Denies Cert in RS-DVR Case
6/29. The Supreme Court denied certiorari in Cable News Network v. CSC
Holdings, a copyright infringement case involving RS-DVR systems. See,
Orders List [11 pages in PDF] at page 11.
This lets stand the August 4, 2008,
pages in PDF] of the U.S. Court of
Appeals (2ndCir), which is also reported at 536 F.3d 121.
The Court of Appeals reversed the judgment of the District Court, and held
that CSC's Remote Storage Digital Video Recorder (RS-DVR) system does not
violate the Copyright Act by infringing plaintiffs' exclusive rights of
reproduction and public performance.
See, story titled "2nd Circuit Reverses in Remote Storage DVR Copyright Case"
in TLJ Daily E-Mail
Alert No. 1,806, August 5, 2008. This opinion is also reported at 536 F.3d
In May, the Department of Justice's (DOJ)
Office of the Solicitor General (OSG)
amicus curiae brief with the Supreme Court urging it to deny certiorari. See,
titled "DOJ Urges SCUS to Deny Cert in RS-DVR Case" in
TLJ Daily E-Mail Alert
No. 1,946, June 2, 2009.
Supporters of the 2nd Circuit's opinion made much of this denial of
certiorari. For example, Gary Shapiro, head of the Consumer Electronics
Association (CEA), stated in a release that "the Court's decision was a
Similarly, Gigi Sohn, head of the
Public Knowledge, stated in a
release that "the
Supreme Court has struck a blow for the rights of consumers and for innovation.
Consumers will benefit from lower costs and more recording options, while cable
companies will see greater efficiencies in their operations".
However, there were many possible reasons for denying certiorari in this case
that may not be present in another case when a similar legal question is
The OSG wrote in its brief that "this case does not provide a suitable
occasion" to resolve these issues. One reason is that the 2nd Circuit is the
first to address the copyright implications of network based analogues to VCRs
and set-top DVRs. Also, the OSG wrote that "The parties' stipulations, moreover,
have removed two critical issues -- contributory infringement and fair use --
from this case. That artificial truncation of the possible grounds for decision
would make this case an unsuitable vehicle for clarifying the proper application
of copyright principles to technologies like the one at issue here."
There is also the matter that the Supreme Court grants certiorari when four
Justices vote to grant certiorari. These decisions are not made by
majority vote. In this case, two Justices (Roberts and Alito) did not
participate in the certiorari vote, thus making it harder to achieve the four
vote minimum. They may participate in a certiorari vote the next time this issue
There is also the matter that Thomas Perrelli, the new Associate Attorney
General, was until his appointment to the DOJ the Managing Partner of the
Washington DC office of the law firm of Jenner
& Block, and Co-Chair of its Entertainment and New Media Practice. This firm
represents CNN in this case.
Patrick Ross, head of the Copyright Alliance, stated in a
release that "Like
the lower court's ruling, the U.S. Supreme Court decision is unfortunate and
potentially harmful to creators and creative enterprises across the spectrum of
copyright industries. We will monitor the ramifications of this decision and
continue pushing for policy and legal outcomes that maintain creators'
This case is Cable News Network, et al. v. CSC Holdings, Inc., et al.,
Supreme Court, Sup. Ct. No. 08-448, a petition for writ of certiorari to the
U.S. Court of Appeals for the 2nd Circuit, App. Ct. Nos. 07-1480-cv(L) and
07-1511-cv(CON). The Court of Appeals heard appeals from the U.S. District Court
for the Southern District of New York, Judge Denny Chin presiding. Judge John
Walker wrote the opinion of the Court of Appeals, in which Judges Sack and
Livingston joined. See, Supreme Court
|10th Circuit Affirms FTC
Judgment Against Information Broker
6/29. The U.S. Court of Appeals
(10thCir) issued its
pages in PDF] in FTC v. Accusearch, affirming the District Court's
injunctive and monetary judgment against the operator of a web site that sold
confidential phone records obtained by pretexting practices.
