New first principles? Assessing the Internet's challenges to jurisdiction.

CONTENTS

I.  INTRODUCTION

II. THE CURRENT STATE OF THE LAW
    A. Jurisdiction Defined Generally
    B. Jurisdictional Actors: A Public Law Concept
    C. The Customary International Law of Jurisdiction
       (and a Bit on Treaties)
    D. The Special Case of Qualified Territoriality
    E. Distinguishing Extraterritorial Effect from Extraterritorial
       Jurisdiction

III. CHALLENGES POSED BY THE INTERNET: TRADITIONAL NORMS
     UNDER STRESS
     A. Technology and Globalization
     B. The Internet

 IV. STATE JURISDICTION OVER INTERNET-BASED ACTIVITIES
     A. Qualified Territoriality and the Courts
     B. Prescriptive Jurisdiction
     C. The Erosion of Jurisdiction

  V. STATE RESPONSES
     A. Unilateral Territorial Measures
     B. Conflict
     C. Formal Cooperation and Harmonization

 VI. RECOMMENDATIONS
     A. New First Principles
     B. Forecasts and Suggestions

VII. CONCLUSION

I. INTRODUCTION

Despite its historical origins, the Internet is far more than a communications network. In a short space of time it has become an apparently borderless marketplace, a forum for discussion and exchange of ideas, a criminal network, and a site for the uninhibited exchange of intellectual property. Its global and decentralized nature has also dramatically changed the identities and roles of traditional actors and intermediaries in a range of activities, from commerce to cultural production and information dissemination.

The variety and significance of so much Internet activity--and its impact on pressing domestic issues such as crime, national security and the economy--has necessarily compelled states toward increased engagement with matters outside their traditional spheres of legal authority. Put simply, because the Internet is borderless, states are faced with the need to regulate conduct or subject matter in contexts where the territorial nexus is only partial and in some cases uncertain. This immediately represents a challenge to the Westphalian model of exclusive territorial state sovereignty under international law. As a result, many states have grappled with defining the boundaries of traditional notions of state jurisdiction in cyberspace. This is manifest in the assumption of jurisdiction by states over a broad range of subject matter, from the most routine financial transactions to the muchhyped need for "cyber-security" against Internet-based attacks by other governments or terrorist groups. Courts struggle with a range of increasingly pressing challenges to their very competency to hear a matter, which would have been unheard of only two decades ago. (1) Inter-state conflict is inevitable and has occurred.

Given this situation, it is imperative to attain a clear understanding of the law of jurisdiction and to examine its operation in cyberspace. However, a great deal of the attention paid to jurisdictional issues in the legal literature has been sector-based; one sees publications on jurisdiction over cyber-crime, jurisdiction over foreign torts, jurisdiction over commercial transactions, and so on. The literature has also often been limited to a consideration of jurisdiction solely in the context of a single branch of government, most often in relation to the exercise of jurisdiction by courts. What is needed, we suggest, is an approach grounded solidly on a broad understanding of both how states and state entities exercise their jurisdiction, and the fundamental legal norms that underpin it.

Accordingly, in this paper we will explore both the concept of state jurisdiction and the way in which this concept is being transformed in the context of the Internet. Drawing on examples from various substantive law areas that have been affected by the Internet, we will develop and illustrate the range of state actions encompassed by a broad understanding of jurisdiction. Such a multi-faceted approach to jurisdiction is required to understand the Internet's impact on the way jurisdiction is exercised by various arms of the state, whether through legislative, administrative, judicial or enforcement activity. Through this lens we will examine the manner in which states, via the various branches of government, have adapted to the challenge of the Internet. We scrutinize the extent to which these responses have already begun to shape new principles for the exercise of state jurisdiction in the Internet age and query whether new "first principles" of jurisdiction are nascent, emergent, or even required. The goal is to understand the current state of the law, to assess and forecast where the Internet has placed traditional norms and expectations under stress, and to suggest means and ways by which states, legislators, and courts must innovate.

