5/16. The Supreme Court issued its 5-4 opinion [73 pages in PDF] in Granholm v. Heald, and consolidated cases, holding that Michigan's and New York's regulatory schemes that permit in-state wineries directly to ship alcohol to consumers, but restrict the ability of out-of-state wineries to do so, violate the dormant commerce clause.

While the facts of these cases involve wine sales, this opinion will make it easier for businesses that engage in electronic commerce to challenge the constitutionality of state protectionist statutes that discriminate against internet based commerce. Also, this case is notable because, the states have a stronger case for restricting commerce in wine than in other products and services, because the 21st Amendment grants states special powers to regulate alcohol sales.

However, the impact of the opinion may be limited, to the extent that Michigan and New York discriminated only against out of state direct sellers (such as internet based sales). A state may avoid the consequences of this opinion simply by not carving out an exception for its in state direct sellers.

Background. This is the consolidation of three case, Granholm v. Heald (No. 03-1116), Michigan Beer & Wine Wholesalers v. Heald (No. 03-1120), and Swedenburg v. Kelly (No. 03-1274). See, story titled "Supreme Court Grants Certiorari in Internet Wine Sales Cases" in TLJ Daily E-Mail Alert No. 905, May 26, 2005.

The U.S. Court of Appeals (6thCir) issued its opinion in Heald v. Engler on August 28, 2003. The Court held that Michigan's alcohol sales statute violates the dormant commerce clause.

The U.S. Court of Appeals (2ndCir) issued its opinion [28 pages in PDF] in Swedenburg v. Kelly, on February 12, 2004. The District Court had held that a New York statute prohibiting out of state wineries from selling directly to New York residents, such as via the internet, violated the Commerce Clause of the Constitution. The Appeals Court reversed, holding that New York's statute is a permissible exercise of authority granted to states under the 21st Amendment, thus rejecting the Commerce Clause challenge. See, stories titled "2nd Circuit Rules in Internet Wines Sales Case" in TLJ Daily E-Mail Alert No. 840, February 19, 2004; and "Court Holds New York's Ban on Internet Wine Sales Is Unconstitutional" in TLJ Daily E-Mail Alert No. 551, November 18, 2002.

Opinion of the Court. The Supreme Court concluded that "both States discriminate against interstate commerce in violation of the Commerce Clause, Art. I, §8, cl. 3, and that the discrimination is neither authorized nor permitted by the Twenty-first Amendment. Accordingly, we affirm the judgment of the Court of Appeals for the Sixth Circuit, which invalidated the Michigan laws; and we reverse the judgment of the Court of Appeals for the Second Circuit, which upheld the New York laws."

The Court wrote that "Michigan and New York regulate the sale and importation of alcoholic beverages, including wine, through a three-tier distribution system. Separate licenses are required for producers, wholesalers, and retailers. ... the three-tier system is ... mandated by Michigan and New York only for sales from out-of-state wineries. In-state wineries, by contrast, can obtain a license for direct sales to consumers. The differential treatment between in-state and out-of-state wineries constitutes explicit discrimination against interstate commerce."

The regulatory schemes of Michigan and New York affect all direct sales. However, the Court noted that internet sales is an important component of direct sales. It wrote that "Technological improvements, in particular the ability of wineries to sell wine over the Internet, have helped make direct shipments an attractive sales channel." The Court also quoted the Federal Trade Commission's (FTC) July 2003 report [139 pages in PDF] titled "Possible Anticompetitive Barriers to E-Commerce: Wine": "interstate direct shipping represent the single largest regulatory barrier to expanded e-commerce in wine".

The Court held the Michigan and New York regulatory schemes unconstitutional under the commerce clause. Article I, Section 8, of the Constitution provides that "The Congress shall have Power ... to regulate Commerce with foreign Nations, and among the several States ..."

The dormant commerce clause, which the Court applied in this case, is the judicial concept that the Constitution, by delegating certain authority to the Congress to regulate commerce, thereby bars the states from legislating on certain matters that affect interstate commerce, even in the absence of Congressional legislation. Although, the opinion of the Court does not expressly state that this case is decided under the dormant commerce clause. However, the cases cited by the majority, the reasoning of the majority opinion, and the dissents, make clear that this is a dormant commerce clause case.

