Wanda Solomon was sentenced in 2007 for conspiracy to distribute and possess with intent to distribute cocaine and cocaine base. After considering the sentencing factors contained in 18 U.S.C. § 3553(a), the United States District Court for the Western District of Pennsylvania sentenced her to a prison term that fell within the range recommended by the United States Sentencing Guidelines. A 2014 amendment to those guidelines retroactively reduced the offense level associated with her drug conviction by two steps. As a result, Solomon sought a reduction of her sentence, but, given the seriousness of her offenses, the Court concluded that a reduction was not appropriate. Because that decision was a sound exercise of discretion, we will affirm.
Solomon ran a large-scale cocaine distribution ring in western Pennsylvania. She involved her family members, including at least one minor child, in her drug dealing. Her son, Jelani, became actively involved as a co-conspirator and was arrested. He then ordered the murder of an informant he believed had led to the arrest.
Solomon's drug dealing continued for over a decade before the law caught up with her. She and her co-conspirators were charged in two indictments with conspiracy to distribute and possess with intent to distribute cocaine and crack cocaine, in violation of 21 U.S.C. §§ 841(a)(1) and 846. Two members of her group were also charged with the murder of the informant, but Solomon was not directly implicated in that crime.
The pervasiveness of your conspiracy is despicable; most especially despicable because it appears as though almost every sibling in your family was involved in criminal activity one way or another, including having the involvement to some degree of a minor ․ in transporting drugs and/or money over the course of the time -- it's absolutely incredible to me that everybody in the Solomon family was involved in this criminal activity for a lengthy period of time.
It is clear that you had a major leadership role in the conspiracy and you continued the conspiracy after the horrific homicide of a helpless man ․ for virtually no reason in the world. That you continued to run the business, you continued to supply Jelani with money, you continued to pay his bills, you continued to help [one of the other co-conspirators] after this incident.
Your prior criminal involvement and history is of no small moment in my consideration of sentencing.
In February 2016, Solomon filed a motion for a reduction of her sentence as a result of recent amendments to the sentencing guidelines which retroactively reduced the base offense levels for certain drug offenses. See U.S. Sentencing Guidelines Manual § 2D1.1(c) (U.S. Sentencing Comm'n 2016); Id. at app. C supp. amends. 782, 788. Solomon also asked the Court to take into account her post-sentencing conduct. While in prison she has invested time in education, received a high school graduation equivalency certificate, and been involved in prison service organizations. She requested a sentence reduction to 168 months – a sentence on the lower end of the newly recommended guideline range of 168 to 210 months.
(App. at 2-3.) Solomon timely appealed.
We review the District Court's denial of a motion for a reduction of sentence for abuse of discretion. United States v. Styer, 573 F.3d 151, 154 (3d Cir. 2009). We accord great deference to the District Court's “reasoned balancing of” the pertinent factors and will uphold the sentence if it is “substantively reasonable” and “logical and consistent” with the sentencing factors in § 3553(a). Id. at 154-55 (internal quotation marks and citation omitted).
Given this deferential standard of review, we have no difficulty affirming the District Court's decision not to reduce Solomon's sentence. The recent guidelines amendments do “not entitle a defendant to a reduced term of imprisonment as a matter of right.” U.S. Sentencing Guidelines Manual § 1D1.10 cmt. background (U.S. Sentencing Comm'n 2016). Instead, in deciding whether to make a “discretionary reduction,” id., the court “shall consider the factors set forth in 18 U.S.C. § 3553(a) ․.” Id. at cmt. 1(B)(i). The court may also take into account “[p]ost-[s]entencing [c]onduct ․.” Id. at cmt. 1(B)(iii).
It is clear that the District Court took into account all of the pertinent factors, including the guidelines amendments and Solomon's exemplary prison conduct. It nevertheless concluded that those factors “did not override” the severity of the conduct that had justified Solomon's original sentence. Styer, 573 F.3d at 154. The Court emphasized Solomon's central role in the drug conspiracy, her continued involvement “after the murder of an innocent man,” (App. at 3), her decision to involve minors in the conspiracy, and her lengthy criminal history. In light of those aggravating factors, the District Court was well within its discretion to conclude that the guidelines amendments and the mitigating post-sentencing conduct do not justify a sentence reduction. Cf. Styer, 573 F.3d at 154 (“While [the Defendant] disagrees with the comparatively little weight the Court accorded his post-conviction conduct in relation to other factors, we cannot conclude that the Court's reasoned balancing of those factors was an abuse of discretion.”).
Solomon argues that the District Court committed a legal error when it noted that the initial sentence “was not ultimately based on” the sentencing guidelines. (App. at 2.) Read in context, though, it is clear that the Court was simply commenting on the unobjectionable fact that the sentencing guidelines “were advisory only,” and that its initial sentencing decision “was based on the Court's thorough evaluation of the § 3553 sentencing factors.” (App. at 2.) The District Court took those same factors into account when it determined that the initial sentence remained the proper one. Accordingly, we will affirm.
For the foregoing reasons, we will affirm the District Court's denial of a reduction in Solomon's sentence.
1. The sentence enhancement concerned the involvement of one particular child who was directed by Solomon to deliver cocaine and to pick up payments. The District Court also may have considered, however, that Solomon had likely involved other minors in her criminal activities over the years.
2. The District Court had jurisdiction to consider Solomon's request for a sentence reduction under 18 U.S.C. § 3231. We have jurisdiction over her appeal pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(e).


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The Remedy of Fundamental Breach and the United Nations Convention on the International Sale of Goods (CISG) - A Principle Lacking Certainty?
This paper will look at fundamental breach under the CISG. This topic will be approached only from the perspective of the buyer. This paper does not attempt to give an in depth analysis of avoidance. It attempts to 'map the territory'. Its purpose is to assist in the development of a basic understanding of how the CISG is constructed by analysing some of the Convention's breach of contract provisions. This paper is not analytical but rather descriptive in nature, as it attempts to describe the current 'state of play'. The intended use of this paper is as a practical guide to the problem of avoidance of contractual obligations under the CISG.
In brief, it is argued that the process approach is to be preferred over the outcome approach in the application of the CISG by tribunals and national courts. Arguably, because of the nature of fundamental breach, not every decision that is the outcome is uniform. Each decision can be unique to each case. However the method by which the decision has been reached is uniform. This is so because the methodology for applying and interpreting the CISG is clearly described. Any inconsistency or vagueness is not attributable to the CISG, but rather to those applying it. This is because any interpretation of the CISG must be approached with Art. 7 in mind.
Two points need to be observed. First, the drafters of the CISG purposefully incorporated words which need to be understood in an inter-national (rather than national) context. Honnold suggested that the drafters solved this problem by 'rooting out words with domestic connotations in favor of non-legal earthy words to refer to physical acts'. Secondly -- and it follows from the first point -- recourse to domestic law is only appropriate in cases where the CISG is silent. In his 'Celebration Anthology' of 50 Years of the German Federal Supreme Court, Schlechtriem explains the relationship between Art. 7 and any municipal court.
The rule in Art. 7(1) CISG compels the discipline, so to speak, that members of an orchestra without a conductor must exercise: no easy task when one essentially gives the cadence himself, which the others must follow. Moreover, this task is especially difficult because one must constantly observe how other highest courts decide and one is more dependant on the receipt of information via the legal academic community than is the case with domestic law.
The problem of a breach of contract attracts widely divergent solutions. In every legal system there are expressions and techniques recognised nowhere else. For a remedial system to be successful, the remedies it provides must be economically defendable and must account for the rights of both (or all) parties to any given contract.
Certainty is required in order for parties to calculate the risk of entering into contracts. Doubt is cast upon the utility of a remedial model when a party can only discover its merits once they lodge a claim. There are comparatively few national legal systems in the world where certainty of remedy cannot be known in advance. The system established by the CISG is no exception.
As indicated above, different systems use different solutions to deal with the same problem. By way of brief example, the German legal system distinguishes between 'impossibility', 'delay' and 'positive breach'. Such distinctions have not been well received elsewhere. Similarly, neither Germanic nor Anglo-American lawyers appreciate the French system where it takes a judicial decree to release parties from their contractual obligations.
It should be pointed out that the German Law of Obligations has been modernised as a result of European Union (EU) endeavours to reach common principles and structures for the law of Obligations in Europe. As a consequence of these EU initiatives the German Civil Code was revised and, amongst other reforms, the basic concept of a breach of contract was rewritten by following solutions of the CISG.
In practical terms, [the remedial provisions are] the substantive heart of the whole Principles. ... Chapter 7 is probably the most imaginative synthesis to emerge in this generation to some of the most difficult questions of contract law.
Rosett's characterisation of the CISG as a 'synthesis' is well founded, as the CISG embodies a remedial system which is in some parts new and in others parts old. The CISG follows time tested general principles in some areas, such as awarding damages to the aggrieved party.
Fundamental breach on the other hand, which gives rise to avoidance of contract, is a unique principle -- or as some authors stated, a 'milestone concept'. That said, the term 'fundamental breach' was not unknown at the time the CISG was settled, and has in one form or another been in use as a contractual cure in a wide range of legal systems for some time.
As has been observed it is important to note that, in contrast to its treatment in Common Law states, fundamental breach under the CISG is not restricted to the interpretation of exception clauses.
It goes to the heart of the contract and, therefore, a fundamental breach is the essential precondition for avoiding a contract. In other words, it decides whether a contract lives or dies. Another point needs to be made here. In the 'unwinding of failed contracts' the application of the CISG is limited to those cases where there has been a breach of a contract. All issues of avoidance that relate to the validity [page 222] of a contract are excluded by operation of Art. 4 of the CISG. They must be dealt with under domestic law.
Fundamental breach may be available as a remedy to the buyer in two main situations. The first is where the goods are delivered, but there is a breach of a term of the contract. The second situation is that the goods have not been delivered. This distinction is important as the steps which need to be taken, and the conditions that need to be fulfilled, can vary substantially.
