Publishers fight Apple e-book ruling

Woman selecting e-book Apple has been ordered to terminate agreements with publishers, which include retail price deals HarperCollins, Simon & Shuster and Penguin are among publishers who have filed a complaint against restrictions imposed on Apple by a US court.

Last month Apple was found guilty of conspiring with publishers to fix the price of e-books bought via iTunes.

It was ordered to terminate deals with five major companies and allow other e-book retailers to sell to iPad and iPhone users for the next two years.

The publishers say they are being punished by the restrictions.

Under agreements put in place between Apple and companies including Hatchett and Macmillan, electronic book price-fixing took place, creating unfair competition for other retailers, the court ruled last month.

At the time most of the publishers reached separate settlements totalling more than $150m (£96m) but Apple said it would fight the "false allegations".

According to the Associated Press news agency, the publishers' complaint says: "The provisions do not impose any limitation on Apple's pricing behaviour at all.

"Rather, under the guise of punishing Apple, they effectively punish [publishers that settled in the case]."

Garner analyst Van Baker told AP that the ruling seemed "heavy-handed".

"It is basically putting a stake through a portion of Apple's business, and I confess to being surprised by that," he said.

"It strikes me as a pretty heavy-handed solution to the issue."

E-Book Ruling Gives Amazon an Advantage

A federal judge ruled on Wednesday that Apple had illegally conspired with five of the six biggest publishers to try to raise prices in the budding e-books market.

The decision came two days after Barnes & Noble lost its chief executive and said it would not appoint another, signaling that the biggest chain of physical bookstores could be immediately broken up.

The verdict in the Apple case might have been a foregone conclusion, telegraphed by the judge herself, but it emphatically underlined how the traditional players in the book business have been upended. Only Amazon, led by Mr. Bezos, seems to have a plan. He is executing it with a skill that infuriates his competitors and rewards his stockholders.

“We’re at a moment when cultural power is passing to new gatekeepers,” said Joe Esposito, a publishing consultant. “Heaven forbid that we should have the government telling our entrepreneurs what to do, but there is a social policy issue here. We don’t want the companies to become a black hole that absorbs all light except their own.”

The Apple case, which was brought by the Justice Department, will have little immediate impact on the selling of books. The publishers settled long ago, protesting they had done nothing wrong but saying they could not afford to fight the government. But it might be a long time before they try to take charge of their fate again in such a bold fashion. Drawing the attention of the government once was bad enough; twice could be a disaster.

“The Department of Justice has unwittingly caused further consolidation in the industry at a time when consolidation is not necessarily a good thing,” said Mark Coker, the chief executive of Smashwords, an e-book distributor. “If you want a vibrant ecosystem of multiple publishers, multiple publishing methods and multiple successful retailers in 5, 20 or 50 years, we took a step backwards this week.”

Some in publishing suspected that Amazon had prompted the government to file its suit. The retailer has denied it, but it still emerged the big winner. While Apple will be punished — damages are yet to be decided — and the publishers were chastened, Amazon is left free to exert its dominance over e-books — even as it gains market share with physical books. The retailer declined to comment on Wednesday.

“Amazon is not in most of the headlines, but all of the big events in the book world are about Amazon,” said Paul Aiken, executive director of the Authors Guild. “If the publishers colluded, it was to blunt Amazon’s dominance. Barnes & Noble’s troubles may stem from a misstep with its Nook tablets, just as Borders’ bankruptcy might have been hastened by management mistakes, but its precarious position is that of any rent-paying retailer facing a deep-pocketed virtual competitor.”

Last week, Penguin and Random House officially merged, creating a publishing behemoth that might be able to determine its future rather than suffer the fate of Barnes & Noble, a once-swaggering entity that now seems adrift. Random House was not a target of the Justice Department; Penguin was.

Penguin and Random House were innovators who made paperbacks into a disruptive force in the 1940s and ’50s. They were the Amazons of their era, making the traditional book business deeply uneasy. No less an authority than George Orwell thought paperbacks were of so much better value than hardbacks that they spelled the ruination of publishing and bookselling. “The cheaper books become,” he wrote, “the less money is spent on books.”

Orwell was wrong, but the same arguments are being made against Amazon and e-books today. Amazon executives are not much for public debate, but they argue that all this disruption will ultimately give more money to more authors and make more books more widely available to more people at cheaper prices, and who could argue with any of that?

