Legal Material

PENNSYLVANIA MAIL- IN VOTING

As one of the nation’s most crucial battleground states, Pennsylvania’s groundbreaking election legislation was temporarily overturned recently after being found illegal by a state court.

This move came after a tense last year, following a petition from Republican state legislators, petitioning that the statute was unconstitutional. Pennsylvania filed an appeal to the Supreme Court, resulting in an automatic suspension of the statute.

BACKGROUND

Democrat Gov. Tom Wolf signed Act 77 into law in 2019 after it was approved by the Republican-controlled legislature. No-excuse absentee voting, a permanent mail-in voter list, a fifteen-day voter registration deadline reduction, and ninety million dollar expenditure in election infrastructure renovations were included in the bill. Straight-ticket voting was also abolished.

Voting ‘needs the personal presence of the elector’ and the majority ruling, issued by Judge Mary Hannah Leavitt, a Republican, said that the legislature could not modify voting statutes without rewriting the state Constitution. Lawsuits were brought after the 2020 election by Republican Representative Mike Kelly of northern Pennsylvania, who contended that Act 77 was illegal.

HISTORY OF MAIL-IN VOTING

Voting by mail or absentee ballot is an alternative to casting a ballot in person on election day (generally by mail). Voting by mail or absentee ballot is permitted in every state. There are certain states that need an explanation from the voter before they may cast an absentee or mail-in ballot, while others allow any qualified voter to do so.

For the general election on November 3, 2020, thirty-nine states changed their standard and statutory election administration methods. COVID-19 has necessitated a wide range of changes, including delays to the voting date and expanded absentee or mail-in balloting options. Some individuals questioned whether or not these alterations were enough in light of the pandemic’s occurrence. Others alleged that these changes were implemented for partisan political purposes rather than in reaction to COVID-19.

The argument over these changes continued beyond the 2020 election cycle. There were two main avenues of inquiry, being [A.] if it was legal or politically correct to make the changes that were made in the 2020 elections  and [B.] if the unprecedented voter turnout in 2020 was a result of these changes.  If the latter argument held true, the obvious logic would be to consider whether the interim changes were to be made permanent. Alternatively, there is also a concern as to if these alterations have opened the door to election fraud. 

in 2021, legislation aimed at extending or restricting these changes resulted from the ongoing discussion of these issues.

PROCEDURE FOR MAIL-IN BALLOT VOTING

A ballot is sent to the house of a registered voter in the United States, who fills it out and returns it by mail or in person at a secure drop box or voting center. Voting by mail saves polling places money on labor costs. All-mail elections may save money, although a combination of voting choices might cost more. Voting ballots may be sent without payments of postage in various states. Postal voting has been shown to improve voter participation since in theory, postal voting poses a larger chance of fraud than in-person voting. Besides fraud, processing huge numbers of votes and verifying signatures presents various difficulties. 

All mail-in ballots have been used in the state elections of Colorado, Hawaii, Oregon, Utah, and Washington beginning of July 2020. Thirty-three states and the District of Columbia allow residents to vote by mail. The COVID-19 pandemic in 2020 has generated more talk about removing some of those limits in other jurisdictions, which only allow postal voting in specific instances. In the run-up to the 2020 US presidential election, President Donald Trump stated that he would withhold required funds for the postal service to guarantee that postal ballots are processed securely and on schedule after frequently saying that mail-in voting would result in rampant fraud.    Republican legislators have launched a campaign to restrict postal voting in the 2020 election, citing accusations of significant voter fraud. 

Postal ballots were used for persons who could not make it to the polls on election day before absentee voting was made available. The term ‘absentee ballots’ is still used by several states despite the fact that they are no longer required by state law. Permanent absentee voter status is available in certain states, while in others, all residents may apply for the status, which ensures that they will get an absentee ballot in every election.   Before each election, a voter must apply for an absentee ballot.

Before the election, state laws dictate how far in advance ballots or applications for postal votes may be sent out. A voter’s booklet may also be provided in certain states. As a result, each ballot’s processing may be followed, sometimes publicly, and signature files associated with it can be swiftly loaded for speedy signature verification when an envelope is returned by a voter.  The return envelope may be obtained from election officials or a plain envelope can be used in certain jurisdictions by voters who have misplaced theirs. By mail, a voter marks the ballot for the candidates they choose (or just puts in their name), then seals and dates the envelope, and mails it off.   One envelope or a privacy sleeve may be used within an outer envelope in certain areas, to ensure confidentiality. Voters may either mail or drop off their voting envelopes at a local ballot dropbox.

The deadline is determined by state law. In some jurisdictions, postmarks are not counted, and ballots must be received by a certain time on election day. In other jurisdictions, a ballot must have a postmark on or before the day of the election and be received prior to the date of certification. Many vote-by-mail jurisdictions enlist the help of volunteers to take ballots in the walk-up drop-off booths or drive-up quick drop locations. The Help America Vote Act requires some polling options, often at central election headquarters, with voting machines designed for disabled people.

In many jurisdictions, all legal absentee votes are tallied, even if they will have no effect on the result of an election, even if the race is too close to call. Voting by mail was employed in certain counties, while absentee ballots were used in others.

UNDERSTANDING THE ISSUES SURROUNDING MAIL-IN VOTING IN PENNSYLVANIA

Millions of Americans choose to vote early in person or by mail in 2020 as a consequence of the epidemic, particularly among Democrats. The G.O.P. has implemented a slew of new voting restrictions in response to Donald Trump’s erroneous statements regarding absentee votes.

Two-pronged tactics are being used by the party:  [A.] limiting the number of people who may vote and [B.] affording state legislatures more influence over the voting process.  Concerns about the integrity of the American political process have been exacerbated by Republican efforts to tighten voting laws. Voters of color will be disproportionately affected by several of the limitations.

During the year 2021, nineteen states enacted thirty-four laws limiting the right to vote. Most key legislation was passed in battleground states like Texas and Georgia.  A new set of laws may or may not affect elections. There are several rules that will make it more difficult for particular people to vote, generate confusion, or cause longer lines at polling stations. 

However, Republican efforts to invalidate the 2020 election based on Act 77 arguments persisted. Rioters stormed the Capitol soon after. In the wee hours of the morning, Pennsylvanians began to take their seats in the state’s legislature.

HOW DOES THIS AFFECT PENNSYLVANIA VOTING STATUTES

It was confirmed on Friday that the two-year-old mail-in voting statute in Pennsylvania is illegal, in accordance with Republican complaints. After three Republican and two Democratic judges issued a party-line ruling, Democratic Gov. Tom Wolf’s administration promptly appealed to the state Supreme Court, preventing it from invalidating the statute.

While this is a positive development for the state’s upcoming 2022 elections for governor and senator, the Commonwealth Court ruling casts doubt on the state’s voting regulations. In 2019, all voters will be able to cast their ballots by mail, with no excuses, according to the Republican-controlled Legislature. Legislation is expanding on a state constitution clause requiring the state to give a choice for voters in certain situations.

Only one Republican member voted against the measure, which was passed in an agreement with Wolf in order to include a mail-in ballot option. In return, Wolf promised to remove the straight-ticket voting ballot option Republicans had hoped to use to safeguard their suburban candidates from an anti-Trump tsunami in the 2020’s election.

Legislators may extend absentee voting to non-legislators if the constitution does not clearly prohibit it. An appeal by Wolf’s office means that the lower court’s order will not take effect immediately, and he slammed Republicans for attempting to sabotage the legislation ‘in the service of Trump’s false election fraud charges.’

WHAT DID ACT 77 ACHIEVE

There has been no proof of major voting fraud in Pennsylvania or any other state, despite the persistent falsehoods promoted by Trump and his backers. No justification exists in Pennsylvania for eliminating the option to vote by mail. Pennsylvania’s ‘no-excuse mail-in voting statute’ was deemed unlawful by the Commonwealth Court of Pennsylvania on Friday, allowing voters to cast their votes by mail without giving an explanation for their absence.

According to the action, Doug McLinko is seeking an order that declares that Pennsylvania’s Election Code’s Article 13-D violates the state’s constitution. Act 77 inserted Article XIII-D, which states that ‘any eligible elector may vote by mail.’ ‘  It concurred with McLinko, finding ‘that Article VII, Section 1 of the Pennsylvania Constitution is violated‘ 

To eliminate Article VII, Section 1, the necessity for in-person voting is likely to be approved by the people if given to them. However, before legislation permitting no-excuse mail-in voting can ‘be placed into our statute books,’ a constitutional amendment must be put forward to the people and ratified into the basic law.

This verdict will not have any effect on Pennsylvania’s upcoming primary elections and might be overturned by the state’s Supreme Court.  The Supreme Court concluded that if the state wishes to implement no-excuse absentee voting, it must alter the state Constitution.

Voting by mail in the state’s forthcoming primary election in May will not be affected by the verdict, according to the U.S. State Department. Associated Press reports that the decision will be immediately placed on hold if this occurs. The State Supreme Court, in contrast to the Commonwealth Court, has a Democratic majority and has previously supported statutes requiring voters to cast ballots through the mail. The Philadelphia Inquirer said that Democratic voting rights supporters worried that even a short setback might be devastating because it would further erode public confidence in the political process in Pennsylvania.

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Sources

1. The state court concurred with them, ruling 3 to 2.

2. For instance, was it done in line with state law when secretaries of state unilaterally imposed changes? Aside from legal issues, were these alterations implemented in a politically responsible manner?

3. However known incidents of such fraud are very rare, with one database showing just 491 cases of absentee ballot fraud between 2000 and 2012.

4. The Help America Vote Act of 2002 (Pub.L. 107–252  )), or HAVA is a United States federal law which passed in the House 357-48 and 92-2 in the Senate and was signed into law by President Bush on October 29, 2002. The bill was drafted (at least in part) in reaction to the controversy surrounding the 2000 U.S. presidential election when almost two million ballots were disqualified because they registered multiple votes or none when run through vote-counting machines 

The goals of HAVA are: 

replace punchcard and lever-based voting systems;

create the Election Assistance Commission to assist in the administration of federal elections; and

establish minimum election administration standards.

5. About a quarter of all votes cast in the 2016 US Presidential election were cast through postal voting.

6. As a consequence of the outcome of their gamble, they would now turn the table, dispersing the votes of millions of Pennsylvanians,’ wrote Justice David Wecht after the election. Our job isn’t to legitimize such blatant and premature attempts to defy the will of Pennsylvania voters. ‘ ‘When the will of the people is evident, courts should not judge elections.’

Mr. Kelly’s appeal to the Supreme Court of the United States was likewise refused.

7. Hawley said that the state legislature approved Act 77 ‘irregardless’ of what the state’s constitution stated on Jan. 6, 2021, challenging the slate of electors from Pennsylvania.

8. Situations such as being out of town on business, being sick, having a physical impairment, having election day obligations, or participating in religious services are all examples.

9. Voter fraud was determined to be rare in Pennsylvania and the other five key swing states where Trump contested his defeat to Biden in the 2020 presidential election.

Voter fraud accounted for just 0.03 percent of Joe Biden’s winning margin in 11 of the state’s 67 counties, according to election authorities. Moreover, 80,000 votes separated him from Donald Trump in Pennsylvania.

10. Pennsylvania’s Constitution compels eligible voters to cast their votes in person at specified polling sites unless they meet an absentee voting exemption, McLinko said.

By ballot or by such other way as may be authorized by law,’ said Acting Secretary Degraffenreid in defense of no-excuse mail-in voting. A dismissal of McLinko’s revised petition with prejudice on procedural grounds or, alternatively, for lack of substantial merit, was what Degraffenreid requested.

11. According to the court’s judgment, around 1.38 million voters have indicated that they would like to vote by mail in the future.

12. Lawmakers from the Pennsylvania House of Representatives, including Representative Timothy R. Bonner, filed a similar action against the state’s Department of Environmental Protection. A no-excuse mail-in balloting amendment to Pennsylvania’s constitution was recommended by the court, but the ruling ‘expresses no conclusion as to whether or not such a system should or should not be enacted as a matter of public policy.

13. ‘We strongly disagree with today’s decision and are planning to submit an early appeal to the Pennsylvania Supreme Court,’ the Pennsylvania Department of State.

UNDERSTANDING MASS ARBITRATION

Plaintiffs’ firms have devised a strategy to weaponize arbitration agreements against companies in the last two years: file thousands of individual arbitrations at once, trigger massive fee obligations to initiate the claims, and leverage these obligations to force a settlement before the company can defend the merits of the claims themselves. Courts have so far been hesitant to intervene in this situation.

In the wake of the Supreme Court’s decision to uphold class action waivers, a new wave of individual lawsuits is certain to follow.

BACKGROUND

Arbitration, despite its reputation as a scourge for consumers and workers alike, may provide a number of advantages, including speed, flexibility, secrecy, and simplified procedural and evidentiary procedures. In the past ten years, parties and courts alike have focused on one aspect of arbitration: the class action waiver. It all started with the Supreme Court’s ruling in 2011 in AT&T Mobility Servs. v. Concepcion, which affirmed the legality of an arbitration contract that barred individual customers from joining in class action lawsuits.

In this ruling, however, the claims are assumed to be submitted in good faith and to have at least some validity. However, the practice of mass-producing claims is not new.  Mass arbitration is prone to misuse because of the low bar for launching a claim, the lack of control, and the mandated costs corporations must pay as soon as a claim is made, no matter how valid or fabricated it may be. As a consequence, there is a new frontier in collective conflict resolution: mass arbitration to extract compensation that is not related to any genuine damage or wrongdoing but, instead, the exposure a corporation confronts to handle these cases in the arbitral court

Customers in Concepcion were fighting about sales taxes on a free mobile phone that was offered.   AT&T filed a motion to compel arbitration against the Concepcion’s in federal court. 

Class action waiver was also found to be unconscionable by the district court in light of Discover Bank v. Superior Court, a judgment by the California Supreme Court (2005). California’s so-called ‘Discover Bank Rule‘ was pre-empted by the Federal Arbitration Act (FAA), according to the Ninth Circuit.  The United States Supreme Court overruled Discover Bank in a 5–4 decision in AT&T Mobility v. Concepcion. According to the U.S. Supreme Court, private arbitration agreements must be enforced in accordance with their provisions, and the FAA serves this goal.

The Court ruled that the Discover Bank rule was preempted because it interfered with the FAA’s goals and objectives.

THE MANDATORY ORIGINS OF MASS ARBITRATION CLAUSES

Many employees and consumers agree to arbitrate any dispute they may have with their employer or vendor. These agreements often result from ‘mandatory’ arbitration clauses which simply means that the employee or consumer had no choice but to agree if they wanted to take the job or buy the product.

In both state and federal courts throughout the nation, workers and customers brought lawsuits challenging these arbitration agreements, which typically contained waivers of class action proceedings, but they were overwhelmingly unsuccessful. Despite concerns that arbitration agreements were unjust or unconscionable, the U.S. Supreme Court finally dismissed appeals to these terms in a few well-known judgments.

The unwritten and unintended consequences snagged many organizations when it became clear that arbitration would be necessary for employment contracts or purchase agreements. A large number of individual arbitrations were brought by plaintiffs, now referred to as complainants, in which defendants (now called respondents) were obliged to pay filing fees and arbitration costs. It was common for these fees to exceed a million dollars.

Class actions and multidistrict litigation were said to have been overlooked on the defense side because of their ability to settle a large number of comparable issues in a single court procedure. In addition, the enormous quantity of submissions threatens to overload neutral service providers.

A possible solution: impartial providers could come up with strategies that would benefit both claimants and responders, while also offering a fair and efficient venue for settling a large number of comparable claims. It was first met with some skepticism and a few legal battles in opposition, but today numerous suppliers have devised schemes of their own.

CLASS ACTION CLAIM MANAGEMENT PLANS

Claims management plans have been devised by three providers, [A.] the CPR (the International Institute for Conflict Prevention and Resolution), [B.] the AAA (the American Arbitration Association), and [C.] FedArb (Federal Arbitration Board).

Concepcion-era arbitration clauses have been regularly enforced by the Supreme Court, which has ruled against class or representative lawsuits. By holding that the FAA does not provide lower courts the authority to reject a class action waiver because the expense of arbitrating each federal statutory claim separately may outweigh the possible recovery, the Supreme Court overturned the Second Circuit in 2013. It also applied Concepcion in the workplace environment, stating that the National Labor Relations Act did not overrule Congress’s directive in the FAA that arbitration agreements requiring individual processes must be enforced. 

