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Legal news from Thursday, February 28, 2013




Spain Supreme Court strikes down city burqa ban
Rebecca DiLeonardo on February 28, 2013 5:05 PM ET

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[JURIST] The Spanish Supreme Court [official website, in Spanish] on Thursday struck down [judgement, PDF, in Spanish; press release, in Spanish] a city ban on wearing veils over the face in municipal buildings, finding that the law infringes on religious freedom. The city of Lleida, in Catalonia, was the first Spanish city to impose such a ban, but only about 3 percent of its population is Muslim. The city law was previously upheld [JURIST report] by a Spanish appeals court which found that the law was permissible for identification and security purposes. In its ruling, the Supreme Court found that the city of Lleida had not adequately established that the ban on veils would improve security and that the law prevented individuals from practicing religious traditions.

Burqas and other symbols of Islam have been a controversial subject in Europe. In July the Netherlands announced that a ban on burqas would go forward [JURIST report] later this year. Proponents of the Netherlands ban said the purpose was to stop people from being able to commit crimes and remain undetected by concealing their identities and covering their faces. Belgium officially banned [JURIST report] burqas in July 2011. France's ban on burqas took effect [JURIST report] in April 2011. Swiss voters approved a proposal to ban the construction of minarets [JURIST report] in November 2009, and the vote was subsequently upheld [JURIST report] in the European Court of Human Rights [official website] in July 2011. Some commentators have suggested that the rationales behind the European burqa bans are weak [JURIST op-ed] and that the true purpose of the bills is societal discomfort.




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Canada Supreme Court declines to hear 'Toronto 18' appeal
Rebecca DiLeonardo on February 28, 2013 3:48 PM ET

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[JURIST] The Supreme Court of Canada [official website] on Thursday declined to hear the appeals of three men convicted of participation in a terrorist plot. Zakaria Amara, Saad Khalid and Saad Gaya, who were members of the "Toronto 18" terrorist group, were given sentences ranging from 14 years to life for their participation in a failed plot to enact a series of violent attacks on civilians, public officials and government buildings. Their appeal sought to lighten the sentences, asking the Supreme Court to consider the constitutionality of sentencing guidelines for terrorist convicts. The court on Thursday said it would not hear the appeal without issuing any further comment.

The accused leader of the terrorist group, Zakaria Amara, pleaded guilty [JURIST report] in 2009 to charges of planning to bomb three targets in Ontario. The same month Saad Gaya plead guilty while another member of the group, Ali Mohamed Dirie, was sentenced to seven years in prison [JURIST report]. In September 2009, the first of the group to plead guilty, Saad Khalid, was sentenced to 14 years in prison [JURIST report], though the Canadian government sought to alter that sentence for time already served. The first of the suspects to be convicted under Canada's post-9/11 terrorism law was sentenced and released [JURIST reports] in May, with the court citing time served. The Toronto 18 were arrested [JURIST report] in 2006.




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US House reauthorizes Violence Against Women Act
Daniel Mullen on February 28, 2013 3:22 PM ET

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[JURIST] The US House of Representatives [official website] on Thursday approved [roll call vote] the Violence Against Women Act (VAWA) [text, PDF; JURIST news archive] by a vote of 286-138 with seven not voting. The Senate [official website] approved [JURIST report] the same version of the bill earlier this month, and it will now go to President Barack Obama for final approval. The president welcomed [press release] the passage of the legislation "as an important step towards making sure no one in America is forced to live in fear" and is expected to sign the bill into law. House Republicans initially sought to pass a version of the bill that excluded specific protections [NYT report] for lesbian, gay, bisexual and transgender victims of domestic violence. The bill reauthorizes the VAWA for five years and allocates $660 million [WP report] each year to be spent on battered women's shelters, victims advocates, rape-prevention education and other programs. Speaker of the House John Boehner [official website] abandoned the "Hastert rule" [NBC news report], which provides that a bill will only be brought to the House floor for a vote if it has the support of the majority of the majority party, for only the fourth time since becoming Speaker in order to get the bill passed.

Since its expiration in 2011, the reauthorization of the VAWA has been controversial. Last week the UN Special Rapporteur on violence against women Rashida Manjoo [official profile] urged [UN press release; JURIST report] the US Congress to renew the VAWA. In 2011 Manjoo issued a report [text, PDF; JURIST report] which found a continued prevalence of violence against women and discriminatory treatment of women in the US, with a heightened impact on poor, minority and immigrant women. Last year the Republican-led House and the Democratic-controlled Senate both passed versions of the VAWA reauthorization but were unable to reach a compromise [AP report] over the prosecutorial power of tribal courts.




