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September 2008 Archives

Courts: Ohio Early Voting OK

Federal and state courts in Ohio on Monday issued separate rulings allowing Ohio citizens to register to vote and submit an absentee ballot on the same day. Those court decisions open a seven-day Ohio "early voting" window that starts today, in what is seen as a key battleground state for this year's Presidential election.

According to the Columbus Dispatch, Monday's court decisions concerned "an overlap period between the start of absentee voting today and Monday's voter-registration deadline for the Nov. 4 election." (See State-by-State Voter Registration Deadlines, from the U.S. Election Assistance Commission) In the past, Ohio voters were required to be registered at least 30-days before receiving an absentee voting ballot. Monday's rulings -- from the Ohio Supreme Court and federal district courts in the state -- effectively upheld a directive requiring Ohio county elections boards to implement processes allowing Ohio citizens to register to vote and submit absentee ballots on the same day. The Washington Post reports that, across Ohio, "[g]et out the vote efforts have been mobilized to take advantage of the window. . .and lock down votes from individuals who otherwise might not register or send in the absentee forms."

House Vote Rejects Financial Bailout Plan, 228-205

A $700B financial bailout plan has been voted down by the U.S. House of Representatives. Congressional leaders and the Bush administration had reached a tentative deal Sunday on a new version of the financial rescue plan, one that included limitations on executive compensation and sought to protect taxpayers from shouldering at least some of the enormous costs of the aid package (see a Draft of the Bailout Plan, from the New York Times).

Today's 228-205 vote in the U.S. House of Representatives stalls any large-scale bailout efforts. In a statement issued Monday, President Bush had called on Congress to "send a strong signal to markets at home and abroad by passing this bill promptly." According to the Chicago Tribune, lawmakers agreed Sunday to a proposal that divided the bailout into two phases, "starting with $350 billion but requiring congressional approval for a second pay-out," and "includes a demand that if the government does not recoup all the money that it invests in reselling mortgage debt that it purchases, it comes up with a plan to get the financial industry to cover any projected taxpayer losses."

Reuters reports that, under the new bailout plan, the "government will take a stake in companies that tap federal aid so that taxpayers can share in the profits if those companies get back on their feet," and "if the Treasury takes a stake in a company, the top five executives would be subject to limits on their compensation."

Razor Recalls Scooters and 4-Wheel Vehicles

Toy and scooter manufacturer Razor USA and the U.S. Consumer Product Safety Commission (CPSC) have announced the recall of thousands of Razor scooters and four-wheeled ride-on vehicles, due to two separate product defects that can cause injuries to riders.

The scooter recall announced Thursday involves about 103,000 Razor "PowerWing" three-wheeled scooters, black or silver in color. According to a CPSC Press Release, the scooter's foot platforms can have sharp edges and may pose a laceration hazard. Razor USA has received 10 reports of cuts to scooter riders' Achilles tendons or ankles -- with four riders requiring tendon surgery and three needing stitches. CPSC is advising consumers NOT to return the scooters to retailers, but instead to contact Razor USA directly to receive a free set of replacement foot platforms.

Also on Thursday, CPSC announced that Razor is recalling about 30,000 of its "Dirt Quad" electric ride-on vehicles, because a potential defect involving the throttle control can cause the vehicle to surge forward unexpectedly. CPSC advises "Dirt Quad" owners to contact Razor USA to receive a replacement controller at no cost.

New California Law Bans Texting While Driving

Beginning on January 1, Californians who type or read text messages while driving will face a traffic ticket and fine, under a law signed Wednesday by Governor Arnold Schwarzenegger.

California State Bill 28 "specifically bans the use of an electronic wireless communications device to write, send, or read a text-based communication while driving a motor vehicle." Drivers who violate the law will face a "base fine of $20 for a first offense and $50 for each subsequent offense," according to a Press Release from the Office of the California Governor. The San Francisco Chronicle reports that California now joins Connecticut, Lousiana, Minnesota, New Jersey, and Washington as states that have banned texting while driving. As of July 1 2008, California drivers have been required to use a hands-free device to talk on the phone while operating a vehicle, and drivers under the age of 18 have been prohibited from any non-emergency use of an electronic device while driving. (See State-by-State Laws on Driving and Cell Phones/Text Messaging, from the Governors Highway Safety Association)

FBI Probes Firms at Center of Financial Crisis

A number of firms at the center of the current financial crisis and Wall Street bailout debate are being investigated by the Federal Bureau of Investigation (FBI), for possible securities violations related to subprime lending.

