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Legal news from Wednesday, November 17, 2004




Environmental brief ~ 13 countries join US to reduce methane emissions
Tom Henry on November 17, 2004 7:44 PM ET

[JURIST] In Wednesday's environmental law news, the US has encouraged 13 other countries to join an international agreement to reduce methane emissions by trapping the gas and using it for power generation. The program, Methane to Markets, is an attempt to reduce methane emissions by up to 50 million metric tons annually by 2015. The EPA press release is here. The Washington Post has more.

In other news, Nigerian Senate President Wabara has called on the Shell Oil to pay roughly US$1.2 billion in damages or leave the country. The Nigerian House of Representatives had created an arbitration panel that ruled that the company must pay the money as compensation for environmental and general damage supposedly caused by the company's Niger Delta operations. The Senate followed with its own resolution calling for the payment of damages. The company has not responded directly to the panel's ruling or the resolutions. The government press release is here. Nigeria's Vanguard has more on the current action.... The Rhode Island Department of Environmental Management is considering changes to its air pollution control laws that would decrease the level of emissions allowed from cars and other vehicles. The changes would be stricter than current federal standards under the Clean Air Act, would effect cars beginning in the 2008 model year, and would be in line with standards currently used by California, Maine, Massachusettes, New York and Vermont. The proposed regulation amendments are here [PDF]. AP has the story.






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Lawsuit challenges Kentucky same-sex marriage ban
Brandon Smith on November 17, 2004 3:21 PM ET

[JURIST] Three plaintiffs supported by the Kentucky Fairness Alliance have filed a lawsuit against Kentucky's recently-approved constitutional ban on same-sex marriage on the grounds that it applies both to marriage and civil unions. The suit says that by not allowing voters to vote on the two aspects separately, the proposed ban violated constitutional provisions on how amendments are to be placed on ballots and also confused voters with misleading language. Civil rights groups in other states have plans for similar challenges. AP has more. JURIST's Paper Chase has more on challenges nationally and has continuing coverage of same-sex marriage.






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Eisner testimony continues in Disney shareholder suit
Brandon Smith on November 17, 2004 2:46 PM ET

[JURIST] Cross examination of Disney CEO Michael Eisner began Wednesday in a shareholder suit against Walt Disney Co. over whether the executive board neglected its duty to shareholders in allowing former president Michael Ovitz to leave with a $140 million severance package after only 14 months of work. The case threatens to set a high-profile precedent for the business judgment rule which mandates board members' fiduciary responsibility to act in the best interests of company shareholders. Eisner's testimony to date has detailed the bad fit Ovitz turned out to be with Disney. Disney's shareholders have, however, taken exception to Eisner's alleged failure to consult with board members before offering Ovitz the generous severance package, sayaing that Ovitz should have been fired "for cause," thereby avoiding severance pay. The New York Times has more. The Christian Science Monitor has background on the case and its legal ramifications.






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Petco settles FTC charges in consumer website security case
Brandon Smith on November 17, 2004 2:05 PM ET

[JURIST] Petco Animal Supplies has agreed to settle Federal Trade Commission charges that the animal supply company's website violated federal law by misrepresenting privacy promises it made to its customers, the FTC announced Wednesday. The Commission said Petco did not take reasonable or appropriate measures to prevent hacker attacks, allowing access to consumer records and credit card numbers. Petco's settlement requires implementation of a comprehensive security program for its website. Petco's privacy and security policy states, in part:

At PETCO.com, protecting your information is our number one priority, and your personal information is strictly shielded from unauthorized access....Entering your credit card number via our secure server is completely safe. The server encrypts all of your information; no one except you can access it.
This is the FTC's fifth case challenging deceptive business claims about website security. Read the FTC release here. The FTC has the complaint and case information online here.





