Achieving Legal and Business Order in Cyberspace: A Report on Global Jurisdiction Issues Created by the Internet

Business Lawyer

Volumn 55, Issue 4, 2000, Pages 1801-1946

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EID: 0346346286     PISSN: 00076899     EISSN: None     Source Type: Journal    
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References (443)

1. Members of each working group participated in that group's discussion but are not responsible for other portions of the report.
2. John McCormick, The Internet 500: Deep Well, INTERACTIVE WEEK (Nov. 15, 1999) (citing Forrester Research) 〈http://www.zdnet.com/intweek/stories/news/0,4164,2394349, 00.html.
3. "[W]hile the internet should result in a reduction in business costs it will also lead to an increase in competition. New companies can enter industries more easily. One issue will be the extent to which people are prepared to trust the new businesses and execute transactions online." Schroeder Economics, Economic Perspective: Quarterly Economic and Market Analysis, First Quarter 2000 (Jan. 10, 2000).
4. Money Marketing called the doubling of the estimated percentage of U.S. gross domestic product from 1998 to 2005 and the increase of the U.K. gross domestic product from less than one percent in 1998 to an estimated ten percent in 2005 as "exponential growth." Enter the New Web Advisor, MONEY MARKETING, Sept. 9, 1999; Winopportunity.com presents data estimates purporting to show that, "[a]nalysis and projections indicate Web commerce has exponential growth," based on Market Research - Worldwide Commerce Summary, December 1995- December 2001 (visited July 3, 2000) 〈http://www.winopportunity.com/marketresearch. html〉; vehicleonline.com's Web site claims that, "[c]ommercialization has hit the Net, and it's expanding at an exponential rate." Electronic Commerce (visited July 3, 2000) 〈http://vehicleonline.com/webdesign/ecommerc.html〉; "'We continue to see virtually exponential growth in online purchasing penetration, from barely 1 percent a year ago to 4 percent last spring and now to 10 percent,' said Craig Johnson, a partner at Marketing Corp. of America, regarding a recent company survey." Jeffrey R. Harrow, Exponential E-Commerce Growth (last modified Jan. 4, 1999) 〈http://techweb.com/voices/harrow/1999/0104harrow.html〉.
5. Money Marketing called the doubling of the estimated percentage of U.S. gross domestic product from 1998 to 2005 and the increase of the U.K. gross domestic product from less than one percent in 1998 to an estimated ten percent in 2005 as "exponential growth." Enter the New Web Advisor, MONEY MARKETING, Sept. 9, 1999; Winopportunity.com presents data estimates purporting to show that, "[a]nalysis and projections indicate Web commerce has exponential growth," based on Market Research - Worldwide Commerce Summary, December 1995-December 2001 (visited July 3, 2000) 〈http://www.winopportunity.com/marketresearch. html〉; vehicleonline.com's Web site claims that, "[c]ommercialization has hit the Net, and it's expanding at an exponential rate." Electronic Commerce (visited July 3, 2000) 〈http://vehicleonline.com/webdesign/ecommerc.html〉; "'We continue to see virtually exponential growth in online purchasing penetration, from barely 1 percent a year ago to 4 percent last spring and now to 10 percent,' said Craig Johnson, a partner at Marketing Corp. of America, regarding a recent company survey." Jeffrey R. Harrow, Exponential E-Commerce Growth (last modified Jan. 4, 1999) 〈http://techweb.com/voices/harrow/1999/0104harrow.html〉.
6. Money Marketing called the doubling of the estimated percentage of U.S. gross domestic product from 1998 to 2005 and the increase of the U.K. gross domestic product from less than one percent in 1998 to an estimated ten percent in 2005 as "exponential growth." Enter the New Web Advisor, MONEY MARKETING, Sept. 9, 1999; Winopportunity.com presents data estimates purporting to show that, "[a]nalysis and projections indicate Web commerce has exponential growth," based on Market Research - Worldwide Commerce Summary, December 1995- December 2001 (visited July 3, 2000) 〈http://www.winopportunity.com/marketresearch. html〉; vehicleonline.com's Web site claims that, "[c]ommercialization has hit the Net, and it's expanding at an exponential rate." Electronic Commerce (visited July 3, 2000) 〈http://vehicleonline.com/webdesign/ecommerc.html〉; "'We continue to see virtually exponential growth in online purchasing penetration, from barely 1 percent a year ago to 4 percent last spring and now to 10 percent,' said Craig Johnson, a partner at Marketing Corp. of America, regarding a recent company survey." Jeffrey R. Harrow, Exponential E-Commerce Growth (last modified Jan. 4, 1999) 〈http://techweb.com/voices/harrow/1999/0104harrow.html〉.
7. Money Marketing called the doubling of the estimated percentage of U.S. gross domestic product from 1998 to 2005 and the increase of the U.K. gross domestic product from less than one percent in 1998 to an estimated ten percent in 2005 as "exponential growth." Enter the New Web Advisor, MONEY MARKETING, Sept. 9, 1999; Winopportunity.com presents data estimates purporting to show that, "[a]nalysis and projections indicate Web commerce has exponential growth," based on Market Research - Worldwide Commerce Summary, December 1995- December 2001 (visited July 3, 2000) 〈http://www.winopportunity.com/marketresearch. html〉; vehicleonline.com's Web site claims that, "[c]ommercialization has hit the Net, and it's expanding at an exponential rate." Electronic Commerce (visited July 3, 2000) 〈http://vehicleonline.com/webdesign/ecommerc.html〉; "'We continue to see virtually exponential growth in online purchasing penetration, from barely 1 percent a year ago to 4 percent last spring and now to 10 percent,' said Craig Johnson, a partner at Marketing Corp. of America, regarding a recent company survey." Jeffrey R. Harrow, Exponential E-Commerce Growth (last modified Jan. 4, 1999) 〈http://techweb.com/voices/harrow/1999/0104harrow.html〉.
8. 〈http://www.mgt.smsu.edu/mgt487/mgtissue/newstrat/moore.htm〉.
9. 〈http://www.mgt.smsu.edu/mgt487/mgtissue/newstrat/metcalfe. htm〉.
10. The United States Department of Commerce describes the rate of growth of the value of c-commerce transactions as "remarkable," Dept. of Commerce, The Emerging Digital Economy II, Ch. 1. available in 〈http://www.ecommerce.gov/ede/chapter1.html〉 [hereinafter Commerce Dept. Report], while Robert Shapiro, the U.S. Under-Secretary of Commerce for Economic Affairs, characterized the growth as "breathtaking." Paul Taylor, Reaping the Rewards of IT Growth: The Digital Revolution is Bringing About Huge Worldwide Economic and Social Changes, Which Will Enhance Job Creation and Transformation and Change the Way in Which Business is Conducted, FIN. TIMES (LONDON), Sept. 1, 1999, at 1.
11. The United States Department of Commerce describes the rate of growth of the value of c-commerce transactions as "remarkable," Dept. of Commerce, The Emerging Digital Economy II, Ch. 1. available in 〈http://www.ecommerce.gov/ede/chapter1.html〉 [hereinafter Commerce Dept. Report], while Robert Shapiro, the U.S. Under-Secretary of Commerce for Economic Affairs, characterized the growth as "breathtaking." Paul Taylor, Reaping the Rewards of IT Growth: The Digital Revolution is Bringing About Huge Worldwide Economic and Social Changes, Which Will Enhance Job Creation and Transformation and Change the Way in Which Business is Conducted, FIN. TIMES (LONDON), Sept. 1, 1999, at 1.
12. A major "selling point" of the World Wide Web is its ability to offer a "virtual store-front" to anyone, from an individual to a multinational corporation, with a product to market. Commercially available software packages enable even those computer users who are not versed in the intricacies of programming to create customised Web sites quickly and at a relatively low cost. The swift development of this technology and a cultural shift towards encouraging on-line commerce have led to dramatic growth in the demographics and dollar amounts of the on-line marketplace, which in turn offers a challenging new context for the application of the Uniform Commercial Code's ("UCCs") established and emerging concepts of the sale of "goods." Walter A. Effross, The Legal Architecture Of Virtual Stores: World Wide Web Sites And The Uniform Commercial Code, 34 SAN DIEGO L. REV. 1263, 1268 (1997).
13. "With the ability to reach millions of Internet users simply by establishing a website, tens of thousands of companies are expected to take advantage of electronic commerce, 'redefining and restructuring the distribution of goods and services.'" Brian K. Epps, Maritz, Inc. v. Cybergold, Inc.: The Expansion of Personal Jurisdiction in the Modern Age Of Internet Advertising, 32 GA. L. REV. 237, 239 (1997) (quoting Louise Kchoe, Surge of Business Interest, FIN. TIMES, Mar. 1, 1995, at XVIII).
14. See Carleton Fiorina, The Communications Revolution, in COMMONWEALTH CLUB OF CALIFORNIA MONTHLY NEWSLETTER, July 19, 1999, 〈http://www.commonwealthclub. org/newslet/fiorina.html〉 [hereinafter Fiorina].
15. Id.
16. Id.
17. Id.
18. U.S. Government Working Group on Electronic Commerce, Towards Digital eQuality, 2nd Annual Report (1999) (citing Internet Software Consortium Domain Survey 〈http://www.isc.org〉).
19. Matrix Information and Directory Services, Inc. (visited July 3, 2000) 〈http://www. mids.org〉 [hereinafter Matrix].
20. Computer Industry Almanac (visited July 3, 2000) 〈http://www.c-i-a.com/19991liu.htm〉 [hereinafter Almanac].
21. Europe and Asia Play Catch-up with US (last modified Jan. 11, 2000) 〈http://www.e-land.com/estats/011100_wwinternetuse.html〉 [hereinafter Catch-up].
22. Almanac, supra note 16.
23. Catch-up, supra note 17.
24. Id.
25. Id.
26. Mary Brandel, Technology Flashback: E-Commerce Expands, COMPUTERWORLD, Dec. 6, 1999, at 78 (citing Forrester Research).
27. The Boston Consulting Group & Shop.org, New BCG Study Re-Evaluates Size, Growth and Importance of Business-To-Business E-Commerce (visited July 3, 2000) 〈http://www.bcg.com/practice/ecommerce/press_coverage_subpage4.asp〉.
28. Vanessa Hua, E-Shopping: Online Predictions; Despite huge stakes, Net sales estimates no more than educated guesses, SAN FRANCISCO EXAMINER, Dec. 6, 1999, at A14.
29. Id.
30. Europe Surges Forward in eCommerce (last modified Jan. 7, 2000) 〈http://www. emarketer.com/estats/010700_euro.html〉 (citing Forrester Research, 1999).
31. Fiorina, supra note 10.
32. See President William J. Clinton & Vice President Albert Gore, Jr., A Framework for Global Electronic Commerce (1997) (visited July 3, 2000) 〈http://www.iitf.nist.gov/eleccomm/ccomm.htm〉.
33. Id.
34. American Library Ass'n. v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997).
35. Personal jurisdiction is the authority of a state to insist that a defendant appear and defend a claim brought against it or suffer the entry of an enforceable default judgment against it. It is part of a broader universal requirement that a court possess adjudicatory jurisdiction, which encompasses subject matter jurisdiction as well.
36. Prescriptive or regulatory jurisdiction is the authority of a state to regulate an entity's conduct and to penalize its failure to comply with that regulation, either in an enforcement action brought by the state or through the use of its law by its courts to determine the merits of a private claim.
37. In the United States, the potential for such state "aid" in the enforcement of another state's judgment is constitutionally acknowledged in the "full faith and credit clause." U.S. CONST. art. IV, § 1. Similarly, the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Sept. 30, 1968, 1978 O.J. (L 304) 36 [hereinafter Brussels Convention], Title III, provides for recognition and enforcement of a judgment rendered by one contracting state by other contracting states.
38. The Project is directed by a Steering Committee composed of members of the Cyberspace Law Committee of the ABA's Section of Business Law and representatives from Chicago-Kent College of Law. See 〈http://www.kentlaw.edu/cyberlaw〉.
39. See generally Jack Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199 (1998); David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996); Neil Natanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283 (1996); Henry H. Perritt, Jr., Will the Judgment - Proof Own Cyberspace? 32 INT'L LAW. 1121 (1998); Thomas P. Vartanian, Whose Internet is it Anyway? The Law of Jurisdiction in Cyberspace: Achieving Legal Order Among the World's Nations (Mar. 14, 2000), available in 2000 GLOBAL INTERNET SUMMIT (visited May 12, 2000) 〈http://www.kentlaw.edu/cyberlaw/resources/globalsummit.rtf〉.
40. See generally Jack Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199 (1998); David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996); Neil Natanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283 (1996); Henry H. Perritt, Jr., Will the Judgment - Proof Own Cyberspace? 32 INT'L LAW. 1121 (1998); Thomas P. Vartanian, Whose Internet is it Anyway? The Law of Jurisdiction in Cyberspace: Achieving Legal Order Among the World's Nations (Mar. 14, 2000), available in 2000 GLOBAL INTERNET SUMMIT (visited May 12, 2000) 〈http://www.kentlaw.edu/cyberlaw/resources/globalsummit.rtf〉.
41. See generally Jack Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199 (1998); David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996); Neil Natanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283 (1996); Henry H. Perritt, Jr., Will the Judgment - Proof Own Cyberspace? 32 INT'L LAW. 1121 (1998); Thomas P. Vartanian, Whose Internet is it Anyway? The Law of Jurisdiction in Cyberspace: Achieving Legal Order Among the World's Nations (Mar. 14, 2000), available in 2000 GLOBAL INTERNET SUMMIT (visited May 12, 2000) 〈http://www.kentlaw.edu/cyberlaw/resources/globalsummit.rtf〉.
42. See generally Jack Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199 (1998); David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996); Neil Natanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283 (1996); Henry H. Perritt, Jr., Will the Judgment - Proof Own Cyberspace? 32 INT'L LAW. 1121 (1998); Thomas P. Vartanian, Whose Internet is it Anyway? The Law of Jurisdiction in Cyberspace: Achieving Legal Order Among the World's Nations (Mar. 14, 2000), available in 2000 GLOBAL INTERNET SUMMIT (visited May 12, 2000) 〈http://www.kentlaw.edu/cyberlaw/resources/globalsummit.rtf〉.
