Microsoft has been hit with a new class action lawsuit alleging that the company's Xbox 360 console damages game discs.

"Microsoft improperly and/or negligently manufactured the Xbox 360 console in a manner that causes the expensive game discs ... to be scratched, rendering the games unusable," the suit alleges.

The complaint was filed Monday in the U.S. District Court for Southern California by two residents of the state: Christine Moskowitz and Dan Wood. The suit is seeking not less than $5 million in damages for Xbox 360 buyers affected by the alleged glitch.

Microsoft was slapped with a similar action last week in a Florida court.

In the California court filing, Moskowitz says that in March 2006 she purchased for her son an Xbox 360, along with the popular games Gears of War, Crackdown, and Saints Row. Within a few months, the games bore circular scratch marks and wouldn't work properly, Moskowitz claims. Wood says he purchased an Xbox 360 last December and the unit soon damaged his copy of Tom Clancy's Splinter Cell.

Both plaintiffs claim that the Xbox 360 console damaged their discs and that Microsoft refused to replace the ruined games or pay for them.

Earlier this month, Microsoft acknowledged that a hardware defect in the console was leading to what the company called "an unacceptable number" of general hardware failures. To deal with the problem, Microsoft said it would extend the warranty period on the units by three years, at a cost of between $1.05 billion and $1.15 billion.

The company made no mention of a disc scratching problem, however.

On Tuesday, Microsoft announced that Xbox division head Peter Moore was leaving the company to take a position at games publisher Electronic Arts.

In their lawsuit, Moskowitz and Wood argue that Microsoft's scramble to get a next-generation video game system into the market to compete with those from rivals Sony and Nintendo is at the root of the Xbox 360's problems. "Microsoft's rush to market, while positive for Microsoft, was detrimental to consumers because the Xbox 360 suffered from numerous hardware defects," the suit claims.

Responding to the Florida lawsuit, a Microsoft spokesman told InformationWeek that the company has not received a significant number of complaints about scratched discs, despite the fact that "there are millions of Xbox consoles in use."

The Pennsylvania Supreme Court upheld the decision to allow the development of two waterfront casinos in Philadelphia.

The decision affirms the decision of state regulators to allow Foxwoods Casino Philadelphia and SugarHouse Casino to open slots parlors on Columbus Boulevard in Philadelphia. The case was brought by a rival casino proposal whose application was rejected.

However, both casinos must still get city approvals. The casinos could open as early as next year, pending city approvals.

It's likely neighborhood groups, who have fought the proposals, will continue their opposition.

The Pennsylvania Supreme Court upheld the decision to allow the development of two waterfront casinos in Philadelphia.

The decision affirms the decision of state regulators to allow Foxwoods Casino Philadelphia and SugarHouse Casino to open slots parlors on Columbus Boulevard in Philadelphia. The case was brought by a rival casino proposal whose application was rejected.

However, both casinos must still get city approvals. The casinos could open as early as next year, pending city approvals.

It's likely neighborhood groups, who have fought the proposals, will continue their opposition.

In a 2 to 1 decision in March, a panel of judges for the U.S. Court of Appeals for the D.C. Circuit ruled that the city's prohibition against residents keeping handguns in their homes is unconstitutional. In May, the full appeals court declined a petition from the city to reconsider the panel's decision.

Some gun control advocates have cautioned that a defeat in the Supreme Court could lead to tough gun laws being overturned in major cities, including New York, Chicago and Detroit. Fenty said the District had no choice but to fight because more guns in homes could lead to increases in violent crime and deadly accidents.

"The handgun ban has saved many lives and will continue to do so if it remains in effect," Fenty said. "Wherever I go, the response from the residents is, 'Mayor Fenty, you've got to fight this all the way to the Supreme Court.' "

Gun rights advocates welcomed the chance to take the fight to the high court. A central question the D.C. case poses is whether the Second Amendment protects an individual's rights to keep and bear arms.

Experts say gun rights advocates have never had a better chance for a major Second Amendment victory, because a significant number of justices on the Supreme Court have indicated a preference for the individual-rights interpretation.

"Any accurate, unbiased reading of American history is going to come down to this being an individual right," said Wayne LaPierre, executive vice president of the National Rifle Association. "To deny people the right to own a firearm in their home for personal protection is simply out of step with the Constitution."

The city's three-decade-old gun ban was challenged by six D.C. residents -- backed by the libertarian Cato Institute -- who said they wanted to keep guns in their homes for self-defense. The District's law bars all handguns unless they were registered before 1976; it was passed that year to try to curb gun violence, but it has come under attack in Congress and in the courts.

The Second Amendment states: "A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed."

The last Supreme Court ruling on the issue, in Miller v. the United States, is considered by many to define the right to bear arms as being given to militias, not to individuals.

