Lead Opinion
ORDER
We certify to the California Supreme Court the question set forth in Part II of this order. All further proceedings in this case are stayed pending final action by the California Supreme Court, and this case is withdrawn from submission until further order of this court.
I
Caption and Counsel
Gary Kremen is deemed the petitioner in this request because he appeals from the district court’s adverse rulings on the issue certified. The caption of the case is:
GARY KREMEN, an individual, Plaintiff-Appellant, and ONLINE CLASSIFIEDS, INC., a Delaware Company, Plaintiff, v. No. 01-15899 D.C. No. CV-98-20718-JW Northern District of California, San Jose STEPHEN MICHAEL COHEN, an individual; OCEAN FUND INTERNATIONAL LTD., a foreign company; SAND MAN INTERNACIONAL LTD., a foreign company; SPORTING HOUSES MANAGEMENT CORPORATION, a Nevada company; SPORTING HOUSES OF AMERICA, a Nevada company; SPORTING HOUSES GENERAL INC., a Nevada
The following is a list of counsel appearing in this matter:
Counsel for appellant Gary Kremen:
James M. Wagstaffe
100 Spear Street, Suite 1800
San Francisco, CA 94105
415-371-8500
Counsel for appellee Network Solutions, Inc.:
Kathryn E. Archer
401 B Street, Suite 2000
San Diego, CA 92101
619-699-4750
Other counsel appeared for the other-named parties in this appeal; those counsel are not listed here because the claims related to those parties were disposed of by separate disposition as set out in Part III of this order.
II
Question Certified
Pursuant to Rule 29.5(a) of the California Rules of Court, we respectfully request the California Supreme Court to exercise its discretion to adjudicate a question of California law related to Internet domain names and the tort of conversion. This particular case centers on the domain name “sex.com.” The decisions of the California appellate courts provide no controlling precedent regarding the certified question, the answer to which may be determinative of this appeal. We respectfully request that the California Supreme Court answer the certified question presented below. We acknowledge that your Court may decide to reformulate the question, and our phrasing of the issue is not intended to restrict your Court’s consideration of the case. We agree to follow the answer provided by the California Supreme Court.
We invoke the certification process only after careful consideration and do not do so lightly. The certification procedure is reserved for state law questions that present significant issues, including those with important public policy ramifications, and that have not yet been resolved by the state courts. We request certification not because a difficult legal issue is presented but because of deference to the state court on significant state law matters.
Although we are quite capable of resolving the issue presented, we should not reach out to grab the question in the first instance simply because the case involves a novel and “sexy” issue. We are not, of course, unmindful of the burgeoning caseload of the California Supreme Court, and we recognize that the decision to accept certification lies solely within the discretion of your court. But it is not our role to pass advance judgment on the Court’s priorities. We would not presume to certify a run-of-the mill case to your Court nor would we use the certification process to sidestep our diversity jurisdiction. In a case such as this one that raises a new and substantial issue of state law in an arena that will have broad application, the spirit of comity and federalism cause us to seek certification. We accordingly invoke this procedure under the California Rules of Court.
The question of law to be answered is: Is an Internet domain name within the scope of property subject to the tort of conversion?
(a) For the tort of conversion to apply to intangible property, is it necessary that the intangible property be merged with a document or other tangible medium?
(b) If the answer to Question (a) is “yes,” does the tort of conversion apply to an Internet domain name, or, more specifically, is an Internet domain name merged with a document or other tangible medium?
Ill
Statement of Facts
This action stems from Gary Kremen’s (“Kremen”) suit against Network Solutions, Inc. (“NSI”) for the fraudulent transfer of his properly-registered Internet domain name, “sex.com,” to a third party.
A short background regarding the Internet will assist in putting this case in context. The Internet has been described as “a vast system of interconnected computers and computer networks.” See Name. Space, Inc. v. Network Solutions, Inc.,
Under its agreement with NSF, NSI undertook responsibility to “compile and maintain an authoritative, reliable, and up-to-date database” of registered domain names in addition to the conversion tables that index registered domain names to IP numbers.