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FCC may again impose indecency fines on football program
Matt Lubniewski on November 17, 2004 1:50 PM ET

[JURIST] An Federal Communications Commission spokeswoman said Wednesday that the FCC has received a number of complaints about the opening scene of ABC's most recent airing of Monday Night Football. The agency may decide to investigate the incident, which could result in a maximum indecency fine of $32,500 per ABC affiliate. The scene, filmed the previous week and aired on Monday night, featured ABC actress Nicollette Sheridan leaping, naked, into the arms of Philadelphia Eagles player Terrell Owens. Michael Powell, chairman of the FCC, expressed disappointment over the incident in remarks made in an interview with CNBC. AP has more. ABC has since publicly apologized for airing the scene. Television network CBS was fined $550,000 earlier this year over charges of indecency stemming from the NFL's Super Bowl halftime show. Since that incident, the FCC has increased the penalty for broadcast indecency, and ABC has implemented a 5-second delay when airing live football.






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Corporations & securities brief ~ Ken Lay's wife under investigation for Enron stock sale
Amit Patel on November 17, 2004 1:27 PM ET

[JURIST] In Wednesday's corporations and securities law news, federal officials are investigating former Enron Chairman Kenneth Lay's wife in connection with a $1.3 million Enron stock sale just days before the energy company went under. The couple's lawyer indicated the Lays learned about the investigation in circumstantial ways and have not been charged with anything as of yet. The Houston Chronicle has more. In other Enron news, the SEC has barred former top accountant at Enron, Wesley Colwell, from auditing the books of public companies. Colwell agreed to pay $500,000 to settle fraud charges from his time at Enron. JURIST's Paper Chase has continuing coverage of the Enron scandal. AP has more.

In other news, as previously reported on JURIST's Paper Chase, the SEC announced Wednesday that Gary Pilgrim and Harold Baxter, founders of Pilgrim Baxter mutual funds, have agreed to pay $80 million each and be barred from associating with mutual funds in settlement of charges the SEC had brought over market timing abuses. Read the SEC press release, and settlement order. CNN has more.... Kmart Holding Corp. is acquiring department store operator Sears, Roebuck and Co., in a $11 billion deal which will create the nation's third largest retailer. Read the joint press release announcing the merger here. AP has more.... As previously reported on JURIST's Paper Chase, an administrative law judge presiding over a California Public Utilities Commission investigation has concluded that Southern California Gas Company should forfeit $28.8 million in profits earned during the 2000-2001 energy crisis in California, according to a report released late Tuesday. Read the judge's decision here [PDF]. The San Francisco Chronicle has more.... As previously reported on JURIST's Paper Chase, two senior insurance underwriters with Zurich Financial Services, the third-largest commercial insurer in the US, pleaded guilty Tuesday night to charges connected to NY Attorney General Eliot Spitzer's ongoing insurance bid-rigging investigation. Also Tuesday, Zurich reported receiving a subpoena from the SEC and Spitzer. Spitzer's office has a press release on the plea deal here. JURIST's Paper Chase has ongoing coverage of Spitzer's investigation into the insurance industry. The Business Review has more.... The National Association of Securities Dealers' Mutual Fund Task Force has recommended to the SEC that a stricter regulation of so-called soft dollars on Wall Street is needed. The Street.com has more.

  • click for previous corporations and securities law news





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    BREAKING NEWS ~ House Republicans change rules to let DeLay retain leadership even if indicted
    Matt Lubniewski on November 17, 2004 1:23 PM ET

    [JURIST] AP is reporting that House Republicans have adopted a change in rules that would protect re-elected GOP Majority Leader Tom DeLay from having to relinquish his party leadership post in the event of his indictment by a Texas grand jury. DeLay could face such an indictment in the wake of an ongoing investigation into campaign finance irregularities in Travis County, Texas, where three close DeLay associates are accused of making improper corporate donations in 2002 to Texans for a Republican Majority, a political action committee DeLay helped set up. The previous rule required that GOP leaders step down if indicted on charges that could bring a prison term of at least two years. DeLay has criticized the investigation as a partisan attack. The Houston Chronicle has background on the investigation.






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    BREAKING NEWS ~ Bush selects Harriet Miers as White House counsel
    Matt Lubniewski on November 17, 2004 1:03 PM ET

    [JURIST] AP is reporting that President Bush has picked deputy chief of staff Harriet Miers as White House counsel, the post to be vacated by attorney general nominee Alberto Gonzales.

