US court thumbs its nose at Supreme Court of Canada: Google v Equustek

November 19th, 2017 by Barry Sookman Leave a reply »

A court in the Northern District of California in Google LLC v. Equustek Solutions Inc. 2017 WL 5000834 (Nov 2, 2017) issued an order earlier this month enjoining Equustek from enforcing the global de-indexing order it obtained against Google in a British Columbia court. This was an order that was given great scrutiny and which was affirmed by the Supreme Court of Canada in Google Inc. v. Equustek Solutions Inc., 2017 SCC 34 (summarized here).

There are very good reasons to believe the decision of the US court, which was made in default of any appearance by Equustek, was wrongly decided. First, it misconstrues the scope of s230 of the CDA. This section does not apply to prevent the enforcement of court orders like the order affirmed by the Supreme Court of Canada (the “Equustek Order”) that impose no liability on the provider. It is also only an affirmative defense; not a sword that can be used to obtain declaratory relief against a person that has made no claim against the provider.

Second, and more importantly, the U.S. District Court order (the “Google Order”) abrogated a fundamental principle of international law by failing to subject the Equustek Order to traditional principles that govern the enforcement of foreign judgments demanded by principles of private international law and international comity. Civilized countries including Canada and the U.S. generally will show respect for orders made by each others’ courts as a matter of international comity. They do this by enforcing orders made by those courts unless certain vitiating factors are present. Examples including a failure of natural justice, fraud, lack of jurisdiction, or public policy. The California court – as a matter of basic respect for our courts – should have scrutinized the Equustek Order and made a determination as to whether to enforce it in accordance with established principles. By not doing this the California court not only made a major mistake in rendering its decision. It thereby also thumbed its nose at our highest court and created what should be viewed as an international incident.

The decision sets an unfortunate precedent. Google and other large U.S. social media companies operate global platforms. While their operations are global, they often seek, as in this case, to have only the laws of the U.S. apply to their businesses. They want all the benefits of carrying on business in Canada and around the world, but want to insulate themselves from liability under local laws. This is especially problematic given the increasing dominance and global reach of these large enterprises in the face of the expanding attempts of local courts and local laws to impose responsibilities on these social media giants to protect their citizens. This is something that Canada should seek to address in the new NAFTA chapter on e-commerce.

Background to the Equustek Order

I summarized the facts in the Equustek case as follows:

The decision arose from a lower court decision that ordered Google to block websites that were selling goods that violated the trade secrets of the plaintiffs. The plaintiffs obtained a default order against the defendants. But, the defendants continued to sell the offending goods over the Internet. The plaintiffs, unable to enforce their order, asked for Google’s help in blocking the websites. Google voluntarily de-indexed specific URL’s requested by the plaintiffs, but this “whac-a-mole” process was ineffective. When Google refused to de-index the offending websites from its search results, the plaintiffs brought a motion against Google for interim relief requiring Google to de-index the websites from all of its search engines worldwide.

Over Google’s objections, in Equustek Solutions Inc. v. Jack 2014 BCSC 1063 Madam Justice Fenlon of the British Columbia Supreme Court granted the injunction. Google subsequently applied for leave to appeal the decision to the British Columbia Court of Appeal and for an order staying the enforcement of the order. In Equustek Solutions Inc. v. Google Inc., 2014 BCCA 295, the court granted Google leave to appeal the decision but refused Google’s application to stay enforcement of the injunction order. Google’s appeal was later dismissed by the Court of Appeal in Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265.

The Supreme Court of Canada, in a seven to two majority decision written by Justice Abella, affirmed the decisions below.

The Google Order

After losing in the Supreme Court of Canada, Google brought an action against Equustek and others to prevent enforcement of the Equustek Order. Google moved for a preliminary injunction to prevent the enforcement of the order even though Equustek never threatened to enforce the order in the US. The preliminary injunction (Google Order) was granted by District Court Judge Edward Davila.

Google argued that the Canadian order was unenforceable in the U.S. because it directly conflicted with the First Amendment, disregarded the Communication Decency Act‘s (CDA) immunity for interactive service providers, and violated principles of international comity. The court granted the injunction solely relying on the provisions of the CDA. It made no findings on the other possible basis for enforcing the injunction order.

Section 230 of the CDA states the following:

Protection for “Good Samaritan” blocking and screening of offensive material

(1) Treatment of publisher or speaker

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

(2) Civil liability

No provider or user of an interactive computer service shall be held liable on account of–

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or

(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).

