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1
Filed 11/25/02
IN THE SUPREME COURT OF CALIFORNIA
MATTHEW PAVLOVICH,
)
)
Petitioner,
)
)
S100809
v.
)
) Ct.App.
6
H021961
THE SUPERIOR COURT OF SANTA
)
CLARA COUNTY,
)
)
Santa Clara County
Respondent;
)
Super. Ct. No. CV786804
)
DVD COPY CONTROL ASSOCIATION, )
INC.,
)
)
Real Party in Interest.
)
___________________________________ )
"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.) "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.) On the Web, "documents, commonly known as Web
`pages,' are . . . prevalent." (
Ibid.
) These pages are located at Web sites and have
Page 2
2
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.)
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.
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
Page 3
3
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 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
Page 4
4
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.
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 . . . ." 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 (
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 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.
Page 5
5
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
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 (
Vons
), quoting
Internat. Shoe Co. v. Washington
(1945) 326
U.S. 310, 316 (
Internat. Shoe
).)
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, quoting
Internat. Shoe
,
supra
, 326 U.S. at pp. 316-317, 319.) "[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, quoting
Hanson v. Denckla
(1958) 357 U.S. 235, 246
(
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, quoting
Estin v. Estin
(1948) 334 U.S. 541, 545.)
In making this determination, courts have identified two ways to establish
personal jurisdiction. "Personal jurisdiction may be either general or specific."
(
Vons
,
supra
, 14 Cal.4th at p. 445.) In this case, DVD CCA does not contend that
Page 6
6
general jurisdiction exists. We therefore need only consider whether specific
jurisdiction exists.
When determining whether specific jurisdiction exists, courts consider the
" `relationship among the defendant, the forum, and the litigation.' "
(
Helicopteros Nacionales de Colombia v. Hall
(1984) 466 U.S. 408, 414, quoting
Shaffer v. Heitner
(1977) 433 U.S. 186, 204.) 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); (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);
and (3) " `the assertion of personal jurisdiction would comport with "fair play and
substantial justice" ' " (
Vons
,
supra
, 14 Cal.4th at p. 447, quoting
Burger King
Corp. v. Rudzewicz
(1985) 471 U.S. 462, 472-473 (
Burger King
)).
"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 (
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.) "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
Page 7
7
connection with the state." (
World-Wide Volkswagen Corp. v. Woodson
(1980)
444 U.S. 286, 297 (
World-Wide Volkswagen
).)
In the defamation contest, 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 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.)
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.) The court
found jurisdiction proper because "California [was] the focal point both of the
story and of the harm suffered." (
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, 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.)
Page 8
8
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
Swiss 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 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 has held
that, to meet the effects test, "the plaintiff must show that the defendant knew that
Page 9
9
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, 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 to the defendant's knowledge that his intentional conduct would cause
harm in the forum.
1
1
(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)
(footnote continued on next page)
Page 10
10
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 a New Jersey customer of plaintiff's 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
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.
(footnote continued from previous page)
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].)
Page 11
11
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
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.) 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.) 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
and its progeny
2
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.
3
2
(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 1 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
).)
3
(See, e.g.,
Sibley v. Superior Court
(1976) 16 Cal.3d 442, 446 ["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
(footnote continued on next page)
Page 12
12
We now consider whether Pavlovich's contacts with California meet the
effects test. "[T]he plaintiff has the initial burden of demonstrating facts justifying
the exercise of jurisdiction." (
Vons
,
supra
, 14 Cal.4th at p. 449.) 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 aimed his tortious conduct at or intentionally
targeted California.
(footnote continued from previous page)
Cal.App.4th 1750, 1762 [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 [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 (
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 [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
[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 [exercising jurisdiction based on the effects of the
defendant's tortious acts plus his other contacts with California].)
Page 13
13
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 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 Manufacturing 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,
Page 14
14
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, fn. omitted (
JDO
) [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." (
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 purposeful 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
Page 15
15
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.
