|TLJ News from August 16-20, 2007|
Supreme Court to Consider 10b Liability of Stock Issuers' Vendors
8/20. The Supreme Court (SCUS) issued an order in Stoneridge Investment Partners v. Scientific Atlanta allowing for the late filing of amicus curiae briefs by former Commissioners of the Securities and Exchange Commission (SEC), and by Rep. Barney Frank (D-MA) and Rep. John Conyers (D-MI). Chief Justice John Roberts and Justice Stephen Breyer did not participate in this, or previous, decisions. See, Orders List [PDF].
Several former SEC Commissioners support the position of the plaintiffs. In contrast, the Department of Justice's (DOJ) Office of the Solicitor General (OSG) earlier submitted an amicus brief in which it urged the SCUS to reject the position of the plaintiffs, and affirm the judgment of the Court of Appeals.
The plaintiff, Stoneridge Investment Partners, filed a class action complaint in U.S. District Court (EDMo) against Charter Communications, a cable company, alleging securities fraud in violation of Section 10b of the Securities Exchange Act of 1934, which is codified at 15 U.S.C. § 78j(b), and SEC rule 10b-5 thereunder. Stoneridge had purchased Charter Communications stock. Stoneridge also named as defendants Scientific Atlanta and Motorola, equipment suppliers of Charter Communications.
The District Court granted a motion to dismiss filed by the equipment suppliers, and entered judgment. Stoneridge appealed.
The U.S. Court of Appeals (8thCir) issued its opinion [9 pages in PDF] on April 11, 2006 affirming this judgment of the District Court. This opinion is also reported at 443 F.3d 987. The SCUS granted certiorari on March 26, 2007. Oral argument before the SCUS is scheduled for October 9, 2007.
The SCUS states that the question presented [PDF] is "Whether this Court’s decision in Central Bank, N.A. v. First Interstate Bank, N.A., 511 U.S. 164 (1994), forecloses claims for deceptive conduct under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5(a) and (c), 17 C.F.R. 240.l0b-5(a) and (c), where Respondents engaged in transactions with a public corporation with no legitimate business or economic purpose except to inflate artificially the public corporation's financial statements, but where Respondents themselves made no public statements concerning those transactions." See, SCUS opinion in Central Bank v. First Interstate Bank.
The OSG wrote in its amicus curiae brief that "Allowing liability for a primary violation under the circumstances presented here would constitute a sweeping expansion of the judicially inferred private right of action in Section 10(b) and Rule 10b-5, potentially exposing customers, vendors, and other actors far removed from the market to billions of dollars in liability when issuers of securities make misstatements to the market."
The SCUS has received numerous other amicus briefs. See, SCUS docket.
This case is Stoneridge Investment Partners, LLC, v. Scientific-Atlanta, Inc., et al., a petition for writ of certiorari to the U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 05-1974. The Court of Appeals heard an appeal from the U.S. District Court (EDMo).
NTIA Clarifies Deadlines for PSIC Grant Applications
8/20. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register regarding applications for grants under its Public Safety Interoperable Communications (PSIC) Grant Program.
The August 20 notice states that "Each State and Territory continues to be required to submit its application and narrative no later than 11:59 p.m. on August 22, 2007. Each State and Territory, however, will now be required to submit its Statewide Communications Interoperability Plans and Investment Justification under the PSIC Grant Program no later than December 3, 2007." See, Federal Register, August 20, 2007, Vol. 72, No. 160, at Pages 46442-46444.
On July 18, Carlos Gutierrez, the Secretary of Commerce, John Kneuer, head of the National Telecommunications and Information Administration (NTIA), and Michael Chertoff, Secretary of Homeland Security, held a news conference to announce the $968 Million in Public Safety Interoperable Communications (PSIC) grants to be awarded by September 30, 2007. They stated that applications by states, territories and the District of Columbia are due in 30 days. See, story titled "Public Safety Interoperable Communications Grant Applications Due in 30 Days" in TLJ Daily E-Mail Alert No. 1,612, July 19, 2007.
On July 23, the NTIA published a notice in the Federal Register that stated that PSIC grant applications are due within 30 days of July 23, at 11:59 PM. See, Federal Register, July 23, 2007, Vol. 72, No. 140, at Pages 40120-40123.
People and Appointments
8/20. Thomas Sydnor will join the Progress & Freedom Foundation (PFF) in September as a Senior Fellow and Director of the Center for the Study of Digital Property (IPcentral). He previously worked in the U.S. Patent and Trademark Office's (UPSTO) Office of International Relations. See, PFF release.
8/20. The Library of Congress's (LOC) Copyright Royalty Board (CRB) published a notice in the Federal Register that announces the partial Phase I settlement in connection with the 2003 cable royalty fund. The notice also requests that comments be submitted to the Copyright Royalty Judges regarding a motion for further distribution in connection with that fund by September 19, 2007. See, notice in the Federal Register, August 20, 2007, Vol. 72, No. 160, at Pages 46516-46520.