This was not a prospect that many on Wednesday were putting much faith in.

Amazon, its detractors argue, is not a nonprofit or public trust but a hard-nosed company whose investors hope will make lots of money someday soon. It shares closed Wednesday at $292.33, a record.

“The Justice Department’s guns seem pointed in the wrong direction,” Mr. Aiken said.

But the more pressing concern for the industry is the fate of Barnes & Noble. When Borders collapsed two years ago, analysts said there was an unexpected consequence to the loss of 400 stores: the e-book growth rate began to taper off, as readers could no longer examine new titles before ordering them from Amazon.

E-books, in other words, were not a magical technology that could shed all the existing infrastructure of publishing. They needed the existing ecosystem.

“If all of those corporate outlets vanish, there is suddenly a hell of a lot less space devoted to showcasing a large number of titles,” said J. B. Dickey, owner of the Seattle Mystery Bookshop. “We’ll probably see a continuing shrinking in print runs, maybe fewer titles published, fewer authors published and the New York houses retreating into the known best-sellers. Which means more novice and midlist authors scrambling to find a way to stay in print and more authors self-publishing their print books — or more likely releasing their works as e-files.”

All of that sounds dire. Perhaps the only consolation for those who fear the power of Amazon is the knowledge that all companies eventually peak, no matter how unlikely that seems when they are in the ascendance.

Mr. Esposito, the consultant, remembered that 30 years ago there was a book called “The Media Monopoly,” which worried about the excessive power of the Gannett chain of newspapers as well as the three major television networks.

“The book reads almost quaint now,” Mr. Esposito said.

Few Options for Weinstein Co. in Wake of MPAA 'Butler' Ruling (Analysis)

Forest Whitaker on the set of 'The Butler'
Tuesday’s ruling in an MPAA title registration arbitration puts the Weinstein Company in a quandary. As The Hollywood Reporter reported, the arbitrators held that the Weinstein Company could not use the title “The Butler” on its upcoming film because that previously served as the title of a 1916 short film that now belongs to the Warner Bros. library.

In response, the Weinstein Company issued a statement from veteran Supreme Court litigator David Boies that said, “The suggestion that there is a danger of confusion between TWC’s 2013 feature movie and a 1917 [sic] short that has not been shown in theaters, television, DVDs, or in any other way for almost a century makes no sense. The award has no purpose except to restrict competition and is contrary to public policy.”

We don’t know if Boies is quoting from the arbitration ruling – those documents aren’t public and neither Warner Bros. nor the Weinstein Company would supply a copy to THR – but “danger of confusion” isn’t the test under the MPAA system: identicality is (or, in some cases, similarity). Here, the titles are identical. Protection is generally perpetual; in some cases, the duration is only four years, but that doesn’t seem to be at issue here. The TRB does have an appeal process, but the rules for challenged titles are the same on appeal as in the initial process.

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None of that bodes well for the Weinstein Company. But what about Boies’ comment that the award restricts competition? That’s an antitrust argument, and at first glance it has some allure. Surely federal antitrust law – passed by Congress and enforced by agencies and judges – places some limits on what a mere industry association can do?

Actually, not so much, it seems. That’s because another law, the Federal Arbitration Act, requires judges to defer to arbitration agreements, such as the agreement that companies agree to when they sign up with the MPAA’s Title Registration Bureau (TRB). Says the 1925 statute, “A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

In recent decades, the Supreme Court has interpreted the FAA expansively, with the conservative majority on the Court using the statute to allow large companies to divert claims out of the court system and into arbitration. In many instances, that’s favored companies at the expense of consumers and employees, since it keep cases out of the hands of sympathetic juries, and frequently bars class actions as well.

It turns out that the Court’s latest case in this line of precedent was decided less than two weeks ago – and it involved an antitrust claim.

In the case, American Express Co. v. Italian Colors Restaurant, the plaintiff restaurant alleged that “American Express used its monopoly power in the market for charge cards to force merchants to accept credit cards at rates approximately 30% higher than the fees for competing credit cards.” The restaurant asserted that this was a violation of a key antitrust law, the Sherman Act, and brought a class action.

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Citing the FAA, Amex sought to enforce the arbitration clause in its merchant agreements, which also included a prohibition on class actions in arbitration. The restaurant countered that enforcing this prohibition would effectively strip it of its rights, because the case would be too expensive to bring on an individual, plaintiff by plaintiff basis. Expert witness fees alone would be in the hundreds of thousands of dollars at a minimum, whereas the most the restaurant stood to recover if it won a non-class action case was about $38,000.

