YouTube wins on personal jurisdiction, venue arguments in Washington state

My partner John Leonard, an avid fan of quirky YouTube videos, couldn’t resist penning a summary of this recent decision involving the website.

In an unremarkable but informative decision from the Federal Court sitting in the Western District of Washington at Tacoma, Judge Franklin Burgess, on April 15 of this year, declined to subject YouTube to the Court’s jurisdiction in that State merely because YouTube appears on the Internet in Washington.

In the case, Victoria S. Bowen vs. YouTube, Inc., the plaintiff, Ms. Bowen, a YouTube registered user, alleged that certain YouTube users posted harassing comments on YouTube directed at her. She also alleged that her “intellectual property rights have been repeatedly violated,” and that YouTube had engaged in negligent affliction of emotional distress upon her. She also, apparently, alleged that YouTube violated her civil rights under Section 1983 of Federal law.

The Court summarily disposed of her emotional distress claim stating that it was barred by Section 230 of the Communications Decency Act. The Court also dismissed her civil rights claim, saying that it could not proceed because YouTube was not acting under color of State law. As to her intellectual property rights claim, the Court similarly dismissed it because of its “infirmities,” without going into detail.

Most of the opinion, however, was devoted to a discussion of whether, under the facts as alleged in the Complaint, YouTube is subject to jurisdiction in the State of Washington.

The Court noted that in order for Washington State jurisdiction to attach, the defendant must have: (1) committed an act or transaction with the State; (2) the claim must have arisen out defendant’s activities in the State; and (3) the exercise of jurisdiction must be reasonable. Citing several Ninth Circuit cases as precedent, the Court ruled that there was no personal jurisdiction over YouTube in Washington because YouTube’s “presence” in the State was merely passive, and that the plaintiff’s use of YouTube in the State was not enough to render YouTube subject to Washington State jurisdiction.

The Court further found that under YouTube’s “terms of use,” to which plaintiff, by virtue of her being a registered user, had agreed, YouTube “shall be deemed to be a passive website that does not give rise to personal jurisdiction over [it]…in jurisdictions other than California,” and that, “any claim between you [the user] and YouTube that arises in whole or in part from the YouTube website shall be decided exclusively by a court…located in San Mateo County, California.” Therefore, said the Court, Ms. Bowen could not maintain a suit against YouTube in the State of Washington.

Interestingly, after YouTube had filed its motion to dismiss, the plaintiff, probably recognizing that her attempt to keep the case in Washington was doomed, moved to transfer the case to California. The Court, however, ruled that dismissal, not transfer, of the case was the proper way to go. Whether the plaintiff can get another shot at YouTube by re-filing the case in California was not discussed, but the success of any such subsequent case seems unlikely, absent any new facts or legal theories alleged, given the apparent substantive infirmities in plaintiff’s case.

The lesson of this case is clear and simple. If you, as a user, especially a registered user, of a website agree to that site’s posted terms of use, and you later wish to make a claim or file suit against the site, you most likely will be bound by the site’s designated forum where claims may be made and lawsuits can be brought. Furthermore, even in the unlikely event that the site’s terms of use do not designate a state or states where claims and suits must be brought, there is a chance you will be required to make an affirmative showing that the website had more than just a passive presence in the state where you choose to sue.

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Section 230 does not shield website from state IP claims

Guest blogger John Leonard is at it again, this time summarizing a recent federal court decision construing Section 230 in the “adult website” context.    

An interesting decision came down last week from the United States District Court for the District of New Hampshire, Doe vs. Friendfinder Network, et. al. In that case, Judge Joseph LaPlante, in a well-reasoned opinion, replete with common sense, upheld the concept of CDA tort immunity for owners and operators of websites, as to information provided by other information content providers, while extending the intellectual property immunity exemption to state intellectual property laws.

The plaintiff Doe, unwilling, for obvious reasons, to use her real name in the lawsuit, filed a multi-count complaint based upon the appearance on the defendant’s website of her name, purported information, and a purported nude photo of her, for purposes of showing her availability for dating, and, presumably, sexual relationships and activities. In her complaint charging, among other things, invasion of privacy, defamation, infliction of emotional distress, and violations of the New Hampshire Consumer Protection Act and the Federal Lanham Act, the plaintiff denied that she had ever provided any information to the website, that some of the information included in her profile on the website was false, and that the nude photo accompanying the information was not of her.