AIG, Fannie Mae, Freddie Mac, and Lehman Brothers -- and their executives -- are among 26 sub-prime lenders being investigated by the FBI, according to CNNMoney.com. In recent years, subprime loans allowed people with lower income or poor credit to purchase homes. But as the housing bubble burst and these loans became unaffordable for many borrowers, foreclosures saw a huge increase nationwide, a major trigger for the current financial crisis. According to Bloomberg.com, the FBI's investigation centers on whether the financial giants committed accounting misstatements and securities violations that may have played a role in the subprime collapse.

SEC Puts Temporary Ban on "Short Selling"

The Securities and Exchange Commission (SEC) on Friday issued an order temporarily banning the "short selling" of the securities of almost 800 financial companies, in an effort to protect the stock market and boost investor confidence.

Investors profit from "short selling" by 1) obtaining potentially overvalued stock on loan from an investment firm, 2) quickly selling the stock, 3) buying the stock back when the price goes down, and 4) pocketing the difference before returning the stock to the lending firm. The SEC announcement of the temporary ban came on Friday, with the agency deeming the action necessary "to protect the integrity and quality of the securities market and strengthen investor confidence." The SEC Order is effective immediately, and applies to the purchase of securities in 799 designated companies. Over the weekend, the agency issued an amendment to the order, requiring the reporting of certain short sales.

Congress Debates $700B Financial Bailout

Over the weekend, U.S. Treasury Secretary Henry Paulson introduced the Bush Administration's $700 billion plan to stabilize Wall Street and rescue some of the country's largest financial institutions, and Democrats and Republicans in Congress are debating how best to move the proposal forward.

The "bailout" legislation proposed by the administration would allow the U.S. Treasury Department "to buy suspect U.S. mortgage loans from U.S. and foreign-owned banks, at a possible cost of as much a $700 billion," according to the Washington Post. Some members of Congress have proposed modifications to the plan -- including the possible inclusion of relief for homeowners, and limitations on compensation for company executives. In a statement delivered Monday to encourage Congress's swift action on the bailout legislation, President Bush declared that "the whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts."

Also on Monday, Reuters reports that the Federal Reserve agreed to convert "once high-flying" Goldman Sachs and Morgan Stanley from investment banks "into more conventional depositary institutions," as part of Washington's plan to stabilize the financial market.

Arizona Immigration Law, Employer Sanctions Upheld

A federal appeals court has upheld the 2007 Legal Arizona Workers Act, which sanctions employers and businesses that willfully hire illegal aliens. A number of civil rights organizations and Arizona business groups had challenged the law, which allows the state to revoke the business licenses of employers who are in violation.

In Wednesday's decision, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit turned away the challenge, holding that 1) the Arizona law did not overstep federal immigration authority, and 2) the law satisfies constitutional due process requirements because employers are allowed to present evidence to "rebut the presumption" of an employee's illegal status -- giving businesses a "meaningful opportunity to be heard before sanctions are imposed."

The Associated Press reports that the "court left the door open for other challenges, saying no one has been accused of violating the law since it took effect nine months ago."

Constitution Day is September 17th

Constitution Day celebrates the signing of the final draft of the U.S. Constitution on September 17, 1787. FindLaw's Constitution Day feature commemorates Constitution Day, providing links to the official texts of constitutions in the U.S., all 50 states, and worldwide; legal commentary on issues related to constitutional law; resources on Constitution Day, and much more.

FBI: Violent Crimes Down in 2007

The Federal Bureau of Investigation (FBI) has released its annual report on the latest crime trends in the United States. The statistics show that both violent crime and property crime were down nationwide in 2007, when compared with data from 2006.

According to the report released Monday (Crime in the United States 2007), in 2007 there were about 1.41 million instances of violent crime in the U.S. (down 0.7 percent from 2006), and approximately 9.84 million property crimes (a 1.4 percent decrease from 2006). All seven crimes tracked in the FBI's "specific offense" category -- murder, forcible rape, robbery, aggravated assault, burglary, larceny/theft, and motor vehicle theft -- were down for 2007. To compile the 2007 report, the FBI worked in conjunction with more than 17,000 local, city, state, tribal, and federal agencies -- groups that represented almost 95 percent of the U.S. population.