Summary. The Court of Appeals held that the
Trade Commission (FTC) has authority under Section 5 of the FTC Act to seek
fines and injunctions against those who sell confidential personal information
obtained by fraudulent means. This affirms a process that enables the FTC to
protect consumer privacy. It is a victory for consumer privacy advocates.
The Court of Appeals also held that the defendants are not entitled to
Section 230 immunity. While these defendants did not engage in activity
immunized by Section 230, the Court's analysis may further expand the
opportunities for the tort bar and activist judges to impose liability on the
very sort of web sites that the Congress sought to immunize in enacting Section
The Court of Appeals could have crafted an opinion that employed an analysis
that excluded fraud based information brokers such as Accusearch from immunity,
without imperiling the free flow of information on beneficial interactive web
sites such as collaborative web sites like Wikipedia, message board sites,
interactive e-commerce sites like eBay and Amazon, and social networking sites
like MySpace. But, it did not.
None of the interactive web sites that fall within the meaning of Section
230, that the Congress sought to protect, and that contribute to the success of
the internet as a source of useful information, participated in the case, either
as parties or amici. The Court of Appeals only received the arguments of a fraud
based information broker, a U.S. agency charged with protecting consumers
against fraud, and an amicus curiae Canadian agency charged with protecting
This opinion does not inflict the same scope of damage to the interactive web
as the 9th Circuit's April 3, 2008,
en banc opinion
[PDF] in FHCSFV v. Roommates.com, 521 F.3d 1157, or its June 22, 2009,
[PDF] in Barnes v. Yahoo. But, it too is another opinion that
incrementally chips away at the immunity provided by Section 230, and the
benefits that this immunity provides.
Background. Accusearch, Inc., a Wyoming corporation, is the operator
of an information brokerage web site named Abika.com. Its owner, sole officer
and director is Jay Patel.
The District Court wrote that it has offered for sale personal information,
including confidential phone records, GPS traces disclosing the locations of
cell phones, social security number verification, utility records, Department
of Motor Vehicle (DMV) records, and reverse e-mail lookups. It obtained these
records by fraudulent practices known as pretexting.
The Court of Appeals wrote that "the search services offered on Abika.com
were primarily services provided by third-party researchers, who were required
by Accusearch to provide assurances that they would perform their work in
accordance with applicable law." It added that "Acquisition of this information
would almost inevitably require someone to violate the Telecommunications Act or
to circumvent it by fraud or theft."
The Court of Appeals continued that "The researchers had no direct contact
with Abika.com's customers". Rather, customers paid Accusearch a search fee,
which "would forward the search request to a researcher who could fulfill it".
The researcher would forward the information to Accusearch, which would provide
it to the customer.
On July 7, 2005, the Electronic Privacy Information Center (EPIC) filed a
complaint with the FTC requesting that it "initiate an industry-wide
investigation into online investigation sites", including Abika.com. See, story
titled "EPIC Complains to FTC About Online Information Brokers" in
TLJ Daily E-Mail
Alert No. 1,171, July 11, 2005.
District Court Proceedings. On May 1, 2006, the Federal Trade Commission (FTC) filed a
complaint [7 pages in PDF] in the U.S. District Court (DWyo) alleging
violation of Section 5 of the FTC Act, which is codified at
15 U.S.C. § 45(a)(1).
Section 5 is a general grant of authority to prevent unfair or deceptive
practices in interstate commerce. It provides, in part, that "Unfair methods of
competition in or affecting commerce, and unfair or deceptive acts or practices
in or affecting commerce, are hereby declared unlawful."
The complaint referenced, but did not plead violation of,
47 U.S.C. § 222, which requires that telecommunications carriers must
protect the confidentiality of consumer proprietary network information (CPNI),
which includes calling history and activity, billing records, and unlisted
telephone numbers of service subscribers.
Section 222 only regulates the conduct of carriers. It provides, in part,
that "a telecommunications carrier that receives or obtains customer proprietary
network information by virtue of its provision of a telecommunications service
shall only use, disclose, or permit access to individually identifiable customer
proprietary network information in its provision of (A) the telecommunications
service from which such information is derived, or (B) services necessary to, or
used in, the provision of such telecommunications service, including the
publishing of directories."
