Yahoo! Suit Against French Activists Passes First Test

In the latest turn of events concerning the regulation of Nazi and other hate-related memorabilia sales online, a U.S. district court in California Thursday decided not to dismiss a lawsuit filed by Yahoo! (Nasdaq: YHOO) aiming to declare a French court's ruling against the Internet portal unenforceable.

"The court's opinion indicates that those who seek to use the foreign courts to influence U.S. publishers will need to face legal challenges to enforcement of those claims under U.S. law," the Washington, D.C.-based Center for Democracy and Technology (CDT) said in response to the court's decision.

After a French court ordered Yahoo! to find a way to bar French residents from accessing Web-based auctions of Nazi artifacts, Yahoo! filed suit in December in the U.S. District Court in San Jose, California.

The Yahoo! suit asked the federal court to declare that the French court has no jurisdiction over Yahoo's U.S.-based operations, and that the French court's order violates rights guaranteed by the U.S. Constitution. Yahoo! contends that only a U.S. court has jurisdiction to determine if the French order is enforceable in the United States.

The France-based International League Against Racism and Anti-Semitism (LICRA) filed its motion to dismiss Yahoo's U.S. lawsuit in February.

Border Lines

The U.S. court's refusal to dismiss the U.S. case gives the Internet portal a new venue to defend itself. Moreover, the court's decision indicated that it may side with Yahoo! on the ultimate question of whether the French court has the authority to order Yahoo! to change its U.S.-based practices -- even though those practices have ramifications via the Internet in France.

"While filing a lawsuit in a foreign jurisdiction may be entirely proper under the laws of that jurisdiction, such an act nonetheless may be 'wrongful' from the standpoint of a court in the United States if its primary purpose or intended effect is to deprive a U.S. resident of its constitutional rights," the court said.

The district court also said, "this court is the more efficient and effective forum in which to resolve the narrow legal issue in question."

However, the court has not yet ruled on the merits of the Yahoo! lawsuit.

Publishers Have Say

In April, the CDT filed a "friend of the court" brief in support of Yahoo!. Other groups supporting the brief included the American Association of Publishers, Freedom to Read Foundation, the American Civil Liberties Union (ACLU), Human Rights Watch, People for the American Way, and the Society of Professional Journalists.

According to the CDT, enforcement of the French order would fundamentally change the nature of the Internet as a medium of free expression.

"The consensus (of U.S. courts) so far is that this new medium fulfills the promise of the First Amendment and should receive the highest level of court protection," the CDT argued in the brief.

Worldwide Issue

In addition, the CDT believes that granting recognition to the French court's order would have significant global ramifications for free speech on the Internet.

"It would establish a legal framework wherein all Web sites on the global Internet are subject to the laws of all other nations, regardless of the extent to which such legal requirement conflicts with the law of the place where the speakers are located," said the CDT.