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Judge denies request to block British libel suit over humor piece

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  1. Libel and Privacy

    NMU         NEW YORK         Libel         Oct 23, 2002    

Judge denies request to block British libel suit over humor piece

  • A U.S. court won’t bar Harrods, the London department store company, from suing The Wall Street Journal in Britain in a case that began as an April Fool’s joke.

A libel suit against The Wall Street Journal arising out of an April Fool’s joke may proceed in Great Britain, a federal judge in New York decided Oct. 15.

Judge Victor Marrero in Manhattan denied a request by Dow Jones & Co. Inc., the parent company of the newspaper, to prevent the British company Harrods from pursuing a libel claim in Britain.

The dispute is based on the paper’s response to an April Fool’s joke played by Harrods this year.

On March 31, Harrods issued a mock press release saying: “Al Fayed Reveals Plan to ‘Float’ Harrods.” The statement said that Mohammed Al Fayed, owner of Harrods, would issue an important announcement the next day about plans for the famous department store. The bogus brief also made reference to “a first-come-first-served share option offer” and directed journalists seeking comment to contact “Loof Lirpa” — “April Fool” spelled backward.

Another press release issued April 1 described Al Fayed’s plan to “float” Harrods by building a boat version of the department store and mooring it on the Thames River in London.

The Wall Street Journal took Harrods’s first press release as a real announcement of the company’s intention to “float shares,” or make a public offering. On April 1, the paper reported, in print and online, that Harrods would reveal plans that day to publicly list shares.

The following day, upon learning that the press releases were jokes, the Journal published a correction.

On April 5, the Journal printed a story about the Harrods gag. Dow Jones contends the item, entitled “The Enron of Britain?,” was intended to poke fun at Harrods’s joke. The Journal admitted in the story that it had been fooled by the press release hoax. It also questioned the propriety of issuing bogus information.

Harrods objected to the story and, in particular, its comparison of Harrods to the scandal-ridden company, Enron. Harrods lawyers contended the April 5 story damaged the company’s reputation.

According to court papers, a flurry of correspondence ensued between attorneys for Dow Jones and Harrods. Dow Jones refused to publish a correction in response to the April 5 piece, claiming the report was factually accurate and was meant merely as a tongue-in-cheek humor article. Dow Jones offered to publish a letter from Harrods in the Journal, but Harrods declined to do so.

After learning of Harrods’ intention to sue Dow Jones for libel in Britain, the U.S. media company filed its own lawsuit in federal court in New York. The suit asked the court to apply a federal law called the Declaratory Judgment Act to stop Harrods from bringing suit in Britain.

British libel law is harder on the media than U.S. law.

Dow Jones argued that a court order was appropriate and necessary to free the Journal from “vexatious and oppressive” litigation overseas. Dow Jones said that a libel suit over the humor item would never stand in the United States and that defending a lawsuit in Britain would be burdensome and expensive.

In its opinion, the U.S. court denied Dow Jones’s request to block a British suit.

The court said the Declaratory Judgment Act was meant to “facilitate early and effective adjudication of disputes” before they expand into larger conflicts. However, the act can be applied only where there is an “actual controversy.”

Dow Jones had argued that an actual controversy existed because the company’s potential exposure to liability in the United Kingdom — when no such libel case could be brought in the United States — violates the First Amendment.

Judge Marrero disagreed. In his opinion, he said that “Dow Jones’ claim of impending harm, and its fears of enforcement of an adverse judgment, are too abstract, remote and hypothetical to constitute an actual controversy” under the federal law.

The judge also questioned whether courts in the United Kingdom would recognize and enforce a U.S. court’s order not to bring suit there.

Dow Jones’s attorney, Jack M. Weiss, said he and his client were disappointed with the court’s decision. “We think the court undervalued its responsibility to protect U.S. constitutional interests and overstated the complications in doing so,” Weiss said. Dow Jones is evaluating its options and will decide soon whether to appeal.

(Dow Jones & Co., Inc. v. Harrods, Ltd.; Media counsel: Jack M. Weiss, Gibson, Dunn & Crutcher, New York) WT

© 2002 The Reporters Committee for Freedom of the Press

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