| Calif. Court Refuses to
Enforce Forum Selection Clause in AOL's TOS |
6/21. The California
Court of Appeal (1/2) issued its opinion
[PDF] in AOL
v. Superior Court affirming the trial court's
denial a AOL's motion to stay or dismiss a class action suit
brought by AOL subscribers in California state court, despite
a choice of forum clause in AOL's Terms of Service (TOS)
designating Virginia as the jurisdiction for all litigation.
Facts and Procedure. Al Menendez and other former AOL
subscribers filed a complaint in the Superior Court of Alameda
County, California, against AOL alleging unauthorized billing
of credit card accounts in violation of several California
state statutes. Plaintiffs seek class action status. AOL's TOS
contains both a choice of forum clause, and a choice of law
clause. Both designate Virginia, the home of AOL.
Significantly, Virginia state law does not allow consumer
lawsuits to be brought as class actions. The Superior Court
denied AOL's motion. AOL then brought this petition for writ
of mandate.
Holding. The California Court of Appeal denied
AOL's petition on the basis the AOL's choice of forum clause
is unenforceable. The Court wrote that "Our law favors
forum selection agreements only so long as they are procured
freely and voluntarily, with the place chosen having some
logical nexus to one of the parties or the dispute, and so
long as California consumers will not find their substantial
legal rights significantly impaired by their
enforcement." It continued that "enforcement of
AOL's forum selection clause, which is also accompanied by a
choice of law provision favoring Virginia, would necessitate a
waiver of the statutory remedies of the CLRA, in violation of
that law's anti-waiver provision (Civ. Code, § 1751) and
California public policy. For this reason alone, we affirm the
trial court’s ruling." |
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| Trade Promotion Authority
Hearings |
6/21. The Senate
Finance Committee completed two days of hearings on
granting the President trade promotion authority,
formerly known as fast track. Sen. Max Baucus (D-MT),
the new Chairman of the Committee, said in his opening
statement [PDF] on June 20 that he supports trade
promotion authority, but is pessimistic that it will pass this
year. He continued that "In the 1980s, the issue was
intellectual property. And on this issue, there is great
parallel with the current discussions on labor rights and
environmental standards. Initially, developing countries hotly
opposed the U.S. position on intellectual property. And they
wanted it addressed through the largely ineffective World
Intellectual Property Organization. In our own country, many
argued that trying to address this issue "muddied the
waters." But after years of hard negotiation, the
developing world relented, and intellectual property
protection became an integral part of trade agreements. It
remains so today. Now the issue is standards on labor and the
environment." See also, Sen. Baucus' opening
statement from June 21.
Sen. Charles Grassley
(R-IA), the ranking Republican, said in his opening
statement [PDF] on June 20 that "Unfortunately,
whenever we have attempted to talk about the benefits of
international trade during the last six months, the discussion
has soon been diverted into a discussion on labor and the
environment. These are important issues. We have to address
them in some fashion. I hope to do that in a constructive,
bipartisan way this year. But they are not, and should not be,
the central focus of the trade debate."
USTR Robert Zoellick
stated in his prepared
testimony of June 21 that "If the Congress cannot or
will not act, the United States will pay a price. Since the
Congressional grant of authority to negotiate trade agreements
expired in 1994, America has fallen behind." He also said
that "It really will not help working men and women at
home or abroad -- or environmental causes -- to paralyze trade
negotiations with cumbersome limits or sanctions or pressures.
Together, we want to achieve results, not procedural
breakdowns."
See also, prepared testimony of June 20 witnesses: Harold
McGraw (McGraw-Hill Companies), Chuck
Merja (National Association of Wheat Growers), John
Sweeney (AFL-CIO), Mark
Van Putten, President and CEO, National Wildlife
Federation), Robert
Hormats (Goldman Sachs), Peter
Scher (Mayer, Brown & Platt), Alan
Wolff (Dewey Ballantine), Clayton
Yeutter (Hogan and Hartson). |
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| Powell Advocates Policy
Based on Market Economics |
6/21. FCC Chairman Michael Powell
gave a speech
to the Federal Communications
Bar Association in Washington DC. This was another in a
series of addresses in which he advocated "building
policy that is centered around market economics."
He stated that "Market systems, far from being the bane
of consumers, have unquestionably produced more consumer
welfare than any other economic model devised by mankind. How
is it that anyone can argue that the pro-market policies of
the United States have not yielded enviable productivity in
our economy, jobs for our citizens, a higher standard of
living than nearly any other country in the world, and a
tradition of innovation and invention that has brought new
products, tools and services to our citizens?" However,
he also stated that "deregulation for its own sake is not
responsible policy." He also stated that
"responsible government policy must acknowledge that
consumers can be harmed by market abuses and we must have a
robust and effective consumer protection component at the
FCC." |
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| Rep. Sessions Condemns FCC
Central Planning |
| 6/20. Rep. Pete
Sessions (R-TX) inserted a statement in the Congressional
Record criticizing the FCC's spectrum allocation policies. He
asked, "are our telecom regulators and regulations
serving the New Economy or burdening it?" He also
inserted a copy of an editorial published in the Wall Street
Journal on the subject of Northpoint's dealings with the FCC.
