Yahoo's Battle for Free Speech

Can a foreign court fine a U.S. Internet company for refusing to restrict foreign users' access to its Web site? That issue remains unresolved after a federal appeals court in San Francisco dismissed a lawsuit brought by Yahoo, Inc.  

In November 2000, a French court said it would fine Yahoo approximately $13,000 per day unless it took action to prevent French Web users from gaining access to Nazi-related materials, including memorabilia up for auction on Yahoo.com.  The U.S-based Yahoo auction site allowed French users to buy and sell Nazi material banned in France. (Yahoo.fr does not allow Nazi material, following French law; the French court was addressing the U.S. Yahoo site.)

Yahoo filed suit,  Yahoo!, Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, and asked the U.S. district court to rule the French judgment unenforceable in the United States because it violated the company's free speech rights.

The district court held that it had personal jurisdiction over the two French organizations, and that enforcement of the French order by an American court would violate the First Amendment. The French organizations filed an appeal with the Ninth Circuit, but appealed only the ruling on personal jurisdiction.

The ACLU of Northern California and the national ACLU, together with an impressive consortium of other free speech advocates, filed a friend of the court brief arguing that the court had jurisdiction over the case and asking the Ninth Circuit to affirm the district court’s judgment.

The court, however, did not answer the question of whether American Internet service providers can be fined by foreign courts for providing access to content that is protected by the First Amendment in the U.S. but considered unlawful abroad.

Relying in part on the important First Amendment issues raised by the case, an 8-3 majority of the 11-member en banc panel hearing the case held that the district court did have personal jurisdiction over the French litigants. 

However, three members of the eight-member majority favored dismissing the case because it was uncertain whether the French court would actually enforce its order.  When their three votes were added to the three votes of the judges who said the case should be dismissed because there was no personal jurisdiction, the result was a 6-5 majority in favor of dismissal.   Thus the case was dismissed. 

The ACLU-NC believes that if a foreign person or entity takes affirmative steps both in a foreign court and in the United States to force a U.S.-based speaker to censor constitutionally protected speech, U.S. courts have jurisdiction to protect that speech. The inability to obtain a timely declaratory judgment can have a broad chilling effect on free expression over the Internet.   

We were disappointed with the Ninth Circuit’s dismissal of the case, although its analysis of the personal jurisdiction issue is important because it takes First Amendment factors into account.