On May 9, 1994, Kremen registered the domain name “sex.com” with NSI. Kremen did so by filling out and electronically submitting a short registration form. No payment was necessary in order to effect the registration. Kremen registered sex.com under his d/b/a “Online Classifieds, Inc.” (“OCI”) and listed himself as the administrative and technical contact person. Kre-men did not use the domain name for any significant purpose during the 18 months that it was registered to OCI.
In October 1995, NSI received a letter on OCI letterhead and putatively signed by OCI’s president. The letter was addressed to Stephen Cohen (“Cohen”) and purportedly authorized him to notify NSI on OCI’s behalf that NSI should delete the sex.com domain name from its database, thereby terminating OCI’s registration. The letter further stated that OCI had no objection to Cohen’s registering sex.com in his own name.
Upon receipt of the letter, NSI deleted OCI’s registration of sex .com and re-registered it to Sporting Houses Management, Inc., one of Cohen’s alter ego corporations, with Cohen listed as the administrative contact. Cohen proceeded to use the sex.com domain name as a platform upon which to build a lucrative Internet-based pornography business. As it turned out, the so-called authorization letter was a forgery concocted by Cohen or at his behest. NSI claims that there was no evidence to question the authenticity of the letter, although Cohen disputes that characterization.
Approximately eight months after NSI registered sex.com in Cohen’s name, Kre-men demanded that NSI reinstate his registration of sex.com. NSI informed him that it would not do so absent a court order. In October 1998, Kremen brought suit against Cohen and NSI seeking in-junctive relief and damages. Kremen alleged, among other things, that by honoring Cohen’s fraudulent instruction to transfer the sex.com registration, NSI was liable in tort for conversion and as a bailee. Kremen also brought other state law claims that are not at issue in this certification request.
Judge Ware, of the District Court for the Northern District of California, granted summary judgment in favor of NSI, concluding that there was “no evidence establishing that a domain name, including sex.com, is ‘merged in or identified with’ a document or other tangible object.... Thus, under the traditional precepts governing the tort of conversion, a domain name is not protected intangible property.” In the district court’s view, extending the tort of conversion to include Internet domain names involves a complex policy question that is more appropriately the subject of legislation. The district court also expressed concern that because the
On Kremen’s claims against Cohen regarding the transfer letter and the appropriated domain name, the district court found that the purported transfer letter was a forgery and that the transfer of the domain name was void and a nullity. The court restored registration of sex.com to Kremen, and rendered a judgment in favor of Kremen for $65 million, a judgment that Kremen has had very limited success in enforcing due to Cohen’s fugitive status.
On appeal to our court, Kremen argued, among other claims, that the district court erred in concluding that no cause of action for conversion or bailment exists against NSI for its unauthorized registration of sex.com to Cohen. Consideration of Kre-men’s claims against NSI are stayed pending this certification request. We resolved the remaining claims between Kremen and Cohen and related entities in an unpublished memorandum disposition in which we affirmed the district court’s judgment in favor of Kremen. Kremen v. Cohen,
IV
Statement of Reasons for Certification
We respectfully request that the California Supreme Court provide an authoritative answer to the certified question for the following reasons:
The certified question presents an issue of significant precedential and public policy importance. Although both California state courts and the federal courts have broadly considered conversion in connection with intellectual property, such as trade secrets, neither has specifically considered the state law tort of conversion in the context of an Internet domain name. With the growing ubiquity and importance of the Internet and the number of domain names increasing exponentially — -there are now some 30 million domain names
Following is a discussion of the background regarding the tort of conversion, as
The parties do not dispute that domain names are a kind of property. This proposition appears to be consistent with California’s broad definition of “property.” See Cal. Civ.Code §§ 654 & 655(property includes “all inanimate things which are capable of appropriation or of manual delivery”). The parties disagree, however, whether a domain name like sex.com is the kind of intangible property that can support a claim for conversion. At issue is whether such intangible property constitutes a sufficiently definite right and whether such intangible property must also be merged into a document or other writing.