The Court wrote that "Time and again this Court has held that, in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate ``differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.´´ ... This rule is essential to the foundations of the Union. The mere fact of nonresidence should not foreclose a producer in one State from access to markets in other States. ... States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses." (Citations omitted.)

The Court added that "The rule prohibiting state discrimination against interstate commerce follows also from the principle that States should not be compelled to negotiate with each other regarding favored or disfavored status for their own citizens. States do not need, and may not attempt, to negotiate with other States regarding their mutual economic interests."

It continued that "Laws of the type at issue in the instant cases contradict these principles. They deprive citizens of their right to have access to the markets of other States on equal terms. The perceived necessity for reciprocal sale privileges risks generating the trade rivalries and animosities, the alliances and exclusivity, that the Constitution and, in particular, the Commerce Clause were designed to avoid. State laws that protect local wineries have led to the enactment of statutes under which some States condition the right of out-of-state wineries to make direct wine sales to in-state consumers on a reciprocal right in the shipping State.

The Court noted that "California, for example, passed a reciprocity law in 1986, retreating from the State’s previous regime that allowed unfettered direct shipments from out-of-state wineries. ... Prior to 1986, all but three States prohibited direct-shipments of wine. The obvious aim of the California statute was to open the interstate direct-shipping market for the State’s many wineries. ... The current patchwork of laws -- with some States banning direct shipments altogether, others doing so only for out-of-state wines, and still others requiring reciprocity—is essentially the product of an ongoing, low-level trade war." (Citations omitted.)

The Court then concluded that "The discriminatory character of the Michigan system is obvious. Michigan allows in-state wineries to ship directly to consumers, subject only to a licensing requirement. Out-of-state wineries, whether licensed or not, face a complete ban on direct shipment. The differential treatment requires all out-of-state wine, but not all in-state wine, to pass through an in-state wholesaler and retailer before reaching consumers. These two extra layers of overhead increase the cost of out-of-state wines to Michigan consumers. The cost differential, and in some cases the inability to secure a wholesaler for small shipments, can effectively bar small wineries from the Michigan market. The New York regulatory scheme differs from Michigan’s in that it does not ban direct shipments altogether. Out-of-state wineries are instead required to establish a distribution operation in New York in order to gain the privilege of direct shipment. ... This, though, is just an indirect way of subjecting out-of-state wineries, but not local ones, to the three-tier system." (Citations omitted.)

The Court next rejected the arguments of Michigan and New York that the regulatory schemes in these case are permissible because wine sales, and alcohol sales generally, are a special case, because of the 21st Amendment.

Section 2 of the 21st Amendment provides, in part, that "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited." That is, it prohibits, as a matter of federal Constitutional law, violation of a state's laws regarding the transportation or importation of alcoholic beverages into that state . It thus confers upon the states some authority to regulate interstate commerce in alcoholic beverages.

The Court reviewed at length the history of pre-prohibition regulation of alcohol sales, prohibition, and repeal of prohibition, and concluded that "the Twenty-first Amendment does not supersede other provisions of the Constitution and, in particular, does not displace the rule that States may not give a discriminatory preference to their own producers." It added that "State policies are protected under the Twenty-first Amendment when they treat liquor produced out of state the same as its domestic equivalent."

Justice Clarence Thomas wrote a long dissent (at pages 41-73), that was joined by Rehnquist, Stevens and O'Connor, that challenges this 21st Amendment analysis. The reasoning of this dissent can only be pertinent to regulation of alcohol sales. It will have no bearing on other types of restraints on e-commerce.

The majority, having concluded that Michigan and New York discriminated against interstate commerce, and that the 21st Amendment offers no excuse, then concluded that "We still must consider whether either State regime ``advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.´´" In particular, the states argued that their regulatory schemes protect their states against the harms associated with underage drinking.

