12/29. President Obama signed into law S 3386 [LOC | WW], the "Restore Online Shoppers' Confidence Act". See, White House news office release.

Legislative History. Sen. John Rockefeller (D-WV) introduced this bill on May 19, 2010. See, story titled "Sen. Rockefeller Introduces Bill to Regulate Aggressive Sales Tactics on Internet" in TLJ Daily E-Mail Alert No. 2,086, May 21, 2010.

The SCC amended and approved it on June 19, 2010. See, story titled "Senate Commerce Committee Approves Bill to Regulate Aggressive Sales Tactics on Internet" in TLJ Daily E-Mail Alert No. 2,096, June 17, 2010.

Sen. Rockefeller discussed this bill in the Senate on November 18, 2010. See, story titled "Sen. Rockefeller Discusses His Bill to Regulate Internet Sales Practices" in TLJ Daily E-Mail Alert No. 2,162, November 22, 2010.

The House passed the bill on December 15, 2010. See, story titled "House Passes Rockefeller Internet Sales Practices Bill" in TLJ Daily E-Mail Alert No. 2,180, December 16, 2010.

Sen. Rockefeller has stated that the purpose of this bill is to prevent businesses from billing online consumers' credit and debit cards for things that they have not ordered.

Comparison to Section 5 of FTC Act. At the same time that this bill was being enacted into law, the Federal Trade Commission (FTC) used its "unfair or deceptive acts or practices" authority, under Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45, to bring an action against numerous internet based businesses that charged consumers' credit and debit cards for things that they had not ordered. See, related story in this issue titled "FTC Files Complaint Alleging Unfair or Deceptive Online Billing Practices".

Section 5 of the FTC Act is a broad grant of authority, which does not reference internet sales, but which the FTC has successfully applied to internet sales practices. S 3386 gives the FTC specific authority with respect to certain internet sales practices.

S 3386 gives enforcement authority to the FTC. However, it also gives enforcement authority to the states. Section 5 of the FTC Act is enforced only by the FTC.

S 3386 regulates the use of negative option marketing on the internet. The FTC's just filed action alleges that the defendants' negative option marketing practices violated the FTC Act.

S 3386 also regulates transfers of credit or debit card information to any "post-transaction third party seller", and regulates the activities of these post-transaction third party sellers.

It provides that "It shall be unlawful for any post-transaction third party seller to charge or attempt to charge any consumer's credit card, debit card, bank account, or other financial account for any good or service sold in a transaction effected on the Internet, unless ... before obtaining the purchaser’s billing information, the post-transaction third party seller has clearly and conspicuously disclosed to the purchaser all material terms of the transaction ... and ... the post-transaction third party seller has received the express informed consent for the charge from the consumer whose credit card, debit card, bank account, or other financial account will be charged by ... obtaining from the consumer ... the full account number of the account to be charged; and ...the consumer's name and address and a means to contact the consumer; and ... requiring the consumer to perform an additional affirmative action, such as clicking on a confirmation button or checking a box that indicates the consumer’s consent to be charged the amount disclosed."

S 3386 also provides that "It shall be unlawful for an initial merchant to disclose a credit card, debit card, bank account, or other financial account number, or to disclose other billing information that is used to charge a customer of the initial merchant, to any post-transaction third party seller for use in an Internet-based sale of any goods or services from that post-transaction third party seller."

It also provides that "It shall be unlawful for any person to charge or attempt to charge any consumer for any goods or services sold in a transaction effected on the Internet through a negative option feature, unless ... before obtaining the purchaser’s initial agreement to participate in the negative option plan, the seller has clearly and conspicuously disclosed all material terms of the transaction ..."

12/21. The Federal Trade Commission (FTC) filed a civil complaint [81 pages in PDF, redacted] in the U.S. District Court (DNev) against Jeremy Johnson and numerous other defendants alleging violation of Section 5(a) of the FTC Act in connection with their marketing and sale of internet based information products and services. See also, FTC release.