Historically, the tort of conversion exclusively protected rights in tangible property. At least one commentator has called the tangibility requirement a “hoary limitation” without “valid and essential reason.” Val D. Ricks, The Conversion of Intangible Property: Bursting the Ancient Trover Bottle With New Wine, 1991 BYU L.Rev. 1681, 1682 (1991) (quoting Prosser and Keeton on the Law of Torts 91-92(W. Page Keeton, ed., 5th ed.1984)). California courts have, however, long extended the tort to certain forms of intangible property such as stocks, bonds, notes, recorded performances, and warehouse receipts. See, e.g., A & M Records, Inc. v. Heilman,
Kremen analogizes the domain name to a stock interest or warehouse receipt, thus putting the domain name firmly within the scope of property covered by the tort of conversion. NSI argues that the domain name, as a reference point in a computer database, does not rise to the level of a definite or certain property right.
In Payne, your Court stated that the tort “no longer exists as it did at common law, but has been developed into a remedy for the conversion of every species of personal property.”
Question (a):
An analysis of the scope of intangible rights requires answering whether the rights must be reflected in some documentary form.
The Restatement of Torts provides that
(1) Where there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.
(2) One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to a liability similar to that for conversion, even though the document is not itself converted.
Restatement (Second) of Torts § 242. .At least one California Court of Appeal has favorably viewed the Restatement’s approach. In Thrifty-Tel, Inc. v. Bezenek,
Two California Court of Appeals cases touch on the subject of documentary merger in connection with customer lists but do not address the issue presented in this certification. See Kieberk Corp. v. Palm-Springs-La Quinta Dev. Co.,
Thus, there do not appear to be any California cases squarely addressing whether the “merged with” requirement is a part of California law, nor have we been able to locate any cases from your Court indicating whether California follows the Restatement’s approach.
Question (b):
If your Court determines that, for purposes of conversion, intangible property must be merged with or reflected in a document or something tangible, we will then have to address a secondary question: whether the tort of conversion applies to an Internet domain name.
California courts have recognized a cause of action for intangible goods that have been merged with various kinds of tangible media. See Thrifty-Tel,
According to Kremen, a domain name is a unique functional object that serves to access the corresponding IP address. Kremen argues that a domain name is merged with and identified with a document, namely the DNS database or a portion thereof. The DNS database is described as a decentralized but hierarchical database that correlates a domain name with the appropriate IP address. America Online, Inc. v. Huang,
NSI counters that the DNS database is not like a warehouse receipt. Relying principally on the description in America Online, NSI notes that although the DNS matches domain names with IP numbers, “this simple description incorrectly suggests that the DNS is a central database to which other computers may refer, when the DNS is instead a decentralized, albeit hierarchal, process for correlating a domain name with the appropriate IP address.”
Again, our development of tort law on this novel issue would benefit from your Court’s elucidation of the proper treatment of domain names under California tort law. We advance no legal position on the competing arguments but simply offer a neutral characterization of the competing positions. The dissent’s discussion of the details of the .com registry and Internet architecture provides a useful backdrop but only serves to highlight the merits of the question and goes beyond the judicial dialogue central to the certification process.
V
The clerk of this court shall forward a copy of this order, under official seal, to the California Supreme Court, along with copies of all briefs and excerpts of record that have been filed with this court. The parties shall notify the clerk of this court within 14 days of any decision by the California Supreme Court to accept or to decline certification. If the California Supreme Court accepts certification, the parties shall file a joint report six months after the date of acceptance and every six months thereafter advising us of the status of the proceedings. The parties shall notify the clerk of this court within 14 days of the issuance of an opinion by the California Supreme Court.
IT IS SO ORDERED.
Notes
. Certification "strengthens the primacy of the state supreme court in interpreting state law by giving it the first opportunity to rule on an undecided or unclear issue.... Allowing federal courts to defer to state courts in such cases reinforces the federal judiciary's acknowledgment of state sovereignty and fosters values of federalism and comity in a way beneficial to state interests.” Jerome I. Braun, A Certification Rule for California, 36 Santa Clara L.Rev. 935, 940 (1996).
