Recycling innovator faces prison for trying to extend computers’ lives

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Electronics-recycling innovator faces prison for trying to extend computers’ lives

Eric Lundgren is obsessed with recycling electronics.

He built an electric car out of recycled parts that far outdistanced a Tesla in a test. He launched what he thinks is the first “electronic hybrid recycling” facility in the United States, which turns discarded cellphones and other electronics into functional devices, slowing the stream of harmful chemicals and metals into landfills and the environment. His Chatsworth company processes more than 41 million pounds of e-waste each year and counts IBM, Motorola and Sprint among its clients.

But an idea Lundgren had to prolong the life of personal computers could land him in prison.

Prosecutors said the 33-year-old ripped off Microsoft Corp. by manufacturing 28,000 counterfeit discs with the company’s Windows operating system on them. He was convicted of conspiracy and copyright infringement, which brought a 15-month prison sentence and a $50,000 fine.

In a rare move though, a federal appeals court has granted an emergency stay of the sentence, giving Lundgren another chance to make his argument that the whole thing was a misunderstanding. Lundgren does not deny that he made the discs or that he hoped to sell them. But he says this was no profit-making scheme. By his account, he just wanted to make it easier to extend the usefulness of secondhand computers — keeping more of them out of the trash.

The case centers on “restore discs,” which can be used only on computers that already have the licensed Windows software and can be downloaded free from the computer’s manufacturer, in this case Dell. The discs are routinely provided to buyers of new computers to enable them to reinstall their operating systems if the computers’ hardware fails or must be wiped clean. But they often are lost by the time used computers find their way to a refurbisher.

Lundgren said he thought electronics companies wanted the reuse of computers to be difficult so that people would buy new ones. “I started learning what planned obsolescence was,” he said, “and I realized companies make laptops that only lasted as long as the insurance would last. It infuriated me. That’s not what a healthy society should have.”

He thought that producing and selling restore discs to computer refurbishers — saving them the hassle of downloading the software and burning new discs — would encourage more secondhand sales. In his view, the new owners were entitled to the software, and this just made it easier.

The government, and Microsoft, did not see it that way. Federal prosecutors in Florida obtained a 21-count indictment against Lundgren and his business partner, and Microsoft filed a letter seeking $420,000 in restitution for lost sales. Lundgren claims that the assistant U.S. attorney on the case told him, “Microsoft wants your head on a platter and I’m going to give it to them.”

The U.S. attorney’s office in Miami and Microsoft declined to comment. Senior U.S. District Judge Daniel T.K. Hurley observed that none of the discs Lundgren made were actually sold and declined to order him to pay restitution. Hurley imposed a 15-month sentence that was less than half of that called for by federal sentencing guidelines, which indicated 36 to 47 months.

In court, the judge made it clear that this was a tough case.

“This case is especially difficult,” Hurley told Lundgren at his sentencing last May, “because of who you are today and in terms of who you have become.” The judge received evidence of Lundgren’s recycling company, IT Asset Partners; his projects to clean up e-waste in Ghana and China; and a 2016 initiative in which Lundgren’s company repaired and donated more than 14,000 cellphones and $100,000 to the Cell Phones for Soldiers organization to benefit U.S. soldiers deployed overseas.

Lundgren grew up in Lynden, Wash., where, as a 16-year-old, he became the town’s computer recycler after the local sheriff’s department heard about his talent for fixing or reusing computer parts. Some parts of a computer — for example, the Apple touch screen — are proprietary and cannot be recycled. But 95% of a computer, Lundgren said — such as the battery or the motor or the circuits — are generic and can be reused or repurposed. He has devoted much time to recovering discarded batteries, whether from cars or computers, and reusing them in wheelchairs, electronics and various vehicles.

At 19, Lundgren moved to Los Angeles and started his first electronics recycling company, and at 20 he landed his first big client: American Airlines, refurbishing and selling about 40,000 computers a year. The computers came with the original license or “certificate of authenticity” stickers and with product key numbers on the sticker, though their hard drives had been erased, so reinstalling Windows was legal, Lundgren said.