By a 5-3 vote (with one Justice not participating), the Supreme Court turned away the restaurant’s objection. As a result of the FAA, said Justice Scalia for the majority, “courts must ‘rigorously enforce’ arbitration agreements according to their terms. . . . That holds true for claims that allege a violation of a federal statute, unless the FAA’s mandate has been ‘overridden by a contrary congressional command.’”

The decision then found no such contrary command in the antitrust laws as regarding class actions. Regarding the underlying substantive issue – the alleged antitrust violation – the decision said, “so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.”

That may give Boies an opening, because the TRB rules don’t provide a mechanism for challenging the system itself on antitrust grounds (or any grounds at all). But the Supreme Court decision includes a dissent (by Justice Kagan) that, ironically, works against such an argument: “If the arbitration clause is enforceable, Amex has insulated itself from antitrust liability – even if it has in fact violated the law.”

STORY: The Butler' Battle Escalates Weinstein Co. Hints Lawsuit, Raises Antitrust Warning

In other words, even an arbitration clause that snuffs out an antitrust claim will be upheld by the conservative majority on the Court.

As THR reported, Boies also argued in a letter to Warner Bros. on Wednesday that Warners had agreed to allow the Weinstein Company to use the title “in return for certain contributions that TWC agreed to make.” A source familiar with the dispute rejects the notion that there was any deal. That’s the sort of he-said she-said that a court is likely to say the Weinstein Company should have raised with the arbitrator. Perhaps it did so – in which case it evidently lost the argument. A court is unlikely to revisit the issue.

That all would seem to make a suit by the Weinstein Company against Warners a long shot at best. What about suing the MPAA? Boies wrote them on Wednesday too, saying “To the extent that the MPAA in concert with its members seeks to ‘permanently protect’ titles where there is no plausible claim of possible confusion, and no claim of actual damages, such an attempt would be a naked restraint on trade in violation of the anti-trust laws.”

But there are problems here. The TRB rules include a waiver of damages against the MPAA, TRB and related entities. That doesn’t preclude seeking an injunction against the rules, of course.

Even an injunction seems unlikely, though, because the Weinstein Company voluntarily and knowingly agreed to the arbitration process when it signed onto the TRB. And the Weinstein Company received a benefit – its own titles are protected from reuse by other TRB signatories and by MPAA members.

In essence, a suit against the MPAA is an attempt to make an end run around an unfavorable arbitration award. That’s exactly the sort of thing courts disfavor, as the 9th Circuit (the federal Court of Appeals that includes California) pointed out in a case involving a challenge to WGA credit arbitration, Marino v. Writers Guild of America.

Stepping back for a moment, it’s not even clear that an antitrust claim would have legs. After all, the arbitration award doesn’t prohibit the Weinstein Company from releasing its film; it just has to do so under a different name. That’s a restriction, of course, but intellectual property laws – and IP-related contracts – always impose restrictions. They provide monopolies of various sorts to the IP owner.

Boies and the Weinstein Company may have arguments to counter this point, but whether they’ll be able to get a court to even consider those arguments seems like a long shot. Arbitration may sometimes be a bed of nails, but under Supreme Court precedent, if those are the accommodations you agreed to, the courts won’t provide a mattress later.

Kristen Bell, Dax Shepard Tease Wedding Plans After Gay Marriage Ruling

Kristen Bell is celebrating the Supreme Court victory for same-sex couples by taking her relationship with comedian Dax Shepard to the next level.

The couple, who have a young daughter together, have been engaged since 2009, but have said they would not marry until their gay friends were allowed to.

"Once it's official and everybody stops appealing it the minute before it passes, we'll get married," the House of Lies star said on Larry King Now in August 2012.

STORY: Supreme Court's Gay Marriage Decisions: Hollywood Reacts

After the Supreme Court struck down the Defense of Marriage Act, which restricts federal benefits to same-sex couples, Bell tweeted at her fiance:

.@daxshepard1 will you marry me? Xo #marriageequality #loveislove”

— Kristen Bell (@IMKristenBell) June 26, 2013

He seemed more than keen on the idea, responding:

@IMKristenBell F--- Yes!!!!!!!!!!!