. Although the Arizonans case involved a constitutional question, neither the California rule nor practice requires that the issue be a constitutional one. Indeed, the procedure is designed to let the California Supreme Court decide whether it wants to have the first crack at a significant state-law issue and the majority of certifications that your Court has accepted have not involved a constitutional question. See e.g., Cadence Design Sys., Inc. v. Avant! Corp.,
. See Mylene Mangalindan, Renew It or Lose It: Companies Often Forget to Renew Their Domain Names, Wall St. J. (July 15, 2002), available in 2002 WL-WSJ 3400519.
. We recognize that cases from other jurisdictions may be instructive, but they are not controlling. Likewise, citation to Ninth Circuit cases interpreting California law does not provide a definite interpretation from a California court. See, e.g., Bancroft & Masters, Inc. v. Augusta Nat’l, Inc.,
. "Courts have traditionally refused to recognize as conversion the unauthorized taking of intangible interests that are not merged with, or reflected in, something tangible."
Dissenting Opinion
dissenting.
When a federal court certifies a case to a state supreme court, it draws from a limited reservoir of comity. Certifying the case shifts the difficult work of deciding it to the state court, which is often so busy keeping its own house in order that it
I am aware of the prevailing infatuation with this procedural device — the “sacred cow in our modern judicial barnyard.” Bruce M. Selya, Certified Madness: Ask a Silly Question ..., 29 Suffolk U.L.Rev. 677, 678 (1995). But we have a duty to use it sparingly and sensibly; that a case raises difficult legal questions is not enough. See L. Cohen & Co. v. Dun & Bradstreet, Inc.,
These circumstances are not present here. We are perfectly capable of answering both questions ourselves, and there is no indication that courts are overrun with lawsuits raising the issue. Cyberspace will not implode if the supreme court confronts the majority’s questions at some point in the future rather than today; the issues may well be sharpened by common law development in the meantime.
The Certified Questions
By long common law tradition, those who give away the property of others do so at their peril.
I. Conversion of Intangibles
The majority’s first question is whether, “[f]or the tort of conversion to apply to intangible property, [it is] necessary that the intangible property be merged with a document or other tangible medium.” Order at 1038. The quaintness of the question, couched in language more reminiscent of postillions than POP servers, gives a pretty good clue that the majority is disinterring legal arcana long since laid to rest. Conversion originated in the fifteenth century as a remedy against one who found a plaintiffs lost goods and put them to his own use. See Prosser and Keeton on the Law of Torts § 15, at 89 (W. Page Keeton ed., 5th ed.1984); J.B. Ames, The History of Trover, 11 Harv. L.Rev. 277, 277 (1897). Because of this pedigree, the tort “became encrusted ... with legal rules that assumed that the property taken was tangible” — the sort of thing that one could “find in a field and later sell at a market.” Val D. Ricks, The Conversion of Intangible Property: Bursting the Ancient Trover Bottle with New Wine, 1991 B.Y.U. L.Rev. 1681, 1685. This limitation was harmless enough when people’s worldly goods consisted of livestock and farm tools, but today it’s a relic.
Our first question, then, is whether California still clings to the dated distinction between tangibles and intangibles. Some states do, albeit with significant ad hoc exceptions to accommodate commercial reality. The Restatement extends conversion only to intangible rights “merged” in a document. Restatement (Second) of Torts § 242;
The majority today quotes this passage from Payne and ventures that “[t]he question then arises as to the scope of coverage for intangible property.” Order at 1041. I would have thought this was precisely the question that Payne answered, and that its response was “every species.” “Personal property,” after all, is “[a]ny movable or intangible thing that is subject to ownership and not classified as real property.” Black’s Law Dictionary 1233 (7th ed.1999) (emphasis added). Sex.com, we all agree, is property subject to ownership — namely, Kremen’s. And, obviously, it's not real estate.
