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August 3, 2010, Alert No. 2,117.
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Congress Passes Foreign Libel Judgments Bill

7/27. The House and Senate passed HR 2765 [LOC | WW], the "Securing the Protection of our Enduring and Established Constitutional Heritage Act" or "SPEECH Act". This bill, among other things, prohibits the recognition and enforcement in the United States of foreign defamation judgments when the foreign court does not afford at least as much protection for freedom of speech and press as the U.S. court.

Introduction. Currently, the sale and distribution of books and other written materials over the internet exposes authors, publishers and internet service providers (ISPs) in the U.S. to libel suits around the world. Rachel Ehrenfeld, one such book author, has been a proponent of this legislation.

This bill is an attempt to protect U.S. authors, publishers and ISPs from abusive speech suppressing litigation abroad. It does this by precluding the enforcement in state or federal courts of certain foreign libel judgments.

Kurt Wimmer, an attorney with the Washington DC office of the law firm of Covington & Burling who represents publishers and ISPs, wrote in his prepared testimony for a Senate Judiciary Committee (SJC) hearing on February 23, 2010, that "publishers can be sued in foreign jurisdictions that do not protect free expression simply because their work can be accessed through the Internet". He added that "courts, litigants and prosecutors have pursued distant authors based on Internet publications intended for the authors' local readers".

The bill recites in its findings that "Some persons are obstructing the free expression rights of United States authors and publishers, and in turn chilling the first amendment to the Constitution of the United States interest of the citizenry in receiving information on matters of importance, by seeking out foreign jurisdictions that do not provide the full extent of free-speech protections to authors and publishers that are available in the United States, and suing a United States author or publisher in that foreign jurisdiction."

Also, when an foreign court issues a libel judgment against a U.S. author, publisher or ISP, but the foreign party has not yet brought an action in a U.S. court to enforce the foreign judgment, if the U.S. party brings a declaratory judgment action in a U.S. court, the foreign party may prevail on a motion to dismiss for lack of personal jurisdiction, for failure to state a claim, or for the absence of a case or controversy. The bill attempts to remedy this also.

Sen. Jeff Sessions (R-AL), the ranking Republican on the SJC, stated in a release on July 28, 2010, that "Free speech is a bedrock principle of our Republic, essential to our continued liberty. The passage of the SPEECH Act further cements that legacy and strengthens free speech protections for all Americans. It will ensure that American writers cannot be penalized by foreign libel judgments that do not comply with American law, removing a dangerous chilling effect on the exercise of First Amendment rights."

Sen. Jeff SessionsSen. Sessions (at right) added that this bill "will also give Americans who have been subject to foreign libel judgments the opportunity to petition an American court and have their name cleared. This is an important bipartisan achievement and a reminder that Congress’ job is not to control and diminish free speech -- including political advocacy -- but to allow for the robust competition of ideas."

Legislative History. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law held a hearing on February 12, 2009. See, HJC web page with hyperlinks to prepared testimony.

Rep. Steve Cohen (D-TN) introduced HR 2765 on June 9, 2009. The House passed one version of this bill on June 15, 2009.

The SJC held a hearing on February 23, 2010. See, SJC web page for this hearing. The SJC amended and approved the bill on July 13, 2010. The full Senate amended and passed the bill on July 19. On July 27, the House passed the version of the bill passed by the Senate.

The 110th Congress also considered, but did not pass, related legislation. See, HR 5814 (110th) [LOC | WW], the "Free Speech Protection Act of 2008", introduced on April 16, 2008, by Rep. Peter King (R-NY). See also, story titled "Rep. King Introduces Free Speech Protection Act" in TLJ Daily E-Mail Alert No. 1,756, April 29, 2008.

Bill Summary. HR 2765 provides for the non-recognition of foreign libel judgments on either of two grounds: lack of First Amendment like protection and exercise of personal jurisdiction without due process like limitations.

