Transcript Jurisdiction - Carnegie Mellon University

Lecture 2:
Internet Jurisdiction
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Outline
• Jurisdiction: the central Internet legal question
– Why? Every website is accessible from everywhere
• Personal jurisdiction in the US
• Internet jurisdictional tests
• International jurisdiction
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Internet Operation
www.tektronix.com
192.65.40.31
REQUEST FOR HOME PAGE
www.cs.cmu.edu
128.2.203.179
ADDRESSEE: 192.65.40.31
PC
PC
SERVER
ROUTER
ROUTER
HOME PAGE
SERVER
ADDRESSEE: 128.2.203.179
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Internet Communications
www.tektronix.com
www.cs.cmu.edu
SEATTLE
BEAVERTON
CHICAGO
MIDDLETOWN
PHILADELPHIA
DC
Personal Jurisdiction
• When does court C have power over person X?
– Example: Can a resident of Pennsylvania be sued in
California for breach of an online contract?
– Who decides? The court decides on its own jurisdiction.
• Personal jurisdiction is largely geographic
– Acts, parties, physical presence in a state
– Long-arm power. States have jurisdiction over people
outside the state causing harm inside the state
• The Internet does not respect geography
– Often can’t tell where someone is
– Can’t tell routing, location of caches, optical cables, servers,
etc.
– Does it matter?
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Personal Jurisdiction
• Constitutional limitations
– 5th Amendment: “No person shall be “deprived of life, liberty,
or property, without due process of law.” (Applies to federal
government)
– 14th Amendment: “nor shall any State deprive any person of
life, liberty, or property, without due process of law.”
• What is a “person”?
– A natural person
– A “juristic person.” A partnership, corporation, limited liability
company, trust, etc. An entity that can sue and be sued.
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Due Process
• What is “due process”?
– ‘due process’ means fundamental fairness and substantial
justice. Vaughn v. State, 3 Tenn. Crim. App. 54, 456 S.W.2d 879,
883 (1970)
– "An orderly proceeding wherein a person is served with
notice, … and has an opportunity to be heard and to enforce
and protect his rights before a court having power to hear
and determine the case. Kazubowski v. Kazubowski, 45 Ill.2d
405, 259, N.E.2d 282, 290 (1970), cert. den. 400 U.S. 926
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Personal Jurisdiction (U.S.)
• Residents of a state are subject to its jurisdiction
– Based on geography, state manages its territory
• Avail themselves of the legal protection of the state
• Juristic persons reside in any state in which they
(1) are incorporated; or
(2) “doing business”; or
(3) where their employees reside
• Residents can be sued in their own state on any type
of claim for which the court has subject matter
jurisdiction. (Personal jurisdiction not an issue.)
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Personal Jurisdiction (U.S.)
• Federal courts: jurisdiction specified by law
– Federal matters: “all cases arising under the Constitution,
laws, or treaties of the United States” 28 U.S.C. §1331
– State matters: 28 U.S.C. §1332. Amount over $75K and
• between citizens of different states
• between a foreign state (country) and a U.S. citizen
• States:
– for residents (citizens + people within the state’s borders):
unlimited jurisdiction
– for non-residents: jurisdiction limited by the Constitutional
guarantee of “due process”
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Jurisdiction Over Non-Residents
• Based on actions of the party
• “Minimum contacts” rule: does the party have
sufficient “contacts” with the forum that exercising
jurisdiction will not “offend traditional notions of fair
play and substantial justice”? International Shoe Co. v.
Washington, 326 U.S. 310 (1945)
• Foreseeability: Would the party expect to be sued
there?
• Forum = place where the case is being heard
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Jurisdiction Over Non-Residents
• Did the party “purposefully avail himself” of the
privilege of conducting activities in the forum?
