UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

YAHOO! INC.,

a Delaware corporation,

Plaintiff,

v.

LA LIGUE CONTRE LE RACISME ET

L’ANTISEMITISME, a French

association, and L’UNION DES

ETUDLANTS JUlFS DE FRANCE, a

French association,

Defendants.

No. C00-21275

COMPLAINT FOR DECLARATORY RELIEF

Trial Date: Not Yet Set

Plaintiff Yahoo! Inc. complains of defendants La Ligue Contre Le Racisme et L’Antisemitisme and L’Union Des Etudiants Juifs de France and alleges as follows:

PARTIES

1.         Plaintiff Yahoo! Inc. (“Yahoo!”)is a Delaware corporation with its principal place of business in Santa Clam, California.

2.         Yahoo! is informed and believes and thereon alleges that defendant La Ligue Contre Le Racisme Et L’Antisemitisnie (“LICRA”) is a French association with its principal place of business in Paris, France.

3.         Yahoo! is informed and believes and thereon alleges that defendant L’Union Des Etudiants Juifs De France (“UEJF”) is a French association with its principal place of business in Pans, France.

SUBJECT MATTER JURISDICTION

4.         The amount in controversy between the parties exceeds $75,000.

5.         The plaintiff is a citizen of both California and Delaware. All defendants are citizens of France. This court has original jurisdiction under 28 U.S.C.A. §1332(a)(2) because this action is a civil action between a citizen of a U.S. state and “subjects of a foreign state” where the amount in controversy exceeds, exclusive of costs and interest, $75,000.

PERSONAL JURISDICTION

6.         Yahoo! is informed and believes and thereon alleges that LICRA and UEW have, with the intent of forcing Yahoo! to take certain actions in Santa Clara, California and elsewhere in the U.S., committed acts expressly and repeatedly targeted at U.S.-based Yahoo! and users of Yahoo!’s U.S. services, including but not limited to:

(a)         sending a “cease and desist” letter to Yahoo! in Santa Clara, California demanding that it remove from its U.S.-based auction site (httn://auctions.yahoo.com) (the “U.S. Auction Site”) items that are constitutionally protected speech in the U.S.;

(b)      filing civil complaints (the “Paris Lawsuit”) against Yahoo! in the Tribunal de Grande Instance de Paris (the “Paris Court”) relating to material that they viewed on Yahoo!’sU.S. services;

(c)repeatedly availing themselves of the services of the U.S. Department of Justice and U.S. Marshal’s Office to serve complaints and orders in the Paris Lawsuit on Yahoo! in Santa Clara, California;

(d)         seeking and obtaining an injunction that forces Yahoo! to suppress and restrain constitutionally protected speech in the U.S. that is posted by users of Yahoo!’s U.S...based services, and to expend significant funds to modify Yahoo!’s U.S.-based services and reengineer Yahoo!’s U.S. servers in order to suppress and restrain speech that is constitutionally protected in the U.S.. but illegal in France.

7.         Yahoo! is informed and believes and thereon alleges that LICRA and URW filed suit against Yahoo! to cause it to censor legally protected speech in the U.S. that they find offensive and to make an example of Yahoo! so that other U.S.-based websites and services would also censor their U.S. users.

8.         Yahoo! is informed and believes and thereon alleges that defendant LICRA agreed to Yahoo!’s Terms of Service, which state that users agree to “submit to the personal and exclusive jurisdiction of the courts, located within the county of Santa Clara, California” to resolve any claims relating to use of the Yahoo! service, when LICRA used Yahoo!’s website and webservers located in Santa Clara, California to (a) view Yahoo!’s U.S. Auction Site and (b) create a U.S.­ based Yahoo! e-mail account (licra_2000@yahoo.com) for its own use.