 The CDA also expressly states thatNothing in this section shall be construed to limit or expand any law pertaining to intellectual property” and that “Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”

The California court’s reasons for finding that Google had a likelihood of success on the merits was expressed as follows:

Section 230 of the Communications Decency Act “immunizes providers of interactive computer services against liability arising from content created by third parties…

To qualify for Section 230 immunity, Google must show that (1) it is a “provider or user of an interactive computer service,” (2) the information in question was “provided by another information content provider,” and (3) the Canadian order would hold it liable as the “publisher or speaker” of that information…

The court held that Google met the first two elements of the test. The court held that the third element was met for the following reason…

Third, the Canadian order would hold Google liable as the “publisher or speaker” of the information on Datalink’s websites. The Supreme Court of Canada ordered Google to “de-index the Datalink websites” from its global search results because, in the Court’s view, Google is “the determinative player in allowing the harm to occur” to Equustek. Compl. Ex. B ¶¶ 49, 53. The Ninth Circuit has held that, regardless of the underlying cause of action, a claim treats an intermediary as a publisher when it requires the intermediary to remove third-party content. Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1103 (9th Cir. 2009). The Barnes panel held that “removing content is something publishers do, and to impose liability on the basis of such conduct necessarily involves treating the liable party as a publisher of the content it failed to remove.” Id. at 1103. The Canadian order treats Google as a publisher because the order would impose liability for failing to remove third-party content from its search results.

As noted above, there are two good reasons for believing the Google Order is flawed:

  • It misconstrues the scope of s230 of the CDA. It does not apply to prevent the enforcement of court orders like the Equustek Order that impose no liability on the provider. It is also only an affirmative defense; not a sword that can be used to obtain declaratory relief against a person that has made no claim against the provider.
  • It is inconsistent with well-established U.S. principles governing enforcement of foreign orders and the principle of private international law including the principle of international comity.

The CDA does not provide a basis for refusing to enforce the Equustek Order

The only case relied upon by the California court for the legal proposition that the CDA gave Google immunity from the Equustek Order is Barnes v Yahoo. But, that case was a much different case. In Barnes, the plaintiff brought an action in state court against Yahoo for its failure to remove indecent profiles of the plaintiff posted on Yahoo’s website by the plaintiff’s former boyfriend. The complaint against Yahoo was premised on the negligent provision or non-provision of services which Yahoo undertook to provide, a form of negligence referred to as “negligent undertaking.” Barnes’ claim also sounded in breach of contract.

The court found that Yahoo could rely on the CDA. However, the opinion rejected the contention that Section 230 of the CDA grants a general immunity against any liability deriving from third party content.

Section 230(c) Looking at the text, it appears clear that neither this subsection nor any other declares a general immunity from liability deriving from third-party content, as Yahoo argues it does. “Subsection (c)(1) does not mention ‘immunity’ or any synonym.” Chi. Lawyers’ Comm. for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F.3d 666, 669 (7th Cir.2008). Our recent en banc decision in Fair Housing Council of San Fernando Valley v. Roommates.Com, LLC, rested not on broad statements of immunity but rather on a careful exegesis of the statutory language. 521 F.3d 1157, 1171 (9th Cir.2008) (en banc) (noting that to “provid[e] immunity every time a website uses data initially obtained from third parties would eviscerate [the statute]”2).

After canvassing the text of the Section, the court further held that the CDA only provides immunity from causes of action that would create liability from claims that arise from the provider being a publisher of information.

Following this approach, one notices that subsection (c)(1), which after all is captioned “Treatment of publisher or speaker,” precludes liability only by means of a definition. “No provider or user of an interactive computer service,” it says, “shall be treated as the publisher or speaker of any information provided by another information content provider.” § 230(c)(1)(emphasis added). Subsection 230(e)(3) makes explicit the relevance of this definition, for it cautions that “[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”3 Bringing these two subsections together, it appears that subsection (c)(1) only protects from liability (1) a provider or user of an interactive computer service (2) whom a plaintiff seeks to treat, under a state law cause of action,4 as a publisher or speaker (3) of information provided by another information content provider.

Thus, what matters is not the name of the cause of action—defamation versus negligence versus intentional infliction of emotional distress—what matters is whether the cause of action inherently requires the court to treat the defendant as the “publisher or speaker” of content provided by another. To put it another way, courts must ask whether the duty that the plaintiff alleges the defendant violated derives from the defendant’s status or conduct as a “publisher or speaker.” If it does, section 230(c)(1) precludes liability. Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1101–02 (9th Cir. 2009), as amended (Sept. 28, 2009) (emphasis added)

The California court failed to consider whether compliance with a court order, whether from a State court or a court of another country, was a cause of action that created any liability for Google arising from its search engine activities. There are good reasons for thinking it does not. A decision directly on point is Hassell v Bird 247 Cal.App.4th 1336 (Cal.C.A. June 7, 2016), Review Granted September 21, 2016, a decision of a California court of Appeal that distinguished the Barnes case precisely on this key issue.

In that case, Hassell obtained a judgment holding Bird liable for defamation and requiring her to remove defamatory reviews she posted about Hassell on Yelp.com, a Web site owned Yelp. The judgment contained an order requiring Yelp to remove Bird’s defamatory reviews from its Web site. Yelp, who was not a party in the defamation action, filed a motion to vacate the judgment relying, in part, on the CDA. The court held that the CDA did not apply as a removal order did not create any liability on Yelp. Further, it distinguished the Barnes and other like cases from removal order cases like those in issue in Hassell.

