The X-Men have recently relocated to San Francisco and were welcomed by a pro-mutant mayor. They in turn invited all remaining mutants seeking sanctuary to relocate and live with them. Simon Trask responds by sponsoring Proposition X - a law that would limit reproductive rights of mutants.
He justifies this since the last recorded birth of a mutant resulted in the destruction of Cooperstown, Alaska. While the mutant was not at fault, this doesn't stop misinformation from being spread about the dangers of another mutant birth. To a species on the verge of extinction, this is completely unacceptable.
Beast lead a protest that turned violent and was arrested and placed in a cell next to Professor X. More riots broke out. To help the police get the city under control, Norman Osborn, his Avengers, and H.A.M.M.E.R. agents have been called in to assist. Norman cashes in on his pact with Emma Frost and recruits her for one of his contingency plans. To complicate matters even further, a fake Professor X has gone on national television and requested that Cyclops turn himself in.
Norman and his Charles Xavier continue their televised message for Cyclops to give himself over to the authorities. Their interaction comes across as very rehearsed since "Xavier" unconditionally agrees with Osborn's decisions and responds in an obsequious tone. Together they state that the Avengers will use only non-lethal crowd control measures and are only here to help.
Across the city, the members of Osborn's team confront both mutant and human rioters. One member in particular, Spider-Man (Venom III) is shown fighting Colossus - and losing. Colossus rips out a piece of pavement and smashes it against Venom's face, temporarily stunning him. This provides Iceman the opportunity to extract his teammate.
The scene then shifts to Alcatraz Island where Beast and the real Charles Xavier are being held. Guards arrive in Beast's cell and take him before Dark Beast and his Omega Machine. Dark Beast invites him counterpart to take a seat.
Back at H.A.M.M.E.R. headquarters, Osborn introduces Emma Frost to her all-new, all-different "dark" X-Men. The Mimic, Cloak & Dagger, Daken, and Weapon Omega from Canada. Before he continues, Frost insists that whoever is impersonating Xavier needs to stop now. Mystique then shape-shifts back to her normal form. Frost refuses to cooperate as she doesn't trust Mystique. Osborn assures Frost that Mystique has some nanotech devices in her bloodstream that will guarantee her cooperation or her death. Frost insists that as a balance to his choices, she recommends Namor to be part of the team. Osborn - having little choice - agrees.
The next day's press conference introduces Osborn's official group of X-Men to help get the mutant population under control. In addition they implement a citywide curfew. At Greymalkin Industries Cyclops and the other mutants have little choice but to comply for now and determine the best course of action.
St. Francis hospital: Simon Trask mentally enslaves the hospital staff, one-by-one, with a touch of his hand. He orders them to "rise".
The Gene Pool Bar: Sunspot, Adam X, Match, Lorelei, Avalance, Meld, and Hellion discuss their best course of action. Hellion states that humanity will no longer listen to reason; they want blood. Hoping to gain as much attention as possible for their predicament, the mutants decide that they will break curfew but assemble peacefully. They want their arrest to be matter. Match suggests Union Square Park, it's a public area and it's impossible to ignore.
They arrive at Union Square and Match intentionally ignites the foliage to draw attention to themselves. Hellion then dares Osborn to come out and arrest them. Left with no choice, Frost uses Cloak to teleport her "X-Men" to arrest the mutants at Union Square. When they arrive, they quickly become engaged in a brawl with the younger mutants.
Hellion and his crew wanted to peacefully assemble to let the world know that American rights were being trampled "for the greater good". Not necessarily a bad idea; it's very noble. What actually happened was that they destroy public property and get into a fight with the mutant police. This goes against their original intentions, I think.
Not being judgmental, but I'm gonna blame this on the beer. Or Matt Fraction. Or the Editor. One or all of them are to blame for this slip-up. It was never made clear whether they were drunk and got rowdy or somebody left out something. They transitioned from the bar to the square without so much as a caption hinting at their state of mind. Something simple like "Beware of drunken politically active mutants".
Osborn's X-team was hand-picked (read: manipulated) into joining him. While we know about Frost, the other members compliance is explained in the Dark Reign: X-Men limited series. This way he can appear to be working with others, yet maintaining absolute control over everything. It's amazing how far he will go to retain his power.
4 webs. Another interesting chapter of this arc. Despite the hiccup between the bar and Union Square scenes, this was a very interesting read.
Art-side, Terry & Rachel Dodson do an excellent job. The only questionable item is his depiction of Venom. He is drawn to resemble an anthropomorphic killer whale rather than a human with an alien symbiote.