9/9/12
Internet Jurisdiction
Michael I. Shamos, Ph.D., J.D.
Institute for Software Research
School of Computer Science
Carnegie Mellon University
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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.
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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.”
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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 corporation
that 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.
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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.
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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.)
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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!
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Wilson v. RIU Hotels (E.D. Pa., 2012)
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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
APPLE
VACATIONS
WILSON
HOTEL
RIU
Wilson v. RIU Hotels (E.D. Pa., 2012)
• 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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Wilson v. RIU Hotels (E.D. Pa., 2012)
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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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
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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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Burdick v. Superior Court of Orange County
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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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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 its 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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Yahoo! Nazi Memorabilia Case
• Yahoo! initially obeyed the French order
• Dec. 2000 Yahoo filed a declaratory judgment action in
California against LICRA and UEJF
THESE
– asserts jurisdiction on grounds that:
ARGUMENTS
• LICRA, UEJF sent cease-and-desist letters into
SUCCEEDED
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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.
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Major Ideas
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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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Q&A
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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?)
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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)
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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”
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
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
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS