[JURIST] Leading Wednesday's corporation and securities law news, the US Court of Appeals for the District of Columbia Circuit has suspended controversial corporate governance rules for mutual funds promulgated by the Securities and Exchange Commission. The suspension will last until a lawsuit brought by the US Chamber of Commerce [advocacy website] and other groups challenging the new rules is resolved. The rules require that chairmen of mutual funds and 75 percent of the board of directors be independent. In June the court ruled [JURIST report] that the SEC had not considered the costs of implementing the change and ordered the SEC to reconsider the rules. In the last days of former SEC Chairman William Donaldson's tenure, he cast the deciding vote to reinstate the rule [JURIST report]. Bloomberg has more.

In other corporations and securities law news...

• As previously reported today in JURIST's Paper Chase, Unocal [JURIST news archive] shareholders approved Chevron's planned $17.8 billion takeover [merger website] bid for the oil company. The shareholders voted 77% in favor of the sale. The Chevron bid of cash and stock was approved despite a previous $18.5 billion cash offer from Chinese state energy firm Cnooc [Wikipedia profile]. Cnooc withdrew its bid last week [JURIST report] because of intense political pressure, including a provision in the new energy bill that would have delayed any Chinese company for at least 120-days. Chevron and Unocal had originally agreed to the merger in principal in April [press release] before Cnooc attempted to buy Unocal. The difference in price equates to approximately $5 per share. Bloomberg has more.
  
  
• Two former Bayer AG [corporate website] executives were indicted Wednesday for their role in a price fixing scheme. Grand juries indicted Jurgen Ick and Gunter Monn for fixing prices on rubber chemicals from 1995-2001. Bayer pleaded guilty to related charges in 2004 [Bayer press release] and paid a $4.7 million fine. Ick and Monn, both of whom are German, face a maximum punishment of three years imprisonment and a $ 350,000 fine. One of their former associates, Martin Petersen, pleaded guilty to the same charges last year [DOJ press release] and was sentenced to four months in jail. Reuters has more.

[JURIST] The US Fourth Circuit Court of Appeals Wednesday upheld a Virginia law [text; overview] requiring daily recital of the Pledge of Allegiance [JURIST news archive] in Virginia public schools. Attorneys for plaintiff Edward Myers had argued that the phrase "one nation under God" was tantamount to governmental establishment and endorsement of religion, a violation of the Establishment Clause [overview]. The three-judge panel ruled [opinion text] that the statute does not have a religious purpose or effect, calling it a "patriotic exercise". It is not clear if Myers will appeal to the US Supreme Court. AP has more.

[JURIST] Cyprus Foreign Minister George Iacovou [official website] told reporters Wednesday that he is unaware if former UN Oil-for-Food chief Benon Sevan [BBC profile] is in the country, but if he is, any extradition request from abroad will likely be met with opposition. Several reports indicate that Sevan, a Cyprus national, traveled to Cyprus following his resignation [JURIST report] from his honorary position with the UN just before a report released by the Independent Inquiry Committee investigating the UN Oil-for-Food scandal charged him with taking almost $150,000 in bribes [JURIST report]. Under Cyprus law, the extradition of Cypriot nationals to other jurisdictions is prohibited. Reuters has more.

[JURIST] The Inter-American Court of Human Rights [official website] has denied an appeal request to reinterpret its November 2004 ruling [JURIST report] that upheld the conviction of an American tried in Peru on charges she collaborated with the terrorist group Tupac Amaru Revolutionary Movement [overview]. Lawyers for Lori Berenson [advocacy website] claimed that her trial failed to meet international standards for fairness, and have sought to have her conviction and 20-year sentence overturned. In a 2000 CBS News interview [text], Berenson characterized her original trial proceedings as hostile and coercive, saying that she had faced a panel of hooded judges and that armed guards had aimed assault rifles at her and her lawyer's heads during the 10-minute proceeding. She is scheduled for release in November 2015. AP has more.

[JURIST] Leading Wednesday's states brief, the California Supreme Court [official website] held today without comment that it will not immediately review a March ruling [JURIST report] that declared the state ban on same-sex marriage unconstitutional. In that ruling, Superior Court Judge Richard Kramer wrote, "It appears that no rational purpose exists for limiting marriage in this state to opposite-sex partners." The appeal will now be heard by the 1st District Court of Appeal in San Francisco. Opponents of gay marriage are attempting to qualify a constitutional amendment [JURIST report] to ban gay marriage for next year's ballot. AP has more.

In other state legal news ...