Yelp argues the authority summarized above establishes that the removal order is void. We disagree. The removal order does not violate 47 United States Code section 230 because it does not impose any liability on Yelp. In this defamation action, Hassell filed their complaint against Bird, not Yelp; obtained a default judgment against Bird, not Yelp; and was awarded damages and injunctive relief against Bird, not Yelp.

These circumstances distinguish the present case from Yelp’s authority, all cases in which causes of action or lawsuits against Internet service providers were dismissed pursuant to 47 United States Code section 230. (See, e.g., Barnes v. Yahoo!, Inc. (9th Cir.2009) 570 F.3d 1096, 1098 [CDA “protects an internet service provider from suit” for failing to remove material from its Web site that was harmful to the plaintiff];…

Neither party cites any authority that applies 47 United States Code section 230 to restrict a court from directing an Internet service provider to comply with a judgment which enjoins the originator of defamatory statements posted on the service provider’s Web site. We note, however, that section 230 explicitly provides that “[n]othing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section.” (§ 230(e)(3).) As discussed above, California law authorizes a trial court to issue an injunction preventing the repetition of statements that have been adjudged to be defamatory by the trier of fact. (Balboa Island, supra, 40 Cal.4th at p. 1160, 57 Cal.Rptr.3d 320, 156 P.3d 339.) California law also empowers the court to enforce its judgment by ordering that an injunction run to a non-party through whom the enjoined party may act. (Planned Parenthood, supra, 107 Cal.App.4th at pp. 352–353, 132 Cal.Rptr.2d 46.) It appears to us that these state law procedures are not inconsistent with section 230 because they do not impose any liability on Yelp, either as a speaker or a publisher of third party speech…

Yelp argues that cases extending CDA immunity to claims for injunctive relief that are alleged directly against an interactive service provider in a tort action must apply with equal force to an injunction that binds a non-party. Otherwise, Yelp argues, “a plaintiff who wants to enjoin an interactive computer service can nullify its immunity under the CDA by suing the creator of the third-party content and then obtaining an injunction binding the interactive computer service….” This argument ignores the fact that protection against third party liability is the foundation of CDA immunity. As we have pointed out, Hassell did not allege any cause of action seeking to hold Yelp liable for Bird’s tort. The removal order simply sought to control the perpetuation of judicially declared defamatory statements. For this reason, Yelp seriously understates the significance of the fact that Hassell obtained a judgment that establishes that three reviews Bird posted on Yelp.com are defamatory as a matter of law, and which includes an injunction enjoining Bird from repeating those three reviews on Yelp.com. Indeed, that injunction is a key distinction between this case and the CDA cases Yelp has cited, all of which involved allegations of defamatory conduct by a third party, and not a judicial determination that defamatory statements had, in fact, been made by such third party on the Internet service provider’s Web site.

The Hassel court also rejected Yelp’s contention that the possible threat of a contempt of court sanction was a form of liability for which it could claim immunity under the CDA.

…Violating the injunction or the removal order associated with it could potentially trigger a different type of liability that implicates the contempt power of the court. Generally speaking, “a non-party to an injunction is subject to the contempt power of the court when, with knowledge of the injunction, the non-party violates its terms with or for those who are restrained.” (People v. Conrad, supra, 55 Cal.App.4th at p. 903, 64 Cal.Rptr.2d 248, italics omitted.)

Yelp does not cite any authority which addresses the question whether 47 United States Code section 230 would immunize Yelp from being sanctioned for contempt. In our opinion, sanctioning Yelp for violating a court order would not implicate section 230 at all; it would not impose liability on Yelp as a publisher or distributor of third party content. A “contempt proceeding is not a civil action but is of a criminal nature even though its purpose is to impose punishment for violation of an order made in a civil action. [Citation.]” (Freeman v. Superior Court (1955) 44 Cal.2d 533, 536, 282 P.2d 857.) The cases we have found in which Internet service providers were named in contempt proceedings are consistent with this conclusion. (See, e.g., Blockowicz v. Williams (7th Cir.2010) 630 F.3d 563; Arista Records, LLC v. Vita Tkach (S.D.N.Y.2015) 122 F.Supp.3d 32.)

The Hassell court is not the only decision that the Google Order conflicts with. A court from the Southern District of California, in Doe PUBLIUS v BOYER–VINE, 237 F.Supp.3d 997 (S.D.Cal. Feb. 27, 2017) recently held that Section 230 of the CDA only applies as an affirmative defense to a liability claim. Following the decision in both Hassel and another case in which Google was involved, Google, Inc. v. Hood, 822 F.3d 212, (5th Cir. 2016), the court dismissed a declaratory action brought by an operator of a web site for an order that he did not need to comply with a demand letter from the State Legislature to remove personal information posted on the web site about State Senators and Assembly members. The letter was a written demand under Section 6254.21(c) of the Government Code. The declaratory relief requested was refused. The letter did not by itself create any liability and even if it did a court does not have jurisdiction to grant a declaratory judgment claim that a threatened lawsuit would violate § 230.