Courts applying California law have followed in Payne’s tracks, recognizing conversion of intangible property without inquiring whether it was merged in a document. A & M Records, Inc. v. Heilman,
Most telling, however, is our own recent decision in Bancroft & Masters, Inc. v. Augusta National Inc.,
As the majority notes, Payne has not been universally followed. In Olschewski v. Hudson,
If Olschewski and Adkins had pointed to intervening cases where the California Supreme Court had retreated from Payne, they might give us pause. But they did nothing of the sort; they simply refused to apply controlling precedent by incorrectly labeling it dicta. We are bound by the pronouncement of the state’s highest court unless there are convincing reasons to believe that it would no longer adhere to its earlier rationale. Olschewski and Adkins — like the majority in our case — offer nothing to suggest it would not. “Certification is inappropriate when ... the supreme court of a state has already ruled and its decision is unambiguous.” United States v. Pend Oreille Pub. Util. Dist. No. 1,
Searching for another reason to doubt Payne meant what it said, the majority invokes the Restatement. Our order implies that, unless a state explicitly disclaims the Restatement’s rules, we’ll assume that any deviations from that canonical text must have been an oversight. Poor Justice Brandéis, whose fifty state laboratories have been amalgamated into a single research park run by the American Law Institute.
The majority identifies no convincing reason to believe that the California Supreme Court would overrule Payne. Speculation that a state supreme court might revisit a 123-year-old precedent and mail its tort jurisprudence back to the dark ages is not a ground for certification. If it were, we would certify nearly every diversity case we hear.
II. The “Merged in a Document” Test
None of this matters anyhow, because Kremen wins even under the Restatement. The majority’s analysis on this point is lacking. It cites a handful of state decisions, observes that none involves a domain name and proclaims our interpretive faculties exhausted. This is not a frugal use of the privilege the California Supreme Court affords us. Certification is for resolving true uncertainties in state law; it presupposes that we’ve made a diligent effort to apply the traditional judicial tools of analogical reasoning.
Kremen can sue for conversion under the Restatement because his domain name is in fact merged in a document, and NSI frustrated his use of it. See Restatement (Second) of Torts § 242(2) (“One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to liability....”). His intangible property is (among other things) the right to have people who type “www.sex.com” into their web browsers sent to his website. It is, in standard Geek, the right to have the second-lev
It most certainly is. NSI’s registry is the master list that associates .com domains like “sex” with particular IP addresses. It’s essentially a ledger with domains in one column and IP addresses in another. See Thomas,
There are several analogues to NSI’s .com registry in the case law, but the closest is a corporate share register. A share register qualifies as a document in which shares are merged. See Phansalkar v. Andersen Weinroth & Co.,
California courts have long held that a shareholder can sue a corporation for conversion if it wrongfully refuses to transfer title to shares on its books. Ralston v. Bank of Cal.,
Cases where a defendant is held liable for converting a document are also instructive. Plunkett-Jarrell Grocery Co. v. Terry,
One can imagine arguments against recognizing conversion of all intangibles, but none applies to domain names. Some intangibles are vaguely defined and may not give the defendant fair notice of the plaintiffs property right. See Olschewski,
A second difficulty arises when the property is a “nonexclusive” intangible like a trade secret, the theft of which does not actually prevent the plaintiffs use. See Ricks, supra, at 1705-07 & n. 100. But domain names are exclusive intangibles (again, just like corporate stock). A defendant who wrongfully takes a domain name deprives the plaintiff of its use entirely. Domain names are much more like corporate stock or accounts receivable than they are like customer goodwill or trade secrets — intangibles that many courts applying the Restatement have declined to protect, see Restatement (Second) of Torts § 242 cmt. f & reporter’s notes.
These considerations merely reinforce a conclusion that the case law compels. We don’t need the California Supreme Court to spell out the inevitable consequences of the state’s jurisprudence every time a new species of property emerges. California law, even narrowly construed, recognizes conversion of property that shares all the relevant features of domain names. That’s all we need to know to decide the case.
