TLJ News from January 21-25, 2008

People and Appointments

1/25. President Bush announced his intent to designate Elisebeth Cook to be the acting Assistant Attorney General in charge of the Department of Justice's (DOJ) Office of Legal Policy (OLP). See, White House release.

More News

1/25. The U.S. Court of Appeals (5thCir) issued its opinion [42 pages in PDF] in Chicago Bridge and Iron v. FTC. The Court of Appeals denied a petition for review of an order of the Federal Trade Commission (FTC) to divest assets that it acquired from another company in 2000, on the basis that the transaction substantially lessens competition or tends to create a monopoly in the relevant markets in violation of section seven of the Clayton Act, which is codified at 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, which is codified at 15 U.S.C. § 45. This case does not involve information or communications technologies. It pertains to the markets for storage tanks for liquified natural gas (LNG), liquified petroleum gas (LPG), and liquid atmospheric gases, such as nitrogen, oxygen, and argon (LIN/LOX), and the market for thermal vacuum chambers (TVCs) for testing satellites. However, the opinion addresses numerous procedural and substantive issues in competition law. It addresses, among other issues, burdens of proof and persuasion, high entry barriers and the potential entry defense, federal regulation as a barrier to entry, measuring market concentration with the Herfindahl Hirshmen Index (HHI) and other evidence, and use of post acquisition evidence including actual entry. This case is Chicago Bridge and Iron Company, N.V., et al. v. FTC, U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 05-60192, a petition for review of a final order of the FTC.

1/25. The Federal Communications Commission (FCC) fined ABC for a 2003 episode of the television series titled "NYPD Blue" which disclosed a woman's buttocks. The FCC issued a Notice of Apparent Liability for Forfeiture (NALF) which states that the program included "adult female nudity", consisting of a woman with "her back to the camera". The FCC reasoned that ABC broadcast an "adult woman's buttocks", that this constitutes a "sexual organ", and is "titillating and shocking". The FCC concluded that this is indecent within the meaning 18 U.S.C. § 1464 and Section 73.3999 of the FCC's rules. The FCC fined ABC $27,500 per station. The NALF lists 51 stations. This NALF is FCC 08-25. Section 1864 provides that "Whoever utters any obscene, indecent, or profane language by means of radio communication shall be fined under this title or imprisoned not more than two years, or both."

1/25. The Executive Office of the President's (EOP) Office of Science and Technology Policy's (OSTP) National Science and Technology Council's (NSTC) Committee on Science's (COS) Subcommittee on Research Business Models published a notice in the Federal Register that announces administrative terms and conditions on research and research related awards that are subject to OMB Circular A-110, titled "Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations". See, Federal Register, January 25, 2008, Vol. 73, No. 17, at Pages 4563-4567.

1/25. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces, describes, and sets application deadlines for various of its Measurement, Science and Engineering Grants Programs, including the Electronics and Electrical Engineering Laboratory Grants Program (EEEL), the Information Technology Laboratory Grants Program (ITLG), and the Center for Nanoscale Science and Technology Grants and Cooperative Agreements Program (CNST). EEEL grant applications are due by 5:00 PM on June 15, 2008. ITLG and CNST applications are considered on a continuing basis. See, Federal Register, January 25, 2008, Vol. 73, No. 17, at Pages 4521-4535.

1/25. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces, describes, and sets application deadlines (5:00 PM on February 25, 2008) for Summer Undergraduate Research Fellowships (SURF) in Gaithersburg, Maryland, and Boulder Colorado. See, Federal Register, January 25, 2008, Vol. 73, No. 17, at Pages 4535-4540.

1/25. The Securities and Exchange Commission (SEC) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (February 25, 2008) for, its amendments to the proxy rules to facilitate electronic shareholder forums. See, Federal Register, January 25, 2008, Vol. 73, No. 17, at Pages 4450-4459.

Copps Addresses Public Interest, Broadcast Licensing, and PSAs

1/24. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech [3 pages in PDF] in Washington DC regarding broadcasting. He advocated adopting rules shortening license terms, and changing the license renewal process. He also discussed public service announcements (PSAs) and the meaning of the public interest.

