Jolitz Heritage

Jurisdiction and the Information Superhighway

Jurisdiction and the Information Superhighway 12/95 UC Berkeley, Berkeley, CA. Jurisdiction and the Information Superhighway, William F. (Bill) Jolitz. Jurisdiction and the Information Superhighway by , William F. (Bill) Jolitz Copyright (C) 1995 , William F. (Bill) Jolitz ABSTRACT An individual in Tennessee downloads a pornographic image from a computer located in California, initiating an action brought by Tennessee authorities against the California business which owns the computer. Since the Internet spans not only state and federal jurisdictions but also international boundaries, the question of just who has personal jurisdiction impacts the choice of which laws to apply to commerce on the Internet. This question of jurisdiction is pivotal if we are to resolve the emerging conflicts just beginning to manifest themselves in the area of communications and technology commerce. In this paper, the author argues for a doctrine independent of the technology itself to resolve these questions of personal jurisdiction to arrive at an obvious and equitable resolution of the conflict. 1 Since the basis of any legal system is that it be valid, reasonable, certain, flexible and knowable, the lack of clear rulings with respect to jurisdiction and Internet com- merce have led to confusion. In sum, the current doctrine is not knowable (since it depends on who is doing commerce in what jurisdiction), and not flexible (it must be revised every time technology appears to change); hence, it is inconsistently applied (and thus it is not reasonable or certain as to what the end result will be). This lack of clarity has resulted in confusion and ignorance as to the application of law on the Internet -- to the point that it is currently driven by a "law of the jungle" ethos. In his book The Law of Electronic Commerce, Benjamin Wright of the Texas Bar stated that much of the concern with respect to technology change is focused on the fact that a change has occurred, and far less on the effect of the change. He writes (page 3:3): Attorneys are most comfortable when conservative. Either they want to do it the old way, or they want to see a herd doing it the new way. They sense (rightly) that if the whole world moves in a particular direction, the law will follow. He brings up another lawyer's observations on changing technologies: "The typewriter, the telephone, the photocopier and the calculator were all, in their day, initially received with great caution. Lawyers, for example, were wary of the typewriter because the could no longer identify the source of the script in front of them in the same way they could identify a handwritten document." ... A handwritten document is a unique, integrated unit. It is virtually impossible to fraudulently switch the document's pages. Page switching on a typewritten document, however, requires only the lifting of a staple. So conservative nineteenth century lawyers were rational in resisting typewriters. But their judgement was pitiful, for the danger in advancing from handwritten to typewritten documents was minute. Today, it would be ludicrous for a lawyer to even wonder whether it makes any practical difference whether a business document is handwritten or typewritten. It is this author's opinion that this perspective is at the heart of the current legal dilemmas involving computer networks -- that this same pitiful judgement has once again occurred. Since computer networks are merely telephone systems for computers, the preceding fifty-plus years of experience should be directly applicable when extrapolating reasonable and equitable methods for articulating law in this "new" frontier. Unfortunately, the only decision by the Supreme Court which covers jurisdiction on computer networks appears confused by the "glamour" of the technology. As such, this decision attempts to force it into an obtuse structure to feebly hold past doctrines in place while completely ignoring more obvious and succinct decisions covering such matters in the area of telephone communications. As in the case of the legal system struggling with the move from parchment to paper, and handwriting to typewritten pages, courts frequently miss the simpler point in early cases.2 The case of pornographic images downloaded to another state is not the only one involving the Internet where jurisdiction becomes an issue, to wit: In a Technology Review article, the act of downloading a Sherlock Holmes story from a London site is discussed. While Sir Arthur Conan Doyle stories have fallen into the public domain outside of the United Kingdom, inside the UK they still fall under copyright. If the user is not in the UK, which jurisdiction prevails? Another example cited focusses on the credentials of a lawyer who answers Legal questions globally across the Internet. Is he now practicing law without a license in certain regions? Enforceability is another concern. In Canada, Ontario officials forced the deletion of Internet news information concerning a sensitive case.3 In response, Canadian users simply bypassed Canadian systems and obtained the information over the Internet from other nations systems directly. The effect of the attempted censure actually raised sensational interest of the case considerably, yet erected a barrier that took even the least competent of users mere minutes to bypass.4 Pornography on the Internet The issue of pornography on the Internet lends itself well to a study of the application of long-arm statutes and personal jurisdiction due to considerations of local interpretation. In addition, it is a widespread activity with an established historical trend. In Miller v. California, the Supreme Court