Showing posts with label legal news. Show all posts
Showing posts with label legal news. Show all posts

Tuesday, March 27, 2018

Cambridge Analytica accused of violating election laws

Government watchdog group Common Cause [advocacy website] filed a pair of legal complaints [complaints, PDF] on Monday accusing Cambridge Analytica LTD and its affiliates of violating federal election laws that prohibit foreigners from participating in the decision-making process of US political campaigns.


Filed with the Federal Election Commission (FEC) and the Department of Justice [official websites], Common Cause names multiple other defendants including parent company SCL Group Limited [corporate website], former CEO Alexander Nix, SCL co-founder Nigel Oakes, acting CEO Alexander Tayler and former employee Christopher Wylie. All defendants are non-US citizens.


Cambridge Analytica has been criticized recently for allegedly harvesting personal data of more than 50 million Facebook users without their permission.


According to FEC data, the Trump campaign paid Cambridge Analytica almost $6 million for services during the election cycle. Acting CEO Alexander Tayler has stated [press release] that "we in no way resemble the politically-motivated and unethical company that some have sought to portray."


Cambridge Analytica has denied [press release] any wrongdoing based on these allegations, claiming they only use the social media platform for outward marketing.


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Saturday, March 24, 2018

UK appeals court rules electronically transmitted software not a 'good'

The UK Court of Appeal [official website] ruled this week that software is not a good, overruling[opinion] the lower court opinion.


The issue on appeal was whether the sale of a license to use software counts as a "sale of goods" under the UK's commercial regulations. The court ruled that it did not, as the software was given to the buyer electronically and not on a "tangible medium."


The court cited the Consumer Rights Act of 2015[text], which defines goods as "tangible moveable items." Therefore, intellectual property rules apply to the sale of the license instead.


Recent innovations in software raise new challenges for the judiciary. Earlier this month John Buckleton of New Zealand's Institute of Environmental Science and Research discussed [JURIST op-ed] the future of DNA software in the courtroom. Last April the European Court ruled [JURIST report] that the sale of software that makes piracy easier may violate copyright law. Last January the EPA claimed [JURIST report] Fiat Chrysler failed to disclose engine software that increased pollutants.


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Monday, March 5, 2018

Supreme Court decides appropriate standard of review for 'insider' status

The US Supreme Court [official website] ruled [opinion, PDF] unanimously Monday in US Bank National Association v. Village at Lakeridge[SCOTUSblog materials] that the correct standard of review for determining whether an individual is an "insider" for bankruptcy proceeding purposes is clear error.


The case involves a purchase of a claim against a debtor, Robert Rabkin, who had a romantic relationship with the principal individual of the bankrupt, Kathleen Bartlett, at the time of the transaction. The Bankruptcy Code [text] identifies groups of creditors (e.g. relatives, partners, officers, directors) as "insiders" [definitions] with whom the insolvent bankrupt may partake in transactions that favor those insiders and by extension, disadvantage other, less-favored creditors. Here, the bankruptcy court [materials] determined that the romantic relationship with Bartlett was not enough to make Rabkin an enumerated insider. The US Court of Appeals for the Ninth Circuit [official website] affirmed [opinion, PDF] the bankruptcy court, ruling that the review of the bankruptcy court's definition of "non-statutory insider" is a purely factual question.


The Supreme Court ultimately agreed with the Ninth Circuit's standard of review, finding that this case centered around what kind of "mixed question" of law and fact and the appropriate standard of review for a mixed question "depends on whether answering it entails primarily legal or factual work." The court found that the determination of whether Rabkin was an insider was primarily a factual question, because it depends upon whether the transaction was conducted at arms length.


Justice Elena Kagan wrote:


This [question] is about as factual sounding as any mixed question gets. Such an inquiry primarily belongs in the court that has presided over the presentation of evidence, that has heard all the witnesses, and that has both the closest and deepest understanding of the record-i.e., the bankruptcy court. One can arrive at the same point by asking how much legal work applying the arm's-length test requires. It is precious little-as shown by judicial opinions applying the familiar legal term without further elaboration. Appellate review of the arm's-length issue-even if conduct de novo-will not much clarify legal principles or provide guidance to other courts resolving other disputes. The issue is therefore one that primarily rests with a bankruptcy court, subject only to review for clear error.

The court, however, refused to rule on whether the correct legal standard was chosen to decide if someone is an insider. Rather the court used the Ninth Circuit's two-part test in deciding the correct standard of review.

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Thursday, February 22, 2018

Supreme Court hears oral arguments in two criminal procedure cases

The US Supreme Court [official website] on Wednesday heard oral arguments in two criminal procedure cases.