In Henry Schein, Inc. v. Archer & White Sales, Inc. and Lamps Plus, Inc. v. Varela, the Court continued to strictly enforce arbitration agreements in accordance with their provisions. According to the first decision, ‘a court lacks no competence to determine the arbitrability problem’ when an arbitration agreement delegated arbitrability concerns to an arbitrator, the Supreme Court ruled. 

When parties agree to arbitrate individually, not in a class or collective action, the FAA requires that arbitration agreements be enforced according to their terms.

Supreme Court ruled in Lamps Plus, Inc. v. Varela that class arbitrations are not permitted in 2019, thereby reining in the power of parties to litigate on a class basis. The Supreme Court ruled in favor of the petitioner. Silence and uncertainty, according to the Court, are inadequate indicators of assent to class arbitration. As a result, arbitrations must be conducted on an individual basis unless a class action agreement is explicitly provided for.

THE CPR PROTOCOL

The Employment-Related Mass Claims Protocol CPR plan, which may be discovered, is the most extensive and in-depth of the three options. 

To ensure that all parties are on the same page, the Protocol goes into great depth. However, the Protocol makes it plain that the parties might alter the conditions of the Protocol in order to satisfy their specific requirements. Attorneys from both the plaintiffs’ and defendants’ sides, as well as well-versed arbitrators, were selected by CPR to serve on a Task Force that was tasked with drafting the Protocol.

In order to be eligible for the CPR program, an individual must have filed and amassed at least thirty comparable claims against the same company. The first step is to determine whether the circumstances are comparable enough to merit the Protocol’s use. An Administrative Arbitrator will determine whether the Protocol should be used if they can’t come to an agreement.

An Initiation Price will be paid by Respondents if the Protocol applies, although this is not the complete fee that will be paid in the long run. The arbitration will thereafter take place in ten instances that have been chosen at random. The Administrative Arbitrator will consider whether one or more of the additional instances submitted by either party should be included.

 In each situation, CPR will then construct a random list of fifteen conflict-free neutrals. At the very least, 30% of the names on the list will be varied neutrals. Prior to getting the list, respondents must pay an appointment fee.

One arbitrator will be chosen for each test case through a ranking and striking procedure by the parties and a chance for a party to object based on arbitrator disclosures. The arbitrator’s fees must be paid at that point. After the first pre-hearing meeting, the arbitrator will hear the matter and deliver a reasoned award within a hundred and twenty days after the hearing. CPR will then make these rewards completely anonymous. 

Choosing a mediator who will be compensated by Respondent is the next step. Having access to the anonymized arbitration awards, the mediator can attempt to reach a ‘Substantive Methodology’ for resolving all the cases that are still outstanding at that point, namely all those filed up to that point except for the cases that have been the subject of a final arbitration award. All major conditions of a settlement must be agreed upon, and objective standards must be used to apply those terms to each specific case. A ninety-day mediation period is allowed. All cases are put on hold and the statute of limitations is extended during this period.

Even if mediation fails, the Respondent or any Claimant might choose to continue in court instead of arbitration. To opt-out of the agreement, the parties have sixty days. That said, if Respondent chooses to withdraw, all of the charges against it will go to trial. The claimant, on the other hand, has the option to go to court even if Respondent refuses to opt-out. Arbitration is the only option if both parties refuse to withdraw their claims. It must be completed within a hundred and twenty days following the appointment of an arbitrator.

Each Claimant will get an offer if the mediation is successful, and they have the option of accepting or rejecting it. Arbitration is the next step if the offer is turned down. Any mix of in-person and remote hearings may be held by the arbitrator. There must be a hearing within fifty miles of the domicile of the Claimant.

In no more than six months, the arbitrations and mediations for the test cases should be completed, followed by another six months for the arbitration. As a last alternative, the mediation process may be restarted by the parties, but only those parties who did not previously have the chance to do so can now opt-out.

THE AAA PLAN

The AAA has prepared ‘Supplementary Rules for Multiple Case Filings’. Other forms of arbitration may choose to arbitrate under CPR’s rules, which do not apply to employment or consumer issues.

The AAA invites parties to agree on a number of issues in the introduction to the new Rules, like [A.] agreed-upon scheduling order; [B.] agreement to appoint a special master to oversee common procedural issues (e.g. discovery, the statute of limitations); [C.] an agreement to hear the case solely on documents; [D.] an agreement to assign multiple cases to a single arbitrator; [E.] an agreed form of award; [F.] limitations on briefs, motions, and [G.] disclosure request, as well as the arbitration process itself.

When twenty-five or more comparable cases are filed, the Rules apply, and the parties’ representation is either consistent or coordinated. All consumer and employment cases that fulfill this qualification will be subject to these rules. Demand for Arbitration is submitted, but the filing party must additionally submit a Multiple Case Filing Intake Data Spreadsheet after the threshold of twenty-five cases has been met, and this Spreadsheet must be updated when further cases are filed. There is a forty-five-day deadline for filing responses, counterclaims, and/or amended claims.

Further filings may be made after the Initial Arbitration Demand, if necessary, in relation to all previously filed matters. The AAA may decide to appoint a Process Arbitrator to decide the administrative issue for all cases included in the Multiple Case Filing if the parties dispute any AAA administrative decision (e.g., designation of cases as substantially similar, filing of one document addressing substantially similar issues, determining the applicable rules, determining the payment of fees and compensation for the arbitrator)…

The Process Arbitrator might be chosen by the parties, chosen from a list provided by the AAA, or picked by the AAA. After receiving a final submission, a Process Arbitrator must reach a decision within thirty days. It is the responsibility of the parties and the Merits Arbitrator to abide by the decision of the Process Arbitrator.

Merits arbitrators might be chosen by the parties or from a list published by the American Arbitration Association (AAA). The parties will have fifteen days after receiving the list of arbitrators to rank and strike. If no arbitrator is chosen via this method, the AAA may choose an arbitrator and may allocate many cases to that arbitrator.

The arbitrator’s remuneration and costs will be handled in the same way as all other AAA matters. Administrative Fees.

THE FEDARB FRAMEWORK

Currently, FedArb is using the trademark ADR-MDL to refer to a ‘Framework for Mass Arbitration Proceedings.’ 

There are 20 or more claims brought by workers or customers, represented by the same law firm, that fall within FedArb’s purview, and those claims contain a similar set of facts and legal difficulties. A $50 filing fee is all that each claimant is need to pay unless state or local regulations allow them to be waived. The company will cover all setup, administrative, and arbitration expenses.

While the ADR-MDL panel is formed, all individual arbitrations are halted. FedArb charges a one-time ADR-MDL startup cost for the Company. ADR-MDL panel or FedArb will designate a lead counsel for claimants if various law firms represent them and they cannot agree on who will represent them as lead counsel. Former federal judges from FedArb’s list will be used to select a three-judge panel, with input from the parties. The parties may agree on a single FedArb panelist if there are less than fifty claims and the total amount of damages sought is less than USD250,000.

Disputes involving legal, procedural, and factual matters will be resolved by the ADR-MDL Panel. All present and future claimants will be bound by the panel’s decision on a standard damages formula.

Following such decisions, the case will be remitted to individual arbitrators for consideration of any remaining problems. Fed Arb will provide the parties with a list of five names from which they may choose an arbitrator. The arbitrator must make a decision within ninety days after being appointed. 

However, nothing in the ADR-MDL framework prevents the parties from resolving any case or group of cases, notwithstanding the absence of a mediation procedure. 

ISSUES WITH MASS ARBITRATION

However, mass arbitration has changed the equation for litigants by making arbitration more expensive than litigation. expenses for each individual arbitration demand filed with the AAA. A good example is the AAA Employment Arbitration Rules. Arbitration expenses in California must now be paid within thirty days of the due date established by the arbitration provider.

Some corporations have refused to pay the first filing fees, claiming that mass arbitration is improper because of the rising expenses. When it comes to the California statute that requires payment within thirty days, a court found that the rule ‘encourages arbitration’ by ‘preventing parties… from holding, hostage workers’ or customers’ lawfully arbitrable claims,’ and so was not prohibited by the Federal Arbitration Act. 

Finally, each of these protocols is designed to cope with massive volumes of data. These features seem to be recurring: expedited procedures, respondents paying most of the costs, and a system for detecting comparable issues that can be used in many situations.

Courts ordering firms to pay the majority of expenses in required arbitration is another factor contributing to the growth of mass arbitrations. When arbitration has been imposed by the employer and is only permitted at the employer’s request, as the D.C. Circuit ruled in 1997, it is the employer’s responsibility to cover the whole cost of arbitration. If plaintiffs must spend much more to begin arbitration than they must pay in court, it is ‘inappropriate,’ the court concluded. Courts have often set constraints on arbitration agreements, such as requiring unbiased arbitrators, adequate discovery, and the ability to seek all forms of remedy that would be available in court. 

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“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” – Foster, William A

Sources

1. AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011a)

2. Any claims must be made ‘in the individual capacity of the parties and not as a plaintiff or member of any putative class or representative action,’ according to the arbitration clause in the phone’s sale and service agreement.

3. Discover Bank v. Superior Court, 36 Cal. 4th 148,

4. Under the Discover Bank test, a class-action waiver will be unenforceable under California law when it appears in a ‘consumer contract of adhesion’, when the disputes ‘predictably involve small amounts of damages, and where the plaintiff alleges that ‘the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money

5. Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. ___ (2019)

6. 17-988 Lamps Plus, Inc. v. Varela (04/24/2019)

7. However, in the latter, the Court found the parties’ consent to class-wide arbitration could not be based only on ambiguity and that any such desire must be conveyed unambiguously rather than in ordinary arbitration agreement terminology, such as ‘class arbitration.’

8. Arbitrability conflicts may only be decided through arbitration, and courts have no authority in certain cases.

9. On behalf of 1,300 Lamps Plus workers, a hacker obtained their tax information and then submitted a bogus tax return in Frank Varela’s name, resulting in a class-action lawsuit. In the same place. On the basis of an arbitration provision in its employment contract, Lamps Plus sought dismissal of the litigation in favor of individual arbitration. Employees were allowed to continue as a class in arbitration, but the Ninth Circuit upheld this decision on the premise that the arbitration language was vague as to whether class arbitrations were permitted.

10. A worldwide mediation of the Multiple Case Filings will be arranged within 120 days after the filing of the Answer. If the parties are unable to agree on a mediator, the AAA will select one for them. Both the arbitrations and the mediation will take place at the same time. The arbitrations will not be halted unless the parties agree to it. No one must participate in mediation if they don’t want to. The mediator will not serve as an arbitrator in this case.

11. Multi-district Litigation (MDL) is a term used in federal court to describe the practice of assigning a single judge to pre-trial hearings for a large number of comparable cases. FedArb’s ADR-MDL is based on this broad concept.

12. Cal. Civ. Proc. Code 1281.97, as amended.

13. 823 F. App’x 535 decision in Adams v. Postmates, Inc, 414 F. Supp. 3d 1246, 1250 (ND Cal. 2019). (9th Cir. 2020).

14. There are 10,356 individuals who have filed a lawsuit against Postmates Inc. (C.D. Cal. Jan. 19, 2021).

15. Burns International Security Services, 105 F.3d 1465, 1485, Cole v. Burns, Inc. (D.C. Cir. 1997)

THE OECD ON THE DIGITAL ECONOMY

On December 20th, 2020, Organisation for Economic Cooperation and Development (OECD) nations discreetly began an extraordinary effort to develop standard guidelines for accessing private sector personal data for national security and law enforcement reasons. On the basis of the assumption that these democratic governments, despite legal differences, share many commonalities in this area, and that articulating them can help restore trust in data flows between countries and highlight their differences from authoritarian regimes that engage in indiscriminate access to individuals’ data, the project is being undertaken.

The guidelines stem from the principle that there is a danger that disparities in national legislation could hamper the free flow of personal data across frontiers. These flows have greatly increased in recent years and are bound to grow further with the widespread introduction of new computer and communications technology. Restrictions on these flows could cause serious disruption in important sectors of the economy, such as banking and insurance.

BACKGROUND ON ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT

The OECD’s effort to establish standard restrictions on government access has been marked by conflicts and delays. The OECD has just begun work on the project after an impasse that halted development in the second half of 2021. 

In today’s digital age, governments have access to a great deal of personal information. Even more, data is kept by private organizations, ranging from cloud service providers to other businesses that use local computers to store their data. Public health activities in response to the coronavirus and financial market regulation may benefit from private sector personal data. National security and law enforcement are two of the most essential uses for government access to data.

Since Edward Snowden’s 2013 disclosures concerning the extent and scale of U.S. signals intelligence gathering, there has been heightened international scrutiny of U.S. intelligence services’ access to privately owned data. The Schrems judgments of the Court of Justice of the European Union (CJEU) in 2015 and 2020, which suspended data transfers under the EU-US Safe Harbor framework and subsequently the Privacy Shield, have kept the issue in the limelight. International surveillance laws in the United States do not provide safeguards equal to those necessary by European law, according to the CJEU. Since then, Europeans’ attention to the NSA’s actions has expanded to include a comparison of the monitoring regimes of other Western democracies’ counterparts.

WHAT IS THE PRIVACY SHIELD

Personal data transfers between the European Union and the United States for commercial reasons were regulated under the EU–US Privacy Shield. For one thing, it made it easier for US corporations to obtain personal data from EU organizations in compliance with European Union data protection regulations. The EU–US Privacy Shield superseded the International Safe Harbor Privacy Principles, which were ruled unconstitutional by the European Court of Justice in October 2015.  On July 16, 2020, the European Court of Justice (ECJ) ruled that the EU–US Privacy Shield was illegal.

Privacy organizations have taken legal action against the Privacy Shield.  There were initial doubts about whether the instances would be acceptable. Despite this, the Privacy Shield’s future was in doubt by February 2017.

It was in December 2019 that the Court of Justice of Europe (CJEU) delivered a preliminary opinion in the Data Protection Commissioner (DPC) v. Facebook Ireland case(also known as Schrems II). The clash in regimes might lead to a number of different outcomes. The author stated that the ruling ‘should generate equal measures of relief and alarm for the U.S. government and for companies dependent on data transfers.

In Schrems II, a final CJEU ruling was issued on July 16, 2020.  The European Court of Justice ruled that the EU-US Privacy Shield for data exchange did not adequately safeguard EU people from government surveillance. ‘Transfers on the basis of this legal framework are unlawful,’ the European Data Protection Board (EDPB), an EU agency whose rulings are obligatory for national privacy supervisory agencies, said.

The European Court of Justice has ruled that ‘standard contractual terms’ may still be used to facilitate data transfers between the EU and other nations (SCCs). When it comes to nations with laws that are fundamentally incompatible with the EU Charter of Fundamental Rights and the GDPR, SCCs may not be able to safeguard data.

WHAT IS THE CLOUD ACT

Because of amendments made to the Stored Communications Act (SCA) by the CLOUD Act, law enforcement agencies in the United States now have the ability to compel technology companies with U.S. headquarters to turn over information held in server farms located anywhere, even if the servers are located outside the country.

CLOUD Act was established as the FBI had difficulty getting remote data via service providers using SCA warrants since the SCA was designed before cloud computing became a viable technology. For instance, an inquiry by the FBI into drug trafficking in 2013 led to an SCA warrant for emails kept on a Microsoft server in Ireland, which Microsoft refused to deliver. In Microsoft Corp. v. United States, the Supreme Court heard a case involving a legal dispute. Despite the FBI’s assertion that Microsoft had complete control of the data, Microsoft asserted that the SCA did not apply to data held outside the United States. For cross-border law enforcement purposes, the FBI might propose a mutual legal assistance treaty (MLAT), but obtaining one or having one processed via an already-in-place treaty would take time and hinder enforcement activities.

SO, WHAT DOES THIS MEAN

CLOUD Act and EU E-evidence regulations now exist as new legislation and plans that allow for international access to cloud services. Both coerced (or forced) access and direct access may be conducted by governments and corporations. There is a difference between a law enforcement agency’s demand for access and an intelligence agency’s use of administrative authority in democratic nations. The non-democratic nations, on the other hand, may resort to pressure and penalties.