This paper will consider both situations. Article 49 is the starting point for any investigation of avoidance. Article 49(1)(a) makes the obvious point hat any failure of a seller to perform his obligation under the contract can amount to a fundamental breach. In this case a court or tribunal must decide whether a fundamental breach, or merely a breach of the contract, has occurred.
As pointed out above, this distinction is vital. It is explained in Art. 49. It is perhaps unfortunate that Art. 49(1)(a) delivers what may be termed a 'mother-statement' here -- if the failure of the seller to perform any of their obligations amounts to a fundamental breach under the contract or the Convention, then the contract may be avoided by the buyer. It is clear that simply not performing any obligation in itself does not give rise to avoidance. The non-performance must be fundamental.
The problem is that Art. 49 proceeds only to distinguish between two situations. First where the goods have been delivered, and secondly where delivery has not taken place. Article 49(2) describes the situation when the goods have been delivered. The general rule in that case is that the buyer loses the right to declare the contract avoided. It follows that any proposed application of avoidance should be preceded by an investigation whether delivery has taken place. A preliminary focus on fact is justified by the drafting of Art. 49, under sub-article (1)(a) of which the requirements for avoidance are repeated but vary depending whether the goods have been delivered or not.
The next issue is definition. The question of what will amount to a fundamental breach is not answered in Art. 49. Article 25 contains an explanation of [page 223] fundamental breach. As has been noted above, it has been argued that the provisions of the CISG that deal with fundamental breach contain vague language causing uncertainty and unpredictability. This is partly due to the history of the CISG. The perceived vagueness was due to the fact that the drafters could not come to an agreement on the type of breach which leads to an avoidance.
As has been noted, the reason for this lack of consensus was the range in the definition of fundamental breach in the legal systems of origin of the drafting parties. In the end, a political compromise resulted in the language contained in Arts. 49 and 25. However, much of the uncertainty and unpredictability of the concept of avoidance of contracts has been removed by the usage of practitioners.
To begin with, Art. 25 is not a free standing provision. It is arguably only 'declaratory' and not substantive in character. The requirement is that it must be read in conjunction with 'functional' Articles such as, in the case of the buyer, Art. 49.
The CISG in Art. 25 only provides general interpretative guidelines by highlighting the criteria which must be met. It is not an argument to simply point out that it is 'difficult for a buyer and his advisors [to determine] how high a hurdle will be set in any particular case'. Many of these problems of determining avoidance can be overcome by applying Art. 8 -- the intent of the parties -- to the principle of fundamental breach.
To determine whether a fundamental breach has occurred, a dual test must be applied. The elements of this dual test are (1) 'substantial detriment' and (2) 'unforeseeability'.
In addition it must also be pointed out that the party wishing to avoid the contract must send a clear declaration of avoidance to the breaching party. Article 25 contains what may be termed an obvious statement in the form of its guarantee that the CISG will protect what 'a party is entitled to expect under the contract'. To take the promisee's expectations into account requires a clear reference to Arts. 8(1) and (2).
Article 8 is therefore of great importance, as it allows the court to take into account not only the objective intent of the parties but also their subjective intent. All the relevant circumstances of the case 'including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties'  can be used to determine the intent of the parties. The threshold issue for the court is to determine what the party expected to receive under the bargain in question. The second step is then to find out whether there was a breach of the contract. As a third step, the court must determine whether a fundamental breach has occurred by applying the dual test.
Article 25, as the first part of the test, requires that substantial detriment to one party must have occurred before the breach can be termed 'fundamental'. Such a term cannot be uniformly defined as it depends on each party's expectation of their contractual entitlements. It follows that what amounts to a fundamental expectation, or Kardinalpflicht, will vary from contract to contract. This relativity is strengthened when consideration is given to the fact that 'substantial detriment' is not narrowed to a specific harm but rather widened 'to all detrimental effects in the particular context of the other party's situation'.
the buyer was without unreasonable expenditure able to process the goods differently or sell them in the normal course of business, if only with a price discount, and if the buyer could reasonably be expected to take such measures.
It is clear from the above examples that 'substantial detriment' goes beyond damages as described in Art. 74. Simply put, detriment does not equal damages. It is left to the parties to determine what importance they attach to contractual obligations. The reason for this drafting is that the promoters of the CISG would not have introduced a particular principle which, as Will coined, 'is a fresh legal concept and is not fraught with history'. Furthermore, the second part of the dual test under Art. 25 includes a proviso that the party in breach ought to have foreseen the damage. In other words, the breaching party must have, or ought to have, the knowledge that a breach would result in substantially depriving the other party 'of what he is entitled to expect'.
Hence foreseeability of the detriment must be proven. Foreseeability is a general principle of the CISG and must be understood in conjunction with Art. 74. It should be noted that frequently Hadley v Baxendale  is quoted as the source of the foreseeability principle. However caution must be applied and Murphy was correct when he observed that: judges should try to divorce themselves from the influence of Hadley as much as possible: its rules are not the same as those under the [foreseeability principle of] article  of the CISG.
However, precisely where the 'line in the sand' between a breach and a fundamental breach has been drawn is not easily ascertainable. Most cases -- but not all -- appear to rule in favor of avoidance if a high proportion of goods do not conform to the contract. But this is not uniformly so. In determining a fundamental breach, 'although without expressly saying so, case law seems to favor an economically oriented approach based on the actual loss suffered by the aggrieved party'.
The fact that economic loss is of importance is shown in a German case. The German Bundesgerichtshof in 1979 delivered what could be termed a 'classic' decision. Only 3% of the delivered cheese in the transaction in question was actually defective. Because at the time of contractual formation both seller and buyer knew that the cheese market in Germany was saturated, it was foreseeable that customers would change to other suppliers even for trivial unsatisfactory deliveries. It can be argued that in this case the German court considered the foreseeable losses of the buyer in the context of the foreseeable behaviour of the buyer's customers.
Graffi came to the conclusion that courts in general do not seem to pay great attention to contractual expectations or the principle of foreseeability. Rather, in Graffi's view evidence of a substantial detriment which was suffered seems to play an important role in determining whether a fundamental breach had occurred. However, it is difficult to see how determination of a 'substantial detriment' can be undertaken in a vacuum without taking the expectations of the parties, or at least the economic circumstances of their bargain, into consideration. Such a determination requires the application of Art. 8.
In order to apply the dual test within the context of Art. 49, it must be first established whether goods have been delivered or not. As suggested above, such a distinction is important, as the requirements to prove fundamental breach are case specific.
This situation does not pose any problems besides the fact that it leaves open the issue of whether the failure of the seller actually amounts to a fundamental breach. As has been noted, Art. 8 will assist a tribunal or court in their determining the purpose of the contract, and hence also to identify what the buyer was entitled to [page 227] under the contract and whether the seller 'substantially deprived him of what he was entitled to'.
However, the CISG assists the buyer in allowing the aggrieved party to avoid having to define the failure of the seller as being 'fundamental'. The buyer only needs to give the seller an additional time period, or Nachfrist, to perform his obligations. If the seller fails to do so this second breach amounts to a fundamental breach.
It is not the non-delivery which is the trigger of a fundamental breach but the failure to respond to the invitation to deliver. The Nachfrist contemplated by Art. 47 must be of a reasonable length. Article 47(2) does protect the seller during that time, as the buyer is not allowed to resort to any remedy for breach of contract until the extension is exhausted. Arguably, the contract can be termed to have been 'suspended' until it becomes clear whether delivery will take place or not.
Of interest in this context is the decision of the Appellate Court of Düsseldorf  where the question of Nachfrist was discussed. If time is of the essence, and both parties are aware of this fact, setting a Nachfrist in case of non delivery is not essential. The Düsseldorf court went further and explained that the mere fact that the seller sets a later delivery date acts as a Nachfirst and avoidance pursuant to Art. 49 can be affected in the same manner as if the buyer would have set a Nachfrist.
If goods have been delivered the situation becomes more complicated as the operation of several legal principles, including restitution and unjust enrichment, may be triggered. However, a careful reading of the CISG reveals that adherence to the Convention's rules furnishes the desired explanations. The CISG starts with the premise that once goods have been delivered, the remedy of fundamental breach is lost.
In essence, delivery means the aggrieved buyer can claim damages or any other remedy as described in Art. 45, except avoidance. However this is not a strict rule as certain exceptions have been listed. The CISG makes a distinction between late delivery and breaches other than late delivery. Once late delivery is made, a declaration of avoidance must be made in a timely fashion. Once the goods have [page 228] left the country of origin it may be argued that avoidance is no longer an appropriate remedy. The CISG is conscious of the 'tyranny of distance' and the associated costs. It is therefore not surprising that once goods have been delivered the CISG, only allows avoidance in exceptional circumstances.
Once goods have been delivered many possible breaches can occur. For example, goods may be delivered which do not conform to the contract. Non-conformity will be made out where the goods are faulty or simply do not correspond to the quality or fitness as desired under the contract. Article 49 simply points to the fact that avoidance must be communicated to the seller within a reasonable time after he 'knew or ought to have known of the breach'.
The problem with Art. 49 is that it does not fill the time gap between inspecting the goods and giving notice of the defects or lack of conformity to the seller. Reading the CISG within its four corners will, however, solve this problem. The problem of the time gap is governed by Arts. 38 and 39. The question of conformity is dealt with at Art. 35.
This is only one example of a possible breach of contract and its solution. The CISG describes other breaches, such goods not being free from any right or claim of a third party pursuant to Art. 41. Furthermore, even when goods have been delivered and a breach occurs, the CISG gives the buyer the opportunity to avoid having to define fundamental breach. The CISG confers this opportunity by the deployment of the principle of Nachfrist, much as it does for cases where goods have not been delivered.
The solution to fundamental breach is that a buyer, if time permits, should simply give the seller a Nachfrist in order to avoid the problem of definition. The question of time, or even the essential requirement to give a Nachfrist, is dependent on the circumstances.