…Section 230 therefore “precludes liability that treats a website as the publisher or speaker of information users provide on the website. In general, this section protects websites from liability for material posted on the website by someone else.” Doe v. Internet Brands, Inc., 824 F.3d 846, 850 (9th Cir. 2016). More specifically, § 230 immunity applies when “(1) the defendant [is] a provider or user of an interactive computer service; (2) the cause of action treat[s] the defendant as a publisher or speaker of information; and (3) the information at issue [is] provided by another information content provider.” Hassell v. Bird, 247 Cal. App. 4th 1336, 1362 (2016) (citation and quotation marks omitted)…

Hoskins’s claim is premised on the assumption that the Office’s takedown request violates his § 230 immunity…

Though not on all fours with the facts of this case, Google, Inc. v. Hood, 822 F.3d 212, 225-26 (5th Cir. 2016), guides the Court’s analysis here as the only analogous case the Court can find. Hood involved Google’s declaratory judgment challenge to a state attorney general’s administrative subpoena that “sought information on Google’s platforms, advertising practices, and knowledge of and efforts to police `dangerous’ or `illegal’ content.” Id. at 218. The subpoena stated that if Google refused to comply, the attorney general “`may apply to’ a state court `for an order compelling compliance.'” Id.

Before responding to the subpoena or seeking relief in state court, Google filed a declaratory judgment case in federal court. Id. at 219. Google alleged, among other things, that the attorney general’s investigation violated its § 230 immunity, and that any further proceedings to enforce the subpoena would likewise violate that immunity. Id. at 219-20. The attorney general moved to dismiss the case on numerous grounds, including that Google’s claims were not ripe for adjudication. See Google, Inc. v. Hood, 96 F. Supp. 3d 584, 592 (S.D. Miss. 2015),rev’d,822 F.3d 212. The district court disagreed, and found that the claims were ripe because “Google is not required to expose itself to civil or criminal liability before bringing a declaratory action to establish its rights under federal law, particularly where the exercise of those rights have been threatened or violated.” Id. at 594 (citing MedImmune, 549 U.S. at 128-29).

The Fifth Circuit reversed, holding that the “administrative subpoena was not ripe for adjudication.” Hood, 822 F.3d at 224. The court so held because (1) the subpoena was “non-self-executing,” meaning that Google could not be sanctioned for not complying with it; (2) the attorney general could, but did not file a state court action to enforce Google’s compliance; and (3) if the attorney general did file such a suit, Google could raise its claimed § 230 immunity as a defense. See id. at 224-26; see also id. at 227 n.12 (“[W]e do not suggest that section 230 of the CDA would not apply if Hood were to eventually bring an enforcement action, or cannot be applied at the motion-to-dismiss stage.”). For these reasons, the Fifth Circuit held that Google’s “pre-enforcement challenge” was unripe. Id. at 226.

This is consistent with the Court’s understanding that § 230 immunity is an affirmative defense. See Zeran v. America Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997); Doe v. GTE Corp., 347 F.3d 655, 657 (7th Cir. 2003); Barnes, 570 F.3d at 1109. As the Ninth Circuit explained, § 230(c)(1) “only protects from liability (1) a provider or user of an interactive computer service (2) whom a plaintiff seeks to treat, under a . . . cause of action, as a publisher or speaker (3) of information provided by another information content provider.” Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1100-01 (9th Cir. 2009) (emphasis added)…

As § 6254.21(c) and the demand letter make clear, the only liability Hoskins faced was a potential lawsuit and attorney’s fees and costs if he failed to comply with the Office’s request. Despite extensive research, the Court cannot find any authority that suggests the Office’s letter even triggers Hoskins’s purported § 230 immunity, much less violates it, as the letter is not a “cause of action,” and did not impose any kind of “liability” on Hoskins—even if he ignored it. See Barnes, 570 F.3d at 1099; Hassell, 247 Cal. App. 4th at 1363 (“The [court’s] removal order does not violate section 230 because it does not impose any liability on Yelp.”)… Likewise, the Court is unaware of any authority that suggests the Court has jurisdiction over a declaratory judgment claim that a threatened lawsuit would violate § 230. Hood, the only case with similar circumstances the Court can locate, suggests otherwise. Accordingly, the Court finds that Hoskins’s claim that Defendant “violated Hoskins’ rights under Section 230,” FAC at ¶ 55, is not ripe for review. Hoskins is therefore not likely to succeed on the merits of his § 230 claim.

Another District Court in Qatar Investment & Projects Development Holding Company W.L.L. v John Doe  17 cv-553-jdp (W.D.Wisc. Oct. 24, 2917) granted a similar order to the order issued in Hassel v Bird.  In granting a preliminary injunction to restrain the publication of defamatory material, the court also issued removal orders against the non-parties Automattic (the company that hosts WordPress blogs), Twitter and Tumbler to remove any offending text or photos of which they received notice from the plaintiffs. See, Eurene Volokh, Qatar prince, anti-Islam site, defamation law and WordPress: The future of libel litigation?

