Source: http://www.techlawjournal.com/alert/2006/07/12.asp
Timestamp: 2019-04-20 15:00:32+00:00

Document:
TLJ Daily E-Mail Alert No. 1,409, July 12, 2006.
July 12, 2006, Alert No. 1,409.
7/12. The U.S. Court of Appeals (9thCir) issued its opinion [16 pages in PDF] in Peable Beach v. Caddy, holding that the U.S. District Court lacks personal jurisdiction over a citizen and resident of the United Kingdom (UK) who operates a web site that a U.S. plaintiff alleges infringes and dilutes its trademark rights.
7/12. The U.S. Court of Appeals (6thCir) issued its opinion [6 pages in PDF] in Preferred Capital v. Associates in Urology, reversing the judgment of the District Court. The Court of Appeals held that a forum selection clause in a commercial telecommunications equipment lease agreement is enforceable.
Associates in Urology (AIU) is a medical practice group with its principal place of business in Ridley Park, Pennsylvania, near Philadelphia. Preferred Capital, Inc. (PCI) is an Ohio company. NorVergence, Inc., is a New Jersey company.
AIU leased telecommunications equipment from NorVergence. The lease agreements included a choice of law and forum selection clause. These agreements provided that "This agreement shall be governed by, construed and enforced in accordance with the laws of the State in which Rentor’s principal offices are located or, if this Lease is assigned by Rentor, the State in which the assignee’s principal offices are located, without regard to such State’s choice of law considerations and all legal actions relating to this Lease shall be venued exclusively in a state or federal court located within that State".
At the time that AIU signed these agreements, in February of 2004, NorVergence had already assigned these agreements to PCI, without informing AIU. Nor did NorVergence disclose that it was operating a fraudulent business.
NorVergence is a company with record of fraud. On November 3, 2004, the Federal Trade Commission (FTC) filed a complaint [12 pages in PDF] in U.S. District Court (DNJ) against NorVergence alleging unfair and deceptive acts or practices in violation of Section 5(a) of the FTC Act in connection with its selling and financing of telecommunications products and services. See also, FTC release.
On June 29, 2005, the District Court issued its Default Judgment and Order of Permanent Injunction and Monetary Relief [11 pages in PDF]. See also, FTC release. Also, last month the District Court issued a permanent injunction [PDF] against Thomas N. Salzano and Peter J. Salzano, individually and as officers of NorVergence.
The FTC wrote in its June 26, 2006, release that "NorVergence rental contracts contained clauses that purportedly required customers to pay even if NorVergence failed to provide any services and allowed the finance companies to seek collections in any forum they chose, making it very difficult for customers to dispute the monthly rental fees. Ultimately, consumers were burdened with long-term equipment rental payments for which they received no telecommunications services."
The District Court wrote in its default judgment that "The telecommunications services NorVergence promised to consumers have not been provided at least since August 2004, and, in some cases, have never been provided. At the same time, various finance companies who took assignments from NorVergence of the majority of the rental agreements have insisted that consumers continue to pay on those agreements."
In October of 2004, one of these finance companies, PCI, filed a complaint in state court in Ohio against AIU, alleging non-payment, and requesting damages of over $76,000. AIU denies the debt. AIU removed the action to the U.S. District Court (NDOhio). It also asserted lack of jurisdiction, improper venue, and forum non conveniens.
The District Court dismissed the complaint for lack of personal jurisdiction over AIU. In doing so, it held that the forum selection clause is unenforceable for being unjust.
PCI appealed. The Court of Appeals reversed.
It held that "A forum selection clause contained in an agreement in connection with an arm's length commercial transaction between two business entities is valid and enforceable."
In continued that "In determining the validity of a particular forum selection clause, we thus consider the following factors: (1) the commercial nature of the contract; (2) the absence of fraud or overreaching; and (3) whether enforcement of the forum selection clause would otherwise be unreasonable or unjust."
First, the Court of Appeals held that AIU is commercial, and that the forum selection clause is commercial in nature.
Second, the Court of Appeals held that while there was fraud by NorVergence (and perhaps fraud by PCI) in other activities, there was no fraud in the inducement to enter into the forum selection clause.
