Jurisdiction in Cyberspace 
Thailand - August September 2006 |
Dr Alan Davidson
Quirk - Read chapter 2Akindemowo - browse pages 271 - 280
Browse
Jurisdiction – The Dow Jones case – January/February 2003
Jurisdiction in Cyberspace: the Gutnick Decision - October 2001
http://www.theage.com.au/articles/2002/12/14/1039656257342.html
Akindemowo - browse pages 271 - 280
Internet technology often blurs the lines between the sending and receiving of information, which makes the "place" where various transactions take place somewhat indeterminate. It is easy to see why the Internet has created a challenging set of problems for choice-of-law analysis.
Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc. *
"While this Court has neither the jurisdiction nor the desire to
prohibit the creation of Internet sites around the globe, it may
prohibit access to those sites in this country."
"Individuals and organizations outside of Minnesota who disseminate information in Minnesota via the Internet and thereby cause a result to occur in Minnesota are subject to state criminal and civil laws." Gambling - Lottery - Sports Bookmaking - Accomplice liability -
References
Notes on Jurisdiction in Cyberspace
Jurisdiction has a number of meanings. For our purposes it is a legal term for the ability of a court to determine disputes. Jurisdiction and the Internet raises a number of interesting questions.
Prosecution for obscenity, United States of America v. Thomas, 74 F.3d 701 (1996) (although this case could be distinguished because it involved a bulletin board service rather than a website).
Trademark and copyright infringement,
tortious interference with contracts and competition issues have so far
been the most fruitful source of cases arising from internet use. American
decisions include:
Bensusan Restaurant Corp.
v. King, 40 U.S.P.Q. (2d) 1519 (S.D.N.Y.), conf'd by the U.S. Court
of Appeals (2d cir.) on Sept. 10, 1997;
Cybersell Inc. v. Cybersell
Inc. (U.S.C.A., 9th Cir. 1997);
Inset Systems Inc. v.
Instruction Set Inc., 937 F.Supp. 161 (D. Conn. 1996);
Maritz Inc. v. Cybergold
Inc., 947 F. Supp. 1328 (E.D. Mo. 1996);
Panavision International,
L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996);
Playboy Enterprises Inc.
v. Chuckleberry Publishing Inc., 39 U.S.P.Q. (2d) 1746 and 1846 (S.D.N.Y.
1996);
Zippo Manufacturing Co.
v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).
Deceptive trade practices - State of Minnesota v. Granite Gate Resorts, Inc., 568 N.W. 2d 715 (Minn. C.A. 1997).
The two extremes approaches are that a website operator is carrying on business in every place where information may be downloaded, and hence is amenable to the jurisdiction of the courts in each of those places and that a party should not be able to escape the consequences of his or her own negligence or misconduct based solely on use of this new medium.
The internet has been described
by the U.S. Supreme Court as an "international network of interconnected
computers";
Reno v. American Civil
Liberties Union, 000 U.S. 96-511 (1997), http://supct.law.cornell.edu/supct/hmtl/96-511.ZS.html.
Jurisdiction of Electronic Transaction in Thailand
http://www.thailawforum.com/articles/electronictransaction.html
From the Conclusion
Jurisdiction of electronic transaction is concerned about the authorities of the court to consider and adjudicate cases relating to civil and commercial activities in the nature of a contract, agreement or other arrangements which use the means of electronic communication. In other words, jurisdiction of electronic transaction can be called "Internet or Cyberspace jurisdiction" in commercial activities. There are many discussions whether jurisdiction of electronic transaction is similar to or different from territorial jurisdiction and currently there are no official legislations or rules and regulations are established in order to face Cyberspace jurisdiction problems, especially in Thailand. Nevertheless, it might be too soon to decide whether the law of Cyberspace jurisdiction should be established separately from the law of jurisdiction in the real world. The only way we can solve Cyberspace problems in the current situation is to apply all existing laws relating to this matter.
The existing principles of jurisdiction in Thai law include the nationality or domicile or the place of residence of the plaintiff or defendant, and the cause of action, to deal with problems of jurisdiction of electronic transaction. However, in the case that Thai Court cannot establish jurisdiction by identifying the place where the cause of action arises and the defendant resides outside Thai Court jurisdiction. Under Thai law, it is uncertain for Thai Court to establish jurisdiction over the defendant because there is no existing rules of Thai jurisdiction can be adequately applied to solve this problem. So far, there is only a legislation relating to electronic transaction in Thailand, and lack of the Supreme Court decision has been decided involving the issue of jurisdiction of electronic transaction. Thus, it is necessary to encourage Thai Courts to establish new criteria by applying principles of traditional jurisdiction along with new concept of electronic commerce law to deal with jurisdiction of electronic transaction issue in order to avoid this uncertainty of Court decision in the future.
Courts' Jurisdiction in Internet Disputes
Competence over civil
disputes
Courts first of all assert
jurisdiction in civil matters on the basis of the geographical location
of the parties. The primacy of in personam or personal jurisdiction
is reflected in both civil and common law regimes, which provide that the
defendant's residence in the jurisdiction confers authority to its court
in the absence of any other connecting factor between the territory and
the dispute.
Personal jurisdiction under U.S. law
The exercise of determining whether a U.S. court is competent to hear a dispute resembles that used by Australian courts, but is complicated by the overlay of the Due Process Clause of the 14th Amendment of the Constitution. As in Australia the starting point for jurisdiction over parties to a dispute is their presence in the forum. A court may assert "general" jurisdiction where the defendant is domiciled in the state or has "continuous and systematic" activities there. Helicopteros Nationales de Columbia, S.A. v. Hall, 466 U.S. 408; Data Disc Inc. v. Systems Technology Associations Inc., 557 F. 2d 1280 (9th Cir. 1977). Otherwise, a court must find grounds for "specific" jurisdiction. This requires a finding of sufficient contact between the forum and the non-resident defendant. The court then must analyze whether the exercise of its jurisdiction is consistent with "traditional notions of fair play and substantial justice". International Shoe Co. v. Washington, 326 U.S. 310.
One test often used to determine specific jurisdiction in the U.S. is the application of the "purposeful availment" test. Compuserve Inc. v. Patterson, 89 F. 3d 1257 (6th Cir. 1996) Under this rule, the court analyzes whether the defendant has deliberately taken the opportunity to conduct activities in the forum and thereby obtain the benefits of the domestic law. If so, and assuming the exercise of jurisdiction is otherwise reasonable and fair, the court will be competent to hear a dispute arising from those activities. The purposeful availment test, and other rules used to establish specific jurisdiction, do not require that a defendant have a physical presence in the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462; CompuServe Inc. v. Patterson; California Software Inc. v. Reliability Research, Inc. In the words of the U.S. Supreme Court, the defendant's onduct and connection with the forum must only be such that he "should reasonably anticipate being haled into court there". Burger King Corp. v. Rudzewicz.
Forum non conveniens
Under the forum non conveniens
principle, a court may stay or dismiss a suit if it is persuaded that there
is another forum that is more closely connected to the events giving rise
to the suit, or otherwise better suited to adjudicate the issues.
In the absence of Canadian authorities, our courts may turn to American caselaw when faced with these questions. Whether guidance will be obtained may depend on how soon it is sought. Prior to the mid-nineties, there were very few decisions by U.S. courts on competence over internet disputes. the decision of the U.S. District Court in California in California Software Inc. v. Reliability Research Inc. dates from 1986, almost 10 years before any other reported case. Since 1995, there has been a veritable explosion of cyberspace litigation. American courts have used various tests to determine whether they have jurisdiction over internet disputes. Some courts have simply applied traditional rules, while others have tried to devise new tests to accommodate the peculiarities of the medium. As a perhaps inevitable result, it is already difficult to find complete consistency in the application of rules relating to competence.
Inset Systems Inc. v. Instruction Set Inc.
Inset Systems Inc. ("Inset") was a software company based in Connecticut and Instruction Set Inc. ("Instruction") was a technology company based in Massachusetts. Inset sued in its home state for an injunction and damages based on the defendant's use of the Inset name as the title of its webpage and in its toll-free number ("1-800-US-INSET"). Instruction asked the court to decline jurisdiction on the grounds that it had no office or employees in Connecticut, and only conducted its affairs regularly in Massachusetts.
Under Connecticut's long-arm statute, its courts have specific jurisdiction over any non-resident defendant who repeatedly solicits business in the state, subject only to the due process requirements of the 14th Amendment of the U.S. Constitution. The court in this case found that Instruction's webpage was a solicitation of business which had been continuously in effect over the previous six months. Since there were about 10,000 internet users in the state who could have been exposed to this solicitation, the court concluded that it had specific jurisdiction.
The court further found that its assumption of jurisdiction did not offend the due process requirement of "minimum contacts" with the forum. Since the defendant had set up a webpage and a toll-free number which could be used by anyone in the U.S., including internet users in Connecticut, Instruction must have reasonably foreseen that it could be sued in the state's courts on the basis of its acts. The court also held that the defendant would not be greatly prejudiced by its decision because the distance between Connecticut and Massachusetts is not great, and it had already retained counsel in the state.
The actual result in this case does not seem terribly unjust given the proximity of the competing jurisdictions. The court's reasoning, however, must give pause to any website operator. The mere possibility of consulting a website from any particular territorial jurisdiction was deemed sufficient to give rise to a finding of business activity there. No specific attempts to solicit business from citizens of Connecticut (as opposed to those in the other 49 states) was necessary to ground competence. On the court's reasoning, a company operating a website and a toll-free number should reasonably anticipate being sued in the courts of any state. The only safeguard to over-reaching jurisdiction was the consideration of fair play, which was met by the court's conclusion that it would not greatly inconvenience Instruction to defend in the forum.
Cybersell Inc. v. Cybersell Inc.
This litigation involved an Arizona company and a Florida company with the same name, both offering consultation services for advertising on the internet. The Arizona company sued in its home state for infringement of its federally registered trademark "Cybersell". The defendant Florida company moved for a dismissal based on the absence of jurisdiction of the Arizona court.
Applying the "purposeful availment" test, the Arizona court found that it was necessary to distinguish between "active" and "passive" websites. Passive sites only transmit information, and are not directed at persons in any particular territory. The court concluded that there must be something more to indicate that a website operator has purposefully directed his activity in a substantial way to the forum's residents. Examples of website attributes sufficient to trigger a finding of purposeful availment would include a chance to register a user name or be put on a mailing list, or the placement of a toll-free number or e-mail address to obtain further information. A large number of "hits" from users in any particular jurisdiction might also give rise to specific jurisdiction of its courts.
Based on these criteria, the U.S. Court of Appeals upheld the lower court's decision to dismiss the Arizona action for lack of personal jurisdiction over the Florida defendant. The court found that the defendant's website was essentially passive. Internet users who hit the site were given the opportunity to record their addresses but could not buy products or services without taking further steps to contact the company. The purpose of the site was not the direct transaction of business, but rather the advertising of services which could be obtained by means other than through the internet.
There is a logical connection between the purpose of the website and the operator's reasonable expectation of the consequences that may flow from its use, including the possibility of being sued outside his home state. Making this distinction represents an improvement on the blanket approach of the Connecticut court in the Inset case.
Unfortunately, the court in Cybersell also held that specific jurisdiction can be based on the number of times a site is "hit" by users in a particular forum. This is not reasonable, since the use of the site is completely out of the control of the operator. It could be argued that a high level of interest in a site from a particular jurisdiction should alert an operator to the possibility of a lawsuit there. This presupposes, however, that a website operator may know who is consulting the site. The burden the test places on operators is very heavy, since it is well nigh impossible for an operator to selectively prevent the use of its website by users in any particular place. This means that even an operator who is aware of a high number of hits from certain users may face the unpalatable choice of risking prosecution in that place (even if the website does not target users there) or abandoning the medium altogether. One could attempt to insert an appropriate clause.
Bensusan Restaurant Corp. v. King
The plaintiff corporation owned the internationally famous "Blue Note" nightclub in New York City. The defendant was the owner of a nightclub in Missouri also called "The Blue Note", which catered to college students at the nearby university. The plaintiff sued in New York for trademark infringement and unfair competition on the basis of the defendant's website. It also asked the court to order the defendant to change the name of the club and to shut down the website, which contained a calendar of upcoming attractions, and a telephone number to call for further information. The Missouri Blue Note website originally contained a hyperlink to the New York "Blue Note" site, but it was removed when the plaintiff complained.
The U.S. Court of Appeals upheld the trial decision dismissing the lawsuit for lack of jurisdiction.
Under New York's long-arm statute, a court has jurisdiction if a tort is committed in the state or damages are suffered there. With respect to the site of the tort, the court held that all the acts complained of (the creation of the website, the use of the Blue Note name and the creation of the hyperlink) had taken place in Missouri at the instigation of Missouri residents. Jurisdiction over non-resident defendants based on the occurrence of damage in New York had to be restrictively interpreted. In this case, the defendant could not reasonably foresee that its acts could cause damage in New York, nor was it obtaining substantial income from inter-state commercial activity. The mere fact that the defendant hired nationally-known musicians to play, and that its student clientele might be not be uniquely Missouri residents, was not enough to attract jurisdiction.
The reasoning in the Bensusan case is appealing because the court looks beyond the potential effect of the internet's use to examine its actual effect on the facts of this case. Although advertising of the Missouri club on the internet reached into other jurisdictions, on the evidence the club was a local enterprise which did not threaten its namesake in New York. The court did not even have to deal with the issue of due process, since it found that it had no jurisdiction at all.