— dax shepard (@daxshepard1) June 26, 2013

Minutes earlier, Shepard tweeted: "DOMA is dead. Prop 8 is dead. Now let's bring my big, gay marriage to @IMKristenBell to Life!!!!""

Last August, the couple appeared together on CNN's Piers Morgan Tonight, where Shepard explained why they were holding off on getting married, despite their long engagement.

"We're not going to have a party when half of our friends ... can't do that thing we're doing," he said. "We're not going to ask them to come celebrate a right they don't have. That's just tacky! Forget like anything else, it's like really tacky for us.”

Bell said in the interview, "I don't believe in standing in the way of love, and I want to stand up for that right."

She added: "And that's what it is. If someone wants to commit their life to another person, why would I not bolster that argument?”

Watch Dax's and Shepard's comments from 2012 below.

Follow me on Twitter @sajilpl

Goldman Sachs flies rainbow flag for same-sex ruling

A rainbow flag flies outside Goldman Sachs' Wall Street headquarters.

"We strongly support the Court's affirmation today of marriage equality," the firm tweeted within hours of the ruling.

Goldman (GS, Fortune 500) is one of many Wall Street firms to publicly promote workplace inclusion of lesbian, gay, bisexual and transgender employees. It also joined hundreds of companies -- including Starbucks (SBUX, Fortune 500) and Google (GOOG, Fortune 500) -- that had filed a brief with the Supreme Court in opposition to DOMA.

"Today's decisions help define who we are as a people, whether or not we are part of the group directly affected," CEO Lloyd Blankfein said through the company's Twitter account Wednesday.

Citigroup (C, Fortune 500) also cheered the court's ruling, noting in a company statement that it promotes a work environment where "diversity is embraced" and "differences are valued and respected," while the CEO of credit rating firm Moody's called the ruling "a significant step forward in ensuring workplace equality."

Related: Which states allow same-sex marriage?

Meanwhile, Google showed its support through a hidden "easter egg" on its site that displayed a rainbow flag around the search box whenever anyone typed the search term "gay" or "marriage equality" in honor of Gay Pride Month.

Fellow tech giants, Apple (AAPL, Fortune 500), eBay (EBAY, Fortune 500) and Microsoft (MSFT, Fortune 500), released statements in support. "Today's decision turns the page on a law that made it more difficult for us to treat all of our employees, regardless of sexual orientation, equally," Brad Smith, Microsoft's general counsel said in a statement.

 

Starbucks CEO Howard Schultz, who publicly told off an investor who complained about the company's support for gay marriage, was not available for comment Wednesday. But company spokesperson Danny Cowan said the company, which has offered benefits for domestic partners -- including same-sex partners -- for more than two decades, was pleased by the ruling.

"Equality and inclusion are core values of our company," he said. "We always put our people first and will continue to advocate for equality and inclusion."

Related: Financial impact of same-sex marriage ruling

Retailers, such as Ben & Jerry's, Gap (GPS, Fortune 500) and Marc by Marc Jacobs, also used social media to show support. Travel site Orbitz (OWW) tweeted about a contest to "celebrate DOMA's defeat" that offered flights to places that support marriage equality as prizes, while Kenneth Cole announced a giveaway of the company's "Equalitees" shirts through its Instagram account in honor of the "history-making decision."

"Thrilled about today's #SCOTUS ruling in favor of marriage equality, an issue we've been supporting since 1995," the company said on its Facebook page.

Related: Same-sex ruling: 'A huge relief'

The rush of corporate support comes in stark contrast to 2008, when California's Proposition 8 was on the ballot and only a handful of companies publicly supported marriage equality, said Deena Fidas, deputy director of the Human Right Campaign's workplace project

"Corporate advocacy for marriage equality seemed to be a bright red line that many did not want to cross," she said. "It's absolutely incredible that in such a short period of time we've seen this."

Twitter: @sajilpl

Same-sex marriage ruling: Financial impact

In a 5-4 ruling, the court ruled that the 1996 Defense of Marriage Act is unconstitutional because it denies married same-sex couples the same benefits that heterosexual couples receive.

The court ruled that DOMA singled out same-sex marriage and treated same-sex couples "as living in marriages less respected than others."

Married same-sex couples in a dozen states and the District of Columbia will now be eligible for more than 1,000 spousal benefits previously off limits under DOMA. And the court's other decision on Wednesday, striking down California's Prop 8, paves the way for same-sex marriages to resume in that state.