Comity and Responsibility
Although the great majority of states— including all those in our circuit — now have certification procedures, California came to the process late. It adopted its rule less than five years ago, and only after endless carping from the bar. See, e.g., Jerome I. Braun, A Certification Rule for California, 36 Santa Clara L.Rev. 935 (1996). Even then, California adopted a rule much narrower than those of other states in our circuit. Other states permit certification from any federal court, but California accepts only questions certified by a court of appeals or the United States Supreme Court. Compare Cal. Rules of Court 29.5(a) with, e.g., Ariz. Sup.Ct. R. 27(a)(1). The California Supreme Court has also been more parsimonious in accepting certified questions. It’s practically unheard of for a supreme court of another state to reject a certified question of our court.
The California Supreme Court’s evident ambivalence toward the certification process reflects the brutal realities of supervising the judiciary of the most populous state in the nation. Congestion in the California Supreme Court has been a fixture ever since the state was admitted to the Union. See Karl Manheim, The Business of the California Supreme Court: A Comparative Study, 26 Loy. L.A. L.Rev. 1085, 1092 (1993). The court delivers about 100 written opinions per year— twenty-five percent more than the United States Supreme Court, with two fewer justices. Compare Judicial Council of Cal., 2002 Annual Report: Court Statistics Report 9 tbl.6 [hereinafter Court Statistics] (103 opinions for 2000-2001), with Admin. Office of the U.S. Courts, 2001 Judicial Business 73 tbl.A-1 [hereinafter Judicial Business] (83 opinions for 2000-2001). Overall, the court disposes of some 9000 cases per year, up more than sixty percent from ten years ago, and once again more than the corresponding figure for the United States Supreme Court. Compare Court Statistics, supra, at 4 tbl.l (9047 dispositions for 2000-2001, compared to 5466 for 1991-1992), with Judicial Business, supra, at 73 tbl.A-1 (7762 dispositions for 2000-2001).
The seven justices of the California Supreme Court sit atop a judiciary with approximately 100 justices in the courts of appeal and 2000 judicial officers in the superior courts. Court Statistics, supra, at 18 tbl.l (96.8 justice full time equivalents); id. at 39 tbl.l (1998.0 judge, commissioner and referee FTEs). By comparison, Washington, the next most populous state in our circuit, has a nine-member supreme court but only thirty judicial officers in the courts of appeals and only about 400 in the superior, district and municipal courts combined. See Washington Courts, at http://www.courts.wa.gov/courts/ (last visited Oct. 15, 2002) (court of appeals directories listing 22 judges and 8 commissioners); Superior Court 2001 Annual Caseload Report 31 tbl., at http://www.courts.wa.gov/caseload/ (175 judges plus 49 commissioner FTEs); Courts of Limited Jurisdiction 2001 Annual Caseload Report 43 tbl., at http://www.courts.wa.gov/caseload/ (151 judge FTEs plus 31 commissioner FTEs).
The California Supreme Court is further hamstrung by its mandatory death penalty jurisdiction; it reviews an automatic direct appeal from every case where a death sentence is imposed. See Court Statistics, supra, at 4 tbl.l. This is a daunting prospect, with California’s death row now numbering 600 and still growing. See Gerald F. Uelmen, Courtly Manners, Cal. Law., July 2001, at 37, 74.
Even if the California Supreme Court turned down our certification request, we would still have taken up a disproportionate amount of the court’s time and attention. Our requests are doubtless given far closer scrutiny than the run-of-the-mill petition of an ordinary litigant. The supreme court has turned down a significant number of our certified cases, but this cannot have been an easy or pleasant task,
The crowded California docket also means that certification is a less efficient mechanism for ascertaining state law. The cases we send to the California Supreme Court are beset by the same delays that plague the rest of its caseload. The average length of time from certification order to decision is well over a year and a half. See Appendix tbl.l; cf. Stephen R. Barnett, Un-Rocket Docket, Cal. Law., May 2002, at 17, 17 (average time on docket for all non-death penalty cases of 543 days). This is approximately triple the national average computed by one comprehensive study from the 1980s. See Carroll Serón, Certifying Questions of State Law: Experience of Federal Judges 39 tbl.7 (Fed. Judicial Ctr., FJC Staff Paper 83-1, 1983) (six to seven months).
