Supreme Court of California
Matthew PAVLOVICH, Petitioner,
v.
The SUPERIOR COURT of Santa Clara County, Respondent;
DVD Copy Control Association, Inc., Real Party in Interest.
No. S100809.
Nov. 25, 2002.
Website operator who posted computer program
to enable the decryption and copying of digital versatile discs (DVDs)
containing motion pictures filed petition for writ of mandate to compel the
Superior Court, Santa Clara County, No. CV 786804, William J. Elfving, J., to quash service of process on basis of lack of
personal jurisdiction in suit by encryption technology licensor for
misappropriation of trade secrets. The Court of Appeal summarily denied
petition. Website operator filed petition for review. The Supreme Court
transferred matter to Court of Appeal with directions. On remand, the Court of
Appeal, Premo, Acting P.J., denied writ. The Supreme Court granted review,
superseding the opinion of the Court of Appeal. The Supreme Court, Brown, J., held that: (1) exercising jurisdiction violated due
process, disapproving Nam
Tai Electronics, Inc. v. Titzer,
113 Cal.Rptr.2d 769; (2) evidence of express
aiming or intentional targeting toward the forum state was required; and (3)
knowledge that allegedly tortious conduct could harm industries centered in
state was insufficient.
Reversed and remanded.
Opinion, 109
Cal.Rptr.2d 909, superseded.
Baxter, J., dissented and filed opinion in which George, C.J., and Chin, J., concurred.
West Headnotes
[1] Constitutional Law 
3964
(Formerly 92k305(5))
The
exercise of personal jurisdiction over a nonresident defendant comports with
state and federal due process clauses, if the defendant has such minimum
contacts with the state that the assertion of jurisdiction does not violate
traditional notions of fair play and substantial justice. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[2] Constitutional Law 3964
(Formerly 92k305(5))
Under the
minimum contacts test for determining whether exercising personal jurisdiction
violates due process, an essential criterion in all cases is whether the
quality and nature of the defendant's activity is such that it is reasonable
and fair to require him to conduct his defense in that state. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[3] Constitutional Law 3967
(Formerly 92k305(5))
The
minimum contacts test for determining whether exercising personal jurisdiction
violates due process is not susceptible of mechanical application; rather, the facts of each case must be
weighed to determine whether the requisite affiliating circumstances are
present. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[4]
Constitutional Law 3964
(Formerly 92k305(5))
The
determination under the minimum contacts test for determining whether
exercising personal jurisdiction violates due process is one in which few
answers will be written in black and white; the greys are dominant, and even
among them the shades are innumerable. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[5] Courts 11
Personal
jurisdiction may be either general or specific.
[6] Courts 12(2.10)
When determining
whether specific jurisdiction exists, courts consider the relationship among
the defendant, the forum, and the litigation.
[7] Courts 12(2.10)
A court
may exercise "specific jurisdiction" over a nonresident defendant
only if (1) the defendant has purposefully availed himself or herself of forum
benefits; (2) the controversy is related to or arises out of the defendant's
contacts with the forum; and (3) the assertion of personal jurisdiction would
comport with fair play and substantial justice.
[8] Constitutional Law 3964
(Formerly 92k305(5))
The purposeful
availment inquiry for specific jurisdiction and due process focuses on the
defendant's intentionality; this prong is only satisfied when the defendant
purposefully and voluntarily directs his activities toward the forum so that he
should expect, by virtue of the benefit he receives, to be subject to the
court's jurisdiction based on his contacts with the forum, and the purposeful
availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of
random, fortuitous, or attenuated contacts or of the unilateral activity of
another party or a third person. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[9] Constitutional Law 3964
(Formerly 92k305(5))
The Calder effects test for determining purposeful availment and the
constitutionality of personal jurisdiction under the due process clause
requires additional evidence of express aiming or intentional targeting by the
defendant toward the forum state. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[10] Constitutional Law 3964
(Formerly 92k305(5))
[10] Courts 12(2.5)
Foreseeability of causing injury in
another state is not a sufficient benchmark for exercising personal
jurisdiction; rather, the foreseeability that is critical to due process
analysis is that the defendant's conduct and connection with the forum state
are such that he should reasonably anticipate being haled into court there,
and, thus, the knowledge that harm will likely be suffered in the forum state,
when unaccompanied by other contacts, is too unfocused to justify personal
jurisdiction. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[11] Courts 35
The
plaintiff has the initial burden of demonstrating facts justifying the exercise
of personal jurisdiction.
[12] Courts 35
If the
plaintiff meets the initial burden of demonstrating facts justifying the
exercise of jurisdiction, then the defendant has the burden of demonstrating
that the exercise of jurisdiction would be unreasonable.
[13] Appeal and Error 1010.1(8.1)
30k1010.1(8.1) Most
Cited Cases
In
reviewing a trial court's determination of personal jurisdiction, the Supreme
Court will not disturb the court's factual determinations if supported by
substantial evidence.
[14] Appeal and Error 842(1)
[14] Courts 39
When no
conflict in the evidence exists, the question of personal jurisdiction is purely
one of law, and the reviewing court engages in an independent review of the
record.
[15] Constitutional Law 3965(8)
(Formerly 92k305(5))
[15] Courts 12(2.25)
Website
operator who allegedly posted on Internet a computer program to enable the
decryption and copying of digital versatile discs (DVDs) with motion pictures
did not expressly aim his allegedly tortious conduct at or intentionally target
California, and, thus, exercising personal jurisdiction violated due process in
encryption technology licensor's suit for misappropriation of trade secrets,
even though operator knew about entity for licensing encryption technology and
possibility of harm to motion picture, computer, and consumer electronics
industries centered in California; he could not have known that his conduct
would harm licensor in California when the misappropriated code was first
posted two months before the first license and did not encourage his Web site
visitors to pirate copyrighted motion pictures, and purposeful availment under
the effects test was thus not shown; disapproving Nam
Tai Electronics, Inc. v. Titzer,
113 Cal.Rptr.2d 769. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[16] Constitutional Law 3964
The mere
unilateral activity of those who claim some relationship with a nonresident
defendant cannot satisfy the due process requirement of contact with the forum
state in order to exercise personal jurisdiction. U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[17] Constitutional Law 3965(8)
(Formerly 92k305(5))
[17] Courts 12(2.25)
The
foreseeability that third parties could use a computer program to decrypt and
copy digital versatile discs (DVDs) containing motion pictures could not, by
itself, satisfy the express aiming requirement for the exercise of personal
jurisdiction consistently with due process in suit by encryption
technology
licensor against website operator who posted decryption program on Internet Web
site for misappropriation of trade secrets.
U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
[18] Constitutional Law 3964
(Formerly 92k305(5))
[18] Courts 12(2.25)
A
defendant's knowledge that his tortious conduct may harm industries centered in
state is relevant to any determination of personal jurisdiction and may support
a finding of jurisdiction, but this knowledge alone is insufficient to
establish express aiming at the forum state as required by the effects test for
determining purposeful availment and the constitutionality of personal
jurisdiction under the due process clause.
U.S.C.A.
Const.Amend. 14; West's
Ann.Cal. Const. Art. 1, § 7.
***332 *265 **4 Ornah
Levy; Huber Samuelson; HS Law Group;
Hopkins & Carley, Arthur
V. Plank, San Jose, and Allonn
E. Levy for Petitioner.
Richard S. Wiebe, San Francisco, for the
Computer & Communications Industry Association and the Student Press Law
Center as Amici Curiae on behalf of Petitioner.
Ann
Brick and Stephen McG. Bundy for the American Civil Liberties Union of Northern
California as Amicus Curiae on behalf of Petitioner.
Weil, Gotshal & Manges, Jared
Ben Bobrow, Christopher
J. Cox, Robert
G. Sugarman, Jeffrey
L. Kessler, Geoffrey
D. Berman, and Gregory
S. Coleman for Real Party in Interest.
BROWN, J.
"The Internet is an international network
of interconnected computers" which "enable[s] tens of millions of
people to communicate with one another and to access vast amounts of
information from around the world."
(Reno
v. American Civil Liberties Union
(1997) 521 U.S. 844, 849-850, 117 S.Ct. 2329, 138 L.Ed.2d 874.) "The best
known category of communication over the Internet is the World Wide Web, which
allows users to search for and retrieve information stored in remote computers,
as well as, in some cases, to communicate back to designated sites. In concrete terms, the Web consists of a vast
number of documents stored in different computers all over the world." (Id.
at p. 852, 117 S.Ct. 2329.) On the Web, "documents, commonly known
as Web 'pages,' are **5 ... prevalent." (Ibid.) These pages are located at Web sites and have addresses
marking their location on the Web. (See ibid.) If a Web page is freely accessible, then anyone with
access to a computer connected to the
Internet may view that page. With its
explosive growth over the past two decades, the Internet has become " 'a
unique and wholly new medium of worldwide human communication.' " (Id.
at p. 850, 117 S.Ct. 2329.)
*266 Not surprisingly, the so-called
Internet revolution has spawned a host of new legal issues as courts have
struggled to apply traditional legal frameworks to this new communication
medium. Today, we join this struggle and
consider the impact of the Internet on the determination of personal
jurisdiction. In this case, a California
court exercised personal jurisdiction over a defendant based on a posting on an
Internet Web site. Under the particular
facts of this case, we conclude the court's exercise of jurisdiction was
improper.
***333 I
Digital versatile discs (DVD's) "provide
high quality images, such as motion pictures, digitally formatted on a
convenient 5 inch disc...." Before the commercial release of DVD's
containing motion pictures, the Content Scrambling System (CSS), a system used
to encrypt and protect copyrighted motion pictures on DVD's, was
developed. The CSS technology prevents
the playing or copying of copyrighted motion pictures on DVD's without the
algorithms and keys necessary to decrypt the data stored on the disc.
Real party in interest DVD Copy Control
Association, Inc. (DVD CCA) is a nonprofit trade association organized under
the laws of the State of Delaware with its
principal place of business in California.
The DVD industry created DVD CCA in December 1998 to control and
administer licensing of the CSS technology.
In September 1999, DVD CCA hired its staff, and, in December 1999, it
began administering the licenses. Soon
thereafter, DVD CCA acquired the licensing rights to the CSS technology and
became the sole licensing entity for this technology in the DVD video format.
Petitioner Matthew Pavlovich is currently a
resident of Texas and the president of Media Driver, LLC, a technology
consulting company in Texas. During the four years before he moved to Texas, he
studied computer engineering at Purdue University in Indiana, where he worked
as a systems and network administrator.
Pavlovich does not reside or work in California. He has never had a place of business,
telephone listing, or bank account in California and has never owned property
in California. Neither Pavlovich nor his
company has solicited any business in California or has any business contacts
in California.
At Purdue, Pavlovich was the founder and
project leader of the LiVid video project (LiVid), which operated a Web site
located at "livid.on.openprojects.net." The site consisted of a
single page with text and links to other *267 Web sites. The site only provided information; it did not solicit or transact any business
and permitted no interactive exchange of information between its operators and
visitors.
According to Pavlovich, the goal of LiVid was
"to improve video and DVD support for Linux and to ... combine the
resources and the efforts of the various individuals that were working on
related things...." To reach this goal, the project sought to defeat the
CSS technology and enable the decryption and copying of DVD's containing motion
pictures. Consistent with these efforts,
LiVid posted the source code of a program named DeCSS on its Web site as early
as October 1999. DeCSS allows users to
circumvent the CSS technology by decrypting data contained on DVD's and
enabling the placement of this decrypted data onto computer hard drives or
other storage media.
At the time LiVid posted DeCSS, Pavlovich knew
that DeCSS "was derived from CSS algorithms" and that reverse
engineering these algorithms was probably illegal. He had also "heard" that
"there was an organization which you had to file for or apply for a
license" to the CSS technology. He
did not, however, learn that the organization was DVD CCA or that DVD CCA had
its principal place of business in California until after DVD CCA filed this
action.
**6 In its complaint, DVD CCA alleged
that Pavlovich misappropriated its trade secrets by posting the DeCSS program
on the LiVid Web site because the " DeCSS program ... embodies, uses,
and/or is a substantial derivation of confidential proprietary information
which DVD CCA licenses...." ***334 The complaint sought injunctive
relief but did not seek monetary damages.
In response, Pavlovich filed a motion to quash service of process,
contending that California lacked
jurisdiction over his person. DVD CCA
opposed, contending that jurisdiction was proper because Pavlovich
"misappropriated DVD CCA's trade secrets knowing that such actions would
adversely impact an array of substantial California business
enterprises--including the motion picture industry, the consumer electronics
industry, and the computer industry."
In a brief order, the trial court denied Pavlovich's motion, citing Calder
v. Jones
(1984) 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804
(Calder
), and Panavision
Intern., L.P. v. Toeppen
(9th Cir.1998) 141 F.3d 1316 (Panavision
).