The bill as enacted by the Congress provides that "Notwithstanding any other provision of Federal or State law, a domestic court shall not recognize or enforce a foreign judgment for defamation unless the domestic court determines that -- (A) the defamation law applied in the foreign court's adjudication provided at least as much protection for freedom of speech and press in that case as would be provided by the first amendment to the Constitution of the United States and by the constitution and law of the State in which the domestic court is located; or (B) even if the defamation law applied in the foreign court's adjudication did not provide as much protection for freedom of speech and press as the first amendment to the Constitution of the United States and the constitution and law of the State, the party opposing recognition or enforcement of that foreign judgment would have been found liable for defamation by a domestic court applying the first amendment to the Constitution of the United States and the constitution and law of the State in which the domestic court is located."

The bill also provides that "Notwithstanding any other provision of Federal or State law, a domestic court shall not recognize or enforce a foreign judgment for defamation unless the domestic court determines that the exercise of personal jurisdiction by the foreign court comported with the due process requirements that are imposed on domestic courts by the Constitution of the United States."

The bill next addresses ISPs. It provides that "Notwithstanding any other provision of Federal or State law, a domestic court shall not recognize or enforce a foreign judgment for defamation against the provider of an interactive computer service, as defined in section 230 of the Communications Act of 1934 (47 U.S.C. 230) unless the domestic court determines that the judgment would be consistent with section 230 if the information that is the subject of such judgment had been provided in the United States."

47 U.S.C. § 230 provides in part 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 bill also creates a cause of action "for a declaration that the foreign judgment is repugnant to the Constitution or laws of the United States", including that "it would not be enforceable" under the above quoted sections.

It adds that it is the sense of the Congress that such an action "shall constitute a case of actual controversy".

Wimmer wrote in his February 23 testimony that "Foreign libel judgments, especially those accompanied by a ``declaration of falsity,´´ also impose reputational harms on authors and publishers. No author or publisher wants to be tarred with the brush of a defamation judgment. This is especially true if that judgment states that the author or publisher published statements deemed by a court to be untrue. Unless a United States author is provided with a mechanism to challenge the foreign judgment on his or her own initiative, the foreign libel plaintiff can deprive the author or publisher with an opportunity to vindicate his or her reputation."

He added that "most American authors and publishers must wait for the foreign plaintiff to take action enforcing the judgment in the United States. This limitation permits the foreign plaintiff to use that foreign judgment to chill future criticism while also ensuring that a United States court will not have jurisdiction over him to declare the judgment unenforceable."

The bill defines "domestic court" to include both federal and state courts.

Rachel Ehrenfeld. Rachel Ehrenfeld has urged passage of this legislation. She wrote a book [Amazon] titled "Funding Evil: How Terrorism Is Financed -- and How to Stop It" in which she alleged that Khalid Salim Bin Mahfouz financially supported terrorism. He sued her in England, and obtained a default judgment.

She filed a complaint in U.S. District Court (SDNY) against Mahfouz seeking a declaratory judgment under the Declaratory Judgment Act, which is codified at 28 U.S.C. § 2201, that the foreign judgment is not enforceable in the U.S. for violating the First Amendment. The District Court dismissed for lack of jurisdiction over Mahfouz, and the Court of Appeals affirmed. See, story titled "2nd Circuit Affirms in Ehrenfeld v. Mahfouz" in TLJ Daily E-Mail Alert No. 1,725, March 3, 2008.

See also, Ehrenfeld's prepared testimony [PDF] for the February 12, 2009, HJC hearing.

Also, the New York legislature responded to the Mahfouz affair by passing its Libel Terrorism Protection Act. See, story titled "New York Senate Passes Libel Terrorism Protection Act", also in TLJ Daily E-Mail Alert No. 1,725, March 3, 2008.

Effectiveness. This bill is likely to provide some protection to individuals, such as Ehrenfeld, who have no assets abroad. Abusive foreign libel judgment creditors will be unable to enforce their foreign monetary judgments against such authors in the U.S.