• The US Fourth Circuit Court of Appeals Wednesday upheld a Virginia law [text] requiring public schools to lead a daily recitation of the Pledge of Allegiance. In the opinion [PDF text], Judge Karen Williams wrote, "Undoubtedly, the pledge contains a religious phrase, and it is demeaning to persons of any religions to assert that the words 'under God' contain no religious significance. The inclusion of those two words, however, does not alter the pledge as a patriotic activity." A father of three children had claimed the phrase "one nation under God" was an unconstitutional promotion of religion. AP has more.
  
  
• As reported earlier today in JURIST's Paper Chase, a California appeals court has refused [PDF text] to place Governor Arnold Schwarzenegger's redistricting plan on the November ballot because the use of two different versions during the certification process was a "clear violation of the constitutional and statutory procedures for the circulation of an initiative petition." The court stated that "The proponents caused the problem in this case by their own negligence in circulating a different version of the initiative measure than that submitted to the attorney general." Proposition 77 [PDF text] seeks to remove the power to draw congressional and legislative boundaries from state lawmakers and to place that power with a panel of retired judges. California Attorney General Bill Lockyer [official website] said the ruling "is important for California voters because it protects the integrity of the initiative process." The decision, which will be appealed, affirmed a Superior Court ruling that removed the proposition from the ballot [JURIST report]. CNN has more.
  
  
• The Maryland Supreme Court has ruled [PDF text] that mortgage brokers who charge consumer fees for handling mortgage and refinance loans are subject to the state's Finder's Fee Law. The court found that the state law [text], which sets limits on such fees, was not preempted by federal law because mortgage brokers are outside the reach of the federal statute. The decision reversed a lower court ruling. The Baltimore Sun has local coverage.

[JURIST] US Department of Homeland Security [official website] Secretary Michael Chertoff has said that privacy concerns over the new Secure Flight passenger screening program [official website] are overstated. Speaking Tuesday with USA Today editors, he observed:

The average American gives information up to get a CVS [drugstore discount] card that is far more in-depth than TSA's going to be looking at... Would you rather give up your address and date of birth to a secure database and not be pulled aside and questioned, or would you rather not give it up and have an increased likelihood that you're going to be called out of line and someone's going to do a secondary search of your bag?

His comparison of CVS to airline security is way off the mark - retail stores cannot stop Americans from traveling, or falsely identify them as suspected terrorists. And, recent scandals show that our most private information stored in central databases is subject to security breaches and theft by hackers.

[JURIST] A federal judge set a trial date for early next year in the case of two Albany men accused of money laundering and supporting terrorism. Yassin Aref, 35, is imam at the Masjid as-Salam mosque [mosque website] in Albany and Mohammed Hossain, 50, a mosque founder who owns a restaurant, was freed on bail [JURIST report] in August last year. The FBI says [CNN report] the two participated in a plot to acquire a shoulder-fired missile and assassinate a Pakistani diplomat. The plot was an FBI sting operation. Evidence questions now loom as doubts exist about a note found at a terrorist camp [JURIST report] and the government reviews what evidence to ask the judge to keep secret for security reasons. Evidence filings are expected to wrap up by October 11, when a schedule for pretrial motions will be announced. AP has more.

[JURIST] The Serb minority in Kosovo [Wikipedia backgrounder] Wednesday objected to a self-rule plan proposed by the province's Albanian leaders, asking for more concessions. The Serbs are demanding decentralized power and bigger self-governing areas in what is now a UN protectorate [UNMIK website]. One Serb leader called the latest plan "improved compared to the original version, but insufficiently compared to what we are asking for." An Albanian leader called the rejection "hurried and irrational". Reuters has more.

[JURIST] The wife and son of former Chilean dictator General Augusto Pinochet [JURIST news archive] were charged Wednesday as accomplices in a tax fraud case related to accusations that Pinochet hid millions of dollars in overseas accounts, including some in the US [JURIST report]. In June, Pinochet was stripped of immunity [JURIST report] so that he could face tax evasion charges [JURIST report] and Chilean authorities are scrutinizing assets to try and recover back tax money owed [JURIST report] to the government. BBC News has more. From Santiago, La Nacion has local coverage in Spanish.

[JURIST] In a joint statement issued Wednesday, Unocal [corporate website; JURIST news archive] and Chevron [corporate website] announced early results from a vote of a majority of Unocal shareholders that favored acceptance of a Chevron offer of $69 per share. The approval of the nearly $18 billion purchase comes after months of negotiations and contentious competition [JURIST report] from China National Offshore Oil Company Ltd. (CNOOC) [official website], an oil company connected to the Chinese government trying to secure resources for China's booming economy. CNOOC eventually withdrew its bid [JURIST report], citing "unprecedented political opposition" from US lawmakers. According to the press release, the vote count will be officially tallied by August 17. AP has more.

