If you are alleged to have bribed government agents outside the United States or pirated music and movies protected by the Copyright Act, then you may find yourself sitting in a federal court in Richmond, Virginia. Why? Various government agency servers are located in that court’s jurisdiction and evidence of your criminal activities may have passed through government servers or private servers located in that region.
As covered in my previous post, Cloud Computing, Social Media, and Other Internet-Based Data Transmissions Could Give Rise to Personal Jurisdiction in Distant Forums, the physical journey of internet transmissions has become a more prominent aspect of courts’ personal jurisdiction analyses, which has inevitably led to more lawsuits, both civil and criminal, involving foreign nationals. That previous post discussed a Canadian citizen being hailed to the District of Connecticut for possible trade secret violations on the basis that she accessed her former firm’s server in order to transfer documents. Another recent case from the Southern District of New York involved the Foreign Corrupt Practices Act (FCPA) and permitted the Securities Exchange Commission (SEC) to pursue its enforcement action against three Hungarian executives based upon the passage of emails through SEC servers in the US. See SEC v. Straub, No. 1:11-cv-09645 (S.D.N.Y., February 8, 2013).
While the domestic ramifications present interesting questions for businesses, the effect on international commerce and even diplomatic relations is even more dramatic, as the experience of Neil MacBride demonstrates. As the U.S. attorney for the Eastern District of Virginia, MacBride has pursued pirates, both digital and sea-faring, as well as numerous securities fraud prosecutions by employing creative uses of jurisdictional statutes and quirks of the area. In a Washington Post profile of MacBride and the district, the author notes that one major tool in his toolbox is the fact that the servers for the EDGAR filing system are located in Alexandria, Virginia, allowing him to use communications entities have with the SEC as a linchpin to bring matters into the district. That power was used to charge Lee Farkas, the founder of Florida-based mortgage lender Taylor Bean and Whitaker, who was convicted along with seven others in a $3 billion fraud scheme.
In another prominent case, MacBride indicted Megaupload founder Kim Dotcom for the alleged management of massive copyright infringement scheme based on the fact that the infringing content was stored on servers leased from a company in northern Virginia. Dotcom is fighting extradition, as have other defendants who have been caught up in MacBride’s web.
Whether this use of the internet’s framework is an overreach in some instances is an open question, but it is reasonable to expect that government agencies will continue to use servers as a hook to haul foreign defendants into the United States for adjudication.