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Legal news from Thursday, June 17, 2010

Supreme Court rules objection to bankruptcy exemption not required to recover excess value
Sarah Miley on June 17, 2010 3:53 PM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday ruled [opinion, PDF] 6-3 in Schwab v. Reilly [Cornell LII backgrounder; JURIST report] that a trustee assigned to a Chapter 7 bankruptcy [Cornell LII backgrounder] case is not required to object to the exemptions made by the debtor in order to preserve the estate's right to retain any value in the asset beyond the value of the exempt interest. The US Court of Appeals for the Third Circuit held [opinion, PDF] that the debtor intended to fully exempt the asset and that the trustee had to object within 30 days. Justice Clarence Thomas, writing the opinion for the court, reversed the circuit court opinion and held that under § 522 of the Bankruptcy Code [text] the debtor is only entitled to the dollar amount she claimed, not the full value of the asset. Thomas concluded that:
because the Code defines such property as an interest, not to exceed a certain dollar amount, in a particular asset, not as the asset itself, the value of the property claimed exempt should be judged on the dollar value the debtor assigns the interest, not on the value the debtor assigns the asset.
Justice Ruth Bader Ginsburg dissented, joined by Chief Justice John Roberts and Justice Stephen Breyer.

In 2005, Nadejda Reilly filed a Chapter 7 bankruptcy petition and claimed two exempt interests in "business equipment," estimating the value at $10,718. Although an appraisal revealed that the equipment's total market value could be as much as $17,200, the bankruptcy estate's trustee William Schwab, did not object to the claimed exemptions because the dollar value Reilly assigned to each fell within the limits maximum limits imposed by the Code. Schwab moved the Bankruptcy Court for permission to auction the equipment so Reilly could receive the dollar value she claimed exempt and the estate could distribute the remaining value to her creditors. Reilly argued that Schwab's failure to object within the thirty-day statutory period rendered the property exempt. Schwab countered that Reilly's exemption was limited to the specific amount claimed and did not serve to fully exempt the property from distribution. Schwab also argued that the objection deadline applied only to the type of property claimed as exempt, not to the value.

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US lawyer in Rwanda custody released on bail
Dwyer Arce on June 17, 2010 1:51 PM ET

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[JURIST] A Rwandan court on Thursday granted the bail request of US lawyer and JURIST Forum [website] contributor Peter Erlinder [professional profile; JURIST news archive]. Judge Johnson Busingye of the High Court of Rwanda [GlobaLex backgrounder] granted unconditional release [Reuters report] due to Erlinder's persisting medical problems, which would allow Erlinder to leave the country, but requires that he inform the court of his whereabouts and comply with court orders. Erlinder, who was being hospitalized during the hearing, is expected to return to the US on Friday [AFP report]. In reacting to the court's decision, Prosecutor General Martin Ngoga [New Times profile] said that the investigation against Erlinder is ongoing, and that the ruling does not affect the charges against him [press release, PDF], stating:
Bail on health grounds cannot be mistaken as vindication for Mr. Erlinder - it just proves that the justice system he so freely criticizes was willing to show him compassion with respect to his physical and mental wellbeing. This will not deter the prosecution as we finalize the case against Mr. Erlinder. He will soon be called to defend his record of genocide denial that insults the people of Rwanda and inflames those who seek to harm us.
Thursday's bail hearing comes on appeal from the Gasabo Intermediate Court's decision Sunday ordering that Erlinder be detained for 30 more days [JURIST report] as the investigation is pending, citing flight risk, despite Erlinder's claim that he needed to return to the US for medical treatment following what Rwandan officials say was a suicide attempt [JURIST report].