Interestingly, among the plaintiff’s charges were allegations that the defendants caused portions of the allegedly bogus profile to appear on search engines and as advertisements, or “teasers”, on other unaffiliated sites. Plaintiff’s bogus profile also allegedly appeared on similar websites that are operated by the defendants. She also alleged that, in response to her request that the profile be removed from the website, the defendants then posted the statement that, “this member has removed her profile,” thereby implicitly, if not actually, stating that the allegedly bogus profile was of the plaintiff.

The judge began his analysis by affirming the principle, adopted by most Federal Circuits, that, stemming from Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997), sections [47 U.S.C.] 230(c)(1), (f)(3), and (e)(3) of the CDA bar state law claims (except those relating to intellectual property) against interactive computer services for publishing content provided by another information content provider. This immunity, according to the judge, applied even to the complaint that the website operator posted the allegedly bogus profile of the plaintiff on other websites. As to this charge, citing the First Circuit decision of Universal Comm’n. Sys. v. Lycos, 478 F.3d 412 (2007), the judge held that the mere re-posting or repetition of information received from another did not render the defendants “information content providers” on their own behalf so as to subject them to state and common law liability.

As to the charge that the defendants, in their statement regarding the removal of the profile, affirmatively acknowledged that the profile was in fact that of the plaintiff, the judge opined that because the association of the plaintiff with the profile originally came from another content provider, the defendants (in repeating that association) were not responsible for creating the association, and therefore “cannot be considered an ‘information content provider’ under the statute because no profile has any content until a user [here, someone other than the defendants] actively creates it.”

Judge La Plante did, however, rule in favor of the plaintiffs on two not insignificant counts of her complaint, one complaining of a violation of her right to publicity, another charging a violation of the Federal Lanham Act (the statute generally concerned with trademark and trade name issues). As to her invasion of privacy claim, the judge noted that insofar as one of the plaintiff’s four invasion of privacy sub-claims involved the violation of plaintiff’s right to publicity, that sub-claim was one concerning intellectual property, and was therefore exempt from the immunity provision of the CDA. In so holding, the judge explicitly rejected the decision of the Ninth Circuit Court of Appeals in Perfect 10 v. CC Bill, LLC, 488 F.3d 1102 (2007) which held that the intellectual property exemption to CDA immunity applied only to Federal and not to state, intellectual property claims. As Judge LaPlante explained, that interpretation was contrary to the express language of the statute, and in effect constituted a judicial re-writing of the CDA.

Finally, the judge held that the plaintiff’s Lanham Act claims, asserting false advertising and false designation, could proceed because they also were subject to the intellectual property exemption. The judge emphasized that the defendants’ use of the plaintiff’s allegedly false and bogus profile as unauthorized “teasers” for marketing (advertisement) purposes “falls directly” with the language of the Lanham Act preventing such unauthorized use. The judge rejected outright the defendants’ argument that such “false endorsement” claims can only be made by celebrities and did not apply to the common folk, as being totally unsupported by any authority.

In the introduction to this short review, I praised Judge LaPlante’s decision as being well-reasoned and consistent with common sense. I must here, however, add one exception, perhaps just a minor quibble over language but nonetheless, I believe, important. This relates to that portion of his ruling where he found that the defendants’ statement that “this member has removed her profile.” Given that this statement was made after the plaintiff had contacted the defendants and told them that the profile was in fact false, and that she was not a member, were the defendants out-of-bounds when they then affirmatively created the statement that she was a member and that this was in fact her profile? I wonder if this conduct by the defendants did not go beyond the mere repeating of information provided by another, and in effect constituted an affirmative statement authored by the defendants themselves. While the defendants may not have been under an obligation to launch an investigation into who, the original provider of the profile or the plaintiff, was telling the truth, surely they did not have to phrase the removal language in such a way as to continue to identify the plaintiff as “a member” of the service and the subject of the profile. Neutral words such as “this profile removed upon request” would certainly have been sufficient to satisfy the defendants’ need for an explanation without specifically referring to the plaintiff’s person. In this author’s humble opinion, in this specific and limited situation, the court may have extended the CDA tort immunity a little too far.