43. See generally Jack Goldsmith, Against Cyberanarchy, 65 U. CHI. L. REV. 1199 (1998); David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996); Neil Natanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283 (1996); Henry H. Perritt, Jr., Will the Judgment - Proof Own Cyberspace? 32 INT'L LAW. 1121 (1998); Thomas P. Vartanian, Whose Internet is it Anyway? The Law of Jurisdiction in Cyberspace: Achieving Legal Order Among the World's Nations (Mar. 14, 2000), available in 2000 GLOBAL INTERNET SUMMIT (visited May 12, 2000) 〈http://www.kentlaw.edu/cyberlaw/resources/globalsummit.rtf〉.
44. 74 F.3d 701 (6th Cir. 1996).
45. The substantive areas are advertising/consumer protection, intellectual property, payment systems/banking, data protection, public law/gaming, sale of goods, sale of services, securities, and taxation.
46. See 〈http://www.kentlaw.edu/cyberlaw〉 for the Project's Terms of Reference, etc. The Project is sponsored by the ABA Section of Business Law and cosponsored by the Sections of Intellectual Property Law, International Law and Practice, Public Utility, Communications and Transportation, Science and Technology, and Tax.
47. See GEORGE S. MACHOVEC, TELECOMMUNICATIONS, NETWORKING AND INTERNET GLOSSARY 56 (1993) (defining the Internet as "[t]he collection of networks that connect government, university, and commercial agencies . . . any set of interconnected, logically independent networks"); see also CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1260 n.2 (6th Cir. 1996) (defining the Internet as "[t]he world's largest computer network, often described as a 'network of networks.'") (citations omitted); Inset Sys., Inc. v. Instruction Set, Inc., 937 E Supp. 161, 163 (D. Conn. 1996) (defining "[t]he Internet [as] a global communications network linked principally by modems which transmit electronic data over telephone lines"); American Civil Liberties Union v. Reno, 929 F. Supp. 824, 830-45 (E.D. Pa. 1996) (defining the Internet as "not a physical or tangible entity, but rather a giant network which interconnects innumerable smaller groups of linked computer networks. It is thus a network of networks.").
48. Tammy S. Trout-McIntyre, Personal Jurisdiction and the Internet: Does the Shoe Fit? 21 HAMLINE L. REV. 223, 224 (1997).
49. Id.
50. Global Internet Project, How the Internet Works (visited July 3, 2000) 〈http://www.gip.org/gip7.htm〉.
51. Id.
52. Id.
53. The Internet Corporation for Assigned Names and Numbers (visited June 3, 2000) 〈http://www.icann.org/general/abouticann.htm〉.
54. The .COM domain was intended for use by commercial businesses, .NET was focused specifically for network or Internet service providers, .ORG was meant for non-commercial organisations, .EDU was designated for four-year degree granting educational institutions, .MIL was for the military, .GOV was reserved for government entities.
55. Network Solutions, Inc. is a private company which performs the function of registering Internet domain names. It is currently under contract with the National Science Foundation . . . and is the leading registrar of domain names. It is the only organization which is permitted to register domain names ending in ".com", ".org", ".net", ".edu" or ".gov." It registers over 100,000 new domain names each month - approximately one every 20 seconds. Academy of Motion Picture Arts and Sciences v. Network Solutions Inc., 989 F. Supp. 1276, 1277 (C.D. Cal. 1997).
56. A history list records the web pages a user has viewed during his or her time online.
57. A bookmark consists of the title of a web page and the URL and is stored for the purpose of helping the user find his or her favorite web sites at a later time.
58. Jurisdictional rules, of course, never define the substance of the law that may be applied by a state; they only define what state may exercise jurisdiction over a defendant or regulate its conduct.
59. For purposes of this Report, a "state" is a nation-state (country), a confederation of nation-states, or a separate governmental entity within a nation-state that constitutes a forum which may apply or enforce laws and/or adjudicate disputes.
60. What constitutes targeting needs to be agreed upon globally. Generically, targeting should cover technological practices that sponsors use to purposefully avail themselves of the commercial benefits of the targeted states. See Parts 2.2 and 3.1.2.(b), infra.
61. In this regard, consider the implications of an international "dormant commerce clause," a gloss on Section 403 of the Restatement (Third) of Foreign Relations Law.
62. A consumer's Bot should be defined as one to which no criteria were applied except those explicitly specified by the consumer, i.e. a "fiduciary" Bot.
63. For example, the Global Business Dialogue, the Hague Conference on Private International Law, the Internet Law and Policy Forum, the International Chamber of Commerce, the United Nations Commission on International Trade Laws, the World Intellectual Property Organization, the World Trade Organization, and others are studying jurisdiction issues in Cyberspace. We note that the Committee of Experts on Crime in Cyberspace of the Council of Europe released a draft treaty that would require all participating nations to adopt new laws requiring government access to encrypted information, expanding copyright and criminalizing possession of common security tools (〈http://conventions.coe.int/treaty/en/projects/cybercrime.htm〉). The Global Internet Project has issued recommendations for businesses and organizations to follow and measures for governments to consider regarding cybercrimes (〈http://www.gip.org/gipwp0500.htm〉).
64. For example, tax authorities may attempt to increase their efforts to create, on a global basis, uniform rules for requiring tax assistance from non-resident providers of goods and services over the Internet, including efforts to encourage large and sophisticated providers of financial, credit, or similar services to discharge a greater part of the burden of tax assistance. Requiring such assistance is controversial. The E.U. recently proposed requiring foreign sellers of services delivered over the Internet to E.U. customers to charge value-added taxes; the United States immediately protested. See CNN Financial Network, EU Proposed Web Tax (last modified June 8, 2000) 〈http://cnnfn.com/2000/06/08/europe/eu_vat/〉.
65. One early exception to this absolute rule, though perhaps not clearly perceived as such, was the recognition of a nation's jurisdiction over its citizens even in their absence. See Pennoyer v. Neff, 95 U.S. 714, 723-24 (1877). As the story of King Henry H and Thomas Becket demonstrates, such an exception was not always accepted; the Archbishop fled to France precisely because, while on French territory, the English crown had no jurisdiction to penalize his prior conduct in England.
66. In the United States, a state may still constitutionally exercise jurisdiction on this basis. See Burnham v. Superior Court, 495 U.S. 604 (1990). Australia also recognizes such jurisdiction on a nation-wide basis. See Comments-Australia, submitted by Mallesons Stephens Jaques, available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Mallesons] at 2.2 and 2.6. On the other hand, the Brussels Convention, supra note 33, tit. II, § 1, art. 3, disallows jurisdiction based solely on service in the forum. And, the Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters proposed by the Hague Conference on Private International Law (May 5, 1992) [hereinafter draft Hague Convention] also bars this basis of jurisdiction. Article 18(2)(f)(2)(a) of the same draft also precludes the exercise of jurisdiction based on the seizure of property within the state unrelated to the claim, a position with which the United States is now in agreement. See generally Shaffer v. Heitner, 433 U.S. 186 (1977).
67. In the United States, a state may still constitutionally exercise jurisdiction on this basis. See Burnham v. Superior Court, 495 U.S. 604 (1990). Australia also recognizes such jurisdiction on a nation-wide basis. See Comments-Australia, submitted by Mallesons Stephens Jaques, available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Mallesons] at 2.2 and 2.6. On the other hand, the Brussels Convention, supra note 33, tit. II, § 1, art. 3, disallows jurisdiction based solely on service in the forum. And, the Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters proposed by the Hague Conference on Private International Law (May 5, 1992) [hereinafter draft Hague Convention] also bars this basis of jurisdiction. Article 18(2)(f)(2)(a) of the same draft also precludes the exercise of jurisdiction based on the seizure of property within the state unrelated to the claim, a position with which the United States is now in agreement. See generally Shaffer v. Heitner, 433 U.S. 186 (1977).
68. In fact, when jurisdiction was based on this kind of physical power over the person of the defendant, the court inevitably applied its own law or dismissed the case; it did not apply the law of another sovereign. See A.E. ANTON & P.R. BEAUMONT, PRIVATE INTERNATIONAL LAW 18 (2d ed. 1990).
69. While jurisdictional jurisprudence in the United States specifically focuses on the defendant, many other countries assert jurisdiction based on the place of the harm (see Brussels Convention, supra note 33, art. 5(3)) or the existence of an action brought against defendant A, served within the jurisdiction, to which defendant B is a "necessary and proper party." Id. art. 6(1). Nonetheless, although the defendants' acts are certainly less than would be required under U.S. law, in all situations the defendant did choose to do something manufacture a product, enter into a relationship with another party - that contradicts its desire to remain completely isolated. Still, clearly the U.S. concern with choice does not consciously drive all jurisdictional analysis.
70. The five themes discussed in Sections 2.1 to 2.5 were presented in a speech by Thomas P. Vartanian. See Thomas P. Vartanian, E-Commerce & Internet Regulation, 1999 BNA PUBLIC POLICY FORUM ON E-COMMERCE & INTERNET REGULATION (November 15, 1999) 〈http://internetconference.pf.com〉 (on file with The Business Lawyer, University of Maryland School of Law).
71. The five themes discussed in Sections 2.1 to 2.5 were presented in a speech by Thomas P. Vartanian. See Thomas P. Vartanian, E-Commerce & Internet Regulation, 1999 BNA PUBLIC POLICY FORUM ON E-COMMERCE & INTERNET REGULATION (November 15, 1999) 〈http://internetconference.pf.com〉 (on file with The Business Lawyer, University of Maryland School of Law).
72. Countries gave much thought to the rules regulating contract formation, presumably at least in part to guarantee perceived desirable jurisdictional results. In Australia, for example, a contract is formed at the time and place its acceptance is received by the offeror. The consumer is the offeror, so the typical consumer contract is "formed" when and where the consumer receives the seller's acceptance. See Mallesons, supra note 58, at 3.76-3.82. Brazil, Columbia, and Romania also look to the residence of the offeror, although in Brazil a contractual choice of a different law will be upheld if it is not in violation of public policy. See Written Remarks, submitted by Nestor Nestor Kingston & Petersen, available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 at 9.
73. In Canada, proposed legislation would fix the address of the consumer as the place in which an online contract was formed. See Canadian Law on Jurisdiction in Cyberspace, submitted by Arlan Gates, Paul Tackaberry and Adam Balinsky, available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Gates].
74. The Brussels Convention permits domiciliaries of contracting states to be sued in the courts of another contracting state where the contractual obligation in question is to be performed. Brussels Convention, supra note 33, tit. II, § 2, art. 5.
75. Of course, not all assertions of jurisdiction were based on this kind of conduct-based inquiry. For example, as described infra, states continue to assert jurisdiction over their citizens with respect to claims that arise outside of the state and to regulate conduct that occurs elsewhere which is intended to and does cause substantial effects in the state. Nonetheless, a concern with where relevant acts took place is central to many, if not most, decisions.
76. In some contexts some countries have already implicitly recognized this in the specific context of electronic commerce. Australia's Electronic Transactions Act 1999 (Cth) provides default rules for the place of dispatch and receipt of electronic communications (including the place of an offer or acceptance of a contract) based on the party's place of business or ordinary residence. See Mallesons, supra note 58, at 3.5-3.13.
77. It is generally believed that generic disclaimers alone are not sufficient to determine that a site docs not target a specific forum. "Offer void where prohibited by law," for example, says nothing about the actual intent of the offeror.
78. Thus, the Wyoming doctor who diagnosed and prescribed a course of treatment for an Illinois patient performed a regulated service in Illinois.
79. *6 (N.Y. Sup. Ct. July 22, 1999), the court found that it was not enough to request a party who wished to gamble to specify his location; if an individual from New York was denied access, all that would be necessary would be to enter another state as his location without physically leaving New York. On the other hand, those wishing to gamble needed to wire money to open a bank account in Antigua, which might have provided another clue to the bettor's location. And in any event, the requirement of "good faith" implies that even an imperfect filter may succeed if it is a reasonable choice.
80. Legal regulation may block some sellers from some markets.
81. The concern that a mere contractual tie to a forum party would permit an assertion of personal jurisdiction over the non-present party was noted and rejected by the Court in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). The Court's opinion makes it clear that among the relevant jurisdictional factors is the extent to which the relationship was actively sought out by the nonpresent party. The change may also affect at least default rules respecting applicable law. In Switzerland, for example, a contract is subject to the law of the state with which it is most closely connected, presumed to be the ordinary residence of the party called upon to provide the characteristic performance, i.e. the seller. But to the extent that the buyer defines its purchase, activates delivery, etc., its control may surpass that of the seller, resulting in the use of the law of the buyer's residence. This assumes, of course, that the buyer utilizing a Bot is still seen as the buyer; a Bot might lack legal standing. See Meyer, Müller, Eckert, ABA Cyberspace Jurisdiction Project (Dec. 20, 1999), available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Meyer], at A and D. The Rome Convention on the Law Applicable to Contractual Obligations June 19, 1980, 80/934/EEC, 1980 O.J. (L 266) 2, art. 4 [hereinafter Rome Convention] also mandates use of the law of the country with which the contract is most closely connected, presumed to be the habitual residence of the party who is to effect the performance characteristic of the contract. Such Bots might also be seen as trespassing on third-party web sites. The disruption such a result would cause is severe, because search tools in common use rely on accessing deep links. See Automated Queries to Ebay Site Preliminarily Enjoined as Likely Trespass, 68 U.S.L.W. 1734 (June 6, 2000).
82. Contract terms themselves, of course, also supply a set of substantive rules to govern the transaction, which will be used by a court unless they violate the public policy of the forum.
83. Italy, for example, provides that the choice of any forum other than the consumer's domicile is deemed unfair and, therefore, unenforceable unless the seller can demonstrate the existence of dealings over that clause with the consumer. Similarly, the choice of the law of a non-E.U. country is void if the chosen law is less favorable to the consumer and the contract's closest connection is to an E.U. country. See Emilio Tosi, Consumer Protection under Italian Law (Nov. 30, 1999), available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Tosi].
84. For an excellent discussion of these clauses and their treatment in Europe, see Gabrielle Kaufmann-Kohler, Choice of Court and Choice of Law Clauses in Electronic Commerce, in ASPECTS JURIDIQUES DU COMMERCE ELECTRONIQUE (Vincent Jeanneret, dir., 2000).
85. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 593 (1991). However, individual states, when their law is applicable (Carnival Cruise Lines was an admiralty case, so federal law controlled), may as a matter of public policy refuse to enforce such clause. See, e.g., Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000) (refusing to enforce Pennsylvania choice of forum clause against a California franchisee).
86. For an argument that liability ought to fall on the party best able to manage the risk rather than automatically being assigned to the party "at fault," see Hal R. Varian, Economic Scene, N.Y. TIMES, June 1, 2000, at C2.
87. See infra, notes 98-107 and accompanying text.
88. Recognition and enforcement of judgments as distinct jurisdictional issues are discussed in more detail in the doctrinal section, infra Part 3.3.
89. 47 U.S.C. § 230 (1996).
90. See, e.g., Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997). See generally Henry H. Perritt, Jr., Cyberspace and State Sovereignty, 3 J. INT'L LEG. STUD. 155 (1997).
91. Pub. L. No. 105-304, 1998 U.S.C.C.A.N. (112 Stat.) 2860.
92. Godfrey v. Demon Internet Ltd., 4 All E.R. 342 (Q.B.1999). See Law News Network Tech Law Center, British Court Concludes ISPs Liable for Bulletin Board Postings (visited July 3, 2000) 〈http://www.lawnewsnetwork.com/stories/A20742-2000Apr6.html〉.
93. Ruling Threatens German Internet, FIN. TIMES, Apr. 14, 2000 available in 〈http://www. ft.com〉. Similarly, in 1998, a German court had found the head of CompuServe in Germany guilty of failing to block access to child pornography; the ruling was reversed. Id.
94. Pennoyer v. Neff, 95 U.S. 714 (1877), determined that international law constrained states' assertions of personal jurisdiction prior to the adoption of the 14th Amendment. Subsequent to its adoption, the definitions of the restraints imposed by due process and that imposed by international law have developed in tandem. While Congress may violate international law in exercising prescriptive jurisdiction, it is strongly presumed not to have done so. Murray v. Schooner Charming Betsy, 6 U.S. 64 (1804).
95. See, e.g., Adventure Communications, Inc. v. Kentucky Registry of Election Fin., 191 F.3d 429 (4th Cir. 1999) (discussing whether Kentucky could insist that West Virginia broadcasters, who accepted advertisements from Kentucky gubernatorial candidates broadcast into Kentucky, comply with Kentucky disclosure laws).
96. The discomfort of many civil law countries with the U.S. doctrine of "minimum contacts" is reflected in the current debate regarding article 9 of the draft Hague Convention, supra note 58, which provides for jurisdiction over a defendant where it has a branch, agency, or other establishment and the claim relates directly to the activities of that branch, agency, or establishment. The U.S. delegation wishes also to provide for jurisdiction in a forum where the defendant has carried on related regular commercial activity in the absence of a permanent presence, a provision which many other delegations find troubling because of the definitional issue regarding "regular commercial activities."
97. Any deprivation of property by the United States, pursuant to the Fifth Amendment to the U.S. Constitution, or by a state, pursuant to the Fourteenth Amendment, must comport with due process; either the extinguishing of a claim by an unsuccessful plaintiff or the award of damages to a successful one constitutes such a deprivation. Courts of each state are required to give full faith and credit to judgments of other states, U.S. CONST. art. IV, § 1, only if those judgments also satisfy the constitutional requirement. See Pennoyer v. Neff, 95 U.S. 714 (1877).
98. Before asserting jurisdiction, a court must be statutorily authorized to do so. Only when such authorization exists does the constitutional inquiry arise. Neither states nor the United States are required to assert the entirety of constitutionally permissible jurisdiction. Compare, i.e., Gray v. American Radiator & Standard Sanitary Corp., 176 N.E.2d 761 (Ill. 1961) with Feathers v. McLucas, 209 N.E.2d 68 (N.Y. 1965).
99. International Shoe Co. v. Washington, 326 U.S. 310 (1945). Prior to the Shoe decision, the Court's focus had been on the power of the state rendering the judgment to enforce it. In accordance with then-current understanding of public (international) law, the Pennoyer Court had identified the situations in which such power existed: 1) the defendant had been personally served with process while physically present in the state (the state could theoretically imprison the defendant until the litigation was resolved and, if ordered to do so, the judgment paid; in exchange for the state's willingness to permit the defendant to leave the jurisdiction, other states acknowledged the "power" of the judgment-rendering state and agreed to enforce its decisions); 2) property belonging to the defendant in the forum state was seized at the commencement of the lawsuit (thus providing a fund from which to pay the successful plaintiff); 3) the defendant was a citizen (or domiciliary or resident) of the forum (international law was thought to acknowledge the right of each state to assert jurisdiction over its own nationals even in their absence); 4) the defendant consented to the assertion of jurisdiction (thus obviating any issue of the actual power to enforce the judgment); or 5) the lawsuit involved the status of the defendant under the domestic law of the forum (for example, an absent defendant's marital status vis-à-vis a citizen of the forum). However, as society became more mobile and as the Court's appreciation of the full faith and credit clause grew, it became apparent that the Pennoyer Court's understanding was both unworkably narrow and unnecessary.
100. 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
101. Id. at 319.
102. Hanson v. Denckla, 357 U.S. 235, 253 (1958). This focus on the defendant's purposeful choice is not found in all other countries. See supra note 60. And outside the constraints imposed by the Brussels Convention, supra note 33, France, for example, will assert jurisdiction whenever the plaintiff is a French national. Code Civil [C. Civ.] art. 14 (Fr.). See Kevin M. Clermont, Jurisdictional Salvation and the Hague Treaty, 85 CORNELL L. REV. 89, 91-95 (1999) [hereinafter Jurisdictional Salvation].
103. Hanson v. Denckla, 357 U.S. 235, 253 (1958). This focus on the defendant's purposeful choice is not found in all other countries. See supra note 60. And outside the constraints imposed by the Brussels Convention, supra note 33, France, for example, will assert jurisdiction whenever the plaintiff is a French national. Code Civil [C. Civ.] art. 14 (Fr.). See Kevin M. Clermont, Jurisdictional Salvation and the Hague Treaty, 85 CORNELL L. REV. 89, 91-95 (1999) [hereinafter Jurisdictional Salvation].
104. Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 113-14 (1987).
105. See, for example, Hess v. Pawloski, 274 U.S. 352 (1927), in which a state's jurisdiction over a nonresident motorist was justified because, according to a Massachusetts statute, the motorist had "consented" to the appointment of a state official as his agent for service of process when he drove into the state. Id. at 356- 57. Such consent, of course, is totally fictional and hardly is what the Pennoyer Court rightly thought obviated the need for state power to enforce its judgment. Other state laws also equated doing business in the state with either consent or presence, in an attempt to fit the then-current reality within the Pennoyer linguistics. See generally RICHARD L. MARCUS, MARTIN H. REDISH & EDWARD T. SHERMAN, CIVIL PROCEDURE: A MODERN APPROACH 682-86 (2d ed. 1995).
106. See supra note 33.
107. The Convention applies only to claims brought against domiciliaries of contracting states; if the defendant is domiciled elsewhere, the national law of the forum determines the propriety of a jurisdictional assertion. In the United States, on the other hand, the same due process considerations apply no matter where the defendant is domiciled.
108. Brussels Convention, supra note 33, tit. II, § 2, art. 5.
109. MINSOHO (Code of Civil Procedure), arts. 4-7. See generally ZENTARO KITAGAWA, DOING BUSINESS IN JAPAN, Vol. 7 § 1.02 (1997) [hereinafter KITAGAWA] and HIROSHI ODA, JAPANESE LAW (2d ed. 1999) [hereinafter ODA]. However, in transnational disputes Japanese courts may take into account "exceptional circumstances" that overcome a general presumption of jurisdiction whenever authorised by the Code. ODA, at 447-48. See also Hideyuki Kobayashi & Yoshimasa Furata, Products Liability Act and Transnational Litigation in Japan, 34 TEX. INT'L L.J. 93 (1999).
110. MINSOHO (Code of Civil Procedure), arts. 4-7. See generally ZENTARO KITAGAWA, DOING BUSINESS IN JAPAN, Vol. 7 § 1.02 (1997) [hereinafter KITAGAWA] and HIROSHI ODA, JAPANESE LAW (2d ed. 1999) [hereinafter ODA]. However, in transnational disputes Japanese courts may take into account "exceptional circumstances" that overcome a general presumption of jurisdiction whenever authorised by the Code. ODA, at 447-48. See also Hideyuki Kobayashi & Yoshimasa Furata, Products Liability Act and Transnational Litigation in Japan, 34 TEX. INT'L L.J. 93 (1999).
111. MINSOHO (Code of Civil Procedure), arts. 4-7. See generally ZENTARO KITAGAWA, DOING BUSINESS IN JAPAN, Vol. 7 § 1.02 (1997) [hereinafter KITAGAWA] and HIROSHI ODA, JAPANESE LAW (2d ed. 1999) [hereinafter ODA]. However, in transnational disputes Japanese courts may take into account "exceptional circumstances" that overcome a general presumption of jurisdiction whenever authorised by the Code. ODA, at 447-48. See also Hideyuki Kobayashi & Yoshimasa Furata, Products Liability Act and Transnational Litigation in Japan, 34 TEX. INT'L L.J. 93 (1999).
112. MINSOHO (Code of Civil Procedure), arts. 4-7. See generally ZENTARO KITAGAWA, DOING BUSINESS IN JAPAN, Vol. 7 § 1.02 (1997) [hereinafter KITAGAWA] and HIROSHI ODA, JAPANESE LAW (2d ed. 1999) [hereinafter ODA]. However, in transnational disputes Japanese courts may take into account "exceptional circumstances" that overcome a general presumption of jurisdiction whenever authorised by the Code. ODA, at 447-48. See also Hideyuki Kobayashi & Yoshimasa Furata, Products Liability Act and Transnational Litigation in Japan, 34 TEX. INT'L L.J. 93 (1999).
113. Obviously parties can interact with each other electronically in legally significant ways without the use of a web site. When they do, however, each knows from the outset the identity of the others, and jurisdictional resolutions developed in the context of other long distance commercial relationships are easily applied.
114. 176 N.E.2d 761 (Ill. 1961).
115. 444 U.S. 286 (1980).
116. In dissent, Justices Marshall and Brennan argued that the defendants did indeed benefit from the existence of Audi dealerships and repair facilities throughout the United States, including Oklahoma, and that such indirect benefit, like that identified in Gray, ought suffice, at least in light of the fact that cars are intended to be driven from one place to another. Id. at 313-17 (Marshall, J., dissenting).
117. 480 U.S. 102 (1987).
118. Id. at 112. Many courts have latched onto this language to conclude that when such purposeful direction, or targeting, is shown, both personal and prescriptive jurisdiction may be asserted by the targeted forum. See supra Part 2.2.
119. Id.
120. Id. at 117.
121. Id. at 122 (Stevens, J., concurring).
122. In Shoppers Food Warehouse v. Moreno, 746 A.2d 320 (D.C. 2000), advertising in D.C. was held sufficient to subject the defendant to jurisdiction in the District of Columbia where a District plaintiff slipped and fell in the defendant's Maryland store, although the court did note that 1) the claim was only "related" to the advertising and 2) the jurisdictional result might have been different had the advertising been on the Internet, even though the greater metropolitan D.C. area, including the pertinent parts of Maryland and some of Virginia, can be considered a "unified legal and commercial community." Id. at 332. The court's caveat about Internet advertising is interesting in light of Butler v. Beer Across America, 83 F. Supp. 2d 1261 (N.D. Ala. 2000). An Alabama law permitted parents to sue those who sold alcohol to their minor children; from his home in Alabama, the plaintiff's son ordered beer from the Illinois defendant which was shipped to him in Alabama. Finding that an assertion of jurisdiction would violate due process, the court focused on the fact that the sale occurred "in" Illinois, because that is where title to the beer passed (a nice example of courts' traditional fixation with physicality) and that each state regulates sales of liquor within its borders (which is in fact a concern with the scope of Alabama's regulatory jurisdiction). I he personal jurisdiction issue can be seen as resolved correctly only if the defendant is conceived of as a local, Illinois entity not reaching into Alabama to solicit customers a questionable conclusion here, given not only its use of the web but also its name, failure to attempt to limit access to those everywhere over the age of legal majority, and its undisputed knowledge of the residence of the purchaser.
123. Jurisdiction over the buyer at the seller's home, for nonpayment for example, is not assumed, however. Burger King Corp. v. Rudzewicx, 471 U.S. 462 (1985); Jamik, Inc. v. Days Inn of Mount Laurel, 1999 WL 1092008 (N.D. Ill. 1999).
124. See Thomas P. Vartanian, A US Perspective on the Global Jurisdictional Checkpoints in Cyberspace (visitedJuly 3, 2000) 〈http://internetlaw.pf.com/〉. See also THOMAS P. VARTANIAN ET AL., 21ST CENTURY MONEY, BANKING & COMMERCE 608-24 (1998).
125. See Thomas P. Vartanian, A US Perspective on the Global Jurisdictional Checkpoints in Cyberspace (visitedJuly 3, 2000) 〈http://internetlaw.pf.com/〉. See also THOMAS P. VARTANIAN ET AL., 21ST CENTURY MONEY, BANKING & COMMERCE 608-24 (1998).
126. 937 F. Supp. 295 (S.D.N.Y. 1996), aff'd, 126 F.3d 25 (2d Cir. 1997).
127. 480 U.S. 102 (1987).
128. The case turned on an interpretation of New York's long-arm statute.
129. 89 F.3d 1257 (6th Cir. 1996).
130. Brussels Convention, supra note 33, tit. II, § 2, art. 5. Financial damage alone is insufficient to trigger this provision, however, and if damage is suffered in more than one jurisdiction (for example, in a claim for libel), each jurisdiction may only assess damages for the harm caused there; the plaintiff may obtain complete relief only from the forum in which the wrongful conduct occurred. See James A. Graham, Comment to the Draft Final ABA Report § II (visited July 3, 2000) 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Graham]. With respect to the interpretation of the Japanese Code, see ODA, supra note 96, at 395-96, and KITAGAWA, id., § 1.02.
