Exam No.  ________
Dean Henry H. Perritt, Jr.                                                                                                                           Spring, 2000
Conflict of Laws                                                                                                                                            Time:  _____

1. This examination consists of 4 pages.  Please check to make certain you have the complete examination.

2. Read these instructions carefully and read each question carefully.  Think each problem through before you write and treat every appropriate issue in each question.  Be direct and concise.

3. Answers will be graded upon the reasons given as well as the conclusions drawn.  If more than one reason is pertinent to an answer, state every reason.

4. While you have been permitted to bring materials into the examination room, answering the questions appropriately will put time pressure on you.  You should not do extensive research during the examination.  Credit will be weighted according to the time allocations shown.  Manage your time accordingly.

5. You may decide, in answering one or more questions, that a complete answer would require legal research.  If this is so, you should identify the specific issue that you would research.  If you have a mastery of the basic concepts, you will be able to frame research issues very narrowly and precisely.

6. It also may be that more factual information is required to answer a question.  If this is the case, you should say what factual information is required and why you need it.  A mastery of the underlying concepts will permit you to frame any factual inquiries very narrowly and link them precisely to the legal issue involved.

7. Organization and clarity are very important.  A shorter answer that is well organized and evidences a clear understanding of basic concepts and their interrelationships is better than a long answer with disconnected fragments of information.

8. Do not write outside the margins of your bluebook pages.

9. Write your examination number on your bluebook(s) and on each page of this examination.  Do not use your name.

10. When you have finished the examination place it inside your bluebook(s) and deposit them in the appropriate box in the examination room.

Any material including any outlines whether commercially prepared or not, whether accessible by computer or not.  No communication by e-mail is permitted during the exam.
Conflict of Laws Final Examination

Question I. (two hours)

Shelby White, a domiciliary and habitual resident of Atlanta, Fulton County, Georgia, started an electronic commerce company about one year ago.  The company has developed a business plan, signed up customers, and successfully started operations.  Investment bankers are interested in taking the company public through an Initial Public Stock Offering ("IPO").  Mr. White was scheduled to make a final presentation to the lead investment banker on 1 February 2000.  Throughout the month of January, he and his small staff had worked 16 hour days including weekends to develop sales projections, financial statements, and images of the company's Web sites for the presentation.  On 31 January, Mr. White received an email message, apparently from a former high school classmate with the subject line, "I Love You."  Curious, he opened an attachment to the message and was puzzled by the attachment contents, which referred to omissions in his email address book.

Turning his attention back to a last minute review of the materials he was ready to transfer to his portable computer for a flight to New York for the presentation the next day, he was startled to find that all of the files containing the charts for the presentation had been erased.  Despite frantic work by Mr. White and his staff, they were unable to recover the files in time for the flight to New York, and the presentation had to be cancelled.  Over the next several weeks, the stock market fell, and the investment banker declined interest in further exploration of an IPO.  After investigation, Mr. White, his staff, and a variety of technical consultants and law enforcement agencies determined that the damage had been caused by a computer virus that had spread over much of the world in "I Love You" messages.

The virus apparently was the work of John Coe a renegade Australian computer hacker who wrote the virus, intending that it replicate in email address books and spread around the world.  He intentionally wrote the program so that the virus would erase wordprocessing, spreadsheet, image, and presentation files on any computer on which it was received.  He began the propagation of the virus by sending it to everyone who had an account on an email and access provider located in Canberra, Australia operated by an Internet access provider called Australia On Line ("AOL").  AOL is incorporated under Australian law.  AOL is a wholly owned subsidiary of AOL-Time Warner, an American (Delaware) company with its principal place of operations in Arlington, Virginia.  AOL-Time Warner systematically and continuously does business in every one of the 50 states.

Mr. White's own email service is provided by Fulton County Access ("Full Access"), located in Atlanta, Georgia.  One reason Mr. White selected Full Access as his Internet service provider was commitments made by Full Access in advertisements and its subscriber agreement that it offered "virus free" email accounts, sweeping email boxes every few minutes with virus detection and eradication software.  Unfortunately, the "I Love You" virus caught almost everyone by surprise and the Full Access virus protection software did not detect it.

Obtaining counsel, Mr. White sues Mr. Coe, Australia On Line and Full Access in the Superior Court of Fulton County, Georgia.  The claim against Mr. Coe is based on trespass, the one against AOL is  based on negligence for allowing Mr. Coe to use its services without determining that he had a long history of misconduct on the Internet, and against Full Access for breach of contract.

