFC) to be used for speech with one purpose (charity),
but not speech with another purpose (political advocacy). In the present case, the government
allowed a federal facility (school district e-mail system) to be used for speech with one
purpose (political advocacy regarding a pending bill), but not speech with the identical
purpose (political advocacy regarding that same bill). Unless the government can argue that
speech with which it agrees is a permissible limited purpose, and that speech with which it
disagrees falls outside of this purpose, then the limited public forum doctrine is also
inapplicable to this case.
Court opinions lack some clarity and consistency on the concepts of "non-public
forum", "limited public forum" and "designated public
forum". Yet, the present case does not lie in a previously
ambiguous area. That the school district carried the speech of third parties
directed to the general public rebuts the argument that the e-mail system is a
non-public forum. That Page sought to use the same facility, at the
same time, to engage in speech on the same legislative issue rebuts the argument
that the school district's e-mail system was a limited public forum and that
Page's speech fell outside of the limited purpose of the forum.
Also, the Court of Appeals ignored the Supreme Court's landmark
regarding the public forum doctrine in Hague v. CIO, 307 U.S. 496 (1939). In that case,
a state government attempted to limit the access of speakers to public streets and parks.
Justice Owen Roberts, writing for the Court, concluded in lofty language that "Wherever the
title of streets and parks may rest, they have immemorially been held in trust for the use of
the public and, time out of mind, have been used for purposes of assembly, communicating
thoughts between citizens, and discussing public questions. Such use of the streets and public
places has, from ancient times, been a part of the privileges, immunities, rights and liberties
Nor did the Court of Appeals cite two other landmark public forum doctrine cases.
These are the Supreme Court's 1981
opinion in Widmar v. Vincent, 454 U.S. 263 (1981), which is discussed immediately
below, and International Society for Krishna Consciousness v. Lee, 505 U.S. 672 (1992),
which is discussed further below.
In Widmar a state university precluded registered student religious
groups from using its facilities, when it had allowed other registered student
groups to use the same facilities. The Supreme Court affirmed the Court of
Appeals' judgment for the religious groups seeking access.
Justice Lewis Powell, wrote the opinion of the Court. He concluded that
"Having created a forum generally open to student groups, the University seeks
to enforce a content-based exclusion of religious speech. Its exclusionary
policy violates the fundamental principle that a state regulations of speech
should be content-neutral, and the University is unable to justify this
violation under applicable constitutional standards."
After its review of Supreme Court precedent, the Court of Appeals addressed whether the
speech that the school district published and sent was "government speech". It wrote
that this "depends on the government's ownership and control of the message, and the
government's ownership and control of the message may be determined from consideration of
It continued that factors to be considered are "the purpose of
the program in which the speech occurs", the "editorial control exercised by the
government", the "identity of the person actually delivering the message",
and the person bearing the ultimate responsibility for the content of the speech.
The Court then noted that the school board adopted a resolution opposing the
bill, and that the third party speech that it sent also opposed the bill. It
also noted that the school board "instructed its Director of School/Community
Relations to communicate its position through its various communications
channels to government employees, legislators, students, and the public at
large, urging that the bill be voted down."
The Court continued that the school district did not write all of the content; third parties
wrote some of it. But, the government "approved all speech, even that of third parties,
as representative of its own position for inclusion in its messages opposing the bill. Thus,
it also controlled the message."
And, with respect to the e-mail, it "included in or attached to some e-mails"
items written by "private parties, it thereby created a limited public forum. Again,
however, the School District, on its own initiative, selected" the outside items and
thus adopted them "to support its own message." Moreover, these private parties
did not have "access to the School District’s e-mail facility."
Hence, the Court of Appeals concluded that "the School District established its own
message and effectively controlled the channels of communication through which it disseminated
that message, as required for application of the government speech doctrine".
Thus, speech, even that written by private parties, falls under the "government speech
doctrine" if it represents the position of the government, and the government
reviewed and selected it for transmission over its e-mail system.
