This is Part One of a two-part review by Professor Leora Harpaz of the material covered in my Internet Law course during the Spring, 2012 semester.

Internet Law Spring 2012 Review - Part One

I. The Use of Analogy in Legal Reasoning (Chapter I)

A. In cases in which courts reason by analogy, they look for similarities and differences between the subject of a case currently before the court and the subjects of prior cases involving related things. To decide on the proper analogy and therefore the appropriate legal rule, it is necessary, as long as the two situations are not identical, for a court to decide which similarities are important and which differences are unimportant. This process of identifying relevant similarities and irrelevant differences lies at the heart of reasoning by analogy.

B. To illustrate the use of metaphor and analogy, the readings first focused on two cases in which plaintiffs rely on a theory of trespass to chattels to establish liability. In eBay, Inc. v. Bidder’s Edge, Inc. (p. 9), the court identified two elements of the tort: “(1) defendant intentionally and without authorization interfered with plaintiff’s possessory interest in the computer system; and (2) defendant’s unauthorized use proximately resulted in damage to plaintiff.” (p. 14). The court concluded that defendant’s use of a software robot was sufficiently tangible to amount to a trespass (akin to the unauthorized use of telephone lines) and that damage could be demonstrated because defendant consumed a portion of plaintiff’s bandwidth and server capacity. By contrast, in Intel Corp. v. Hamidi (p. 16), the court concluded that no liability existed based on the sending of e-mail messages to plaintiff’s employees because there was no evidence that receipt of the e-mails damaged plaintiff’s computer system. The court distinguished cases where the defendant sent a large volume of spam and placed a significant burden on the plaintiff’s computer system by using disk space and draining processing power. In Hamidi, the plaintiff’s real objection was to the content of defendant’s e-mails and not the volume. The court relied on public policy as a basis for its refusal to create “an absolute property right to exclude undesired communications from one’s e-mail and Web servers.” (p. 24). It, therefore, refused to treat computer servers like real property for purposes of trespass law (trespass to real property does not require a showing of injury to the property unlike trespass to chattels where injury is required), thus rejecting the metaphor of the internet as a physical space.

C. The use of metaphor and analogy are also relevant in cases involving statutory interpretation such as under the doctrine of ejusdem generis: “General words following a particular designation are usually presumed to be restricted so as to include only things or persons of the same kind, class, or nature, unless there is a clear manifestation of a contrary purpose.” (p. 7). This doctrine was relevant to the decision in Access Now, Inc. v. Southwest Airlines, Co. In that case, the court had to decide whether a website is a place of public accommodation under Title III of the ADA or whether places of public accommodation only include physical spaces and not virtual spaces. In deciding whether a website was covered by the statute, the court examined the statutory definition of a place of public accommodation, including the 12 specific categories listed in the statute, and the legislative history of the statute. The court concluded that Southwest’s “virtual ticket counter” did not fall within the statute since the specifically listed categories were all physical places. In addition, the court rejected liability based on the nexus theory. Under that theory, liability could be found where the inaccessibility of the website impeded “access to a specific, physical, concrete space.” The Access Now court distinguished Rendon v. Valleycrest Prod., Ltd., where an automated telephone selection process was characterized as “a discriminatory screening mechanism . . . which deprives [the plaintiffs] of the opportunity to compete for the privilege of being a contestant on the [game show].” (p. 38). According to the Access Now court, “the website at issue here is neither a physical, public accommodation itself as defined by the ADA, nor a means to accessing a concrete space such as the specific televistion studio in Rendon.” (p. 38).  