Income tax: Same-sex couples will now be able to file their federal income taxes jointly. For many couples -- especially those where one person earns significantly more than the other -- merging incomes for tax purposes will result in big savings.

Janet and Janet Emery-Black, who married in California in 2008, estimate they could save more than $10,000 a year in income tax by filing jointly. Because one is retired and the other works full-time, combining incomes would put them in a much lower tax bracket.

Related: Same-sex ruling: 'A huge relief'

The Emery-Blacks are also hoping to take advantage of a protective refund claim by amending their taxes for the past three tax years to get back some of the extra income tax they paid as a result of DOMA.

The couple has already amended their 2009 tax returns and they plan to file protective refund claims for 2010 and 2011. If the IRS approves those claims they expect to receive a total of more than $30,000 in refunds for the last three years.

Other couples won't be helped by filing jointly, however. Kevin O'Leary and Brian Esser, from New York City, will actually end up owing roughly $5,000 more in income tax per year because they bring in similar salaries.

Gift tax: Same-sex couples will also be exempt from gift tax when transferring assets to each other. Under DOMA, any gift between same-sex spouses of more than $14,000 began adding up to a lifetime limit of $5.25 million -- after which a 40% tax was assessed. Opposite-sex couples have never been subject to that tax.

Joshua Hatfield Charles and Dixon Charles, from Rockville, Md., were married five years ago. They paid more than $8,000 for attorneys and accountants to help avoid a huge gift tax for transferring assets to each other. If DOMA hadn't been overturned, they estimate they would have spent another $7,000 to $9,000 on legal fees and taxes.

Same-sex couples who divorce can also be subject to the federal gift tax when dividing assets.

Related: Which states allow same-sex marriage?

Health insurance: Some couples also pay extra income tax on the medical benefits one partner receives through the other's health insurance plan.

The Emery-Blacks, for example, will save at least $1,000 in income tax per year by not paying tax on these spousal benefits.

Meanwhile, many federal employees will likely be granted spousal benefits like partner health insurance.

For Joanne Pedersen, a retired federal employee from Connecticut, the ruling could mean that her retirement plan will finally extend health benefits to her wife, Ann Meitzen. It would be a big boost: Meitzen suffers from lung illnesses and spends half of her monthly Social Security benefits on medical expenses.

"Financially we're not doing great," said Pedersen, now 59. "We were looking forward to a nice retirement where we would both be doing well, but that's not happening."

Death benefits: Same-sex couples will now be eligible for the same federal tax treatment and Social Security benefits as opposite-sex couples in the event that one spouse passes away.

This means a surviving spouse will be eligible for Social Security survivors benefits and will be exempt from the 40% federal estate tax on assets exceeding $5.25 million.

Related: The high cost of same-sex divorce

What the decision doesn't do: While many of the specifics of the Supreme Court's ruling are still fuzzy, it appears that couples must be married at a state level for all of these federal benefits to apply -- meaning domestic partnerships and civil unions don't qualify, Young said.

It's also unclear whether federal benefits will apply to same-sex couples who marry in a state where same-sex marriage is legal but move to a state where it's not recognized.

Currently, same-sex marriage is legal in 12 states and Washington, D.C., while seven states grant domestic partnerships and civil unions.

"[The Supreme Court is saying,] 'Yes, you can have these benefits, but up it's up to each state whether they are even going to recognize these couples in the first place,'" said Kyle Young, a financial advisor and vice president for Wells Fargo Advisors. "It's still going to leave us in the position where there's [still] a patchwork of marriage equality."

Twitter: @sajilpl

Court Overturns DOMA, Sidesteps Broad Gay Marriage Ruling

Plaintiff Edith Windsor,of New York, waves to supporters in front of the Supreme Court in Washington on Wednesday, after the court heard arguments on her Defense of Marriage Act (DOMA) case.

The Supreme Court issued rulings on two highly-anticipated cases on gay marriage today. By 5-4, it ruled the federal Defense of Marriage Act, which defines marriage as a union between one man and one woman, is unconstitutional.

But in a separate ruling, it declined to take on the broader issue of gay marriage. The court decided supporters of Prop 8, a 2008 ballot measure that outlawed same-sex marriages in the state, did not have standing to bring the case to the court.

NPR's Carrie Johnson explains: "By a holding of 5-4 with Chief Justice John Roberts in the majority, the Supreme Court rules the petitioners lack standing so the court avoids the underlying issues, remands and wipes away the decision by 9th Circuit Court of appeals, which means for now the lower court ruling invalidating California's Prop 8 stands."

