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Web sites can expose publishers to lawsuits in other states, countries

From the Spring 2002 issue of The News Media & The Law, page 6.

From the Spring 2002 issue of The News Media & The Law, page 6.

By Monica Dias

Newspapers could risk lawsuits in other states or far-off countries by posting articles on their Web sites if more courts adopt the rationale of two recent rulings.

The decisions — one in Virginia and one in Australia — allowed plaintiffs in libel suits to haul out-of-state newspapers into courts in the plaintiffs’ home jurisdiction merely because an allegedly defamatory article was posted on the Internet and was available to Web surfers in that jurisdiction.

In the Virginia case, two Connecticut newspapers, The Hartford Courant and the New Haven Advocate, posted articles on their Web sites about Connecticut’s practice of sending inmates to Virginia prisons, where the transferred inmates complained that guards used unnecessary force and spoke to them in racist terms. The reporters did not travel to Virginia and made only a few phone calls to Virginia for interviews. The Advocate had no subscribers in Virginia, while the Courant had eight.

Despite contacts between the newspapers and Virginia that their attorneys described as “virtually nil,” U.S. District Judge Glen M. Williams in Big Stone Gap, Va., ruled in August 2001 that the Virginia prison warden could sue the newspapers and their reporters for libel in Virginia. He reasoned that jurisdiction in Virginia was proper because the articles were on Web sites “accessible twenty-four hours a day in Virginia.” (Young v. New Haven Advocate)

In the Australia case, a Victoria Supreme Court judge ruled in August 2001 that Dow Jones & Co., the New Jersey-based publisher of Barron’s magazine, could be sued for defamation in Australia for a Barron’s article that was posted on the Internet and was accessible to subscribers in Australia. The Australian businessman who was the subject of the article sued in Victoria, claiming that the article defamed him by implying that he was a money launderer and tax evader.

The Australian judge ruled that the article was published in Australia when Web users downloaded it, not in New Jersey where Dow Jones posted the article. This gave the Victoria court jurisdiction over the case, the judge ruled. (Gutnick v. Dow Jones & Co. Inc.)

Young and Gutnick illustrate how one of the great attractions of the Internet for newspaper publishers — exposure to a wider audience — also is becoming a great complication for journalism on the Web.

Where newspapers once circulated mainly to people who paid for a hard copy, now readers anywhere in the country or around the globe can access any newspaper via the paper’s Web site. With the decisions in Young and Gutnick, newspapers face the risk that a widespread presence in cyberspace could leave them vulnerable to the expense and burden of defending libel lawsuits in courts across the country and around the world.

Both Young and Gutnick are on appeal.

Media attorneys and First Amendment advocates say the lower court decisions will set a dangerous precedent if they are not overturned. The Reporters Committee for Freedom of the Press joined a friend-of-the-court brief urging the U.S. Court of Appeals in Richmond, Va., (4th Cir.) to overturn Young.

“If this decision (in Young) were allowed to stand, it could have a very serious chilling effect on what newspapers are willing to say and what they’re willing to write about,” said Stephanie Abrutyn, attorney for Tribune Co., publisher of the Advocate and Courant.

“The expense of that kind of suit is so significant that newspapers would have to think long and hard about under what circumstances they’re willing to write about people and places and events that take place outside their home state. It seems to defeat the purpose of a Web site to provide news and information if you have to be selective about what news and information you can put on the Web site.”

The Young decision, in particular, stretches the usual definition of jurisdiction.

The basics of jurisdiction

U.S. constitutional law requires that a court must exhibit personal jurisdiction over a defendant or the lawsuit will be dismissed. Traditional concepts of personal jurisdiction focus on a defendant’s “minimum contacts” with the jurisdiction.

The U.S. Supreme Court has held that it is not enough to base personal jurisdiction on the likelihood of causing injury in another state. Instead, a defendant must meet the “purposeful availment” test, meaning the defendant must avail himself of the benefits and protections of the laws of the jurisdiction. This happens when the defendant’s actions create a substantial connection with the state in which jurisdiction is sought, such as when the defendant’s activities are purposefully directed toward residents of another state.

For newspapers, the boundaries of a court’s jurisdiction generally extend only as far as the newspaper’s circulation. The fewer copies sold in a particular state, the less chance of a court finding that the newspaper publisher has established the required minimum contacts with the state.

That analysis becomes murky on the Internet, where anyone with a mouse and a modem has quick access to an out-of-state newspaper.

Jurisdiction and the Internet

Most courts use the “sliding scale” test to establish personal jurisdiction on the Internet. Under that test, the nature and quality of a defendant’s commercial activity on the Internet determine whether a court has jurisdiction.