“If they brought in a computer without a certificate of authenticity,” Lundgren said of his customers, “then we’d part it out” and not refurbish and resell it. He added clients including Dell, Asus, Lenovo and Coca-Cola, handling their discarded computers.

Lundgren became intrigued with following the world’s e-waste stream and wound up moving to China. “I learned the back end of what happens when things are thrown away,” he said. He became more focused on reducing the ever-growing heaps of discarded plastics and glass that a “use it and toss it” society creates, eliminating the burning of electronic trash that pollutes the air and combating the leakage of computer-based chemicals that filter into the water.

While in China, Lundgren hit upon the idea of selling restore discs to computer refurbishers. The discs work if computers still have their license and product keys available, and the license transfers with the computer, no matter who owns it.

“Microsoft does not sell restore CDs,” Lundgren said. “Microsoft sells licenses” that enable their software to work, from $300 for a new operating system to $25 for a license for a refurbisher who wants to resell a computer that does not already have a licensed copy of Windows.

In 2013, federal authorities intercepted shipments of 28,000 restore discs that Lundgren had manufactured in China and sent to his sales partner in Florida. The discs had labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos. “If I had just written ‘Eric’s Restore Disc’ on there, it would have been fine,” Lundgren said.

As a result of violating the copyright of Windows and Dell, Lundgren pleaded guilty to two of the 21 counts against him. But he believed that because the discs had no retail value and were seized before they were sold, he would not receive any prison time. His sentence was based on the financial loss involved.

Microsoft attorney Bonnie MacNaughton wrote to Hurley, the judge, describing the case as one of “software piracy,” costing the computer industry billions of dollars annually, and saying that prosecution was important “to deter others from engaging in the illicit global trade in decoupled product activation keys” — meaning the sale or trade of the license stickers applied to the originally licensed computer. Microsoft calculated that Lundgren’s 28,000 restore discs could have been sold to refurbishers for $20 each, and that 75% of that total was Microsoft’s average profit, so it demanded restitution of $420,000.

As their expert witness at the sentencing, prosecutors called a Microsoft program manager from Ireland to explain to the judge how the discs worked and their value. Jonathan McGloin testified that Microsoft licensed Windows to computer manufacturers such as Dell and also licensed them to make restore or recovery discs to be included with the new computers. McGloin also testified that Microsoft charges computer refurbishers about $25 for a new license and copy of the software but didn’t differentiate that from what was done by Lundgren, who was not making a new copy of the software and intended his restore discs only for computers that were already licensed.

“In essence, I got in the way of Microsoft’s profits, so they pushed this into federal court on false pretense,” Lundgren said. He said McGloin “testified that a free restore CD was worth the same price as a new Windows operating system with a license. … This was false and inaccurate testimony provided by Microsoft in an attempt to set a precedent that will scare away future recyclers and refurbishers from reusing computers without first paying Microsoft again for another license. … Anyone successfully extending the life cycle of computers or diverting these computers from landfills for reuse in society is essentially standing in the way of Microsoft’s profits.”

Lundgren called his own expert witness, Glenn Weadock, an author of numerous software books who testified for the government in a major antitrust case against Microsoft that was resolved in 2001. Weadock was asked, “In your opinion, without a code, either product key or COA [certificate of authenticity], what is the value of these reinstallation discs?”

“Zero or near zero,” Weadock said.

Why would anybody pay for one? Lundgren’s lawyer asked.

“There is a convenience factor associated with them,” Weadock said.

Still, Hurley decided that Lundgren’s 28,000 restore discs had a value of $700,000, and that qualified Lundgren for a 15-month term along with a $50,000 fine. He denied Lundgren’s request to remain free pending his appeal, but the U.S. 11th Circuit Court of Appeals granted the request as Lundgren was about to surrender for imprisonment.

“I thought it was freeware,” Lundgren said of the restore discs. “If it’s free, then I’m just going to duplicate the free repair tool and give it away, and that’ll be fine,” he thought. “The value’s in the license. They didn’t understand that.”

His appeal is pending before the 11th Circuit.