131. Brussels Convention, supra note 33, tit. II, § 2, art. 5. Financial damage alone is insufficient to trigger this provision, however, and if damage is suffered in more than one jurisdiction (for example, in a claim for libel), each jurisdiction may only assess damages for the harm caused there; the plaintiff may obtain complete relief only from the forum in which the wrongful conduct occurred. See James A. Graham, Comment to the Draft Final ABA Report § II (visited July 3, 2000) 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉 [hereinafter Graham]. With respect to the interpretation of the Japanese Code, see ODA, supra note 96, at 395-96, and KITAGAWA, id., § 1.02.
132. According to James A. Graham, this reflects a basic principle of European tort law, not shared by the United States, that only the victim/plaintiff needs protection. James A. Graham, IP, Comments to the Proposed ABA's Draft (visited July 3, 2000) 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
133. Id.
134. 465 U.S. 783 (1984).
135. No matter how slight the actual activity of the defendant in the state is, jurisdiction is constitutionally proper if the claim arises directly out of that activity, as libel arises out of the sale of the paper in the state. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 773-75 (1984).
136. Analogies to Calder, however, must keep in mind the critical need for injury localized in the forum. Compare Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202 (W.D.N.Y. 2000) (harm suffered at plaintiff's principal place of business) with Bailey v. Turbine Design, Inc., 86 F. Supp. 2d 790 (W.D. Tenn. 2000) (where plaintiff was a business competitor of the defendants with a global presence, defamation not related to plaintiff's residence insufficient to subject defendant to jurisdiction in state of that residence) and Nutrition Physiology Corp. v. Enviros Ltd., 87 F. Supp. 2d 648 (N.D. Tex. 2000) (a passive web site, absent sales into or advertisements in the forum, insufficient to sustain jurisdiction in the plaintiff's home state in a suit for patent infringement). Not only, of course, must the brunt of the harm be felt in the forum; the defendant must know of that likelihood when it acts. Core-Vent Corp. v. Noble Indus. AB, 11 F.3d 1482, 1486 (9th Cir. 1993), applied in Nissan Motor Co., Ltd. v. Nissan Computer Corp., 89 F. Supp. 2d 1154 (2000). 119. 938 F. Supp. 616 (C.D. Cal. 1996), aff'd, 141 F.3d 1316 (9th Cir. 1998).
137. 141 F.3d 1316, 1321 (9th Cir. 1998).
138. Id. An alternative approach might have avoided reliance on Calder, assuming that Panavision only wanted to prevent the use of the domain name by Toeppen. The name is property; the state where it is located, i.e. the state with jurisdiction over the entity who controls it (Network Solutions, Inc. in Virginia) may seize it; because the claim arises directly out of the use of the property, there are minimum contacts between the defendant Toeppen and the state where it is located and due process is satisfied. See Thomas R. Lee, In Rem Jurisdiction in Cyberspace, 75 WASH. L. REV. 97 (2000). As the article notes, 1999 amendments to the Lanham Act, found at Pub. L. No. 106-13, 1999 U.S.C.C.A.N. (113 Stat.) 1501, specifically authorize this kind of jurisdictional assertion. Id. at 124-25. Those amendments persuaded the court in Caesars World, Inc. v. Caesars-Palace.com, No. 99-550-A, 2000 U.S. Dist. LEXIS 2671 (E.D. Va. Mar. 3, 2000) to assert this sort of in rem jurisdiction and permitted it to distinguish a prior, contrary holding from the same district that had been severely criticized in Lee's article (distinguishing Porsche Cars North America, Inc. v. Porsch.com, 51 F. Supp. 2d 707 (E.D. Va. 1999)). In turn, an alternative to in rem jurisdiction is provided by the new arbitration procedures of the ICANN. By registering a domain name, registrants agree to arbitrate the transfer and recovery of domain names, provided by dispute resolution services including the World Intellectual Property Organization. The advantage, of course, is speed. See John Caher, New Domain Arbitration Rules Get Results (visited July 3, 2000) 〈http://www.lawnewsnetwork.com/stories/A18566-2000MarI3.html〉.
139. Id. An alternative approach might have avoided reliance on Calder, assuming that Panavision only wanted to prevent the use of the domain name by Toeppen. The name is property; the state where it is located, i.e. the state with jurisdiction over the entity who controls it (Network Solutions, Inc. in Virginia) may seize it; because the claim arises directly out of the use of the property, there are minimum contacts between the defendant Toeppen and the state where it is located and due process is satisfied. See Thomas R. Lee, In Rem Jurisdiction in Cyberspace, 75 WASH. L. REV. 97 (2000). As the article notes, 1999 amendments to the Lanham Act, found at Pub. L. No. 106-13, 1999 U.S.C.C.A.N. (113 Stat.) 1501, specifically authorize this kind of jurisdictional assertion. Id. at 124-25. Those amendments persuaded the court in Caesars World, Inc. v. Caesars-Palace.com, No. 99-550-A, 2000 U.S. Dist. LEXIS 2671 (E.D. Va. Mar. 3, 2000) to assert this sort of in rem jurisdiction and permitted it to distinguish a prior, contrary holding from the same district
140. 992 F. Supp. 44 (D.C. 1998).
141. 1999 NSW SC 526. See Mallesons, supra note 58, at 3.23-3.31, from which this paragraph is drawn.
142. See supra notes 106-07 and accompanying text.
143. See supra note 113 and accompanying text.
144. Article 13 defines a consumer as a person who enters into a contract "for a purpose which can be regarded as being outside his trade or profession." Non-consumer contracts are best analyzed under Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) and the Brussels Convention, supra note 33, tit. II, § 2, art. 5.
145. See supra note 107.
146. 471 U.S. 462 (1985).
147. Id. at 485-86.
148. See, e.g., VCS Samoa Packing Co. v. Blue Continent Products (PTY) Ltd., 83 F. Supp. 2d 1151 (S.D. Cal. 1998) (contract between California plaintiff, who initiated the contact, and South African defendant for purchase of tuna to be delivered to plaintiff's cannery in American Samoa insufficient to subject defendant to jurisdiction in California).
149. 89 F.3d 1257 (6th Cir. 1996).
150. Shareware is software provided free of charge on the understanding that if the end user decides to retain the program after trying it out, the user will remit a predetermined (usually low) fee to the owner of the program.
151. The inclusion of this clause is a nice example of courts' (and, therefore, parties') preoccupation with where certain events take place.
152. 134. 89 F.3d at 1260.
153. Id. at 1261.
154. Id. at 1263.
155. Id. at 1264.
156. Id.
157. Id.
158. Id. at 1265 (quoting Southern Mach. Co. v. Mohasco Indus., 401 F.2d 374, 381 (6th Cir. 1968)).
159. Id.
160. Id.
161. The Tenth Circuit in Intercon, Inc. v. Bell Atlantic Internet Solutions, Inc., 205 F.3d 1244 (10th Cir. 2000), had less trouble drawing an analogy to Compuserve itself in holding that the continued, knowing, and unauthorized use of the plaintiff's Internet access service by defendant was sufficient to sustain personal jurisdiction over it at the plaintiff's home. The more obvious analogy, however, would have been to Calder.
162. Brussels Convention, supra note 33, tit. II, § 2, art. 5. Articles 13 and 14 of the Brussels Convention preclude use of similar logic when the defendant is a consumer.
163. 937 F. Supp. 161 (D. Conn. 1996).
164. Id. at 164.
165. Id.
166. The extent to which a site is visited can actually be measured (and with the use of web cookies and other devices, the identity of certain users may even be discerned).
167. One decision by the British Columbia Court of Appeals does leave the impression that a web site makes a foreign defendant's plea of lack of jurisdiction less likely to succeed; the site means the defendant has portrayed itself as an international actor. See Old North State Brewing Co. v. Newlands Services, Inc. [1998] 58 B.C.L.R. (3d) 144, discussed in Gates, supra note 62, at 3-4. The case itself, however, was simplistic and not dependent on Internet advertising; it involved the purchase and installation of equipment in the forum by the defendant, as well as losses suffered there by the plaintiff. More troubling is another Canadian decision, Alteen v. Informix Corp., [1998] 79 A.C.W.S. (3d) 1157, decided by the Newfoundland Supreme Court. Newfoundland investors sued a California company for misrepresentation; jurisdiction was upheld because investment information was available in Canada via the Internet, making Canadian investment foreseeable to the defendant. The site contained no disclaimer, but contact between the parties apparently did not take place in the forum. See Gates, supra note 62, at 4, 6. By comparison, if a defendant is already subject to an injunction precluding the use of an infringing mark in the United States, maintenance of a web site accessible in the United States is sufficient, if other requirements are met, to constitute contempt. See A.V. by Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281 (S.D.N.Y. 2000); Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996).
168. 952 F. Supp. 1119 (W.D. Pa. 1997).
169. Id. at 1124 (citations omitted). The court held that it had jurisdiction over the defendant because Zippo Dot Com had entered into contracts with approximately 3,000 Pennsylvania residents and seven Pennsylvania ISPs and therefore was doing business in the state. For an argument that Zippo's three categories are being collapsed into two (passive and interactive), see Section of Public Utility, Communications and Transportation Law of the American Bar Association, 1999 Annual Report, 217-32 (1999).
170. 952 F. Supp. at 1124.
171. 130 F.3d 414 (9th Cir. 1997). The Ninth Circuit did not expressly state that it accepted the Zippo court's analysis, but analyzed the facts before it in terms of the three categories outlined there and expressly quoted Zippo's analysis of interactive web sites.
172. The jurisdictional significance of maintaining a toll free number is questionable. Given the number of different area codes that may exist within a single metropolitan area and the frequency with which people travel on business, it is not unusual for small businesses that operate primarily within a single state (or even county) such as real estate brokers and mortgage bankers - to maintain toll free numbers for the convenience of existing and potential clients.
173. 130 F.3d at 418.
174. The court wrote that: Cybersell FL did nothing to encourage people in Arizona to access its site, and there is no evidence that any part of its business (let alone a continuous part of its business) was sought or achieved in Arizona. To the contrary, it appears to be an operation where business was primarily generated by the personal contacts of one of its founders. While those contacts are not entirely local, they aren't in Arizona either. No Arizonan except for Cybersell AZ 'hit' Cybersell FL's web site. There is no evidence that any Arizona resident signed up for Cybersell FL's web construction services. It entered no contracts in Arizona, made no sales in Arizona, received no telephone calls from Arizona, earned no income from Arizona, and sent no messages over the Internet to Arizona. Id. at 419.
175. Id.
176. Id. at 418.
177. Id. at 420.
178. Id. at 419.
179. 199 F.3d 1343 (D.C. Cir. 2000).
180. This was the insight of the court in Millennium Enterprises, Inc. v. Millennium Music LP, which refused to conflate the potential of doing business on an interactive site with citizens of the state with actually doing such business. 33 F. Supp. 2d 907 (D. Or. 1999) See also Rothschild Berry Farm v. Serendipity Group LLC, 84 F. Supp. 2d 904 (S.D. Ohio 1999) (interactive site not utilized by forum residents (in fact, after motion to dismiss for lack of personal jurisdiction was filed, the defendant did receive one apparently unrelated request for sale, which it refused to fill) insufficient to sustain an assertion of personal jurisdiction in a trademark infringement claim).
181. Following the opinion in Inset, the court in Maritz, Inc. v. CyberGold, Inc., found relevant the number of "hits" on the defendant's site by forum residents. 947 F. Supp. 1328 (E.D. Mo. 1996). The case involved trademark infringement, so the number of Missouri residents who saw the site, and thus the injury to the plaintiff in Missouri, was important. However, there are two problems. In the first place, there was no indication that the defendant intentionally sought to infringe the trademark, the issue the Benusan court found dispositive. Second, the numbers are unreliable and ultimately unhelpful. Not all addresses (which is how those who come to the site are identified) are geographically located; not all those who visit a site do so from their own address; not all addresses may belong to different visitors. Finally, the number of visitors from a given forum, even if known, really doesn't say anything about the importance of that forum to the site sponsor. In CyberGold, the court was swayed by 131 hits from Missouri. The significance of the number is unclear.
182. If a site is so targeted, the forum may assert jurisdiction over its author and its contact, pursuant to Asahi and Calder.
183. The difficulty in sensibly "locating" acts in Cyberspace was at the center of one of the seminal articles on jurisdictional issues in this new era. David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367 (1996).
184. There is a difference between claims that are related to a defendant's contacts with the forum and those that arise from the contacts. In the latter instance, the contact is itself an element of the claim; jurisdiction is then clear. A good example is Keeton v. Hustler Magazine, Inc., a libel suit in which the defendant argued that the plaintiff's close-to-total lack of contact with the forum and its own negligible sales there ought defeat jurisdiction. 465 U.S. 770 (1984). The Court, however, held that the claim arose out of the sale of magazines in the state and jurisdiction was, therefore, proper. By contrast, when the defendant's contact with the forum state is via the stream of commerce, a claim for tortious injury there caused by the product is related to but does not arise out of the forum contact. Without the defendant's use of the stream of commerce, the final product would not have been purchased by the plaintiff in the state; however, it is an alleged negligent act elsewhere that allegedly makes the defendant liable to the plaintiff for damages. In this fact pattern, jurisdiction might be defeated if other factors make the forum a less "reasonable" one, for example if the injury occurred outside the state, so that witnesses and evidence were not easily available in the state in which the purchase had taken place.
185. See, e.g., Blackmcr v. United States, 284 U.S. 421 (1932) (absent citizen of the United States subject to the jurisdiction of courts of the United States); Milliken v. Meyer, 311 U.S. 457 (1940) (absent citizen of a state subject to the exercise of personal jurisdiction by courts of the state). See also Brussels Convention, supra note 33, tit. II, § 1, art. 2; ODA, supra note 96, at 395. There are some technical differences between the United States, the E.U., and Japan, however. In the United States, citizenship is a sufficient basis of jurisdiction even if the defendant is domiciled elsewhere; under article 18 of the draft Hague Convention, supra note 58, nationality of a defendant is a prohibited ground of jurisdiction. Furthermore, both Europe and Japan apparently equate domicile and habitual residence; in the United States an individual "habitually resident" in one state may retain her domicile in another state if she intends to return there. No Supreme Court case has found jurisdiction proper in that situation, but domicile combined with U.S. citizenship is the generally accepted test for state citizenship.