That means gay marriages in California may resume but the ruling does not have a broader implication across the country.

The Defense of Marriage Act case is simpler. As SCOTUSblog reports, the court struck down the federal law because it denies same-sex couples the "equal liberty" guaranteed by the Fifth Amendment.

The 1996 Defense of Marriage Act, or DOMA, was signed into law by President Bill Clinton, barring federal recognition of same-sex marriages for purposes such as Social Security survivors' benefits, insurance benefits, immigration and tax filing.

Section 3 of the law defines marriage as "a legal union between one man and one woman as husband and wife" and a spouse as "a person of the opposite sex who is a husband or a wife." That provision had been struck down by eight lower courts before the Supreme Court's 5-4 ruling in United States v. Windsor
.
This decision means that legally married same-sex couples are now entitled to the same federal benefits as married opposite sex couples.

The majority opinion was written by Justice Anthony Kennedy and joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, and Samuel Alito dissented.

In Hollingsworth v. Perry
, Chief Justice Roberts was joined by Scalia, Ginsburg, Breyer and Kagan. Kennedy filed a dissent in which Thomas, Alito and Sotomayor joined.
SCOTUSblog has this "plain English" explanation of what happened in the Prop 8 case:

"After the two same-sex couples filed their challenge to Proposition 8 in federal court in California, the California government officials who would normally have defended the law in court, declined to do so. So the proponents of Proposition 8 stepped in to defend the law, and the California Supreme Court (in response to a request by the lower court) ruled that they could do so under state law. But today the Supreme Court held that the proponents do not have the legal right to defend the law in court. As a result, it held, the decision by the U.S. Court of Appeals for the Ninth Circuit, the intermediate appellate court, has no legal force, and it sent the case back to that court with instructions for it to dismiss the case."

Update at 11:37 a.m. ET. 'An Exalted Conception':

In his dissent in the DOMA case, Scalia basically argued the people should be allowed to rule themselves. He writes:

"This case is about power in several respects. It is about the power of our people to govern themselves, and the power of this Court to pronounce the law. Today's opinion aggrandizes the latter, with the predictable consequence of diminishing the former. We have no power to decide this case. And even if we did, we have no power under the Constitution to invalidate this democratically adopted legislation. The Court's errors on both points spring forth from the same diseases root: an exalted conception of the role of this institution in America."

Update at 11:29 a.m. ET. Equal Protection:

The majority opinion in the DOMA case is worth noting. Korva has been sifting through it and of note is that Justice Kennedy wrote his opinion saying DOMA violates the Constitution's equal protection clause.

He writes quoting Dept. of Agriculture v. Moreno:

"DOMA seeks to injure the very class New York seeks to protect. By doing so it violates basic due process and equal protection principles applicable to the Federal Government. The Constitution's guarantee of equality 'must at the very least mean that a bare congressional desire to harm a politically unpopular group cannot' justify disparate treatment of that group."

Kennedy goes on:

"DOMA writes inequality into the entire United States Code. The particular case at hand concerns the estate tax, but DOMA is more than a simple determination of what should or should not be allowed as an estate tax refund. Among the over 1,000 statutes and numerous federal regulations that DOMA controls are laws pertaining to Social Security, housing, taxes, criminal sanctions, copyright, and veterans' benefits. DOMA's principal effect is to identify a subset of state-sanctioned marriages and make them unequal. The principal purpose is to impose inequality, not for other reasons like governmental efficiency.

"DOMA's unusual deviation from the usual tradition of recognizing and accepting state definitions of marriage here operates to deprive same-sex couples of the benefits and responsibilities that come with the federal recognition of their marriages. This is strong evidence of a law having the purpose and effect of disapproval of that class. The avowed purpose and practical effect of the law here in question are to impose a disadvantage, a separate status and so a stigma upon all who enter into same-sex marriages made lawful by the unquestioned authority of the States."

Update at 11:10 a.m. ET. 'Immense Victory':

Legal scholar Jeffrey Toobin tells CNN that the DOMA case is an "immense victory" for proponents of gay marriage.

On Prop 8, Toobin said, the court did not go as far as they may have liked.

"The court could have said all 50 states should have gay marriage," Toobin said. They didn't but it "certainly looks like the court may be moving in that direction."