9.         Yahoo! is informed and believes and thereon alleges that defendant UEJF agreed to Yahoo!’s Terms of Service, which state that users agree to “submit to the personal and exclusive jurisdiction of the courts located within the county of Santa Clara, California” to resolve any claims relating to use of the Yahoo! service, when UEJF used Yahoo!’s website and webservers located in Santa Clara, California to view (a) Yahoo!’s U.S. Auction Site; (b) websites hosted on Yahoo!’s U.S.-based webpage hosting service (httn:1/geocities.vahoo.com) (the “U.S. Webpage Service”), including a webpage containing an English-language translation of Adolph Hitler’s “Mein Kampf” (http://www.geocities.com/ southbeach/cabana/7748/ mk.html) and (c) directory listings on Yahoo!’s U.S.-based search engine (http://www.vahoo.com) (the “U.S. Search Engine”).

10.         Yahoo! is informed and believes and thereon alleges that defendants LICRA and UEJF intend to enforce inthe U.S. certain court orders they obtained in the Paris Lawsuit.

VENUE

11.         This court has venue pursuant to 28 U.S.C. § 1391(d). Venue is available in the district of plaintiff’s choosing because alien defendants may be sued in any district. Defendants have also agreed to a forum selection clause that places venue in this district for any dispute concerning their use of plaintiff’s service.

GENERAL ALLEGATIONS

12.         Yahoo! operates a wide array of Internet sites and services -- including an Internet search engine, an automated online auction site, webpage hosting services and streaming media services -- at the Uniform Resource Locator (“URL”) http://www.yahoo.com. All Yahoo! services that end in the “.com” suffix, without an associated country code as a prefix or extension, are operated in the English language, targeted to a U.S. audience, hosted on U.S. servers and operate under U.S. laws (collectively, “Yahoo!’s U.S.Services”). Yahoo! subsidiary corporations also operate regional Yahoo! sites and services in 20 other countries, including, for example, Yahoo! France, Yahoo! India, Yahoo! Spain, and Yahoo! Korea. All regional Yahoo! sites, including Yahoo! France, are operated in that local region’s primary language, targeted to the local citizenry, and operated under local laws. Each of these regional Yahoo! sites also contains the country’s unique two-letter code as either a prefix or a suffix in its UR.L; for example, Yahoo! France may be found at http://www.yahoo.fr and Yahoo! Korea may be found at http://www.yahoo.kr.

13.         Yahoo!’s subsidiary corporations have undertaken significant efforts to develop regional sites and services and to operate them in accordance with local laws and cultural mores.

14.         On or about April 5,2000, defendant LICRA sent a cease and desist letter to Yahoo! in Santa Clara, California and threatened “unless you cease presenting Nazi objects for sale [on the U.S. Auction Site] within 8 days, we shall size [sic] the competent jurisdiction to force your company to abide by [French] law.”

15.         Because items displaying the swastika or other Nazi symbols are constitutionally protected speech in the U.S. -- and because most “Nazi” items complained of are historical collectibles, like World War 11-era stamps, coins or photographs -- Yahoo! historically has not removed such items when it receives a complaint that users have posted them to its U.S. Auction Site. Rather, Yahoo! has removed only such user-posted materials that seek to promote or incite violence against persons or groups based upon race or similar factors.

16.         In its cease and desist letter, LICRA limited its request to the U.S. Auction Site. Yahoo! is informed and believes and thereon alleges that LICRA did not request that Yahoo! take any action concerning the Yahoo! France auction site (http://fr.auctions.yahoo.com) (the “France Auction Site”) because Yahoo! France removes from the France Auction Site any user-posted items containing Nazi insignias, symbols or other content that violates French law.

17.         LICRA’s cease and desist letter gave Yahoo! until April 13, 2000 to respond. Before Yahoo! could do so, on or about April 10, 2000, LICRA filed a civil complaint against Yahoo! in the Tribunal de Grande Instance de Paris (the “Paris Court”) based on French Penal Code, Article R.645-2. LICRA’s complaint sought to compel Yahoo! to prevent users of the U.S. Auction Site from posting Nazi-related items that allegedly violate French law or to reengineer its systems so that such items would be blocked from the view of persons in France. LICRA also sought to compel Yahoo! to pay penalties for violation of the French Penal Code in the amount of 100,000 Euros per day (approximately U.S. $90,000) for every day that its U.S. Auction Site continued to violate French law.