Copps said that PSAs "can be part of the quid pro quo broadcasters make with we, the people, in order to obtain their licenses." He also said that the "upcoming DTV transition" is "germane to this discussion of PSAs: It’s going to require lots of air time to make viewers aware of what’s coming and what they need to do to prepare themselves for DTV. But it would be tragic if we saw all the other kinds of PSAs and public service programming cut back to accommodate this new need. Stepping up to the plate here means broadcasters doing both the DTV transition and moving ahead -- not cutting back -- on PSAs."

He also argued that the FCC should "craft a new definition of the public interest". He stated that "The problem right now isn't that the public interest standard is so vague that it can mean anything. The problem is that it’s so vague that it means nothing."

He also argued that "Eight-year licenses renewable by post card application and bereft of FCC examination and accountability do not serve the public interest. It is time to greatly shorten the license period and to make sure everyone understands that serving the public interest means specific public interest guidelines, obligations and accountability."

He advocated establishing an "honest-to-goodness licensing process" with "honest-to-goodness public interest considerations". "Honest to goodness" is not a term defined by the Communications Act of 1934, the Administrative Procedure Act, or FCC regulations. Nor did Copps explain what this term means. Although, he said that the FCC should "consider a processing guideline on PSA minimums".

He said that the FCC's "Localism Notice of Proposed Rulemaking" could serve as the vehicle for imposing new obligations on broadcasters.

The FCC adopted its "Report on Broadcast Localism and Notice of Proposed Rulemaking" on December 18, 2007, and released the text [98 pages in PDF] on January 24, 2008. It is FCC 07-218 in MB Docket No. 04-233.

Initial comments are due within 30 days of publication of a notice in the Federal Register. Reply comments are due within 60 days of such publication. As of the January 28, 2008, issue of the Federal Register, this notice had not yet been published.

People and Appointments

1/24. Sen. Roger Wicker (R-MS), who replaced former Sen. Trent Lott (R-MS) as Senator from the state of Mississippi, was named to the Senate Commerce Committee (SCC). Sen. Wicker was previously a member of the House of Representatives. See, statement by Sen. Ted Stevens (R-AK), the ranking Republican on the SCC.

More News

1/24. The Federal Communications Commission (FCC) adopted and released a Memorandum Opinion and Order (MO&O) [46 pages in PDF] that approves the transfer of control of Clear Channel Communications (CCC) from its public shareholders to private equity funds controlled by Thomas H. Lee Partners, L.P. and Bain Capital, LLC, subject to conditions, including the divestiture of 42 radio stations. CCC previously owned 1,172 broadcast radio stations and 35 broadcast television stations. FCC Commissioner Michael Copps again expressed his concern with private equity ownership of broadcast licenses. He wrote that "we once again close our eyes and pretend that nothing has changed -- as if these new entities are no different than our traditional broadcast licensees." FCC Commissioner Jonathan Adelstein wrote about "alleged anticompetitive practices with respect to advertising in the radio industry." He wrote that "small and minority broadcasters have complained about the dominance of major radio station groups and the use of their size and scope to increase their share of local advertising revenue." He approved in part, and concurred in part, concluding only that the FCC "should show greater concern".

1/24. The Federal Communications Commission (FCC) released the text of its Report and Order [50 pages in PDF] in its proceeding titled "In the Matter of Standardized and Enhanced Disclosure Requirements for Television Broadcast Licensee Public Interest Obligations". The FCC adopted this item on November 27, 2007. See, story titled "FCC Adopts New Rules Regarding Disclosure Requirement of TV Broadcasters" in TLJ Daily E-Mail Alert No. 1,680, November 30, 2007. This Report and Order is FCC 07-205 in MM Docket No. 00-168 and MM Docket No. 00-44.

