A federal appeals panel in California restored a class action lawsuit facing the Czech companies that operate prominent pornographic websites, such as Xvideos, determining the female plaintiffs should be allowed to bring their allegations of illegal exploitation in U.S. courts.
An organization at the forefront of the effort to combat online porn publishers over alleged exploitation of women and minors said the decision stands as a key win and a legal landmark, likely clearing the path for more lawsuits against foreign porn producers.
In 2021, a plaintiff identified only as Jane Doe filed suit against WebGroup Czech Republic, or WGCZ, and NKL Associations, which is also based in Prague, leveling counts against them and 11 foreign corporations for allegedly violating California state and U.S. federal law when they either participated in or benefited from distribution of videos depicting the sexual abuse of the plaintiff and other women who were childhood sex-trafficking victims.
WGCZ operates Xvideos.com, while NKL operates Xnxx.com.
In Los Angeles federal court, U.S. District Judge Virginia Phillips dismissed Doe's claims.
Doe challenged the dismissal before the U.S. Ninth Circuit Court of Appeals, setting aside myriad reasons for Phillips’ dismissal ruling to focus on a finding she lacked the personal jurisdiction to being her claims.
Ninth Circuit Judge Daniel Collins wrote the panel’s opinion, filed Jan. 2; Judges Milan Smith and Kenneth Lee concurred, with Lee writing a brief special concurrence.
Collins said Doe alleged she was 14 when a sex trafficker force her “to participate in the creation of videos of adults raping her,” with at least four such recordings uploaded to Xvideos.com and Xnxx.com. Doe said the sites made no attempt to verify her identity or age; claimed one video generated more than 160,000 views; and alleged the sites didn’t respond to her requests to remove the uploads from her first contact in 2017 until an attorney sent a cease-and-desist letter in the fall of 2020, which did result in removal of the files.
The sites targeted in Doe's lawsuit are hosted on servers in the Netherlands operated by U.S.-based ServerStack, itself wholly owned and operated by another U.S. firm, DigitalOcean Holdings. Further, WGCZ and NKL contract with content delivery networks, some of which are based in the United States.
“In operating their websites, WGCZ and NKL use the services of several California-based companies, including Google, EPOCH, PayPal, and Twillio,” Collins wrote. “Specifically, WGCZ and NKL contract with Google and Twillio to manage emails, and they contract with PayPal and EPOCH to manage payments in U.S. dollars to and from their users and advertisers. WGCZ and NKL are also the owners of several registered U.S. trademarks for XVideos.com and Xnxx.com.”
Collins said Judge Phillips dismissed Doe’s complaint by deciding the court lacked the jurisdiction to hear the claims against WCGZ and NKL, which meant she didn’t address Doe’s claims the other nine foreign defendants were corporate alter egos of her primary targets. Phillips also denied Doe’s request for jurisdictional discovery regarding those entities.
In reversing Phillips’ ruling, the panel held Doe “made a sufficient prima facie showing that WGCZ’s and NKL’s operation of their pornography websites was ‘expressly aimed’ at the United States,” Collins wrote.
Among the allegations in Doe’s favor are the sites’ contracts with U.S.-based content delivery network services, which demonstrate a corporate strategy to deploy technology that makes streaming high-definition video from the sites plausible for American users.
“The use of (content delivery network services) in particular locations to pull content onto local servers in those locations (including specifically the United States), and for the express purpose of improving nearby users’ viewing experience, demonstrates differential targeting of the U.S. market,” Collins wrote. “The fact that WGCZ and NKL may have also differentially targeted other particular locations does not detract from the fact that their use of U.S.-based (content delivery network services) shows that they expressly aimed their websites at the U.S. market.”
The panel further cited data showing American users account for 12% and 19% of traffic on both sites, a figure that translated to advertising revenue. Although the panel noted the record on such revenue doesn’t, by itself, establish standing, “the substantial financial success that the companies achieved” by targeting American users “is a relevant additional factor in confirming that the companies expressly aimed their websites at the United States.”
Doe also adequately alleged the websites caused her harm they knew would likely be suffered in the U.S. The combination of the 160,000 views figure and the fact up to 19% of the sites’ users are American makes it “clear that a substantial volume of the widespread publication of the videos of (Doe’s) abuse occurred in the United States,” Collins wrote. “These facts more than suffice to bring this case.”
Although the sites claim they have no record of requests to take down the videos before Doe’s attorney intervened, the panel said at the stage of a dismissal motion factual inferences should be reasonably drawn in Doe’s favor. Finally, Collins wrote, the websites failed to show it would be unreasonable to hear Doe’s case in federal court in California.
The panel reversed Phillips’ dismissal of WGCZ and NKL, vacated her dismissal of the other nine foreign entities and remanded the entire complaint to federal circuit court with instructions to “address the remaining unresolved issues concerning whether personal jurisdiction may be asserted against those additional defendants.”
After expressing agreement “with Judge Collins’ excellent opinion,” Judge Lee wrote a concurrence explaining “it would have been prudent for the district court to have ordered very limited jurisdictional discovery here. Such discovery would have tethered the district court’s analysis more tightly onto our circuit’s personal jurisdiction framework.”
Had that been ordered, Lee continued, the Ninth Circuit panel might have known the extent of the sites’ use of U.S.-based content delivery network services and whether that showed the companies targeted the market differently from other regions.
“But even without such jurisdictional discovery, other evidence and common sense strongly suggest that WGCZ and NKL expressly aimed at the United States market,” Lee wrote. “And it makes little sense to insist on a remand on that issue and further delay this case involving allegations of underaged sex trafficking. But in other less obvious cases, it may behoove a district court to allow jurisdictional discovery, especially if the pleadings are imprecise.”
Doe is represented by attorneys from the forms of Clark Hill PLC, of Philadelphia; Kazerouni Law Group, of Costa Mesa, Calif.; the National Center on Sexual Exploitation; and Levin Papantonio Rafferty Proctor Buchanan O'Brien Barr & Mougey, of Pensacola, Fla.
WGCZ and NKL are represented by attorneys from the firms of Quinn Emanuel Urquhart & Sullivan, of Washington, D.C., and Los Angeles; and Wilson Sonsini Goodrich & Rosati, of Los Angeles and New York.
Following the ruling, Dani Printer, senior legal counsel for the National Center on Sexual Exploitation, said: “This decision ensures that foreign websites cannot avoid accountability in the United States, on jurisdictional grounds, when they target the U.S. market and profit from child sexual abuse material of U.S. children. We are grateful that the court ruled for this courageous plaintiff, as it moves her one more step closer to justice.
“This appellate decision is binding precedent for the Ninth Circuit and will likely have a significant impact across the United States for survivors.”