The Court was unimpressed. It wrote that "The States provide little evidence that the purchase of wine over the Internet by minors is a problem. Indeed, there is some evidence to the contrary. A recent study by the staff of the FTC found that the 26 States currently allowing direct shipments report no problems with minors’ increased access to wine. ... This is not surprising for several reasons. First, minors are less likely to consume wine, as opposed to beer, wine coolers, and hard liquor. ... Second, minors who decide to disobey the law have more direct means of doing so. Third, direct shipping is an imperfect avenue of obtaining alcohol for minors who, in the words of the past president of the National Conference of State Liquor Administrators, “ ‘want instant gratification.’ ”" (Citations omitted.)

The Court added that barring only out of state sales is no way to protect against underage drinking.

In addition to underage drinking, the states argued that their regulatory regimes are necessary to enforce tax collection. However, the Court rejected this argument also. It held that the states already have adequate remedies under federal and state laws for collecting tax revenues. It wrote that "The States have not shown that tax evasion from out-of-state wineries poses such a unique threat that it justifies their discriminatory regimes."

The Court wrote in conclusion that "States have broad power to regulate liquor under §2 of the Twenty-first Amendment. This power, however, does not allow States to ban, or severely limit, the direct shipment of out-of-state wine while simultaneously authorizing direct shipment by in-state producers. If a State chooses to allow direct shipment of wine, it must do so on evenhanded terms. Without demonstrating the need for discrimination, New York and Michigan have enacted regulations that disadvantage out-of-state wine producers. Under our Commerce Clause jurisprudence, these regulations cannot stand."

Stevens Dissent. Justice Stevens wrote a short dissent (at pages 37-40), that was joined in only by Justice O'Connor. Like Justice Thomas, Justice Stevens addressed the 21st Amendment. He wrote that "The New York and Michigan laws challenged in these cases would be patently invalid under well settled dormant Commerce Clause principles if they regulated sales of an ordinary article of commerce rather than wine. But ever since the adoption of the Eighteenth Amendment and the Twenty-first Amendment, our Constitution has placed commerce in alcoholic beverages in a special category."

However, Stevens also wrote more broadly "Today many Americans, particularly those members of the younger generations who make policy decisions, regard alcohol as an ordinary article of commerce, subject to substantially the same market and legal controls as other consumer products. That was definitely not the view of the generations that made policy in 1919 when the Eighteenth Amendment was ratified or in 1933 when it was repealed by the Twenty-first Amendment."

Thus, Justice Kennedy, and those who joined him, are members of the younger generation.

Perhaps more significantly, he suggests that the majority makes a "policy" decision, rather than a judicial interpretation.

Reaction. The Institute for Justice represented the plaintiffs in Swedenburg v. Kelly. The IJ's Clint Bolick stated in a release that "This landmark ruling is a victory for consumers and small businesses and a defeat for economic protectionism. It demonstrates that in the era of the Internet, the Court will vindicate the principles of free trade that made this country great."

The IJ's Chip Mellor stated that "This victory is about much more than wine -- it is about the freedom of small businesses to operate without arbitrary and anti-competitive government regulation getting in their way. Now that we have set this important precedent, we'll work to expand on it to help other entrepreneurs who face similar government-imposed good-old-boy networks. This is an important step, but it is only one step in the Institute for Justice’s long-term national campaign to advance economic liberty -- the right to earn an honest living."

Analysis of Supreme Court Voting. This is a five to four opinion. Justice Kennedy wrote the opinion for the Court. He was joined by Justices Scalia, Souter, Ginsburg and Breyer. Justice Thomas wrote a lengthy dissent that was joined by Chief Justice Rehnquist, and Justices Stevens and O'Connor. Justice Stevens also wrote a separate dissent, that was joined by Justice O'Connor.

The vote did not break down along ideological lines. Those who more often defend free enterprise split. Notably, Justice Thomas and Chief Justice Rehnquist opposed the free enterprise outcome in this case. Defenders of states rights also split. Justice Scalia opposed states rights in this case.

As Justice Stevens hinted in his dissent, the Supreme Court split along lines of age and seniority. The "younger generation" overturned the state regulatory regimes.

