AG Bobek suggests limiting jurisdiction for online defamation of legal and natural persons (C-194/16, Bolagsupplysningen and Ilsjan)
By Bernd Justin Jütte
In his opinion in Case C-194/16 Advocate General (AG) Bobek suggests limiting the jurisdictional competence for infringements of personality rights of legal and natural persons on the Internet to two venues: the place of the domicile of the publisher and the centre of interest of the company whose personality rights have been infringed. If the Court were to follow the AG, this would mark a departure from the rule established in eDate/Martinez, which gives the injured party also the choice to litigate in all 28 Member States of the EU. If the Court were to adopt this position, parallel litigation in multiple fora would be precluded and judicial competence would be limited to such courts that have a true link to the dispute.
The appellants in the proceedings before the Estonian Riigigohus (Supreme Court) are an Estonian-established company, Bolagsupplysningen OÜ (BOÜ), which does the majority of its business in Sweden, and one of its employees, Ms Ilsjan. The respondent is Svensk Handel AB, a Swedish trade federation. The respondent had placed BOÜ on a blacklist which was published on its website including a statement that BOÜ “deals in lies and deceit”. A forum on that website generated more than 1.000 reactions to the blacklisting, including calls for acts of violence against BOÜ and its employees. BOÜ together with Ms. Ilsjan requested that the information on the website be rectified and the comments removed. Furthermore, they also requested substantial damages for loss in profit due to a loss of reputation in Sweden. The first-instance court in Estonia rejected all claims, arguing that the losses had not been suffered in Estonia and that it therefore lacked jurisdiction under Article 7(1) of Regulation No 1215/2012 (Brussels I Regulation (recast)). The mere accessibility of the website in Estonia would not grant the court jurisdiction. That decision was confirmed on appeal.
The appellants then appealed to the Estonian Supreme Court. The latter stayed the proceedings and referred a set of questions to the Court of Justice of the European Union (CJEU), which AG Bobek reformulated for greater clarity.
The questions referred to be the Estonian Supreme Court are (as reformulated by AG Bobek):
- Can a legal person sue for the entire harm caused by infringing comments on a website in the country where that person has its centre of interest?
- What is the centre of interest for legal persons?
- In which jurisdiction could a thusly injured legal person seek remedies other than damages?
The Brussels I Regulation (recast) foresees as its general rule of jurisdiction that a defendant should be sued in the courts of the Member state where he is domiciled (Article 4(1)). This forum should always be available to claimants “save in a few well- defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor.“ (Recital 15) One of these cases for which the Regulation offers an alternative forum is non-contractual liability, or, as the legislator has put it in Article 7(2), ”in matters relating to tort, delict or quasi-delict”.
Special jurisdiction for torts under Article 7(2)
The AG begins his analysis with a “tour de force” through the jurisprudence of the CJEU on the question of jurisdiction for infringements of personality rights (paras 24-32). In relation to torts, delicts and quasi-delicts, the special rule of jurisdiction under Article 7(2) of the Brussels I Regulation (recast) applies, pursuant to which a person may be sued in “the courts of the place where the harmful event occurred or may occur”. This rule should safeguard that a court with a particularly close connection to the dispute has jurisdiction so as to enable a sound administration of justice (Recital 16, Brussels I (recast), for further references see FN 8 of the AG’s opinion). This provision was first interpreted in Bier v Mines de potasse d’Alsace (then still under the pre-predecessor of the Regulation, the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters). Pursuant to Bier, the concept of the place where the harmful even occurred covers both the place where the damage occurred and the place of the event giving rise to the damage.
This dichotomist rule of jurisdiction was applied to reputational damage caused by libellous remarks in newspapers in the Shevill case. Here, the Court ruled that the Bier rule would grant jurisdiction to the courts of the Member State where the publisher is established (i.e. the place where the event giving rise to the harm occurred), or before the courts where the newspapers were (physically) distributed and where the victim alleges to have suffered harm (i.e. the place where the damage occurred). The former court has jurisdiction for the entirety of the damage suffered by the injured party, whereas the latter courts only have jurisdiction to rule on the injury suffered within the territory of the Member State in which the respective national court is located.
