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Yahoo Inc.’s attempt to protect itself against a French court’s order forbidding auctions of Nazi memorabilia failed Aug. 23 in the U.S. Court of Appeals for the 9th Circuit. A divided panel ruled that U.S. courts do not have jurisdiction over two organizations that successfully sued Yahoo in French court, winning sanctions and thousands in fines. It is against French law to sell or possess Nazi memorabilia. Two groups — La Ligue Contre Le Racisme et L’Antisemitisme and L’Union Des Etudiants Juifs de France — filed suit against the well-known Internet portal in 2000, arguing that Yahoo facilitates transactions and discussions of the offending materials. A diverse crowd — including media, the American Civil Liberties Union, the U.S. Chamber of Commerce, and Internet companies — watched the case because it dealt with untrodden legal ground involving Internet commerce and the collision of different countries’ courts. The French groups have never tried to collect on their judgment. Instead, Yahoo filed a pre-emptive suit against the groups and prevailed in front of California federal Judge Jeremy Fogel, who granted Yahoo summary judgment and said the French judgment conflicted with the First Amendment. But 9th Circuit Senior Judges Warren Ferguson and A. Wallace Tashima didn’t even reach that constitutional issue. Instead, they concluded that the French groups’ actions didn’t allow U.S. courts to get involved because the French groups hadn’t yet harmed Yahoo. “Yahoo cannot expect both to benefit from the fact that its content may be viewed around the world and to be shielded from the resulting costs,” Ferguson wrote for the majority. “If Yahoo violates the speech laws of another nation, it must wait for the foreign litigants to come to the United States to enforce the judgment before its First Amendment claim may be heard by a U.S. court.” Senior Judge Melvin Brunetti dissented. Brunetti agreed with Fogel that the French groups took actions in California that put them under federal court jurisdiction. They sent a cease-and-desist letter to Yahoo, used the U.S. Marshals Service to serve process, and asked the French court to order Yahoo to do something that could only be done at its California headquarters. That the groups failed to enforce the judgment against Yahoo is “immaterial” because the Internet portal is still suffering injury, according to Brunetti. Robert Vanderet, a partner in O’Melveny & Myers’ Los Angeles office who argued the case on behalf of Yahoo, says he was disappointed, but not crushed because the decision was based only on the procedural issue of jurisdiction. “We would have preferred the 9th Circuit join its voice with Fogel’s on the First Amendment issue, but it’s a good decision in that it doesn’t challenge that,” says Vanderet. “I think the message to these French groups is ‘you’re off the hook only because you never tried to enforce’ ” the judgment. Wendy Seltzer, a staff attorney at the Electronic Frontier Foundation, notes that the jurisdictional issues aren’t fully resolved. The French groups could still try to enforce the French court’s ruling in the United States. “The harm is really in that chill in the period of uncertainty,” she says. The EFF signed an amicus brief submitted by the Center for Democracy & Technology, the ACLU, and other First Amendment groups on behalf of Yahoo. The French groups were represented by Richard Jones, special counsel at Covington & Burling in San Francisco. Jeff Chorney ([email protected]) is a reporter with The Recorder , an ALM publication based in San Francisco.

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