The three most senior members of the Court (Rehnquist, Stevens and O'Connor) voted together in the minority. The more junior members, with the exception of Justice Thomas, formed the majority.

This may bode well for future constitutional challenges to protectionist state statutes that burden electronic commerce. Three of the members of the minority may soon retire from the Supreme Court.

5/16. The Supreme Court has held all of its oral arguments for the October Term 2004. The Supreme Court will likely issue opinions in the next several weeks for the cases argued in the October Term 2004 for which it has not yet issued its opinion. It will then recess for the summer. The opening conference of the October Term 2005 is scheduled for September 26, 2005. See, calendar [PDF].

There are still several important technology related cases yet to be decided, including MGM v. Grokster (copyright and P2P systems), NCTA v. Brand X (regulation of broadband internet services), and Merck v. Integra (research exemption to patent infringement).

Copyright. The Supreme Court heard oral argument in MGM v. Grokster, Sup. Ct. No. 04-480, on March 29, 2005. See, story titled "Supreme Court Hears Oral Argument in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,106, March 30, 2005.

Metro Goldwyn Meyer (MGM), and other movie companies, and various record companies, filed a complaint in the U.S. District Court (CDCal) against Grokster, Streamcast and Kazaa alleging copyright infringement, in violation of 17 U.S.C. § 501. They alleged contributory and vicarious infringement. They did not sue individual infringers. Also, professional songwriters and music publishers filed a complaint against the same defendants alleging contributory and vicarious infringement. The two actions were consolidated.

On April 25, 2003, the District Court issued an opinion holding that Grokster's and Streamcast's peer to peer (P2P) networks do not contributorily or vacariously infringe the copyrights of the holders of music and movie copyrights. See also, story titled "District Court Holds No Contributory or Vicarious Infringement by Grokster or Streamcast P2P Networks" in TLJ Daily E-Mail Alert No. 650, April 28, 2003

On August 19, 2004, the U.S. Court of Appeals (9thCir) issued its opinion [26 pages in PDF], affirming the District Court. See, story titled "9th Circuit Holds No Vicarious Infringement in Grokster Case" in TLJ Daily E-Mail Alert No. 963, August 20, 2004.

Regulatory Classification of Cable Modem Service. The Supreme Court heard oral argument in NCTA v. Brand X Internet Services, Sup. Ct. No. 04-277, and FCC v. Brand X Internet Services, Sup. Ct. No. 04-281, on March 29, 2005. See, story titled "Supreme Court Hears Oral Argument in Brand X Case" in TLJ Daily E-Mail Alert No. 1,106, March 30, 2005.

This case concerns the Federal Communications Commission's (FCC) Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF], adopted on March 14, 2002, that cable modem service is an information service, and that there is no separate offering as a telecommunications service.

The majority of the FCC Commissioners have argued that they are pursuing the policy goals of promoting investment in new facilities, promoting technological innovation, promoting intermodal competition between different providers, and ultimately, promoting the deployment of inexpensive and ubiquitous broadband, and all of the new services that will run over broadband.

The U.S. Court of Appeals (9thCir) issued its opinion [39 pages in PDF] on October 9, 2003 vacating that the FCC's declaratory ruling. See, story titled "9th Circuit Vacates FCC Declaratory Ruling That Cable Modem Service is an Information Service Without a Separate Offering of a Telecommunications Service" in TLJ Daily E-Mail Alert No. 754, October 7, 2003.

Research Exemption to Patent Infringement. The Supreme Court heard oral argument in Merck KGaA v. Integra LifeSciences I, Sup. Ct. No. 03-1237, on April 20, 2005. This is a drug patent case involving a research exemption to patent infringement. However, it is possible that the Supreme Court will issue an opinion that impacts research in other fields and technologies.

The U.S. Court of Appeals (FedCir) issued a divided opinion on June 6, 2003. Judge Randall Rader wrote the opinion of the Court, strictly construing Section 271(e)(1) of the Patent Act. Judge Pauline Newman dissented in part, emphasizing the underlying purposes of patent law; she would construe the statute more broadly, and recognize a meaningful common law research exemption. See also, the Court of Appeals' December 3, 2003 errata.

There have also been proposals to amend the Patent Act to provide a more general exemption for research. See, story titled "Supreme Court Takes Case Involving Research Exemption to Patent Infringement" in TLJ Daily E-Mail Alert No.1,053, January 11, 2005.

Constitutional Authority for Tech Related Criminal Statutes Under the Commerce Clause. There is also Ashcroft v. Raich, Sup. Ct. No. 03-1454. The Supreme Court granted certiorari back on June 28, 2004. It heard oral argument on November 11, 2004.

The facts giving rise to the case do not involve technology. The Supreme Court wrote that the question in this case is "Whether the Controlled Substances Act, 21 U.S.C. 801 et seq., exceeds Congress's power under the Commerce Clause as applied to the intrastate cultivation and possession of marijuana for purported personal ``medicinal´´ use or to the distribution of marijuana without charge for such use." See, summary [PDF].

There is no general grant of criminal law making authority in the Constitution. Some federal criminal statutes are based upon the authority of the Commerce Clause, including some technology related criminal statutes. Hence, how the Supreme Court decides this case may affect the constitutional authority of the Congress to enact technology related criminal statutes that are based upon the Commerce Clause.

For example, the Supreme Court has received a petition for writ of certiorari in U.S. v. James Maxwell, Sup. Ct. No. 04-1482. This case involves to the constitutionality of 18 U.S.C. § 2252A(a)(5)(B), which addresses pormography on computer disks or computers hard drives.

The Office of the Solicitor General (SG) filed a brief with the Supreme Court in April, 2005, urging the Supreme Court to hold this petition for writ of certiorari until it decides Ashcroft v. Raich on the merits.

The SG wrote that the issue in Maxwell is "Whether 18 U.S.C. 2252A(a)(5)(B), which prohibits the knowing possession of child pormography ``that was produced using materials that have been mailed, or shipped or transported in interstate or foreign commerce,´´ is unconstitutional, as exceeding Congress's Commerce Clause authority, as applied to respondent's intrastate possession of child pormography stored on computer disks that had traveled in interstate commerce." (TLJ misspells words that cause subscribers' e-mail servers to block delivery of the TLJ Daily E-Mail Alert.)

State Sovereign Immunity. The Supreme Court granted certiorari in Central Virginia Community College v. Katz, Sup. Ct. No. 04-885, on April 4, 2005. It has not yet heard oral argument. Hence, its opinion is not likely to come until late this year, or next year.

The underlying dispute in this case does not involve technology. This is a bankruptcy case. This case involves the authority of the Congress, under the bankruptcy clause of the Constitution, to abrogate state sovereign immunity in the bankruptcy code. See, 11 U.S.C. § 106(a). Four state colleges run by the state of Virginia challenge the constitutionality of § 106, asserting state sovereign immunity, 11th Amendment immunity, and the 10th Amendment. The Bankruptcy Court and the U.S. Court of Appeals (6thCir) ruled against the state colleges.

The argument advanced by the state colleges is similar to those made by the state of Florida when it successfully argued before the Supreme Court that the Patent and Plant Variety Protection Remedy Clarification Act is an unconstitutional abrogation of state's 11th Amendment immunity. Hence, the Supreme Court's opinion in this case could impact remedies for enforcing intellectual property rights.

See, story titled "Supreme Court Grants Certiorari in State Sovereign Immunity Case" in TLJ Daily E-Mail Alert No. 1,109, April 5, 2005.

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. The House will begin consideration of HR 2360, the "Department of Homeland Security Appropriations Act for FY 2006". See, Republican Whip Notice.

The Senate will meet at 9:45 AM. It will resume consideration of HR 3, the "Transportation Equity Act".

9:00 AM - 5:30 PM. The Federal Communications Commission's (FCC) North American Numbering Council (NANC) will meet. See, notice and agenda [2 pages in PDF]. Location: FCC, 445 12th Street, SW, Room TW-C305.

10:00 AM. The House Ways and Means Committee's Subcommittee on Trade will hold a hearing on the future of the World Trade Organization (WTO). See, notice. Location: Room 1100, Longworth Building.

