Source: http://www.techlawjournal.com/alert/2003/12/16.asp
Timestamp: 2019-04-23 09:57:42+00:00

Document:
TLJ Daily E-Mail Alert No. 800, December 16, 2003.
December 16, 2003, 9:00 AM ET, Alert No. 800.
12/15. The Department of Justice (DOJ) settled its civil antitrust lawsuit against First Data Corporation and Concord EFS, Inc.. The DOJ had sued to stop the merger of these two personal identification number (PIN) debit networks. First Data has now agreed to divest its entire interest in NYCE Corporation in order to proceed with its proposed acquisition of Concord EFS.
On October 23, 2003, the DOJ, seven states, and the District of Columbia filed a complaint [28 pages in PDF] in U.S. District Court (DC) against First Data and Concord EFS, alleging that First Data's planned acquisition of Concord would violate Section 7 of the Clayton Act.
The complaint alleged that "Concord operates STAR, the nation's largest PIN debit network. STAR currently handles approximately half of all PIN debit transactions in the United States. First Data owns a controlling interest in NYCE, the nation's third-largest PIN debit network." Hence, "First Data's acquisition of Concord would combine the largest and third-largest point-of-sale ("POS") PIN debit networks in the United States".
See also, story titled "DOJ Sues to Stop Merger of PIN Debit Networks", also published in TLJ Daily E-Mail Alert No. 765, October 24, 2003.
The proposed Final Judgment submitted by the parties provides, in part, that "Defendant First Data is ordered and directed, within one hundred fifty (150) calendar days after the Court's signing of the Hold Separate Stipulation and Order in this matter, or five (5) days after notice of the entry of this Final Judgment by the Court, whichever is later, to divest NYCE Holdings in a manner consistent with this Final Judgment to an Acquirer acceptable to the United States in its sole discretion, after consultation with plaintiff states."
See also, Hold Separate Stipulation and Order and the United States' Memorandum Regarding Procedures for Entry of Final Judgments, both filed on December 15.
The trial had been scheduled to start on December 15 in the U.S. District Court (DC).
Hewitt Pate (at right), the Assistant Attorney General in charge of the DOJ's Antitrust Division, stated in a release that "This settlement is a victory for American businesses and consumers ... The Division was prepared to show at trial that the acquisition, as originally proposed, would have caused merchants to pay higher prices for PIN debit transactions, which could have forced them to pass on those price increases to consumers. This settlement ensures that American businesses will pay competitive prices for PIN debit transactions and that consumers will benefit from that competition."
Concord EFS stated in a release that "In connection with the DOJ settlement, the two companies also agreed to new financial terms, with a new value of approximately $6.9 billion, based on First Data’s closing price on Friday, December 12, 2003, of $39.30. The revised merger agreement also extends the original January 31, 2004 end date to April 30, 2004 to allow sufficient time to obtain the necessary shareholder approvals of the revised terms. The revised agreement increases transaction certainty by eliminating many, but not all, conditions to completing the merger. The boards of both companies have approved the revised agreement."
This case is USA v. First Data & Concord EFS, Inc., U.S. District Court for the District of Columbia, D.C. No. No. 03-2169 (RMC).
12/15. The Supreme Court of California issued its opinion [MS Word] in The People ex rel. Thomas J. Orloff v. Pacific Bell, a case regarding the authority of the California Public Utilities Commission (CPUC), and state prosecutors, to regulate telecommunications carriers. The Court held that carriers may be subject to simultaneous and overlapping proceedings before the CPUC and in the state courts.
The District Attorneys for the Counties of Alameda, San Mateo, and Monterey filed a complaint in California Superior Court against Pacific Bell and others alleging violation of California unfair competition law in connection with their offering of telecommunications services.
Pacific Bell is also regulated by the CPUC. It was conducting a parallel proceeding to investigate the same practices that were the subject of the prosecutors' Superior Court action.
The Superior Court of Alameda County, and the California Court of Appeal, both held that the District Attorneys' action in state court was barred by California Public Utilities Code section 1759. The California Supreme Court reversed.
The California Supreme Court wrote that "section 1759 provides that only this court and the Court of Appeal possess jurisdiction to review decisions of the California Public Utilities Commission (PUC) or ``to enjoin, restrain, or interfere with´´ the PUC in the performance of its duties. Thus, an action filed in superior court against a public utility subject to the jurisdiction of the PUC can be precluded by section 1759, where the action would ``interfere with´´ the authority of the PUC. Here, several district attorneys filed a civil action in superior court, alleging that a public utility violated the law by engaging in false advertising and unfair business practices. An administrative enforcement proceeding involving some of the same allegations of misconduct by this utility was pending in the PUC at the time the civil action was filed, and the superior court and the Court of Appeal concluded that because the present action might result in conflicting rulings with the parallel PUC proceeding, the action would interfere with the authority of the PUC and thus was barred by section 1759."
