La Ligue Contre Le Racisme et L’Antisemitisme (LICRA) et al. brought suit against Yahoo! in France, resulting in a French court ruling that Yahoo! must block access to Nazi-related materials of any French user accessing its main website in the United States. Though the levying of damages is through a separate proceeding in France, the French court indicated that Yahoo! would potentially be required to pay fines upwards of $13,000 per day of noncompliance. Yahoo! did not fully comply with the French court order for First Amendment reasons, as it is technologically unable to block access of these materials to users with French Internet Protocol (IP) addresses while at the same time allowing Americans access. To protect itself against potentially large accruing fines, Yahoo! filed for declaratory judgment on the claim that First Amendment rights prevent enforcement of the French court order in the United States. The District Court for the Northern District of California denied LICRA’s motion to dismiss for lack of personal jurisdiction, and granted Yahoo! summary judgment. On August 23, 2004, the Ninth Circuit overruled the judgment for Yahoo!. The appellant, LICRA, appealed on three grounds: (1) declaratory judgment was not appropriate as the case was not ripe; (2) the District Court’s assertion of specific jurisdiction was invalid; (3) the District Court should have abstained from considering the case.The Ninth Circuit ruled in favor of appellant on the specific jurisdiction issue without addressing the other two issues. Yahoo! acknowledged that there was no basis for general jurisdiction due to a lack of systematic and continuous contact with California. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.9 (1984). The Court applied its own three-pronged test for specific jurisdiction: (1) the purposeful availment of the privilege and benefits of conducting activities in the forum state; (2) the claim arises out of or relates to these activities; (3) the exercise of jurisdiction by a court is reasonable. Bancroft & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). The issue to the Court was whether appellants met the purposeful availment prong by expressly aiming their conduct at California, as described in Calder v. Jones, 465 U.S. 783 (1984). Only if this prong is met would the other two prongs of the test need consideration.
LICRA et al.’s litigation-related activities consisted of a cease-and-desist letter sent to Yahoo!’s corporate headquarters, the service of process to Yahoo! via the U.S. Marshal’s Office, and the request to the French court requiring action by Yahoo! in California. Yahoo! argued that these activities were wrongful in that the intent of LICRA et al. was to cause a violation of the First Amendment rights of Americans, and therefore that the express aiming doctrine would allow the exercise of specific jurisdiction on appellants. In a 2-1 decision authored by C.J. Ferguson, the Ninth Circuit concluded that the conduct of LICRA does not meet the express aiming test because their actions, though targeting Yahoo! in California, were not wrongful because they had clear legal basis in France.
The Court distinguished Bancroft & Masters because, in that case, plaintiffs argued that defendants had tortious intent when triggering a dispute resolution process to determine the owner of a domain name. Though there is a potential First Amendment claim by Yahoo! in this case, the Court stated that LICRA et al.’s actions were perfectly legal under French law. The Court appears to differentiate LICRA et al.’s intent from the potential effects of their actions in the United States. It seems that the Court also finds it reasonable for Yahoo! to pay the possible costs of waiting for adjudication of any potential future damages claim in the United States due to its activities in France, since Yahoo! receives benefits from doing business in France. Yahoo!’s First Amendment claim is not prejudiced by requiring Yahoo! to wait until LICRA et al. attempt to collect damages in U.S. courts. In dissent, C.J. Brunetti contends that wrongful or tortious intent is not required for express aiming. Rather, “[A] defendant’s good-faith . . . letter coupled with his other contacts in the forum justified the exercise of personal jurisdiction.” Innamed Corp. v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001).