3/17. The U.S. Court of Appeals (10thCir) issued its divided opinion [74 pages in PDF] in US v. Nacchio, reversing the conviction of Joseph Nacchio, a former CEO of Qwest Communications International, and remanding for a new trial, before a new judge.

The Department of Justice (DOJ) criminally prosecuted Nacchio on allegations that he traded shares of Qwest while knowing that the company was unlikely to continue to meet its announced earnings.

On April 19, 2007, a trial jury of the U.S. District Court (DColo) returned a verdict of guilty on 19 counts of violation of federal securities laws involving insider trading. It acquitted Nacchio on 23 other counts.

On July 27, 2007, the District Court imposed a sentence of 72 months in prison on Nacchio. See, DOJ release.

The Court of Appeals held that "the improper exclusion of his expert witness merits a new trial". However, the Court of Appeals rejected Nacchio's other appeal points -- insufficiency of the evidence, improper jury instructions, and exclusion of classified information.

The excluded expert witness was Daniel Fischel, a professor at the University of Chicago law school, whose testimony would have provided economic analysis of Nacchio’s trading patterns, and the economic importance of the allegedly material inside information.

The Court of Appeals rejected, with little explanation, Nacchio's argument that the District Court erred in preventing him from introducing "classified information relevant to Qwest’s business prospects and the defendant’s state of mind".

The Court of Appeals wrote that Nacchio "claims that the evidence would have shown that he personally had reason to believe that Qwest’s economic prospects were much better than others realized. Thus, he says, this evidence should have been permitted both to show that he did not have material information and to negate scienter. We affirm the district court’s decision, because even if the classified information were presented and established what he said it would, it could not exonerate Mr. Nacchio as he claims. Essentially, Mr. Nacchio argues that undisclosed positive information can be used as a defense to a charge of trading on undisclosed negative information. We disagree."

The Court added that "If an insider trades on the basis of his perception of the net effect of two bits of material undisclosed information, he has violated the law in two respects, not none."

The Court of Appeals did not address whether or not the DOJ brought criminal charges against against Nacchio in retaliation for refusal to comply with National Security Agency (NSA) requests for customer call record data in violation of 47 U.S.C. § 222.

Nor does the Court of Appeals does not address whether or not Nacchio's claims regarding Qwest's business prospects were anticipated contracts with the NSA, or whether those contracts were also withheld in retaliation.

See also, story titled "Bush Responds to USA Today Story Regarding NSA Database of Phone Calls" in TLJ Daily E-Mail Alert No. 1,369, Friday, May 12, 2006, and story titled "BellSouth and Verizon Attack USA Today Story" in TLJ Daily E-Mail Alert No. 1,372, Wednesday, May 17, 2006.

The Court of Appeals also ordered that the case be reassigned to another District Court Judge. Judge Edward Nottingham presided at the first trial.

This case is U.S.A. v. Nacchio, U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 07-1311, an appeal from the U.S. District Court for the District of Colorado. Judge McConnell wrote the opinion of the Court of Appeals in which Judge Kelly joined. Judge Holmes dissented in part.

3/17. The U.S. Supreme Court granted certiorari in FCC v. Fox Television Stations, a broadcast profanity case involving the Federal Communications Commission's (FCC) regulation of "fleeting expletives". See, Orders List [18 pages in PDF] at page 3. See also, Supreme Court docket.

On November 6, 2006, the FCC issued an Order [36 pages in PDF] on remand regarding complaints that four broadcast television programs contained indecent and/or profane material. The Order concluded, among other things, that comments made by Nicole Richie during "The 2003 Billboard Music Awards" and by Cheryl LaPiere during the "The 2002 Billboard Music Awards" were indecent and profane. This order is FCC 06-166.

Fox, CBS, and ABC filed petitions for review of the FCC's order. See also, stories titled "FCC Releases Indecency Orders" in TLJ Daily E-Mail Alert No. 1,332, March 20, 2006, and "FCC Releases Order on Remand Regarding Broadcast Indecency" in TLJ Daily E-Mail Alert No. 1,484, November 7, 2006.

On June 4, 2007, the U.S. Court of Appeals (2ndCir) issued its divided opinion [53 pages in PDF] finding that "the FCC’s new policy sanctioning ``fleeting expletives´´ is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy. Accordingly, the petition for review is GRANTED, the order of the FCC is VACATED, and the matter is REMANDED to the agency for further proceedings consistent with this opinion."