The decision violates principles of international comity

What is especially troubling about the decision is that it completely by-passed the customary conflicts of laws principles generally applied by courts including US courts in determining whether, as a matter of comity, a foreign judgment should be enforced.

In Canada, for example, foreign judgments including even foreign injunctions can be enforced. See, Pro Swing Inc. v. Elta Golf Inc., [2006] 2 SCR 612. In Chevron Corp. v. Yaiguaje, [2015] 3 SCR 69, the Supreme Court of Canada explained that the recognition and enforcement of foreign judgments is based on comity, a respect for the actions taken in the foreign state.

… it must be remembered that the notion of comity has consistently been found to underlie Canadian recognition and enforcement law. In Morguard, this Court stated that comity refers to “the deference and respect due by other states to the actions of a state legitimately taken within its territory”, as well as “the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws”: pp. 1095-96, quoting with approval the U.S. Supreme Court’s foundational articulation of the concept of comity in Hilton v. Guyot, 159 U.S. 113 (1895), at pp. 163-64…

…in Van Breda, LeBel J. emphasized that the goal of modern conflicts systems rests on the principle of comity, which, although a flexible concept, calls for the promotion of order and fairness, an attitude of respect and deference to other states, and a degree of stability and predictability in order to facilitate reciprocity: para. 74. This is true of all areas of private international law, including that of the recognition and enforcement of foreign judgments.

Canadian courts do not enforce all foreign judgments. A foreign judgment will not be enforced based on fraud, denial of natural justice, or on public policy grounds. The public policy defense prevents the enforcement of a foreign judgment which is contrary to the Canadian concept of justice. It turns on whether the foreign law is contrary to Canadian views of basic morality. This defense was described by the Supreme Court in Beals v. Saldanha, [2003] 3 SCR 416 as follows:

The third and final defence is that of public policy. As stated in Castel and Walker, supra, at p. 14-28:

…the traditional public policy defence appears to be directed at the concept of repugnant laws and not repugnant facts.

How is this defence of assistance to a defendant seeking to block the enforcement of a foreign judgment? It would, for example, prohibit the enforcement of a foreign judgment that is founded on a law contrary to the fundamental morality of the Canadian legal system. Similarly, the public policy defence guards against the enforcement of a judgment rendered by a foreign court proven to be corrupt or biased…

The use of the defence of public policy to challenge the enforcement of a foreign judgment involves impeachment of that judgment by condemning the foreign law on which the judgment is based. It is not a remedy to be used lightly. The expansion of this defence to include perceived injustices that do not offend our sense of morality is unwarranted. The defence of public policy should continue to have a narrow application.

In the US in international diversity cases enforceability of judgments of courts of other countries are generally governed by the law of the state in which enforcement is sought. Yahoo! Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 433 F.3d 1199, 1212 (9th Cir.2006) (en banc) (per curiam) (“Yahoo! II“) (plurality opinion.) In considering whether to enforce foreign judgments, California (and many other U.S. States) look to general principles of comity followed by those courts which apply the Restatement (Third) of the Foreign Relations Law of the United States.

The general principle of enforceability under the Third Restatement is that an American court will not enforce a judgment if the cause of action on which the judgment was based, or the judgment itself, is repugnant to the public policy of the United States or of the State where recognition is sought. Enforcement will, however, usually be accorded a judgment of a foreign court except in situations where the original claim is repugnant to fundamental notions of what is decent and just in the State where enforcement is sought. The foreign laws need not be identical to those in the U.S., they must be repugnant to U.S. laws or policies. Under the repugnancy standard, American courts sometimes enforce judgments that even conflict with American public policy or are based on foreign law that differs substantially from American state or federal law. Yahoo II at 1212-1215.

It is troubling that the Google court did not subject the enforcement of the Equustek Order to the U.S. repugnancy standard. Under that analysis the court could have taken into consideration a number of similarities rather than any repugnancy between U.S. and Canadian law in the circumstances before the court such as the following.

U.S. courts, like the court in Equustek, also grant world-wide injunctions in trade secret misappropriation cases. See, Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970 (9th Cir. 1991). Such orders are not repugnant to U.S. law.

The CDA has a carve out that covers intellectual property claims. The carve out applies to U.S. federal intellectual property laws which would include the U.S. Defend Trade Secrets Act of 2016. This law provides for relief for foreign trade secret misappropriation claims. Some cases, but not all, have held that the CDA exemption for intellectual property law claims also applies to state trade secret claims. Both Canada and the U.S. and other members of TRIPS are required to protect trade secrets and to provide for effective remedies against trade secret misappropriation. It hardly seems repugnant to the principles behind the CDA to enforce an order based on trade secret misappropriation under Canadian law. In fact, it might have been argued that the CDA carve out for intellectual property claims might apply to trade secret misappropriation claims under the laws of Canada.