Later on, this interpretation found application to the infringement of personality rights through information published on the Internet in eDate/Martinez. In this case, the Court granted jurisdiction to the national courts in which the website that contained injurious content was accessible, but only for the respective damage suffered in that Member State (so-called “mosaic” approach). But it also added another head of jurisdiction where the injured individual could claim the entirety of damages for the harm suffered: the centre of interest of a person. This criterion refers to the country where the claimant has his habitual residence, or to another Member State which a particularly close link can be established with.
Legal and natural persons alike?
The BOÜ case differs from the above case law, in the sense that one of the claimants is a legal and not a natural person. Moreover, in addition to damages, the claimants also seek injunctions to correct and remove information on the Internet. According to the AG, this would justify a reassessment of the rules established in Shevill and eDate/Martinez (para. 34).
As a first and preliminary step, the AG discusses whether legal persons enjoy personality rights. He does this in quite some length, the discussion spanning over 34 paragraphs. In summary, as the analysis will be subsequently focus on the jurisdictional question, the AG favours a more or less full protection of a company’s personality rights under Article 16 and 17 of the EU Charter (paras 41-51) but also stresses that companies enjoy certain rights under national statutory law, which is why the question does not require addressing in the first place (paras 52-60). Accordingly, he comes to the conclusion that a different treatment of legal persons for the purpose of establishing special jurisdiction under Article 7(2) of the Brussels I Regulation (recast) would not be warranted (paras 61-69).
This conclusion is not uninteresting, though, as the following analysis of the place of jurisdiction is, therefore, equally applicable to natural and legal persons, in which AG Bobek suggest to abandon the “mosaic” approach the Court had developed in eDate/Martinez.
Simplifying special jurisdiction for online infringements
Having established that natural and legal persons should be treated in the same way, AG Bobek critically addresses the existing interpretation of the Court in respect of the place of jurisdiction for online infringements of personality rights. Acknowledging that the Internet “is simply a very different medium”, he finds “compelling arguments to revisit the overly broad rules on special jurisdiction” developed by the Court. In essence, he suggests limiting special jurisdiction under Article 7(2) to two fora at the choice of the injured party; the courts in both fora would have jurisdiction to rule on the full claim, irrespective of whether the claimant is a legal or natural person (paras 70-72).
To make his argument, the AG begins by outlining the difficulties that would result from maintaining the “mosaic” approach pursuant to Shevill for torts committed via the Internet. This approach, AG Bobek argues, was based on the factual reality of a physical distribution of newspapers as media through which infringing acts could be communicated. Assessing jurisdiction based on the places of physical distribution could still be reconciled with the limited territorial jurisdiction of Member States (paras 73-75).
An automatic extension of the Shevill approach to torts committed online would, however, not take into consideration the fact “that the Internet operates very differently.” Discarding arguments of linguistic limitations of the receiving audience, AG Bobek sees the borderless nature of the Internet as a reason to revisit the uncritical reception of Shevill in eDate/Martinez.
First, he argues that the result of granting parallel jurisdiction to potentially 28 national courts would be irreconcilable with the objective of the Brussels I Regulation (recast) to provide objective and predicable jurisdictional rules (paras 78-79). Second, parallel proceedings in multiple jurisdictions would create practical obstacles for rationalising the conduct of judicial proceedings (paras 80-83). Third, the splitting of jurisdictions would prove impractical when discussing injunctions, which are indivisible by nature, as opposed to easily separable claims for damages (para. 84). These arguments lead to the conclusion that an application of the Shevill rule to the Internet would neither serve to guarantee the sound administration of justice in the sense that a court with a close connection to the specific claim would be seized, nor would a choice of 28 different jurisdiction advance the interests of either party (paras 85-90).
AG Bobek suggests bringing the jurisdictional rules for Internet-based infringements of personality rights closer to the roots of non-contractual liability of the Brussels I Regulation (recast) (and its predecessors). Based on the approach developed in Mines de potasse d’Alsace he recommends a limitation of jurisdiction to the place that gives rise to the damage (i.e. where the information emanates from) and the place where the harm occurred (i.e. the centre of interest of the injured person).