The Court of Appeals did not decide any of the Constitutional issues. However, it wrote in extensive dicta that "we are skeptical that the Commission can provide a reasoned explanation for its ``fleeting expletive´´ regime that would pass constitutional muster".

See also, story titled "2nd Circuit Vacates and Remands FCC Profanity Order" in TLJ Daily E-Mail Alert No. 1,590, June 4, 2007.

Kevin Martin, Chairman of the FCC, wrote in a statement that "I am pleased the Supreme Court will review the Second Circuit’s decision in Fox vs. FCC. The Commission, Congress and most importantly parents understand that protecting our children is our greatest responsibility. I continue to believe we have an obligation then to enforce laws restricting indecent language on television and radio when children are in the audience."

FCC Commissioner Deborah Tate issued a release in which she stated that she is "pleased". FCC Commissioner Michael Copps also issued a release in which he stated that he too is "pleased".

The ACLU's Caroline Fredrickson stated in a release that "The FCC’s new policy of policing television broadcasts with a vengeance doesn’t survive First Amendment scrutiny. Giving the Commission the ability to leverage arbitrary fines based on a vague set of standards will have a chilling effect on free speech, because broadcasters trying to avoid the penalties will err on the side of caution and begin censoring content that wouldn’t actually be considered indecent."

This case is FCC, et al. v. Fox Television Stations, Inc., et al., U.S. Supreme Court, Sup. Ct. No. 07-582, a petition for writ of certiorari to the U.S. Court of Appeals for the District of Columbia, App. Ct. Nos. 06-1760-ag, 06-2750-ag, and 06-5358-ag. The Court of Appeals heard petitions for review of a final order of the FCC.

3/17. The U.S. Supreme Court denied certiorari in Microsoft v. Novell, an antitrust case involving PC operating systems that dates back to the mid-1990s. See, Orders List [18 pages in PDF] at page 15.

This lets stand the October 15, 2007, opinion [31 pages in PDF] of the U.S. Court of Appeals (4thCir), which affirmed the judgment of the District Court.

The Court of Appeals affirmed the District Court's denial of Microsoft's motion to dismiss the Sherman Act Sections 1 and 2 claims. Microsoft argued that since Novell did not compete with Microsoft in the PC operating system market it did not suffer antitrust injury, and therefore lacked standing.

The Court of Appeals also affirmed the District Court's dismissal of, as untimely, other claims brought by Novell.

This case is Microsoft Corp. v. Novell, Inc., Sup. Ct. No. 07-924, a petition for writ of certiorari to the U.S. Court of Appeals for the 4th Circuit, App. Ct. Nos. 06-1134 and 06-1238. The Court of Appeals heard appeals from the U.S. District Court for the District of Maryland, D.C. Nos. 1:05-cv-01087-JFM and 1:00-md-01332-JFM), Judge Frederick Motz presiding. Chief Justice Roberts did not participate. See also, Supreme Court docket.

3/17. The U.S. Court of Appeals (8thCir) issued its opinion [8 pages in PDF] in Entertainment Software Association v. Swanson, affirming the District Court's permanent injunction against enforcement of a statute of the state of Minnesota that prohibits minors from purchasing or renting certain video games.

Minnesota enacted a statute titled "Minnesota Restricted Video Games Act", which is now codified at Minnesota Statutes Section 325I.06, that provides that a person under the age of 17 may not knowingly rent or purchase a video game rated AO or M by the Entertainment Software Rating Board (ESRB), and that violation is subject to a civil penalty of up to $25.

The Entertainment Software Association (ESA) and Entertainment Merchants Association (EMA) filed a complaint [PDF] in U.S. District Court (DMinn) against Lori Swanson, in her capacity as Attorney General of Minnesota seeking an injunction on constitutional grounds. The District Court enjoined enforcement of the statute. It reasoned that the video games a protected speech, and that strict scrutiny analysis is applicable. See, order [PDF], which is reported as Entertainment Software Ass’n v. Hatch, 443 F. Supp. 2d 1065 (2006).

Minnesota brought the present appeal. The Court of Appeals affirmed.

It wrote that "violent video games are protected free speech" and that "any restriction on the purchase or rental by minors of violent video games is subject to strict scrutiny analysis". Under this standard, the statute withstands scrutiny only if it necessary to serve a compelling state interest and is narrowly tailored to achieve that end.

The Court of Appeals conceded that the state has a compelling interest in "safeguarding the psychological well-being of minors". However, it continued that this interest cannot be "merely conjectural". The state must show that "regulation will in fact alleviate these harms in a direct and material way". The Court of Appeals concluded that "the evidence falls short of establishing the statistical certainty of causation demanded".

