Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'antisemitisme

Appellants La Ligue Contre Le Racisme Et L'Antisemitisme ("LICRA") and L'Union Des Etudiants Juifs De France ("UEJF") appeal the District Court's grant of summary judgment in favor of Appellee Yahoo! Inc. ("Yahoo!"). Appellants contend that the District Court lacked jurisdiction, that the case was not ripe, and that the District Court should have abstained from hearing the case. We hold that there was no personal jurisdiction over Appellants and reverse the District Court.

Yahoo! is an Internet service provider which has its principal place of business in Santa Clara, California. Its American website, www.yahoo.com, targets U.S. users and provides many services, including auction sites, message boards, and chat rooms, for which Yahoo! users supply much of the content. Nazi discussions have occurred in Yahoo!'s chat rooms and Nazi-related paraphernalia have appeared for sale on its auction website.

Section R645-2 of the French Criminal Code bans exhibition of Nazi propaganda for sale and prohibits French citizens from purchasing or possessing such material. Although a Yahoo! subsidiary, Yahoo! France, operates www.yahoo.fr in France and removes all Nazi material from its site to comport with French law, French users can still access the American Yahoo! website that carries the Nazi-related discussions and auction items.

In April 2000, LICRA and UEJF discovered that they could access www.yahoo.com in France and view Nazi materials. On April 5, 2000, LICRA sent a cease-and-desist letter to Yahoo! in Santa Clara, California, demanding that Yahoo! prohibit the display of the Nazi materials because the practice was illegal in France. On approximately April 10, LICRA filed a complaint against Yahoo! in a French court, alleging violations of the Nazi Symbols Act. On April 20, UEJF filed a second complaint against Yahoo!, alleging further violations of French law because of the Nazi-related postings. Appellants served Yahoo! with the complaint by using the United States Marshals Service pursuant to the service-abroad requirements of the Hague Convention. Yahoo! challenged the French court's jurisdiction, but the court found jurisdiction was proper under Section 46 of France's New Code of Civil Procedure. Both LICRA and UEJF litigated the cases in France.

On May 22, 2000, the French court, at the request of LICRA and UEJF, issued an order requiring Yahoo! — subject to a fine of 100,000 Francs (approximately $13,300) per day — to destroy all Nazi-related messages, images, and text stored on its server, particularly any Nazi relics, objects, insignia, emblems, and flags on its auction site, and to remove any excerpts from Mein Kampf and Protocole des Sages de Sion, books promoting Nazism. The order also required Yahoo! to remove from its browser directories, which are accessible in France, the headings "negationists" and any equivalent category under the heading "Holocaust." The French court further ordered Yahoo! to take all necessary measures to prohibit access to the Nazi artifacts on its site and to warn that viewing such material violates French law. On November 20, the French court reaffirmed its May 22 order, giving Yahoo! three months to comply with the first order and reiterating that fines would accrue daily if Yahoo! did not comply with the order. Appellants used the United States Marshals Service to serve the order on Yahoo! in Santa Clara, California. The imposition of penalties is provisional in France and cannot be imposed without further court proceedings. Yahoo! chose not to pursue its appeal in France, and its right to appeal expired on February 7, 2001.

Yahoo! has not fully complied with the French orders. Some items, such as copies of Mein Kampf, coins, and stamps, are still available through www.yahoo.com. Yahoo! has, however, modified its hate-speech policy to preclude use of its services to promote groups that are known for taking violent positions against others because of race or similar factors. Yahoo! also removed Protocole des Sages de Sion from its site.

On December 21, 2000, Yahoo! filed a complaint in the Northern District of California requesting a declaration that the French court's orders of May 22 and November 20 were not recognizable or enforceable in the United States. LICRA and UEJF filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b) claiming that the District Court lacked in personam jurisdiction over them. Yahoo! thereafter filed a motion for summary judgment claiming that the French orders were in violation of the First Amendment and asserting that a summary declaratory judgment was appropriate because fines were accruing for each day that Yahoo! failed to comply with the French orders. Yahoo! contended that the French judgment and fines would only be collectable in the United States since the French court had prohibited collection from Yahoo!'s French subsidiary and Yahoo! has no other assets in France.

The District Court concluded that it could properly exercise specific jurisdiction over LICRA and UEJF and, accordingly, denied their motion to dismiss. The District Court then granted Yahoo!'s motion for summary judgment, holding that there was an actual controversy causing a real and immediate threat to Yahoo! and that enforcement of the French orders in the United States would violate the First Amendment. The following day, the District Court filed an amended judgment, declaring that both the May 22 and November 20, 2000, French court orders were unenforceable in the United States.