TLJ Comment and Criticism. The interpretation announced in this opinion will
especially impact cyber fora. That is, if the government were to invite a speaker to talk in
a government auditorium or on a public street, the government cannot have the degree of
control over the content of the speech, and answers to questions, that this
opinion appears to require for the "government speech doctrine" to apply.
In contrast, the government can review and approve the content of text files, and audio
and video clips that are sent by e-mail, or published in web sites. The
government can meet the control test set forth in the just released opinion in
the context of these cyber media.
Also, the holding of this case that speech is
exempt from the public forum doctrine if it is approved, reviewed, and selected
by the government, is largely indistinguishable in substance and effect from
holding that in public facilities the government can promote speech with which
it agrees and censor speech with which it disagrees. Yet, if freedom of speech
means anything, it is that the government cannot promote speech that it
supports, while suppressing speech that it rejects.
On the other hand, the damage to free speech
inflicted by this opinion is limited to public spaces and facilities. This
opinion has no adverse consequences for privately sent e-mail, privately
operated web sites, private interactive computer services, and other private
interactive media. Also, to the limited extent that government entities operate
interactive media, these would likely fall outside of the scope "government
speech doctrine" as articulated in this opinion,
because the government operators may not exercise the requisite degree of control.
Finally, while being compelled to send private
political speech by e-mail may seem odious to government entities, these entities could easily
avoid this outcome without relying upon the holding in this case. First, the school district
in this case could, and perhaps should, have refrained from waging a grass roots legislative
lobbying campaign. School boards exist to oversee educational operations, and implement state
statutes -- not to engage in political lobbying. Second, having decided to participate in the
legislative process, the school district could have refrained from using taxpayer funded e-mail
facilities to wage its campaign. Third, having decided to lobby, and to use the publicly owned
e-mail system, it could have restricted its lobbying to messages authored by
government personnel, and not incorporated its outside allies into its e-mail campaign.
Rather, the school district both declined to exercise restraint, and excluded opposing
speakers from its facilities. It then turned to the courts to render an opinion allowing its
conduct. In allowing this, the Court of Appeals degrades traditional American notions of
freedom of speech in public places and facilities.
Spurious Free Speech Claims. There are reasons for courts to
scrutinize public forum doctrine claims for access to government property. In
many of these cases the core purpose for seeking access is not speech or
assembly. Rather, the First Amendment is asserted solely as a pretext for
engaging in other activities that enjoy no Constitutional protection, such as
disrupting government activities and operations, engaging in non-expressive
commerce, or accosting and begging persons in the forum.
Several cases address these situation. For example, the Supreme Court held in its 1992
opinion in International Society for Krishna Consciousness v. Lee,
505 U.S. 672, that Hari Krishnas do not have a Constitutional right to pester
air travelers in publicly owned airports with pleas for money. The Hari Krishnas
argued that this was a religious ritual, protected by the First Amendment
speech clause, and that they perform this religious ritual in airports.
The Court held that airports are not public fora. In addition, Justice Anthony Kennedy
wrote in a concurring opinion that is relevant to the present case that "failure to
recognize the possibility that new types of government property may be appropriate forums
for speech will lead to a serious curtailment of our expressive activity."
In the present case there are no facts suggesting that Page had any motive
for speaking other than expressing support for a pending bill.
This case is Randall Page v. Lexington County School District One, U.S. Court of
Appeals for the 4th Circuit, App. Ct. No. 07-1697, an appeal from the U.S. District Court for
the District of South Carolina, at Columbia, D.C. No. 3:06-cv-00249-CMC, Judge Cameron Currie
Judge Paul Niemeyer wrote the opinion of the Court of Appeals, in which Judges Karen
Williams and Allyson Duncan joined. Judges Williams and Niemeyer were appointed by former
President Bush. Judge Duncan was appointed by the current President Bush.
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, June 25
The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's
schedule for week of June 23, and
schedule for June 25.
The Senate will meet at 9:30 AM. It will resume
consideration of the House message to accompany HR 3221
"American Housing Rescue and Foreclosure Prevention Act of 2008".