    1:10 PM ET - The AP story is available here. Harriet Miers formerly served as Bush's personal lawyer in Texas, and has been serving as deputy chief of staff since 2003. A bio of Harriet Miers is available here. The appointment of White House counsel does not require Senate confirmation.

    10:00 PM ET - The official White House statement on the appointment is now online here.






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    Polanksi asks UK court for permission to sue via video
    Matt Lubniewski on November 17, 2004 1:01 PM ET

    [JURIST] Roman Polanski, the Oscar-winning film director, urged England's highest court on Wednesday to allow him sue via video link to avoid being extradited to the US on charges of child sex offenses. Polanski, who lives in Paris, wishes to sue Vanity Fair magazine in the UK for libel. Polanski relies upon English civil procedure rule CPR 32.3, which allows witnesses to give evidence via video link. Last year, a British Court of Appeal ruled that Polanski would not be allowed to give evidence via video link from Paris, holding that "the court should not be seen to assist a claimant who is a fugitive from justice to evade sentence for a crime of which he has been convicted." Polanski fears that appearing in a British court would result in his extradition to the US as a fugitive. Polanski plead guilty to having unlawful sex with a minor in a California court in 1977, but fled the country before the sentence was handed down and has not returned since. Lawyers for Polanski argued that forcing him to appear in the UK effectively prevents his ability to sue for libel, and unfairly allows defendants to get away with the offense. The high court is expected to issue a written decision early next year. BBC News has more.






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    Pilgrim Baxter founders settle with SEC for 'unprecedented' amount
    Matt Lubniewski on November 17, 2004 12:28 PM ET

    [JURIST] The SEC announced Wednesday that Gary Pilgrim and Harold Baxter, founders of Pligrim Baxter mutual funds, have agreed to pay $80 million each and be barred from associating with mutual funds in settlement of charges the SEC had brought over market timing abuses. The $160 million payment will be added to the $90 million paid by the Pilgrim Baxter firm in 2003, and ultimately will be distributed to injured investors. Stephen M. Cutler, director of the SEC’s enforcement division, said the fines were “virtually unprecedented for individuals in civil cases”. The Financial Times has more. Read the SEC press release, and settlement order.






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    UK Home Secretary says ID cards will secure liberties, not erode them
    Chris Buell on November 17, 2004 11:38 AM ET

    [JURIST] UK Home Secretary David Blunkett said Wednesday that government plans to issue national ID cards will help protect people's identities rather than threaten their civil liberties. Blunkett, who was speaking at the Institute of Public Policy Research, said the extent of information on the cards would be limited to personal details including name, address, date of birth, along with a unique biometric identification such as a fingerprint or iris scan. The controversial plan was questioned by the Home Affairs committee in Parliament in a report [PDF] issued in July. Read a Home Office press release. The Home Office has more on the ID card plan. Northern Ireland's National News has more.






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    FBI wrongly linked Oregon lawyer to Madrid bombings, forensics experts conclude
    Chris Buell on November 17, 2004 11:22 AM ET

    [JURIST] A panel of forensics experts have concluded that institutional intimidation at the FBI prevented agents from correcting an obvious mistake that led to the arrest of an innocent Oregon lawyer in connection with the Madrid train bombings last spring. The panel's report, which was published in the November/December issue of the Journal of Forensic Identification, found that after a supervisor in the fingerprint division of the agency identified the print as Mayfield's, it was difficult for other agents to point out the mistake. The Justice Department is also investigating the incident. Mayfield was arrested in May and held as a material witness before all charges were dropped and the FBI issued an apology. Newsweek has more on Mayfield, who filed a lawsuit against the government in October alleging that he was targeted because he was a Muslim. JURIST's Paper Chase has more on the Madrid bombings and Mayfield. The Washington Post has more.