U.S. District Judge Emmet G. Sullivan dismissed the residents' lawsuit -- Parker v. the District of Columbia-- several years ago, ruling that the amendment was tailored to membership in a militia.

But the appeals panel ruled in March that the District has a right to regulate and require registration of firearms but not to ban them in homes. The ruling also struck down a section of the law that required owners of registered guns, including shotguns, to disassemble them or use trigger locks.

"We're very pleased the case will go to the Supreme Court," said Alan Gura, an attorney for the residents. "We believe it will hear the case and will affirm that the Bill of Rights does protect the individual."

Singer said she will receive pro bono legal assistance from several high-profile constitutional law experts, including former acting solicitor general Walter E. Dellinger III. She called the city's handgun laws "reasonable" and said many handguns are used in illegal activities.

"This is not a law which takes away the rights to keep and bear arms," Dellinger said. "It regulates one kind of weapon: handguns."

Singer said she will ask for a 30-day extension to file the District's appeal with the Supreme Court, which would push the deadline to Sept. 5. The city's handgun laws will remain in effect throughout the appeal, Singer said.

"If the U.S. Supreme Court decides to hear this case, it could produce the most significant Second Amendment ruling in our history," Paul Helmke, president of the Brady Center to Prevent Gun Violence, said in a statement. "If the U.S. Supreme Court follows the words of the U.S. Constitution and the Court's own precedents, it should reverse the Appeals Court ruling and allow the District's law to stand."

Akal Security Inc., one of the largest contract security providers in the country, will pay the United States $18 million to resolve allegations that it violated the terms of its contract to provide trained civilian guards at eight U.S. Army bases, the Justice Department announced today. According to the settlement, some of the supplied security guards allegedly failed to satisfy weapons qualification requirements and receive other training, and the contractor allegedly failed to satisfy contractual man-hour requirements.

In September 2003, the U.S. Army awarded a series of contracts for security guards to the Espanola, N.M., company for bases in Kansas, Washington, Texas, Georgia, North Carolina and Alabama. The company agreed at that time to provide fully trained personnel who were weapons qualified in accordance with military police firearms requirements.

In October 2004, three company employees, who worked as security guards at Ft. Riley, Kan., filed a qui tam or whistleblower suit against the company on behalf of the United States in U.S. District Court for the District of Kansas. Under the qui tam statute, a private party, known as a “relator,” can file an action on behalf of the United States and receive a portion of the recovery. The relators in this case will receive a share of the settlement that has yet to be determined.

“Today’s settlement illustrates the Justice Department’s determination to recover paid out funds where terms of government contracts are not met,” said Peter D. Keisler, Assistant Attorney General for the Civil Division.

The settlement resolves Akal’s potential liability under the False Claims Act arising from the complaint. The litigation and settlement of the case was conducted by the Department’s Civil Division along with the U.S. Attorney’s Office for the District of Kansas, as well as the U. S. Attorney’s Offices for the Western District of Kentucky, the Eastern District of Kentucky, the Western District of Washington, the Western District of Texas, the Southern District of Georgia, the Northern District of Alabama, and the Eastern District of North Carolina. The case was investigated by the Department of Defense’s Defense Criminal Investigative Service Office of the Defense Inspector General, and the U.S. Army Criminal Investigation Command.

Attorney General Alberto R. Gonzales, Assistant Attorney General for National Security Kenneth L. Wainstein and FBI Director Robert S. Mueller, III today announced a series of comprehensive measures to significantly enhance national security oversight and compliance at the Justice Department and FBI.

Among the primary components of this oversight effort, which has been in the works for months, are the proposed launch of two offices to conduct reviews, compliance activities, and training. The first is a dedicated Oversight Section within the Justice Department’s National Security Division. The second is a proposed Office of Integrity and Compliance at the FBI.

The oversight and compliance programs run by these offices will be at the forefront of the Justice Department’s ongoing efforts to ensure that national security investigations are conducted in a manner consistent with the nation’s laws, regulations, and policies, including those designed to protect the privacy interests and civil liberties of U.S. citizens.

“The top priority of the Department is to protect the nation from terrorist attack. At the same time, we have an important obligation to make sure the tools we use to prevent terrorism also protect the civil liberties of our citizens,” said Attorney General Gonzales. "This effort helps us achieve these objectives by enhancing internal controls over the Department’s national security activities.”

“The changes we announcing today are historic in nature. The FBI is instituting one of the first, agency-wide internal compliance programs in the federal government, and, for the first time, Justice Department attorneys will have a comprehensive mandate to examine all aspects of the FBI’s national security program for compliance with laws, regulations, and guidelines,” said Assistant Attorney General Wainstein.