TIME CHANGE. 9:00 AM. The Senate
Judiciary Committee's (SJC) Subcommittee on the Constitution will hold a hearing titled
"Laptop Searches and Other Violations of Privacy Faced by Americans Returning from
Overseas Travel". Sen. Russ Feingold
(D-WI) will preside. The witnesses will be Larry Cunningham (Assistant District Attorney,
Bronx County), Susan Gurley (Association of Corporate Travel
Executives), Farhana Khera (Muslim Advocates),
Nathan Sales (George
Mason University School of Law),
Peter Swire (Ohio State University law school), and Lee Tien
(Electronic Frontier Foundation). See,
notice. Location: Room 226,
10:00 AM. The House Small
Business Committee's (HSBC) Subcommittee on Regulations, Healthcare and Trade will hold
a hearing titled "The Impact of Online Advertising on Small Firms". Location:
Room 1539, Longworth Building.
10:00 AM. The House
Appropriations Committee (HAC) will meet to mark up three items, including the
commerce, justice, and science appropriations bill. The HAC will webcast this meeting.
This mark up has been rescheduled from June 19. Location: Room 2359, Rayburn
10:00 AM. The
Senate Homeland Security and Government Affairs Committee will hold a
business meeting. The agenda includes consideration of Elaine Duke to be Under
Secretary for Management at the Department of Homeland Security (DHS). See,
[PDF]. Location: Room 342, Dirksen Building.
10:00 AM. The Securities and Exchange
Commission (SEC) will hold an event titled "Open Meeting". See,
Location: SEC, Auditorium, Room L-002, 100 F St., NE.
10:00 AM. The Department of Homeland
Security's (DHS) Homeland Security Advisory Council will hold a partially closed
meeting to review recommendations of the Essential Technology Task Force (ETTF) and to
receive briefings from Secretary Michael Chertoff and others. See,
notice in the
Federal Register, June 19, 2008, Vol. 73, No. 119, at Page 34945. Location:
Ritz-Carlton Hotel, Salon II, 1150 22nd St., NW.
11:00 AM. The
House Commerce Committee (HCC)
will meet to mark up HR __, the "Protecting Records, Optimizing Treatment, and
Easing Communication through Healthcare Technology Act of 2008". The HCC will
webcast this markup. Location: Room 2123, Rayburn Building.
2:00 PM. David McCormick (Under Secretary for
International Affairs at the Department of the Treasury) will give a speech
titled "Remarks on International Economic Policy in a Globalized World". For
more information, contact Savina Rupani at 202-457-8719 or srupani at csis dot org.
Location: Center for Strategic and International Studies, 1800 K St., NW.
|Thursday, June 26
The House will meet at 10:00 AM for legislative business. See, Rep. Hoyer's
schedule for week of June 23.
10:00 AM. The
Senate Judiciary Committee (SJC) may hold an executive business meeting.
includes consideration of four judicial nominees: Paul Gardephe (to be a Judge
of the U.S. District Court for the Southern District of New York), Kiyo
Matsumoto (E.D.N.Y.), Cathy Seibel (S.D.N.Y.), and Glenn Suddaby (N.D.N.Y.).
The SJC rarely follows its published agenda. Location: Room 226, Dirksen Building.
10:00 AM. The
Senate Finance Committee (SFC) will hold a hearing titled "The
Foundation of International Tax Reform: Worldwide, Territorial, and Something
in Between". The witnesses will be James Hines (University of
Michigan Law School), Stephen Shay (Ropes & Gray), Roseanne Altshuler (Rutgers
University), and Robert Dilworth (McDermott Will & Emery). See,
Location: Room 215, Dirksen Building.
11:00 AM - 12:30 PM. The Heritage
Foundation will host a panel discussion titled "Homeland Security, Privacy
and Civil Liberties: A Five Year Review". The speakers will be
Chertoff (Secretary of Homeland Security),
(Officer for Civil Rights and Civil Liberties, DHS),
Hugo Teufel (Chief
Privacy Officer, DHS), Peter
Swire (Ohio State University law school), Kevin Lanigan
(Human Rights First), and
(Heritage). See, notice.
