LAW OF COMPUTER TECHNOLOGY FALL 2015 © 2015 MICHAEL I. SHAMOS Internet Jurisdiction Michael I....

LAW OF COMPUTER TECHNOLOGY FALL 2015 © 2015 MICHAEL I. SHAMOS

Internet Jurisdiction

Michael I. Shamos, Ph.D., J.D.Institute for Software ResearchSchool of Computer ScienceCarnegie Mellon University

9/9/12


Internet Personal Jurisdiction

• Personal jurisdiction is largely based on geography, physical location– Acts, parties, physical presence in a state– Acts causing damage or injury in the state

• BUT: the Internet does not respect geography– Often can’t tell where someone is– Can’t tell routing, cable location, optical fiber,

servers, etc.– Does it matter?


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 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?


Zippo: 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.


Zippo Case• Zippo Manufacturing v. Zippo Dot Com Inc., 952 F.Supp. 1119 (W.D.

Pa. 1997). 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.”

http://euro.ecom.cmu.edu/program/courses/tcr840/2003/Zippo%20Mfr_%20Co.htm


Best Odds v. iBus Media (D. Nev. 2014)

• Best Odds is a Nevada corporation that provides gambling news and information over the Internet

• iBus Media is an Isle of Man corporationthat does the same thing

• Both use the trademark MacPoker• Best Odds owns a U.S. trademark registration for “MacPoker”• When no federal statute governs personal jurisdiction, a federal

court applies the law of the forum state.

http://euro.ecom.cmu.edu/program/law/08-732/Jurisdiction/BestOdds.pdf


Best Odds v. iBus Media (D. Nev. 2014)

• The iBus website can be viewed from Nevada• The Ninth Circuit test for special jurisdiction:

(1) Defendant must purposefully direct his activities to the forum; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum; AND

(2) the claim must arise out of defendant’s forum-related activities; AND

(3) jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

• “Nothing in the interactive features depicted in Plaintiff’s exhibits indicates that Defendants expressly targeted citizens of the United States, let alone Nevadans. In fact, one of the five screenshots shows only links to poker rooms that are ‘Not Accepting US Players’.”

• No purposeful direction, therefore no jurisdiction. Dismissed.

http://euro.ecom.cmu.edu/program/law/08-732/Jurisdiction/BestOdds.pdf


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.)


Effect of Forum Selection Clauses• Williams v. America OnLine, Inc., (2001 Mass. Super. No. 00-

0962)• 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!

Wilson v. RIU Hotels (E.D. Pa., 2012)

• Rita Wilson lives in Pennsylvania• RIU has headquarters in Mallorca, Spain• RIU owns the RIU Palace Hotel in Cabo San Lucas, Mexico• Wilson booked a room at the hotel on the Internet through the

website of Apple Vacations, a Pennsylvania company• Wilson was injured at the hotel and sued in Pennsylvania

WILSON

RIU

HOTEL

APPLEVACATIONS


• The Court found it had subject matter jurisdiction.– Amount in dispute > $75K– Between citizen of a state and a citizen of a foreign state

• Personal jurisdiction– RIU distributed brochures to a travel agency in PA– RIU gave marketing materials to Apple Vacations, which

operates in PA– Both Apple Vacations and RIU websites can be accessed

from PA– Wilson claims RIU maintained “systematic and continuous

contact” with PA



• The Court found:• Wilson’s claim did not arise out of any PA contact• Injury was in Mexico, unrelated to place of booking)• RIU advertising was not specifically directed to PA

(advertising nationally is not sufficient – otherwise a company would be subject to jurisdiction everywhere)

• Apple Vacations website is available everywhere, not just in PA

• HELD, no personal jurisdiction over RIU in Pennsylvania


Burdick v. Superior Court of Orange County(Cal. App., Feb. 14, 2015)

• Burdick, a resident of Illinois, made a defamatory comment about John Sanderson’s on Burdick’s Facebook page

• (The actual comment is not relevant to jurisdiction.)• Sanderson brought suit for libel in California

CALIFORNIA

ILLINOIS

Burdick v. Superior Court of Orange County

• Burdick had no contacts with California• No residence, no office, no property• No bank account, no licenses, no employees• Burdick asserted lack of personal jurisdiction• He asked the Court to quash the subpoena commanding

him to appear• Sanderson argued that Burdick’s posting had an “effect”

against him in California• The Superior Court (the lowest level of court in California)

refused to dismiss the case• California Supreme Court granted review and transferred

the review to the Court of Appeals


Burdick v. Superior Court of Orange County

• Sanderson sought specific (not general) jurisdiction• The case arose from Burdick’s actions in California• Appeals Court held:• A foreign act with foreseeable effects in the forum

state does not always confer specific jurisdiction• The forum must be the “focal point” of the conduct• There must be “express aiming” or “purposeful

targeting”• Burdick did not aim his comments at or target

California• The Superior Court was ordered to dismiss the case



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


The iCraveTV Case

•

TORONTO

UNITED STATES

•

CANADA

PITTSBURGH •

NY

PA

BUFFALO

• US TV stations broadcast from Buffalo

• iCraveTV set up receivers in Toronto, Canada

• iCraveTV registered the iCraveTV.com domain name in Pittsburgh

iCraveTV.com

• No iCraveTV servers in the US

• iCraveTV was sued in Federal Court in Pittsburgh by TV networks, movie studios and sports leagues for copyright infringement

• Do US courts have jurisdiction?

• iCraveTV wrapped its own advertising around the images and served them to anyone visiting its website

• Received US TV signals, stored them on a streaming RealServer in Canada

RealServer • iCraveTV is a Canadian company owned Pennsylvania residents

iCraveTV


Yahoo! Nazi Memorabilia Case

• The Penal Code of France, Sec. R645-1, 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


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



Yahoo! Nazi Memorabilia Case• Yahoo! initially obeyed 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

– 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

THESEARGUMENTSSUCCEEDED


Yahoo! Nazi Memorabilia Case• Nov. 2001 California court decided 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.”

• Appeal to the Ninth Circuit, which held that California had no jurisdiction over LICRA (no purposeful availment) so it reversed the District Court.

• The French decision stands but is not enforceable in the United States.


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 country 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?


Major Ideas

• Jurisdiction is largely territorial• Territories make little sense on the Internet• The Zippo test is alive and well• International jurisdiction is complicated by the

interaction of different legal systems• An Internet treaty may be required


QA&


Butler v. Beer Across America

• 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?)


Butler v. Beer Across America

• FACT: BAA had sold beer to other Alabama residents• FACT: BAA had bought beer from Alabama brewers.• FACT: BAA had advertised nationally, but not specifically

in Alabama• HELD: no personal jurisdiction over BAA in Alabama.

The website was an “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)


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”


Recent Internet Cases

• Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008).

– Boschetto in California bought a car on eBay from Hansing in Wisconsin

– The car did not conform to Hansing’s description. – Boschetto sued in California– HELD, NO JURISDICTION in California– One sale not a sufficient contact


Attaway v. Omega (Ind. App. 2009)

• Llexcyiss Omega in Indiana sold a car on eBay to Attaway in Idaho

• Attaway paid through MasterCard• Attaway hired CarHop USA, based in Washington, to pick

up the car in Indiana and deliver it to Idaho• Attaway claimed the car was not as described and

recovered $5900 in damages from MasterCard• By submitting a bid, the Attaways agreed to appear, in

person or by representative, in Indiana to pick up the vehicle

• By sending an agent into Indian, the Attaways “purposely availed” themselves of the privilege of conducting activities within Indiana. Jurisdiction was PROPER

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