Court Takes On Corporate Privacy
The Supreme Court stepped into a dispute between two high-tech competitors on Monday, agreeing to clarify when U.S. companies can be ordered to release confidential records to foreign regulators.
It also rejected an appeal Monday from an Illinois-based Islamic charity whose assets were impounded three months after the terrorist attacks, and agreed to hear its first cases arising from the government's anti-terrorism campaign following the Sept. 11 attacks. The justices will consider whether foreigners held at a U.S. Navy base in Cuba should have access to American courts.
Intel Corp. is fighting a California appeals court ruling that may force it to release documents to the European Commission.
The commission has conducted a preliminary investigation of Intel, based on an antitrust complaint by rival Advanced Micro Devices Inc. The competitor contends that Intel abused its position as the world's leading computer-chip maker to keep other companies from winning market share in Europe.
Intel is backed in its appeal by business groups like the U.S. Chamber of Commerce and National Association of Manufacturers. They argue that the appeals court decision gives foreign companies an opportunity to seek supersensitive information about policies and strategies of U.S. competitors.
The Bush administration also asked the Supreme Court to review the law that allows federal courts to help people obtain testimony or information for use in foreign or international tribunals. Government lawyer Paul Clement said the administration does not believe Intel should have to turn over its documents.
In the charity case, the Global Relief Foundation argued that the government put it out of business without proof the charity was funneling money to terrorists.
Justices refused to consider whether it was unconstitutional or illegal for the government to freeze the foundation's bank accounts. Since the attacks on Sept. 11, 2001, the United States and other governments have frozen the assets of several groups they claim assist groups like al Qaeda.
Global Relief has not been charged with a terror-related crime. It has said it provides humanitarian relief in about 20 nations, mainly those with large Muslim populations.
Foundation attorney Roger C. Simmons of Frederick, Md., told the court in a filing that the government has "instilled a fear in the Muslim community that they are being persecuted for their religious beliefs."
Simmons said a lower court ruling against it would allow the government to shut down charities like the Red Cross or United Way for giving aid in terrorist hot spots, or freeze the assets of an American who buys illegal drugs, because terrorism is funded by illegal drug sales.
The Chicago-based 7th U.S. Circuit Court of Appeals ruled against the foundation in December, turning down multiple arguments, including that it was unconstitutional for the court to consider secret evidence.
The Treasury Department ordered the freezing of the foundation's accounts in December 2001, at the same time agents raided the group's headquarters in Bridgeview, Ill.
The government said they found evidence of communication between Global Relief offices and the former personal secretary of terrorist leader Osama bin Laden, Wadih El-Hage.
Solicitor General Theodore Olson said in court filings that the asset seizure was justified because of the threat to national security.
Two years ago, Advanced Micro Devices asked a federal judge in California to help them get documents from Intel to give to the European Commission. The commission, a regulatory board which enforces EU antitrust law, had not sought the information and says it doesn't want the records.
The judge refused to help in the company's request for documents, which were part of another court case and kept private. But the 9th U.S. Circuit Court of Appeals in San Francisco said the court had the discretion to order the transfer of the records.
Seth Waxman, the Washington attorney for Intel, said in court filings that the decision allows any company to get information from "its closest commercial rivals simply by asking a foreign enforcement agency to investigate them."
"It exposes individuals and businesses to costly fishing expeditions of rivals," he said.
Advanced Micro Devices lawyer Patrick Lynch of Los Angeles said in a filing that the European Commission has limited resources and that the records sought in California will help with its investigation.
Lynch said the company wanted the Supreme Court to hear the appeal, in order to speed up the resolution of its 3-year-old complaint with European regulators.
The European Commission also supports Intel in the case.
The court will hear arguments in the case next year, but with only eight members. Justice Sandra Day O'Connor said Monday that she would not participate in consideration of it. She frequently recuses herself from cases in which she has a financial interest.
The corporate privacy case is Intel Corp. v. Advanced Micro Devices, Inc., 02-572. The charity case is Global Relief Foundation v. Snow, 03-46.