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Wikileaks defendant pleads guilty lesser charges
Daniel Mullen on February 28, 2013 2:30 PM ET

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[JURIST] Pfc. Bradley Manning [advocacy website; JURIST news archive] pleaded guilty on Thursday to 10 of the 22 charges against him for providing classified materials to WikiLeaks [website; JURIST news archive] in what the government says is the largest leak of classified documents in US history. Manning, who is charged [JURIST report] with violating the Espionage Act, pleaded not guilty [NBC news report] to the most serious charge against him, aiding the enemy. Additionally, Manning read a statement [CNN report] offering, for the first time, his rationale for leaking the documents. Manning claimed he became depressed about the situation in Iraq and Afghanistan and wanted the public to know about the "ground reality" but did not believe the information could harm the US. Thursday's plea comes one day after US Army Colonel Denise Lind, who is presiding over Manning's case, denied [JURIST report] a defense motion to dismiss the charges against Manning because he he has not been provided with a speedy trial.

Since his arrest in 2010, Manning's case has been controversial. In January Lind ruled that prosecutors must prove that Manning knew he was aiding the enemy and that the treatment he received while in military custody was illegal and excessive [JURIST reports]. In November Lind accepted [JURIST report] a partial guilty plea to several of the minor charges against Manning. In August JURIST guest columnist Philip Cave argued [JURIST comment] that the lack of transparency in Manning's case undermines the validity of the eventual verdict. In June Lind ordered [JURIST report] the prosecution to submit to her a number of files that were allegedly withheld from the defense during discovery. Earlier that month Lind denied a motion [JURIST report] to dismiss 8 of the 22 charges against Manning after his defense argued that they were unconstitutionally vague. In May UN Special Rapporteur on torture accused [JURIST report] the US government of cruel and inhuman treatment.




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ICTY overturns ex-Yugoslav army chief's war crimes conviction
Keith Herting on February 28, 2013 2:09 PM ET

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[JURIST] The appeals chamber of the International Criminal Tribunal for the former Yugoslavia (ICTY) [official website] on Thursday overturned [text, PDF; press release] the convictions of ex-Yugoslav army chief Momcilo Perisic [ICTY profile, PDF; JURIST news archive] for crimes against humanity and violations of the laws or customs of war. The appeals chamber found that the court's trial chamber had failed to apply the law correctly when it determined that "specific direction is not an element of aiding and abetting liability." Because the lower court had erred in its interpretation of the law, the appeals chamber rendered its decision de novo and concluded the evidence against Perisic was not convincing "beyond a reasonable doubt." The decision to overturn the conviction means that Perisic is once more free and that the ICTY has not convicted any Serbian official for war crimes committed in Bosnia and Croatia.

Perisic was found guilty of 12 out of 13 charges, including aiding and abetting murders occurring during the Srebrenica massacre [JURIST news archive], inhumane acts, attacks on civilians, unjust persecutions and having knowingly supplied "extensive logistical assistance" to the Army of Republika Srpska (VRS) and the Army of Serbian Krajina (SVK) that would be used to torture and kill hundreds of Muslim civilians. He was also found guilty on the basis of command responsibility for the inhumane acts of his officers and subsequently failing to punish them. In March 2011 UN prosecutors demanded that Perisic receive a life sentence [JURIST report] for alleged war crimes and crimes against humanity committed against Bosnian Muslims in the early 1990s. Perisic's trial began [JURIST report] in October 2008, and closing arguments concluded at the end of March 2011. ICTY Prosecutor Mark Harmon said Perisic was one of the "principal collaborators" of late Yugoslav president Slobodan Milosevic [JURIST news archive], claiming in his opening statement that Perisic "created an environment of impunity, wherein his subordinates were encouraged and did persist to commit crimes, knowing there would be no consequences." Perisic turned himself in to the UN in 2005, surrendering to officials [JURIST report] from the ICTY.