In all of these cases the lack of conformity or non-delivery becomes immaterial because the non-performance of the seller within the given period in itself amounts to a fundamental breach. This solution is simple and provides no real controversy. As a mater of fact there are no cases reported where the non-observance of a Nachfrist was subsequently questioned by a court or tribunal as not to constitute fundamental breach.
Once a fundamental breach is established the parties are released from their respective obligations. However this does not prevent the aggrieved party claiming damages which are due to them. Such damages are always in addition to the specific rights a buyer has when the contract is avoided. In general the buyer can rely on Arts. 75 and 76 for remedies. These two articles are interrelated. Article 75 allows a buyer to claim 'the difference between the contract price and the price in the substitute transaction'. Replacement purchases may be made by the buyer when the goods are not delivered or where faulty goods have been delivered. Again, in cases of non-delivery the situation is simple and Art. 75 will resolve the buyer's claim. The same can be said if the seller resold the goods.
Article 76 resolves the problem if the buyer has not made a substitute purchase or has not resold the goods. He simply recovers the difference between the current price and the price fixed by the contract. The problem as to when the current price is to be calculated is also determined by Art. 76(1). If the goods have not been delivered it is the price at the time of avoidance. If the goods have been delivered it is the prevailing price at the time when the goods were taken over.
In addition, once a fundamental breach is established and the goods do not conform to the contract, it will act as a trigger to claim delivery of substitute goods pursuant to Art. 46(2). Alternatively, Art. 46(3) will allow the buyer to ask for repair of delivered goods. Only in cases of fundamental breach is the buyer in a position to choose between the two remedies provided for by Art. 46. In all other cases repair is the only available remedy.
It is important to note here that giving an additional time period is not asking for specific performance. The right to avoid a contract is diametrically opposed to the right to specific performance. Specific performance can be claimed in respect of all breaches of a contract but the availability of avoidance is limited. The [page 230] question of specific performance is only of relevance in circumstances where the risk has shifted from the seller to the buyer. The question is whether the buyer has access to the remedies under Arts. 46(2) and 50 (i.e. rectification of defects or the reduction of price). The solution is not without controversy and is the subject of divergent authority. The prevailing view is that Arts. 46(2) and (3) only apply for defects in quality.
At this point an interesting observation may be made concerning situations where goods are shipped by sea. It has been argued that trade in commodities raises different issues to trade in machinery and other capital goods where a breach of contract is envisaged. The argument is that in commodity trade the volume of paper trading exceeds the volume of dealing in the underlying goods. This may be the case.
In cases of this nature the original question -- where has the breach occurred -- is of importance. It is obvious that at the end of a transaction, whether in commodity goods or otherwise, the goods must be delivered. Only at the time of delivery will the relationship between the ultimate purchaser and seller be revealed. The trade in documents, or more specifically the trade in negotiable instruments, is specifically excluded under the CISG and does not concern the ultimate buyer at all. It is the delivery or non-delivery to the buyer of the actual goods which is covered by the Convention. Hence, the argument that the CISG does not apply to commodities is an over-simplification and is not correct.
Whilst it is true that the negotiable instruments traded in respect of a commodity are outside the scope of the Convention, this is not the end of it. The CISG still applies to commodity transactions in so far as it covers the actual sale and delivery of the commodity. The paper trading that is outside the scope of the Convention is a matter for the domestic law of the site where the instruments were traded.
In cases where the goods have been delivered and the buyer wishes to make a replacement purchase the whole matter rests on the question whether the buyer is [page 231] able to make restitution  of the disputed goods substantially in the same condition as he received them.
If both parties are obliged to make restitution they must do so concurrently. However, there are exceptions. One arises where the goods have perished, deteriorated or have been damaged in transit and the damage is not the buyer's fault. Furthermore, it is not surprising that the CISG requires the buyer or seller to account for all benefits they derived under the contract.
Avoidance is very closely linked to restitution as the buyer will forfeit the right to avoid the contract if it is impossible to make restitution. Article 82(1) basically provides the bar on the exercise of avoidance. Article 82(1) is not unique as it corresponds with article 2-608(2) of the UCC. But the same article also sets out many exceptions to the general rule.
Before our discussion of restitution begins, a further problem needs to be addressed, namely whether Art. 82(2)(c) is only confined to defects in quality. The problem stems from the fact that this article uses the expression 'lack of conformity'.
'Lack of conformity' can be interpreted in several ways. First, it may only refer to the conformity of goods. This is a very narrow interpretation. Secondly, the word 'conformity' can be extended to mean conformity with the contract. Taking into consideration what Honnold said in relation to the usage of words -- '[root] out words with domestic connotations in favor of non-legal earthy words [referring] to physical acts' -- the wider interpretation would seem most appropriate. However, words cannot be given meaning in isolation, as the CISG needs to be read within its four corners. The question of conformity, or lack thereof, must therefore be investigated within the four corners of the Convention.
Mohs points to the fact that Art. 82(2)(c) refers to quality, third party intellectual property rights and provides a limited remedy in relation to defects in title. In relation to defects in title to goods, the buyer obviously has no interest in keeping the goods. The only remedy they would be seeking is to avoid the contract. Therefore, whether Art. 50 allows a price reduction or not is of no real practical significance.
The same argument can be advanced if goods are either destroyed or lost. In such cases it will be unlikely that the buyer will ask for a price reduction, whether permitted under Art. 50 or not. Furthermore, whether a price reduction is allowed in certain circumstances does not influence the question of uniformity. It merely narrows down the remedies once a fundamental breach has been accepted by the tribunal. Whether remedies are narrowed down by choice, necessity or law does little to suggest that the question of fundamental breach, and for that matter the uniformity of the CISG, has been put in doubt.
Article 84 recognises that not in all circumstances the goods can be returned in the same condition the buyer received them or at all. The buyer nevertheless owes the seller all the benefits which they derived having been in possession of the goods. The buyer has to account for the concrete amount even if they sold the goods at a 'give-away' price. However, the CISG does place a limitation on 'bargain sales'. While it is possible for the aggrieved buyer to sell the goods cheaply due to their condition, the limitation is that the sale must be in the normal course of business as described in Art. 82(2)(c). In cases of genuine lower than expected prices the bar to avoidance does not apply.
The conclusion is that the wording in Art. 82 must be read widely taking general principles into consideration. Hence, even in cases where restitution is impossible, the buyer is still entitled to avoid the contract. It is of special significance that the CISG included many remedies into its regime. Not all remedies suit every opportunity, and an aggrieved party must select the remedy which is appropriate under the circumstances of the breach to which they have been exposed.
But without Art. 70 a buyer could not avoid the contract, nor ask for substitute deliveries, because both remedies require the return of the goods in the same condition as received. This would be rather difficult if the goods have been lost or damaged in transit, such as if they fall overboard on a ship. Because of Art. 70, the risk has been shifted back to the seller who breached the contract.
As has been shown, the CISG has introduced a system by which contracts can be unwound due to fundamental breach. The Principles of European Contract Law, the UNIDROIT Principles of International Commercial Contracts and the Avant-projet d'un Code Europeen des Contracts have introduced similar rules into their respective documents. Arguably, therefore, fundamental breach has been conceived as being of interest and value in any attempt to unify contract law.
The CISG has attempted to balance the needs of the buyer to have the opportunity to avoid the contract in case of non-performance with those of the seller, who requires compensation for any performance or part performance of the contract. In other words, despite an unwinding of the contract a party must account for all the benefits it has derived from a contract before the avoidance.
the CISG offers a risk rule, it is unnecessarily complex and leaves a number of questions unanswered. It is a solution that is founded on an outdated approach since it distributes the risk of accidental loss in the same way as German law did before the recent reform of the law of obligations, namely by excluding the right to avoid the contract.
Arguably, English law is not as predictable as it has been suggested. A business person may still have some considerable problems in predicting how an English court will classify an 'unclassified' term. Even if it will be classified as an intermediate term, the trader's problems are not over.
In domestic situations the problem of making restitution is relatively simple. This is because distances are not as big as in international transactions, and the matter remains within one jurisdiction. Considering that in international trade both parties are domiciled in different jurisdictions, the question of certainty and trust is of far greater concern to the parties than it is in a sale conducted within a domestic community. A seller or buyer must be assured that the law will protect their interests and that the 'tyranny' of distance will not thwart attempts at restitution.
Arguably, therefore, once the goods have been dispatched and are not lost or irreparably damaged, avoidance is and will be the choice of last resort for an aggrieved party. Damages are a far greater incentive in international trade once performance has been established. However, non-delivery will attract the remedy of avoidance, as it is efficient, clear cut and definite.
Considering the problematic status of fundamental breach why then should the CISG be applied? Simply put, it is a uniform international sales law and is applied very often in international arbitrations. For example, the CISG is the de facto sales law in the EU. Furthermore, the CISG 'provide[s] rules governing the international sale of goods which, apart from being uniform, also take into account the fact that export or import transactions are often entered into by parties who do not possess equal bargaining power'. Forum shopping is not eliminated, but is, as a practice, drastically reduced.
It is submitted that this in itself is a major advantage for international business. The most important aspect of this discussion, however, is the need to appreciate that the general principles packaged in the CISG must be understood as driving a process. That is, the CISG is process driven and not outcome driven. It is left to the intuition of the courts or tribunals -- based on the available facts -- to arrive at a just conclusion. Outcomes must vary because the facts are not the same in all cases. Uniformity and predictability are achieved by applying the same process by which a result is achieved. This is arguably no different to the common law system of precedent where, once the same facts have been discovered, previous decisions are applied to determine the outcome. Uniformity is thereby achieved.
a1. Assoc/Professor, Victoria University, Melbourne, Adjunct Professor, School of Law, Murdoch University, Perth, Australia.
1. The seller's remedies are in essence the same except those which specifically are unique such as paying the price.
2. Honnold, J. 'Uniform Laws for International Trade: Early "Care and Feeding" for Uniform Growth', (1995) 1 International Trade and Business Law Annual 2.
3. Schlechtriem, P., 'Uniform Sales Law in the Decisions of the Bundesgerichtshof' 50 Years of the Bundesgerichtshof, A Celebration Anthology from the Academic Community. Available at: <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem3.html>.