II. Problems of Geography and Sovereignty (Chapter II)

A. Application of Local Zoning Ordinances to Online Activity

1. These problems are difficult ones in the context of the internet because the law is traditionally based on physical boundaries and cyberspace makes such boundaries irrelevant. We began exploring these questions by looking at local zoning ordinances applied to online activity. In Voyeur Dorm L.C. v. City of Tampa (p. 40), the City of Tampa tried to classify a residence as an adult entertainment facility under its zoning laws. Voyeur Dorm provided 24 hour internet transmission of the activities at the residence. Subscribers paid a fee to watch and chat with the women who lived at the residence. Reversing the district court, the Eleventh Circuit found that the residence was not an adult entertainment establishment because adult entertainment was not offered to the public at the residence since viewers of the residence did so only from other locations. In Voyeur Dorm, the activity physically occurred in Tampa, but that physical location was irrelevant because the activity was being transmitted over the internet rather than viewed at the Tampa residence. Therefore, the effects of the activity were experienced elsewhere. Since the zoning ordinance which classified adult entertainment facilities focused on the local effects of the regulated facilities, it was interpreted not to apply to the residence operated by Voyeur Dorm.

2. By contrast, in Flava Works, Inc. v. City of Miami (p. 44), the Eleventh Circuit upheld Miami’s application of its restriction on the operation of a business in a residential zone as applied to a similar facility. Despite the fact that customers and vendors did not go to the residence and its business operations were located elsewhere, the court concluded that the residence where the video images were created was an essential part of Flava Works’ business operations. While the residence was not an adult entertainment facility, it was a business, defined generally as “[a] commercial enterprise carried on for profit” (p. 47), located in a residential zone.

B. Federal vs. State Power to Regulate the Internet and the Dormant Commerce Clause

1. In striking down New York’s effort to criminalize the distribution of adult material to a person who is a minor, the court in American Library Association (ALA) v. Pataki (p. 48) was concerned that the nature of the internet made it impossible to restrict the effects of the New York law to conduct occurring within New York. The court struck down the New York law as a violation of the Dormant Commerce Clause based on each of three theories. According to the court, a state regulation of the internet may be unconstitutional because it violates the Dormant Commerce Clause in either of 3 ways:

(1) by having impermissible extraterritorial applications (impacts activities which occur beyond its borders where the conduct being regulated is legal in the state in which the user acts, but is illegal in the state which seeks to assert the power to regulate that conduct); or
(2) by imposing severe burdens on interstate commerce without those burdens being offset by countervailing benefits in protecting state citizens (a balancing test); or
(3) by creating the danger of subjecting persons or entities to inconsistent regulations.

In ALA v. Pataki, the court recognized that the internet is an instrument of interstate commerce and therefore subject to federal regulatory power, but may be beyond the reach of state power in various circumstances. The result in the case is consistent with a number of other cases striking down similar state laws on the same grounds.

2. By contrast, in Washington v. Heckel (p. 64), the Supreme Court of Washington upheld Washington’s anti-spam legislation against a Dormant Commerce Clause challenge by concluding that the law’s benefits outweighed its burdens and that the law had no sweeping extraterritorial effect. Unlike the New York decision, the Washington court did not view the three criteria relied on in ALA v. Pataki as three separate Dormant Commerce Clause standards, but instead viewed them all as factors to be considered under the balancing test (the second of the 3 standards applied by the court in ALA v. Pataki). In assessing the burdens on interstate commerce (with the commerce being in the form of commercial advertising), the court viewed the burdens of compliance with the Washington anti-spam law as not as serious as the New York court’s assessment of the burdens imposed by the New York law. In large part, the court was able to conclude that the burdens were minimal by focusing on the burden of complying with Washington law as to all spam sent by defendant (the burden of truthfulness - p. 68), rather than the burden of separating spam sent to Washington residents from spam sent to nonresidents. By contrast, the court viewed the benefits as more significant than the New York court’s appraisal of the limited benefits in the protection of children achieved by the enforcement of the New York law.