• “Purposefully directing” activities to the forum
• Transacting business with the forum
• Visiting the forum in connection with the transaction
• Acts with consequences in the forum, e.g. causing
injury
• Contacts “numerous, purposeful, and continuous”
• Not “random, isolated, or fortuitous”
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Example: Pennsylvania Long-Arm Statute
• A Pa. Court may exercise jurisdiction over a person who acts
directly or by an agent, as to a cause of action arising from:
• Transacting any business in this Commonwealth:
– doing by any person in this Commonwealth of a series of similar acts
for the purpose of realizing pecuniary benefit
– doing of a single act in this Commonwealth for the purpose of
thereby realizing pecuniary benefit with the intention of initiating a
series of such acts.
– shipping merchandise directly or indirectly into or through Pa.
– engaging in any business or profession within Pa.
• Contracting to supply services or things in Pa.
• Causing harm or tortious injury by act or omission in or out of Pa.
42 Pa. C.S. §5322
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Factors Affecting Jurisdiction
When more than one state has jurisdiction, we look at:
(1) burden on the defendant
(2) forum state's interest in resolving the dispute
(3) the plaintiff's interest in receiving convenient and
effective relief
(4) interstate judicial system's interest in obtaining the
most efficient resolution of controversies, and
(5) shared interest of the several states in furthering
fundamental substantive social policies.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)
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Internet Jurisdiction
NOT JUST JURISDICTION
OVER WEB TRANSACTIONS
• Maintaining website that regularly sends information into the
forum state on request is sufficient for general jurisdiction.
– Maritz, Inc. v. CyberGold, Inc., 947 F.Supp. 1328 (E.D. Mo.
1996). Opinion.
– CyberGold had a website in California that sent
advertisements to interested users who signed up to receive
them
– CyberGold had no employees or physical presence in
Missouri
– Maritz, a Missouri corporation, alleged trademark
infringement
– Held: Missouri jurisdiction proper. “CyberGold automatically
and indiscriminately responds to each and every user who
accesses its web site”
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Internet Jurisdiction Issues
• Where does an Internet company reside?
– Where any of its servers is located?
– Where the domain is registered?
– Along the path where messages are routed to it?
– Where more than 3 employees work?
– Where its ISP is located?
– Where a lot of computers are located?
– Where orders are “taken”?
– Where orders are “filled”?
– Where goods are stored? What about information goods?
• Do any of these distinctions make sense?
• Do we need Internet courts?
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Internet Jurisdiction
• Courts recognize three types of eCommerce activity
• Doing business over the Internet
– “the knowing and repeated transmission of computer files over
the Internet”
– Personal jurisdiction proper
• Passively informational websites
– “little more than an electronic billboard for the posting of
information”
– No personal jurisdiction
• Gray area:
– defendant has a website that allows a user to exchange
information with a host computer
– jurisdiction depends on nature of the information transmitted
and degree of interaction.
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Zippo Case
• Zippo Manufacturing v. Zippo Dot Com Inc., 952 F.Supp. 1119
(W.D. Pa. 1997), 2 ECLR 197, 2/14/97. Full text.
• Zippo Manufacturing is in Bradford, Pa. Makes Zippo lighters
• Zippo.com is in Sunnyvale, California. Operates an Internet
news service. 140,000 subscribers. About 3000 (2%) are in Pa.
Subscribers only have password access to a bulletin board
• Zippo.com has contracts with 7 ISPs in Pa.
• Zippo Manufacturing sued Zippo.com for trademark infringement
• HELD, jurisdiction proper because of Pa. contacts
– “The middle ground is occupied by interactive Web sites where a
user can exchange information with the host computer. In these
cases, the exercise of jurisdiction is determined by examining the
level of interactivity and commercial nature of the exchange of
information that occurs on the Web site.”
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Intercon Case
• Intercon, Inc. v. Bell Atlantic Internet Solutions, Inc., 205 F.3d
1244 (10th Cir., March 9, 2000). Full text.
• Intercon is an Oklahoma ISP (icon.net)
• Bell Atlantic Internet Solutions is a Delaware corp. offering dialup
ISP service in the northeast US. No presence in Oklahoma
• Bell Atlantic mistakenly routed its email traffic to icon.net instead
of to its subcontractor iconnet.net
• icon.net was choked with email, severely affecting its ISP service.