II. THE CURRENT STATE OF THE LAW

A. Jurisdiction Defined Generally

It is difficult to come up with a legal term which is more overburdened than 'Jurisdiction"; it is a "word of many, too many, meanings." (2) Its multiple layers and meanings are driven by the context in which it is used, but there are nonetheless common threads that allow lawyers, when speaking with each other, to use the word in an intelligible way. Generally speaking, jurisdiction refers to:

   ... the ability of the state to exercise some form of power,
   coercive or otherwise, over persons, places, things (including
   property) and events. This power may be exercised by various
   agencies of the state--the legislature, the executive, the courts
   or regulatory bodies that receive delegated power from one of those
   sources--and is defined and delimited by whatever the powers of
   those agencies happen to be. (8)

One sometimes sees the phrase "domestic jurisdiction" used in a way meant to distinguish it from "international jurisdiction," yet this is essentially shorthand for a point that is vital to examining jurisdiction and the Internet--to wit, there is a domestic law of jurisdiction and there is international law about jurisdiction. Any given state will have a law or set of laws, typically as part of its constitution, which sorts out the relative authority of any branch of the state. For example, in federal states such as Canada and the U.S., the constitution prescribes what powers each level of government (federal and provincial, federal and state, respectively) has, and implicitly or explicitly sets out limitations on those powers, whether according to subject matter, geography, or some other factor. It also sets out the areas of competence of the courts. As noted in the introduction, this domestic law is not the primary focus of this paper, apart from at a general level which will be described in part B of this section, below.

The international law of jurisdiction is our primary focus here--that is to say, the body of public international law which sets out rules for when and how the state (in its many aspects) may exercise jurisdiction over something. It is in a practical sense analogous to the international law of the sea, a field which demanded the creation of a set of rules among states, as the jurisdictional actors, given that the subject matter was so vast that none could control it. Yet even this analogy breaks down when one considers the global electronic interconnectedness of the Internet, which produces the unique effect that it exists, operates and is used both in one state at a time and simultaneously in all states. Not only will any single state not wish to control the Internet, it could not possibly do so except in isolated pockets, and even then any exercise of jurisdiction over the Internet potentially has implications for something or someone outside that state.

The latter point is perhaps the most important, because it illustrates that any exercise of jurisdiction by a state in an inter-connected world has the potential to bump up against the interests of another state. This naturally implicates the international law of jurisdiction, which, as Mann noted in his seminal essay, establishes normative parameters for "a State's right under international law to regulate conduct in matters not exclusively of domestic concern." (4) That law, he wrote, "is concerned with what has been described as one of the fundamental functions of public international law, viz. the function of regulating and delimiting the respective competences of States." (5) Jurisdiction at international law "reflects the basic principles of state sovereignty, equality of states and non-interference in domestic affairs." (6) Quite obviously, states' sovereign interests are heavily engaged in Internet-related matters, regardless of subject matter. Accordingly, in our view, international jurisdiction is the hot topic when it comes to "law and the Internet."

The international law meaning of jurisdiction will be explored below, as well as our overall question, which is whether that body of law is adequate to offer states a meaningful framework to govern their actions in relation to Internet-based activities.

B. Jurisdictional Actors: A Public Law Concept

It is important to emphasize at the outset that jurisdiction is an inherently public law concept. This might seem self-evident, given the definitions for jurisdiction provided above, and yet we feel it bears explanation and emphasis if one is to gain a broad understanding of the nature of jurisdiction. It may also help to avoid the problems which often crop up in the literature, from focusing on a particular kind of exercise of jurisdiction, by a particular state entity, in a particular area of substantive law.

One of the building blocks of the literature regarding the law of jurisdiction has, for many decades, (7) been the division of the state into three entities for the purpose of exercising jurisdiction. (8) These familiar branches are: the legislative or prescriptive branch, which refers to the ability of the state to make and apply laws to subject matter, whether that subject matter involves wholly domestic matters or touches on matters outside the state's territory; the enforcement or executive branch, which refers to the state's ability to give effect to its laws (including the ability of police or other government actors to investigate a matter, which might be referred to as investigative jurisdiction); and the judicial or adjudicative branch, which refers to the ability of a state's courts to adjudicate cases, particularly for our purposes those with foreign elements. (9)

Accordingly, any action taken by a state that can be called an exercise of jurisdiction must ultimately go through one of these channels. The exercise of jurisdiction operates across a spectrum of subject matter, and jurisdiction is a function of the level of state interaction with or intrusion into the subject matter. Depending on the subject matter, there may be an exercise of legislative, executive, or judicial jurisdiction--or there may be a mixture of any two or three of them. In fact, it is rarely the actions of one branch of the state that are implicated; the law of jurisdiction changes depending upon which state entity or entities are engaged in a particular exercise of jurisdiction. It is important to understand this, not least because proposals for law reform should reflect a holistic idea of what kind of state action is being contemplated. It is also important for this paper because, as will be explored in section III, below, some of the challenges posed by the Internet impact the state's capacity to exercise any or all of the three forms of jurisdiction--and thus its ability to govern.