The first head of jurisdiction, which coincides with the general rule of jurisdiction, does not require much alteration as this remains, as already in Shevill and eDate/Martinez, the place where the publisher has its domicile, and does not differ for online and offline infringements. This head of jurisdiction should safeguard that jurisdiction rests with a court which can influence the person who has access and who can alter the allegedly infringing information (paras 93-94). The second head of jurisdiction would then be the place where the injured person “was most strongly hit”, which is most likely his centre of interest and also the “true centre of the dispute”, i.e. the place with the closest link to the dispute (paras 95-96).. Both jurisdictions would further have competence to rule on the full claim (paras 97-98).
The “mosaic” option developed in Shevill and adapted for online infringements in eDate/Martinez to sue an infringer in every Member State in which a website containing defamatory or libellous is accessible would be discarded for the reasons outlined above. This would, pursuant to AG Bobek, serve to realize the objective to provide for predictability of jurisdiction and guarantee a sound administration of justice.
The centre of interest for legal persons
Next, AG Bobek suggests a dual and case-specific approach to identify the centre of interest of natural and legal persons. This approach should be based on “the factual and social situation of the claimant viewed in the context of the nature of the particular statement.” This should ensure the jurisdiction of a court that sits at the “centre of gravity of the specific dispute” (paras 100-101). For natural persons the Court already established in eDate/Martinez that the centre of interest is, in general, the habitual residence of the claimant. This starting point should be considered in the light of the concrete statements in question and its effects on the professional and personal life of the person concerned (paras 102-103). For legal persons the centre of interests, as a general rule, is most likely to be found in the Member State where the entity attains its highest turnover (for-profit organizations) or where most of its “clients” are located (non-profit organizations), and where the damage to the reputation of that entity are likely to be felt the most (para. 104).
As one suggestion of the referring court, AG Bobek also considers whether the place of establishment could be considered a relevant place for jurisdiction, taking inspiration from Article 3(1) of the Insolvency Regulation, which refers to the “centre of main interests”, i.e. the place where (for the purpose of that Regulation) a debtor conducts the administration of its interests (paras 105-108). For companies this is indeed most likely the place of establishment. This criterion to determine jurisdiction for the respondent of proceedings is comparable to the default rule of jurisdiction of Article 4 of the Brussels I Regulation (recast). The difference between the place of jurisdiction between Article 3(1) of the Insolvency Regulation and Article 4 of the Brussels I Regulation (recast) on the one hand and the special jurisdictional rule of Article 7(2) of the latter, as interpreted by the CJEU in eDate/Martinez, on the other, is that Article 7(2) grants the claimant forum actoris, meaning that jurisdiction is granted on the basis of the location of the claimant (para. 110).
Therefore, AG Bobek argues, the place of domicile or establishment is a possible, but not the decisive criterion in deciding the courts of which Member State have competence to hear the claim. It is conceivable that the place of establishment does not coincide with the main place of activities of a given claimant, which is why other factors must be taken into consideration, such as the main commercial or other professional activities of legal persons.
Considering that for natural persons the place of jurisdiction is most likely the place of residence, other places where a natural person maintains social and professional structures might exist (paras 113-114, see also para. 49 of eDate/Martinez). This can also be true for legal persons, and a general rule for the centre of interest of such entities cannot be made. A factual and contextual assessment of a given situation might also lead to multiple possible places for jurisdiction. In such a case it is for the claimant to choose to seize the courts of one of those Member States. These courts would have full jurisdiction to hear the full claim and other courts would be barred to hear claims based on lis pendens.
Jurisdiction for related injunctions
Finally, AG Bobek addresses the question whether a court which is only competent to hear an action for partial damages (assuming that eDate/Martinez were not to be overruled) can, nevertheless, order cross-border injunctions for rectification and removal of information in its entirety. The AG rejects the possibility of splitting injunctions for very practical reasons. As an injunction for rectification and removal would have to target the source of the harm, viz. the website containing the allegedly infringing content, there is only that website to target with an injunction.
