2006 International Law Update, Volume 12, Number 4 (April)

2006 International Law Update, Volume 12, Number 4 (April)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com. 

CHILD ABDUCTION

Fourth Circuit affirms district court’s finding that International Child Abduction Remedies Act (ICARA) does not confer jurisdiction upon federal courts to hear claims of access denials

Petitioner Sarah Claudia Aragon Cantor and Respondent Andrew Cohen married in April 1990 in Israel. During the marriage the couple had four children, R.C., A.C., I.C., and Y.C. On July 16, 1998, the couple divorced in an Israeli Rabbinical Court; it also decreed that respondent would take custody of A.C. and I.C. and petitioner would retain custody of Y.C. and R.C. Petitioner and respondent later agreed on placing the girls, R.C. and A.C., with the petitioner and the boys, I.C. and Y.C. with the respondent. On January 2, 2000, the Rabbinical Court handed down a modified divorce degree conforming to this agreement.

On July 9, 2002, the Court issued a third divorce decree providing that petitioner would retain custody over the two girls and respondent over the two boys. This decree also ruled that the two boys and A.C. should live with the respondent in Germany, where the U.S. Air Force had stationed him at the time. In December 2002, petitioner and respondent had talks about R.C.’s situation in Israel. As a result, the parties agreed that R.C. would move to Germany to live with respondent. The parties, however, could not agree on when R.C. should return to Israel.

On March 2, 2004, the USAF assigned respondent briefly to Qatar and then back to the U.S. At the end of his tour, respondent and the four children continued to live in the U.S. Petitioner, who was still living in Israel, filed with the Maryland federal court asking for the return of, and/or access to, the children. The court found that it lacked jurisdiction to hear petitioner’s access claims and dismissed that prong of the petition. The court then granted petitioner’s motion for final judgment and petitioner noted a timely appeal. Reviewing the case de novo, the Fourth Circuit affirms.

The petitioner argued that the plain language of 42 U.S.C. Section 11603(b) of the ICARA, which implements the Hague Convention on the Civil Aspects of International Child Abduction [T.I.A.S. 11670; in force for U.S. July 1, 1988], confers jurisdiction on federal courts to hear access claims. It states that: “[a]ny person seeking to initiate judicial proceedings under the Convention for the return of a child or for arrangements for organizing or securing the effective exercise of rights of access to a child may do so by commencing a civil action by filing a petition for relief sought in any court which has jurisdiction of such action and which is authorized to exercise its jurisdiction in the place where the child is located at the time the petition is filed.”

The Fourth Circuit disagrees with petitioner’s reading. It points out that the correct analysis does not begin with Section 11603 but with Section 11601, ICARA’s implementing language. Section 11601 does not mention visitation rights or access rights until the last subsection. Subsection (a)(4) prescribes that “[t]he Convention . . . establishes legal rights and procedures for the prompt return of the children who have been wrongfully removed or retained, as well as for securing the exercise of visitation rights.” Moreover, subsection (b)(4) provides that “the Convention and this chapter empower courts in the United States to determine only rights under the Convention and not the merits of any underlying child custody claims.”

Article 21 of the Hague Convention - - itself entitled “Rights of Access” - - allows for applications to “secure and organize” rights of access to the local Central Authority, in this case, the U.S. Department of State. This differs markedly from Article 12 of the Convention. This Article provides for the filing of judicial proceedings and grants judicial authority over wrongful removal or retention cases. The context makes it clear that the Convention does not empower the federal courts to exercise jurisdiction over access claims.

The Fourth Circuit further cites long established precedent that federal courts are courts of limited jurisdiction in family law matters. “With the exception of the limited matters of international child abduction or wrongful removal claims, which is expressly addressed by the Convention and ICARA, other child custody matters, including access claims, would be better handled by the state courts which have the experience to deal with this specific area of the law.” [Slip op. 8-9]

This does not leave the petitioner bereft of a remedy to enforce the exercise of her access rights, however, since the Convention does not preclude the petitioner from filing a claim for visitation rights in the appropriate state court under state family law.

Citation: Cantor v. Cohen, 442 F.3d 196 (4th Cir. 2006).

                                

EUROPEAN UNION LAW

Court of First Instance (CFI) holds that European Union can be liable for non-contractual damages caused by its institutions even in absence of unlawful conduct

The Agreement establishing the World Trade Organization (WTO) seeks to reduce customs, tariffs and other trade barriers among the contracting parties. The 1993 EU regulation dealing with the import of bananas contained preferential provisions for certain African, Caribbean and Pacific States. The WTO eventually held the EU banana regime incompatible with WTO trading rules. See 2000 International Law Update 191; 2001 International Law Update 62 & 108. The EU later revised its banana regime, but the U.S. still obtained WTO authorization to impose increased customs duties on EU products in the amount of $191.4 million per year. In June 2001, the U.S. suspended these duties.

Six EU companies (applicants) that export a variety of products, including the Italian battery manufacturer FIAMM, sued in the CFI claiming compensation from the EU Commission and the Council of the European Union for damages they had allegedly suffered because of the U.S.’s retaliatory action.

The Court first points out that the EU may incur non-contractual or tort liability for the unlawful conduct of its institutions (1) if the EU institutions’ conduct is unlawful, (2) if actual damage results, and (3) if a causal link exists between the institutions’ conduct and the damage. Here, however, the Court is unable to decide whether the Commission and the Council had acted unlawfully because they fall within the purview of the WTO regime. Thus, the CFI has to dismiss the applicants’ claims for damages.

The Court does hold, however, that the EU may incur liability even in the absence of unlawful action by its institutions. Where applicants cannot show that the EU institutions’ conduct is unlawful, companies that unduly suffer because of their conduct may obtain compensation if (1) actual damages occurs, (2) there is a causal link between the damage and the conduct of EU institutions, and (3) the damage is “unusual” and “special.”

Here, the CFI determines actual damages based on statistics that show a drop in the exports of the applicants’ products from the EU to the U.S. Furthermore, there is a causal link, because it was the Commission’s and the Council’s adoption of the banana regime that caused the U.S. to adopt retaliatory measures.

In the end, the Court dismisses the actions because the commercial damage suffered by the plaintiff companies was not unusual or special. To receive compensation, the damage would have to exceed the limits of the economic risks involved in such export activity. That is not the case here.

Citation: Judgments of Court of First Instance in cases T-69/00, T-151/00, T-301/00, T-320/00, T-383/00, T-135/01, FIAMM et FIAMM Technologies, No. 108/2005, 14 December 2005; Court of First Instance of European Communities, Press Release No 108/05, 14 December 2005, available, along with judgments, on the Court’s website “curia.eu.int”; 2006 Official Journal of European Union (C 48) 22, February 25, 2006.