Pavlovich petitioned the Court of Appeal for a
writ of mandate. After the Court of
Appeal summarily denied the petition, we granted review and transferred the
matter back to the Court of Appeal with directions to vacate its denial order
and issue an order to show cause. The
Court of Appeal then *268 issued a published opinion denying the
petition. Because Pavlovich knew that
posting DeCSS on the LiVid Web site would harm the movie and computer
industries in California and because "the reach of the Internet is also
the reach of the extension of the poster's presence," the court found that
he purposefully availed himself of forum benefits under the Calder effects test. The
court also concluded that the exercise of jurisdiction over Pavlovich was
reasonable.
We granted review to determine whether the
trial court properly exercised jurisdiction
over Pavlovich's person based solely on the posting of the DeCSS source code on
the LiVid Web site. We conclude it did
not.
II
[1] California courts may exercise personal jurisdiction on
any basis consistent with the Constitutions of California and the United
States. (Code
Civ. Proc., § 410.10.) The exercise of jurisdiction over a nonresident defendant
comports with these Constitutions "if the defendant has such minimum contacts
with the state that the assertion of jurisdiction does not violate '
"traditional notions of fair play and substantial justice." '
" (Vons
Companies, Inc. v. Seabest Foods, Inc.
(1996) 14 Cal.4th 434, 444, 58 Cal.Rptr.2d 899, 926 P.2d 1085 (Vons
), quoting Internat.
Shoe Co. v. Washington
(1945) 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95
(Internat.
Shoe
).)
[2][3][4] Under the minimum contacts test, "an essential
criterion in all cases is whether the 'quality and nature' of the defendant's
activity is such that it is 'reasonable' and 'fair' to require him to conduct
his defense in that State." (Kulko
v. California Superior Court
(1978) 436 U.S. 84, 92, 98 S.Ct. 1690, 56 L.Ed.2d 132, quoting Internat.
Shoe, supra,
326 U.S. at pp. 316-317, 319, 66 S.Ct. 154.) "[T]he 'minimum contacts' test ... is
not susceptible of mechanical application;
rather, the facts of each case must be weighed to determine whether the
requisite 'affiliating circumstances' are present." (Kulko,
at p. 92, 98 S.Ct. 1690, quoting Hanson
v. Denckla
(1958) 357 U.S. 235, 246, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (Hanson
).)
"[T]his determination is one in which few answers will be written
'in black and white. The greys are dominant and even among them the shades are
innumerable.' " (Kulko,
at p. 92, 98 S.Ct. 1690, quoting Estin
v. Estin
(1948) 334 U.S. 541, 545, 68 S.Ct. 1213, 92 L.Ed. 1561.)
[5] In making this determination, courts have identified two
ways to establish ***335 personal jurisdiction. "Personal jurisdiction may be either
general *269 or specific." (Vons,
supra,
14 Cal.4th at p. 445, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) In this case, DVD
CCA does not contend that general jurisdiction exists. We therefore need only consider whether
specific jurisdiction exists.
[6][7] When determining whether specific jurisdiction exists,
courts consider the " 'relationship among the defendant, the forum, and
the litigation.' " **7(Helicopteros
Nacionales de Colombia v. Hall
(1984) 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404, quoting Shaffer
v. Heitner
(1977) 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683.) A court may
exercise specific jurisdiction over a nonresident defendant only if: (1) "the defendant has purposefully
availed himself or herself of forum benefits" (Vons,
supra,
14 Cal.4th at p. 446, 58 Cal.Rptr.2d 899, 926 P.2d 1085); (2) "the 'controversy is related to or "arises
out of" [the] defendant's contacts with
the forum' " (ibid., quoting Helicopteros,
supra,
466 U.S. at p. 414, 104 S.Ct. 1868); and (3) " 'the assertion of personal
jurisdiction would comport with "fair play and substantial justice" '
" (Vons,
supra,
14 Cal.4th at p. 447, 58 Cal.Rptr.2d 899, 926 P.2d 1085, quoting Burger
King Corp. v. Rudzewicz
(1985) 471 U.S. 462, 472-473, 105 S.Ct. 2174, 85 L.Ed.2d 528 (Burger
King
)).
[8] "The purposeful availment inquiry ... focuses on the
defendant's intentionality.
[Citation.] This prong is only satisfied
when the defendant purposefully and voluntarily directs his activities toward
the forum so that he should expect, by virtue of the benefit he receives, to be
subject to the court's jurisdiction based on" his contacts with the forum. (U.S.
v. Swiss American Bank, Ltd.
(1st Cir.2001) 274 F.3d 610, 623-624 (Swiss
American Bank
).) Thus,
the " 'purposeful availment' requirement ensures that a defendant will not
be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or
'attenuated' contacts [citations], or of the 'unilateral activity of another
party or a third person.'
[Citations.]" (Burger
King, supra,
471 U.S. at p. 475, 105 S.Ct. 2174.) "When a [defendant] 'purposefully avails
itself of the privilege of conducting activities within the forum State,'
[citation], it has clear notice that it is subject to suit there, and can act
to alleviate the risk of burdensome litigation by procuring insurance, passing
the expected costs on to customers, or, if
the risks are too great, severing its connection with the State." (World-Wide
Volkswagen Corp. v. Woodson
(1980) 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (World-Wide
Volkswagen
).)
In the defamation context, the United States
Supreme Court has described an
"effects test" for determining purposeful availment. (Noonan
v. Winston Co.
(1st Cir.1998) 135 F.3d 85, 90 (Noonan
).) In Calder, a reporter in Florida wrote an article for the National
Enquirer about Shirley Jones, a well-known actress who lived and worked in
California. The president and *270
editor of the National Enquirer reviewed and approved the article, and the
National Enquirer published the article.
Jones sued, among others, the reporter and editor (individual
defendants) for libel in California. The
individual defendants moved to quash service of process, contending they lacked
minimum contacts with California. (Calder,
supra,
465 U.S. at pp. 785-786, 104 S.Ct. 1482.)
The United States Supreme Court disagreed and
held that California could exercise jurisdiction over the individual defendants
"based on the 'effects' of their Florida conduct in California." (Calder,
supra,
465 U.S. at p. 789, 104 S.Ct. 1482.) The court found jurisdiction proper because
"California [was] the focal point both of the story and of the harm
suffered." ***336 (Ibid.) "The allegedly libelous story concerned the California
activities of a California resident. It
impugned the professionalism of an entertainer whose television career was centered in California
... and the brunt of the harm, in terms both of [Jones's] emotional distress
and the injury to her professional reputation, was suffered in
California." (Id.
at pp. 788-789, 104 S.Ct. 1482, fn.
omitted.) The court also noted that the
individual defendants wrote or edited "an article that they knew would
have a potentially devastating impact upon [Jones]. And they knew that the brunt of that injury
would be felt by [Jones] in the State in which she lives and works and in which
the National Enquirer has its largest circulation." (Id.
at pp. 789-790, 104 S.Ct. 1482.)
Although Calder involved a libel claim, courts have applied the effects
test to other intentional torts, including business torts. (See IMO
Industries, Inc. v. Kiekert AG
(3d Cir.1998) 155 F.3d 254, 259-260, 261 (IMO
) [courts must consider Calder in intentional tort cases]; Far
West Capital, Inc. v. Towne
(10th Cir.1995) 46 F.3d 1071, 1077 (Far
West
) ["Courts have also applied Calder to business torts"].)
Application of the test has, however, been less than uniform. (See **8Swiss American Bank, supra,
274 F.3d at p. 624, fn. 7 ["we note that
several circuits do not appear to agree as to how to read Calder "]; IMO,
supra,
155 F.3d at p. 261 [courts applying Calder to nondefamation cases have adopted "a mixture of
broad and narrow interpretations"].)
Indeed, courts have "struggled somewhat with Calder
's import, recognizing that the case cannot stand
for the broad proposition that a foreign act
with foreseeable effects in the forum state always gives rise to specific
jurisdiction." (Bancroft
& Masters, Inc. v. Augusta Nat. Inc.
(9th Cir.2000) 223 F.3d 1082, 1087 (Bancroft
).)
Despite this struggle, most courts agree that
merely asserting that a defendant knew or should have known that his
intentional acts would cause harm in the forum state is not enough to establish
jurisdiction under the *271 effects test. (See IMO,
supra,
155 F.3d at p. 265 ["we ... agree with the
conclusion reached by the First, Fourth, Fifth, Eighth, Ninth and Tenth
Circuits that jurisdiction under Calder requires more than a finding that the harm caused by the
defendant's intentional tort is primarily felt within the forum"]; Griffis
v. Luban
(Minn.2002) 646 N.W.2d 527, 534 [the United
States Supreme Court "did make it clear that foreseeability of effects in
the forum is not itself enough to justify long-arm jurisdiction"].)
Instead, the plaintiff must also "point to contacts which demonstrate that
the defendant expressly aimed its tortious conduct at the
forum...." (IMO,
supra,
155 F.3d at p. 265.) For example, the Third Circuit Court of
Appeals has held that, to meet the effects test, "the plaintiff must show
that the defendant knew that the plaintiff would suffer the brunt of the harm
caused by the tortious conduct in the forum, and point to specific activity
indicating that the defendant expressly aimed its tortious conduct at the
forum." (IMO,
supra,
155 F.3d at p. 266.) Similarly, in the Ninth Circuit Court of Appeals, the plaintiff must show not only that
the defendant "caused harm, the brunt of which is suffered and which the
defendant knows is likely to be suffered in the forum state," but also
that the defendant "committed an intentional act ... expressly aimed at
the forum state." (Bancroft,
supra,
223 F.3d at p. 1087.) Indeed, virtually every jurisdiction has held
that the Calder effects test requires intentional conduct expressly
aimed at or targeting the forum state in addition ***337 to the
defendant's knowledge that his intentional conduct would cause harm in the
forum.
[FN1]
FN1. (See, e.g., Wien
Air Alaska, Inc. v. Brandt
(5th Cir.1999) 195 F.3d 208, 212
["Foreseeable injury alone is not sufficient to confer specific
jurisdiction, absent the direction of specific acts toward the
forum"]; Noonan,
supra,
135 F.3d at p. 91 [holding that the defendants'
knowledge that the plaintiff would suffer injury in the forum was insufficient
to establish jurisdiction under the effects test because the defendants
"did not direct their actions toward" the forum state]; id.
at pp. 90-91;
ESAB
Group, Inc. v. Centricut, Inc.
(4th Cir.1997) 126 F.3d 617, 625 (ESAB
) [holding that the defendants' knowledge that
their actions would, if successful, "result in less sales" for the
plaintiff, "which was headquartered in" the forum state, was
insufficient to establish jurisdiction under the effects test, because the
defendants did not "manifest behavior
intentionally targeted at and focused on" the forum]; Far
West, supra,
46 F.3d at p. 1080 [holding that the defendants'
knowledge that their acts would interfere with the contractual rights of a
forum resident is not enough to establish jurisdiction under the effects test
because their acts had no "connection" to the forum state
"beyond [the] plaintiff's corporate domicile"]; id.
at pp. 1079-1080; Hicklin
Engineering, Inc. v. Aidco, Inc.
(8th Cir.1992) 959 F.2d 738, 739 [holding that
the defendant's knowledge that its tortious acts "may have an effect on a
competitor, absent additional contacts," is insufficient to establish
jurisdiction]; Drayton
Enterprises, L.L.C. v. Dunker
(D.N.D.2001) 142 F.Supp.2d 1177, 1184 [holding
that the defendants' "revealing and procuring [of] a trade secret"
"while knowing that the primary consequence would be felt in" the
forum state was not enough to establish jurisdiction]; id.
at pp. 1184-1185;
Cognigen
Networks, Inc. v. Cognigen Corp.
(W.D.Wash.2001) 174 F.Supp.2d 1134, 1141 ["A
defendant's knowledge of a resident plaintiff's use of a mark in an
intellectual property tort claim is not enough to satisfy the effects test for
personal jurisdiction"]; Barrett
v. Catacombs Press
(E.D.Pa.1999) 44 F.Supp.2d 717, 731 ["Unless
[the forum state] is deliberately or knowingly targeted by the tortfeasor, the
fact that harm is felt in [the forum state] from conduct occurring outside
[that state] is never sufficient to satisfy
due process"]; Conseco,
Inc. v. Hickerson
(Ind.Ct.App.1998) 698 N.E.2d 816, 819 [holding
that the defendant's knowing posting of a forum resident's trademark on a Web
site was insufficient to confer jurisdiction because there was no
"purposefully directed activity"];
Griffis
v. Luban, supra,
646 N.W.2d at pp. 535-537 [holding that the
knowing posting of defamatory material about a forum resident on the Internet
is insufficient to establish express aiming];
Laykin
v. McFall
(Tex.App.1992) 830 S.W.2d 266, 271 [holding that
a court may not exercise jurisdiction even though the "intentional
tortfeasor knowingly cause[d] injury" in the forum state because "he
did not purposefully direct his activities into" the forum].)