Criminal law is the domain from which the international law of jurisdiction originally emerged, and it presents a good example of the range of jurisdictional action set out above. At various stages, an exercise of criminal jurisdiction can involve all three state branches. The executive might sign a treaty with other states, agreeing to criminalize a particular act and exercise jurisdiction over it. Most such treaties are not self-executing (10) and will require an exercise of legislative jurisdiction (the passing of a law) to both criminalize the act and establish jurisdiction over it. The police, an arm of the executive branch of the state, exercise enforcement jurisdiction by investigating the crime and arresting perpetrators. The courts exercise adjudicative jurisdiction, first by determining whether they have the jurisdiction to adjudicate (either by looking to their inherent jurisdiction or determining whether the legislature has awarded them the power to adjudicate this particular matter) and then by trying and sentencing the perpetrator. (11)

Naturally, depending on the subject matter, a particular exercise of jurisdiction might involve only one branch, with little or no activity from the other two. For example, the executive, in particular, may engage in unilateral exercises of its jurisdiction, such as making diplomatic communications, imposing trade embargoes, signing treaties or memoranda of understanding, etc. The courts in common law jurisdictions, when exercising their inherent powers, sometimes administer the (court-made) common law and act to resolve a dispute between parties without any input from the legislature--though even then, attempts to enforce a civil judgment will likely involve the machinery and compulsory powers of the executive. Civil law jurisdictions would see an interaction between executive-level activity, legislative creation of the civil code and judicial interpretation and enforcement of the code's provisions.

It is important, too, to recognize that an act of jurisdiction is still public, even if it is with regard to a subject matter thought of as "private." The courts may adjudicate public law (e.g. criminal, regulatory, privacy, etc.), but they may also preside over private law disputes between parties. Those parties bring a private right of action that they possess before the court, and the court (in an act of adjudicative jurisdiction) determines whether it can adjudicate and proceeds to resolve the dispute. However, the act of adjudication itself is public. This is true even for private international law, with courts deciding whether they have jurisdiction to hear disputes with foreign aspects or whether to enforce foreign awards. (12)

An exceptional situation may exist where private parties (including the state, when it is acting as a private litigant) agree to submit a dispute to a private arbitral body of some sort, essentially contracting out of their legal and/or constitutional rights to have the courts hear the dispute. The manner in which a private arbitral body is constituted and the powers which the parties agree it will have are often referred to as "jurisdiction," yet in our view they do not fit within that term, or at least certainly not within the conception of jurisdiction being examined here. A better term might be "competence," given the public law content and connotation of the word "jurisdiction." Moreover, it is worth noting that public law jurisdiction is in the background of even private dispute mechanisms. Governments may choose to outlaw these private mechanisms, or more realistically, may regulate access to them by statute or civil code, or pass laws regarding when arbitral awards will and will not be enforced, including the enforcement of contracts containing mandatory arbitration clauses.

Recognizing the public law nature of jurisdiction and the branches of its manifestation, then, this paper will not delve into the vagaries of the internal jurisdictional arrangements of any given state, except by illustrative example. Rather, we will proceed to analyze the impact of these exercises of jurisdiction upon the international law of jurisdiction, both customary and treaty-based.

C. The Customary International Law of Jurisdiction (and a Bit on Treaties)

The previous section has dealt with the ways in which an exercise of jurisdiction is made manifest. This next section will dig into the substance of the law of jurisdiction. (13) While, as noted above, every state has its own domestic law about the exercise of jurisdiction, jurisdiction in the sense we mean here is primarily a creature of customary international law. (14) Like some other areas of customary international law, this body of rules is binding on all states but is not exactly "hard" law in operation; it is more a set of overarching principles that provides a legal basis for states to determine what each may do, and not do, inside and outside their borders. Given the potential for conflict between states as they exercise jurisdiction, it has been accurately stated that the purpose of this body of law "is to safeguard the international community against overreaching by individual nations." (15)

The starting point is territoriality: in the international legal system, the state is essentially a territorial entity and each state enjoys plenary jurisdiction within, and exclusive control over, its territory. (16) A state's plenary jurisdiction over its territory, and every person and thing within it, is a function of state sovereignty. As other states are equally sovereign, it follows that as soon as one state exerts power in a way that purports to regulate or actively affect matters outside its borders, it will face, at least nominally, some limitations. This is captured in the inelegant but standard phrase "extraterritorial jurisdiction."