Full Access answers the complaint and vigorously litigates its liability, presenting evidence that any obligation it had under its warranty was fulfilled and that the virus attack could not have been foreseen and should be treated under Georgia contract law as an unforeseeable and unpreventable event under the Force Majeure Doctrine applicable in Georgia.  Australia On Line enters a limited special appearance for the purpose of contesting jurisdiction only, arguing that under Virginia law the acts of corporate subsidiaries and parents cannot be attributed to each other.  Mr. Coe, served by email, pursuant to the Georgia Long Arm statute does not appear, and a default judgment is entered against him.  Assume the Georgia Long Arm statute asserts jurisdiction to the limits permitted by the U.S. Constitution.

Georgia conflicts law is unsettled.  Georgia decisions can be found embracing traditional choice of law rules, and more modern ones.  A relatively recent Georgia case involving a trespass claim against an email spammer held that trespass is not available as a legal theory for unpermitted access to computer resources or for damage to electronic files.  Georgia corporation law affords strong protection to corporate affiliates, not allowing the attribution of conduct by one affiliate to another as long as they are separately incorporated.  A statute in Georgia immunizes Internet intermediaries for liability for the conduct of their subscribers and others who use their services.  Georgia law is favorable to claims for breach of contract claims against Internet Service Providers.

Virginia law allows the corporate veil to be pierced (for owners of corporations to be held liable for the acts of corporations they own) when the owner exercises close control over the operations of the owned corporation.  Virginia cases allow the corporate veil to be pierced when a subsidiary uses the same name as the parent corporation.  A Virginia statute immunizes Internet intermediaries for liability for the conduct of their subscribers and others who post information on their servers.  Virginia trespass law allows claims for intentional damage to computer files and for unpermitted entry into computer resources.

Australian law allows trespass actions for damage to computer files and for unpermitted entry into computer resources.  It does not provide any immunity for Internet intermediaries.  It preserves corporate veils and does not attribute the conduct of one corporate affiliate to another.

In answering the questions that follow, do not discuss substantive law except as necessary fully to explore conflict of laws issues.

A. What arguments should Mr. White make to maximize his chances of obtaining an enforceable judgment against Australia On Line ("AOL")?  What are AOL's best responses?

B. Under Georgia law, a default judgment may not be obtained unless the plaintiff establishes his cause of action.  Accordingly, Mr. White must provide legal argument to sustain his trespass claim against Coe.  What arguments should he make to establish his entitlement to a judgment?

C. If Mr. White discovers that Mr. Coe has substantial assets in Australia, what defenses can he expect Mr. Coe to assert if he takes a Georgia default judgment based on trespass and seeks to have an Australian court recognize and enforce it?

D. Suppose the Internet and email service contract between Mr. White and Full Access contains a forum selection and choice of law clause providing that any claims must be litigated in Illinois courts under Illinois law, Illinois law does not recognize Force Majeure defenses unless they are explicitly reserved, and they were not in the terms of service contract.  Mr. White had never read the terms of service contract because it was only made available if he had clicked on a particular button when he signed up for the Full Access service.  He did not do so, and was surprised, and he was surprised when Full Access introduced the forum selection and choice of law clauses in the Georgia litigation.  What arguments should Mr. White make to maximize his chances of an enforceable judgment against Full Access?  What arguments should Full Access make to avoid liability?

Question II. (one hour)

George Williams and Wendell Blair have been domestic partners, living in Burlington, Vermont for ten years.  They qualify as domestic partners under the new Vermont statute which (a) is retroactive and (b) allows domestic partners to hold property as tenants by the entireties.  Both are domiciliaries of Vermont.  They have a timeshare interest in a condominium in Mobile, Alabama, which they have maintained for five years, often discussing the possibility of retiring to Mobile.  They hold this interest as "tenants by the entireties" a form of ownership traditionally reserved to married couples.  At common law, when a tenancy by the entirety failed because the parties were not married, some courts (including, assume, Alabama's) found a tenancy in common.  If the condo interest were held as tenants in common, the sister would inherit Mr. Williams' interest.  If it was held as tenants by the entirety, Mr. Blair would own the entire condo interest.

Mr. Williams recently died, and you have been retained to represent Mr. Blair.

Mr. Williams left a sister in Burlington from whom he was estranged.  The sister, wants to spend vacations in Alabama, and seeks to inherit Mr. Williams interest.

Mr. Blair has asked you to file a diversity action in the United States District Court for the Southern District of Alabama to ensure his exclusive enjoyment of the timeshare in the condominium.

What arguments should you make, and what responses should you anticipate by the sister, who has appeared and is not contesting personal jurisdiction?