The Court of Appeals relied upon its 2003 opinion [9 pages in PDF] in Interactive Digital Software Ass’n v. St. Louis County, 329 F.3d 954. See, story titled "Eighth Circuit Holds Ban on Sales of Violent Video Games to Minors Violates First Amendment" in TLJ Daily E-Mail Alert No. 673, June 4, 2003.

The Entertainment Software Association's Rich Taylor stated in an e-mail to TLJ that the ESA "is both pleased and encouraged by today’s Eight Circuit Court ruling. The court underscored what others also determined after exhaustively reviewing all relevant research: there is no causal link between video games and real-life violence."

He continued that "with the ESRB ratings, parental education, and the parental controls available on all new video game consoles, there are myriad ways that those concerned can ensure that children play appropriate, parent-approved computer and video games."

He concluded that "we believe a combination of parental choice and parental control is the only legal, sensible, and most importantly, effective way to empower parents, and we dedicate ourselves to working with all parties to accomplish this goal."

This case is Entertainment Software Association and Entertainment Merchants Association v. Lori Swanson, U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 06-3217, an appeal from the U.S. District Court for the District of Minnesota. Judge Wollman wrote the opinion of the Court of Appeals, in which Judges Smith and Benton joined.

The House will not meet.

The Senate will not meet.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Sprint Nextel v. FCC, App. Ct. No. 07-1416. Judges Ginsburg, Sentelle and Brown will preside. This is a petition for review of the Federal Communications Commission's (FCC) Third Memorandum Opinion and Order in its proceeding titled "Improving Public Safety Communications in the 800 MHz Band". See, FCC's brief [PDF]. Location: Location: 333 Constitution Ave., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Practice Committee will host a lunch titled "Reflections on Spectrum Policy: The Licensed vs. Unlicensed Debates". The speakers will be David Donovan (Association for Maximum Service Television), Paul Kolodzy, Jonathan Nuechterlein (Wilmer Hale), and Ben Scott (Free Press). The price to attend is $15. Registrations and cancellations are due by 12:00 NOON On March 14. See, registration form [PDF]. Location: Sidley Austin, 1501 K St., NW.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Intellectual Property Practice Committee will host a closed brown bag lunch titled "Intellectual Property Issues on Capitol Hill". The speakers will be Ryan Triplette (office of Sen. Arlen Specter (R-PA)), Jennifer Schneider (office of Rep. Rick Boucher (D-VA)), David Whitney (House Subcommittee on Courts, the Internet and Intellectual Property minority staff), Erik Stallman (office of Rep. Zoe Lofgren (D-CA)), and Aaron Cooper (Senate Judiciary Committee staff). Location: Dow Lohnes, 1200 New Hampshire Ave., NW.

1:00 - 4:00 PM. The Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC) will meet by conference call. See, notice in the Federal Register, January 24, 2008, Vol. 73, No. 16, at Page 4132.

2:00 - 4:00 PM. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will hold one of a series of meetings to discuss the U.S. positions for the March and April 2008 meeting of the ITU-T Study Group 3 and related issues of the international telecommunication regulations. See, notice in the Federal Register, February 4, 2008, Vol. 73, No. 23, at Page 6547. Location?

4:00 PM. Andrew Odlyzko (University of Minnesota) will give a lecture titled "Technology Mania: Comparing the 1999 Internet Bubble with the 1840s Railroad Mania". Location: Room 120, George Mason University School of Law, 3301 Fairfax Drive, Arlington, VA.

TIME? The National Institute of Standards and Technology (NIST) will host a closed conference titled "FIPS 140-3: Software Security Workshop". See, notice. Location: NIST, Lecture Room B, 100 Bureau Drive, Building 101, Gaithersburg, MD.

The House will not meet.

The Senate will not meet.

4:00 - 6:30 PM. The New America Foundation (NAF) will host a panel discussion titled "Can Online Investing End Poverty? MicroPlace's Innovative Microfinance Strategy". The speakers will include Jamie Zimmerman (NAF), Tracey Turner (MicroPlace), Shari Berenbach (Calvert Foundation), Robert Mosbacher (P/CEO of the Overseas Private Investment Corporation), Kate McKee (Consultative Group to Assist the Poor), Ellen Seidman (NAF). See, notice. Location: Rotunda, Ronald Reagan Building and International Trade Center, 1300 Pennsylvania Ave., NW.

The House will not meet.

The Senate will not meet.

Good Friday.

The House will not meet.

