| Beales May Head FTC
Consumer Protection Bureau |
5/31. The Wall Street
Journal reported that incoming FTC Chairman Timothy Muris
will appoint Howard Beales head of the FTC's Consumer
Protection Bureau.
The FTC's Consumer
Protection Division is involved in both fighting online
fraud and promoting online privacy. Howard
Beales is a "Chicago school" economist who is a
professor at the business school at George Washington
University in Washington DC. He is an Associate Professor of
Strategic Management & Public Policy in the School of Business and Public
Management. He specializes in consumer research, contract
law, economics of commercial free speech, applied
macro-economics, advertising, public policy toward business,
safety and health regulations.
Beales and Muris worked together at the FTC in the 1980s. They
have also co-authored academic works. See, Howard Beales and
Timothy Muris, State and Federal Regulation of National
Advertising, The AEI Press, Washington DC, 1993. See, Amazon
listing (out of print), and AEI order
form. |
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| Privacy Advocates Write to
Muris |
| 5/31. A collection of groups that engage in advocacy
regarding online privacy sent a letter
to Timothy Muris, the incoming Chairman of the FTC, in which
they advocated that Muris "make the protection of privacy
a top priority for the FTC." They listed among their
requests that the FTC "Revisit the effectiveness of the
"unfair and deceptive trade practices" regime to
protect consumer privacy ..." |
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| More People and
Appointments |
5/31. Michael Copps was sworn in as a Commissioner of
the FCC. He is a Democrat,
and a former aide to Sen.
Ernest Hollings (D-SC). His term runs until runs until
June 30, 2005. See, FCC
release.
5/31. Kathleen Abernathy was sworn in as a Commissioner
of the FCC. She is a Republican. Her term expires June 30,
2004. See, FCC
release.
5/31. Valerie Caproni, Director of the SEC's Pacific
Regional Office, will leave her position at the end of July to
join the law firm of Simpson
Thacher & Bartlett. See, SEC release. |
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| New IP Suits |
5/29. Radio Spirits Inc. filed a complaint in U.S. District
Court (NDCal)
against Napster alleging
contributory and vicarious copyright infringement and
unfair competition. Radio Spirits is the old-time radio and
classic video subsidiary of MediaBay,
Inc. (Case No. 01-02090.) See, MediaBay
release.
5/31. Agere Systems filed
a complaint in U.S. District Court (DDel) against Proxim alleging patent
infringement. The three patents in suit relate to wireless
local area networking products. See, Agere
release.
5/31. Motorola filed a
complaint in U.S. District Court against e-mail spammer Paging
America alleging trademark infringement and unfair
competition. Motorola stated that Paging America sent
unsolicited e-mail messages that misled consumers into
believing that Motorola was affiliated with Paging America,
which contained Motorola trademarks, and which referenced free
Motorola pagers that were neither free nor made by Motorola.
See, Motorola
release. |
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| New Documents |
USCA:
opinion
in Helwig v. Vencor re pleading standards in class action
securities suits under the PSLRA, 5/31 (HTML, USCA).
USCA:
opinion
in Spectators' Communication Network v. Colonial Country Club
re antitrust, 5/31 (HTML, USCA).
EPIC:
letter
to Muris re privacy, 5/31 (HTML, EPIC). |
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| Divided 6th Circuit
Addresses Pleading Standards in Securities Class Actions |
5/31. The U.S.
Court of Appeals (6thCir) issued its opinion
in Helwig
v. Vencor, a case regarding pleading standards
in class action securities suits under the Private Securities
Litigation Reform Act (PSLRA). The Court, sitting en banc, was
split seven to six. Previously, the District Court, and then a
divided three judge panel of the Appeals Court, concluded that
plaintiffs failed to state a claim. See, Helwig v. Vencor, 210
F.3d 612 (6th Cir. 2000). The Appeals Court, sitting en banc,
reversed.
Plaintiffs are investors in Vencor, a health care provider now
known as Kindred
Healthcare. Plaintiffs filed a complaint in the U.S.
District Court (WDKent)
against Vencor, and several of its directors, alleging
violation of federal securities laws. Plaintiffs plead
misleading statements and omissions in violation of §§
10(b) and 20(a) of the Securities Exchange Act of 1934 and
Rule 10b-5 thereunder. Plaintiffs sought class action status.
Defendants moved to dismiss under Ruled 12(b)(6) for failure
to state a claim. At issue is whether the plaintiffs'
complaint meets the pleading requirements set by the Private
Securities Litigation Reform Act of 1995 (PSLRA),
which the Congress passed to insulate defendants from abusive
suits. The PSLRA creates both a safe harbor for forward
looking statements, and a heightened pleading requirement:
plaintiffs must "state with particularity facts giving
rise to a strong inference that the defendant acted with the
required state of mind."