LICRA and UEJF filed timely notice of appeal challenging the District Court's exercise of personal jurisdiction over them, the ripeness of the case, and the Court's failure to abstain.

The French court's determination that Yahoo! was in violation of French law may not be reviewed by any U.S. court. Yahoo!, however, contends that enforcement of the French court's judgment in the United States would violate Yahoo!'s First Amendment rights. This constitutional claim would presumably be reviewable by any U.S. court able to assert jurisdiction over LICRA and UEJF.

Jurisdiction may be obtained, and the First Amendment claim heard, once LICRA and UEJF ask a U.S. district court to enforce the French judgment. As of yet, the organizations have declined to do so. Rather than wait for the French parties to take action, Yahoo! requested the District Court below to issue a declaratory judgment that enforcement of the French order by U.S. officials would be unconstitutional.

The District Court held that it did have personal jurisdiction over LICRA and UEJF. We review this exercise of personal jurisdiction de novo. Panavision Int'l., L.P. v. Toeppen, 141 F.3d 1316, 1319-20 (9th Cir.1998).

As Yahoo! acknowledges, no basis for general jurisdiction exists because LICRA and UEJF do not have the kind of continuous and systematic contacts with the forum state sufficient to support a finding of general personal jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). We hold that LICRA and UEJF are also not subject to personal jurisdiction under the specific jurisdiction doctrine, which permits jurisdiction over a defendant in a lawsuit "arising out of or related to the defendant's contacts with the forum." Id. at n. 8.

In International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Supreme Court held that "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"

Exercise of jurisdiction is consistent with these requirements of "minimum contacts" and "fair play and substantial justice" where (1) the non-resident defendant has purposefully directed his activities or consummated some transaction with the forum or a resident thereof, or performed some act by which he purposefully availed himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction is reasonable. Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000).

The first requirement, purposeful availment of the benefits of the forum, "ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (internal quotation marks and citations omitted). A defendant must, by his own actions, create a "substantial connection" to the forum state. Id.

In the present case, the District Court found that LICRA and UEJF had purposely availed themselves of the benefits of California. The District Court based this holding on three contacts with the forum: (1) the cease-and-desist letter LICRA sent to Yahoo!; (2) the use of the United States Marshals Service to serve process; and (3) LICRA and UEJF's request to the French court that Yahoo! perform certain acts on its server and remove certain Nazi items from its website in California. The District Court held that these contacts constituted "express aiming," in the sense contemplated by the Supreme Court in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), and by this Court in Bancroft & Masters, sufficient to confer personal jurisdiction because Yahoo! alleged that LICRA's and UEJF's intent was to compel Yahoo! to censor constitutionally protected content in California. We disagree.

In Calder, the Supreme Court elaborated on the "purposeful availment" standard in the tort context. The plaintiff, whose acting career was centered in California, brought a libel suit in California against a reporter and editor of a Florida tabloid. Id. at 784, 788, 104 S.Ct. 1482. The defendants asserted that their employer alone was responsible for the circulation of the article in California and that they should therefore not be subject to jurisdiction in California courts. Id. at 789, 104 S.Ct. 1482. They likened themselves to a welder employed in Florida whose defective product causes injury in California and contended that principles holding the manufacturer subject to jurisdiction in distant states should not be applied to a welder who derives no direct benefit from his employer's interstate sales. Id.

The Court rejected this analogy, stating that the writer and editor were not charged with "untargeted negligence" but rather "intentional, and allegedly tortious, actions ... expressly aimed" at California. Id. at 789, 104 S.Ct. 1482. The defendants knew that the article would have a possibly devastating impact on the plaintiff and that the brunt of any harm would be felt in California. Id. at 789-90, 104 S.Ct. 1482. Under those circumstances, the Court said, the defendants "must `reasonably anticipate being haled into court there' to answer for the truth of the statements made in their article." Id. at 790, 104 S.Ct. 1482.

In Bancroft & Masters, 223 F.3d at 1087, this Court noted that cases since Calder had "struggled somewhat with Calder's import, recognizing that the case cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction." We stated that there must be "something more," and concluded that "something more" was what the Calder Court described as express aiming at the forum state. Bancroft & Masters, 223 F.3d at 1087; see also Calder, 465 U.S. at 789, 104 S.Ct. 1482 ("[T]heir intentional, and allegedly tortious, actions were expressly aimed at California."). We then held that the express aiming requirement of Calder was "satisfied when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state." Bancroft & Masters, 223 F.3d at 1087.