4
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.
5
4
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.
5
(See, e.g.,
JDO
,
supra
, 72 Cal.App.4th at p. 1059 [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. W Publishing 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
(footnote continued on next page)
Page 16
16
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., 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.
First, Pavlovich's knowledge that DeCSS could be used to illegally pirate
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 [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 State.' " (
World-Wide
Volkswagen
,
supra
, 444 U.S. at p. 298, quoting
Hanson
,
supra
, 357 U.S. at p.
253.) "[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
(footnote continued from previous page)
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].)
Page 17
17
over that defendant. (
Wolfe
,
supra
, 217 Cal.App.3d at p. 547.) 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 (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 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)
Page 18
18
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 availment under the effects test.
6
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.
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
6
(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] [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].)
Page 19
19
because he
should have known
that his conduct
may
harm-not a California
plaintiff-but industries associated with that plaintiff. As a practical matter, such
a ruling makes foreseeability of harm the sole basis for jurisdiction in
contravention of controlling United States Supreme Court precedent. (See
Burger
King
,
supra
, 471 U.S. at p. 474.)
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.
7
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
7
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.
Page 20
20
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 may harm industries in California to
jurisdiction in California, we decline to do so.
8
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.
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.
8
We disapprove of
Nam Tai Electronics, Inc. v. Titzer
(2001) 93
Cal.App.4th 1301, to the extent it is contrary to our decision today.
Page 21
21
III
Accordingly, we reverse the judgment of the Court of Appeal and remand
for further proceedings consistent with this opinion.
BROWN, J.
WE CONCUR:
KENNARD,
J.
WERDEGAR,
J.
MORENO,
J.
Page 22
1
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
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 (
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
Page 23
2
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
]" (
World-Wide
Volkswagen Corp. v. Woodson
(1980) 444 U.S. 286, 297 (
World-Wide
Volkswagen
)) for litigation " `aris[ing] out of' " his forum-related conduct (
Vons
Companies, Inc. v. Seabest Foods, Inc.
(1996) 14 Cal.4th 434, 451 (
Vons
)).
Moreover, defendant has made no "compelling case" (
Burger King Corp. v.
Rudzewicz
(1985) 471 U.S. 462, 477 (
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, quoting
Internat. Shoe
Co. v. Washington
(1945) 326 U.S. 310, 320 (
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)
strongly favors 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.
Page 24
3
F
ACTS
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 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 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" 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
Page 25
4
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 Pavlovich's
depositions. Much is fiercely disputed between the parties, but the record
Page 26
5
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.
1
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
1
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.
Page 27
6
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 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, 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."
Page 28
7
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.
2
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 to any other playback format he or she wishes.
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 the production of DVD player
components such as "video boards" or "DVD boards," and that "a lot" of hardware
manufacturers are located in California.
2
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.)
Page 29
8
In a brief order, the trial court denied the motion, citing
Calder
,
supra
,
465 U.S. 783, and a Ninth Circuit 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;
Page 30
9
(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.
D
ISCUSSION
The majority correctly state the broad principles. California may assert
personal jurisdiction over a foreign defendant on any basis consistent with 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." ' " (
Vons
,
supra
, 14 Cal.4th 434, 444,
quoting
Internat. Shoe Co.
,
supra
, 326 U.S. 310, 316; see
Burger King
,
supra
,
471 U.S. 462, 471-478.)
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;
Burger King
,
supra
, 471 U.S. 462, 471-472) and the mutual territorial
limits of coequal sovereigns in a federal system (
Vons
,
supra
, at p. 445; see
World-Wide Volkswagen
,
supra
, 444 U.S. 286, 292). 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, quoting
World-Wide Volkswagen
,
supra
, at p. 297.)