However, this bill is likely to provide less protection to individuals and businesses that have assets abroad that are subject to seizure. Moreover, avoided nations with by despotic regimes provides limited results. This legislation is directed at Democratic nations, including the United Kingdom, France, and Australia, that have a history of abusive libel litigation against U.S. parties.

This bill does nothing to prevent foreign libel judgment creditors from enforcing their judgments in the foreign countries in which they obtain their judgments.

For example, Dow Jones was successfully sued in Australia for an allegedly defamatory news story published on the internet. See, December 10, 2002, opinion of the High Court of Australia in Dow Jones v. Gutnick, and story titled "High Court Rules Australia Has Jurisdiction Over Dow Jones Based on Web Publication" in TLJ Daily E-Mail Alert No. 564, December 10, 2002.

Jack Goldsmith and Tim Wu wrote in their book [Amazon] titled "Who Controls the Internet: Illusions of a Borderless World", that "Within two years of the decision, Dow Jones agreed to pay Gutnick AU$180,000 in damages and AU$400,000 in legal fees to settle the case."

They offered the analysis that "Australia can effectively coerce Dow Jones because Dow Jones is a multinational company with employees, facilities, contracts, and bank accounts in Australia. But the vast majority of Internet users -- students, e-consumers, porn purveyors, chat room participants, web-page operators, bloggers, and over 99 percent of other Net users -- have no connection to Australia or to any other country other than the one in which they live."

Similarly, Wimmer testified on February 23 that Congressional legislation would "only be a step. International law reform also will be essential".

Senate Passes Copyright Bill

8/2. Sen. Patrick Leahy (D-VT) and Sen. Jeff Sessions (R-AL) introduced S 3689 [LOC | WW], the "Copyright Cleanup, Clarification, and Corrections Act of 2010", on August 2, 2010. The Senate passed the bill the same day, without debate or a roll call vote.

The Senate Judiciary Committee (SJC) held no hearing or mark up for this bill. The House, which has recessed until September 14, has not passed this bill.

Many bills with words such as "technical corrections" in the title actually contain significant substantive changes to law. This bill, however, contains numerous largely non-controversial changes that do clean up, clarify, and correct the Copyright Act.

rightSen. Leahy (at right) stated in the Senate that this bill makes "commonsense improvements to the copyright system that will make it more efficient". See, Congressional Record, August 2, 2010, at Pages S6594-5.

He added that "The provisions of the bill fall into three categories: those designed to make the Office's operations more efficient; those designed to clarify issues of copyright law made unclear either by recent court decisions or by ambiguities in the statute; and those that are technical."

First, Sen. Leahy explained that "the Copyright Office has requested two statutory changes that will facilitate their transition to digital files and record keeping. These changes will also make it easier for filers to submit documents electronically." These two changes would affect Section 512 and 205.

Bill Summary. This article shows deletions from the current statute in strikethrough, and additions in red. Readers whose e-mail services or software, or browsers, remove HTML formatting tags may not be able to view these changes to the statute.

17 U.S.C. § 512 pertains to "Limitations on liability relating to material online".

Subsection 512(c) provides that "A service provider shall not be liable for monetary relief, or, ... for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider" among other things "has designated an agent to receive notifications of claimed infringement ... by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information: ..."

The bill then provides that the Register of Copyrights need not keep both electronic and hard copies of its directory of such agents. It amends then ending of Subsection 512(c)(2) to read as follows: "The Register of Copyrights shall maintain a current directory of agents available to the public for inspection, including through the Internet, in both electronic and hard copy formats, and may require payment of a fee by service providers to cover the costs of maintaining the directory."

The bill would also amend 17 U.S.C. § 205 regarding "Recordation of transfers and other documents".

Subsection 205(a) currently provides that "Any transfer of copyright ownership or other document pertaining to a copyright may be recorded in the Copyright Office if the document filed for recordation bears the actual signature of the person who executed it, or if it is accompanied by a sworn or official certification that it is a true copy of the original, signed document."

