Can U.S. Laws Protect Online Speech from Foreign Libel Suits?

“…in cyberspace, the First Amendment is a local ordinance.”

That’s a remark famously made in 1997 by John Perry Barlow, one of the co-founders of the Electronic Frontier Foundation. Barlow’s complete statement is well worth re-reading but one implication of this particular remark is that the reach of American constitutional values may be limited by our country’s physical borders. When the work of U.S. journalists makes its way to foreign shores via the Internet, foreign courts are likely to apply a very different set of legal principles to defamation actions brought by foreign plaintiffs. And the foreign legal playbook is not likely to include an analog to the U.S. First Amendment.

What this means is that an article or blog post that would not give rise to liability under U.S. law could give rise to liability in a foreign country. And to nail that down a step further, if U.S. authors and publishers curb their expression out of fear of offshore lawsuits, First Amendment protections are thereby diminished.

Ehrenfeld v. Mahfouz

The U.S. Congress and at least one state legislature (New York) have taken notice of the offshore defamation liability issue and its potential for chilling the speech of U.S. authors and journalists. The New York Legislature has enacted legislation to protect U.S. authors sued abroad, prompted by a controversy involving an English libel judgment against U.S. author Rachel Ehrenfeld. The U.S. Congress is currently considering similar legislation.

Rachel Ehrenfeld

Ehrenfeld is not an online journalist, but her case and its fallout have implications for online content providers, journalists and bloggers. Ehrenfeld authored a book in which she alleged that Saudi bank executive Khalid Salim Bin Mahfouz financially supported terrorism. Although the book was published only in the U.S., Mahfouz sued Ehrenfeld in England based on the fact that 23 copies were sold there via the Internet and a chapter of the book was made available on a website accessible in England. When Ehrenfeld chose not to respond to the action, the English court ordered her to pay damages and attorney fees to Mahfouz and to cease publication of the defamatory statements.

Note that Mahfouz is not a citizen of the UK; he is a citizen of Saudi Arabia. The tactic of non-resident plaintiffs bringing suit in a country with libel laws more favorable to plaintiffs is referred to as libel tourism. The UK is a favored destination for libel tourists, as it has particularly stringent defamation laws and no inconvenient First Amendment to limit them. In fact, Mahfouz has brought several similar libel actions in UK courts against other authors as well.

Jurisdiction and Enforcement of Judgments

Jurisdiction and enforcement of judgments is one of the first things used by law schools to make students’ heads hurt, so bear with us here. We’ll try to make it go down easy.

As a practical matter, Mahfouz’s UK libel judgment isn’t of much use to him (except to frighten Ehrenfeld) unless he can enforce the judgment in the U.S. For example, to enforce the damages portion of the judgment and collect money from Ehrenfeld, Mahfouz must bring an action in a state where Ehrenfeld has property. Ehrenfeld sought to head off any attempt to do that by pre-emptively bringing suit against Mahfouz in New York, the state where she is a resident. She asked the court to declare that Mahfouz could not enforce his judgment in U.S. courts, precisely because the UK court did not take into consideration her free speech rights as a U.S. citizen. Therefore, the enforcement of the judgment would be against U.S. and New York State public policy.

While Ehrenfeld’s case is procedurally complicated, involving proceedings in both federal and state courts, what it ultimately came down to is a technical interpretation of the New York State law that sets out the circumstances under which a New York court (or a federal court located in New York) can exercise “in personam” jurisdiction — that is, jurisdiction over a person. New York State’s highest court concluded [PDF file] that under New York law it had no jurisdiction over Mahfouz based solely on his lawsuit against Ehrenfeld in England because that lawsuit did not constitute “transacting business” in New York. In the absence of jurisdiction over Mahfouz, a New York court had no power to hear Ehrenfeld’s lawsuit against him.

This meant that Ehrenfeld would have to wait until Mahfouz tried to enforce the UK judgment against her in New York before she could challenge it in a U.S. court. What’s the harm in waiting, you say? Ehrenfeld argued that the possibility that the judgment might be enforced in the U.S. at some point in the future would have a chilling effect not only on her writing and publication, but also on other authors. What’s more, she argued, chilling her speech is exactly the effect that Mahfouz sought by bringing suit in the first place. The court nevertheless ruled that this was not enough to give it jurisdiction under New York law.

New York Enacts Libel Terrorism Protection Act

The New York Legislature responded to the ruling against Ehrenfeld by changing the law. The Libel Terrorism Protection Act was signed into law in April; it is very specifically tailored to address Ehrenfeld’s situation.

First, the law amends New York’s personal jurisdiction law to reverse the result in the Ehrenfeld case. New York courts (and federal courts located in New York) may now exercise jurisdiction in a case where a libel judgment has been obtained in a foreign court, if the work involved was published in New York and the person who might have to satisfy the judgment is either a resident of New York, has assets in New York, or “may have to take actions in New York to comply with” the judgment. Given the status of New York as a hub for traditional publishers, the revised law would give a lot of potential offshore libel defendants the opportunity to challenge libel judgments obtained in foreign courts.

Ehrenfeld’s book at the heart of the case

Second, the Act goes to the heart of Ehrenfeld’s argument that the UK judgment should not be enforced because U.S. constitutional law standards were not met. The Act holds that New York courts may not enforce a defamation judgment obtained in a non-U.S. court if the law of the country in which the judgment was obtained does not provide “at least as much protection for freedom of speech and press…as would be provided by both the United States and New York Constitutions.”