Update at 10:50 a.m. ET. The Law Of The Land:

David Boies, one of the attorneys fighting Prop 8 in the Supreme Court, said this was a victory.

On the steps of the Court, he said in Hollingsworth v. Perry, the court could not get to the merits of the case. But the DOMA case made it clear that the court would agree that banning gay marriage is a violation of the constitution.

"When that case comes," Boies said, "marriage equality will be the law of the land."

 

Ruling neuters key US voting law

 Strict voting laws affect millions of Americans
The US Supreme Court has struck down a key part of a landmark civil rights-era electoral law designed to protect minority voters.

By a margin of 5-4, the justices quashed section 4 of the 1965 Voting Rights Act.

They ruled that an updated formula was needed to decide which jurisdictions' election laws need monitoring.

The law requires all or parts of 15 US states, mostly in the South, to receive federal approval for election changes.
'40-year-old' facts
The Voting Rights Act was extended for 25 years by Congress in 2006 with broad support.
Continue reading the main story
Few pieces of legislation strike such a chord as much as the 1965 Voting Rights Act. The law named - and effectively shamed - state and local governments, forcing them to obtain permission from Washington DC before changing voting laws.

There were and are many critics of the law. Some saw it, and still see it, as an unwarranted intrusion by the federal government into states' rights. The court has not endorsed their view. Instead, the court struck down the way in which states and local governments are chosen for federal oversight.

But the effect is pretty much the same because Congress now needs to find another way to choose states that require oversight - and Congress is very unlikely to agree on any such thing. The court has, intentionally or not, torn the key enforcement mechanism out of the act.
"Congress did not use the record it compiled to shape a coverage formula grounded in current conditions," Chief Justice John Roberts wrote in the court's opinion.

"It instead re-enacted a formula based on 40-year-old facts having no logical relationship to the present day."

The justices did not go so far as to strike down section 5 of the law, known as the pre-clearance provision, which requires certain states to get federal approval before making election-law changes.

But since section 4, which sets the test for pre-clearance, has been found unconstitutional, the ruling effectively renders section 5 invalid until a new formula can be agreed by Congress.

Justice Ruth Bader Ginsburg, who was backed by three liberal-leaning colleagues, said in dissent that the court "errs egregiously by overriding Congress' decision".

Reading aloud her view to a packed courtroom in Washington DC, she said there could be no doubt that voter discrimination still existed.

"But the court today terminates the remedy that proved to be best suited to block that discrimination," she said.
Obama 'deeply disappointed'
President Barack Obama said he was "deeply disappointed" by the court's ruling, adding that the Voting Rights Act "helped secure the right to vote for millions of Americans".

"Today's decision invalidating one of its core provisions upsets decades of well-established practices that help make sure voting is fair, especially in places where voting discrimination has been historically prevalent," he said in a statement.

Shelby County, in the southern state of Alabama, launched the legal challenge. It argued that the pre-clearance process was out of date and an over-reach of federal power.

Critics of the voting law acknowledged that it may have been necessary in the 1960s, but they said times had changed and it was not longer appropriate to hold Southern states accountable for past wrongs.

Alabama Governor Robert Bentley told the Birmingham News the decision was "the most significant ruling" in his lifetime.

"Was there a reason to pass the Voting Rights Act 48 years ago? Yes, there was," Mr Bentley said. But he said "areas of discrimination" had been "addressed".

"As governor, I can assure you we're not going to have discrimination in the state of Alabama based on race, especially related to voting," he said.

The Voting Rights Act was intended to stop practices such as literacy tests, poll taxes or similar measures to keep black people from voting, in states with a history of racial discrimination.
Supporters of the Voting Rights Act say it is still relevant
Supporters of the provision say recent efforts to change election laws in some parts of the US, including a series of voter identification laws, underline the voting act's continued relevance.
2012 election blocks
Last year, the US justice department blocked changes to voter identification laws in the states of South Carolina and Texas.

And a federal court ruled that a plan to change the boundaries of congressional districts in Texas discriminated against the state's large and growing Hispanic population.

Activists in favour of preserving the law say that since the Voting Rights Act was renewed seven years ago, as many as 31 proposed changes to election laws have been blocked by Washington.

Last week, the US Supreme Court struck down a state law in Arizona that would have required registered voters to provide proof of citizenship at the polls.

Democrats say stricter voting laws, mainly championed by Republican legislatures, are designed to make it harder for minorities - who tend to vote Democratic - to cast their ballots.