(Cross-posted from the Citizen Media Law Project Blog)
In a case of first impression in Texas, the U.S. Court of Appeals for the Fifth Circuit held that
the “single publication rule,” which states that the statute of
limitations period for libel begins to run when a defamatory statement
is first published, applies to publications on the Internet.
Some background on the case: on July 29, 2003, the Dallas Morning News published — in print
and on its website — an allegedly defamatory article by financial writer
Scott Burns about an accelerated mortgage program offered by Nationwide
Bi-Weekly Administration, a company that provides mortgage payment
services for borrowers. The article, among other things, accused
Nationwide of engaging in deceptive business practices.
Nationwide filed a complaint
in Ohio state court, near where it is based, on July 28, 2004, asserting claims for defamation,
tortious interference with prospective business relations, and business
disparagement against the Dallas Morning News, its owner Belo Corp.,
and Burns. Nationwide did not, however, serve the complaint on any of
the defendants until June 2005. (Shortly thereafter, the defendants
successfully removed the case to federal court in Ohio, whereupon the court transferred venue to the Northern District of Texas.)
And some background on the law: “statute of limitations” is a term used
by courts to describe the
maximum amount of time plaintiffs can wait before bringing a lawsuit
after the events they are suing over have occurred. This time limit is
typically set by state statute and is intended to
promote fairness and keep old cases from clogging the courts. In the
defamation context, this time period typically begins to run at
the time a defamatory statement is first communicated to a third-party.
Under Texas law, the statute of limitations for libel actions is one
year. See Tex. Civ. Prac. Code § 16.002(a).
Because Nationwide didn’t serve its complaint until almost two years
after the article was first published, it seems like a rather
straightforward application of a statute of limitations defense. This
is precisely what the defendants argued in their motion to dismiss.
But Nationwide had its own take on how the law should work. It argued
that every time someone does a Google search and finds the article in
question, the statute of limitations period begins anew. As Ars Technica reported at the time, “this is like claiming that finding the article in a
microfilmed back issue of the paper somehow amounts to ‘republication,’
and means that the statute of limitations might never run out.”
The district court, rejecting Nationwide’s argument, commented that
such an idea “would hinder the development of a robust marketplace of
ideas” and dismissed
the lawsuit. (The Judge also found that Nationwide had failed to
diligence in waiting almost a year to serve the defendants, and
therefore wasn’t entitled to the earlier date on which it filed the
Nationwide appealed the dismissal, and on December 21, 2007 the Fifth Circuit affirmed. In doing so, the court went straight to the heart of Nationwide’s argument:
[T]he continued availability of an article on a
website should not result in republication, despite the website’s
ability to remove it. Perhaps more important than the similarities
between print media and the Internet, strong policy considerations
support application of the single publication rule to information
publicly available on the Internet. See Firth [v. State, 775 N.E.2d
463, 466 (N.Y. 2002)] (discussing the “potential for endless
retriggering of the statute of limitations, multiplicity of suits and
harassment of defendants” and warning of a corresponding chilling
effect on Internet communication). We agree that these policy
considerations favor application of the single publication rule here
and we note that application of the rule in this context appears
consistent with the policies cited by Texas courts in adopting and
applying the single publication rule to print media: to support the
statute of limitations and to prevent the filing of stale claims.
As to Nationwide’s business disparagement and tortious interference claims,
which normally are entitled to a two-year statute of limitations under
Texas law, the Fifth Circuit stated that when allegedly defamatory statements
form the sole basis for a business disparagement or tortious
interference claim, the one-year statute of limitations
for libel applies.
This is an important decision for both traditional and non-traditional publishers. If
Nationwide’s view of the law were to carry the day, it would eviscerate
the statute of limitations for defamation on the Internet. Online
publishers would then be faced with only one way to cabin their legal
liability and protect against stale claims: delete all content older
than one year. No more archives, no more wayback machine, just today’s
news folks. Is that the kind of Internet we want?
For more on the case, see the CMLP’s database entry: Nationwide v. Belo Corp.