The complaint alleges that the defendants "operate a far-reaching Internet enterprise that deceptively enrolls unwitting consumers into memberships for products or services and then repeatedly charges their credit cards or debits funds from their checking accounts without consumers' knowledge or authorization for memberships the consumers never agreed to accept. This scam has caused hundreds of thousands of consumers to seek ... reversals of charges to their credit cards or debits to their banks accounts."

The complaint states that defendants formed numerous "Shell Companies using maildrop addresses and straw-figures as owners and officers because they knew that it was unlikely they could obtain additional merchant accounts using existing companies, due to these companies’ negative chargeback histories."

"They have also attempted to drive down their chargeback rates by threatening to report consumers who seek chargebacks to an Internet consumer blacklist they operate called ``BadCustomer.com´´ ..." It further alleges that defendants "have attempted to counter the large number of complaints about their conduct by flooding the Internet with supposedly independent positive articles and other web pages."

The complaint alleges that the defendants violated the FTC Act with their misrepresentations regarding grant programs, and charging consumers' credit cards and debiting their bank accounts without their authorization. It also alleges that "misrepresenting that the positive articles and other web pages about Defendants' grant and money-making products posted on the Internet are independent reviews from unbiased consumers" violates the FTC Act.

Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45, provides, in relevant 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 also alleges violation of Section 907(a) of the Electronic Funds Transfer Act (EFTA), which is codified at 15 U.S.C. § 1693e(a), and Section 205.10(b) of Regulation E, 12 C.F.R. § 205.10(b), in connection with unauthorized charges to credit and debit cards.

Section 907 provides in part that "A preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing ..."

This case is FTC v. Jeremy Johnson, et al., U.S. District Court for the District of Nevada, D.C. No. 2:10-cv-02203-RLH -GWF, Judge Roger Hunt presiding.

12/29. The House and Senate passed HR 6517 [LOC | WW], the "Omnibus Trade Act of 2010", on December 22, 2010. President Obama signed it on December 29, 2010. See, White House news office release.

It extends the sunset date for the Trade Adjustment Assistance (TAA) subsidy program from January 1, 2011, to February 13, 2011.

Ron Kirk (at right), the U.S. Trade Representative (USTR), stated in a release on December 22 that "I am disappointed that Congress adjourned without fully extending three trade programs that support American jobs and increase U.S. competitiveness. While the extension of Trade Adjustment Assistance and the Andean Trade Preference Act is important and will allow these programs to continue for an additional six weeks, these programs require a long-term extension to ensure that they operate as intended".

Kirk added that "The exclusion of the Generalized System of Preferences from the package means that this important program will lapse on December 31 ... The Obama Administration will continue to work with Congress in an effort to secure a full, long-term reauthorization of these three essential trade programs."

12/27. The White House news office released a harsh statement of condemnation of the criminal conviction of Mikhail Khodorkovsky in Russia. It states that Russia has failed to keep its commitment to the rule of law. It states nothing, however, about Russia joining the World Trade Organization (WTO). It states that "We are deeply concerned that a Russian judge today has indicated that for a second time Mikhail Khodorkovsky and Platon Lebedev will be convicted. We are troubled by the allegations of serious due process violations, and what appears to be an abusive use of the legal system for improper ends. The apparent selective application of the law to these individuals undermines Russia’s reputation as a country committed to deepening the rule of law. The Russian government cannot nurture a modern economy without also developing an independent judiciary that serves as an instrument for furthering economic growth, ensuring equal treatment under the law, and advancing justice in a predictable and fair way." See also, statement by Secretary of State Hillary Clinton, which does not reference WTO membership either.

12/17. The Office of the U.S. Trade Representative (USTR) published a notice in the Federal Register requesting public comments regarding the proposed Anti-Counterfeiting Trade Agreement (ACTA). See, stories titled "ACTA Draft Released", "Summary of ACTA", and "Reaction to ACTA" in TLJ Daily E-Mail Alert No. 2,140, October 11, 2010. The deadline to submit comments is 5:00 PM on February 15, 2011. See, Federal Register, December 17, 2010, Vol. 75, No. 242, at Pages 79069-79070.

