6/26. Thomas Barnett, Assistant Attorney General in charge of the Antitrust Division, gave a speech titled "Current Issues in Merger Enforcement: Thoughts on Theory, Litigation Practice, and Retrospectives"

He discussed, among other things, the Antitrust Division's failed effort to block Oracle's acquisition of PeopleSoft.

On February 26, 2004, the DOJ and several states filed a complaint in U.S. District Court (NDCal) against Oracle alleging that its acquisition of PeopleSoft would lessen competition substantially in interstate trade and commerce in violation of Section 7 of the Clayton Act. The DOJ sought an injunction of the proposed acquisition. See, story titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004.

However, Oracle fought back, and won a prompt and decisive legal victory. The District Court held that the government failed to meet its burden of showing by a preponderance of the evidence that the proposed merger is likely substantially to lessen competition in a relevant product and geographic market. See, story titled "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

Barnett (at right) stated in his June 26 speech that the economy has evolved towards increased product differentiation, so that "the agencies may find it hard to provide a clear and succinct verbal or empirical description of the characteristics of the market".

He also said that "the sale of differentiated products may involve price discrimination, which can complicate traditional market definition by (1) making it harder to distinguish between products that are in and out of the market, because the distinction only applies to a subset of the parties' customers, and (2) implicating in more extreme cases the rarely-discussed substantiality issue, i.e., how many or what percentage of customers must a merger harm to constitute a Section 7 violation."

Section 7 of the Clayton Act is codified at 15 U.S.C. § 18.

For example, said Barnett, "Oracle could be viewed as a price discrimination case. Oracle and PeopleSoft sold largely the same product to thousands of customers, most of whom did not demand all of the functionality available in the software. For those that did not want the most sophisticated functionality, the government agreed that the relevant market included a number of competitors in addition to Oracle, PeopleSoft and SAP."

"The government argued that Oracle charged a price that depended in part on how much of the functionality that each customer needed. This complex competitive process was not easy to investigate or convey to the court", concluded Barnett.

He also discussed merger retrospectives. He said that "Because most merger decisions are prospective, they seem particularly well suited to retrospective study to inform our future decisions." He concluded that "such efforts are important and valuable", but "we need to be careful how we conduct such studies and how we interpreting any results."

Barnett also reviewed statistics for the last six years for Antitrust Division merger enforcement actions. Finally, he discussed electronic production issues.

6/30. The U.S. Court of Appeals (4thCir) issued its opinion [11 pages in PDF] in Strawn v. AT&T Mobility, regarding removal of class action complaints to federal courts under the Class Action Fairness Act of 2005 (CAFA).

This case involves a class action complaint filed in state court in West Virginia alleging that Cingular Wireless (now AT&T Mobility) violated the West Virginia Consumer Credit and Protection Act by charging customers $2.99 per month for "Roadside Assistance" if they did not opt out of the program.

The CAFA, which is codified at 28 U.S.C. § 1453, has a threshold of an aggregate amount in controversy exceeding $5 Million

AT&T removed the action to the U.S. District Court pursuant to the CAFA. The District Court remanded the action back to the state court, stating that the $5 Million threshold is not met. The Court of Appeals reversed.

This case is Strawn, et al. v. AT&T Mobility LLC, et al., U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 07-2084, an appeal from the U.S. District Court for the Southern District of West Virginia, at Charleston, D.C. No. 2:06-cv-00988, Judge John Copenhaver presiding. Judge Paul Niemeyer wrote the opinion of the Court of Appeals, in which Judges Karen Williams and Alexander Williams, sitting by designation, joined.

6/30. The U.S. Court of Appeals (1stCir) issued its opinion in US v. Novak, holding that a wiretap of phone conversations between an attorney and a client in state prison, without a warrant, but with the permission of the client, does not violate the 4th Amendment, even when there is a state law prohibiting monitoring of conversations between prisoners and attorneys.