10:00 AM. The House Science Committee will meet to mark up two bills, including HR __, a bill to establish a Science and Technology Scholarship Program to give scholarships to prepare students for careers in the National Weather Service and in marine research, atmospheric research and satellite programs. Location: Room 2318, Rayburn Building.

10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing titled "Intellectual Property Theft in China". The witnesses will be Victoria Espinel (acting Assistant USTR for Intellectual Property), Ted Fishman (author and journalist, China, Inc.), Myron Brilliant (U.S. Chamber of Commerce), and Eric Smith (International Intellectual Property Alliance). Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. See, notice [PDF]. Location: Rooom 2141, Rayburn Building.

11:30 AM - 1:00 PM. The Business Software Alliance (BSA) and Center for Strategic and International Studies (CSIS) will host a panel discussion titled "Battling International Organized Cyber Crime". The keynote speaker will be Ralph Basham (Director of the U.S. Secret Service). The panelists will be Ed Appel (Joint Council of Information Age Crime), Bill Conner (Ch/CEO of Entrust), James Lewis (CSIS), Brian Nagel (U.S. Secret Service), Kim Peretti (Trial Attorney in the DOJ's Computer Crime and Intellectual Property Section), Phil Reitinger (Microsoft), and Jody Westby (Price Waterhouse Coopers). Lunch will be served. RSVP to rsvp at bsa dot org by May 11. Press contact: Wendy Rosen at 202 530-5127 or wendyr at bsa dot org. Location: 1800 K Street, NW, B-1 conference center.

12:00 NOON. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing titled "Intellectual Property Theft in Russia". The witnesses will be Victoria Espinel (acting Assistant USTR for Intellectual Property), Bonnie Richardson (Motion Picture Association of America), Matt Gerson (Universal Music Group),  and Eric Smith (International Intellectual Property Alliance). Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. See, notice [PDF]. Location: Rooom 2141, Rayburn Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Committee will host a brown bag lunch on the Federal Communications Commission's (FCC) radio ownership rules. The speakers will be Alan Schneider (FCC's Audio Division, invited), Jack Goodman (Wilmer Cutler), and Michael Passarelli (BIA). Location: Dow Lohnes & Albertson, 1200 New Hampshire Ave., NW, Suite 800.

2:30 PM. The House Rules Committee will meet to adopt a rule for consideration of HR 1817 RH [79 pages in PDF] "Department of Homeland Security Authorization Act for Fiscal Year 2006", which includes an amended version of the "Department of Homeland Security Cybersecurity Enhancement Act of 2005".

Day two of a two day event hosted by the American Cable Association titled "Annual Washington Summit".

Day one of a three day event hosted by the Armed Forces Communications and Electronics Association (AFCEA) titled "TechNet International 2005: Network Centric Operation: Balancing Speed and Agility with Security". See, event web site and schedule. Location: Washington Convention Center.

The House will meet at 10:00 AM for legislative business. The House may consider HR 2360, the "Department of Homeland Security Appropriations Act for FY 2006", and HR 1817 RH [79 pages in PDF] the "Department of Homeland Security Authorization Act for Fiscal Year 2006", which includes an amended version of the "Department of Homeland Security Cybersecurity Enhancement Act of 2005". See, Republican Whip Notice.

12:01 AM. The Business Software Alliance (BSA) will release a study of international software piracy. For more information, contact Debbi Mayster at 202 530-5132 or debbim at bsa dot org or Laura Brinker at 202 715-1540 or laura dot brinker at dittus dot com.

