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High Court makes landmark ruling on Internet jurisdiction in libel cases

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  1. Libel and Privacy

    NMU         AUSTRALIA         Libel         Dec 10, 2002    

High Court makes landmark ruling on Internet jurisdiction in libel cases

  • Dow Jones lost an appeal in a case that could have wide-ranging ramifications for online publishers.

The highest court in Australia decided Dec. 10 that Dow Jones, publisher of numerous periodicals including the Wall Street Journal and Barron’s, can be sued in Australia over an article that was written in the United States and distributed over the Internet.

The case has serious implications for publishers who post news and other articles on the Internet, where they can be accessed all over the world.

The High Court of Australia rejected Dow Jones’s appeal that a defamation suit brought by Australian businessman Joseph Gutnick should be brought in New Jersey, where the article was placed on the Internet, rather than in Australia.

Gutnick alleges he was defamed in an October 2000 article that appeared in Barron’s magazine, both in print and online. The article connected Gutnick, a wealthy Melbourne resident, with money laundering operations in the United States and Australia.

The decision centered on the legal definition of where a story is “published,” for purposes of a libel suit. Dow Jones argued that “publication” occurs in the place where the publisher places the article on the Internet, in this case New Jersey.

The court disagreed, holding that “publication” occurs where the alleged damage to reputation takes place.

“Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer,” the court said in its opinion. Because harm in this case occurred in Australia, the court reasoned, an Australian court should have jurisdiction over the case.

Dow Jones must now defend a libel suit in Australia. Australian libel law is different from U.S. law and provides significantly fewer protections for news gatherers, according to David Schulz, an attorney with the law firm Clifford Chance.

The court did not make any findings on the merits of the underlying defamation action.

In a statement, Dow Jones voiced its disappointment with the outcome of the appeal but said it was encouraged that the court seemed to recognize “the unique challenges posed by Internet publication.”

Schulz, who submitted a friend-of-the-court brief in the case on behalf of media entities, called the High Court’s ruling “very disturbing.” He said the underlying premise of the decision, that it is appropriate for court in Australia to determine liability for a story posted in the United States, is groundless.

Moreover, the High Court’s ruling, which is the first declaration by a court of final appeal on the controversial issue of jurisdiction in Internet libel cases, provides “alarming” precedent for other courts facing the issue, Schulz said.

What the decision now requires, Schulz said, is that an online publisher, before any story is published on its Web site, take into account the laws of all countries where the story might be accessed and where a libel action might occur. This could have serious impact on publishing and on news gathering activities in countries with strict libel laws, he said.

One justice who participated in the decision recognized that the court’s ruling was not a “wholly satisfactory” answer to the question of what court has jurisdiction over cases alleging libel over the Internet. Justice Kirby said the issue “may warrant national legislative attention” and “international discussion in a forum as global as the Internet itself.”

(Dow Jones v. Gutnick) WT

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© 2002 The Reporters Committee for Freedom of the Press

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