Therefore, ignoring certain “absurd” scenarios where only a proportionate part of the information were to be deleted, it is only conceivable that a court seized with a claim for partial damages would still be able to order all remedies that are available under the respective domestic law (paras 126-128). AG Bobek further points out, and thereby strengthening his arguments to limit the possible places of jurisdiction to two, that if 28 courts in as many Member States could be competent to hear the case for the respective damage caused in these Member States, all these courts could also order injunctions, which would most likely differ in nature and scope, and might, even worse, be contradictory (para. 130).
AG Bobek comes to the conclusion that Article 7(2) of the Brussels I Regulation is to be interpreted to mean that the place of jurisdiction for a claim in respect of the entirety of the harm caused by an infringement of personality rights of a legal person is the Member State where that legal person has its centre of interest. This is the place where that person conducts its main professional activities provided that the information can affect the professional activities in that Member State.
AG Bobek’s opinion is certainly daring as he suggests to revisit, and change, the 2011 eDate/Martinez ruling of the Court, which is based on the much earlier Shevill decision (1995). But it is also a reasonable suggestion, which together with his proposal to enable courts to issue cross-border injunctions for rectification and removal, helps better achieve the aims of the Brussels I Regulation (recast). Indeed, two (or slightly more) places of jurisdiction instead of 28 are more likely to ensure legal certainty based on a close connecting factor and the proper administration of justice.
If the Court were to follow the opinion, it would shut the door to jurisdiction based on mere accessibility of a website in a Member State, at least for infringements of personality rights. AG Jääskinen had made a similar attempt in Pinckney for intellectual property rights. Although the facts of the latter case were different – infringement of copyright instead of personality rights – AG Jääskinen also argued for a limitation of the Member States whose courts would have jurisdiction for infringements committed via the Internet; he suggested to limit jurisdiction to such Member States to which a particular website that offers for sale infringing copies of works protected by copyright is addressed.
However, AG Jääskinen was unsuccessful in his attempt to persuade the Court, which maintained that in such cases the relevant criterion is accessibility and, accordingly, all Member States in which a website is accessible are competent to hear an action for the damage occurred in the territory of that Member State. It is worth noting that AG Jääskinen had rejected a centre of interest approach for copyright due to the different nature of the rights concerned, more concretely because the damage suffered by an infringement of personality rights is more intense where the injured person has his centre of interests.
The considerations that lead the Court to deny limited jurisdiction in Pinckney were certainly motivated by the economic nature of the exclusive rights granted to copyright owners. Personality rights are not territorially limited economic rights, such as copyright, which are easily separable for the purposes of calculating damages. herefore a centring-in on a more limited geographical area for jurisdiction would make sense when considering the reputational damage suffered by claimants (pecuniary and non-pecuniary losses are claimed in BOÜ, whereas Ms. Ilsjan only claims the latter). The ruling in Pinckney does, therefore, from a systematic perspective, not stand in the way for a departure from the Shevill and eDate/Martinez rulings, and a parallel application of the criteria proposed by AG Bobek to injunctions would certainly make sense.
That being said, an argument could be made that partial injunctions are possible by geo-blocking allegedly infringing websites for the territories Member States in which an injunction has been ordered. After all, Netflix, Spotify and other online services are able to offer different versions of their services in different Member States. This is technologically possible and would, as a result, make the website inaccessible in those Member States. AG Bobek argued that it is particularly this alleged impossibility to order partial (read: territorially limited) injunctions that would also support his argument to limit jurisdiction for the main claim to the place of domicile of the publisher and the centre of interest of the claimant.
Technological technicalities aside, the proposition of AG Bobek is a reasonable one as it would achieve the aims of Brussels I (recast) better than the current interpretation which includes the “mosaic” approach. Effectively, the third jurisdictional option, which the AG suggests to abandon, is of limited relevance as one single forum will often be more convenient for the claimant. Only aggressive litigants who use multiple jurisdictions to exhaust the resources of a respondent would mourn the abolishment of the Shevill and eDate/Martinez interpretation of Article 7(2) for online infringements of personality rights.