9th Circuit Holds Arbitration Clause in Cell Phone Contract Unenforceable
8/17. The U.S. Court of Appeals (9thCir) issued its opinion [29 pages in PDF] in Shroyer v. New Cingular Wireless Services and AT&T, holding that a mandatory arbitration clause in a standard cell phone service contract is unconscionable, and therefore, unenforceable. See, full story.
FCC Sets Date for 700 MHz Auction
8/17. The Federal Communications Commission (FCC) released a Public Notice [PDF] (DA 07-3415) that schedules the 700 MHz auction (Auction Number 73) to begin on January 16, 2007, and requests comments on bidding procedures.
This notice seeks comments on "anonymous bidding, to enhance competition by safeguarding against potential anticompetitive auction strategies", "applicants trying to combine multiple C Block licenses to place bids on packages of those licenses", "block-specific aggregate reserve prices, to help assure that the public recovers a portion of the licenses' value", and "offering licenses for the relevant block(s) in a prompt subsequent auction in the event auction results do not satisfy applicable reserve prices".
The deadline to submit initial comments is August 31, 2007. The deadline for reply comments is September 7, 2007.
The FCC adopted its 700 MHz Second Report and Order on July 31, 2007, and released the text [PDF] on August 10, 2007. See also, story titled "FCC Adopts 700 MHz Band Order" in TLJ Daily E-Mail Alert No. 1,619, July 31, 2007.
People and Appointments
8/17. Rep. Denny Hastert (R-IL) announced that he will not run for re-election. Rep. Hastert is a member of the House Commerce Committee (HCC). He was previously the Speaker of the House.
8/17. The U.S. District Court (DC) issued an order [2 pages in PDF] denying the Federal Trade Commission's (FTC) request for a preliminary injunction of the proposed acquisition by Whole Foods of Wild Oats on August 16, 2007. The District Court also wrote, but sealed, a memorandum opinion. The FTC asserts that there exists a market for premium natural and organic supermarkets, and that the merger would lessen competition in this market. Jeffrey Schmidt, Director of the FTC's Competition Bureau, stated in a release on August 16, 2007, that "We are reviewing our options." On August 17, the FTC filed a Notice of Appeal [2 pages in PDF] to the U.S. Court of Appeals (DCCir). This case is FTC v. Whole Foods Markets, Inc. and Wild Oats Markets, Inc., U.S. District Court for the District of Columbia, D.C. No. 07-1021 (PLF), Judge Paul Friedman presiding.
8/17. The U.S. Court of Appeals (FedCir) issued its per curiam opinion [2 pages in PDF] in Caritas Technologies v. Comcast, affirming the judgment of the District Court. This case is Caritas Technologies, Inc. v. Comcast Corporation, et al., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2007-1057, an appeal from the U.S. District Court for the Eastern District of Texas, D.C. No. 2:05-CV-339.
People and Appointments
8/16. David Cavicke was named Republican Chief of Staff for the House Commerce Committee (HCC). He was previously General Counsel and Deputy Chief of Staff for the HCC. Before that, he worked in the New York City office of the law firm of Milbank Tweed. He replaces Bud Allbright, who left earlier this summer. Neil Fried remains Senior Counsel for Telecommunications. See, HCC release.
8/16. Rep. Deborah Pryce (R-OH) announced in a release that she will not run for re-election. She was previously the Republican Conference Chairman. See also, statement by President Bush.
8/16. The Federal Communications Commission (FCC) released the text [73 pages in PDF] of its Report and Order and Further Notice of Proposed Rulemaking regarding the roaming obligations of CMRS providers. The FCC adopted, but did not release, this item on August 7, 2007. It is FCC 07-143 in WT Docket No. 05-265. Initial comments on the NPRM portion of this item will be due within 60 days after publication of a notice in the Federal Register. Reply comments will be due within 90 days of such publication. As of the August 20, 2007, issue of the Federal Register, the FCC had not yet published this notice. See also, story titled "FCC Adopts CMRS Roaming Order and NPRM" in TLJ Daily E-Mail Alert No. 1,623, August 15, 2007.
8/16. The Federal Communications Commission (FCC) published a notice in the Federal Register that announces, describes, and sets comment deadlines for its notice of proposed rulemaking regarding government efforts to plan consumer understanding of the transition to digital television. The FCC adopted this NPRM on July 21, 2007, and released the text on July 30, 2007. It is FCC 07-128 in MB Docket No. 07-148. See also, Public Notice [PDF] (DA 07-3612). Initial comments are due by September 17, 2007. Reply comments are due by October 1, 2007. See, Federal Register, August 16, 2007, Vol. 72, No. 158, at Pages 46014-46020.
8/16. The Recording Industry Association of America (RIAA) announced that it has sent another round of pre-litigation letters to 58 schools regarding illegal file trafficking on college campuses. The RIAA stated in a release that "Each pre-litigation settlement letter informs the school of a forthcoming copyright infringement suit against one of its students or personnel and requests that university administrators forward that letter to the appropriate network user." The RIAA states that it sent letters to Columbia, Duke, Emory, Haverford, Oberlin, Rice, Swarthmore, Tulane, and other schools.
Go to News from August 11-15, 2007.