U.S. law provides somewhat analogous mechanisms for courts to grant injunctions against intermediaries to aid in enforcing court judgments. For example, in Hassel v Bird Yelp argued that the court had no jurisdiction to make a removal order against it as it was a non-party and was not aiding or abetting Bird in publishing the content adjudged to be defamatory. The District Court disagreed and made the order. The order was affirmed by the Court of Appeal which confirmed that courts “have the power to fashion an injunctive decree so that the enjoined party may not nullify it by carrying out the prohibited acts with or through a nonparty to the original proceeding.”

…an injunction can properly run to classes of persons with or through whom the enjoined party may act…

These settled principles undermine Yelp’s theory that the trial court was without any authority to include a provision in the Bird judgment which ordered Yelp to effectuate the injunction against Bird by deleting her defamatory reviews. As Judge Goldsmith observed in the order denying Yelp’s motion to vacate, our Supreme Court has explicitly confirmed that injunctions can be applied to nonparties in appropriate circumstances. (Ross, supra, 19 Cal.3d at p. 906.) “`In matters of injunction … it has been a common practice to make the injunction run also to classes of persons through whom the enjoined person may act, such as agents, servants, employees, aiders, abettors, etc., though not parties to the action, and this practice has always been upheld by the courts, and any of such parties violating its terms with notice thereof are held guilty of contempt for disobedience of the judgment….

Yelp argues in the alternative that, even if the injunction against Bird could properly be enforced against a nonparty like Yelp, the evidence in this case does not “support the theory that Yelp was somehow `aiding and abetting’ Bird’s violation of the injunction.” This issue was a major dispute below. But as we have already discussed, it has no bearing on the question whether the trial court was without power to issue the removal order in the first instance. The authority summarized above establishes that a trial court does have the power to fashion an injunctive decree so that the enjoined party may not nullify it by carrying out the prohibited acts with or through a nonparty to the original proceeding.

Under U.S. Federal Rule of Civil Procedure 65(d)(2)(C), a court may enjoin any “persons who are in active concert or participation with” a party. This rule has been applied in numerous cases against third party intermediaries to compel them to comply with court orders.

  • An example is Arista Records, LLC v. Tkach, S.D.N.Y., (June 3, 2015) where cloudfare was ordered to cease providing domain name services to grooveshark. Other cases include Hermes v. Doe, (SDNY April 30, 2012); Chanel Inc. v. Does (D. Nev., Nov. 14, 2011); ABS-CBN Corporation v Ashby, Case (Dist. Or. Aug. 8, 2014); Richemont International SA v Chen, Case (SDNY Jan. 4, 2013), ABS-CBN Corporation v Cinesilip.net 2017 WL 1628900 (S.D.Fla. May 1, 2017), ABS-CBN Corporation v Moveonline.io Case No. 17-CV-61803-Bloomo/Valle (S.D. FLO. Sept. 20, 2017).
  • At the time the Google Order was rendered a Magistrate Judge in American Chemical Society v Sci-HUB (Civ. Action No 1:1 7cv0726 (LMB/JFA) (E.D. Vir. Sept. 28, 2017) had recommended enjoining a web site from making available copyright infringing copies of scientific publications after the site refused to shut down (even after it had been ordered to shut down by a prior court order). The Magistrate also recommended making an order against search engines, ISPs, and domain name registrars who had notice of the order to cease facilitating access to the website that made available infringing books and articles. That recommendation led to an order in American Chemical Society v Sci-HUB (Civ. Action No 1:1 7cv0726 (LMB/JFA) (E.D. Vir. Nov. 3, 2017), whereby a District Court in granting the injunction made an order and also granted an injunction enjoining “any person or entity in active concert or participation with Defendant Sci-Hub and with notice of the injunction, including any Internet search engines, web hosting and Internet service providers, domain name registrars, and domain name registries, cease facilitating access to any or all domain names and websites through which Defendant Sci-Hub engages in unlawful access to, use, reproduction, and distribution of the” plaintiff’s trade-marks and copyright publications.” There were no territorial limitations in the order. The order was made even after the Computer and Communications Industry Association (CCIA) filed an amicus brief in the lawsuit, asking that ISP and search engine blocking be removed order. The court refused to remove this relief from the order. See, Dalmeet Singh Chawla, Court demands that search engines and internet service providers block Sci-Hub.

The orders made in the Rule 65 cases have world-wide effects of removing or de-listing online locations from the Internet.

There is a question about whether the requirement in the Rule 65 orders that they apply only to “persons who are in active concert or participation with” the defendants makes them applicable against any ISP or search engine writ large with notice of the order. See, Blockowicz v. Williams, 630 F.3d 563 (7th Cir. 2010). However, in light of this Federal rule and its application in numerous cases and the long standing jurisdiction exercised by the courts to fashion an injunctive decree to prevent the enjoined party from nullifying orders of the court, it is quite arguable that the Equustek Order was either consistent with or at least not repugnant to U.S. law or policy.

