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Legal news from Monday, July 14, 2008

Federal Reserve Board approves restrictive changes to US lending laws
Deirdre Jurand on July 14, 2008 3:06 PM ET

[JURIST] The Federal Reserve Board on Monday approved new rules for home mortgage loans [draft regulations, PDF; press release] designed to reduce unfair lending practices and increase consumer protection. The new rule amends the Truth in Lending Act [text] to include prohibitions against granting loans without a verification of the borrower's ability to repay, bans on some debt prepayment penalties and requirements that lenders sometimes establish escrow accounts and homeowner's insurance. Lenders will also be prohibited from coercing appraisers to falsely represent a home's value, using unfair fee structures and misrepresenting or failing to provide an account of total loan costs. Chairman of the Federal Reserve Ben Bernanke said [transcript] at the board meeting:

Besides offering broader protection for consumers, a uniform set of rules will level the playing field for lenders and increase competition in the mortgage market, to the ultimate benefit of borrowers. We will work collaboratively with our fellow regulators, both state and federal, to see that the rules are consistently applied and vigorously enforced.
Most of the rules will go into effect on Oct. 1, 2009. Bloomberg has more. AFP has additional coverage.

Last month, the Federal Bureau of Investigation (FBI) [official website] announced that more than 400 people had been indicted [press release; JURIST report] in connection with what has been termed the US "sub-prime mortgage collapse." Most of the indictments involved fraud related to individual mortgages, with the FBI focusing on lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes, which account for more than $1 billion in losses. The same day, the US Attorney's Office for the Eastern District of New York [official website] also announced the indictments [text, PDF; press release] of two senior hedge fund managers at Bear Stearns [corporate website] for allegedly misleading investors even after they knew their mortgage-related funds were at serious risk of collapse.

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Federal court rules eBay has no duty to police trademarks
Mike Rosen-Molina on July 14, 2008 2:17 PM ET

[JURIST] A New York district court judge ruled [PDF text] Monday that Internet auction house eBay [corporate website] is not required to actively monitor its website for the sale of counterfeit goods. The decision comes in a case brought by jeweler Tiffany & Company [corporate website], alleging that eBay diluted its trademark by facilitating the sale of "copycat" Tiffany jewelry. EBay argued that it had no responsibility to take proactive steps against the sale of counterfeit items. AP has more. The New York Times has additional coverage.

The decision marks a dramatic contrast with recent rulings in Europe, where a French court earlier this month ordered [JURIST report] eBay to pay $63 million in damages to LVMH Moët Hennessy Louis Vuitton (LVMH) [corporate website] for failing to prevent the sale of counterfeit luxury goods. EBay said that it would appeal the decision [press release]. LVMH praised the holding as a victory for designers seeking to control the distribution of their merchandise or prevent the sale of "copycat" products. Last month, another French court ruled against eBay in a similar lawsuit for failing to prevent the sale of fake Hermès International SCA [corporate website] products.

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Five suspects plead guilty to failed UK liquid bomb plot
Mike Rosen-Molina on July 14, 2008 12:28 PM ET

[JURIST] Five men involved in an alleged plot to blow up transatlantic planes [JURIST report] leaving a London airport pleaded guilty to lesser conspiracy charges Monday in London's Woolwich Crown Court [official website]. Abdulla Ahmed Ali, Assad Sarwar, and Tanvir Hussain [GlobalSecurity profiles] admitted that they planned to set off bombs but insisted that their only intention was to create a media stir to promote an anti-western film they planned to make. They and two other men, Ibrahim Savant and Umar Islam [GlobalSecurity profiles], also pleaded guilty to conspiracy to create a public nuisance by releasing videos about planned suicide attacks. The plot's discovery led to a widespread increase in airport security measures, including a ban on bringing liquids or gels onto planes. AP has more. CBC News has additional coverage.

A total of 24 men were arrested during raids on UK properties in August 2006, and police charged 11 suspects [JURIST report] under the Terrorism Act 2006 [text]: eight with conspiracy to commit murder and with preparing acts of terrorism, one with possession of articles useful to a person preparing an act of terrorism, and two with failing to disclose information of material assistance in preventing an act of terrorism. One detainee was released, police had previously released another without charge [JURIST report] and arrested an additional suspect [JURIST report]. Nineteen of the named suspects [list] had their assets frozen by the Bank of England [corporate website].