Location: Heritage, 214 Massachusetts Ave., NE.
12:00 NOON. The Cato Institute will
host a panel discussion titled "Trade Facilitation: The New Wave of International
Trade Liberalization?". The speakers will be
Steven Creskoff (Creskoff
& Doram), Michael Finger, Bill Lane (Caterpillar, Inc.), John Wilson (World Bank),
and Dan Ikenson (Cato). Cato will
webcast this event. Lunch will be served after the program. See,
notice and registration
page. Location: Cato, 1000 Massachusetts Ave., NW.
4:00 - 5:45 PM. The American Enterprise
Institute (AEI) will host a discussion of the
book [Amazon] titled "Termites in the Trading System: How Preferential Agreements
Undermine Free Trade", by Jagdish
Bhagwati. The speakers will be Bhagwati, Brian Hindley
(European Centre for International Political Economy),
Philip Levy (AEI), and Claude Barfield (AEI). See,
notice. Location: AEI, 12th floor, 1150 17th St., NW.
Deadline to submit initial comments to the
Federal Communications Commission (FCC) regarding Verizon's and Qwest's request that
the FCC grant them the same forbearance that it granted to AT&T in its April 24, 2008,
Opinion and Order [31 pages in PDF]. That MOO is FCC 08-120 in WC Docket No. 07-21 and
WC Docket No. 05-342. See,
notice in the Federal Register, June 12, 2008, Vol. 73, No. 114, at Pages
|Friday, June 27
The House will meet at 9:00 AM for legislative business. See, Rep.
schedule for week of June 23.
9:00 AM - 4:00 PM. The Federal Communications Commission's
(FCC) Consumer Advisory Committee will meet. See, FCC
notice [PDF] and
notice in the Federal Register, June 11, 2008, Vol. 73, No. 113, at Page
33090. Location: FCC, Commission Meeting Room, 445 12th St., SW.
10:00 AM. The
House Judiciary Committee's (HJC) Antitrust Task Force will hold a hearing
titled "Competition on the Internet". See,
notice. The HJC
will webcast this hearing. Location: Room 2141, Rayburn Building.
Deadline to submit comments to the
U.S. Patent and Trademark Office (USPTO) regarding its
proposal to amend the Rules of Practice in Trademark Cases to require a fee of $50 for
filing a request for reconsideration on paper of an examining attorney's final refusal,
whereas no fee would be required for a request for reconsideration filed through the
Trademark Electronic Application System (TEAS). See,
notice in the Federal Register,
April 28, 2008, Vol. 73, No. 82, at Pages 22894-22895.
Deadline to submit initial comments to the
Federal Communications Commission (FCC) in response to
its Further Notice of Proposed Rulemaking (FNPRM) regarding whether the eligible
telecommunications carrier (ETC) obligation to provide monthly digital television (DTV)
transition notices to low income subscribers should be expanded to require the provision of
such notices to all subscribers, and whether multichannel video programming distributors
(MVPDs) should be required to provide on air DTV transition education on their systems. This
[30 pages in PDF] is FCC 08-119 in MB Docket No. 07-148. See also,
correction [PDF]. See,
notice in the
Federal Register, May 28, 2008, Vol. 73, No. 103, at Pages 30591-30596.
|Monday, June 30
The House will begin its July 4th recess. See, Rep. Hoyer's
calendar [4.25 MB PDF].
The Senate will begin its July 4th recess. See, Senate
Accelerated deadline to submit initial comments to the
Federal Communications Commission (FCC) in response to
its notice of proposed rulemaking (NPRM) regarding small, minority owned and women owned
businesses in broadcasting. See, original
notice in the Federal Register, May 16, 2008, Vol. 73, No. 96, at Page 28400-28407,
accelerating comment deadlines in the Federal Register, May 29, 2008, Vol. 73, No. 104, at
Page 30875. The FCC adopted this NPRM on December 18, 2007, and released the text on March
5, 2008. See,
NPRM [70 pages in PDF], first
[2 pages in PDF] and second
[2 pages in PDF]. This NPRM is FCC 07-217 in MB Docket Nos. 07-294, 06-121, 02-277, and
04-228, and MM Docket Nos. 01-235, 01-317, and 00-244.
|Tuesday, July 1
The House will not meet.