The court's rationale, however, is difficult to apply to other facts. Since the defendant business in Bensusan had a single, specific, geographical location, it was natural for the court to be skeptical about the impact of "national" advertising on either the Missouri club's revenues or those of the New York Blue Note. Many disputes involving the internet will not involve a business with one specific location.
There were also none of the hallmarks of "interactivity" on the website that complicated the analysis of jurisdiction in Cybersell and Inset. The Missouri club website had no toll-free number, tickets to shows could not be purchased on the internet, and there was no mechanism for registration of users. If these elements had been present, would the result have been different? None of these earmarks of "interactivity" would have changed the reality of the Missouri club's customer base and the lack of real competitive threat to the plaintiff's business. Using the analysis of the courts in Inset and Cybersell, however, these elements might have been a justification for the exercise of jurisdiction by the New York court.
State of Minnesota v. Granite Gate Resorts, Inc.
This is an unusual case in that it involves a quasi-penal proceeding against a non- resident. Whether the reasoning of the court would apply in a private litigation is unclear, because public policy considerations may have weighed more heavily than in a litigation between two private parties. The case is discussed because, despite this context, the court used traditional principles of jurisdiction applicable to purely civil disputes.
Granite Gates Resorts was a Nevada company which advertised Wagernet, a forthcoming on-line sports betting service on the internet. The Wagernet website offered a toll-free number to call for further information, and invited internet users to register to be included on a mailing list. Subscribers were also warned that they should check local laws with respect to restrictions on sports betting.
The Wagernet site was actually operated by a company in Belize, and was connected by a hyperlink with a webpage which explained the contract into which subscribers would enter. Under this contract, all lawsuits against Wagernet would have to be taken in the courts of Belize, but lawsuits against subscribers could be taken in the courts of their residence.
A consumer investigator for the Minnesota Attorney General's office telephoned the toll-free number on the site, identified himself as a Minnesota resident and asked about betting. He was told how to bet, and that it was legal. This was incorrect, since all forms of sports betting are illegal in Minnesota. On the basis of the website and the phone call, the state sued Granite Gate for deceptive trade practices, false advertising and consumer fraud.
The Minnesota Court found that it had jurisdiction to proceed against Granite Gate, and the appeal court agreed. It based its competence on its long-arm statute, which provided that it had jurisdiction over a non-resident defendant so long as this did not offend due process considerations. The plaintiff hence had to show that the defendant had minimal contacts with the forum and that jurisdiction would not offend traditional notions of fair play and substantial justice. In the court's words, the defendant must have committed some act by which it "purposefully availed itself of the privilege of conducting activities within the state, thus invoking the benefits and protections of its laws".
To determine whether these tests were met, the Minnesota court examined five factors:
the quantity of contacts: the court noted that computers located in Minnesota were among the 500 computers that most often accessed the defendant's website, and that the Wagernet mailing list included the name and address of at least one Minnesota resident. Minnesota residents were also identified as having used the toll-free number on the site.This decision, like that in Bensusan, purports to apply traditional rules of jurisdiction on internet activities. The results are mixed. It is hard to dispute that the state's interest was engaged once it was established that a Minnesota resident had been informed over the phone that he could legally participate in on-line sports betting, and that at least one Minnesota resident was on a mailing list.the quality of contacts: in the court's view, the defendant had targeted an American market by setting up a website in English and offering a U.S. phone number.
connection between the cause of action and the contacts: the lawsuit was based on the information available on the website, which was intended for and received by Minnesota consumers.
the state's interest: the court found this to be self-evident since, if the state had no interest, it could not uphold its consumer protection laws.
convenience of the parties: according to the court, a company which maintained the right to sue in subscribers' home states could not complain when it was sued in those same states. In the court's words: " 'Foreign' corporations that seek business in Minnesota and reserve the right to sue Minnesotan customers in court here cannot claim inconvenience as an excuse to avoid personal jurisdiction here, particularly in light of the state's interest in regulating advertising and gambling."
The court's decision, however,
was not based primarily on these factors, but on the features of the website.
Once again, it was held that a website constitutes a deliberate "broadcast"
everywhere, and that this inherent quality, as well as a toll-free number
on the site, suffices to attract the jurisdiction of any state's court.
As well, as in Cybersell, the court grounded jurisdiction in the
number of hits from computers in the home forum, a factor beyond the control
of the website operator. The warning on the website about checking local
laws with respect to on-line betting was disregarded by the court. The
inconvenience of litigating in a distant forum was dismissed on the sole
ground that the defendant had reserved the right to sue in any subscriber's
home state.
Zippo Mfg. Co. v. Zippo Dot Com, Inc. 952 F. Supp. 1119 (W.D. Pa. 1997)
Zippo Manufacturing Company, a Pennsylvania corporation which manufactures lighters and holds the trademark in the mark "Zippo" brought a trademark infringement and dilution claim against the defendant. The defendant moved to dismiss the complaint for want of personal jurisdiction. The court denied the motion, holding that defendant had sufficient contacts with the forum to permit the exercise of jurisdiction over it. The defendant was a California based company with neither offices or employees in Pennsylvania. Its contact with Pennsylvania residents was limited to and telephone communications. Defendant operated a World Wide website hosted on a California server which was available to Pennsylvanian residents. The site advertised the services defendant offered to its clientele. These included permitting access to various newsgroup messages stored on a computer in California. To obtain access, the user completes online an application, and pays for the service by credit card, either online or via telephone. The user then receives a password, which permits the user to access the newsgroup messages. Defendant had entered into subscription contracts with some 3000 Pennsylvanians (which represented 2% of its clientele), as well as contracts with 7 Pennsylvanian based Access Providers to give defendant's customers access to the information in question. These contacts, found the court, were sufficient to permit the exercise of jurisdiction over the defendant.
Said the court:
Dot Com repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords. Dot Com knew that the result of these contracts would be the transmission of electronic messages into Pennsylvania. The transmission of these files was entirely within its control. ... When a defendant makes a conscious choices to conduct business with the residents of a forum state 'it has clear notice that it is subject to suit there. ... If Dot Com had not wanted to be amenable to jurisdiction in Pennsylvania, the solution would have been simple - it could have chosen not to sell its services to Pennsylvania residents.This last sentence indicates that the court might have found that mere advertising on the , without more, would not be sufficient to permit the exercise of jurisdiction over the advertiser. This is indicated by the following statement of the court:
[O]ur review of the available cases and materials reveals that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the . This sliding scale is consistent with well developed personal jurisdiction principles. At one end of the spectrum are situation where a defendant clearly does business over the . If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the , personal jurisdiction is proper. (Compuserve v. Patterson) At the opposite end are situations where a defendant has simply posted information on an Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. (Bensusan) 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. (Maritz v. Cybergold).
Webber v. Jolly Hotels
977 F. Supp. 327 (D NJ 1997)
Defendant is an Italian corporation that owns 32 hotels in Italy. Defendant does not conduct any business in New Jersey. However, it does provide "photographs of hotel rooms, descriptions of hotel facilities, information about numbers of rooms and telephone numbers" on its World Wide Web site on the Internet.
Plaintiff sustained injuries when she fell at a hotel owned by Defendant. She filed suit in New Jersey, and Defendant moved to dismiss the case for lack of personal jurisdiction. The court agreed that it lacked jurisdiction over the Defendant (although it did not dismiss the case, transferring it instead to the Southern District of New York).
The accessibility of Defendant's web site to consumers in NJ does not constitute the kind of "continuous and substantial" contacts with the forum state to sustain general personal jurisdiction over the defendant. "[E]xercising jurisdiction over a defendant who merely advertises its services or product on the Internet would violate the Due Process Clause of the Fourteenth Amendment [and] would disrespect the principles established by International Shoe and its progeny. "
Defendant placed information about its hotels on the Internet as an advertisement, not as a means of conducting business. In the past year, two district courts have refused to exercise jurisdiction over defendants who have a passive connection to the Internet. In Smith v. Hobby Lobby Stores, Inc., 968 F. Supp. 1356 (W.D. Ark. 1997), the Court found that an advertisement in a trade publication was an insufficient contact with the forum state because the defendant "did not contract to sell any goods or services to any citizens of Arkansas over the Internet site." Id. at 1365. In Hearst, supra, the Court concluded that advertising services on the Internet was equivalent to advertising in a national magazine, and that under New York law, such advertisements do not provide the requisite contacts to provide personal jurisdiction. 1997 U.S. Dist. LEXIS 2065, 1997 WL 97097 at *10; see also Bensusan, 937 F. Supp. at 301 (finding that creation of Web site is not sufficient to find that defendant purposefully availed himself of forum).
This Court agrees with the finding in Hearst that advertising on the Internet falls under the same rubric as advertising in a national magazine. This Circuit has consistently held that advertising in national publications "does not constitute 'continuous and substantial' contacts with the forum state." See, e.g., Gehling v. St. George's School of Medicine, 773 F.2d 539, 542 (3d Cir. 1985); see also Giangola v. Walt Disney World Co., 753 F. Supp. 148, 156 (D.N.J. 1990) [*334] ("In an age of modern advertising and national media publications and markets, plaintiffs' argument that such conduct would make a defendant amenable to suit wherever the advertisements were aired would substantially undermine the law of personal jurisdiction."). In addition, advertising on the Internet is not tantamount to directing activity at or to purposefully availing [**17] oneself of a particular forum.
Conclusions
Traditional rules have proved appropriate for some cases such as Bensusan. Where litigation centers on a defendant's activities in a single, specific, geographical location, the use of the internet for advertising purposes should not defeat the usual rules relating to evidence of damage within a forum and the defendant's intent (or lack of intent) to target a specific market. The use of the internet in such cases is incidental, and its unique qualities should not alter the usual jurisdictional principles.
Some courts have attempted to adapt accepted jurisdictional rules by differentiating between active and passive websites. It seems reasonable that a website operator who has targeted a specific market by referring to a particular forum, or by selling services on-line to customers, should be subject to the jurisdiction of the courts of the forum. There are, however, two problems with the test as so far formulated by U.S. courts.
First, the level of "interactivity" deemed sufficient to trigger jurisdiction is minimal. Should the mere fact of including a toll-free number on a website confer jurisdiction on the courts of every forum from which the number may be used? Does the posting of a message in English necessarily connote an attempt to target a North American market? Should not a greater degree of intent to reach a specific market be required?
A second and greater problem is the willingness of courts to equate the interactivity of a website with its use by parties in a particular forum. This is unfair in that it may be impossible to know who has used a website, or to control access from any given place. The importance conferred on the number of hits from users in the forum shows a basic misapprehension about the anonymity afforded by cyberspace. It is also a departure from the traditional rule requiring a defendant to do something to trigger competence of the courts within a specific jurisdiction.
In considering whether traditional rules on jurisdiction may be used or adapted for internet disputes, it is important to remember that the forum non conveniens test as currently applied by Australian courts may not always afford the same protection as the due process requirements of the 14th Amendment of the U.S. Constitution. The Australian test focuses on the relative merits of two or more forums, whereas the American test addresses the unfairness that may result if a party is forced to defend in a foreign jurisdiction. Australian courts tend to engage in a balancing exercise, while U.S. courts must consider procedural guarantees.
Given these potential difficulties,
the caselaw which will emerge from the courts on their jurisdiction over
internet disputes should be closely monitored. A failure by the courts
to account for the unique nature of the internet may inhibit the internet's
commercial use, since the application of traditional rules without modification
may lead to the assertion of jurisdiction grounded in very minimal contacts
with the forum. In determining jurisdiction, the courts should more specifically,
in our view, consider the following guidelines.
Based Jurisdiction and the
Internet are Traditional Rules Enough? Ogilvy Renault 1998
http://www.law.ualberta.ca/alri/ulc/current/ejurisd.htm
Forum Non Conveniens
Introduction
- Jurisdictional Limits
- Extra Territorial Aspects
- Choices of Law
- Common Law - Forum Conveniens
- Personal Jurisdictions
- Contacts
- "Doing Business Test"
- "Long Arm" principles
- Minimum Contact Test
Rules
of Private International Law
- These rules
are sometimes referred to as conflicts of law rules. It is possible that
an Australian court will determine that the law which applies to a particular
situation is that of another country. In this case the Australian court
will apply that other country's law.
Hopefully, the parties to an international contract will specifically identify the law which applies to the contract. The parties may also identify which country's courts have jurisdiction to hear disputes arising under the contract.
How is the proper law of a contract determined?In Dow Jones v Gutnick [2002] HCA 56 per Kirby J at paras 129-131:1. express choice of law
Golden Acres Ltd v Queensland Estates Pty Ltd [1969] Qd R 378.
2. implied choice of law
Altantic Underwriting Agencies Ltd v Compagnia di Assicuranzione di Milano S.p.A [1979] 2 Lloyds Rep 240.
3. Neither express nor implied choice of law
The test is one of `most closely connected'.
Re United Railways of the Havana and Regla Warehouses Ltd [1960] Ch 52.Mendelson - Zeller Co Inc v T & C Providores Pty Ltd [1981] 1 NSWLR 366.
4. Once the proper law is determined the domestic rules of that system of law are applied to the contract.5. A related topic to the choice of law applying is that of the correct choice of forum in which to hear the subsequent action. This is called 'forum non conveniens'.