In Bancroft & Masters, the defendant, Augusta National Inc. (ANI), held several federally registered trademarks for "Masters." Id. at 1084. The plaintiff, California-domiciled Bancroft & Masters ("B & M"), registered the domain name "masters.com" for use as its business homepage. Id. When ANI learned of B & M's use of the domain name, ANI sent a letter to B & M's California offices demanding that B & M cease and desist its use of masters.com. Id. at 1085.

More importantly, ANI also sent a letter to Network Solutions, Inc. ("NSI"), the organization charged at the time with regulating domain names. Id. at 1085. That letter triggered NSI's dispute-resolution process, which gave B & M three options: (1) voluntarily transfer the domain name to ANI; (2) allow the domain name to be placed "on hold" such that neither party could use it; or (3) obtain a declaratory judgment establishing B & M's right to use the domain name. Id. B & M chose the third option and filed suit in California; ANI challenged jurisdiction. Id.

B & M contended that ANI's letters constituted purposeful availment under Calder, since ANI triggered NSI's dispute-resolution process in part to wrongfully effect the conversion of B & M's masters.com domain name. Id. at 1087. Although ANI responded that its letters were purely defensive, aimed only at protecting its mark, we adopted B & M's interpretation because prima facie jurisdictional analysis requires us to accept the plaintiff's allegations as true. Id.

Interpreting Calder, we determined that the express aiming "requirement is satisfied when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state." Bancroft & Masters, 223 F.3d at 1087. We concluded that ANI's letters wrongfully initiated the NSI process and that this act was targeted at B & M; thus, it was not presumptively unreasonable to hale ANI into a California court to answer for its allegedly wrongful actions. Id. at 1089.1

Consequently, for LICRA's and UEJF's litigation efforts against Yahoo! to amount to "express aiming," those efforts must qualify as wrongful conduct targeted at Yahoo!.2 We hold that they do not.

France is within its rights as a sovereign nation to enact hate speech laws against the distribution of Nazi propaganda in response to its terrible experience with Nazi forces during World War II. Similarly, LICRA and UEJF are within their rights to bring suit in France against Yahoo! for violation of French speech law.3 The only adverse consequence experienced by Yahoo! as a result of the acts with which we are concerned is that Yahoo! must wait for LICRA and UEJF to come to the United States to enforce the French judgment before it is able to raise its First Amendment claim. However, it was not wrongful for the French organizations to place Yahoo! in this position.

In Bancroft & Masters, 223 F.3d at 1087, because the plaintiff had so alleged, we were required to assume that ANI had initiated the NSI process to effect the wrongful conversion of the masters.com domain name and not merely to protect its own rights. According to this assumption, it was wrongful for ANI to place B & M in the position of having to choose between the three options available to it under the NSI procedures (voluntarily transferring the domain name to ANI, allowing the domain name to be placed "on hold" such that neither party could use it, or obtaining a declaratory judgment establishing B & M's right to use the domain name).

Here, however, the French court has already uphe ld LICRA and UEJF's position with respect to French law. We know that LICRA and UEJF were acting to uphold their legitimate rights under French law. This places the parties in this case in a very different posture than the parties in Bancroft & Masters. As a result, we cannot say here that the parties did anything wrongful, sufficient for a finding of "express aiming," in bringing this suit against Yahoo!.

Yahoo! obtains commercial advantage from the fact that users located in France are able to access its website; in fact, the company displays advertising banners in French to those users whom it identifies as French. Yahoo! cannot expect both to benefit from the fact that its content may be viewed around the world and to be shielded from the resulting costs — one of which is that, if Yahoo! violates the speech laws of another nation, it must wait for the foreign litigants to come to the United States to enforce the judgment before its First Amendment claim may be heard by a U.S. court.

LICRA and UEJF took action to enforce their legal rights under French law. Yahoo! makes no allegation that could lead a court to conclude that there was anything wrongful in the organizations' conduct. As a result, the District Court did not properly exercise personal jurisdiction over LICRA and UEJF. Because the District Court had no personal jurisdiction over the French parties, we do not review whether Yahoo!'s action for declaratory relief was ripe for adjudication or whether the District Court properly refused to abstain from hearing this case.

REVERSED.

Appellants La Ligue Contre Le Racisme Et L'Antisemitisme ("LICRA") and L'Union Des Etudiants Juifs De France ("UEJF") appeal the district court's grant of summary judgment related to a French judgment against Appellee Yahoo! Inc. ("Yahoo!"). Appellants claim that the district court lacked jurisdiction over them, that the case was not ripe, and that the district court should have abstained from hearing the case.

