Essay Question from the 2008 CivPro Exam

With updated answer:

Question 2

Virginia (a domiciliary of Virginia) owns a website that displays material concerning Saudi (a domiciliary of Saudi Arabia) that, under the laws of Saudi Arabia, is defamatory. Saudi brings suit against Virginia in Saudi Arabia, claiming harm to his reputation in Saudi Arabia due to availability of the material on the web in that nation. Saudi asks for an injunction against Virginia, compelling her to make the material unavailable on the web in Saudi Arabia. He also asks for compensation for damages to his reputation. Consenting to personal jurisdiction over her, Virginia appears in the Saudi Arabian suit, arguing not merely that the material is not defamatory under Saudi Arabian law, but that even if it were, the only way that she can make the material unavailable in Saudi Arabia is by removing it from her website entirely. Since the material is perfectly legal under the laws of the United States and indeed is protected under the First Amendment to the United States Constitution, Saudi should receive no relief. The Saudi Arabian court concludes the material is defamatory and that the First Amendment is not applicable in Saudi Arabia. It therefore issues the requested injunction against Virginia and gives Saudi the requested damages of $1 million. But since Virginia has no assets or any other presence in Saudi Arabia, the Saudi Arabian court cannot execute the damages judgment and has no real power to sanction Virginia for failure to abide by its injunction.

Anticipating that Saudi might seek to enforce the Saudi Arabian judgment in the United States, Virginia brings an action against Saudi in the federal district court for the Eastern District of Virginia (the district where Virginia herself lives and where she maintains her website). Virginia asks for a declaratory judgment stating that the Saudi Arabian judgment is unenforceable in the United States because it is contrary to the First Amendment. Saudi makes a motion to dismiss the declaratory judgment action for three reasons 1) the federal court lacks personal jurisdiction over him, 2) the federal court lacks subject matter jurisdiction, and 3) venue is improper. Assume that Saudi has no contacts with the United States beyond any described in this question. How should the federal court decide Saudi’s motion?

 ANSWER

Let’s begin with venue. The matter is very easy, since under 1391(c)(3)  a defendant not resident in the United States may be sued in any judicial district. End of story.

It is also possible to argue for venue on the ground that a substantial part of the events or omissions giving rise to the claim (under 28 USC 1391(b)(2)) occurred in the E.D. Va., since that is where Virginia maintains her website. Some of you argued against venue because the claim in Virginia’s declaratory judgment action concerned the Saudi Arabian judgment, not the website. But one might argue that she sought a declaratory judgment so that she could refrain from having to remove the material from the website (in addition to not having to pay $1M), once again arguably making the event giving rise to the claim an event in the E.D. Va. You were rewarded for wondering about these issues, although the fact that Saudi is an alien made the motion to dismiss on venue grounds a non-starter.

Next let’s look at SMJ. Some of you simply said that the action had federal question SMJ under 28 USC 1331, since the suit concerned the First Amendment. But does this satisfy the Mottley rule? Imagine that the Mottleys had brought an action in federal court seeking a declaratory judgment that the contract they had with the railroad was compatible with the federal statute forbidding free passes. In such a case they would not be suing the railroad under state contract law anymore (the way they were in the actual Mottley case). But their declaratory judgment action would in effect be seeking a determination of a federal defense to such a state contract law action. If such declaratory judgment actions had federal question SMJ, there would be a relatively easy avenue for escaping Mottley and bringing federal defenses in federal court.

We discussed this problem briefly in class. The Supreme Court has concluded that federal question SMJ cannot be created in this fashion:

Where the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action, and not of the defense, which will determine whether there is federal-question jurisdiction in the District Court. Public Serv. Comm'n of Utah v. Wycoff Co. 344 U.S. 237, 248–249 (1952).

In effect, Virginia is seeking to litigate a federal defense to an action by Saudi, under state law, to enforce his Saudi Arabian judgment. There will be no federal SMJ unless Saudi’s action to enforce the judgment would have federal SMJ. I was rather pleased how many of you caught this issue.

But there is still the possibility of alienage SMJ under 29 USC 1332(a)(2), since even Saudi’s suit against Virginia to enforce the Saudi Arabian judgment is a controversy between “citizens of a State and citizens or subjects of a foreign state.” In addition, the amount in controversy is surely satisfied, since the judgment is for $1 M (not counting the cost to Virginia of abiding by the injunction). So there is federal SMJ.