EXTRADITION

Privy Council of United Kingdom upholds U.S.’s 1996 request for extradition of two alleged drug kingpins from Federation of St. Christopher and Nevis

Noel Heath and Glenroy Matthew (petitioners) are citizens of the Federation of St. Christopher and Nevis (the Federation). The U.S. government (respondent) wants them extradited for trial on serious drug charges. The U.S. charged both petitioners with having conspired to supply and import cocaine into the U.S. -- Heath into New York, Matthew into Florida.

The U.S. had requested the petitioners’ extradition as far back as May 1996. In June of that year, the Federation’s Minister of Foreign Affairs ordered Dr. Haynes Blackman, the senior magistrate of the relevant district at that time, to issue warrants for their arrest. The Extradition Act of 1870 governs extradition in the Federation and it was the magistrate’s duty to hear the case in the same manner as if the prisoner were charged with an indictable offence committed in England. If the evidence produced would justify the prisoner’s committal for trial, the magistrate is to commit him to prison. If not, he should set him free. After a hearing in August 1996, Dr. Blackman held that both petitioners fell into the latter class.

Although judicial review proceedings in April 1998 led to the quashing of those discharge orders by the High Court the petitioners have been at liberty ever since. The intervening years, however, have seen a whole series of proceedings. Nothing daunted, the petitioners have gone on resisting their extradition by all available means. After a series of drawn out procedural misadventures and corrections, complicated somewhat by the retirement of Magistrate Blackman, the petitioners brought their first appeal to the Privy Council.

They advanced four main contentions. First, they urged that the Minister of Foreign Affairs had no power to issue the requisitions to the magistrate on June 24, 1996. Secondly, they argued that the High Court was itself in error in ruling that the magistrate had taken a wrong approach to the evidence before him. (In particular this involved a holding that the transcripts of certain tape‑recorded telephone conversations, apparently implicating the petitioners in the alleged drug offenses, were inadmissible in the extradition proceedings).

Their third point was that section 14 of the Federation’s Constitution barred the United States’ judicial review challenge to the magistrate’s original discharge orders made under section 10 of the 1870 Act. Finally, petitioners complained that there had been such a long delay in the case as to amount to oppression and an abuse of process.

Having considered and rejected each of those submissions, the Board advised Her Majesty to dismiss the appeal and to remit the case to the High Court. Following the Board’s order of June 26, 2002, the petitioners promptly applied to the High Court for constitutional relief, alleging that because of the delay it would be unfair and oppressive to continue the extradition proceedings against them. The High Court joined that application with the remittal. After hearings in December 2002, March 2003 and April 2003, the High Court dismissed the constitutional application on July 9, 2003. It also entered a mandamus order to the senior magistrate of the relevant district “to resume the hearing of the extradition proceedings and commit [the petitioners] ... under the Extradition Act of 1870".

Again the petitioners appealed, this time to the Federation’s Court of Appeal. They put forward three main grounds of appeal: first, that the U.S.’s tape‑recorded phone conversations were inadmissible, second, that the delay was so substantial that the court ought to discontinue the proceedings and third, that the High Court had acted unconstitutionally in ordering the magistrate to commit the petitioners under section 10.

The Court spurned all three grounds and dismissed the appeal on October 21, 2003. On July 31, 2004, it granted final leave to appeal to the Privy Council. Upon consideration, the Council dismisses the appeal and orders the utmost speed in carrying out the final extradition proceedings.

“The principal argument which Queens Counsel now urges upon [us] is that the judge acted unlawfully in directing the magistrate to commit the [petitioners] under section 10 of the 1870 Act so that the Court of Appeal were wrong to have upheld that order. [Counsel] acknowledges that, at any further hearing, the magistrate would be bound by the Board’s earlier ruling as to the admissibility and sufficiency of the evidence adduced in the extradition proceedings by the respondent government.”

“[Counsel] advances essentially three reasons why the Board should nevertheless conclude that it was wrong to issue mandamus directing the magistrate to commit the [petitioners]. First, he submits that such an order would deny [them] the opportunity to call or give evidence should they wish to do so. Secondly, he contends that the new magistrate, ... would not have heard any evidence in the matter and could not therefore properly commit the [petitioners] under section 10. Thirdly, he indicates that the [petitioners’] wish to advance yet further arguments as to why it would be an abuse of process now to extradite them for trial in the U.S.” [¶ 13].

Their Lordships are unpersuaded on the first argument. “Critical to [counsel’s] argument is that the opportunity to give evidence had not already been accorded to these [petitioners] in the course of the original committal hearings before Dr. Blackman in August 1996. Is that, however, so? The record of those hearings must be examined. It reveals the following.”

“All three defendants were represented by Dr. Fenton Ramsahoye QC. The proceedings against Heath were heard first, the evidence in his case being adduced on 19 and 20 August. At the conclusion of that evidence the record reads: ‘Dr Ramsahoye QC: ‘we are not leading any evidence”’.

“Dr. Ramsahoye then addressed the Court, followed by counsel for the U.S. followed by Dr. Ramsahoye in reply. The Court then announced that it would give its decision at a later date and that the proceedings against Matthew and Miller [N. B. the latter voluntarily returned to the U.S. and was convicted.] would commence the following morning. The evidence against the defendants in that case was given on 22 and 23 August following which once again Dr Ramsahoye and counsel for the U.S.A. addressed the Court. Later, on 28 October 1996, Dr. Blackman gave his reserved judgment concluding that, in neither case, did the evidence adduced by the U.S.A. justify the defendants’ committal for trial.” [¶ 15].

“Having regard to those facts, their Lordships are wholly unpersuaded that, by the conclusion of the hearing on 23 August, the [petitioners] still retained any right to call or give evidence in the committal proceedings. ... It seems to the Board inconceivable that, had Dr Blackman eventually ruled (as it is now plain he should have done) the other way, it would then have been open to the [petitioners] to call evidence and have the whole case against them considered afresh.”

“Still less does it appear to their Lordships that there was any evidence then available to the [petitioners] which could possibly have refuted the prima facie case against them assuming that the transcripts of the intercepted telephone conversations had been held, as they should have been, admissible.” [¶¶ 15-17].

Petitioners also contended that the law required a remand to a new magistrate for a full hearing since Dr. Blackman has retired. “In their Lordships’ view there is nothing in this argument. They recognise that it was apparently by reference to Dr Blackman’s retirement that the Board thought it right on the 2002 appeal to remit the matter to the High Court to decide on the next step but their Lordships see no inconsistency between that order and the decision then taken by [the High Court] on the remittal to order the new magistrate to commit.”

“The position is no different from that which can arise on a prosecutor’s appeal by way of case stated from a decision of justices. If the Divisional Court conclude that the justices erred in law and that the only proper course open to them was to have convicted, they will send the case back to the justices with a direction to convict and it would be quite immaterial whether or not the constitution of the Bench had meantime changed.” [¶ 20].

