'Borderless cyberspace' ? - Internet jurisdiction issues

1
'Borderless cyberspace' ? - Internet
jurisdiction issues

• Internet Governance Topic 4
• Russell Allen
• Incorporating slides by Professor Graham
  Greenleaf and Dan Svantesson
• Reading Guide 8 'Borderless' cyberspace expands
  on these slides

2
Introduction

• Whats the problem?

3
Borderless problems

• You are defamed on a website overseas
• Your books bought from an online bookstore
  overseas never arrive
• Will an Australian court hear your case?
• Which countrys law applies?
• Can you enforce Australian laws overseas?
• Why dont countries have the same laws?

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Borderless cyberspace?

• Two methods by which law overcomes the
  borderless problem
• (i) Private international law
• Methods of resolving conflicts in cyberspace
  between individuals from different countries
• (ii) Public international law
• Agreements between States to have common local
  rules concerning cyberspace
• Methods of resolving disputes between States

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Conflict of Laws

• AKA Private International Law

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What is Conflict of laws?

• Procedural rules as contrasted to substantive
  rules!
• Private International law (or jurisdictional
  issues)
• Not only international also domestic in
  federations like Australia

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What is Conflict of Laws?

• Jurisdiction Which court will decide the
  dispute?
• Choice of law which substantive law should the
  court apply?
• Recognition and Enforcement Where can the
  judgment have effect?

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A Four Step Model (NSW)

• Jurisdiction Supreme Court Rules
• Choice of law (contract) proper law, (tort) lex
  loci delicti
• Forum non conveniens YES/NO
• Recognition enforcement YES/NO

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Jurisdiction

• Jurisdiction Choice of Law Forum non
  Conveniens - Enforcement

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Jurisdiction in Australia

• When will Australian courts assert cyberspace
  jurisdiction?
• 2 connections must be present -
• (i) Personal jurisdiction
• (ii) Subject matter jurisdiction

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Personal jurisdiction

• Depends on service of a writ on the Defendant
  (D) - 2 possibilities
• (I) Satisfied if D can be served in Australia, or
  consents to jurisdiction
• (ii) Australian court can allow service ex juris
  outside Australia

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Service Ex Juris in Tort

• The tort was committed within the forumSupreme
  Court Rules 1970 (NSW) Pt 10 r 1A(1)(d)
• The tort had damaging effects within the forum
  Supreme Court Rules 1970 (NSW) Pt 10 r 1A(1)(e)

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Service Ex Juris in Contract

• The contract was made within the forum
• The contract was breached within the forum
• The contract is governed by the law of the forum

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Service Ex Juris for Injunctions

• May be permitted when the plaintiff seeks
  injunction to compel or restrain act of defendant
  within the forum which infringes Ps rights in
  forum

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Choice of Law

• Jurisdiction Choice of Law Forum non
  Conveniens - Enforcement

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Choice of Law

• This issue will only ever arise if the forum
  finds that it may claim jurisdiction.
• Sometimes the question of jurisdiction is not in
  dispute, but the choice of law is.

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Choice of Law

• Lex fori the law of the forum
• Lex loci delicti the law of the place where the
  wrong was committed
• Lex loci celebrationis the law of the place
  where a judicial act occurs

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Choice of Law

• The reasonable expectation of the parties.
• Uniformity in result

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Defamation (Tort)

• Main Rule Lex loci delicti
• John Pfeiffer Pty Limited v Rogerson 2000 HCA
  36 (21 June 2000)
• Regie National des Usines Renault SA v Zhang
  2002 HCA 10 (14 March 2002)

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Defamation (Tort)

• The place of wrong is the place where the
  publication takes place
• Publication takes place where the defamatory
  material is made manifest to the receiving third
  party, in a format which can be comprehended by
  the receiver

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Contracts

• The proper law of the contract
• Express choice of the proper law
• Inferred choice of the proper law
• Objective approach to the proper law

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Party Autonomy

• Parties to contract are free to make binding
  agreement between themselves as to forum and
  choice of law
• Restrictions on this in EU law
• Restrictions on this in s67 Trade Practices Act
  1974 (Cth)

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Forum Non Conveniens

• Jurisdiction Choice of Law Forum non
  Conveniens - Enforcement

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Forum Non Conveniens

• Courts have a discretionary power to decline
  jurisdiction when the convenience of the parties
  and justice would be better achieved by resolving
  the dispute in another forum.
• Court considers factors such as the ease of
  access to sources of proof, and the availability
  of witnesses.
• Court may decline to exercise jurisdiction if it
  finds that it is a clearly inappropriate forum to
  determine the application Voth v Manildra Flour
  Mills (1990) 171 CLR 538

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Forum Non Conveniens

• A court shall decline jurisdiction under certain
  circumstances
• In Australia clearly inappropriate forum

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Forum Non Conveniens

• Supreme Court Rules 1970 (NSW) - SECT 10.6A(2)(b)
  
• that this Court is an inappropriate forum for
  the trial of the proceedings

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Factors taken into account

• Connection between forum and subject-matter
• Connection between forum and the parties
• Judicial advantages to the plaintiff
• The availability of an alternative forum
• The applicable law

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Forum Non Conveniens

• In majority of common law states more
  appropriate forum
• Which rule is better?
• Clearly inappropriate forum OR More
  appropriate forum?