Court: Virginia Anti-Spam Law Unconstitutional

Virginia's highest court has ruled that a state law prohibiting the mass sending of unsolicited emails ("spam") is an overly broad restriction on free speech, a decision that overturns the criminal conviction of a North Carolina man once known as one of the country's most notorious spammers.

In 2004, Jeremy Jaynes was convicted and sentenced to nine years in prison based on charges that, on three separate occasions, he sent more than 10,000 unsolicted emails to America Online subscribers over a 24-hour period, a violation of the "unsolicited bulk email" provision of the Virginia Computer Crimes Act. On Friday, the Virginia Supreme Court struck down the law, ruling that it is "unconstitutionally overbroad on its face because it prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment to the United States Constitution." The decision reverses Jaynes's conviction, which in 2004 was the first felony spam conviction in the U.S., according to the Washington Post.

FDA Issues Health Warning on Infant Formula from China

Federal health officials are reminding consumers that infant formula manufactured in China is illegal in the U.S. and should be avoided, as contaminated milk powder has been linked to at least two infant deaths and over 1,200 illnesses in China.

The U.S. Food and Drug Administration (FDA) issued a Health Information Advisory on Friday, "advising caregivers not to feed infant formula manufactured in China to infants" and assuring consumers that "there is no known threat of contamination in infant formula manufactured by companies that have met the requirements to sell infant formula in the United States." According to the FDA, manufacturers who have met federal health requirements for marketing milk-based infant formulas in the U.S. are: Abbott Nutritionals, Mead Johnson Nutritionals, Nestle USA, PBM Nutritionals, and Solus Products LLC.

In China, contaminated milk powder has been linked to 1,253 cases of infant illness, including at least two deaths and 340 hospitalizations, the New York Times reports. Early investigation has revealed that the powder formula was tainted with melamine, a chemical used in the manufacturing of plastics.

Online Auto Safety Database Made Public

For the first time, the National Highway Traffic Safety Administration (NHTSA) is making vehicle safety data available to the public via a searchable database, as part of a court order and legislation from Congress. The NHTSA's new Early Warning Reporting (EWR) search engine gives consumers access to information and statistics on death, injury and property damage claims (including lawsuits) that have been submitted to vehicle manufacturers.

The Los Angeles Times points out that the "long-awaited" release of manufacturer safety information does not include data on tires (or child restraint devices) although it was "a series of fatal rollovers involving Firestone tires that led to the passage of the reporting law eight years ago and the creation of the database." According to Reuters, "consumer and safety groups now have easier access to raw safety figures, which may enable them to sharpen their arguments and spot trends."

Court Reinstates Shareholder Suit Over Vioxx

A federal appeals court on Tuesday reinstated a lawsuit brought by investors who had purchased stock in Merck & Co., Inc. -- manufacturer of the painkiller Vioxx -- and allege that Merck's officers and directors misrepresented the drug's safety and commercial viability.

Vioxx, once a hugely-popular prescription pain medication, was pulled from the market in 2004, due to its link to increased risk of serious cardiovascular problems like heart attack and stroke. Shareholders filed the class action securities fraud lawsuit against Merck & Co., Inc. in 2003. A federal trial court dismissed the shareholders' suit in April 2007, ruling that too much time had passed between the date on which the shareholders should have been aware of Merck's alleged fraud and the date the suit was filed, so the claims were barred by the statute of limitations.

In Tuesday's ruling, a three-judge panel of the U.S. Court of Appeals for the Third Circuit stressed that a plausible alternative explanation for Vioxx patients' increased cardiovascular risk -- a theory that the court calls the "naproxen hypothesis" -- still existed on dates relevant to the statute of limitations. In reinstating the suit, the panel ruled 2-1 that the lower court "acted prematurely" in finding that the shareholders were on legal notice of the alleged fraud on the date that would have made the claims time-barred, because "[a]s of that date, market analysts, scientists, the press, and even the FDA agreed that the naproxen hypothesis was plausible, at the very least."

