By Eric Auchard
A U.S. appeals court declined to intervene on Thursday on behalf of Yahoo Inc. , the world's largest Internet media company, saying U.S. courts have no jurisdiction in a case pitting free speech against a French law barring the sale of Nazi memorabilia.
In a case that pitted U.S. freedom of speech rights against European anti-hate group statutes, the U.S. 9th Circuit Court of Appeals reversed a lower court ruling that had rejected French plaintiffs attempts to enforce French laws against U.S. companies in U.S. courts.
In a mixed decision, an 11-judge panel said that because Yahoo had voluntarily complied "in large measure" with the French court's orders and barred the sale of Nazi memorabilia from its site in France, Yahoo's free speech petition has become a moot issue.
"Unless and until Yahoo changes its policy again, and thereby more clearly violates the French court's orders, it is unclear how much is now actually in dispute," the court's majority said.
A Yahoo attorney said the Sunnyvale, California-based company was aware of the decision and formulating a response.
"The only precedent is that when foreign plaintiffs try to impose censorship on U.S.-based Web sites, U.S. courts have jurisdiction," said Mary Catherine Wirth, Yahoo's former senior international legal counsel, now director of data protection.
The lower U.S. court previously had declared as unenforceable a French court action against Yahoo by two French anti-Nazi groups, La Ligue Contre Le Racisme et L'Antisemitisme (LICRA) and L'Union des Etuidiants Juifs de France (UEJF).
A U.S. district court initially sided with Yahoo in arguing that the French court's decision to require Yahoo to restrict access to hate group Web pages on Yahoo's global auctions site violated U.S. free speech principles.
When a three-judge panel of the higher-ranking 9th Circuit looked at the case in 2004, the decision was reversed.
The legal fight kicked off when a French court ruled in 2000 that Yahoo must remove pages that contained links to Adolph Hitler's autobiography Mein Kampf, the fabricated anti-Jewish tract "Protocols of the Elders of Zion" and to Web sites that denied the existence of Hitler's Holocaust.
The French court said Yahoo was liable to pay daily fines, which, if enforced over the five years since the ruling, would amount to $15 million for displaying hate-group memorabilia.
In the latest ruling, the 9th Circuit said that because Yahoo had largely complied with the French court's order by limiting the sale of some hate-group memorabilia on its auction site, "It is extremely unlikely that any penalty, if assessed, could ever be enforced against Yahoo! in the United States.
"Further, First Amendment harm may not exist at all," the court's majority opinion stated, referring to the basic U.S. law protecting free speech rights.
A concurring opinion written by a minority of the appeals court noted that "criminal statutes of most nations do not comport with the U.S. Constitution. That does not give judges in this country the unfettered authority to pass critical judgment on their validity," even in cases deemed to involve "morally reprehensible speech of the worst order."
Susan Crawford, a law professor who teaches a course on cyberlaw at Cardozo School of Law in New York, labeled the decision a "missed opportunity" to decide whether "it is appropriate for one country to assert extraterritorial jurisdiction over (Web) servers located in another country."
"The facts in this case allowed the court to avoid the difficult diplomatic issues raised by the dispute," she said.
(Additional reporting by Jim Christie in San Francisco)
Copyright 2006 Reuters Limited.
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