The Privy Council next addresses two further arguments against extradition. “First the [petitioners] wish to contend yet again that the delay in their committal is such that it would now be an abuse of process to extradite them to the U.S.A.. Secondly they [point to their ] formal designation by the President of the United States on June 2, 2000 as “global drug traffickers” under the Foreign Narcotics Kingpin Designation Act , that they could not get a fair trial in the U.S.A.; there is, thus a real risk that they would suffer a flagrant denial of justice.”

Their Lordships conclude that these arguments fail on two grounds. First, assuming, as their Lordships would hold, that it was proper for [the High Court] on July 9, 2003, pursuant to the Board’s earlier judgment, to order the new magistrate to commit the [petitioners] to prison, it matters not whether grounds have subsequently arisen for contending that it would be oppressive or otherwise unfair now to extradite them. Following committal under section 10, it will be for the Minister then to decide whether to surrender them to the requesting state. No doubt it would be open to them to challenge the Minister’s decision by judicial review were there good grounds for doing so. That would not, however, invalidate the section 10 committal.” [¶¶ 22-23].

In addition, the Board rejects the contention based upon delay. “The longer the [petitioners] manage to draw out these proceedings, the longer the delay before they can eventually be extradited for trial. It by no means follows, however, that they can invoke this further delay to establish a case of hardship or oppression. In the first place it is they themselves who are largely responsible for it; ... it was Dr Ramsahoye’s arguments which surprisingly persuaded the magistrate that [the High Court’s] first order had failed to quash the original discharge orders.”

“As for the subsequent delay, this has resulted from the [petitioners’] relentless attempts to thwart the extradition process. Secondly, the [petitioners] can establish no convincing prejudice consequent upon the delay. They have, as stated, been at liberty ever since 28 October 1996. They can hardly complain ... of the sword of Damocles hanging over them. Nor are their Lordships persuaded by the argument that, had they been brought to trial with reasonable expedition, they would have avoided designation under the United States Kingpin legislation in June 2000: their own efforts would inevitably have delayed extradition beyond that date.” [¶ 24].

With respect to the designation issue, the Board sees no merit in it. “The evidence is that the President’s designation of these [petitioners] ... under the title ‘Foreign Narcotics Kingpin’ was announced in a press release on June 1, 2000, is contained in a U.S. Government public website, has been published by the press, and may well be published again in connection with their proposed trial. And this is so, [petitioners contend] despite specific provision being made in the legislation for a person’s name not to be disclosed if the U.S. Attorney General determines that such disclosure may jeopardise the integrity or success of an ongoing criminal prosecution. ... Put succinctly, it is [petitioners’] basic submission that the United States courts would be unable to safeguard the [petitioners] against the prejudicial effects of their designation.”

Their Lordships brand this as an “impossible” argument.“A convenient statement of [the controlling] principle in the specific context of extradition law is to be found in the Supreme Court of Canada. [That Court pointed out] in The Republic of Argentina v. Mellino [1987] 1 S.C.R. 536, 558 [that]: ‘Our courts must assume that [the defendant] will be given a fair trial in the foreign country. Matters of due process generally are to be left for the courts to determine at the trial there as they would be if he were to be tried here.”

“Attempts to pre‑empt decisions on such matters, whether arising through delay or otherwise, would directly conflict with the principles of comity on which extradition is based.” In their Lordships’ view, the evidence comes nowhere near establishing that the [petitioners] would be at risk of suffering a flagrant denial of justice were they to be extradited. Rather the United States courts must be trusted to secure them a fair trial.”

“In summary, their Lordships conclude that there is nothing in any of the grounds of appeal and no substantial reasons advanced why these extradition proceedings should not now be brought to a speedy and final conclusion. The appeal is dismissed with costs. ... These [petitioners] should be committed under section 10 without further delay.” [¶¶ 25-27].

Citation: Heath v. United States, 2005 WL 3299098 (Privy Council), [2005] U.K.P.C. 45.

MEDICAL NEGLIGENCE

Australian appellate court upholds $7 million judgment in medical malpractice action against hospital for failing to disseminate recent amendments to cancer treatment protocol by United States study group and against estate of treating specialist for his failure to seek out such information

Monique Frances King (plaintiff) was 13 years old in 1989 when she received treatment for cancer at the South Eastern Sydney Area Health Service (SAHS) which operated the Prince of Wales Children’s Hospital (defendant 1). Now 29 years old, she sued the SAHS and the estate of the late Professor Darcy O’Gorman-Hughes (defendant 2) for personal injuries suffered as a result of her treatments.

When a neurosurgeon had explored plaintiff’s spine, he discovered a highly malignant tumor surrounding the right C-7 nerve root. The surgeon removed as much of the tumor as he could reach. Plaintiff then came under the care of Dr. Hughes for cancer treatments.

One of the treatment modes was intraspinal chemotherapy. This consists of administering three agents: methotrexate (MTX), cytosine arabinoside (Ara‑C) and hydrocortisone. The medical profession generally refers to this procedure as “triple intrathecal therapy” or TIT whether or not three agents are involved. After this treatment plan went into effect, the plaintiff began on or about July 21,1989 to show symptoms of myelopathy (damage to her spinal cord); which eventually led to her quadriplegia.

The heart of plaintiff’s case was the charge that Dr. Hughes and the other pediatric oncologists at SAHS failed to live up to their professional duties to keep themselves informed as to recent U.S. developments in the management of the children’s cancer from which plaintiff suffered.

The defendants do not deny that the plaintiff’s quadriplegia resulted from the treatment she received. They blamed the combination of radiotherapy, the administration of Act‑D as part of the systemic chemotherapy, and TIT. They do deny that any breach of duty on their part relating to their treatment of the plaintiff was the cause of any compensable damage.

The evidence showed that Dr. Hughes took into account many published writings, plus his own substantial experience. The key issue in this case arose from the fact that his treatment plan rested in part on a protocol known in the U.S. as IRS‑II. In particular, Dr. Hughes followed the guidelines in the IRS‑II protocol in deciding to use TIT as part of the treatment plan. He also took those recommendations into account in deciding on the size and number of doses of MTX, Ara‑C and hydrocortisone to be given by way of TIT and of Act‑D to be administered by way of systemic chemotherapy.

A body called Intergroup Rhabdomyosarcoma Study Group (IRS Group) had published a relevant IRS‑II protocol (A rhabdomyosarcoma is a highly malignant tumor in children that typically occurs in the head and the neck.). The IRS Group mainly operates in the U.S.; it had regularly been carrying out studies of different types of treatment for malignant head tumors.

The protocol set forth the recommended dosages of chemotherapy agents and their frequency, and the amount of radiotherapy. An article in a medical journal suggested that patients had a substantially improved survival rate when treated with an intensive therapy which included TIT and that it might, with some modifications, also be of value in treating tumors in the spinal region.

The defendants had included TIT in the protocol specifically to prevent metastasis. They refer to it as “prophylactic” TIT. Physicians could also use TIT for “salvage” purposes, that is, to achieve survival in desperate cases. Prophylactic TIT was an experimental and controversial form of treatment. The defendants concede that it was radical.

