The Hague Treaty Adoption--Diverse laws, uniform enforcement

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The Hague Treaty Adoption--Diverse laws, uniform enforcement

It's easy to lose track of physical location on the Internet. We all know that Web servers, mail servers, routers, and the rest of the devices that make the Internet work all occupy discrete space in the physical world. But we don't usually know, or even care, whether the information we seek is served from Kansas City, Kansas, or Bombay, India. Physical location does matter, however, even on the Internet.

If you register your next domain name with Gandi.net, you'll be doing business with a French company. Register with Joker.com and you'll be doing business with a German company. Both domain name registrars have an English-language user interface for their Web sites, so you might easily miss the terms and conditions that alert you to the fact that you're doing business with a foreign company. That's probably okay as long as everything goes well, but if you ever have a dispute with one of those companies, you're facing a problem of international proportions. Can you sue the company in your home country? If you do, will the company even show up in court? Will you have to retain a lawyer in a distant country?

What's worse is the prospect that the foreign company might sue you in a foreign country. Being subject to foreign laws has been the stuff of nightmares ever since Midnight Express scared us all silly twenty-odd years ago. No, a foreign company can't pull you from your house and throw you in a dark, dank jail thousands of miles away, but it can sue you for damages in a foreign court. Just as the sentence and terms of incarceration for drug smuggling in Midnight Express were out of proportion to our own sense of what was fair, damage awards in foreign countries can seem similarly arbitrary and unjust.

So you might be surprised to learn that the United States government, along with the governments of almost fifty other nations, is drafting an international treaty that would make it easier to enforce foreign judgments domestically. In some cases, it could be the civil law equivalent of taking you out of your home in Kansas and forcing you into a Turkish jail cell. The proposed treaty could have significant repercussions for a networked world.

Global Law Enforcement
Treaty negotiations are taking place under the auspices of the Hague Conference on Private International Law. If you haven't heard of this yet, don't worry, neither has anyone else. Unfortunately, the treaty has been developing quietly for almost a decade, under the radar of many people who would be impacted by it.

The earliest discussions about making international judgments easier to enforce began in 1992. Naturally, no one was thinking much about the treaty's effect on the Internet back then. In the early '90s, the focus was on business-to-business transactions. Because of the increasingly multinational nature of commerce, businesses wanted a greater ability to enforce their international contracts with foreign partners. Those very real business concerns drove delegates to the conference to propose an international process that would result in a treaty among nations for the cooperative enforcement of international judgments.

Ten years of consensus building and negotiation have led to a draft treaty that tries to ensure predictability in the enforcement of court judgments. For example, if a U.S. company obtains a judgment against a German business partner in a U.S. court, then under the terms of the proposed treaty, a German court would be required to honor that judgment, without requiring the U.S. company to reargue the entire case. The other side of the coin is that if you're a German company entering into a contract with a U.S. company and pledging to abide by U.S. law and litigate your disputes in the United States, you can no longer simply elect not to show up when sued in a U.S. court. Sooner or later, a German court will enforce that judgment against you.

National boundaries will no longer be a practical defense to civil liability. This all makes wonderful sense for international business-to-business transactions. But the participants in the process of the Hague convention treaty didn't think too much about the Internet.

During treaty development, it was widely believed that companies would, of course, be aware that they were doing business with a foreign corporation. Not so on the Internet. Just as on the Internet no one knows whether you're a dog, neither does anyone know whether you're American or Belgian or Indian.

Where Are You?
When you do care about the location of Internet resources, there are tools to help you figure out where a given server is located. Traceroute, and some of its graphical companions like VisualRoute, can tell us where a host computer is located. The Whois database is a fairly accurate resource for determining the physical address of the person or company that has registered a domain name. However, these aren't typically tools that the average user relies upon before talking with a friend or conducting business over the Internet. As we seamlessly move from Web site to Web site, the underlying physical infrastructure disappears in our minds.

Most e-commerce sites identify their physical location in their terms of service agreement. This is the long, boilerplate agreement that every consumer promises to abide by when purchasing something over the Internet or registering for services. You do read those, don't you? Somewhere in the contract, usually near the bottom, you'll find a choice of law provision and a choice of forum provision.

Choice of law tells you which jurisdiction's law applies to the transaction, and the choice of forum tells you the exclusive place where you must bring any lawsuit against the company. For the most part, the place designated in the choice of law and choice of forum provisions is the vendor's home. As you can probably guess, it usually isn't where you live, or even near where you live.