[JURIST] The state of South Dakota has appealed to the US Supreme Court over a ruling in a voting rights case involving American Indian voters filed by the American Civil Liberties Union. [advocacy website; press release]. The dispute centers around whether the state must seek a clearance from the Justice Department for new redistricting plans in portions of South Dakota without a majority of Indian voters. Sherri Sundem Wald, South Dakota's assistant attorney general, said counties without a majority of Indian voters did not need Justice Department approval but an ACLU spokesman said South Dakota was attempting to deprive its citizens of the protections provided by the Voting Rights Act [text]. AP has more.

[JURIST] Citing national security concerns, the US Justice Department has asked a federal district court to dismiss a lawsuit brought by a Canadian man who claims he was deported to Syria and tortured. Maher Arar [Wikipedia profile], born in Syria and a citizen of Canada as well, was detained at JFK Airport in New York City in September 2002 while changing planes during a vacation trip from Tunisia back home to Canada; he was held in solitary confinement in a Brooklyn detention center for a while and was then deported to Syria, a move which angered the Canadian government and rights groups. Arar claims that in Syria he was tortured into making false confessions of terrorist involvement; the Center for Constitutional Rights [case background] filed suit against the US government on his behalf in 2004. The Justice Department now wants the suit dismissed because they say it would force them to reveal classified information [PDF assertion of secrets privilege, motion opposing] that links Arar to al-Qaeda. Democracy Now has an interview with David Cole [text], the lead attorney on the case for CCR and Arar, discussing the implications of the government's motion:

What we're saying in this lawsuit is that [renditions are] unconstitutional under the Fifth Amendment. It is -- you can’t beat people, nor can you send people to other countries to be beaten, and it's something that warrants judicial intervention.

[JURIST] In the wake of a US Eleventh Circuit Court of Appeals [official website] decision Tuesday in which the convictions and sentences of five accused Cuban spies [advocacy website] were overturned [JURIST report; PDF opinion], the Cuban government has called for the release of all five men. On Wednesday, Ricardo Alarcon, the speaker of the National Assembly in Cuba, praised the ruling and asked that the men be released while they await a new trial. The men were convicted in 2001 of spying and sentenced to 15 years in prison. They admitted they were Cuban spies, but said they were watching the activities of exile groups opposed to Cuban leader Fidel Castro [Wikipedia profile], rather than the US government. The Eleventh Circuit ruled that the trial in Miami was biased due to community prejudice and extensive media coverage. CBC News has more. From Havana, the Latin American News Agency has local coverage.

[JURIST] President Bush signed a 6-year, $286.4 billion highway bill on Wednesday, ending a long debate between Congress and the White House and putting into place a permanent highway bill for the first time since September 2003. The old bill was extended six times as both sides debated spending amounts and special projects; the Senate originally approved $295 billion [JURIST report] while the House approved $284 billion [JURIST report], an amount approved by the White House but $30 billion more than President Bush initially recommended. Upon signing the Transportation Equity Act [PDF text], President Bush said the legislation not only will upgrade the country's highway infrastructure but will also include important safety provisions. Read the full text of Bush's remarks. AP has more.

[JURIST] Judge Lewis A. Kaplan of the US District Court for the Southern District of New York [official website] has ruled that Parmalat [corporate website] can proceed with its lawsuit against Bank of America [corporate website] though he dismissed most of the Italian dairy company's claims. Kaplan granted Bank of America's motion to dismiss [JURIST report] for 10 of the 12 claims put forth by Parmalat [JURIST report] representative Enrico Bondi, and portions of the two other claims. A spokeswoman for Bank of America said the bank was pleased with the ruling, saying the numerous dismissed claims "significantly narrows" the amount that could be awarded in damages. Parmalat filed for insolvency in December 2003, with about $17.3 billion of debt, after realizing there was a massive $4.9 billion discrepancy in its books. Reuters has more.