“The FBI is charged with the mission to protect and defend the United States against terrorist and foreign intelligence threats and to enforce the nation's criminal laws, while upholding the fundamental protections provided by the Constitution,” said FBI Director Robert S. Mueller, III. “That requires striking a sometimes delicate balance, and the establishment of a compliance program marks another important step toward ensuring we fulfill our mission with an unswerving commitment to the rule of law.”

These measures build upon past Department improvements in national security oversight as counter-terrorism efforts have expanded. Last September, for instance, the Department created a National Security Division, in part, to enhance oversight of FBI and Department national security activities. In 2005, the FBI created a National Security Branch to centralize and coordinate FBI national security programs. Over the past several years, the Department has also expanded its reviews of FBI use of Foreign Intelligence Surveillance Act (FISA) authorities.

Oversight Program within DOJ’s National Security Division

The National Security Division plans to broaden the scope of its national security oversight well beyond the Department’s traditional oversight role, which was primarily focused on the FBI’s use of FISA authorities. For the first time, Justice Department attorneys will have the clear mandate to examine all aspects of the FBI’ national security program for compliance with laws, regulations, and policies.

Dedicated Oversight Section -- To accomplish the expanded mandate spelled out above, the Department is standing up a dedicated Oversight Section within the National Security Division. This section will consist of attorneys and staff members specifically dedicated to ensuring that the Department fulfills its national security oversight responsibilities. Until recently, the Department’s national security oversight largely focused on the FBI’s use of FISA authorities, with the Department conducting accuracy reviews to ensure the accuracy of FBI declarations to the Foreign Intelligence Surveillance Court (FISC) and minimization audits to ensure FISA information is handled appropriately. The Oversight Section will expand this focus beyond FISA to include all aspects of the FBI’s national security program and its use of national security tools.

Comprehensive National Security Reviews – The Oversight Section will exercise its oversight functions by conducting regular reviews of national security activities at FBI field offices and FBI Headquarters national security units. These reviews, which have already begun, are staffed by career Department attorneys with years of law enforcement and intelligence experience from the National Security Division and the FBI’s Office of General Counsel, along with officials from the Department’s Privacy and Civil Liberties Office. These reviews are not limited to the FBI’s use of FISA or National Security Letters, but examine all national security activities to ensure compliance with all applicable laws, guidelines and policies. Since establishing this review process in April 2007, the Division has completed national security reviews in four FBI field offices and plans to complete a total of 15 such reviews by the end of the year.

Reviews of Intelligence Oversight Board Referrals – As directed by the Attorney General in March 2007, the National Security Division will also be responsible for reviewing all referrals by the FBI to the Intelligence Oversight Board (IOB). This review process will focus on whether these referrals indicate that a change in policy, training, or oversight mechanisms is required. The Oversight Section will report to the Attorney General twice a year on such referrals and inform the Department's Chief Privacy and Civil Liberties Officer of any referrals that raise serious civil liberties or privacy issues.

Training and Outreach -- In addition, the National Security Division will provide training on legal and regulatory compliance issues for its lawyers and FBI agents and analysts, as well as conduct outreach to the rest of the intelligence community.

Office of Internal Compliance and Oversight at the FBI

The second key portion of this oversight and compliance initiative will be the FBI’s Office of Integrity and Compliance, which was recently proposed by the FBI Director. While compliance programs have long been a staple of private corporations, this effort would represent one of the first times a federal agency established an agency-wide compliance program. The creation of this office and the implementation of a new FBI-wide compliance program would represent a substantial innovation in the way the FBI does business. The office will work to ensure compliance not only in national security activities, but in all FBI activities.

Mission -- The mission of the FBI’s proposed Office of Integrity and Compliance is to develop, implement, and oversee a program that ensures there are processes and programs in place that promote FBI compliance with both the letter and spirit of all applicable laws, regulations, and policies. The office would cultivate an environment committed to these principles and assist FBI management at all levels foster and maintain a culture where ethics and compliance are paramount considerations in decision making.

Structure -- The proposed Office of Integrity and Compliance would be headed by a career Assistant Director who will report directly to the FBI’s Deputy Director, providing direct access to the top decision makers within the FBI. The management structure would include a Steering Committee, chaired by the FBI Director, and five Executive Management Committees, which would examine compliance in different of portions of the FBI, including the National Security Branch, Criminal Investigations, investigative support, administrative and information technology.

New Policies and Risk Assessments -- The Office of Integrity and Compliance would begin establishing policies on compliance standards, training, communications, and risk assessments for the FBI. The office would support the implementation of the FBI’s overall compliance policies and standards within FBI Divisions, monitor the FBI-wide compliance program, ensure that necessary audits are performed, and deliver an annual report to key stakeholders. The office would also work closely with the FBI Inspections Division to identify high-risk areas, amend inspection protocols to include compliance risk, and ensure that compliance monitoring is carefully planned and executed.