Took 7 months for Bell Atlantic to correct the problem
• Intercon sued Bell Atlantic in Oklahoma
• HELD, jurisdiction proper because “defendant purposefully
availed itself of the Oklahoma server for … months after being
notified of the erroneous address”
• (District Court dismissed the case; Court of Appeals reversed.)
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Effect of Forum Selection Clauses
• Williams v. America OnLine, Inc., (2001 Mass. Super. No. 000962)
• Software downloaded by AOL damaged Williams’ computer
• Williams consented to an online “Terms of Service” contract
containing the clause: “You expressly agree that exclusive
jurisdiction for any claim or dispute with AOL or relating in any way to
your membership or your use of AOL resides in the court of Virginia and
you further agree and expressly consent to the exercise of personal
jurisdiction in the courts of Virginia in connection with any such dispute
.…”
• Williams was already an AOL member; previously agreed to a
Virginia forum selection clause
• Damage to computer occurred before Williams agreed to new
contract. New contract governs, but forum selection clause is
unenforceable!
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Butler v. Beer Across America
•
•
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•
•
•
•
Beer Across America (BAA): Illinois company selling beer over the Internet;
no offices, assets or personnel in Alabama; never visited Alabama
Butler and her son, a minor, live in Alabama. Son bought 12 bottles of beer
for $24.95 from BAA by ordering over the Internet
The Alabama Civil Damages Act provides for a civil action by the parent or
guardian of a minor against “any person who unlawfully sells or furnishes
spiritous liquors to such minor and may recover such damages as the jury
may assess.”
Butler brought suit against BAA in Alabama. (Why?)
BAA had sold beer to other Alabama residents, bought beer from Alabama
brewers. Advertised nationally, but not specifically in Alabama
HELD: no personal jurisdiction over BAA in Alabama. Website “electronic
version of a postal reply card”
Butler is not without remedy. Case was transferred to court in Illinois.
Butler v. Beer Across America, 83 F.Supp. 2d 1261 (N.D. Ala. 2000)
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Internet Criminal Jurisdiction
• Transmission of obscene material from California over phone
lines to Tennessee computer sufficient contact to try California
residents in Tennessee, even though transmission was
originated by postal inspector from Tennessee
– United States v. Thomas, 74 F.3d 701 (6th Cir. 1996) cert. den. Full
text.
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Bases of International Jurisdiction
• Territoriality principle
– regulate conduct within its territory
• Nationality principle
– regulate conduct of nationals, wherever they are
• Effects principle
– regulate conduct having effect in the state
• Universality principle
– jurisdiction over crimes that are universally condemned
• Protective principle
– jurisdiction over defendants who threaten security of a state
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The iCraveTV Case
CANADA
• US TV stations broadcast from Buffalo
• iCraveTV is a Canadian company owned
Pennsylvania residents
RealServer
• iCraveTV registered the iCraveTV.com
domain name in Pittsburgh
iCraveTV
NY
TORONTO •
• iCraveTV set up receivers in
Toronto, Canada
• Received US TV signals, stored them
on a streaming RealServer in Canada
BUFFALO
•
• iCraveTV wrapped it own advertising
around the images and served them
to anyone visiting its website
• No iCraveTV servers in the US
PA
PITTSBURGH
• iCraveTV was sued in Federal Court in
Pittsburgh by TV networks, movie
studios and sports leagues for copyright
infringement
iCraveTV.com
•
• Do US courts have jurisdiction?
UNITED STATES
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Soma v. Standard Chartered Bank
• Soma Medical International v. Standard Chartered Bank, 196 F.3d
1292 (10th Cir. 1999). Full text.