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Thailand protesters petition for corruption charges over temple dispute
Devin Montgomery on July 14, 2008 12:02 PM ET

[JURIST] Protesters led by Thailand's People's Alliance for Democracy [JURIST news archive] petitioned the country's National Counter Corruption Commission (NCCC) [official website] Monday, asking it to bring new corruption charges against government officials and former prime minister Thaksin Shinawatra [BBC backgrounder; JURIST news archive]. The protesters are seeking new charges against the government for allegedly granting Cambodia full claim to a historic temple in exchange for personal favors to Thaksin. Last week, Thailand's Constitutional Court [official website, in Thai] ruled that current prime minister Samak Sundaravej [BBC profile] violated the country's constitution by dropping Thai claims [JURIST report] to the Preah Vihear temple [Telegraph backgrounder] without parliamentary approval. Opponents of the temple transfer have called for those involved to be impeached and charged with treason [JURIST report], while others have called for the government to rescind its recognition of the bid or join in the multinational force [Bangkok Post reports] that will guard the site. Reuters has more.

This latest controversy arises a week after the UN Educational Scientific and Cultural Organization (UNESCO) [official website] approved a Cambodian application [UNESCO press release, in French] for recognition of the temple as a UNESCO World Heritage site. Tensions have long existed between Thailand and Cambodia concerning the Preah Vihear temple, as both countries have claimed jurisdiction over the structure. In 1962, the International Court of Justice (ICJ) ruled [opinion, PDF] that the temple was officially located in Cambodia.

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Bush lifts executive order banning offshore oil drilling
Mike Rosen-Molina on July 14, 2008 11:51 AM ET

[JURIST] US President George W. Bush issued a memorandum [presidential statement] Monday to the Secretary of the Interior, lifting an executive ban on offshore oil drilling [JURIST news archive] put in place in 1990 by then-President George H. W. Bush. Monday's action will have little practical effect because offshore drilling is still prohibited by a longstanding congressional moratorium. The limitation on the practice has been in place since 1981, and makes 85 percent of the coastal waters surrounding the US off-limits for oil drilling. On Monday, the League of Conservation Voters condemned [press release] Bush's move as a reckless temporary solution to the current oil crisis. Reuters has more. The Washington Post has additional coverage.

Last month, Bush called on Congress to relax restrictions on oil exploration [statement text; JURIST report], saying that it should also allow drilling to begin in the Arctic National Wildlife Refuge [official website] in Alaska. Bush argued that resources currently off-limits to energy companies could offset rising fuel prices. Environmental organizations have criticized efforts to expand oil drilling [WWF report] in the Arctic, calling for increased research into energy conservation and renewable resources instead. Critics have also said that offshore development will require several years and a massive infrastructure that could impact local wildlife.

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Canada agrees to $235M settlement in Nova Scotia oil and gas dispute
Deirdre Jurand on July 14, 2008 11:48 AM ET

[JURIST] Canadian government leaders reached an agreement [text, PDF; press release, PDF] with Nova Scotian officials on Sunday which requires the Canadian government to pay the province $235 million CAD for lost profits from prior government offshore oil and gas projects. In 1980, the Canadian government obtained the right [program backgrounder, PDF] to buy partial ownership in private Canadian oil and gas projects, including those off the coast of Nova Scotia. The province obtained the rights to some of the profits in 1982, and in 1986 the federal government abolished its 1980 share rights and agreed to compensate the province [agreement materials] for its lost profits. Compensation provisions remained unclear until an independent panel recently recommended [text, PDF] a payment amount and a timetable for the reparations, which the governments adopted. The Canadian government will also pay the province an estimated $633 million CAD over the next 15 years for current and future oil and gas projects. Nova Scotian Premier Rodney MacDonald said [speech text] of the agreement:

Fiscal responsibility is the cornerstone of our province and our government. Ninety-two per cent of Crown Share payments — or about $800 million — will be applied to the provincial debt. Over time, these payments will free up millions of dollars in debt servicing costs each year, money which will be invested in the priorities of Nova Scotians. [sic]
The Globe and Mail has more.

The agreement made in 1986 required the federal government to pay Nova Scotia 75 percent of the government's profits as soon as the earnings reached $200 million CAD on any eligible oil or gas operation off the Nova Scotia coast. The provincial and federal governments had disagreed on the exact terms of the payments, but profits only recently reached the required amount on the first qualifying operation, the Sable Project [official website].