But the test of minimum contacts is necessarily flexible, and, as the
majority concede, subtle shades of grays predominate. (Maj. opn.,
ante
, at p. 5;
see
Kulko v. California Superior Court
(1978) 436 U.S. 84, 92 (
Kulko
).) "[T]he
question of jurisdiction cannot be answered by the application of precise formulas
or mechanical rules. Each case must be decided on its own facts." (
Integral
Development Corp. v. Weissenbach
(2002) 99 Cal.App.4th 576, 583 (
Integral
Page 31
10
Development Corp.
); see
Cornelison v. Chaney
(1976) 16 Cal.3d 143, 150
(
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; see also
Helicopteros Nacionales de Colombia v. Hall
(1984) 466 U.S. 408, 414;
Vons
,
supra
, 14 Cal.4th 434, 446.) 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), 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; see also
Keeton v. Hustler
Magazine, Inc.
(1984) 465 U.S. 770, 776 (
Keeton
);
McGee v. International Life
Ins. Co.
(1957) 355 U.S. 220, 223;
Vons
,
supra
, at p. 447.)
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
benefit and protection of its laws.
" (
Hanson v. Denckla
(1958) 357 U.S. 235, 253,
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.
Page 32
11
Thus, in
Calder
,
supra
, 465 U.S. 783, 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.)
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.)
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' " (Cal. Judicial Council com., 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 (Cal. Judicial Council com., 14 West's Ann. Code Civ. Proc.,
supra
, foll.
§ 410.10, p. 473; cf.,
Sibley v. Superior Court
(1976) 16 Cal.3d 442, 446 (
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]).
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;
Keeton
,
supra
, 465 U.S. 770, 774.) 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
Page 33
12
residents, " `
that he should reasonably anticipate being haled into court there
' "
for related litigation. (
Burger King
,
supra
, at p. 474, quoting
World-Wide
Volkswagen
,
supra
, 444 U.S. 286, 297, 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.) 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 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
Page 34
13
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; cf.
Floveyor Internat., Ltd
.
v.
Superior Court
(1997) 59 Cal.App.4th 789, 793-794.)
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 [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; cf.
Gleaves v. Waters
(1985) 175 Cal.App.3d 413, 417 [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.
3
Pavlovich, a technical expert in this area, knew CSS
3
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
(footnote continued on next page)
Page 35
14
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. 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.
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.
Accordingly, the necessary minimum contacts required by
Calder
,
supra
,
465 U.S. 783, 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.
(footnote continued from previous page)
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.
Page 36
15
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 [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 [significant regular circulation of nationwide magazine in
Page 37
16
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 Internet Web sites, then
solicited payoff to relinquish domain names];
Indianapolis Colts, Inc. v. Metro.
Baltimore Football
(7th Cir. 1994) 34 F.3d 410, 411-412 (
Indianapolis Colts, Inc.
)
[in Indiana trademark infringement suit by former Baltimore (now Indianapolis)
Colts of National 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
(
CompuServe
) [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].)
4
4
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
, at p. 1, citing, for such a description
of the World Wide Web,
Reno v. American Civil Liberties Union
(1997) 521 U.S.
844, 849-852.) But the maintenance of a Web site that includes content intended
and expected to harm particular individuals, entities, or interests in specific places
(footnote continued on next page)
Page 38
17
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."
5
(footnote continued from previous page)
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).
5
(E.g.,
Jewish Defense Organization, Inc. v. Superior Court
(1999)
72 Cal.App.4th 1045 [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 Services, 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)
(footnote continued on next page)
Page 39
18
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,
italics added.) The
plaintiff
need not be the exact person or entity toward whom
the defendant's conduct was directed.
(footnote continued from previous page)
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 [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.)
Page 40
19
The facts of
Vons, supra
, 14 Cal.4th 434, 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.
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.) " `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, quoting
Cornelison
,
supra
, 16 Cal.3d 143, 148, 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 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
Page 41
20
reasonably anticipate a California lawsuit with respect to that subject. (
Vons
,
supra
, 14 Cal.4th 434, 456-460.)