The International Criminal Tribunal for Rwanda (ICTR) [official website] on Tuesday called for Erlinder's release [JURIST report] in a letter to Rwanda authorities. Acting on the advice of the UN Office of Legal Affairs [official website], the ICTR asserted in the letter that Erlinder has immunity from prosecution under the Convention on Privileges and Immunities of the United Nations [text, PDF], a treaty that Rwanda to which is a party that prevents legal action of any kind against UN employees working in an official capacity. On Monday, US Secretary of State Hillary Clinton [official website] stated that the Obama administration had expressed concern [statement] to the Rwandan government over Erlinder's detention and the prosecution of opposition candidates but emphasized the US government's continued support for the Rwandan government. Last week, US Representatives Betty McCollum (D-MN) and Keith Ellison (D-MN) [official websites] introduced a resolution [JURIST report] calling on the Rwandan government to release Erlinder in order to "prevent ... an impasse in relations" between the US and Rwanda. Rwandan police arrested Erlinder [JURIST report] last month on charges that he denied the 1994 Rwandan genocide [HRW backgrounder; JURIST news archive]. Erlinder was in Rwanda to prepare his defense of opposition presidential candidate Victoire Ingabire Umuhoza [campaign website], who was arrested in April [JURIST report] on similar charges. Erlinder has pleaded not guilty [JURIST report].

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Supreme Court rules fixing of coastal boundaries not 'taking'
Hillary Stemple on June 17, 2010 1:30 PM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday ruled [opinion, PDF] in Stop the Beach Renourishment, Inc. v. Florida Department of Environment Protection [Cornell LII backgrounder] that the state of Florida did not "take" property without just compensation in violation of the Fifth Amendment [text] where the state permanently fixed property boundaries as part of a beachfront restoration project. The petitioners in the case argued [JURIST report] that coastal property owners are entitled to two easements, the right to have their land touch the water, and the right to gain property through coastal expansion. They argued that the practice of adding sand to prevent beach erosion, as authorized by Florida's Beach and Shore Preservation Act [text], effectively ended the easements in violation of Florida common law. They also argued that the practice of taking land was unconstitutional under the Fifth Amendment. Justice Antonin Scalia announced the judgment of the court, upholding the Florida Supreme Court decision [opinion, PDF], stating:
There is no taking unless petitioner can show that, before the Florida Supreme Court's decision, [coastal] property owners had rights to future [coastal expansion] and contact with the water superior to the State's right to fill in its submerged land. Though some may think the question close, in our view the showing cannot be made.
The court was unified in its holding, but there was a four to four split on the question of whether the Fifth Amendment applies to judicial "takings." Justice Scalia was joined by Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito in holding that the Fifth Amendment clause against "taking" without just compensation applies to the judicial branch as well as the legislative and executive branches. Justice Anthony Kennedy was joined by Justice Sonia Sotomayor in concluding that the court did not need to reach the issue of judicial taking in order to reach their decision on the case. Justice Stephen Breyer was joined by Justice Ruth Bader Ginsburg in concluding that such complex questions of constitutional law need not be decided to reach a conclusion on this case. Justice John Paul Stevens took no part in the ruling.

The court originally granted certiorari [JURIST report] in the case to determine the constitutional question of whether the taking of land by the judiciary was a violation of due process. During oral arguments, counsel for the US argued as amicus curiae on behalf of the respondents that "what has happened here is the State has exercised, not just sovereign regulatory rights; it has exercised critical sovereign proprietary rights."

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Supreme Court rules NLRB must have 3 member panel to exercise authority
Sarah Miley on June 17, 2010 12:08 PM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday ruled 5-4 in New Process Steel v. National Labor Relations Board (NLRB) [Cornell LII backgrounder; JURIST report] that the NLRB lacks the authority to decide cases where only two of the five-member board are present. Section 3(b) of the National Labor Relations Act [29 USC § 153(b)] provides that three members are enough to constitute a quorum of the NLRB. The US Court of Appeals for the Seventh Circuit found [opinion, PDF] that the NLRB had acted appropriately when it continued to issue board decisions for 27 months as a two-member quorum after one group member's appointment expired. Justice John Paul Stevens, writing the opinion for the court, held that Section 3(b) requires that an NLRB quorum must maintain a membership of three "at all times" in order to exercise the delegated authority of the full board. Stevens concluded:
We are not insensitive to the Board's understandable desire to keep its doors open despite vacancies. Nor are we unaware of the costs that delay imposes on the litigants. If Congress wishes to allow the Board to decide cases with only two members, it can easily do so. But until it does, Congress's decision to require that the Board's full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than be swept aside in the face of admittedly difficult circumstances.
Justice Anthony Kennedy dissented, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor. In his dissent Kennedy stated that "the objectives of the statute, which must be to ensure orderly operations when the Board is not at full strength as well as efficient operations when it is, are better respected by a statutory interpretation that dictates a result opposite to the one reached by the Court." The NLRB later released a response [press release, PDF] to the Supreme Court's ruling stating that "[t]he same question has been raised in five more cases pending before the Supreme Court, and 69 that are pending before the Courts of Appeals. It is expected that those cases will be remanded to the Board, and the now-four member Board will decide the appropriate means for further considering and resolving them."