The international law regarding the exercise of jurisdiction by states can be expressed simply: one state's exercise of sovereign power cannot infringe upon the sovereignty of another state or states. This is easy enough to assert, but nebulous and nuanced in application because judging where the line is crossed is a complex exercise. As explained below, the rules differ as between legislative and enforcement jurisdiction, as well. The central point of conflict will be situations of concurrent jurisdiction, i.e. where two or more states have some legal claim to exercise jurisdiction over a particular matter.

It is worth noting that, as in all international legal disputes, resolution can be reached on an ad hoc basis; states can agree on where primary jurisdiction should lie on a case-by-case basis. For example, if a French citizen commits murder in the United States, France may have a claim to jurisdiction over its national. However, it is likely to defer to the U.S. since the U.S. is the state where the act occurred and probably where all of the evidence is located, as well as being the more aggrieved state of the two. Simply because a state notionally has jurisdiction over a matter does not necessarily mean that it will have any interest in exercising it.

However, regarding legislative jurisdiction, various principles have developed in international law to allow states to mitigate the conflict that may result from concurrent claims to jurisdiction. This system of "allocat[ing] competences" (17) is a direct outgrowth of the need to manage inter-state relations, and while it is normative in character it is functionalist in practice. As Brownlie has written, "the sufficiency of grounds for jurisdiction is an issue normally considered relative to the fights of other states and not as a question of basic competence." (18)

The starting point, of course, is the territorial principle, which renders territorial sovereignty as discussed above one of the bedrock jurisdictional notions. It is accepted that a state can assert jurisdiction over its territory, including the territorial sea, internal waters, airspace, and certain maritime zones. (19) In the context of criminal jurisdiction, it is not unusual (and increasingly typical) that a crime may take place in more than one state, either by way of elements of the crime occurring in more than one state or where the crime is completed in one state but has effects in another. (20) This has led to a sub-class of the territoriality principle developing, called qualified territoriality, which will be dealt with in part D, infra.

Since territoriality is the starting point, it follows that the other jurisdictional principles are extraterritorial. The four principles which have gained some acceptance in international law as supporting extraterritorial action are as follows:

(a) nationality principle: States may assert jurisdiction over the acts of their nationals, wherever the act might take place. This principle is employed more often by civil law than by common law countries, but has equal status with territoriality as a universally-accepted valid ground o f jurisdiction. (21)

(b) protective principle: States may assert jurisdiction "over acts committed abroad that are prejudicial to its security, territorial integrity, and political independence." (22) Examples are treason, espionage, and counterfeiting of state currency.

(c) universal principle: States may assert jurisdiction over certain criminal acts which are deemed to be offensive to the international community at large and thus justify broad jurisdictional permissiveness. Some examples are genocide, crimes against humanity, war crimes, and piracy. (23) Certain treaty regimes oblige member states which apprehend an individual accused of the relevant crime to prosecute the individual regardless of whether there is any connection between the crime and the apprehending state. If the state does not wish to prosecute, then it is obliged to extradite the individual to a treaty partner state which indicates a willingness to prosecute. This kind of mechanism is known as aut dedare, aut judicare ("extradite or prosecute"), (24) and can be distinguished from the broader notion of universality both by its mandatory character and by the fact that it applies only between the parties to the relevant treaty.

(d) passive personality principle: Some states have, from time to time and controversially, asserted jurisdiction over acts which injured their nationals, regardless of territorial location. (25) It is increasingly accepted that passive personality jurisdiction can be used, though usually as a subsidiary principle, in cases of terrorist violence. The U.S. makes extensive use of this principle in anti-terrorism legislation. (26)

Exercising extraterritorial jurisdiction, then, is not necessarily illegal under international law: it depends upon whether in exercising jurisdiction a state can be said to infringe upon the sovereignty of another. In terms of international law methodology, it is controversial whether the law is permissive, in the sense that each state is free to exercise jurisdiction unless there is a prohibitive rule to the contrary, (27) or restrictive, requiring a state to justify its assertion of jurisdiction on some recognizable legal basis. As Ryngaert has noted, "it is unclear which doctrine has the upper hand," (28) and the question is essentially one of burden of proof. The important aspect is that each of the jurisdictional principles above has the effect of legitimizing, to a greater or lesser extent, a state's claim to exercise jurisdiction over persons, places, and things beyond its territory. They are the techniques which states use to broker conflicts, usually in situations of concurrent jurisdiction.