4. Zweigert & Kötz, Introduction to Comparative Law, 1998, Clarendon Press, Oxford, at p. 510.
6. See Schlechtriem, P., 'The German Act to modernize the Law of Obligations in the Context of Common Principles and Structure of the Law of Obligations in Europe' (2002) Oxford University Comparative Law Forum; available at: <http://oucif.iuscomp.org>.
7. Holmes, W., 'The Path of the Law', (1897) Harvard Law Review 462.
8. Rosett, A, 'UNIDROIT Principles and Harmonisation of International Commercial Law; Focus on Chapter Seven'; available at: <http://www.unidroit.org/English/publications/review/articles/1997-3.htm>.
9. Graffi, L., 'Case Law on the Concept of "Fundamental Breach" in the Vienna Sales Convention', (2003) No 3 International Business Law Journal 338.
10. Zimmermann. R. 'Restitutio in Integrum: The Unwinding of Failed Contracts under the Principles of European Contract Law, the UNIDROIT Principles and the Avant-project d'un Code Europeen des Contrats', 2005-4 Uniform Law Review 729.
11. For examples of fundamental breach see: Bundesgericht (Switzerland) November 13 2003 available at: <http://cisgw3.law.pace.edu/cases/031113s1.html>; Tribunal of International Commercial Arbitration at the Ukraine Chamber of Commerce and Trade, 18 November 2004, available at: <http://cisgw3.law.pace.edu/cases/041118u5.html>; OLG Düsseldorf, 21 April 2004, available at: <http://cisgw3.law.pace.edu/cases/040421g2.html>, Landgericht Stendal, 12 October 2000, available at: <http://cisgw3.law.pace.edu/cases/001012g1.html>; and OLG Stuttgart, 12 March 2001, available at: <http://cisgw3.law.pace.edu/cases/010312g1.html>.
12. For examples see LG Frankfurt, 11 April 2005, available at: <http://cisgw3.law.pace.edu/cases/050411g1.html>; LG Saarbrucken, 1 June 2004 available at: <http://cisgw3.law.pace.edu/cases/040601g1.html>; OLG Dusseldorf, 21 April 2004, available at: <http://cisgw3.law.pace.edu/cases/040421g2.html>; OLG Stuttgart, 12 March 2001, available at: <http://cisgw3.law.pace.edu/cases/010312g1.html>.
13. Cook, S. 'The UN Convention of Contracts for the International Sale of Goods, A Mandate to Abandon Legal Ethnocentricity' 16 J.L. & Com. 258.
14. Graffi, supra fn 9, at p. 338.
17. Will, M., in Bianca and Bonell (eds) Commentary on the International Sales Law: The 1980 Vienna Sales Convention (1987) Giuffre Milan, at p. 210.
19. Will, supra fn 17, at p. 208.
20. LG Saarbrücken, 1 June 2004 available at: <http://cisgw3.law.pace.edu/cases/040601g1.html>.
21. OLG Stuttgart, 12 March 2001, available at: <http://cisgw3.law.pace.edu/cases/010312g1.html>.
22. See for example LG Frankfurt, 11 April, 2005, available at: <http://cisgw3.law.pace.edu/cases/050411g1.html>.
23. Will, supra fn 17, at p. 210.
25. (1843-60) All E.R. Rep. 461.
26. Murphy, A.G., 'Consequential Damages in Contracts for the international Sale of Goods and the Legacy of Hadley' 23 Wash. J. Int'l L. & Econ (1989) 415 - 474. Reprinted and available at: <http://cisgw3.law.pace.edu/cisg/biblio/murphy.html>.
27. The lack of conformity is addressed by Art. 35 of the CISG and a substantial body of law is available. In this context see for example, OLG Stuttgart, 12 March 2001, available at: <http://cisgw3.law.pace.edu/cases/010312g1.html>.
28. Graffi, supra fn 9, at p. 343.
31. Graffi, supra fn 9, 345.
33. See KG Appenzell Ausserrhoden, 10 March 2003, available at: <http://cisgw3.law.pace.edu/cases/030310s1.html>; OLG Karlsruhe, 20 July 2004, available at: <http://cisgw3.law.pace.edu/cases/040720g1.html>; and OLG Düsseldorf, 21 April 2004, available at: <http://cisgw3.law.pace.edu/cases/040421g2.html>.
34. OLG Düsseldorf, 21 April 2004, available at: <http://cisgw3.law.pace.edu/cases/040421g2.html>.
36. See Bundesgericht Switzerland, 13 November 2003, available at: <http://cisgw3.law.pace.edu/cases/031113s1.html>; LG Saarbrücken, 26 October 2004, available at: <http://cisgw3.law.pace.edu/cases/040601g1.html>; LG Bielefeld, 15 August 2003, available at: <http://cisgw3.law.pace.edu/cases/030815g1.html>; LG Bayreuth, 10 December 2004, available at: <http://cisgw3.law.pace.edu/cases/041210g1.html>; and LG Frankfurt, 11 April 2005, available at: <http://cisgw3.law.pace.edu/cases/050411g1.html>.
37. See OLG Düsseldorf, 21 April 2004, available at: <http://cisgw3.law.pace.edu/cases/040421g2.html>.
39. See Art. 81(1) CISG and also LG Braunschweig, 30 July 2001.
41. Eiselen, S, 'A Comparison of the Remedies for Breach of Contract under the CISG and South African Law', in Basedow et al; (eds) Aufbruch nach Europa -- 75 Jahre Max-Planck-Institut für Privatrecht, (2001) Mohr Siebeck: Tübingen.
42. Mohs, F., 'The Restitution of Goods on Avoidance of the Contract fro Lack of Conformity within the Scope of Art. 82(2)(c) CISG', Review of the Convention on Contracts for the International Sale of Goods (CISG) (2003/2004), at p. 55.
43. For a full discussion see Mohs, F., ibid, at p. 58.
44. See Mullis, A., 'Avoidance for breach under the Vienna Convention; A Critical Analysis of Some of the Earlier Cases', in Andreas & Jarborg (eds), Anglo-Swedish Studies in Law, 1998, Lustus Forlag, at p. 328.
45. Ibid, at p. 329.
46. See Arts. 81 to 84 CISG.
51. Honnold, J., 'Uniform Laws for International Trade: Early "Care and Feeding" for Uniform Growth', (1995) 1 International Trade and Business Law Annual, 2.
52. For a treatment of the four corner approach see Zeller, B. 'Four-Corners -- The Methodology for Interpretation and Application of the UN Convention on Contracts for the International Sale of Goods' available at: <http://www.cisg.law.pace.edu/cisg/biblio/4corners.html>.
53. See Mohs supra fn 42, at pp. 66 and 69.
54. Mohs, supra fn 42, at p. 70.
55. Ibid, at p. 72.
57. Zimmermann, supra fn 10, at p. 730.
58. Benjamin on Sales (Sweet & Maxwell) 5th ed. (1997), at pp. 18-116.
59. Mullis, A., supra fn 44, at p. 334.
60. Bonell, J. 'Introduction to the Convention' in Bianca and Bonell (eds) Commentary on the International Sales Law: The 1980 Vienna Sales Convention, (1987) Giuffre Milan, at p. 1.
61. Treitel G., in Benjamin's Sale of Goods (2006) Sweet & Maxwell, at para. 18.004.

matches:
Art. 7
Art. 7
Art. 7
Art. 4
Art. 49
Art. 49
Art. 49
Art. 49
Art. 49
Art. 25
Art. 49
Art. 25
Art. 8
Art. 74
Art. 25
Art. 74
Art. 8
Art. 49
Art. 8
Art. 47
Art. 49
Art. 45
Art. 49
Art. 35
Art. 41
Art. 75
Art. 76
Art. 46
Art. 46
Art. 46
Art. 82
Art. 82
Art. 50
Art. 50
Art. 82
Art. 82
Art. 70
Art. 70
Art. 35
Art. 81
Art. 82


SUPPLEMENTARY INFORMATION:BackgroundThe FAA issued Advisory Circular No. 60-10, entitled “Recommended Safety Parameters for Operation of Hang Gliders” on May 16, 1974. That advisory circular contained recommended safety parameters for the operation of sport hang gliders, in lieu of formal Federal regulation. The advisory circular defined “hang glider” as “an unpowered, single place vehicle whose launch and landing capability depends on the legs of the occupant and whose ability to remain in flight is generated by natural air currents only.” The sport of hang gliding has advanced dramatically since Advisory Circular No. 60-10 was issued.
To establish regulations to deter flights which present a serious danger to aircraft and to provide a basis for necessary enforcement action the FAA published Notice of Proposed Rulemaking No 816 on July 27, 1981 (46 FR 38472). That Notice proposed to include both powered and unpowered hang gliders under the generic term “ultralight vehicle” and included proposed weight and fuel limitations for those vehicles. The Notice proposed a number of operational limitations for ultralight vehicles, while recognizing that the vehicles are used primarily for sport purposes. More than 2,500 persons and organizations submitted comments to that proposed rule. This rule is the result of FAA consideration of those comments in light of its responsibility for safety in the National Airspace System. Because of the growing significance of this segment of the aviation community, the new rules have been codified under a new Part of the Federal Aviation Regulations, Part 103.
THE RULESubpart A –GeneralSection 103.1 Applicability (proposed §101.1(a)(3)).This section defines the term “ultralight vehicle,” The proposed rule would have limited the term to single-occupant designs weighing less than 155 pounds, with a fuel capacity of 15 pounds or less, and which had no U.S. or foreign airworthiness certificate. The final rule expands the definition to differentiate between powered and unpowered ultralight vehicles. The 155-pound weight limitation has been retained for unpowered designs and is the only criterion for those vehicles. Those ultralights equipped with powerplants must weigh less than 254 pounds empty weight. In addition, powered ultralight vehicles must have a fuel capacity not exceeding 5 U.S. gallons and be incapable of more than 55 knots calibrated airspeed at full power in level flight. The power off stall speed of a powered ultralight must not exceed 24 knots calibrated airspeed.