*272 **9 At least one exception
does, however, exist. In Janmark,
Inc. v. Reidy
(7th Cir.1997) 132 F.3d 1200, the plaintiff, an
Illinois corporation, and the defendants, California residents, were
competitors who sold minishopping carts worldwide. The defendants claimed that they owned a
copyright in their cart design and threatened the plaintiff's New Jersey
customer with contributory copyright infringement. Because of the threat, the customer stopped
buying shopping carts from the plaintiff.
Based on this incident, the plaintiff sued the defendants for tortious
interference with prospective economic advantage. (Id.
at p. 1201.)
Although the defendants had no other
contacts with Illinois, the Seventh Circuit Court of Appeals found that Illinois
could exercise jurisdiction over the defendants solely because "the
injury and thus the tort occurred in Illinois." (Id.
at p. 1202.)
In doing so, the Seventh Circuit apparently concluded that the state
where the injury occurred--in this case, the plaintiff's residence--could
always exercise jurisdiction over a nonresident defendant in the intentional
tort context.
[9][10] Like most of our sister courts, we do not find Janmark persuasive. By
making the location of the harm dispositive, Janmark ignores "the defendant's knowledge and intent in
committing the tortious activity"--the very focus of the ***338
purposeful availment requirement. (IMO,
supra,
155 F.3d at p. 264.) Even if Janmark merely stands for the proposition that a defendant's
knowledge that its tortious acts would cause the plaintiff injury in the forum
state satisfies the effects test (see IMO,
supra,
155 F.3d at p. 264, fn. 6), it is still
problematic. "[F]oreseeability of
causing injury in another State ... is not a 'sufficient benchmark' for
exercising personal jurisdiction." (Burger
King, supra,
471 U.S. at p. 474, 105 S.Ct. 2174.) Rather, "the foreseeability that is
critical to due process analysis ... is that the defendant's conduct and
connection with the forum State are such that he should reasonably anticipate
being haled into court there." (World
Wide Volkswagen, supra,
444 U.S. at p. 297, 100 S.Ct. 559.) The knowledge that harm will likely be suffered
in the forum state, "when unaccompanied by other contacts," is
therefore "too unfocused to justify personal jurisdiction." (ESAB,
supra,
126 F.3d at p. 625.) Thus, we decline to follow Janmark *273 and its progeny [FN2] and join
with those jurisdictions that require additional evidence of express aiming or
intentional targeting. In doing so, we
are in accord with those California decisions applying the effects test. [FN3]
FN2. (See, e.g., Bunn-O-Matic
Corp. v. Bunn Coffee Service Inc.
(C.D.Ill.2000) 88 F.Supp.2d 914; Clearclad
Coatings, Inc. v. Xontal Ltd.
(N.D.Ill. Aug. 20, 1999, No. 98 C 7199) 1999 WL 652030; McMaster-Carr
Supply Co. v. Supply Depot, Inc.
(N.D.Ill. June 16, 1999, No. 98 C 1903) 1999 WL 417352; Bunn-O-Matic
Corp. v. Bunn Coffee Service Inc.
(C.D.Ill.1998) 46 U.S.P.Q.2d 1375 (Bunn-O-Matic
I ).)
FN3. (See, e.g., Sibley
v. Superior Court
(1976) 16 Cal.3d 442, 446, 128 Cal.Rptr. 34, 546 P.2d 322 ["The mere causing of an 'effect' in California ...
is not necessarily sufficient to afford a constitutional basis for jurisdiction"]; Mansour
v. Superior Court
(1995) 38 Cal.App.4th 1750, 1762, 46 Cal.Rptr.2d 191 [refusing to exercise jurisdiction under the effects test because there
was "no evidence [the defendants]
purposefully directed their activities toward [ ] California"]; Edmunds
v. Superior Court
(1994) 24 Cal.App.4th 221, 236, 29 Cal.Rptr.2d 281
[refusing to exercise jurisdiction under the effects test because the
defendant's acts were directed at Hawaii and not California]; Wolfe
v. City of Alexandria
(1990) 217 Cal.App.3d 541, 548-549, 265 Cal.Rptr. 881 (Wolfe
) [refusing to exercise jurisdiction under the
effects test because the defendant's acts, even if wrongful and fraudulent,
were not expressly aimed at California];
Taylor-Rush
v. Multitech Corp.
(1990) 217 Cal.App.3d 103, 114, 265 Cal.Rptr. 672
[exercising jurisdiction under the effects test because the defendant's
contacts with California showed intentional targeting]; Farris
v. Capt. J.B. Fronapfel Co.
(1986) 182 Cal.App.3d 982, 990, 227 Cal.Rptr. 619
[finding that the "effects in California" of the defendant's tortious
acts were "too remote in time and causal connection to fairly and justly
require" the defendant "to come to California to defend
himself"]; Quattrone
v. Superior Court
(1975) 44 Cal.App.3d 296, 304, 118 Cal.Rptr. 548
[exercising jurisdiction based on the effects of the defendant's tortious acts
plus his other contacts with California].)
[11][12][13][14][15] We now consider whether Pavlovich's contacts with
California meet the effects test. "[T]he plaintiff has the initial **10 burden of demonstrating
facts justifying the exercise of jurisdiction." (Vons,
supra,
14 Cal.4th at p. 449, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) If the plaintiff
meets this initial burden, then the defendant has the burden of demonstrating
"that the exercise of jurisdiction would be unreasonable." (Ibid.) In reviewing a trial court's determination of
jurisdiction, we will not disturb the court's factual determinations "if
supported by substantial evidence."
(Ibid.) " When no conflict in the evidence exists, however,
the question of jurisdiction is purely one of law and the reviewing court
engages in an independent review of the record." (Ibid.) Applying these standards, we conclude that the evidence in
the record fails to show that Pavlovich expressly ***339 aimed his
tortious conduct at or intentionally targeted California.
In this case, Pavlovich's sole contact with
California is LiVid's posting of the DeCSS source code containing DVD CCA's
proprietary information on an Internet Web site accessible to any person with
Internet access. Pavlovich never worked in California. He owned no property in California,
maintained no bank accounts in California, and had no telephone listings in
California. Neither Pavlovich nor his
company solicited or transacted any business in *274 California. The record also contains no evidence of any
LiVid contacts with California.
Although we have never considered the scope of
personal jurisdiction based solely on
Internet use, other courts have considered this issue, and most have adopted a
sliding scale analysis. "At one end
of the spectrum are situations where a defendant clearly does business over the
Internet. If the defendant enters into
contracts with residents of a foreign jurisdiction that involve the knowing and
repeated transmission of computer files over the Internet, personal
jurisdiction is proper. [Citation.] At the opposite end are situations where a
defendant has simply posted information on an Internet Web site which is
accessible to users in foreign jurisdictions.
A passive Web site that does little more than make information available
to those who are interested in it is not grounds for the exercise [of] personal
jurisdiction. [Citation.] The middle ground is occupied by interactive
Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction
is determined by examining the level of interactivity and commercial nature of
the exchange of information that occurs on the Web site." (Zippo
Mfg. Co. v. Zippo Dot Com, Inc.
(W.D.Pa.1997) 952 F.Supp. 1119, 1124.)
Here, LiVid's Web site merely posts
information and has no interactive features.
There is no evidence in the record suggesting that the site targeted
California. Indeed, there is no evidence
that any California resident ever visited, much less downloaded the DeCSS
source code from, the LiVid Web site. Thus, Pavlovich's alleged "conduct
in ... posting [a] passive Web site[ ] on the
Internet is not," by itself, "sufficient to subject" him
"to jurisdiction in California."
(Jewish
Defense Organization, Inc. v. Superior Court
(1999) 72 Cal.App.4th 1045, 1060, 85 Cal.Rptr.2d 611 (JDO ), fn. omitted [refusing to exercise jurisdiction under
the effects test even though the defendant had "passive Web sites on the
Internet"]; Cybersell,
Inc. v. Cybersell, Inc.
(9th Cir.1997) 130 F.3d 414, 419-420 [refusing to
exercise jurisdiction under the effects test even though the defendant posted
infringing material on its Web site];
but see Bunn-O-Matic
I, supra,
46 U.S.P.Q.2d at p. 1377 [suggesting that the
operation of a Web site, by itself, is sufficient to establish express aiming
at the forum state].) " 'Creating a
site, like placing a product into the stream of commerce, may be felt
nationwide--or even worldwide--but, without more, it is not an act purposefully
directed toward the forum state.' "
(Cybersell,
at p. 418, quoting Bensusan
Restaurant Corp. v. King
(S.D.N.Y.1996) 937 F.Supp. 295, 301, affd. (2d
Cir.1997) 126 F.3d 25.) Otherwise, "personal jurisdiction in
Internet-related cases would almost always be found in any forum in the
country." *275(GTE
New Media Services Inc. v. BellSouth Corp.
(D.C.Cir.2000) 199 F.3d 1343, 1350.) Such a result would
"vitiate long-held and inviolate principles of" personal
jurisdiction. (Ibid.)
Nonetheless, DVD CCA contends posting the
misappropriated source code on an Internet Web site is sufficient to establish ***340
purposeful**11 availment in this case
because Pavlovich knew the posting would harm not only a licensing entity but
also the motion picture, computer and consumer electronics industries centered
in California. According to DVD CCA,
this knowledge establishes that Pavlovich intentionally targeted California and
is sufficient to confer jurisdiction under the Calder effects test.
Although the question is close, we disagree.
As an initial matter, DVD CCA's reliance on
Pavlovich's awareness that an entity owned the licensing rights to the CSS
technology is misplaced. Although
Pavlovich knew about this entity, he did not know that DVD CCA was that entity
or that DVD CCA's primary place of business was California until after
the filing of this lawsuit. More
importantly, Pavlovich could not have known this information when he allegedly
posted the misappropriated code in October 1999, because DVD CCA only began
administering licenses to the CSS technology in December 1999--approximately
two months later. Thus, even
assuming Pavlovich should have determined who the licensor was and where that
licensor resided before he posted the misappropriated code, he would not have
discovered that DVD CCA was that licensor. [FN4] Because Pavlovich
could not have known that his tortious conduct would harm DVD CCA in California
when the misappropriated code was first posted, his knowledge of the existence
of a licensing entity cannot establish express aiming at California. [FN5]
FN4. At oral argument, DVD CCA claimed that Pavlovich had
received a cease-and-desist letter from the Motion Picture Association (MPA),
and contended his receipt of this letter established purposeful availment.
Although the complaint alleged that MPA sent such a letter to various Web sites
and Internet service providers, the record contains no copy of this
letter. Moreover, nothing in the record
indicates that such a letter was sent to Pavlovich or that he received or even
knew about the letter. Accordingly, DVD CCA's unsubstantiated allusion to a
cease-and-desist letter cannot support a finding of jurisdiction. In any event, DVD CCA made no mention of this
letter to the trial court and Court of Appeal or in its briefs to this
court. Thus, it has waived the issue.
FN5. (See, e.g., JDO,
supra,
72 Cal.App.4th at p. 1059, 85 Cal.Rptr.2d 611
[refusing to exercise jurisdiction under the effects test because the defendant
did not know that the plaintiff would suffer harm in the forum state]; Chaiken
v. VV Pub. Corp.
(2d Cir.1997) 119 F.3d 1018, 1029 [refusing to
exercise jurisdiction under the effects test because the defendant had no
reason to believe that the plaintiffs would suffer harm in the forum
state]; Search
Force, Inc. v. Dataforce Intern., Inc.
(S.D.Ind.2000) 112 F.Supp.2d 771, 780 [refusing
to exercise jurisdiction under the effects test because the defendant was not
aware of the plaintiff's use of the
trademark before the defendant created its infringing Web site]; Tech
Heads, Inc. v. Desktop Service Center, Inc.
(D.Or.2000) 105 F.Supp.2d 1142, 1148 [refusing to
exercise jurisdiction under the effects test because the defendant did not know
about the plaintiff or its presence in the forum state]; Perry
v. RightOn.com
(D.Or.2000) 90 F.Supp.2d 1138, 1141 [refusing to
exercise jurisdiction under the effects test because the defendant did not know
about the plaintiff or his residence when the defendant acquired the infringing
domain name]; Rannoch,
Inc. v. Rannoch Corp.
(E.D.Va.1999) 52 F.Supp.2d 681, 685 [refusing to
exercise jurisdiction under the effects test because the defendant did not know
about the plaintiff or its trademarks].)
Thus, the only question in this case is
whether Pavlovich's knowledge that his tortious conduct may harm certain
industries centered in California-i.e., *276 the motion picture,
computer, and consumer electronics industries-is sufficient to establish
express aiming at California. As
explained below, we conclude that this knowledge, by itself, cannot establish
purposeful availment under the effects test.