S 3689 would add the following sentence: "A sworn or official certification may be submitted to the Copyright Office electronically, pursuant to regulations established by the Register of Copyrights."

Next, the bill repeals 17 U.S.C. § 601 titled "Manufacture, importation, and public distribution of certain copies". This is the ancient manufacturing clause, a trade protectionist measure enacted for the benefit of U.S. printers and unions, that prohibited the importation into the U.S. of English language works by U.S. authors, unless manufactured or printed in the U.S. Over time it was narrowed. It has not been in effect since 1986.

The bill also revises 17 U.S.C. § 201 regarding "Ownership of copyright". It would amend Subsection 201(d) to read as follows: "Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title, including the right to transfer or license the exclusive right to another person in the absence of a written agreement to the contrary."

Sen. Leahy explained that the "bill clarifies, for instance, that the exclusive licensee of a work may further license the work in the absence of an agreement to the contrary".

The bill also revises 17 U.S.C. § 303 regarding "Duration of copyright: Works created but not published or copyrighted before January 1, 1978". It would amend Subsection 303(b) to read as follows: "The distribution before January 1, 1978, of a phonorecord shall not for any purpose constitute a publication of the musical work any musical work, dramatic work, or literary work embodied therein."

The bill also revises 17 U.S.C. § 803 regarding "Proceedings of Copyright Royalty Judges". It amends Subsection 803(b)(6)(A) to read as follows: "The Copyright Royalty Judges may issue regulations to carry out their functions under this title. All regulations issued by the Copyright Royalty Judges are subject to the approval of the Librarian of Congress. All regulations issued by the Copyright Royalty Judges are subject to the approval of the Librarian of Congress and are subject to judicial review pursuant to Chapter 7 of title 5, United States Code, except as set forth in subsection (d). Not later than 120 days after Copyright Royalty Judges or interim Copyright Royalty Judges, as the case may be, are first appointed after the enactment of the Copyright Royalty and Distribution Reform Act of 2004, such judges shall issue regulations to govern proceedings under this chapter."

The bill also revises 17 U.S.C. § 114 regarding "Scope of exclusive rights in sound recordings". It amends Subsection 114(f)(2)(C) to read as follows: "The procedures under subparagraphs (A) and (B) shall also be initiated pursuant to a petition filed by any copyright owners of sound recordings or any eligible nonsubscription service or new subscription service indicating that a new type of eligible nonsubscription service or new subscription service on which sound recordings are performed is or is about to become operational, for the purpose of determining reasonable terms and rates of royalty payments with respect to such new type of service for the period beginning with the inception of such new type of service and ending on the date on which the royalty rates and terms for preexisting subscription digital audio transmission services or preexisting satellite digital radio audio services eligible nonsubscription services and new subscription services, as the case may be, most recently determined under subparagraph (A) or (B) and chapter 8 expire, or such other period as the parties may agree."

The bill also revises Public Law No. 111-146. This was S 2968, the "Trademark Technical and Conforming Amendment Act of 2010". President Obama signed it into law on March 17, 2010. The bill revises Section 4, which provides for a Department of Commerce to write a report for the Congress on harm to small businesses resulting from unreasonable litigation tactics of trademark owners.

The amends Section 4's description of the study to be conducted to read as follows: "the extent to which small businesses may be harmed by litigation tactics by corporations attempting the purpose of which is to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner".

Sen. Leahy stated that this "fulfills a commitment I made to the chairman and ranking member of the House of Representatives Committee on the Judiciary just before the House passed the Trademark Technical and Conforming Amendments Act. The chairman and ranking member suggested that we strike the words ``by corporations´´ from section 4 of that law. I agreed, and offered to include such an amendment in subsequent legislation. That change is included in this bill."

Finally, the bill contains a section titled "Technical Corrections". It makes several changes in grammar and syntax. It also arranges the definitions of 17 U.S.C. S 101 in alphabetical order.