1/24. The Department of Commerce announced that the U.S. Patent and Trademark Office (USPTO) will administer the National Medal of Technology and Innovation. See, USPTO release. This medal program was instituted by the Stevenson Wydler Technology Innovation Act of 1980, which is Public Law No. 96-180. It is codified, along with amendments, at 15 U.S.C. § 3711. This medal program was previously administered by the DOC's Technology Administration (TA), which the Congress terminated last year in Section 3002 of HR 2272 [LOC | WW], the "America Competes Act of 2007", which is now Public Law No. 110-69. See also, commentary titled "National Medal of Technology Program", story titled "Bush Awards National Medals of Technology and Science", and story titled "House Democrats Promote Their Innovation Agenda in TLJ Daily E-Mail Alert No. 1,312, February 17, 2006.

1/24. The Federal Communications Commission (FCC) released a public notice [2 pages in PDF], numbered DA 08-150, regarding procedure for assignment of petitions for review of a final order of the FCC where petitions have been filed in multiple federal circuits. 28 U.S.C. § 2112(a) provides for a judicial lottery. 47 C.F.R. § 1.13 also addresses procedure for invoking the judicial lottery. The just released notice states that "Litigants are strongly urged to hand deliver your petition for review to the Office of General Counsel -- hand delivery is the preferred method and will ensure that you receive an OGC time/date stamp as proof of timely filing. Should you attempt to submit your petition for review by some other means or to some other location (for example, the Commission’s Office of the Secretary, the window in the 12th Street lobby of the FCC headquarters building, or one of the Commission’s off-site mail intake facilities), you run the risk that your petition will not be received by the Office of General Counsel in time to be eligible for a judicial lottery."

1/24. Bill Gates of Microsoft gave a speech titled "A New Approach to Capitalism in the 21st Century" in Davos, Switzerland. He said that "In many crucial areas, the world is getting better. These improvements have been triggered by advances in science, technology, and medicine. They have brought us to a high point in human welfare. We're really just at the becoming of this technology-driven revolution". And this, he said has been brought about by capitalist self-interest. But, he also advocated "creative capitalism, an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities."

1/24. The Copyright Royalty Judges published a notice in the Federal Register that announces their final determination of the rates and terms for the digital transmission of sound recordings and the reproduction of ephemeral recordings by preexisting satellite digital audio radio services for the period January 1, 2007, through December 31, 2012. These rates and terms are effective as of January 24, 2008. See, Federal Register, January 24, 2008, Vol. 73, No. 16, at Pages 4080-4104.

FTC Seeks Contempt Order Against MySpace Page Jackers

1/23. The Federal Trade Commission (FTC) filed a civil contempt motion [3 pages in PDF] and memorandum in support [30 pages in PDF] in U.S. District Court (DNH) in FTC v. Odysseus Marketing and Walter Rines, alleging violation of a previously issued permanent injunction that bars defendants and others from employing a deceptive online advertising scheme that page jacks MySpace web pages, and then mouse traps internet users who visit page jacked pages. See, full story.

More News

1/23. The Copyright Office published a notice in the Federal Register that announces, recites, describes, and sets comment deadlines for, its proposed rules changes regarding the recordation of notices of termination and related matters. The CO wrote in its notice that its proposed changes "would communicate the Office's practices as to notices of termination that are untimely filed; clarify the fact that a notice of termination is not legally sufficient simply because it has been recorded; update the legibility requirements for all recorded documents, including notices of termination; make minor explanatory edits to the fee schedule for multiple titles within a document (adding notices of termination as an example); and create a new mailing address to which notices of termination should be sent." Initial comments are due by February 22, 2008. Reply comments are due March 24, 2008. See, Federal Register, January 23, 2008, Vol. 73, No.15, at Pages 3898-3900.

1/23. The Securities and Exchange Commission (SEC) filed a civil complaint [28 pages in PDF] in U.S. District Court (SDNY) against Andrew J. McKelvey, a former CEO of Monster Worldwide, Inc., alleging violation of federal securities laws in connection with alleged backdating of stock option grants. Monster operates an employment web site. The complaint alleges violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and other sections. The SEC also announced in a release that it simultaneously reached a settlement with McKelvey in which McKelvey admitted no wrongdoing, but agreed to pay $275,989.72. Monster stated in a release it has entered into a Memorandum of Understanding with McKelvey that provides for the settlement of claims asserted against McKelvey on behalf of the company. The release states that "The settlement provides that Mr. McKelvey will pay the Company eight million dollars and convert the 4,762,000 shares of Class B Common Stock owned by him for a like number of ordinary shares of Common Stock."