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.) Because he
targeted the trade secrets of industries he 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.) As to the
motion picture
industry, the majority 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
Page 42
21
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.
6
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 resident, standing alone, is not
sufficient to satisfy the test of
Calder
,
supra
, 465 U.S. 783.
7
And several cases
6
E.g.,
Asahi Metal Industry Co. v. Superior Court
(1987) 480 U.S. 102, 112
(
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 (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.
7
See, e.g.,
IMO
,
supra
, 155 F.3d 254, 260-268 (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 defendant and New Jersey despite defendant's
knowledge that 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).
Page 43
22
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.
8
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 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.
8
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 defendant's Web site domain name infringed plaintiff's trademark).
Page 44
23
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 "[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. (
World-Wide Volkswagen
,
supra
,
444 U.S. 286, 297; see
Burger King
,
supra
, 471 U.S. 462, 474.) 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; see
Internat. Shoe Co.
,
supra
, 326 U.S. 310, 316, 320; see also
Integral
Development Corp.
,
supra
, 99 Cal.App.4th 576, 587 [suggesting that, even absent
prior employer-employee relationship, California suit by California corporation
Page 45
24
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].)
9
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
, at p. 18.) By the same
token, however, no decision has held that the defendant's efforts to target an entire
9
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 mini-
shopping 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
, at p. 11, quoting
IMO
,
supra
, 155 F.3d 254, 264), nor do I construe
Janmark
as permitting jurisdiction based solely on mere " `foreseeability of
causing injury in another State' " (maj. opn.,
ante
, at p. 11, quoting
Burger King
,
supra
, 471 U.S. 462, 474, original italics omitted).
Page 46
25
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 the
harm would be felt there. (
Calder
,
supra
, 465 U.S. 783, 788-790.) While
targeting of an individual forum resident certainly meets that test, the aiming is no
less 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
Page 47
26
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.)
10
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 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 jurisdiction compels such an illogical and unfair outcome. I therefore
conclude that Pavlovich purposefully established minimum contacts with
10
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, 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.)
Page 48
27
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; see also
Asahi Metal Industry Co.
,
supra
, 480 U.S. 102, 113;
World-Wide Volkswagen
,
supra
, 444 U.S. 286, 292.)
"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, 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
Page 49
28
Texas to defend the suit. We cannot discount the significant time, expense, and
inconvenience this may entail.
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;
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 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
, p. 11.) 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.)
Page 50
29
reflects both its common concern with regulating trade secret infringements and its
special interest in providing effective remedies 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 that
would otherwise be required." (
Burger King
,
supra
, 471 U.S. 462, 477.) For
these reasons, I am amply persuaded that California's assertion of personal
jurisdiction over Pavlovich, for purposes of this specific litigation, is
constitutionally fair and reasonable.
11
11
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.
Page 51
30
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.
BAXTER, J.
WE CONCUR:
GEORGE, C.J.
CHIN, J.
Page 52
1
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion
Pavlovich v. Superior Court
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted
XXX 91 Cal.App.4th 409
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S100809
Date Filed:
November 25, 2002
__________________________________________________________________________________
Court:
Superior
County:
Santa Clara
Judge:
William J. Elfving
__________________________________________________________________________________
Attorneys for Appellant:
Ornah Levy; Huber Samuelson; HS Law Group; Hopkins & Carley, Arthur V. Plank and Allonn E. Levy
for Petitioner.
Richard S. Wiebe for the Computer & Communications Industry Association and the Student Press Law
Center as Amicus 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.
__________________________________________________________________________________
Attorneys for Respondent:
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.
Page 53
2
Counsel who argued in Supreme Court (not intended for publication with opinion):
Allonn E. Levy
Hopkins & Carley
70 S. First Street
San Jose, CA 95113
(408) 286-9800
Gregory S. Coleman
Weil, Gotshal & Manges
8911 Cap. of Tx Hwy, Suite 4140
Austin, TX 78759
(512) 349-1930