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September 9, 2009, Alert No. 1,981.
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9th Circuit Considers Commerce Clause

9/9. The U.S. Court of Appeals (9thCir) issued its opinion [14 pages in PDF] in Los Angeles v. Kern County, rejecting a commerce clause challenge to a county ordinance.

This case involves recycling of wastes by the City of Los Angeles, and other recyclers. It does not involve information technology. However, the key legal issues involve the Constitution's commerce clause, which also serves to protect participants in electronic commerce from local and state government regulators who would burden or discriminate against online commerce.

Kern County, California, passed an ordinance banning the type of recycling used by Los Angeles. The City of Los Angeles and others filed a complaint in the U.S. District Court (CDCal) against the Kern County Water Agency and others alleging, among other things, violation of the commerce clause. The District Court held that Kern County violated the commerce clause.

The Court of Appeals held otherwise, on the basis of standing.

The commerce clause and the concept of standing are both in the Constitution. The Court of Appeals concluded that Los Angeles lacks "prudential standing", a concept not found in the Constitution. In so doing, it applied the "zone of interests test", which is not in the Constitution either. Hence, the Court applied extraconstitutional judicially created principles to hold that it would not be prudent to allow Los Angeles to invoke a Constitutional principle.

Waste disposal and recycling is interstate commerce. Kern County's ordinance regulates all recyclers. Los Angeles suffered financial harm as a result of the ordinance. But, the Court reasoned that "Financial injury, standing alone, does not implicate the zone of interests protected by the dormant Commerce Clause. That financial injury must somehow be tied to a barrier imposed on interstate commerce." Both Los Angeles and Kern County are in the same state. Thus, the Court wrote that, hypothetically, had the ordinance allowed out of state recyclers to do business in Kern County, Los Angeles would have suffered the same injury, but there would be not barrier to interstate commerce.

This limited notion of interstate commerce does not bode well for e-commerce actors who might seek to invoke the protections afforded by the commerce clause in the 9th Circuit.

Perhaps it should be noted that the 9th Circuit applies a far broader concept of interstate commerce in the context of federal criminal statutes, including those that bar certain internet based conduct. That is, crimes are created by statute; the Constitution provides that the Congress only has legislative powers enumerated in the Constitution; there is no general grant of criminal authority; the Congress relies upon the commerce clause as authority for most of the criminal statutes that it enacts.

This case is City of Los Angeles, et al. v. Kern County Water Agency, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 07-56564, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-06-05094-GAF, Judge Gary Fees presiding. Judge Diarmuid O'Scannlain wrote the opinion of the Court of Appeals, in which Judges Pam Rymer and Kim Wardlaw joined.

Export Regulators Seek Comments on Rules

9/8. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that requests comments on the BIS's "foreign policy-based export controls".

The BIS conducts these reviews annually. The deadline to submit comments is October 8, 2009.

The BIS promulgates regulations that implement the Export Administration Act of 1979 (EAA), as expired. The BIS regulates the export, and non-export, of, among other things, computers, software, and encryption products.

The main rationale for this regulatory regime is promoting national security by limiting hostile foreign nations' access to certain military products and technologies. Section 5 of the EAA pertains to "National Security Controls".

Section 6, the subject of the just released notice, pertains "Foreign Policy Controls". Some of its provisions are related to national security (such as regulation of exports to nations that support terrorism), while others are not (such as regulation of exports of crime control and detection items). Section 6 serves as the basis for the BIS's regulation of information and communications technologies.

The BIS has also leveraged its control over exports to limit access of U.S. purchasers to certain products and technologies. Also, Section 7 pertains to further regulation, including limits on the export of cedar logs, crude oil, and refined petroleum products.

The just published notice poses numerous questions. For example, it asks about "The likelihood that such controls will achieve the intended foreign policy purpose, in light of other factors, including the availability from other countries of the goods, software or technology proposed for such controls".

It also asks about the effect of controls on "the competitive position of the United States in the international economy", and the government's ability "to enforce the controls effectively".