In This Issue
This issue contains the following items:
 • Congress Passes Foreign Libel Judgments Bill
 • Senate Passes Copyright Bill
 • Representatives Introduce Resolution Against New Taxes on Online Retailers
 • More Capitol Hill News
 • People and Appointments
Washington Tech Calendar
New items are highlighted in red.
Tuesday, August 3

The House is in recess. It will next meet at 2:00 PM on September 14, 2010. See, HConRes 308.

The Senate will meet at 9:30 AM. It will consider the nomination of Elena Kagan to be a Justice of the Supreme Court.

8:30 - 10:45 AM. Day one of a two day partly closed meeting of the Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Emerging Technology and Research Advisory Committee. The BIS did not disclose the subject matter of this meeting. See, notice in the Federal Register: July 16, 2010, Vol. 75, No. 136, at Pages 41439-41440. Location: DOC, Hoover Building, Room 3884, 14th Street between Pennsylvania and Constitution Avenues, NW.

10:00 AM. The Senate Judiciary Committee's (HJC) Subcommittee on Administrative Oversight and the Courts will hold a hearing titled "Protecting the Public Interest: Understanding the Threat of Agency Capture". The witnesses will be Nicholas Bagley (University of Michigan law school), Sidney Shapiro (Wake Forest University law school), and Tevi Troy (Hudson Institute). See, notice. The SJC will webcast this event. Location: Room 226, Dirksen Building.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced event titled "The New HIPAA/HITECH Regulations: What's New and What Do Those Changes Mean?". See, notice. Prices vary. CLE credit.

1:30 - 5:00 PM. The Federal Aviation Administration's (FAA) RTCA Special Committee 222: Inmarsat Aeronautical Mobile Satellite (Route) Services will meet. See, notice in the Federal Register, July 12, 2010, Vol. 75, No. 132, at Pages 39724-39725. Location: ARINC Building 6, Conference Center Room 6-A1, 2551 Riva Road, Annapolis, MD.

2:30 PM. The Senate Homeland Security and Government Affairs Committee's (SHSGAC) Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security will hold a hearing titled "Transforming Government Through Innovative Tools and Technology". See, notice. The SHSGAC will webcast this event. Location: Room 342, Dirksen Building.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed hearing. Location: Room 219, Hart Building.

Wednesday, August 4

8:30 - 10:45 AM. Day two of a two day partly closed meeting of the Department of Commerce's (DOC) Bureau of Industry and Security's (BIS) Emerging Technology and Research Advisory Committee. The BIS did not disclose the subject matter of this meeting. See, notice in the Federal Register: July 16, 2010, Vol. 75, No. 136, at Pages 41439-41440. Location: DOC, Hoover Building, Room 3884, 14th Street between Pennsylvania and Constitution Avenues, NW.

9:00 AM - 5:00 PM. Day one of a three day meeting of the National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). The agenda includes "Embedded software (biomedical, ICS) and associated malware", "FISMA Guidance", "National Initiative for Cybersecurity Education (NICE)", "Key Priorities next 2-3 years for NIST in cyber security", "Threat Vector Initiative", "Fedramp", "Cyber Coordinator Briefing", "National Protection and Programs Directorate Briefing", "Security Roadmap", "Initiative 3 Exercise (Einstein)", "S-Cap usage and continuous monitoring", "Authentication and Trust Framework Secure Online Transaction (SOT) Work", and "Assurance of Legitimate Government Outbound Mail". See, notice in the Federal Register, July 13, 2010, Vol. 75, No. 133, at Pages 39920-39921. Location: Marriott Hotel Washington, 1221 22nd St., NW.

10:00 AM. The Senate Judiciary Committee's (SJC) Subcommittee on Terrorism and Homeland Security will hold a hearing titled "Government Preparedness and Response to a Terrorist Attack Using Weapons of Mass Destruction". See, notice. The HJC will webcast this event. Location: Room 226, Dirksen Building.