PREDECESSORS TO THE OECD PRINCIPLES

Because of its extensive experience in economic law and in the privacy issues surrounding private sector data, the OECD jumped at the chance to take on the G-20 proposal. For decades, governments and businesses have relied on its 1980 Privacy Guidelines, which were last amended in 2013, as a method of preserving confidence in data transfers. Additionally, the OECD has already dealt with international business law enforcement by drafting and implementing the 1999 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

OECD’s Committee on Digital Economic Policy (CDEP) made the topic a priority in December 2020 and provided terms of reference for an informal working group of members to explore in December 2020. As a possible consequence of the project, the committee considered creating an official non-binding OECD legal instrument.

DRAFT COMPELLED ACCESS PRINCIPLES

To begin with, the drafting committee came up with an initial set of promises that could be applied to any way of government accessing private-sector data. Proportionality, openness, and the presence of procedures for supervision and redress were all mentioned as essential components of this data protection framework. Although it did not specify how these safeguards would be implemented, each country’s legislative structure and pertinent circumstances would dictate how these safeguards would be implemented in their respective countries.

The national legislative framework lays forth legitimate goals for law enforcement and national security access, ensures that the breadth of data collection and usage is compatible with the declared purpose, and records incidents of access for later oversight and remedy reasons. The word ‘proportionality’ is used in EU data protection legislation, but not in other OECD member nations’ legal systems.

This concept recognizes that nations have set legal standards for government access requests that are proportionate with the level of individual rights intrusion. In certain situations, a government’s executive branch is not required to approve a request for access, but rather an independent judicial or administrative authority, depending on the severity of the interference.

HOW THE CONVENTION WAS DRAFTED

In order to protect the integrity and security of personal information gained by compelled access, the data is only maintained for as long as it is legally permitted, and if it is no longer permitted, it is erased. In addition, the handling rules are meant to allow oversight authorities to assess the gathering and use of data in the future.

Government access law frameworks may not be as transparent as those in the private sector, according to the transparency principle. ‘To the maximum degree practical,’ obliged access regimes are open and accessible to the public. Classified material may be withheld from the public for a length of time while people have the right to request that their personal data be released.

Compliance monitoring acknowledges the presence of ‘a a variety’ of procedures for monitoring required to access, assuring reporting, and correcting non-compliance. An independent inquiry or audit may be conducted and documented via frequent reports by oversight bodies.

This kind of remedy is carried out by independent agencies such as courts and other neutral institutions that are not directly involved in the case at hand. These institutions may demand that data be corrected or deleted, or that damages be compensated. Obligated access information may be utilized in a criminal prosecution if it is subsequently accessed and challenged by the accused. Due to a ‘legitimate government necessity to preserve the lives and integrity of national people, or national security or law enforcement information and investigations,’ this notification right may be reduced or postponed

There were disagreements within the Organization for Economic Co-operation and Development about the continuing US and European Union negotiations to fix aspects of the Privacy Shield system. In its 2020 Schrems II ruling, the CJEU held that the US foreign surveillance system did not fulfill the criteria of the EU Charter of Fundamental Rights in terms of remedy and proportionality. It had taken into account not just the legally required access requests of U.S. national security services under the Foreign Intelligence Surveillance Act (FISA), but also the covert access restrictions of Executive Order 12333, a different legal authority. Because an OECD accord was restricted in scope to obligatory access, it may have been interpreted as minimizing the necessity of a trans-Atlantic agreement on direct access under Executive Order 12333.

The principles center around [A.] Collection Limitation [B.]Data Quality; [C.] Purpose Specification, [D.] Use Limitation; [E.] Security Safeguards; [F.] Openness; [G.] Individual Participation and [H.] Accountability

The principles lay down the standard for the collection of data that may possibly infringe upon the rights of private individuals. There should be limits to the collection of personal data and any such data should be obtained by lawful and fair means and, where appropriate, with the knowledge or consent of the data subject. Additionally, personal data should be relevant to the purposes for which they are to be used, and, to the extent necessary for those purposes, should be accurate, complete, and kept up-to-date.

 The purposes for which personal data are collected should be specified not later than at the time of data collection and the subsequent use limited to the fulfillment of those purposes or such others as are not incompatible with those purposes and as are specified on each occasion of change of purpose. Personal data should not be disclosed, made available, or otherwise used for purposes other than those specified in accordance with Paragraph 9 except [A.] with the consent of the data subject; or [B.] by the authority of law.

Personal data should be protected by reasonable security safeguards against such risks as loss or unauthorized access, destruction, use, modification, or disclosure of data. There should be a general policy of openness about developments, practices, and policies with respect to personal data. Means should be readily available for establishing the existence and nature of personal data, and the main purposes of their use, as well as the identity and usual residence of the data controller.

Individual Participation Principle

An individual should have the right: [A.]  to obtain from a data controller, or otherwise, confirmation of whether or not the data controller has data relating to him; [B.] to have communicated to him, data relating to him within a reasonable time; [C.] to be given reasons if a request made) is denied, and to be able to challenge such denial; and [D.] to challenge data relating to him and, if the challenge is successful to have the data erased, rectified, completed, or amended.

A data controller should be accountable for complying with measures that give effect to the principles stated.

ALTERNATIVES TO THE OECD PRINCIPLES

The OECD is not the only global fora addressing the problem of government access to private-sector data now that it has resumed its work.

In October, the Global Privacy Assembly (GPA), a group of national data protection agencies from across the world, approved a resolution recommending guidelines for government access to private sector personal data. While the OECD draft was created by governments’ delegations that included both privacy and security service officials, this resolution was written primarily by privacy regulators. According to the resolution, governments should establish the need and proportionality of data requests by monitoring agencies. In contrast to the OECD concept, the GPA principle asks for regulatory constraints on secondary uses or onward transfers of gathered data. While the GPA’s decision seems to favor court approval before overseas monitoring may be enacted, an independent body, administrative or judicial in character, would be preferable.

The Council of Europe (COE), situated in Strasbourg, has also taken beginning moves toward addressing this issue. Multilateral agreements on both data protection and law enforcement have already been created by the COE (the Budapest Convention, with its newly issued Second Additional Protocol). United States has joined the Budapest Convention but has not acceded to the COE data protection instruments as an observer state

An OECD policy statement on government access to data for law enforcement and national security reasons may have a significant normative impact. They may assist in identifying and promoting best practices across member states’ domains. There is a possibility for them to convey the consensus view of established democratic governments and help to the advancement of national and international law. 

The recommendations, thus, are fourfold.  The guidelines recommend that [A.] Member countries take into account in their domestic legislation the principles concerning the protection of privacy and individual liberties set forth in the Guidelines; [B.] Member countries endeavor to remove or avoid creating, in the name of privacy protection, unjustified obstacles to transborder flows of personal data; [C.] Member countries co-operate in the implementation of the Guidelines set forth in the Annex; and [D.] Member countries agree as soon as possible on specific procedures of consultation and co-operation for the application of these Guidelines.

The OECD has a long history of successfully addressing challenging issues related to national sovereignty. A tax initiative aimed at combating multinational corporations’ base erosion and profit shifting (BEPS) is an example of this. With the OECD/G20 Inclusive Framework on BEPS, one hundred and forty nations and jurisdictions have agreed to follow a fifteen-point strategy to combat tax evasion. Additionally, the OECD helped multiple nations and jurisdictions reach a ground-breaking minimum corporate tax agreement to meet the tax problems posed by the digitization of the industry.

The OECD’s efforts on international bribery and taxes were as difficult as negotiating the laws allowing government access to data for national security and law enforcement reasons. An organization with a multi-stakeholder culture in an area where the private sector and civil society have much to say, such as global warming, is more likely to succeed. It’s a great time for democracies to demonstrate how their shared commitment to the rule of law and human rights applies in an era when the possibility for electronic monitoring of people has grown enormously. They could send a powerful statement to the rest of the world after they agreed on how to sequence work combining obligatory access principles and direct access modalities.

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Sources

1. ‘Government Access to Personal Data Held by the Private Sector: Statement by the OECD Committee on Digital Economy Policy.’ OECD, https://www.oecd.org/digital/trusted-government-access-personal-data-private-sector.htm.

2. MacAskill, Ewen, et al. ‘NSA Files Decoded: Edward Snowden’s Surveillance Revelations Explained.’ The Guardian, Guardian News and Media, 1 Nov. 2013, https://www.theguardian.com/world/interactive/2013/nov/01/snowden-nsa-files-surveillance-revelations-decoded. 

3. Schrems judgments

4. Clarifying Lawful Overseas Use of Data Act or CLOUD Act (H.R. 4943) is a United States federal law enacted in 2018 by the passing of the Consolidated Appropriations Act, 2018, PL 115-141, Division.

5. United States v. Microsoft Corp., 584 U.S. ___, 138 S. Ct. 1186 (2018)

6. ‘Government activities that fail to retain confidence, notably via uncontrolled, unjustified, or excessive demand by governments that force access to personal data held by the private sector,’ the committee declared in a statement. ‘The lack of universal norms for trustworthy government access to personal data may lead to unwarranted limits on data flows resulting in severe economic repercussions,’ the report said. ‘

7. Foreign Intelligence Surveillance Act of 1978 (‘FISA’ Pub.L. 95–511, 92 Stat. 1783, 50 U.S.C. ch. 36)

8. The earlier guidelines provide these principles

https://www.oecd.org/sti/ieconomy/oecdguidelinesontheprotectionofprivacyandtransborderflowsofpersonaldata.htm

9. Collection limitation

10. Data quality

11. Purpose specification

12. Security Safeguards Principle

 13.Openness Principle

14. At a charge, if any, that is not excessive; in a reasonable manner; and in a form that is readily intelligible to him

15. Accountability Principle

CONVENTION ON THE RECOGNITION OF DIVORCES AND LEGAL SEPARATIONS

Since 1993, the Working Party on the Extension of the Brussels Convention has been in charge of drafting the wording of the Convention. The discussions dragged on for a long time and were extremely tough at several points. Final political agreement was gained on a number of elements based on the Presidency’s final compromise proposal during the Council meeting in December 1997 under the Luxembourg Presidency.

An international agreement called the Hague Divorce Convention was signed by the Hague Conference on Private International Law in order to recognize divorces and legal separations from other countries (HCCH). As long as divorce was granted in accordance with the proper legal procedure in the state where the divorce was granted, it may be recognized.

BACKGROUND

In the first place, it is important to remember the reasons for the exclusion from the 1968 Brussels Convention. 

Secondly, divorce and marital problems are the most important issues in family law. At a period when there were only six Member States, the Jenard report alludes to ‘severe divergences’ across legal systems, In other cases, they are even constitutionally significant changes. When it comes to different sorts of civil status covered by the Convention, there are complications (for instance, separation and annulment are unknown in the national law of Finland and Sweden)

This means that neither the length of the convention nor the compromises that have to be made can come as a surprise. Property and family law are distinct, as shown by this Convention’s omission from 1968. After thirty years, European integration has progressed significantly since the 1968 Brussels Convention was written up. It was necessary to respond to the rising frequency of familial connections between people who are citizens or residents of different nations, and this Convention provides such a legal answer.

The topic of whether a convention on jurisdiction and the acceptance and enforcement of judgments in marriage cases was essential was thoroughly debated. Results from implementing the Hague Convention on the Recognition of Divorces and Legal Separations have been praised by the several Member States. The other Member States, on the other hand, said that they would not sign on to the Hague Convention of 1970. As a starting point, there were three main reasons to contemplate drafting up a new European convention being the demand for uniformity in the jurisdiction in matrimonial disputes,  the need to develop a common mechanism for the recognition and enforcement of annulment, divorce, and separation judgments across the European Union and the establishment of regulations on lis pendens, an innovation that on its own would justify the Convention and contribute to the prevention of inconsistent judgments, is a reason for the Convention.

HOW HAS THE CONVENTION EVOLVED

The original goal of the Convention was to include marriage disputes in the scope of the 1968 Brussels Convention. As a result, the wording of the 1968 Convention, which is acknowledged in the preamble, served as a springboard for work on this Convention. This crucial background could not have been ignored, given its demonstrated success and the wealth of case law from the Court of Justice of the European Communities, which allowed us to focus on the most contentious aspects of the text. Despite this, there are substantial variations between the two texts in certain areas (such as the lack of a public forum and any hierarchy in the grounds of jurisdiction), while the rules are more similar in others (as for lis pendens and automatic recognition). The result is a different convention, despite the fact that the goal is the same: to harmonize international jurisdiction laws and enable worldwide recognition and execution of judgments.

Therefore, the case-law of the Court of Justice of the European Communities must be examined since the similar wording in the 1968 Brussels Convention and this Convention must in theory be understood to imply the same thing. For clauses that are worded identically to those in the Brussels Convention, the explanatory reports for the 1968 Convention and its subsequent revisions include no new information. In order to save the courts from having to study several documents, it was deemed prudent to copy the relevant passages of the previous report in this one.

After the Treaty came into effect, the European Council held a two-day conference in Brussels on December 10 and 11, 1993, and concluded that it would need more effort in specific areas of the family life of European citizens. To that aim, the Council concluded that the 1968 Brussels Convention should be examined for the possibility of expanding its scope to include family law problems. 

The Hague Conference on Private International Law’s involvement in the development of the Convention cannot be overlooked. The Hague Conference on Private International Law revised the Convention of 5th  October 1961 on the powers of authorities and the law applicable to the protection of infants at the same time the European Union was working on the Convention on Jurisdiction and Recognition and Enforcement of Judgments in Matrimonial Matters. 

While the European Union has observer status at the Hague Conference, it is not permitted to do the opposite under the Treaties creating the European Community and the Treaty of European Union. The Permanent Bureau of The Hague Conference on Private International Law was invited to meet informally with representatives of all three institutions during the first half of 1995, starting during France’s Presidency. This was done to discuss how the texts being drafted at both institutions were linked.

PROCEDURES

The focus is on a treaty signed by the European Union’s member states on the jurisdiction, applicable law, recognition, enforcement, and cooperation in respect of parental responsibility and measures to protect children from abuse and neglect. This treaty, as well as the Hague Convention of October 19, 1996, address the same issues. 

Only those divorces obtained in a state where (at the time of the start of the proceedings) the ‘respondent‘  had its residence or the ‘petitioner’ [A.] corresponds to the nationality of both spouses; [B.] corresponds to the nationality of the petitioner and where they lived, or had lived for 1 year in the past 2 years and [C..] corresponds to the nationality of the petitioner, and where they are present, while the last state of their joint residence does not provide for divorce

Convention on the Recognition of Divorces and Legal Separations is its official name. Written on June 1, 1970, it went into effect on August 24, 1975.

Divorces and legal separations may be recognized if they were acquired via the proper legal procedure in the state where they were granted. The Hague Conference on Private International Law produced the first international treaties on marriage and divorce. It was in 1902 that the first divorce and separation laws were enacted. The goal of the Convention of 1970 is to make it easier for divorces and separations acquired in one contracting state to be recognized in another contracting state. As a result, divorced couples may rest certain that their new status will be recognized overseas in the same way as in the nation where they received their divorce. The divorce is automatically recognized, making it easier to remarry. It explains the legal status of the couple in question.

Art. 1 states that divorce resulting through judicial or other actions recognized by the state and legally binding in the state are covered by this provision. A state-approved organization in England might recognize talaqs and other religious divorces that are not recognized by civil courts in other European countries. An administrative process that is recognized by the nation where it was pronounced is included in the term.

Only the final decree or order of divorce is covered under the Convention on Legal Separation and Divorce. No findings of culpability or ancillary divorce orders are covered under Art 1. The Convention does not provide for the annulment of marriages. The Convention does not cover the process of registering a divorce in a foreign nation.

Like Brussels II, it does not provide direct rules of jurisdiction. However, a divorce may only be recognized if the state where the divorce happened has particular ties. Art 2 lays them out in a general way. Habitual residence of the respondent, the petitioner’s habitual residence along with one year of habitual residence or the last joint habitual residence, joint nationality and nationality of both parties, or the nationality of the petitioner along with the physical presence and last joint habitual residence in a country where they resided prior to instituting proceedings.

Habitual residency is defined in Article 3 as including domicile in nations like England and Wales where nationality is not a requirement.

Recognition may be denied because proper notice was not given to the respondent in accordance with Art. 8; or because the divorce is irreconcilable with an earlier divorce decision which has been recognized as such by the state to which recognition is sought, Art. 9. Art. 10 of the Constitution allows for the refusal of recognition if it would be clearly at odds with national policy. Additionally, rejection of recognition might be governed by specific regulations that seldom come into play. A signatory State may postpone divorce or legal separation procedures in one nation if there are also processes taking place in another contracting state regarding the marital status of either party. 

