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Libel Tourism

From the Spring 2010 issue of The News Media & The Law, page 4. When the U.S. Senate Judiciary Committee…

From the Spring 2010 issue of The News Media & The Law, page 4.

When the U.S. Senate Judiciary Committee held a hearing in February with the provocative title: “Are Foreign Libel Lawsuits Chilling Americans’ First Amendment Rights?” the answer of the attorneys testifying — veteran media lawyers Kurt Wimmer and Bruce D. Brown — was an unequivocal ‘yes.’

“The potential for being sued or prosecuted on the basis of an online publication really does chill the exercise of the central First Amendment freedoms,” Wimmer testified.

“This chill can result in self censorship, it can result in the decision not to publish, it can result in decisions to assess American content based on legal standards that protect free speech much less than do our laws.”

The Senate is considering federal legislation that would make libel suit judgments against Americans filed elsewhere unenforceable in the United States. As the Internet has made the instantaneous worldwide distribution of publications possible, plaintiffs frequently attempt to bypass American law, which has strong First Amendment protections, by suing journalists and authors in any country where someone bought the book or, in some cases, merely read the article on the Internet. In many of these countries, defendants have to prove the truth of what they have written, rather than the plaintiff bearing the burden of proof, as in the United States.

As an example of the chilling effect of such lawsuits, Wimmer pointed to a book written by an American university professor and former State Department official that was published by the Cambridge University Press. In “Alms for Jihad: Charity and Terrorism in the Islamic World” Robert Collins and J. Millard Burr linked Saudi billionaire Sheikh Khalid Bin Mahfouz to terrorism financing. Mahfouz, a resident of Ireland, said the book defamed him and filed suit in a British court. Cambridge University Press, unable to afford litigation, stopped publishing the tome, shredded the unsold books and told libraries to destroy their copies, which the American Library Association advised its members not to do because “the British settlement is unenforceable in the United States.”

A 2004 survey conducted by the American Bar Association and the International Chamber of Commerce reported that more than half of all media companies surveyed adjusted their operations to account for the risk of Internet jurisdiction.

“A foreign judgment, as soon as it’s rendered, has an immediate and damaging effect on the author who has been sued even if the judgment is never enforced by the U.S. courts,” Wimmer testified.


Wrecking crew of Americans’ free speech rights

Book author and American Center for Democracy Director Rachel Ehrenfeld has lobbied Congress for libel reform since she, too, fell victim to international forum shopping when Mahfouz sued her in the United Kingdom.

In 2003, Ehrenfeld published the book “Funding Evil: How Terrorism is Financed — and How to Stop It.” Though it was primarily sold in the United States, 23 copies ordered from were shipped to England. This, and the posting of a chapter of the book on the internationally accessible ABC News website, constituted the only jurisdictional hook Mahfouz needed to convince British courts to exercise jurisdiction.

In 2005, the English High Court of Justice found that it had jurisdiction over the suit. Ehrenfeld never acknowledged jurisdiction and the British court entered default judgment against her. Ehrenfeld subsequently slammed Mahfouz in the media, calling him “a one-man wrecking crew of Americans’ free speech rights.”

Ehrenfeld wasn’t been the first author affected by Mahfouz, and likely won’t be the last — since 2002 he has sued or threatened legal action dozens of times in British courts, often against authors based elsewhere. Cases of libel tourism are increasingly in the limelight. British lawmakers recently considered overhauling the country’s laws but the effort stalled. Individual states, such as New York, have addressed libel tourism for their residents, but Ehrenfeld says federal legislation is the best course.

“It is very important for Congress to move as fast as possible,” Ehrenfeld said. “Once the U.S. passes a federal law saying that no [frivolous] judgment can be enforced, that will make a huge impact,” she said.

Mahfouz isn’t the only plaintiff that has gone after American authors in courts far away from where they live or work — celebrities and even countries have obtained verdicts against journalists for articles written and published in the United States. Some of these cases do not fit the classic definition of libel tourism, because plaintiffs actually reside in the forums in which they attempt to file, but still the cases affect American authors and reporters in a similar way.

In 2002, Australia’s highest court ruled that the publisher of numerous periodicals, including the Wall Street Journal and Barron’s, could be sued in Australia over a U.S.-based article that was distributed over the Internet. Publisher Dow Jones rejected the argument that a related defamation suit should be brought in New Jersey, where the article was published online, instead of the plaintiff’s home country of Australia.

Reporter and book author Joe Sharkey was hit with lawsuits after his 36,000-word, front-page, first-person account of being one of seven survivors on a business jet that collided with a commercial airliner midair over Brazil and left 154 people dead ran in The New York Times. Another report later ran in the Sunday Times of London magazine.

Though Sharkey lived in the United States and his account was published here and in the United Kingdom, nearly three years after the crash a process server showed up at his door in the New Jersey with news that he was being sued by a crash widow for $250,000 for defaming the country of Brazil on his personal blog. The lawsuit also demanded printed apologies from every media outlet that had published his stories.

“The lawsuit against me in Brazil is pending,” Sharkey said in an e-mail message.

“Every so often, one of the news outlets there does a story saying that once the libel judgment is handed down (inevitable and, I understand, imminent), prosecutors plan to seek a criminal indictment against me on the ground that causing ‘dishonor’ to Brazil is a crime,” Sharkey wrote. “Even if I had written what is alleged, of course, nothing I said or wrote would constitute libel in the U.S.”