New Process Steel [official website], a US-based steel processing company, filed suit against the NLRB in 2008 after the two-member Board issued decisions sustaining two unfair labor practice complaints against petitioner. The three member delegation was brought down to two in December 2007 when a member's appointment expired. During the 27-month period in which the Board had only two members, it decided almost 600 cases.

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Supreme Court rules sentencing guidelines changes do not affect modification hearings
Hillary Stemple on June 17, 2010 11:52 AM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday ruled [opinion, PDF] in Dillon v. United States [Cornell LII backgrounder] that the court's decision in United States v. Booker [opinion, text] does not provide for special consideration of changes in sentencing guidelines during U.S.C. §3582(c)(2) [text] sentence modification hearings. The court ruled in Booker that federal sentencing guidelines [materials] are advisory only, although they had never ruled on the application to sentence modification hearings. The petitioner argued [JURIST report] that Booker also holds for sentence modification hearings under U.S.S.G. §1B.10 [text], which allows for sentence reduction if the sentencing guidelines have been amended. He argued that in light of Booker, the re-sentencing court could have lowered his sentence beyond the newest sentencing guidelines based on discretionary factors. The court, however, held that Booker's holding does not extend to §3582(c)(2). Justice Sonia Sotomayor, writing for the majority, upheld the decision below stating:
By its terms, §3582(c)(2) does not authorize a sentencing or resentencing proceeding. Instead, it provides for the modif[ication of] a term of imprisonment by giving courts the power to reduce an otherwise final sentence in circumstances specified by the [federal sentencing guidelines] Commission. ... Section 3582(c)(2)'s text, together with its narrow scope, shows that Congress intended to authorize only a limited adjustment to an otherwise final sentence and not a plenary resentencing proceeding.
Justice John Paul Stevens dissented and Justice Samuel Alito took no part in the decision.

Petitioner Percy Dillon was originally sentenced under the federal guidelines to 322 months in prison for drug related offenses. The sentencing commission subsequently reduced the sentencing guidelines for drug related offenses and Dillon filed a pro se motion for sentence reduction pursuant to §3582(c)(2). The district court reduced Dillon's sentence to 277 months, which fell under the revised sentencing guidelines. Dillon appealed the reduction to the Third Circuit Court of Appeals which upheld [opinion] Dillon's modified sentence and ruled that Booker does not apply in sentence modification proceedings. The Supreme Court granted certiorari [JURIST report] to resolve the issue of Booker's application on retroactive sentence modifications.

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Supreme Court allows reasonable searches of private texts on work-issued devices
Sarah Miley on June 17, 2010 10:25 AM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Thursday unanimously ruled [opinion, PDF] in City of Ontario v. Quon [Cornell LII backgrounder; JURIST report] that an employer's search of private text messages on a work-issued device does not violate the Fourth Amendment [text] if the search is motivated by a legitimate work-related purpose and is not excessive in scope. The court's ruling applies even when the employee possess a reasonable expectation of privacy in the device. The US Court of Appeals for the Ninth Circuit had ruled [opinion, PDF] that Quon, a special weapons and tactics (SWAT) team member, had a reasonable expectation of privacy in text messages sent to and from his SWAT pager under an informal policy of allowing personal use of the pagers, and therefore his Fourth Amendment rights had been violated. Justice Anthony Kennedy, writing the opinion of the court, reversed the circuit court opinion holding that the search is validated if it is reasonably related to the employer's legitimate work-related objectives and narrow in scope, regardless of an employee's expectation. The court cautioned that the ruling should be applied narrowly and should not determine privacy expectations of emerging technology before its role in the work place is fully developed:
The Court must proceed with care when considering the whole concept of privacy expectations in communications made on electronic equipment owned by a government employer. The judiciary risks error by elaborating too fully on the Fourth Amendment implications of emerging technology before its role in society has become clear. Prudence counsels caution before the facts in the instant case are used to establish far-reaching premises that define the existence, and extent, of privacy expectations enjoyed by employees when using employer-provided communication devices. A broad holding concerning employees' privacy expectations vis-a-vis employer-provided technological equipment might have implications for future cases that cannot be predicted. It is preferable to dispose of this case on narrower grounds.
Justice Antonin Scalia joined all but one part of the court's opinion, and additionally wrote a concurrence in part and in the judgment. Justice John Paul Stevens wrote a separate concurrence.