The Court of Appeals reversed the District Court, which had suppressed the recordings of phone conversations. This case was decided solely under the 4th Amendment (unreasonable searches and seizures); neither the 6th Amendment (right to counsel) nor 18 U.S.C. § 2511 (federal wiretap act) was at issue.

Scott Holyoke, who has prior convictions, was a prisoner in pretrial detention at the Barnstable County Jail in the state of Massachusetts on drug charges. The Court of Appeals opinion suggests, but does not expressly state, that Holyoke has expertise in gaming the criminal justice system.

Holyoke, who was already represented, sought further assistance from Lawrence Novak, an attorney. He contacted Novak by prison telephone. A state regulation prohibits monitoring of phone calls between an attorney and a client in state prison. The prison has an automatic monitoring system. Signs and recorded messages alert prisoners that calls are monitored and recorded. Prisoners can have their attorneys' phone numbers excluded from monitoring. Holyoke did not add Novak's number. The prison excludes from monitoring calls involving the numbers of members of the state bar. Nevertheless, calls from Holyoke to Lawrence Novak were recorded.

State employees listened to these recordings, even after hearing Novak state that he is an attorney. The government then obtained Holyoke's permission, but no court warrant, to continue to monitor the calls. The Court of Appeals opinion states that "Novak agreed to launder what he was told were the proceeds of drug trafficking, and to accept $60,000 of that money in payment". The opinion does not disclose whether or not this conversation pertained to payment of legal fees.

The US prosecuted Novak. He moved to suppress evidence obtained in wiretaps, citing the 4th Amendment ban on unreasonable searches and seizures. He did not argue the 6th Amendment's right to counsel (he was the counsel), or the federal wiretap statute (which allows phone surveillance with the consent of one party to the communication). The District Court suppressed the evidence in an opinion reported at 453 F. Supp. 2d 249.

The US brought the present appeal. The Court of Appeals reversed.

It wrote that "A telephone call can be monitored and recorded without violating the Fourth Amendment so long as one participant in the call consents to the monitoring."

"Furthermore, inmates and pretrial detainees who have been exposed to the sort of warnings that Holyoke saw here have been deemed to have consented to monitoring."

The Court of Appeals continued that "Here, there is no question that Massachusetts law was violated. That does not, however, invalidate Holyoke’s consent for Fourth Amendment purposes. In the absence of the state regulations that Novak cites, we would find no Fourth Amendment bar to the monitoring of phone calls. The state regulation cannot alter Holyoke's consent."

It also wrote that "there is no evidence that Holyoke was aware of this state regulation, or that he believed his consent to monitoring of phone calls was limited only to non-attorney-client calls. We thus find no reason to believe that Holyoke's consent was vitiated by the prison officials’ failure to abide by the applicable regulations."

The Court concluded that "Because Holyoke consented to monitoring of his calls, those calls -- including those made between Holyoke and his attorney -- can be introduced into evidence consistently with the requirements of the Fourth Amendment."

This case is USA v. Lawrence Novak, U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 07-1826, an appeal from the U.S. District Court for the District of Massachusetts, Judge Reginald Lindsay presiding. Judge O'Connor wrote the opinion of the Court of Appeals, in which Judges Selya and Boudin joined.

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 Arvind Panagariya (Columbia University). The speakers will be Panagariya and Swaminathan Aiyar (Cato). See, notice and registration page. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.

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.

The House will not meet.

The Senate will not meet.

Deadline to submit comments to the National Institute of Standards and Technology's(NIST) Computer Security Division (CSD) regarding its NIST IR 7502 [24 pages in PDF] titled "The Common Configuration Scoring System".

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking regarding adjusting certain patent fee amounts for Fiscal Year 2009 to reflect change in the Consumer Price Index (CPI). See, notice in the Federal Register, June 3, 2008, Vol. 73, No. 107, at Pages 31655-31663.

Independence Day. See, Office of Personnel Management's (OPM) list of 2008 federal holidays.

The House will not meet.

The Senate will not meet.

The House will return from it July 4th recess.