In another lawsuit, German courts in 2010 exercised jurisdiction over New York Times journalist Raymond Bonner. The Federal Court of Justice based its jurisdiction on the roughly 15,000 registered German users of the Times website — not even those who had actually viewed the story. Also not a classic libel tourism case, since the plaintiff lived in Germany, it demonstrates the very real dangers of foreign exercise of jurisdiction over American reporters and writers who publish online.

In some cases, libel tourists aren’t foreign nationals, but American citizens. Wealthy public figures, including celebrities such as Cameron Diaz, have used foreign courts to sue the media and win.

Cameron Diaz’s successful 2005 defamation suit against the National Enquirer for an article — viewed 279 times by British internet users — alleging the actress was cheating with a married MTV producer later caused the paper’s web site to block British readers.

Legislative Fixes

The idea of reforming international libel protections isn’t new, but as Internet publishing allows stories written in the United States to be distributed instantaneously across the world, there is a renewed interest in passing libel tourism reform.

When American courts said they did not have the jurisdiction to declare the judgment against Ehrenfeld unenforceable because the plaintiff never attempted to collect the judgment, the New York Legislature stepped in to pass the Libel Terrorism Protection Act in 2008. The law blocks the enforcement of lawsuits from jurisdictions that have lower levels of free speech protection than those in the United States. Other states, including Illinois and Florida, have enacted similar laws.

At the time New York passed the law, Gov. David Paterson said that though the state had “done all it can to protect our authors … they remain vulnerable if they move to other states, or if they have assets in other states. We really need Congress and the President to work together and enact federal legislation that will protect authors throughout the country against the threat of foreign libel judgments.”

State legislation that isn’t specific to libel has been used to dismiss foreign judgments against United States citizens. States that have adopted the Uniform Foreign Money Judgments Recognition Act, for example, give “full faith and credit” to fair monetary judgments unless “repugnant to the public policy of [the enforcing] state.”

The U.S. District Court in the District of Columbia cited that statute when it dismissed a British libel judgment against a Maryland radio broadcaster in 1995’s Matusevitch v. Telnikoff because it was “based on libel standards that are repugnant to the public policies of the State of Maryland and the United States.”

Telnikoff had published an opinion piece in the London Daily Telegraph about the BBC’s hiring of Russian correspondents and Matusevitch wrote a letter to the editor charging Telnikoff with anti-Semitism. Telnikoff sued Matusevitch, who lived in Maryland at the time, and won. Matusevitch countersued and argued that the state’s public policy barred Telnikoff from enforcing the judgment against him. The appeals court agreed.

Last year, The New York Times’ editorial board urged nationwide reform, noting that state legislation is “a good start, but it still leaves writers with only a patchwork of protection. Congress needs to pass a law that makes clear that no American court will enforce libel judgments from countries that provide less protection for the written word.”

“Publishers don’t want to be sued in other countries and therefore they have become very PC,” Ehrenfeld said. “Authors are told, ‘We won’t publish it because we don’t want to be sued.’ Writers and reporters are restricting themselves to issues they think can pass through quietly.”

Ehrenfeld said the chilling effect on her area of expertise is “very bad for national security because the media stopped identifying funders of terrorism by name” and the secrecy puts people all over the world at greater risk, including American forces in Iraq and Afghanistan.

The federal legislation being considered in the Senate, the Free Speech Protection Act of 2009, has been in committee since February. Notably, at the time of that hearing, none of the Senate Judiciary Committee members seemed to voice opposition to the overarching purpose of the law. However, there are some key differences in the Senate and House versions that may affect how likely the law is to pass.

The bill in the Senate, S. 449, would prevent United States courts from recognizing foreign libel judgments and would also allow authors who lose those foreign libel judgments to file suit against the plaintiff in a court here in order to recover damages and reasonable legal fees. The damages in the current legislation include “the amount of any foreign judgment,” “the costs, including reasonable legal fees,” incurred due to the foreign lawsuit, and “the harm caused to the United States person due to decreased opportunities to publish, conduct research, or generate funding.”

Another provision that may make passage tricky is the section on “treble damages,” which says that if the foreign plaintiff “intentionally engaged in a scheme to suppress rights” guaranteed by the First Amendment to the Constitution, the court may award triple the amount of actual damages.

This differs from the House bill, which also prevented courts from recognizing foreign judgments but stopped short of allowing citizens to counter sue foreign plaintiffs — some fear that United States courts exercising jurisdiction over foreign libel defendants may anger other countries as overstepping their boundaries and laws.

Aside from stateside reform, efforts for reform abroad, specifically in Britain, have been recently renewed, but have not yet passed. A “Defamation Bill” was introduced in the House of Lords on May 26 that contains a libel defense for “publication on a matter of public interest.” Apparently, although the new provisions do not explicitly mention libel tourism, a leading human rights lawyer and newspaper columnist, Lord David Pannick, said in The Times of London that the bill would “remedy many of the legal deficiencies that have made London the libel capital of the world and severely damaged freedom of expression.”

Ehrenfeld said she hopes her story and others will also continue to encourage an international convention on the issue. “We cannot suppress free and responsible writing about issues,” she said.