Supreme Court denies Perfect 10’s certiorari petition

As I suspected, the Supreme Court of the United States has denied (see page 3) Perfect 10’s petition for a writ of certiorari (request for review) in Perfect 10 v. CCBill, et al. Thus the Ninth Circuit’s (faulty, in my opinion) ruling stands, at least for the time being.

I doubt this is the last time we’ll be hearing about the appropriate scope of 47 USC 230(e)(2).

Perfect 10 files Reply Brief with Supreme Court

I just finished looking over Perfect 10’s reply brief, recently filed in support of its petition for certiorari pending before the U.S. Supreme Court. Thank you to Perfect 10’s counsel, Jeff Mausner, for sharing it with me.

I still think that Perfect 10’s position on the merits is the legally correct one. My opinion is based on the text of the statute, and the apparent absence of any compelling evidence of congressional intent supporting an opposite reading. Whether withholding immunity for state IP claims is a good idea, though, is not something I’m going to address here.

Will the Supreme Court issue a writ on the basis that, simply put, the Ninth Circuit blew it by employing the wrong approach and reaching the wrong decision? I am not convinced that it will. Last week litigant and amicus briefs were distributed for consideration at a November 30, 2007 conference, so perhaps we’ll have an answer before the end of the year.

If you missed them, here are links to my prior posts on the petition itself, and the Respondents’ opposition brief, as well as a summary of the Ninth Circuit’s opinion.

CCBill and CWIE file brief opposing Perfect 10’s Supreme Court Petition

A few months ago I wrote about the Petition for a Writ of Certiorari filed by Perfect 10, Inc. with the U.S. Supreme Court in Perfect 10 v. CCBill, et al. In a nutshell, the Ninth Circuit previously ruled that the intellectual property exception to Section 230 immunity only pertains to federal (not state) intellectual property claims. Perfect 10 wants the Supreme Court to hear its appeal and rule that the exception applies to both federal and state IP claims, meaning Section 230 immunity would not protect a defendant from state (and federal) IP claims. Now it’s the Respondents’ turn to weigh in.

John P. Flynn, a partner in the Phoenix law firm Dioguardi Flynn Jones LLP, represents Respondents CCBill LLC and CWIE LLC. John kindly shared with me the brief filed last Friday opposing Perfect 10’s petition. John’s co-counsel is Jay M. Spillane of the Los Angeles law firm Spillane Shaeffer Aronoff Bandlow LLP.

Zeroing in on a serious potential problem with Perfect 10’s position, Respondents argue in their submission that the Ninth Circuit’s ruling below

is consistent with the findings and intentions of Congress to promote the development of Internet computer services with a clear nationwide immunity. . . . [w]ere the rule otherwise, Internet computer service providers would be faced with uncertainty across all fifty states as to which state claims for relief are, involve, or are akin to ‘intellectual property.’

In other words, adopting Perfect 10’s interpretation of Section 230(e)(2) could/would have a chilling effect upon online publishers across the country, uncertain as to their exposure to liability from one state to another.

That said, I still find Perfect 10’s position on the merits – which if ever adopted would require guidance from the courts on what constitutes a state IP claim – more persuasive. I haven’t researched the relevant legislative history, but it would seem that if Congress meant to limit the exception to federal IP claims, it could (and would) have said so (as it did in 230(e)(1)). If the legislative history clearly supported the opposite conclusion, I would have expected to see a reference to same in the Ninth Circuit’s ruling and/or Respondents’ brief (which instead cites Zeran). And as an aside, Respondents’ use of Potomac Electric Power Co.‘s rule of statutory interpretation (“members of the judiciary must put aside their ‘appraisal of the wisdom or unwisdom of a particular course consciously selected by Congress’”) could come back to haunt them. Some courts may not like Congress’ apparent decision to provide a broad IP exception to Section 230 immunity, but it’s not their (the courts’) job to approve or disapprove. However, it’s probably not fair for me to opine on the merits here, given neither parties’ brief was offered as a merits brief. Which brings me to my next and more important point. Who cares about the merits right now?

Remember, Perfect 10 is trying to persuade the Supreme Court to hear the case, not to rule in its favor, just yet, on the merits (although merits arguments can of course sometimes help get the job done). And on this issue, I think Respondents have the better arguments. For example, Respondents accuse Perfect 10 of trying to manufacture a conflict between the Ninth Circuit’s ruling and UCS v. Lycos, arguing that in UCS the First Circuit

did not analyze the meaning of ‘law pertaining to intellectual property,’ but simply assumed that the state trademark dilution claim at issue came within this exception. Such an unconsidered assumption, without analysis, does not create a conflict worthy of review.