Between 1984 and 1991, the IRS Group developed and put out a new protocol, known as IRS‑III, involving a different group of patients. On June 5, 1987, the Group published an important amendment to the protocol. This document dealt with the risk of neurological complications from combining radiotherapy with TIT.

Uncertain of what had caused these complications, the amendment advised (1) that physicians should cut back the doses of prophylactic intrathecal chemotherapy to levels now used for central nervous system (CNS) leukemia and (2) that they should strictly limit intrathecal therapy to 4 doses in 20 weeks. In addition, it advised that the ‘maximum’ tolerance dose of radiation to the spinal cord should not exceed 4140‑4200 cGy.

This information would have been of vital importance to the plaintiff. Her actual treatment differed substantially from that advised by the 1987 amendment to IRS‑III, and these differences lay at the heart of the respondent’s case. For example, the dosages of Ara‑C given to plaintiff were each of 70 mg. This was less than recommended by IRS‑II, but much more than the 30 mg advised by the amendment to IRS‑III.

Dr. Hughes died before the trial in 2000. Nevertheless, a number of documents in evidence clearly show that he claimed not to have been aware of the relevant amendment made to the IRS III protocol. Moreover, he had no direct association with the IRS Group. On the other hand, Dr. Leslie White, one of the other pediatric oncologists on the staff of the Prince of Wales Hospital, was a “corresponding member” of a Children’s Cancer Group in the United States, which itself belonged to the IRS Group.

In his trial testimony, Dr. White conceded that his membership was “for the hospital”. The minutes of the Group’s meetings were reaching him during the 1980s. He said that he usually saved these minutes as a useful source of general information. There was no restriction on sharing of the information he gained from the U.S. material, which included commentaries on the protocols. He admittedly was aware that defendant 2 had partially based his prescription for sarcoma patients on IRS‑II.

Dr. White turned over some documents he had received about a meeting of the Pediatric Oncology Group in Orlando, Florida, in April 1988. The minutes clearly informed any reader interested in the IRS‑II protocol that IRS III had taken its place and would have greatly reduced the quantities of chemicals given to plaintiff. The trial judge found in part that these doses and their frequencies of use had caused the plaintiff’s injuries.

In his judgment, the lower court had inferred from Dr. White’s evidence that he had failed to circulate the information in the Orlando minutes. “I would draw the same inference, as well as the further inference that it had not been circulated because the document had been a large one and Dr. White had not got around to reading it. Dr. White agreed that, had he been asked by Dr. Hughes whether he had any documentation in relation to the IRS‑II protocol, he would have searched through his documents and would have produced this document.” [¶ 23].

At the end of trial, the judge entered a $7 million judgment against the hospital defendant but not against the estate of Dr. Hughes. Both sides appealed. The Court of Appeal of the Supreme Court of New South Wales affirms the judgment against the hospital but also finds against the estate.

“An important issue resolved by the judge concerned the circumstances in which Professor O’Gorman‑Hughes was unaware of the 1987 amendment to the IRS protocol. A reference to this amendment had been published before the [plaintiff’s] treatment in a paper ... written by Frederick B. Ruymann, the Director of the Division of Hematology/Oncology at the Children’s Hospital in the Ohio State University School of Medicine. He was a member of the IRS Group Committee at the time.”

“The paper, which is said to have been written on behalf of the IRS Group, was included in a new medical journal, ‘Cancer in Children’, dated December 1987. The paper stated that brain stem dysfunction in a small number of patients had prompted the amendment, which reduced TIT and avoided simultaneous TIT and radiotherapy. It identified in detail the reduced TIT as being administered in weeks 0, 6, 12 and 20 and then stopped ....” [¶ 26]

“The [trial] judge described the medical journal in which this paper had been published as ‘obscure’ ... [and] not one Professor O’Gorman‑Hughes would have been expected to have seen. There was no evidence of any other published reference to the 1987 amendment to the IRS protocol prior to the respondent’s treatment. ... A more detailed article concerning the amendment was published in the ‘Cancer’ journal in 1992, after the [plaintiff] had received her treatment.”

“The [trial] judge held that it was entirely reasonable’ for Professor O’Gorman‑Hughes to expect that Dr. White would have been in a position to advise him of any relevant protocol changes which had occurred since IRS‑II, but that he had received no such advice from Dr. White.” [¶¶ 27-28].

The lower court found that Dr. Hughes’ ignorance of the amendment to the IRS [III] protocol did not result from negligence on his part. He concluded that Dr. Hughes had used a degree of diligence which would guarantee the prescription of treatment in accordance with the most current and considered guidelines available in the world.

The Court of Appeal first approves the finding of liability on the part of the hospital. “The judge held that Dr. White (for whose acts and omissions the hospital was vicariously responsible) had either failed to make himself aware of such information in the relevant Orlando document that the IRS protocol had been amended or he had failed to establish a system for the proper dissemination of such information throughout the department. That breach of his duty of care by Dr. White had materially contributed to the [plaintiff’s] quadriplegia.” [¶¶ 32-33].

“Dr. White was a pediatric oncologist in the pediatric oncology group. The clear inferences from all of the evidence are that he took part in at least the regular weekly meetings of that group, and that he knew that his colleagues in that group needed all of the relevant information he had gleaned from his overseas connections for the treatment of their patients, including Professor O’Gorman‑Hughes for the treatment of the respondent. Dr. White knew that Professor O’Gorman‑Hughes’s protocol was based in part on IRS‑II, and that studies of the IRS Group were regarded as being studies of importance.”

“When Dr. White did finally read the Orlando minutes, he realised the information they contained was significant to Professor O’Gorman‑Hughes’s treatment of the respondent, as he drew this information to the attention of the defendants’ legal advisers, and he agreed that, if he had been asked by Professor O’Gorman‑Hughes whether he had any information in relation to the IRS‑II protocol, he would have searched through his documents and would have produced these particular minutes; he also said that he would normally have circulated them when the document was received.” [¶ 38]

“In my opinion, all of this material justified the judge’s acceptance of a duty of care on the part of Dr. White in relation to the dissemination of the Orlando minutes to the members of the oncology department team. He did not find that Dr. White had a duty actively to seek out information from any particular overseas body; his implicit finding was merely that Dr. White had a duty to pass on information he had received from such bodies. I am not persuaded that the judge’s conclusion that Dr. White had been negligent was erroneous. I would reach the same conclusion as the judge did for myself.” [¶ 40].

The defendants next attack the judge’s finding that, if Dr. Hughes had found out about the amendment to the IRS III protocol, he would have sought advice from members of the IRS Group as to the problems they had encountered by way of highly undesirable side effects from the chemotherapy being administered under the protocol. “The [defendants] submit that the judge should have accepted the evidence of their witness, Dr. Kellie, that in Sydney and Melbourne, it was very rare in oncological circles to seek advice from overseas in the initial stages of treatment but relatively common to seek assistance from overseas if unusual side effects are encountered in the course of the treatment.” [¶ 41].