On September 28, 2007, the District Court signed its
[22 pages in PDF] granting the FTC's motion for summary judgment, and denying Accusearch's motion for summary judgment.
The District Court rejected Accusearch's assertion of
Section 230 immunity. Section 230 was enacted as part of the Communications
Decency Act (CDA), which was a part of the Telecommunications Act of 1996.
Section 230(c)(1) provides that "No provider or user of an interactive
computer service shall be treated as the publisher or speaker of any information
provided by another information content provider."
The District Court held that Accusearch operates an interactive computer
service, but that the FTC's complaint does not seek to treat Accusearch as a
publisher. Moreover, it held that the original records were created by phone companies,
and misappropriated as a result of Accusearch's efforts, and that Accusearch
participated in the creation or development of the information sold to its
customers. Hence, the complaint did not treat Accusearch as the "publisher or
speaker of any information provided by another information content provider".
The District Court found that Accusearch violated Section 5 of the FTC Act.
On December 20, 2007, the District Court signed its
Order and Judgment for Permanent Injunction and Other Equitable
Relief [14 pages in PDF]. It banned defendants from selling phone records.
It also awarded the FTC a monetary judgment of $l99,692.71.
Court of Appeals: FTC Act. Defendants brought the present appeal. It
argued that it broke no law, that the FTC lacks authority to enforce Section 222, and that it has immunity under Section 230. It also argued that the
injunction was unnecessary and unconstitutional for overbreadth.
McNicholas, of the Washington DC office of the law firm of
Sidley Austin, filed an
amicus curiae brief
for Jennifer Stoddart,
Privacy Commissioner of Canada, urging affirmance of the judgment of the
This brief primarily argues for the protection of consumer
privacy. However, it also argues that Section 230 immunity is inapplicable in
this case. It relies upon the 9th Circuit's Roommates.com opinion.
The Court of Appeals affirmed. Judge Harris Hartz wrote the majority opinion.
The Court of Appeals wrote that "the FTCA enables the FTC to take action
unfair practices that have not yet been contemplated by more specific laws", but
that "violations of law may be relevant to the unfairness analysis".
It continued that "the FTC alleged that the substantial-injury element of an
unfair practice, see 15 U.S.C. § 45(n), was met partly by the subversion of
consumer privacy protections afforded by the Telecommunications Act. But the
existence of that injury turns on whether the Telecommunications Act was
violated (by somebody), not on whether Accusearch could itself be held liable
under the Telecommunications Act." (Parentheses in original.)
Moreover, "the FTC may proceed against unfair practices even if those
practices violate some other statute that the FTC lacks authority to
administer". In the case of Section 222 violations, the Federal Communications
Commission (FCC) is the agency with enforcement authority.
Court of Appeals: Section 230. The Court of Appeals also rejected
Accusearch's Section 230 immunity argument. First, on the issue of whether
Accusearch is an "interactive computer service" within the meaning of Section
230 (the District Court held that it is), the Court of Appeals declined to rule.
An unresolved issue is whether to qualify as an "interactive computer
service" one must allow interaction among the users. Accusearch did not allow
this interaction. The statute does not require this. Nevertheless, the FTC argued
that it is necessary. The Court of Appeals wrote, "we leave it to another day".
Second, the Court of Appeals addressed whether the complaint treats
Accusearch as a publisher. The District Court concluded that it does not. The
Court of Appeals did not decide.
Although, Judge Tymkovich wrote in his concurring opinion that "the FTC
sought and ultimately held Accusearch liable for its conduct rather than for the
content of the information it was offering on the Abika.com website. Section 230
only immunizes publishers or speakers for the content of the information from
other providers that they make public. ... The CDA says nothing about immunizing
publishers or speakers for their own conduct in acquiring the information."
Third, the Court of Appeals addressed, and based its affirmance upon, the
issue of whether the complaint treated Accusearch as the "publisher or speaker
of any information provided by another information content provider".
