Technology and internet jurisdiction.

• Author: Reidenberg, Joel R.
• Position: Choice of Law and Jurisdiction on the Internet

The current Internet technology creates ambiguity for sovereign territory because network boundaries intersect and transcend national borders. At one level, this technologically-created ambiguity challenges sovereign jurisdiction. Yet, the evolution of the Internet's technological infrastructure is intertwined with sovereign jurisdiction because the relationship between technology and law is dynamic. (1) As sovereign states grapple with the challenges of existing technologies, they still must protect their citizens in the online environment.

The debates over Internet jurisdiction, (2) however, mask deep and fundamental objections to state authority. Jurisdiction fits within a broader struggle over the respect for the rule of law in the Information Society. In effect, jurisdiction over activities on the Internet has become one of the main battlegrounds for the struggle to establish the rule of law in the Information Society. (3)

Parts of the Internet community have long sought to divorce the applicability of sovereign law from their online activities. (4) While the days of Internet separatism have waned, many technology players continue to advocate in favor of legal immunity for online activities. Yahoo! exemplifies this view. As a proponent of technological immunity, Yahoo! believes that democratically chosen laws should not apply to its online activities. In the now famous French case, the U.S. company transmitted images of Nazi objects that were constitutionally protected in the United States, but illegal to display in France where the users were located and where Yahoo! targeted advertising. (5) Yahoo! unsuccessfully argued that France did not have personal jurisdiction over the U.S. company because it was operating on the Internet from the United States and that French law did not apply to the images because they were stored on a server in the United States. (6) Yahoo! also argued that the technology offered it no means to comply with French law. (7) When the French courts rejected the technology-based defenses and ruled against Yahoo!, the company went forum shopping and sought to deny enforcement of the French order by suing for a declaratory judgment in federal court in California. (8) In essence, the U.S. Internet company wanted to avoid the application and enforcement of a law it did not like in a country where it did business over the Internet. Although Yahoo! found a willing accomplice at the U.S. district court in the company's effort to obtain immunity from financial liability, the U.S. court of appeals overturned the lower court decision and held that the California court had no personal jurisdiction over the French parties and that France had every right to hold Yahoo! accountable in France. (9)

This Essay argues that the initial wave of cases seeking to deny jurisdiction, choice of law, and enforcement to states where users and victims are located constitutes a type of "denial-of-service" attack against the legal system. Internet separatists use technology-based arguments to deny the existence of sufficient contacts for jurisdiction and the applicability of rules of law interdicting certain behavior. From this perspective, the attackers seek to disable states from protecting their citizens online.

The Essay next shows that innovations in information technology will undermine the technological assault on state jurisdiction. This counterintuitive effect is born out of the fact that more sophisticated computing enlists the processing capabilities and power of users' computers. This interactivity gives the victim's state a greater nexus with offending acts and provides a direct relationship with the offender for purposes of personal jurisdiction and choice of law. Some of these same innovations also enable states to enforce their decisions electronically and consequently bypass the problems of foreign recognition and enforcement of judgments.

Finally, the Essay argues that the exercise of state power through assertions of jurisdiction can and should be used to advance the development of more granular technologies and new service markets for legal compliance. Technologies should be available to enable Internet participants to respect the rule of law in states where their Internet activities reach. Assertions of state jurisdiction and electronic enforcement are likely to advance this public policy.

1. THE TECHNOLOGICAL DENIAL OF LAW: A DENIAL-OF-SERVICE ATTACK

   Internet enthusiasts embrace the wonder of the Internet's global electronic reach, but often reject the burden and responsibility of a global presence. The defenses for hate, (10) lies, (11) drugs, (12) sex, (13) gambling, (14) and stolen music (15) are in essence that technology justifies the denial of personal jurisdiction, the rejection of an assertion of applicable law by a sovereign state, and the denial of the enforcement of decisions. As Internet technologies enable global activities from remote locations, these claims rely on the technical infrastructure choices that parties make to conduct their online activities and on the assumption that existing technologies are static. In the face of these claims, legal systems engage in a rather conventional struggle to adapt existing regulatory standards to new technologies and the Internet. (16) Yet, the underlying fight is a profound struggle against the very right of sovereign states to establish rules for online activity.

