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Legal news from Tuesday, July 5, 2005 |
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Corporations and securities brief ~ SEC to pursue civil suit against Scrushy
James Murdock on July 5, 2005 6:58 PM ET

[JURIST] Leading Tuesday's corporations and securities law news, a Securities and Exchange Commission (SEC) [official website] spokesman said today that the agency still plans to pursue a $785 million civil suit against former HealthSouth Corp. [corporate website] CEO Richard Scrushy [official website] despite his acquittal [JURIST report] last week in the criminal case against him. The SEC filed a complaint [text] in March 2003 accusing Scrushy of leading the company's $2.7 billion accounting fraud and signing false financial statements, but the case was delayed because it conflicted with the criminal charges. Last week, US District Judge Inge Johnson allowed Scrushy access to $150 million of his assets, which had been frozen throughout the criminal trial, and also ordered the SEC to "show cause" in order to prevent their case from being dismissed. The SEC is seeking the $785 million to cover fines against Scrushy and to pay back shareholders of HealthSouth. AP has more.
In other corporations and securities news... - The EU's Competition Commission [official website] voted Tuesday to allow Lufthansa AG [corporate website] to purchase Swiss International Airlines [corporate website]. In order for the $374.7-million takeover to be approved, Lufthansa had to agree to give up many of its takeoff and landing spots throughout Europe. The US yesterday approved the merger without requiring any concessions. The soon to be joined companies said in a joint press release that the purchase helps "ensure the long-term future of the air transport connections that are so crucial to Switzerland." In a press release, the commission said that the company's concessions were necessary so as to "not lead to higher prices or reduced choice of carrier." Bloomberg has more.
- The US and Brazil have reached a tentative truce in their battle over US cotton subsidies. Brazil had filed a formal complaint [AP story] against the US for not complying with a WTO [official website] ruling that called on the US to cut its cotton subsidies. The complaint asked for higher tariffs on US exports to offset US subsidies. Seeking to make amends, President Bush today called for Congress to eliminate the offending subsidies. AP has more.
- In a filing today, Northwest Airlines told the SEC that it must cut costs to remain viable. The airline said that it is in ongoing negotiations with its employees' unions but must lower its pension and labor costs. AP has more.


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States brief ~ Oklahoma Supreme Court strikes down collective bargaining act
Rachel Felton on July 5, 2005 3:46 PM ET

[JURIST] Leading Tuesday's states brief, the Oklahoma Supreme Court Tuesday struck down the Oklahoma Municipal Employees Collective Bargaining Act [text] as unconstitutional. The state law allowed municipal employees to unionize in cities with populations greater than 35,000. The court found the law unconstitutional because it discriminated against municipal workers in towns with smaller populations, and Justice Steven W. Taylor wrote in the majority opinion "to avoid the special treatment of a special law, the privilege of collective bargaining must extend to employees of all the cities throughout the state if it is to extend to any." Attorneys for the American Federation of State, County and Municipal Employees [official website] and the Communications Workers of America [official website] argued that the smaller population limits have been upheld. AP has more.
In other state legal news ... - The Connecticut Supreme Court has upheld [PDF text] a $300,000 punitive award granted by an arbitration panel because "Connecticut does not have a well-defined public policy against the award of excessive punitive damages." The arbitration award was given to two Subway franchise owners after the panel determined that Subway [corporate website] founder Fred DeLuca violated the Connecticut Unfair Trade Practices Act [text]. The panel awarded no compensatory damages, but granted each franchise owner $150,000 in punitive damages. AP has more.
- The North Carolina Court of Appeals ruled [text] Tuesday that the firing of a Randolph County investigator by a district attorney, after the investigator publicly criticized the district attorney, was within the district attorney's power. The appeals court held that the decision to fire the investigator "rested within [the district attorney's] lawful and discretionary scope of authority" and that the firing was not injurious to the public or against the public good. During the investigator's campaign for sheriff, he chastised the district attorney for several prosecutorial decisions. AP has more.