[JURIST] A Canadian Federal Court judge has ruled that intelligence authorities must stop interrogating Guantanamo Bay [JURIST news archive] detainee Omar Khadr [CBC Khadr family profile]. Justice Konrad von Finckenstein's decision also slammed Canadian counterterrorism agents for gathering information at a place where he claims Canada's Charter of Rights and Freedoms [text] has been violated. Khadr has admitted killing a US medic [JURIST report] while fighting with the Taliban. He was captured when he was 15 years old and transferred to Guantanamo Bay after turning 16. The US never clarified Khadr's legal status or charged him but agents from the Canadian Security Intelligence Service [official website] and the Canadian Department of Foreign Affairs and International Trade [official website] have interviewed him at Guantanamo at least three times. Von Finckenstein's ruling prevents further interviews from occurring. The Globe and Mail has more.

[JURIST] Saudi Arabia announced [Saudi Press Agency report] on Tuesday that five men turned over to them by US authorities at Guantanamo have been released. No names were given, but an official said the five had completed the judicial process and any prison terms. It's unclear how long each prisoner was detained or when they were turned over. The US sent three detainees [JURIST report] from Cuba to Saudi Arabia in July and five in May 2003. AP has more.

[JURIST] Protesters in cities across Asia Wednesday urged government officials in Japan to apologize for the actions of the Imperial Army [Wikipedia backgrounder] and compensate women forced into sexual slavery in brothels run by the Japanese military before and during WWII. The nearly 200,000, mostly Korean sex slaves known as "comfort women" [Wikipedia backgrounder] have received some apologies from the Japanese government, which has also set up a private fund for compensation. Critics have been angered by recent statements from officials downplaying the brothels and the approval this year of schoolbooks in Japan that omit references to sexual slavery. As the 60th anniversary of Japan's defeat in WWII approaches, many are pushing for greater compensation [Amnesty International press release] for the women but Japan argues that bilateral treaties rule out any official payouts to individuals. Reuters has more. The Seoul Times has local coverage.

[JURIST] Despite answering questions [JURIST report] before the Iraqi Special Tribunal [official website; JURIST news archive] in late June, former Iraqi deputy prime minister Tariq Aziz [BBC profile] said Tuesday that he will not testify against Saddam Hussein [JURIST news archive] at his upcoming trial. Saddam has been officially been charged only for the 1982 killings of dozens of Shiites in response to an assassination attempt though more charges are pending; charges have yet to be filed against Aziz. Some observers speculated that Aziz would be a key witness for the prosecution [JURIST report]. Reuters has more.

[JURIST] Pakistan's chief election commissioner Abdul Hameed Dogar Wednesday promised to take swift and severe action against anyone prohibiting women from accessing polls in next week's local government elections. Dogar said he would go so far as to cancel results in areas where women were barred from casting votes. The statements come after the country's North West Frontier Province [Wikipedia backgrounder] earlier in the month passed a controversial Islamic law [JURIST report] introducing a Taliban-style moral policing system that many claim will harshly restrict women's rights. Last week, the Pakistan Supreme Court rejected the law as unconstitutional [JURIST report]. AFP has more.

[JURIST] Public Advocate of the United States [advocacy website], a right-wing group based in Virginia, announced [press release] Wednesday that they would become the first conservative group to oppose the nomination of John Roberts [JURIST news archive] to the US Supreme Court. The group is protesting his behind-the-scenes work [JURIST report] on Romer v. Evans [opinion], a 1996 case where the Supreme Court overturned a Colorado constitutional provision as discriminatory towards homosexuals. The protest comes despite no other evidence of Roberts' position on gay rights, and the understanding that positions advocated by lawyers in court are not necessarily indicative of their own personal beliefs or legal interpretations. AP has more.

[JURIST] Russian Federal Prisons Service director Yuri Kalinin said Wednesday that the transfer of former oil tycoon Mikhail Khodorkovsky [defense website, in English] to a larger cell with more inmates was "normal prison procedure" and not a form of punishment. Lawyers for Khodorkovsky said earlier this week that he had been denied access to newspapers and television and moved to a bigger cell as payback for an article [Russia Journal summary, in English] he wrote in a publication last week calling on various political factions to join forces against the Kremlin. Russian leaders have consistently denied there was any political element to Khodorkovsky's prosecution [JURIST news archive], but many analysts see the take-down of the former Yukos [company website; JURIST news archive] head as part of a plan supported by the highest government officials to eliminate a political opponent prior to the 2008 presidential election. Reuters has more. MosNews has local coverage.

8/11/05 4:32 PM ET - An English translation of Khodorkovsky's essay, originally published in Vedomosti, has been posted on Khodorkovsky's trial website. Read the full text of the article.