18.         On or about April 20, 2000, UEJF likewise filed a complaint against Yahoo! in the Paris Court, joining in LICRA’s lawsuit based on French Penal Code, Article R.645-2. UEJF’s claims concerning the U.S. Auction Site are substantially similar to LICRA’s. UEJE also sought to compel Yahoo! to “cease hosting” on its U.S. Webpage Service user-posted writings that allegedly violate French law (such as an English language translation of “Mein Kampf) or to block such material from the view of persons in France. UEJF sought to compel Yahoo! to pay penalties for violation of the French Penal Code in the amount of 100,000 Euros per day (approximately U.S. $90,000) for every day that its U.S. Auction Site and U.S. Webpage Service continued to violate French law or, alternatively, for every kilobyte of data violating French law.

19.         At the initial hearing before the Paris Court on or about May 15,2000, and throughout the proceeding, Yahoo! maintained its objections to the Paris Court’s exercise of jurisdiction over Yahoo!.

20.         The Paris Court heard the Paris Lawsuit as an emergency proceeding on an expedited basis before a single judge. At the initial hearing before the Paris Court on or about May 15,2000 and throughout the proceeding, Yahoo! maintained its objections to expedited, emergency review and requested a full and fair trial before a judicial panel. Yahoo!’s objections and requests were dismissed by the Paris Court.

21.         On or about May 22, 2000, the Paris Court issued an order commanding Yahoo! to “take all necessary measures” to “dissuade and render impossible” any access via “yahoo.com” by internet users in France to “the Nazi artifact auction service or any other site or service that constitutes an apology of Nazism or a contesting of Nazi crimes” (hereinafter the “May 22nd Order”) (A copy of the May 22nd Order in the original French and translated into English is attached as Exhibit A).

22.         On or about July24, 2000, the parties reconvened before the Paris Court for a status conference. Yahoo! explained to Paris Court Judge Jean-Jacques Gomez (“Judge Gomez”) that it would be technically impossible for Yahoo! to comply with the May 22nd Order. Yahoo! supported its claim with a technical report prepared by French Internet expert Jean-Denis Gorin and with a declaration from Yahoo! engineer Geoff Ralston.

23.         By order dated August 11, 2000, Judge Gomez ordered the formation of an expert panel to report on whether compliance with the May 22nd Order was technically feasible.

24.         By order dated September 18, 2000, Judge Gomez confirmed that the expert panel would be comprised of Francois Wallon of France, Ben Laurie of the United Kingdom, and Vinton Cerf of the United States (the “Expert Panel”). The Expert Panel was to render its joint, written opinion in a report presented to the Court on November 5, 2000.

25.         Yahoo! is informed and believes and thereon alleges that Judge Gomez gave an interview about the Paris Lawsuit to the French language Internet magazine, Transfert, while the lawsuit was pending. The interview was published in Transfert’s October 2000 issue. In the interview, Judge Gomez said that the Paris Lawsuit posed the question of whether companies like Yahoo! would conform to “a single line of morality acceptable to all.”

26.         Yahoo! is informed and believes and thereon alleges that the Expert Panel’s final written report, which was submitted to the Paris Court on November 5, 2000 (the “Expert Report”), was prepared in the French language by the French expert, Francois Wallon. Neither Vinton Cerf nor Ben Laurie was provided with an English-language translation of the Expert Report until Yahoo! translated it after the Paris Court’s November 20, 2000 ruling. Yahoo! Is informed and believes and thereon alleges that neither Mr. Cerf nor Mr. Laurie reads or speaks French.