“The two situations are quite different. Where there has been no question of reliance on an overseas protocol involving a radical, experimental and controversial means of treatment, used rarely in the hospital, the practice described by Dr. Kellie may well be the usual one. In this case, however, the judge was fully entitled to conclude that Professor O’Gorman‑Hughes would have made inquiries once he knew that there had been an amendment to the IRS protocol on which he had in part relied in formulating his own protocol.” [¶ 42].

“It was open to the judge to conclude that the treatment based in part on the earlier IRS protocol would not have been administered if Professor O’Gorman‑Hughes had been made aware of the amendment. My own conclusion is that Professor O’Gorman‑Hughes, after making inquiries of members of the IRS Group or others in relation to the amendment, would have adopted the advice given by the amendment, and the respondent would not have been rendered quadriplegic by the treatment administered to her. That, as I understand the judgment, is the effect of what the judge held. There was no error made by him in doing so.” [¶ 47].

“The judge [also] held that Dr. White was negligent in failing either to make himself aware of the information in his possession relating to the amendment to the IRS protocol on which Professor O’Gorman‑Hughes relied or to establish a system for the proper dissemination of such information throughout the oncology department at the hospital. The judge then held that (1) the dosages and frequency of the chemotherapeutical agents administered by Professor O’Gorman‑Hughes at a higher level than those advised by the amendment to the IRS protocol had caused the respondent’s myelopathy and consequent quadriplegia, and (2) if Professor O’Gorman‑Hughes had known of the relevant amendment, he would have modified the regime he had prescribed for the respondent.” [¶ 50].

The appellate court, however, disagrees with the lower court as to the nonliability of Dr. Hughes. “I conclude that the system in place for sharing information in the oncology department of the hospital was insufficient for the treatment prescribed, that Professor O’Gorman‑Hughes was aware of the nature of the system in place, and that, by proceeding with the treatment of the respondent without ensuring that he had been placed in as good a position as if he had conducted a literature search and any necessary follow‑up inquiries himself, he failed in his duty to the respondent in the particular circumstances of this case to be in possession of all the necessary up‑to‑date information in relation to that treatment.”

“I am satisfied that, if Professor O’Gorman‑Hughes had performed that duty, he would have become aware of the 1987 amendment to the IRS protocol, and that he would have modified the regime he had prescribed for the respondent. As the excessive dosages of Ara‑C by way of TIT and their frequency associated with the radiotherapy contributed to the respondent’s myelopathy and thus her quadriplegia, causation is established as discussed earlier in this judgment.” [¶¶ 71-72]

Citation: South Eastern Sydney Area Health Service v. King, [2006] N.S.W.C.A. 2; 2006 WL 496074 (New South Wales Ct. App. 2006).

OFFICIAL IMMUNITY

Second Circuit affirms lower court’s decision granting summary judgment to defendant holding that U.S. doctrine of official immunity protects Northrop Grumman Information Technology’s (NGIT’s) discretionary reporting of adverse allegations about Irish plaintiffs to proper government agencies

In 1998, Congress enacted the Irish Peace Process Cultural and Training Program Act of 1998 (IPPCTP). It allows “young people from disadvantaged areas of [Ireland] suffering from sectarian violence and high structural employment to enter the United States for the purpose of developing job skills and conflict resolution abilities in a diverse, cooperative, peaceful, and prosperous environment, so that those young people can return to their homes better able to contribute toward economic regeneration and the Irish peace process.”

The Department of State (DOS) and the then-Immigration and Naturalization Service (INS) were to carry out the IPPCTP provisions. The regulations delegated the day-to-day operation of the plan to a Program Administrator (PA). Here, the PA is NGIT. Its duty is to identify job opportunities for program members and to recommend employers to take part in the program. The DOS has final authority to approve employers and to issue letters of certification to aliens chosen for the program. The PA would also make sure that the Irish youth meet program requirements and must report to the DOS and INS on key aspects of the program, such as a participant’s termination or withdrawal from the program.

In August 2001, James Murray and Ruth Gould (plaintiffs) came to the U.S. on nonimmigrant visas under the IPPCTP to work at “Kitty Hawk Kites” in North Carolina. After September 11, 2001, however, business dropped off and plaintiffs transferred to Las Vegas Airsports (LVA), a hang-gliding school in Las Vegas, Nevada owned by Steve Smith. NGIT checked with Smith to verify that LVA qualified for the program; it then recommended it to the DOS, which in turn approved LVA as an IPPCTP employer for plaintiffs.

Plaintiffs went to work at LVA in October 2001. In early December of 2001, the relationship between the plaintiffs and Smith began to deteriorate. They complained that Smith failed to pay them, that he demanded completion of assignments unrelated to their agreed-upon responsibilities, and that he exposed the plaintiffs to unnecessary hazards. On January 10, 2002, Smith stopped furnishing plaintiffs with work and did not respond to their attempts to contact him. Ten days later the plaintiffs contacted NGIT to voice their concerns about Smith; again on February 13, 2002 they also asked for a transfer to a different employer.

Smith in turn called NGIT and denied that plaintiffs ever worked for him. He alleged that both plaintiffs were working for many different employers, and that plaintiff Murray was getting his pilot’s license. NGIT asked Smith to put these claims in writing; he did so but also added that plaintiffs held views opposed to U.S. policy. Smith further urged NGIT to forward the information to the INS and the FBI. NGIT notified the DOS and INS. Within a few days, the INS took plaintiffs into custody. The INS later decided that plaintiffs were out of status with IPPCTP, because more than thirty days had passed since the end of their approved employment. At an immigration hearing requested by the INS on May 28, 2002, the tribunal ordered plaintiffs removed from the U.S.

Plaintiffs then sued NGIT for negligent misrepresentation, defamation, negligence, and breach of contract. A New York federal court gave summary judgment to NGIT. On appeal, the Second Circuit reviews the record de novo and affirms.

Plaintiffs’ claims largely rest on NGIT’s transmittal to the DOS and INS of Smith’s allegations that plaintiffs posed a possible terrorist threat. NGIT responds that the doctrine of official immunity protected this transmittal. “The doctrine of official immunity is designed to promote the effective administration of government affairs by ensuring that government officials are ‘free to exercise their duties unembarrassed by the fear of damage suits.’ Barr v. Matteo, 360 U.S. 564, 571 (1959) (plurality opinion).”

“As the Supreme Court has made clear, official immunity is not meant ‘to protect an erring official, but to insulate the decisionmaking process from the harassment of prospective litigation.’ Westfall v. Erwin, 484 U.S. 292, 295 (1988). The doctrine rests on the premise that the threat of damage suits might ‘appreciably inhibit the fearless, vigorous, and effective administration of policies of government.’ Barr, 360 U.S. at 571. Moreover, government can function more effectively and efficiently ‘if officials are freed of the costs of vexatious and often frivolous damages suits.’” [Slip op. 4]

Federal officials are entitled to absolute immunity from state tort liability when the acts are: (a) discretionary in nature and (b) fall within the scope of the officials’ duties. This two prong test is used in determining application of official immunity to non-governmental persons or entities.

