9th Circuit Reverses in Yahoo v. LICRA
August 23, 2004. The U.S. Court of Appeals (9thCir) issued its split opinion [34 pages in PDF] in Yahoo v. LICRA, holding that the U.S. District Court lacks personal jurisdiction over the French defendants.
Previously, the French defendants, LICRA and UEJF, sued Yahoo in a French court, and obtained a judgment ordering Yahoo to stop publishing certain material in its web site located in the U.S. In the present action, Yahoo sued the French defendants in U.S. District Court seeking a declaratory judgment that the French judgment is unenforceable in the U.S. because it violates the First Amendment. The District Court held that it does have personal jurisdiction over the French defendants, and that the French judgment violates the free speech rights of Yahoo. In the present opinion, the Appeals Court reversed the District Court. It held that the District Court lacks personal jurisdiction because the French defendants have not purposely availed themselves of the benefits of the forum.
Background. Yahoo is a corporation incorporated in the state of Delaware. It is based in San Jose, in the state of California. Its web site is available to anyone anywhere in the world with internet access.
La Ligue Contre La Racisme et L'Antisemitisme (LICRA) and L'Union Des Etudiants Juifs de France (UEJF) are two groups located in the European nation of France.
LICRA and EUJF filed a complaint in a court in France against Yahoo asserting that information made available over the internet violates the law of France.
The French court issued a judgment that orders Yahoo to "render impossible" access by persons in France to Nazi related content on servers located in the United States. The French court issued the following order: "We order the Company YAHOO! Inc. to take all necessary measures to dissuade and render impossible any access via Yahoo.com to the Nazi artifact auction service and to any other site or service that may be construed as constituting an apology for Nazism or a contesting of Nazi crimes."
The French defendants wrote a cease and desist letter to Yahoo in California, and used U.S. Marshals in California to serve papers on Yahoo.
The nation of France and two French groups seek to apply French law extraterritorially to censor expression by a U.S. company within the U.S., in contradiction of rights protected by the First Amendment of the U.S. Constitution. However, the present opinion is not about whether extraterritorial application of laws, or freedom of expression. Rather, the sole issue decided in the present opinion is the preliminary procedural question of whether the U.S. have jurisdiction over the two French groups.
District Court Proceedings. On December 21, 2000, Yahoo filed a complaint in the U.S. District Court (NDCal) against LICRA and UEJF seeking a declaratory judgment that the French judgment is unenforceable in the U.S. because it violates the free speech clause of the First Amendment of the U.S. Constitution.
LICRA and EUJF have strenuously fought Yahoo's action, not on its merits, but on a variety of procedural grounds.
On June 7, 2001, the District Court issued its Order Denying Motion to Dismiss [PDF] in which it rejected the French defendants' argument the Court lack personal jurisdiction. See, story titled "U.S. Has Jurisdiction over French Defendants in Yahoo v. LICRA" in TLJ Daily E-Mail Alert No. 205, June 11, 2001.
On November 7, 2001, the District Court issued its Order Granting Motion for Summary Judgment [PDF] in favor of Yahoo. See, story titled "NDCal: French Court Order Restricting Internet Speech is Unenforceable in U.S." in TLJ Daily E-Mail Alert No. 305, November 9, 2001.
Court of Appeals. The French defendants brought this appeal, raising three issues. They argued that the District Court lacked personal jurisdiction, that the case is not ripe (because they have not yet sought to enforce the French judgment in the U.S.), and that the abstention doctrine applies.
Judge Warren Ferguson wrote the opinion of the Court, in which Judge Wallace Tashima joined. It is a brief opinion, especially for one addressing personal jurisdiction. It holds that the District Court lacks personal jurisdiction, and therefore reverses. It does not address the two other appeal issues.
The Court reviewed the Supreme Court's minimum contacts analysis in International Shoe v. Washington, 326 U.S. 310 (1945), and the 9th Circuit's application of this analysis in Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082 (2000).
The Court wrote that the "Exercise of jurisdiction is consistent with these requirements of “minimum contacts” and “fair play and substantial justice” where (1) the non-resident defendant has purposefully directed his activities or consummated some transaction with the forum or a resident thereof, or performed some act by which he purposefully availed himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction is reasonable."
The Court then concluded that the first element, purposeful availment, is lacking. The Court concluded that the three acts cited by the District Court -- the cease and desist letter, the use of U.S. Marshalls, and the suit seeking an order regarding a website in California -- were insufficient.
The Court added that "France is within its rights as a sovereign nation to enact hate speech laws against the distribution of Nazi propaganda in response to its terrible experience with Nazi forces during World War II. Similarly, LICRA and UEJF are within their rights to bring suit in France against Yahoo! for violation of French speech law. The only adverse consequence experienced by Yahoo! as a result of the acts with which we are concerned is that Yahoo! must wait for LICRA and UEJF to come to the United States to enforce the French judgment before it is able to raise its First Amendment claim. However, it was not wrongful for the French organizations to place Yahoo! in this position."
Dissenting Opinion. Judge Melvin Brunetti wrote a 23 page dissent. He argued first that "the case law in our circuit makes clear that, although wrongful conduct will satisfy the Supreme Court's constitutional standard for the exercise of in personam jurisdiction, it is not necessarily required in all cases; indeed, I believe that the Supreme Court’s ``express aiming´´ test may be met by a defendant’s intentional targeting of his actions at the plaintiff in the forum state."
Second, he argued that "the record provides ample indication
that LICRA and UEJF targeted Yahoo! in California by successfully moving the
French court to issue an order requiring Yahoo!'s American website to comply
with French law, serving Yahoo! with such order in the United States, and
thereby subjecting Yahoo! to significant and daily accruing fines if Yahoo!
refuses to so comply; it is immaterial to the analysis that LICRA and UEJF have
yet to enforce the monetary implications of Yahoo!’s refusal to acquiesce in the
French court order."