Furthermore, “[i]n light of the [purported Florida trademark law] claim’s failure on independent First Amendment grounds, the First Circuit’s view as to the inapplicability of Section 230 is dictum and does not raise a material conflict with the Ninth Circuit decision.”

Respondents offer up plenty of other reasons why this case does not presently belong before the Supreme Court, such as (i) there is no conflict with Supreme Court precedent, (ii) the case was remanded by the Ninth Circuit to the district court, and precedent apparently directs that a case in this posture is not appropriate for High Court review, (iii) following final judgment, Perfect 10 will presumably have another opportunity to request Supreme Court review (and the Court would benefit from a richer record), and (iv) “[t]he law concerning the scope of the ‘intellectual property’ exception . . . is undeveloped.”

My guess is that Perfect 10’s petition (and the various amicus briefs filed in support thereof) will not muster enough votes to obtain the writ. But I wouldn’t mind being wrong on this one, at least from an academic standpoint.

Perfect 10 seeks Supreme Court review of Section 230 ruling

Jeffrey N. Mausner, counsel for Perfect 10, Inc., has kindly shared with me the Petition for a Writ of Certiorari filed last week with the United States Supreme Court on behalf of his client in Perfect 10, Inc. v. CC Bill LLC, et al (Docket No. 07-266). He also permitted me to post the 143 page filing on my blog.

Perfect 10’s Petition seeks review of the Ninth Circuit’s March 2007 ruling, as modified one month later, in Perfect 10, Inc. v. CC Bill LLC, et al. as it relates to 47 USC 230(e)(2). As you may know, Paragraph (2) provides that nothing in Section 230 “shall be construed to limit or expand any law pertaining to intellectual property.” The Petition presents the question of whether “the Ninth Circuit err[ed] in reading any law to mean only any Federal law, in conflict with a decision of the First Circuit and statutory construction rules of this Court.” (internal quotations omitted, italics and hyperlink added).

Perfect 10 is concerned that the Ninth Circuit’s ruling, which grants Section 230 immunity for state IP claims, “will sharply erode the ability of those in the entertainment industry to seek meaningful legal recourse for the violation of their valuable publicity rights.” The company would appear to have good reason to be concerned with the treatment of publicity rights, and other state intellectual property rights, under Section 230, given the obstacles it has faced in attempting to protect its federal copyrights under the DMCA framework.

Here are the three main arguments offered by Perfect 10 in support of its Petition:

1. The Ninth Circuit erroneously broadened Section 230 immunity by effectively amending (e)(2) to read “any Federal law” instead of “any law.” Relatedly, the Ninth Circuit also disregarded statutory construction principles when it effectively narrowed the (e)(2) exception from “any law” to “any Federal law.” (noting that when Congress meant ‘just federal’ in another Paragraph of the same statute, it said so).

2. The Ninth Circuit’s decision conflicts with the First Circuit’s UCS ruling and other courts holding that state IP claims are not barred by Section 230.

3. Congress did not adopt the argument – embraced by the Ninth Circuit – that because state IP laws are not uniform they should not “dictate the contours of [Section 230 immunity].”

Although it understandably did not not delve into the impact of having fifty states’ laws to consider, I thought the Petition was quite persuasive. It surely goes without saying that were the Supreme Court to rule that Section 230 does not immunize state IP claims, we would see more of these types of actions filed, which would presumably result in a (desirable?) chilling-effect on certain online conduct (at least with respect to non-judgment proof companies), especially given the fact that few (any?) states have enacted protections from state IP claims comparable to the DMCA takedown provisions.

One last observation. In a footnote, Perfect 10 maintains that, in addition to its rights of publicity and wrongful use of trademark claims, its unfair competition and false advertising claims also “arise under laws pertaining to intellectual property, as they are both based on, among other things, rights of publicity violations.” If another federal appellate court considering the issue rules that Section 230 does not immunize state IP claims, or if the Supreme Court takes this appeal and reverses, online companies and the courts alike will obviously need some guidance as to what constitutes state IP law/claim.

On brief with Mr. Mausner was Daniel J. Cooper, General Counsel for Perfect 10, Inc. Responses to the Petition are due September 28, 2007.