1/23. The U.S. Court of Appeals (9thCir) issued an amended opinion [27 pages in PDF] in Comedy Club v. Improv West, a dispute involving a trademark license agreement, and arbitration thereof. The Court of Appeals affirmed in part, vacated in part, and remanded. This case is Comedy Club, Inc., et al. v. Improv West Associates, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. Nos. No. 05-55739 and No. 05-56100, appeals from the U.S. District Court for the Central District of California.

9th Circuit Holds Arbitration Provisions in T-Mobile's Service Agreements Unenforceable in Washington State

1/22. The U.S. Court of Appeals (9thCir) issued its opinion [16 pages in PDF] in Lowden v. T-Mobile USA, a class action case regarding the enforceability of arbitration clauses in consumer contracts under the law of the state of Washington.

Kathleen Lowden filed a class action complaint, on behalf of current and former T-Mobile customers, in state court in Washington, against T-Mobile USA, alleging violation of the Washington Consumer Protection Act. She alleges that T-Mobile improperly charged for certain fees beyond the advertised price of service, charged for calls during a billing period other than that in which the calls were made, and charged for roaming and other services that should have been free.

T-Mobile removed the action to the U.S. District Court, and there moved to compel arbitration. The District Court denied the motion. T-Mobile then brought the present appeal.

The Court of Appeals affirmed. It held that the arbitration provision is substantively unconscionable and unenforceable under Washington law, and further, that the state law is not preempted by the Federal Arbitration Act (FAA), which is codified at 9 U.S.C. §§ 1-16.

The Court of Appeals relied primarily upon the Washington State Supreme Court 2007 opinion in Scott v. Cingular Wireless, which is reported at 161 P.3d 1000, and the 9th Circuit's 2007 opinion in Shroyer v. New Cingular Wireless Services and AT&T, which is reported at 498 F.3d 97. See, Scott opinion [19 pages in PDF] and dissent [18 pages in PDF], and Shroyer opinion [29 pages in PDF]. See also, TLJ story on Shroyer opinion, titled "9th Circuit Holds Arbitration Clause in Cell Phone Contract Unenforceable", in TLJ Daily E-Mail Alert No. 1,624, August 24, 2007.

The present case is Kathleen Lowden, et al. v. T-Mobile USA, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 06-35395, an appeal from the U.S. District Court for the Western District of Washington, D.C. No. CV-05-01482-MJP, Judge Marsha Pechman presiding. Judge Ronald Gould wrote the opinion of the Court of Appeals, in which Judges William Canby and Susan Graber joined.

Bush Signs Secret Export Control Directives for Dual Use Items

1/22. The White House news office issued a two paragraph release that states that "The President signed today a package of directives" that pertain to "export control policies".

However, the White House news office did not publish any of these directives. Nor did the news office disclose the contents of any of these directives. The White House news office did not respond to a request from TLJ for copies of the directives.

The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) also published a copy of the White House release, and a further two page statement [PDF]. However, the BIS did not publish any of the directives signed by the President. A BIS representative told TLJ that the directives are "not publicly available".

The BIS enforces, and promulgates regulations that implement, the Export Administration Act of 1979 (EAA). It is Public Law No. 96-72. The EEA expired in 2001. The Congress has neither extended nor replaced the statute. The BIS continues to enforce and implement the EAA pursuant to executive orders of the President.

The BIS statement asserts that there is now a "focus on transparency".

It also states that the unpublished directives relate to dual use items. Dual use items includes such things as computers, processors, software, and encryption products.

The White House statement is two paragraphs. The first paragraph states, in full, that "The President signed today a package of directives that will ensure the United States' export control policies and practices support the National Security Strategy of 2006, while facilitating the United States' continued international economic and technological leadership. These new directives will advance a more efficient and transparent export licensing process and enhance dispute resolution mechanisms. They will also help ensure proper levels of control for continued U.S. economic competitiveness and innovation while protecting national security. The Directives are intended to clarify and strengthen the ability of the U.S. Government to monitor and deny U.S. controlled goods, services or technologies to a potential enemy."