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    Man who set self on fire in White House protest was key witness in terror case
    Chris Buell on November 17, 2004 10:53 AM ET

    [JURIST] A man who lit himself on fire Monday in front of the White House was a key government witness in the case against Sheik Ali Hassan al-Moayad, who is accused of raising millions for terror groups including al-Qaida, defense attorneys for al-Moayad have said. Mohammed Alanssi, a 52-year-old Virginia resident, is in serious condition, a fact which al-Moayad's attorneys said will seriously hurt the government's case. Alanssi wrote letters to both the FBI [PDF] and a Washington Post reporter [PDF], explaining that he was unhappy with the government's treatment of him but was afraid to stop cooperating. The FBI has refused to comment on the case or on Alanssi. AP has more.






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    International brief ~ Japan constitutional reforms envision active military, female emperor
    D. Wes Rist on November 17, 2004 10:43 AM ET

    [JURIST] Japan's Liberal Democratic Party, the current ruling party in the nation's Diet, has finished a draft proposal of reforms to the country's constitution. Included in the proposed reforms are specific changes to the structure and purpose of the nation's military, which has been defined as purely a self-defense force since the end of World War II. The new proposal suggests a more active level of involvement for the military and states that "Japan will actively contribute to the realization of international peace." The proposal also includes a constitutional requirement to follow norms of international human rights law and allows for any heir, regardless of gender, to assume the throne of Emperor. This last proposal is seen as an acknowledgement of the pressure that has been put on Princess Masako, the wife of the current heir to the throne Crown Prince Naruhito, to bear a male heir. JURIST's Paper Chase has background on the move towards a more active Japanese military. Yomiuri Shimbun has more.... 21 ministers from Asia Pacific Economic Cooperation (APEC) nations are meeting Wednesday in Santiago, Chile in preperation for the weekend's official summit. The discussion is expected to focus significant attention on anti-terrorism measures in the Pacific Rim as well as the normal topic of trade. BBC News reports that it has obtained a draft copy of the proposed report and that the report focused on important counter-terrorism measures for the Asia Pacific region. Especially highlighted were concerns of shoulder-launched surface-to-air missiles and concerns about terrorist attacks using food as a source for spreading biological agents. BBC News has more.... Li Weiyi, spokesman for the Taiwan Affairs Office under the State Council, China's cabinet, said Wednesday that talk of constitutional reform in Taiwan by Taiwanese President Chen Shui-bian was merely a cover for renewing attempts to remove Taiwan from China's sphere of influence. Li Weiyi warned that China would "resolutely and completely crush such splittist attempts at all costs." The comment follows remarks by Chen Shui-bian proposing a constitutional reform in the next series of legislative reforms. Chen also announced that Taiwan will once again be seeking admission to the UN, but this time will not be applying as the 'Republic of China' (Mainland China is officially know as the 'People's Republic of China') but instead will simply apply under the name of Taiwan. People's Daily has more.






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    Iraqi PM Allawi voices concern over shooting by US soldier
    Chris Buell on November 17, 2004 10:34 AM ET

    [JURIST] Iraqi Prime Minister Iyad Allawi is "very concerned" by a fatal shooting of an apparently unarmed and wounded Iraqi man in a Fallujah mosque by a US soldier, Allawi's office said Wednesday. US Ambassador to Iraq John Negroponte expressed regret over the shooting Wednesday and said the US was investigating the incident. Negroponte said the incident would not undermine US operations to retake Fallujah, despite anger among residents after the video was aired by Aljazeera, the Arab television news station. US military officials said an investigation was looking into whether more than one shooting occurred at the mosque. JURIST's Paper Chase has background on the shooting. AP has more.






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    CA administrative judge recommends utility forfeit profits from energy crisis
    Chris Buell on November 17, 2004 10:08 AM ET

    [JURIST] An administrative law judge presiding over a California Public Utilities Commission investigation has concluded that Southern California Gas Company should forfeit $28.8 million in profits earned during the 2000-2001 energy crisis in California, according to a report released late Tuesday. If approved by the full commission, the finding would make Southern California Gas the first California utility found guilty in the crisis. A spokeswoman for the utility said the judge ignored evidence in reaching his conclusion, which she said was politically motivated. According to the investigating judge, the gas utility abused its power to sell gas to buyers other than its usual customers. Read the judge's decision [PDF]. The San Francisco Chronicle has more.