The Senate will return from it July 4th recess. It will meet at 2:00 PM for morning business. At 3:00 PM, it will resume consideration of the House message to accompany HR 3221 [LOC | WW], the "American Housing Rescue and Foreclosure Prevention Act of 2008".

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Lucent v. Gateway, App. Ct. No. 2007-1546. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Carnegie Melleon v. Hoffman-La Roche, App. Ct. Nos. 2007-1266 and 2007-1267. Location: Courtroom 201, 717 Madison Place, NW.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking regarding assignment of Educational Broadband Service (EBS) spectrum in the Gulf of Mexico. The FCC adopted this item on March 18, 2008, and released the text [111 pages in PDF] on March 20, 2008. This item is FCC 08-03 in WT Docket Nos. 03-66; 03-67, and 02-68, IB Docket No. 02-364, and ET Docket No. 00-258.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking (2ndFNPRM) regarding reauctioning the D block of the 700 MHz auction (Auction No. 73). The FCC adopted this item on May 14, 2008. See, story titled "FCC Announces NPRM for D Block Auction" in TLJ Daily E-Mail Alert No. 1,766, May 14, 2008. The FCC later released the text [101 pages in PDF]. It is FCC 08-128 in WT Docket No. 06-150 and PS Docket No. 06-229. See, notice in the Federal Register, May 21, 2008, Vol. 73, No. 99, at Pages 29581-29623.

Deadline to submit reply 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, Memorandum 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 33430-33431.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Broadcom v. ITC, App. Ct. No. 2007-1164. Location: Courtroom 201, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Kyocera Wireless v. ITC, App. Ct. No. 2007-1493. Location: Courtroom 201, 717 Madison Place, NW.

1:30 - 4:30 PM. The Department of Homeland Security's (DHS) National Infrastructure Advisory Council, which provides advice on critical infrastructure sectors and their information systems, will meet. This meeting may be closed to the public. See, notice in the Federal Register, June 16, 2008, Vol. 73, No. 116, at Page 34028. Location: undisclosed.

8:00 AM - 5:00 PM. The Information Technology Association of America (ITAA) will host a one day conference titled "Defense 2.0: Transforming DoD Through the New Paradigm of IT". See, notice. Prices vary. Location: Ritz Carlton, Pentagon City.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Privacy Implications of Online Advertising". See, notice. Location: Room 253, Russell Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Gammino v. Davel Communications, App. Ct. No. 2008-1089, a patent infringement action involving international call blocking technology. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Asyst Technologies v. Emtrak, App. Ct. No. 2007-1554. This is a patent case involving an inventory management system used in the production of integrated circuits Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Tavory v. NTP, App. Ct. Nos. 2007-1527 and 2008-1090, patent and copyright cases involving e-mail push software. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Broadcomm v. Qualcomm, App. Ct. No. 2008-1199. Location: Courtroom 203, 717 Madison Place, NW.

6/27. The Department of Justice (DOJ) announced in a release that it "has reached a settlement with Steven Hatfill to resolve pending civil litigation about the disclosures of information related to the investigation of the anthrax mailings in the fall of 2001."

This release states that the US admits no wrongdoing. It contains no apology.

The DOJ release adds that the US will pay Hatfill and his attorneys $2.825 Million and purchase for Hatfill an annual annuity of $150,000.

Christopher Wright and other attorneys at the law firm of Harris Wiltshire & Grannis (HWG) represent Hatfill in this and related cases. Wright is a former General Counsel of the Federal Communications Commission (FCC). HWG focuses on telecommunications matters.

HWG stated in a release that "Our journalists also failed us, by putting aside their professional skepticism and shoveling the leaked information all too willingly into publication without questioning the accuracy of the information, the motives of the leakers, or the fairness of the government’s tactics. As an innocent man, and as our fellow citizen, Steven Hatfill deserved far better."

HWG's release does not comment on reporters who refused to testify, citing confidentiality.

See also, story titled "4th Circuit Reinstates Hatfill's Defamation Suit Against NYT" in TLJ Daily E-Mail Alert No. 1,185, August 1, 2005.

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