[JURIST] Britain's Conservative Party leader Michael Howard [official website] Wednesday joined an earlier call [JURIST report] by former UK Home Secretary David Blunkett [Wikipedia profile] for the British courts not to interfere with Parliament's efforts to enact new anti-terrorism laws. Prime Minister Tony Blair has made some controversial proposals, including advocating a possible amendment to the Human Rights Act [JURIST report] if it interferes with the new laws. In an opinion piece [full text] in Wednesday's Telegraph, Howard agreed that Parliament, not the courts, should be the ones shaping legislation. Howard wrote:

"The difficulty we now face is that the Government has invited the judges to do precisely what Lord Reid said they couldn't do. The Human Rights Act, for example, gives the judiciary the authority to consider whether an Act of Parliament is proportionate to the objective it is intended to achieve - drawing them directly into political controversy. . . Parliament must be supreme. Aggressive judicial activism will not only undermine the public's confidence in the impartiality of our judiciary, but it could also put our security at risk. . ."

[JURIST] After his arrest [JURIST report] in Buenos Aires earlier this week, Bosnian Serb paramilitary leader Milan Lukic agreed Tuesday to be extradited and face new charges before the International Criminal Tribunal for the Former Yugoslavia [official website; JURIST news archive], according to court papers. The UN court says that Lukic will face charges [ICTY press release; amended indictment] of crimes against humanity and violations of laws or customs of war for extermination, persecutions, murder and inhumane acts committed in southeastern Bosnia and Herzegovina between 1992 and 1994. Lukic, who was convicted in absentia [JURIST report] by a Serbian war crimes court and sentenced to 20 years for his role in the 1993 abduction and killing of 20 Bosnian Muslims, has denied allegations he took part in atrocities during the Bosnian war. Argentine officials did not say when Lukic might be extradited. Reuters has more.

[JURIST] The Delaware Court of Chancery ruled in favor of Disney executives [decision excerpts via LA Times] Tuesday in a shareholder suit [LA Times report] that alleged that the Disney board violated their duties by ratifying a 1996 decision to fire former company president Michael Ovitz with severance. Shareholders filed suit [JURIST report] objecting to the $140 million severance package given to Ovitz, who only held the position for 15 months. Chief Executive Michael Eisner [Wikipedia profile] fired him and the board approved the dismissal along with the severance payment. The plaintiffs wanted Eisner and the board to reimburse the money to the company, arguing that Ovitz should have been fired for cause instead, and thus would not have received the extra money. The court ruled that while the actions of the directors "fell significantly short of the best practices of ideal corporate governance," the law "cannot hold fiduciaries liable for a failure to comply with the aspirational ideal of best practices." Bloomberg has more. The LA Times provides the full text of the decision [part 1, PDF; part 2; part 3; part 4].

[JURIST] According to wire reports, the International Atomic Energy Agency [official website] has confirmed that seals at Iran's Isfahan nuclear facility have been broken [AP report], allowing Iran to fully resume its uranium conversion activities. The IAEA held an emergency meeting [JURIST report] yesterday to discuss how to handle Iran's resumption of its nuclear program. The US and the EU are calling for a continued suspension of nuclear conversion activities, which initially began last November, but Iran will now be able to continue its work in the entire facility, though it will be subject to IAEA surveillance. The IAEA has background on Iran's nuclear activities.

[JURIST] The California Court of Appeal for the Third Appellate District [official website] Tuesday rejected an appeal to have a measure backed by Governor Arnold Schwarzenegger [official website] that would change the redistricting process in California included on November's special election ballot. The ballot measure, Proposition 77 [PDF text], is a voter initiative that seeks to take the redistricting responsibility away from a legislature dominated by Democrats. Though supporters of the plan submitted enough signatures to qualify for the ballot, they used wording that differed in 17 places during the certification process. "The petitioners could easily have avoided or discovered and corrected the problem of different versions before the circulation of the petitions," Judge Coleman Blease wrote in a 2-1 decision [PDF text]. Schwarzenegger said he hoped the decision would be appealed to the state supreme court. Reuters has more.

[JURIST] Speaking as part of a panel [recorded video via ABA] on the independence of the judiciary at the annual meeting of the American Bar Association [group website] Tuesday, US Supreme Court Justice Stephen Breyer [Wikipedia profile] said that controversial rulings on divisive issues like the rights of homosexuals and capital punishment have created a surge in political reaction that is threatening the independence of judges. ABA President Michael Greco [ABA profile] said judges have faced threats of physical violence along with calls for impeachment by lawmakers in Washington angered by court rulings. Discussing the Court's method of examining constitutional limits to decide important issues, Breyer said that the Court can't control the politics of the issues involved. AP has more.