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Yahoo Inc.’s attempt to protect itself against a French court’s order forbidding auctions of Nazi memorabilia failed in the 9th U.S. Circuit Court of Appeals Monday. 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 — were watching the case because it deals with untrodden legal ground involving Internet commerce and the collision of different countries’ courts. One of the key issues is that the French groups have never tried to collect on their judgment. Instead, Yahoo filed a pre-emptive lawsuit against the groups and prevailed in San Jose, Calif. in front of U.S. District Judge Jeremy Fogel, who granted Yahoo’s summary judgment request and said the French judgment conflicts with the First Amendment. But 9th Circuit Senior Judges Warren Ferguson and A. Wallace Tashima didn’t even reach that constitutional issue. Instead, they stopped their analysis after deciding that the French groups’ actions didn’t rise to a level that would allow U.S. courts to get involved. The judges hang their hat on reasoning that the French groups haven’t yet done anything to harm Yahoo. “Yahoo obtains commercial advantage from the fact that users located in France are able to access its Web site � 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, writing that “although wrongful conduct will satisfy the Supreme Court’s constitutional standard for the exercise of [personal] jurisdiction, it is not necessarily required in all cases; indeed, I believe that the Supreme Court’s ‘express aiming’ test may be met by a defendant’s intentional targeting of his actions at the plaintiff in the forum state.” 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 the Internet company 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, said he was disappointed but not crushed because the decision was based only on the procedural issue of jurisdiction. “We would have preferred the Ninth 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,” Vanderet said. “I think the message to these French groups is ‘you’re off the hook only because you never tried to enforce’” the judgment. Yahoo hasn’t decided whether to appeal, Vanderet added. But the court’s reluctance to do a full analysis could also be bad for Yahoo and other Internet companies that do business over international lines. Wendy Seltzer, a staff attorney at the Electronic Frontier Foundation, said 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,” Seltzer said. The EFF signed an amicus curiae brief that was 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. “Yahoo would like the world to be covered by America’s First Amendment because that would make it easier for Yahoo to do business around the world,” Jones told The Associated Press. “But that puts Yahoo in the ironic position of trying to impose American values on the rest of the world.” The case is Yahoo v. La Ligue Contre Le Racisme et L’Antisemitisme, 04 C.D.O.S. 7742.

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