ruled that residents of Bible Belt towns were not required to endure the explicit levels of pornography allowed in metropolitan centers. Thus, physical proximity to a source of potentially pornographic material established the legal doctrine of local tests to determine if material is pornographic or not. Since global computer networks by their nature erase such local and distant boundaries, pornography can no longer be judged reasonably based on this doctrine, since it inherently presumes a knowledge of who is viewing it and where it is being viewed from in order to establish local interpretation. It is quite likely that many cases may occur in this area due to the profligation of such materials on electronic forums. In France during the mid 1980's, the Minitel5 system rose from obscurity as an electronic replacement for the French telephone directory on the basis of access to materials and communications that easily would not pass the Miller v. Calfornia test in any community in the Midwestern U.S. Following in its footsteps, the Internet can also lay claim to a veritable smorgasboard of pornography. In a Carnegie-Mellon University study, researchers found 68 different sites located in 32 states, collectively providing 450,620 images and other materials that had been distributed 6,432,297 times. The Nastiest Place on Earth In 1992, the Thomases (a husband and wife) operated a business vending pornographic images from a bulletin board service called Amateur Action which was accessible via the Internet. For a yearly $99 fee, they would allow subscribers to view a large selection of por- nography, including partially clad children, bestiality, and bondage. Far from innocent pur- veyors, they proudly billed their site in Internet promotional pieces as "the nastiest place on earth". 6 They were quite successful, boasting of 3,600 subscribers in 1994. A Tennessee man surfing the Internet in mid-1993 who saw the images supplied in pro- motional pieces alerted the USPS of the appearance of the child pornography. The USPS swung into action with Operation Longarm, an anti-pornography measure that concentrated on child pornography. Memphis-based postal investigator David Dirmeyer posed as a sub- scriber ("Lance White") to Amateur Action and probed the site and its selection of materials. His work formed the basis of a criminal complaint which was used to obtain a search warrant from a federal judge (Patel) in California. Investigators raided the Thomases' house in January of 1994 and the couple was subsequently arrested to face federal charges of interstate transport and sales of pornographic materials in Tennesse. In a jury trial presided by Judge Gibbons where the local community standard was applied to determine if the materials were pornographic, the Thomases were convicted. They unwisely attempted to make use of the family lawyer who had previously dealt with a more minor matter7 in California. His entire defense was based on declaring that Miller v. California itself was not constitutional, irrespective of the materials found. The attorney did not investigate the case, mounted no defense, and failed to make any pretrial motions other than to file a motion to dismiss based on the North American Free Trade Agreement. These and other failings8 have formed the basis of the pending appeal in the case being considered by the U.S. Court of Appeals for the 6th Circuit by the Thomases new attorneys of record. The trial centered around two issues in the indictment: 1) the allegation that the Thomases shipped obscene videotapes through the mail to subscribers; and 2) that the Memphis U.S. Attorney's Office asserted jurisdiction because of the fact that the postal inspector who was based in Tennessee had initiated the action by his undercover access of the Thomases computer via the Internet. For the Thomases, the facts of the mailing of videotapes clearly made the first issue the most damaging.9 However, it is the issue of personal jurisdiction with respect of downloading images from the Internet that has the greater repercussions if allowed to stand. What community standard applies to information on a computer network when such information can be obtained by such diverse communities as New York, San Francisco and Memphis? Neither in the original case nor in the appeal case did the defense counsel rely on the argument of lack of personal jurisdiction and relevant case law of other related cases. Instead, the central thrust was against the issue of the materials itself being pornographic. It is significant to note that other porn cases in Tennessee never even make it to trial, and that in 1992 the San Jose police seized and examined the contents of the Thomases computers and found the materials insufficiently offensive to justify prosecution. One of the Thomases new attorneys, Causey, said "I'd have brought somebody in from Memphis where they sell these types of things right here. It would have made a helluva difference." The former attorney Williams comments that "... This is dealing with a political case, rather than a legal one...". Relevant Case Law In Sable Communications v. FCC, the US Supreme Court established a ruling that is considered to be a model of what they intend for the Internet. Sable, a phone sex talk purveyor, was administratively judged by the Federal Communications Commission as to the content of its communications not being able to pass the Miller v. California test in various localities. Sable contended that personal jurisdiction was not singularly established. The Supreme Court decided that Sable must bear the burden of compliance in each jurisdiction. This was considered to be reasonable since, as a step in processing payment, the location of the