Finally, let’s look at PJ. This question is similar to an actual case – Yahoo v. La Ligue Contre Le Racisme et L’Antisemitisme (“LICRA”) and L’Union des Etudiants Juifs de France (“UEJF”). LICRA and UEJF got a judgment against Yahoo in French court concerning the availability in France of Nazi-related content on Yahoo’s sites. Such material is illegal under French law. Yahoo was ordered to remove the material, even though Yahoo argued this could not be done unless the material was removed from Yahoo sites entirely. Yahoo then brought a declaratory judgment action in federal court in the N.D. Cal. seeking a determination that the French judgment was not entitled to recognition in the U.S. because it violated the First Amendment. (It is worth noting that the constitutional requirements of full faith and credit do not extend to the judgments of other nations. A US court is not required to give a French judgment the same preclusive effect it would have in France.) LICRA and UEJF made a motion to dismiss for lack of PJ. The district court held for Yahoo, a panel on the 9^th Circuit reversed, and then the 9^th Circuit, en banc, reversed the panel, holding that there was indeed PJ (although it also held that the case was not ripe, a matter not at issue in this question).

Why did the 9^th Circuit ultimately hold that there was PJ? Notice that under FRCP 4(k)(1)(A), we must show that a state court in California would have PJ.

General PJ will clearly not work. We have no evidence of any contact between LICRA or UEJF and California except the fact that they brought suit against Yahoo in France. That would surely not be the sort of substantial continuous contacts for them to be sued in California on any cause of action.

So we must show specific PJ. Was the French lawsuit itself a sufficient contact with California for specific jurisdiction? It is not enough, surely, that a California company was sued in France. (Imagine for example, that the suit concerned some event that occurred solely in France.) But the French suit requested that Yahoo be compelled to so something (remove the materials) that could only be done in California. In that sense they committed an act intentionally directed at California. Furthermore Yahoo’s declaratory judgment action concerns this very action.

This is obviously a close case, but the best answers focused on Saudi’s Saudi Arabian lawsuit itself (which sought to require Virginia to do something in Virginia) as the contact with the state of Virginia that might support PJ, even if you concluded in the end that there was no PJ.

Some of you pointed to the information about Saudi that was put on the website in Virginia. But there is no evidence that Saudi bore any responsibility for the information being on the site. Remember, for PJ one must point to what it was about the defendant’s acts that created minimal contacts with the forum state.

Some of you said that PJ could be generated from Saudi reaching out to Virginia by observing the material on Virginia’s site. In fact, there is no evidence that Saudi has ever looked at the site. His suit is for defamation, that is, damage to his reputation from other people in Saudi Arabia looking at the site. He could have found out about the content of the site solely from these other people. Furthermore, it is not likely that his looking at the site, even if it occurred, would be sufficient to create PJ – especially since this act is not directly related to his cause of action (which, as we have seen, concerns other people looking at the site). It would be odd if there mere act of gathering evidence about an act of defamation on the internet submitted the defamed person to PJ where the material was posted.

Notice that there would be no problem showing PJ over Saudi if Saudi had actually brought suit in Virginia to enforce the Saudi judgment. But that has not happened yet and it isn’t clear that it will ever happen.

Some of you attempted to argue that the 4(k)(2) was applicable, on the ground that Virginia’s suit was under federal law and there would be no PJ in any state. I don’t think that provision could be relied upon, because, as we have seen, Virginia’s action is not a federal question action. But even if it were relied upon, there would still have to be sufficient contacts with the US for PJ under the 5^th Amendment. In answering this question you would still have to talk about the same problems that I have mentioned above.

Some of you mentioned the comment I made in class that there is a practical tendency in 4(k)(2) cases to find PJ over a defendant sufficient for the 5^th Amendment on the basis of contacts with the US that, if they were contacts with a particular state, would be insufficient for PJ in the state under the 14^th Amendment. Although this is true as a practical matter, the legal standard is still the defendant’s intentional contacts with the US. Some of you seemed to assume that 5^th Amendment PJ could be found without the defendant reaching out to the US in any fashion. This is not so.

Comments

[Max Eichelberger]

So I'm steadily working my way through these questions and I felt compelled to mention that I do feel a little sorry for your students. Kudos to those who ferretted out the answer.

I was strolling along until the minimum contacts section.

I briefly considered the injunction as the Saudi's contact with the state but discarded it when I noticed that Virginia preemptively filed suit. The injunction of the Saudi Arabian court, I incorrectly thought, never 'makes it' to the Virginian court before the second case commences. Therefor it is not a meaningful fact. Since there is no mention that the court in Virginia ever realizes that the case happens at all except for the pleadings of Virginia my inner skeptic spoke too loudly. Could a Virginian court declare that it had personal jurisdiction over a foreign citizen merely because a resident states that (1) a foreign court ruling actually happened, 'trust' her, (2) it affects her and (3) it could only apply to Virginia? The complexities of web hosting be damned.

On second glance, after reading the answer, there seems something intuitively wrong to me about the situation. The Saudi could explicitly say that the injunction would never apply to Virginia and that he, for religious reasons, refuses to recognize the existence of Virginia (or even the person Virginia--only his friends acknowledge her smut) at all. But, apparently, that would still be a non-factor. The potential for enforcement is enough to establish personal jurisdiction. Intent does not matter.

But on more thoughtful reflection I think I'm grasping it a bit more firmly. The answers are very well written and, in any event, great question. It has given me a lot to consider.