3. In National Federation of the Blind v. Target Corp. (p. 70), a federal district court also rejected a Dormant Commerce Clause argument that California could not apply state anti-discrimination law to Target’s website because of the extraterritorial effects of the application of state law. In the lawsuit, the plaintiff sought to require Target to alter its website to make it accessible to the blind. In rejecting the Dormant Commerce Clause defense to the plaintiff’s state law claim, the district court reasoned that Target was free to create a separate version of its website for California residents in order to comply with California law, thereby avoiding extraterritorial effects. It is not at all clear that other courts would agree with the reasoning of this case since the burden of potentially being required to create 50 different versions of its website to comply with myriad state regulations of the internet might be viewed as unconstitutional under the balancing test which compares the burdens on interstate commerce from complying with state law to the benefits from the application of state law.

C. Jurisdiction to Adjudicate

1. Enforcement of Foreign Judgments

a. In this section, we considered the Yahoo! dispute over the auctioning off of Nazi paraphernalia on its U.S. website. The background of the case involves a French court applying French law to Yahoo! because its website could be viewed in France. The Yahoo! dispute raises the problem that different countries have different standards for acceptable online content, with the U.S. standards being the most permissive. Since online content is available everywhere, either countries must allow foreign-based content to be accessible despite its violation of local standards or foreign-based content that is legal where it is created can be subjected to the standards of myriad countries because it violates the standards of those countries. In Yahoo!, Inc. v. La Ligue Contre Le Racisme Et L’Antisseittsme (p. 76), we examined Yahoo!’s efforts to convince a U.S. federal district court in California not to enforce the order of the French court. The French court ordered Yahoo! to make the Nazi artifacts unavailable to French visitors to its U.S. website despite Yahoo!’s claim that to comply with the order it would have to make the material unavailable to all visitors to its website. The court rejected the argument that Yahoo! lacked the technical ability to determine the geographical origin of visitors to its U.S. website. It concluded that such information could be obtained from a combination of the use of software that identifies the geographical location of visitors to a website, software that Yahoo! was already using, and directly asking visitors to the website their geographical location. The federal district court in California found in favor of Yahoo! in a case in which Yahoo! sought a declaratory judgment that the French court order was not enforceable in the United States because it conflicts with the First Amendment in that it would require that Yahoo! censor the content of its U.S. website despite the fact that the speech at issue is protected by the First Amendment even though illegal in France. The district court also rejected an argument that comity required the district court to honor the French decree. The court reasoned that respect for a foreign judgment was not required when enforcement would violate protections for free speech under the U.S. Constitution. On appeal, the Ninth Circuit reversed the decision on other grounds and did not reach the First Amendment issue.

b. In Sarl Louis Feraud International v. Viewfinder, Inc. (p. 83), the district court reached a similar conclusion to the district court in the Yahoo! case in rejecting the enforcement efforts by a party who had won a judgment in a copyright dispute in a French court against a U.S. website. The district court dismissed the action, reasoning that the photos at issue were protected by the First Amendment and, therefore, the French judgment was not enforceable under the public policy exception to the to New York Uniform Foreign Money Judgment Recognition Act. On appeal, the Second Circuit overturned the dismissal and remanded the case for further proceedings. Its rationale was that the public policy exception was narrow and that it was not clear that the photos were protected by “the fair use doctrine [which] encompasses all claims of first amendment in the copyright field.” (p. 87).

2. Application of Criminal Law to Out-of-State Conduct  

Hageseth v. Superior Court of San Mateo County (p. 89) is an example of a typical internet criminal jurisdiction issue where the regulated activity takes place outside the jurisdiction, but its effects are experienced within the jurisdiction. Voyeur Dorm (p. 40) presented the reverse of that problem because the activity took place locally, but its effects occurred elsewhere. In Hageseth, the defendant was charged with practicing medicine in California without a license. The issue in the case was whether the California court had criminal jurisdiction over the defendant as a result of online activity even though he had not been physically present in the state, did not have any direct interactions with residents of the state, and did not act through an agent in the state. The court concluded that it did have criminal jurisdiction because “a state may exercise jurisdiction over criminal acts that are committed outside the state but are intended to, and do, produce harm within the state.” (p. 92). Even though the defendant issued a prescription to a California resident through a series of intermediaries in other states, he knew the person he wrote the prescription for resided in California and that the medication would be sent to California. As a result, the court viewed the crime of practicing medicine without a license as having been consummated in California. Therefore, it was proper for California to exercise extraterritorial criminal jurisdiction. The court did not believe that the fact that the regulated activities occurred in cyberspace instead of real space should limit state court jurisdiction.