10:00 - 11:00 AM. The American Enterprise Institute (AEI) will host an event titled "After ECFA: The Present and Future of Cross-Strait Relations". The ECFA is the Economic Cooperation Framework Agreement, a free trade agreement between the People's Republic of China and Taiwan. The speakers will be Shin-Yuan Lai (Minister of Taiwan's Mainland Affairs Council), and Gary Schmitt (AEI). See, notice. Location: AEI, 1150 17th St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Shum v. Intel, App. Ct. Nos. 2009-1385 and 2010-1109. Location: Courtroom 201.

2:00 - 4:00 PM. The Federal Communications Commission's (FCC) Consumer Advisory Committee will meet. See, FCC notice and notice in the Federal Register, July 19, 2010, Vol. 75, No. 137, at Page 41863. Location: FCC, Room 3B516, 445 12th St., SW.

Thursday, August 5

8:30 AM - 5:00 PM. Day two of a three day meeting of the National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). See, notice in the Federal Register, July 13, 2010, Vol. 75, No. 133, at Pages 39920-39921. Location: Marriott Hotel Washington, 1221 22nd St., NW.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda again includes consideration of several judicial nominees: Mary Helen Murguia (to be a Judge of the U.S. Court of Appeals for the 9th Circuit), Edmond E-Min Chang (U.S. District Court, Northern District of Illinois), Leslie Kobayashi (USDC/DHawaii), Denise Casper (USDC/DMass), and Carlton Reeves (USDC/DMiss). See, notice. The SJC will webcast this event. The SJC rarely follows its published agendas. Location: Room 226, Dirksen Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Typhoon Touch v. Dell, App. Ct. No. 2009-1589, an appeal from the U.S. District Court (EDTex) in a patent infringement case regarding touch screen computing technology. Location: Courtroom 201.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Nuance Communications v. ABBYY Software, App. Ct. No. 2010-1100. Location: Courtroom 201.

10:30 AM. The Federal Communications Commission (FCC) may hold an event titled "open meeting". Location: FCC, Commission Meeting Room, 445 12th St., SW.

Friday, August 6

8:00 AM - 12:30 PM. Day three of a three day meeting of the National Institute of Standards and Technology's (NIST) Information Security and Privacy Advisory Board (ISPAB). See, notice in the Federal Register, July 13, 2010, Vol. 75, No. 133, at Pages 39920-39921. Location: Marriott Hotel Washington, 1221 22nd St., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Extreme Network v. Enterasys Network, App. Ct. No. 2009-1325, an appeal from the U.S. District Court (WDWisc) in a patent infringement case regarding computer networks technology. Location: Courtroom 201.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Western Union v. Moneygram, App. Ct. No. 2010-1080, an appeal from the U.S. District Court (WDTex) in a patent infringement case regarding money transfer technology. Location: Courtroom 201.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding license renewals, discontinuance of operations, geographic partitioning, and spectrum disaggregation for certain Wireless Radio Services. The FCC adopted this NPRM on May 20, 2010, and released the text [71 pages in PDF] on May 25, 2010. It is FCC 10-86 in WT Docket No. 10-112. See, notice in the Federal Register, July 7, 2010, Vol. 75, No. 129, at Pages 38959-38974.

Monday, August 9

Target date for the Senate to begin its August recess. See, 2010 Senate calendar.

Tuesday, August 10

6:00 - 8:15 PM. The DC Bar Association will host a panel discussion titled "The Legal Duty to Provide Information Security: Who, What, When, Where and How". The speaker will be Jay Westermeier (Finnegan). The price to attend ranges from $89 to $129. Reporters are barred from attending most DC Bar events. This event qualifies for CLE credits. See, notice. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

Representatives Introduce Resolution Against New Taxes on Online Retailers

7/29. Rep. Paul Hodes (D-NH), Rep. Shelly Capito (R-WV), Rep. Joe Pitts (R-PA), Rep. Kurt Schrader (D-OR), and Rep. Dan Lungren (R-CA) introduced HRes 1570.

