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State courts rule libel lawsuits extend beyond borders

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From the Summer 2010 issue of The News Media & The Law, page 23. A pair of state-court rulings last…

From the Summer 2010 issue of The News Media & The Law, page 23.

A pair of state-court rulings last summer that expanded the reach of libel litigation beyond state borders could make online comments and reports tantalizing targets for libel plaintiffs even if the defendants are thousands of miles away.

Though neither the court in Florida or Ohio ruled on the merits of the defamation claims, both decided that lawsuits could proceed against speakers based elsewhere — potentially exposing any newspaper, website, blogger or individual to lawsuits if they merely comment about businesses in those two states.

“What we’re going to have is a crazy-quilt patchwork of different rules, and the average blogger is not going to have a clue about them,” said Clay Calvert, director of the University of Florida’s Marion B. Brechner First Amendment Project.

Calvert described the increasingly confusing tangle of Internet defamation law as analogous to the differing state standards regulating obscenity. Just as the proprietor of a pornography website must tailor its content to the most conservative state to avoid legal action, going forward a blogger could have to tone down his posts to stay above the most plaintiff-friendly state’s threshold for obtaining jurisdiction to file suit against and out-of-state libel defendant. The trend is alarming to First Amendment advocates.

In the first case, the Ohio Supreme Court decided on June 10 that a resident of Richmond, Va., would have to defend a defamation suit outside his home state. The lawsuit, Kauffman Racing Equip. LLC v. Roberts, was filed by an auto-supply company against Scott Roberts. It alleged that he waged a smear campaign against the company on several online message boards and accused it of selling defective engine blocks.

A week after the Kauffman decision, the Florida Supreme Court decided Internet Solutions Corp. v Marshall. The case involved a blogger in Washington state who posted comments about VeriResume, a resume-collection firm. The firm’s parent company, Internet Solutions Corp., accused blogger Tabatha Marshall of writing that it operated a phishing scam to defraud customers. The company sued Marshall for defamation in Florida, its principal place of business.

In the past eight years, courts in other parts of the country have refused to grant plaintiffs the jurisdiction to file Internet-libel cases against out-of-state defendants. The U.S. Court of Appeals in Richmond (4th Cir.) in 2002, for example, ruled in Young v. New Haven Advocate that a Virginia prison warden could not sue two Connecticut newspapers in Virginia because their websites were “not designed to attract or serve a Virginia audience.”

The same year, the U.S. Court of Appeals in New Orleans (5th Cir.) ruled in Revell v. Lidov that a former FBI official could not bring a libel suit in Texas against Columbia University and a Harvard medical professor over an article posted on Columbia’s website alleging the plaintiff was involved in a government conspiracy to allow terrorists to carry out the 1988 bombing of a Pan Am flight. The court found that it was not appropriate because the article did not mention Texas, the website had less than 20 subscribers from Texas at the time it was published and Texas was not the main locale where the plaintiff suffered harm.

But neither of those federal court cases are binding on state courts in Ohio and Florida..

The issue in the Kauffman and Marshall cases was whether the court could have jurisdiction over someone who neither lived or did business in Ohio or Florida by invoking a “long-arm” clause that is written into state law.

The purpose of long-arm statutes, which are on the books in all states, the District of Columbia and Puerto Rico, is to hold nonresidents accountable for their actions within that state. In invoking the statute, courts will typically look first at whether such a statute would apply in a given situation and then consider whether applying it would in any way interfere with a defendant’s right to “due process” guaranteed by the Constitution. If it’s applicable and doesn’t present a constitutional problem, a long-arm lawsuit can proceed.

A few states exempt defamation from their long-arm statutes, including New York, where the intent of the law was to allow publications and speakers to mount their defense in the jurisdiction in which they intended to speak, said media law professor Stuart Karle.

Lawmakers “didn’t want people hauled into remote courts,” said Karle, who teaches at New York University and Columbia University and was formerly the media counsel for Dow Jones & Co., publisher of The Wall Street Journal. “Now the element that’s added with the Internet is that everything is published globally and simultaneously.”

The Florida and Ohio high courts ruled that long-arm statutes can be used in claims in which the Internet is the conduit of allegedly defamatory statements, even if the writer is unaware that anyone in those states is reading it. While the Florida court did not have to consider the due process question, the Ohio court concluded that jurisdiction did not violate the defendant’s constitutional rights.