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Arkansas lawmakers override veto on abortion ban after 20 weeks
Keith Herting on February 28, 2013 1:19 PM ET

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[JURIST] The Arkansas Senate [official website] voted Thursday to override a veto by Governor Mike Beebe [official website] of the Pain Capable Unborn Child Protection Act [HB 1037, PDF] which bans most abortions in the state 20 weeks after conception. The ban became law immediately following the Senate's 19-14 vote to override the veto [JURIST report] issued by Beebe on Tuesday. In his letter [official statement] accompanying his veto of the 20-week ban Beebe said he decided to attempt to block the bill because:
"[I]t would impose a ban on a woman's right to choose an elective, nontherapeutic (sic) abortion before viability, House Bill 1037, if it became law, would squarely contradict Supreme Court precedent. When I was sworn in as Governor I took an oath to preserve, protect, and defend both the Arkansas Constitution and the Constitution of the United States. I take that oath seriously"
Beebe also claimed his veto was to prevent dedicating state funds to defending the law which he felt was contrary to the decision in Roe v. Wade. According to Beebe, the last case in Arkansas challenging the constitutionality of an abortion statute cost Arkansas over $148,000 in 1999, and that because of the rising litigation costs a similar suit could be more costly to taxpayers.

Immediately after overriding the governor's veto, the Arkansas Senate passed the Arkansas Human Heartbeat Protection Act [SB 134, PDF] to restrict abortions after 12 weeks, which Beebe has previously said he would veto. The Senate's override makes Arkansas the eighth US state to ban or restrict abortions after 20 weeks. Similar laws restricting reproductive rights [JURIST backgrounder] are currently facing legal challenges in Arizona and Georgia [JURIST reports].




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California AG urges Supreme Court to overturn same-sex marriage ban
Brandon Gatto on February 28, 2013 1:13 PM ET

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[JURIST] California Attorney General Kamala Harris [official profile] on Wednesday filed [press release] an amicus curiae brief [text, PDF] with the US Supreme Court [official website] arguing that the ban on same-sex marriage [JURIST backgrounder] imposed by the state's Proposition 8 [text, PDF; JURIST news archive] is unconstitutional and should therefore be overturned. In particular, Harris contended that the purpose of the ban "was to take away the right of gay and lesbians couples to call their union a 'marriage' and to strip loving relationships of validation and dignity under the law," and thus should be deemed in violation of the Fourteenth Amendment's Equal Protection Clause [text; Cornell LII backgrounder] of the US Constitution [text]. She added that this purpose is unsupported by a legitimate or rational state interest, and that California actually has a state interest in protecting children to see the law invalidated, as 50,000 children are being raised by same-sex parents and should not risk "feeling inferior because their family unit is not validated or honored by the law." In an additional argument, Harris contended that the federal government sponsors of Proposition 8 cannot defend the law in the Supreme Court because they lack proper legal standing to bring an appeal. Unlike state officials, she argued, federal officials "lack enforcement authority" and therefore do not suffer a necessary injury-in-fact as a result of a district court's judgment. The Supreme Court will hear oral arguments in the case, Hollingsworth v. Perry [docket], on March 26.

The issue of same-sex marriage is an ongoing controversy in the US. Earlier this week businesses, cities, and other organizations filed two amicus curiae briefs [JURIST report] with the Supreme Court also in support of same-sex marriage, urging the court to strike down the Defense of Marriage Act (DOMA) [text, PDF] in US v. Windsor [docket] in addition to Proposition 8. Also this week, attorneys for Edith Windsor [NYT profile], the plaintiff, filed a brief [JURIST report] with the court arguing that DOMA is unconstitutional. Last week, three other briefs were filed [JURIST report], including one written by the US Office of the Solicitor General [official website], which argued that DOMA is unconstitutional, and one written by the Bipartisan Legal Advisory Group (BLAG), which defended the law's constitutionality. Last month, the Supreme Court received briefs in both cases defending the constitutionality [JURIST report] of both Proposition 8 and Section 3 of DOMA. The court granted certiorari in both cases [JURIST report] in December.




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UN rights experts urge investigation into North Korea political prisons
Brandon Gatto on February 28, 2013 12:14 PM ET

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[JURIST] UN Special Rapporteur on Human Rights in North Korea [official website] Marzuki Darusman and a group of independent human rights experts on Thursday announced their support for an international inquiry [UN News Centre report] into human rights violations in the Democratic People's Republic of Korea to bring awareness to the country's system of political prison camps. Emphasizing that the allegations of prisoner abuse require further investigation, Working Group on Arbitrary Detention [official website] Chairman El-Hadji Malick Sow [SCSL backgrounder] explained how many of the system's 150,000 prisoners have been found "guilty of political crimes such as expressing antisocialist sentiments, having unsound ideology, or criticizing the government." In addition to reports that detainees are often not told why they have been arrested or when they will be released, Special Rapporteur on extrajudicial, summary, or arbitrary executions [official website] Christof Heyns added that those who attempt to escape are allegedly executed by firing squad or hanging. According to the group, prisoners also endure some of the most egregious violations of international law, including forced labor with little food and no access to healthcare, and torture for breaking camp rules, as Special Rapporteur on torture and other cruel, inhuman or degrading treatment or punishment [official website] Juan Mendez described. Mendez also explained that reports indicate the raping and sexual exploitation of female prisoners by prison guards, and that "resultant pregnancies are met with forced abortion or killing." Darusman will present a comprehensive report of all findings on North Korea's human rights situation to the UN Human Rights Council (UNHRC) [official website] on March 11.