5.1 What is the test of a convenient forum?
(a) The Australian approach:
Oceanic Sun Line Special Shipping Co v Fay (1988) 62 ALJR 389Voth v Manildra Flour Mills Pty Ltd (1990) 65 ALJR 83
Henry v. Henry (1996) 185 CLR 571(see 571)The High Court reaffirmed its position in Regie National des Usines Renault SA v Zhang (2002) 76 ALJR 551, that “[a]n Australian court cannot be a clearly inappropriate forum merely by virtue of the circumstance that the choice of law rules which apply in the forum require its courts to apply foreign law as the lex causae.”The test is one of 'the clearly inappropriate forum'.(b) The English approach:
Spiliada Maritime Corporation Ltd v Cansulex Ltd [1987] AC 460
Williams v Lloyds (1994)
The test is one of 'the clearly more appropriate forum'.
Thus, there is a divergence of opinion between the English approach (and indeed the approach in other common law jurisdictions such as the United States and Canada), and the Australian view on this topic. Naturally, our High Court's view is the important one. Notice when you read Voth that the High Court is careful to try to incorporate the Spiliada outcome into the judgement.
In the first place, the publication
of the claimed defamatory statement was in Victoria, where it was downloaded
and where the print publication was also sold. Second, the plaintiff is
a resident of Victoria, has his business headquarters here, his family
here, his social and business life here, and seeks to have his Victorian
reputation vindicated by the courts of the State in which he lives. Third,
the plaintiff is indifferent to the other substantial parts of the article
and desires only that the attack on his reputation in Victoria as a money-launderer
should be repelled and his reputation re-established. Fourth, the plaintiff
has undertaken to sue in no other place in respect of the matters which
found his own proceeding. This undertaking destroys at a stroke the defendant's
claim that New Jersey is to be the preferred jurisdiction because of its
capacity to award worldwide global damages. Quite apart from the effect
of the undertaking upon this part of the defendant's case that the USA
is the preferred jurisdiction, the legal assertion that worldwide damages
could be awarded and would be awarded in the United States, if the plaintiff
succeeded, has not been established as a matter of the law of the country
to my satisfaction.
"Throughout, the argument
has been that the article is "indelibly American, written by Americans
for Americans interested in the stock market and its affairs". The weakness
in this argument is that the aspect sued on by Mr Gutnick is indelibly
Victorian, connected with no other place and that any documentation or
evidence concerning the matter will all be found in Victoria." (129)
"I reach a clear conclusion that the State of Victoria is both the appropriate forum and convenient forum for the disposition of the litigation commenced by the plaintiff. Many of the defendant's claimed difficulties are more imagined than real, but, at the end of the day, the most significant of the features favouring a Victorian jurisdiction is that the proceeding has been commenced by a Victorian resident conducting his business and social affairs in this State in respect of a defamatory publication published in this State, suing only upon publication in this State and disclaiming any form of damages in any other place." (130)
"In my view, it would be verging on the extraordinary to suggest that Mr Gutnick's action in respect of that part of the publication on which he sues should be removed for determination to the State of New Jersey or the State of New York... Accordingly, for all of these reasons, I refuse the defendant's application for a stay of this proceeding." (131)
Australian Cases
Macquarie
Bank v Berg [1999] NSWSC 526 (2 June 1999)
http://www.austlii.edu.au/au/cases/nsw/supreme_ct/1999/526.html
Macquarie Bank Limited & Anor v Berg [2002] NSWSC 1110 (22 November 2002) Smart AJ
http://www.austlii.edu.au/au/cases/nsw/supreme_ct/2002/254.html
The first Australian case with a hint of internet jurisdiction was Macquarie Bank v Berg, although the court failed to elaborate on the applicability of any special consideration for the internet. Berg, a disgruntled ex employee of Macquarie Bank placed defamatory material online regarding the bank on a server located in California. Macquarie Bank sought an ex parte interlocutory injunction. Simpson J expressed concern that to make the order as sought, would have the effect of restraining publication of all the material presently contained on the website to any place in the world. The factors against the grant of jurisdiction included the enforceability of the order, the undesirability of superimposing the law of New South Wales relating to defamation on every other state, territory and country of the world, and the interlocutory nature of the application.
"12 The first and most significant of these concerns the nature of the Internet itself. No evidence was adduced to explain the mechanics of the operation of the Internet. It is reasonably plain, I think, that once published on the Internet, material is transmitted anywhere in the world that has an Internet connection. It may be received by anybody, anywhere, having the appropriate facilities. Senior counsel conceded that, to make the order as initially sought, would have the effect of restraining publication of all the material presently contained on the website to any place in the world. Recognising the difficulties associated with orders of such breadth, he sought to narrow the claim by limiting the order sought to publication or dissemination "within NSW". The limitation, however, is ineffective. Senior counsel acknowledged that he was aware of no means by which material, once published on the Internet, could be excluded from transmission to or receipt in any geographical area. Once published on the Internet material can be received anywhere, and it does not lie within the competence of the publisher to restrict the reach of the publication.
13 The consequence is that, if I were to make the order sought (and the defendant were to obey it) he would be restrained from publishing anywhere in the world via the medium of the Internet.
14 The difficulties are obvious. An injunction to restrain defamation in NSW is designed to ensure compliance with the laws of NSW, and to protect the rights of plaintiffs, as those rights are defined by the law of NSW. Such an injunction is not designed to superimpose the law of NSW relating to defamation on every other state, territory and country of the world. Yet that would be the effect of an order restraining publication on the Internet. It is not to be assumed that the law of defamation in other countries is coextensive with that of NSW, and indeed, one knows that it is not. It may very well be that, according to the law of the Bahamas, Tazhakistan, or Mongolia, the defendant has an unfettered right to publish the material. To make an order interfering with such a right would exceed the proper limits of the use of the injunctive power of this court.
15 For this reason alone, I would refuse the order sought."
The case before Simpson J was unsatisfactory for a number of reasons. First it was an application for an ex parte interlocutory injunction. As such Berg do not formally appear to argue his case. Second, it is unusual for a Court to grant such an injunction when the other party is out of the jurisdiction. However, Simpson J did not give that reason for her judgment. Instead she referred to the nature of the Internet and expressed concern about superimposing the laws of NSW on anyone who publishes on the Internet.
Berg's dealing with the Macquarie Bank did not end there. There is a substantial history, and corresponding number of reported cases dealing with Berg's applications before the NSW Industrial Relations Commission and Macquarie Bank's continued pursuit of this matter.
In Macquarie Bank Limited v Berg [2002] NSWSC 1110 (22 November 2002) Smart AJ considered certain procedural matters. This case was heard after the judgment of Hedigan J in Gutnick v Dow Jones, but before the High Court handed down its decision on the appeal. Smart AJ was well aware of the controversy of the decision of Simpson J.
By this time Berg had developed the argument that many commentators, including myself, had feared, that the Gutnick principle should be limited to subscription web sites and not extended to the World Wide Web and freely disseminated material. Their argument was that Dow Jones must know that material placed on its server would be read and so "published" in Victoria, because Dow Jones had taken over 300 paid subscriptions from Victorian residents. Berg argued that it was unknown who may or may not read and access a standard web site. Berg argued it was the recipient who published the material by "pulling" it into Victoria when accessing the site.
According to Smart AJ Berg's submission that "the jurisdiction into which the matter would be sent could (not) have been reasonably anticipated by the defendant". With respect, this argument seems unsustainable. The web site was designed for only one purpose and dealt with only one topic. It dealt with Macquarie Bank and was highly critical of certain actions and policies of the Macquarie Bank and its executives. The site was surely targeted at one jurisdiction only, the jurisdiction where the Macquarie Bank operated, New South Wales.
However, the matter did not need to be decided by Smart AJ and left to a possible future Court to determine if and when the defamatory actions proceeds. Smart AJ finally stated: "Until the facts are found definitively it is too early to say which law applies. On the facts, this case is in a class of its own".
Berg further complicated the facts by stating that he had no involvement in the creation of the web site or in the posting of the material. He claims that he told the saga of his problems with another person and even sent certain material to that person for his information. Berg claims that this person was experimenting with the creation of web sites at this time. He claims that he did not know that this person would use the information and material by placing it on the web site. In so doing Berg is claiming that he is the wrong defendant even if the material is defamatory.
"32 Counsel for the defendant contended that it was a moot question whether the placement on the Internet in the United States of America of arguably defamatory material accessible in New South Wales amounted to publication of the material in New South Wales. Counsel reserved the right to argue this point in an appellate court or at a later stage in the present proceedings. It was not a point to be argued at this stage."
"41 The defendant submitted that the "pull" technology means that the decision to bring the matter complained of into the jurisdiction was that of the recipient and that neither the identify of the recipient nor the jurisdiction into which the matter would be sent could have been reasonably anticipated by the defendant on the material before the Court. In this respect the position was distinct from that in Gutnick v Dow Jones & Co Inc [2001] VSC 305 as Dow Jones had subscribers in Victoria for its journal who had paid for the material to be sent via the Internet into that jurisdiction. In the course of that judgment Hedigan J stated that Dow Jones had programmed its computers to decline requests for material. Hedigan J doubted the accuracy of the remark of Simpson J in this case that once published on the Internet, material might be transmitted anywhere in the world as an Internet connection. I doubt if that was what she intended to say. Gutnick was not concerned with the World Wide Web because Dow Jones only put its material on for subscribers or trial subscribers."
"55 The defendant submitted that the case was overwhelmed by the application of Californian law and that the indications were that the plaintiffs could not win in California because of the law as to free speech. Until the facts are found definitively it is too early to say which law applies. On the facts, this case is in a class of its own."
ACCC v Purple Harmony Plates Pty Limited [2001] FCA 1062 GOLDBERG J 6 AUGUST 2001 MELBOURNE
1 The Australian Competition and Consumer Commission ("the Commission") has filed an application seeking injunctive relief restraining the first respondent, Purple Harmony Plates Pty Limited ("the company"), from publishing and distributing material containing representations that certain products which it offers for sale have performance characteristics or benefits which they do not have...
2 The Commission's case is that the representations were misleading or deceptive or likely to mislead or deceive, ... contrary to the provisions of s 52 and s 53(c) of the Trade Practices Act 1974 (Cth) ("the Act"). The Commission relies on s 51A of the Act on the basis that the representations are as to future matters which cannot be substantiated.
3 From a date in 1996, the company has advertised and promoted the products for sale by the distribution of a brochure and display on an Internet website homepage at www.purple-plates.com ("the website"). The website is promoted by, and maintained in the name of, the company. On 13 and 14 June 2000, officers of the Commission, obtained a print out of the website on which the products were stated to have various benefits.
4 In July 2000, an officer of the Commission used the website to purchase from the company a Purple Harmony disk and a small Purple Harmony angel. These products were delivered to the officer in Canberra.
5 The Commission wrote to Mr Lyster ...
7 On 2 May 2001, an officer
of the Commission printed out another copy of the website. The contents
of the website were largely the same as on 28 August 2000.
12 The Commission claimed
that the representations were contained in the company's brochure and on
its website, which the company used to advertise and promote the products
for sale. The company's brochure and print outs of the website's contents
were obtained by officers of the Commission on 13 and 14 June 2000, 28
August 2000 and 2 May 2001.
22 I am satisfied that Mr Lyster and Ms Glover have been shown to have been involved in the contraventions of s 52 of the Act.
23 The respondents challenged the jurisdiction of the Court to hear and determine the application filed by the Commission. Their contentions focused on claims that the Act was invalid, and that they were not subject to the jurisdiction of the Court as they had seceded from the Commonwealth of Australia and were now citizens of the Principality of Caledonia, having transferred their assets and investments to the Principality.
24 It was not apparent what were the boundaries of that Principality, but the address of the company and Mr Lyster was 20 Davis Street Kew. The respondents filed a joint affidavit sworn on 19 April 2001 in which they asserted that:
* According to s 7 of the
Act, it was the duty of the Governor-General to appoint members of the
Commission;
* The post of Governor-General
does not hold a legal position or authority to carry out this duty. The
position of Governor-General has never existed or held jurisdiction in
matters pertaining to the Commonwealth of Australia or the people of Australia
as the appointment of each of the Governors-General was invalid because
the relevant Letters Patent were not signed under the Royal Sign Manual
or by Queen Victoria's heir;
* All employees, members
and associate members of the Commission were illegally employed and had
no jurisdiction over matters described in the Act;
* As the post of Governor-General
was invalid, the Act was invalidly assented to and was unconstitutional,
null and void;
* On and from 17 February
1986, the respondents formed the constructive intent to secede from the
Commonwealth of Australia, and the Governor of the State of Sherwood had
the power to deem the respondents to be Caledonian citizens and to have
seceded from that date;
* As Caledonian citizens,
the respondents had no allegiance to uphold contracts pertaining to the
Commonwealth of Australia and were not beholden to answer to the Commission;
* All members of parliament,
ministers of State and justices were invalidly appointed;
* As the respondents were
no longer citizens of the Commonwealth of Australia, having chosen to exercise
their right of secession, they were immune from the jurisdiction of the
Court;
* The former officers of
the former de facto government of the Crown and Government of the Commonwealth
of Australia, including the Commission, by continuing to assume sovereignty
over the people of Australia, represented the imposition over the people
of Australia of a foreign power;
* There were no members
or employees of the Commission validly appointed at law to cause the issue
of demand for relief sought in the Commission's application, to cause the
issue of the initial inquiry, to swear any affidavit in support of application
for relief, or to appoint and instruct the Australian Government Solicitor
(also invalidly or illegally appointed) to prosecute the proceeding.