The Senate will not meet.
9:00 AM - 4:00 PM. The The National
Institute of Standards and Technology (NIST) will hold a public workshop regarding the
establishment of a laboratory accreditation program for laboratories performing inoperability,
performance, and conformance biometrics testing on Personal Identification Verification
equipment. The Department of Homeland Security (DHS) requested that the NIST establish
such a program. See, notice
in the Federal Register, June 13, 2008, Vol. 73, No. 115, at Pages 33806-33807.
Location: NIST, Green Auditorium, Gaithersburg, MD.
2:00 - 3:30 PM. The American Enterprise
Institute (AEI) will host a book forum. The speakers will be Mark Krikorian
(Center for Immigration Studies), author of the
book [Amazon] titled "The New Case Against Immigration: Both Legal and
Illegal", Jason Richwine (AEI), Fred Siegel
(Progressive Policy Institute), and David
Frum (AEI). See,
notice. Location: AEI, 1150 17th St., NW.
|Wednesday, July 2
The House will not meet.
The Senate will not meet.
12:00 NOON. The Cato Institute
will host a discussion of the
book [Amazon] titled "India: The Emerging Giant", by
Panagariya (Columbia University). The speakers will be Panagariya and
(Cato). See, notice and registration
page. Lunch will follow the program. Location: Cato, 1000 Massachusetts
Deadline for transmittal of applications for awards for Fiscal Year 2009
from the Department of Education's (DOE) Technology and Media Services for
Individuals with Disabilities program. This program provides awards to
"support educational media services activities designed to be of educational
value in the classroom setting to children with disabilities" and to "provide
support for captioning and video description of educational materials that are
appropriate for use in the classroom setting". See,
notice in the
Federal Register, June 2, 2008, Vol. 73, No. 106, at Pages 31442-31448.
|7th Circuit Rules in Antitrust Tying
6/23. The U.S. Court of Appeals (7thCir) issued
its opinion in Sheridan v. Marathon, an antitrust case involving tying of services.
The Court of Appeals affirmed the District Court's dismissal of the complaint.
The services in this case are not technology related. They are gasoline
sales, and associated credit card payments. However, tying issues often arise in
the sale of technology and communications services and products.
This is a class action antitrust case brought by Marathon gas dealers against Marathon
Petroleum Company alleging that it is violating the Section 1 of the Sherman Antitrust
Act by tying gasoline dealerships to the processing of credit card sales at those
Judge Richard Posner (at left), one of the leading
authorities on antitrust law, wrote the opinion of the Court of Appeals. He wrote a summary of
the state of the law on tying.
He began by writing that "In a tying agreement, a seller conditions the sale of a product
or service on the buyer’s buying another product or service from or (as in this
case) by direction of the seller. The traditional antitrust concern with such an
agreement is that if the seller of the tying product is a monopolist, the tie-in
will force anyone who wants the monopolized product to buy the tied product from
him as well, and the result will be a second monopoly. This will happen,
however, only if the tied product is used mainly with the trying product; if it
has many other uses, the tie-in will not create a monopoly of the tied product."
(Parentheses in original.)
"Tying agreements can also be a method of price discrimination
...". Posner continued that the monopolist might charge a higher price for the
product with the less elastic users, and a lower price for the product with the
more elastic users. However, he noted that "price discrimination does not
violate the Sherman Act unless it has an exclusionary effect. And a monopolist
doesn't have to actually take over the market for the tied product in order to
discriminate in price. He just has to interpose himself between the sellers of
the tied product and his own customers so that he can reprice that product to
"The Supreme Court used to deem tying agreements illegal provided only that
... the tying arrangement embraced a nontrivial amount of interstate commerce.