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Enforcement

• Jurisdiction Choice of Law Forum non
  Conveniens Enforcement

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Recognition and Enforcement

• If there is no risk that the judgment can be
  enforced against you, why bother defending?
• If there is no chance of having the judgment
  enforced against the other party, why bother
  going to court?

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Recognition and Enforcement

• Assets in third country, that would recognize and
  enforce the judgment (Brussels Convention in the
  EU)
• Future business in the state that made the
  judgment or in third country, that would
  recognize and enforce the judgment
• This area is being harmonized through
  international co-operation.

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Enforcement in Australia

• In Australia there are two ways to enforce a
  foreign judgment
• Recognition at common law
• Recognition by Statute

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Recognition by Statute

• Only certain countries
• On a reciprocity level

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Recognition at common law

• Any country
• A four criteria test
• Foreign court must have had international
  jurisdiction
• Foreign judgment must be final and conclusive
• Same parties and same action
• A fixed debt

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Defences to Common Law

• Foreign judgment obtained by fraud
• Foreign judgment contrary to public policy
• Foreign court acted contrary to natural justice
• Foreign judgment is penal
• Foreign court acted perversely in refusing to
  apply the appropriate law
• Foreign judgment estopped by prior judgment
  within Australia
• Foreign Procedings (Excess of Jurisdiction) Act
  1984 (Cth)

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Recap The Model (NSW)

• Jurisdiction Supreme Court Rules
• Choice of law (contract) proper law, (tort) lex
  loci delicti
• Forum non conveniens YES/NO
• Recognition enforcement YES/NO

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Australian Cases
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Macquarie Bank v Berg

• Macquarie Bank Ltd v. Berg 1999 NSWSC 52
• Injunction sought to stop publication by
  Defendant in US on US website of defamatory
  material
• Court declared it had power, but exercise was a
  matter of discretion

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ASIC v Matthews

• ASIC v. Matthews 1999 FCA 164
• ASIC v. Matthews 2000 NSWSC 392
• Publishing of securities material on website,
  order given to take down and not republish.
• Material moved to NZ web server
• Found to be contempt of court, 3 months
  imprisonment

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Gutnick v Dow Jones

• 2001 VSC 305 (Supreme Court of Victoria) - Dow
  Jones (DJ) published Barrons Magazine on the web
  with an article ('Unholy Gains') about G. DJs
  servers are in New Jersey USA (NJ).
• G said the defamation occurred in Victoria (Vic)
  DJ said it occurred in NJ (where defamation of
  public figures is only where malice is proven)
• Court held that defamation occurs where a person
  comprehends the defamatory content - in Vic - so
  only Vic law must be satisfied

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More Gutnick

• Dow Jones v. Gutnick 2002 HCA 56 (High Court)
• Upheld Hedigan Js initial decision
• Publication takes place where a person
  comprehends the defamatory content

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A Side Issue Lawyers v Geeks

• Read comments by Hedigan J in the initial
  instance, 2001 VSC 305, at 70, 71
• Compare with comments by Dr Clarke in Defamation
  on the Web Gutnick v. Dow Jones at
  http//www.anu.edu.au/people/Roger.Clarke/II/Gutni
  ck.html

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A side issue How new is the Internet?

• Kirby J more than simply another
  mediumrevolutionary leap
• Callinan J no more than a means of
  communication by a set of interconnected
  computers
• Note Despite this, both judges reached same
  conclusion

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Gutnick on Jurisdiction

• Victorian Supreme Court Rules Rule 7.01(1)
• Originating process may be served out of
  Australia without order of the Court where
• (i) the proceeding is founded on a tort committed
  in Victoria
• (j) the proceeding is brought in respect of
  damage suffered wholly or partly in Victoria and
  caused by a tortious act or omission wherever
  occurring

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Gutnick on Choice of Law

• Lex Loci Delicti (fairly recent rule)
• So, Dow Jones needed a change in the law to win
• Callinan J a radical shift in the law of
  defamation

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Dow Jones on Choice of Law

• Place of uploading
• Effect Extending US Law
• Problem What about, eg, FreeNet?
• Problem What about ASIC v. Matthews?
• Problem Jurisdiction different to Choice of Law

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Gutnick on Forum non Conveniens

• clearly inappropriate test reaffirmed
• Gutnick gave an undertaking to sue in Victoria,
  for damages suffered in Victoria under Victorian
  law.
• Gaudron J Whole controversy test

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Two Other Issues

• Gutnick gave an undertaking to sue in Victoria,
  for damages suffered in Victoria under Victorian
  law. Did this influence the Court?
• WSJ.com was a subscription site, with a number of
  subscribers who had paid by methods which
  identified their jurisdiction, eg Credit Cards.
  Would a totally free site have fared differently?