Art. 11 of the Convention states that a state cannot prohibit a divorce from being recognized by another state’s law and therefore prevent either spouse from remarrying.

LEGAL BASIS OF THE CONVENTION

A noteworthy success in terms of European Union judicial cooperation in civil issues is the accurate and suitable handling of the subject matter of the Convention. As a result, Article K.3 of the Treaty was selected as the legal foundation for the Convention, despite the fact that Article 220 was theoretically viable. For this reason, it is important to note that the legal foundation has ramifications for the drafting process, but not for lawyers or citizens when it comes to enforcing or applying the Convention.

The Council ratified the Convention on 28 May 1998, which was signed by the representatives of all Member States on the same day. The Preamble, which focuses on four main points, reveals the Convention’s concerns and thoughts as it prepares to convene. 

First, a desire to implement current norms for jurisdiction in annulment and divorce cases, as well as to enable the speedy and automatic recognition across the Member States of decisions on such issues issued in the Member States. As a result, it is essential to establish a set of norms controlling parental responsibility for the children of both spouses during such procedures, which will make it easier to recognize and enforce the applicable judgments swiftly and automatically.

The Court of Justice of the European Union (CJEU) might be given the competence to interpret the Convention’s terms. The court states that it is a ‘double treaty,’ since it includes both rules for direct jurisdiction and provisions for the recognition and execution of foreign judgments. This convention has its roots in that of the Brussels Convention, which was groundbreaking at the time, although it has undergone significant modifications. It is therefore necessary to set up the norms of international jurisdiction that will cause the court of origin to deny jurisdiction if the provisions of the Convention aren’t in its favor. It is possible to develop a climate of mutual trust and provide legal certainty for the citizenry, enabling the implementation of an automated recognition and enforcement system that is substantially simplified.

The Convention will become applicable ex officio after it has been accepted by the Member States in line with constitutional criteria and has been implemented in each Member State. As a result, all of the Convention’s rules must be applied and, as of the date of entry into force, those rules will take precedence over all other national or contractual provisions, subject only to the limitations of the Convention itself and in accordance with the applicable constitutional framework. In this way, the mechanism’s foundation and integration into national law in each Member State are both accomplished at the same time. Therefore, only national law will apply to situations that aren’t specifically addressed by the Convention.

ORGANISATION OF THE CONVENTION

Titles II and III are clearly the most important parts of the Convention and have been afforded the most attention (jurisdiction and recognition and enforcement of judgments). As a whole, the argument over scope was reflected in the discussion of these two topics in particular.

Title II lays forth the requirements that must be followed before a decision in a marriage case may be rendered by the court of origin. In states where the legal systems have not been unified, however, these principles have no effect on the allocation of territorial jurisdiction. Direct matrimonial jurisdiction is without a doubt the Convention’s most significant innovation. International treaties relating to such topics are usually limited to recognition and execution of judgments and regulations on indirect jurisdiction — that is to say, a court’s ability to determine whether it has jurisdiction over a particular case.

To begin, there are rules in Section 1 regarding jurisdiction, which are more specifically referred to as the ‘strict basis for jurisdiction’ (Articles 2 to 8). There are two main provisions: Article 2 lays out the reasons in marital cases and Articles 3 and 4 deal with parental duty and the specific regulation pertaining to the 1980 Hague Convention, respectively. Afterward, Article 5 deals with counterclaims, while Article 6 deals with the conversion of legal separation into a divorce. Article 7 deals with the exclusive nature of jurisdiction under Articles 2 to 6, while Article 8 deals with residual jurisdiction and is analogous to Article 4 of the 1968 Brussels Convention.

As outlined in the Convention, Articles 9 and 10 of Section 2 examine jurisdiction and whether or not the respondent has been able to make arrangements for the defense. Lis pendens and dependent acts are discussed in Section 3 (Article 11).

In Section 4 (Article 12), the provisional and protective measures are discussed in further detail.

In light of Title II, Title III focuses on the recognition and execution of court orders. Even while it seemed as if things would be simple after the previous articles’ topics had been addressed, this was far from the case. Discussions focus mostly on automatic recognition’s impact on civil status records and the grounds for non-recognition and enforcement. Furthermore, it was necessary to take into consideration the fact that the recognition was limited to the breakdown of the relationship and not to other issues (see paragraphs 22 and 64). As a result of this dilemma, there is a reduction in the requirement for enforcement. The Brussels Convention’s enforcement mechanism is quite similar to this one.

Transitional and general provisions may be found in Title IV; the general provisions can be found in Title V, and final provisions can be found in Title VII.

Sources

1. The Jenard report (which served as an explanation for the Convention’s initial draught) provided the following justification for the exclusion of human subjects from its scope:

If the Committee had been successful in unifying the rules of jurisdiction in this field, it would have been difficult not to reexamine the rules of jurisdiction at the enforcement stage, regardless of the rules chosen by the Committee. This is especially true with regard to the rules of conflict of laws. If this had been done, the Convention’s essence would have been altered, making it less effective. It’s also possible that the court of enforcement would have been tempted to abuse the public policy concept by refusing to recognize foreign judgments referred to it if the Committee had agreed to withdraw all powers of examination from the court of enforcement, even in matters not relating to property rights. As a compromise, the Committee members decided to keep the draft’s unity and effectiveness while narrowing its scope. Divorce is clearly the most significant issue when it comes to status and legal ability because of the vast divergences across the different legal systems.’

2. The person against whom proceedings were started

3. Such divorces and legal separations shall be recognized in all other Contracting States, subject to the remaining terms of this Convention, if, at the date of the institution of the proceedings in the State of the divorce or legal separation (hereinafter called ‘the State of origin’) –

(1)   the respondent had his habitual residence there; or
(2)   the petitioner had his habitual residence there and one of the following further conditions was fulfilled –

a) such habitual residence had continued for not less than one year immediately prior to the institution of proceedings;
b) the spouses last habitually resided there together; or

(3)   both spouses were nationals of that State; or
(4)   the petitioner was a national of that State and one of the following further conditions was fulfilled –

a) the petitioner had his habitual residence there; or
b) he had habitually resided there for a continuous period of one year falling, at least in part, within the two years preceding the institution of the proceedings; or

(5)   the petitioner for divorce was a national of that State and both the following further conditions were fulfilled –

a) the petitioner was present in that State at the date of institution of the proceedings and
b) the spouses last habitually resided together in a State whose law, at the date of institution of the proceedings, did not provide for divorce.

4. The Recognition of Divorces and Legal Separations Act 1971 made it legal in England and Wales

5. There are a total of twenty signatories to this agreement. In total, these countries include the following: Albania, Australia, China in respect of Hong Kong; Cyprus; Czech Republic; Denmark; Egypt; Finland; Italy; Luxembourg; Moldova; Netherlands; Norway; Portugal; Slovakia; Sweden; Switzerland; and the United Kingdom to include Bermuda, Guernsey, Jersey, and the Isle of Man. In other words, it includes all 12 EU countries and the United Kingdom.

6. It must be known that as part of the process of ratification or acceptance, it is possible to make reservations.

HAGUE ADOPTION CONVENTION

Intercountry adoption, child laundering, and child trafficking are all covered by the Hague Convention on the Protection of Children and Co-operation in Respect of Intercountry Adoption (or Hague Adoption Convention), an international convention aimed at preventing corruption and abuses that can accompany international adoption. 

To guarantee that adoptions under the Convention are widely acknowledged and given effect in other party nations, the Convention establishes a formal international and intergovernmental recognition of intercountry adoption.

BACKGROUND

The main objectives of the Convention are set out in Article 1. In private international law, the Hague Conference on Private International Law is the main body. The agreement was signed on May 29, 1993, and came into effect on May 1ST, 1995. Ninety-nine countries have approved it as of March 2019. It has been signed by South Korea, Nepal, and Russia but has not yet been ratified. Foreign adoptions of their own children are not permitted in several countries that have not signed the Convention.

International adoption has been addressed in past multilateral agreements. Still, the Hague Adoption Convention is the most comprehensive and demands coordination and direct cooperation between governments to ensure that proper protections are observed.

According to the Hague Adoption Convention, there are various conditions surrounding adoption. It is necessary to establish a ‘Central Authority’ to act as the primary point of contact for adoption processes. This means that every adoption is set up to satisfy several checks for a child who is eligible for adoption, including [A.] verifying that the adoption is legal under both countries’ laws; [B.] to make a reasonable prior effort to facilitate a domestic adoption; and [C.] to agree to only use certified adoption agencies.

When a suitable family cannot be located in the child’s birth country, intercountry adoption may provide the youngster with a permanent home. Among other things, it permits international adoption when the child’s country of origin determines that it is eligible for adoption and when the search for an adoptive placement for the child in its country of origin is given due consideration.

The other party nations recognize adoptions completed in line with the Convention.

WHAT IS A CENTRAL AUTHORITY

Under Article III, the central adoption authorities chosen by the contracting governments are given responsibility for authorizing the whole procedure. For private adoptions (when adoptive parents set the terms of adoption directly with the biological parents or with children’s institutions placed in their country of origin, without recurring to accredited adoption service providers), the Convention provides an effective framework for safeguarding against potential risks.

HCCH’s Guide to Good Practice for the Implementation and Operation of the 1993 Intercountry Adoption Convention guides how to implement, apply, and interpret the Convention. Intercountry adoptions are protected under the Hague Convention on the Protection of Children and Co-operation in Respect of Intercountry Adoption. Adoptions between countries are governed by the Hague Convention, which was signed into law on May 29th, 1993. As a result of its signing of the Convention in 1994, the United States became a signatory on April 1st, 2008. 

MAJOR PROVISIONS OF THE ADOPTION CONVENTION

All adoptions by U.S. citizens who live in the United States of children who reside outside the United States that are members of the Convention are covered by the Convention( these are termed Convention countries). There are significant similarities between adopting from Convention countries and adopting from non-Convention countries. There are, nevertheless, some significant variances. In particular, those seeking to adopt may receive greater protections if they adopt from a Convention country.  

Each Convention-signatory country must set up a Central Authority to operate as the official point of contact and a clearinghouse for information. The Department of State serves as the primary U.S. representative at the Convention.

It is possible to adopt children from other countries if a suitable family cannot be found in the child’s birth country. International adoption is permitted when the child’s home country judges that it is suitable for adoption and the search for an adoptive placement in the child’s home country is given appropriate attention. The other signatory countries recognize Convention-compliant adoptions.

Convention adoptions require adoption service providers to be certified or licensed by the federal government to provide essential adoption services. As a result of the Department of State’s approved Accrediting Entity, prospective adoptive parents may rest certain that their adoption service provider has been thoroughly vetted. The Intercountry Adoption Accreditation and Maintenance Entity (IAAME) evaluates adoption agencies and people based on the same requirements to guarantee professionalism and ethical procedures.

REQUIREMENTS FROM INTERCOUNTRY ADOPTION AGENCIES

Intercountry adoption agencies must be accredited or authorized, overseen by an accredited agency, or exempted as initiated in July 2014.

Adoption service providers authorized and recognized by the Convention shall detail and disclose in writing the adoption fees and expected costs in advance. The adoption service provider is only allowed to charge unanticipated fees if they fall under a very narrow set of conditions. Complaints about adoption service providers may also be lodged with the Department of State via an official complaint system.

When a child is adopted from a Convention nation, the United States Embassy or Consulate that issued the immigrant visa will issue the child’s adoption certificate or custody certificate. When the adoption (or award of custody) has satisfied the criteria of the Convention and the U.S. Intercountry Adoption Act, a consular official from the United States issues the certificate. 

U.S. Citizenship and Immigration Services (USCIS) decides if a ‘Convention adoptee’ child is eligible for immigration to the United States before the final adoption or award of custody may take place in the child’s home country. Before the adoption is completed (or custody is given) in the nation of origin, a U.S. consular official examines if the kid looks to fit the requirements for visa eligibility. This will let potential adoptive parents know whether the kid looks eligible for entry into the United States before they ever meet the child in person. 

PREREQUISITES FOR CONDUCTING AN ADOPTION

Form I-800A, Application for Determination of Suitability to Adopt a Child from a Convention Country, and Form I-800, Petition to Classify Convention Adoptee as an Immediate Relative, must be filed by prospective adoptive parents in Convention adoption cases. U.S. Citizenship & Immigration Services must receive both forms (USCIS). For USCIS to evaluate whether a potential adoptive family is qualified and eligible to adopt a child from a Convention nation, Form I-800A must be submitted and approved before Form I-800. On Form I-800A, prospective adoptive parents must indicate the nation they want to adopt. 

Before adoption or custody is granted, prospective adoptive parents must submit Form I-800 to confirm the child’s eligibility to enter the United States via the Convention adoption procedure once they have received Form I-800A permission from USCIS and have been matched with a specific child. A child adopted from a Convention nation must fit the criteria of a ‘Convention adoptee’ to be eligible for adoption in the United States. Convention adoption situations need the use of two visas, IH-3 and IH-4.

This requires the Department of State to verify that every adoption to the United States completed under the Convention complies with the Convention, the IAA, and the U.S. implementing regulations. 

The Department of State conducts an assessment of the nation’s laws, processes, policies, and infrastructure to determine if the country can implement protections and governance structures in accordance with Convention criteria when it ratifies the Convention. It is the goal of the evaluation to certify for each nation.

A Central Authority, other competent authorities, or accredited organizations are authorized to carry out Convention duties by enacting laws or regulations that designate and authorize them. A central authority must be established to connect with other central authorities, monitor or undertake the accreditation of agencies, and authorize competent entities by the Convention (such as foreign adoption service providers). Furthermore, additional Convention duties would be carried out by appropriately qualified authorities and certified entities of any kind.

The Central Authority also ensures that the convention’s fundamental principles are upheld. Under the Convention, foreign governments may cooperate to guarantee that adoptions are carried out by their own laws and regulations. It is necessary to ensure that the Authority protections are done following a thorough examination of all available choices for the child in their home country. The competent authorities may then conclude that intercountry adoption is in the child’s best interest. 

This judgment is made by the Central Authority or other authority when suggesting a match with potential adoptive parents (adoptability) and included in the Article 16 report on the child. Securing written approval from the child’s parents or legal guardian after birth and without receiving any money or benefit to elicit the consent, the child will be adopted by a new family. If the country of origin’s laws permits, the Central Body or other authority must conclude that the Convention acquired all essential consents in its Article 16 report on a child.

WHEN IS AN INTERCOUNTRY ADOPTION PROHIBITED

The Convention’s tasks and responsibilities should be clearly defined and coordinated. Step-by-step processes must be implemented in the local context and accordance with the Convention’s safeguards in the proper sequence.

It is the responsibility of the Central Authority to forbid anybody participating in an intercountry adoption from obtaining any inappropriate financial or other benefits or from receiving excessively high payment for services given in connection to intercountry adoption. 

Additionally, adoption-related communication between prospective adoptive parents and any other person who cares for the children until adoption-related matches between prospective adoptive parents and children have been made in countries that have previously been deemed acceptable and eligible to adopt is prohibited. This is sometimes called the prohibition on prior contact. Adoptions involving blood relatives or those that fulfill other criteria stipulated by the nation of origin are excluded from this rule.

Adoption service providers (ASPs) in the United States are authorized or guaranteed to deliver services. US adoption service companies play an important role when it comes to intercountry adoptions. Adoption service providers in the United States may be required to perform certain roles in the adoption process in other nations.

As a result, it ensures that authorities can fulfill their commitments under the Convention and efficiently monitor the whole process. There must be enough staffing, money, training, and other resources, as well as political and legal backing to respect the Convention principles and framework in light of local cultural practices, as well as consistent decision-making procedures.

Sources

1. to establish safeguards to ensure that intercountry adoptions take place in the best interests of the child and with respect for their fundamental rights as recognized in international law,

to establish a system of co-operation amongst the Contracting States to ensure that those safeguards are respected and thereby prevent the abduction, the sale of, or traffic in children,

to secure the recognition in the Contracting States of adoptions made by the Convention

2. The preamble to the Convention states:

Intercountry adoptions shall be made in the best interests of the child and with respect for their fundamental rights and to prevent the abduction, the sale of, or traffic in children and each State should take, as a matter of priority, appropriate measures to enable the child to remain in the care of their family of origin.