The majority holds that, "for LICRA's and UEJF's litigation efforts against Yahoo! to amount to `express aiming,' those efforts must qualify as wrongful conduct targeted at Yahoo!." The majority, in turn, finds no wrongful conduct on LICRA's and UEJF's part based on the fact that LICRA and UEJF have not come to the United States to enforce the French court judgment.

I dissent from such position for two reasons. First, as detailed below, the case law in our circuit makes clear that, although wrongful conduct will satisfy the Supreme Court's constitutional standard for the exercise of in personam jurisdiction, it is not necessarily required in all cases; indeed, I believe that the Supreme Court's "express aiming" test may be met by a defendant's intentional targeting of his actions at the plaintiff in the forum state. Second, I dissent because the record provides ample indication that LICRA and UEJF targeted Yahoo! in California by successfully moving the French court to issue an order requiring Yahoo!'s American website to comply with French law, serving Yahoo! with such order in the United States, and thereby subjecting Yahoo! to significant and daily accruing fines if Yahoo! refuses to so comply; it is immaterial to the analysis that LICRA and UEJF have yet to enforce the monetary implications of Yahoo!'s refusal to acquiesce in the French court order. Therefore, because I believe that LICRA and UEJF directed their actions toward Yahoo! in California sufficiently to confer in personam jurisdiction, I respectfully dissent.

Although I generally agree with the majority's recitation of the background of this case, I will emphasize and elaborate on certain facts throughout the opinion to highlight where our analyses diverge.

Appellants raise three issues on appeal. First, they assert that the case lacked ripeness for declaratory relief from the district court. Second, they argue that the district court improperly exercised personal jurisdiction over them. Finally, they claim that the district court erred when it refused to abstain from hearing the case.

A court may, in an "actual controversy," declare the rights and obligations of the parties. 28 U.S.C. § 2201 (2003). The Declaratory Judgment Act's "actual controversy" requirement is analyzed just as in constitutional cases involving questions of "actual controversy." Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40, 57 S.Ct. 461, 81 L.Ed. 617 (1937). The controversy must be definite and concrete, not merely hypothetical or abstract. Id. at 240, 57 S.Ct. 461. The dispute must be subject to specific, conclusive relief, not advisory in nature. Id. at 241, 57 S.Ct. 461.

LICRA and UEJF have followed their lawsuit to completion in the French court. Judgment has been rendered against Yahoo! and fines continue to accrue daily. LICRA and UEJF have simply refrained from enforcing the judgment against Yahoo!. A declaration regarding enforcement of a judgment that has already been ordered by a court, even though not yet sought by the adversarial party, is distinguishable from a declaration sought when a lawsuit has never been instigated. See id. at 240, 57 S.Ct. 461 (The controversy "must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts."); cf. San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir.1996) (holding that to have standing to challenge a statute the plaintiff must show a genuine threat of imminent prosecution under the statute); Int'l. Society for Krishna Consciousness v. City of Los Angeles, 611 F.Supp. 315 (C.D.Cal.1984) (case not sufficiently concrete for adjudication because group exercising speech rights at airport had not been harassed by airport officials). As the district court noted, LICRA and UEJF have not requested withdrawal of the French order so that the penalties accruing against Yahoo! would cease. Yahoo! could feasibly be responsible for all retroactive penalties that accrue until Yahoo! is in compliance with the French order. The threat to Yahoo! is concrete and growing daily. Therefore, I believe that the case is sufficiently ripe to be heard in American courts.

The district court and Yahoo! acknowledge that no basis for general jurisdiction exists. Even if a nonresident party's contacts with the forum state are insufficient for general personal jurisdiction, however, the party may be amenable to jurisdiction under the specific jurisdiction doctrine if the claim is related to the party's activities in or contacts with the forum state. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

In the seminal case on personal jurisdiction, International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Supreme Court held that "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. at 316, 66 S.Ct. 154 (emphasis added). The "minimum contacts" prong of the due process inquiry focuses on whether the defendant "has purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The "fair play and substantial justice" prong gives the defendant an opportunity to "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." Id. at 477, 105 S.Ct. 2174.

This Circuit has summarized the Supreme Court's jurisprudence by setting forth a three-factor test to determine whether asserting jurisdiction over an out-of-state defendant comports with due process. Jurisdiction may be exercised when the following requirements are met:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privileges of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

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

Bancroft & Masters, Inc. v. Augusta Nat'l Inc.,