Earlier this month Darusman similarly urged [JURIST report] the UNHRC and the UN General Assembly [official website] to investigate human rights violations in North Korea. In November, he expressed concern [JURIST report] over the country's lack of development in human rights, and called on its new leader, Kim Jong-un [BBC profile; JURIST news archive], to remedy the matter. Last month UN High Commissioner for Human Rights Navi Pillay [official profile] condemned North Korea's human rights record [JURIST report] and urged the international community to make efforts to improve the situation. Pillay's plea came only days after Human Rights Watch [advocacy website] called on the UN [JURIST report] to examine human rights abuses, particularly in light of the drop in individuals escaping into China and reports by successful escapees of increasing crackdown on escape attempts.




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Bangladesh war crimes tribunal sentences Jamaat-e-Islami leader to death
Sung Un Kim on February 28, 2013 11:55 AM ET

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[JURIST] The International Crimes Tribunal Bangladesh (ICTB) [Facebook page] on Thursday sentenced to death Jamaat-e-Islami party (JI) [party website, in Bengali; GlobalSecurity backgrounder] leader Delwar Hossain Sayeedee [JURIST news archive]. Following the death sentence, violence [Reuters report] between police and activists from Sayeedee's party ensued throughout the country resulting in at least 30 deaths while more than 300 were wounded. Sayeedee was found guilty by the court for mass killing, rape, arson, looting and forcing minority Hindus to convert to Islam during the 1971 Bangladesh Liberation War [GlobalSecurity backgrounder]. He is the third senior party official convicted by the international tribunal. Defense counsel stated that he will appeal the sentence. Sayeedee is a former member of Parliament in the National Assembly of Bangladesh [official website, in Bengali] and one of the leaders of the JI Bangladesh. He has been charged with 20 crimes [PTI report] contained in the International Crimes (Tribunals) Act of 1973 [text, PDF] including genocide, arson, rape and torture, and he went on trial [JURIST report] in November 2011.

Earlier this month the Bangladesh parliament [official website] approved amendments to the country's war crimes laws to allow prosecutors to appeal sentences given to defendants convicted of war crimes. These amendments are a response to protests [JURIST report] that ensued after Abdul Quader Mollah, another JI leader, was given a life sentence [JURIST report] for war crimes committed during the Bangladesh Liberation War (BLW). The protesters believed a life sentence was too lenient and that Mollah, who was convicted of charges including murder, rape and torture, should have been given the death penalty. The law passed by parliament will be effective retroactively [AP report] to July 2009, allowing prosecutors to appeal Mollah's sentence.




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Japan court rejects Samsung's patent claim against Apple
Sung Un Kim on February 28, 2013 11:00 AM ET

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[JURIST] The Tokyo District Court [official website, in Japanese] on Thursday rejected a patent infringement claim brought by Samsung against Apple [corporate websites]. Samsung accused Apple of stealing its data transmission technology [AFP report] used in Apple's iPhone smartphones, but the court dismissed the challenge. The alleged patent infringement involved technologies for optimizing transmission and reducing power usage during data transmission, reducing data transmission errors, and tethering a phone to a PC to enable the latter to utilize the phone's wireless data connection. The South Korean company had sought an injunction to prevent its competitor from manufacturing and selling its products in Japan. Samsung stated that it will take necessary steps to protect its intellectual property rights. It is unclear whether the company will appeal the recent decision.

This was the latest ruling in the global dispute between the two companies. In August of last year, the same court dismissed Apple's claim [JURIST report] against Samsung holding that latter did not violate Apple's patents of synchronizing music and video data. An appeal followed [JURIST report] two months later. Last month a judge for the US District Court for the Northern District of California [official website] ruled that Samsung did not willfully infringe [JURIST report] Apple's patents. The judge's ruling partially abrogates the jury verdict [JURIST report] finding that Samsung willfully infringed Apple's asserted patents. However, the judge declined to overturn the jury's findings on validity and infringement and also refused to grant Samsung a new trial on the grounds that the trial was allegedly manifestly unfair. In December Apple agreed to withdraw claims [JURIST report] against a Samsung product that Samsung asserts has never been sold in the US in the second of the two patent infringement cases taking place in the US District Court for the Northern District of California. In October a Dutch court ruled that Samsung did not infringe [JURIST report] on an Apple software patent. During same month, a UK court ruled similarly in case regarding Apple's design patent [JURIST report].