In this case, NGIT as a private contractor, was administering a program under the U.S. immigration laws. It was hired to perform a governmental function and, in its official capacity, conveyed information with possible national security implications to the agency charged with its oversight. NGIT acted within the scope of its obligations to the DOS and INS as it was required by federal regulations to monitor and report on the IPPCTP and its participants. NGITs action in forwarding the information from Smith to the DOS and INS was within the parameters of its employment.

Furthermore, the regulations and the IPPCTP do not instruct NGIT, as Program Administrator, on how to handle allegations involving national security. NGIT’s decision to share the information with the DOS and INS immediately without further investigation was thus a discretionary act. “We recognize that absolute immunity comes at a price; it sometimes allows an ‘injured party with an otherwise meritorious tort claim [to be] denied compensation simply because he had the misfortune to be injured by’ an individual entitled to immunity. Westfall, 484 U.S. at 295.”

“For this reason, the Supreme Court has cautioned that immunity is appropriate only when ‘the contributions of immunity to effective government . . . outweigh the . . . harm to individual citizens.’” Doe v. McMillan, 412 U.S. 306, 320 (1973). The balance here tips strongly in favor of immunity. NGIT’s action in forwarding the information it received from Smith to the DOS and INS is precisely the type of discretionary action that sound public policy requires to be protected by official immunity.” [Slip op. 5]

The Court further explains that the public interest lies in ensuring that immigration law administrators feel free to convey information of this nature to the proper government agencies. “The threat of damage suits arising from the transmittal of such information would deter a company in NGIT’s position from promptly sharing that information with government agencies. The incentives should be the other way: to encourage administrators like NGIT to pass along sensitive allegations promptly to the overseeing federal agencies, which are in the better position to investigate and act on the information. We therefore find that applying immunity in this circumstance is consistent both with protecting ‘officials who are required to exercise their discretion’ and promoting the ‘public interest in encouraging the vigorous exercise of official authority.’ Butz v. Economou, 438 U.S. 478, 506 (1978).” [Slip op. 5-6]

Citation: Murray v. Northrop Grumman Information Technology, Inc., No. 04-5097-cv, 2006 WL 905903 (2d Cir. April 10, 2006).

PATENTS

Federal Circuit concludes that, under 28 U.S.C. Section 1498, United States is liable for use of method patent only when it practices each and every step of patented process within its territory

The U.S. government contracted with Lockheed Martin Corporation (Lockheed) to design and build the F-22 fighter. Lockheed subcontracted for two types of silicide fiber products, (1) a pre-impregnated material made from Nicalon Silicon carbide fibers, and (2) silicide fiber made from Tyranno fibers. A factory in Japan partially carbonizes the Nicalon silicon carbide fibers and makes it into sheets which it then imports into the U.S. The Japanese are the sole makers of the raw Tyranno fibers but a U.S. company locally turns them into silicide fiber mats.

The Zoltek Corporation (plaintiff) is the assignee of U.S. Reissue Patent No. 34, 162 (the Re ’162 patent). The patent claims certain methods of manufacturing carbon fiber sheets with controlled surface electrical resistivity. Plaintiff brought suit against the U.S. in the Court of Federal Claims under Section 1498(a), alleging that the U.S. and Lockheed used the methods claimed in the Re ’162 patent for the F-22 without paying the owner thereof.

Section 1498 (a) states, in relevant part: “Whenever an invention described in and covered by a patent of the United States is used ... by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture ...”

The government moved for partial summary judgment. It contended that 28 U.S.C. Section 1498(c)(2000) barred plaintiff’s Section 1498(a) claims because they arose in Japan. Section 1498(c) limits the scope of claims under Section 1498(a) by disallowing “claim[s] arising in a foreign country”. The trial court denied the motion. Though it agreed that Section 1498(c) did block plaintiff’s claims under Section 1498(a), the court directed plaintiff to amend its complaint to allege an uncompensated taking under the Fifth Amendment.

Both sides sought permission to lodge an interlocutory appeal. The U.S. Court of Appeals for the Federal Circuit accepts the appeals. The Court affirms the trial court’s ruling that Section 1498(a) does preclude the infringement allegations On the other hand, it reverses and remands because the lower court had erred in holding that plaintiff could allege patent infringement as a Fifth Amendment taking.

As a sovereign, the federal government is ordinarily immune from any legal action though Congress can waive this immunity under certain specified conditions and limitations. In this case, though subsection (a) of Section 1498 does allow judicial recourse against the federal government for patent infringement, subsection (c) curtails this waiver.

“This court has held that ‘direct infringement under section 271(a) is a necessary predicate for government liability under section 1498.’ NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1316 (Fed. Cir. 2005) ... We have further held that ‘a process cannot be used ‘within’ the United States as required by section 271(a) unless each of the steps is performed within this country.’ Id. at 1318. Consequently, where, as here, not all steps of a patented process have been performed in the United States, government liability does not exist pursuant to section 1498(a).” [Slip op. 3-4]

In a concurring opinion, Judge Arthur Gajarsa further explains that the issue revolves around whether plaintiff’s infringement claims do “arise” in a foreign country under Section 1498(c). Though Section 1498(c) does curtail the waiver of sovereign immunity, “[t]he question here is the extent of this curtailment when the government practices a patented process having multiple steps.” [Slip op. 13] As to the plaintiff’s Nicalon fiber allegations, a Japanese maker carried out all the steps of this process patent abroad. As such, the claim “arises in a foreign country” and Section 1498(c) bars the action.

With respect to the Tyranno fiber products, an overseas factory made the fibers but a U.S. company finalized the product in the United States. Even though the allegedly infringing conduct did not entirely take place within national boundaries, the courts interpret the phrase “claims arising abroad” expansively, thus “capturing any claim that does not arise entirely through domestic infringing conduct. In doing so, I reject any contention that the analysis depends on where any individual step of the claimed method was practiced.” [Slip op. 16]

“In sum, the infringing use of a patented method under Section 1498(a) consists of practicing all steps in the claimed method. Because the injury from infringement is intangible and not amenable to geographical reference, the cause of action cannot be said to arise where injury is suffered, and the Section 2680(k) cases are of limited value in interpreting Section 1498(c). I would thus look to where the infringing conduct occurred to ascertain where the claim arises.”

“In the first analysis, no particular step has primacy. But since a court must give the sovereign immunity waiver at Section 1498 a narrow construction, I must view the exclusion at Section 1498(c) broadly and resolve ambiguity in favor of immunity. For that reason, Section 1498(c) precludes an action premised on infringing use of a method claim if some steps of the method are practiced abroad. Since [plaintiff’s ]Tyranno product claims fall within this construction, they are barred. Thus, the trial court properly concluded that it lacked jurisdiction over those infringement allegations.” [Slip op. 19]

Citation: Zoltek Corp. v. United States, No. 04-5100 , 2006 WL 827304 (Fed. Cir. March 31, 2006).