Source : https://lat.ms/2oaZ4et

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U.N. Elects Saudi Arabia to Women’s Rights Commission

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U.N. Elects Saudi Arabia to Women’s Rights Commission

The Geneva-based human rights group UN Watch condemned the U.N.’s election of Saudi Arabia, “the world’s most misogynistic regime,” to a 2018-2022 term on its Commission on the Status of Women, the U.N. agency “exclusively dedicated to the promotion of gender equality and the empowerment of women.”

“Electing Saudi Arabia to protect women’s rights is like making an arsonist into the town fire chief,” said Hillel Neuer, executive director of UN Watch. “It’s absurd — and morally reprehensible.”

“This is a black day for women’s rights, and for all human rights,” said Neuer. Interview: Why Saudis Joined Women’s Rights Body

“Saudi discrimination against women is gross and systematic in law and in practice. Every Saudi woman,” said Neuer, “must have a male guardian who makes all critical decisions on her behalf, controlling a woman’s life from her birth until death. Saudi Arabia bans women from driving cars. Why did the U.N. choose the world’s leading oppressor of women to promote gender equality and the empowerment of women?”

Saudi women feel betrayed by the UN. “I wish I could find the words to express how I feel right know. I’m ‘saudi’ and this feels like betrayal,” tweeted a self-described Saudi woman pursuing a doctorate in international human rights law in Australia.

“Today the UN sent a message that women’s rights can be sold out for petro-dollars and politics,” said Neuer, “and it let down millions of female victims worldwide who look to the world body for protection.”

The fundamentalist monarchy is now one of 45 countries that, according to the U.N., will play an instrumental role in “promoting women’s rights, documenting the reality of women’s lives throughout the world, and shaping global standards on gender equality and the empowerment of women.”

Saudi Arabia was elected by a secret ballot last week of the U.N.’s 54-nation Economic and Social Council (ECOSOC). Usually ECOSOC rubber-stamps nominations arranged behind closed doors by regional groups, however this time the U.S. forced an election, to China’s chagrin.

Source : https://bit.ly/2pq5Pfm

‘Corporations Are People’ Is Built on an Incredible 19th-Century Lie

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Corporations Are People’ Is Built on an Incredible 19th-Century Lie

Somewhat unintuitively, American corporations today enjoy many of the same rights as American citizens. Both, for instance, are entitled to the freedom of speech and the freedom of religion. How exactly did corporations come to be understood as “people” bestowed with the most fundamental constitutional rights? The answer can be found in a bizarre—even farcical—series of lawsuits over 130 years ago involving a lawyer who lied to the Supreme Court, an ethically challenged justice, and one of the most powerful corporations of the day.

That corporation was the Southern Pacific Railroad Company, owned by the robber baron Leland Stanford. In 1881, after California lawmakers imposed a special tax on railroad property, Southern Pacific pushed back, making the bold argument that the law was an act of unconstitutional discrimination under the Fourteenth Amendment. Adopted after the Civil War to protect the rights of the freed slaves, that amendment guarantees to every “person” the “equal protection of the laws.” Stanford’s railroad argued that it was a person too, reasoning that just as the Constitution prohibited discrimination on the basis of racial identity, so did it bar discrimination against Southern Pacific on the basis of its corporate identity.

The head lawyer representing Southern Pacific was a man named Roscoe Conkling. A leader of the Republican Party for more than a decade, Conkling had even been nominated to the Supreme Court twice. He begged off both times, the second time after the Senate had confirmed him. (He remains the last person to turn down a Supreme Court seat after winning confirmation). More than most lawyers, Conkling was seen by the justices as a peer.

It was a trust Conkling would betray. As he spoke before the Court on Southern Pacific’s behalf, Conkling recounted an astonishing tale. In the 1860s, when he was a young congressman, Conkling had served on the drafting committee that was responsible for writing the Fourteenth Amendment. Then the last member of the committee still living, Conkling told the justices that the drafters had changed the wording of the amendment, replacing “citizens” with “persons” in order to cover corporations too. Laws referring to “persons,” he said, have “by long and constant acceptance … been held to embrace artificial persons as well as natural persons.” Conkling buttressed his account with a surprising piece of evidence: a musty old journal he claimed was a previously unpublished record of the deliberations of the drafting committee.