Under the sliding scale test, established in 1997 by a federal district court in Pennsylvania in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., a court would have jurisdiction over a defendant who clearly does business over the Internet, such as by repeatedly transmitting computer files over the Web to enter a contract with an out-of-state entity.

No jurisdiction would exist over a defendant with a passive Web site or one that merely makes information available.

For those Web sites that have some interactive capabilities, the Zippo court said jurisdiction would be determined by looking at the “level of interactivity and the commercial nature of the exchange of information that occurs on the Web site.”

Some courts base their decision on the effects that a Web site has in a particular state.

This analysis relies on the U.S. Supreme Court’s ruling in 1984 in Calder v. Jones, a pre-Internet libel case. The court held that California courts could exercise jurisdiction over a reporter and editor of the Florida-based National Enquirer for an article about actress Shirley Jones, a California resident.

The court found that jurisdiction was proper because the National Enquirer had a large circulation in California, the story concerned the California activities of a California resident and used California sources, and the brunt of the harm was suffered in California. The intentional conduct of the reporter and editor in Florida was calculated to cause injury in California.

One court recently extended the Calder “effects” test in a non-libel case that could have ramifications for journalists.

In Pavlovich v. Superior Court, the California developer of a system to protect copyrighted movies on DVDs sued an Indiana college student who posted computer programs on the Internet to bypass the copyright-protection system.

The student argued that he did not know the identity of the company that sued him when he posted the information on the Internet, so his conduct did not intentionally target the California company.

The California Court of Appeals in San Jose held in August 2001 that California courts had jurisdiction over the student, now living in Texas. Since the student’s conduct was aimed at California, the state where the student knew the movie industry was located, a California court could hear the case, the appeals court ruled.

Although Pavlovich involved a non-journalist, the reasoning of the California Court of Appeal could be dangerous for journalists. If the Pavlovich ruling were applied to newspaper libel cases, a reporter writing about a major industry could be sued in the state where the industry is located.

Implications of Young and Gutnick

In Young, the federal judge who decided that Virginia had jurisdiction over the New Haven Advocate and The Hartford Courant “eviscerated decades of precedent,” attorneys for the newspapers argue in their brief to the appeals court.

The Connecticut newspapers derived no commercial benefit from Virginia through their Web sites, which are directed specifically to Connecticut readers, said Abrutyn, the newspapers’ attorney.

The Young decision relied in part on the Calder “effects” test. The newspapers argued that Calder should not apply because, unlike the National Enquirer‘s large circulation in California, the Advocate and Courant had little or no circulation in Virginia. Also, the Connecticut newspapers did not intentionally aim their activities toward the Virginia prison warden.

But Judge Williams found that the Advocate and Courant articles on the Web sites described the Virginia prison system and alluded to the warden or described the warden’s office in Virginia. The newspapers knew the warden was employed in Virginia and that any harm the warden suffered would occur mainly in Virginia, the judge ruled.

“The trial court in essence said if you put a story on the Internet, you could be hauled into court anywhere that story is alleged to cause harm, which would be a very broad test of jurisdiction,” said media attorney David Schulz.

“It’s a real problem for newspapers in particular who have Web sites that are really directed to their local communities but cover national and international news.”

The Gutnick decision magnifies those concerns, Schulz said. If Dow Jones must defend the case in Australia, it will have to defend itself against Australian libel law, which does not recognize the concept of actual malice and does not consider the context of the entire story in which an allegedly defamatory statement was included.

“Someone sitting in New Jersey can’t reasonably be expected to know what the law is of libel or privacy or sedition in Australia or the Sudan or Iraq or who knows where,” said Schulz, whose law firm, Clifford Chance Rogers & Wells in New York City, represents media organizations that plan to submit a friend-of-the-court brief to the Australian appeals court.

What can newspapers do?

If the Young and Gutnick decisions are not overturned and are followed as precedent in other courts, there may be little that newspapers can do to protect themselves.

The Connecticut newspapers in Young argued that it is technologically impossible to block readers from certain states from a newspaper’s Web site.

Self-censorship also would be impractical, said Robert O’Neil, director of the Thomas Jefferson Center for the Protection of Free Expression and author of the media organizations’ friend-of-the-court brief in Young.

“It would be unworkable as a practical matter to have to edit each day’s Web issue with an eye to what material might focus on what states, where residents might draw what inferences,” O’Neil said. “That’s simply an outlandish, unmanageable process.”

Even if newspaper editors could accurately make the judgment call on which stories to quarantine from the Web, they should not be asked to do so, O’Neil said.

“Even if it was possible, it’s still in our view not something that constitutes a reasonable expectation of a publisher,” he said.