[16][17] First, Pavlovich's knowledge that DeCSS could be used to
illegally pirate ***341 copyrighted motion pictures on DVD's and that
such pirating would harm the motion picture industry in California does not
satisfy the express aiming requirement. As an initial matter, we question whether
these effects are even relevant to our analysis, because DVD CCA does not
assert a cause of action premised on the illegal pirating of copyrighted motion
pictures. (See Cornelison
v. Chaney
(1976) 16 Cal.3d 143, 148, 127 Cal.Rptr. 352, 545 P.2d 264 [specific jurisdiction "depends upon the quality and
nature of [the defendant's] activity in the forum in relation to the
particular cause of action " (italics added) ].) In any event,
"the mere 'unilateral activity of those who claim some relationship with a
nonresident defendant cannot satisfy the requirement of contact with the forum **12
State.' " (World-Wide
Volkswagen, supra,
444 U.S. at p. 298, 100 S.Ct. 559, quoting Hanson,
supra,
357 U.S. at p. 253, 78 S.Ct. 1228.) "[T]he
fact that a defendant's actions in some way set into motion events which
ultimately injured a California resident" cannot, by itself, confer
jurisdiction over that defendant. (Wolfe,
supra,
217 Cal.App.3d at p. 547, 265 Cal.Rptr. 881.) Thus, the foreseeability that third parties
may use DeCSS to harm the motion picture industry cannot, by itself, satisfy
the express aiming requirement. Because
nothing in the record suggests that Pavlovich encouraged Web site visitors to
use DeCSS to illegally pirate copyrighted motion pictures, his mere
"awareness" they might do so does not show purposeful availment. (See Asahi
Metal Industry Co. v. Superior Court
(1987) 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (plur. opn. of O'Connor, J.) [the mere awareness that third parties will sweep the
defendant's product into the forum state does not convert its act of selling
the product to third parties "into an act purposefully directed toward the
forum State"].)
Second, Pavlovich's knowledge of the effects
of his tortious conduct on the consumer electronics and computer industries
centered in California is an even more attenuated basis for jurisdiction. According to DVD CCA, Pavlovich knew that
posting DeCSS would harm the consumer electronics and computer industries in
California, because many licensees of the CSS technology resided in
California. The record, however,
indicates that Pavlovich *277 did not know that any of DVD CCA's
licensees resided in California. At
most, the record establishes that Pavlovich should have guessed that these
licensees resided in California because there are many consumer electronic and
computer companies in California. DVD
CCA's argument therefore boils down to the following syllogism: jurisdiction exists solely because
Pavlovich's tortious conduct had a foreseeable effect in California. But mere foreseeability is not enough for
jurisdiction. (See Bancroft,
supra,
223 F.3d at p. 1087.) Otherwise, the commission
of any intentional tort affecting industries in California would subject a
defendant to jurisdiction in California.
We decline to adopt such an expansive interpretation of the effects test. (See Callaway
Golf Corp. v. Royal Canadian Golf Ass'n
(C.D.Cal.2000) 125 F.Supp.2d 1194, 1200
["Merely knowing a corporate [plaintiff] might be located in California does not fulfill the effects
test" (italics added) ].)
Cases citing a defendant's knowledge of the
effects of its tortious conduct on an industry centered in the forum state to
support a finding of jurisdiction under the effects test are inapposite. In exercising jurisdiction, those courts
concluded that the defendant's knowledge of industry-wide effects in the forum
state in conjunction with other evidence of express aiming at the forum
state established purposeful ***342 availment under the effects test. [FN6] Thus, those cases
merely hold that such knowledge is relevant to any determination of personal
jurisdiction. They do not establish that
such knowledge, by itself, establishes express aiming. Indeed, DVD CCA does not
cite, and we have not found, any case where a court exercised jurisdiction
under the effects test based solely on the defendant's knowledge of
industry-wide effects in the forum state.
FN6. (See Panavision,
supra,
141 F.3d at p. 1322 [the defendant "engaged
in a scheme to register [a forum resident's] trademarks as his domain names for
the purpose of extorting money from" that resident]; Cable
News Network v. GoSMS.com, Inc.
(S.D.N.Y.2000) 56 U.S.P.Q.2d 1959, 1963 [2000 WL 1678039, *4] [the defendant "transmitted infringing content
to" forum residents]; 3DO
Co. v. Poptop Software Inc.
(N.D.Cal.1998) 49 U.S.P.Q.2d 1469, 1472 [1998 U.S. Dist. Lexis 21281], 1998 WL
962202 [the defendants
"encourage[d] and facilitate[d] users" in the forum state "to download
allegedly infringing copies" from its Web site and used a server in the
forum state to operate the site].)
This dearth of supporting case law is
understandable when we consider the ramifications of a contrary holding. According to DVD CCA, California should
exercise jurisdiction over Pavlovich because he should have known that
third parties may use the misappropriated code to illegally copy movies
on DVD's and that licensees of the misappropriated technology resided in
California. In other words, DVD CCA is
asking this court to exercise jurisdiction over a defendant because he should
have known that his conduct **13 may harm--not a California
plaintiff--but industries associated with that plaintiff. As a practical matter, such a ruling makes
foreseeability of harm *278 the sole basis for jurisdiction in
contravention of controlling United States Supreme Court precedent. (See Burger
King, supra,
471 U.S. at p. 474, 105 S.Ct. 2174.)
Indeed, such a broad interpretation of the
effects test would effectively eliminate the purposeful availment requirement in
the intentional tort context for select plaintiffs. In most, if not all, intentional tort cases,
the defendant is or should be aware of the industries that may be affected by
his tortious conduct. Consequently, any
plaintiff connected to industries centered
in California--i.e., the motion picture, computer, and consumer electronics
industries--could sue an out-of-state defendant in California for intentional
torts that may harm those industries.
For example, any creator or purveyor of technology that enables copying
of movies or computer software--including a student in Australia who develops a
program for creating backup copies of software and distributes it to some of
his classmates or a store owner in Africa who sells a device that makes digital
copies of movies on videotape--would be subject to suit in California because
they should have known their conduct may harm the motion picture or computer
industries in California. [FN7] Indeed, DVD CCA's
interpretation would subject any defendant who commits an intentional tort
affecting the motion picture, computer, or consumer electronics industries to
jurisdiction in California even if the plaintiff was not a California
resident. Under this logic, plaintiffs
connected to the auto industry could sue any defendant in Michigan, plaintiffs
connected to the financial industry could sue any defendant in New York, and
plaintiffs connected to the potato industry could sue any defendant in Idaho.
Because finding jurisdiction under the facts in this case would effectively
subject all intentional tortfeasors whose conduct ***343 may harm
industries in California to jurisdiction in California, we decline to do so. [FN8]
FN7. Pavlovich
claims--and DVD CCA does not dispute--that DeCSS may be used for legitimate, and not just illegal,
purposes. Thus, Pavlovich is no
different from the student or store owner in the hypothetical.
FN8. We disapprove of
Nam
Tai Electronics, Inc. v. Titzer
(2001) 93 Cal.App.4th 1301, 113 Cal.Rptr.2d 769,
to the extent it is contrary to our decision today.
[18] We, however, emphasize the narrowness of our
decision. A defendant's knowledge that
his tortious conduct may harm industries centered in California is undoubtedly
relevant to any determination of personal jurisdiction and may support a
finding of jurisdiction. We merely hold
that this knowledge alone is insufficient to establish express aiming at
the forum state as required by the effects test. Because the only evidence in the record even
suggesting express aiming is Pavlovich's knowledge that his conduct may harm
industries centered in California, due process requires us to decline
jurisdiction over his person.
*279 In addition, we are not confronted
with a situation where the plaintiff has no other forum to pursue its claims
and therefore do not address that situation.
DVD CCA has the ability and resources to pursue Pavlovich in another
forum such as Indiana or Texas. Our
decision today does not foreclose it from doing so. Pavlovich may still face the music--just not
in California.
III
Accordingly, we reverse the judgment of the
Court of Appeal and remand for further proceedings consistent with this
opinion.
WE CONCUR:
KENNARD, WERDEGAR, MORENO, JJ.
DISSENTING OPINION BY BAXTER, J.
I respectfully dissent. That this case involves a powerful new medium
of electronic communication, usable for good or ill, should not blind us to the
essential facts and principles. The
record indicates that, by intentionally posting an unlicensed decryption code
for the Content Scrambling System (CSS) on their Internet Web sites, defendant
and his network of "open source" associates sought **14 to
undermine and defeat the very purposes of the licensed CSS encryption
technology, i.e., copyright protection for movies recorded on digital
versatile discs (DVD's) and limitation of playback to operating systems
licensed to unscramble the encryption code.
The intended targets of this effort were not individual persons or
businesses, but entire industries.
Defendant knew at least two of the intended targets--the movie industry
and the computer industry involved in producing the licensed playback
systems--either were centered in California or maintained a particularly substantial presence here. Thus, the record amply supports the trial
court's conclusion, for purposes of specific personal jurisdiction, that
defendant's intentional act, even if committed outside California, was
"expressly aimed" at California.
(See Calder
v. Jones
(1984) 465 U.S. 783, 788-790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (Calder
).)
In the particular circumstances, it cannot
matter that defendant may not have known or cared about the exact identities
or precise locations of each individual target, or that he happened to
employ a so-called passive Internet Web site, or whether any California
resident visited the site. By acting
with the broad intent to harm industries he knew were centered or
substantially present in this state, defendant forged sufficient
"minimum contacts" with California "that he should reasonably anticipate being haled
into court [here ]" ***344(World-Wide
Volkswagen Corp. v. Woodson
(1980) 444 U.S. 286, 297, 100 S.Ct. 559 (World-Wide
Volkswagen
)) for litigation " 'aris [ing] out of'
" his forum-related conduct *280(Vons
Companies, Inc. v. Seabest Foods, Inc.
(1996) 14 Cal.4th 434, 451, 58 Cal.Rptr.2d 899, 926 P.2d 1085 (Vons
)).
Moreover, defendant has made no
"compelling case" (Burger
King Corp. v. Rudzewicz
(1985) 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (Burger
King
)) that California's assertion of personal
jurisdiction for this purpose otherwise
fails to "comport with 'fair play and substantial justice.' " (Burger
King, supra,
at p. 476, 105 S.Ct. 2174, quoting Internat.
Shoe Co. v. Washington
(1945) 326 U.S. 310, 320, 66 S.Ct. 154, 90 L.Ed. 95
(Internat.
Shoe Co.).) Quite the
contrary. Defendant identifies no
unconscionable burden of defending the suit here, nor does he suggest
California litigation would infringe any significant sovereignty interests of
other jurisdictions.
But California has a substantial interest in
the subject matter, and California appears a fair, convenient, and effective
forum for California-centered industries to obtain relief. Moreover, this action seeks injunctions
against a large number of persons, geographically dispersed, who are alleged to
have participated with defendant in an organized effort to infringe and defeat
DVD encryption. Thus, so long as the
defendants' due process rights are not compromised, the interests of both the
plaintiff and the interstate judicial system "in obtaining the most
efficient resolution of controversies" (World-Wide
Volkswagen, supra,
444 U.S. 286, 292, 100 S.Ct. 559) strongly favor
suit against all in a single forum, rather than a multiplicity of suits in the
defendants' individual domiciles.
Accordingly, I conclude the Court of Appeal's judgment should be
affirmed.
FACTS
As
the majority opinion indicates, DVD's are a means of storing digitally
formatted information, including video information, on convenient 5 inch
discs. One major use of DVD's, probably
the best known to the consuming public, is as a medium for storing and viewing
copyrighted motion pictures. Before the commercial release of movies on DVD's,
the motion picture and DVD industries developed CSS. This encryption technology
was designed to protect DVD movies against unauthorized copying and to allow
playback of CSS-encrypted DVD's only on operating systems with CSS decryption
capability. To protect the trade secret
represented by CSS, the technology and its descrambling codes were disclosed
only subject to licensing agreements.
Plaintiff DVD Copy Control Association, Inc.
(DVD CCA) is a nonprofit trade association organized under Delaware law, but
with its principal place *281 of business in Morgan Hill,
California. DVD CCA was created by the
motion picture and DVD industries to administer the licensing of CSS. No later
than **15 December 1999, DVD CCA took over administration of the
licenses.
DVD CCA immediately filed suit in California
superior court against defendant Matthew Pavlovich, 20 other named individuals,
and 500 Does for misappropriation of trade secrets. The complaint alleges the following: As early as October 25, 1999, Jon Johansen, a
resident of Norway, posted on the Internet a computer program, dubbed DeCSS,
that defeats CSS encryption. DeCSS was derived by "willfully 'hacking' and/or
improperly reverse engineering software created by" a CSS licensee. Around the time Johansen posted the DeCSS
program, the same information appeared on a Web site "operated by"
Pavlovich. Thereafter, many other Web sites "in at least 11 states and 11
countries" ***345 either posted the code directly or provided links
to the sites where it appeared directly.
The defendants who posted or provided Web site links to this information
knew or should have known DeCSS was derived from the misappropriation of
proprietary information, because DeCSS was specifically designed to defeat CSS
and was aimed at infringing movie copyrights by permitting the
"pirating" of movies on DVD's. The motion picture industry-- centered
in California--and the computer and electronics businesses involved in DVD
development and production--including 73 companies in California--have been
harmed because the wholesale copying and distribution of DVD's destroys both
the movies' copyrights and the market for DVD-based products. The breach of CSS has also delayed the
introduction of DVD audio--a new technology in which these industries have
invested substantially--while a new copyright protection system is developed.