Unpowered ultralight vehiclesA number of commenters, including the United States Hang Gliding Association (USHGA), object to the inclusion of “pure” hang gliders in the same definition as powered hang gliders. They raise the point that there are a number of distinctive operational differences between a pure hang glider and a powered vehicle which should be considered when assessing the necessity for regulations for these vehicles. The USHGA emphasizes its own self-regulation program and safety record.
The USHGA’s self-regulation program lacks the legal authority to enforce requirements to ensure the safety of others. There is no requirement for any hang glider operator to be a member of the USHGA.
Under this rule, those unpowered vehicles weighing 155 pounds or more must be certificated under the appropriate FAR’s. No specific comments were received which objected to the 155-pound limitation on unpowered vehicles.
Powered ultralight vehiclesA large number of commenters request that the proposed maximum empty weight of 155 pounds be raised for powered ultralight vehicles. The suggestions range from 180 to 350 pounds. The reasons offered include greater structural integrity, more opportunity for design innovations, and the fact that many of the vehicles presently operated exhibit all of the other characteristics generally attributed to ultralights but weigh more than the proposed weight limit.
Some commenters suggest that limitations of 220 pounds or 330 pounds be adopted because they are “international standards.” This is not correct. Canada, England, and Australia adopted 220 pounds as the maximum weight for a particular category of aircraft. In those countries, even if the weight limitation is met, the aircraft must be certificated and the pilots licensed. The 330-pound limit was established by the Federation Aeronautique Internationale for a category called “microlight aircraft.” That category was established merely for the purpose of recording performance achievements of a particular group of aircraft.
The FAA agrees that the weight limitation for powered ultralight vehicles should be raised from the proposed 155 pounds. The 254pound limitation was established because it closely corresponds to commenters’ recommendations that the weight limitation be raised to at least 115 kilos, and because the vast majority of current vehicles on the market weigh less than 254 pounds. This weight does not include floats or safety devices intended for deployment in an emergency situation, e.g., parachutes and the harnesses and ballistic package necessary for deployment.
Single OccupantThe rule limits both powered and unpowered ultralight vehicles to a single occupant. A few commenters suggest that two-seat versions be available for carrying passengers or for training purposes. The basis for allowing ultralight vehicles to operate under special rules which do not require pilot and aircraft certification is the “sport” aspect of the operation.
Because pilot qualifications are not controlled or monitored, the single-occupant requirement is a necessary component in the continuation of the policies which allow the operation of ultralight vehicles free from many of the restrictions imposed on aircraft. Persons wishing to operate two place vehicles have the availability of existing provisions of the FAR’s for conducting such operations.
Recreation or Sport Purposes OnlyRecent activities and advertisements in ultralight-oriented publications (included in the docket) imply that commercial operations may be conducted by an uncertificated pilot in an ultralight which has not been certificated as an aircraft. Those types of operations are not allowed under the rule.
Several commenters suggest that ultralight vehicles be limited to sport or recreational purposes only. The position of the FAA has consistently been that these vehicles may be operated for sport and recreation purposes only. The justification for allowing the operation of these vehicles without requiring aircraft and pilot certification has been that this activity is a ”sport” generally conducted away from concentrations of population and aircraft operations. Like any sport, the participants are viewed as taking personal risks which do not affect others not involved in the activity.
Section 103.3 Inspection requirements (proposed §101.55)This section ensures the FAA’s authority to inspect ultralight vehicles for compliance with the limits specified in §103.1 and is retained in the final rule as proposed in Notice No. 81-6. A large number of commenters object to the inspection requirements, believing that considerable FAA manpower and resources would be required in this effort. The USHGA and its membership contributed a majority of the objecting comments, citing the remoteness of hang gliding sites as impractical for the FAA to monitor.
Section 103.5 WaiversIn proposing to include ultralight operations under Part 101, ultralights would have been eligible for the waiver provisions applicable to all operations under that Part. By removing the ultralight proposal from Part 101, the waiver eligibility for ultralights would have been lost. The FAA has concluded that the ultralight industry and the public would be best served by retention of waiver eligibility for these vehicles.
Section 103.7 Certification and registrationThe intent of the FAA is to provide for safety in the national airspace with a minimum amount of regulation. Accordingly, those vehicles which meet the definition of “ultralight vehicle”‘ will be exempt from FAA certification and registration requirements. Similarly, pilots of ultralight vehicles, as defined in this Part, will not be required to possess FAA pilot certificates or airman medical certificates.
FAA will continue to monitor performance of the ultralight community in terms of safety statistics, growth trends and maturity and, if indicated, will take additional regulatory actions to preclude degradation of safety to the general public while allowing maximum freedom for ultralight operations. In summary, it should be emphasized that the individual ultralight operator’s support and compliance with national self-regulation programs is essential to the FAA’s continued policy of allowing industry self regulation in these areas.
Pilot CertificationA large number of commenters believe that there should be some requirement that pilots of ultralights be required to exhibit some knowledge and/or experience before being allowed to operate these vehicles. The suggestions range from no requirements to pilot certification under the requirements of Part 61. The general groupings of the comments are: (1) No certification; (2) required ground training on regulations and conventional aircraft operations; (3) required ground training and instructor sign-off for unsupervised solo operations: (4) successful passage of a written test, such as the FAA glider pilot written examination; (5) issuance of an Ultralight Pilot Certificate by the FAA based on satisfactory completion of a examination, and observed performance as the pilot of an ultralight; and (6) conforming to the certification requirements of Part 61 for student and private pilots.
The FAA endorses the ultralight community’s efforts to develop and administer, under FAA guidelines, a national pilot certification program. At this time, however, pilots of ultralight vehicles are not required by Federal regulation to be certificated.
Aircraft RegistrationSome commenters, primarily State and local governments, recommend that these vehicles be registered and be required to display their registration number. The reasons center around identification of any offenders. The FAA’s experience in identification of offenders and processing enforcement action validates their recommendations. The FAA endorses the ultralight community’s efforts to develop and maintain, under FAA guidelines, a national registration system which would be immediately accessible to the FAA. However, registration of ultralight vehicles will not be required by Federal regulation at this time.
Aircraft CertificationThere are a small number of commenters who recommend additional Federal regulations requiring certification of ultralight vehicles to some design standards. The FAA has consistently refrained from the certification of these vehicles because they were occupied by a single occupant for sport or recreational purposes. This policy is in accord with Federal regulatory policies regarding other sport activities. The pilots of these vehicles accept the responsibility for assuring their personal safety much as the driver of a moped street vehicle or a scuba diver does when engaged in his sport. The FAA has noted and commends the efforts of the USHGA to establish design standards and flight testing of new hang glider designs. The FAA endorses the development of similar standards and testing of new powered designs by the ultralight community. However, the FAA presently has no intent to require certification of these vehicles by Federal regulation.
Subpart B-Operating Rules Section 103.9 Hazardous operations (proposed §101.7)This section prohibits any ultralight operator from engaging in activity which jeopardizes the safety of persons or property on the ground or in the air. The prohibition against hazardous flight or dropping of objects is common to the regulations pertaining to civil aircraft, and the FAA is addressing ultralight operations with equivalent stringency.
Section 103.11 Daylight operations (proposed §101.43).The proposed rule would have limited the operation of ultralights to the hours between official sunrise and official sunset. The limitation on daytime operations was retained with an added provision for twilight operations under certain conditions. Other night-time operations are not allowed.
There are some commenters who believe that operations in Alaska should be excluded from the daylight operations section. They allude to the uniqueness of their “normal” day and how ultralight operations would be adversely affected.
Several comments support the original proposal and do not want operations during the nighttime hours. The primary concern centers around the difficulty in seeing these vehicles, especially at the higher altitudes, and the perceived inability of these operations to be conducted safely. The FAA has observed ultralight operations during the twilight periods and has found the light available for such operations to be adequate in many instances. Operators were able to maneuver safely to avoid each other and also effect safe takeoffs and landings. Since most vehicles are operated at nearly the same altitude, they could be easily seen silhouetted against the lighted sky. Operations were conducted in relatively close proximity to each other, and each operator was readily aware of the others’ presence. The mild weather conditions which generally prevailed during the twilight periods combined with the controllability and maneuverability of these vehicles to enhance the safety factor for flight.
The FAA has adopted an alternative which provides an acceptable level of safety to aircraft while still allowing ultralights to operate in uncontrolled airspace during this period of the day. The FAA’s conclusion on this issue is to disallow ultralight operations in controlled airspace during the period from sunset to sunrise. This affords aircraft operators the margin of safety to which they are entitled and, at the same time, leaves adequate airspace to the ultralight operator during a 30-minute twilight period.
The FAA has determined that the occasional aircraft operation in uncontrolled airspace during the twilight period should not entirely preclude ultralight operations. The visibility from above of ultralights operating at very low levels can be significantly enhanced by the addition of an anticollision light on these vehicles. Such a light would provide the descending aircraft pilot with a distinct indication of the ultralight’s presence. Additionally, it would enable ultralight operators to better see and avoid each other.
Section 103.13 Operations near aircraft and other ultralight vehicles;Right-of-way rules (proposed § 101.49).The proposed regulations with respect to ultralight vehicle right-of-way are adopted. An additional provision is added to clarify the right-of-way requirements in situations involving powered and unpowered ultralight vehicles.
Section 103.15 Operations over congested areas (proposed §101.47).The proposed prohibition of ultralight vehicle operations over congested areas is retained in the final rule. The comments favoring an easing of the proposed rule focus on three main areas: (1) Those who favor permitting operations with a minimum altitude ranging from 1,000 to 3,000 feet AGL; (2) those requesting that the minimum altitude requirements of §91.79 be allowed: and (3) those who believe that no minimum altitude should be specified, especially for unpowered vehicles, due to the short field ability and small size of the vehicles.