3. Personal Jurisdiction

a. To exercise personal jurisdiction over a nonresident defendant, there must be a long-arm statute which authorizes a state’s courts to exercise jurisdiction under the circumstances. In addition, the exercise of jurisdiction must comply with the Due Process Clause. The state can, but need not, exercise jurisdiction to the full extent permitted by the Due Process Clause.

b. The cases in this section examine personal jurisdiction arising out of internet activities. In analyzing this issue, courts rely on traditional personal jurisdiction principles and analysis, first distinguishing between general jurisdiction (which exists when the defendant’s activities in the forum are substantial or continuous and systematic and where the cause of action need not arise from the forum contacts and which is not usually present in the cases we read) and specific jurisdiction (where the cause of action must arise out of the defendant’s contacts with the forum).

c. In cases where specific jurisdiction is invoked, the courts use the test for minimum contacts to establish that due process is satisfied:

1) the defendant must have minimum contacts with the forum;

2) the claim must arise out of those contacts; and

3) the exercise of jurisdiction must be reasonable.

This test is designed to make sure that the exercise of personal jurisdiction does not offend “traditional notions of fair play and substantial justice.” Of central importance to the minimum contacts analysis is the concept of purposeful availment - whether the defendant has purposefully availed itself of the benefits of doing business in the forum.

d. In applying these tests to the internet, controversy exists over whether the creation of a website accessible within the jurisdiction is enough to create purposeful availment. Some courts find it is because the defendant has knowledge that the content of its site will be available in the forum; others find it insufficient because the defendant’s conduct is not specifically aimed at the forum, but is aimed everywhere the internet is accessible. To resolve this issue, some courts look at the nature of the defendant’s internet activities (Zippo’s sliding scale test to evaluate the level of interactivity - p.100). In this inquiry, they consider whether the defendant’s website is passive or active and, because few websites are totally passive, how active it is and whether, other than having a website, the defendant has directed its activities at forum residents. These inquiries are relevant because the court is interested in determining whether the defendant’s activities are purposefully directed toward forum residents. The courts are concerned with exposing the defendant to jurisdiction everywhere based on internet activities because a website automatically creates at least some presence in all jurisdictions and internationally. Therefore, generally, more than having a passive website is thought to be necessary for personal jurisdiction.

e. Specific business arrangements with forum residents, such as having subscribers to an internet service who reside within the forum, explain some of the cases including Zippo (p. 102). Such arrangements, which are viewed as purposeful contact with the forum, rather than accidental or fortuitous contact, satisfy the requirement of purposeful availment.

f. There is a disagreement among the courts over exactly what kind of internet activity is required for jurisdiction and what kind of conduct will be viewed as targeted at the forum. Some courts, for example, reject Zippo’s focus on the level of interactivity of the defendant’s website. As a replacement for the level of interactivity, some courts look for a purposeful and specific effort to target residents of the forum. Some recent decisions have emphasized the relevance of targeting analysis which looks at whether the plaintiff targeted a defendant within the forum, targeted its website to the state or manifested an intent to target business within the state (see Paragraph I below which discusses the Young case). No clear criteria for how to separate targeting from occasional random contacts with the forum have yet been clearly developed.