In Rosales-Mireles v. US [transcript, PDF], the petitioner framed the question for the court as: "How should a court of appeals exercise its discretion when confronted with an obvious guidelines error that probably results in a defendant serving a longer prison sentence?" Rosales-Mireles pleaded guilty [SCOTUSblog report] to illegal re-entry, and the district court sentenced him to 78 months in prison based on the probation officer's erroneous conviction count, which caused the potential sentence to jump from 70-87 months to 77-96 months. Once Rosales-Mireles became aware of the error, he appealed. On appeal under Federal Rules of Civil Procedure 52(b) [text, PDF], Rosales-Mireles was required to show that the district court's sentence showed a "plain error," which "seriously affects the fairness, integrity or public reputation of judicial proceedings."


The court pressed the petitioner to justify overturning a case as this, where the error resulted in a longer sentence but only as to a matter of additional months, not several years. Further, the court raised the issue that neither Rosales-Mireles nor his attorney discovered the error at sentencing and the error could have been corrected if they did.


The second case, Dahda v. US [transcript, PDF], asks the court whether evidence gathered from improper wiretapping should be excluded according to Title III of the Omnibus Crime Control and Safe Streets Act of 1968 [text].


At the Kansas district court, the court found [SCOTUSblog report] the police wiretapped an area much broader than that permitted but the court still allowed the prosecution to present the evidence. Under Title III, the evidence is suppressible when the wiretap is "insufficient on its face." The Supreme Court thus is left to interpret the meaning of "insufficient" as it relates to the wiretap order.


Dahda argued that "insufficient" means the order did not comply with Title III requirements, stating:


We think that an order is insufficient on its face if the failure to comply with the requirements of Title III is evident from the four corners of the order itself. And the government now concedes that, under such a standard, the orders here would be invalid because each of the orders here contained jurisdictional provisions that went too far, that went beyond the power of the district court to authorize.



The government argued that the order is not insufficient because "insufficient" necessarily requires a lack of information or detail and the order gave too much authority. The court, however, pressed the government to explain how the order was sufficient even though it did not detail the jurisdiction the police could wiretap. In response, the government argued Title III does not require the government to state where in the jurisdiction the wiretap is authorized.

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Tuesday, February 13, 2018

FTC sues dental supply companies over consumer protection law violations

The US Federal Trade Commission (FTC) [official website] announced [press release] Monday that it has filed a complaint against the three biggest dental supply companies, "alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners."


The dental supply companies, Benco, Henry Schein and Patterson, are full-service dental distributors, supplying a range of equipment from gloves and cement to dental chairs and lights. The complaint accuses the companies of participating in an agreement "to deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors." Essentially, the distributors agreed to refuse to compete and offer discounts to buying groups, thus greatly disadvantaging solo and small groups of dentists.


The FTC charges the companies of violating Section 5 of the FTC Act [text], which prohibits unfair methods of competition. Benco is also charged with "invitation to collude" under Section 5 because the company is believed to have invited a fourth distributor to join the agreement. As of now, the administrative trial is set for October.

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Monday, February 12, 2018

Germany court rules Facebook personal data usage illegal

A German consumer group said [press release, in German] Monday that the Berlin Regional Court [official website, in German] ruled [judgment, PDF, in German] that Facebook's use of personal data was illegal because it did not adequately secure the informed consent of its users.


The Federation of German Consumers Organisation(vzbv) [advocacy website], which brought the suit, stated that Facebook's default settings and some of its terms of service were in breach of consumer law by denying consumers of a "meaningful choice." The Federal Data Protection Act [text, PDF] permits personal information to be recorded and used by a company only with explicit agreement from the individual.


According to Heiko Duenkel, litigation policy officer, "Facebook hides default settings that are not privacy-friendly in its privacy center and does not provide sufficient information about it when users register." The main issues brought were regarding how it tracks which sites sites its users access; its app, which had a pre-activated service that revealed an user's location to the person they chatted with; and default settings permitted search engines to link to the user's timeline making it easier to find an user's profile.


In accordance, the court found that the default settings were invalid as declarations of consent and eight clauses in the terms of service were declared invalid, such as the terms allowing Facebook to transmit data to the US and use personal data for commercial purposes and the "authentic name" policy which required users to use their real names. Additionally, the court held that Facebook needed to obtain explicit consent from its members before using their names and profile pictures in com mercialand sponsored materials.


Facebook plans to appeal, stating that it has made significant changes to its terms of service and data protection guidelines since the case was originally brought, and will be in accordance with the General Data Protection Regulation [text], which provides significant changes [text] in privacy laws.


vzbv also plans to appeal to the Berlin Court of Appeal [official website] on claims that were rejected.


Facebook in the past has faced various complications with its services and privacy concerns in Germany. In 2016, the Dusseldorf district court [official website, in German] ruled against the use of Facebook's "like" button on an online shopping site, finding that consent from customers is required before transmission of their identities to Facebook. That same year, a federal court ruled that Facebook's "friend finder" feature constituted as advertising harassment.



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