Section 230 defines "information content provider" as "any person or entity
that is responsible, in whole or in part, for the creation or development of
information provided through the Internet or any other interactive computer
The Court of Appeals focused on the words "responsible" and "development",
neither of which are defined by the statute.
It concluded that "a service provider is ``responsible´´ for the
development of offensive content only if it in some way specifically
encourages development of what is offensive about the content." (Emphasis
added by TLJ.)
Applying this vague standard, the Court of Appeals concluded
that Accusearch was "responsible", and hence was itself an "information content
provider" not entitled to immunity.
The Court of Appeals then held that the District Court's injunction was
Court of Appeals: Concurring Opinion. Judge Timothy Tymkovich wrote a
He wrote regarding the majority's "unnecessary extension of the CDA's terms
``responsible´´ and ``development,´´ thereby widening the scope of what
constitutes an ``information content provider´´ with respect to particular
information under the Act."
He continued that "The majority holds that by soliciting third-parties to
obtain and then exposing the confidential telephone records to public view,
Accusearch is responsible -- at least in part -- for developing that
information. Under this definition, the line between passive posting of tortious
or unlawful commentary, news articles, or other previously unpublished
information and content development depends on an amorphous analysis of the
motivations of the content provider in soliciting or acquiring that information.
In the majority’s view, a content provider seeking out the information in good
faith may be able to obtain CDA immunity for any subsequent liability, as it
would not have been “responsible, in whole or in part, for the . . . development
of [that] information.” § 230(f)(3). If the provider’s motivations are not in
good faith, however, the majority’s approach transforms the provider into a
developer of that information."
He argued that "the FTC’s allegations of FTCA violations stemmed not from the
content of the information Accusearch was disclosing (or developing), but from
Accusearch’s own conduct in (1) offering the information for sale, (2)
soliciting and encouraging third-parties to violate the law in obtaining the
information, and (3) ultimately paying these third parties and selling the
information to consumers. Accusearch’s duty to refrain from engaging in these
unfair business practices does not derive from its status or conduct as an
Internet website that publishes content." (Footnote omitted.)
Rather, Tymkovich, cited the 9th Circuit's Barnes opinion, wrote that
"the duty the FTC alleged Accusearch violated derives from the expectations that
a business would not engage in unlawful or unfair business practices in general
(whether the business is a conventional bricks-and-mortar operation or exists
entirely on the World Wide Web)." (Parentheses in original.)
That is, "While Internet publication of the confidential phone data, by
itself, may very well be protected by the CDA, the CDA does not immunize,
expressly or implicitly, the manner in which Accusearch conducted its business.
In sum, the CDA does not extend to immunize a party’s conduct outside the realm
of the Internet just because it relates to the publishing of information on the
Thus, Tymkovich argued that "I would limit the analysis to whether the CDA
even applies in the first place. I would conclude that it does not, and that
Accusearch therefore was liable for its unfair business practices in violation
of the FTCA."
TLJ Commentary. This case is victory for consumer privacy advocates.
It confirms that the FTC can use its broad Section 5 authority to pursue
However, it should be recalled that this case was commenced in May of 2006.
It followed the EPIC's disclosures regarding the activities of information
brokers. Also, shortly after the filing of the complaint, the Congress began its
investigation of Hewlett Packard pretexting scandal, and the activities of
information brokers generally.
The Congress followed through by enacting a pretexting specific criminal
the "Telephone Records and Privacy Act of 2006". It was signed into
law on January 12, 2007. It is now Public Law No. 109-476. It is codified at
18 U.S.C. § 1039(a)(3).
The Department of Justice (DOJ) is enforcing it. See, story titled
"District Court Imposes 21 Month Prison Sentence for Phone Record
Pretexting" in TLJ Daily E-Mail Alert No. 1,954, June 12, 2009. This
criminal statute, along with heightened security practices by carriers, has
lessened the importance of an FTC process.
This opinion also holds that Accusearch is not entitled to Section 230
immunity. This too is a victory for consumer protection advocates. However, the
Court of Appeals analysis may also create increased potential for imposition of
liability upon the very sort of interactive web sites that Section 230 was
enacted to prevent.