Recently, the principles described above have been employed as criteria within a more global test for the legality of an exercise of jurisdiction: whether there is "a substantial and bona fide connection between the subject-matter and the source of the jurisdiction." (29) Brownlie, among others, has posited that state jurisdiction over an extraterritorial act will be lawful where this primary criterion is met. (30) In a similar vein is the rule of jurisdictional "reasonableness," which is set out in the Restatement (Third) of U.S. Foreign Relations Law, (31) though the extent to which it reflects accepted international law principles is debatable. (32)

Given the state sovereignty concerns at play when actual enforcement of law is concerned, the rules regarding the exercise of enforcement-jurisdiction are much more restrictive. As the Permanent Court of International Justice (PCIJ) wrote in the Lotus case, a state:

   ... may not exercise its power in any form in the territory of
   another State. In this sense jurisdiction is certainly territorial;
   it cannot be exercised by a State outside its territory except by
   virtue of a permissive rule derived from international custom or
   from a convention. (33)

Accordingly, not only will states not enforce the public (particularly criminal) laws of other states, (34) but absent exceptional circumstances no state may enforce its own laws upon the territory of a second state absent some clear legal authorization to do so. (35) This extends to both investigative jurisdiction (36) (so, for example, the police of one state cannot investigate in another state without the latter's permission) and jurisdiction over the person (for example, the police of one cannot arrest an individual in another state, again without the latter's permission). (37)

These rules emerged from the criminal law stable, and as a result they are quite broad in scope and fairly permissive in nature. On the whole they are not well-developed, and certainly not as well-developed as rules relating to extraterritorial jurisdiction that have been developed by the courts of various states for use in their domestic legal systems. (38) Historically they have worked fairly well in the criminal law sphere, where the reasonably rare inter-state conflicts tended to be resolved via negotiation between prosecutorial authorities or governments; one does not see a surfeit of cases before the International Court of Justice regarding criminal jurisdiction. (39) However, they have worked less well for private law disputes. Certainly they are binding upon all state exercises of jurisdiction in private international law, whether it be legislative, enforcement, or adjudicative. However, in private international law cases the interests presented are more economic than public order-oriented, and thus the major players reasonably desire and demand predictability. (40) As a result, national systems of private international law (or conflicts of law) are much more detailed and nuanced than the more indeterminate and malleable public international law rules, (41) in "recognition that civil jurisdiction is not merely an exercise of State power, but also a means of resolving private disputes." (42) Public international law principles have informed the growth and development of private international law principles, particularly in those areas where public law legislation is privately enforced, such as securities, anti-competition and intellectual property laws. There are also specific public international law treaties which facilitate inter-state cooperation in private law disputes, though these are more in the way of basic machinery (43) rather than assisting in jurisdictional selection. On the whole, however, most commentators note that there has been a commingling and confluence between the rules of jurisdiction as they apply purely to public matters and as they apply to private law matters, (44) particularly regarding the Internet. (45) Accordingly, we will discuss jurisdiction in various areas of substantive law throughout this paper, but always with an eye to their impact on the overall international law of jurisdiction. (46)

Another point to which we will return is that states often seek to manage the exercise of jurisdiction and head off disputes by concluding treaties, both bilateral and multilateral, on particular subject matters which contain obligations regarding the coordination of exercising jurisdiction. Again, the most prominent of these emerge from the criminal law field and are often referred to as the "suppression conventions," (47) examples being the UN Convention on Transnational Organized Crime (48) and the Terrorist Bombing Convention. (49) These treaties typically provide that each state party will criminalize a particular act, exercise jurisdiction over it on a number of bases (including those set out above), and importantly will agree to the exercise of extraterritorial jurisdiction by other state parties over the relevant offences, even if a given state does not typically exercise such jurisdiction. States forestall conflicts and coordinate …