The case was brought by Ontario SWAT officer Jeff Quon after text messages on work-issued pager were searched during a department review. The police department had an official no-privacy policy, but a lieutenant announced an unauthorized informal policy of allowing some personal use of the pagers, which Quon utilized. After determining the current payment system was not efficient, the department ordered a review of the content of the text messages for the purpose of determining how many of the text messages were for business purposes. The search revealed Quon had sent personal messages to friends, as well as sexually explicit texts to both his wife and mistress. Quon then filed suit against the department claiming a violation of the Fourth Amendment under unreasonable searches.

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San Francisco board approves cell phone radiation ordinance
Hillary Stemple on June 17, 2010 10:15 AM ET

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[JURIST] The San Francisco Board of Supervisors [official website] on Tuesday voted to approve an ordinance [transcript] that would require retailers who sell cellular phones to display the varying amounts of radiation emitted by the different cell phone models. The ordinance passed by a vote of 10-1 and Mayor Gavin Newsom [official website], who helped sponsor the legislation, is expected to sign the ordinance into law after a 10 day comment period and final vote by the Board of Supervisors. Supporters of the legislation contend that it will help consumers make informed choices [LAT report] when purchasing cellular phones, while members of the cellular phone industry say the legislation will mislead the retail public into believing one product is safer than another. The safety of cellular phone radiation levels has been a topic of debate, and while San Francisco is the first to pass legislation on the issue, similar legislation has been considered by Maine and California [materials]. If the ordinance receives final approval as expected, it will go into effect early next year.

While cellular phone radiation emission levels have caused some concern, more legislative attention has been focused on banning cellular phone use while driving. Last month, UN Secretary General Ban Ki-moon [official website] called for a global ban on cell phone use [JURIST report] while driving. In October, Ontario enacted a law banning the use of handheld devices [JURIST report] while driving, joining other jurisdictions in Canada and the US to pass similar bans including Quebec, Nova Scotia, Newfoundland, Labrador, California, and New York. Earlier this October, US President Barack Obama signed [JURIST report] an executive order [text] making it illegal for federal employees or government contractors to use text messaging while driving.

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US federal court hears closing arguments in Proposition 8 case
Dwyer Arce on June 17, 2010 9:43 AM ET