First, it should be noted that the majority opinion, like the Canadian amicus
brief, relies upon the 9th Circuit's opinion in Roommates.com. The
concurrence relies upon the 9th Circuit's opinion in Barnes v. Yahoo. In
these opinions the Judges of the 9th Circuit did not apply the statute. Rather,
they have a fundamental difference of policy objectives with the Congress, and
are engaging in incremental judicial slight of hand to limit the immunity
provided by the statute. It is not encouraging for the future of an open and
interactive web unhindered by tort litigation that another circuit is relying
upon these 9th Circuit opinions.
For more information on Roommates.com, see stories titled "9th Circuit Holds Roommates.com May be Liable for
Speech of Users" in
TLJ Daily E-Mail Alert No. 1,581, May 15, 2007; "9th Circuit to Rehear
Section 230 Case En Banc" in
TLJ Daily E-Mail
Alert No. 1,657, September 18, 2007; and "En Banc 9th Circuit Panel Rejects
Section 230 Immunity in Roommates.com Case" in
TLJ Daily E-Mail
Alert No. 1,741, April 2, 2008. For more information on Barnes v. Yahoo,
see story titled "9th Circuit Again
Rejects Section 230 Defense" in TLJ Daily E-Mail Alert No.
1,962, June 29, 2009.
Second, the majority opinion in the present case provides an analysis that
tort lawyers, and like minded members of the judiciary, will cite in future
cases to limit or deny Section 230 immunity.
The majority's standard, that a web site has no immunity "if it in some way
specifically encourages development of what is offensive about the content", is
both vague and far reaching. Encouragement and offensiveness are amorphous
concepts. Moreover, the sort of web sites that make the web dynamic and informative
encourage, rather than discourage, users to post comments and other content.
Also, when plaintiffs file suits, they allege the occurrence of something
offensive. Plaintiffs' lawyers will always be able to allege encouragement and
This standard provides less certainty and less predictability as to whether
Section 230 will be afforded. It also creates a higher expectation that immunity
will be denied. All this will disincent web site operators from providing
interactive features, or lead them to charge higher prices for them to cover
This case is FTC v. Accusearch, Inc., dba Abika.com, and Jay Patel, U.S.
Court of Appeals for the 10th Circuit, App. Ct. No. 08-8003, an appeal from the U.S. District Court for the District of Wyoming,
D.C. No. 2:06-CV-00105-WFD. Judge Hartz wrote the opinion of the Court of
Appeals, in which Judge Holmes joined. Tymkovich wrote a
|This issue contains the following items:
• Supreme Court Denies Cert in RS-DVR Case
• 10th Circuit Affirms FTC Judgment Against Information Broker
• 9th Circuit Rules on Prevailing Party Attorneys Fees in Copyright
• DHS/CBP Supervisor Embezzles Laptop from Airline Passenger
• 6th Circuit Declines to Rule on State Taxes,
E-Commerce, Commerce Clause, and Indian Tribes
New items are highlighted in
The House will not meet the week of June 29 through
July 3. It will next meet on July 7, 2009, at 2:00 PM.
The Senate will not meet the week
of June 29 through July 3. It will next meet on July 6,
2009, at 2:00 PM. See, Senate
10:00 AM. The Center
for Democracy and Technology (CDT) will host a news briefing titled "The
Emerging Privacy Landscape: Will Congress Enact Broad-based Consumer Privacy
Legislation This Year?". The speakers will include Leslie Harris, Ari
Schwartz, and Alissa Cooper of the CDT. To participate by phone, call
800-377-8846; the participant code is 92874158#. Breakfast will be served.
Location: CDT, 1634 I St., NW.
12:15 - 1:30 PM. The Federal Communications Commission (FCC) will host
a brown bag lunch titled "Bridging the Gap: Transactions 101 -- An
Introduction to Communications Transactions and Related FCC Oversight".