caller could be established in advance of providing the requisite service. In effect, the Supreme Court not only increased the number of jurisdictions to the largest number possible, but also place the burden of compliance for individual standards in each jurisdiction squarely on the shoulders of the information source. Unfortunately, this decision is technologically dependent -- in all modern computer and telephone networks, billing may be proveable, but delivery destination of information is not. Compliance may be technically impossible.l0 This doctrine also fails because it is not reasonable to expect an information supplier to understand the myriad rules and changes in the rules for every jurisdiction with which he may deal. In Mcllwee v. ADM, a dispute involving disclosures and stock sales over the telephone led the plaintiff (McIlwee) to attempt to invoke the Illinois long-arm statute to gain personal jurisdiction. Before Posner, Cummings, and Crabb of the US Court of Appeals, Crabb dis- tills the case down to a single paragraph: In response to a hypothetical question posed at oral argument, McIlwee's counsel conceded that it would be "a stretch" to assert jurisdiction in Illinois over the individual defendants on the basis of a call placed to plaintiff in Illinois in which defendants' only utterance was to ask the time. The bare allegation that the stock sale was "discussed" does not make the assertion of jurisdiction any less of a stretch. The record is devoid of any indication that the conversations regarding the sale were more substantive than an exchange about the time. The district court did not err in holding that the complaint and affidavits before it were too sparse to support the inference that defendants' telephone discussions with McIlwee were undertaken in order to perpetuate a fraud on an Illinois resident. The author argues that the long-arm statutes exist primarily to allow jurisdiction to be established in cases where otherwise intentional deceptive or criminal activities could elide prosecution, and not to provide an avenue to "forum shop" a complaint for the benefit of the plaintiff. Thus, in the absence of clear intent, the doctrine of forum non conveniens applies. In applying this ruling to the second issue of the Thomases indictment, the prosecution should have demonstrated that the effect of the transfer of information from California to Tennessee was more substantive than any other exchange prior to evaluating the content of the transfer itself, but this was not done. The postal inspector initiated contact with a computer, which responded much like an answering machine) to return information requested following payment, exactly like hundreds-of-thousands of transactions processed over the Internet daily. This does not directly justify any clear intent to do harm in and of itself. If this is done according to this ruling, all that remains is the application of the relevant sta- tute and business law to examine any indirect intent. To violate statutes making it illegal to transport for sale pornographic materials, it must be proved that a sale commissioned the transfer of pornographic goods which were received in another state. It is perfectly legal for someone to travel to California, buy the goods, and return with them to Tennessee. It is not necessarily allowable to have the goods travel to Tennessee if the sale then occurs inside of Tennessee. In the latter instance, the seller is responsible (e.g. retains ownership) until the goods are received, while in the former instance the buyer is solely responsible (since he receives it on the site of purchase). Since the transaction was the same regardless of whether the inspector's computer receiving the goods was actually present in California or Tennessee, (e.g. no shipping charges were added, nor did the goods stay in possession of the Thomases until it was marked as received by the inspector in Tennessee), the transaction matches the first instance outlined above and hence is not in violation. Further justifying this position, the software mechanism used by the inspector in obtaining the information used a techniquell that "pulled" the information from the California machine; it must be initiated and cooperate with the remote machine for any information to be obtained. In effect, the mechanism allows for a remote presence just like a telephone provides a remote voice or an airplane provides a means for a person to be conducted to a remote location. Thus, the sale occurs in California and not in Tennessee. Note that this test makes irrelevant how the remote capability is manifest; thus, it is technologically independent (mechanical, electronic or even by "magic").l2 The effect of this doctrine is that all communication takes place within the jurisdiction it originates. If the intent of the communication can be proved to be solely to undermine the laws of the answering (or receiving) party, then long-arm statutes (like that outlined earlier) allow the complaint to be heard in the receiving party's jurisdiction (allowing the due process protection of the receiving party to be maintained). Otherwise, it is up to the courts to sort out this diversity and reasonably identify the proper jurisdiction via the doctrine of forum non conveniens. In Pres-Kap v. System One, the District Court of Appeal of Florida ruled in a 2 to 1 decision on the scope of jurisdiction in a dispute between a service provider and a user of the service. The defendant/appellant Pres-Kap, a travel agency located in New York, engaged a lease to make use of the database services provided by the plaintiff/apellee System One, a Florida-based information provider. After Pres-Kap stopped making payments for the