This means that a New York court being asked to enforce a foreign libel judgment must first determine if the law of the foreign country meets U.S. and New York constitutional law standards with respect to speech and press freedoms. That’s a high standard, and one that many jurisdictions, including England, are not likely to meet. If the foreign law fails the test, under this provision the judgment can’t be enforced.

Location, Location, Location

What kind of protection does the New York law afford online writers and publishers? Potentially, it provides a great deal of protection, but there are a number of unanswered questions about the law, which remain untested in the courts so far.

For online or traditional authors or publishers who are sued in New York to enforce a foreign judgment, the Act may be an important defensive tool. The second part of the Act (the enforcement of judgments provision) allows them to defend against the enforcement of a foreign libel judgment that doesn’t meet U.S. free speech standards. But keep in mind that a plaintiff seeking to enforce a foreign libel judgment might seek to enforce it in another state in which the publisher or author has assets. The casual blogger who lives and works in New York State and has no assets elsewhere is probably in good shape under this portion of the Act. But publishers or large media organizations (or perhaps the prosperous casual blogger) that have assets in other states are protected under this provision only to the extent that a suit to enforce a judgment is brought in New York.

Constitutional Provision vs. Constitutional Provision

As an offensive tool, the first part of the Act (the jurisdiction provision) may give authors and publishers in the same situation as Ehrenfeld the opportunity to proactively challenge a foreign defamation judgment even before a foreign plaintiff tries to enforce it in the U.S.

Among the questions raised by the provision, however, is whether the exercise of jurisdiction over a foreign plaintiff in a situation such as that presented by Ehrenfeld v. Mahfouz will itself be found constitutional. The power of a court to exercise jurisdiction requires not only that the specific provisions of the state’s personal jurisdiction law be met, but also that the requirements of the Due Process clause of the U.S. Constitution be satisfied. Ironically, an author or publisher’s attempt to vindicate their rights under one U.S. constitutional provision may be stymied by another.

Just as the First Amendment backstops the law of defamation, the Due Process clause backstops the law of personal jurisdiction and limits the extent to which a U.S. court may require a foreign party to answer to a lawsuit filed in the United States. To greatly oversimplify, the court must find that it is “fair” to require the foreign party to appear. The great sloping piles of law books containing judicial decisions discussing whether the exercise of jurisdiction in one situation or another is “fair” should discourage anyone from thinking that the resolution of that issue is clear or simple, even on the facts presented in Ehrenfeld v. Mahfouz.

A parallel situation may be found in a controversy several years ago over a lawsuit brought against Yahoo in France under French hate crimes law. Yahoo attempted to get a U.S. court in California to declare the judgment unenforceable in U.S. courts on free speech grounds. The U.S. Court of Appeals for the Ninth Circuit split on several issues, including whether the Due Process clause permits a California court to exercise jurisdiction over the French plaintiffs based on their actions in the French lawsuit. Suffice to say that the court’s ruling did not give a clear answer to that question.

Congress Considers Similar Bills

The U.S. Congress has also addressed the issue of foreign libel actions in several pending bills. H.R. 6146: would protect defendants in foreign defamation actions from the enforcement of foreign judgments inconsistent with U.S. free speech law. S.2977: and H.R. 5814,: the “Free Speech Protection Act of 2008,” would both protect defendants from such judgments and allow them to bring an action against the foreign plaintiff for damages. The legislative session will end shortly and the chances of these bills being passed would appear to be slim, but they may well be reintroduced when the new Congress convenes in January. The protection provided by these bills would apply nationally.

Location, Location, Location (Again)

Neither the New York legislation nor the bills pending in Congress deal with a related scenario, where the publisher has assets or facilities located in the country that is seeking to apply its own laws. This issue has arisen in situations involving U.S.-based media companies that have been sued, or threatened with legal action, related to the content on their websites or Internet services.

One recent example concerns executives of Google who are being prosecuted in Italy? on defamation and other charges related to a YouTube video showing a disabled Italian child being taunted. As Google has an office in Italy, it cannot as a practical matter ignore the action (as it might if an action was brought by a prosecutor in, say, Azerbaijan). The possibility of prosecution by foreign authorities in a country where a company is located, or the enforcement of a foreign judgment against assets located in the foreign country, is likely to yield a different outcome than cases in which the defendants are located solely in the United States.

Conclusion

As newspapers and other traditional content providers increasingly move to the Internet, the chance that there will be further disputes such as that involved in Mahfouz v. Ehrenfeld increases correspondingly. Newspapers and media companies that have placed their content online have already been subjected to offshore defamation litigation in Australia (Gutnick v. Dow Jones), Canada (Bangoura v. Washington Post) and the UK (Harrods v. Dow Jones) under legal regimes less favorable to speech freedoms than the U.S.

The enactment of the New York law may provide some potential protection for online publishers, journalists and bloggers faced with offshore litigation that threatens U.S. free speech values, but even the enactment of such legislation nationally will not cover all potential circumstances in which a foreign plaintiff (or prosecutor) may seek to apply local values to online expression. As John Perry Barlow said, the applicability of U.S. law depends upon location, location, location.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, “Doing Business on the Internet” and “Emerging Technologies and the Law.” He also co-writes the New Media & Technology Law Blog.