186. See, e.g., Blackmcr v. United States, 284 U.S. 421 (1932) (absent citizen of the United States subject to the jurisdiction of courts of the United States); Milliken v. Meyer, 311 U.S. 457 (1940) (absent citizen of a state subject to the exercise of personal jurisdiction by courts of the state). See also Brussels Convention, supra note 33, tit. II, § 1, art. 2; ODA, supra note 96, at 395. There are some technical differences between the United States, the E.U., and Japan, however. In the United States, citizenship is a sufficient basis of jurisdiction even if the defendant is domiciled elsewhere; under article 18 of the draft Hague Convention, supra note 58, nationality of a defendant is a prohibited ground of jurisdiction. Furthermore, both Europe and Japan apparently equate domicile and habitual residence; in the United States an individual "habitually resident" in one state may retain her domicile in another state if she intends to return there. No Supreme Court case has found jurisdiction proper in that situation, but domicile combined with U.S. citizenship is the generally accepted test for state citizenship.
187. 342 U.S. 437 (1952).
188. 169. 466 U.S. 408 (1984).
189. Id. at 416.
190. Id. at 418. In support of its holding, the majority cited Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516 (1923), a pre-Shoe case involving an attempted assertion of personal jurisdiction by New York over an Oklahoma retail purchaser of men's clothing. The Court specifically noted that it was not determining whether, on similar facts today, an exercise of specific jurisdiction over the defendant would be permissible; the Rosenberg holding was that the defendant was not "present" in New York by virtue of its purchases, so as to subject it to jurisdiction there under the logic of Pennoyer.
191. Ownership of real property in the state, for instance, may not be the equivalent of residency; residency is possible without ownership, and ownership need not include use of the property. However, it too provides a permanent connection to the state; arguably the jurisdictional implications of that connection are best considered here rather than as an analogy to the holding of the Court in Burnham regarding jurisdiction based on the personal service of process on a defendant present in the forum.
192. Bryant v. Finnish Nat'l Airline, 208 N.E.2d 439 (N.Y. 1965).
193. Nichols v. G.D. Searle & Co., 221 F.2d 1195 (4th Cir. 1993) (assuming that employees engaged in advertising and solicitation work out of an office).
194. The harshness of the assertions of general jurisdiction over a defendant in multiple fora based on its multiple residences may, of course, be reduced through use of the doctrine of forum non conveniens. Indeed, the doctrine's most frequent use is in situations in which the claim brought against the defendant is totally unrelated to its activities in the forum. However, there are significant differences between a constitutional protection and a discretionary one. See generally Margaret G. Stewart, Forum Non Conveniens: A Doctrine in Search of a Role, 74 CAL. L. REV. 1259 (1986).
195. ODA, supra note 96, at 395. See also Joseph W.S. Davis, Dispute Resolution in Japan, Kluwer Law International (1996) [hereinafter Davis], at 195-201. Australia also permits such assertions. Mallesons, supra note 58, § 2.6.
196. See Digital Equipment Corp. v. Altavista Technology, Inc., 960 F. Supp. 456 (D. Mass. 1997).
197. 997 F. Supp. 782 (E.D. Tex. 1998).
198. See Buckeye Boiler Co. v. Superior Court, 458 P.2d 57 (Cal. 1969).
199. 495 U.S. 604 (1990)
200. Although seizure of property located in the forum at the commencement of the lawsuit had also been a traditional basis of jurisdiction, the Court had previously rejected its continuing validity in Shaffer v. Heitner, 433 U.S. 186 (1977), requiring an analysis under Shoe of the relationship between the contact exemplified by the presence of the property and the plaintiff's claim. This, Justice Scalia argued, didn't negate the validity of jurisdiction based on service in the forum; minimum contacts are required for all nonpresent defendants. 495 U.S. at 620-21.
201. Justice Scalia was unimpressed. He noted that the first two prongs of the argument would hold true whether or not the defendant had been personally served while in the forum and that the third is simply another way of stating Scalia's own reliance on tradition. Id. at 622.
202. Id. at 640 (Brennan, J., concurring).
203. See National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964).
204. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).
205. See The M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972).
206. Brussels Convention, supra note 33, art. 17.
207. Davis, supra note 177, at 197.
208. See supra note 72 and accompanying text. See also Tosi, supra note 72. Brazil, Colombia and Uruguay also limit the enforceability of contractual choice clauses. In Brazil, if the defendant is domiciled in the country, if the contractual obligation is to be performed there, or if the dispute arises from matters occurring or practiced there, Brazilian courts will assert jurisdiction. See Noronha Advogados, A Brazilian Perspective § 5.1.2 [hereinafter Advogados] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Colombia will not enforce such a clause if the contract is to be executed there, unless the choice falls under the New York Arbitration Convention. See Luisa Gamboa, Colombian Comments [hereinafter Gamboa] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Uruguay simply does not recognize such clauses at all. See Guyer & Regules, Answers to the Requested Questions: Uruguay 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
209. See supra note 72 and accompanying text. See also Tosi, supra note 72. Brazil, Colombia and Uruguay also limit the enforceability of contractual choice clauses. In Brazil, if the defendant is domiciled in the country, if the contractual obligation is to be performed there, or if the dispute arises from matters occurring or practiced there, Brazilian courts will assert jurisdiction. See Noronha Advogados, A Brazilian Perspective § 5.1.2 [hereinafter Advogados] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Colombia will not enforce such a clause if the contract is to be executed there, unless the choice falls under the New York Arbitration Convention. See Luisa Gamboa, Colombian Comments [hereinafter Gamboa] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Uruguay simply does not recognize such clauses at all. See Guyer & Regules, Answers to the Requested Questions: Uruguay 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
210. See supra note 72 and accompanying text. See also Tosi, supra note 72. Brazil, Colombia and Uruguay also limit the enforceability of contractual choice clauses. In Brazil, if the defendant is domiciled in the country, if the contractual obligation is to be performed there, or if the dispute arises from matters occurring or practiced there, Brazilian courts will assert jurisdiction. See Noronha Advogados, A Brazilian Perspective § 5.1.2 [hereinafter Advogados] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Colombia will not enforce such a clause if the contract is to be executed there, unless the choice falls under the New York Arbitration Convention. See Luisa Gamboa, Colombian Comments [hereinafter Gamboa] 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉. Uruguay simply does not recognize such clauses at all. See Guyer & Regules, Answers to the Requested Questions: Uruguay 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
211. Neither does the national law of France in cases involving consumers (applicable when the dispute is not subject to the Brussels Convention). See James A. Graham, Comments to the Proposed Draft by the ABA 〈http://www. kentlaw.edu/cyberlaw/docs/foreign/〉.
212. See Mallesons, supra note 58, at 3.58-3.60.
213. Davis, supra note 177, at 197.
214. 499 U.S. 585 (1991).
215. Unsurprisingly, "click wrap" agreements, the online equivalent of retention of the ticket, are also upheld. See Lieschke v. RealNetworks, Inc., No. 99-C-7274, 2000 U.S. Dist. LEXIS 1683 (N.D. Ill. Feb. 10, 2000).
216. The M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (enforcing a contractual choice of the London Court of Justice with respect to a suit between an American and a German Company concerning the towing of a drilling rig from Louisiana to Italy).
217. 499 U.S. at 594 (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17 (1972)).
218. U.S. CONST. amend. XIV, § 1. "No State shall . . . deprive any person of life, liberty, or property, without due process of law. . ."
219. U.S. CONST. art. IV, § 1. "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." This clause is most familiar to U.S. lawyers because of its requirement that one state enforce a valid judgment of another state, but by its terms it also defines the recognition one state must give to another's laws.
220. The precepts of international law, according to section 403 of the Restatement (Third) of Foreign Relations Law of the United States, may require one state to abstain from applying its own law when another state has a stronger claim to the application of its law, as explained later in this section of the Report. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES Report 403 (1986) [hereinafter RESTATEMENT (THIRD)]
221. Hughes v. Fetter, 341 U.S. 609 (1951). This case neatly demonstrates the disjunction between subject matter jurisdiction and prescriptive jurisdiction, a line recently blurred by a majority of the Supreme Court in Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993). State courts are presumed to have subject matter jurisdiction over private transitory (versus purely local) claims; federal courts have similar jurisdiction in diversity cases. Whether the state law of the state in which the court sits may be used or not does not affect the existence of that jurisdiction. If either a private or public nonfrivolous claim is brought in federal court because the plaintiff alleges it arises out of federal law, and the court determines that law is inapplicable, the case should be dismissed for failure to state a claim upon which relief may be granted, not for lack of subject matter jurisdiction.
222. The Court's apparent reluctance to impose meaningful restraints on a state's assertion of prescriptive jurisdiction may have contributed to the strictness with which it reviews assertions of personal jurisdiction. In Hanson v. Denckla, 357 U.S. 235 (1958), had the court of Florida been able to obtain jurisdiction over the Delaware trustee it would have utilized Florida law to find that the trust agreement, entered into by a then-citizen of Pennsylvania and the Delaware bank, was invalid under Florida law (it had been "republished" there when the grantor had exercised her power of appointment under the trust agreement). Clearly use of Florida law to determine the validity of an agreement entered into in Delaware is not intuitively logical, but it is constitutional.
223. 449 U.S. 302 (1981).
224. Id. at 334.
225. See Hunt-Wesson, Inc. v. Franchise Tax Bd. of Cal., 120 S. Ct. 1022 (2000). This clause operates primarily as a restriction on a state's ability to impose a sales tax on an out-of-state seller. Before it may do so, the sale must have, inter alia, a "substantial nexus" with the state, Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), which in turn requires a physical presence of the vendor in the state. National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753 (1967). Canada also requires a fixed physical base. See Gates, supra note 62, at 5.
226. JOSEPH STORY, CONFLICTS OF LAWS 1 (8th ed. 1883) [hereinafter STORY].
227. **31 (finding no personal jurisdiction over non party to permit requested remedy); Alexander Milburn Co. & United Electrical, Radio & Machine Workers, 78 NLRB 747, 1948 WL 7782 (1947) (adjudicating claimed lack of personal jurisdiction because of faulty service); West India Fruit & Steamship Co. & Seafarers International, 130 NLRB 343, 353, 1961 WL 15253, Case No. 15-CA-1454 (1961) (applying choice of law concepts from Lauritzen v. Larsen, 345 U.S. 571 (1953), to determine effect of foreign registry). Securities decisions are an exception. A Westlaw search on 30 January 2000 of the FSCC- ADMIN database found 398 documents using the phrase "personal jurisdiction." A search of the same database for the phrase "choice of law" identified 40 documents.
228. **31 (finding no personal jurisdiction over non party to permit requested remedy); Alexander Milburn Co. & United Electrical, Radio & Machine Workers, 78 NLRB 747, 1948 WL 7782 (1947) (adjudicating claimed lack of personal jurisdiction because of faulty service); West India Fruit & Steamship Co. & Seafarers International, 130 NLRB 343, 353, 1961 WL 15253, Case No. 15-CA-1454 (1961) (applying choice of law concepts from Lauritzen v. Larsen, 345 U.S. 571 (1953), to determine effect of foreign registry). Securities decisions are an exception. A Westlaw search on 30 January 2000 of the FSCC- ADMIN database found 398 documents using the phrase "personal jurisdiction." A search of the same database for the phrase "choice of law" identified 40 documents.
229. **31 (finding no personal jurisdiction over non party to permit requested remedy); Alexander Milburn Co. & United Electrical, Radio & Machine Workers, 78 NLRB 747, 1948 WL 7782 (1947) (adjudicating claimed lack of personal jurisdiction because of faulty service); West India Fruit & Steamship Co. & Seafarers International, 130 NLRB 343, 353, 1961 WL 15253, Case No. 15-CA-1454 (1961) (applying choice of law concepts from Lauritzen v. Larsen, 345 U.S. 571 (1953), to determine effect of foreign registry). Securities decisions are an exception. A Westlaw search on 30 January 2000 of the FSCC- ADMIN database found 398 documents using the phrase "personal jurisdiction." A search of the same database for the phrase "choice of law" identified 40 documents.
230. **31 (finding no personal jurisdiction over non party to permit requested remedy); Alexander Milburn Co. & United Electrical, Radio & Machine Workers, 78 NLRB 747, 1948 WL 7782 (1947) (adjudicating claimed lack of personal jurisdiction because of faulty service); West India Fruit & Steamship Co. & Seafarers International, 130 NLRB 343, 353, 1961 WL 15253, Case No. 15-CA-1454 (1961) (applying choice of law concepts from Lauritzen v. Larsen, 345 U.S. 571 (1953), to determine effect of foreign registry). Securities decisions are an exception. A Westlaw search on 30 January 2000 of the FSCC- ADMIN database found 398 documents using the phrase "personal jurisdiction." A search of the same database for the phrase "choice of law" identified 40 documents.
231. **31 (finding no personal jurisdiction over non party to permit requested remedy); Alexander Milburn Co. & United Electrical, Radio & Machine Workers, 78 NLRB 747, 1948 WL 7782 (1947) (adjudicating claimed lack of personal jurisdiction because of faulty service); West India Fruit & Steamship Co. & Seafarers International, 130 NLRB 343, 353, 1961 WL 15253, Case No. 15-CA-1454 (1961) (applying choice of law concepts from Lauritzen v. Larsen, 345 U.S. 571 (1953), to determine effect of foreign registry). Securities decisions are an exception. A Westlaw search on 30 January 2000 of the FSCC-ADMIN database found 398 documents using the phrase "personal jurisdiction." A search of the same database for the phrase "choice of law" identified 40 documents.
232. But see, supra note 201.
233. The term "commerce" means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country. 29 U.S.C. § 152(6) (1994) (National Labor Relations Act definitions); The provisions of this Act shall apply to all interstate and foreign communication by wire or radio and all interstate and foreign transmission of energy by radio, which originates and/or is received within the United States, and to all persons engaged within the United States in such communication or such transmission of energy by radio, and to the licensing and regulating of all radio stations as hereinafter provided. 47 U.S.C. § 152(a) (1994) (Federal Communications Act); 'Commerce' means commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation. 15 U.S.C. § 44 (1994) (Federal Trade Commission).