The complaint further asserts: The Motion Picture Association sent
cease-and-desist notices to some 66 Web sites and Internet service providers,
including Pavlovich and all but one of the other named defendants. Some who received notices had voluntarily removed the DeCSS
information, but Pavlovich and all the other named defendants who were notified
had refused.
The complaint asks for a declaratory judgment
that defendants have willfully misappropriated the CSS trade secret. It seeks to enjoin the defendants, singly or
in combination, from distributing, via the Internet or otherwise, any
proprietary information or trade secrets relating to the CSS technology, and
from copying, marketing, licensing, publishing, selling, leasing, or renting the
DeCSS program and any other product substantially derived from CSS proprietary
property or trade secrets.
Pavlovich moved to quash summons, alleging
that California courts lacked personal jurisdiction over him. The motion, and DVD CCA's opposition, attached
considerable documentary evidence, including excerpts from *282
Pavlovich's depositions. Much is
fiercely disputed between the parties, but the record discloses the following
facts that are either uncontroverted, or are fairly inferable in support of the
trial court's jurisdiction order:
Pavlovich is the president of a startup
technology consulting company. He
currently lives and works in Texas, and he has no direct business or personal
ties with California. While a computer
engineering student in Indiana, he was the founder and project leader of the
LiVid video project. The project
operated a Web site at livid.on.openprojects.net, which posted the DeCSS source
code. [FN1]
FN1. Pavlovich
vigorously disputes whether DVD CCA has shown, for purposes of personal
jurisdiction over him, that the DeCSS source code actually was posted on
the LiVid Web site, and if so, whether Pavlovich himself had any responsibility
for the posting. In his declaration
attached to the motion to quash, Pavlovich carefully avoided either admitting
or denying that DeCSS was posted on the site, or that he was personally
involved, though he acknowledged he had "input" into the site. In
excerpts from his deposition, as presented to the trial court, Pavlovich
several times described himself as the "founder and leader" of the
LiVid project, but these deposition excerpts shed no further light on whether,
or by whom, the DeCSS source code was posted.
In his brief on the merits, Pavlovich urges affirmatively that his
"sole connection" to the case is as "one of many
contributors" to a Web site which "allegedly" posted information
in derogation of the CSS trade secret.
At oral argument in this court, Pavlovich's counsel insisted it is not
clear by whom, or even whether, the DeCSS source code was posted on the LiVid
Web site; counsel represented that no
such material was found among the contents of Pavlovich's computer hard drive,
as provided during discovery on the motion to
quash. But in light of Pavlovich's claim
of his predominant role in LiVid, his admission that he had input into the
project's Web site, and his artful failure to deny the Web site posting or his
involvement therein, I conclude the trial court was entitled, based on the
evidence before it, to draw the inferences necessary for personal
jurisdiction.
***346 **16 According to
Pavlovich, LiVid was "an organization of software developers and computer
programmers from around the world that were interested in ... developing ...
video and DVD-related applications" for the Linux computer operating
system. The project's goal, according to
Pavlovich, was to "improve video and DVD support" for Linux and, in
particular, "to develop an open source DVD player for Linux" so
"we could play ... DVDs ... on the systems that we had bought that had DVD
drives...." In other DeCSS-related litigation, Pavlovich himself has
testified as an expert witness "relating to computers, primarily Linux DVD
technology," specifically including "various projects in Linux
including the Linux video and DVD project."
By the time the LiVid Web site posted the
DeCSS source code, Pavlovich had heard there was an entity that licensed CSS
technology. As Pavlovich explained, "[i]n the course of the development of
the ... Linux video and DVD project, there was a lot of discussion regarding
the decryption piece of the full length of
decoding of DVD," and people on the LiVid mailing list *283 were
advising that "you've got to apply for a license." A CSS licensee posted on the site a friendly
warning that CSS was a licensed trade secret which licensees were forbidden to
disclose, that its purpose was to prevent the pirating of movies from DVD's,
that Hollywood was "paranoid" about pirating, and that if CSS were
"cracked," there was a "good chance" no new movie titles
would be released on DVD. Nonetheless, the project declined to seek a license
because, as Pavlovich indicated, "more than likely a license would not
allow us to release the source code and things like that that didn't follow the
same development path as open source followed."
Pavlovich also understood that DeCSS had been
"reverse engineered from another [CSS-equipped] DVD player like a Windows
player." In an e-mail dated October
1, 1999, he advised that "[r]everse engineering is illegal in most (if not
all) of the countries that developers in this project live in."
Nonetheless, Pavlovich's e-mail predicted that although "[t]his is a very
nasty thing and a lot is on the line for those involved," "DVD
(everything non-free) will be hacked before the end of time."
In his deposition, Pavlovich insisted the
LiVid project was not directly concerned with the unauthorized reproduction and
distribution of copyrighted materials contained on DVD's. However, Pavlovich
admitted he was aware that DeCSS could
facilitate the process of transferring the information stored on the discs to
computer hard drives, whence it could be copied into new playback mediums. [FN2] Indeed, Pavlovich insisted that one who buys
a DVD with copyrighted material should have the freedom to duplicate it, at
least for personal use, and to transfer its information ***347 to any
other playback format he or she wishes.
FN2. There is some
controversy among those familiar with DVD technology, and with the CSS system
in particular, whether CSS encryption itself prevents the copying of materials
contained on CSS-encoded DVD's. However, in a recent federal case involving the
federal Digital Millennium Copyright Act (17
U.S.C.A. § 1201 et seq.), the court of appeals upheld district court
findings that DeCSS "sidesteps" whatever anticopying protections are
contained on standard DVD's and is the "superior" means of acquiring
easily copyable movies. (Universal
City Studios, Inc. v. Corley
(2d Cir.2001) 273 F.3d 429, 438, fn. 5.)
Pavlovich insists he did not know the identity
or location of the CSS licensing entity until this lawsuit was filed. However, he did know that the movie industry
was centered in California and that computer companies of the kind involved in producing components for DVD
players had a substantial presence here.
Specifically, Pavlovich admitted, "the general common idea is that
Hollywood is the area" where the movie industry is centered, that several
major movie studios are located or have substantial presences in Hollywood,
that Silicon Valley is one of the "top three technology hot spots in the
United States," that computer hardware manufacturers are involved in *284
the production of DVD player **17 components such as "video
boards" or "DVD boards," and that "a lot" of hardware
manufacturers are located in California.
In a brief order, the trial court denied the
motion, citing Calder,
supra,
465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804, and
a Ninth Circuit Court of Appeals case applying Calder, Panavision
Intern., L.P. v. Toeppen
(9th Cir.1998) 141 F.3d 1316 (Panavision
).
Pavlovich petitioned the Court of Appeal for a writ of mandate. The petition was summarily denied. On review, we retransferred the matter to the
Court of Appeal with directions to vacate its denial order and issue an order
to show cause. After briefing and
argument, the Court of Appeal wrote an opinion denying the writ.
The Court of Appeal reasoned that (1)
Pavlovich knew or should have known his Internet activities were having
injurious effects on the California movie and computer industries, (2) he also
necessarily knew the misappropriated material posted on his Web site was
instantly accessible to a wide range of Internet users and consumers, including those in
California, (3) his use of the Internet, rather than older mass communications
media, as the means of inflicting harm was irrelevant, and (4) the instant
access afforded by an Internet Web site is the equivalent of the site
operator's personal presence wherever the site's material is accessed and
appropriated. Hence, the Court of Appeal
concluded, though physically absent from California, Pavlovich had established
minimum jurisdictional contacts with this state under a theory of
"purposeful availment" of its benefits and privileges, because, by
his intentional conduct, he had caused harmful effects in the state.
The Court of Appeal further concluded that
personal jurisdiction over Pavlovich was reasonable under all the
circumstances. It stressed that (1) the
degree of Pavlovich's personal interjection was substantial, because his knowing
activity posed substantial harm for industries centered in California; (2) the burden of defending the suit in
California was substantial, but not so great as to deny Pavlovich due
process; (3) Pavlovich identified no
conflict with the sovereignty of his home state; (4) California had a substantial interest in
the subject matter; (5) California
offered a logical forum for convenient, efficient, and effective resolution of
the dispute; and (6) no other forum could
claim a greater interest.
DISCUSSION
The
majority correctly state the broad principles.
California may assert personal jurisdiction over a foreign defendant on
any basis consistent with *285 the state and federal Constitutions. (Code
Civ. Proc., § 410.10.) Such jurisdiction is constitutionally permissible only
"if the defendant has such minimum contacts with the state that the
assertion of jurisdiction does not violate ' "traditional notions of fair
play and substantial justice." ' " ***348(Vons,
supra,
14 Cal.4th 434, 444, 58 Cal.Rptr.2d 899,
926 P.2d 1085, quoting Internat.
Shoe Co., supra,
326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95; see Burger
King, supra,
471 U.S. 462, 471-478, 105 S.Ct. 2174, 85 L.Ed.2d 528.)
The "minimum contacts" rule protects
both the defendant's "liberty interest in not being subject to the
judgments of a forum with which he or she has established no meaningful
'contacts, ties, or relations' " (Vons,
supra,
14 Cal.4th 434, 445, 58 Cal.Rptr.2d 899, 926 P.2d 1085; Burger
King, supra,
471 U.S. 462, 471-472, 105 S.Ct. 2174, 85 L.Ed.2d 528) and the mutual territorial limits of coequal sovereigns in
a federal system (Vons,
supra,
at p. 445, 58 Cal.Rptr.2d 899, 926 P.2d 1085; see World
Wide Volkswagen, supra,
444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490). The rule also " 'gives a degree of
predictability to the legal system that allows potential defendants to
structure their primary conduct with some minimum assurance as to where that conduct will and will not render
them liable to suit.' " (Burger
King, supra,
at p. 472, 105 S.Ct. 2174, quoting World-Wide
Volkswagen, supra,
at p. 297, 100 S.Ct. 559.)
But the test of minimum contacts is
necessarily flexible, and, as the majority concede, subtle shades of grays
predominate. (Maj. opn., ante, at
127
Cal.Rptr.2d at p. 334, 58 P.3d at p. 6; see Kulko
v. California Superior Court
(1978) 436 U.S. 84, 92, 98 S.Ct. 1690, 56 L.Ed.2d 132 (Kulko
).) "[T]he question of jurisdiction cannot
be answered by the application of precise formulas or mechanical **18
rules. Each case must be decided on its
own facts." (Integral
Development Corp. v. Weissenbach
(2002) 99 Cal.App.4th 576, 583, 122 Cal.Rptr.2d 24
(Integral
Development Corp.); see Cornelison
v. Chaney
(1976) 16 Cal.3d 143, 150, 127 Cal.Rptr. 352, 545 P.2d 264 (Cornelison
).)
For particular litigation, the "fair
warning" standard that underlies the minimum contacts rule "is
satisfied if the defendant has 'purposefully directed' his activities at
residents of the forum [citation], and the litigation results from alleged
injuries that 'arise out of or relate to' those activities
[citation]." (Burger
King, supra,
471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528; see also Helicopteros
Nacionales de Colombia v. Hall
(1984) 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404; Vons,
supra,
14 Cal.4th
434, 446, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) As Burger
King explained, there are several reasons why
personal jurisdiction is appropriate in such cases. A state generally has a manifest interest in
providing its residents a forum for redressing injuries inflicted by
out-of-state actors. When such persons "purposefully derive benefit"
from their interstate activities (Kulko,
supra,
436 U.S. 84, 96, 98 S.Ct. 1690, 56 L.Ed.2d 132), *286
it may well be unfair to allow them to raise a territorial shield against
efforts to hold them to account where injury proximately resulted. Also, modern
transportation and communications have made it much less burdensome, and thus
less unfair, to require one to litigate in another forum for disputes relating
to such activity. (Burger
King, supra,
at pp. 473- 474, 105 S.Ct. 2174; see also Keeton
v. Hustler Magazine, Inc.
(1984) 465 U.S. 770, 776, 104 S.Ct. 1473, 79 L.Ed.2d 790 (Keeton
); McGee
v. International Life Ins. Co.
(1957) 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223; Vons,
supra,
at p. 447, 58 Cal.Rptr.2d 899, 926 P.2d 1085.)
The necessary purposeful direction toward the
forum has sometimes been described as requiring "some act by which the
defendant purposefully avails itself of the privilege of
conducting activities within the forum [s]tate, thus invoking the benefits
and protections of its laws." ***349(Hanson v. Denckla
(1958) 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283, italics added.) But purposeful availment in this literal
sense is not the only form of purposeful direction that will permit the
exercise of personal jurisdiction over a foreign defendant.
Thus, in Calder,
supra,
465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804, the
court concluded that California actress Shirley Jones could bring a California
suit against Florida residents who wrote and edited an allegedly defamatory
article about her which appeared in a nationally circulated tabloid newspaper.
The court concluded that, despite their lack of any direct personal or business
ties to California, the individual defendants had "expressly aimed"
their intentional conduct at this state.