The BIS also seeks comments on "Information that illustrates the effect of foreign policy-based export controls on trade or acquisitions by intended targets of the controls."

See, Federal Register, September 8, 2009, Vol. 74, No. 172, at Pages 46088-46089.

BIS Loosens Controls on Export of ICT Items to Cuba

9/8. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes, recites, and sets the effective date for, its new rules liberalizing rules affecting the export of information and communications technology (ICT) products to Cuba.

This notice states that "These actions do not suspend or terminate the United States embargo of Cuba." Rather, it is asserted that the embargo remains in effect, while exceptions are created for enumerated ICT products that are "consolidated gift parcels", personal luggage, or donated consumer devices.

These changes pertain to computers, computer peripherals, monitors, cell phones, SIM cards, satellite phones, digital cameras, television and radio receivers, and other products.

This notice also states that these rule changes revise "the scope of existing licensing policy regarding certain telecommunications links including satellite radio and satellite television services".

These rule changes are effective as of September 3, 2009. The BIS also seeks public comments. There is no deadline to submit comments.

OUSTR to Hold Hearing on PRC Compliance with WTO Trade Obligations

8/31. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register announcing that the interagency Trade Policy Staff Committee (TPSC) will hold a hearing on the People's Republic of China's (PRC) compliance with the commitments made in connection with its accession to the World Trade Organization (WTO).

The hearing will be held on Friday, October 2, 2009, at Room 1, 1724 F St., NW. The deadline to submit requests to testify, and copies of written testimony, is 12:00 NOON on September 18. The deadline to submit written comments is 12:00 NOON on September 22.

The OUSTR will use this hearing, testimony and comments to assist it in preparing its annual report to the Congress on the PRC's WTO compliance.

Terrence McCartin is the Deputy Assistant U.S. Trade Representative for China Enforcement. Claire Reade is the Chief Counsel for China Trade Enforcement.

The OUSTR seeks comments on, among other things, intellectual property rights (IPR), and IPR enforcement.

See, Federal Register, August 31, 2009, Vol. 74, No. 167, at Pages 44895-44896.

More Trade News

Catherine Ashton9/9. Catherine Ashton, the EU Trade Commissioner, gave a speech on September 8 at the China International Fair for Investment and Trade in Xiamin, People's Republic of China (PRC). She stated that "Protection of intellectual property, especially patents, is also crucial if more companies are to bring their ideas and their technology to China. Without the promise of protection for their innovations, European companies are sometimes hesitant to invest here. It is therefore very encouraging that the Chinese leadership sees the necessity of a well-enforced IPR system as a stepping-stone to future economic development." She also gave a speech on September 9 at the University of International Business and Economics in Beijing, PRC. She said that the "High Level Economic and Trade Dialogue" between the EU and PRC "gives both sides a means of working towards more effective protection of intellectual property rights, especially patents -- as these are crucial for innovation, investment and the transfer of technology. We are also working on strengthening our customs cooperation, which is vital in the fight against IPR infringement, as well as streamlining administrative and legal procedures in IPR protection. These issues, rather than tariffs, are now the big issues of EU/China trade relations."

9/9. The European Commission (EC) announced an investigation into "misleading advertising and unfair practices on websites selling consumer electronic goods". See, EC release.

9/8. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes, recites, sets the effective date of, and requests comments upon, rules changes regarding export license requirements for non-exports (in country transfers) and the BIS's Entity List. See, Federal Register, September 8, 2009, Vol. 74, No. 172, at Pages 45990-45993. These rules changes are effective September 8, 2009. There is no deadline to submit written comments on these rules changes.

9/8. The European Commission (EC) reappointed Damien Neven as the Chief Competition Economist for a term of three years. See, EC release.

9/3. President Obama announced his intent to nominate Michael Punke to be the U.S. Ambassador and Permanent Representative to the World Trade Organization (WTO) in Geneva, Switzerland. See, White House news office release. Peter Allgeier, whose responsibilities including this position, has left the Office of the U.S. Trade Representative (OUSTR). The OUSTR also stated in its release that "David Shark, Deputy Chief of the United States Mission to the WTO, is serving as interim Charge d'Affaires at the U.S. Mission pending Punke's confirmation, and Matt Rohde, Assistant United States Trade Representative for the WTO and Multilateral Affairs, will serve as interim senior official for the Doha round of negotiations". (Emphasis added.)