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ICC prosecutor applies for warrant to arrest Sudan president
Andrew Gilmore on July 14, 2008 10:54 AM ET

[JURIST] International Criminal Court (ICC) Chief Prosecutor Luis Moreno-Ocampo [official profile] applied for an arrest warrant [application, PDF; ICC press release] Monday for Sudanese President Omar al-Bashir [BBC profile, JURIST news archive] on charges of genocide, crimes against humanity, and war crimes for atrocities committed in the country's Darfur region [JURIST news archive]. The application follows a three-year investigation into atrocities and genocide in Darfur that began with the referral of the situation to the Office of the Chief Prosecutor in 2005 [JURIST report]. Since then, the Office of the Prosecutor has gathered eyewitness and victim statements, taken testimony from Sudanese government officials, and examined material provided by the UN and other aid organizations in order to build evidence to support the charges against al-Bashir. The summary of the charges against al-Bashir notes:

The evidence establishes reasonable grounds to believe that AL BASHIR intends to destroy in substantial part the Fur, Masalit and Zaghawa ethnic groups as such. Forces and agents controlled by AL BASHIR attacked civilians in towns and villages inhabited by the target groups, committing killings, rapes, torture and destroying means of livelihood. AL BASHIR has thus forced the displacement of a substantial part of the target groups and attacked them in the camps for internally displaced persons (“IDPs”), causing serious and bodily harm – through rapes, tortures and forced displacement in traumatizing conditions – and deliberately inflicting on a substantial part of those groups conditions of life calculated to bring about their physical destruction.

AL BASHIR’s conduct simultaneously constitutes genocide against the Fur, Masalit and Zaghawa ethnic groups, crimes against humanity and war crimes against any civilian population in the area, including members of the target groups. [sic]
The indictment and charges against Al-Bashir mark the first time a sitting head of state has been charged with genocide, war crimes, and crimes against humanity by the ICC. BBC News has more. The New York Times has additional coverage.

News of Monday's hearing [JURIST report] began circulating Friday. The Sudanese government has already rejected the ICC's jurisdiction and has refused to surrender two previously-named war crimes suspects [JURIST report]. Hundreds of thousands of people have allegedly been killed in Darfur by Sudanese military and janjaweed [Slate backgrounder] militia forces. The investigation that resulted in Monday's charges, which involved more than 100 witnesses in 18 countries, led Moreno-Ocampo to state before the UN Security Council [official website] in June that “evidence shows that the commission of such crimes on such a scale, over a period of five years, and throughout Darfur, has required the sustained mobilization of the entire Sudanese state apparatus.” The Security Council has repeatedly called on Sudan to comply with the ICC investigation [JURIST], but Sudan has refused to do so, calling Moreno-Ocampo a "terrorist" [JURIST report] and suggesting that he should be removed from office.

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Doctors Without Borders must repay Holland for ransom: Swiss high court
Mike Rosen-Molina on July 14, 2008 10:50 AM ET

[JURIST] The Supreme Court of Switzerland [official website, in German] Monday ruled that Doctors without Borders (MSF) [advocacy website] must repay the Dutch government for its share of a ransom paid to secure the release of a MSF official. MSF's former Dagestan head was kidnapped in 2002 [MSF backgrounder], and his abductors demanded 1 million euros in ransom. The Dutch government contributed 770,000 euros to the aid worker's release, of which it said 270,000 euros was meant as a loan to MSF. MSF denied that the money was intended as a loan and refused repayment, instead seeking reimbursement from Holland for its share of the ransom. The court rejected MSF's claim for compensation. Ria Novosti has more. AP has additional coverage.

Dagestan has become an increasingly volatile region in recent years. Earlier this year, Russian prosecutors opened a murder investigation [JURIST report] into the death of journalist Ilyas Shurpayev [personal blog], a correspondent for Russia's state-run Channel One [media website, in Russian], who was found dead with stab wounds and a belt around his neck when firefighters responded to a fire, apparently set after the attack. Hours before his death, Shurpayev reportedly wrote a blog post complaining that he had been banned from writing columns for a newspaper in Dagestan and proclaiming, "I am now a dissident." The same day, the head of Dagestan's state TV and radio company Gadzhi Abashilov was killed when unidentified gunmen opened fire on his car. Russian Prosecutor General Yury Chaika [official website, in Russian] said he would take "personal" charge of the Abashilov investigation.

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Former HP executive pleads guilty to revealing IBM trade secrets
Deirdre Jurand on July 14, 2008 9:57 AM ET

[JURIST] A former vice president for Hewlett Packard (HP) [corporate website] pleaded guilty [DOJ press release] Friday to one count of theft of trade secrets [18 USC s. 1832 text] for giving HP protected information he obtained while working for IBM [corporate website]. Atul Malhotra said in his plea that before leaving IBM, he requested and received information on IBM's pricing and marketing strategies, which he then e-mailed to two HP executives during his employment there. HP spokeswoman Emma McCulloch said [Bloomberg report] that the company fired Malhotra after an internal investigation into the incident. Prosecutors formally charged [indictment, PDF] Malhotra last month, and sentencing is scheduled for October 29. He could be sentenced to up to 10 years in prison, a $250,000 fine and three years of supervised release. Reuters has more.