9:30 AM. The Senate Judiciary Committee has scheduled an executive business meeting. The SJC frequently cancels meetings without notice. The SJC rarely follows its agenda. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

10:00 AM - 12:00 NOON. The House Science Committee's Subcommittee on Research will hold a hearing titled "The National Nanotechnology Initiative: Review and Outlook". The witnesses will be Floyd Kvamme (Co-Chair of the President's Council of Advisors on Science and Technology), Scott Donnelly (General Electric), John Kennedy (Clemson University's Center for Advanced Engineering Fibers and Films), John Cassady (Oregon State University), and Alain Kaloyeros (President of Albany NanoTech). For more information, contact Joe Pouliot at 202 225-0581 or joe dot pouliot at mail dot house dot gov. Location: Room 2318, Rayburn Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing on the nomination of David Sampson to be Deputy Secretary of Commerce. Press contact: Melanie Alvord (Stevens) 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. The hearing will be webcast by the SCC. Location: Room 253, Russell Building.

10:00 AM. The House Financial Services Committee's (HFSC) Subcommittee on Financial Institutions will hold a hearing titled "Enhancing Data Security: The Regulators' Perspective". Location: Room 2128, Rayburn Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyer's Committee (YLC) will host a brown bag lunch to hold elections. There will be no proxy voting. Voting is limited to current YLC members. All nominations must be e-mailed to Jason Friedrich or Pam Slipakoff by May 11. For more information, contact Jason Friedrich at jason dot friedrich at dbr dot com or 202 354-1340 or Pam Slipakoff at pamslip at yahoo at com or 202 418-7705. Location: Willkie Farr & Gallagher, 1875 K Street, NW, 2d Floor.

6:00 - 8:30 PM. Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour". For more information, contact Pam Slipakoff at pamslip at yahoo dot com. Location: Poste-Modern Brasserie, 555 8th Street, NW.

Day two of a three day event hosted by the Armed Forces Communications and Electronics Association (AFCEA) titled "TechNet International 2005: Network Centric Operation: Balancing Speed and Agility with Security". See, event web site and schedule. Location: Washington Convention Center.

The House will meet at 10:00 AM for legislative business. The House may consider HR 2360, the "Department of Homeland Security Appropriations Act for FY 2006", and HR 1817 RH [79 pages in PDF] the "Department of Homeland Security Authorization Act for Fiscal Year 2006", which includes an amended version of the "Department of Homeland Security Cybersecurity Enhancement Act of 2005". See, Republican Whip Notice.

2:00 PM. The Senate Banking Committee will hold a hearing on the nomination of Ben Bernanke to be a Member of the President's Council of Economic Advisers. Location: Room 538, Dirksen Building.

RESCHEDULED FROM MAY 12. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF]. The event will be webcast by the FCC. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM. The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on several nominations, including that of Philip Perry to be General Counsel of the Department of Homeland Security (DHS). See, notice. Location: Room 562, Dirksen Building.

5:30 PM. The Discovery Institute and the Progress and Freedom Foundation (PFF) will host a book presentation. George Gilder will discuss his book titled The Silicon Eye: How a Silicon Valley Company Aims to Make All Current Computers, Cameras, and Cell Phones Obsolete [Amazon]. RSVP to 202 682-1201 or rsvp at dc dot discovery dot org. Location: 1015 15th St. NW, Suite 900.

Day three of a three day event hosted by the Armed Forces Communications and Electronics Association (AFCEA) titled "TechNet International 2005: Network Centric Operation: Balancing Speed and Agility with Security". See, event web site and schedule. Location: Washington Convention Center.

The House may meet at 9:00 AM for legislative business. See, Republican Whip Notice.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "The Future of The Broadcast Flag: Implications for Congress, the FCC and the DTV Transition". The speakers will be John Rogovin (former FCC General Counsel), Fritz Attaway (MPAA), James Burger (Dow Lohnes), Mike Godwin (Public Knowledge) and Lawrence Sidman (Paul Hastings). See, notice. Location: Room 1537, Longworth Building, Capitol Hill.

12:15 PM. Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a luncheon titled "Hot Topics in Wireless". The speakers will be Sam Feder (assistant to FCC Chairman Kevin Martin), John Branscome (assistant to FCC Commissioner Kathleen Abernathy), Paul Margie (assistant to FCC Commissioner Michael Copps), and Barry Ohlson (assistant to FCC Commissioner Jonathan Adelstein). The price to attend is $15.00. RSVP by 5:00 PM on Tuesday, May 17th to wendy@fcba.org. Location: Sidley Austin, 6th Floor conference room, 1501 K Street, NW.