g. In addition to the general issue of personal jurisdiction, we also looked separately at how to establish personal jurisdiction for intentional tort claims. In these cases, the plaintiff must show either sufficient contacts for general jurisdiction, or that the defendant committed a tort within the forum, or that the defendant committed a tort outside the forum that he knew or had reason to know would produce harm within the forum state. This last category is a description of the “effects test” from Calder v. Jones (p. 104-05 and p. 109) which requires defendant commit an intentional tort, defendant expressly aim its conduct at the forum causing harm the brunt of which is suffered in the forum, and defendant know the plaintiff will suffer harm in the forum.

h. In applying the effects test to cases where internet content is the source of the harm, for example posting defamatory content online about the plaintiff knowing that the plaintiff lives and works in the forum and will be injured in her reputation there, courts vary in the extent of the purposeful activity aimed at the forum they require to establish personal jurisdiction. Amway Corp. v. Proctor & Gamble (p. 103) is an example of the use of this effects or “express aiming” test in a case asserting claims for intentional torts. In the case, the court found personal jurisdiction existed in Michigan based on the fact that the defendant placed defamatory statements on his website in Oregon, the plaintiff corporation, a corporation with its principal place of business in Michigan, suffered the brunt of the harm in Michigan, and defendant, who had worked for the plaintiff, knowing that the plaintiff would be harmed in Michigan, expressly aimed his conduct at Michigan. Express aiming analysis is similar if not identical to targeting analysis described in Paragraph I below.

i. Another application of the effects test to establish personal jurisdiction is targeting analysis. In Young v. New Haven Advocate (p. 106), the Fourth Circuit used targeting analysis to reject personal jurisdiction in a libel action filed in Virginia against two Connecticut newspapers and concluded that the defendants’ websites did not target Virginia since their online content was aimed at a local Connecticut audience (despite the fact that the defendants’ actions in publishing newspaper articles about a Virginia prison warden probably satisfied the literal requirements of the effects test). In reaching its conclusion that two online publication were not targeted at Virginia, the court examined the entirety of the online publications and not just the articles that were asserted to be libelous. Some courts, such as the Ninth Circuit, use the phrase “express aiming” to describe an analysis that is similar if not identical to targeting. The phrase comes from the Calder case which states, in talking about the defendants, that “their intentional, and allegedly tortious, actions were expressly aimed at California.” Similarly, the use of the phrase “targeting” analysis can be attributed to Calder which states that “petitioners are not charged with mere untargeted negligence.”

j. In Tamburo v. Dworkin (p. 117), the Seventh Circuit applied the Caldor effects test. In its discussion, the court reviewed the disagreements in the courts over how to apply the effects test to online tortious activity. These disagreements include the issue of whether the Zippo sliding scale analysis should be applied in the intentional tort context, and whether Caldor’s concept of express aiming should be applied broadly or narrowly. The Amway case is an example of a broad interpretation where all that is required is that the defendant target the plaintiff whom the defendant knows resides in the forum. Other courts interpret this requirement more narrowly and, in addition, require that the forum be the focal point of the tort. Young is an example of a narrow interpretation where the court requires that the defendant intend to reach readers in the forum. The Tamburo court suggests that this analysis could be applied to local publications, but would not suffice in the case of a national publication.

k. In Boschetto v. Hansing (p. 111), the Ninth Circuit refused to find personal jurisdiction in California in a case in which a Wisconsin seller sold an automobile to a California buyer on eBay. The court, applying due process principles, reasoned that the sale was an isolated transaction where the seller agreed to sell to the highest bidder, wherever the buyer was located, the seller did not regularly conduct business on eBay, and the interactivity of the eBay website was irrelevant because it was operated by eBay and not by the defendant seller. Under the circumstances, “a one-time contract for the sale of a good that involved the forum state only because that is where the purchaser happened to reside,” the contacts with the forum were insufficient for personal jurisdiction. The court distinguished cases “[w]here eBay is used as a means for establishing regular business with a remote forum such that a finding of personal jurisdiction comports with ‘traditional notions of fair play and substantial justice.’” A concurring opinion emphasized that the contacts with California were “random, fortuitous, or attenuated” and not purposeful.