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Argentina congress approves pact with Iran to probe community center bombing
Julie Deisher on February 28, 2013 10:58 AM ET

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[JURIST] The National Congress of Argentina [official website, in Spanish] on Thursday approved an agreement with Iran to investigate the 1994 bombing of a Jewish community center in Buenos Aires. Argentinian courts have long accused Iran of sponsoring the attack [Reuters report], which killed 85 people, and in 2007 Argentinian authorities secured Interpol arrest warrants for five Iranians, including current Iranian Defense Minister Gen. Ahmad Vahidi. Argentine President Cristina Fernandez [official website, in Spanish] favors the move, in spite of objections from the Jewish community [Buenos Aires Herald report], Israel and the US. The agreement, initially signed [JURIST report] in January, will create an independent truth commission, to be composed of five judges who are jointly nominated foreign legal experts having residency in neither Argentina nor Iran. The commission is to conduct an investigation and prepare a report with recommendations on how to proceed with the case based on the laws of each country and within the framework of international law.

Iran drew additional ire from the US in January when an Iranian court sentenced an American-Iranian pastor to eight years in prison [JURIST report] for threatening national security through his leadership in Christian house churches. Earlier that month Iranian lawyer and prominent human rights activist Nasrin Sotoudeh [JURIST news archive] was temporarily released after spending over two years in prison [JURIST report] in Tehran for her September 2010 conviction for propaganda and harming national security. Iranian authorities pursued Sotoudeh because she represented political activists and sought to highlight the execution of juveniles in the country. Last month Argentina sentenced former Interior Minister Jaime Smart to life in prison for crimes against humanity [JURIST report] during the nation's 1976-1983 "Dirty War" [GlobalSecurity backgrounder; JURIST news archive]. In July Argentina's Poder Judicial de la Nacion sentenced two former Argentine dictators [JURIST report] to a total of 65 years in prison for their involvement in the systematic kidnapping of babies from leftist activists detained and killed during the "Dirty War."




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Canada Supreme Court upholds hate speech laws
Julie Deisher on February 28, 2013 10:04 AM ET

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[JURIST] The Supreme Court of Canada [official website] ruled [judgment] Wednesday that limitations on free speech with regards to hate speech are constitutionally valid. Under the Canadian Charter of Rights and Freedoms [text], every Canadian is entitled to "freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication." This provision is limited by the Saskatchewan Human Rights Code [PDF], which imposes specific prohibitions on publication and expression of speech "that exposes or tends to expose to hatred, ridicules, belittles or otherwise affronts the dignity of any person or class of persons on the basis of a prohibited ground." The court stated that such limitations were demonstrably justified in a free and democratic society, and that the law appropriately balanced the fundamental values underlying freedom of expression with the competing Charter value of commitment to equality and respect for group identity and the inherent dignity owed to all human beings:
the benefits of the suppression of hate speech and its harmful effects outweigh the detrimental effect of restricting expression which, by its nature, does little to promote the values underlying freedom of expression. Section 14(1)(b) of the Code represents a choice by the legislature to discourage hate speech and its harmful effects on both the vulnerable group and on society as a whole, in a manner that is conciliatory and remedial. In cases such as the present, the process under the legislation can provide guidance to individuals ... so that they can continue expressing their views in a way that avoids falling within the narrow scope of expression captured by the statutory prohibition. The protection of vulnerable groups from the harmful effects emanating from hate speech is of such importance as to justify the minimal infringement of expression that results from the restriction of materials of this kind.
The ruling came in the case of activist William Whatcott, who was originally fined $17,500 for distributing anti-gay pamphlets.

Maintaining an appropriate balance between limiting hate speech and respecting freedom of expression remains controversial. Following the release of an anti-Islam film in September, which incited riots throughout the middle east [BBC report], several countries have been scrutinizing exactly how far the freedom of speech should go. In February, JURIST Guest Columnist Felix Treguer, Policy and Legal Analyst at La Quadrature du Net, discussed [JURIST comment] the "judicial guerilla war" in France being waged on "hateful" Internet content, unduly stifling free speech. In November an independent UN expert urged countries to combat hate speech on the Internet [JURIST report], while simultaneously protecting freedom of speech.




