Tuesday, November 27, 2001
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California Lacks Jurisdiction Over Internet Defamation Suit—C.A.
By KENNETH OFGANG, Staff Writer/Appellate Courts
The Court of Appeal for this district yesterday rejected a Hong Kong company’s claim tht it should be allowed to sue here over allegedly false attacks made over an Internet messge board.
California courts lack jurisdiction where the parties aren’t based here and the only unique connection between this state and the facts of the case is that the bulletin board operator is located here, the court ruled.
Div. Four affirmed Los Angeles Superior Court Judge Richard Fruin Jr.’s order dismissing a suit by Nam Tai Electronics, Inc. against a Colorado man accused of posting falsehoods about the company on a Yahoo! message board devoted to discussion of companies whose stock is publicly traded.
Nam Tai claims that Joe Titzer, a frequent poster on the Yahoo! boards whose true identity was obtained from Yahoo! through a subpoena, falsely accused the company of having colluded with other companies to obtain contracts illegally. The company also accused Titzer of falsely stating that Nam Tai was losing business to a competitor.
Fruin ruled that “while specific jurisdiction could be extended over” Titzer based on his user agreement with Palo Alto-based Yahoo!, “it would not comport with traditional notions of fair play and substantial justice to do so.”
The judge reasoned that Nam Tai had only filed suit in California so that it could serve a subpoena on Yahoo! to obtain Titzer’s identity, that Titzer’s postings lacked any “peculiar impact” on California, and that the fact that a particular BBS operator is present in California is insufficient to confer jurisdiction when the postings are being entered from computer terminals outside the state and read worldwide.
Justice Daniel Curry, writing for the Court of Appeal, agreed with Fruin.
Prior Case
Curry cited Jewish Defense Organization, Inc. v. Superior Court (1999) 72 Cal.App.4th 1045, which held that a New York resident who posted several allegedly libelous statements on Web sites through Internet providers with offices in California was not amenable to suit in this state.
Nam Tai argued that JDO was distinguishable because Titzer was an active poster on the Yahoo! boards, and didn’t merely use “passive” websites like the defendant in the earlier case. But Curry was unpersuaded.
“The issue is not whether the company that makes the Web sites available is incorporated or based in California,” the justice wrote. “...The determinative question is whether the Web sites themselves are of particular significance to California or Californians such that the user has reason to know the posting of a message will have significant impact in this state. Although we presume respondent’s messages were available to Californians or anyone else with access to the Internet, appellant presented no evidence to suggest that respondent’s messages or the Web sites on which they were posted were directed at Californians or disproportionately likely to be read by residents of this state.”
Forum-Selection Clause
Nor can Nam Tai rely on the forum-selection clause in the Yahoo! service agreement, Curry said, because the clause does not unambiguously require a user to submit to California jurisdiction when sued by a third party rather than by Yahoo!
The appellate court also ruled that Titzer did not submit to the Superior Court’s jurisdiction when his attorney filed a status conference questionnaire and appeared at the status conference and informed the court that the defendant was contesting personal jurisdiction.
“While we agree it would have been better practice to postpone the status conference when the sole defendant submits a motion to quash based on lack of personal jurisdiction,” Curry wrote, “we do not believe appearance at a hearing whose purpose is to inform the court of the status of the case should be deemed a general appearance.”
Attorneys on appeal were Robert E. Feyder and Michael J. Quinn of Kirkpatrick & Lockhart for Nam Tai and Lee G. Werner of Carroll & Werner for Titzer.
Copyright 2001, Metropolitan News Company