• Soma is a Delaware corporation doing business in Utah
• Standard Chartered Bank (SCB) is a UK bank with an office in
Hong Kong (no presence in Utah)
• Soma had an account with SCB’s Hong Kong office
• SCB maintained a website accessible from Utah
• Defendant Fong submitted a forged signature card to SCB; then
withdrew $250,000 from Soma’s account
• Soma sued SCB in Utah
• HELD, no jurisdiction in Utah since SCB had a “passive Web site
that does little more than make information available to those who
are interested”
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Yahoo! Nazi Memorabilia Case
• The Penal Code of France, Sec. R6456, makes it an offense
– “other than for the needs of a film; a show or an exhibit enjoying
historical context,
– to wear or exhibit in public a uniform, an insignia or an emblem which
evokes the uniforms, insignia or the emblems which were worn or
exhibited [by Nazis]”
• Penalty:
– fines; higher for subsequent offenses
– confiscation of the object used to commit the infraction
– perform public service; prohibition against carrying firearms for 3 years
• Yahoo! auctions routinely offered Nazi items
• Yahoo! Inc. is a California corporation
• Yahoo! France is a joint venture between Yahoo! Inc. and Softbank,
a UK corporation
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Yahoo! Nazi Memorabilia Case
• Yahoo! Inc. and Yahoo France were sued in France by LICRA
(League Against Racism and Antisemitism) and UEJF (Union of
French Jewish Students) to enforce R6456
• Yahoo argued:
– Court had no jurisdiction over it
– Yahoo’s content is directed to US “internauts”
– Yahoo servers are in the US
– Any order against Yahoo could not be enforced in the US
because of freedom of speech
• HELD, France has jurisdiction over Yahoo because
– violation of the Code was disruptive to public order
– visualization of Nazi objects causes grief in France
– Yahoo (US) offers French content to users in France
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March 11, 2001
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Yahoo! Nazi Memorabilia Case
• Yahoo! initially complied with the French order
• Dec. 2000 Yahoo filed a declaratory judgment action in California
against LICRA and UEJF
– asserts jurisdiction on grounds that:
• LICRA, UEJF sent cease-and-desist letters into California
• LICRA, UEJF agreed to Yahoo’s “terms of service”
• LICRA, UEJF used the U.S. Marshal to serve process
SUCCEEDED
– alleges:
• Yahoo cannot comply on technological grounds
• French order chills freedom of expression in the U.S.
• Online service providers are immunized by DMCA
• Feb. 2001 Yahoo announced it would no longer comply
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Yahoo! Nazi Memorabilia Case
• Nov. 2001 California court granted summary judgment that “the First
Amendment precludes enforcement within the United States of a
French order intended to regulate the content of its speech over the
Internet.” 169 F. Supp. 2d 1181 (N.D. Cal. 2001)
• “What is at issue here is whether it is consistent with the Constitution
and laws of the United States for another nation to regulate speech
by a United States resident within the United States on the basis
that such speech can be accessed by Internet users in that nation.”
• Dec. 2001: appeal filed with Ninth Circuit
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Significance of Yahoo!
• Goes way beyond Nazi memorabilia
• Basic question:
When acts performed in country A are legal in A but
violate the laws of B because of transmission over the
Internet:
– Whose laws apply?
– Does B have jurisdiction?
– Should A act in aid of any judgment against its own citizen?
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In the Matter of Moshe D.
• Court of Cassation, Rome, Italy (Dec. 27. 2000)
• Moshe D. was libeled by a statement on a website outside Italy
• Magistrate forbade prosecution: (1) offense not committed in
Italy; (2) sequestration of the server would affect other sites
• Reversed on appeal. Prosecution may proceed.
• Court must “assess the nature of the offense of libel as
perpetrated through that new medium of … the Internet”
• “The offense is … perpetrated not upon publication of the
injurious statement, but when the same is perceived by subjects
one may consider “third parties” in relation to both the sender
and the injured party”
• Conclusion: libel is an offense anywhere the statement is
perceived
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Major Ideas
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Jurisdiction is largely territorial
Territories make little sense on the Internet
Jurisdiction should be predictable, but isn’t
Federal action may be necessary
International jurisdiction is complicated by the interaction
of different legal systems
• An Internet treaty may be required
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Q&A
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