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    EU, Iran downplay accord, while report says Pakistani scientist gave Iran nuclear material
    Chris Buell on November 17, 2004 9:33 AM ET

    [JURIST] Both the EU and Iran Wednesday sought to condition a tentative agreement on Iran's suspension of uranium enrichment on further cooperation between both sides. Iran warned that it would halt its suspension if further progress was not made when it meets with European leaders in December, while the EU cautioned Iran that it could still be referred to the UN Security Council for its nuclear activities. Amid the war of words between both sides, an Iranian opposition group Wednesday reported that Pakistani scientist Abdul Qadeer Khan gave weapons grade enriched uranium to Iran in 2001 and that Iran was seeking to complete a weapon in 2005. Farid Soleimani, an official with the National Council of Resistance of Iran, said that Khan had given Iran similar weapons designs as those he gave Libya. Khan has admitted to leading a black-market nuclear weapons network that distributed materials and technology to Iran, Libya and North Korea. The opposition group also reportedly disclosed a new weapons site, CNN reported. The International Atomic Energy Agency has more on negotiations with Iran. AFP has more.






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    Two Zurich execs plead guilty in Spitzer insurance probe
    Chris Buell on November 17, 2004 9:09 AM ET

    [JURIST] Two senior insurance underwriters with Zurich Financial Services, the third-largest commercial insurer in the US, pleaded guilty Tuesday night to charges connected to NY Attorney General Eliot Spitzer's ongoing insurance bid-rigging investigation. Also Tuesday, Zurich reported receiving a subpoena from the SEC and Spitzer. The executives pleaded guilty to following instructions from brokers to submit losing bids, allowing contracts to go to designated parties. Both face up to a year in prison on the charges under NY's Donnelly Act. Spitzer's office has a press release on the plea deal. JURIST's Paper Chase has ongoing coverage of Spitzer's investigation into the insurance industry. The Financial Times has more.

    9:30 AM ET - The Hartford Courant reports that investigations into the insurance industry are expected to widen following testimony by state officials and regulators before Congress Tuesday.






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    Legal agenda and live webcasts ~ Wednesday, November 17
    Jeannie Shawl on November 17, 2004 5:24 AM ET

    [JURIST] Here's a run-down of law-related events, expected developments and live webcasts on JURIST's docket for Wednesday, November 17.

    On Capitol Hill, the US Senate will meet at 9:30 AM ET and will begin consideration of the Debt Limit Extension Bill (S 2986). Watch a live webcast (via C-SPAN).... The US House will convene at 10 AM ET. Watch a live webcast (via C-SPAN).... The US House Government Reform Committee Subcommittee on Energy Policy, National Resources and Regulatory Affairs will hold a 10 AM ET hearing on the Bush administration's record on regulatory reform. Watch a live webcast.... The US House International Relations Committee will hold a 3 PM ET hearing on the UN Oil-for-Food program in Iraq and tracking funds. Charles Duelfer, Special Adviser to the Director of the CIA on Iraq's Weapons of Mass Destruction, is among those scheduled to testify. Watch a live webcast.

    The US Sentencing Commission's two-day public hearing on possible changes to sentencing guidelines continues today at 10 AM ET. Read the hearing agenda.

    The trial of Slobodan Milosevic continues Wednesday at the International Criminal Tribunal for the former Yugoslavia. Watch a webcast of the trial beginning at 9:30 AM local time (3:30 AM ET); the webcast is on a 30-minute tape delay. The ICTY has background on the case.... Also Wednesday, the trial of Fatmir Limaj and his co-defendants continues at the ICTY. Watch a webcast beginning at 2:45 PM local time (8:45 AM ET); the webcast is on a 30-minute tape delay. The ICTY has case information.

    At the United Nations, the General Assembly will continue its debate on oceans and the law of the sea at its 10 AM ET session.

    Incoming European Commission President Jose Manuel Barroso will present the new slate of nominated European Commissioners to the European Parliament, to be followed by parliamentary debate. Watch a live webcast beginning at 3 PM local time (9 AM ET).






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