The Department of Justice said that HP cooperated fully with the investigation, but the company has been under heavy legal scrutiny recently. In November 2007, HP subsidiary Mercury Interactive settled [press release; JURIST report] derivative lawsuits regarding the alleged backdating of stock options. In March, a California judge dismissed felony charges [JURIST report] against four defendants who pleaded guilty to misdemeanors in the HP pretexting scandal [JURIST news archive]. In December 2006, HP settled an unfair business practices suit [JURIST report] brought by California Attorney General Bill Lockyer for $14.5 million. The backdating of Mercury option grants occurred before HP's acquisition of the company, but HP asserted that all liabilities for the backdating scandal would be handled without decreasing the value of HP's stock.

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France denies citizenship to Muslim woman for failure to adopt French culture
Andrew Gilmore on July 14, 2008 8:50 AM ET

[JURIST] The French Council of State [official website, in French] has denied [ruling, PDF, in French] a Moroccan-born Muslim woman's citizenship application because she failed to assimilate to French culture and she practices a type of Islam found incompatible with French values. The ruling was made public for the first time on Friday by the French newspaper Le Monde, which reported [text, in French] that the Council of State's decision marked the first occasion that the French government considered the level of religious practice in determining whether a person was fit for citizenship. The woman, identified only as Faiza M., is married to a French national, speaks French, has three children born in France, and wears a burka covering her entire body except her eyes. Reuters has more. BBC News has additional coverage.

The perceived assimilation of Muslims has been a source of conflict in France during recent years. In 2005, the French government authorized emergency powers [JURIST report] to deal with rioting in Paris suburbs by poor immigrant youths. The riots were generally attributed to larger race and religious issues in France, including the marginalization of immigrants and young people originally from Muslim countries. In 2004, the French government passed a law [JURIST report] banning the wearing of conspicuous religious items, including Islamic headscarves, in public schools.

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Definition of 'Israel' holds back Paris summit agreement with Palestinians
Deirdre Jurand on July 14, 2008 8:28 AM ET

[JURIST] French foreign minister Bernard Kouchner [BBC profile] said Monday that officials will have to adjust the final declaration [PDF text] of a Paris Mediterranean summit [summit materials, PDF] because of a disagreement between Israelis and Palestinians on how Israel [JURIST news archive] is described in the agreement. The summit began Sunday and was designed by French President Nicolas Sarkozy as an effort to unify Mediterranean countries around common interests such as ecological protection, transportation routes, security, and commercial development:

Over and above existing cooperation, it aims to establish shared governance and create ever-closer cooperation through concrete regional projects. This renewed political drive to further Mediterranean interests must be reflected in the establishment of a genuine and equal partnership between the northern and southern rims.
Palestinian foreign minister Riyad Al-Maliki said the original declaration's reference to Israel as the "state of the Jewish people" and a "national and democratic state," failed to recognized Palestinian [JURIST news archive] interests in the country. The final version of the Union for the Mediterranean's text was vaguely worded in order to avoid this and other contentious details, but summit leaders have said they will continue to work on making the agreement more specific. AFP has more.

The Union for the Mediterranean will include 43 countries [WAFA report] from both Europe and the Middle East. It is designed to take the place of the 1995 Euro-Mediterranean Partnership [founding text; materials], which was also targeted at promoting cooperation within the region.

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Turkey indicts secularists for alleged coup plot
Devin Montgomery on July 14, 2008 8:25 AM ET

[JURIST] Turkish prosecutors indicted 86 alleged members of the secular Ergenekon [BBC backgrounder] group Monday for allegedly attempting to destabilize and overthrow the country's ruling Justice and Development Party (AKP) [party website]. The group is believed responsible for bombing the headquarters of the newspaper Cumhuriyet [newspaper website, in Turkish], assassinating Turkish-Armenian journalist Hrant Dink [BBC obituary; JURIST news archive], and planning other attacks to provoke a military coup to topple the AKP. The suspects will be tried under Turkey's anti-terror laws. Among those indicted were journalists, intellectuals, and Turkish Workers' Party [party website, in Turkish] leader Dogu Perincek [personal website, in Turkish; JURIST report]. Chief prosecutor Aykut Cengiz Engin said that those arrested more recently [JURIST report] for ties to the group, including two former generals, will be separately indicted once an investigation into their alleged involvement is completed. AP has more. Hürriyet has local coverage.

Critics allege that the AKP has improperly investigated secular groups as part of a drive to impose Islamic principles [Ha'aretz report] in violation of the country's secular constitution [text], and that the link between the group and the alleged plots is weak [Hürriyet op-ed]. In March, Turkish Chief Prosecutor Abdurrahman Yalcinkaya petitioned the country's Constitutional Court to disband the AKP [JURIST report] for allegedly working to undermine the nation's secular principles.

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Unprecedented Notice of Warrantless Wiretapping in a Closed Case
Ramzi Kassem
CUNY School of Law

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