Privacy: Yahoo Case Tests Boundaries Of Cyber Law

Sarah Lai Stirland
(c) National Journal Group, Inc.

In 1996, former Grateful Dead lyricist John Perry Barlow famously
declared: "Governments of the industrial world, you weary giants of
flesh and steel, I come from Cyberspace, the new home of Mind. On behalf
of the future, I ask you of the past to leave us alone ... You have no
sovereignty where we gather."

Almost a decade after Barlow issued his tract, governments around the
world are instead trying to figure out which nation's laws should take
precedence and where, when and how they should apply. One closely
watched case may provide some answers by examining the question of
whether companies in the United States can preemptively block the
enforcement of foreign court decisions on their home turf.

Legal observers are eagerly awaiting the opinion of a panel of 9th U.S.
Circuit Court of Appeals judges, who re-heard arguments in late March in
a case pitting Yahoo against two French civil rights groups. The panel
is expected to issue an opinion in the case between Yahoo and two Jewish
anti-defamation groups as early as the end of the year.

In 2000, a court in Paris ruled that Yahoo.com violated French criminal
law by making available Nazi paraphernalia on the auctions portion of
its Web site. The court ordered Yahoo to block access to these portions
of its site to users located in France. Yahoo told the French court that
such a move was impossible. Yahoo attorneys then filed suit in
California federal district court saying that they were anticipating
enforcement of the judgment in the United States, and were therefore
seeking a pre-emptive judgment from a U.S. judge declaring that the
French court's decision could not be enforced in the United States.

At issue is whether U.S. courts have the authority to make decisions
about entities that have not brought any legal action within the United
States, but that could seek to enforce a foreign court's decision here.

Cyber law experts say if the panel decides that U.S. courts do not have
the authority Yahoo is seeking, legal compliance by any businesses with
an e-commerce component in the United States could quickly revert to the
rules of those countries with the most restrictive laws. In the Yahoo
case, the specter of the threat of enforcement has an unconstitutionally
chilling effect on Yahoo and its users' speech, they argue.

"The question here is: What kind of certainty can you get about which
law will be applied to your servers on the Web?" said Jeffrey Pryce, a
lawyer with Steptoe and Johnson. "It's about getting some degree of
management of legal risk in order to make business decisions."

For Yahoo, the question also is whether the French court's orders and
penalties of approximately $19,600 (100,000 Francs at the time) a day
for non-compliance can or will be enforced in the United States. In
their complaint to the federal district court, Yahoo's attorneys argued
that the United States is the only place where the French judgment can
be enforced because, among other reasons, that is where Yahoo's Web
servers are located.

National Journal's Technology Daily PM

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Sarah Lai Stirland
Senior Writer
National Journal's Technology Daily