12/17. The Department of Commerce's (D)C) Bureau of Industry and Security (BIS) published a notice in the Federal Register that amends the Export Administration Regulations (EAR) with annual change to the Entity List for entities located in the People's Republic of China and Russia. On May 28, 2010, the BIS published amendments for entities located in Canada, Egypt, Germany, Hong Kong, Israel, Kuwait, Lebanon, Malaysia, South Korea, Singapore, and the United Kingdom. The just published notice states that a third notice "will likely be published in early 2011" for entities in the rest of the world. See, Federal Register, December 17, 2010, Vol. 75, No. 242, at Pages 78883-78892.

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No events listed.

No events listed.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking and Notice of Inquiry (NPRM & NOI) [36 pages in PDF] regarding expanding the FCC's location surveillance mandates for mobile communications and devices. The FCC adopted and released this item on September 23, 2010. It is FCC 10-177 in PS Docket No. 07-114 and WC Docket No. 05-196. See, notice in the Federal Register, November 2, 2010, Vol. 75, No. 211, at Pages 67321-67333.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-51 Rev. 1 [13 pages in PDF], titled "Guide to Using Vulnerability Naming Schemes", released on December 6, 2010.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft NIST IR-7694 [24 pages in PDF], titled "Specification for the Asset Reporting Format 1.1", released on December 6, 2010.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft NIST IR-7693 [32 pages in PDF], titled "Specification for Asset Identification 1.1", released on December 6, 2010.

No events listed.

The House will meet. Members will take the oath of office.

The Senate will meet at 12:00 NOON.

The House will meet.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Third Notice of Proposed Rulemaking (3rdNPRM) [43 pages in PDF] regarding technical rules for the Fixed-Satellite Service in the 37.5-42.5 GHz band. The FCC adopted this item on October 29, 2010, and released the text on November 1, 2010. It is FCC 10-186 in IB Docket No. 97-95. See, original notice in the Federal Register, November 22, 2010, Vol. 75, No. 224, at Pages 71064-71066, and correction notice in the Federal Register, December 13, 2010, Vol. 75, No. 238, at Page 77602.

12/22. The Senate confirmed five more judicial nominees on the last day of its lame duck session. See, Congressional Record, December 22, 2010, at Page S11072.

The Senate confirmed Mary Murguia to be a Judge of the U.S. Court of Appeals (9thCir). She has been a Judge of the U.S. District Court (DAriz) since 2000. She was appointed by former President Clinton. Before that she held various state and federal prosecutorial positions.

The Senate confirmed Scott Matheson to be a Judge of the U.S. Court of Appeals (10thCir). He has been a professor at the University of Utah's law school since 1985. Before that, he worked for the law firm of Williams & Connolly. Also, he was the U.S. Attorney for the District of Utah during the Clinton administration. He is the author of the 2009 book [Amazon] titled "Presidential Constitutionalism in Perilous Times". He is the brother of Rep. Jim Matheson (D-UT) who narrowly won re-election in November. See also, story titled "Obama Picks Matheson for 10th Circuit" in TLJ Daily E-Mail Alert No. 2,055, March 4, 2010.

The Senate confirmed Kathleen O'Malley to be a Judge of the U.S. Court of Appeals (FedCir). She has long been a Judge of the U.S. District Court (NDOhio), to which she was appointed by former President Clinton.

The Senate confirmed Beryl Howell to be a Judge of the U.S. District Court (DC). From 2003 to 2009, she was Executive Managing Director and General Counsel of Stroz Friedberg. Before that, she was Senate Judiciary Committee (SJC) staffer for Sen. Patrick Leahy (D-VT).

The Senate confirmed Robert Wilkins to be a Judge of the U.S. District Court (DC). Wilkins is a partner in the Washington DC office of the law firm of Venable. His law firm biography states that he is a criminal defense attorney who has also worked on intellectual property cases.