Certification burdens litigants, who foot the bill while their lawyers reargue the controversy in a different forum. The parties will now file briefs in the California Supreme Court, explaining why it should or should not accept the certification request. Cal. Rules of Court 29.5(e)(1). Next, they will reply to each other’s briefs. Id. 29.5(e)(4). If the court accepts the request, the parties will file more briefs and replies, arguing the case on the merits. Id. 29.5(h)(1). Once the state supreme court sends the case back to us, the
This is a cpmplex case, but not in a way that justifies certification. Whether NSI’s .com registry is a document in which intangible property rights are merged is a hard technical question, not a hard legal one. It’s a matter of coming up with the right analogy, and- that has more to do with understanding how the Internet works than with state property law. The relevant facts are not genuinely disputed, but it takes a close reading to reconcile the competing characterizations, and a familiarity with the underlying technology doesn’t hurt. We’re certifying this case to the California Supreme Court, not to the ghost of Jonathan Postel;
This case happens to be in federal court because the parties are from different states, but there is nothing inevitable about this party alignment. If the issue is as far-reaching as the majority believes, it will come up in state court soon enough. But I doubt the case really is that far-reaching. The facts date back to the Wild West days of domain name registration, when NSI had no written contracts with registrants. NSI changed that policy long ago. Domain name contracts are relevant because they provide for significant limits on liability and because they may affect the scope of the property right conferred. Future cases involving conversion of domain names will raise different questions. This decision will no doubt be relevant, but it won’t be dispositive.
The California Supreme Court is always free to overrule any decision we render on the subject. It may even benefit from the insights we are able to offer, just as it benefits from prior consideration by state court judges. In this sense, we are just like another state court of appeal. We do California no favors by asking its supreme court to solve our problems while we stand mutely by.
Table 2. Cases Certified to the California Supreme Court
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. The majority draws encouragement from Arizonans for Official English v. Arizona,
. Conversion is a strict liability tort, so NSI's negligence is not an issue. Nonetheless, NSI’s claim that it had no reason to question the authenticity of Cohen’s forged letter is too much to bear. Kremen originally registered sex.com to his d/b/a, Online Classifieds, Inc. (OCI), listing himself as the contact. The forged letter stated that OCI had fired Kre-men and that its board of directors had "decided to abandon the domain name sex.com” to Cohen, giving no explanation whatsoever for this singular generosity. NSI received the letter not from OCI but as an enclosure sent by Cohen; the letter explained, "Because [OCI] do[es] not have a direct connection to the internet, we request that [Cohen] notify the internet registration [sic] on our behalf....” That a company called "Online Classifieds” would have no Internet connection is beyond implausible. Yet NSI made no effort to contact Kremen before giving away the domain name. It’s a bit as if Judge Reinhardt sent a letter to the DMV saying, "Judge Kozinski wants you to transfer title to his Lamborghini to me — he’d write to you himself, but he’s out of stamps.”
.The majority's citation to Moore v. Regents of the University of California, 51 Cal.3d 120,
. The Restatement provides:
(1) Where there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.
(2) One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to a liability similar to that for conversion, even though the document is not itself converted.
Restatement (Second) of Torts % 242.
. See, e.g., Grynberg Prod. Corp. v. British Gas, p.l.c.,
. Reports to the contrary notwithstanding. See, e.g., Shannon Lafferty, Legal Battle for Sex.com Continues in Calif., Legal Intelligencer, Feb. 1, 2001, at 4 ("the most valuable piece of real estate on the Internet”).