Of course, all of the criticisms made here about the Google Order are not intended as any criticism of Judge Davila. The preliminary injunction motion was not defended by Equustek and all Judge Davila had to inform his decision was what Google and its friendly and usual Amici (EFF and Wkipedia) put before him. The decision in the Hassel case was directly relevant to the issue before the California court. Yet, Google did not refer to the case in its factum even though it was aware of it including because Equustek had relied on it in its written Memorandum of Argument in the Canadian Supreme Court case. The Hassel decision is under review by the California Supreme Court. Under Cal. Rules of Court, Rule 8.1115 e) the decision has no binding or precedential effect. However, under this rule the decision could still have been cited for its potential persuasive value. The judge also did not have the benefit of the decisions in the Google v Hood or Doe PUBLIUS v BOYER–VINE cases. The judge also did not have the benefit of arguments that the CDA defense had to be subjected to a public policy analysis under applicable principles of comity. Nor were the cases against intermediaries under U.S. Federal Rule of Civil Procedure 65(d)(2)(C) put before him.

The court also did not consider whether it had any personal jurisdiction over Equustek or whether the case was even ripe for consideration given Equustek had publicly stated it did not intend to enforce the Equustek Order in the U.S. Given how central those issues were in the Ninth Circuit’s en banc decision in the Yahoo II case, had these issues been considered by the court, it might have dismissed or considered dismissing the motion on those grounds also.

Judge Davila might well have wanted these authorities and arguments to be brought to his attention, especially as the motion was being sought without Equustek being before the court.

Troubling Implications of the Google Order

The decision sets an unfortunate precedent. Google and other major online providers operate global platforms. While their businesses are global, they often seek, as in this case, to have only the laws of the U.S. apply to their businesses. They want all the benefits of carrying on business in Canada and around the world, but want to insulate themselves from local liability – in this case arguing that their foreign responsibilities to abide by a Canadian court order are trumped by a U.S. law (the CDA) that does not apply in Canada.

This type of immunity is especially troubling because injunctions against these intermediaries to de-index illegal content or to take down web sites that disseminate illegal materials are becoming more and more common and represent an essential enforcement tool online. For example;

  • In a recent Australian case, X v Twitter Inc [2017] NSWSC 1300 (28 September 2017), a court granted a global takedown order against Twitter to prevent publication of information that was being published by a third party in breach of confidence. Twitter refused to appear, perhaps because it wants to be in a better position to oppose enforcement of an order against it in the U.S.
  • Facebook has been ordered by courts in Ireland to remove pages that violate the privacy rights of individuals or that constitute harassment. For example, in CG v Facebook Ireland Limited [2016] NICA 42 (21 December, 2016) an injunction was granted ordering Facebook to remove a site posted on Facebook that was used to harass an individual and which involved the misuse of private information.
  • Very recently in Autorité des marchés financiers v. PlexCorps, 2017 QCTMF 88, the Quebec Financial Markets Administrative Tribunal, relying on Equustek ordered Facebook to shut down the Facebook accounts of Plexcorps and Plexcoin because they were soliciting and canvassing investors, in Quebec or from Quebec to outside Quebec in contravention of Quebec’s securities laws.
  • Recently, in Douez v. Facebook, Inc., 2017 SCC 33, the Supreme Court of Canada refused to enforce Facebook’s exclusive venue clause in its terms of service so as to permit privacy claims against Facebook to be adjudicated in the Province of British Columbia. If the privacy claim is successful, there will be another order of a Canadian court to enforce against Facebook.
  • De-indexing orders have been against search engines including Google in the European Union to protect privacy rights of individuals including in the Max Mosley cases in France and Germany. See, Barry Sookman Internet justice: Mosley v Google and in the “right to be forgotten” case, Google Spain SL, Google Inc. v. Agencia Española de Protección de Datos, Mario Costeja González, C-131/12 [2014], CURIA; a de-indexing order was also made against search engines in the French copyright case, APC v. Auchan Telecom, 11/60013, Judgment (28 November 2013) (Tribunal de Grande Instance de Paris).
  • Google has also been ordered numerous times internationally to take down defamatory content from its blogging platform. Most recently, the Columbia Constitutional Court ordered Google to completely remove from the Internet a website hosted on Blogger.com. See, Fierro Calcedo v Google Inc (Judgment T-063A/17).
  • Google has also been found to be liable for publishing defamatory materials in its search results on many occasions, most recently in Google Inc. v Duffy [2017] SASCFC 130 (4 October 2017) (summarized here)

The Google Order raises the issue as whether large U.S. social media companies like Google will attempt to leverage the success in this case to oppose enforcement of future orders against them, such as the types of orders summarized above. There are also evolving problems with information that is published or otherwise made accessible through these platforms that are raising concerns. For example, Canada might well seek to regulate misleading online paid for advertisements or “fake news” in elections or other specific contexts. This is currently being considered in the U.S.  Or Canada may want to take action to combat propaganda allegedly spread by, for example, state-run news agencies such as Russia Today and Sputnik. Giving these large global multinational companies – these “NetStates” –  broad immunities from the laws of foreign countries would be a major set-back around the world that could imperil global enforcement of local rights.

