2003 B.C. Intell. Prop. & Tech. F. 040801
A World Apart
The internet has been creeping into the very foundations of law over the past years. Recently, cyberspace found its footing in personal jurisdiction in the case of Young v. New Haven Advocate and the Dow Jones & Co., Inc. v. Gutnick case in Australia. While covering basically the same issue of personal jurisdiction in the internet age, the two courts were a world apart in their rulings.
The New Haven case revolved around the fact that a Connecticut-based newspaper had posted on its website a story about the harsh living conditions and treatment of Connecticut inmates that were sent to Virginia prisons because of Connecticut’s over-populated facilities. Specifically, the New Haven Advocate stated that the prison warden, Stanley Young, had displayed Civil War memorabilia in his office.
Under the claim of libel, Young filed a lawsuit against the newspaper charging that this story painted him as a racist amongst other things. However, the New Haven Advocate countered that the U.S. District Court did not have proper personal jurisdiction because the New Haven Advocate had no connections with Virginia. They did not have offices there. They did not have employees there. They did not even have any subscribers there. Nor did any of their reporters even go to Virginia. Yet, the District Court still found that it had personal jurisdiction to pull in the New Haven Advocate; the court decided that since this story was published on the website with a potential “worldwide audience”, New Haven Advocate should have predicted that Virginians would also view this story that could damage Young’s reputation.
This case was appealed to the Fourth Circuit who later found that the District Court was wrong. Central to the Appellate Court’s ruling was the application of other personal jurisdiction cases to the present case. For instance, the court first looked to Int’l Shoe Co. v. Washington to establish the notion of sufficient minimum contacts. Int’l Shoe Co. v. Washington, 326 U.S. 310. In addition, the court turned to Calder v. Jones as the basis of the long-standing libel suit and personal jurisdiction along with the more recent ALS Scan v. Digital Serv. Consultants internet case in reasoning that Young did not establish sufficient personal jurisdiction. Calder v. Jones, 465 U.S. 783; ALS Scan v. Digital Serv. Consultants, Inc., 293 F.3d 707. In Calder, the court ruled that in a libel suit, the harm must be expressly aimed at the forum state and also that the harm would also be felt in the forum state. ALS Scan stands for the proposition that in the internet medium, just as in Calder, must be directed also at the forum state. In the present case, the New Haven Advocate intended its audience to be readers in Connecticut and directed the content on its website accordingly. The New Haven Advocate did not intend nor direct their content to Virginia thus falling below the standard under Calder and ALS Scan.
In Dow Jones v. Gutnick, the plaintiff was a wealthy Australian businessman who claimed that Barron’s Online, a subsidiary of Dow Jones, had published a defamatory paper against him hinting that he was a money-launderer. Similar to New Haven Advocate, Dow Jones argued that it had neither employees nor any offices in Australia. Further, ninety nine percent of its subscribers are in the U.S. Thus, it is not directing its content to Australia (or the equivalent argument of no sufficient minimum contacts). However, the Australian court rejected Dow Jones’ case. The Australian court then questioned where the libel occurred. They ruled that libel did occur in Australia against the arguments from Dow Jones. In its reasoning, the court explained that publication on the internet readily confers publication in Australia when the internet story is read in Australia. It is first sent in digital format from the web servers in New Jersey to a readable form when accessed by computer in Australia.
Alternatively, Dow Jones put forth the simple publication rule argument. Under the simple publication rule, Dow Jones would concede that the article was published in Australia; however, since it was on the web, it was simultaneously published around the world. Thus, the proper forum for a lawsuit would be where Dow Jones had directed its content: the U.S. This argument was also rejected by the Australian court. Rather, the court stated that it would keep a traditional approach: each publication can bring about its own lawsuit. The court further explained in their opinion that, to date, internet cases can still be tried on the traditional approaches to law, and there does not need to be a new set of law in place. The court reasoned that if a party does publish on the internet, the party should fully understand that the publication can be effectively unbounded by geography. If the party wants to limit internet publication, it should come up with some effective measure to do so.
Unlike the U.S. decision, this Australian decision could potentially cause fervor over forum shopping. It would be predicted that U.S. websites would use only U.S. sources and stay in the U.S because their first amendment right to free speech is protected against any foreign jurisdiction. It is hard to predict with certainty how international companies will begin dealing with this issue. For now, it seems that if the world were to follow the Australian court’s reasoning, there could be a lawsuit in every country that can receive publication; each publication would have to take into account each country’s laws on defamation and libel where the publication could potentially be accessed. And technology was supposed to make our lives simpler?
Federal Litigator
18 No.2 FEDLIT 32
Forbes.com
http://www.forbes.com/2002/12/10/cx_aw_1210dowjones.html
LDRC MediaLawLetter, Dec. 2002, pg. 5-10.
http://www.ldrc.com/index2.html (membership required)
Newspaper Association of America
http://www.naa.org/artpage.cfm?AID=4756&SID=1069
Tech Law Journal
http://www.techlawjournal.com/topstories/2002/20021213.asp
SRI Media
http://www.srimedia.com/artman/publish/article_317.shtml