Reuters reports that Merck "is considering asking either the full court of appeals or the U.S. Supreme Court to review the panel's decision," while "[l]awyers for the plaintiffs applauded the ruling and said it will permit them to move forward with the case, which seeks billions of dollars in damages."

Iowa Meat Plant Charged with Child Labor Violations

A meat packing plant in Iowa has been charged with committing more than 9,000 state child labor law violations, some involving the workplace safety of employees under the age of 16, according to the Iowa Attorney General.

A criminal complaint filed Tuesday against Agriprocessors Inc. of Postville, Iowa alleges that the kosher meat packing facility engaged in a number of unlawful employment practices involving 32 workers under the age of 18 -- seven of whom were under 16. A News Release from the Iowa Attorney General's Office sums up the charges as including:

"Employing a child under age 18 in a meat packing plant; employing a child under age 18 in an occupation that exposes the child to dangerous or poisonous chemicals; employing a child under age 16 who operated power machinery; employing a child under age 16 who worked during prohibited hours or more hours in a day than permitted by law; and employing a child under 16 who worked more hours in a week than permitted by law."

The Des Moines Register quotes an Agriprocessors Inc. spokesperson as stating: "All of the minors at issue lied about their age in order to gain employment at the company. At the time of hiring, all of the minors, like all job applicants, presented and signed documents stating that they were over 18."

Auto Safety Group Urges States to Raise Driving Age

A new report from a national highway safety group examines the impact of state driver's licensing age laws on teen motor vehicle crashes, and calls on states to consider raising driver's licensing ages in order to reduce traffic accidents and save lives.

Licensing Age and Teenage Driver Crashes: A Review of the Evidence, from the Insurance Institute for Highway Safety (IIHS), focuses on "the costs in terms of lives of allowing licensure sooner rather than later," and finds that "licensing at later ages would substantially reduce crashes involving teen drivers," according to an IIHS News Release. IIHS points out statistics showing that New Jersey -- the only state in which drivers must wait until age 17 to become licensed -- has a much lower fatal crash rate for young drivers when compared with neighboring Connecticut, where the licensing age is 16.

According to the IIHS, lawmakers in Delaware, Florida, Georgia, Illinois, and Massachusetts have recently proposed legislation to raise the driving age -- but those measures were unsuccessful. A number of states allow teens to become licensed drivers before the age of 16, with certain restrictions -- including Idaho, Mississippi, and South Carolina. (See today's IIHS News Release for a look at driver's licensing ages in all states and a number of countries.). The Chicago Tribune reports that IIHS research shows states making progress in reducing the number of teen car crashes through the use of graduated driver licensing laws, which "ease restrictions on teen drivers as they gain experience and keep a clean driving record."

FDA Begins Quarterly Drug Safety Reports

The U.S. Food and Drug Administration (FDA) has begun publishing quarterly reports on its website (http://www.fda.gov) that identify drug products that are under safety investigation by the agency, and the specific health risks associated with use of the drugs.

On Thursday, the FDA released Potential Signals of Serious Risks/New Safety Information Identified by the Adverse Event Reporting System (AERS) January - March 2008. The FDA is providing this information to consumers and health care providers under the 2007 Food and Drug Administration Amendments Act, which requires the agency to release public quarterly updates of new safety information or potential signals of serious risk associated with certain drugs. In a News Release announcing the new reporting program, the FDA stressed that "the appearance of a drug on [the] list does not mean that FDA has concluded that the drug has the listed risk, or that FDA has identified a causal relationship between the drug and the listed risk." Janet Woodcock, M.D., director of the FDA's Center for Drug Evaluation and Research has this advice for patients: "Don't stop taking your medicine. If your doctor has prescribed a drug that appears on this list, you should continue taking it unless your doctor advises you differently."

WebMD reports that the FDA's Adverse Event Reporting System (AERS) "collects reports from patients, hospitals, doctors, and drug companies about suspicious problems that might -- or might not -- be related to a medication."

Ex-Credit Suisse Brokers Charged in $1B Subprime Fraud Scheme

Federal officials have filed securities fraud charges against two former Credit Suisse brokers, accusing the pair of securities fraud in connection with the purchase of auction rate securities (ARS) tied to high-risk subprime debt. The charges are part of the federal government's probe of wrongdoing in the ARS market.