service, System One filed suit in Florida state court for damages of the broken lease. System One claimed that personal jurisdiction was established by the payment of fees and use of service.l3 This argument was accepted by the trial court. In reversing the trial court, the Court of Appeal had quite a different slant on the matter: ... Contrary to the trial court's determination, however, we conclude that these two contacts cannot convert this obviously New York-based transaction into a Florida transaction so that the defendant could reasonably expect to be sued in Florida in the event the transaction soured.... The additional factor in this case that the computer database for the contracted-for information happens to be located in Florida cannot change this result. There is no showing on this record that the defendant was even aware of the exact electronic location of the subject computer database, as this clearly would have been of little importance to it. And even if such knowledge had been shown, this surely would not have altered the defendant's reasonable expectation that New York courts would be resorted to in the event of a dispute between the parties over this New York-based contract solicited by the plaintiff in New York, negotiated by the parties in New York executed by the defendant in New York, and serviced by the plaintiff in New York. It is true that the defendant may have benefited financially from the subject contract, as well as prior similar contracts, but this was a financial gain arising from a New York, not a Florida-based business transaction. This being so, we think the trial court erred in denying the defendant's motion to dismiss this action for lack of in personam jurisdiction over the defendant. The maintenance of the instant suit against the defendant, based on the totality of the circumstances, offends traditional notions of fair play and substantial justice -- and therefore does not comply with the minimum-contracts due process requirement which must be met before Florida may assume in personam jurisdiction over a nonresident defendant. Judges Hubbart and Baskin have an obvious concern that a "reverse long-arm" procedure is taking place, with an effectively New York company using a minor Florida business base to force a change in jurisdiction for its benefit. In apparent contradiction to the doctrine of Sable v. FCC, location of where the service actually was performed was considered meaningless to determining jurisdiction -- instead, the location wherer the business appeared to be predominately conducted had more bearing on the matter. Thus, they considered the choice of a Florida jurisdiction as not reasonable, and falling under the doctrine of forum non conveniens. In addition, they were inspired to add: Indeed a contrary decision would, we think, have far-reaching implications for business and professional people who use "on-line" computer services for which payments are made to out-of-state companies where the database is located. Across the nation, in every state, customers of "on-line" computer information networks have contractual arrangements with out-of-state supplier companies, putting such customers in a situation similar, if not identical, to the defendant in the instant case.... Based on the trial court's decision below, users of such "on-line" services could be hauled into court in the state in which the supplier's billing office and database happen to be located, even if such users, as here, are solicited, engaged, and serviced entirely in-state by the supplier's local representatives. Such a result in our view, is wildly beyond the reasonable expectations of such information users, and, accordingly, the result offends traditional notions of fair play and substantial justice. They suggest that a contrary ruling might present the opportunity for many similar cases to arise and allow for the chance of innocent confusion as to what may be presumed to be reasonable laws to be obeyed. The dissenting judge also had an interesting opinion: The appellant, for over nine years, availed itself of information supplied by a computer database located here in Florida. This information ... contributed to the financial well being of the appellant ... It executed a total of four contracts between 1982 and 1989, and made rental payments in Florida for such use from 1982 until 1991. It was certainly on notice that it could reasonably expect to be sued in the courts of Florida. Here Judge Barkdull reflects the conservative view that payment alone constitutes a record, which implies notice. The pattern fit the mold so no further interpretation was required. Judge Barkdull does not see any additional concern beyond the immediate application of a simple test, and it is important to realize that many share this opinion. Here is an example of a judge who is conceptually no different from those who mistrusted the arrival of typewriters. Conclusion "The fault dear Brutus, is not in our stars, but in ourselves, that we are underlings." - Shakespeare, Julius Caesar, Act I It is not a point of this paper that the law should be adapted to fit changes in technology. Rather, it is we who must adapt and apply uniformly the law to all cases including those encorporating "new" technologies. Cumbersome and obsolete doctrines give way to lithe ones only when they are burdened to the point of collapse -- leaving only those elements which were universal to begin with, yet until that point obscured by the "novelty" of the moment. In this paper, a pathologic case involving pornography and the Internet was used to more closely examine the broader topic of jurisdiction and new communication technologies in light of three different cases. While the Supreme Court case clearly dominates the legal landscape at this time, more concise and illuminating views may be found in current cases in the lesser courts. From these views, a suggested alternative doctrine has been derived in this paper. For successful application on the information superhighway, such rules of the road must be knowable, reasonable, and certain by its drivers. Footnotes: 1 Ensuring that the rights of due process are not biased in favor of of either the plaintiff or the defendant. 