The respondents also claimed $30 million in damages and sought injunctions directing the Commission to distribute and publish corrective material and directing all unconstitutional government bodies to exempt the respondents' activities.
27 I reject the respondents' submission that the Governors-General have not been properly appointed and that legislation assented to by the Governors-General has not been validly assented to...
28 I also reject the respondents' claims that they are no longer citizens of the Commonwealth of Australia, having chosen to secede...
30 I am satisfied that each of the respondents are amenable to the jurisdiction which is conferred on the Court in any matter arising under the Act pursuant to s 86 of the Act. Not only was a Notice of Appearance filed on their behalf on 4 December 2000, but it is apparent that the commercial activities of the company are carried on within Australia. There is no basis for the respondents' claim for damages against the Commission and I reject it.
33 The Commission also sought orders for corrective advertising, directing the respondents to place a corrective statement on the website and to send corrective letters to the company's customers. The Court has the power to make an order for corrective advertising under the general injunction power pursuant to s 80(1) of the Act and, on application by the Commission or the Minister, pursuant to s 80A(1): Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Pty Ltd (2000) 34 ACSR 673 at 676-677... I consider that this case is one in which it is appropriate to order corrective advertising. I take into account the period during which the representations have appeared on the website, the subject-matter of the representations and the fact that they relate to the ability of the products to resolve health problems and help people with their personal well-being.
34 The Commission submitted that the corrective statement on the website should appear as an automatically generated active pop-up window or message box when the consumer accessed the homepage and the page containing the order form on the website. As the representations were published on the website, they have the capacity to reach a wide audience of people who may have been misled by the representations. The corrective statement proposed by the Commission informs consumers about the misleading nature of the previous representations, offers a full refund to consumers who purchased the company's products and believe that they were misled, invites consumers who have inquiries about the notice to contact the Commission and informs consumers that the statement has been placed as a result of action taken in the Court pursuant to s 52 of the Act. I am satisfied that an order for corrective advertising in this form is appropriate to remedy the misleading effect of the material published on the website.
35 Although the website does
not have an "au" designation, I am satisfied that the Court has jurisdiction
in relation to the website. The Commission produced evidence that the website
was registered in the name of the company and Mr Lyster was the administrative
contact for the site. Mr Lyster asserted that the website should have been
registered in his name, rather than the name of the company. Mr Lyster
also submitted that the Court had no jurisdiction over the website as his
contract with the company which administered ".com" domain names was governed
by the laws of Virginia in the United States of America. It is irrelevant
that the agreement with the domain name administrator may not be subject
to the jurisdiction of Australian Courts (on which issue I express no view
in the absence of full argument on the issue). The Commission has sought
to invoke the Court's jurisdiction and power of enforcement over the respondents
and, as Mr Lyster acknowledged, Mr Lyster has the authority to instruct
other people to place material on the website.
Gutnick v Dow Jones & Co Inc [2001] VSC 305*** (28 August 2001) Hedigan J
Jurisdiction in Cyberspace has been a vexed issue for electronic commerce participants. Modern communications bypass traditional terrestrial norms and concepts. Publications on the Internet are continuous 24 hours a day for as long as the material remains online. Australian case law is scant. However, the detailed decision Hedigan J in Gutnick v Dow Jones [2001] VSC 305 on defamation on the Internet, handed down on 28 August 2001, is the first significant contribution to fill the vacuum in Australia.
Effects Test
In Calder v. Jones 465 US
783 (1984). Shirley Jones was a famous entertainer living and working in
California who was defamed by an article in the National Enquirer, which
was published in Florida but had a nationwide circulation including a substantial
readership in California. The court held that California was the
"focal point both of the story and of the harm suffered" and so jurisdiction
in California was based on the "effects" of the defendants' Florida conduct
(at 789).
Facts
In Gutnick, Dow Jones published
the Barrons Magazine (Barrons) which contained an article alleging inter
alia that Victorian businessman Joseph Gutnick was "masquerading as a reputable
citizen when he was a tax evader who had laundered large amounts of money".
The magazine sold 305,563 hard copies, 14 in Victoria, and was available
on the website wsj.com to some 550,000 subscribers, some 300 in Victoria.
The Dow Jones servers were located in New Jersey. His honour particularly
examined jurisdiction arising from the Internet connection as this could
affect the award damages.
Submissions
Geoffrey Robertson QC for
Dow Jones made several unsuccessful "bold assertions ... remarkable for
its ambition":
- imposing liability where downloading occurred "would have a serious ‘chilling effect’ on free speech";
- "a narrow rule was appropriate for the age of globalization.";
- "the Internet offer(s) Australians the greatest hope of overcoming the tyranny of distance";
- Hedigan J has "a national duty to decide that there was no jurisdiction in Australia even if I had a legal view to the contrary, and that it is (his honour's) duty publicly to declare that Mr Gutnick's action against Dow Jones take place in New Jersey";
- downloading is "self-publishing";
- "the process is akin to taking a book out of a library in New Jersey and taking it home to Victoria to read";
- "Mr Robertson briefly flirted with the proposition that cyberspace was a defamation-free zone, but did not develop it. Nor shall I." (paras 15-20).
Hedigan J mocks Robertson's "bold assertions" commenting that the unique nature of the Internet must not lead to the abandonment of the analysis that the law has traditionally and reasonably followed to reach just conclusions. His Honour expressed concern that Robertson's arguments, "attractively presented as they were, became enmeshed in the pop science language of 'get' messages, 'pulling off', 'firewalls'", and "trumpeting of cyber-space miracles" degenerated into "sloganeering" which in the end decides nothing (paras 70 and 71).
Authorities referred to
- Digital Equipment Corporation v Alta Vista Technology Inc 960 F Supp. 456 (D Mass 1997) dealt with Internet use in which it was stated: "Using the Internet ... is as much knowingly 'sending' ... as it is a telex, mail or telephonic transmission; ... ATI 'knows' that its Website reaches residents ... who choose to access it, just as surely as it 'knows' any lateral telephone call is likely to reach its destination" (para 38).
- Hedigan J questioned the value of the decision in Macquarie Bank v Berg.
- Lee Teck Chee v Merrill Lynch International Bank [1998] CLJ 188 - the High Court of Malaya, Nathan J held that publication had not taken place in Malaya where the alleged defamatory words published on a Singapore server. However, there was no evidence that any person in Malaya had accessed the web site.
- In Kitakufe v Oloya Ltd (unreported) the Ontario Court assumed jurisdiction for a defamatory statement made in a Ugandan newspaper republished on the Internet. Notwithstanding a multitude of connections with Uganda, Hume J assumed jurisdiction on the basis of access to the website and downloading.
- In Godfrey v Demon Internet Ltd [1999] 4 All ER 343 Moreland J considered an Internet bulletin board amounted to publishing postings to subscribers.
- Hedigan J cited Calder v Jones with approval. The US Supreme Court held that "jurisdiction may be exercised over a foreign defendant who directs his or her defamatory message at the forum and the plaintiff suffers harm there."
The defendant's argument that it would be unfair for the publisher to have to litigate in the multitude of jurisdictions in which its statements are downloaded and read, "must be balanced against the world-wide inconvenience caused to litigants, from Outer Mongolia to the Outer Barcoo." His Honour stated that "if you do publish a libel justiciable in another country with its own laws ... then you may be liable to pay damages for indulging that freedom" (para 75).
Hedigan J considered the following factors as significant:
- the downloading of the publication in Victoria;
- the plaintiff's residence, business headquarters, family, social and business life are in Victoria;
- the plaintiff seeks to have his Victorian reputation vindicated by the courts of the State in which he lives;
- the plaintiff undertook not to sue in any other place.
His Honour concluded
that the most significant factor favouring a Victorian jurisdiction is
that "the proceeding has been commenced by a Victorian resident conducting
his business and social affairs in this State in respect of a defamatory
publication published in this State, suing only upon publication in this
State and disclaiming any form of damages in any other place... it would
be verging on the extraordinary to suggest that Mr Gutnick's action in
respect of that part of the publication on which he sues should be removed
for determination to the State of New Jersey." (para 131)
Cases quoted by Hedigan J
Macquarie Bank v Berg
Jurisdiction Extract (AD)
Questions
sometimes arise as to the country or State whose courts have jurisdiction
to adjudicate on a subject, and as to the law which is to be applied. This
area of the law is referred to as conflict of laws or private international
law. These principles are well established. However, modern communications
bypass traditional terrestrial norms and concepts. Electronic commerce
can be engaged without parties ever meeting in a faceless exchange of data
from computer to computer. The borderless nature of the Internet often
hides or disguises the origin of particular websites and corresponding
information.
International
Notwithstanding the borderless nature of cyberspace, established frameworks of jurisdiction are still applicable. However, a number foreign cases have raised novel problems associated with jurisdiction involving cyberspace. Most cases emanate from the United States where disputes have arisen between parties in different States. Although the approach in the United States involves constitutional factors, more than one common law jurisdiction has applied that approach: see eg the British Columbia Court of Appeal in Braintech Inc v Kostiuk (1999) 63 BCLR (3d) 156 and the High Court of Delhi in Yahoo Inc v Akash Arosa [1999] FSR 931.
Personal jurisdiction is typically satisfied where the defendant is present in the jurisdiction or has significant contacts with the jurisdiction. In the United States, it is sufficient if the defendant "purposefully availed" itself of the jurisdiction such as by repeatedly conducting business. United States courts are required to apply a due process requirement under the Fourteenth Amendment to the US Constitution. In International Shoe Co v Washington 326 US 310 (1945) the United States Supreme Court held that due process requires the defendant to have "minimum contacts" with the plaintiff's jurisdiction and prescribes that the jurisdiction is consistent with "traditional notions of fair play and substantial justice": at 316.
The purposeful availment requirement ensures that random and fortuitous contacts do not cause a defendant to be improperly brought into a forum. The fair play requirement permits the court to examine whether the defendant's acts or their consequences have sufficient connection with the state to make jurisdiction reasonable.
Early cyberspace cases granted jurisdiction merely because the defendant's website could be accessed in the plaintiff's jurisdiction. In Inset System Inc v Instruction Set Inc 937 F Supp 161 (D Conn 1996) the court granted jurisdiction over a defendant who maintained a mere passive website, partly due to the relative proximity of the two relevant States. The courts later distinguish between passive and active websites. Passive sites merely display information. Active websites may provide for form filling and provide facilities to contract online, or may simply provide an email link.
InZippo Manufacturing Co v Zippo Dot Com Inc 952 F Supp 1119 (WD Pa 1997) the court formulated a sliding scale approach which has been adopted by many courts. At one end of the scale:
"… are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction": at 1124.
"… are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper": Zippo's case at 1124.
Airways Corporation of NZ Ltd & Anor v Pricewaterhouse Coopers Legal [2002] NSWSC 138
(8 March 2002)
12 Senior counsel argued
that the evidence discloses no connection with NSW, and that the appropriate
forum for the commencement of any defamation proceedings is New Zealand.
He relied on the decision of Hedigan J in the Supreme Court of Victoria
in Gutnick v Dow Jones and Co Inc [2001] VSC 305 (unreported 28 August
2001); and of the Court of Appeal, on an application for leave to appeal
(Dow Jones and Co Inc v Joseph Gutnick (unreported 21 September 2001)).
In these decisions it was held that internet publications take place in
the location where they are read, and not in the location from which they
are transmitted. The evidence in this case of delivery being only that
the publications were received in New Zealand, it should be concluded that
publication took place in New Zealand and not Australia. This would be
a compelling circumstance dictating refusal of the order on the basis that
an action, if commenced, would be very likely to be transferred by this
court to New Zealand. I was told that the defendant in Gutnick has been
granted special leave to appeal to the High Court of Australia but that
the appeal has not yet been heard. For present purposes, I am prepared
to accept the conclusions of the Supreme Court of Victoria and the Court
of Appeal of Victoria but bear in mind that these conclusions were reached
on the basis of evidence placed before Hedigan J. That evidence was not
necessarily identical to the evidence on this issue placed before me. Nevertheless,
for present purposes I work on the basis that publication by email takes
place where the email is received and that, on the evidence in this case,
that was in New Zealand.
Dow Jones v Gutnick [2002] HCA 56
The High Court Decides
"Thinking Outside the Square"
According to Kirby J, “when a radically new situation is presented to the law it is sometimes necessary to think outside the square… this involves a reflection upon the features of the Internet that are said to require a new and distinctive legal approach.”
On 10 December 2002 the High Court handed down its decision in Dow Jones v Gutnick [2002] HCA 56. By 7-0 in four separate judgments the High Court dismissed the appeal of Dow Jones. The Court determined that publication of a defamatory statement on the Internet occurs at the place of downloading.
Kirby J flagged the danger stating that to “tell a person uploading potentially defamatory material onto a website … will render that person potentially liable to proceedings in courts of every legal jurisdiction where the subject enjoys a reputation, may have undesirable consequences. Depending on the publisher and the place of its assets, it might freeze publication or censor it or try to restrict access to it in certain countries so as to comply with the most restrictive defamation laws that could apply.”