The second paragraph states in full that "The United States continues to face unprecedented security challenges, including terrorist threats from the proliferation of weapons of mass destruction and advanced conventional weapons to unstable regions of the world. The United States also faces economic challenges from the increasing worldwide diffusion of high technology and global markets. As a result, the Administration will continue to ensure that our export control system is focused to meet these challenges."

The BIS statement adds that "the dual-use export control system will increasingly focus on foreign end-users of U.S. high technology products". It elaborates only that this "includes the Validated End User (VEU) program for reliable foreign companies and imposing additional scrutiny of exports to foreign parties with a record of activities contrary to U.S. foreign policy and national security interests through expansion of the Department of Commerce’s Entity List."

The BIS statement also references "developing a regular process for systematic review of the list of controlled dual-use items (the Commerce Control List), revised controls on intra-company transfers, revised controls on encryption products, and a review of reexport controls."

Finally, the BIS statement adds that the Bush administration supports "reauthorization" of the EAA.

OUSTR Puts Czech Republic on Watch List

1/22. The Office of the U.S. Trade Representative (OUSTR) announced that it has completed a Special 301 out of cycle review of intellectual property rights (IPR) protection and enforcement in the Czech Republic. The OUSTR announced that it has placed the Czech Republic on its Special 301 Watch List.

USTR Susan Schwab stated in a release that "We remain concerned at the continuing lack of effective enforcement measures against traders openly selling pirated and counterfeit goods in the notorious border markets".

Section 182 of the Trade Act of 1974, which is codified at 19 U.S.C. § 2242, is also known as Special 301. It requires the OUSTR to make periodic, and out of cycle, reviews of other nations that deny adequate and effective protection of intellectual property rights (IPR) or deny fair and equitable market access to U.S. persons who rely on intellectual property protection.

The OUSTR's web page titled "Background on Special 301" states that the OUSTR "has created a ``Priority Watch List´´ and ``Watch List´´ under Special 301 provisions. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas."

Supreme Court Requests Solicitor General Brief in Telecom Antitrust Case

1/22. The Supreme Court issued an order asking the Department of Justice's (DOJ) Office of the Solicitor General (OSG) to submit an amicus curiae brief in Pacific Bell v. Linkline, App. Ct. No. 07-512. See, Orders List [8 pages in PDF] at page 4.

The U.S. Court of Appeals (9thCir) issued its divided opinion [22 pages in PDF] on September 11, 2007. The majority opinion states that the issue is whether the Supreme Court's January 13, 2004, opinion [22 pages in PDF] in Verizon v. Trinko, 540 U.S. 398, "bars a plaintiff from claiming a violation of § 2 of the Sherman Antitrust Act by virtue of an alleged price squeeze perpetrated by a competitor who also serves as the plaintiff’s supplier at the wholesale level, but who has no duty to deal with the plaintiff absent statutory compulsion. We conclude that it does not, and affirm the order of the district court denying judgment on the pleadings."

See, full story.

Supreme Court Denies Certiorari in Wireless Line Item Billing Case

1/22. The Supreme Court denied certiorari, without an opinion, in Sprint Nextel v. NASUCA, Sup. Ct. No. 06-1184. See, Orders List [8 pages in PDF] at page 4.

47 U.S.C. § 332(c)(3)(A) provides, in part, that "no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services ..."

In March 2005, the Federal Communications Commission's (FCC) issued a declaratory ruling construing Section 332(c)(3)(A)'s prohibition on state rate regulation of cellular providers to preempt state regulations that either prohibit or require the use of "line items".

The National Association of State Utility Consumer Advocates (NASUCA) filed a petition for review. The National Association of Regulatory Utility Commissioners (NARUC) intervened in support of the NASUCA. Sprint Nextel and other wireless companies intervened in support of the FCC.