2:00 PM. The Senate Finance Committee's Subcommittee on Taxation and IRS Oversight will hold a hearing titled "Blowing the Cover on the Stealth Tax: Exposing the Individual AMT". There are many pending bills to modify or repeal the Alternative Minimum Tax (AMT). See for example, HR 703, the "AMT Middle Class Fairness Act of 2005" and HR 1186, the "Alternative Minimum Tax Repeal Act of 2005". Location: Room 628, Dirksen Building.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding its intercarrier compensation system. This FNPRM is FCC 05-33 in CC Docket No. 01-92. The FCC adopted this FNPRM at its meeting of February 10, 2005, and released it on March 3, 2005. See, notice in the Federal Register, March 24, 2005, Vol. 70, No. 56, at Pages 15030 - 15044. See also, story titled "FCC Adopts FNPRM in Intercarrier Compensation Proceeding" in TLJ Daily E-Mail Alert No. 1,076, February 14, 2005.

10:00 AM - 2:00 PM. The Federal Communications Commission (FCC) will hold a pre-auction seminar for the Lower 700 MHz Band Auction (Auction No. 60). Pre-register by May 20. See, FCC notice [PDF]. Location: FCC, 445 12th Street, SW.

POSTPONED. The Federal Communications Bar Association's (FCBA) will host a seminar on enforcement.

Deadline to submit to the Federal Communications Commission (FCC) reply comments and oppositions to petitions to deny in its antitrust merger review proceeding (transfer of control of licenses) associated with the acquisition of MCI by Verizon. See, FCC Public Notice DA 05-762 in WC Docket No. 05-75.

5/16. The Supreme Court denied certiorari in Uzan v. Motorola,. In this case, Motorola and Nokia filed a complaint in the U.S. District Court (SDNY) against Kemal Uzan, and other Turkish defendants, alleging, among other things, common law fraud, promissory fraud, and civil conspiracy to defraud, in connection with their borrowing from Motorola and Nokia to obtain telecommunications equipment.

The District Court held that the defendants are liable for common law fraud, promissory fraud, and civil conspiracy to defraud, and awarded over $4 Billion in compensatory damages, punitive damages, and interest. The District Court also imposed a constructive trust over certain stock.

The U.S. Court of Appeals (2ndCir) rejected the Uzans' arguments on appeal regarding lack of personal jurisdiction and other procedural issues. The Appeals Court vacated and remanded the punitive damages portion of the award, as well as the imposition of a constructive trust over stock. The Appeals Court affirmed the District Court's findings of fact, determination of liability, and award of over $2 Billion in compensatory damages. See, errata opinion [42 pages in PDF] of December 3, 2004.

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

This case is Sup. Ct. No. 04-1255. See, Order List [17 pages in PDF], at page 15.

See also, story titled "2nd Circuit Rules in Motorola v. Uzan" in TLJ Daily E-Mail Alert No. 1,008, November 1, 2004; story titled "Judge Awards Motorola $4,265,793,811.32 From Turkish Telecom Deadbeats" in TLJ Daily E-Mail Alert No. 709, August 1, 2003; and story titled "Motorola & Nokia Sue Turkish Cellular Company for RICO Violations and Computer Hacking" in TLJ Daily E-Mail Alert No. 357, January 30, 2002.

5/16. The Supreme Court announced that it "will take a recess from Monday, May 16, 2005, until Monday, May 23, 2005." See, Order List [17 pages in PDF], at page 17.

5/14. Federal Communications Commission (FCC) Commissioner Michael Copps gave another speech [2 pages in PDF] on media concentration.

5/12. The Recording Industry Association of America (RIAA) announced the filing of complaints, against retail businesses, by record companies, in U.S. District Courts in New York and Florida, alleging copyright infringement in connection with the sale of pirated CDs. The RIAA stated in a release that "some retailers -- such as the owners of convenience stores, liquor stores or corner markets -- are attempting to make a quick buck by re-selling illegal CDs, or, in some cases, manufacturing counterfeit CDs themselves".

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