   1. Personal Jurisdiction

      Some of the earliest attempts to reject state authority relate to personal jurisdiction. In the United States, courts have had great trouble figuring out how to apply traditional jurisdiction principles to Internet activities. To satisfy the Due Process Clauses of the U.S. Constitution, (17) a defendant must have sufficient minimum contacts with the forum "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" (18) The Supreme Court, in Asahi Metal Industry Co. v. Superior Court, was more exacting, and limited personal jurisdiction to cases in which the defendant "purposely avail[s]" himself of the forum. (19) In essence, as the Supreme Court also held in World-Wide Volkswagen v. Woodson, personal jurisdiction is subject to a test of reasonableness. (20) Similar standards exist in foreign states where a court's competence to hear the case depends on the defendant's nexus with the forum state. (21) For example, the Brussels and Lugano Conventions on jurisdiction for intra-European disputes look to various forms of contact between defendants and the state asserting jurisdiction. (22)

      In the Internet context, defendants have generally claimed that a remote forum is precluded from jurisdiction because the contacts are only established through a server that is not within the forum. Defendants assert that their activities are not directed at the forum state. (23) This type of argument challenges the very ability of sovereign states to protect their citizens within their borders from online threats. Among the early U.S. cases, the Western District of Pennsylvania in Zippo Manufacturing v. Zippo Dot Com, Inc. distinguished between active and passive web sites and held that remote, passive web sites did not accord personal jurisdiction to the forum. (24) More recently, courts have looked to online targeting and to deleterious effects within the forum to determine if personal jurisdiction is appropriate. (25) The effects approach is also gaining currency outside the United States. In Dow Jones & Co. v. Gutnick, (26) the High Court of Australia subjected Dow Jones to suit in Australia for defamation in that country under Australian law arising from a web posting on a U.S.-based server. (27) Likewise, the High Court of Justice in the United Kingdom found that Governor Arnold Schwarzenegger's campaign manager could be sued for defamation in the British courts as the result of statements about a U.K. resident that appeared on a newspaper website in the United States. (28)

      The maturation of the analysis reflects an evolution from a somewhat naive view of the Internet to a rejection of the Internet activists' simple denial of law. The Internet became popular precisely because of the promise of a global audience. But, this promise could not absolve online activities of legal responsibility. While online technologies were initially designed for geographically indifferent access, nothing fixed the technology in stone. Commercial pressures and the dynamic nature of the Internet have resulted in geolocation and the re-creation of geographic origin and destination. (29) This design feature and its malleability mean that Internet activity is "purposely availing" throughout the Internet whenever content is posted without geolocation filtering. In gravitating toward an effects doctrine, sovereign states promoted submission to the rule of law rather than capitulation to an Internet attack.

   2. Choice of Law

      The next type of attack against sovereign authority seeks to deny the applicability of the substantive law if it is not the law of the place where the Internet activity was launched, such as the place where the server is located. This blanket denial of prescriptive jurisdiction undermines the basic objective of conflict of laws jurisprudence, which is to avoid forum shopping and promote an efficient resolution of disputes when cases have international dimensions. Network technology pushes the localization of activities for choice-of-law purposes toward the transmission end-points. However, the attack against the law where users are located encourages forum shopping, to locate the infrastructure for the conduct of Internet activities within legal safe havens. (30)

      Sovereign authority, nevertheless, asserts itself against Internet activists. In Twentieth Century Fox Film Corp. v. iCrave TV, a film studio fought successfully to apply U.S. copyright law to streaming video on the Internet and obtained an...