Ninth Circuit Holds No Jurisdiction Over Anti-Nazi French Companies Suing Yahoo! In France
10/1/2004
The Internet insinuates its tentacles all over the world, making it difficult to apply traditional principles of personal jurisdiction, which usually require some pretty significant contact with the forum state. In Yahoo! Inc. v. La Ligue Contre le Racisme et L'Antisemitisme (9th Cir. Aug. 23, 2004), the U.S. Court of Appeals for the Ninth Circuit held that Yahoo! could not obtain personal jurisdiction in California over two French companies that had sued Yahoo! in France and obtained a judgment there, based merely on the French companies' having sent demand letters to Yahoo! in California and having used the U.S. Marshall Service to serve process on Yahoo! in California for the French lawsuit.
The lawsuit arose out of Yahoo!'s having Nazi-related content on its U.S.-directed website, including auctions of Nazi-related memorabilia and materials. Yahoo! maintained a separate website directed to French citizens, from which such materials had largely been removed, in compliance with French law. Faced with a judgment against it in French courts and substantial daily fines until the materials were removed from its U.S. website, Yahoo! sued for declaratory judgment in federal court in California. The French companies moved to dismiss for lack of personal jurisdiction. The trial court upheld personal jurisdiction and granted summary judgment for Yahoo!, holding that the French court's judgment violated Yahoo!'s First Amendment rights and was not enforceable in the United States. The Ninth Circuit reversed, finding that the French companies had insufficient contacts with California to sustain personal jurisdiction.
Comment: Whether sending a demand letter, and related activities, can trigger personal jurisdiction in a declaratory judgment action filed by the recipient in its home state is a tricky issue. In this case, the Ninth Circuit applied the test set forth by the U.S. Supreme Court in Calder v. Jones, in which the Court upheld jurisdiction in California by a California-based actor in a defamation lawsuit against a reporter and editor of a Florida tabloid. The Ninth Circuit noted that Calder "cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction" and that "something more" is required in the nature of "express aiming at the forum state."
The only clear lesson to be drawn from these cases is that fine lines need to be drawn and that the outcome of individual cases is often unpredictable