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Yahoo! loses US appeal over French ruling on Nazi auctions


Yahoo! has lost an appeal against a US district court's ruling which said that the company does not have to obey a French court's decision requiring it to block French citizens from accessing internet auctions of Nazi memorabilia at Yahoo!'s US site.

In a majority decision on Monday, the 9th US Circuit Court of Appeals found that US courts could not interfere with foreign court rulings, unless the foreign power attempted to enforce those rulings in the US.

The case concerned a civil lawsuit filed against Yahoo! in 2000 by two civil liberties groups - La Ligue Contre le Racisme et l'Antisemitisme and L'Union des Etudiants Juifs de France. This led to a landmark ruling in France, with a Paris court ordering Yahoo! to block internet users in France from accessing its auction sites selling Nazi memorabilia.

The court reasoned that French law prohibits the display or sale of anything that incites racism. It was the first time a French court had issued such an order on a foreign company.
The court also imposed fines of around $13,300 per day upon the company for non-compliance.

Yahoo! did not appeal the French court's decision in France; instead, it sought a declaration from a federal court in California. It claimed that the order to ban French users from accessing certain auction sites affected the operations of its US servers, and was therefore unenforceable under the First Amendment provisions regarding free speech.

Yahoo.fr was not the issue; the portal company already tried to ensure that its French site complied with French law. But the French court's concern was that yahoo.com could still be accessed by French users. Yahoo! did not continue the fight because it wanted to sell Nazi memorabilia from yahoo.com. Instead, Yahoo! wanted to fight the point of principle: that a French court should not control the content of its US site.

In 2001 the federal court accepted Yahoo!'s arguments and ruled that the French court could not regulate the company's speech on the internet. The two French groups appealed the decision to the 9th US Circuit Court of Appeals, arguing that the First Amendment cannot prevent the order from being enforced. They also argued that Yahoo! had made no attempt to comply with the order before suing in the US.

A divided Court of Appeals has now reversed the lower court ruling, ruling that the District Court did not have jurisdiction to hear the case.

"Yahoo! cannot expect both to benefit from the fact that its content may be viewed around the world and to be shielded from the resulting costs", wrote Judge Warren J Ferguson, delivering the majority opinion.

"Yahoo!," Judge Ferguson continued, "must wait for LICRA and UEJF to come to the United States to enforce the French judgment before it is able to raise its First Amendment claim. However, it was not wrongful for the French organisations to place Yahoo! in this position."

In effect the Court did not really consider the First Amendment arguments put forward by Yahoo!, except to say that these could be raised if the French government ever tried to enforce the French ruling in the US.

In a dissenting ruling, Judge Melvin Brunetti said that the Court did have jurisdiction because the two French civil liberties groups had targeted Yahoo!'s US web site, and subjected the company to "significant and daily accruing fines".

Yahoo!'s lawyer, Robert Vanderet, told the Associated Press, "This means that Yahoo would have to wait until they tried to enforce the French order in the United States to have it declared unconstitutional".

"It doesn't disturb the court's ruling - it just says that you have to wait until they come into this country to try to enforce it," he added.

"Yahoo would like the world to be covered by America's First Amendment because that would make it easier for Yahoo to do business around the world," Richard Jones, lawyer for the two French groups, told the AP. "But that puts Yahoo in the ironic position of trying to impose American values on the rest of the world."

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