(Calder,
supra,
at p. 789, 104 S.Ct. 1482.) Calder stressed that the defendants' newspaper had prominent
circulation in California, and that California was the focal point of the
story, because the defendants consulted California sources and knew the brunt
of the harm, both emotional and reputational, would be felt in this state,
where Jones lived and pursued her professional career. (Id.
at pp. 788-790, 104 S.Ct. 1482.)
California has similarly assumed that, because
of this state's " 'natural interest in the effects of an act within its
territory, even though the act itself was done elsewhere' " (Judicial
Council of Cal. com., reprinted at 14 West's Ann.Code Civ. Proc. (1973 ed.)
foll. § 410.10, p. 472, quoting Rest.2d Conflict of Laws (Proposed Off. Draft
(1967) pt. I) § 37, com. a, p. 197), one
whose out-of-state act was intended to cause effects here may be sued in
this state for the act just as if it had occurred here (Judicial Council of
Cal. com., reprinted at 14 West's Ann.Code Civ. Proc., supra, foll.
§ 410.10, p. 473; cf. Sibley
v. Superior Court
(1976) 16 Cal.3d 442, 446, 128 Cal.Rptr. 34, 546 P.2d 322 (Sibley
) [state may exercise jurisdiction over foreign
defendant who causes effects here unless nature of effects, and of defendant's
relationship to this state, make exercise of jurisdiction unreasonable] ).
*287 One cannot be sued in a foreign
jurisdiction "solely as a result of
'random,' 'fortuitous,' or 'attenuated' contacts [citations]." (Burger
King, supra,
471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528; **19Keeton,
supra, 465 U.S. 770, 774, 104 S.Ct. 1473, 79 L.Ed.2d
790.) But
the minimum contacts necessary to personal jurisdiction are always present
where the defendant has so purposefully directed injurious conduct
toward the forum, with the intent of affecting its residents, " 'that
he should reasonably anticipate being haled into court there ' " for
related litigation. (Burger
King, supra,
at p. 474, 105 S.Ct. 2174, quoting World
Wide Volkswagen, supra,
444 U.S. 286, 297, 100 S.Ct. 559, italics added.)
In Calder, the court unanimously found that the Florida-based author
and editor of an allegedly defamatory
tabloid article about a California actress "must 'reasonably anticipate
being haled into court [in California]' to answer for the truth of the
statements made in their article.
[Citations.]" (Calder,
supra,
465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804.) As the court observed, the defendants were
"primary participants in an alleged wrongdoing intentionally directed
at a California resident, and jurisdiction over them is proper on that
basis." (Ibid., italics added.)
"An individual injured in California," the court said,
"need not go to Florida to seek redress from persons who, though remaining
in Florida, knowingly cause the injury in California." (Ibid., italics added.)
As the majority indicate, the Calder test of minimum contacts based upon conduct expressly
aimed at the forum is not limited to defamation actions. It applies to intentional ***350 torts
generally. (See, e.g., Bancroft
& Masters, Inc. v. Augusta Nat. Inc.
(9th Cir.2000) 223 F.3d 1082, 1087-1088 (Bancroft
& Masters
); Panavision,
supra,
141 F.3d 1316, 1321- 1322; see also, e.g., IMO
Industries, Inc. v. Kiekert AG
(3d Cir.1998) 155 F.3d 254, 260 (IMO
); Far
West Capital, Inc. v. Towne
(10th Cir.1995) 46 F.3d 1071, 1077.)
"When a defendant moves to quash service
of process on jurisdictional grounds, the plaintiff has the initial burden of
demonstrating facts justifying the exercise
of jurisdiction. [Citation.] Once facts showing minimum contacts with the
forum state are established, however, it becomes the defendant's burden to
demonstrate that the exercise of jurisdiction is unreasonable. [Citation.] Where there is conflicting evidence, the
trial court's factual determinations are not disturbed on appeal if supported
by substantial evidence.
[Citation.] When no conflict in
the evidence exists, however, the question of jurisdiction is purely one of law
and the reviewing court engages in an independent review of the record. [Citation.]" (Vons,
supra,
14 Cal.4th 434, 449, 58 Cal.Rptr.2d 899, 926 P.2d 1085; cf. Floveyor
Internat., Ltd. v. Superior Court
(1997) 59 Cal.App.4th 789, 793-794, 69 Cal.Rptr.2d 457.)
*288 When, as here, no findings of fact
were requested or made, the trial court's implicit findings of disputed fact
are entitled to the same appellate deference as explicit findings. (See City
and County of San Francisco v. Sainez
(2000) 77 Cal.App.4th 1302, 1313, 92 Cal.Rptr.2d 418 [constitutionality, as applied, of cumulative housing code
penalties].) Thus, we must accept all
undisputed facts, indulge all other reasonable factual inferences that support
the trial court's order, and independently apply the law to those facts. (Integral
Development Corp., supra,
99 Cal.App.4th 576, 584-585, 122 Cal.Rptr.2d 24; cf. Gleaves
v. Waters
(1985) 175 Cal.App.3d 413, 417, 220 Cal.Rptr.
621 [preliminary injunction].)
Application of these principles compels a
conclusion that the unique circumstances of this case satisfy the fundamental
requirements of Calder. For purposes of minimum contacts analysis, the following
facts are either undisputed or fairly inferable from the record: The DeCSS source code was posted on defendant
Pavlovich's LiVid Web site as part of a widespread effort to defeat the CSS
encryption system jointly developed by the movie and DVD industries for their
mutual protection and benefit. DeCSS was
posted on the LiVid Web site despite Pavlovich's assumption that DeCSS
illegally infringed the licensed trade secret represented by CSS. [FN3] Pavlovich, a technical expert in this **20 area,
knew CSS was intended to protect copyrighted materials on DVD's from
unauthorized duplication, and also to limit DVD playback to systems with CSS
technology. Indeed LiVid's goal in
defeating CSS was to develop an alternative, and presumably competitive,
"open source" DVD playback system.
***351 Thus, the intended injurious effects of posting DeCSS were
aimed directly at the computer hardware industry involved in producing
CSS-encrypted DVD players--an industry Pavlovich knew was heavily concentrated
in California.
FN3. As indicated
above, this assumption is evidenced by Pavlovich's admission that he understood DeCSS had been
derived by reverse engineering a DVD player equipped with CSS technology, and
by his e-mail, dated October 1, 1999, warning that "[r]everse engineering
is illegal in most (if not all) of the countries that developers in this
project live in." Pavlovich now
urges that under the Uniform Trade Secrets Act as applicable in California
(Civ.Code, § 3426 et seq.), "[r]everse engineering ... alone shall not
be considered improper means" of acquiring a trade secret. (Id., § 3426.1, subd. (a).) But the merits of DVD CCA's lawsuit
are not before us at this preliminary stage.
What counts for jurisdictional purposes is that Pavlovich engaged in
intentional conduct, targeted against California interests, with the understanding
that it would produce potentially actionable effects in this state, thus making
it reasonable to anticipate that he would be haled into court here.
Moreover, Pavlovich knew the purpose of CSS
was to protect copyrighted movies from pirating, and that the widespread
availability of DeCSS undermined that interest.
Thus, even if he did not personally pirate copyrighted material for
commercial gain, Pavlovich, by publishing material he understood as an
infringement of the CSS trade secret, took an action calculated to harm the
movie industry, which Pavlovich knew was centered in California.
*289
Accordingly, the necessary minimum contacts required by Calder,
supra,
465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804, are
present. Pavlovich engaged in "
'(1) intentional actions (2) expressly aimed at the forum state (3) causing
harm, the brunt of which is suffered--and which the defendant knows is likely
to be suffered--in the forum state.' "
(Panavision,
supra,
141 F.3d 1316, 1321, quoting Core-Vent
Corp. v. Nobel Industries AB
(9th Cir.1993) 11 F.3d 1482, 1486 (Core-Vent
).)
Accordingly, he should reasonably anticipate he would be haled into California's
courts to account for his conduct.
The majority ascribe undue significance to the
fact that Pavlovich acted through a new and rapidly burgeoning medium of interstate
and international communication--the Internet.
They assert that the mere posting of information on a passive Internet
Web site, which is accessible from anywhere but is directed at no particular
audience, cannot be an action targeted at a particular forum. Otherwise, they worry, mere use of the
Internet would subject the user to personal jurisdiction in any forum where the
site was accessible.
I agree that mere operation of an
Internet Web site cannot expose the operator to suit in any jurisdiction where
the site's contents might be read, or where resulting injury might occur. (See, e.g., Mink
v. AAAA Development LLC
(5th Cir.1999)
190 F.3d 333, 336-337 (Mink
); Oasis
Corp. v. Judd
(S.D.Ohio 2001) 132 F.Supp.2d 612, 623; Nicosia
v. De Rooy
(N.D.Cal.1999) 72 F.Supp.2d 1093, 1098; but see Inset
Systems, Inc. v. Instruction Set, Inc.
(D.Conn.1996) 937 F.Supp. 161, 164-165 (Inset
Systems, Inc.).) Communication by a universally accessible Internet Web
site cannot be equated with "express aiming" at the entire world.
However, defendants who aim conduct at
particular jurisdictions, expecting and intending that injurious effects will
be felt in those specific places, cannot shield themselves from suit there
simply by using the Internet, or some other generalized medium of
communication, as the means of inflicting the harm. (See, e.g., Calder,
supra,
465 U.S. 783, 789-790, 104 S.Ct. 1482, 79 L.Ed.2d 804 [significant California circulation of nationwide
newspaper supports California defamation suit by California resident against
Florida residents who wrote and edited defamatory article]; Keeton,
supra,
465 U.S. 770, 773-780, 104 S.Ct. 1473, 79 L.Ed.2d 790 [significant regular circulation of nationwide magazine in
New Hampshire supports New Hampshire defamation suit against magazine by
well-known New York resident]; Panavision,
supra,
141 F.3d 1316, 1319-1322 [California suit proper
where Illinois defendant registered and used California plaintiff's trademarks
as domain names for defendant's **21 Internet Web sites, then solicited
payoff to relinquish domain names]; Indianapolis
Colts v. Metro. Baltimore Football
(7th Cir.1994) 34 F.3d 410, 411-412 (Indianapolis
Colts, Inc.) [in Indiana trademark *290 infringement suit by
former Baltimore (now Indianapolis) Colts of National ***352 Football
League against Baltimore CFL Colts of Canadian Football League, defendant
established minimum contacts with Indiana, among other ways, through nationwide
cable telecasts of football games]; cf.,
e.g., CompuServe,
Inc. v. Patterson
(6th Cir.1996) 89 F.3d 1257, 1262-1267 [Ohio
declaratory relief action by Ohio-based Internet service provider is proper where
Texas defendant transmitted "trademarked" software over the Internet
to plaintiff, used plaintiff's Internet service to share and market software,
then e-mailed plaintiff in Ohio, claiming names and marks of plaintiff's
similar software infringed his trademarks];
Bancroft
& Masters, supra,
223 F.3d 1082, 1084-1088 [California declaratory
relief action is proper where defendant, based in Georgia, sent letters both to
plaintiff, a California merchant, and to a Virginia-based Internet Web site
domain name registrar, claiming plaintiff's registered domain name infringed
defendant's trademark, thus forcing plaintiff to sue to retain control of
domain name].) [FN4]
FN4. The majority
imply that the maintenance of a passive Internet Web site cannot be considered
"express aiming" at any jurisdiction because such a site is just a way of allowing
interested persons to search for and retrieve information stored in remote
computers. (Maj. opn., ante,
127 Cal.Rptr.2d at p. 332, 58 P.3d at p. 4,
citing, for such a description of the World Wide Web, Reno
v. American Civil Liberties Union
(1997) 521 U.S. 844, 849-852, 117 S.Ct. 2329, 138 L.Ed.2d 874.) But the maintenance
of a Web site that includes content intended and expected to harm particular
individuals, entities, or interests in specific places is no more
"passive" in this regard than television broadcasts which all or none
may watch as they choose (see Indianapolis
Colts, Inc., supra,
34 F.3d 410, 411-412), or a recorded toll-free
telephone message which all or none may hear as they choose (cf. Inset
Systems, Inc., supra,
937 F.Supp. 161, 165).
In such circumstances, the defendant is not
exposed to universal and unpredictable jurisdiction. He faces suit only in a particular forum
where he directed his injurious conduct, and where he must reasonably
anticipate being called to account.
The cases cited by the majority for the
proposition that operation or use of a passive Internet Web site cannot create
personal jurisdiction in a state foreign to the operator's location are
inapposite. Those decisions hold that personal jurisdiction cannot be based on mere
accessibility to a Web site by residents of the forum state or otherwise
conclude, on their individual facts, that particular uses of the
Internet did not establish the geographic specificity, knowledge, and intent
necessary for "express aiming." [FN5]
FN5. (E.g., Jewish
Defense Organization, Inc. v. Superior Court
(1999) 72 Cal.App.4th 1045, 1059, 85 Cal.Rptr.2d 611, 620 [assertion by plaintiff, who lives in New York and travels
frequently, that he "spends 'considerable professional time' in
California" is insufficient to show California was targeted when plaintiff
was allegedly defamed by an individual and organization, both located in New
York, using Internet services provided by companies with offices in
California]; Cybersell,
Inc. v. Cybersell, Inc.
