November 16, 2001
By Carl S. Kaplan, New York Times

A federal court decision last week was cheered by Internet companies and civil liberties groups as a victory for free expression, but some legal experts are speculating that, in reality, little has changed.

Last year, a court in Paris rattled the legal pads of Internet lawyers around the world when it ordered Santa Clara-based Yahoo Inc. to censor Nazi-related auction items on its United States-based Web sites so that French users who access the sites are not exposed to materials that are constitutionally protected in this country but are illegal in France.

Yahoo had argued, among other things, that because it lacks the technology to block people in France from viewing the Yahoo auction site, it could not comply with the order without banning all Nazi-related material from its services altogether.

The court was unconvinced and to make sure the company was listening, it imposed a daily fine of 100,000 francs (about $13,300) for each day after the end of February, 2001 that Yahoo didn't comply with the judgment.

The case became a battle cry for some civil liberties groups. After all, they argued, if by imposing its legal values within its borders, France can effectively censor Internet content created and freely expressed in the U.S., then any country could do the same thing. Before you know it, they argued, speech on the Internet would be subject to control by foreign governments, who could tell Americans what to say.

A little more than a week ago, the case apparently came to a happy ending for Internet service providers based in the United States. Jeremy Fogel of the United States District Court Judge in San Jose, ruled on November 7th that the French court's order and fine are not enforceable against Yahoo in the United States. He said that to enforce the foreign order would be repugnant to the First Amendment, which protects the sale or display of artifacts or expression of viewpoints associated with a particular political slant, including Naziism and anti-Semitism.

Civil liberties groups cheered. Yahoo, which two months after the French court's ruling revised its auction guidelines to ban certain Nazi-related items -- but not coins or stamps -- issued a victorious press release. But increasingly, some Internet law experts who specialize in the arcane subject of jurisdiction are wondering if Judge Fogel's decision, as a practical matter, is less than meets the eye.

Jack Goldsmith, a law professor at the University of Chicago, is one of the skeptics. "What Judge Fogel held was that the French judgment was not enforceable in the U.S. Well, every lawyer who knows this area of the law knows that you can't enforce a foreign judgment like this in the U.S.," he said. He referred to precedents where judgments awarded in libel-friendly English courts were held to be unenforceable in the United States because of the First Amendment. He added that a foreign country's criminal laws, such as the French hate speech code, have not been enforced in other nations for hundreds of years.

Goldsmith said that the French plaintiffs in the case didn't try to enforce a money judgment in the U.S., because such a move would have been futile. Instead, Yahoo filed a lawsuit to block possible enforcement of the order. "It was a pure PR thing," said Goldsmith. "They wanted a U.S. court to say . . . that what the French court did was wrong."

In any case, said Goldsmith, the French litigants - composed of groups actively opposed to anti-Semitism -- can collect on any money judgment in France. Yahoo has a licensing contract with its French subsidiary, Yahoo France, said Goldsmith. "There is a debt that Yahoo France owes Yahoo, Inc.," he said. "They can attach that."

Goldsmith said that Judge Fogel's decision has not changed the fundamental nature of the jurisdictional dilemma posed by the Internet. "If you are a global Internet company [with foreign assets] doing business in many countries, you have to follow local laws," he said. "I don't know why that's shocking."

In Yahoo's case, said Goldsmith, the company could use filtering technology to reasonably --though not perfectly -- filter out French viewers from certain content. Thus he said, its "fair" for the French court to impose a filtering burden on the company.

Michael Geist, a Internet law expert at the University of Ottawa, agreed that Judge Fogel's decision was "a no brainer" and not particularly significant as a practical matter.

"People who say this case was a great victory are making several fundamental mistakes," he said. One is presuming that the French Court was wrong to impose its view on a United States actor.

"Every country has an issue that it regards as particularly important, such as gambling, free speech, privacy or copyright, and every country believes that for that one issue its law has to apply" to Internet content that originates on a foreign server, Geist explained. "In fact, there have been U.S. cases where New York State, for example, has imposed its anti-gambling laws on foreign companies whose off-shore gambling sites are accessible to New York residents."

"The fact is that people have got to recognize the multi-value self-interest that each country has to enforce its own laws against Internet content that has significant negative effects" within the country's borders, said Geist.

Mary Catherine Wirth, senior corporate counsel in Yahoo's international division, defended the importance of Judge Fogel's decision. For one thing, she said in an interview, the court extended classic law about enforcement of foreign judgments to the Internet context -- a first.

More importantly, the French Court's assertion of jurisdiction over Yahoo, merely because its Web site is accessible in France, is rendered meaningless by the U.S. decision, she said. She said that Yahoo has no assets in France, and that Yahoo France is not a part of the lawsuit. "The French plaintiffs have no way to enforce the judgment except by coming here, and if they can't do that, then that [French] judgment really isn't worth anything," she said.

Wirth acknowledged, however, that other global Internet players with assets abroad might not be in as advantageous a position as Yahoo.

Asked if the French court could seek to extract money from Yahoo France's licensing fees owed Yahoo, she said: "That would be an issue of French law. It's not something I could comment on."