The speakers will be Neil Dellar (FCC Office of the General Counsel) and
Brennan (Hogan & Hartson). For more information, contact Sarah Reisert at
spreisert at hhlaw dot com. The
Federal Communications Bar Association
(FCBA) states that this is a FCBA event. Location:
Hogan & Hartson, 555 13th
Target date for the Office of the U.S.
Trade Representative's (OUSTR) to announce modifications to the list of
articles eligible for duty free treatment under the GSP resulting from the
OUSTR's 2008 Generalized System of Preferences (GSP) Annual Review.
See, notice in
the Federal Register, September 12, 2008, Vol. 73, No 178, at Pages
Deadline to submit comments to the
Office of the U.S. Trade Representative (OUSTR)
regarding the complaints filed with the World
Trade Organization (WTO) by Canada and Mexico regarding U.S. country of
origin labeling requirements. See,
notice in the
Federal Register, May 22, 2009, Vol. 74, No. 98, at Pages 24059-24061.
Deadline to submit initial comments to the Federal
Communications Commission (FCC) in response to its Notice of Inquiry (NOI)
regarding commercial use of a radio audience measurement device developed by
Arbitron named the portable people meter (PPM). The FCC adopted this
NOI on May 15, 2009, and released the text on May 18, 2009. It is FCC 09-43 in
MB Docket No. 08-187. See,
public notice DA 09-1231, and
notice in the
Federal Register, June 1, 2009, Vol. 74, No. 103, at Pages 26235-26241.
Deadline to submit comments to the National
Institute of Standards and Technology's (NIST)
Computer Security Division (CSD) regarding its
SP 800-53 Rev. 3 [220 pages in PDF] titled "Recommended Security
Controls for Federal Information Systems and Organizations".
Deadline to submit comments to the
National Institute of Standards and Technology's
(NIST) Technology Innovation Program Advisory Board in advance of its July 7,
2009, meeting "regarding general policy for the Technology Innovation Program,
its organization, its budget, and its programs within the framework of
applicable national policies as set forth by the President and the Congress".
See, notice in
the Federal Register, June 23, 2009, Vol. 74, No. 119, at Pages 29675-29676.
10:00 AM. The Federal Communications Commission (FCC) may
hold an event titled "Open Meeting". See,
agenda. Location: FCC, Room TW-C305,
445 12th St., NW.
The House will not meet.
10:00 AM. The U.S. Court of
Appeals (FedCir) will consider on the briefs Orenshteyn v. Citrix
Systems, App. Ct. No. 2003-1427. Location: Courtroom 201.
Deadline to submit reply comments to the Federal
Communications Commission (FCC) regarding the March 12, 2009, petition filed
by Denali Spectrum License Sub, LLC asking the FCC to forbear from applying
the unjust enrichment provisions of the FCC's competitive bidding rules. See,
notice in the
Federal Register, June 9, 2009, Vol. 74, No.109, at Pages 27318-27319.
Deadline to submit initial comments to the Federal
Communications Commission (FCC) in response to its public notice regarding
technical specifications for FM digital audio broadcasting (DAB). This
public notice is DA 09-1127 in MM Docket No. 99-325. See,
notice in the
Federal Register, June 12, 2009, Vol. 74, No. 112, at Pages 27985-27988.
The House will return from its Independence Day
District Work Period.
8:30 AM - 3:00 PM. The
National Institute of Standards and Technology's (NIST) Technology
Innovation Program Advisory Board will meet. See,
notice in the
Federal Register, June 23, 2009, Vol. 74, No. 119, at Pages 29675-29676.
Location: NIST, Administration Building, Employees' Lounge,
TIME? The Department of State's (DOS)
International Telecommunication Advisory Committee (ITAC) will meet to
discuss the International Telecommunication Union's (ITU) Regional
Preparatory Meeting for the World Telecommunication Development Conference
on August 13-25, 2009 in Lima, Peru. See,
notice in the
Federal Register, June 22, 2009, Vol. 74, No. 118, at Pages 29529-29530.
Location: AT&T, 10th floor, 1120 20th St., NW.