(9th Cir.1997) 130 F.3d 414 (Cybersell
) [Floridians' mere use of an allegedly
infringing mark on a passive Web site home page promoting their business did
not subject users to personal jurisdiction in Arizona, where mark's owners were
located; there was no evidence defendants
sought Arizona business or otherwise targeted Arizona with knowledge that harm
would be suffered there]; GTE
New Media Service, Inc. v. BellSouth Corp.
(D.C.Cir.2000) 199 F.3d 1343 [mere evidence that
foreign defendants sought to maximize use, within District of Columbia as elsewhere, of their Internet
"yellow pages" service did not create District of Columbia
jurisdiction for suit by competing Internet "yellow pages" service
provider]; Bensusan
Restaurant Corp. v. King
(S.D.N.Y.1996) 937 F.Supp. 295, affd. (2d
Cir.1997) 126 F.3d 25 (Bensusan
Restaurant Corp.) [use of allegedly infringing logotype on Web site
promoting independent Blue Note jazz club, which was located in Missouri, did
not create New York personal jurisdiction in trademark infringement suit by
owner-operator of Blue Note jazz clubs in New York and elsewhere]; see also, e.g., Nam
Tai Electronics, Inc. v. Titzer
(2001) 93 Cal.App.4th 1301, 113 Cal.Rptr.2d 769
[defendant Colorado resident, who posted alleged commercial libels against
plaintiff Hong Kong company on an Internet bulletin board provided by Yahoo!, a
California corporation, was not subject to California jurisdiction at
plaintiff's behest simply because Yahoo!'s Web site was "maintained"
in California and defendant's service agreement with Yahoo! stated that
California jurisdiction would apply to disputes between Yahoo! and defendant].)
For purposes of this case, which does not involve direct commercial
use of the Internet, I find little utility in those federal decisions that look
to " 'the nature and quality of commercial activity that an entity
conducts over the Internet' " to determine personal jurisdiction. (Mink,
supra, 190
F.3d 333, 336, quoting Zippo
Mfg. Co. v. Zippo Dot Com, Inc.
(W.D.Pa.1997) 952 F.Supp. 1119, 1124.)
***353 *291 **22 Next,
the majority accept Pavlovich's argument that he cannot have expressly aimed
his conduct at California because he knew neither the specific identity nor the
location of the CSS licensing agency (now California-based plaintiff DVD
CCA) at the time DeCSS was posted on the LiVid Web site. But knowledge of this exact kind is
unnecessary to establish personal jurisdiction.
When a foreign defendant, by intentional conduct directed toward the
forum, establishes the necessary minimum contacts with that jurisdiction, he or
she may be exposed to litigation there for any " 'controversy [that] is related
to or "arises out of " [those] contacts....'
[Citations.]" (Vons,
supra,
14 Cal.4th 434, 446, 58 Cal.Rptr.2d 899, 926 P.2d 1085, italics added.) The
plaintiff need not be the exact person or entity toward whom the
defendant's conduct was directed.
The facts of Vons,
supra,
14 Cal.4th 434, 58 Cal.Rptr.2d 899, 926 P.2d 1085,
are illustrative. There, customers of
several Jack-in-the-Box restaurants were injured or killed by eating tainted
hamburger. Other Jack-in-the-Box
franchisees brought a California suit against Jack-in-the-Box's California
parent company, Foodmaker, seeking damages for business losses caused by the adverse publicity. Foodmaker cross-complained against various
parties, including California-based Vons, which shipped hamburger to Foodmaker
for use in Jack-in-the-Box restaurants.
Vons, in turn, cross-complained against Foodmaker and the franchises
where food poisoning had occurred, including two Washington state
restaurants. Vons alleged the injuries
could have been avoided by proper cooking procedures.
*292 We held that for purposes of the
particular litigation, jurisdiction over the Washington cross-defendants was
proper, though they had no general ties with California, nor any direct
contacts with Vons. As we explained, "the nexus required to establish
specific jurisdiction is between the defendant, the forum, and the
litigation [citations]--not between the plaintiff and the defendant." (Vons,
supra,
14 Cal.4th 434, 458, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) " 'The crucial
inquiry concerns the character of [the] defendant's activity in the forum [and]
whether the cause of action arises out of or has a substantial connection
with that activity ....' " (Id.,
at p. 452, 58 Cal.Rptr.2d 899, 926 P.2d 1085,
quoting Cornelison,
supra,
16 Cal.3d 143, 148, 127 Cal.Rptr. 352, 545 P.2d 264, italics added by Vons.)
In Vons, this substantial connection between the Washington
cross-defendants and Vons's California cross-complaint arose from the
cross-defendants' California-centered contractual franchise relationship with Foodmaker. The cross-defendants bought all their
hamburger from Foodmaker, and the standard franchise agreement, which provided
that contractual disputes between Foodmaker and its ***354 franchisees
would be litigated in California, set exacting standards for sanitary food
preparation in Jack-in-the-Box restaurants.
Hence, on the basis of their California contacts, the cross-defendants
could reasonably anticipate a California lawsuit with respect to that
subject. (Vons,
supra,
14 Cal.4th 434, 456-460, 58 Cal.Rptr.2d 899, 926 P.2d 1085.)
Similarly here, defendant Pavlovich's
connection with California arises from his participation in a concerted effort
to defeat the CSS encryption system he knew was developed to protect interests
of the movie and DVD-related computer industries. Those industries, as he also knew, were
centered or substantially concentrated in this state. He knew CSS was a trade secret, available
only by a license his LiVid project had specifically declined to obtain. He also assumed the DeCSS source code posted
on the LiVid Web site had been derived by illegal means, and was an
infringement of the proprietary information represented by CSS. DVD CCA's
lawsuit, alleging that the Web site posting was an infringement of the CSS
trade secret, thus " 'arises out of or has a substantial connection with'
" his conduct aimed at this state. (Vons,
supra,
14 Cal.4th 434, 452, 58 Cal.Rptr.2d 899, 926 P.2d 1085.) Because he targeted the trade secrets of industries he **23
knew were centered in California, he must reasonably anticipate California
litigation calling him to account for that conduct. That he did not know the exact identity or
location of the entity authorized to prosecute such an action is immaterial.
The majority also accept Pavlovich's claim
that his contacts with the California movie, computer, and consumer electronics
industries are too random, remote, and attenuated to satisfy Calder
's express aiming test. (Calder,
supra,
465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804.) As to the motion picture industry, the
majority *293 insist it is insufficient that Pavlovich knew the DeCSS
source code could be used to harm that industry through the pirating of
copyrighted motion pictures. The
majority note that DVD CCA's lawsuit does not allege Pavlovich pirated movies,
and they say express aiming at the movie industry cannot be found from the mere
foreseeability that other persons might use the code to do so. As to the computer and electronics
industries, the majority observe there is no evidence Pavlovich actually knew
that California members of these industries were among the CSS licensees
allegedly harmed by DeCSS. Finally, the
majority suggest that a defendant's knowledge of industry-wide effects
cannot form the sole basis for personal jurisdiction in any event.
It is true that one cannot be sued in another
forum simply because his or her conduct has foreseeable
effects there. [FN6] A number of lower court decisions suggest
further that, absent other indicia of activity purposefully directed at the
forum, even the defendant's intent to injure a forum ***355 resident,
standing alone, is not sufficient to satisfy the test of Calder,
supra,
465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804. [FN7] And several cases have held that alleged
trademark infringement on an Internet Web site cannot alone, under Calder, establish minimum contacts with the forum in which the
trademark's owner resides. [FN8]
FN6. E.g., Asahi
Metal Industry Co. v. Superior Court
(1987) 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (Asahi
Metal Industry Co.) (placing product into stream of commerce does not create
minimum contact with every state to which product may foreseeably travel); World-Wide
Volkswagen, supra,
444 U.S. 286, 298, 100 S.Ct. 559, 62 L.Ed.2d 490
(mere foreseeability that vehicle sold by wholesale and retail dealers serving
New York City metropolitan area would be taken to another state, such as
Oklahoma, did not create dealers' minimum contacts with Oklahoma for products
liability suit arising from Oklahoma accident);
Noonan
v. Winston Co.
(1st Cir.1998) 135 F.3d 85, 90-92 (French
publisher's knowledge that copies of its magazine, containing offensive photo
of Massachusetts resident, might reach that
state is insufficient to satisfy Calder
); see also Sibley,
supra,
16 Cal.3d 442, 445-446, 128 Cal.Rptr. 34, 546 P.2d 322.
FN7. See, e.g., IMO,
supra,
155 F.3d 254, 260-268 (the defendant German
corporation's activities, outside New Jersey, which allegedly interfered with
New Jersey-based company's efforts to sell its Italian subsidiary did not
create minimum contacts between the defendant and New Jersey despite the
defendant's knowledge that the plaintiff was headquartered there); ESAB
Group, Inc. v. Centricut, Inc.
(4th Cir.1997) 126 F.3d 617, 625-626 (scheme,
carried out in New Hampshire and Florida, at behest of defendant New Hampshire
manufacturer, to procure, disclose, and use trade secrets and customer lists of
the plaintiff, a South Carolina competitor, did not create minimum contacts
with South Carolina despite the defendant's presumed intent to affect the
plaintiff's business); Hicklin
Engineering, Inc. v. Aidco, Inc.
(8th Cir.1992) 959 F.2d 738, 739 (actions by
Michigan manufacturer, taken outside Iowa, to injure general business of Iowa
competitor, did not create minimum contacts with Iowa).
FN8. E.g., Cybersell,
supra,
130 F.3d 414, 418-420; Bensusan
Restaurant Corp., supra,
937 F.Supp. 295, 299-300; but see Inset
Systems, Inc., supra,
937 F.Supp. 161, 164-165 (Massachusetts defendant
directed its activities toward all states, including Connecticut, by
advertising via Internet and toll-free telephone number; hence, Connecticut jurisdiction was proper
for suit by Connecticut firm alleging that the defendant's Web site domain name
infringed the plaintiff's trademark).
*294 Nonetheless, I believe that the
unusual and unprecedented facts of this case demonstrate purposeful activity
directed toward this forum sufficient to establish minimum contacts under the Calder test. As a result
of his actions, defendant Pavlovich should reasonably have anticipated being
haled into court in this state, and recognition of California's jurisdiction
thus meets constitutional standards of fairness.
The posting of the DeCSS source code on
Pavlovich's LiVid Web site was done with the specific goal of negating,
by illegal means, the licensed CSS technology Pavlovich knew had been jointly
developed by the movie and **24 DVD industries for their mutual
protection. Pavlovich's immediate aim,
he acknowledged, was to promote development of alternative DVD playback systems
not dependent on CSS licensure. However, he also knew CSS was intended to
afford crucial copyright protection to DVD movies. He has denied any personal desire to pirate
movies, or to encourage others to do so.
But by deciding to display the DeCSS source code without restriction on
the universally accessible Web site, Pavlovich offered visitors to the site the
patent opportunity to exploit this information as they chose.
By taking this calculated action, Pavlovich
thus not only foresaw, but must have intended, the natural and probable
consequences he knew would befall the affected industries. These consequences included both the
competitive injury Pavlovich admitted he intended to inflict upon the DVD
industry, which is substantially present in California, and the loss of
copyright protection to the movie industry he knew is primarily associated with
this state.
This lawsuit, brought by the agent of these
affected industries, seeks to forestall just such damage by enjoining
Pavlovich, and other members of his network, from continuing to display the
DeCSS source code on their Web sites. (Civ.Code,
§ 3426.2, subd. (a).) For purposes of
such an action, it is irrelevant whether Pavlovich himself exploited DeCSS for
commercial benefit. The instant suit is predicated on the inherent harm to
California-centered industries caused by Pavlovich's intentional, knowing, and
allegedly improper ***356 "[d]isclosure" of their trade
secret. (Id., § 3426.1, subd. (b)(2).) Pavlovich knew he was targeting those
industries when he acted. He proceeded despite
his assumption that DeCSS was likely "illegal." He thus had every reason to expect--indeed,
he effectively invited--responsive litigation.