It concluded that the lower courts erred in determining that the prosecutors' action is barred by Section 1759. It elaborated that "the PUC does not have exclusive jurisdiction over all actions against a public utility" and "the mere possibility of, or potential for, conflict with the PUC is, in general, insufficient in itself to establish that a civil action against a public utility is precluded by section 1759".
It concluded that "In expressly establishing overlapping enforcement authority against public utilities by both the PUC and public prosecutors, the Legislature has demonstrated that it contemplates that public prosecutors and the PUC will coordinate their enforcement efforts -- and that the superior court in such a civil action can tailor its proceedings and rulings -- to avoid any actual conflict. Nothing in the present action brought by public prosecutors inevitably would lead to conflicting rulings that would interfere with or undermine the regulatory authority of the PUC, and indeed the PUC itself has filed an amicus curiae brief in this matter, eschewing any suggestion that the initiation and prosecution of this civil action would interfere with the performance of its duties and instead maintaining that civil actions brought by public prosecutors are an important complement to the PUC’s consumer protection efforts. Under these circumstances, we conclude that the superior court erred in dismissing this action under section 1759, and we reverse the judgment of the Court of Appeal upholding the dismissal."
12/12. The U.S. Court of Appeals (9thCir) issued its opinion [15 pages in PDF] in Kalantari v. NITV, a copyright infringement case in which the Appeals Court held that a person who imported and copyrighted three films from Iran did not loose copyright protection as a result of the trade embargo on Iran.
Masood Kalantari obtained by contract the rights to copyright, distribute, and exhibit three Farsi language films in the United States. NITV, Inc., d/b/a National Iranian TV, broadcast the three films in the U.S. without Kalantari's permission.
Kalantari filed a complaint in U.S. District Court (CDCal) against NITV and others alleging copyright infringement. The defendants/copiers moved for summary judgment, arguing that Kalantari holds no valid copyright because he allegedly violated the U.S.'s trade embargo on Iran by purchasing the rights in the three films. The District Court granted summary judgment to the defendants.
The Appeals Court reversed. It wrote that the Iranian trade embargo, which is codified at 31 C.F.R. Part 560, is based upon the International Emergency Economic Powers Act, which was passed in 1977, and is codified at 50 U.S.C. §§ 1701, et seq. However, it contains an exemption for information (which was amended in 1994).
50 U.S.C. § 1702(b) provides that "The authority granted to the President by this section does not include the authority to regulate or prohibit, directly or indirectly ... (3) the importation from any country, ... whether commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds."
The Court also noted the legislative history. This language was introduced by Rep. Howard Berman (D-CA), who is now the ranking Democrat on the House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property, "to prevent the executive branch from restricting the international flow of materials protected by the First Amendment".
The Appeals Court held that "The Iranian embargo does not prohibit the commercial importation of an Iranian movie, the copyrighting of the movie, or the assignment to a United States person of rights to obtain and enforce such a copyright."
Judge Susan Graber wrote the opinion of the Court. Judges Betty Fletcher and Pam Rymer joined.
This case is Masood Kalantari v. NITV, Inc., et al., U.S. Court of Appeals for the 9th Circuit, No. 02-56592, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-01-05447-PA, Judge Percy Anderson presiding.
12/10. The Federal Communications Commission (FCC) published a notice in the Federal Register summarizing, and providing comment deadlines for, its notice of proposed rulemaking (NPRM) regarding unlicensed devices.
This notice states that comments are due by January 9, 2004, and that reply comments are due by January 26, 2004. See, Federal Register, December 10, 2003, Vol. 68, No. 237, at Pages 68823 - 68831.
The FCC adopted this NPRM on September 10, 2003. See, FCC release [PDF]. See also, story titled "FCC Announces NPRM Regarding Unlicensed Devices" in TLJ Daily E-Mail Alert No. 739, September 15, 2003.
It released the NPRM [35 pages in PDF] on September 17, 2003. This NPRM is FCC 03-223 in ET Docket No. 03-201.
The NPRM also request comments on ways the FCC "might improve spectrum sharing among unlicensed devices".
12/15. The Federal Communications Commission (FCC) published two notices in the Federal Register regarding its Order on Remand, Further Notice of Proposed Rulemaking, and Memorandum Opinion and Order in CC Docket No. 96-45. It revises the FCC's high cost universal service support mechanism.
This item follows the July 31, 2001 opinion of the U.S. Court of Appeals (10thCir) in Qwest v. FCC, 258 F.3d 1191, which reversed and remanded the FCC's Ninth Order "because it does not provide sufficient reasoning or record evidence to support its reasonableness." See also, the FCC web page titled "Tenth Circuit Remand".
The FCC announced, but did not release, this item on October 16, 2003. See, FCC release [PDF]. See also, story titled "FCC Announces Order on Remand Regarding High Cost Universal Service Support Mechanism" in TLJ Daily E-Mail Alert No. 761, October 20, 2003.