322 CFR § 96.2 – Definitions.

Central Authority means the entity designated as such under Article 6(1) of the Convention by any Convention country, or, in the case of the United States, the United States Department of State. In countries that are not Convention countries, Central Authority means the relevant ‘competent authority’ as defined in this section.

4. Intercountry Adoption Accreditation and Maintenance Entity (IAAME) is a 501 (c)(3) organization created for the sole purpose of the accreditation, approval, monitoring, and oversight of adoption service providers providing intercountry adoption services

5. Accredited agency means an agency that has been accredited by an accrediting entity, by the standards in subpart F of this part, to provide adoption services in the United States in intercountry adoption cases.

Accrediting entity means an entity that has been designated by the Secretary to accredit agencies and/or to approve persons for purposes of providing adoption services in the United States in intercountry adoption cases.

6. USCIS uses this form to adjudicate the eligibility and suitability of the applicant(s) who want to adopt a child who habitually resides in a Hague Adoption Convention country.

7. The U.S. Intercountry Adoption Act of 2000 (IAA) provides in Section 301(a)(1) that ‘The Secretary of State shall, with respect to each Convention adoption, issue a certificate if the Secretary of State (A) receives appropriate notification from the central authority of such child’s country of origin; and (B) has verified that the requirements of the Convention and this Act have been met with respect to the adoption.’

 

HAGUE CIVIL ASPECTS OF INTERNATIONAL CHILD ABDUCTION CONVENTION

Developed by the Hague Conference on Private International Law, the Hague Abduction Convention is a multilateral convention that offers a fast-track way to return a child who has been kidnapped internationally by a parent from one country member to another.

The agreement was signed on October 25th, 1980, and came into effect on December 1, 1983, among the signatories. Abducted children who have been illegally held in a contracting state that is not their country of habitual residence will be returned to their countries of habitual residence as soon as possible under the treaty.

BACKGROUND

In 2019, Barbados and Guyana became the last two nations to join the treaty.No substantive rights of either parent or child are affected by the Convention’s provisions. When a Hague Convention case is brought, courts are not allowed to assess the merits of the child custody issue but are only allowed to select the nation in which that dispute would be tried. In this case, the kid is returning to the member nation rather than directly to the parent who has been left behind.

When a ‘habitual resident’ is breached of custody or access rights, the Convention mandates the return of the child.

HOW THE CONVENTION WORKS

Priority is given to maintaining the current custody arrangement in order to prevent a parent from crossing international borders in pursuit of an easier court. Only minors under the age of sixteen are covered by the Convention.

Law, judicial or administrative decisions, as well as an agreement that has legal force in the nation of habitual residence, are all ways in which a person might be granted custody rights. 

It is becoming less common for international jurisprudence to focus on the intent of the parents when deciding whether a child has been unlawfully removed from a family.

UNDERSTANDING PARENTAL ABDUCTION

International parental child abduction is the removal or retention of a child outside their country of habitual residence in breach of another parent or guardian’s custody rights.

When determining whether a child has been abducted, a presiding judge must examine all relevant facts, including parental purpose or consent. This was laid down in the Supreme Court of Canada’s 2018 Office of the Children’s Lawyer v. Balev judgment.

The Fifth Chamber of the European Union decided that the intention of parents alone cannot, as a general rule, be fundamental to the determination of habitual residence for a child. UK, Australian, and New Zealand legal precedents all take the same stance. In the United States, the debate over the importance of parental intention in determining whether a child has been abducted is polarising.

WHAT IS HABITUAL RESIDENCE

While remaining with one parent in a separate jurisdiction, a child’s habitual residence might change, regardless of and notwithstanding any agreement between parents about the child’s habitual residence. A legal dispute or claim is thus determined by the legislation that applies to the person who has lived in the area for the longest time. Traditional common law countries have typically relied on the law of residence to achieve the same result.

It is easier to maintain a habitual abode than a domicile, and the attention is more on the past rather than the future. There is generally just one place of residence where a person spends most of their time. ‘Home’ for a substantial amount of time is defined as a certain geographic location.

For an application for child return to be successful, the location of a kid’s regular home is critical.  The application may only succeed if the child was a habitual resident of the Member State to which return is requested at the time of the alleged removal or detention.

The phrase ‘habitual residence’ is not defined in the Convention, although it is not meant to be a technical term. According to EU legislation, a child’s ‘habitual residence’ is a location where the youngster has some degree of social and familial involvement.

Courts have to consider the unique circumstances of each particular case before making their final determinations.  A kid must be physically present at a location in order for it to be considered their ‘habitual residence.’ Child nationality and the length of time spent in a Member State are other important variables in determining the child’s place of habitual residence.

THE HYBRID APPROACH TO DETERMINING THE HABITUAL RESIDENCE

Following the historic Office of the Children’s Lawyer v. Balev judgment, a ‘hybrid approach’ was established in Canada. The hybrid method requires the judge deciding on the habitual residence to take into account all relevant factors resulting from the circumstances of the case. When determining whether a child should be removed or retained, the application judge considers the familial and social context in which the child’s life had grown immediately previous to the removal or retention. 

According to current US legal precedent, shared parental intent is an important aspect in deciphering an individual child’s home location. By unlawfully removing or sequestering a kid, a parent cannot establish a new habitual residence for the child. In order to determine a child’s ‘habitual residence,’ the court must look at the facts, the shared objectives of the parties, the history of the children’s placement, and the established character of their family prior to events that led to a request for return of the children. 

EVIDENCE ACCEPTANCE UNDER THE ABUNDANCE CONVENTION

Independent of any member nation’s evidentiary standards, the Convention establishes specific procedures for evidence acceptance and evaluation. For the purpose of a child’s return, Article 30 says that the Application for Assistance and any supporting papers filed to or received by the Central Authority is accepted.  In addition, the convention states that no member country may seek the legalization or other comparable formality of the underlying papers in the context of a Convention case. When a Convention action is taking place, the court in the State where the child resides ‘may take notice directly,’ without recourse to specific procedures for the proof of that law or for the recognition of foreign decisions that would otherwise be applicable, of ‘judicial or administrative decisions, formally recognized and not, in the State of habitual residence of the child.’

An application under the convention only takes into account a child’s best interests to a limited extent. ‘The concept of the best interests of the child must be evaluated in light of the exceptions provided for by the Convention, which concerns the passage of time, the conditions of application of the Convention, and the existence of a ‘grave risk.’ The European Court of Human Rights Grand Chamber laid down the precedent in X v. Latvia, a decision noted by the 2017 Special Commission on the Practical Operation of the convention.

IMPORTANT FEATURES OF THE CONVENTION

Each country that has ratified or acceded to the Convention is required to have a Central Authority. The Central Authority is the main point of contact for parents and other governments involved in abduction cases. The Central Authority generally has the responsibility to help locate abducted children, to help encourage amicable solutions to parental abduction cases, and help facilitate the safe return of children as appropriate.

Any documents submitted to the Central Authority as part of the application are admissible in courts in partner countries without the formalities often required by courts for admitting documents from foreign countries. Additionally, whether a child should be returned to their habitual residence, or whether access visitation rights exist, does not depend on the immigration status or nationality of a child or their parents. 

The Convention limits the defenses against the return of a wrongfully removed or retained child. To defend against the return of the child, the defendant must establish to the degree required by the applicable standard of proof (generally determined by the lex fori, i.e. the law of the state where the court is located):

(a) that Petitioner was not ‘actually exercising custody rights at the time of the removal or retention under Article 3; or

(b) that Petitioner ‘had consented to or acquiesced in the removal or retention under Article 13; or

(c) that more than one year has passed from the time of wrongful removal or retention until the date of the commencement of judicial or administrative proceedings, under Article 12; or

(d) that the child is old enough and has a sufficient degree of maturity to knowingly object to being returned to the Petitioner and that it is appropriate to heed that objection, under Article 13; or

(e) that ‘there is a grave risk that the child’s return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation,’ under Article 13(b); or

(f) that return of the child would subject the child to violation of basic human rights and fundamental freedoms, under Article 20

Sources

1. Any judicial and administrative bodies of contracting states are required to ‘act expeditiously in all proceedings seeking the return of a child’ and to use the most expeditious procedures available to ensure that a final decision is made within six weeks of the date of the proceedings’ initiation, as mandated by Article 4 of the Convention.

2. The Convention states that a child’s removal or detention is ‘wrongful’ if the following conditions are met:

 It is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and b. at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention.

3. The convention’s explanatory report explains what incorrect means in this context:

When one parent takes a child away from the other without their consent, the Convention considers this wrongful, and this wrongfulness stems from the fact that the other parent’s rights are also protected by law and that the removal of the child has interfered with their normal exercise.

4. The Office of Children’s Issues within the U.S. Department of State is the department of the U.S. government that puts in efforts to prevent international parental child abduction (both from the United States and to the United States), help children and families involved in abduction cases, and promote the objectives of the Hague Abduction Convention

5. The Office of the Children’s Lawyer (Office) appealed from the Ontario Court of Appeal decision setting aside a decision of the Ontario Divisional Court that set aside the application judge’s decision that granted the respondent father’s application for return of the children to Germany. The application judge concluded that the children’s habitual residence in Germany and thus ordered their return. Both children were born in Canada after their parents moved from Germany.

6. O.L. v. P.Q (2017) C111/17

7. Article 3

The removal or the retention of a child is to be considered wrongful where –

a)   it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and

b)   at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention.

8. Article 4

The Convention shall apply to any child who was habitually resident in a Contracting State immediately before any breach of custody or access rights. The Convention shall cease to apply when the child attains the age of 16 years.

9. For the purposes of this Convention –

a)   ‘rights of custody’ shall include rights relating to the care of the person of the child and, in particular, the right to determine the child’s place of residence;
b)   ‘rights of access shall include the right to take a child for a limited period of time to a place other than the child’s habitual residence.

10. Any application submitted to the Central Authorities or directly to the judicial or administrative authorities of a Contracting State in accordance with the terms of this Convention, together with documents and any other information appended thereto or provided by a Central Authority, shall be admissible in the courts or administrative authorities of the Contracting States.

11. Article 12

Where a child has been wrongfully removed or retained in terms of Article 3 and, at the date of the commencement of the proceedings before the judicial or administrative authority of the Contracting State where the child is, a period of less than one year has elapsed from the date of the wrongful removal or retention, the authority concerned shall order the return of the child forthwith.

The judicial or administrative authority, even where the proceedings have been commenced after the expiration of the period of one year referred to in the preceding paragraph, shall also order the return of the child unless it is demonstrated that the child is now settled in its new environment.

Where the judicial or administrative authority in the requested State has reason to believe that the child has been taken to another State, it may stay the proceedings or dismiss the application for the return of the child.

12. Article 13

Notwithstanding the provisions of the preceding Article, the judicial or administrative authority of the requested State is not bound to order the return of the child if the person, institution, or other body which opposes its return establishes that –

a)   the person, institution or other body having the care of the person of the child was not actually exercising the custody rights at the time of removal or retention, or had consented to or subsequently acquiesced in the removal or retention; or
b)   there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.

The judicial or administrative authority may also refuse to order the return of the child if it finds that the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of its views.

In considering the circumstances referred to in this article, the judicial and administrative authorities shall take into account the information relating to the social background of the child provided by the Central Authority or other competent authority of the child’s habitual residence

13. In 2005, the mother, originally from Latvia, gave birth to a kid in Australia. The mother was still married to a guy other than the father of the kid at the time of giving birth. Paternity (of any father) was not first confirmed, but it was later determined. Single-parent payments paid by the government were received by the mother, who shared a home with the father, although the father leased an apartment. In 2007, the mother became an Australian citizen. They had a deteriorating relationship, and she left Australia with the kid, aged three and a half months, in 2008.

Later, the father sued for parental rights to the kid in the Australian Family Court, and he requested that the child be returned to him under the Hague Convention. Based on the information provided by the father, the Family Court confirmed his paternity in the Family Court (no DNA testing). Further, a judgment dated November 6, 2008, confirmed that the mother and father had shared parental responsibility for their kid from birth (retroactively). However, after being invited, the mother failed to show up for the hearing either in person or over the phone. Also, she didn’t file an appeal.

UNDERSTANDING STOP AND IDENTIFY STATUTES

Many states have ‘stop and identify’ legislation. Under these statutes, if a police officer reasonably thinks that someone has committed an illegal action, the officer may hold that individual and ask for identification. A person who refuses to present identification commits the offense of refusing an officer’s legal command. 

Without such reasonable suspicion, nonetheless, demand for identification may be unlawful. Drivers who are required to present an ID may need to comply as well. Laws in several places compel drivers who are pulled over for speeding and similar violations to give identification when an officer asks it.

WHAT IS STOP AND IDENTIFY

Statues such as the ‘stop and identify’ legislation exist in various U.S. states, allowing police to require persons they reasonably suspect of criminal activity to reveal their names under certain circumstances. Even in these states, a person is not forced to furnish identification if there is no reasonable suspicion that a crime has been committed, is being committed, or is going to be committed.

Unreasonable searches and seizures are prohibited under the 4th Amendment, which also stipulates that warrants must be backed by solid evidence. This decision by the Supreme Court in Terry v. Ohio (1968) affirmed that police officers may briefly arrest and pat down suspects for weapons when they have reasonable suspicion of their involvement in a crime. It was determined by the Supreme Court in 2004 in Hiibel v. Sixth Judicial District Court of Nevada that laws requiring suspects to provide their identities during a legal Terry stop did not violate the Fourth Amendment.

THE REASONABLENESS TEST

Some ‘stop and identify’ laws, on the other hand, violate suspects’ due process by being imprecise about how they must identify themselves. Kolender v. Lawson (1983), for instance, the Court overturned as unduly broad California legislation requiring ‘credible and trustworthy’ identification. A suspect may refuse to reveal his or her identity under the Fifth Amendment if they have a reasonable concern that doing so might lead to his or her incrimination. As stated in the Constitution’s Fourth Amendment, citizens have the right to be protected against ‘unreasonable searches and seizures of their ‘persons, homes, documents and things.’ 

One of the most important questions in a Fourth Amendment case is the reasonableness of the police action; relevant variables in a consideration of reasonableness include both the indignity and time spent conducting the search. Fourth Amendment intrusions are judged on the basis of three factors: [A.] the gravity of the public concerns served by the seizure, [B.] its advancement of public interest, and [C.] the severity of the interference with individual liberty. Courts use a balancing test to determine whether a given Fourth Amendment intrusion seems to be reasonable.

If people are pulled over by the police for no reason other than to ‘ascertain his identification and the questionable circumstances surrounding his presence overseas,’ they would be entitled to be held under Nevada’s ‘stop-and-identify’ legislation, which is at issue in Hiibel. Reasonable and articulated suspicion of criminal activity is required by law, and the individual held must ‘identify oneself,’ but he or she is not obligated to answer any more inquiries from the police. According to the state’s statute, ‘identity’ just means declaring the person’s name, according to the Nevada Supreme Court.

Twenty-three additional states have identical legislation. Other states (such as Texas and Oregon) have enacted similar rules for motorists alone.

THE STOP AND FRISK

It is a New York City Police Department practice to briefly hold, interrogate, and sometimes search citizens and suspected criminals on the street for weapons and contraband known as the stop-question-and-frisk program, or stop-and-frisk. The Terry stop, as it’s called elsewhere in the country, maybe found here under the name of the stop-and-frisk. Criminal process law section 140.50 contains the policy’s guidelines, which are based on the Supreme Court’s Terry v. Ohio ruling in the United States.

In the United States, a Terry stop permits the police to temporarily hold a person if they have grounds to suspect they are involved in illegal conduct. The criterion for making an arrest is probable cause, not reasonable suspicion. 

Stop and frisk is the term used when police stop and search a pedestrian. Traffic stops are when police pull over a car and conduct a traffic investigation. A pretextual stop is when the police pull over a car for a minor infraction in order to look into other possible criminal conduct. Stops on a bus are subject to additional regulations.

In spite of several Supreme Court decisions defining the relationship between police and the Fourth Amendment in America, Congress has yet to set a standard for police conduct. State legislators and judges have taken action, and some localities have created legislation to address these concerns. Due to the difficulty in proving unconscious prejudice, current standards surrounding the legality of Terry stops fail to take this into consideration. As a result, the system often legitimizes discriminatory actions based on race. 