In criminal charges filed by the U.S. Attorney's Office and a separate civil complaint brought by the U.S. Securities Exchange Commission (SEC), Eric Butler and Julian Tzolov are accused of purchasing more than $1 billion in auction rate securities for their clients, and misrepresenting that the investments were backed by federally-guaranteed collateral like student loans. In fact, the federal government alleges, the securities were backed by subprime mortgages. And once the subprime market collapsed, the customers were "stuck with at least $817 million" in fraudulently-purchased auction rate securities "that they did not want to buy and are now unable to sell," according to the SEC complaint.

Reuters reports that federal and state officials have "reached settlements with several major investment banks" who fraudulently represented that auction-rate debt "was safe and the equivalent of cash."

Sony Recalls VAIO Laptops Due to Overheat Risk

Sony Electronics Inc. on Thursday announced a worldwide recall of certain VAIO TZ-series notebook computer models, because faulty parts could cause the units to short circuit and overheat. Sony has received reports of minor burns to a handful of VAIO users, and is advising owners of the affected laptops to contact the company to resolve the defect.

The problem stems from "irregularly positioned wires near the computer's hinge and/or a dislodged screw inside the hinge," which can cause the affected VAIO models to short circuit and overheat, according to an announcement from the U.S. Consumer Product Safety Commission (CPSC). The CPSC news release issued Thursday indicates that the recall impacts about 73,000 laptops, but a number of media outlets -- including the Associated Press and Bloomberg.com -- state that at least 440,000 computers are affected. The Chicago Tribune reports that "Sony has received 209 reports of overheating worldwide, including seven cases in which people received minor burns."

CPSC is advising consumers to stop using the recalled computers immediately, and to contact Sony toll-free at (888) 526-6219 to arrange for inspection and repair. Sony announced Thursday that customers can enter their VAIO's product code and serial number at http://esupport.sony.com/fixmypc to see if their laptop has been recalled.

New York Law Requires More Employee Notice for Layoffs

Employees in New York will be entitled to more advance notice of mass layoffs and plant closings, under a new law signed by Governor David A. Paterson and announced Tuesday by the state's Labor Commissioner.

Under New York's Worker Adjustment and Retraining Notification (WARN) Act, companies with 50 or more workers must notify employees and the state's Department of Labor at least 90 days before a mass layoff or plant closing. The new standards for New York go further than layoff notice requirements under the federal WARN law, which applies only to companies with 100 or more workers, and mandates 60 days notice before a layoff or closing. "The need for a stringent law at the state level comes on the heels of a number of companies that closed their doors in recent years and gave their workers little or no prior notification," according to a Press Release from the New York State Department of Labor. Companies that fail to provide required notice of layoffs may need to pay as much as $500 for each day inside the 90-day notice window, and may be ordered to provide back wages and medical benefits to workers who didn't receive proper notice.

The Albany Times Union reports that New York now joins California, Illinois, and New Jersey as states with WARN legislation that is tougher than federal standards.

Fire Risk Prompts GM Vehicle Recall

General Motors is recalling more than 850,000 model year 2006 to 2008 vehicles that are equipped with a heated windshield wiper fluid system, because a potential short circuit problem in the fluid system may cause smoke and risk of fire.

The recall announced Friday applies to the following General Motors vehicles equipped with a heated windshield wiper washer system: 2006-2008 Buick Lucerne; 2008 Buick Enclave; 2006-2008 Cadillac DTS; 2006-2008 Hummer H2; 2007-2008 Cadillac Escalade, Escalade ESV, and Escalade EXT; 2007-2008 Chevrolet Avalanche, Silverado, Suburban, and Tahoe; 2007-2008 GMC Acadia, Sierra, Yukon, Yukon XL; 2007-2008 Saturn Outlook. A potential short circuit on the printed circuit board for the washer fluid heater can overheat the control-circuit ground wire -- possibly causing the malfunction of other vehicle electrical features, creating smoke, and increasing the risk of fire -- according to a recall announcement from the National Highway Traffic Safety Administration (NHTSA).

Nine vehicle fires have been linked to the problem, but no injuries or accidents have resulted, according to the Chicago Tribune. Reuters reports that in order to remedy the problem, "GM plans to install a wire harness with an in-line fuse free of charge," and vehicle owners should soon be receiving notification and instructions from GM.