Kudos to those to those who read the terms and conditions of click-wrap contracts on the Internet, but let's face it, most people aren't so diligent. These are contracts quickly made and easily forgotten.

Even when you haven't expressly agreed to be bound by the laws of a specific jurisdiction, sometimes just the effect of your actions in a foreign jurisdiction can give a foreign court the power to make a ruling against you.

And that power is where the treaty being negotiated at the Hague convention would come in.

The Turkish Prison
Because it would reach across boundaries, penetrating virtually every corner of the globe, the treaty's ramifications for the Internet warrant careful attention. If member countries can claim jurisdiction over anything that is published on or distributed over the Internet, they can export their own sense of how Internet resources ought to be used by virtue of the treaty provisions.

Here's how it works. First, keep in mind that the proposed treaty doesn't assume that the world has a homogeneous set of laws. In spite of that, however, it seeks to have a homogeneous set of rules about jurisdiction and the enforcement of the world's myriad different laws. At its core, the proposed treaty from the Hague assumes that laws made by foreign politicians to solve problems in foreign countries can be enforced here in the United States—even when our own laws are in conflict with the foreign laws. That isn't an accident, that's the very purpose of the proposed treaty.

Let's take some examples. In the copyright context, what constitutes a fair use varies depending on where you are. In some countries, you can quote from other sources quite liberally. In other countries, you need permission to use a quote. So what happens when I use a quote in my column without a foreign author's permission, and New Architect publishes that on the Internet? It isn't inconceivable that if the Hague treaty were passed, the foreign author could sue me in his or her home country. If the copyright law over there didn't permit quoting without permission, I'd lose. When the original author brought that foreign judgment to my home in Los Angeles and asked the local court to enforce it, I'd lose again.

What Just Happened?
Virtually every national law applicable to the publishing world—from copyright and trademark to comparative advertising and unfair competition—will suddenly become an international law with global reach.

While there are certain norms in the developed world about many intellectual property rights, we still have considerable variances in the many nuances of how those rights are applied (as in the fair use example above). Outside the intellectual property arena, the variance in national laws is considerable. Rules on libel and slander and disparagement, for example, vary widely. And the law specific to Internet-related liabilities—like those for spam and trespass to chattels (for instance, trespass by unwanted users on pieces of Internet-connected hardware or infrastructure)—are only now developing. The same argument on Internet liability might win your case in California and get you sanctioned in Albania.

If the treaty from the Hague conference becomes binding, and it will probably pass in some form, users will suddenly discover that activities that are legal where they live are illegal somewhere else. That difference won't matter as much after the treaty takes effect. Foreign people or companies will simply bring their laws to you.

The Treaty Evolves
Although it has been ten years in the making, work on the treaty continues. It won't take another ten years to complete. A final version of the treaty will likely be adopted in early 2003, followed closely by ratification of the terms by the member states. By this time next year, it could already be in effect.

What will this mean? The worst projection is that it will cripple the Internet. That seems extreme to me, but it will mean that publishers—and let's face it, on the Internet, we're all publishers—will have to be extra cautious about their liability for foreign judgments. Will that hobble the Internet? Will it require additional liability insurance and attorney reviews for all of those who want to operate an Internet Web site?

For the most part, exercising rights under the new treaty will still be an expensive and time-consuming process, even though its purpose is to streamline enforcement. "Streamlined" will still mean that you'll have to go to court in your home jurisdiction and serve the defendant with a copy of the complaint in his or her home country (and in the native language of the defendant's home country). If you win, then you'll have to hire a lawyer in the foreign country where the defendant lives and file a new suit there, asking the court to enforce your earlier judgment. Granted, you'll likely win that lawsuit in the foreign land, but getting there is costly.

As a practical matter, it means that only the most financially significant matters will be enforced across national boundaries. A consumer dispute over a $20 book order won't likely end up as an enforcement dispute under the treaty, but then again, you never know when a small consumer dispute might explode into a large damages award under Estonian law.

The saving grace is that the most renegade countries in the world aren't likely to adopt the treaty. So don't worry about being subject to the provincial publishing requirements of Iran or North Korea. But unless you're really comfortable with what the laws of the countries likely to adopt this treaty have in store for you (and here's the list of those participating in the process: www.hcch.net/e/members/members.html), this is something to watch and even worry about.