27.         Yahoo! is informed and believes and thereon alleges that although Vinton Cerf submitted a dissenting report to Francois Wallon during the experts’ deliberations, only a small portion of his dissenting view was included in the Expert Report. Mr. Cerf also submitted a second dissenting opinion to Mr. Wallon on November 5, 2000. This dissenting opinion was also not included in the Expert Report and was expressly rejected by the Paris Court at the November 6, 2000 hearing.

28.         Yahoo! is informed and believes and thereon alleges that while the Expert Panel disagreed on certain issues, they all agreed that Yahoo! could not “render impossible” access by French citizens to the offending materials because (a) Internet Protocol (“IP”) address technology only permits identification of French websurfers with approximately 70% accuracy; (b) there are a number of means by which TP address technology may be easily circumvented; and (c) there is no automatic or infallible approach for identifying images or items that “constitute an apology for Nazism or a contesting of Nazi crimes.

29.         Yahoo! is informed and believes and thereon alleges that at the November 6th hearing, defendants asked the Paris Court to permit them to enforce against Yahoo! France any orders issued by the Court against Yahoo! Inc.

30.         On or about November 20, 2000, Judge Gomez issued an order reaffirming his May 22nd Order that required Yahoo! to “take all necessary measures” to “dissuade and render impossible” any access via “yahoo.com” to “the Nazi artifact auction service or any other site or service that constitutes an apology of nazism or a contesting of Nazi crimes” in violation of French Penal Code, Article R.645-2 (the “November 20th Order”) (A copy of the November 20th Order in the original French and translated into English is attached as Exhibit B). Among other things, the November 20th Order:

(a)         Directs Yahoo! to reengineer its content servers in the U.S. and elsewhere so that they can recognize Internet Protocol (“IP”) addresses associated with France or the French territories and block access by websurfers assigned such IP addresses to any materials that violate Article R.645-2;

(b)         Directs Yahoo! to ask users whose IP address is “ambiguous” to provide Yahoo! with a declaration of nationality when they arrive at Yahoo!’s home page or when they initiate any search using the word “Nazi;”

(c)         Requires Yahoo! to comply within 3 months of the Order’s service or face a penalty of 100,000 Francs (approximately U.S. $13,300) for every day of non-compliance;

(d)      Says that requiring Yahoo! to ban symbols of Nazism is mandated by “simple public morality” and has “the merit of satisfying an ethical and moral imperative shared by all democratic societies;” and

(e)         Denies defendants’ request for permission to enforce the Order or any penalties directed at Yahoo! Inc. against Yahoo! France.

31.         Yahoo! is informed and believes and thereon alleges that on or about November 21, 2000, expert panelist Ben Laurie posted a document entitled “An Expert’s Apology” to his website at the URL http://www.apaChe-SSI.Or2IaPologV.htlfll. In his “apology,” Mr. Laurie reiterated that “compliance [with the Paris Court’s Orders] is impossible.” Mr. Laurie also described the technical measures the Paris Court ordered Yahoo! to implement as “half-assed,” “trivially avoidable,’’ “inaccurate,” “ineffective,” and “pointless.’’

CLAIM FOR RELIEF: DECLARATORY RELIEF

(28 U.S.C. § 2291)

32.         Plaintiff Yahoo! realleges and incorporates herein by reference all preceding paragraphs in this complaint.

33.         LICRA and UIEJF have sought and obtained a prior restraint and penal judgment from the Paris Court in order to compel Yahoo! to comply with their demand that it remove, or block access to, content appearing on Yahoo!’s U.S. Services.

34.         Yahoo! cannot comply with the injunction in the Paris Court’s May 22nd and November 20th Orders because compliance is impossible. Moreover, even if compliance were possible, it would (a) burden Yahoo! to the point pf causing significant and permanent harm to its operations, customer base and goodwill, and (b) require yahoo! to collaborate in an unconstitutional prior restraint on freedom of expression ordered by a French court acting extraterritorially and without jurisdiction.