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Gutnick Reactions

• From Gutnick, it seems that wherever a person
  reads a web page, their local law applies to it -
  300 laws may apply!
• Some claim this may destroy the Internet
• Alternative view Why should US law and the US
  First Amendment apply world-wide?
• Enforcement of judgments must also be considered

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Gutnick Unreasonability

• Svantessons Indonesian Newspaper example
• Can unreasonability be incorporated into forum
  non conveniens?
• Kirby J the issue of forum non conveniens is
  the place where the Internet problem is going to
  be solved. (from transcript)

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Other Common Law Cases
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Godfrey v Demon Internet

• 1999 EWHC QB 244 1999 4 All ER 342 (UK)
• Godfrey sued his ISP for defamation because it
  hosted the newsgroup soc.culture.thai, which had
  a posting defaming him
• Publication occurs when a customer of the ISP
  accesses the newsgroup

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Euromarket Designs Inc v Peters

• 2000 EWHC Ch 179 (UK)
• Trademark case, similar domain names
• Irish site had not actively gone out to seek
  world-wide trade

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Investasia v Kodansha

• Investasia Co Ltd v. Kodansha Ltd 1999 2 HKC
  515 (Hong Kong)
• Pre-Gutnick defamation case
• Question asked Do the plaintiffs have a local
  reputation to protect?

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Zippo Manufacturing v Zippo Dot Com

• (1997) 952 F. Supp. 1119 US District Court,
  Pennsylvania (USA)
• Trademark case, website outside Pennsylvania
• Active v. Passive website distinction drawn

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Other Legal Systems Cases
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The French Yahoo! case

• Licra et Uejf vs Yahoo! Inc. and Yahoo France
  (Superior Court of Paris 22 May 2000)
• French Court ordered US Yahoo! to stop Fr.
  citizens accessing auctions of Nazi items or web
  pages with anti-Semitic content (Yahoo! claimed
  technical impossibility), and to remove content
  (to comply with Fr. law).
• Fined US Yahoo! 100,000 Francs/day for
  non-compliance (but not Fr. Yahoo!)

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Criticisms

• Technology makes it impossible
• Encouraging Censorship
• The Internet Ought Not be Censored
• The Internet Ought Not be Goverened by National
  Laws
• Judgement is not Enforceable

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Technology Is is Possible?

• IP based identification
• ISPs outside France
• AOL and Virginia
• Large Corporations
• Cookies
• Why not just lie?

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The US Yahoo! case

• Yahoo! Inc.v Licra et Uejf (US Dist Ct, N.Dist
  of California, Nov 7, 2001)
• Yahoo! USA sought an order that the Fr. judgment
  was not enforceable by a US Court. Yahoo! said it
  would have to remove the material altogether (for
  US citizens also).
• US courts would normally enforce Fr judgments
• Fogel J found a US Court could not make the order
  the Fr Court made without breaching the First
  Amendment, so it could not enforce the fine.
• Even though this concerned a criminal fine,
  which Courts rarely enforce anyway - extradition
  is used

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iCraveTV Comparison

• Twentieth Century Fox v. iCraveTV.com 2000 U.S.
  Dist. Lexis 11670 (W.D. Pa, 2000)
• iCraveTV broadcasting US network TV over the
  Internet
• US Court held that it had jurisdiction
• Case settled

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Remember Google

• Some companies already self censor. Witness
  stormfront.org censorship on Google.de
• This is not contrary to US 1st Amendment
• Yahoo! US now self censors, although stating that
  it is not result of court case.

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International Developments
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Proposed Hague Convention

• First suggested in 1992
• Drafted by the Hague Conference on Private
  International law
• Part 1 Jurisdiction Part 2 Recognition and
  Enforcement
• White, grey Black listed ground of jurisdiction

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Article 7

• Article 7 regulates consumer contracts
• Most recent version April 2001 in Edinburgh
• Based loosely on 1968 Brussels Convention

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Summary
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No world-wide liability??

• Which countries laws do you really have to worry
  about if you publish via Internet?
• Only if these conditions apply
• (i) You live in the country or assent to its
  Courts jurisdiction
• (ii) The judgment is not against the public
  policy of the country
• (iii) You have assets in the country

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One Final Comment

• As long as different countries have different
  laws and cultures, there are no good principles
  for jurisdiction, only less bad ones - Thomas
  Carlen-Wendels