Private international law rules should not permit Google and other large social media companies to do business on a global scale around the world and to seek to defy orders against them locally.

Nor should private international law effectively impose on other countries the flawed cyber-utopian vision of Internet freedoms without responsibilities that is reflected in the CDA. Many individuals in the U.S. have found themselves powerless in trying to remove online content that is defamatory or which violates other rights they have. The CDA enables online service providers to publish illegal materials with impunity even when they exercise editorial control over third party content or fail to respond to takedown notices. It is even being used as a shield by those who intentionally profit from prostitution and crimes against children.[i]  As Neil Turkewitz recently put it “in order to achieve the kind of flowering of diverse human creativity and expression at the foundation of the cyber-utopian vision, we need to address misconduct regardless of the modality employed to effect it.”See, Neil Turkewitz There is no internet freedom without responsibility.

The CDA should not be used to shield large social media companies from complying with their international responsibilities justified on the misconceived notion that the Internet can only flourish when Internet giants have no legal responsibility for disseminating, or facilitating the dissemination of, illegal content.

The problem posed by the Google Order should be addressed in Canada’s NAFTA negotiations. Google and the other social media titans successfully pushed for a new e-commerce Chapter in the TPP. That would have preserved their business model of locating and maintaining their servers and customer data in the U.S. I supported the inclusion of that Chapter in the TPP. See, TPP, copyright, e-commerce and digital policy: a reply to Michael Geist, My appearance before the Trade Committee on the TPP. The U.S. is now pushing for a similar Chapter in an updated NAFTA. Further, one of USTR’s objectives is to export the CDA to Canada and Mexico. According to the U.S. Summary of Objectives for the NAFTA Renegotiation, the U.S. is seeking to “Establish rules that limit non-IPR civil liability of online platforms for third party content, subject to NAFTA countries’ rights to adopt non-discriminatory measures for legitimate public policy objectives.”
In view of the position Google has taken in opposing the enforceability of the Equustek Order, Canada should not only resist attempts to export the CDA (with all of its flaws) to Canada, it should also only agree to a new Chapter on e-commerce on the condition that there is a reciprocal enforcement of judgments commitment that respects legitimate international comity concerns each country has in ensuring that orders made by its courts will be recognized in the other jurisdictions.

Canadian courts asked to enforce a US judgment against a Canadian social media service will generally enforce the order unless it violates public policy here, a defense that is narrow. However, the situation under the recent Google case is quite different. A Canadian decision is given no respect at all if the order can be seen to be covered by the CDA. U.S. social media companies should not have blanket immunities under the CDA that automatically immunizes them from Canadian court orders and Canada should use NAFTA to reach a more balanced compromise.

Michael Geist attempted to defend the Google Order stating:

As I noted several months ago, the U.S. case is precisely what critics of the Supreme Court ruling feared with the prospect of conflicting rulings, protracted litigation, and legal uncertainty becoming a reality. By upholding global takedowns without fully grappling with the implications, the Supreme Court effectively invited other courts to issue conflicting decisions without guidance on how to best resolve the issue.

But, the problem Geist refers to was not the result of the Supreme Court’s order in Equustek. It was the result of Google doing business on a global scale that subjected it to Canadian law and a failure of the U.S. court to properly apply well established rules of comity required by private international law. The U.S. District Court should not have simply thumbed its nose at a decision of our Supreme Court. By doing so it created what should be seen as an international incident that needs to be addressed.

What will happen next

It remains to be seen whether Google’s strategy of getting the declaratory relief it sought will have any effect on its efforts to enforce the Equustek Order against it in Canada such as through contempt proceedings. The Supreme Court noted in the case that

“If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly. To date, Google has made no such application.”

Michael Geist has suggested that “Google’s action in the U.S. starts down toward that path”. However, the decision Google obtained did not address Google’s First Amendment arguments, nor did it find that the enforcement of the order in the U.S. would require it to violate any laws including those in the U.S. All that was decided was that the Canadian order could not be enforced against Google based on Section 230 of the CDA.

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[i] See, Mary Leary, In bid to amend Communications Decency Act, Congress must side with trafficking victims , Andrew Bolson, The Internet Has Grown Up, Why Hasn’t the Law? Reexamining Section 230 of the Communications Decency Act, Ed Klaris et al, United States: Congress to Weaken Section 230 of the Communications Decency Act?; George Pike Scrutiny of Google and Facebook Increases on Both Sides of the Atlantic. Canadian and Commonwealth courts take a much more balanced position in dealing with intermediary liability. They generally only hold true online intermediaries liable for publication of tortious or other illegal material when they cease to be passive intermediaries such as when they continue to host defamatory content after receiving notice that the content is defamatory. See Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] 2 SCR 427  and Crookes v. Newton 2011 SCC 4, describing the attributes of passive instrumental intermediaries. In the U.K., see, Gavin Sutter, The UK’s Broad Rejection of the §230 Model, The Recorder.

* Last updated Nov.23, 2017

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