SPEECH Act celebrates one year anniversary, as its influence spreads overseas

The SPEECH Act saved author Udis Sanchez Lord from paying over $50,000 after losing a defamation lawsuit in Canada.

A Missouri resident, Lord published “From Fieldhand to Ph.D., Ms. Asia International,” an autobiography in which she described a family dispute over an inheritance. Her cousin, Leodegaria Sanchez Pontigon of Canada, thought the text defamed her. So, she sued Lord in Canada, where libel laws do not afford authors the same First Amendment protections as in the United States, and won.

“It’s just really upsetting when you know you didn’t do anything wrong, and you can’t defend yourself in a foreign country,” said Lord, who couldn’t afford to go to Canada for the hearing. “I spent a lot of sleepless nights.”

Luckily for Lord, as her suit made its way through the legal system, the federal government passed legislation that bars U.S. courts from enforcing foreign libel judgments that are not consistent with the U.S. Constitution. The SPEECH Act, which stands for Securing the Protection of our Enduring and Established Constitutional Heritage, became law in August 2010, and Lord’s is one of the first reported cases where an American author used it to ward off a foreign libel decision.

When Pontigon filed suit in Missouri to collect on the Canadian judgment, an appellate court held in April that the SPEECH Act prohibits enforcement here. About a year after the act passed, its biggest effect, media lawyers say, may not be its use as a legal defense but publicity that has sparked international dialogue about libel reform.

British Parliament cracks down on libel tourism

In addition to helping protect U.S. authors from suits filed in a plaintiff’s home country, the SPEECH Act also aims to deter “libel tourism.” In those cases, people who do not live in a foreign country file suit there to bypass defendant-friendly American defamation law. On the heels of the act’s implementation, Britain, home of many libel tourism suits, introduced a draft version of its own legislation that would make it difficult for those claims to be brought there.

To media attorney Kurt Wimmer, foreign reform is key to ending libel tourism because the SPEECH Act only protects American journalists from judgment in the United States. If Lord had assets in Canada, Pontigon could seize them.

The act helps independent authors and small publishers who only have assets in the United States, but multinational companies, such as The New York Times, are not immune from paying damages in other countries.

“Until we actually reform the substance of foreign libel law, which is a country by country effort, and reform the standards for determining limits of jurisdiction, we are going to have an uphill battle,” said Wimmer, who worked to push the act through Congress and testified about it before the Senate Judiciary Committee.

The British bill, unveiled in draft form this spring, is a first step towards international libel reform. Under it, only when England and Wales are the most appropriate places to file suit could they have jurisdiction over non-U.K. or EU residents. The bill also would allow defendants to use a “public interest” defense in defamation suits and require people to demonstrate “substantial harm” before suing.

Citing the SPEECH Act as an impetus for the proposed legislation, a report that Parliament issued in October acknowledges that London has become known as “the libel capital of the world” and that current laws may chill speech.

The federal government passed the SPEECH Act out of that very concern.

SPEECH Act a first step

In the case that led to the reform, Saudi billionaire Sheikh Khalid Bin Mahfouz sued American author Rachel Ehrenfeld in England after she published the book “Funding Evil: How Terrorism is Financed — and How to Stop It” in 2003. Since then, Ehrenfeld, who directs the American Center for Democracy, has lobbied for the act. She said she wanted to ensure that intimidation does not deter other authors from writing about controversial topics.

Libel tourism has grown because online publishing has made it easier for foreign countries to claim jurisdiction over American authors.

In addition to deeming judgments inconsistent with the First Amendment unenforceable, the SPEECH Act prohibits U.S. courts from recognizing decisions where a foreign court’s exercise of jurisdiction does not meet due process requirements.

Under U.S. law, a defendant must have had sufficient contacts and engaged in continuous and systematic acts with the foreign state, but, in some libel tourism suits, plaintiffs have tried to sue in a country where just a few people bought or read the book in question. England took jurisdiction over Ehrenfeld’s case after 23 copies of her book were shipped there and ABC News posted a chapter on its website.

The SPEECH Act isn’t a huge change in the law because American courts traditionally avoid enforcing unconstitutional judgments, Wimmer said. It hasn’t sharply decreased the number of foreign suits, but it is starting to make plaintiffs in other countries realize that American courts won’t enforce decisions that are inconsistent with U.S. libel law, he said.

That’s the effect the SPEECH Act had in InvestorsHub.com v. Mina Mar, in the Northern District of Florida.

Mina Mar is a Canadian company that claimed statements on InvestorsHub’s online message board defamed it. Unlike in the United States, a Canadian plaintiff does not have to show that the defendant made the defamatory statement with actual malice.

Mina Mar won in Canada and filed suit in Florida to collect a $100,000 judgment. But, after InvestorsHub cited the SPEECH Act in its complaint for declaratory relief in January, Mina Mar quickly abandoned its efforts to get the money.

“The act is very powerful in its clarity because very shortly after we moved for declaratory relief, the defendant here pretty much conceded that it was going to lose,” said attorney Deanna Shullman, who represented InvestorsHub.

Even without the SPEECH Act, InvestorsHub likely would have won because Florida is one of the few states that offer statutory protection against libel tourism. Lord’s state — Missouri — does not have similar legislation, so the act has the benefit of creating a uniform standard nationwide.

Still, Ehrenfeld worries that the SPEECH Act hasn’t been publicized enough to lift the chill on American writers. Many lawyers, authors and publishers still don’t know about the act, she said.

“What I wanted to achieve is really to give everybody else in America the ability to write what is important to us,” Ehrenfeld said. “I don’t think that has been achieved because people don’t know that they can actually do it.”

Even though Lord cited SPEECH Act provisions in the Missouri case, the circuit court didn’t consider them when it sided with Pontigon in September 2010, according to the appellate decision. The court then started the process of garnishing her assets.

Though Lord ultimately won on appeal, she said the legal struggle she faced and fear of losing money has dissuaded her from self-publishing. “I used to write a lot of books and publish a lot of books,” Lord said. “Because of this incident, I stopped.”

Still, Lord’s victory and possible changes abroad are promising signs for U.S. writers and publishers. In Britain, a parliamentary committee that reviewed the draft bill not only lauded the proposed changes, but also urged lawmakers to further strengthen protections by requiring courts to address libel-tourism actions quickly. If libel-tourism cases are resolved through mediation, as the committee suggested in its October report, defendants would not incur large legal fees.

To Wimmer, these reform efforts show the SPEECH Act’s symbolic value in helping to spur the international change that is needed to reduce libel tourism.

“I think of the SPEECH Act as a first step rather than a last step,” Wimmer said. “It’s going to be a long process.”