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[JURIST] The US District Court for the Northern District of California [official website] on Wednesday heard closing arguments [transcript] in Perry v. Schwarzenegger [case materials], challenging the constitutionality of Proposition 8 [text; JURIST news archive]. During closing arguments, the attorneys for the plaintiffs argued that the state ban on same-sex marriage [JURIST news archive] violates the Equal Protection Clause and the Due Process Clause [Cornell LII backgrounders] of the 14th Amendment to the US Constitution [text]. Former solicitor general Ted Olson [professional profile], argued for the plaintiffs that denying same-sex couples the ability to marry denied them a fundamental constitutional right based solely on their sexual orientation. Olson argued that the court must therefor apply strict scrutiny [Cornell LII backgrounder], a standard of review that would require the defense to show a compelling interest in continuing the ban in order for it to be constitutional. In his argument, Olson stated:
This case is about marriage and equality. The fundamental constitutional right to marry has been taken away from the plaintiffs and tens of thousands of similarly-situated Californians. Their state has rewritten its constitution in order to place them into a special disfavored category where their most intimate personal relationships are not valid, not recognized, and second rate. Their state has stigmatized them as unworthy of marriage, different and less respected. ... It is the right of individuals, not an indulgence dispensed by the State of California, or any state, to favored classes of citizens which could ... be withdrawn[.]
In the closing arguments in defense of Proposition 8, former assistant attorney general Charles Cooper [professional profile] stressed the importance of the institution of marriage to society as a means to "responsible procreation." He argued that the standard of review applied by the court should be the lower standard of rational basis review [Cornell LII backgrounder], which he argued has been applied by nearly every federal court that had ruled on discrimination based on sexual orientation. He argued that under this standard the ban should be upheld, stating:
[T]he plaintiffs say ... there is no way to understand ... why anyone would support Proposition 8, why anyone would support the traditional definition of marriage except through some irrational and dark motivation, some animus, some kind of bigotry, your Honor. And that is not just a slur on 7 million Californians who supported Proposition 8. It's a slur on 70 of 108 judges who have upheld as constitutional and rational the decision of voters and legislatures to preserve the traditional definition of marriage. It denies the good faith of Congress -- not just these judges, of Congress -- of state legislature after state legislature and electorate after electorate.
Chief Judge Vaughn Walker is expected to issue his ruling within the next few weeks. Regardless of the outcome, the losing side is considered likely to appeal the ruling [NYT report] in the case.

The case began in January [JURIST report] with opening statements from lead attorneys and testimony from plaintiffs seeking the right to marry their same-sex partners. In October, Walker ruled that the case could be heard in federal court [JURIST report]. Walker has said the trial is necessary to ascertain the level of constitutional protection granted to same-sex couples. The lawsuit was filed [complaint text] in May 2009 after Proposition 8 was approved [JURIST report] by California voters in November 2008, overturning a decision [text; JURIST report] of the California Supreme Court [official website] finding that same-sex marriage must be allowed under the California Constitution [text]. Several jurisdictions in the US have legalized same-sex marriage. In March, the District of Columbia joined Vermont, New Hampshire, Iowa, Connecticut, Massachusetts [JURIST reports] and the Coquille Indian Tribe [OregonLive report], in legalizing same-sex marriage.

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Iceland parliament approves measures to protect press freedoms
Hillary Stemple on June 17, 2010 8:55 AM ET

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[JURIST] The Icelandic Parliament [official website, in Icelandic] on Wednesday voted 50-0 [vote count, in Icelandic] to pass sweeping media reform laws aimed at increasing protections for journalists and promoting freedom of speech and transparency in government. The Icelandic Modern Media Initiative (IMMI) [materials] was developed by lawmakers in conjunction with Wikileaks [advocacy website], a non-profit website focused on exposing corruption and unethical actions by governments and corporations. The measures were developed partially in response to Iceland's 2008 economic crisis [BBC backgrounder], where a close relationship between the government and the media has been blamed for a lack of warning about the impending crisis. Provisions in the bill include protection for anonymous sources, and protections against censorship and "libel tourism," and it is being touted as the strongest media protection law [Independent report] in any country. Iceland hopes that provisions in the new law prohibiting enforcement of judgments from other countries that violate the IMMI will encourage foreign news services to move their publication services to Iceland. Minor changes were made to the original draft of the bill [JURIST report] which was released in February, including adding additional responsibilities for the government [text, in Icelandic]. Under the final bill the government must perform a detailed analysis of the security surrounding data centers and they must also host an international conference to discuss the legal implications of increased Internet news reporting.

Iceland has historically been viewed as a country with strong protections for freedom of the press. That reputation took a hit in 2009, following the economic crisis, when it fell to ninth in the annual Worldwide Index of Freedom [press release] released by Reporters Without Borders (RWB) [advocacy website, in French]. Iceland had been ranked first in 2007 and 2008, and second in 2006 [JURIST reports].