This leaves many judicial nominees unconfirmed, including:

• Susan Carney, U.S. Court of Appeals (2ndCir).
• James Graves, U.S. Court of Appeals (5thCir).
• Goodwin Liu, U.S. Court of Appeals (9thCir).
• James Boasberg, U.S. District Court (DC).
• Amy Jackson, U.S. District Court (DC).
• Edward Chen, U.S. District Court (NDCal).
• Edward Davila, U.S. District Court (NDcal).

Sen. Patrick Leahy (D-VT) gave a long speech in the Senate in which he complained about the unfairness of the Senate Republicans in not confirming these and many other District Court nominees. See, Congressional Record, December 22, 2010, at Pages S10988-90.

Republicans gave similar speeches when Senate Democrats blocked confirmation of many of former President Bush's judicial nominees.

See also, "People and Appointments" in TLJ Daily E-Mail Alert No. 2,187, December 23, 2010; "Senate Confirms More Judges" and "Pending Executive Branch Nominations" in TLJ Daily E-Mail Alert No. 2,184, December 20, 2010; and "Senate Confirms Four Judicial Nominees" in TLJ Daily E-Mail Alert No. 2,182, December 18, 2010.

12/29. President Obama announced his intent to give a recess appointment to James Cole to be the Deputy Attorney General (DAG), the number two position at the Department of Justice (DOJ). See, White House news office release.

The position was previously held by David Ogden, who left after a short tenure over differences with Attorney General Eric Holder. Gary Grindler has long been the acting DAG.

The Senate Judiciary Committee (SJC) held a hearing in June, and approved Cole's nomination in July.

Sen. Patrick Leahy (D-VT), Chairman of the SJC, stated in a release on December 29 that "I believe that he would have been confirmed by the Senate had his nomination been given an up-or-down vote. The delays in considering his nomination were unnecessary and wrong."

The Constitution gives the President the authority to make recess appointments. It provides that "The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."

This is construed to mean that Cole's appointment will terminate at the end of the 1st Session of the 112th Congress, at the end of 2011. If the Senate were to confirm Cole, then they would serve at the pleasure of the President, which could be until January of 2017.

The Constitutional purpose of recess appointments is to fill vacancies that may happen during a Senate recess. Recesses were much longer in legislative bodies in the late 18th Century when this clause was drafted. Both Presidents Clinton and Bush also resorted to the practice. Presidents Clinton, Bush, and Obama, use the process to evade the Senate confirmation process, rather than to serve the Constitutional purpose. Presidents of both parties abuse their authority.

Cole is a partner in the Washington DC office of the law firm of Bryan Cave. His Bryan Cave biography states that he has "Represented individuals and entities charged with operating offshore internet gambling businesses". Long ago he worked at the Department of Justice (DOJ), including as Deputy Chief of its Public Integrity Section (PIS).

Cole's Bryan Cave biography also states that he was "Independent Consultant for American International Group, Inc.". Republican opposition to his confirmation is connected to his work for AIG.

12/22. The Senate confirmed Michele Leonhart to be the Administrator of the Department of Justice's (DOJ) Drug Enforcement Administration (DEA). See, Congressional Record, December 22, 2010, at Page S11072.

12/22. The Senate concluded its lame duck session without confirming Eric Hirschhorn to be Under Secretary of Commerce for Export Administration, a position with authority over licensing exports of dual use products, including computers and software.

12/22. The Senate concluded its lame duck session without confirming Michael Punke to be Deputy U.S. Trade Representative.

12/22. The Senate concluded its lame duck session without confirming Islam Siddiqui to be the Chief Agricultural Negotiator in the Office of the U.S. Trade Representative (OUSTR).

12/22. The Senate concluded its lame duck session without confirming Peter Diamond to be a member of the Federal Reserve Board.

12/20. The Department of the Treasury (DOT) published a notice in the Federal Register requesting nominations for membership on the DOT's Financial Crimes Enforcement Network's (FinCEN) Bank Secrecy Act Advisory Group. See, Federal Register, December 20, 2010, Vol. 75, No. 243, at Page 79440.