The majority found that plaintiffs met the pleading
requirement, and hence, reversed and remanded. The majority
followed the approach taken by the First Circuit in Greebel
v. FTP Software. The Court held that the PSLRA contains a
"fact-sensitive approach to pleading". It wrote:
"Because Congress did not endorse or prohibit a
particular manner of pleading, we cannot disregard any set of
facts as insufficient as a matter of law. We inquire instead
whether those facts produce a strong inference of scienter in
securities fraud, which in this Circuit is recklessness for
statements of present or historical fact and actual knowledge
in the case of forward-looking statements." The Court
then enumerated the types facts that are probative of
securities fraud, as listed in the Greebel case.
Merritt wrote the majority opinion, in which Martin, Daughtrey,
Moore, Cole, Clay and Gilman joined. Kennedy wrote the
dissent, in which Boggs, Norris, Suhrheinrich, Siler and
Batchelder joined. The plaintiffs are represented by several
law firms, including Milberg
Weiss, a law firm based in San Diego that specializes in
bringing securities class action suits against technology
companies. Defendants are represented by several law firms,
including Fried
Frank.
Other Circuits. There is conflict among the various
circuits on this issue. See, for example:
• Janas
v. McCracken (In re Silicon Graphics Sec. Litig.), 183
F.3d 970 (9th Cir. 1999).
• Novak
v. Kasaks, 216 F.3d 300 (2d Cir.).
• In
re Advanta Corp. Sec. Litig., 180 F.3d 525 (3d Cir. 1999).
• Bryant
v. Avado Brands, 187 F.3d 1271 (11th Cir. 1999).
• Greebel
v. FTP Software, 194 F.3d 185 (1st Cir. 1999).
Editor's Note. Text that is green
and underlined contains "mouse over
text." That is, if you place your mouse pointer over the
text, then a text box should pop up containing further text.
This feature works in MS Outlook 2000, as well as in MS
Internet Explorer 4 and above, but not in all e-mail programs
and browsers. |
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| Antitrust News |
| 5/31. The U.S.
Court of Appeals (5thCir) issued its opinion
in Spectators' Communication
Network v. Colonial Country Club, a Sherman Act
antitrust case. Plaintiff, Spectators' Communication
Network, alleged that it was excluded from broadcasting
professional golf tournaments. The District Court granted
summary judgment to Defendant. The Appeals Court reversed. |
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| Today |
The House and Senate are in recess for the Memorial Day
District Work Period.
Recommended deadline for submitting written materials to the NIST regarding the June 19-21,
2001, meeting of the Computer
System Security and Privacy Advisory Board (CSSPAB). The
Advisory Board was established by the Computer Security Act of
1987 (Public Law 100-235) to advise the Secretary of Commerce
and the Director of NIST on security and privacy issues
pertaining to federal computer systems. The meeting will be
held at the John Marshall School of Law in Chicago, Illinois.
See, notice
in Federal Register, May 11, 2001, Vol. 66, No. 92, at Page
24117.
12:15 PM. The Federal
Communications Bar Association's Wireless Committee will
host a luncheon. The topic will be placement of towers and
antennas. For more information contact Arlice Johnson at arlice@fcba.org or
202-293-4000. |
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| Monday, June 4 |
8:00 -10:00 AM. The Electronic
Privacy Information Center (EPIC) and Harvard Information
Infrastructure Project (HIIP) will host two panel
discussions. Registration begins at 8:00 AM. Opening addresses
by Deborah
Hurley (HIIP), Marc
Rotenberg (EPIC), and John Anderson begin at 8:15 AM. The
first panel, titled "The Internet and Jurisdiction",
begins at 8:30 AM. The second panel titled "Privacy and
Global Society", begins at 9:15 AM. Location: National
Press Club, First Amendment Lounge, 529 14th St. NW, 13th
Floor, Washington DC.
8:30 AM. The EPIC and HIIP will host an academic panel
discussion on jurisdictional questions brought about by
Internet commerce. The speakers will be:
• Julie
Cohen (Georgetown University Law Center).
• Jamie
Boyle (Duke University School of Law).
• Dave
Farber (University of Pennsylvania).
• Michael
Geist (University of Ottawa Law School).
• Pam
Samuelson (University of California at Berkeley).
• Barbara Simons (Association for Computing
Machinery).
9:15 AM. The EPIC and HIIP will host an academic panel
discussion on the prospects for global privacy protection by
both legal and technological means. The speakers will be:
• Anita Castellitto (University of Pennsylvania School
of Law).
• Simon Davies (Privacy International).
• Whitfield Diffie (Sun Microsystems).
• Oscar Gandy (University of Pennsylvania).
• Austin Hill (Zero-Knowledge Systems).
• Robert Ellis Smith (Privacy Journal).
• Paul Schwartz (Brooklyn Law School). |
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| About Tech Law Journal |
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