That is, the Court of Appeals concluded that fraud in inducing a company to enter into a contract does not imply fraud in inducing a company to enter into a particular clause in that contract.
Third, the Court of Appeals held that the enforcement of the forum selection clause would not be unreasonable or unjust. It pointed out that AIU is a business, and that the court in Ohio is only "a few hours" away.
Hence, it concluded that all three parts of this three part test weigh in favor of validity of the forum selection clause.
The Court of Appeals reversed and remanded to the District Court. However, AIU may yet prevail on the merits at trial.
Also, the case may include yet another twist. The same lease agreements include a jury trial waiver.
This case is Preferred Capital, Inc. v. Associates in Urology, U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 05-3584, an appeal from the U.S. District Court for the Northern District of Ohio, at Cleveland, D.C. No. 04-02359, Judge James Gwin presiding. Judge Clay wrote the opinion of the Court of Appeals, in which Judge Siler and McKeague joined.
The Senate will meet at 9:30 AM. It will resume consideration of resume consideration of HR 5441, the homeland security appropriations bill.
9:00 AM. The U.S. District Court (DC) will hold a motion hearing in USA v. SBC. Judge Sullivan will preside. This case is U.S.A. v. SBC Communications, et al., D.C. No. 1:05CV02102 (EGS). See also, the Department of Justice's (DOJ) web page with hyperlinks to its pleadings in this case. Location: Courtroom 24A, 333 Constitution Ave., NW.
10:00 AM. The Senate Finance Committee will hold a hearing on S 3495, a bill to authorize the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of Vietnam. See, notice. Location: Room 215, Dirksen Building.
10:00 AM. The House Judiciary Committee will meet to mark up several bills. The agenda does not include any technology related bills, but bills may be added to the agenda. See, notice. Press contact: Jeff Lungren or Terry Shawn at 202-225-2492. Location: Room 2141, Rayburn Building.
10:00 AM. The House Commerce Committee will meet to mark up several bills, including HR 5337, the "Reform of National Security Reviews of Foreign Direct Investments Act". See, notice. Location: Room 2123, Rayburn Building.
10:30 AM. The House Ways and Means Committee will hold a hearing titled "Implementation of the United States-Peru Trade Promotion Agreement". See, notice. Press contact: 202- 225-1721. Location: Room 1100, Longworth Building.
10:30 AM. The Senate Banking Committee will hold a hearing on several pending nominations, including that of Frederic Mishkin to be a member of the Board of Governors of the Federal Reserve System. See, notice. Location: Room 538, Dirksen Building.
12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Practice Committee will host a brown bag lunch. Andrew Cotlar (Associate General Counsel of the Association of Public TV Stations) will speak on public broadcasting in the US. For more information, contact Robert Rini at rrini at rinicoran dot com or 202-463-4301. Dial-In Information: 1-866-443-4185, participant code #31665. Location: Sheppard Mullin, 1300 I Street, NW, 11th Floor.
The calendar for the U.S. Court of Appeals (FedCir) states that it will consider, on the briefs, Eolas Technologies v. Microsoft. This is App. Ct. No. 2006-1238.
TIME CHANGE. 9:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The agenda includes consideration of numerous judicial nominations: Neil Gorsuch (to be a Judge of the U.S. Court of Appeals for the 10th Circuit), Jerome Holmes (10th Circuit), Kimberly Moore (Federal Circuit), Bobby Shepherd (8th Circuit), Gustavo Antonio Gelpi (US District Court, Puerto Rico), and Daniel Jordan (USDC, Southern District of Mississippi). The agenda also includes consideration of several Department of Justice (DOJ) nominations: Steven Bradbury (Assistant Attorney General in charge of the Office of Legal Counsel), Alexander Acosta (U.S. Attorney for the Southern District of Florida), Martin Jackley (U.S. Attorney for the District of South Dakota), and Brett Tolman (US Attorney for the District of Utah). The agenda also includes consideration of S 2453, the "National Security Surveillance Act of 2006", S 2455, the "Terrorist Surveillance Act of 2006", S 2468, a bill to provide standing for civil actions for declaratory and injunctive relief to persons who refrain from electronic communications through fear of being subject to warrantless electronic surveillance for foreign intelligence purposes, S 3001, the "Foreign Intelligence Surveillance Improvement and Enhancement Act of 2006", S 2831, the "Free Flow of Information Act of 2006", HR 1036, the "Copyright Royalty Judges Program Technical Corrections Act", and S 1845, the "Circuit Court of Appeals Restructuring and Modernization Act of 2005". See, notice. Most of the items have been on previous agendas. The SJC frequently cancels or postpones meetings without notice. The SJC rarely follows its published agenda. Press contact: Courtney Boone at 202-224-5225. Location: Room 226, Dirksen Building.
