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From: Bennitto1/12/2006 7:53:00 PM
   of 20
Court Dismisses Yahoo Free Speech Suit
Thursday January 12, 5:58 pm ET
By David Kravets, Associated Press Writer
Court Tosses Yahoo Suit That Questioned Liability for Selling Items Illegal in Other Countries

SAN FRANCISCO (AP) -- A federal appeals court on Thursday skirted answering whether Yahoo Inc. must pay a fine of about $15 million to a Paris court for displaying Nazi memorabilia for sale in violation of French law.

The 9th U.S. Circuit Court of Appeals dismissed a federal lawsuit brought by Yahoo in California challenging the fine levied five years ago for running an auction site in which French users could buy and sell the memorabilia banned in France.

Yahoo asked the U.S. court to rule that the judgment could not be collected in the United States because it violated the company's free speech rights.

In a 99-page decision, the court left open the central question of whether U.S.-based Internet service providers are liable for damages in foreign courts for displaying content that is unlawful overseas but protected in the United States.

The court said it was unlikely the French would ever enforce the judgment and doubted Yahoo's free speech rights under U.S. law were violated.

Yahoo's French subsidiary,, complies with French law, but a judge there nonetheless ordered the Sunnyvale-based company to strip Nazi paraphernalia from the portal's main site,

Yahoo eventually banned Nazi material as it began charging users to make auction listings, saying it did not want to profit from such material. But it continued to challenge the ruling, not in France but by filing a lawsuit in U.S. District Court in San Jose over the First Amendment issue.

A district judge in 2002 ruled in favor of Yahoo, saying the American company was not liable for the judgment. That decision was set aside Thursday.

The appeals court did agree that U.S. companies, including Yahoo, could turn to federal courts when overseas judgments inhibit speech protected in the United States.

But the court came to no conclusion about what type of speech it would consider shielding, doubting the presence of any First Amendment controversy to decide in this particular case.

"We have no ruling on the underlying First Amendment issue, which made this case so interesting in the first place," said Paul Schiff Berman, who teaches cyberlaw at the University of Connecticut.

Yahoo did not immediately return calls for comment.
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