234. Similarly, the Australian constitution does not itself limit the extraterritorial reach of the Australian parliament, although Australia does utilize its principles of private inter-national law to determine the law applicable to a dispute. See Mallesons, supra note 58, §§ 2.13, 2.18.
235. Murray v. the Schooner Charming Betsy, 6 U.S. 64 (1804).
236. Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949).
237. The territoriality principle was the foundation of prescriptive jurisdiction, and expansions of the doctrine may be seen as exceptions to this basic principle. Thus, one hundred seventy years ago, Joseph Story in the first treatise on Conflict of Laws, observed that the starting point for the subject is the territorial limits of law. It is plain that the laws of one country can have no intrinsic force, proprio vigore, except within the territorial limits and jurisdiction of that country. . . . No other nation, or its subjects, are bound to yield the slightest obedience to those laws. Whatever extraterritorial force they are to have, is the result, not of any original power to extend them abroad, but of that respect, which from motives of public policy other nations are disposed to yield to them, giving them a . . . with a wise and liberal regard to common convenience and mutual benefits and necessities. STORY, supra note 207, at 8.
238. RESTATEMENT (THIRD), supra note 200, at § 402. For a rare example of the assertion of protective jurisdiction, see United States v. Bin Laden, 92 F. Supp. 2d 189 (S.D.N.Y 2000) (upholding application of U.S. antiterrorism statutues to acts of foreign nationals committed abroad that resulted in the death of, among others, of U.S. nationals and the destruction of U.S. property [embassies]).
239. RESTATEMENT (THIRD), supra note 200, at § 404. In United States v. Martinez-Hidalgo, 993 F.2d 1052 (3d Cir. 1993), for example, the U.S. Maritime Drug Enforcement Act, 46 U.S.C. app. § 1903 (1994), was interpreted to apply to a stateless vessel's nonresident crew found carrying drugs in international waters with no nexus to the United States (i.e. no evidence that the drugs were intended to reach the United States). The court interpreted international law as not requiring such a nexus (a position it might have taken but did not, bolstered by reference to RESTATEMENT (THIRD) section 404) but also noted that, even if international law was to the contrary, congressional intent was clear and governed.
240. The basis is accepted in international law, even though its use in certain circumstances by the United States has been criticized. See generally John A. Trenor, Jurisdiction and the Extraterritorial Application of Antitrust Laws After Hartford Fire, 62 U. CHI. L. REV. 1583, 1601 (1995). Another controversial basis, not generally accepted, is based on the local citizenship of the plaintiff, "passive personality" jurisdiction.
241. Section 403(2) states: (a) the link of the activity to the territory of the regulating state, i.e., the extent to which the activity takes place within the territory, or has substantial, direct, and foreseeable effect upon or in the territory; (b) the connections, such as nationality, residence, or economic activity, between the regulating state and the person principally responsible for the activity to be regulated, or between that state and those whom the regulation is designed to protect; (c) the character of the activity to be regulated, the importance of regulation to the regulating state, the extent to which other states regulate such activities, and the degree to which the desirability of such regulation is generally accepted; (d) the existence of justified expectations that might be protected or hurt by the regulation; (e) the importance of the regulation to the international political, legal, or economic system; (f ) the extent to which the regulation is consistent with the traditions of the international system; (g) the extent to which another state may have an interest in regulation the activity; and (h) the likelihood of conflict with regulation by another state. RESTATEMENT (THIRD), supra note 200, at § 403(2).
242. 345 U.S. 571 (1953).
243. 549 F.2d 597 (9th Cir. 1976).
244. 509 U.S. 764 (1993).
245. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945).
246. 509 U.S. at 769. In dissent, Justice Scalia maintained that a conflict exists whenever states provide different substantive rules of decision and that the majority had misread Section 403(3) of the Restatement (Third). Id. at 798-99 (Scalia, J., dissenting). It does indeed command deference only when compliance with both laws is impossible, but it presupposes that the interest balancing mandated by Section 403(2) has already taken place.
247. See supra note 217.
248. 42 U.S.C. §§ 2000e-2000e-17 (1994).
249. EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991). The decision was overturned by the passage of an amendment to the Civil Rights Act, 42 U.S.C. § 2000e(f); Pub. L. No. 102-166 § 109, 105 Stat. 1071, 1077 (1991).
250. See, e.g., Europe and Overseas Commodity Traders, S.A. v. Banque Paribas London, 147 F.3d 118 (2d Cir. 1998) (U.S. securities laws not applicable to sale of foreign securities made in Florida by a foreign corporation to another foreign entity's president). For a discussion of the varying approaches of circuit courts to the reach of the securities laws, see Kauthar SDN BHD v. Sternberg, 149 F.3d 659 (7th Cir. 1998).
251. The formal American approach is associated with the First Restatement of Conflict of Laws and Joseph Henry Beale, its reporter. The newer approach is identified with Brainerd Currie and the Second Restatement of Conflict of Laws.
252. *d. Needs of the interstate and international systems. Probably the most important function of choice-of-law rules is to make the interstate and international systems work well. Choice-of-law rules, among other things, should seek to further harmonious relations between states and to facilitate commercial intercourse between them. In formulating rules of choice of law, a state should have regard for the needs and policies of other states and of the community of states. Rules of choice of law formulated with regard for such needs and policies are likely to commend themselves to other states and to be adopted by these states. Adoption of the same choice-of-law rules by many states will further the needs of the interstate and international systems and likewise the values of certainty, predictability and uniformity of result. AMERICAN RESTATEMENT § 6 cmt. d.
253. ODA, supra note 96, at 443-44.
254. Tokushige Yoshimura, Jurisdiction Research (visited July 3, 2000) 〈http://www.kentlaw. edu/cyberlaw/docs/foreign/〉.
255. AMERICAN RESTATEMENT, supra note 229, at § 145.
256. AMERICAN RESTATEMENT, supra note 229, at §§ 186-88.
257. See supra note 70.
258. A mandatory rule is defined as one that cannot be derogated from by contract.
259. ODA, supra note 96, at 443.
260. Id. at 443-44.
261. AMERICAN RESTATEMENT, supra note 229, at § 188. If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.
262. Rome Convention, supra note 70, at art. 4. Australia operates under a similar rule, choosing (in the absence of an enforceable contractual choice clause) the law of the state with which the contract has "the closest and most real connection." Mallcsons, supra note 58, at § 2.19.
263. 499 U.S. 585 (1991). Carnival Cruise Lines involved a forum selection clause in a consumer contract. Lower courts have extended its rule to choice of law clauses. See, e.g., Haynsworth v. The Corporation, 121 F.3d 956, 965 (5th Cir. 1997).
264. Rome Convention, supra note 70, at art. 5. Covered consumers are those who were solicited, either individually or through advertising, in their forum and who there completed steps necessary by them for the formation of the contract and those who traveled elsewhere to place an order for goods at the arrangement of the seller for that purpose.
265. See Graham, supra note 113, at § I.A.
266. 277 N.W.2d 298 (S.D. 1979).
267. Demitropoulos v. Bank One Milwaukee, N.A., 915 F. Supp. 1399, 1414 (N.D. Ill. 1996) (upholding choice of law provision) suggests that similarity of an Illinois consumer protection law and the Wisconsin law selected by the choice of law clause vitiated a public policy argument that the Illinois law should be applied notwithstanding the clause.
268. See, e.g., Aldens, Inc. v. Miller, 610 F.2d 538 (8th Cir. 1979) (rejecting claim by interstate mail order vendor that mandatory provisions of Iowa Consumer Credit Code violated Commerce Clause because they imposed burden on operations of vendor; citing cases from the Third, Seventh and Tenth Circuits reaching same conclusion).
269. Exceptions to this include situations where regulatory agencies seek to enforce a judgment issued or obtained against an entity not currently in the forum through the prohibition of its activities in the forum.
270. Typically, though not necessarily, the forum asked to enforce a foreign judgment is the defendant's home state, where he is clearly subject to personal jurisdiction and where his assets are likely to be found. Other fora, however, in which his assets are located may also be asked to enforce the judgment. Jurisdiction there is satisfied because the property in the state constitutes a purposeful contact with it and the claim is, even after Shaffer v. Heitner, 433 U.S. 186 (1977), sufficiently related to the property to make an exercise of jurisdiction reasonable. Shaffer, while questioning quasi in rem jurisdiction as a basis for hearing a case in the first instance, explicitly distinguished enforcement jurisdiction, suggesting that the presence of property supports jurisdiction to enforce a judgment even if the underlying litigation was unrelated to the property. Id. at 217.
271. Supra note 199.
272. Pennoyer v. Nelf, 95 U.S. 714 (1877). If, however, she loses her jurisdictional argument, the judgment will be enforced; she may not litigate the merits of the claim underlying the default judgment.
273. Baldwin v. Iowa State Traveling Men's Ass'n, 283 U.S. 522 (1931).
274. See, e.g., The Uniform Foreign Money Judgments Recognition Act, 13 U.L.A. 261 (1962), adopted by about half the states.
275. See de la Mata v. American Life Ins. Co., 771 F. Supp. 1375 (D. Del. 1991). Canada also bases the recognition and enforcement of foreign judgments on notions of comity, though it does require reciprocal recognition of valid Canadian judgments. See Old North State Brewing Co. v. Newlands Services, Inc. [1998] B.C.J. No. 2474. Of course, such recognition will be disallowed if the rendering court lacked jurisdiction in the opinion of the Canadian court. See Braintcch, Inc. v. Kostiuk [1999] B.C.D. Civ. J. LEXIS 202, discussed at Gates, supra note 62, at 4 (refusing to enforce a default Texas libel judgment in dispute between two British Columbia domiciliaries, because the presence of defamatory material on site accessible in Texas did not provide a "real and substantial connection" between claim or defendant and Texas). Of course, the degree of procedural difficulty may vary widely, even if underlying principles are similar. Both Brazil and Columbia, for example, have quite elaborate statutory requirements for recognition. See Noronha Advogados, supra note 191, at § 5.4.1, and Gamboa, supra note 191.
276. See, e.g., Bridgeway Corp. v. Citibank, 201 F.3d 134 (2d Cir. 2000) (refusing to enforce a final judgment of the Supreme Court of Liberia rendered during a period in which the Liberian judicial system was described by the U.S. State Department as corrupt and incompetent).
277. While one state is bound by another's determination of its own jurisdiction, fora asked to enforce foreign judgments typically will feel free to reconsider the existence of jurisdiction in the rendering state.
278. See Matusevitch v. Telnikoff, 877 F. Supp. 1 (D.D.C. 1995) (refusing to recognize and enforce a British libel judgment because British libel law lacked constitutional protections applied in the United States).
279. Mallesons, supra note 58, at 2.20-2.22.
280. See generally ENFORCEMENT OF FOREIGN JUDGMENTS (Dennis Campell ed., 1997). For a clear, detailed explanation of one country's doctrine, see Rishi Agrawala, Executability & Enforceability of Foreign Judgments and Decrees in India: Judicial Trends (visited July 3, 2000), available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
281. See generally ENFORCEMENT OF FOREIGN JUDGMENTS (Dennis Campell ed., 1997). For a clear, detailed explanation of one country's doctrine, see Rishi Agrawala, Executability & Enforceability of Foreign Judgments and Decrees in India: Judicial Trends (visited July 3, 2000), available in 〈http://www.kentlaw.edu/cyberlaw/docs/foreign/〉.
282. Draft Hague Convention, supra note 58, art. 2.
283. See, e.g., the recent European Commission proposal for the establishment of an alternative dispute "clearinghouse" mechanism to deal with disputes arising from online purchases. Commission launches "e-confidence" on-line forum to promote alternative dispute resolution (last modified April 2000) 〈http://www.ispo.cec.be/ecommerce/epolicy/2000-04.html# econfidence〉.
284. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).
285. Council Directive 93/13/EEC of 5 April 1993 on Unfair Terms in Consumer Contracts.
286. Brussels Convention, supra note 33, tit. 2, § 1, art. 3.
287. The American Advertising Federation suggests this approach in its comments to the Federal Trade Commission on Consumer Protection submitted for the workshop in July 1999, available in 〈http://www.ftc.gov/bcp/icpw/comments/aaf.pdf〉.
288. See analysis in Part 2.2 of this report.
289. Organization for Economic Co-operation and Development, Recommendations of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce (Dec. 9, 1999) (visited July 3, 2000) 〈http://www.oecd.org/dsti/sti/it/consumer/prod/guidelines.htm〉, at 5.
290. See, e.g., Draft International Safe Harbor Privacy Principles Issues by the U.S. Department of Commerce (Mar. 17, 2000) (visited July 3, 2000)
291. See generally United States Government Electronic Commerce Policy (visited July 3, 2000) 〈http://www.ecommerce.gov/join_statements.htm〉.
292. The group is composed of leading Internet companies that address consumer protection issues in electronic commerce. See Electronic Commerce & Consumer Protection Group (visited July 3, 2000) 〈http://www.ecommercegroup.org/〉.
293. Henry H. Perritt, Jr., The Internet is Changing the Public International Legal System, 88 KY. L.J. 885 (1999-2000).
294. 47 U.S.C. § 230(c) was added as part of the Telecommunications Act of 1996. The statute explicitly preempts inconsistent state law. 47 U.S.C. § 230(e)(3) (Supp. 1997).
295. See, e.g., National Consumers League, Consumers and the 21st Century (visited July 3, 2000) 〈http://www.natlconsumersleague.org/FNLSUM1.PDF〉, at 4.
296. 15 U.S.C. § 1681 (1994).
297. 5 U.S.C. § 552a (1994).
298. Loi N° 78-17 du 6 January 1978 relative à l'informatique, aux fichiers et aux libertés [concerning data processing, files, and liberties] (visited July 3, 2000) 〈http://www.cnil.fr/textes/index.htm〉.
299. Council of Europe, Convention for the Protection of Individuals with Regard to the Automatic Processing of Personal Data, ETS No. 108 (Jan. 28, 1981) 〈http://conventions.coe.int/trcaty/EN/cadreprincipal.htm〉; see national laws collected in English translation in the BUSINESS GUIDE TO PRIVACY AND DATA PROTECTION LEGISLATION (C. Franklin ed., 1996).
