Wednesday, March 22, 2006

Yahoo! US suit against French litigants dismissed

The Ninth Circuit issued an en banc decision last week in Yahoo! v. La Ligue Contre Le Racisme et L'Antisemitisme, Download file, and held that Yahoo! could not maintain its law suit in the U.S. against the French parties who had sued it in France over Nazi memorabilia. The case was dismissed without prejudice.

The case is 99 pages long and includes multiple concurrences and a partial dissent. It is a complicated treatment of a close question of the law, but it also serves as an excellent tutorial on the difficult issues presented by the international nature of the Internet.
An eight-judge majority of the elevent-judge panel held that specific personal jurisdiction did exist over the French litigants. However six judges voted that the suit should be dismissed -- three on the grounds that the suit did not present a "ripe" legal question, and three on the grounds that they disagreed about personal jurisdiction. At the same time, five of the judges disagreed about the ripeness issue.
Yahoo! had sued in federal district court to obtain declaratory relief that two French orders issued in 2000 could not be enforced against it here in the United States. Yahoo! had been successfully sued in France for violating French law by making Nazi materials available on its U.S. web site, and the French court issued an order requiring Yahoo! to take "all necessary measures" to "dissuade and render impossible" access by French users to Nazi materials on Yahoo!. This was in addition to a similar order issued against Yahoo! France, which proceeded to comply with the French order. In 2001 Yahoo! adopted a policy prohibiting trade in items that glorify hate groups and the like.
The majority held that personal jurisdiction existed against the French litigants, based on three U.S. contacts -- (1) the cease and desists letter sent to Yahoo!; (2) the service of process on Yahoo!; and (3) the French court order directing Yahoo! to take remedial action in California regarding its web site.
"The suit sought, and the French court granted, orders directing Yahoo! to perform significant acts in California. It is of course true that the effect desired by the French court would be felt in France, but that does not change the fact that significant acts were to be performed in California. The servers that support are located in California, and compliance with the French court's orders necessarily would require Yahoo! to make some change to those servers."
In dismissing the suit, the opinion notes Yahoo!'s extraterritorial First Amendment arguments and concludes:
"First Amendment issues arising out of international Internet use are new, important and difficult. We should not rush to decide such issues based on an inadequate, incomplete or unclear record."
"Yahoo! wants a decision providing broad First Amendment protection for speech and speech-related activities on the Internet that might violate the laws or offend the sensibilities of other countries. As currently framed, however, Yahoo!'s suit comes perilously close to a request for a forbidden advisory opinion."
The case turned in part on the question of whether American users would actually be harmed by implementation of the restrictive measures required by the French court. The French court's experts contended that the necessary restrictions could be implemented in large part through IP address tracking used by Yahoo! to serve French banner ads, along with voluntary disclosures of the user's location. Yahoo! contended these measures were not sufficient but did not put forth how American users would be harmed. And it was unclear whether Yahoo! was in compliance, or not, with the French court's order. So many unanswered questions remain:
"Until we know whether further restrictions on access by French, and possibly American users, are required, we cannot decide whether and to what degree the First Amendment might be violated by enforcement of the French court's orders, and whether such enforcement would be repugnant to California public policy."

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