Effects Test
This writer has proposed
in a number of articles the imposition of an effects test as in Calder
v Jones 465 US 783 (1984). Hedigan J cited this case with approval whilst
Gleeson CJ, McHugh, Gummow and Hayne JJ stated at para 24 “[a]ctivities
that have effects beyond the jurisdiction in which they are done may properly
be the concern of the legal systems in each place.”
Single Publication Rule
Most States in the US have
adopted a single publication rule which treats the sale of a defamatory
books or newspapers as a single publication. The time of the “single
publication” is fixed as the time of the first publication. In the
UK and Australia each publication gives rise to a separate cause of action.
The principle was recently confirmed by the English Court of Appeal in
Loutchansky v Times Newspapers Ltd (Nos 2-5) [2002] QB 783. Samuels
JA observation Australian Broadcasting Corporation v Waterhouse (1991)
25 NSWLR 519, that a single publication rule could only be introduced throughout
Australia by statute was approved by Kirby J.
Gaudron J describes the single publication rule as “a legal fiction which deems a widely disseminated communication ... to be a single communication regardless of the number of people to whom, or the number of states in which, it is circulated.” Dow Jones described the Australian position as “primitive” that every publication of defamatory material constitutes a new and separate tort.
Dow Jones submitted the applicable law should be the place where the web servers were maintained, “unless that place was merely adventitious or opportunistic”. Dow Jones recognised the argument that publishers would place their servers in jurisdictions most advantageous to them, but argued that it did not “misuse” this rule, as the location of its servers was not determined for legal considerations. Gleeson CJ, McHugh, Gummow and Hayne JJ stated that “adventitious” and “opportunistic” are words likely to produce considerable debate. The publisher may decide the server’s location based on costs of operation, benefits offered for setting up business or security and continuity of service. The publisher may have servers in two, states or countries.
Callinan J rejected the appellant's submission that publication occurs at one place, such as the place where the matter is provided, or first published. His Honour believed that view “cannot withstand any reasonable test of certainty and fairness.” He expressed concern that publishers would set up in a “defamation free jurisdiction” or, one in which the defamation laws are tilted towards defendants. His Honour questioned “Why would publishers, owing duties to their shareholders, to maximise profits, do otherwise?”
Kirby J listed four reasons for declining an Internet-specific single publication rule. (1) damage to reputation is essential; (2) communication must take place; (3) each time there is a communication, the plaintiff has a new cause of action; (4) the publisher is liable for publication in a particular jurisdiction where that is the intended or natural and probable consequence of its acts.
Gleeson CJ, McHugh, Gummow and Hayne JJ noted that in Firth v State of New York 775 NE 2d 463 (2002), the New York Court of Appeals decided that the one-year statute of limitation in New York runs from the first posting of defamatory matter upon an Internet site and that the single publication rule applies to that first posting. The Australian position on the position of the limitation period is yet to be determined.
Defence considered
Gleeson CJ, McHugh, Gummow and Hayne JJ suggested that “reasonableness of the publisher’s conduct” might be considered “necessary or appropriate” as a common law defence where all of the publisher’s conduct occurred outside the jurisdiction. Their Honours identified relevant circumstances as “including where that conduct took place, and what rules about defamation applied in that place or those places”. Their Honours drew an analogy with the developing defence of innocent dissemination.
The Internet
Kirby J dealt with the legal
response to the impact of the Internet. His Honour described the
Internet as “essentially a decentralised, self-maintained telecommunications
network” which “demands a radical reconceptualisation of the applicable
common law”. The Internet is “ubiquitous, borderless, global and ambient
in its nature.” The Internet involves “a quantum leap of technological
capacity and the ubiquitous availability of information that demand(s)
a root and branch revision of some of the earlier legal rules in order
to take into account the Internet's special features.” His Honour drew
an analogy between the development of such new legal rules and the Law
Merchant (lex mercatoria) arising out of the general custom of the merchants
of many nations in Europe. “The rules of the common law of England adapted
to the Law Merchant. They did so out of necessity and commonsense.”
Forum Non conveniens
The High Court reaffirmed
its position in Regie National des Usines Renault SA v Zhang (2002) 76
ALJR 551, that “[a]n Australian court cannot be a clearly inappropriate
forum merely by virtue of the circumstance that the choice of law rules
which apply in the forum require its courts to apply foreign law as the
lex causae.”
Kirby J described the dismissal as “contrary to intuition” which “does not represent a wholly satisfactory outcome.” His Honour seemed to consider that a balance is yet to be determined between the human right of access to information and to free expression, and the human right to protection by law for the reputation and honour of individuals, warranting “national legislative attention and … international discussion in a forum as global as the Internet itself.”
The Court determined that the place where damage was inflicted was a most significant factor. The place where the defamation was comprehended and the plaintiff’s connection with the locality were important factors.
According to Gleeson CJ, McHugh, Gummow and Hayne JJ the “spectre which Dow Jones sought to conjure up” that a publisher forced to consider every article it publishes on the Internet “against the defamation laws of every country from Afghanistan to Zimbabwe is seen to be unreal when it is recalled that in all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person may resort.”
Unidroit: Principles of International Commercial Contracts
The Governing Council of the Institute for the Unification of Private Law, Unidroit, has recently issued the English edition of the Principles of International Commercial Contracts. In effect, the Principles are a re-statement of the general principles of contract law acceptable to both common law and civil law traditions. The Principles are the result of the work of a group comprising many distinguished experts in the field of comparative law and international trade law representing the major legal systems and geographical regions of the world. The Principles set forth general rules for international commercial contracts and deal with the topics of the formation, interpretation, substantive validity, performance and non-performance of contracts. A commentary discussing each provision is also included in the text.
It is anticipated that the
Principles will have a number of uses. They could serve as model
provisions for use by commercial entities in contractual negotiations and
arrangements, they could be drawn upon for use in the arbitral area or
they may be used as a means of interpreting and supplementing existing
international instruments. The Principles could also be considered
a type of "ius commune" or "lex mercatoria."
DEVELOPMENTS
NOTE 1
The High Court of Australia determined that the Supreme Court of Victoria had jurisdiction. But - it did not determine liability. The issue of defamation did not reach the Court. Dow Jones made a payment of $450,000 - whilst at the same time claiming the payment was not for defamation. Dow Jones claimed it was in the right and that the payment would not cover Gutnick's legal costs.
NOTE 2
December 2002
A US case handed down three days after the Dow Jones decision. The US case did not know the result of Dow Jones. It decided the case the other way.
Stanley Young v. New Haven Advocate No. 01-2340 (4th Cir., December 13, 2002).
Reversing the court below, the Fourth Circuit Court of Appeals holds that Virginia's Federal Courts may not exercise personal jurisdiction over two small Connecticut newspapers which published articles on the Internet that allegedly defamed a Virginia resident. To be able to assert personal jurisdiction over the newspapers, the court held that they must "(1) direct electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State's courts." The mere posting of an article on a website, even one that addressed conditions in Virginia prisons, was not enough to satisfy this burden. Because the newspapers were small Connecticut-based publications which served almost exclusively Connecticut readers, they would not be subject to jurisdiction in Virginia courts for libel claims arising out of their publication on the articles at issue on the Internet.
To ease overcrowding in its prisons, Connecticut entered into an arrangement to transfer some of its inmates to Wallens Ridge State Prison in Virginia, of which plaintiff Stanley Young was the Warden. This arrangement engendered substantial debate in Connecticut. As a result, each of the defendant newspapers published articles on this subject, which they posted on the Internet. Included within these articles were unfavorable comments about Wallens Ridge.
Alleging that he was defamed by various statements made in these articles, Warden Young commenced this libel suit in Virginia against the newspapers and the reporters who worked on the articles.
Defendants moved to dismiss the suit, arguing that the court lacked personal jurisdiction over them. Defendant New Haven Advocate is a free newspaper published once a week in New Haven, Connecticut. The Advocate has a small number of subscribers, none of whom reside in Virginia. Its content is geared largely to a Connecticut-based readership. Defendant Hartford Courant is a daily newspaper distributed in and serving Hartford, Connecticut. At the time the articles in question were published, the Courant had eight mail subscribers residing in Virginia. Neither newspaper solicits subscriptions in Virginia, nor maintains any offices or employees within the State. None of the defendants' employees visited Virginia in connection with the preparation of the articles in question. Their contact with Virginia was limited to telephone interviews with a Virginia resident. Both newspapers post some of the content from their publications on websites available to Virginia residents.
Holding that the court lacked personal jurisdiction over the defendants, the Fourth Circuit reversed the District Court, and dismissed the suit.
To assert specific personal jurisdiction over a defendant, the plaintiff must show that the defendant "(1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State's courts."
Finding that the newspapers aimed their publications at a Connecticut audience, the court held that they could not be subjected to personal jurisdiction in Virginia because they did not manifest an intent to engage in business or other interactions in Virginia. Said the court:
The facts in this case establish that the newspapers' websites, as well as the articles in question, were aimed at a Connecticut audience. The newspapers did not post materials on the Internet with the manifest intent on targeting Virginia readers. Accordingly, the newspapers could not have "reasonably anticipate[d] being hailed into court [in Virginia] to answer for the truth of the statements made in their article[s]." Calder, 465 U.S. at 790 (quotation omitted). In sum, the newspapers do not have sufficient Internet contacts with Virginia to permit the district court to exercise specific jurisdiction over them.
In reaching this conclusion, the Court determined that the focus of the articles at issue was Connecticut's prison transfer policy, and not the Virginia prison system. It also rejected plaintiff's argument that the court could exercise personal jurisdiction over the defendant newspapers because "(1) the newspapers, knowing that Young was a Virginia resident, intentionally discussed and defamed him in their articles, (2) the newspapers posted the articles on their websites, which were accessible in Virginia, and (3) the primary effects of the defamatory statements on Young's reputation were felt in Virginia."
NOTE 3
15 April 2003
The United Nations to Review the High Court Decision!!!!????
Alpert v Australia
From the Dow Jones Press Release -
Mr. Alpert said:
"I am filing this action with the Human Rights Commission in Geneva because I fear restrictions on the ability of financial journalists such as myself to report truthfully to United States investors on the activities of foreigners who are actively engaged in the U.S. markets. I even fear for our ability to report on U.S. corporations and business people, who might see the High Court's decision as an invitation to attack the U.S. press in a remote forum. Given the differences between the laws of Australia and those of other countries in the Commonwealth and beyond, the impact of Australia's law -- as laid out by the High Court -- could harm journalists throughout the world. Powerful and sophisticated plaintiffs could search out overseas jurisdictions willing to help stifle news coverage that was only directed at local readers in those journalists' home markets."
"Australia has accepted the jurisdiction of the U.N. Human Rights Committee and is obliged to modify Australia's libel laws, should the Committee find that those laws unduly restrict the right of free speech that's protected under Article 19 of the International Convention on Human Rights."
"I hope that the Human Rights Committee will recognize the threat to free speech -- and an informed public -- posed by Australian laws that allow suit against any journalist, anywhere that an article published on the internet can be downloaded. Perhaps the Government of Australia will recognize the need to modify its laws, even before the Human Rights Committee takes up this case."
Dow Jones & Company supports Mr. Alpert in his plea.
***************************
Age Newpaper Article
17 April 2003 Christopher
Webb
Gutnick grist for the learned friends' mill
American publisher Dow Jones & Company Inc - ably assisted by Geoffrey Robertson QC and his pony-tailed lawyer brother Timothy - rolled out the PR machine early yesterday morning.
Timothy, along with London lawyer Mark Stephens and Dow Jones's in-house lawyer Stuart Karle, descended on the media room at the Commonwealth Law Conference with some so-called big news.
No fewer than four press releases or documents were trotted out for this momentous event - the filing of a plea by an American reporter, to wit, one William Alpert, who is on the payroll of Barron's, owned by Dow Jones.
Alpert wrote the piece entitled Unholy Gains which made various allegations against Yossel Gutnick, who later issued defamation proceedings against Dow Jones in the Victorian Supreme Court.
Without rehashing too much history, it is sufficient to say that various procedural issues relating to the matter were heard in the Supreme Court, the Court of Appeal of the Supreme Court and the High Court. Dow Jones lost on all counts and the matter is listed for hearing later this year.
Dow Jones formally unveiled the latest development in the Gutnick-Dow Jones saga at one of the conference's afternoon sessions.
Chaired by defamation supremo Peter Bartlett of Minter Ellison, the session was entitled Jurisdictional Issues Arising from International E.Commerce and Publications via the Internet.
A star-studded panel had been assembled and just about everyone had some connection with the Gutnick V. Dow Jones matter.
The panel included m'learned friends Jeffrey Sher QC and Geoffrey Robertson QC, the barristers for Gutnick and Dow Jones respectively.
There was also High Court Judge Michael Kirby, Dow Jones' Stuart Karle and the company's London lawyer Mark Stephens and Roger McConchie, a Canadian lawyer.
All of them addressed the gathering and when it was his turn Robertson duly announced that on that very day Barron's scribbler William Alpert had filed a plea with the Office of the High Commissioner for Human Rights in Geneva.
Alpert V. Australia was how the 64-page document was headed and an accompanying handout declared "BILL ALPERT HAULS AUSTRALIA TO GENEVA OVER ITS RESTRICTIVE LIBEL LAWS."
Alpert reckoned Australia had violated his right to free speech and said: "I even fear for our ability to report on corporations and business people, who might see the High Court's decision as an invitation to attack the US press in a remote forum."
