CYBERLAW 2002

Class 10: Jurisdiction Over Americans in Foreign Courts/Foreign

Defendants in American Courts

Jurisdiction over Foreign Defendants in American Courts

• Minimum Contacts Analysis

• Court may stay proceedings under forum non conveniens

Desktop Technologies v. Colorworks (E.D. Pa. 1999)

• Pa copying co. sues Canadian copying co. for trademark infringement of COLORWORKS TM through operation of www.colorwords.com websites

• Court applies minimum contacts analysis, Zippo test

• Finds website purely passive: no sales, just ads and information. Orders must be made by fax

• No personal jurisdiction found

Yahoo case

• The Northern District of California stated about the Yahoo! case that it "presents novel and important issues arising from the global reach of the Internet".  What are these issues?

• What is the basis for the California court’s assertion of jurisdiction?

Inconsistent Orders?

• Compare the orders of the French Tribunal de Grande Instance of November 20, 2000 and the Northern District of California of November 7, 2001.  Are they inconsistent?  Do you think that Judge Fogel's ruling is correct?  Why or why not?

What’s Good for the Goose Is Good for the Gander?

• Would a U.S. court have exercised jurisdiction in a case analogous to the Yahoo! case?  Why or why not?

Ben Laurie: An Expert’s Apology

An Expert’s Apology

• Ben Laurie has stated: "What is being fought over is literally what people think. No-one should be able to control what I know or what I think. Not the government. Not the Thought Police. Not my family. Not my friends. The Internet is pure information. The fact that I cast aside my libertarian leanings in order to answer the question for the court, and yet was still unable to help in any substantive way, I find encouraging. We know we've done the right thing when our own best efforts cannot thwart it. . .”

Expert’s Apology Continued

• “Some people seem to think that this sets some kind of important precedent. If it does, then the precedent is surely that the Internet does not adapt well to the control of subject matter, not that governments will intervene and censor it successfully - people have been trying to do that since it started, and they've never got anywhere. This case is no exception." 

• Do you agree or disagree?  Why or why not?

iCraveTV

• What service was iCraveTV set up to provide?  What legal difficulties did the start-up encounter? What was its ultimate fate and why? What will be the future for online TV?

iCraveTV (E.D. Pa. 2000)

• Toronto based company offered TV via Internet

• Rebroadcasting from US channels in e.g. Buffalo, NY

• Apparently legal under Canadian law (as long as treated like cable providers)

• U.S. Court enjoined iCraveTV from broadcasting free internet TV into America

Lessig on iCraveTV

• “The entertainment industry is trying to force the Internet into its own business model - the perfect control of content”

Jurisdiction Over iCrave TV

• Billing itself as the world's first 24-hour-a-day free Internet TV companion, iCraveTV.com is run by former Fox Sports Net Pittsburgh General Manager William Craig and his business partner George Simons – PA residents

• Court finds jurisdiction also over company : sold advertising out of PA, streamed into US

A Comeback?• But Craig has already planned a comeback. He

says the service was legal under Canadian copyright law, but illegally accessed in the U.S. So Craig has developed patent-pending software called iWall that will make it possible to block any Web service from being accessed in a particular jurisdiction.

• He expects to keep a new TV-on-the-Web service (at under $10 a month) within Canada. Craig hopes to negotiate Web deals with Canadian specialty channels and U.S. satellite stations.

A Comeback?• iWall itself should generate revenue, he

adds, through sales to companies to block pornography and gambling sites.

Lesson learned: "Life doesn't always move in straightforward vectors," Craig says of his radically revised business plan. "There are often twists and turns." About his future, Craig is unequivocal: "The game is not over yet."

Sealand

• Will HavenCo be successful in using Sealand as an off-government data haven?  Why or why not?

Treaties

• Most countries in Western Europe have signed treaties that establish a framework for the exercise of jurisdiction by courts of one country over the citizens of another

• E.g. Brussels Convention (15 EU MS) – in 2001 updated with Brussels I Regulation

• Lugano Convention (EFTA members

Brussels/Lugano Convention

• These Convention and even the Brussels I Regulation take a more formalistic approach to questions of jurisdiction that U.S. Courts are likely to take

• No tag jurisdiction under these Conventions (contrast with Burnham)

• Court located at place of performance of K has jurisdiction to hear disputes involving K

• Jur by court located at place of harm of tortious K

U.S. Position/Comity

• No general obligation for U.S. Courts to give full effect to foreign judgments – rather U.S. courts have discretion to honor those judgments under principles of comity

• What’s comity

Comity

• Comity is an expression of one nation’s respect for its international obligations, balanced against the need to safeguard its own interests and interests of its citizens when t hey have been the subject of legal proceedings in foreign courts. E.g. Hilton v. Guyot (1895) – Supreme Court found a French judgment unenforceable because French courts would not have given effect to a similar judgment rendered against a French resident doing business in U.S.

State Courts

• In state courts, applicable principles are likely to be those of the Uniform Foreign Money-Judgments Recognition Act, enacted by about 30 states – codifies common law governing enforcement of foreign judgments and simplifies procedure foreign judgment creditor must follow in seeking to get a foreign judgment registered in a jur where D has assets

Draft Hague Convention on Jurisdiction and Foreign Judgments in Civil and

Commercial Matters• Hague Conference on Private International Law

has been working on this for several years • Hague Conference is an intergovernmental

organization with more than 50 MS,founded in 1893, helping to promote harmonization of bodies of law important in cross-border trade

• Hague Service Convention is great success!

Draft Hague Convention on Jurisdiction and Foreign Judgments in Civil and

Commercial Matters• Draft treaty would facilitate enforcement of

judgments rendered in one signatory state in the courts of another signatory state

• Similar to “full faith and credit” clause in U.S. Constitution

• Mired in controversy and unclear if convention will ever be finalized

Main Sticking Point – different approaches to jurisdictional issues by U.S. and Europe

• European approach more formalistic but greater predictability/certainty

• U.S. approach more fact-specific and contextual under International Shoe mimumum contacts analysis

• Outside U.S., this approach is seen as part of U.S. propensity to litigation. Hostility to spread of U.S. litigation as well as to extensive discovery, class actions, and punitive damages (none of which are permissible in many countries outside U.S.)

Current Situation

• Uncertainty surrounding when courts of one country will exercise jurisdiction to resolve disputes involving non-resident foreigners operating web sites from other countries

• Anyone engaged in Internet commerce must accept some risk of being drawn into litigation in a remote or hostile forum

• How can one minimize risk?