300. Council of Europe, Convention for the Protection of Individuals with Regard to the Automatic Processing of Personal Data, ETS No. 108 (Jan. 28, 1981) 〈http://conventions.coe.int/trcaty/EN/cadreprincipal.htm〉; see national laws collected in English translation in the BUSINESS GUIDE TO PRIVACY AND DATA PROTECTION LEGISLATION (C. Franklin ed., 1996).
301. Directive 95/46/EC of the European Parliament of the Council of 24 October 1995 on the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data, 1995 O.J. (L 281) 31 (Nov. 23, 1995) 〈http://europa. eu.int/eurlex/en/lif/dat/1995/en_395L0046.html〉 [hereinafter E.U. Data Protection Directive], which was to have been implemented in the Member States by October 1998. See European Commission, Status of Implementation of Directive 95/46 (last modified Mar. 29, 2000) 〈http://europa.eu.int/comm/internal_market/en/media/dataprot/law/impl. htm〉.
302. Directive 95/46/EC of the European Parliament of the Council of 24 October 1995 on the Protection of Individuals with Regard to the Processing of Personal Data and on the Free Movement of Such Data, 1995 O.J. (L 281) 31 (Nov. 23, 1995) 〈http://europa. eu.int/eurlex/en/lif/dat/1995/en_395L0046.html〉 [hereinafter E.U. Data Protection Directive], which was to have been implemented in the Member States by October 1998. See European Commission, Status of Implementation of Directive 95/46 (last modified Mar. 29, 2000) 〈http://europa.eu.int/comm/internal_market/en/media/dataprot/law/impl. htm〉.
303. See, e.g., European Commission Internet Task Force, Article 29 Data Protection Working Party, Opinion 1/2000 on certain data protection aspects of electronic commerce (visited July 3, 2000) 〈http://europa.eu.int/comm/internal_market/en/media/dataprot/wpdocs/wp28en. htm〉.
304. FTC Act section five makes it unlawful to engage in "unfair or deceptive" acts or practices "in or affecting commerce." 15 U.S.C. § 45(a)(1) (1994). See, e.g., In the Matter of GeoCities, File No. 982-3015 (FTC 1998) (web site operator required to make additional privacy disclosures and ensure that its practices are consistent with those disclosures); analysis of proposed consent agreement published at 63 Fed. Reg. 44624 (Aug. 20, 1998), available in 〈http://www.ftc.gov/os/1998/9808/9823015.ana.htm〉.
305. Gramm-Leach-Bliley Financial Services Modernization Act of 1999, Pub. L. No. 106-102, 1999 U.S.C.C.A.N. (113 Stat.) 1338, tit. V-Privacy, available in 〈http://frwe-bgate.access.gpo.gov/cgibin/getdoc.cgi?dbname = 106_cong_public_laws&docid = f:publ 102.106〉 [hereinafter GLB Act].
306. Children's Online Privacy Protection Act of 1998, 15 U.S.C. §§ 6501-05 (effective April 21, 2000), available in 〈http://www.ftc.gov/ogc/coppal.pdf〉; regulations at 16 C.F.R. §§ 312.1-312.12 (2000), available in 〈http://www.access.gpo.gov/nara/cfr/waisidx_00/16cfr312_00.html〉.
307. Health Insurance Portability and Accountability Act of 1996 [hereinafter HIPAA], Pub. L. No. 104-191, § 264, 1996 U.S.C.C.A.N. (110 Stat.) 1936, 2032; see also Department of Health and Human Services, Standards for Privacy of Individually Identifiable Health Information; Proposed Rule, 64 Fed. Reg. 59917 (last modified Nov. 3, 1999) 〈http://www.epic.org/privacy/medical/HHS_medical_privacy_regs.html〉.
308. Health Insurance Portability and Accountability Act of 1996 [hereinafter HIPAA], Pub. L. No. 104-191, § 264, 1996 U.S.C.C.A.N. (110 Stat.) 1936, 2032; see also Department of Health and Human Services, Standards for Privacy of Individually Identifiable Health Information; Proposed Rule, 64 Fed. Reg. 59917 (last modified Nov. 3, 1999) 〈http://www.epic.org/privacy/medical/HHS_medical_privacy_regs.html〉.
309. Federal Trade Commission, Privacy Online: A Report to Congress (1998), at 7-11, (visited July 3, 2000) 〈http://www.ftc.gov/reports/privacy3/index.htm〉.
310. OECD, Recommendation of the Council Concerning Guidelines Governing the Protection of Privacy and Transborder Flows of Personal Data, O.E.C.D. Doc. C(80) 58 (Final) (Oct. 1, 1980) 〈http://www.oecd.org/dsti/sti/it/secur/prod/PRIVEN.HTM〉.
311. E.U. Data Protection Directive, supra note
312. 276, art. 4(1)(a) (emphasis added).
313. Id. art. 2(b).
314. Id. art. 2(d).
315. Id. art. 4(1)(a).
316. Id. art. 25(1).
317. Id. art. 4(2).
318. See Peter P. Swire, Of Elephants, Mice, and Privacy: International Choice of Law and the Internet, 32 INT'L LAW. 991, 1006-10 (1998).
319. E.U. Data Protection Directive, supra note 276, art. 25(1).
320. See generally Henry H. Perritt, Jr. & Margaret G. Stewart, False Alarm? 51 FED. COMM. L.J. 811 (1999).
321. See Federal Trade Commission, Self-Regulation and Privacy Online: A Report to Congress (July 1999), at 4 & n.37 〈http://www.ftc.gov/os/1999/9907/privacy99.pdf〉.
322. COPPA, 15 U.S.C.A. § 6501(2)(a)(1) (Supp. 2000).
323. See Federal Trade Commission Act, 15 U.S.C.A. §§ 45(m), 53(b), 57b.(b) (1997). See also, Federal Trade Commission, A Brief Overview of the Federal Trade Commission's Investigative and Law Enforcement Authority (last modified April 1998) 〈http://www.ftc.gov/ogc/brfovrvw.htm〉.
324. GLB Act, supra note 279, § 505.
325. E.U. Data Protection Directive, supra note 276, art. 24.
326. See, e.g., Data Protection Act 1998 (United Kingdom), §§ 60 (prosecutions and penalties) and 61 (liability of directors, etc.) (visited July 3, 2000) 〈http://wood.ccta.gov.uk/dpr/dpdoc.nsf〉;
327. Protection of individuals and other subjects with regard to the processing of personal data, Act No. 675 (1996) (Italy), arts. 10, 23 (2), 29 (4), 32 (1), and 39 (administrative penalties), 34 (strict liability for failure to notify, with penalties including fines and imprisonment), 35 (imprisonment for violations with intent to cause loss or for gain), (visited July 3, 2000) 〈http://www.privacy.it/legge675encoord.html〉.
328. E.U. Data Protection Directive, supra note 276, art. 28.
329. Id.
330. Id. arts. 22, 23.
331. See "Safe Harbor" documents published by the International Trade Administration of the Department of Commerce (visited July 3, 2000) 〈http://www.ita.doc.gov/td/ecom/menul.html〉.
332. Law no. 2472 on the protection of individuals with regard to the processing of personal data (Greece) (official English translation available from the Council of Europe, Project Group on Data Protection [CJ-PD], Strasbourg, France), art. 3(b); administrative sanctions and criminal penalties are found in arts. 19, 21, and 22.
333. See, e.g., Freedom (visited July 3, 2000) 〈http://www.freedom.net〉 (information on anonymous and pseudonymous web browsing); Platform for Privacy Preferences (visited July 3, 2000) 〈http://www.w3.org/P3P〉 (World Wide Web Consortium materials on the Platform for Privacy Preferences designed to be incorporated in web sites and browser software to allow users to set privacy preferences and filter out non-conforming web sites).
334. See, e.g., Freedom (visited July 3, 2000) 〈http://www.freedom.net〉 (information on anonymous and pseudonymous web browsing); Platform for Privacy Preferences (visited July 3, 2000) 〈http://www.w3.org/P3P〉 (World Wide Web Consortium materials on the Platform for Privacy Preferences designed to be incorporated in web sites and browser software to allow users to set privacy preferences and filter out non-conforming web sites).
335. See, e.g., Better Business Bureau (visited July 3, 2000) 〈http://www.bbbonline.org〉 (describing the code of conduct, trust seal, and dispute resolution programs of the U.S. national Better Business Bureau association);
336. see also The Federal Trade Commission, Self-Regulation and Privacy Online: A Report to Congress (1999) (last modified July 1999) 〈http://www.ftc.gov/os/1999/9907/privacy99.pdf〉.
337. See Carnival Cruise Lines Inc. v. Shute, 499 U.S. 585 (1991).
338. See, e.g., E.U. Data Protection Directive, supra note 276, art. 8(2)(a) (Member States may provide that certain sensitive data may not be processed even with the individual's consent).
339. Brussels Convention, supra note 33, art. 3 and Rome Convention, supra note 70, art. 3 provide that a contractual choice of forum or of applicable law, respectively, cannot deprive a consumer of the benefit of mandatory consumer protection laws in the consumer's place of habitual residence, if the consumer was solicited there or entered into the contract there. Those conditions arc often difficult to establish in electronic commerce, especially if the consumer simply accessed a vendor's web site. Hence, the European Commission has recently conducted hearings and solicited comments on the question of establishing a presumption that the consumer's home laws apply to consumer protection in electronic commerce.
340. Brussels Convention, supra note 33, art. 3 and Rome Convention, supra note 70, art. 3 provide that a contractual choice of forum or of applicable law, respectively, cannot deprive a consumer of the benefit of mandatory consumer protection laws in the consumer's place of habitual residence, if the consumer was solicited there or entered into the contract there. Those conditions arc often difficult to establish in electronic commerce, especially if the consumer simply accessed a vendor's web site. Hence, the European Commission has recently conducted hearings and solicited comments on the question of establishing a presumption that the consumer's home laws apply to consumer protection in electronic commerce.
341. See supra note 265, at 7.
342. See supra note 266.
343. See Cover letter of March 17, 2000 from Ambassador David L. Aaron to U.S. organizations requesting comments on the newly-posted draft documents, available in 〈http://www.ita.doc.gov/td/ecom/aaron317letter.htm〉.
344. 47 U.S.C. § 230 (1997); see, e.g., Zeran v. America Online, Inc., 129 F.2d 327 (4th Cir. 1997); cert. denied, 524 U.S. 937 (1998).
345. Directive 2000/_/EC, on certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market ("Directive on electronic commerce"), Common Position adopted by the European Council 28 Feb. 2000, art. 12 (no liability for intermediaries as "mere conduits" of information and communications).
346. But see the report of the F.T.C. to Congress on May 22, 2000, that industry self-regulation alone provides inadequate consumer protection. FTC Concludes Self-Regulation Not Enough to Protect Privacy, Recommends Legislation, 68 U.S.L.W. 2710 (May 30, 2000).
347. See generally the remarks of Sen. Orrin Hatch and others during the debates of the Sonny Bono Copyright Term Extension Act of 1998, Pub. L. No. 105-298, 1998 U.S.C.C.A.N. (112 Stat). These remarks can be found at 141 CONG. REG. S3390 (daily ed. Feb. 22, 1995) (statement of Sen. Hatch); The Copyright Term Extension Act: Hearings Before the House Subcommittee on Courts and Intellectual Property on H.R. 989, 104th Cong. (1995).
348. These changes in the patent term were directly affected by the Trade Related Aspects of Intellectual Property (TRIPs) Agreements of the General Agreement on Tariffs and Trade (GATT) that grew out of the Uruguay Round, Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, April 15, 1994, at 2-3 (GATT Secretariat 1994), Annex IC: Agreement on Trade-Related Aspects of Intellectual Property Rights, reproduced at 33 I.L.M. 81 (1994). These were codified in the United States through the Uruguay Round Agreements Act, Pub. L. No. 103-465, 1994 U.S.C.C.A.N. (108 Stat.) 4809.
349. See 15 U.S.C.A. § 1125(d)(2)(D)(i) (Supp. 2000).
350. See id. § 1125(c).
351. See id. § 1125(a).
352. See id. § 1125(d)(2)(A). These additional procedures are intended to assure due process. As a general proposition, courts may exercise in rem jurisdiction to adjudicate the status of property only if due process would have permitted personal jurisdiction over those who had an interest in the res (or underlying property). See Shaffer v. Heitner, 433 U.S. 186, 207 (1977). However, when the dispute concerns ownership of the property located in the forum, its presence there constitutes "minimum contacts" between the claimants and the forum.
353. 15 U.S.C.A. § 1125(d)(2)(C) (Supp. 2000).
354. Registration does not require the registrant to be a citizen of the nation-state in which registration has occurred and, indeed, many patents and trademarks are registered in multiple jurisdictions, presumably subjecting the registrant to jurisdiction in any of those jurisdictions as well as the requisite contacts to sue or be sued in each jurisdiction.
355. 59 PAT., TRADEMARK & COPYRIGHT J. 723 (Mar. 31, 2000). This, of course, merely has the effect of requiring Network Solutions, Inc., headquartered there, to release the pertinent information regarding the registrant for the purposes of the lawsuit.
356. This is the point that was established by the Berne Convention and is now used by all countries which are signatories to Berne, including the United States. 17 U.S.C. § 102 (1996).
357. In the United States, registration is a prerequisite to filing an infringement lawsuit for most works, but is not necessary to give rise to the rights themselves. 17 U.S.C. § 411 (1996).
358. The Internet Corporation for Assigned Names and Numbers, Uniform Domain Name Dispute Resolution Policy, August 26, 1999, § 2 (visited July 3, 2000) 〈http://www.icann.org/udrp/udrppolicy24oct99.htm〉.
359. Id. § 3.
360. Id. § 4(a)(ii). This element may be negated by evidence that: • before any notice of the dispute, the registrant used or had made "demonstrable preparations to use" either the domain name or a name corresponding to it "in connection with a bona fide offering of goods or services;" • the registrant (either individually or as a business or organization) has been "commonly known by the domain name" even if it "acquired no trademark or service mark rights;" or • the registrant is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain by misleadingly diverting consumers or tarnishing the mark at issue in the dispute. Id. § 4(c).