For purposes of this particular action,
therefore, he established sufficient connection with this state that he must
"reasonably anticipate" being haled into a California court to account for his conduct. *295(World-Wide
Volkswagen, supra,
444 U.S. 286, 297, 100 S.Ct. 559; see Burger
King, supra,
471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528.) Because of the minimum contacts he forged by
his intentional conduct directed toward this state, maintenance of a related
suit against him in this forum does not offend traditional notions of fair play
and substantial justice. (Calder,
supra,
465 U.S. 783, 787-788, 104 S.Ct. 1482, 79 L.Ed.2d 804; see Internat.
Shoe Co., supra,
326 U.S. 310, 316, 320, 66 S.Ct. 154, 90 L.Ed. 95; see also Integral
Development Corp., supra,
99 Cal.App.4th 576, 587, 122 Cal.Rptr.2d 24
[suggesting that, even absent prior employer-employee relationship, California
suit by California corporation against resident of Germany for misappropriation
of trade secrets would be proper under Calder on basis that defendant directed his intentional tortious
conduct toward a known forum resident].) [FN9]
FN9. The majority reject Janmark,
Inc. v. Reidy
(7th Cir.1997) 132 F.3d 1200, deeming it the only
federal decision that would support jurisdiction over Pavlovich, because, they
conclude, it stands for the unpersuasive notion that jurisdiction over an
intentional tort is always proper where the injury, or at least foreseeable
injury, occurred. In Janmark, a California manufacturer of minishopping carts was sued
in Illinois by an Illinois competitor.
The plaintiff alleged that when it refused to participate in the
defendant's cartel scheme, the defendant retaliated by inducing a New Jersey
customer to cancel an order for the plaintiff's carts. The court of appeals found jurisdiction
proper on grounds that the alleged tort was not complete until the customer
cancelled the order; accordingly, the
court ruled, "the injury and thus the tort occurred in Illinois" for
purposes of that state's long-arm statute. (Id.
at p. 1202.)
Whatever the merits of this reasoning, the court additionally noted,
without extended discussion, that Illinois jurisdiction also satisfied the Calder test. I pass no
final judgment on Janmark, but I do not believe it stands for so broad or
unsupportable a proposition as the majority contend. The plaintiff in Janmark posited a scenario in which the defendant, who knew the
plaintiff's identity and Illinois location, attempted to obtain the plaintiff's
cooperation in a monopolistic scheme, and,
when that effort failed, took revenge by acting for the express purpose of
causing commercial injury to the plaintiff.
I do not find this fact pattern lacking in Calder
's requirement of particularized "
'knowledge and intent in committing the tortious activity' " (maj. opn., ante,
127 Cal.Rptr.2d at p. 337, 58 P.3d at p. 9, quoting IMO,
supra,
155 F.3d 254, 264), nor do I construe Janmark as permitting jurisdiction based solely on mere "
'[f]oreseeability of causing injury in another State' " (maj. opn.,
ante, 127 Cal.Rptr.2d at p. 338, 58 P.3d at p. 9, quoting Burger
King, supra,
471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528,
original italics omitted).
**25 I see no reason why the result
should differ simply because Pavlovich targeted entire industries within the
forum, rather than a single individual or business. The majority suggest there is no case
"where a court exercised jurisdiction under the effects test based solely
on the defendant's knowledge of industry-wide effects in the forum
state." (Maj. opn., ante,
127 Cal.Rptr.2d at p. 342, 58 P.3d at p. 12.)
By the same token, however, no decision has held that the defendant's
efforts to target an entire industry cannot form a basis for specific
personal jurisdiction. Jurisdiction is
appropriate under Calder whenever a foreign defendant expressly aimed injurious actions toward the forum, with
the intent and understanding that the brunt of ***357 the harm would be
felt there. (Calder,
supra,
465 U.S. 783, 788-790, 104 S.Ct. 1482, 79 L.Ed.2d 804.) While targeting of
an individual forum resident certainly meets that test, the aiming is no less *296
specific, and jurisdiction no less proper, when the effort is directed, with
equal purpose and precision, at one or more entire industries located there.
Pavlovich insists he did not aim at California
in particular, because movie and computer companies exist throughout the nation
and world. Moreover, he asserts, we may
not assume large companies, with widely dispersed interests and operations,
suffer the "brunt of the harm" in California simply because they are
headquartered here.
Some cases have suggested that "a corporation
'does not [necessarily] suffer harm in a particular geographic location in the
same sense that an individual does.' "
(Cybersell,
supra,
130 F.3d 414, 420, quoting Core-Vent,
supra,
11 F.3d 1482, 1486; see also IMO,
supra,
155 F.3d 254, 262-263, and cases cited.) But other decisions have implicitly rejected
the argument that, for purposes of Calder, acts intended to harm a corporation cannot be said to be
directed at any particular place. (Core-Vent,
supra,
at p. 1487.)
Calder "does not preclude a determination that a corporation
suffers the brunt of harm in its principal
place of business." (Panavision,
supra,
141 F.3d 1316, 1322, fn. 2; see Core-Vent,
supra,
11 F.3d 1482, 1487.) It seems reasonable that, for purposes of
litigation arising from tortious conduct purposefully directed against the
general commercial interests of particular business enterprises, those
businesses may be deemed to have suffered the "brunt of the harm,"
and the actor may reasonably anticipate suit, in the state where he or she knew
they maintained their principal places of business. (Panavision,
supra,
at p. 1322, fn. 2.) [FN10]
FN10. In any event,
where minimum contacts are otherwise present, it may not be necessary
that the "brunt of the harm" was suffered in the forum. In Keeton,
supra,
465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790, the
high court allowed a New Hampshire defamation action against a national
magazine with circulation in that state, even though the plaintiff was a
resident of New York, and it was "undoubtedly true that the bulk of the
harm done to [the plaintiff] occurred outside [the forum]." (Id.
at p. 780.)
Nor, in my view, is it fatal that individual
members of the industries Pavlovich targeted are not based exclusively
within California. When, as here, one purposefully directs injurious conduct
against entire industries, with actual knowledge that they are primarily
or substantially present in a particular forum, his contacts with that
state are no more attenuated, random, or fortuitous, than if, by unusual
happenstance, they were solely concentrated there. The actor must reasonably anticipate that
litigation generated by his intentional conduct will originate in a forum where,
as he knows, the industry or industries he sought to injure are primarily or
substantially located. Otherwise, one who acted from a remote location against
an entire multistate or multinational industry, as opposed to a single
enterprise, could *297 rest secure that he was immune from suit in every
jurisdiction where members of that industry were located.
Indeed, that is the unfortunate result, and
the glaring flaw, of the majority's holding.
Under the majority's rule, the California-centered industries directly
targeted by Pavlovich and his numerous Internet colleagues have no recourse for
their alleged injury but to pursue a multiplicity of individual suits against
each defendant in his or her separate domicile. Nothing in the basic principles
of long-arm ***358 jurisdiction compels such an illogical **26
and unfair outcome. I therefore conclude
that Pavlovich purposefully established minimum contacts with California
sufficient to permit litigation related to those contacts to proceed against
him here.
Of
course, "[o]nce it has been decided that a defendant purposefully
established minimum contacts within the forum State, these contacts [must] be
considered in light of other factors to determine whether the assertion of
personal jurisdiction would comport with 'fair play and substantial justice.'
[Citations.] Thus courts in 'appropriate
case[s]' may evaluate 'the burden on the defendant,' 'the forum [s]tate's
interest in adjudicating the dispute,' 'the plaintiff's interest in obtaining
convenient and effective relief,' 'the interstate judicial system's interest in
obtaining the most efficient resolution of controversies,' and the 'shared
interests of the several [s]tates in furthering fundamental substantive social
policies.' [Citations.]" (Burger
King, supra,
471 U.S. 462, 476-477, 105 S.Ct. 2174, 85 L.Ed.2d 528; see also Asahi
Metal Industry Co., supra,
480 U.S. 102, 113, 107 S.Ct. 1026, 94 L.Ed.2d 92; World-Wide
Volkswagen, supra,
444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490.)
"These considerations sometimes serve to
establish the reasonableness of jurisdiction upon a lesser showing of
minimum contacts than would otherwise be required. [Citations.]" (Burger
King, supra,
471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528,
italics added.) Moreover, "where a
defendant who purposefully has directed his activities at forum residents seeks
to defeat jurisdiction, he must present a compelling case that the
presence of some other considerations would
render jurisdiction unreasonable." (Ibid., italics added.)
Though Pavlovich argues otherwise, he has
failed to make such a compelling case here.
On the contrary, as the Court of Appeal concluded, the factors bearing
on the overall reasonableness of California jurisdiction weigh strongly on the
side of such jurisdiction.
The first of these factors, the burden on the
defendant, favors Pavlovich the most, since he would presumably be required to
travel from his current home in Texas to defend the suit. We cannot discount the significant time,
expense, and inconvenience this may entail.
*298 But such concerns are present
whenever jurisdiction away from the defendant's residence is at issue. Here, the travel required is domestic, not
international, and Pavlovich is not disadvantaged by the alien judicial system
of a foreign nation. (Compare, e.g., Asahi
Metal Industry Co., supra,
480 U.S. 102, 114, 107 S.Ct. 1026, 94 L.Ed.2d 92; Core-Vent,
supra,
11 F.3d 1482, 1489.) The distance between Texas and California is
not extreme under modern conditions.
Pavlovich cites his youth and represents in his brief that his current
income is relatively low, but he does not otherwise suggest any unusual
hardship.
Moreover, as indicated above, Pavlovich
assumed the DeCSS source code was an illegal
infringement of the licensed CSS technology, yet a decision was made to post it
on the LiVid Web site anyway. Pavlovich
thus had reason to anticipate a responsive lawsuit from somewhere. According to his deposition, he has already
voluntarily appeared outside his home state as an expert witness in related
litigation. Thus, the burden is not
constitutionally unreasonable in this case.
On the other hand, the interests of the
plaintiff, the forum, and the interstate judicial system all strongly favor
jurisdiction in this state. For several
reasons, California is a logical forum for convenient, efficient, and effective
relief. The industries affected by
Pavlovich's conduct are centered ***359 or substantially present here. Their licensing agent DVD CCA, the plaintiff
in this suit, has its headquarters here.
As indicated above, California has a natural interest, reflected by the
reach of its long-arm statute, in redressing the effects of an act within its
territory, even though the act was done elsewhere. (See ante, 127 Cal.Rptr.2d at p. 338,
58 P.3d at p. 9.) California has also
evidenced a more specific interest in the type of injury at issue here. California's adoption of the Uniform Trade
Secrets Act (Civ.Code,
§ 3426 et
seq.) reflects both its common concern with regulating trade secret
infringements and its special interest in providing effective remedies **27
for such infringements committed against its own residents.
Finally, and importantly, both DVD CCA and the
interstate judicial system have a strong interest in efficient resolution of
DVD CCA's dispute, involving common issues of fact and law, with all of
the many defendants named in its complaint.
That interest is not served by requiring DVD CCA to pursue individual
defendants in separate fora, if a single suit in one fair and logical forum is
possible. For the reasons already
stated, California is such a forum in this case. In fact, I submit, California's specific
interests, reinforced by the interest in efficient dispute resolution, are so
strong here that "the reasonableness of [California] jurisdiction [may be
established] upon a lesser showing of minimum contacts than would otherwise be
required." (Burger
King, supra,
471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528.)
For these reasons, I *299 am amply persuaded that California's assertion
of personal jurisdiction over Pavlovich, for purposes of this specific
litigation, is constitutionally fair and reasonable. [FN11]
FN11. To the extent
it is relevant to consider whether California jurisdiction would conflict with
the competing sovereign interest of another forum, particularly the defendant's
state of residence (see, e.g., Core-Vent,
supra,
11 F.3d 1482, 1487), Pavlovich identifies no
specific interest of Texas in this
litigation that might create such a conflict, and I am aware of none. Pavlovich concedes that this factor has
little if any weight in his favor.
Though the majority imply otherwise, the
result I propose does not signal a broad new rule that California jurisdiction
is proper over any foreign defendant who causes foreseeable effects in this
state. On the contrary, I base my
conclusions on the specific facts of this case.
These facts indicate that defendant Pavlovich engaged in intentional
conduct purposefully targeted at interests he knew were centered or
substantially present in California, with knowledge they would suffer harm
here, such that he must reasonably have anticipated being called to account in
this state. Pavlovich thus forged
minimum contacts with California, and it is otherwise fair and reasonable to
assert personal jurisdiction over him here for purposes of related litigation.
For these reasons, and these reasons alone, I conclude that his motion to quash
was properly denied.
I would affirm the judgment of the Court of
Appeal.
WE CONCUR:
GEORGE, C.J., and CHIN, J.
For California Supreme Court Briefs See: 2002
WL 984915 (Appellate Brief), PETITIONER'S OPENING BRIEF ON THE MERITS,
(January 16, 2002)
For California Supreme Court Briefs See: 2002
WL 985003 (Appellate Brief), REAL PARTY IN
INTEREST DVD COPY CONTROL ASSOCIATION'S BRIEF ON THE MERITS, (February 14,
2002)
For California Supreme Court Briefs See: 2002
WL 985010 (Appellate Brief), PETITIONER'S REPLY
BRIEF ON THE MERITS, (March 26, 2002)
29 Cal.4th 262, 58 P.3d 2, 127 Cal.Rptr.2d
329, 2003 Copr.L.Dec. P 28,543, 65 U.S.P.Q.2d 1422, 02 Cal. Daily Op. Serv.
11,383, 2002 Daily Journal D.A.R. 13,223
END OF
DOCUMENT