That editorial stated that "The allocation system may
have worked well enough when it was designed 80 years ago to
broadcast first radio and later TV. But a proliferation of
wireless innovations has led to increased demand for spectrum
space, and the current method of doling it out, like all
attempts at central planning, has resulted in an artificial
shortage. Wireless technologies, we'll add here, are but
another way to shake America's thirst for broadband Internet
access, and we suspect that the slothful deployment of
broadband has played a significant role in Nasdaq's struggles
of late and the dot-com skid in general. In effect, government
control of the airwaves has helped to create virtual
queues." See, Congressional Record, June 20, 2001, Page
E1167. |
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| Sen. Frist Addresses
Telecom Act and Local Competition |
| 6/20. Sen. Bill Frist
(R-TN) spoke in the Senate regarding the Telecommunications
Act of 1996, and the state of local competition. He stated
that "it is imperative that we maintain a stable
regulatory framework." He also stated that "Making
fundamental changes to the structure of the 1996 Act will
destabilize the already shaky competitive local exchange
industry, depriving consumers of even the prospects for
meaningful choice. |
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| SEC E-SIGN Act
Interpretation |
| 6/21. The SEC published
an interpretation
in the Federal Register regarding the Application of the
Electronic Signatures in Global and National Commerce (E-SIGN)
Act to record retention requirements pertaining to issuers
under the Securities Act of 1933, the Securities Exchange Act
of 1934, and Regulation S-T. |
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| People and Appointments |
6/21. President Bush nominated Harris Hartz to be a
Judge of the U.S. Court of Appeals for the Tenth Circuit. See,
release.
6/21. President Bush nominated Jon Huntsman to be a
Deputy United States Trade Representative. See, release.
6/21. The Senate
Finance Committee held a hearing on several nominations,
including Allen Johnson (Chief Agricultural Negotiator,
USTR), William Lash (Asst. Sec. of Market Access and
Compliance, DOC), Brian Roseboro (Asst. Sec. of
Financial Markets, Treasury). |
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| US Will Not Renew NTT
Procurement Agreement |
| 6/21. USTR Robert Zoellick
announced that the U.S. "will not renew the bilateral
Nippon Telegraph and Telephone (NTT) Agreement with Japan
covering NTT procurement due to substantive progress on this
issue. The agreement is set to expire July 1, 2001. Instead,
the United States will actively monitor NTT's procurement
practices and purchases from U.S. suppliers through
information provided by U.S. industry." See, USTR
release. See also, TIa
release. |
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| Lofgren Introduces Patent
Reexamination Bill |
6/19. Rep.
Zoe Lofgren (D-CA) introduced HR
2231, the Patent Reexamination Enhancement Act of 2001.
The bill was referred to the House Judiciary
Committee, of which Rep. Lofgren is a member. She stated
that the bill is supported by Rep. Howard Coble
(R-NC), Chairman of the Courts, Internet and Intellectual
Property Subcommittee.
Rep. Lofgren described the bill in a release.
"Under the current patent system, individuals can
challenge a patent conveyed by the Patent and Trademark Office
by two methods, an extremely flawed patent reexamination
process or through costly court battles. A patent challenge
may come about when one inventor believes that a newly
conveyed patent to another person infringes on his/her
existing patent. Lofgren’s bill would fix the flaws in the
patent reexamination process to help keep challenges from
resulting in costly and time-consuming court fights."
"This legislation does not remove the availability of
external litigation in cases that have complex factual or
legal issues," said Rep. Lofgren. "It simply
enhances the internal reexamination process to provide an
effective option without being forced into costly court
challenges." |
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| Friday, June 22 |
The House will meet at 9:00 AM for legislative business. No
votes are expected past 2:00 PM. The Senate will continue
consideration of S 1052, the Patients' Bill of Rights.
12:00 NOON. The Progress and
Freedom Foundation will host a panel discussion on antitrust
policy of the Bush administration. The speakers will be
Robert Atkinson, (Progressive Policy Institute), Thomas Lenard
(Progress and Freedom Foundation), and Kenneth Starr (Kirkland
& Ellis). See, notice.
Location: Room B340, Rayburn Building. |
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| Monday, June 25 |
| 12:00 NOON - 3:00 PM. National
Science Foundation's Advisory Committee for
Cyberinfrastructure will hold a meeting. There will be open
teleconferencing. Persons who plan to attend should contact
Richard Hilderbrandt at 703-292-7093 or rhilderb@nsf.gov. See, notice
in Federal Register. Location: Room 320, National Science
Foundation, 4201 Wilson Blvd., Arlington, VA. |
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| Stearns Subcommittee Holds
Another Privacy Hearing |
6/21. The House
Commerce Committee's Subcommittee on Commerce, Trade, and
Consumer Protection held a hearing titled Information
Privacy: Industry Best Practices and Technological Solutions.
This was its fifth hearing on privacy related issues this
year. Rep. Cliff
Stearns (R-FL), Chairman of the Subcommittee, stated that
"technological solutions designed to reach information
privacy concerns of the consumer are a critical ingredient of
whatever is the recipe to the solution for the problem. ...
The second component of the private sector response to the
American consumer’s information privacy concerns is the
adoption of self-regulatory measures." See also, prepared
statement of Rep. Billy Tauzin (R-LA), the full committee
Chairman.
See also, prepared testimony of witnesses: Michael
Wallent (Microsoft), Austin
Hill (Zero-Knowledge), Frances
Schlosstein (Webwasher), Stephen
Hsu (SafeWeb), John
Schwarz (Reciprocal), Trevor
Hughes (Engage), Jerry
Cerasale (Direct Marketing Association), Steven
Cole (Council of Better Business Bureaus), Jerry
DeVault (Ernst & Young), and Marc
Rotenberg (Electronic Privacy Information Center). |
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| Quote of the Day |
"The feeling of techno overload. You know the feeling.
You have heard this before. When you hear a voice -- Does
everybody have a Palm Pilot? Why don't I have a RIM? What does
the size of my mobile phone say about me? In this area smaller
is better."
FCC Chairman Michael Powell, June 21 address to the
FCBA. |
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