35.         LICRA and UEJF have already sued Yahoo!, and Yahoo! has a reasonable apprehension that LICRA and UBJF will now attempt to enforce the May 22nd and November 20th Orders in the U.S.. both as a prior restraint and as penalties for non-compliance.

36.         Defendants LICRA and UEJF consider the May 22nd and November 20th Orders to be enforceable and have expressed their intent to enforce them against Yahoo! in the U.S. Yahoo! considers those orders to be unenforceable as a matter of law.

37.         The U.S. is the only jurisdiction in which LICRA and UEJF may properly seek to enforce the May 22nd and November 20th Orders because (a) Yahoo!’s U.S. Services are maintained and supported by U.S. webservers; (b) Yahoo! maintains no assets in France; (c) Yahoo! sites and services operated in foreign countries are conducted by separate and independent foreign subsidiary corporations; and (d) the Paris Court has held that LICRA and UEJF may not enforce the Orders against Yahoo! France.

38.         As long as Yahoo! cannot or does not comply with the injunctions set forth in the May 22nd and November 20th  Orders, LIICRA and UEJF threaten to continue to ensure that the fines are assessed and accrued on a daily basis. Without declaratory relief as to whether the May 22nd and November 20th Orders are enforceable, Yahoo! will be required to immediately expend significant funds to reengineer Yahoo!’s servers in Santa Clara and elsewhere in an attempt to comply with an order that is impossible to comply with, or face accrual of fines of approximately $13,300 per day.

39.         Yahoo! is informed and believes and thereon alleges that LICRA and UEJF intend to use the Paris Court’s Order to get other U.S.-based websites and webservices to censor their U.S. users. For example, Yahoo! is informed and believes that LICRA’s attorney, Marc Knobel recently stated that “this could only be the first in a slew of lawsuits against U.S. companies making materials available on the Net that are legal in the U.S., but illegal in Europe,” and “this is not a fight we will stop in two months time.” Without declaratory relief, the May 22nd and November 20th Orders may significantly chill freedom of expression for users of Yahoo’ and other U.S.-based ISPs because such companies may choose to remove constitutionally-protected speech in order to avoid protracted court battles or legal liability.

40.         The monetary portion of the November 20th Order constitutes a penalty or fine for noncompliance with a foreign injunction that is designed to enforce a foreign penal law against a U.S. company and its U.S.-based operations. The Order is not a judgment granting “recovery of a sum of money, other than a judgment for taxes, a fine or other penalty” within the meaning of the Uniform Foreign Money Judgments Recognition Act, Section 1(2), as enacted in California in California Code of Civil Procedure, Section 1713.1(2), and is not recognizable or enforceable.

41.         The Paris Court’s May 22nd and November 20th Orders are not recognizable or enforceable because they violate U.S. and California public policy of protecting free speech. Moreover, because the Orders direct Yahoo! to implement filtering mechanisms and to individually monitor, a priori, all postings to all of its sites and services -- in the U.S. and elsewhere -- they constitute an unconstitutional prior restraint on speech that is protected by the First Amendment to the Constitution of the United States and by Article I of the Constitution of California.

42.         The Paris Court’s May 22 and November 20th Orders are not recognizable or enforceable for the following additional reasons:

(a)      U.S. law immunizes Internet Service Providers (“ISPs”) such as Yahoo! from responsibility and liability for the content of postings by third parties, as provided by section 230 of the Communications Decency Act, 47 U.S.C. Section 230(a). If permitted to stand, the French judgment would give foreign nationals a cause of action against U.S.-based ISPs that U.S. citizens do not have.