The FAA’s position is based on the fact that ultralight vehicles are not certificated as airworthy by any approved method and are flown by uncertificated pilots for sport or recreational purposes only. Similar limitations apply to the operations of experimental and restricted category aircraft based on catastrophic incidents which have occurred in the past. The potential for such an incident makes the general issuance of the suggested authorization unacceptable. The FAA believes that concentrations of the general public must be protected from the possible dangers inherent in the operations of vehicles of uncertificated, possibly unproven designs. In specific limited instances, with appropriate operational limitations, ultralight operations may be approved over congested areas, through the waiver provisions of §103.5.
Section 103.19 Operations in prohibited or restricted areas.In the NPRM, requirements for operations of ultralights were included under the provisions of §101.5. In the final rule, the requirement for ultralight operators to obtain authorization prior to operating in prohibited or restricted areas is retained and restated under §103.19. Prohibited areas have been developed to provide for the safety and security of operations being conducted and to segregate activities considered to be hazardous to non-participating aircraft. Such operations in these areas include military and presidential security, flight training and testing, experimental weapons testing, and the launch and recovery of rocket-powered vehicles.
Section 103.21 Visual reference to the surface (proposed §101.51).NPRM No. 81 – 6 proposed that ultralight operators be required to maintain visual reference to the surface during all flight operations. This would ensure that the operator of an ultralight would have the opportunity to descend and land safely at any time without entering obscuring weather phenomena. Many commenters support the proposal as reasonable and representative of normal ultralight operations. They recognize the possibility of being caught “on top” and the danger, both to themselves and to other airspace users, of trying to descend through a layer of clouds. A few commenters believe that visual reference to the surface is necessary only while climbing or descending and not while in level flight.
The FAA has determined that visual reference with the surface is necessary at all times. Experience with certificated aircraft has shown that many pilots, with fully instrumented aircraft, have been caught “on top” and have required assistance from Air Traffic Control to descend safely. Flying “on top” or between cloud layers often presents visual illusions which cannot be verified without instrumentation. The effect of these illusions is to disorient the airman spatially, with a resulting loss of control of the aircraft. It takes a well-trained and disciplined pilot to ignore what information the human senses are providing and rely on the instrumentation aboard the aircraft.
In the case of ultralights, there is relatively little, if any, instrumentation with which to confirm the flight attitude of the vehicle. Further, if the ultralight operator should get caught “on top” there is no alternative available but to descend unannounced through the clouds. The ultralight operator would be risking not only his own life, but the lives of persons who rely on the safeguards inherent in certificated aviation.
Section 103.21 Flight visibility and cloud clearance requirement (proposed § 101.53). The flight visibility and cloud clearance requirements proposed in the NPRM are the same as those under §91.105, the basic minimums for VFR flight operations by fixed-wing aircraft. Since ultralight vehicles will be sharing the same airspace, the FAA has determined it is practical to apply the same operating minimums.
Some commenters believed that the distance from clouds should be reduced to “clear of clouds.” Their basis for such a change centers around the difficulty in determining actual distances from clouds.
Other commenters suggest that hang gliders be allowed to continue their practice of operating near and in the base of clouds. Their rationale is based on the added lift available from being in close proximity to cumulous clouds. Some hang glider operators fear that the restriction on in-cloud operations would eliminate their ability to vie for long-distance and high-altitude records. The FAA cannot support the operation of ultralights in or near clouds. A specific distance from clouds is required when operating in controlled airspace, primarily due to the presents of aircraft conducting instrument flight operations through the clouds. The cloud clearance requirements serve as a practical buffer to reduce the possibility of having an aircraft exit the clouds on an unalterable collision course. Operations too close to clouds does, in effect, cause a blind side in the aviator’s vision. Operation in and near clouds severely restricts the ultralight operator’s ability to see and avoid, an ability that is paramount in allowing ultralight operations to take place.
Adoption of the AmendmentAccordingly, the Federal Aviation Regulations (14 CFR Chapter 1) are amended, effective October 4, 1982, by adding to Subchapter F (14 CFR Chapter 1) a new Part 103. (Secs. 307,313(a), 601(a), 602 and 603, Federal Aviation Act of 1958 (49 U.S.C. §§ 1348, 1354(a), 1421(a), 1422, and 1423; sec. 6(c), Department of Transportation Act (49 U.S.C. § 1655(c)).
NOTE: The FAA has determined that this regulation is not a major rule under executive Order 12291. Because the rule will regulate a new user segment and because of substantial public interest, it has been determined that it is a significant rule pursuant to the Department of Transportation Regulatory Policies and Procedures (44 FR 11034; February 26, 1979). The total projected costs of this rule may be found in a copy of the regulatory evaluation contained in the public docket. A copy of that evaluation may be obtained by contacting the person identified above under the caption “FOR FURTHER INFORMATION CONTACT.” It is certified under the criteria of the Regulatory Flexibility Act that this rule will not have a significant economic impact on a substantial number of small entities. There are very few small entities involved in ultralight vehicle activities and the majority of those will be unaffected by the implementation of this rule.


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I’m very pleased to host another guest post from Dr. Daniel Rietiker. This time Daniel provides a review and commentary of the recent decision of the U.S. Supreme Court in the Bond case.
It is rare that the Supreme Court of the United States deals with arms control or disarmament issues. It did so recently and delivered its opinion in the case of Bond v. the United States on June 2, 2014. The case arose from a lurid domestic dispute that started when a Pennsylvania woman, Ms. Bond, a microbiologist, learned that her husband was the father of her best friend’s child. This curious case deals with the obligation to implement the provisions of the 1993 Convention on the Prohibition of the Development, Production, Stockpiling, and Use of Chemical Weapons and on Their Destruction (CWC), and there deserves the following brief considerations.
Petitioner Bond sought revenge against H with whom her husband had carried on an affair. She stole a quantity of 10-chloro-10H-phenoxarsine, an arsenic-based compound, from her employer, a chemical manufacturer. She also ordered a vial of potassium dichromate, a chemical commonly used in printing photographs or cleaning laboratory equipment, on Amazon.com. Both chemicals are toxic to humans and, in high enough doses, potentially lethal. It is undisputed, however, that Bond did not intend to kill H.
She then spread the two toxic chemicals on H’s car, mailbox, and door knob in hopes that H would develop an uncomfortable rash. On one occasion H suffered a minor chemical burn that she treated by rinsing with water, but Bond’s attempted assaults were otherwise entirely unsuccessful. The local authorities decided not to pursue the matter, but federal prosecutors charged Bond with violating, among other things, 18 U.S.C. Section 229(a), that is based on the 1993 Chemical Weapons Convention to which the US is a party. Bond moved to dismiss the chemical weapons charges on the ground that the Act violates the Tenth Amendment. When the District Court denied her motion, she pleaded guilty but reserved the right to appeal. The Third Circuit initially held that Bond lacked standing to raise her Tenth Amendment challenge, but the Supreme Court reversed. On remand, the Third Circuit rejected her Tenth Amendment argument and her additional argument that Section 229 does not reach her conduct.
To implement the CWC, Congress enacted the Chemical Weapons Convention Implementation Act of 1998. The statute forbids, inter alia, any person knowingly to “possess[ ] or use . . . any chemical weapon,” (§229(a)(1)). A “chemical weapon” is “[a]toxic chemical and its precursors, except where intended for a purpose not prohibited under this chapter.” (§229F(1)(A)). A “toxic chemical” is “any chemical which through its chemical action on life processes can cause death, temporary incapacitation or permanent harm to humans or animals. The term includes all such chemicals, regardless of their origin or of their method of production, and regardless of whether they are produced in facilities, in munitions or elsewhere.”(§229F(8)(A)). “[P]urposes not prohibited by this chapter” are defined as“[a]ny peaceful purpose related to an industrial, agricultural, research, medical, or pharmaceutical activity or other activity,” and other specific purposes. (§229F(7)).
Chief Justice John G. Roberts Jr. wrote a unanimous decision for the Court.
He started with Bond’s argument that Section 229 did not cover her conduct and recalled that a signatory nation should implement its obligations “in accordance with its constitutional processes.” (Art. VII(1) CWC). Bond was prosecuted under a federal statute, which, unlike the treaty, must be read consistent with the principles of federalism inherent in the constitutional structure of the US. As a result, it was not considered necessary to interpret the scope of the CWC in this case.
In the Court’s view, a fair reading of Section 229 must recognize the duty of “federal courts to be certain of Congress’s intent before finding that federal law overrides” the “usual constitutional balance of federal and state powers,” (Gregory v. Ashcroft, 501 U. S. 452, 460). In the instant case, the ambiguity in the statute derives from the improbably broad reach of the key statutory definition, the term “chemical weapon”, the deeply serious consequences of adopting such a boundless reading, and the lack of any apparent need to do so in light of the context from which the statute arose – a treaty about chemical warfare and terrorism, not about local assaults.
The Court furthermore recalled that where the breadth of a statutory definition creates ambiguity, it is appropriate to look to the ordinary meaning of the term being defined (here “ chemical weapon”) in settling on a fair reading of the statute (Johnson v. United States, 559 U. S. 133). It considered that an ordinary speaker would not describe Bond’s feud-driven act of spreading irritating chemicals as involving a “chemical weapon.” and that the chemicals at issue here bear little resemblance to those whose prohibition was the object of the CWC.
The Court concluded that the Government’s reading of Section 229 would transform a statute concerned with acts of war, assassination, and terrorism into a massive federal anti-poisoning regime that reaches the simplest of assaults. It added that “[a]ny parent would be guilty of a serious federal offense – possessing of a chemical weapon – when, exasperated by the children’s repeated failure to clean the goldfish tank, he considers poisoning the fish with a few drops of vinegar.” In light of the principle that Congress does not normally intrude upon the States’ police power, the Court could not conclude that Congress meant to punish Bond’s crime with a federal prosecution for a chemical weapons attack. In fact, only a handful of prosecutions have been brought under Section 229, and most of those involved crimes not traditionally within the States’ purview, e.g., terrorist plots.