Years later, historians would discover that Conkling’s journal was real but his story was a fraud. The journal was in fact a record of the congressional committee’s deliberations but, upon close examination, it offered no evidence that the drafters intended to protect corporations. It showed, in fact, that the language of the equal-protection clause was never changed from “citizen” to “person.” So far as anyone can tell, the rights of corporations were not raised in the public debates over the ratification of the Fourteenth Amendment or in any of the states’ ratifying conventions. And, prior to Conkling’s appearance on behalf of Southern Pacific, no member of the drafting committee had ever suggested that corporations were covered.

There’s reason to suspect Conkling’s deception was uncovered back in his time too. The justices held onto the case for three years without ever issuing a decision, until Southern Pacific unexpectedly settled the case. Then, shortly after, another case from Southern Pacific reached the Supreme Court, raising the exact same legal question. The company had the same team of lawyers, with the exception of Conkling. Tellingly, Southern Pacific’s lawyers omitted any mention of Conkling’s drafting history or his journal. Had those lawyers believed Conkling, it would have been malpractice to leave out his story.

When the Court issued its decision on this second case, the justices expressly declined to decide if corporations were people. The dispute could be, and was, resolved on other grounds, prompting an angry rebuke from one justice, Stephen J. Field, who castigated his colleagues for failing to address “the important constitutional questions involved.” “At the present day, nearly all great enterprises are conducted by corporations,” he wrote, and they deserved to know if they had equal rights too.

Rumored to carry a gun with him at all times, the colorful Field was the only sitting justice ever arrested—and the charge was murder. He was innocent, but nonetheless guilty of serious ethical violations in the Southern Pacific cases, at least by modern standards: A confidant of Leland Stanford, Field had advised the company on which lawyers to hire for this very series of cases and thus should have recused himself from them. He refused to—and, even worse, while the first case was pending, covertly shared internal memoranda of the justices with Southern Pacific’s legal team.

The rules of judicial ethics were not well developed in the Gilded Age, however, and the self-assured Field, who feared the forces of socialism, did not hesitate to weigh in. Taxing the property of railroads differently, he said, was like allowing deductions for property “owned by white men or by old men, and not deducted if owned by black men or young men.”

So, with Field on the Court, still more twists were yet to come. The Supreme Court’s opinions are officially published in volumes edited by an administrator called the reporter of decisions. By tradition, the reporter writes up a summary of the Court’s opinion and includes it at the beginning of the opinion. The reporter in the 1880s was J.C. Bancroft Davis, whose wildly inaccurate summary of the Southern Pacific case said that the Court had ruled that “corporations are persons within … the Fourteenth Amendment.” Whether his summary was an error or something more nefarious—Davis had once been the president of the Newburgh and New York Railway Company—will likely never be known.

Field nonetheless saw Davis’s erroneous summary as an opportunity. A few years later, in an opinion in an unrelated case, Field wrote that “corporations are persons within the meaning” of the Fourteenth Amendment. “It was so held in Santa Clara County v. Southern Pacific Railroad,” explained Field, who knew very well that the Court had done no such thing.

His gambit worked. In the following years, the case would be cited over and over by courts across the nation, including the Supreme Court, for deciding that corporations had rights under the Fourteenth Amendment.

Indeed, the faux precedent in the Southern Pacific case would go on to be used by a Supreme Court that in the early 20th century became famous for striking down numerous economic regulations, including federal child-labor laws, zoning laws, and wage-and-hour laws. Meanwhile, in cases like the notorious Plessy v. Ferguson (1896), those same justices refused to read the Constitution as protecting the rights of African Americans, the real intended beneficiaries of the Fourteenth Amendment. Between 1868, when the amendment was ratified, and 1912, the Supreme Court would rule on 28 cases involving the rights of African Americans and an astonishing 312 cases on the rights of corporations.

The day back in 1882 when the Supreme Court first heard Roscoe Conkling’s argument, the New-York Daily Tribune featured a story on the case with a headline that would turn out to be prophetic: “Civil Rights of Corporations.” Indeed, in a feat of deceitful legal alchemy, Southern Pacific and its wily legal team had, with the help of an audacious Supreme Court justice, set up the Fourteenth Amendment to be more of a bulwark for the rights of businesses than the rights of minorities.

Source : https://bit.ly/2tw0XWw