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Zimbabwe urged to respect human rights in advance of constitutional referendum
Addison Morris on February 28, 2013 8:07 AM ET

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[JURIST] Three UN independent human rights experts on Wednesday urged [press release] the government of Zimbabwe [BBC backgrounder] to respect international human rights including privacy and freedom of association, in light of growing hostility toward civil society organizations. In the weeks leading up to the country's March 16 constitutional referendum [JURIST report], with a subsequent election to take place in July, "human rights experts have received increasing numbers of reports about acts of intimidation and harassment, physical violence and arrests against civil society actors, mostly working on human rights issues." During the many police searches, important documents and files have reportedly been seized from organizations. "With the referendum less than two weeks away, human rights defenders who promote participation have a critical role to play," said Special Rapporteur on the situation of human rights defenders Margaret Sekaggya [CV, PDF]. "They must be protected by the Government and attempts to stifle criticism must end."

Zimbabwe has previously been criticized for its failure to ensure compliance with international human rights standards. Last month Human Rights Watch [advocacy website] said that the unity government, established in 2009 after the 2008 elections resulted in violence, failed to take the necessary steps [JURIST report] to ensure "credible, free and fair elections." In November the Observatory for the Protection of Human Rights Defenders (OBS) [FIDH backgrounder] reported that human rights defenders in Zimbabwe continue to be harassed [JURIST report]. Last March various human rights groups urged South African courts to prosecute Zimbabwe for violations including torture and forced labor [JURIST reports] of civilian workers in illegal mining camps. In June 2009 Amnesty International [advocacy website] reported that Zimbabwe was still experiencing serious human rights violations [JURIST report], such as the arrest and detention of human rights activists, and needed to confront issues that led to such problems.




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Supreme Court rules on securities fraud statute of limitations
Julia Zebley on February 28, 2013 7:12 AM ET

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[JURIST] The US Supreme Court [official website] ruled unanimously [opinion, PDF] in Gabelli v. Securities and Exchange Commission [JURIST report] that the statute of limitations under 28 USC § 2462 [text] begins tolling when the fraud occurs, not when it is discovered. Chief Justice John Roberts delivered the opinion of the court. The federal government and Securities and Exchange Commission (SEC) argued that the government should be able to avail itself to the fraud discovery rule as determined by Exploration Co. v. United States [opinion]. Roberts wrote to explain why the court would not be extending this rule to the government.
There are good reasons why the fraud discovery rule has not been extended to Government enforcement actions for civil penalties. The discovery rule exists in part to preserve the claims of victims who do not know they are injured and who reasonably do not inquire as to any injury. Usually when a private party is injured, he is immediately aware of that injury and put on notice that his time to sue is running. But when the injury is self-concealing, private parties may be unaware that they have been harmed. Most of us do not live in a state of constant investigation; absent any reason to think we have been injured, we do not typically spend our days looking for evidence that we were lied to or defrauded. And the law does not require that we do so. Instead, courts have developed the discovery rule, providing that the statute of limitations in fraud cases should typically begin to run only when the injury is or reasonably could have been discovered. The same conclusion does not follow for the Government in the context of enforcement actions for civil penalties.The SEC, for example, is not like an individual victim who relies on apparent injury to learn of a wrong. Rather, a central "mission" of the Commission is to "investigat[e] potential violations of the federal securities laws." Unlike the private party who has no reason to suspect fraud, the SEC's very purpose is to root it out, and it has many legal tools at hand to aid in that pursuit. It can demand that securities brokers and dealers submit detailed trading information. It can require investment advisers to turn over their comprehensive books and records at any time. And even without filing suit, it can subpoena any documents and witnesses it deems relevant or material to an investigation.
The court reversed the decision [opinion] of the US Court of Appeals for the Second Circuit.

Gabelli v. Securities Exchange Commission [SCOTUSblog backgrounder] was argued in January after being granted [JURIST report] in September. Gabelli Funds, LLC, is an investment adviser to a mutual fund formerly known as Gabelli Global Growth Fund (GGGF). At one point it allegedly gave advice to its client, Headstart Advisers, Ltd., on how to engage in "market timing" [backgrounder] in exchange for Headstart's investment in a hedge fund. Although market timing is not technically illegal, it is discouraged due to impeding long-term investment strategies, and was the claim the SEC focused on in this case.




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