Bravo, Bill, but no one is quaking in their boots on these shores, least of all Jeffrey Sher, the barrister acting for Gutnick.
"It looks as though the thing has been stage managed. It has all the appearances of a PR stunt," said Sher yesterday.
"It's hard to imagine this journalist who has never been sued having any right to complain about anything," he said.
"It seems a little odd to me that he (the journalist) regards himself as having such a grievance that he wants some international body to tell the Australian High Court that it got it wrong.
"But no doubt the matter will be looked into and I would expect that I might have an ally in this particular exercise, namely the Australian government solicitor who I daresay will take up the cudgels for the High Court of Australia.
"I'm not quaking in my boots. Thus far the score is Gutnick: seven, Dow Jones: nil," he said to much audience laughter.
To which Geoffrey Robertson responded, again to much mirth: "There are 18 judges on the Human Rights Court."
Meanwhile, there was plenty of other legal business discussed at other sessions attended by the 1600 or so judges, lawyers and other law-types.
Principal speaker Justice Stephen Charles at The Liability of Advocates session said: "It was a good spirited debate. We had a strong opposing view put by the president of the Canadian Bar Association saying that the immunity should not exist and, insofar as it does, should be abolished ..."
Justice Hartley Hansen said the conference was very worthwhile.
"It's an opportunity to meet people from a very wide range of countries.
"There are a lot of judges here which is attractive from our point of view and there were a very good, wide-ranging selection of topics."
Justice Marilyn Warren said: "It was very useful, verystimulating and challenging and much food for thought. I will go away and reflect on everything I've heard."
http://www.theage.com.au/articles/2003/04/17/1050172662897.html
NOTE 4
25 April 2003
The US Supreme Court denied certiorari, without opinion, in Healthgrades.com v Northwest Healthcare Alliance. This denial lets stand the judgment of the US Court of Appeals (9thCir) holding that the US District Court (WDWash) has personal jurisdiction over an out of state defendant in defamation case, based solely upon publication of its allegedly defamatory statements in its internet web site. The lower courts, and foreign courts, have issued many judgments in the last few years, some of which are inconsistent, which leave considerable uncertainty as to when a court has personal jurisdiction over a distant defendant, whose internet based conduct serves as the basis for the claim, and personal jurisdiction. The Supreme Court passed up an opportunity to bring some clarity to this issue.
Background
HealthGrades.com (HG) publishes
ratings of health care providers in a web site. It is based in the state
of Colorado. It is incorporated in Delaware. Northwest Healthcare Alliance
(NHA) provides health care services in the state of Washington, where it
is also incorporated. HG rated NHA "average".
District Court
NHA filed a complaint in
state court in the state of Washington against HG alleging defamation.
HG removed the action to the U.S. District Court (WDWash), and then moved
to dismiss for lack of personal jurisdiction.
The District Court wrote in its Order Granting Defendant's Motion to Dismiss, 13 June 2001, that "Courts confronting jurisdictional challenges based on the maintenance of internet websites have developed an analytical doctrine in which the sites are placed somewhere along a ‘broad spectrum of internet use’ with interactive websites, on one hand, and passive websites, on the other, representing the spectrum's poles." It added that "Truly passive websites, which are generally accessible and simply post information available to the visitor, without more, do not support the exercise of personal jurisdiction over the passive website."
The District Court determined that HG's website is passive, and dismissed the complaint for lack of jurisdiction in Washington.
Court of Appeals
The US Court of Appeals
(9thCir) reversed, in a judgment which it designated as non-precedential,
and which it did not publish.
The Appeals Court wrote that "Because most Internet activity occurs in cyberspace, the Internet presents special consideration in personal jurisdiction analysis, and the law in this area can fairly be described as in its infancy."
It continued "Thus far the
Ninth Circuit has endorsed two tests for determining whether an out-of-state
web site operator's activities amount to purposeful availment of the forum
state rendering the exercise of personal jurisdiction over the out-of-state
web site operator constitutionally
permissible: 1) the sliding scale approach, as articulated in Cybersell
... and 2) the effects test, endorsed by the Supreme Court in Calder
v. Jones, ... , and adopted by the Ninth Circuit in Panavision
..."
The Appeals Court continued “The effects test is employed when the harm allegedly suffered by plaintiff sounds in tort. ... Under this approach, the exercise of personal jurisdiction over an out-of-state defendant is proper if the defendant: 1) engaged in intentional actions; 2) expressly aimed at the forum state; 3) causing harm, the brunt of which is suffered -- and which the defendant knows is likely to be suffered -- in the forum state.”
The Appeals Court added that since the plaintiff sued for defamation, which is a tort, the effects test should be applied. It then held that under this effects test the exercise of jurisdiction over the defendant, HG, is permissible.
It explained that "has purposefully interjected itself into the Washington state home health care market through its intentional act of offering ratings of Washington medical service providers. This act was expressly aimed at plaintiff's forum state, since defendant was well aware that its ratings of Washington home health care providers would be of value primarily to Washington consumers. Though defendant gleaned its information from various public sources, including the federal government, the information was obtained originally from Washington sources, and the allegedly defamatory rating received by plaintiff on defendant's web site concerned the Washington activities of a Washington resident. Finally, the brunt of the harm allegedly suffered by plaintiff occurred in Washington -- where plaintiff is incorporated, where plaintiff has its principal place of business, and where plaintiff's reputation is likely to suffer if in fact it has been injured by defendant's actions. The effects, therefore, of defendant's out-of-state conduct, were felt in Washington, plaintiff's claims arise from that out-of state conduct, and defendant could reasonably expect to be called to account for its conduct in the forum where it understood the effects of its actions would be felt."
Petition for Writ of Certiorari
HG asserted in it petition
that "The ‘effects test’ doctrine of Calder v Jones ... cannot be
applied to create personal jurisdiction based on the maintenance of an
internet web site which has uniform, nationwide application."
HG cited several case from other circuits, including ALS Scan v. Digital Services Consultants, 293 F.3d 707 (4th Cir. 2002), Young v. New Haven Advocate, 315 F.2d 256 (4th Cir. 2002), and Revel v. Lidov (5th Cir. Dec. 31, 2002).
Other Judgment
Young v New Haven Advocate,
like HealthGrades, involves a claim of defamation. But the 4th Circuit
applied a different analysis, and reached the opposite result. Thus, the
Supreme Court denied certiorari, despite there arguably being a split between
the circuits (if a non-published opinion can create a split).
In Young v New Haven Advocate, the Virginian Court held that it does not have jurisdiction over two small newspapers, and their editors and reporters, located in Connecticut, who wrote allegedly defamatory stories about a Virginia prison warden and published them on the internet. The Court held that the web publication did not establish minimum contacts because the newspapers are not directed at a Virginia audience.
Relying on ALS Scan and International Shoe v Washington, 326 U.S. 310 (1945), the 4th Circuit wrote that "The facts in this case establish that the newspapers' websites, as well as the articles in question, were aimed at a Connecticut audience. The newspapers did not post materials on the Internet with the manifest intent of targeting Virginia readers. ... In sum, the newspapers do not have sufficient Internet contacts with Virginia to permit the district court to exercise specific jurisdiction over them."
On the other hand, perhaps the judgments in HealthGrades and Young v New Haven Advocate, are consistent, because a newspaper, even if published on the internet, is still aimed at a local audience, while a health care rating service is aimed wherever the rated health care providers are located.
The 9th Circuit's judgment reached the same result as the High Court of Australia’s case of Dow Jones v. Gutnick. However, while the results were the same (personal jurisdiction exists where the allegedly defamed party is located), the analyses differed.
The Australian Court wrote in the Gutnick case that "defamation is to be located at the place where the damage to reputation occurs. ... In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done. Ordinarily then, that will be the place where the tort of defamation is committed."
NOTE 5 - 22 May 2003
Harrods Limited v Dow Jones & Co Inc [2003] EWHC 1162 (QB) (May 22 2003).
The Harrods Case involved an article that appeared in Dow Jones's publication the Wall Street Journal and on its website www.wsj.com, both of which are published from the United States. Harrods commenced defamation proceedings against Dow Jones in England. The English court was asked to rule on whether it could hear the claim or whether it was more appropriate for it to be heard in the United States.
Justice Eady acknowledged the limited amount of publication in England (only 10 copies of the Wall Street Journal were circulated in England and there were very few English hits to the Wall Street Journal website). However, the judge said that where a company or person has a reputation to protect in England, even though there has been limited publication in England, that person has the right to seek to vindicate its reputation in England.
The judge rejected the United States' 'single publication' rule, which provides that a defendant should only be sued in the place of the first publication of the defamatory material. His Honour said that English law recognises that publication can occur in a multiplicity of places, with each publication founding a separate action.
Once again a Dow Jones publication has led to a groundbreaking ruling on jurisdiction. Although this decision was based on online and offline publication, it will equally apply if publication is via the Internet only. If a target of a publication is based in England, then an online or offline publisher would do well to check English defamation laws before publishing.
The other feature of this case is that the New York courts were asked to intervene but declined to do so. The New York judge recognised that the parties had a more appropriate remedy through the English proceedings. However, both the New York and English judges also recognised that when it comes to enforcement of any damages award in the United States, Harrods may face an uphill struggle to have its award recognized, given US concepts of freedom of speech. Therefore, the English courts may offer vindication of a reputation, but obtaining an enforceable damages award will be more difficult.
http://www.internationallawoffice.com/
*****
Dow Jones v Harrods 02 Civ.
3979. (October 2002)
The Wall Street Journal's bid to have a federal judge in New York block a purportedly frivolous libel suit in England has been denied.
In a case that started out as an April Fool's joke, Judge Victor Marrero of the Southern District of New York declined to apply the Declaratory Judgment Act and issue a ruling preventing Harrods department store from suing the newspaper.
"To the question 'What is in a joke?' this lawsuit gives a decidedly wooden answer: a federal case," Judge Marrero said in Dow Jones & Co. Inc v. Harrods Ltd., 02 Civ. 3979.
The dispute began on March 31, 2002, when a mock press release announcing Mohammed Al Fayed's intention to offer shares in a floating version of Harrods moored in the Thames River was misinterpreted by The Wall Street Journal as an announcement to "float shares." The newspaper ran an item on the supposed offering on April 1.
After realizing the hoax, the newspaper published a correction the following day. But three days later, on April 5, it printed an item about the April Fool's joke, in which it conceded being taken in by the prank. And although the newspaper intended the piece to be tongue in cheek, Al Fayed and Harrods were not pleased by "The Enron of Britain?" headline.
Lawyers for Harrods said the article caused serious damage to the company's reputation, and demanded a correction and an apology as well as the payment of "substantial damages."
When the Harrods lawyers asked for disclosure of Wall Street Journal circulation figures and the number of hits on the newspaper's Web site for Great Britain, Dow Jones & Co. Inc., the paper's parent company, filed suit in the Southern District of New York on May 24 seeking to block a London action that Harrods ultimately filed five days later.
Judge Marrero said that Dow Jones was eager to avoid a trial in Britain because libel laws there are far more friendly to plaintiffs.
He said the Declaratory Judgment Act, 28 U.S.C. § 2201(a), "was designed as a means to facilitate early and effective adjudication of disputes at a time when a controversy, though actual, may still be incipient, but before it expands into a larger conflict."
But Marrero said the case fell short of being an "actual controversy," because Dow Jones had offered only an "abstract tower of hypotheticals stacked like a house of cards on suppositions piled on top of speculations."
The judge said that if he were to grant the relief sought by Dow Jones, "the conflict may be fully resolved," but only if the courts in the United Kingdom and elsewhere recognized and enforced the New York court's judgment.
Dow Jones had argued that a declaratory judgment was appropriate because it would be freed from "vexatious and oppressive" litigation abroad. The company said that its assets in the United Kingdom were minimal, that no court in the United States would find for Harrods under the law of defamation in this country, and that the expense of defending the action would be significant.
Essentially, Marrero said the company was seeking to apply the act "as a defensive shield, a preemptive means to immunize a litigant" from the costs of litigation.
But Marrero said there was nothing in the statute or the pertinent case law that supports using the act to serve "such a sanctuarial purpose." The judge said it made no difference that the "asserted harmful conduct relates to an exercise of First Amendment rights."
SETTLED DOCTRINE
Moreover, the judge said,
it is settled doctrine that the "authority of federal courts to enjoin
foreign lawsuits" involving litigants within their jurisdiction "should
be used sparingly and granted only with care and restraint."
And even though Dow Jones considered the April 5 article as a "jocular response to Harrods' April Fool's prank," and the judge doubted whether there was any real injury caused by the Enron remark, he said it could not be "summarily declared" that the Harrods action must be dismissed as a matter of law "as frivolous and motivated by bad faith."
http://0ldfox.blogspot.com/2002_10_01_0ldfox_archive.html
Note 6
Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75
- was brought against Dow Jones & Co. Inc., publisher of the Wall Street Journal, for an article published online. The issue was whether Yousef Jameel, a Saudi businessman could prove that the article had caused him "substantial harm" and whether it was proper for Jameel to sue in the UK rather than in a US court, where the article had been uploaded. Lord Phillips, writing for the court, found "that it would not be right to permit this action to proceed. It would be an abuse of process to continue to commit the resources of the English court, including substantial judge and possibly jury time, to an action where so little is now seen to be at stake."
