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British court throws out libel suit against Dow Jones Co.

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    News Media Update         UNITED KINGDOM         Libel    

British court throws out libel suit against Dow Jones Co.

  • A High Court jury in London dismissed a libel case brought by British department store Harrods over a 2002 Wall Street Journal article, and ordered the company to pay a portion of the newspaper’s legal fees.

Feb. 19, 2004 — A jury in London’s High Court yesterday dismissed a libel lawsuit against Dow Jones Co., owner of The Wall Street Journal, rejecting a claim that British department store Harrods was harmed by a 2002 article that jokingly compared the company to Enron.

The newspaper asserted in court filings that the article was meant as a “tongue-in-cheek” humor story. In addition to throwing out the suit, the court ordered Harrods to pay a portion of Dow Jones’s legal bills within 14 days.

“It was unfortunate that an article published in the U.S. and seen by millions there, but only 22, at most, in England, was hauled into the English legal system to be defended at a cost of tens of thousands of pounds,” said Brigitte Trafford, vice president of communications at Dow Jones.

“It seems ridiculous that Harrods, that could not sue in the U.S., took the time of an English court and jury on an article with the most tenuous connection imaginable to England and with absolutely no evidence of any actual loss,” Trafford added.

The case began as an April Fool’s joke. On March 31, 2002, Harrods issued a mock press release announcing plans to “float” the company. The notice mentioned “a first-come-first-served share option offer.” A later press release described the plans of Harrods owner Mohammed Al-Fayed to “float” the company by mooring a boat version of the store on the Thames River in London.

Editors at the Journal read the first press release as a genuine announcement that Harrods planned to “float shares” — make a public offering of stock shares — and published a story about it on April 1. After learning it had been duped, the Journal printed a correction and an article titled “The Enron of Britian?” The article acknowledged that the newspaper’s editors were fooled, and questioned the propriety of issuing false press releases.

According to a Feb. 18 article in the Journal, Al-Fayed said he was “surprised and disappointed” by the court’s decision to dismiss his libel claim. He added that the comparison of Harrods to the scandal-ridden Enron, which declared bankruptcy in December 2001, was “extremely damaging” to the company’s interests.

Harrods was ordered to pay approximately $60,000 worth of Dow Jones’s legal fees.

In May 2002, Dow Jones attempted to halt the lawsuit before it could begin in Britain, asking a federal district court in New York to issue a declaratory judgment under the Declaratory Judgements Act. The act allows courts to declare the legal rights of the party seeking the declaration, provided an actual controversy exists.

The court declined in October 2002 to issue a judgment, finding that no actual controversy existed and questioned the effect such a judgment would have in the United Kingdom. In October 2003, the U.S. Court of Appeals in New York City (2nd Cir.) upheld the district court ruling.

(Harrods Ltd. v. Dow Jones Co.; Media Counsel: Gavin Millar, Doughty Street Chambers, London) KM

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© 2004 The Reporters Committee for Freedom of the Press

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