... Beginning in the 1970s, however, the Court began to reexamine and in some
instances discard antitrust doctrines that (like tying agreements) place
limitations on distributors or dealers." (Parentheses in original.)
The most recent in this line of Supreme Court cases was Leegin Creative
Leather Products, Inc. v. PSKS, Inc., 551 U.S. __. See, June 28, 2007
[55 pages in PDF] and
titled "SCUS Holds That All Vertical Price Restraints Are Subject to Rule of
Reason" in TLJ
Daily E-Mail Alert No. 1,603, June 28, 2007.
"The Court has not discarded the tying rule, and we have no authority to do so. But
it has modified the rule by requiring proof that the seller has ``market power´´ in the market
for the tying product", wrote Posner, citing the 2006
opinion [PDF] of the
Supreme Court in Illinois Tool Works, Inc. v. Independent Ink, Inc., 547 U.S. 28. See
titled "Supreme Court Vacates in Patent Tying Antitrust Case" in
TLJ Daily E-Mail
Alert No. 1,321, March 2, 2006.
So, wrote Posner, "market power" is key, "but its meaning requires
elucidation. Monopoly power we know is a seller's ability to charge a price
above the competitive level (roughly speaking, above cost, including the cost of
capital) without losing so many sales to existing competitors or new entrants as
to make the price increase unprofitable." (Parentheses in original.)
"The word ``monopoly´´ in the expression ``monopoly power´´ was never
understood literally, to mean a market with only one seller; a seller who has a
large market share may be able to charge a price persistently above the
competitive level despite the existence of competitors. Although the price
increase will reduce the seller’s output (because quantity demanded falls as
price rises), his competitors, if they are small, may not be able to take up
enough of the slack by expanding their own output to bring price back down to
the competitive level; their costs of doing so would be too high -- that is
doubtless why they are small." (Parentheses in original.)
"As one moves from a market of one very large seller plus a
fringe of small firms to a market of several large firms, monopoly power wanes.
Now if one firm tries to charge a price above the competitive level, its
competitors may have the productive capacity to be able to replace its reduction
in output with an increase in their own output at no higher cost, and price will
fall back to the competitive level. Eventually a point is reached at which there
is no threat to competition unless sellers are able to agree, tacitly or
explicitly, to limit output in order to drive price above the competitive level.
The mere possibility of collusion cannot establish monopoly power, even in an
attenuated sense to which the term ``market power´´ might attach, because then every
firm, no matter how small, would be deemed to have it, since successful
collusion is always a possibility."
Judge Posner then applied this analysis to the facts of the present case. He
wrote that Marathon is the only seller of Marathon franchises, but Marathon is a
trademark, not a market. And, the complaint alleges no market in which Marathon
has a monopoly or market power, and alleges no collusion with other gas companies.
He continued that "we are given no reason to doubt that if Marathon raises the price
of using the Marathon name above the competitive level by raising the price of the credit card
processing service that it offers, competing oil companies will nullify its price increase
simply by keeping their own wholesale gasoline prices at the existing level."
However, Posner not only concluded that there was no illegal tying. He rejected the
argument that there was even product tying. Posner concluded that Marathon did not tie
credit card processing to the franchise, because it merely required franchisees to honor
the Marathon credit card. The dealers could accept other credit cards. Posner wrote that
"The additional cost of using multiple card processing systems is not a penalty imposed
by Marathon to force the use of its system, but an economy that flows directly from Marathon’s
offering its own credit card and credit card processing service."
Finally, Posner rejected the plaintiffs' alternative theory of antitrust liability, that
in exchange for overcharging its dealers for credit card processing, Marathon received
kickbacks from the banks and other financial institutions that offer credit cards.
This case is John Sheridan, et al. v. Marathon Petroleum Company, LLC, et al., U.S.
Court of Appeals for the 7th Circuit, App. Ct. No. 07-3543, an appeal from the U.S. District
Court for the Southern District of Indiana, Indianapolis Division, D.C. No. 1:06-cv-1233-SEB-VSS,
Judge Sarah Barker presiding.
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