The Court furthermore suggested that Pennsylvania’s laws were sufficient to prosecute assaults like Bond’s and that there was no indication in Section 229 that Congress intended to abandon its traditional reluctance to define as a federal crime conduct readily denounced as criminal by the States (United States v. Bass, 404 US, at 349). That principle goes to the very structure of the Constitution and protects the liberty of the individual from arbitrary power. The global need to prevent chemical warfare does not require the Federal Government to “reach into the kitchen cupboard”.
As a result, the Court reversed and remanded.
Justices Scalia, Thomas and Alito each issued a concurring opinion. They indicated that they would have rested the decision on constitutional grounds, saying that the chemical weapons law covered minor crimes but that Congress had over-stepped its constitutional authority by enacting it. Justice Scalia challenged the logic and workability of the argument of the majority according to which the test proscribed by Section 229 depends on the particular chemicals that the defendant used as well as on the circumstances in which she used them. He agreed that poisoning a goldfish tank is apparently out, but asked himself what if the fish belongs to a Congressman or Governor and the act is meant as a menacing message?
1. The opinion provides for a useful summary of the motifs that triggered the negotiations and conclusion of the CWC, namely the use of this dreadful weapon, beginning with World War I, when over a million casualties, up to 100 000 of them fatal, are estimated to have been caused by chemicals. Iraq’s use of nerve agents and mustard gas during its war with Iran in the 1980s, as well as the attacks with sarin gas by Japanese extremists in 1994 and 1995, are also mentioned. On the other hand, I find it surprising that the opinion does not at all address the recent use of chemical weapons in Syria, clearly reported and acknowledged not only by civil society (see, for instance, the Human Rights Watch report “Attacks on Ghouta”, published on 10 September 2013), but also by the UN Security Council (Resolution 2118(2013) of 27 September 2013).
2. Moreover, the opinion lays out certain essential features of the CWC, in particular the definition of “chemical weapons”. As a reminder, the CWC defines chemical weapons as“[t]oxic chemicals and their precursors, except where intended for purposes not prohibited under this Convention, as long as the types and quantities are consistent with such purposes.” (Art. II(1)(a)). “Toxic Chemical,” in turn, is defined as “Any chemical which through its chemical action on life processes can cause death, temporary incapacitation or permanent harm to humans or animals. This includes all such chemicals, regardless of their origin or of their method of production, and regardless of whether they are produced in facilities, in munitions or elsewhere.” (Art. II(2)). “Purposes Not Prohibited Under this Convention” means “[i]ndustrial, agricultural, research, medical, pharmaceutical or other peaceful purposes,” (Art. II(9)(a)), and other specific purposes not at issue here (Arts. II(9)(b)–(d)). In the light of this definition, that has simply been copied into Section 229 (see above), it seems clear to me that Bond’s conduct falls in the ambit of the CWC.
3. Moreover, and this aspect is clearly underdeveloped in the opinion, the applicability of the CWC does not depend on an ongoing armed conflict in the sense of the Geneva Conventions, but applies also in peace times. Art. I is very clear in this regard: “Each State Party to this Convention undertakes never under any circumstances…” In other words, the allegation by the majority of the Court according to which the CWC is above all a response to war crimes and “warlike” activities is subject to caution. Interestingly, many judgment of the European Court of Human Rights (ECtHR) having led to violations of the right to life (Art. 2 ECHR) or the right not to be subject to cruel or inhuman treatment (Art. 3 ECHR) caused by chemical weapons or riot control agents, rely to a certain extent on the CWC, even thought the underlying situations fell short of an armed conflict (see, for instance, Finogenov and others v. Russia, No. 18299/03, Judgment of 20 December 2011, or Ali Güneş v. Turkey, no. 9829/07, 10 April 2012).
4. The Court also recalled that, although the Convention is a binding international agreement in the sense of the 1969 Vienna Convention on the Law of Treaties it is not “self-executing”, and has therefore to be implemented in the national legal systems. The CWC provides that “[e]ach State Party shall, in accordance with its constitutional processes, adopt the necessary measures to implement its obligations under this Convention.” (Art. VII(1)). “In particular,” each State Party shall “[p]rohibit natural and legal persons anywhere…under its jurisdiction…from undertaking any activity prohibited to a State Party under this Convention, including enacting penal legislation with respect to such activity.” (Art. VII (1)(a)). The United States, by enacting section 229, pursued the fulfilment of this treaty obligation. On the other hand, it cannot be claimed that the CWC imposes on the States an obligation to prosecute and punish an individual each time a conduct that might fall in the ambit of the treaty is at stake. Criminal prosecution and punishment is a State’s prerogative and a field where the authorities traditionally enjoy a broad margin of appreciation, the so-called prosecutorial discretion (in this sense, opinion, p. 19). Therefore, considering the minor gravity of the present case, the US would not have been responsible, from an international law point of view, for failing to initiate prosecutions against Bond. Another question, closely linked but not dealt with by the Court, is whether the measures taken by the authorities were sufficient in order to prevent her from stealing the toxic and potentially lethal chemicals from her employer, presumably a private company. The CWC, although non-self-executing, is a treaty that, once implemented in the domestic legal order, imposes obligations on private persons and companies. In such a situation of a “horizontal” effect, the States Parties must ensure that private entities dealing with dangerous chemicals are well trained and that they take the necessary safety measures against accidents and abuse (see, in this sense, Art. VII(1)(b) CWC).
5. Lastly, for scholars interested more broadly in questions of arms control and disarmament, the opinion provides for a significant confirmation of the ultimate aim of all arms control measures, that lies in “general and complete disarmament”. Indeed, the Court recalled “[t]hat the nations that ratified the Convention (States Parties) had bold aspirations for it: general and complete disarmament under strict and effective international control, including the prohibition and elimination of all types of weapons of mass destruction.” (opinion, p. 2). It is obvious that this kind of statement, expressed by the Supreme Court of one of the main nuclear powers, is a valuable reference in the assessment of the pending applications introduced by the Republic of the Marshall Islands before the ICJ against the Nuclear-Weapon States with regard to their obligations stemming from Article VI NPT (see the discussion on this topic in this blog, including my post dated June 10, 2014, under “Nuclear”).
To sum up, there is no doubt that, in the light of the principle pacta sunt servanda and Article VII(1) CWC, the Congress was obliged to enact legislation implementing the CWC. It did so by adopting Section 229, which is largely identical with the general obligations under Art. I CWC. This catalogue of duties turns out to be too vague to be compatible with the fundamental principles of a fair criminal trial. Moreover, from my point of view, by prosecuting Ms. Bond based on section 229, the authorities, given the special circumstances of the case, used a sledgehammer to crack a nut. In other words, the measure taken against Bond turns out to be clearly disproportionate.
On the other hand, the fact that the application of the CWC does not depend on an armed conflict can be considered an opportunity with a view of prosecuting other, more serious acts committed in peace times through the use of chemicals, such as the widespread practice, in particular in India or Pakistan, of acid throwing against women, defacing and often marginalizing them for life. I hope that the approach adopted by the majority of the Court in the – admittedly awkward – Bond case will not have negative repercussions on potential prosecutions of that kind.

matches: v. v. v. v. v. v.


any voting securities or assets of a person with annual net sales or total assets of $100,000,000 (as so adjusted and published) or more are being acquired by any person with total assets or annual net sales of $10,000,000 (as so adjusted and published) or more.
In the case of a tender offer, the person whose voting securities are sought to be acquired by a person required to file notification under this subsection shall file notification pursuant to rules under subsection (d).
end on the thirtieth day after the date of such receipt (or in the case of a cash tender offer, the fifteenth day), or on such later date as may be set under subsection (e)(2) or (g)(2).
The Federal Trade Commission and the Assistant Attorney General may, in individual cases, terminate the waiting period specified in paragraph (1) and allow any person to proceed with any acquisition subject to this section, and promptly shall cause to be published in the Federal Register a notice that neither intends to take any action within such period with respect to such acquisition.
The term “voting securities” means any securities which at present or upon conversion entitle the owner or holder thereof to vote for the election of directors of the issuer or, with respect to unincorporated issuers, persons exercising similar functions.
The amount or percentage of voting securities or assets of a person which are acquired or held by another person shall be determined by aggregating the amount or percentage of such voting securities or assets held or acquired by such other person and each affiliate thereof.
such other acquisitions, transfers, or transactions, as may be exempted under subsection (d)(2)(B).
prescribe such other rules as may be necessary and appropriate to carry out the purposes of this section.
The Federal Trade Commission or the Assistant Attorney General may, prior to the expiration of the 30-day waiting period (or in the case of a cash tender offer, the 15-day waiting period) specified in subsection (b)(1) of this section, require the submission of additional information or documentary material relevant to the proposed acquisition, from a person required to file notification with respect to such acquisition under subsection (a) of this section prior to the expiration of the waiting period specified in subsection (b)(1) of this section, or from any officer, director, partner, agent, or employee of such person.
whether the request for additional information or documentary material has been substantially complied with by the petitioning person.
Internal review procedures for petitions filed pursuant to clause (i) shall include reasonable deadlines for expedited review of such petitions, after reasonable negotiations with investigative staff, in order to avoid undue delay of the merger review process.
Not later than 90 days after December 21, 2000, the Assistant Attorney General and the Federal Trade Commission shall conduct an internal review and implement reforms of the merger review process in order to eliminate unnecessary burden, remove costly duplication, and eliminate undue delay, in order to achieve a more effective and more efficient merger review process.
Not later than 120 days after December 21, 2000, the Assistant Attorney General and the Federal Trade Commission shall issue or amend their respective industry guidance, regulations, operating manuals and relevant policy documents, to the extent appropriate, to implement each reform in this subparagraph.
the effects of such reforms.
The Federal Trade Commission or the Assistant Attorney General, in its or his discretion, may extend the 30-day waiting period (or in the case of a cash tender offer, the 15-day waiting period) specified in subsection (b)(1) of this section for an additional period of not more than 30 days (or in the case of a cash tender offer, 10 days) after the date on which the Federal Trade Commission or the Assistant Attorney General, as the case may be, receives from any person to whom a request is made under paragraph (1), or in the case of tender offers, the acquiring person, (A) all the information and documentary material required to be submitted pursuant to such a request, or (B) if such request is not fully complied with, the information and documentary material submitted and a statement of the reasons for such noncompliance. Such additional period may be further extended only by the United States district court, upon an application by the Federal Trade Commission or the Assistant Attorney General pursuant to subsection (g)(2).