FOREIGN SOVEREIGN IMMUNITY

In challenge to criminal restraining order against foundation which is allegedly supporting terrorism, Fifth Circuit finds that Foreign Sovereign Immunities Act (FSIA) provisions do not trump criminal forfeiture statutes

In July 2004, the United States filed an indictment, charging the “Holy Land Foundation For Relief and Development” (HLF), inter alia, with materially supporting a terrorist organization. Some have described the HLF as the American fundraising arm of Hamas. A Texas district court issued an ex parte restraining order, indefinitely freezing HLF’s assets looking toward their forfeiture.

David Strachman (plaintiff) is administering the estate of two terrorism victims, Yaron and Efrat Ungar. The Ungars were U.S. citizens who died in a Hamas terrorist attack in 1996. Plaintiff filed an unsuccessful challenge to the district court’s restraining order. In February 2004, Strachman and other plaintiffs had obtained a default judgment for more than $116 million against Hamas in Rhode Island. The assets have allegedly been levied upon based on writs of execution issued by other district courts to satisfy a $116 million judgment against HLF.

Plaintiff claimed that Section 201(a) of TRIA permits attachments and executions “notwithstanding any other provisions of law,” and that the legislative purpose of TRIA should trump any forfeiture provisions. This subsection of TRIA provides: “Notwithstanding any other provision of law, . . . any property with respect to which financial transactions are prohibited or regulated pursuant to section 5(b) of the Trading with the Enemy Act, section 620(a) of the Foreign Assistance Act of 1961, sections 202 and 203 of the International Emergency Economic Powers Act, or any other proclamation, order, regulation, or license issued pursuant thereto, shall be subject to execution or attachment in aid of execution of any judgment relating to a claim for which a foreign state (including any agency or instrumentality of such state) claiming such property is not immune under section 1605(a)(7)[FSIA].”

Plaintiff appealed the restraining order against HLF, arguing that the Texas district court lacked jurisdiction to issue the order. In particular, plaintiff maintained that Section 201(a) - the attachment provision of the Terrorism Risk Insurance Act of 2002 (TRIA) - overrides criminal forfeiture provisions. The Fifth Circuit disagrees but vacates, and remands to the district court for lack of compliance with the notice requirement of Fed.R.Civ.Proc. 65(a)(1).

“The purpose of the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. Sections 1330, 1602-11, is to set forth principles by which a federal court decides a foreign state’s claim that its property is immune from jurisdiction. ... 28 U.S.C. Section 1602 (‘Claims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in this chapter.’). Subject to certain international agreements involving the United States, a foreign state’s property in the United States is immune from attachment arrest and execution except as provided in 28 U.S.C. Sections 1610 and 1611.”

“The TRIA amended Section 1610 of the FSIA, which is titled ‘Exceptions to the immunity from attachment or execution’ to make available assets that might otherwise be immune from execution. The TRIA’s legislative history clarifies that the purpose of Section 1610(f)(1)(A) is ‘to strip a terrorist state of its immunity from execution or attachment in aid of execution.’ 148 Cong. Rec. S11528 (daily ed. Nov. 19, 2002) (statement of Sen. Harkin) [Cite]. Thus, the purpose of Section 1610(f)(1)(A) appears to be to provide a general exception to a foreign state’s immunity from execution and attachment. See TRIA, Pub. L. No. 107-297, Title II, section 201(a), 116 Stat. 2322, 2337 (2002) (where the general nature of section 201(a) is emphasized as follows: ‘In General. Notwithstanding any other provision of law . . . .’).”

“We conclude that the ‘notwithstanding’ language relied on by the Ungars appears to target statutory immunities to execution. The criminal forfeiture statute does not immunize HLF bank accounts from writs of execution. The challenged restraining order freezes and preserves the accounts until the claims to them can be prioritized in ancillary proceedings. The TRIA does not address these circumstances. Because the issues at bar do not involve a foreign state’s or terrorist party’s FSIA immunity from execution, we find no basis to conclude that Section 1610(f)(1)(A) preempts, trumps, or otherwise interferes with the operation of 21 U.S.C. Section 853 criminal forfeiture provisions.” [Slip op. 10-11]

Citation: United States v. Holy Land Foundation for Relief and Development, No. 04-11282, 2006 WL 853334 (5th Cir. April 4, 2006).

WORLD TRADE ORGANIZATION

WTO upholds U.S. efforts to comply with tribunal recommendations in U.S.-Canadian Softwood Lumber Dispute

A Panel of the World Trade Organization (WTO) has issued its Report in the U.S.-Canadian Softwood Lumber dispute after Canada claimed that the U.S. had failed to implement earlier WTO Reports. This is a proceeding under Article 21.5 of the Dispute Settlement Understanding, providing for a review of whether governmental measures taken after WTO review comply with WTO trading rules.

This dispute goes back to 2001, when the U.S. Department of Commerce (DOC) began an anti-dumping investigation which resulted in duties on the six largest Canadian exporters of softwood lumber.

In the original investigation, the DOC calculated a weighted average normal value and export price for each product type, and then aggregated the results to produce one single margin of dumping for the product under investigation for each investigated exporter. In the process of aggregation, the DOC assigned a value of ‘zero’ as the amount of dumping where the weighted average export price was more than the weighted average normal value.

Where the weighted average export price was less than the weighted normal value, however, the DOC arrived at a weighted average margin of dumping. This process of assigning a zero value as the amount of dumping for individual product type comparisons is known as “zeroing.”

In 2004, a WTO Panel found that the DOC had failed to comply with Article 2.4.2 of the Anti-Dumping Agreement (ADA). See 2004 International Law Update 59. This Article provides in part that “the existence of margins of dumping during the investigation phase shall normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions or by a comparison of normal value and export prices on a transaction-to-transaction basis. ...”

The WTO Appellate Body largely upheld the Panel Report. See 2004 International Law Update 127. In particular, it approved the Panel’s finding that the DOC’s “zeroing” methodology to determine the existence of dumping margins was inconsistent with the ADA.

In May 2005, the DOC issued a Notice of Determination Under Section 129(b)(2) of the Uruguay Agreements Act (URAA) [19 U.S.C. Section 3538(b)(2)]. The Act provides for administrative action to follow up on compliance with WTO Panel and Appellate Body reports. This Notice explains that the DOC has calculated new rates to carry out WTO recommendations.

Specifically, the DOC matched individual sales of Canadian lumber in the U.S. (export transactions) with individual sales of Canadian lumber in Canada (normal value transactions or NVTs), and then compared the price of each export transaction with the price of an NVT. Where the normal value exceeded the export price, the DOC calculated a final margin of dumping. The DOC did not take into account instances where the export transactions exceeded the NVT. Thus, the DOC did not offset amounts from non-dumped transactions against the amounts of the dumped transactions.