9:30 AM - 5:30 PM. The Antitrust Modernization Commission (AMC) will hold a meeting to deliberate on possible recommendations regarding the antitrust laws to Congress and the President. The meeting is open to the public, but registration is required. See, notice in the Federal Register, June 23, 2006, Vol. 71, No. 121, at Page 36059. Location: Morgan Lewis, main conference room, 1111 Pennsylvania Ave., NW.
9:30 - 11:00 AM. The Markle Foundation's (MF) Task Force on National Security will host an event to release a report titled "Mobilizing Information to Prevent Terrorism: Accelerating Development of a Trusted Information Sharing Environment". Registration and check-in will begin at 8:30 AM. At 9:30 AM, the speakers will present the report, and then respond to questions. Location: The Brookings Institution, 1775 Massachusetts Ave., NW.
10:00 AM. The Senate Finance Committee will hold a hearing on the nomination of Eric Solomon to be Assistant Secretary of the Treasury for Tax Policy. Location: Room 215, Dirksen Building.
10:00 AM. The Senate Homeland Security and Governmental Affairs will hold a hearing on the nomination of Eric McMillin to be Deputy Director of the Office of Management and Budget (OMB). See, notice. Location: Room 342, Dirksen Building.
10:30 AM. The House Ways and Means Committee's Subcommittee on Select Revenue Measures will hold a hearing titled "Issues Relating to the Patenting of Tax Advice". See, notice. Location: Room B-318, Rayburn Building.
12:00 NOON - 2:00 PM. The Alliance for Public Technology (APT) will host a brown bag lunch titled "Preemption of State Wireless Regulation: Where Do Consumers Fit In?". The speakers will be Brian Fontes (Cingular) and Dane Snowden (CTIA). RSVP to apt at apt dot org or 202-263-2970. Location: 919 18th St., NW, 10th Floor Conference Room.
2:00 - 5:00 PM. The Center for Democracy and Technology (CDT) and the Congressional E-9-1-1 Caucus will host a demonstration titled "Emergency Communications Services Tech Fair". See, notice. There will also be a reception at 5:00 - 7:00 PM. Location: Rayburn Foyer, Rayburn Building, Capitol Hill.
2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Unmanned Aerial Systems in Alaska: A Framework for the Nation". Sen. Ted Stevens (R-AK) will preside. See, notice. Location: Room 562, Dirksen Building.
6:00 - 9:15 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled & "Antitrust Investigations: Tactical and Ethical Issues". The speakers will include Ray Hartwell (Hunton & Williams), Kathryn Fenton (Jones Day), Donald Klawiter (Morgan Lewis & Bockius), Ann Marie O’Brien (Antitrust Division). The price to attend ranges from $70-$125. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
The Republican Whip Notice states that there are no votes expected in the House.
5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding its special provincial review (SPR) of intellectual property rights (IPR) protection in Peoples Republic of China (PRC). See, notice in the Federal Register, June 16, 2006, Vol. 71, No. 116, at Pages 34969-34970.
6:00 PM. Deadline for upfront payments for the Federal Communications Commission's (FCC) Auction 66. This is the auction of Advance Wireless Services (AWS) licenses in the 1710-1755 MHz and 2110-2155 MHz (AWS-1) bands. See also, notice in the Federal Register, June 2, 2006, Vol. 71, No. 106, at Pages 32089-32091.
Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding whether and how an open global database of proxy numbers of Video Relay Service (VRS) users may be created so that a hearing person may call a VRS user through any VRS provider without having to ascertain the first VRS user's current internet protocol address. See, notice in the Federal Register, May 31, 2006, Vol. 71, No. 104, at Pages 30848-30856. This FNPRM is FCC 06-57 in CG Docket No. 03-123.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its further notice of proposed rulemaking (FNPRM) regarding telecommunications relay services (TRS) and speech to speech services for individuals with hearing and speech disabilities, and misuse of internet protocol relay service and video relay service. This item is FCC 06-58 in CG Docket No. 03-123. See, notice in the Federal Register, June 1, 2006, Vol. 71, No. 105, at Pages 31131-31137.
8:30 - 10:00 AM. The Progress and Freedom Foundation (PFF) will host a book launch for Net Neutrality or Net Neutering: Should Broadband Internet Services be Regulated? This book is a collection of essays. The speakers will be Thomas Lenard (PFF), David Farber (University of Pennsylvania), Randy May (Maryland Free State Foundation), and Adam Thierer (PFF). See, notice and registration page. A continental breakfast will be served. Location: Holeman Lounge, National Press Club, 529 14th St., NW.
8:30 AM - 1:30 PM. The U.S. Chamber of Commerce's National Chamber Foundation will host an event titled "The State of the American Judiciary". The keynote speaker will be Justice Antonin Scalia. See, notice. For more information, contact Danielle Walker at 202-463-5500 or ncfevents at uschamber dot com. Location: U.S. Chamber, 1615 H Street, NW.
10:00 AM. The House Financial Services Committee's (HFSC) Subcommittee on Financial Institutions will hold a hearing titled "Hearing entitled "ICANN and the Whois Database: Providing Access to Protect Consumers from Phishing". Location: Room 2128, Rayburn Building.
12:00 NOON - 1:30 PM. The DC Bar Association will host a panel discussion titled "Trademarks and the Internet". The speakers will include David Kelly (Finnegan Henderson). The price to attend ranges from $15-$30. For more information, call 202-626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
1:30 - 5:00 PM. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) will hold their third joint public hearing on "whether and when specific types of single-firm conduct may violate Section 2 of the Sherman Act by harming competition and consumer welfare and when they are pro-competitive or benign". This hearing will focus on refusals to deal. The presenters will be Stephen Donovan (International Paper), William Kolasky (WilmerHale), Hewitt Pate (Hunton & Williams), Robert Pitofsky (Georgetown University Law Center), Steven Salop (Georgetown University Law Center), and Mark Whitener (General Electric). Location: Conference Room C, 601 New Jersey Ave., NW.
Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST) ant the American National Standards Institute (ANSI) titled "Options for Action Summit: Addressing U.S. Competitiveness in Global Standardization". See, notice. Location: NIST, 100 Bureau Drive, Gaithersburg, MD.
10:00 AM. The Senate Commerce Committee's (SCC) Subcommittee Technology, Innovation, and Competitiveness will hold a hearing titled "High-Performance Computing". See, notice. The hearing will be webcast by the SCC. Sen. John Ensign (R-NV) will preside. Press contact: Aaron Saunders (Stevens) at 202-224-3991 or Andy Davis (Inouye) at 202-224-4546. Location: Room 562, Dirksen Building.
10:00 AM. The Senate Banking Committee will hold a hearing titled "The Federal Reserve's Second Monetary Policy Report to Congress for 2006". The witness will be Federal Reserve Board (FRB) Chairman Ben Bernanke. See, notice. Location: Room 538, Dirksen Building.
12:00 NOON. The Cato Institute will host a panel discussion titled "U.S.-China Trade, Exchange Rates, and the U.S. Economy". The speakers will be Nicholas Lardy (Institute for International Economics), Frank Vargo (National Association of Manufacturers), and Daniel Griswold (Cato). Lunch will follow the program. See, notice. Location: Cato, 1000 Massachusetts Ave., NW.
2:15 - 5:30 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "Practical Law Office Technology for Solos and Small Firms". The speakers will include Reid Trautz and Lisa Weatherspoon. The price to attend ranges from $50-$125. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
6:30 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Summer Associate Happy Hour". For more information, contact Chris Fedeli at cfedeli at crblaw dot com or 202-828-9874. Location: Location: Helix Lounge, 1430 Rhode Island Ave., NW.

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