The Ohio court in Kauffman based its ruling in part on a 1984 U.S. Supreme Court decision, Calder v. Jones. In that case, actress Shirley Jones — best known to television audiences as the mother from “The Partridge Family” — sought to bring the Florida-based National Enquirer to court in California. The Supreme Court sided with Jones because California was “the focal point of both the story and the harm suffered” by Jones. In Kauffman, the offending comments were posted on the public forum sections of performanceyears.com and pontiacstreetperformance.com, as well as in an item description on eBay Motors, and the court found that Roberts intended to harm the company through his comments.

“What I loose [sic] in dollars I will make up in entertainment at their expence [sic],” Roberts wrote, later adding, “[T]his is not to get a resolution. I have a much bigger and dastardly plan than that and this is a good place to start.” The court also found that the comments had an effect in Ohio because five of the company’s Ohio clients had asked about Roberts’s Web postings.

The court concluded that Roberts “hoped that his commentary would have a devastating effect on [Kauffman] and that if there were fallout from his comments, the brunt of the harm would be suffered in Ohio,” Justice Paul Pfeifer wrote for the majority.

Though the court did not decide the merits of the defamation claim, the granting of jurisdiction amounted to a victory for the plaintiff: Roberts decided to settle.

The Florida Supreme Court, meanwhile, was most interested in what “electronic communication into Florida” was sufficient to meet the state’s long-arm statute. The court in Marshall followed a more expansive view of defamation liability under Florida’s long-arm statute, holding that a nonresident may be sued there if his electronic communication is accessible to Florida residents.

“By posting allegedly defamatory material on the Web about a Florida resident, the poster has directed the communication about a Florida resident to readers worldwide, including potential readers within Florida,” Justice Barbara Pariente wrote for the unanimous court.

“When the posting is then accessed by a third party in Florida, the material has been ‘published’ in Florida and the poster has communicated the material ‘into’ Florida, thereby committing the tortious act of defamation within Florida,” the opinion continued.

The court rejected Marshall’s request that it distinguish between general-audience websites, such as her blog, and those that target Florida audiences through their published content or commercial activities. The court cited a federal district-court case, Richards v. Sen., et al. that focused on whether the out-of-state defendant intended to target Florida residents in posting Web content accessible to Florida residents.

Calvert said he was disappointed that the Florida Supreme Court did not seem to consider the possible chilling effect on blogs and other Internet-based media that are accessible anywhere.

“I didn’t see in that opinion anything like … a wrestling with the possibility of Internet as a different medium with different rules, or a review of the possibility that some of these potential law suits might be SLAPP suits,” he said. A SLAPP lawsuit — a strategic lawsuit against public participation — are cases in which the goal is not to win a case but rather to silence the defendant through legal intimidation. These sorts of lawsuits can be more easily dismissed in some jurisdictions under anti-SLAPP laws.

The court did not decide whether the lawsuit would violate Marshall’s due process rights because the U.S. Supreme Court, as a procedural matter, was deciding the long-arm issue at the request of an Atlanta appellate court, which will decide the due process question, according to Marc Randazza, who is representing Marshall in the matter.

Though the due process question has yet to be resolved, Randazza said the impact of the Florida court’s decision is straightforward.

“If you write about Florida, using Florida sources or write about a Florida politician, according to the Supreme Court you are per se subject to the long-arm statute,” he said.

In the long run, if the U.S. Court of Appeals in Atlanta (11th Cir.) decides that a Florida court has jurisdiction over Marshall, courts elsewhere could cite the appellate decision in allowing courts to claim jurisdiction over nonresident defendants in Internet libel cases.

While neither court decided the merits of the defamation claims, the procedural issue influenced the outcome of the cases because the mere certainty of having to defend a claim in a distant state often is enough to force a defendant to settle.

Although the Ohio and Florida cases do not set a rule beyond their borders, other states — especially states as friendly to plaintiffs as Ohio and Florida — that are unsettled in this area of defamation law might look to the Marshall or Kauffman decisions for guidance.

In that sense, Calvert said, the cases represent “momentum” toward liability for out-of-state speakers.

“It would take another court a little bit of moxie to ignore or distinguish those cases,” Calvert said. “It becomes a groupthink after a while.”