Canada objected to the U.S.’s efforts to comply with the WTO’s advice. In May 2005, it requested the present Article 21.5 review. It asked the Panel to decide whether, in its Section 129 proceeding, it was proper for the DOC to sum up only the amounts of dumped transactions, or whether the DOC had to offset the amounts from non-dumped transactions.

The Panel now rules that the DOC’s determination did not clash with the ADA. Thus, the U.S. has properly implemented the recommendations and rulings of the Dispute Settlement Body.

Citation: United States- Final Dumping Determination on Softwood Lumber from Canada - Recourse to Article 21.5 of DSU by Canada (WT/DS264/RW) (3 April 2006); 70 Federal Register 22636 (May 2, 2005).

United Kingdom’s new terrorism law enters into force. As of March 30, 2006, the United Kingdom has put into effect a new law to combat terrorism, the Terrorism Act of 2006. It prohibits, inter alia, (1) the fostering of terrorism through statements and publications; (2) the circulation of terrorist publications; (3) the making and possession of terrorist devices or materials; and (4) trespasses on nuclear sites. It also provides penalties for possessing material, including nuclear material, for terrorist purposes. The July 7, 2005 bomb attacks in London had motivated the passage of the Act. Citation: Terrorism Act of 2006, available through website of the United Kingdom Office of Public Sector Information, www.opsi.gov.uk/ACTS/acts2006.htm; BBC News report of 13 April 2006, 10:48 GMT.

China substantially overhauls securities laws. Effective January 1, 2006, the People’s Republic of China has made many basic changes in its statute regulating securities. The New Securities Law (NSL) has revised about 40% of the original provisions and contains amendments to more than 100 articles. Among the main topics addressed are the following. The NSL defines what constitutes a “public offering” under Chinese law. While not accurately defining “securities,” the NSL seems to widen the scope of the regulations to include government bonds, investment fund units and securities-related derivatives. The new statute also sets a three-month time limit for the China Securities Regulatory Commission (CSRC) to decide whether or not to approve issuance applications as well as a six-month period to allow the government to rule on the establishment of securities companies. The NSL substantially changes the administration of securities listings and relaxes the criteria for listing both stocks and corporate bonds on stock exchanges. The NSL increases the protections for small shareholders and imposes stricter rules on the liabilities of directors. Finally, it increases the powers of the SCRC to deal with illegal activity such as stock manipulations or insider trading. Citation: Memorandum on China: Fundamental Changes of the 2006 PRC Securities Law by Angela Wang & Co., Solicitors, of Hong Kong and Shanghai, March 20, 2006; for full text see http://www. mondaq.com.

U.S. bans doing business with Hamas-led Palestinian Authority. The U.S. Treasury has prohibited U.S. companies from doing business with the Palestinian Authority, now controlled by Hamas. This is a militant Islamist Group classified by the U.S. as a terrorist entity. The Treasury has found that Hamas has a property interest in the Palestinian Authority. - The U.S. and the European Union have already cut off any government aid to the Palestinian Authority when Hamas came into power on March 30, 2006. Citation: BBC News reports of April 14, 2006, 17:27 GMT & 18:21 GMT; euobserver.com press release of April 7, 2006, 17:42 CET; “Israel Serves (sic) Ties with Hamas-Led Palestinian Authority,” Voice of America report of 09 April 2006.

U.S. revises sanctions against Burma. On August 16, 2005, the U.S. Office of Foreign Assets Control (OFAC) issued an interim final rule designed to revise the Burmese Sanctions Regulations (BSRs). Burma has been subject to sanctions since 1997, but the passage of the Burmese Freedom and Democracy Act of 2003 (BFDA), combined with President Bush’s Executive Order of July 28, 2003, caused far-reaching revisions of Burmese sanctions. OFAC then reissued the whole set of BSRs. They have continued the ban on all new direct investment in Burma by U.S. persons, such as contracts for the development of resources (including natural, agricultural, commercial, financial, industrial, and human resources). Unlike other sanctions programs, however, the BSRs itemize certain types of prohibited indirect investments. The BSRs also ban the importation of most products from Burma. The only direct controls on U.S. exports to Burma pertain to specific restrictions on the exportation of financial services, broadly defined. The BSRs allow all other exports to Burma as long as they do not involve the financial services ban. Moreover, U.S. financial institutions can operate limited accounts for individuals in Burma, unless those persons are on the Specially Designated Nationals and Blocked Persons (SDN) list. Citation: Based on Article by Leigh Hansson and William Pomeranz, Originally published in Export, Customs & Trade Sentinel, Volume II, Number 4, Fall, 2005.

Japan and U.S. agree to intensify protection of intellectual property. On March 30, 2006, the United States and Japan pledged to cooperate more closely to protect and enforce the intellectual property rights of their citizens. The U.S. Commerce Secretary and the Japanese Minister of Economy, Trade and Industry announced that the two nations have agreed to step up the exchange of information, the sharing of resources, the streamlining of patent procedures and the support of small and medium‑sized businesses. Washington estimates that violations of intellectual property rights cost American businesses about $250 billion a year and lost hundreds of thousands of U.S. jobs. “This isn’t only an economic problem,” the U.S. Secretary also observed, “it’s also a problem of health and safety,” referring to phony medicines and counterfeit car parts that he said endangered lives around the world. Under the plan, both representatives pledged that Japan and the U.S. will coordinate their efforts to address rights violations in third countries and to harmonize patent laws. Before arriving in Tokyo, the U.S. secretary had visited Beijing. There he had met with the head of China’s State Intellectual Property Office, the agency assigned to enforce patents and copyrights. No details of those talks were made public, but the Secretary seemed to imply that he had discussed the problems created by widespread product piracy in China. Citation: The Associated Press (online), Tokyo, Thursday, March 30, 2006 at 8:55 a.m. (byline of Hiroko Tabuchi).

Colombia and U.S. sign agreement to protect Colombian archaeological heritage. On March 15 in Bogota, U.S. and Colombian officials signed a Memorandum of Understanding (MOU) entitled “Imposition of Import Restrictions on Archaeological Material from the Pre-Columbian Cultures and Certain Ecclesiastical Ethnological Material from the Colonial Period of Colombia.” This bilateral agreement responds to a request submitted to the U.S. Department of State by the Government of Colombia for assistance under the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property [823 U.N.T.S. 231; in effect for U.S. December 2, 1983] to which both the U.S. and Colombia are parties. The MOU will bring new import restrictions into force. It will be supported through the collaboration of both governments through scholarly exchanges, research, technical assistance, and the promotion of education to appreciate, preserve and protect the cultural patrimony of Colombia which extends from about 1500 B.C. to 1830 A.D. Citation: Media Note 2006/275, U.S. State Department, Office of Spokesman, Washington, D. C. Friday, March 17, 2006 at 1:34 p.m.