. Thrifty-Tel, Inc. v. Bezenek,
. The majority's order describes the basic function of the Domain Name System and the fact that it associates domain names with IP addresses — sets of numbers that uniquely identify each computer connected to the Internet. See Order at 1038-39. But it omits any discussion of how the DNS actually works beyond the observation that it is a "decentralized, albeit hierarchical, process.” Id. at 20 (quoting Am. Online, Inc. v. Huang,
NSI’s .com registry, also known as the ".com zone file,” associates particular second-level .com domains like "sex” with particular IP addresses. If a browser wants to find the website "www.sex.com,” it goes through the following steps: It first looks in a "root” registry to find out who has the list of .com addresses — and that root registry says "NSI.” It then looks in NSI’s .com registry to find out who has the list of sex.com addresses — that registry (now) says "Gary Kremen.” Finally, it looks in Gary Kremen's sex.com registry to find out where the website www. sex.com is located. (These registries don’t literally say "NSI” and "Gary Kremen”; they list the IP addresses of their computers. But it's the same idea.) Thus, while the DNS as a whole is a “decentralized, albeit hierarchical, process,” NSI’s .com registry is not — it’s just a list of second-level .com domains and corresponding IP addresses; a document in any relevant sense of the word. See generally Brief of Amicus Curiae Electronic Frontier Foundation at 6-8; Thomas v. Network Solutions, Inc.,
. The majority bases almost its entire discussion on the mistaken assumption that the relevant document is the decentralized DNS as a whole. Order at 1042-43. The only part of the DNS at issue here is NSI's registry of .com domains — the .com zone file. NSI’s claim that "there is no master directory of domain names and IP addresses to which a computer refers” is true but irrelevant. Other registries list the second-level domains in .gov, .mil, .edu and the like; still others list the third-level domains within each second-level .com domain. But NSI’s registry of second-level .com domains is the only piece of the DNS that matters in this case because Kremen’s entry in this particular registry is what NSI gave away. NSI’s .com registry, not the DNS as a whole, is the document in which Kremen’s property is merged.
. NSI’s .com registry isn't actually consulted directly on every query, because other servers copy and store its information in order to speed up response times. If a browser wants to know an IP address, it may get it from a nearby server that previously copied the information from NSI. See Thomas,
. Payne did not so hold, of course; it imposed no merger requirement at all. It held that share registers and share certificates have the same evidentiary function. See Payne,
. A share register identifies the person who owns the shares, while the .com zone file only identifies the address of the owner’s computer. Even if this difference mattered — which seems hard to believe — domain names are explicitly linked to their owners in another document, the "WHOIS database” maintained by the registrar (also NSI in this case). Kremen's WHOIS record for sex.com, for example, can be retrieved by typing "sex.com” into the web interface of NSI’s WHOIS server, currently located at http://www.net-sol.com/cgi-bin/whois/whois. NSI's WHOIS database seems to be yet another document in which Kremen's property is merged.
. In our case, the document itself wasn’t converted; the .com zone file remained in NSI’s hands throughout. But that means only that Kremen’s claim sounds in section 242(2) of the Restatement rather than section 242(1). Compare Restatement (Second) of Torts § 242(2) ("One who effectively prevents the exercise of intangible rights of the kind customarily merged in a document is subject to liability ...."), with id. § 242(1) ("Where there is conversion of a document in which intangible rights are merged, the damages include the value of such rights.”). "Merged” surely can't mean one thing in one section and something else in the other.
. Even when it's painfully obvious that we asked the wrong question. See, e.g., Scheehle v. Justices of the Supreme Court,
. The only reason that the court's death penalty docket is at all manageable, apparently, is a parallel shortage of appointed counsel. Uelmen, Courtly Manners, supra, at 74.
. The majority declines to consider the burden we impose on the state supreme court when we force it to rule on our certification requests, opining that "it is not our role to pass advance judgment on the Court's priorities.” Order at 1038. By that logic, we would certify every case on our diversity docket — and every Federal Tort Claims Act case too — so that the state supreme court could have first crack at the state law issues presented. Surely, exercising some judgment about the productive use of the state court’s time and resources, not to mention those of the parties, is part of our responsibility in deciding whether to certify.
California's rule, moreover, requires that the certification order be signed by the presiding judge, making no allowance for a situation, like ours, where the presiding judge is in dissent. Cal. Rules of Court 29.5(d). This has led to the odd situation where I find myself dissenting from an order that bears my signature. Cf. Crocker Nat’l Bank v. Clark Equip. Credit Corp.,
. Turnaround times for the next two largest states in our circuit are shorter. Washington typically returns cases to us in about nine months; Arizona usually takes about a year.
. Nor to A1 Gore, for that matter.