8/24. The European Commission (EC) released a document [338 pages in PDF] titled "EU Competition Law: Rules Applicable to Merger Control".

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In This Issue
This issue contains the following items:
 • 9th Circuit Considers Commerce Clause
 • Export Regulators Seek Comments on Rules
 • BIS Loosens Controls on Export of ICT Items to Cuba
 • OUSTR to Hold Hearing on PRC Compliance with WTO Trade Obligations
 • More Trade News
Washington Tech Calendar
New items are highlighted in red.
Wednesday, September 9

The House will meet at 10:00 AM for legislative business. It will consider numerous non-technology items under suspension of the rules. See, Rep. Hoyer's schedule for week of September 7.

The Senate will meet at 10:00 AM for morning business. It will then resume consideration of S 1023 [LOC | WW] , the "Travel Promotion Act of 2009".

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Strengthening Forensic Science in the United States". It will cover, among other topics, computer forensics. See, notice. Location: Room 226, Dirksen Building.

POSTPONED. 10:30 AM. The House Judiciary Committee's (HJC) Subcommittee on the Constitution, Civil Rights, and Civil Liberties will hold a hearing on HR 3162 (107th Congress), the "USA PATRIOT Act", as amended. Title II of this bill pertains to searches and seizures, electronic surveillance and access to data. See, notice. Location: Room 2141, Rayburn Building.

12:15 - 1:30 PM. The Federal Communications Commission's (FCC) Office of Strategic Planning and Policy (OSPP) will host an event titled "Opportunity to Help Shape FCC Data Practices and Follow-up to Access to Government's 2009 Survey on FCC Transparency and Openness". The speakers will include Paul de Sa (Chief of the OSPP), Chris Bjornson, Michelle Cohen, Peter Corea, and Howard Weiss. The Federal Communications Bar Association (FCBA) states that this is an FCBA event. Location: Covington & Burling, 12th floor, 1201 Pennsylvania Ave., NW.

1:30 PM. The Federal Communications Commission (FCC) will host an event titled "staff workshop for the development of a National Broadband Plan". The speakers will be John Horrigan (Consumer Research Director, Omnibus Broadband Initiative), Marc Berejka (Department of Commerce), Robert Cannon (FCC, Senior Counsel for Internet Law), Michael Wroblewski (Deputy Director of the FTC's Office of Policy Planning), Michael Nelson (Georgetown University), Sascha Meinrath (New America Foundation), Joel Kelsey (Consumers Union), Ari Schwartz (Center for Democracy and Technology, (Debra Berlyn (Consumer Policy Solutions), Adam Thierer (Progress & Freedom Foundation), Alan Simpson (Common Sense Media), Burke Culligan (Yahoo), Michael McKeehan (Verizon), Timothy Sparapani (Facebook). Location: FCC, Commission Meeting Room, 445 12th St., NW.

2:30 PM. The Senate Judiciary Committee (SJC) will hold a hearing on the nominations of Joseph Greenaway (to be a Judge of the U.S. Court of Appeals for the 3rd Circuit), Roberto Lange (USDC for the District of South Dakota), Irene Berger (USDC for for the Southern District of West Virginia), and Charlene Honeywell (USDC for the Middle District of Florida). See, notice. Location: Room 226, Dirksen Building.

6:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "CLE Seminar on Lobbying Rules for a New Administration". Most FCBA events are not open to the public. Location: Wiley Rein, 1776 K St., NW.

Day one of a two day event hosted by the National Defense Industrial Association (NDIA) titled "2009 Homeland Security Symposium and Exhibition". See, event web site. Location: Arlington Crystal Gateway Marriott, 1700 Jefferson Davis Hwy., Arlington, VA.

