Pavlovich v. Superior Court

58 P.3d 2, 127 Cal. Rptr. 2d 329, 29 Cal. 4th 262, 2002 Cal. Daily Op. Serv. 11383, 65 U.S.P.Q. 2d (BNA) 1422, 2002 Daily Journal DAR 13223, 2002 Cal. LEXIS 7959
CourtCalifornia Supreme Court
DecidedNovember 25, 2002
DocketS100809
StatusPublished
Cited by150 cases

This text of 58 P.3d 2 (Pavlovich v. Superior Court) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pavlovich v. Superior Court, 58 P.3d 2, 127 Cal. Rptr. 2d 329, 29 Cal. 4th 262, 2002 Cal. Daily Op. Serv. 11383, 65 U.S.P.Q. 2d (BNA) 1422, 2002 Daily Journal DAR 13223, 2002 Cal. LEXIS 7959 (Cal. 2002).

Opinions

Opinion

BROWN, J.

“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 [117 S.Ct. 2329, 2334, 138 L.Ed.2d 874].) “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 [117 S.Ct. at p. 2335].) On the Web, “documents, commonly known as Web ‘pages,’ are . . . prevalent.” (Ibid.) These pages are located at Web sites and have 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 [117 S.Ct. at p. 2334].)

[266]*266Not 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 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.open-projects.net.” The site consisted of a single page with text and links to other [267]*267Web 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 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 [104 S.Ct. 1482, 79 L.Ed.2d 804] (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 [268]*268issued 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 Colder effects test. The court also concluded that the exercise of jurisdiction over Pavlovich was reasonable.

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.

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58 P.3d 2, 127 Cal. Rptr. 2d 329, 29 Cal. 4th 262, 2002 Cal. Daily Op. Serv. 11383, 65 U.S.P.Q. 2d (BNA) 1422, 2002 Daily Journal DAR 13223, 2002 Cal. LEXIS 7959, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pavlovich-v-superior-court-cal-2002.