(b)      The Orders violate public policy in favor of freedom of expression recognized not only in the United States as a fundamental constitutional right, but also by treaty and international law, for example, as set forth in (1) Article 19 of the International Covenant on Civil and Political Rights (“ICCPR”), the Resolution of Advice and Consent by the U.S. Senate, and the Instrument of Ratification by the President of the United States, (2) Article 10 of the Convention for the Protection of Human Rights and Fundamental Freedoms; and (3) Article 19 of the Universal Declaration of Human Rights. France is a signatory to all three of the foregoing.

(c)      The Orders exercise an unreasonable, extraterritorial jurisdiction over the operations and content of a U.S.-based webservice belonging to a U.S. citizen. The Paris Court has extraterritorially imposed on. a U.S. corporation the drastic remedy of a prior restraint and penalties that are impermissible under U.S. law, instead of simply enforcing the French Penal Code against French citizens who break French law by accessing information hosted outside their country that the French Penal Code deems illegal.

(d)      The Orders are contrary to California’s public policy that (I) neither specific nor preventive relief can be grantedto enforce a penalty, or. to enforce a penal law, and (2) a private right of action, especially when used to impose a prior restraint on freedom of expression, should not be implied from a penal law.

(e)         Yahoo! is informed and believes and thereon alleges that France would not give reciprocal recognition to, or enforce, a judgment of the State of California that granted an injunction against a French citizen that required specific conduct by him in France to ensure compliance with California penal law.

(f)         The Paris Court lacked personal jurisdiction over Yahoo!.

(g)         Yahoo! was not afforded a full and fair opportunity to be heard in the Paris proceedings. The Paris Court disregarded crucial evidence put before it by Yahoo! and by the Expert Panel, and the Tribunal was biased such that the proceedings did not comport with U.S. notions of due process.

43.         An actual controversy has arisen and now exists between Yahoo! and defendants LICRA and UBJE as to the recognizability and enforceability of the Paris Court’s May 22 and November 20th Orders, which (1) impose a penal judgment; (2) constitute a prior restraint of speech in violation of the First Amendment to the United States Constitution and Article I of the California Constitution; (3) are inconsistent with federal law that immunizes ISPs like Yahoo! from liability for content posted to its sites by third parties; (4) are repugnant to numerous public policies of the State of California and the United States of America as well as contrary to applicable treaties and international law; and (5)were rendered in a proceeding that did not comport with acceptable principles of jurisdiction or due process.

44.         A declaratory judgment is necessary to immediately resolve the question of whether the May 22nd and November 20th  Orders are enforceable. Without such a declaratory judgment, Yahoo! must immediately commence significant reengineering of its servers in the United States in an attempt to comply with an order that is impossible to comply with, at significant expense, or face fines of approximately $13,300 per day. Moreover, attempts to comply with the Court’s order could slow delivery of Yahoo!’s service, block access by persons other than French nationals, and otherwise disrupt Yahoo!’s business, thereby causing immediate and permanent harm to its customer base and established goodwill. Finally, declaratory relief is necessary to prevent a significant chilling effect on the freedom of expression for users of Yahoo! and other U.S .based ISPs, because as a result of the May 22nd and November 20 Orders, such U.S. companies may choose to remove constitutionally protected speech in order to avoid protracted court battles or legal liability.

PRAYER

WHEREFORE, Yahoo! prays that this Court enter judgment in its favor and against LICRA and UEJF as follows:

(1)    For declaratory relief that the Paris Court’s May 22 and November 20th Orders, or any comparable orders hereafter issued against Yahoo!, are not recognizable or enforceable;

(2)    For recovery of Yahoo!’s attorneys’ fees, costs and expenses incurred herein; and

(3)    For all other such relief as the Court deems just and proper, including, as necessary, a preliminary injunction or permanent injunction against defendants LICRA and UEJIF to prevent them from enforcing or attempting to enforce the Paris Court’s May 22nd and November 20th Orders,or any comparable orders hereafter issued against Yahoo!.

Dated:         December 21, 2000

COOLEY GODWARD LLP

By: /s/

Michael Traynor

Attorneys for Plaintiff YAHOO! INC.