Deadline to submit comments to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) in response to its notice of proposed rulemaking regarding expanding the definition of money services businesses. See, notice in the Federal Register, May 12, 2009, Vol. 74, No. 90, at Pages 22129-22142.

Thursday, September 10

The House will meet at 10:00 AM for legislative business. It will consider numerous non-technology items under suspension of the rules. See, Rep. Hoyer's schedule for week of September 7.

8:15 AM - 12:45 PM. The U.S. China Economic and Security Review Commission will hold a hearing titled "China's Media and Information Controls -- The Impact in China and the United States". See, notice in the Federal Register, August 18, 2009, Vol. 74, No. 158, at Pages 41784-41785. Location: Room 562, Dirksen Building, Capitol Hill.

9:00 AM - 4:00 PM. The Federal Communications Commission's (FCC) Consumer Advisory Committee (CAC) will meet. See, August 24, 2009, public notice, and notice in the Federal Register, August 31, 2009, Vol. 74, No. 167, at Pages 44843-44844. The Federal Register notice states that the CAC "is expected to consider an outline of its recommendations to be submitted in connection with the National Broadband Plan Notice of Inquiry (NOI), Docket 09-51". Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St., SW.

9:30 - 11:30 AM. The Free State Foundation (FSF) will host an event discuss and release a book titled "New Directions in Communications Policy". It is a collection of essays by Gerald Brock, Diane Disney, Richard Epstein, Randolph May, John Mayo, Bruce Owen, Glen Robinson, James Speta, Dennis Weisman, Steven Wildman, and Christopher Yoo. RSVP to Susan Reichbart at sreichbart at freestatefoundation dot org. Location: Murrow Room, National Press Club, 13th floor, 529 14th St., NW.

10:00 AM. The House Judiciary Committee (HJC) will hold a hearing titled "Competition and Commerce in Digital Books". See, notice. Location: Room 2141, Rayburn Building.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Communications, Technology, and the Internet will hold a hearing titled "Oversight of the American Recovery and Reinvestment Act: Broadband, Part 2". The witnesses will be Larry Strickling (NTIA) and Jonathan Adelstein (RUS). See, notice. Location: Room 2123 Rayburn Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration of HR 985 [LOC | WW] and S 448 [LOC | WW], both titled the "Free Flow of Information Act of 2009". These bills have been on many previous agendas. The agenda also includes consideration of the nominations of Beverly Martin (to be a Judge of the U.S. Court of Appeals for the 11th Circuit), Jeffrey Viken (USDC/South Dakota), Neil MacBride (U.S. Attorney for the Eastern District of Virginia), Peter Neronha (U.S. Attorney for the District of Rhode Island), Daniel Bogden (U.S. Attorney for the District of Nevada), and Dennis Burke (U.S. Attorney for the District of Arizona). See, notice. Location: Room 226, Dirksen Building.

1:00 PM. The House Foreign Affairs Committee's (HFAC) Subcommittee on Asia, the Pacific and the Global Environment will hold a hearing titled "U.S.-China Relations: Maximizing the Effectiveness of the Strategic and Economic Dialogue". See, notice. Location: Room 2172, Rayburn Building.

Day one of a two day event hosted by the National Defense Industrial Association (NDIA) titled "2009 Homeland Security Symposium and Exhibition". At 9:00 to 10:30 AM there will be a panel discussion titled "Securing Cyberspace and America’s Cyber Assets: Threats, Strategies and Opportunities". The speakers will include DHS Assistant Secretary for Cybersecurity and Communications Gregory Schaffer. See, event web site. Location: Arlington Crystal Gateway Marriott, 1700 Jefferson Davis Hwy., Arlington, VA.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding additional spectrum for the Medical Device Radiocommunication Service. The FCC adopted this NPRM on March 17, 2009, and released the text on March 20, 2009. It is FCC 09-20 in ET Docket No. 09-36 and RM-11404. See, notice in the Federal Register, May 13, 2009, Vol. 74, No. 91, at Pages 22491-22498.