The U.S. Court of Appeals (11thCir) issued its opinion [44 pages in PDF] on July 31, 2006, in NASUCA v. FCC, granting the petition.

It held that the FCC exceeded its authority when it preempted the states from requiring or prohibiting the use of line items. It wrote that "The scope of federal authority to regulate ``rates´´ or ``entry´´ does not include the presentation of line items on cellular wireless bills. ... This billing practice is a matter of  ``other terms and conditions´´ that Congress intended to be regulable by the states." See also, story titled "11th Circuit Rules on Preemption of State Regulation of Wireless Services" in TLJ Daily E-Mail Alert No. 1,430, August 11, 2006.

On June 11, 2007, the Supreme Court requested a brief from the Department of Justice's (DOJ) Office of the Solicitor General (OSG). See, story titled "Supreme Court Seeks OSG Brief in Sprint Nextel v. NASUCA" in TLJ Daily E-Mail Alert No. 1,593, June 11, 2007.

The OSG submitted its amicus curiae brief on December 20, 2007, it which it argued that the Court of Appeals opinion is incorrect, but that the Supreme Court should nevertheless deny certiorari. It wrote that, Section 332 aside, the FCC can preempt state line item regulations on the basis that they conflict with established federal policies, and that the Court of Appeals opinion does not affect this power. Moreover, it pointed out that the FCC has an open rulemaking proceeding.

The Supreme Court's order lets stand the judgment of the Court of Appeals.

The NARUC issued a release in which it stated that "By determining that it should not review this case, the Supreme Court is underscoring the important role that State commissioners play. This decision is a big win for consumers and it ensures that their State regulatory commissions will remain on the customer-protection beat."

The opinion of the Court of Appeals facilitates the ability of states to limit information in bills, and limit consumer understanding, as for example, by prohibiting line items that disclose to consumers how much their service is being taxed by the state.

This case is Sprint Nextel Corporation, et al. v. National Association of State Utility Consumer Advocates, et al., Supreme Court of the United States, Sup. Ct. No. 06-1184, a petition for writ of certiorari to the U.S. Court of Appeals for the 11th Circuit, App. Ct. Nos. 05-11682 and 05-12601.

More Supreme Court News

1/22. The Supreme Court issued an order asking the Department of Justice's (DOJ) Office of the Solicitor General (OSG) to submit an amicus curiae brief in Hulteen v. AT&T, Sup. Ct. No. 07-543. See, Orders List [8 pages in PDF] at page 4. The U.S. Court of Appeals (9thCir) issued its divided opinion [30 pages in PDF] on March 8, 2006. This is a case regarding Title VII, calculation of retirement benefits, and pregnancy leave.

1/22. The Supreme Court denied certiorari in Burroughs v. BellSouth, Sup. Ct. No. 07-7760. See, Orders List [8 pages in PDF] at page 6.

1/22. The Supreme Court denied rehearing in M2 Software v. Viacom, Sup. Ct. No. 07-202. See, Orders List [8 pages in PDF] at page 8.

People and Appointments

1/22. Matthew Berry was named General Counsel of the Federal Communications Commission (FCC). He has worked in the FCC's Office of General Counsel since June of 2005. Before that, he was Counselor to the Assistant Attorney General in charge of the Department of Justice's (DOJ) Office of Legal Policy (OLP). He has also been an attorney adviser in the DOJ's Office of Legal Counsel (OLC). He also clerked for U.S. Supreme Court Justice Clarence Thomas and for U.S. Court of Appeals (DCCir) Judge Laurence Silberman. See also, story titled "Matthew Berry Joins FCC" in TLJ Daily E-Mail Alert No. 1,160, June 23, 2005.

1/22. Ajit Pai was named Deputy General Counsel of the Federal Communications Commission (FCC). He was previously Associate General Counsel. Before joining the FCC he was Chief Counsel of the Senate Judiciary Committee's Subcommittee on the Constitution. He has also been Senior Counsel at the Department of Justice's (DOJ) Office of Legal Policy (OLP), Associate General Counsel at Verizon Communications, and a trial attorney in the Telecommunications Task Force at the DOJ's Antitrust Division.