HOW TO GAUGE WHETHER A STOP AND IDENTITY IS LEGAL

In the United States, interactions between police and others fall into three general categories: consensual (‘contact’ or ‘conversation’), detention (often called a Terry stop, after Terry v. Ohio,) or arrest. ‘Stop and identify’ laws pertain to detentions. In Terry v. Ohio, the balancing test behavior is shown in a more complex manner since police possessed reasonable suspicion in the defendant. An officer frisked the accused after seeing suspicious behavior and detained him when he found firearms in his possession. The Supreme Court agreed on writ of certiorari that the officer had reasonable suspicions that the defendant was planning a robbery and would be armed. The defendant’s rights were balanced against the government’s interest in crime prevention and police protection, which was taken into consideration by the Court. However, in spite of the significant privacy invasion, the Court finally decided that the frisk served the purpose of neutralizing a danger to police and members of the public.

Different obligations apply to drivers of motor vehicles, who generally are required by state vehicle codes to present a driver’s license to police upon request.

Having ‘specific and articulable facts that suggest the individual be stopped is or is going to engage in criminal behavior gives police reasonable suspicion to make a stop. Officers have a lot of leeways when it comes to stopping citizens since they are seldom supervised. The ‘totality of the circumstances determines whether the suspicion is warranted. The Supreme Court ruled that the word ‘reasonable suspicion’ should be considered on a case-by-case basis since it is so broad. Often, it is based on a collection of circumstances that, taken individually, would not be sufficient to warrant a halt.

Suspicion must be directed at a specific individual. When determining whether or whether a stop is necessary, police officers rely heavily on situational variables based on illegal activity. In other words, if they see someone acting strangely or breaking the law, they will intervene. 

WHAT IS TERMED AS A CONSENSUAL INTERACTION UNDER STOP AND IDENTIFY

A police officer may approach anybody at any moment and ask them questions. A simple chat may be the goal, although authorities may suspect criminal activity but lack ‘specific and articulable evidence’ to warrant detention or arrest, and hope to learn this information during interrogation. There is no obligation on the part of the person being contacted to identify himself or answer any further inquiries, and the person is free to leave at any moment. 

WHAT IS TERMED AS A REASONABLE SUSPICION UNDER STOP AND IDENTIFY

When circumstances make it seem unlikely that a person has the freedom to depart, that individual is said to be held.

People may be temporarily detained if the authorities have reasonable suspicions that they’ve done, are committing, or will commit a crime. This power is specifically granted in several state legislatures. It was decided in Terry that police may check for weapons in a restricted way (known as ‘frisking’) if they have reasonable suspicions that the individual being arrested is in fact armed and dangerous.

Officers are required to have reasonable suspicion before holding someone, but they are not obligated to tell the individual what their suspicions are. Only if the suspect is apprehended and the propriety of the stop is contested in court would the officer have to state his suspicions.

A Terry stop inmate may be questioned by police, but they are not obligated to answer any questions.  A person arrested under Terry’s circumstances must identify themselves to authorities and in certain instances offer extra information, although many states have ‘stop and identify’ statutes that demand this.

For a long time before Hiibel, the question of whether a person might be detained and charged for refusing to give their identity remained unanswered. The federal circuit courts of appeal divided authority on this issue and the U.S. Supreme Court twice declined to examine the subject.] A prisoner was not needed to provide written identity in Hiibel, the Court suggested but might meet the requirement simply by mentioning his or her name. The reluctance to identify oneself may be taken into account together with other criteria in order to determine if there is probable cause for an arrest under several ‘stop and identify’ legislation.

The Supreme Court has yet to rule on the legality of requiring a prisoner to submit information outside their identity as of February 2011. The only information a detained individual is obliged to disclose is their entire name in certain areas, such as Arizona.

WHAT HAPPENS IF AN INDIVIDUAL IS ARRESTED

Simply being suspected of criminal behavior is all it takes to warrant a person’s arrest and subsequent incarceration. For an arrest, a police officer must have reason to suspect the suspect of a crime. Police in certain jurisdictions are required to tell the person they want to arrest and the reason they are doing so. However, it is not always clear when detention turns into an arrest. After an arrest, authorities have the right to conduct a search of the suspect, their residence, and the surrounding area.

A detained person’s need to identify themselves may be governed by the jurisdiction where the arrest takes place. A Miranda warning must be given to someone who has been arrested and the police want to interrogate them about their Fifth Amendment rights to keep quiet. Although some states have laws that require an arrested person to give their name and other biographical information, some state courts have held that refusal to give one’s name constitutes obstructing a public officer, it is unclear whether ‘stop and identify’ laws could compel giving one’s name after being arrested. A person who is detained but refuses to provide their identity has little prospect of being released quickly.

An individual may thus be arrested by a police officer who personally saw them violate any state statute, city ordinance, or federal law. Police arrest powers vary depending on the seriousness of the offense. However, the officer must actually have seen the violation. The police may not arrest and take anybody into custody unless they fail to disclose their identity, refuse to sign the citation, or have previously failed to appear in court or pay a fee on a similar crime if the charge is a small misdemeanor for which only a fine is available (not time in prison).

Unless individuals have an outstanding warrant or a long history of failure to appear in court, an officer can generally only arrest them for [A.] a misdemeanor committed in the officer’s presence;  [B.] their medical or mental state may cause them to harm themselves or others; [C.] if the offense is domestic violence or the officer is concerned the individual may harm another person; [D.] the individual fails to identify themselves by giving their name and date of birth. A police officer may arrest anyone and search their belongings if they refuse to identify themselves.

Even though the police officer did not personally witness the specific individual commit the offense, the person might be arrested for a felony (a crime for which prison time is an option) if the officer has reason to suspect they still committed it. If they are found guilty, the court system (not the police) will decide whether or not the officer’s belief was reasonable. Whether or not the person is aware of a warrant for their arrest, they may be arrested. A warrant that has already been issued cannot be revoked by the police. The individual specified on the warrant must be arrested and the warrant must be served. 

An arrest warrant is a legal document that instructs the police or sheriff to arrest and detain someone. It is issued by a judge or a court clerk. No special format is necessary for this content. When this person is arrested, the arresting officer does not have to have the warrant in hand. After they have been arrested, however, the officer has a legal obligation to show them the warrant and provide them with a copy.

for assistance serving legal papers

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“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” – Foster, William A

Sources

1. Hiibel v. Nevada, U.S. Sup. Ct. 2004

2. Terry v. Ohio, 392 U.S. 1 (1968)

3.  Supra note 1

4. Kolender v. Lawson, 461 U.S. 352,

5. ‘Police ‘Pretext’ Traffic Stops Need to End, Some Lawmakers Say.’ Police ‘Pretext’ Traffic Stops Need to End, Some Lawmakers Say | The Pew Charitable Trusts, https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2020/09/03/police-pretext-traffic-stops-need-to-end-some-lawmakers-say. 

6.  § 140.50 Temporary questioning of persons in public places; search for weapons.

In addition to the authority provided by this article for making an arrest without a warrant, a police officer may stop a person in a public place located within the geographical area of such officer’s employment when he reasonably suspects that such person is committing, has committed or is about to commit either (a) a felony or (b) a misdemeanor defined in the penal law, and may demand of him his name, address and an explanation of his conduct.

Any person who is a peace officer and who provides security services for any court of the unified court system may stop a person in or about the courthouse to which he is assigned when he reasonably suspects that such person is committing, has committed, or is about to commit either (a) a felony or (b) a misdemeanor defined in the penal law, and may demand of him his name, address and an explanation of his conduct.

When upon stopping a person under circumstances prescribed in subdivisions one and two a police officer or court officer, as the case may be, reasonably suspects that he is in danger of physical injury, he may search such person for a deadly weapon or any instrument, article or substance readily capable of causing serious physical injury and of a sort not ordinarily carried in public places by law-abiding persons. If he finds such a weapon or instrument, or any other property possession of which he reasonably believes may constitute the commission of a crime, he may take it and keep it until the completion of the questioning, at which time he shall either return it, if lawfully possessed, or arrest such person.

7. The United States Supreme Court held that where: (1) a Police Officer observes unusual conduct by a Subject; (2) The Subject’s conduct leads the Officer reasonably to conclude that criminal activity may be afoot and that the Subject may be armed and presently dangerous; (3) the Officer identifies himself as a policeman; (4) the Officer makes reasonable inquiries; and (5) Nothing in the initial stages of the encounter serves to dispel the Officer’s reasonable fear for safety, the Officer may conduct a carefully limited search of the outer clothing of the Subject in an attempt to discover weapons, and that such a search is a reasonable search under the Fourteenth Amendment, so that any weapons seized may properly be introduced in evidence.

8. Additionally, the officer’s personal beliefs and the decision-making paradigm in which they work influences their choice. Systemic racial profiling is possible.

9. However, a person may typically decide if the conversation is consensual by asking ‘Am I free to leave?’ Police are not compelled to advise a person that they can reject to answer questions and continue about their business

WHAT THE SEC SAID ABOUT GAMESTOP

The U.S. Securities and Exchange Commission on 18th October published a report analyzing the frenetic activity in shares of retailer GameStop Corp and other ‘meme’ stocks, in January, and suggested certain areas for additional regulatory review. 

The report will have consequences that alter where retail stock orders are processed and how that service is compensated for when brokers can limit the trading and the degree of openness surrounding short sells.  The report comes after US securities authorities investigating the unexplained rise in GameStop shares in January asked for further investigation of ‘game-like elements on certain trading platforms.

SO, WHAT HAPPENED

Shares of GameStop surged more than 1,600 percent in January as retail investors collaborated in discussion boards like Reddit’s WallStreetBets to attempt to bid up the heavily shorted stock and force hedge funds to unwind their bets against it, with the hope the short squeeze would drive the price even higher.

The fluctuation in GameStop shares, among other prominent meme stocks, led the clearinghouse that ensures transactions before they are completed to increase the collateral from brokers to clear the deals. That prompted many brokerages, notably Robinhood Markets, to temporarily suspend trading in the red-hot stocks, helping halt the surge, upsetting ordinary traders, and shaking market confidence. Others, including Charles Schwab Corp altered margin requirements and restricted sophisticated options strategies on the impacted equities

WHAT ACTUALLY PROMPTED THE SET UP OF RETAIL TRADING

In late 2019, major retail brokers like Schwab and Fidelity copied Robinhood’s lead and removed trading fees. Then, in early 2020, with COVID-19 lockdowns confining people at home, big entertainment and sports events canceled, and government stimulus payments delivered to many U.S. families, retail trade volumes surged.

While the primary story surrounding the GameStop craze was individual investors taking on large hedge funds, institutional investors were also significant participants in buying and selling.

WHAT HAPPENED TO THE MARKET BECAUSE OF THIS

To comprehend what happened in January 2021, it is essential to understand the market framework within which the incidents happened. From the viewpoint of individual traders, the lifespan of a stock transaction begins with an investor putting an order via an account they create with a broker-dealer.   

The broker-dealer then directs the order for execution to a trading center, such as a national securities exchange, an alternative trading system (‘ATS’), or an off-exchange market maker.  Once a trading center executes the order, the client receives a confirmation and the transaction is reported to a securities information processor that gathers, consolidates, and publishes the price and volume data to market data suppliers and others.

This processor will go on to publish the transaction information (that the buyer and seller both report the same security, price, shares, and dollar amount.)  The transaction information in question is also transmitted to the clearing broker, who confirms the deal by checking the trade data.

 The clearing broker must ‘settle’ an equity trade inside of a couple of days of the completion of the transaction by formally shifting the stock from the seller’s brokerage firm’s account to the buyer’s brokerage firm’s account and relocating the money from the buyer’s brokerage firm to the seller’s brokerage firm, a process made possible by clearing agencies enrolled with the Commission under the Exchange Act.

REPERCUSSIONS FOR GAMESTOP

Congress conducted numerous hearings on the GameStop episode. The SEC has sought public opinions on the impact of the ‘gamification’ of trading applications and if the public is in danger. Additionally, the major post-trade utility for U.S. equities has suggested reducing the settlement period for stock transactions to one day after the deal occurs, from two days. Various businesses and industry organizations have made suggestions on increasing transparency surrounding the execution of retail orders. 

LAWS SURROUNDING BROKER-DEALERS

Broker-dealers are usually required to register with the Commission according to the Exchange Act and are subject to federal securities laws as well as the rules and supervision of the SROs to which they belong. Generally, broker-dealers that do business with the public in securities must join FINRA.    Broker-dealers are also beholden to a multitude of regulatory standards, including those imposed by the Commission and, where applicable, FINRA and the exchanges to which they belong, such as customer account opening obligations, sales practices obligations, and net capital and other financial responsibility rules. 

Numerous such laws and regulations establish responsibilities on the way client orders are handled. Broker-dealers are subject to various conduct obligations, including the duty of ‘best execution,’ which usually requires a broker-dealer to execute client orders at the most advantageous terms reasonably available in the circumstances, which is typically the best reasonably available pricing.

Additionally, FINRA Rule 5320 (commonly referred to as the ‘Manning Rule‘) prohibits FINRA members from trading ahead of customer orders (e.g., receiving a customer order to buy and then purchasing for its own account at a price that would satisfy the customer’s order without providing the customer with that price or a better price).

SO, WHAT DID THE REPORT SAY

Investors were anticipating Securities and Exchange Commission Chair Gary Gensler’s findings and recommendations on GameStop/Robinhood/Reddit saga for well over six months. Gensler’s Report centers around Gamestop as well as the market structure of the US trading system. Investors in Reddit chatrooms and subreddits like WallStreetBets pushed up the value of GameStop shares in January, according to Robinhood/Reddit. Many of these transactions were made on Robinhood, which later ran into financial difficulties.

The ‘gamification’ of trading in the United States was a major talking point. Gensler is concerned about a number of elements of the country’s trading system (trading with game-like features such as points, rewards, leaderboards, bonuses, and competitions to increase engagement). He’s also been outspoken against the practice of brokers like Charles Schwab sending their orders to market makers in return for fees known as payment for order flow. As a result, some brokers are able to provide zero-commission services.

The  Securities and Exchange Commission report analyzing volatility in GameStop and other so-called ‘meme’ stocks, stated the dramatic market movements underlined the need for ‘possible investigation and additional consideration’ of measures to guarantee ‘fair, orderly and efficient markets.

RECOMMENDATIONS FROM THE REPORT

SEC Chair Gary Gensler has already criticized ‘gamification’ on the online platform Robinhood, which is appealing to young investors. Robinhood has been credited with bringing a generation of new individual investors to the stock market, but the platform is also renowned for features that detractors claim may make it addictive.

Under the arrangement, termed payment for order flow, brokerage companies sell the right to execute small investors’ transactions to larger trading houses, which earn modest profits on the difference between the purchasing and selling prices. This method has allowed Robinhood and other brokers to provide free stock trading, but opponents argue this is worrisome. Retail brokers have a motivation to promote greater trading by individual investors, even if it may not be in their best interest.

The tactic was challenged in a proposed class-action lawsuit by retail investors against Robinhood, and some opponents have argued that the time had come to prohibit it. Mr. Gensler had indicated on Capitol Hill and to news outlets that he was ready to explore restrictions or an outright prohibition, but the report offered no evidence that such dramatic changes would be coming since it does not provide details as to recommendations.

WHAT THE REPORT SAID ABOUT GAMESTOP

The SEC report details GameStop‘s rapid increase of a little under USD20 a barrel at the end of 2020 to a high of USD483 on January 12. Yet the SEC said that story did not stop here alone. GameStop purchases by those covering shorts were ‘a small fraction of overall buy volume’ and the company’s share price remained high even after the direct effects of such trades should have waned, according to the regulator

The increase was viewed in the financial media as motivated at least in part by a desire of ordinary investors talking on the Reddit platform cooperating in an attempt to revenge against short sellers.

Seasoned investors saw GameStop’s moves as disconnected from basic concerns about the company’s financial performance and its future. The S.E.C.’s study was the latest effort by regulatory authorities to make sense of the meme-stock rise when a trading frenzy caused stratospheric price gains for companies such as GameStop and the struggling movie company AMC Entertainment.

The report revealed that the fast price rises had been driven in part by so-called short squeezes, as investors who bet against the company, notably hedge funds, had to rapidly reverse course and purchase the shares themselves to close out their holdings.