Jameel sued after the Wall Street Journal Online published an article online that contained a link to a document showing that Jameel had contributed or been approached to contribute money to al-Qaeda. The article, entitled "WAR ON TERROR, List of Early al Qaeda Donors Points to Saudi Elite, Charities," had been posted on www.wsj.com on Mar. 18, 2003, and was archived shortly thereafter but remained available until July 2003 when it was removed altogether. The article included a link to a document that had been recovered from a terrorist group in Bosnia. That document showed what was called "the Golden Chain" - a list of twenty names of prominent Saudi individuals who had either contributed or been approached to contribute money to al-Qaeda in 1988 when the group was fighting against the invasion of Afghanistan by the Soviet Union.
In deciding the case, the court considered how many people had accessed the online article in the United Kingdom. The court said that the Wall Street Journal Online, which allows only subscribers access to its articles, had about 6,000 subscribers in the United Kingdom. However, technical research by Dow Jones showed that only five subscribers had actually accessed the article and seen Jameel"s name on the list. In addition, Dow Jones informed the court that three of those five who had accessed the article were associated with Jameel. The other two subscribers" identities were not released for privacy reasons; however, neither had any knowledge of or connection to Jameel. In essence, the court ruled that without a "substantial" publication in England, there was no damage to Jameel"s reputation and no way for him to collect damages.
The Jameel case may have toughened the traditional standard for plaintiffs in English defamation law, requiring them to show something more than minimal harm. The court in Jameel also signalled potentially more favourable legal standards for news media defending against international defamation claims by choosing not to follow the reasoning of a previous defamation case brought against Dow Jones in Australia.
Note 7
Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471
MERKEL J
para 43 - the use of a trade mark on the Internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded. Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor used the mark in that jurisdiction when the mark is downloaded.
See also paras 16-26
TALK ON JURISDICTION AND THE INTERNET
Peter Nygh
BRISBANE 19 FEBRUARY 2002
Introduction
The Internet is the most prominent of the challenges to the traditional rules of private international law. It defies, in particular, the traditional rules based on national sovereignty and locality. As the Supreme Court of the United States said in Reno v American Civil Liberties Union after describing the methodology of the Internet: ‘Taken together these tools constitute a unique medium – known to its users as “cyberspace” – located in no particular geographical location but available to anyone, anywhere in the world, with access to the Internet’. It has been said that national legislatures cannot impose their will on it and courts cannot call the actors in the internet before them or seek to regulate their actions. Some, indeed, have spoken about ‘Cyberspace’ as an area lying beyond the reach of municipal law that is either anarchic or must be made subject to its own rules and institutions. The United States government has called for the least governmental interference with the Internet. Is this true? If so, will it be the end of private international law, as we know it?
There are a number of aspects of the technology that challenge existing rules:
- First and foremost the difficulty of locating where certain events have taken place. The heads used in UCPR r 124(1) refer to acts or events taking place in Queensland, such as the place where a contract was entered into (head g), the place where a tort was committed (head k) or the place where the contract was broken, that is to say, where it was mis-performed or should have been performed (head h). How are these to be identified when the event does not take place in a definable geographic spot but in Cyberspace?
· Secondly, there is a problem of identification. All persons entering the system will be assigned an e-mail address, but this does not by itself indicate an address where that person may be found. It may not even disclose that person’s real name. It is true that for addresses outside the United States, there has to be a suffix like ‘fr ‘or ‘de’ to indicate national origin. But it may not in fact correspond with national origin. One does not have to be a resident of the United States or operate from the United States to have a domain name like ‘com’ without a suffix. Most persons using the suffix ‘to’ have nothing to do with the Pacific Kingdom of Tonga. Thus, even connecting factors like the residence of the defendant and plaintiff may be difficult to identify, let alone the personal identity of the contractual partner or tortfeasor.
· Thirdly, there is the enormous reach of the Internet. It is indeed worldwide. It differs therefore in degree at least with earlier means of communication both because of its ease of user and its potential reach. Although the Internet still has its widest use in the United States, Australia is not far behind and it is increasingly used in Europe and is now available in all continents. It is more or less instantaneous and can be availed of by anyone with access to the requisite facilities anywhere in the world. This means that traditional rules in relation to the tort of defamation that favour the place of publication, can give rise to liability anywhere in the world and subject the information content provider to the most stringent liability that exists. Conversely, scandalous messages can be given a world wide circulation. It also means that a person offering goods or services on the Internet may have that offer accepted anywhere in the world and may find itself subjected to stringent consumer protection laws. It will also lead to more frequent infringements of copyright and other intellectual rights of individual countries.
To the best of my knowledge these issues have not as yet been addressed specifically by the revisions of private international law and jurisdiction that have taken place at national and international level. I am not aware of any rule that addresses specifically jurisdiction and choice of law in Internet transactions. The European Community Directive on E-commerce issued in 2000 expressly denies any intention to enact any choice of law or jurisdictional rules: see Article 1(4). As we will see, the Electronic Transactions Act 1999 of the Commonwealth and its Queensland counterpart, the Electronic Transactions Act 2001, both based on the UNCITRAL Model Law on Electronic Commerce of 1996, will have some impact on the existing rules, but are essentially concerned with adapting domestic law to electronic commerce in validating transactions that otherwise might be seen as non-compliant.
The Hague Conference on Private International Law started its consideration of a world-wide convention on the recognition and enforcement of judgments in 1993. At that stage the Internet was only a gleam in Vice-President Gore’s eye. The Special Commission entrusted with preparing a draft convention for consideration at a Diplomatic Conference, completed a preliminary draft Convention on Jurisdiction and Recognition of Foreign Judgments in Civil and Commercial Matters in October 1999. The draft does not contain any direct references to electronic commerce although it is clearly included in its scope. A minor exception is seen in Article 4.2.b of the Preliminary Draft which provides that the requirement of writing for a valid choice of forum agreement can be satisfied by ‘any other means of communication which renders information accessible so as to be usable for subsequent reference’. This is the same as the provision in Article 6(1) of the UNCITRAL Model Law and repeats language that has also been adopted (in relation to the requirement of writing generally) in the federal and Queensland Electronic Transactions Acts. This clearly includes a message sent by e-mail (as well as facsimile) that can be saved on the recipient’s computer or printed from that computer. Some other rules have been drafted with the Internet in mind, although it is not mentioned as such. This is particularly true of Article 7(1)(a) of the Preliminary Draft which contains a type of ‘activity’ clause that clearly includes advertising on the Internet.
The potential application of the provisions of the proposed Convention to the Internet has proven to be very controversial. Some have urged for the adoption of the ‘country of origin’ approach that would favour sellers and publishers (provided they pick the right country). Others support the ‘country of destination approach’, that would favour consumers and plaintiffs generally. As usual, the right balance lies somewhere in between, but that happy medium has not yet been discovered.
Some basic principles
We should not, however, throw up our hands in despair and decide that we face such a radical new entity that the existing rules are totally useless. Some of them may be, but one should not throw out the baby with the bath water to repeat a famous saying. A few basic principles should be kept in mind:
· The Internet exists
in this world and is not out of it. Whether States should do so or not,
may be another question, but most of those who act through the Internet
can be found within both legislative and judicial jurisdiction of nation
states. Cyberspace is not a ‘no-man’s land’ where anarchy reigns.
Indeed the experience of the Yahoo! case in France shows that national
law and courts can have a considerable influence on the Internet.
· Some of the problems
listed above, can be solved by enhanced technology. Software is being advertised
offering so-called ‘geolocation’ services that claims to let the user know
in real-time where each visitor to a web site is located. Needless
to say, I cannot judge the correctness of such claims.
· The rules must also, in so far as possible, be ‘medium neutral’, that is to say, being able to be applied both in electronic and in other forms of commerce.
· We should not throw existing rules of private international law overboard when they are applicable to the Internet, such as the principle of autonomy or those principles that look to the place of acting or place of harm. There may have to be recourse to presumptions to cover cases where those places cannot be readily identified, but the changes should be incremental rather than revolutionary. As the Americans say: ‘if it ain’t broke, don’t fix it’.
· We should not try to meet all possible cases of possible abuse of the Internet, especially when they are not peculiar to the Internet. For instance, the offender who cannot be identified is a common general problem. It is impossible to invent a rule against it, unless one adopts a general insurance scheme.
· We should not give any significance to the places where the Service Provider has given access to, or conveyed through, any messages, unless the Service Provider has committed a separate act or default to render itself liable. In other words, subject to that last exception, only the circumstances surrounding the information provider and the user should be relevant for jurisdictional and choice of law purposes. There appears now to be a consensus that the service provider should not bear any liability in respect of any information routed through it or even cached or hosted by it as long as it was not aware of the nature of the internet content: see Broadcasting Services Act 1992 (Cth), Fifth Schedule clause 91(1) as inserted in 1999; see also the more restrictive European Community Directive on E-commerce of 2000, Articles 12, 13 and 14. It follows from this that those activities, as long as the ISP remains unaware (and no inquiries need be made), should have no legal significance. Even in cases where the Service Provider has intervened wrongfully, that act should only be relevant jurisdictionally as regards the Service Provider’s own liability.
Jurisdiction in contracts
In the discussions in The Hague it was generally accepted that no problems arise in cases where goods and services are ordered on the Internet but are delivered ‘off-line’. If the goods as delivered turn out to be defective or are not delivered at all, the ordinary rules can be applied. The Electronic Transactions Act means that a contract concluded by electronic means has the same force and effect as a contract concluded by mail and the proper law of such a contract can either be stipulated in that correspondence or deduced from the transaction as a whole.
The only possible problem may arise if the plaintiff seeks to rely on the contract having been made in Queensland. The established common law rule is that the place of contracting occurs where the last act necessary to create a binding obligation between the parties took place. This is the place where the acceptance of the offer takes place. Under the ancient ‘post box rule’ that was the place from where the acceptance was mailed or telegraphed. That principle does not apply to instantaneous communications. Since telephone and facsimile messages have been regarded as ‘instantaneous’, I have little doubt that an electronic message would be similarly regarded. Consequently, the place of contracting will be the place where the message of acceptance is received.
That may raise the next question: where was it received? Fortunately the Electronic Transactions Act 2001 (Qld) comes to our assistance with a useful presumption.
25 Place of dispatch
and receipt
(1) Unless otherwise
agreed between the originator of an electronic communication and the addressee
of the communication —
(a) the communication is
taken to have been dispatched from the originator’s place of business;
and
(b) the communication is
taken to have been received at the addressee’s place of business.
(2) For subsection
(1) —
(a) if the originator or
addressee of the communication has more than 1 place of business, and 1
of the places (the “relevant place”) has a closer relationship to the underlying
transaction the communication is about — the relevant place is taken to
be the originator’s or addressee’s only place of business; and
(b) if the originator or
addressee has more than one place of business, but paragraph (a) does not
apply — the originator’s or addressee’s principal place of business is
taken to be the originator’s or addressee’s only place of business; and
(c) if the originator or
addressee does not have a place of business — the place where the originator
or addressee ordinarily resides is taken to be originator’s or addressee’s
place of business.
Thus, if the addressee’s place of business is in Brisbane, it does not matter that the acceptance was received in an Internet Café in Sevilla. It does not even matter that the sender knew the addressee was in Spain unless an agreement can be inferred to the contrary. There is a problem if the sender of the message does not know that address. But that is the sender’s problem. As shown above, there are means of finding out and the usual commercial diligence should apply. The situation does not differ from that in mail or telephone orders.
As regards performance ‘on-line’, the position is a bit more complex. If the complaint is about delivery of defective goods, eg infected software, the place of breach is the place where the software was received. That can be determined by reference to the above legislation.
If the goods are never sent, the place of breach is the place where the obligation is due to be performed. In the case of delivery ‘on-line’, it is fair to assume that this is the place where downloading of the material was expected to take place. Although the above provisions of the Electronic Transactions Acts would not be applicable in a case where no message was sent, I would argue that in the absence of any information given as to the place of location, it would be presumed to be the place of business/residence of the buyer.
Jurisdiction in tort
Some torts are peculiar to the Internet, such as ‘spamming’ or infecting users with viruses either deliberately or negligently. More common have been suits alleging defamation on the Internet. A number of such cases have arisen in Australia. Of these the only conclusive decision so far is that of Hedigan J of the Supreme Court of Victoria in Gutnick v Dow Jones, Inc that is currently pending before the High Court.
As far as jurisdiction is concerned, the Supreme Court of Quensland can assume jurisdiction in respect of a defamation (or indeed any other tort) on the basis of UCPR r 124(1)(l), that is to say, that the plaintiff suffered damage within the jurisdiction in whole or in part as a result of the tort regardless of where the tort was committed. That provision has received a very wide interpretation and it was one of the bases upon which Hedigan J assumed jurisdiction in Victoria where the plaintiff resides.
However, if all the plaintiff has suffered is residual damage, even in the place of residence, it is still open to argue that the court should decline jurisdiction in its discretion on the ground of forum non conveniens. That is what occurred in Voth v Manildra Flour Mills Pty Ltd where the majority of the High Court found that the tort in question had been entirely committed in the United States (Brennan CJ dissenting). For that reason, the location of the place of wrong is an important issue in the Gutnick case.