2 During a discussion focussed on defining an algorithm as a patentable invention in a case brought by Chevron Corporation which established the legal basis for software patents in the US, one of the 'lesser lights' on the Supreme Court reportedly whispered to another "Are they going to talk to us about logarithms again?". -- From a personal communication with Harold Messner, an attorney for Chevron Corporation at the time. 3 The officials were. applying rules that limited information on a case to avoid the sensationalism present in cases like the O.J. Simpson case. 4 Other breaking events which are still changing as this is mitten involve the German government's attempt to censor sites and newsposters who 'incite racial hatred' such as those professing neo-Nazi beliefs. Since these sites are located in the U.S. and Canada, international jurisdiction issues cannot be ignored. 5 A philosophical precursor to the Internet. 6 Intending an obvious twist on the Disneyland motto -- ironic given child pornography was one of their specialties. 7 A family member's drunk driving charge. 8 See Offensive to Professional Standards. In short, Williams is alleged to have minimized the downside risk to his clients, defended both together and not separately, and to have limited erperience trying criminal cases. In addition, he seriously annoyed the California federal judge who ruled on search issues. To this end, Judge Patel wrote a scathing order in August 1994 with the excerpt: "... counsel's claims of fraud and conspiracy would constitute serious allegations were they not so patently frivolous on their face ... [the pleadings] are more worthy of a pro se litigant, and an inept one at that...". Judge Patel rejected all of Williams arguments and had the state bar investigate his qualifications to try cases in California. 9 Because materials were transported across interstate boundaries that could be contested with local jurisdiction and obvious tests. In addition, it required the defendant's attorney to prove that similar materials could be obtained locally. 10 Mobility services are about to be deployed, thus allowing telephone numbers and computer network ID's to remain constant as people and equipment travel around. Billing is independent of destination of use. As such, the ability to prove delivery will eventually drop only to the level required to avoid non-repudiation of request of service (which does not itself require the physical location to be known). Currently, cellular telephones can "roam" and only to a limited degree inside the phone system itself can location be determined. Worse, it is possible to intentionally mislead location with some networks, potentially requiring additional tests ("you have a Tennessee accent, I must assume you are ceiling from Tennesse"). 11 Client mode FTP (file transfer protocol) via a WWW (web) browser. 12 It may be interesting to note that in German telecommunications law, any kind of communication that crosses a thoroughfare is covered by the same laws, regardless of the means through which it is communicated. 13 However, all other contacts, negotiations, support and service were all handled in New York by System One from a New York office. In addition, a clause in the contract subjecting the defendant to suit in Florida had been struck out. Cases Cited 1989 Sable Communications v. FCC, US Supreme Court 1994 Pres-Kap v. System One, District Court of Appeal of Florida 3rd district 1994 Mcllwee v. ADM, US Court of Appeals 7th circuit 1973 Miller v. California, US Supreme Court References "CMU Study of Porn on the Internet:" Reclaiming Sex from the Pornographers: Cybersexual Possibilities, Carlin Meyer, Georgetown Law Journal. June 1995, Volume 83, Number 5, Page 1969. "Pres Kap v. System One:" Extending the Reach of the Long-arm Statute through the Internet, Michael J. Santisi, The John Marshall Journal of Computer & Information Law, Spring 1995, Volume 13, Number 3, Page 133. "Amateur Action v. Tennesse:" Criminal Law and the Internet; Recent Legal Cases Highlight the Difficulty of Applying Existing Laws to Assertedly Criminal Conduct in Cyberspace, Mark Eck- enwiler, Legal Times, January 23 1995, Volume 17, Number 36, Page S32. Offensive to Professional Standards, Howard Mintz, The Recorder, January 5 1995, Page 1. Law and Order Comes to Cyberspace, Edwin Diamond, Technology Review. October 1995, Volume 98, Number 7, Page 22. A Cyberspace Legal Odyssey, Benjamin Wittes, New Jersey Law Journal. January 2, 1995, Page 18. Litigation Online: Cyber Issues Loom, Edward a. Cavazos, The American Lawyer, May 1995, Supplement: Litigation at a Crossroads, Page 54. "Extending First Amendment Protections:" Jefferson on the Internet, Nicholas Johnson, Federal Communications Law Journal. December 1994, Volume 17, Number 2, Page 281. Virtual Chaos: Crime goes Online, Gayle M.B. Ahnson, The Washington Times. May 8, 1995, Monday, Final Ed, Page 6. Adapting Criminal Law to Computer Activity, Mark Eckenwiler, The Connecticut Law Tribune. February 27 1995, supplement: Technology, Page 11a. "Reference Works:" The Law of Electronic Commerce: EDI, E-mail and Internet: Technology, Proof, and Liability, Benjamin Wright, 2nd edition, Boston, Little, Brown and Company, 1995.