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International brief ~ Nepal Bar president calls on king to give up government control
D. Wes Rist on July 5, 2005 3:45 PM ET

[JURIST] Leading Tuesday's international brief, Nepal Bar Association [profession website] president Shambhu Thapa has called on King Gyanedra [official profile] to relinquish his position as chairman of the Council of Ministers, which would effectively remove Gyanedra's direct control of the Nepalese government. Thapa criticized the five months of direct, monarchial rule since the February 1 declaration of a state of emergency [JURIST report] as unfruitful, and encouraged Gyanedra to remain involved only as the "last custodian" of the Nepalese government. Thapa also scorned comments made last week by former Chief of Army Staff Sachit Shamsher Rana, who had called for political parties to be declared "anti-national elements." JURIST's Paper Chase has continuing coverage of Nepal [JURIST news archive]. NepalNews.com has local coverage.
In other international legal news ... - A highly controversial postal reform bill that will privatize the entirety of the Japan Postal Service [official profile] narrowly passed through the Japanese House of Representatives [government website] Tuesday, in a 233 - 228 vote. The bill will create four independent entites that will compete to provide mail in Japan with increased efficiency and speed. The over 300,000 employees of the Japan Post opposed the bill for fear of losing their jobs, and the status of those employees as a strong voting block, with significant sway in rural areas influenced politicians concerned with maintaining support. While a political victory for Japanese Prime Minister Junichiro Koizumi [official profile], the vote revealed a larger than expected split among his own Liberal Democratic Party [official website]. The bill will be presented to the upper house for approval, but a rejection there can still be overridden by another approval in the House. JURIST's Paper Chase has continuing coverage of Japan. Japan Today has local coverage.
- International press rights organization Reporters Without Borders (RSF) [advocacy website] has appealed to international icon Nelson Mandela [ANC profile] for assistance in fighting the extreme restrictions against journalists in place in Zimbabwe. RSF Secretary-General Robert Menard said that the organization was left no other option but to appeal for Mandela's help in light of recent tightening of the already strict journalist laws. Zimbabwe recently increased the jail time [JURIST report] applicable to journalists found to be "publishing falsehoods" from 15 to 20 years incarceration. RSF asked Mandela in a letter to use his status to ease those restrictions, which have already resulted in over 100 arrests in the last three years. JURIST's Paper Chase has continuing coverage of Zimbabwe [JURIST news archive]. ZimOnline has local coverage.
- Ahmadou Seck, head of the Electoral Unit of the UN Mission to Burundi [official website], as well as Paul Ngarambe, chairman of the National Independent Electoral Commission, praised the national elections held Monday in Burundi for the 100 seats in the National Assembly. While both organizations reported minor disturbances and irregularities in the voting process, neither reported any incidents that would alter the outcome of the result. Official results are slated for release Wednesday, but the preliminary tally [Reuters report] puts the Forces for the Defence of Democracy party, which represents the nation's Hutu ethnic majority, in the lead, with between 60-80 of the 100 available seats. The National Assembly and the Senate, which is scheduled to be elected later in July, will elect a new president for Burundi by a 2/3 majority no later than August 19. The FDD majority in the National Assembly, combined with the previous majority obtained in the Council elections [JURIST report], whose members will elect the Senators, virtually guarantees a Hutu will be elected president. AllAfrica.com has local coverage.


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Africa seeks permanent seats on UN Security Council
Jamie Sterling on July 5, 2005 1:35 PM ET

[JURIST] African leaders Tuesday approved a resolution at the fifth African Union Summit [official website] seeking two permanent seats on the expanding UN Security Council [official website]. The AU is calling for the number of Council seats be increased from 15 to 26, with six of the new members granted permanent seats with veto rights; two of the other permanent seats to go to Asia, one to Latin America and Caribbean and one to Western Europe and the remaining non-permanent seats will go to Asia, Eastern Europe, Latin America and Caribbean. No African country currently holds a Council seat. Japan, Brazil, India, and Germany, aka the G-4 nations, are seeking four permanent seats for themselves on the Security Council and have requested that their resolution [PDF, draft], which also offers Africa two permanent seats, be voted on in July [JURIST report]. The US supports expanding the Security Council [JURIST report] by "two or so" permanent members, saying any more may hinder the Council's efficiency. Reuters has more.


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French cabinet alters status of "illegitimate" children
Krista-Ann Staley on July 5, 2005 8:35 AM ET

[JURIST] In an unusual move sidestepping parliament, the French Cabinet Monday removed the legal difference between "legitimate" children, born to married parents, and "natural" children, born to unmarried parents. The distinction had been established in the original 1804 French Napoleonic code. In the future, as opposed to having to specially register as a new parent, unmarried mothers will automatically be recognized as the mothers of formerly "illegitimate" offspring. Unmarried fathers will still have to register with authorities at city hall. Almost 50% of French children in 2004 were born to unmarried couples, up sharply from 11.4% in 1980. The law will take effect on July 1, 2006. AP has more. From Paris, Le Figaro provides local coverage.


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