Momentarily, it appeared, tiny traders had upended the conventional balance of power on Wall Street. But when trading volume increased and prices climbed, many brokers prevented ordinary investors from purchasing the shares of major meme stocks, reversing their gain. The stoppage sparked anger among ordinary investors, a rush of lawsuits, and a variety of internet theories claiming that big Wall Street companies had ordered trade to cease.

WHAT DID THE REPORT SAY ABOUT THE CLEARINGHOUSE

The S.E.C.’s report alternatively highlighted that Robinhood and other platforms had stalled trading in certain shares after the industry-run clearinghouse that settles most stock trades- a technique that requires two additional business days -demanded nearly seven billion dollars from thirty-six clearinghouse members on January 27th, the peak of the frenzy.

That demand is called a margin call. This was intended to guarantee that the stock trading system would continue even if the increasing risk connected with the high trading in meme stocks caused a brokerage company to fail. To minimize the amount required, several platforms restricted trading in certain hot equities.

The clearinghouse’s demands, the S.E.C. concluded, represented a market operating properly — but it indicated that regulators might explore measures to speed up the settlement of transactions, possibly lessening the effect of similar margin calls in the future.

OVERALL THEMES OF THE REPORT

In the report, the SEC focussed on four aspects as a broad area regulation rather than providing recommendations being [A.] forces that may cause a brokerage to restrict trading; [B.]  digital engagement practices, [C.] trading in dark pools and through wholesalers and [D.]short selling and market dynamics.  

The SEC report did not draw inferences on the main reason for GameStop’s uncertainty, saying, ‘Whether driven by a desire to squeeze short-sellers and thus profit from the resultant rise in price, or by belief in the fundamentals of GameStop, it was a positive sentiment, not the buying-to-cover that sustained the weeks-long price appreciation of GameStop stock.’ 

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Contact us for more information about our process serving agency. We are ready to provide service of process to all of our clients globally from our offices in New York, Brooklyn, Queens, Long Island, Westchester, New Jersey, Connecticut, and Washington D.C

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” – Foster, William A

Sources

1. staff, Science X. ‘SEC Report Questions Trading Apps after Gamestop Frenzy.’ Tech Xplore – Technology and Engineering News, Tech Xplore, 19 Oct. 2021, https://techxplore.com/news/2021-10-sec-apps-gamestop-frenzy.html.

2. This is called ‘T+2’

3. The Securities Exchange Act of 1934 (also called the Exchange Act, ’34 Act, or 1934 Act) (Pub.L. 73–291, 48 Stat. 881, enacted June 6, 1934, codified at 15 U.S.C. § 78a)

4. Hatmaker, Taylor. ‘Lawmakers Announce Hearings on GameStop and Online Trading Platforms.’ TechCrunch, TechCrunch, 28 Jan. 2021, https://techcrunch.com/2021/01/28/gamestop-hearings-congress-waters-robinhood/. 

Rep. Maxine Waters (D-CA), chairwoman of the House Committee on Financial Services, announced plans for an investigation into the situation, pointing to a history of ‘predatory conduct’ from hedge funds.’

5. ‘Concept Release: Securities Transactions Settlement.’ Concept Release: Securities Transactions Settlement; Release No. 33-8398; 34-49405; IC-26384; File No. S7-13-04, https://www.sec.gov/rules/concept/33-8398.htm. 

6. The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) as well as the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. The US government agency which acts as the ultimate regulator of the US securities industry, including FINRA, is the US Securities and Exchange Commission (SEC).

7. The term Manning rule is the informal name for a financial industry rule in the United States: Financial Industry Regulatory Authority (FINRA) regulation, Rule 5320. It prohibits a FINRA member firm from placing the firm’s interest before/above the financial interests of a client.

8. ‘Consideration should be given to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise,’ stated the 45-page SEC study, which fell short of recommendations.

9. The S.E.C.’s study reiterated that concern: ‘These payments may constitute a conflict of interest for the retail broker-dealer,’ the report stated.

10. Number of clearing brokers experienced intraday margin calls from a  clearinghouse.    In reaction,  some broker-dealers decided to restrict trading in a limited number of individual stocks in a way that some investors may not have anticipated.   This episode highlights the integral role clearing plays in risk management for equity trading but raises questions about the possible effects of acute margin calls on more thinly capitalized broker-dealers and other means of reducing their risks.   One method to mitigate the systemic risk posed by such entities to the clearinghouse and other participants is to shorten the settlement cycle.

11. Consideration should be given  to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise.  In addition,  payment  for order flow and the incentives   it  creates may cause broker-dealers to find  novel  ways to increase customer trading,  including  through  the use of digital  engagement  practices

12. Much of the retail order flow in  GMEwas purchased by wholesalers and executed off-exchange.  Such trading interest is less visible to the wider market—and payments to broker-dealers may raise questions about the execution quality investors receive.    Further,  though wholesalers increasingly handle individual investor order flow,  they face fewer requirements concerning their operational transparency and resiliency as compared to exchanges or ATSs.

13. While short selling and calls on social media for short squeezes received a great deal of media attention,  the interplay between shorting and price dynamics is more complex than these narratives would suggest.    Improved reporting of short sales would allow regulators to better track these dynamics.

PRIVACY OF GENETIC INFORMATION IN THE UNITED STATES

Genetic information about oneself is often disregarded as private by individuals. The genome, or whole set of DNA, is unique to each person, but the particular variations within a person’s genome may be widely shared across biological relatives or even throughout the entire human population. The genome’s dual importance as a private and public collection of widely shared common components makes any discussion of legislation addressing genetic privacy impossible.

As an identity, DNA has been conceived as the person’s ‘book of life’ and as a way to predict the future, although this isn’t as true as many people believe. A common reaction to this way of thinking is the desire to be in control of who has access to their genetic data, which leads to demands for robust privacy protection or even personal genetic data ownership.

BACKGROUND

Contrary to popular belief, genetic data does not only apply to a single person. It may provide information about a person’s immediate and distant ancestors. A person’s genetic variations can only be understood by examining the genetic data of many other individuals.  Because of the genome’s open nature and high monetary worth, determining how much control people should have and how to offer adequate privacy safeguards is challenging.

A new form of privacy is also gaining popularity since the notion of ‘privacy’ itself has changed over the last several decades. Because of this, the conventional understanding of privacy—as the ‘right to be left alone’—has come under growing pressure in the Information Age. Due to the Internet and other ubiquitous communication technologies, a lot of personal information may be shared without the knowledge or permission of the individual.  Some argue that maintaining one’s secrecy is less important than controlling how their data is distributed and used by others, such as when seeking healthcare, making purchases, and going about their daily life. According to this ‘dominant paradigm’, privacy is defined as a personal right to choose how one’s data is used, both on and off the Internet.

CALIFORNIA’S ADVANCES IN GENETIC PRIVACY

The Genetic Information Privacy Act signed into law by California Governor Gavin Newsom on October 9tH requires direct-to-consumer genetic testing businesses to give information and seek explicit permission from customers about the collection, use, and dissemination of genetic data, provided in bill SB 41.

People now have more say in how their genetic information is utilized, owing to the Genetic Information Privacy Act. Consent may be revoked by customers if they follow specific processes. This means that companies like 23AndMe Inc. and Ancestry.com Inc. must delete a customer’s biological sample within thirty days of the customer revoking their permission if the customer cancels the order. 

WHERE GENETIC PRIVACY COMES INTO PLAY

Recent technological advancements have made it feasible to analyze DNA directly with incredible precision and cost reductions, contributing to the dramatic growth of genome-based approaches such as exome- or genome-based sequencing, which can provide significantly more information than single-gene tests. For certain infants born with developmental disabilities or severe illnesses, genetic testing has already proved useful in identifying diseases with no known cause.

It’s crucial to note that HIPAA only applies to organizations that are either ‘covered entities’ or their business associates (BAs) when dealing with genetic data or any other PHI.  Many unprotected organizations gather genetic information, such as 23andMe and genealogical websites like Ancestry.com, which provide genetic testing online. There is currently no government oversight of companies like 23andMe, despite the FDA recently notifying the company that it was marketing its over-the-the-counter saliva collection kit and Personal Genome Service (PGS) in violation of the Federal Food, Drug, and Cosmetic Act. It has been stated by the FDA that ‘a false-positive BRCA-related risk assessment for breast or ovarian cancer could lead to prophylactic surgery, chemotherapy, intensive screening or other morbidity-inducing actions, while a false negative could lead to a failure to recognize an actual risk that may be present

Existing rules governing genetic information are obviously deficient in a wide range of respects. Instead of making safeguards reliant on who possesses the data, one solution to GINA and HIPAA’s flaws—and not only in genetics—is to attach protections to the data itself. This eliminates the patchwork effect caused by so-called ‘covered entities.’.

The genetic data of customers must be protected from illegal usage by direct-to-consumer testing businesses. Consumers’ accounts and genetic data must also be accessible and erasable by the businesses.

Third-party access permission forms must also be more clear for customers. As a result of this, businesses that provide direct-to-consumer genetic testing must abide by all applicable regulations when providing customer genetic data to police enforcement without their permission. As a result of this change in legislation, ancestry websites will still be utilized as tools for law enforcement investigators, according to Umber. Unless permission has been sought directly from the court, individuals cannot sell or give away material. Most direct-to-consumer businesses’ practices are now codified under the new legislation. Civil fines will be levied on companies who break the new rule. As of January 1, 2022, the Genetic Information Privacy Act will go into effect as a result of the legislation.

WHAT IS THE COMMON RULE

A basic ethical norm known as The Common Rule governs biomedical research in the United States that involves human subjects and seeks to safeguard their privacy by removing ‘identifiers’ such as their name or address from gathered data. Policymakers have been urged to provide uniform standards and best practices for researchers’ access to and use of genetic data obtained from individuals. 

For biomedical and behavioral research involving human participants, The Common Rule was established in the United States in 1981. In July 2018, a major change went into effect. It regulated Institutional Review Boards (IRBs) to oversee human research after the Declaration of Helsinki was revised in 1975. Regardless of the financing, virtually all academic institutions in the country hold their researchers to these declarations of rights.

Additionally, the Genetic Information Nondiscrimination Act (GINA), safeguards genetic privacy for the general population, as well as research subjects. As a result of GINA, health insurers and employers may no longer seek or demand genetic information on a person or a member of that person’s family (and further prohibits the discriminatory use of such information). Other types of insurance, such as life insurance, are not covered by this policy. The Genetic Information Nondiscrimination Act (GINA)  was signed into law on May 21, 2008.  GINA protects individuals against discrimination based on their genetic information in health coverage and in employment.  

GINA is divided into two sections or Titles.  Title I of GINA prohibits discrimination based on genetic information in health coverage.  Title II of GINA prohibits discrimination based on genetic information in employment.

HOW DOES GINA WORK

GINA is primarily an anti-discrimination statute.  Genetic information cannot be used to discriminate against an individual when it comes to insurance by group health and Medicare supplementary plans, but not by life, disability, or long-term care policies.

Genetic information cannot be used in work decisions such as hiring, dismissing, or promotion, according to Title II of GINA. In addition, employers are forbidden from requesting or purchasing genetic information under this provision. If an employer has less than fifteen workers, however, GINA does not apply. Federal government entities are prohibited from collecting and utilizing genetic information on workers or job candidates in hiring and promotion decisions under an Executive Order that goes along with GINA. 

In the United States, GINA allegations are investigated and enforced by the Equal Employment Opportunity Commission (EEOC). As part of its post-offer, pre-employment medical examination, one company was accused by the Equal Employment Opportunity Commission of violating GINA by asking and requiring job applicants to indicate whether or not they had a family medical history for a number of diseases and disorders. The lawsuit, filed in 2013, was settled for $50,000. A week later, the EEOC sued the Founders Pavillion nursing and rehab facility in Corning, New York, in a similar manner.

WHY DOES GENETIC PRIVACY MATTER

A person’s privacy refers to how much the public has access to them. Privacy is a concept referring to the significance of limiting access to a person or to information about them.

There are also certain genetic privacy safeguards under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Genetic information is included in HIPAA’s definition of health information, and health care professionals are prohibited from disclosing it to anybody. Protected health information (PHI) now includes genetic information, according to the HIPAA Omnibus Rule of 2013. Data cannot be used for any other health insurance plans save for life, disability, or long-term care insurance, which is still allowed. Long-term care insurance excludes anybody with a hereditary tendency to Alzheimer’s, for example, from being insured. According to the definition, genetic information comprises genetic testing and a family member or their baby or embryo, as well as proof of sickness in a family member. It excludes gender and age.

It’s essential to remember that genetic privacy includes informational privacy Genetics is intimately linked to data, whether it’s in the form of family trees or the findings of genetic tests. Genetic information is often very sensitive due to the potential impact on an individual’s and their family’s present and future health. There are also significant societal and economic ramifications to this discovery.

However, the Omnibus Rule ignores one issue with GINA: GINA is built on an outdated genetics foundation dating back over two decades. Only those who have not yet been diagnosed with an illness, i.e., the condition has not yet ‘manifest,’ are protected under GINA. Numerous genetic markers may now be tested to see whether they are precursors to illness or if the individual would benefit from preventative therapy. For purposes of GINA and HIPAA, genetic markers that are present do not constitute a ‘manifestation’ of a disease.

Concerning genetic privacy and personal privacy in general, three important ideas are secrecy, security, and anonymity. As the term suggests, confidentiality denotes an instance in which information is shared inside a trusted partnership, such as between a doctor and patient with an understanding that it would not be revealed without the consent of those who originally shared it. Confidentiality, which includes not disclosing genetic information, is a cornerstone of many health professionals’ ethical standards and a cornerstone of any laws. In certain situations, such as those recognized by law or ethical standards, other interests, such as the safety and health of third parties, may take precedence over the need to preserve confidentiality entirely.

for assistance serving legal papers

Simply pick up the phone and call Toll Free (800) 774-6922 or click the service you want to purchase. Our dedicated team of professionals is ready to assist you. We can handle all of your process service needs; no job is too small or too large!

Contact us for more information about our process serving agency. We are ready to provide service of process to all of our clients globally from our offices in New York, Brooklyn, Queens, Long Island, Westchester, New Jersey, Connecticut, and Washington D.C

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction, and skillful execution; it represents the wise choice of many alternatives” – Foster, William A

Sources

1. Some have argued that individuals have a responsibility to disclose data about themselves for low-risk research since knowing the causes of health and illness is so important

2. ‘California Governor Signs into Law Bills Updating the CPRA and Bills Addressing the Privacy and Security of Genetic and Medical Data, among Others.’ The National Law Review, https://www.natlawreview.com/article/california-governor-signs-law-bills-updating-cpra-and-bills-addressing-privacy-and. 

3. ‘At-home DNA tests have provided people with the ability to seek meaningful connections to long-lost family or their own cultural and religious histories. Most people have no idea that this data can then legally be shared with third parties or potentially used against them in a variety of ways,’ said Senator Tom Umberg, who authored the bill. ‘Genetic testing companies have, to date, gone largely unregulated by either state or national governments. This has led to breaches of sensitive private biological information.’

4. The Health Insurance Portability and Accountability Act of 1996 (HIPAA Pub.L. 104–191 110 Stat. 1936 or the Kennedy–Kassebaum Act) is a United States federal statute enacted by the 104th United States Congress and signed into law by President Bill Clinton on August 21, 1996. It modernized the flow of healthcare information, stipulates how personally identifiable information maintained by the healthcare and healthcare insurance industries should be protected from fraud and theft, and addressed some limitations on healthcare insurance coverage

5. ‘FDA Orders Genetics Company 23andMe to Cease Marketing of Screening Service.’ The Guardian, Guardian News and Media, 25 Nov. 2013, https://www.theguardian.com/science/2013/nov/25/genetics-23andme-fda-marketing-pgs-screening. 

6. The Common Rule is a 1981 rule of ethics in the United States regarding biomedical and behavioral research involving human subjects. A significant revision became effective July 2018. It governed Institutional Review Boards for oversight of human research and followed the 1975 revision of the Declaration of Helsinki; it is encapsulated in the 1991 revision to the U.S. Department of Health and Human Services Title 45 CFR 46 (Public Welfare) Subparts A, B, C and D. Subpart A.

7. The World Medical Association (WMA) has developed the Declaration of Helsinki as a statement of ethical principles for medical research involving human subjects, including research on identifiable human material and data.