It resolves that "it is the sense of the House of Representatives that Congress should not impose any new burdensome or unfair tax collecting requirements on small online businesses, which would ultimately hurt the economy and consumers in the United States."

It also states that "Whereas any Federal legislation that would upset this open and fair environment and impose new onerous and burdensome tax collecting schemes on hundreds of thousands of small online retailers would not only adversely impact thousands of jobs and reduce consumer choice, but would also effectively put an end to the robust e-commerce marketplace that consumers in the United States currently enjoy".

The U.S. Supreme Court ruled in Quill v. North Dakota, 504 U.S. 298 (1992), that state and local taxing authorities are barred under the Commerce Clause from requiring remote sellers without a substantial nexus to the taxing jurisdiction to collect sales taxes for sales to persons within the jurisdiction. However, the Court added that Congress may extend such authority.

Legislation is introduced in every Congress that would give states the authority to impose taxes on distant and out of state direct retailers, including web based retailers. See, for example, HR 5660 [LOC | WW], the "Main Street Fairness Act", introduced by Rep. Bill Delahunt (D-MA) on July 1, 2010.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that the "CCIA has long opposed taxes on e-commerce, which would burden on-line vendors with the task of sorting through the policies of thousands of taxing authorities around the country, and forcing them to serve as revenue collection agencies for each of them. Small businesses from mom and pop operations to entrepreneurial companies may close if faced with such a legal and accounting nightmare."

It was referred to the House Ways and Means Committee (HWMC). Although, it is directed at legislative proposals that fall within the jurisdiction of the House Judiciary Committee (HJC). Rep. Robert Wittman (R-VA) joined as a cosponsor on July 30.

More Capitol Hill News

8/2. The Government Accountability Office (GAO) released a report [53 pages in PDF] titled "Cyberspace: United States Faces Challenges in Addressing Global Cybersecurity and Governance".

8/2. Sen. Ted Kaufman (D-DE) gave a speech in the Senate regarding science, technology, engineering, and math (STEM) education. See, Congressional Record, August 2, 2010, at Pages S6563-4.

7/29. Rep. Danny Davis (D-IL) introduced HR 5952 [LOC | WW], a bill to amend the Internal Revenue Code of 1986 to allow a credit for installation of "utility poles or supports made from composite materials which are comprised of at least 15 percent recycled materials and are fully recyclable". It was referred to the House Ways and Means Committee.

7/28. The Senate amended and approved, without objection, S 1749 [LOC | WW], the "Cell Phone Contraband Act of 2010". The House passed this bill on July 20, 2010. See, story titled "House Passes Prison Cell Phones Bill" in TLJ Daily E-Mail Alert No. 2,109, July 21, 2010. See also, story titled "Senate Judiciary Committee to Consider Cell Phones in Prisons" in TLJ Daily E-Mail Alert No. 2,038, January 25, 2010.

7/27. Rep. Vernon Ehlers (R-MI) and Rep. Jared Polis (D-CO) introduced HRes 1560, a resolution in support of computer science education.

7/27. Sen. Sheldon Whitehouse (D-RI) gave a speech in the Senate regarding cyber security. See, Congressional Record, July 27, 2010, at Pages S6265-6.

People and Appointments

8/2. Federal Communications Commission (FCC) Chairman Julius Genachowski named Phoebe Yang to be his senior advisor on broadband. She was previously General Counsel of the FCC's Omnibus Broadband Initiative. She has also worked for Discovery Communications, AOL Time Warner, and the law firm of Hogan & Hartson. See, FCC release.

8/2. Matthew Martens was named Chief Litigation Counsel at the Securities and Exchange Commission's (SEC) Division of Enforcement. He was previously an Assistant U.S. Attorney in the U.S. Attorney's Office for the Western District of North Carolina. See, SEC release.

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