The traditional rule in relation to inter-country defamation is that the tort takes place where the publication is made, not where it is written or spoken. That may mean, as Simpson J remarked, in Macquarie Bank v Berg, that a defamatory message placed on the Internet, is published in any place where it is accessed. That was also the conclusion of Hedigan J who held that the tort had been committed in Victoria where the offending message had been accessed by certain persons. But Simpson J also pointed out an inconvenient result from that proposition: does this mean that the defendant is potentially liable to suit and possibly the law in any jurisdiction where the message can be accessed. Or, in other words, can a message originating in the United States and protected by the free speech provisions of the First Amendment create a liability in Singapore with its stringent defamation laws?
The alternative that was rejected by Hedigan J is to favour the country of origin, in that case the United States. His Honour did not accept this since it would enhance the peculiar standards of the US and its corporations at the expense of Australian plaintiffs, although, of course, Australians could also be at the receiving end.
There are two issues here: firstly can one maintain the multiple publication rule whereby a separate tort of defamation is committed in each place where the message is received. It lies at the foundation of decisions such as Gorton v ABC (1973) 22 FLR 181 and the House of Lords recently refused to abandon it in Berezovsky v Michaels [2000] 2 All ER 986. But it leads to the very problem illustrated by Simpson J in relation to the ubiquitous internet. Secondly, what should be the rule if one moves to a ‘single tort’ concept? One solution is to revert to the basic test propounded by the Privy Council in Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458 at 468 and approved by the High Court in Voth:
The right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question: where in substance did the cause of action arise?
If one proceeds on the basis of a ‘single tort’ of defamation, it could be argued that in essence that was the place where the message was composed and ‘published’ by placing it on the computer for others to access. Hedigan J felt that this would create ‘defamation havens’. Others may argue that it is the law of countries like the UK, Australia and Singapore that are too restrictive. Perhaps a compromise solution may also to look at the country where the message was intended for. Thus, a message essentially designed for a US audience, if defamatory, creates in substance a cause of action that arises in the US. That argument finds some support in the High Court’s remark in Voth that ‘the statement was in substance made at the place to which it was directed, whether or not it is there acted upon’. (1990) 171 CLR 538 at 568. Admittedly, that remark related to a negligent misrepresentation.
The High Court will be the first highest national court to deal with this issue.
A very common action nowadays is for misleading or deceptive conduct under the TPA or FTA. That is a fertile ground for action in respect of messages on the Internet. Assuming that the culprits are corporations incorporated or resident outside Australia, the question would arise whether the offending conduct took place in Australia (or Queensland) if the message was accessed here. By analogy with cases on tortuous misrepresentation, it has been held that a breach of s 52 by a misleading or deceptive statement occurs where the statement is received. But in Voth the majority of the High Court laid down a somewhat more restrictive test: ‘the statement was in substance made at the place to which it was directed, whether or not it is there acted upon’. (1990) 171 CLR 538 at 568. The question then arises whether the person placing the message on the web site directed it to the whole world, or only to a certain part of it. That question is, as the High Court put it, ‘to be determined by reference to the events and by asking … where in substance the act took place’.
Damage control
Choice of law and choice
of forum clauses
That is obviously a stratagem usable especially in Business to Business transactions. However, as the decision of the High Court in Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418, shows, it cannot be used in the face of consumer protection provisions, such as are found in s 67 of the TPA or s 8 of the Insurance Contracts Act 1984.
Blocking mechanisms
This is a technical issue on which I am not an expert. The French court in the Yahoo! Case accepted evidence that messages could be filtered to avoid reaching users in France. But it was obviously too difficult for Yahoo! Because it deleted the program shortly after the judgment facing a penalty of FF 10.000 per day.
Disclaimers and refusals to deal
Of course, a seller is not bound to accept an offer to buy. As indicated before, it may be possible to discover the whereabouts of the offeror in most cases. A seller who finds that the consumer protection laws in country A are too onerous need not do business there.
With defamation it is a bit more difficult. In Berg the defendant had posted a disclaimer that his web site was protected by US law. But that is of dubious value especially where the dispute arose in NSW. If, of course, the single tort of defamation rule were adopted with a test of direction (or targeting as it is called in the US), then while a simple disclaimer would not be sufficient, a direction in fact or deed to a particular country would be relevant.
Limitation to damages suffered in the forum
This was a principle long known to French law and adopted by the European Court of Justice in Fiona Shevill v Agence Presse France. It is also supported by the decision of the majority of the Full Court of the Federal Court in David Syme & Co v Grey (1992) 115 ALR 237 (Neaves and Gummow JJ; Higgins J dissenting). It was hailed in The Hague as a method to avoid forum shopping although others worried about the need to bring multiple actions in various countries if the damage occurred partly in each. However, according to Shevill, global damages would be available in the country where the message was originally printed (in that case a newspaper published primarily in France). However, in Gutnick the plaintiff made it clear that he was only seeking to recover damages suffered in Victoria.
Forum non conveniens
I have already touched upon
this. Obviously, that could solve the problem (if they know of the institution
there) referred to by Simpson J of the plaintiff suing in Tajikistan in
order to take advantage of its laws if there was nothing more in that country
than accessibility. But in Berezovsky v Michaels the House of Lords was
clearly flattered that the plaintiff, a Russian, chose to sue in England
as against his own country (because vindication there would be suspect)
or in the United States where the defamatory material originated (because
he might be faced with a defence based on the First Amendment).
http://www.gtlaw.com.au/
The approach by the Attorney
General of Minnesota was to impose jurisdiction where any person detrimentally
affected the consumers of Minnesota. The Attorney General commenced
several prosecutions and issues warnings. For example, the Attorney
Genral prosecuted the owner of an Internet gambling site, where the site
was located outside the jurisdiction, namely Belize, where it accepted
bets from Minnesota residents.
In one high-profile case, several anti-racism groups based in France sued the US company Yahoo for auctioning Nazi memorabilia online. France, which lost tens of thousands of its citizens to the Holocaust, has strict laws aimed at squelching racist expression. It is illegal to display or sell racist material in France. Yahoo and free speech advocates argued that the case would set an international legal precedent regarding the right of one country to reach across borders and impose its own laws on websites based in other nations. "The French approach would lead to a lowest common denominator world where the most restrictive rules of any country would govern all speech on the Internet," said staff counsel with the Centre for Democracy and Technology in Washington, DC. "What happens when the government of China decides to prosecute a human rights group in the US for publishing dissident materials that are legal here but illegal there?"
Another argument in favour of creating a separate Internet jurisdiction is it would clarify issues relating to responsibility. For example, who is responsible when offensive material is posted? The person who posts the material? The operators of the
website/newsgroup/mailing list where the material is posted? Or the Internet Service Provider (ISP) that carries the material?
The UK-based Internet Service Provider (ISP) Demon Internet found itself in hot water when a physicist, Dr Laurence Godfrey, sued over comments posted to a newsgroup. Dr Godfrey says he launched the legal action because Demon ignored his requests to remove the offending material. When it became apparent that the UK courts would not rule in its favour, Demon decided to settle. The case infuriated free speech advocates, who compared it to holding a telephone company responsible for conversations held over its lines, or the post office liable for the content of the letters it delivers. "This is going to have a chilling effect on free speech" said Adam Taylor, head of the e-commerce and technology group at the London law firm Withers. "As a result of this settlement, Internet Service Providers are going to be very nervous. When anybody makes the slightest complaint about anything, they're going to be pulling material down. If they don't, they leave themselves liable to the kind of defamatory actions taken in this case."
One of the big concerns about creating a separate jurisdiction for the Internet is deciding what standards should apply. If cyberspace could be defined as a "community", then consensus needs to be reached on community standards. The Internet already contains a high number of communities that make and enforce individual rules and obligations. People who abuse others online or use the Internet to publish offensive or obscene material can have their Internet accounts terminated. Those who post offensive material on newsgroups or abuse others in chat rooms are also censured by other users. Some argue that this is insufficient. There have been several cases where people publishing offensive material have had their accounts terminated and then moved to another ISP. If there was a standard set of laws governing the Internet and a central enforcement agency, there would be less possibility of this happening.
As well, it could be argued that a separate Internet jurisdiction would make it easier for law enforcement agencies to stamp out child pornography, extremist "hate sites" and other Net nasties.
Some believe that if the Internet had a separate jurisdiction, then the strictest community standards would apply in each case. This means the future of the Internet as a unique forum for free expression and vigorous discussion could be placed in jeopardy.
International
Jurisdiction in Cyberspace:Which States May Regulate the Internet? Stephan
Wilske and Teresa Schiller
http://www.law.indiana.edu/fclj/pubs/v50/no1/wilske.html
The John Marshall Law School: Cyberspace Law - Jurisdiction Page
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
Cybersell, Az. v. Cybersell, Fla., No. 96-17087 (9th Cir., Dec. 2, 1997).
Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996). affirmedCiv. 96-9344 (2d.Cir., Sep. 10, 1997).
Digital Equipment Corp. v. Altavista Technology, Inc. 960 F. Supp. 456 (D. Mass. 1997).
Inset Systems, Inc. v. Instruction Set, Inc. 937 F. Supp. 161 (D. Conn. 1996).
Maritz, Inc. v. CyberGold, Inc. 947 F. Supp. 1328 (E.D. Mo. Aug. 19, 1996). preliminary injunction denied, 947 F. Supp. 1338 (Aug. 29, 1996)
Panavision International, L.P. v. Toeppen 938 F. Supp. 616 (C.D. Cal. 1996). summary judgment against defendant Toeppen, 945 F. Supp. 1296 (1996). summary judgment for defendant Network Solutions, Inc., 41 U.S.P.Q.2d 1310 (Nov. 27, 1996). Affirmed by the Ninth Circuit (Apr. 17, 1998)
United States v. Thomas 74 F.3d 701 (6th Cir.)
Zippo Mfg. Co. v. Zippo Dot Com, Inc. 952 F. Supp. 1119 (W.D. Pa. 1997)
Timeline
30 October 2000
Barrons publication
28 August 2001
Gutnick v Dow Jones & Co Inc [2001] VSC 305
Hedigan J
21 September 2001Dow Jones Company Inc v Gutnick [2001] VSCA 249
Buchanan JA and O'Bryan AJA.
10 December 2002
Dow Jones & Company Inc. v Gutnick [2002] HCA 56
21 March 2003 (hearing 13 and 14 May 2002)
Gutnick v Dow Jones (No 2) [2003] VSC 79.
Bongiorno J (action to strike out 6 paragraphs of defence successful)
16 October 2003
Gutnick v Dow Jones & Co Inc (No 3) [2003] VSC 407
Bongiorno J (re amending defence)
26 April 2004
Gutnick v Dow Jones & Co Inc (No 4) [2004] VSC 138
Order – amendment of defence permitted – based on High Court decision Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5; (2004) 78 ALJR 346; (2004) 204 ALR 193.
***
1 April 2002 – April Fools Joke
5 April 2002 – Defamatory comments "Enron of Britain"
11 October 2002
Marrerro, J.
Dow Jones, Inc. v. Harrods, Ltd., 237 F. Supp.2d 394 (S.D.N.Y. 2002).
10 October 2003
DOW JONES & COMPANY, INC v HARRODS LIMITED
(Argued: September 23, 2003 Decided: October 10, 2003) 2nd Circuit
FEINBERG, KATZMANN, AND RAGGI, Circuit Judges.
***
Macquarie Bank Limited & Anor v Berg [2002] NSWSC 254 (3 April 2002)
Procedural by Smart AJ
32 Counsel for the defendant contended that it was a moot question whether the placement on the Internet in the United States of America of arguably defamatory material accessible in New South Wales amounted to publication of the material in New South Wales. Counsel reserved the right to argue this point in an appellate court or at a later stage in the present proceedings. It was not a point to be argued at this stage.
Macquarie Bank Limited & Anor v Berg[2002] NSWSC 1110 (22 November 2002) Smart AJ
41 The defendant submitted that the "pull" technology means that the decision to bring the matter complained of into the jurisdiction was that of the recipient and that neither the identify of the recipient nor the jurisdiction into which the matter would be sent could have been reasonably anticipated by the defendant on the material before the Court. In this respect the position was distinct from that in Gutnick v Dow Jones & Co Inc [2001] VSC 305 as Dow Jones had subscribers in Victoria for its journal who had paid for the material to be sent via the Internet into that jurisdiction. In the course of that judgment Hedigan J stated that Dow Jones had programmed its computers to decline requests for material. Hedigan J doubted the accuracy of the remark of Simpson J in this case that once published on the Internet, material might be transmitted anywhere in the world as an Internet connection. I doubt if that was what she intended to say. Gutnick was not concerned with the World Wide Web because Dow Jones only put its material on for subscribers or trial subscribers.
55 The defendant submitted that the case was overwhelmed by the application of Californian law and that the indications were that the plaintiffs could not win in California because of the law as to free speech. Until the facts are found definitively it is too early to say which law applies. On the facts, this case is in a class of its own.
What is meant by:Dr Alan Davidson
jurisdiction
conflict of laws
private international law
forum
proper lawWhat is the 3 stage test in Zippo's case
Zippo Mfg. Co. v. Zippo Dot Com, Inc. 952 F. Supp. 1119 (W.D. Pa. 1997)Can the result in Macquarie Bank v Berg [1999] NSWSC 526 (2 June 1999) be justified? Give reasons for and against.
http://www.austlii.edu.au/au/cases/nsw/supreme_ct/1999/526.htmlCompare Gutnick's case and Calder v Jones.
2006
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