361. Id. § 4(a). Bad faith registration and use may be evidenced by any of the following circumstances, among others: • registration or acquisition of a domain name "primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the . . . mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name;" • registration of a domain name in order to prevent a mark owner "from reflecting the mark in a corresponding domain name," but only in cases where the registrant has engaged in "a pattern of such conduct;" • registration of a domain name "primarily for the purpose of disrupting the business of a competitor;" or • using a domain name to intentionally attempt "to attract, for commercial gain," Internet users to a web site or other online location "by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement" of the web site or location (or product or service offered at such site or location). Id. § 4(b).
362. Id. § 4(d).
363. Id. § 4(i). According to the Policy, all disputes other than those that qualify for administrative proceedings must be resolved in litigation between the affected mark owners and registrants.
364. Id. § 5.
365. Id. § 4(k).
366. ITHIEL DE SOLA POOL, TECHNOLOGIES OF FREEDOM 214 (1983).
367. 17 U.S.C.A. § 512 (Supp. 2000).
368. Copyright and Related Rights in the Information Society - Proposal for Directive/Background (Dec. 10, 1997).
369. In the United States, for example, the Comptroller of the Currency is the primary federal regulator of national banks. The Comptroller's authority, and the powers, investments, and activities of national banks are governed by the National Bank Act of 1863. See, e.g., 12 U.S.C. § 24 (1998). See generally THOMAS P. VARTANIAN ET AL., 21sT CENTURY MONEY, BANKING & COMMERCE 13-31 (1998). Other financial institutions (thrifts, credit unions, etc.) are regulated by separate federal agencies, and those chartered to operate by individual states are supervised by a state-level regulator.
370. With respect to the key regulatory issue of capital standards, see BANK FOR INT'L SETTLEMENTS, COMM. ON BANKING REGULATIONS AND SUPERVISORY PRACTICES, Proposal for International Convergence of Capital Measurement and Capital Standards, 1 (Dec. 1987) , reprinted in 27 INT'L LEGAL MATERIALS 530 (March 1988).
371. With respect to the key regulatory issue of capital standards, see BANK FOR INT'L SETTLEMENTS, COMM. ON BANKING REGULATIONS AND SUPERVISORY PRACTICES, Proposal for International Convergence of Capital Measurement and Capital Standards, 1 (Dec. 1987) , reprinted in 27 INT'L LEGAL MATERIALS 530 (March 1988).
372. See The Basel Accord (last modified July 3, 2000) 〈http:www.bis.org/publ/index.htm〉.
373. Bank Secrecy Act, 31 U.S.C. § 5318 (1994).
374. NATIONAL GAMBLING IMPACT STUDY COMMISSION, FINAL REPORT, at 2-15 (June 18, 1999) 〈http://www.ngisc.gov/reports/〉 [hereinafter NGISC FINAL REPORT]. According to the report, revenues from Internet gambling doubled from previous year. Id. at 2-16.
375. See Jack L. Goldsmith, What Internet Gambling Legislation Teaches about Internet Regulation, 32 INT'L LAW 1115, 1116 (1998).
376. NGISC FINAL REPORT, supra note 341, at 2-16.
377. Nations including Australia, Antigua, Barbuda, Austria, Belgium, Costa Rica, Germany, South Africa, and several regions of the United Kingdom have licensed Internet gambling operations. NGISC FINAL REPORT, supra note 341, at 5.1 n.5.
378. Gambling is regulated by several U.S. federal statutes including the Wire Act (18 U.S.C. § 1084 (1994)), the Travel Act (18 U.S.C. § 1952 (1994)), the Aiding and Abetting Statute (18 U.S.C. § 2 (1994)), the Professional and Amateur Sports Protection Act (28 U.S.C. § 3702 (1994)), and the Interstate Transportation of Wagering Paraphernalia Act (18 U.S.C. § 1953 (1994)). In addition, several pieces of legislation have been introduced in recent years, most notably, the "Internet Gambling Prohibition Act of 1997" (S. 474), which has been reintroduced in the 106th Congress by Senator Jon Kyl of Arizona.
379. People v. World Interactive Gaming Corp., 1999 WL 591995 (N.Y Sup. July 22, 1999).
380. *5.
381. 568 N.W.2d 715 (Minn. Ct. App. 1997), aff'd, 576 N.W.2d 747 (Minn. 1998).
382. 568 N.W.2d at 716-17. The district court found that the defendant's activities over the Internet constituted minimum contacts with the state, and its exercise of personal jurisdiction was the issue on appeal.
383. Id. at 717. The court's opinion does not address the issue of applicable law. It (and presumably the parties) assumes that Minnesota law governs the issue of legality with respect to a gambling site accessed (or at least accessible; as a sanction for refusing to comply with discovery orders, the court established as a fact that the defendant's mailing list contained the name and address of at least one Minnesota resident) in the state. The law applied to determine the legality of conduct without reference to private claims of damage is always that of the forum. If it does not apply to the conduct (for example, because the legislature chose to make it illegal to operate a gaming site only if the site was physically located in Minnesota), the suit is dismissed.
384. Id. at 718. The five factors employed by the court were: (1) the quantity of contacts with Minnesota; (2) the nature and quality of the defendant's contacts; (3) the connection between the cause of action and the defendant's contacts; (4) the state's interest in providing a forum; and (5) the convenience of the parties.
385. Id. at 721.
386. See note 349, supra.
387. 568 N.W.2d at 718-19.
388. Id.
389. 356. Id. at 721.
390. Id. at 722.
391. Id.
392. See also Missouri ex rel. Nixon v. Interactive Gaming & Communications Corp., No. CV97-7808 (Mo. Jackson County Cir. Ct. May 22, 1997). This case also resulted in a similar holding. The defendant, a Delaware corporation, actively sent promotional brochures into Missouri, and other promotional materials via e-mail. Further, the defendant, when questioned by an investigator from the Missouri Attorney General's office as to whether it was legal in Missouri to gamble through the site, answered in the affirmative. Therefore, the court held that the active solicitation of business in Missouri fell under the state's long-arm statute and enjoined the defendant from conducting further business within Missouri or with residents of the state.
393. *1 (N.D. Ill. Feb. 26, 1998).
394. *6.
395. Id.
396. Id. Actually, such a conclusion need not follow. The mere transaction of business does not subject a defendant to jurisdiction unless the claim is at least related to the business transacted. Here, for example, the claim was for attorney's fees allegedly owed to the plaintiff as a result of his investigation into short-swing profits realized by an insider in the defendant corporation. Those activities, however, occurred in either Nevada or New York (on the American Stock Exchange), not in Illinois. Nonetheless, the court is clearly correct that to characterize a passive web site as the transaction of business is disingenuous.
397. 998 F. Supp. 738 (W.D. Tex. 1998).
398. Id. at 744.
399. Id.
400. Id.
401. Id. at 744-45.
402. Id. at 741.
403. Id. at 745.
404. Id.
405. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991). See also Gilmer v. Interstate Johnson Lane Corp., 500 U.S. 20 (1991).
406. Jubelirer v. Mastercard International, Inc., 68 F. Supp. 2d 1049 (W.D. Wis. 1999).
407. The distinctions become more complex when technology blurs the difference between a "good" and a "service." For example, are the words of a new novel downloaded to a consumer's computer through the Internet the sale of a good or the provision of a service?
408. Colo. Rev. Stat. § 12-36-106 (1999) (Emphasis added).
409. 952 F. Supp. 1119 (W.D. Pa. 1997).
410. Id. at 1124.
411. See, e.g., Mediconsultant (visited July 3, 2000) 〈http://www.mediconsult.com〉; WebMD (visited July 3, 2000) 〈http://www.webmd.com〉; MedicineOnline.com (visited July 3, 2000) 〈http://www.medicineonline.com〉.
412. See, e.g., Mediconsultant (visited July 3, 2000) 〈http://www.mediconsult.com〉; WebMD (visited July 3, 2000) 〈http://www.webmd.com〉; MedicineOnline.com (visited July 3, 2000) 〈http://www.medicineonline.com〉.
413. See, e.g., Mediconsultant (visited July 3, 2000) 〈http://www.mediconsult.com〉; WebMD (visited July 3, 2000) 〈http://www.webmd.com〉; MedicineOnline.com (visited July 3, 2000) 〈http://www.medicineonline.com〉.
414. See Viagra (visited July 3, 2000) 〈http://www.viagra.com〉.
415. Food and Drugs Act, R.S.C., ch. F-27 (1985) (Can.), as amended.
416. See iCraveTV (visited July 3, 2000) 〈http://www.icravetv.com〉.
417. Twentieth Century Fox Film Corp. v. ICRAVETV, No. 00-121, 2000 U.S. Dist. LEXIS 1013 (W.D. Pa. Jan. 28, 2000).
418. For example, some Web sites now provide surgical data categorized by type and hospital. See, e.g., University of California's Employee Benefit Plan Administration (visited July 3, 2000) 〈http://www.ucop.edu/bencom/hw/healthscope/hospitals.html〉; Cardiac Surgery in New Jersey: 1999-1997 (visited July 3, 2000) 〈http://www.state.nj.us/health/hcsa/cabgs98/cabgs98.htm〉.
419. For example, some Web sites now provide surgical data categorized by type and hospital. See, e.g., University of California's Employee Benefit Plan Administration (visited July 3, 2000) 〈http://www.ucop.edu/bencom/hw/healthscope/hospitals.html〉; Cardiac Surgery in New Jersey: 1999-1997 (visited July 3, 2000) 〈http://www.state.nj.us/health/hcsa/cabgs98/cabgs98.htm〉.
420. See, e.g., drugstore.com (visited July 3, 2000) 〈http://www.drugstore.com〉; PlanetRx.com (visited July 3, 2000) 〈http://www.planetrx.com〉.
421. For example, Oklahoma provides that the following is unprofessional conduct: § 59-509 13. Prescribing or administering a drug or treatment without sufficient examination and the establishment of a valid physician-patient relationship.
422. David R. Johnson & David Post, Law and Borders - The Rise of Law in Cyberspace, 48 STAN. L. REV. 1367, 1371 (1996).
423. The Internet also uses "caching," i.e., the process of copying information to servers in order to shorten the time of future trips to a web site. The Internet server may be located in a different jurisdiction from the site that originates the information and may store partial or complete duplicates of materials from the originating site. The user of the World Wide Web will never see any difference between the cached materials and the original. American Civil Liberties Union v. Reno, 929 F. Supp. 824, 848-49 (E.D. Pa. 1996).
424. Keynote address of Douglas Atkin (Feb. 10, 2000), reprinted in Instinet CEO Atkin: U.S. Must Move Faster to Catch E-Trading Boom, SEC. INDUS. NEWS, (Feb. 21, 2000), at 3, 6.
425. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).
426. Prime examples are the "open IPO" of W.R. Hambrecht & Co. and the channeling of syndicate positions to "e-investors" by Wit Capital.
427. See, e.g., "Steven Wallman" in The Online Finance 40, INSTITUTIONAL INVESTOR, Apr. 1, 2000 at 73, 106.
428. P. Johnson, The Virtual Investor, the Virtual Fiduciary: The Internet and Its Potential Effects on Investors, 16 ANN. REV. BANKING L. 431, 445 (1997).
429. See discussion in the Securities Working Group's Revised Draft Report, February 17, 2000 at pages 152-60 〈http://www.kentlaw.edu/cyberlaw〉.
430. See, e.g., Electronic Prospectuses, Australian Securities Commission Policy Statement 107 (Sep. 18, 1996).
431. Not to be overlooked is the need to minimize the effects test in cyberjurisdictional cases. Such tests have invoked forum jurisdiction when the conduct can be found designed to have an impact in the forum. We should require clear evidence of an intended impact before making a foreign entity subject to forum jurisdiction. Just because there is an effect does not mean the effect was actually intended, particularly when a piece of data can be circulated millions of times over in a matter of seconds.
432. SEC 1998 Release on Jurisdiction discussed in First Draft Report, Sept. 15, 1999.
433. There could, of course, be a sort of "Star Wars" struggle between more technologically-advanced Bots and the programs seeking to impose the "cyber-moat." However, this is a promising area.
434. See generally Mark Gillen & Pittman Potter, The Convergence of Securities Laws and Implications for Developing Securities Markets, 24 N.C. J. INT'L L. & COMM. REG. 83, 86-87 (1998). Securities laws typically have many common provisions, including mandatory disclosure requirements on the distribution of securities to the public, ongoing mandatory disclosure requirements for post-distribution trading of securities, and prohibitions against insider trading and market manipulation. Rules governing the manner in which takeover bids are made, the period over which such bids must be kept open, and the information that must be provided to offeree shareholders are also typical of regulatory regimes. Id.
435. Id. at 106-08.
436. Eventually, English will lose its present dominance in Cyberspace. Because of the limited subject matter involved in cybersccurities, it is probable that Internet users and their Bots will be able to communicate in all major languages.
437. See, for example, the California Internet Tax Freedom Act, which became effective for three years starting on January 1, 1999, and which forbids any city or county within the state from imposing discriminatory taxes on Internet access, online computer services or the use thereof. The legislation singles out the bit tax and bandwidth tax as being specifically forbidden
438. For example, a significant sticking point in the ultimately unsuccessful attempt by The National Tax Association's Communication and Electronic Commerce Tax Project to come up with an approach to sales tax collection by out of state vendors was the insistence by industry representatives that if a vendor agreed to collect sales tax on Internet sales into a state in which it had no physical presence, it would not be opening itself up to increased risk of claims for income tax as well.
439. Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
440. National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753 (1967).
441. See In the Matter of Orvis Co. v. Tax Appeals Tribunal, 654 N.E.2d 954 (N.Y. 1995), and Brown's Furniture, Inc. v. Wagner, 655 N.E.2d 795 (Ill. 1996).
442. Private ordering is designed, of course, to avoid the need for litigation, but as cases considering the validity of contractual choice of forum and law clauses demonstrate, the judiciary can only remain uninvolved if both parties choose it to remain so.
443. States that share such common understandings may also be more willing to defer to contractual choices of a sharing state's law. See David R. Johnson, Susan P. Crawford, & Samir Jain, Deferring to Contractual Choices of Law and Forum to Protect Consumers (and Vendors) in Ecommerce (last modified Aug. 16, 1999) 〈http://www.kentlaw.edu/cyberlaw/docs/drafts/crawford.html〉.