Effective date of the Federal Communications Commission's (FCC) final rule
regarding the reconfigured 800 MHz band plan established for the
U.S.-Canada border contained in the Fourth Memorandum Opinion and Order
released on February 25, 2009. This 4thMO&O is DA 09-442 in WT Docket No.
02-55. See, notice
in the Federal Register, May 5, 2009, Vol. 74, No. 85, at Pages 20602-20605.
|9th Circuit Rules on Prevailing Party
Attorneys Fees in Copyright Cases
6/26. The U.S. Court of Appeals
(9thCir) issued its
opinion [14 pages in PDF] in Cadkin v. Loose, holding
that a defendant is not entitled to attorney's fees as a prevailing party under
17 U.S.C. § 505 when a plaintiff voluntarily dismisses without prejudice a
lawsuit containing copyright claims.
This is a case involving claims of copyright
infringement. The plaintiffs voluntarily dismissed. The defendants sought
attorneys fees as the prevailing party, which the District Court awarded. This
Section 505 of the Copyright Act provides that "In any civil action
under this title, the court in its discretion may allow
the recovery of full costs by or against any party other than the United
States or an officer thereof. Except as otherwise provided by this title, the
court may also award a reasonable attorney’s fee to the prevailing party as
part of the costs."
The Court of Appeals reversed. It held that the 9th Circuit's 1941 opinion
in Corcoran v. CBS, 121 F.2d 575, a copyright case on point, is
"no longer good law" in light of the Supreme Court's 2001
Buckhannon v. West Virginia Department of Health and Human Resources,
532 U.S. 598.
Buckhannon was a Fair Housing Amendments Act (FHAA) case in which
the Supreme Court held that prevailing party status turns on whether there has
been a material alteration of the legal relationship of the parties.
The Court of Appeals wrote that "Because
the plaintiffs in this lawsuit remained free to refile their copyright claims
against the defendants in federal court following their voluntary dismissal of
the complaint, we hold the defendants are not prevailing parties and thus not
entitled to the attorney's fees the district court awarded them."
This case is Emil Cadkin, et al. v. Erma Loose, et al., U.S. Court of
Appeals for the 9th Circuit, App. Ct. No. 08-55311,
an appeal from the U.S. District Court for the Central District of California,
D.C. No. CV-03-01591-JVS, Judge James Selna presiding. Judge Raymond Fisher
wrote the opinion of the Court of Appeals, in which Judges Betty Fletcher and
Ronald Gould joined.
Embezzles Laptop from Airline Passenger
6/26. John Joseph Rendzia, Jr., pled guilty in, and was sentenced by, the
U.S. District Court (EDVa) for
embezzlement and conversion of a laptop computer.
Rendzia was at the relevant time a Department
of Homeland Security (DHS) Customs and Border Patrol (CBP) supervisor at the
Philadelphia International Airport. He embezzled the laptop from an airline
passenger, and converted it to his own use. See, Department of Justice (DOJ)
Numerous bills were introduced in the 110th Congress to limit DHS/CBP laptop
searches. Several have already been introduced in the 111th Congress. See, story
titled "Summary of Bills
Regarding DHS/CBP Laptop Searches" in TLJ Daily E-Mail Alert No.
1,953, June 11, 2009.
On January 7, 2009, Rep. Eliot Engel
(D-NY) and Rep. Ron Paul (R-TX),
introduced HR 239
the "Securing our Borders and our Data Act of 2009". Also, on
March 26, 2009, Rep.
Loretta Sanchez, and others, introduced HR 1726
the "Border Security Search Accountability Act of 2009". She also
introduced a bill in the last Congress. See, story titled "Rep. Sanchez
Introduces Bill Regarding Customs Searches of Laptops" in
TLJ Daily E-Mail
Alert No. 1,825, September 15, 2008.
Also in the 110th Congress, on September 26, 2008,
Feingold (D-WI), introduced S 3612
the "Travelers' Privacy Protection Act of 2008". The companion bill
in the House was HR 7118
introduced by Rep. Adam Smith
(D-WA). Also, on July 23, 2008, Rep.