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Switzerland parliament passes US banking treaty
Dwyer Arce on June 17, 2010 8:43 AM ET

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[JURIST] The Swiss Federal Assembly [official website] on Thursday gave final approval on an agreement [text, PDF] with the US that will allow Swiss bank UBS [corporate website; JURIST news archive] to disclose account information of clients suspected by the US government of tax evasion. The approval came at a conciliation meeting between the two houses of parliament at which the Swiss National Council [official website], the lower house of parliament, voted 81-63 [Bloomberg report] to drop its calls for a referendum [JURIST report] that would have delayed ratification of the treaty until some time in 2011. The agreement allows UBS to turn over information of 4,450 US clients to the US Internal Revenue Service (IRS) [official website] and may prevent the US Department of Justice (DOJ) [official website] from resuming a lawsuit against UBS in which it had sought the names of 52,000 UBS clients. The Swiss Federal Tax Administration [official website] has already sent the DOJ the information of 500 UBS clients [AP report] who signed waivers allowing the disclosure.

The National Council on Tuesday voted 81-61 to pass the treaty after rejecting it [JURIST report] last week. The tax conflict has already cost UBS $780 million in fines levied by the DOJ for its admitted assistance [BBC report] of US citizens in avoiding taxes. The agreement was before the parliament due to a court ruling in January, when the Swiss Federal Administrative Court [official website, in French] ruled [JURIST report] that an American taxpayer's financial information at UBS may not be disclosed to the IRS pursuant to an August 2009 agreement [JURIST report]. Also in January, the Federal Administrative Court ruled [JURIST report] that the Swiss Financial Market Supervisory Authority [official website, in German] violated the law in February 2009 when it ordered UBS to disclose information to the US on more than 250 of the bank's clients without the authority to do so. In September, the US and Switzerland signed a treaty [JURIST report] that would increase the amount of information shared between the two nations on would-be tax evaders. The agreement came one month after a Swiss banker and lawyer were indicted in US federal court [JURIST report] for helping clients hide assets. In March 2009, the Swiss announced their intention to adopt a more stringent definition [JURIST report] of tax evasion and to work with other countries to investigate such claims.

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Rights group urges Israel to end Palestine home demolitions
Erin Bock on June 17, 2010 7:12 AM ET

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[JURIST] Amnesty International (AI) [advocacy website] on Wednesday issued a report [text, PDF] urging the Israeli government to stop demolishing Palestinian homes [press release] found to be constructed illegally in the Occupied Palestinian Territories (OPT) [UN official profile]. AI cited incidents over the past five years where Israeli forces demolished Palestinian homes and schools, leaving more than 600 Palestinians homeless. The demolitions are carried out on structures found to be built in violation of Israeli law, which requires building permits for all new construction. According to the report, most Palestinians are denied building permits after lengthy application and appeals processes, while Israelis have little difficulty obtaining permits. As a result, Palestinians are forced to build without official permits. According to AI, the demolitions violate the International Covenant on Economic, Social and Cultural Rights (ICESCR) [text, PDF] that guarantees a right to housing without discrimination and the Fourth Geneva Convention [text] that prohibits destruction of property without military necessity:
The right to adequate housing is an essential component of the right to a decent standard of living. When fulfilled, it can provide a foundation on which other rights are better able to be realized...Violations of the right to adequate housing...are both a symptom of the wider human rights violations to which Palestinians are subject and a barrier to their achievement of other human rights.
According to the group, the UN has unsuccessfully called for Israel to put an end to the demolition practice on many occasions and estimates that some 4,800 demolition orders are pending.

Property rights have been an invariable point of contention between Israel and Palestine. In March UN Secretary-General Ban Ki-moon [official profile] called Israeli settlement construction in the West Bank "illegal" [JURIST report]. His statement came two weeks after Israel announced the construction of 1,600 new housing units in East Jerusalem, where Palestinians hope to establish the capital of their future state. Ban voiced his support for the proposed plan of Palestinian Authority Prime Minister Salam Fayyad [BBC profile] to build the institutions of an independent state by 2011 and called for the immediate resumption of peace talks to result in an independent Palestinian state within two years. Earlier that month, the Quartet on the Middle East, a group comprising the US, European Union, UN, and Russia, dedicated to mediating the Israeli-Palestinian peace process, urged the Israeli government to "freeze all settlement activity ... and to refrain from demolitions and evictions in East Jerusalem." Israeli Prime Minister Benjamin Netanyahu [official website] responded stating that construction in East Jerusalem would not be restricted despite international criticism and pressure from the US.

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

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