8. It is contained in the 1991 amendment to Title 45 CFR 46 (Public Welfare) Subparts A, B, C, and D of the U.S. Department of Health and Human Services

9. The 21st Century Cures Act is a United States law enacted by the 114th United States Congress in December 2016 and then signed into law on December 13, 2016. It authorized $6.3 billion in funding, mostly for the National Institutes of Health. The act was supported especially by large pharmaceutical manufacturers and was opposed especially by some consumer organizations.

Proponents said that it would streamline the drug and device approval process and bring treatments to market faster. Opponents said that it would allow drugs and devices to be approved on weaker evidence, bypassing randomized, controlled trials, and bring more dangerous or ineffective treatments to market]

The bill incorporated the Helping Families In Mental Health Crisis Act, first introduced by then-Congressman Tim Murphy, R-Pa., which increased the availability of psychiatric hospital beds and established a new assistant secretary for mental health and substance use disorders.

10. The Genetic Information Nondiscrimination Act of 2008 (Pub.L. 110–233), 122 Stat. 881, enacted May 21, 2008), is an Act of Congress in the United States designed to prohibit some types of genetic discrimination. The act bars the use of genetic information in health insurance and employment: it prohibits group health plans and health insurers from denying coverage to a healthy individual or charging that person higher premiums based solely on a genetic predisposition to developing a disease in the future, and it bars employers from using individuals’ genetic information when making hiring, firing, job placement, or promotion decisions.

11. ‘Fabricut to Pay $50,000 to Settle EEOC Disability and Genetic Information Discrimination Lawsuit.’ Fabricut to Pay $50,000 to Settle EEOC Disability and Genetic Information Discrimination Lawsuit | U.S. Equal Employment Opportunity Commission, https://www.eeoc.gov/newsroom/fabricut-pay-50000-settle-eeoc-disability-and-genetic-information-discrimination-lawsuit. 

12. Fabricut, Inc., one of the world’s largest distributors of decorative fabrics, will pay $50,000 and furnish other relief to settle a disability and genetic information discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC)

13. About 170 lawsuits have been filed by employees, applicants, and former employees alleging that businesses illegally requested or exploited genetic information for discrimination as of late July 2013, according to the EEOC.

14. The HIPAA Omnibus Rule was finalized by the Office for Civil Rights (OCR). The Office of Management and Budget (OMB) approved the final rule and subsequently published it in the Federal Register. The Federal Register has published the final Omnibus rules written by the U.S. Department of Health and Human Services (HHS) that will modify the HIPAA Privacy, Security, Breach Notification, and Enforcement Rules. 

WHAT’S HAPPENING WITH FACEBOOK

For more than five hours on October 4th, a critical part of the world’s social media landscape was down due to an error in the routers that coordinate traffic to Facebook‘s data centers. The outage re-ignited demands for federal antitrust changes that might decapitate the rapidly expanding internet behemoth.

The catastrophic, if only temporary, failure of the business left millions without access to a single communications tool. Because of its monopoly on three of the world’s social communications markets, consumers have no other choice than to utilize Facebook.

WHEN FACEBOOK FAILED

Facebook’s systems are set up to check for errors, but an audit tool that was supposed to block the command that triggered the outage had a flaw, according to the firm. Furthermore, malicious behavior was not to blame for the outage.

Unfortunately for Facebook, the system breakdown occurred just as the corporation was coming under fire from Congress for allegedly prioritizing profits above user safety, an accusation disputed by Facebook.

WhatsApp, a major messaging service with over two billion users, was disabled for consumers and internal tools were also restricted for workers.  For Facebook engineers, the problem was made much worse since the outage disabled the tools they usually use to analyze and fix failures of this kind. Indeed, it was necessary to send engineers to the data centers to fix it, a task made harder since it took the business a long time to get engineers inside to work on the servers because of the tight security measures in place.

Even when the data centers’ network connection was restored, Facebook said it was concerned that a spike in traffic might cause the company’s websites and applications to go down.

According to Facebook, a mistake during regular maintenance on the company’s data center network was to blame for the worldwide system failure on Monday that lasted over six hours and created a flood of issues that prolonged the repair process. Web monitoring company Downdetector claimed the outage was the worst it has ever seen. Billions of Facebook (FB.O), Instagram (IGS.O), and WhatsApp (WAP) users were denied access to their applications as a result, and the corporation has been under fire for weeks now.

FRANCES HAUGEN’S TESTIMONY

For years, Facebook has battled accusations that it has a monopoly on social networking. A request to dismiss the Federal Trade Commission’s (FTC) complaint accusing Facebook of squashing its competitors was also submitted by Facebook’s attorneys on Monday as its engineers raced to repair its server problems.

A former Facebook employee turned whistleblower testified before the U.S. Senate on Tuesday, accusing the corporation of prioritizing profits above user safety, a charge the company rejects. Facebook owns Instagram as well as WhatsApp. Employee Frances Haugen stressed the fact that  that ‘Facebook’s closed design means it has no oversight — even from its own Oversight Board, which is as blind as the public.’

That makes it impossible for regulators to serve as a check. Haugen’s argument centered around the fact that Facebook has had incidents of rampant violence on the platform, and maintained that Facebook had done too little to prevent its platform from being used by people planning violence. This is owing to the fact that Facebook was used by people planning mass killings in Myanmar and in the Jan. 6 assault by Trump supporters who were determined to toss out the 2020 election results.

October 3rd, on ‘60 Minutes,’ Frances Haugen, in her capacity as a former Facebook data scientist, came forward not only to acknowledge that she was the whistle-blower who had leaked the documents. Additionally, she revealed they formed the basis of at least eight complaints that she and her lawyers had filed with the Securities and Exchange Commission. 

As the main product manager on the civic-integrity team, Haugen worked for Facebook for almost two years until the firm combined the two teams into a single department. The day following the Facebook outage, on October 5th, Haugen spoke before the Senate Committee on Consumer Protection, Product Safety, and Data Security for more than eight hours. In her testimony to the Senate, she said, ‘Almost no one outside of Facebook understands what occurs within Facebook.’ since ’the corporation deliberately conceals critical information from the general public, the United States government, and governments worldwide.’

WHERE THE FTC COMES INTO PLAY

There is renewed interest in the antitrust case filed by the Federal Trade Commission (FTC) against Facebook after the widespread social media outrage, which was allegedly triggered by an error on Facebook routers.

The Federal Trade Commission (FTC) is now involved in a battle to solve Facebook’s underlying issue, which shows monopolistic tendencies. This market inequity is addressed in part by the antitrust case now pending in the courts.  ‘Antitrust’ refers to laws enacted by governments to prevent companies from becoming monopolies in order to maintain healthy competition. So, for example, if a company buys out several of its best rivals, it would be in violation of antitrust rules since it would have dominance in the relevant industry.

Four months after successfully having a previous lawsuit dismissed, Facebook Inc. filed a fresh petition on October 4th  seeking the dismissal of a federal antitrust action claiming the corporation engaged in illegal monopolization. There are allegations that Facebook illegally maintained its dominant position by acquiring potential rivals like the messaging platform WhatsApp and image-sharing app Instagram. The company’s submission to a federal court in Washington, D.C., is the newest counterattack against the Federal Trade Commission, which first sued Facebook in December. It is the commission’s goal to undo the arrangements that have been made. 

By filing a lawsuit on December 9th, 2020, the Federal Trade Commission claimed that Facebook was unlawfully preserving its social networking monopoly by engaging in anticompetitive behavior for many years. After a thorough investigation conducted in collaboration with a group of attorneys general from forty s states, the District of Columbia, and Guam, the complaint claims that Facebook has employed a systematic strategy to eliminate competition, along with its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of mobile messaging app WhatsApp, and the encroachment of anticompetitive circumstances on third-party software developers. This behavior hurts competition, reduces consumer choice in personal social networking, and denies marketers the advantages of competition in the marketplace.

This could include, among other things, the requirement of divestitures of assets such as Instagram and WhatsApp, the prohibition on Facebook imposing anticompetitive conditions on software developers, and the requirement for Facebook to seek prior notice and approval for any future merger or acquisition. 

According to the lawsuit filed with the FTC, Facebook has its sights set on prospective competitors who could challenge its hegemony. At a time when users of individual social networking services were moving from desktop computers to smartphones and when people were progressively adopting photo-sharing, Instagram appeared. Additionally, it was claimed Facebook officials, including CEO Mark Zuckerberg, soon realized that Instagram was a dynamic and creative personal social network that posed an existential threat to Facebook’s monopolistic power.

WHY INSTAGRAM AND WHATSAPP ARE RELEVANT

Instagram’s purchase by Facebook for a billion dollars in April 2012 reportedly neutralizes Instagram’s immediate threat while also making it increasingly impossible for another personal social networking rival to acquire size.

When ‘over-the-top’ mobile messaging applications first appeared, Facebook apparently saw them as a significant challenge to its dominance. Facebook’s leadership was aware—and concerned—that a successful mobile messaging app might join the personal social networking market by adding new features or by spinning off a separate personal social networking app, according to the lawsuit, which cites internal emails and documents.

WhatsApp was the obvious worldwide ‘category leader’ in mobile messaging by 2012. Again, according to the lawsuit, Facebook decided to purchase WhatsApp for nineteen billion dollars in February 2014 rather than compete with a growing danger. With the purchase of WhatsApp, Facebook reportedly neutralizes any future threats to its personal social networking monopoly, as well as making it more difficult for any new competitors to establish a foothold in mobile messaging.

This is something Facebook strongly disputes, claiming that it has earned its current position on the merits by providing users with things they want for free. Earlier this year, a federal judge dismissed the first FTC case against Facebook after finding that the agency had not made enough allegations to back up its argument that the social media giant had broken the law.

According to the court, the agency was given one more shot to prove its case. As a result of the FTC’s first complaint, Facebook claims that a deficit still exists. It argued that the FTC’s claims that the business is a monopolist are unsupported by statistics.

‘A litigation-driven fiction at odds with the business reality of strong competition with surging rivals like TikTok and scores of other attractive choices for customers,’ was a major argument during this case.

In its second complaint, the FTC provided a more in-depth explanation of why it thought Facebook was abusing its market power to stifle any competitors who could pose a danger to its dominance. While claiming Facebook used ‘strong-arm methods’ to hurt competitors by blocking third-party app developers from accessing its platform, the latest lawsuit also argues that Facebook wanted to acquire rivals rather than compete with them.

THE NEED TO UPDATE ANTI-TRUST LEGISLATION

Long-standing demands by a bipartisan coalition of U.S. legislators to modernize the country’s rules regulating monopolies in order to properly regulate—or possibly split up— the business have gained new urgency in light of the outages and Haugen’s testimony and appearance on 60 Minutes Sunday.

Since the Clayton and Sherman Acts were enacted more than a century ago, not much has changed in terms of American antitrust legislation. Republicans and Democrats, for various reasons, have increasingly criticized the growth of Big Tech in recent years. Market concentration, according to Democrats, harms consumers in the long run, while Republicans believe that big digital firms may use their market dominance to stifle some forms of free expression.

As a result of existing antitrust rules, the impact of a company’s saturation on consumer prices is given precedence. Because Facebook generates money from advertising and is free for users, regulatory agencies have a hard time enforcing conventional monopoly restrictions due to the financial effect on users. However, there are encouraging indications that things may improve in the near future.

Six antitrust reform measures were advanced by the House Judiciary Committee in June, including one that would prohibit internet firms from buying up growing rivals and another that would prevent big tech from giving their own goods priority over competitors’ products. It took the committee over 20 hours to mark up this package of legislation because of disagreements over how to effectively restructure the space.

HOW FACEBOOK IS RETALIATING

US antitrust regulators want to compel Facebook to sell Instagram and WhatsApp as part of a revamped antitrust lawsuit, which the social media giant is fighting. 

The company maintained that FTC failed to establish a ‘plausible factual basis for labeling Facebook an illegal monopolist.’ This led Facebook to state that there is ‘no foundation’ to claim that Facebook has or had a monopoly. A dismissal with a prejudice request from Facebook would make it more difficult for the agency to modify its case.  Facebook said on October 4th that Judge Boasberg had erred in dismissing such arguments.

Lina Khan, the FTC’s new chairperson, was a major contender for Facebook’s request for dismissal. Because of her past criticism of big internet firms, Facebook claimed that Ms. Khan was biased when she joined the FTC and had concluded that the corporation had broken the law. Facebook Inc. thus wants Federal Trade Commission Chair Lina Khan to be recused from participating in decisions about the agency’s monopoly lawsuit against the company, saying her past criticism of Facebook means she’s biased. The request stems from Facebook’s citation of Ms. Khan’s barred from any involvement in the antitrust case, citing her academic writings and her work on a House committee that investigated tech companies, including Facebook.

The FTC had rejected a recusal petition submitted by Facebook prior to the current action, stating that the business enjoyed sufficient constitutional due-process protections since the FTC’s case would be handled by a federal court.

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Sources

1. In a blog post, Facebook Vice President of engineering Santosh Janardhan explained the company’s engineers issued a command that unintentionally disconnected Facebook data centers from the rest of the world.

2. ‘Facebook Explains Error That Caused Global Outage.’ The Guardian, Guardian News, and Media, 5 Oct. 2021, https://www.theguardian.com/technology/2021/oct/05/what-caused-facebook-whatsapp-instagram-outage. 

3.‘The company’s leadership knows how to make Facebook and Instagram safer but won’t make the necessary changes because they have put their astronomical profits before people. Congressional action is needed,’ Frances Haugen, the former employee, said at a U.S. Senate hearing

4. Roberts, Molly. ‘Opinion | What the Facebook Blackout Taught Us.’ The Washington Post, WP Company, 5 Oct. 2021, https://www.washingtonpost.com/opinions/2021/10/05/what-facebook-blackout-taught-us/. 

5. Mac, Ryan. ‘Who Is Frances Haugen, the Facebook Whistle-Blower?’ The New York Times, The New York Times, 5 Oct. 2021, https://www.nytimes.com/2021/10/05/technology/who-is-frances-haugen.html. 

6. ‘The company’s leadership knows ways to make Facebook and Instagram safer and won’t make the necessary changes because they have put their immense profits before people. Congressional action is needed,’ she will say. ‘As long as Facebook is operating in the dark, it is accountable to no one. And it will continue to make choices that go against the common good.’

7. ‘This inability to see into the actual systems of Facebook and confirm that Facebook’s systems work as they say is like the Department of Transportation regulating cars by watching them drive down the highway,’ her testimony says. ‘Imagine if no regulator could ride in a car, pump up its wheels, crash test a car, or even know that seat belts could exist

8. She added, ‘Facebook wants you to believe that the problems we are talking about are unsolvable. They want you to believe in false choices. They want you to believe that you must choose between a Facebook full of divisive and extreme content or losing one of the most important values our country was founded upon, free speech. . . . That to be able to share fun photos of your kids with old friends you must also be inundated with anger-driven virality. They want you to believe that this is just part of the deal. I am here today to tell you that that’s not true.’

9. New York Democratic Attorney General Letitia James announced the state’s lawsuit, which includes the District of Columbia and Guam. It was also filed in Washington, D.C.

10. ‘FTC Sues Facebook for Illegal Monopolization.’ Federal Trade Commission, 18 Mar. 2021, https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization. 

11. The Clayton Antitrust Act of 1914 (Pub.L. 63–212, 38 Stat. 730, enacted October 15, 1914, codified at 15 U.S.C. §§ 12–27, 29 U.S.C. §§ 52–53), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anti-competitive practices in their incipiency.

12. The Sherman Antitrust Act of 1890 (26 Stat. 209, 15 U.S.C. §§ 1–7) is a United States antitrust law that prescribes the rule of free competition among those engaged in commerce.

13. Lerman, Rachel. ‘Analysis | the Technology 202: Congress Takes Aim at Antitrust Legislation Designed to Reel in Big Tech.’ The Washington Post, WP Company, 24 June 2021, https://www.washingtonpost.com/politics/2021/06/24/technology-202-congress-takes-aim-antitrust-legislation-designed-reel-big-tech/. 

14. ‘Takeaways from the Latest Proposed Competition Legislation.’ Law360, https://www.law360.com/consumerprotection/articles/1428001/takeaways-from-the-latest-proposed-competition-legislation.

15. Bloomberg.com, Bloomberg, https://www.bloomberg.com/news/articles/2021-07-14/facebook-wants-ftc-chair-khan-recused-from-antitrust-case.

16. Ms. Khan shouldn’t have taken part in the second case, according to the business, and it should be rejected for that reason.