Zoe Lofgren (D-CA) introduced HR 6588
the "Electronic Device Privacy Act of 2008".
See also, stories titled "Summary of Cases
Regarding DHS/CBP Laptop Searches" and "ACLU Seeks DHS Records
Regarding Unwarranted Laptop Searches" in TLJ Daily E-Mail Alert No. 1,953, June
|6th Circuit Declines to Rule on State Taxes,
E-Commerce, Commerce Clause, and Indian Tribes
6/26. The U.S. Court of Appeals
(6thCir) issued its
in Keweenah Bay Indian Community v. Rising, a declaratory
judgment action regarding Indian immunity from state taxation under the federal
Constitution's commerce clause. The Court of Appeals remanded the case to the
District Court to develop the factual record.
State legislatures and tax collectors seek to increase tax collections,
particularly from people and entities that lack influence in the state
legislature. This frequently involves out of state businesses and consumers, as
well as in state discrete and insular minorities who lack the normal protections
of the political process.
This case involves in state Indians, and the out of state businesses with
which they do business online.
The extent of state authority to tax out of state businesses, such as
Amazon.com, that have no presence in the taxing state, but which sell over the
internet, is the subject of other disputes. The Supreme Court's 1992
Quill v. North Dakota, 504 U.S. 298, seemingly precludes such taxation,
but states nevertheless seek to collect taxes through these online retailers.
The Quill opinion is based in large part upon the commerce clause. The
commerce clause is also the main line of defense for internet businesses against
state regulation of e-commerce.
For the present case, it must be recalled that the commerce clause contains a
further limitation upon state authority in the context of Indians.
The commerce clause provides that "The Congress shall have Power ... To
regulate Commerce with foreign Nations, and among the several States, and with
the Indian Tribes".
The Keweenaw Bay Indian Community is a
federally recognized Indian tribe located in the state of Michigan. Despite the
commerce clause, Michigan is taxing it and its members.
The Court of Appeals wrote that "Michigan has apparently adopted
a policy of taxing transactions involving the Community or its members, while
permitting them to apply to the Treasury for an exemption or refund on a
The Community and its members have claimed exemptions. The
state has retaliated by withholding federal funds, held by the state, and
owed to the Community.
The Community filed a complaint in the
U.S. District Court (WDMich) against
Jay Rising and other Michigan officials, seeking declaratory and injunctive
relief from Michigan's collection of sales and use taxes on transactions
involving the Community or its members. It also sought damages under 42 U.S.C. §
1983. The District Court granted summary judgment to Michigan on all claims.
This appeal followed.
The Court or Appeals ruled that the factual record developed by the District
Court in this case is too thin . "Because the questions presented cover a myriad
transactions and are too broad, too abstract, and unsupported by specific facts,
the relief requested cannot be granted at this time. Lacking a specific factual
context, the questions are not justiciable."
It held that the Community is not entitled to the declaratory and injunctive
relief it requests at this time. It remanded to the District Court. It added
that "it is possible that such relief may ultimately be attained through
appropriately fact-specific litigation."
The Court of Appeals also commented specifically about the lack of a factual
record on the subject of internet transactions.
It wrote that "it may be that there are a large number of sales in which there is a
legitimate dispute over whether the sale takes place within Indian country or
not. For example, what happens when an Indian orders a product or service
online -- say a magazine, book, educational service, or any one of hundreds of
similar items -- pays for it using a debit card that draws from a bank outside of
Indian country, and the product is delivered within Indian country? That
question, and similar variations thereof, have not been resolved and are not
properly before us."
This case may return to the Court of Appeals.
This case is Keweenah Bay Indian Community v. Jay Rising, et al., U.S.
Court of Appeals for the 6th Circuit, App. Ct. No. 08-1585, an appeal from the
U.S. District Court for the Western District of Michigan, at Marquette, D.C. No.
05-00224, Judge Gordon Quist presiding.
Judge Merritt wrote the opinion of the Court of Appeals, in which Judges Griffin
and Kethledge joined.
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