If a proceeding is instituted or an action is filed by the Federal Trade Commission, alleging that a proposed acquisition violates section 18 of this title, or section 45 of this title, or an action is filed by the United States, alleging that a proposed acquisition violates such section 18 of this title, or section 1 or 2 of this title, and the Federal Trade Commission or the Assistant Attorney General (1) files a motion for a preliminary injunction against consummation of such acquisition pendente lite, and (2) certifies the United States district court for the judicial district within which the respondent resides or carries on business, or in which the action is brought, that it or he believes that the public interest requires relief pendente lite pursuant to this subsection, then upon the filing of such motion and certification, the chief judge of such district court shall immediately notify the chief judge of the United States court of appeals for the circuit in which such district court is located, who shall designate a United States district judge to whom such action shall be assigned for all purposes.
Any person, or any officer, director, or partner thereof, who fails to comply with any provision of this section shall be liable to the United States for a civil penalty of not more than $10,000 for each day during which such person is in violation of this section. Such penalty may be recovered in a civil action brought by the United States.
upon application of the Federal Trade Commission or the Assistant Attorney General.
Any information or documentary material filed with the Assistant Attorney General or the Federal Trade Commission pursuant to this section shall be exempt from disclosure under section 552 of title 5, and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this section is intended to prevent disclosure to either body of Congress or to any duly authorized committee or subcommittee of the Congress.
Any action taken by the Federal Trade Commission or the Assistant Attorney General or any failure of the Federal Trade Commission or the Assistant Attorney General to take any action under this section shall not bar any proceeding or any action with respect to such acquisition at any time under any other section of this Act or any other provision of law.
Nothing contained in this section shall limit the authority of the Assistant Attorney General or the Federal Trade Commission to secure at any time from any person documentary material, oral testimony, or other information under the Antitrust Civil Process Act [15 U.S.C. 1311 et seq.], the Federal Trade Commission Act [15 U.S.C. 41 et seq.], or any other provision of law.
If the end of any period of time provided in this section falls on a Saturday, Sunday, or legal public holiday (as defined in section 6103(a) of title 5), then such period shall be extended to the end of the next day that is not a Saturday, Sunday, or legal public holiday.
The antitrust laws, referred to in subsecs. (c), (d), are defined in section 12 of this title.
This Act, referred to in subsec. (i)(1), is act Oct. 15, 1914, ch. 323, 38 Stat. 730, known as the Clayton Act, which is classified generally to sections 12, 13, 14 to 19, 21, and 22 to 27 of this title, and sections 52 and 53 of Title 29, Labor. For further details and complete classification of this Act to the Code, see References in Text note set out under section 12 of this title and Tables.
The Federal Trade Commission Act, referred to in subsec. (i)(2), is act Sept. 26, 1914, ch. 311, 38 Stat. 717, which is classified generally to subchapter I (§ 41 et seq.) of chapter 2 of this title. For complete classification of this Act to the Code, see section 58 of this title and Tables.
The Antitrust Civil Process Act, referred to in subsec. (i)(2), is Pub. L. 87–664, Sept. 19, 1962, 76 Stat. 548, which is classified principally to chapter 34 (§ 1311 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 1311 of this title and Tables.
December 21, 2000, referred to in subsec. (e)(1)(B), was in the original “the date of the enactment of this Act” which was translated as meaning the date of enactment of Pub. L. 106–553, which enacted subsec. (e)(1)(B), to reflect the probable intent of Congress.
Subsection (j), which required the Federal Trade Commission, with the concurrence of the Assistant Attorney General, to report annually to Congress on the operation of this section, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance. See, also, page 172 of House Document No. 103–7.
Subsec. (e)(1). Pub. L. 106–553, § 1(a)(2) [title VI, § 630(c)], designated existing provisions as subpar. (A) and added subpar. (B).
Subsec. (e)(2). Pub. L. 106–553, § 1(a)(2) [title VI, § 630(d)(1)], substituted “30 days” for “20 days”.
Subsec. (k). Pub. L. 106–553, § 1(a)(2) [title VI, § 630(d)(2)], added subsec. (k).
1999—Subsec. (c)(7). Pub. L. 106–102, § 133(c)(1), inserted before semicolon at end “, except that a portion of a transaction is not exempt under this paragraph if such portion of the transaction (A) is subject to section 1843(k) of title 12; and (B) does not require agency approval under section 1842 of title 12”.
Subsec. (c)(8). Pub. L. 106–102, § 133(c)(2), inserted before semicolon at end “, except that a portion of a transaction is not exempt under this paragraph if such portion of the transaction (A) is subject to section 1843(k) of title 12; and (B) does not require agency approval under section 1843 of title 12”.
1989—Subsec. (c)(7). Pub. L. 101–73, § 1214(1), inserted reference to section 1467a(e) of title 12.
Subsec. (c)(8). Pub. L. 101–73, § 1214(2), struck out reference to section 1726 or 1730a(e) of title 12.
1984—Subsec. (f)(2). Pub. L. 98–620 struck out designation “(A)” before “upon the filing”, and struck out subpar. (B) which had provided that if the Federal Trade Commission or the Assistant Attorney General certified that he or it believed that the public interest required relief pendente lite pursuant to this subsection, the motion for a preliminary injunction had to be set down for hearing by the district judge so designated at the earliest practicable time, would take precedence over all matters except older matters of the same character and trials pursuant to section 3161 of title 18, and had to be in every way expedited.
Amendment by Pub. L. 106–102 effective 120 days after Nov. 12, 1999, see section 161 of Pub. L. 106–102, set out as a note under section 24 of Title 12, Banks and Banking.
Five working days after enactment of this Act [Nov. 21, 1989] and thereafter, the Federal Trade Commission shall assess and collect filing fees established in subsection (b) which shall be paid by persons acquiring voting securities or assets who are required to file premerger notifications by the [sic] section 7A of the Clayton Act (15 U.S.C. 18a) and the regulations promulgated thereunder. For purposes of said Act, no notification shall be considered filed until payment of the fee required by this section. Fees collected pursuant to this section shall be divided evenly between and credited to the appropriations, Federal Trade Commission, ‘Salaries and Expenses’ and Department of Justice, ‘Salaries and Expenses, Antitrust Division’: Provided, That fees in excess of $40,000,000 in fiscal year 1990 shall be deposited to the credit of the Treasury of the United States: Provided further, That fees made available to the Federal Trade Commission and the Antitrust Division herein shall remain available until expended.


1. A finding of the Board of Tax Appeals that certain sale of stock by the taxpayer in this case were ordinary sale, and not "short" sales, was supported by substantial evidence, and was therefore conclusive. P. 316 U. S. 167.
2. The criteria which the Board employed in determining whether the sales of stock in this case were "short" sales complied with the legal principles announced in Provost v. United States, 269 U. S. 443. P. 316 U. S. 168.
3. The Circuit Court of Appeals is authorized by statute to modify or reverse a decision of the Board of Tax Appeals only if it is "not in accordance with law." P. 316 U. S. 168.
Certiorari, 315 U.S. 789, to review the reversal of a decision of the Board of Tax Appeals, 42 B.T.A. 173, redetermining a deficiency in income tax.
The sole question presented by this case is whether certain sales of shares of stock made by the taxpayer, petitioner's decedent, were "short" sales or sales of "long" stock. If they were not "short" sales, then the taxpayer was justified in deducting from dividends credited to the "long" shares the amount of dividends charged to the shares sold.
42 B.T.A. 173. The Circuit Court of Appeals reversed. 124 F.2d 156. We granted the petition for certiorari, 315 U.S. 789, limited to the question whether the sales in the "short" account were in fact "short" sales, because the action of the Circuit Court of Appeals in setting aside the findings of the Board on that issue was seemingly erroneous under the rule of such cases as Helvering v. Lazarus & Co., 308 U. S. 252.
stock. On the basis of such facts, the Board found that "the sales in question were intended to be and were actually executed as ordinary sales, or sales of shares held" in the taxpayer's "long accounts."
In overturning that finding of fact, the Circuit Court of Appeals laid great emphasis on the manner in which the transactions were entered on the taxpayer's books. It also noted that gains or losses were not reported at the moment of the sales, but only when the covering transaction was completed, and that the certificates used in completing the sales were in no way designated as belonging to the taxpayer. And it also stated that it could not be said that the broker did not use borrowed stock to make deliveries on the "short" sales. On that aspect of the case, respondent lays primary emphasis. The contention is that the taxpayer's "long" stock was not "delivered" in consummation of the sales in the "short" account, since the broker merely made delivery out of certificates in street names held by it or for its account, instead of borrowing from other brokers, and since none of those street certificates was in any way designated as the taxpayer's. It is urged that, the facts being undisputed, the question of whether stock was borrowed to complete the sales was a question of law as respects which the Board did not have the final say.
made and which we have enumerated. Those findings are supported by substantial evidence, and are abundant justification for the Board's ultimate finding that the sales made through the "short" account were ordinary sales. It is the function of the Board, not the Circuit Court of Appeals, to weigh the evidence, to draw inferences from the facts, and to choose between conflicting inferences. The court may not substitute its view of the facts for that of the Board. Where the findings of the Board are supported by substantial evidence, they are conclusive. Helvering v. Lazarus & Co., supra; Helvering v. Kehoe, 309 U. S. 277, and cases cited. Under the statute, the court may modify or reverse the decision of the Board only if it is "not in accordance with law." 44 Stat. 110, § 1003(b), 26 U.S.C. Int.Rev.Code, § 1141(c)(1). In this case, the criteria which the board employed in determining whether the sales were "short" sales complied with the legal principles announced in Provost v. United States, 269 U. S. 443.