Stateside defenses against foreign ‘libel tourism’ judgments making progress

From the Summer 2009 issue of The News Media & The Law, page 27.

Developments that could protect American writers from foreign defamation judgments are underway in state capitals and abroad. But the movement’s leaders say it is up to Congress to set up meaningful domestic defenses against so-called libel tourism.

The phenomenon, whereby libel plaintiffs opt to file suit in countries with highly favorable defamation laws, garnered widespread attention after a Saudi Arabian businessman won a 30,000 British pound (currently, $49,000 U.S.) judgment against author Rachel Ehrenfeld in England in December 2004. Ehrenfeld has been an outspoken critic of libel tourism since then and tracks legislative bids in the United States to protect American authors.

While various states have questioned libel tourism, and some in the international community have begun to frown on the practice, Ehrenfeld says it is really a bill sitting in Congress — the federal Free Speech Protection Act, sponsored by Sen. Arlen Specter (D-Pa.) and Rep. Peter King (R-N.Y.) — that has the teeth to make a difference.

The United Kingdom in the spotlight

Conversations about libel tourism usually start with England, which has a reputation for warmly receiving defamation plaintiffs.

That reputation was earned for several reasons, mainly due to the structure of its laws and the scope of its jurisdiction. First, English courts have liberally taken cases that had virtually no connection to the country. For instance, the case against Ehrenfeld was allowed to proceed simply because 23 copies of her book, “Funding Evil: How Terrorism is Financed — and How to Stop It,” had been sold in England via Amazon.com.

Then, once a case is in court, the law favors the plaintiff. Prominent American First Amendment attorney Floyd Abrams, in an article for the British magazine Index on Censorship, cited an estimate that plaintiffs there win about 90 percent of libel cases. Unlike in American libel law, where the plaintiff must prove the allegedly libelous statements are false, it is up to the defendant in Britain to demonstrate the statements are true.

“I always checked everything very carefully, but that is not enough for British laws,” said Ehrenfeld, who decided it was not worthwhile to fight the claim against her in England, resulting in a default judgment.

Another concern is the ability of one judge to have his pick of libel cases, thereby almost single-handedly dictating the country’s libel law, according to his critics.

Paul Dacre, editor of the Daily Mail, in November 2008 accused Justice David Eady of holding a “virtual monopoly” on libel cases, according to British media Web site Press Gazette.

Eady handled Ehrenfeld’s case. More recently, he issued a preliminary ruling in May against British science writer Simon Singh, who was sued by the British Chiropractic Association after he wrote that there was no evidence to support the claim that its members could treat children for conditions such as asthma and ear infections.

Denis Macshane, a Labour Party member of Parliament, was apparently referring to Eady in a December 2008 debate as he explained the problem with having one judge handle the bulk of significant libel cases: “I shall not name him, because he is an honorable man, but it cannot be right that one area of law is principally in the hands of a single judge. There are not three or four judges discussing this and thereby creating a kind of common law, in which different opinions can be challenged.”

Not least among the complaints about British libel law is the often exorbitant cost of mounting a legal defense. For example, Singh’s expenses already amount to 100,000 British pounds, according to The Wall Street Journal.

The United Nations Committee on Human Rights in 2008 went so far as to designate libel a human rights issue that the United Kingdom should address.

The book-publishing community has taken the lead in calling for action stateside.

“Obviously, we’re very concerned about the prospect of people continuing to utilize the British court system as a way to silence U.S. authors,” said Allan Adler, a vice president of the Association of American Publishers.

News media groups have not always been at the forefront of the issue, but Kevin Goldberg, a lawyer for the American Society of News Editors, said journalists are at risk. Goldberg noted the manner in which foreign courts have claimed jurisdiction based on content posted on the Internet.

“That’s clearly the way in which this is going to play out most often,” he said.

Goldberg said he wasn’t aware of any ASNE member who had been personally caught up in libel tourism, “but the way things are going, it’s only a matter of time.”

ASNE joined friend-of-the-court briefs in support of Ehrenfeld during her litigation and generally supports a libel tourism solution, but it hasn’t taken a position on any current bill. Goldberg said the group would like to avoid a situation in which foreign nations perceive a new law as overreaching, resulting in a backlash against journalists — such as courts claiming even wider jurisdiction or ruling against reporters more often.