The Senate will not meet.

12:15 - 1:30 PM. The Federal Communications Bar Association's (FCBA) Engineering and Technical Practice Committee will host a brown bag lunch titled "Understanding Satellite Technology and Spectrum Allocation". The speakers will be Tom Tycz (Goldberg Godles) and Bob Nelson (Chief of the FCC's International Bureau's Satellite Division). For more information, contact Christy Hammond at chammond at wileyrein dot com or 202-719-7365. Location: Wiley Rein, 10th floor conference room, 1750 K St., NW.

5:00 PM. Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding its negotiation of "an anti-counterfeiting trade agreement to strengthen international cooperation, enforcement practices, and participants' legal frameworks to address counterfeiting and piracy". See, notice in the Federal Register, February 15, 2008, Vol. 73, No. 32, at Pages 8910-8911.

Easter.

The House will not meet.

The Senate will not meet.

Deadline to submit to the U.S. Patent and Trademark Office (USPTO) nominations of individuals to serve on the USPTO's National Medal of Technology and Innovation Nomination Evaluation Committee. See, notice in the Federal Register, January 24, 2008, Vol. 73, No. 16, at Page 4182.

Deadline to submit reply comments to the Copyright Office (CO) regarding its proposed rules changes regarding the recordation of notices of termination and related matters. The CO stated that these proposed changes "would communicate the Office's practices as to notices of termination that are untimely filed; clarify the fact that a notice of termination is not legally sufficient simply because it has been recorded; update the legibility requirements for all recorded documents, including notices of termination; make minor explanatory edits to the fee schedule for multiple titles within a document (adding notices of termination as an example); and create a new mailing address to which notices of termination should be sent." See, notice in the Federal Register, January 23, 2008, Vol. 73, No.15, at Pages 3898-3900.

EXTENDED TO APRIL 7. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding pole attachments and 47 U.S.C. § 224. The FCC adopted this NPRM on October 31, 2007, and released the text [40 pages in PDF] on November 20, 2007. This NPRM is FCC 07-187 in WC Docket No. 07-245. See, notice in the Federal Register, February 6, 2008, Vol. 73, No. 25, at Pages 6879-6888, and story titled "FCC Sets Comments Deadlines for Pole Attachments NPRM" in TLJ Daily E-Mail Alert No. 1,714, February 8, 2008. See, notice of extension in the Federal Register, February 12, 2008, Vol. 73, No. 29, at Page 8028.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) in its proceeding titled "In the Matter of Petition to Establish Procedural Requirements to Govern Proceedings for Forbearance Under Section 10 of the Communications Act of 1934, as Amended". The FCC adopted this NPRM on November 27, 2007, and released the text [25 pages in PDF] on November 30, 2007. This item is FCC 07-202 in WC Docket No. 07-267. See, notice in the Federal Register, February 6, 2008, Vol. 73, No. 25, at Pages 6888-6895, and story titled "FCC Sets Comments Deadlines for Forbearance NPRM" in TLJ Daily E-Mail Alert No. 1,714, February 8, 2008.

The House will not meet.

The Senate will not meet.

8:00 - 10:00 AM. The Federal Communications Bar Association (FCBA) will host a breakfast and tour of the Newseum. Prices vary. See, registration form [PDF]. Registrations and cancellations are due by 5:00 PM on March 17. Location: 555 Pennsylvania Ave., NW.

12:00 NOON - 2:00 PM. The Federal Communications Bar Association's (FCBA) FCC Enforcement and International Telecommunications Practice Committees will host a brown bag lunch titled "Birds, Back-up Power and RF Safety: New Challenges in Antenna and Cell Site Compliance and Enforcement". The speakers will be Jeff Steinberg (FCC's Wireless Bureau), Bob Curtis (RF Check), and Christopher Guttman-McCabe (CTIA). For more information, contact Julia Pontecorvo at jpontecorvo at harriswiltshire dot com. Location: Verizon, Suite 400 West, 5th floor, 1300 I St., NW.

1:00 - 4:00 PM. The Architectural and Transportation Barriers Compliance Board's (ATBCB) Telecommunications and Electronic and Information Technology Advisory Committee (TEITAC) will meet by conference call. See, notice in the Federal Register, January 24, 2008, Vol. 73, No. 16, at Page 4132.

Tech Law Journal publishes a free access web site and subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year. However, there are discounts for subscribers with multiple recipients. Free one month trial subscriptions are available. Also, free subscriptions are available for journalists, federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until one month after writing. See, subscription information page.

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