Friday, September 11

Rep. Hoyer's schedule for week of September 7 states that no votes are expected in the House.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Hewlett Packard v. Acceleron, App. Ct. No. 2009-1283. Location: Courtroom 402.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft NIST IR 7581 [32 pages in PDF] titled "System and Network Security Acronyms and Abbreviations".

Saturday, September 12

Deadline to submit comments to the Department of Homeland Security's (DHS) Homeland Security Advisory Council (HSAC) regarding the findings and recommendations of the HSAC's Homeland Security Advisory System Task Force. The HSAC will meet by teleconference on this subject on September 15, 2009. See, notice in the Federal Register, September 8, 2009, Vol. 74, No. 172, at Pages 46215-46216.

Sunday, September 13

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-73 -3 titled "Interfaces for Personal Identity Verification".

Monday, September 14

Deadline to submit nominations to the Department of Commerce's (DOC) National Oceanic and Atmospheric Administration (NOAA) for membership on the NOAA Science Advisory Board (SAB). See, notice in the Federal Register, July 16, 2009, Vol. 74, No. 135, at Page 34559.

Tuesday, September 15

RESCHEDULED FOR DECEMBER 1 and 2. The Federal Trade Commission (FTC) will hold the first in a series of workshops titled "Can News Media Survive the Internet Age? Competition, Consumer Protection, and First Amendment Perspectives". See, original FTC release, and notice of postponement.

12:30 - 2:00 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Committee will host a brown bag lunch to discuss "upcoming activities and your suggestions for the new 2009-2010 year". For more information, contact Karen Higa at 202-974-5764 or email to khiga at chadbourne dot com. Location: Chadbourne & Parke,1200 New Hampshire Ave., NW.

1:00 PM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold a hearing titled "Mandatory Binding Arbitration -- Is it Fair and Voluntary?". See, notice. See also, HR 1020 [LOC | WW], and S 931 [LOC | WW], both titled the "Arbitration Fairness Act of 2009". Many information and communications technology companies, including wireless communications service providers, include arbitration clauses in consumer contracts. Location: Room 2141, Rayburn Building.

5:00 - 6:00 PM. The Department of Homeland Security's (DHS) Homeland Security Advisory Council (HSAC) will meet by teleconference to review the findings and recommendations of the HSAC's Homeland Security Advisory System Task Force. See, notice in the Federal Register, September 8, 2009, Vol. 74, No. 172, at Pages 46215-46216.

Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding the free trade agreement (FTA) between the U.S. and Korea. Representatives of the two nations signed this FTA back on June 30, 2007. Democrats in the Congress have declined to approve it. This FTA includes technology related provisions. See, text of the FTA, and sections regarding telecommunications [17 pages in PDF], electronic commerce [4 pages in PDF], and intellectual property rights [35 pages in PDF]. See, notice in the Federal Register, July 27, 2009, Vol. 74, No. 142, at Page 37084.

12:00 NOON. Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding the free trade agreement (FTA) between the U.S. and Columbia. Representatives of the two nations signed this FTA back on November 22, 2006, and amendments on June 28, 2007. Democrats in the Congress have declined to approve it. This FTA includes technology related provisions. See, notice in the Federal Register, July 29, 2009, Vol. 74, No. 144, at Pages 37759-37760.

Wednesday, September 16

10:00 AM. The Senate Judiciary Committee (SJC) will hold an oversight hearing on the Federal Bureau of Investigation (FBI). FBI Director Robert Mueller will testify. Location: Room 226, Dirksen Building.

5:30 - 6:30 PM. The DC Bar Association will host an event titled "E-Discovery, Sanctions, and the Bench: Have the Courts Gone Too Far?". The speaker will be John Facciola (U.S. District Court). The price to attend ranges from $15 to $35. Most DC Bar events are not open to the public. See, notice. For more information, call 202-626-3463. Location: DC Bar Conference Center, 1101 K St., NW.

6:00 - 8:00 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour". For more information, contact Micah Caldwell at mcaldwell at fh-law dot com, Stefanie Desai at szdesai at mintz dot com, or Darren Abernethy at djabernethy at mintz dot com. Location: Elephant & Castle, 900 19th St., NW.