Thursday, October 22, 2009

Trade Regulation Tidbits

This posting was written by Jeffrey May and John W. Arden.

News, updates, and observations:

 President Barack Obama on October 17 commented on Congressional efforts to repeal the antitrust exemption for the health insurance industry. (See October 15, 2009 posting on Trade Regulation Talk.) In his weekly address, the President discussed the industry’s efforts to derail health care reform to protect its profits and bonuses. “[T]hey’re earning these profits and bonuses while enjoying a privileged exception from our antitrust laws, a matter that Congress is rightfully reviewing.” The White House did not go so far as to announce the President's support for legislative efforts to repeal the antitrust exemption. Appearing on ABC’s "This Week with George Stephanopoulos" on Sunday, October 18, David Axelrod, Senior Advisor to the President, was noncommittal on the legislation. “We’ll see what Congress does,” he said.

 A Minnesota-based packaged-ice company and three of its former executives have admitted to allocating customers, have agreed to plead guilty, and have agreed to pay a $9 million criminal fine, the Department of Justice has announced. The company and the individual defendants have agreed to cooperate with the Justice Department's ongoing antitrust investigation into the industry. The separate charges were filed in the federal district court in Cincinnati under seal in September. The seals were lifted on October 13. A news release on the plea agreement appears here on the U.S. Department of Justice Antitrust Division website.

 On October 16, the Maine House Joint Standing Committee on the Judiciary voted to recommend repeal of a recently-enacted state privacy statute, in light of constitutional issues raised by a federal court challenge to the law. The controversial law—“An Act to Prevent Predatory Marketing Practices Against Minors” (Public Law 230)—prohibits the collection of health-related or other personal information for marketing purposes from a minor without parental consent and bars “predatory marketing” to minors.

On August 28, challengers filed an action for injunctive relief in the federal district court in Maine, claiming that the statute violates the First Amendment rights of adults, as well as minors and online operators; violates the Commerce Clause; and is preempted by the federal Children’s Online Privacy Protection Act. On September 2, Maine Attorney General Janet Mills announced that she would not enforce the law, due to her concerns about its constitutionality. (See September 3, 2009 posting on Trade Regulation Talk.) On September 8, U.S. District Court Judge John Woodcock instructed the plaintiffs and Maine officials to work out acceptable language for an order settling the lawsuit. The parties agreed to an order acknowledging the constitutional defects of the law, documenting the state’s promise to refrain from enforcing the law, citing the legislature’s promise to revise the law in the next session, and putting Maine plaintiff attorneys on note that suits brought under the law would have to overcome constitutional questions raised in the action. (See September 14 posting on Trade Regulation Talk.)

After its hearing last week, committee members and staff indicated that a new legislative proposal—curing defects in the current law—would be introduced when the legislature convenes its next session in January 2010. None of the judicial or legislative action thus far repeals the law or bars private actions enforcing the law.

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