The FCC released the text of this item on October 27, 2003. It is FCC 03-249.
The first notice summarizes the Order on Remand and Memorandum Opinion. It also states that its effective date is January 14, 2004. It is published at Federal Register, December 15, 2003, Vol. 68, No. 240, at Pages 69622 - 69627.
The second notice summarizes the Further Notice of Proposed Rulemaking (FNPRM). It also states that the deadline for comments is January 14, 2004, and that the deadline for reply comments in February 13, 2004. It is published at Federal Register, December 15, 2003, Vol. 68, No. 240, at Pages 69641 - 69647.
For more information, contact Katie King at 202 418-7400 or kking@fcc.gov.
9:00 AM. Department of Homeland Security (DHS) Under Secretary Janet Hale and Chief Financial Officer Bruce Carnes will host an Industry Vendor Day for the eMERGE² (Electronically Managing Enterprise Resources for Government Efficiency and Effectiveness) program. Location: Crystal City Marriott Hotel, Crystal Forum Theater, 1999 Jefferson Davis Highway. Arlington, VA.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding implementation of 47 U.S.C. § 272(b)(1). This NPRM is FCC 03-272 in WC Docket No. 03-228. The FCC adopted this NPRM on November 3, 2003, and released it on November 4, 2003. For more information, contact Christi Shewman at 202 418-1686 or christi.shewman@fcc.gov. See, notice in the Federal Register, November 21, 2003, Vol. 68, No. 225 at Pages 65665 - 65667.
12/12. The U.S. Court of Appeals (1stCir) issued its opinion in Metheny v. Kembel, a dispute involving a local zoning board's issuance of a variance permitting Omnipoint Communications to construct a wireless telecommunications tower. Although, the present opinion addresses only the issue of federal question jurisdiction.
The Appeals Court held that, notwithstanding 47 U.S.C. § 332, and especially, 47 U.S.C. § 332(c)(7)(B)(i)(II), the federal courts lacked jurisdiction over this case. This case involved the preclusive effect of a prior federal judgment.
Judge Howard wrote the opinion of the Appeals Court, in which Judges Boudin and Lynch joined. This case is Karen Metheny, et al. v. Katherine Becker, et al., U.S. Court of Appeals for the 1st Circuit, No. 02-2424, an appeal from the U.S. District Court for the District of Massachusetts, Judge William Young presiding.
12/15. Sen. John Breaux (D-LA) announced that he will not seek reelection to the Senate in 2004. He has represented Louisiana in the Senate since 1986. Before that, he a member of the House of Representatives. He is a member of the Senate Commerce Committee and its Communications Subcommittee. He is also a member of the Senate Finance Committee. See, Sen. Breaux release and statement by President Bush.
12/15. Torie Clarke (at right) was named Senior Advisor for Communications and Government Affairs at Comcast Corporation, effective January 1, 2004. She was previously Assistant Secretary of Defense for Public Affairs. She has also worked for Sen. John McCain (R-AZ), the Chairman of the Senate Commerce Committee. She is also a former VP of the National Cable & Telecommunications Association (NCTA). See, Comcast release.
12/12. David Wajsgras was appointed to the Board of Directors of 3Com Corporation. Wajsgras is SVP and CFO of Lear Corporation, an automotive interiors supplier. See, 3Com release.
12/11. Computer Associates International stated in a release that "the United States District Court for the Eastern District of New York has approved the settlement of all outstanding litigation concerning past accounting issues including shareholder and ERISA class-action suits and related derivative litigation. The company announced the settlements in August 2003."
12/15. The Supreme Court granted certiorari in F. Hoffman-LaRoche v. Empagran, No. 03-724. See, Order List [7 pages in PDF at page 1]. This is an antitrust case involving vitamin companies. At issue is whether the Foreign Trade Antitrust Improvements Act of 1982, which is codified at 15 U.S.C. § 6a, provides jurisdiction under the Sherman Act over the claims of a foreign plaintiff injured by a conspiracy having direct, substantial, and reasonably foreseeable anticompetitive effects on U.S. trade or commerce, when the foreign plaintiff's claimed injury does not arise from those domestic effects. See also, January 17, 2003 opinion of the U.S. Court of Appeals (DCCir) in Empagran v. F. Hoffman-LaRoche, No. 01-7115.
12/12. Lucent Technologies stated in a release that "it received final district court approval of its agreement to settle pending shareowner and related litigation against the company, certain of its current and former officers and directors, and certain other defendants." This is In Re Lucent Technologies Securities Litigation, U.S. District Court for the District of New Jersey, D.C. No. 00-CV-621, and consolidated cases.
12/12. The U.S. District Court (DMass) issued an order [14 pages in PDF] in In Re Lernout & Hauspie Securities Litigation.

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