1/22. President Bush announced his intent to nominate Kathleen Stephens to be Ambassador to the Republic of Korea. See, White House release.

1/22. James O'Connell was named Deputy Assistant Attorney General in charge of international, policy and appellate matters at the Department of Justice's (DOJ) Antitrust Division. He has worked at the Antitrust Division since 2003. Before that, he worked in the Washington DC office of the law firm of Shearman & Sterling. See, DOJ release.

More News

1/22. The White House news office issued a statement urging the Congress to enact legislation to reform the Foreign Intelligence Surveillance Act (FISA). The temporary provisions of S 1927 [LOC | WW], the "Protect America Act", expire on February 1, 2008. White House Press Secretary Dana Perino said in this statement that "The terrorist threat we face does not expire on February 1. For the sake of our national security, Congress must act now to send the President a bill that keeps a critical intelligence gap permanently closed and provides meaningful liability protection for companies that may have assisted in efforts to defend America following the 9/11 attacks."

1/22. House Majority Leader Rep. Steny Hoyer (D-MD) announced that the House schedule for Wednesday, January 23, includes consideration, under suspension of the rules, HRes 852, a resolution to make January 2008 "National Stalking Awareness Month". This resolution states that "rapid advancements in technology have made cyber-surveillance the new frontier in stalking" and that "there is a need to enhance the criminal justice system's response to stalking and stalking victims, including aggressive investigation and prosecution". However, this is only a resolution. See, Rep. Hoyer's calendar for January 23.

7th Circuit Again Reverses in Makor v. Tellabs

1/21. The U.S. Court of Appeals (7thCir) issued its opinion on remand in Makor v. Tellabs, a class action securities case.

Tellabs is a publicly traded company that makes equipment used in fiber optic cable networks. Class action plaintiffs filed a complaint in U.S. District Court (NDIll) against Tellabs and others alleging securities fraud in violation of § 10(b) of the Securities Exchange Act of 1934, which is codified in 15 U.S.C. § 78j, and Rule 10(b)(5) thereunder, and control person liability by Tellabs executives.

The District Court dismissed the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (FRCP) for failure to state a claim upon which relief can be granted. It held that the complaint failed to satisfy the scienter requirements established by the Private Securities Litigation Reform Act (PSLRA), which is codified at 15 U.S.C. § 78u-4 and § 78u-5.

In a previous opinion, the Court of Appeals reversed. However, its opinion conflicted with those of others circuits. The Supreme Court granted certiorari on January 5, 2007. See, story titled "Supreme Court Grants Certiorari in PSLRA Case Regarding Pleading of Scienter" in TLJ Daily E-Mail Alert No. 1,515, January 8, 2007.

On June 21, 2007, the Supreme Court issued its opinion [33 pages in PDF], reversing the Court of Appeals. That opinion gives a meaning to the term "strong inference" that makes it harder for class action securities complaints to survive motions to dismiss. The Supreme Court vacated the opinion of the Court of Appeals. See, story titled "Supreme Court Rules in Tellabs v. Makor" in TLJ Daily E-Mail Alert No. 1,600, June 25, 2007.

In the just released opinion, the Court of Appeals applied the higher pleading standard announced by the Supreme Court. However, it held once again that the complaint satisfies the pleading requirements of the PSLRA. Thus, it again reversed the District Court's dismissal of the complaint.

This case is Makor Issues and Rights, Ltd. v. Tellabs, Inc., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 04-1687, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No.  02 C 4356, Judge Amy St. Eve presiding. Judge Richard Posner wrote the opinion of the Court of Appeals, in which Judges Wood and Sykes joined.

More News

1/21. The Information Technology Association of America (ITAA) and the Government Electronics and Information Technology Association (GEIA) announced that the two groups will merge by April 1, 2008, and continue to use the ITAA name. Phil Bond, the current head of the ITAA, will be the P/CEO of the combined organization. Dan Heinemeier, head of the GEIA, will be EVP of the combined organization. See, ITAA release.

Go to News from January 16-20, 2008.