Lawmakers take action

Specter and King’s bill, the Free Speech Protection Act, would allow an American who has been sued in a foreign libel case, if the speech in question was not defamatory under U.S. law, to ask an American court to declare that any judgment will not be enforced here. The person could also countersue for damages up to three times the amount of the foreign judgment, the financial harm caused and legal costs.

Ehrenfeld likes that proposal because she believes the risk of having to pay damages could deter potential plaintiffs from seeking an easy court win in a country that doesn’t provide First Amendment-level protections. It also lets a defendant go on the offensive, rather than await the outcome of the foreign case and see whether a winning plaintiff will try to enforce the judgment in the states.

The act has been referred to the Senate Judiciary Committee, which spent most of the summer occupied with preparations for Sonia Sotomayor’s Supreme Court confirmation hearing. An identical bill is with the House Judiciary Committee.

In June, the House passed a separate libel tourism bill, sponsored by Rep. Steve Cohen (D-Tenn.), and sent it to the Senate Judiciary Committee. That proposal does not go as far as the Free Speech Protection Act; it would prevent American courts from recognizing foreign libel judgments deemed inconsistent with the First Amendment.

To Ehrenfeld, that is a small improvement from the current state of affairs, essentially codifying a concept that has already been employed by some American judges.

“To pass a law that is just a statement written on paper will not deter anything,” she said.

Before Congress took an interest, individual states had already moved to protect their authors, and some are still considering measures.

It started in New York, where legislators reacted after Ehrenfeld went to a federal judge seeking a declaration that the judgment against her, including an order to destroy copies of her book, could not be enforced in an American court. Her suit was dismissed, because the court said it did not have jurisdiction over the Saudi businessman, Khalid bin Mahfouz.

In May 2008, New York enacted a law giving its state courts jurisdiction over anyone who has obtained a foreign defamation judgment against a New Yorker and limiting the enforcement of those judgments to those that comply with “the freedom of speech and press protections guaranteed by both the United States and New York Constitutions.”

Illinois enacted a similar law last summer, and Florida followed suit earlier this summer. California, New Jersey and Hawaii are considering their own versions of the measure.

The action in state legislatures appears to be the result of individual legislators taking an interest in the issue rather than any centralized effort to change state laws.

Florida passed its law without involvement from the Florida Press Association, and the Illinois bill was introduced not long after the Illinois Press Association became aware of the issue, said Beth Bennett, the association’s government relations director.

“We supported it, but we didn’t really have to get involved,” Bennett said. “We were glad it was introduced, and we were glad it passed.”

It could be that the terrorism angle to libel tourism is what has caught the attention of lawmakers: Ehrenfeld was sued based on her allegations that bin Mahfouz transferred millions of dollars to terrorists’ bank accounts. New York’s legislation was titled the Libel Terrorism Protection Act, and lawmakers have stressed the need to protect writers who shed light on terrorist operations.

“I think what happened was legislators from different states read the newspapers,” Ehrenfeld said. “Look at California. It’s vital to pass this law because there is a huge film and creative industry. They are self-censoring themselves today. That’s outrageous.”

Ehrenfeld said she appreciates that state legislators are showing support for free speech, but she argues that such laws will not stop libel tourism because, like the Cohen bill, they do not provide for damages.

Rumblings across the pond

All the while, some British politicians are launching their own attempts to change the libel laws there, partly motivated by embarrassment over the country’s growing reputation for failing to fully protect free speech.

Macshane, the Labour MP, last year called libel tourism “an international scandal” and England’s libel laws “the plaything of the rich.”

The House of Commons’ Culture, Media and Sport Committee has been hearing testimony on libel reform in recent months, but Ehrenfeld does not believe British lawmakers are prepared to initiate sweeping changes.

“What they have done is restructured the [lawyer] payment fees. Big deal,” she said. “That’s not changing the law.”

Adler shares her sense that England won’t overhaul its libel laws anytime soon.

“The British courts have been making some progress in changing their law on libel on a case-by-case basis,” Adler said. “Frankly, having to wait until that process has satisfactorily evolved will take way too much time. There’s no reason why Congress should not address this issue.”