‘Libel Tourism’ Law Could Overreach on Foreign Plaintiffs, Senate Judiciary Told

Everyone can agree that U.S. courts shouldn’t uphold foreign judgments that violate due process, said Committee Chairman Patrick Leahy, D-Vt. But creating an “unprecedented retaliatory cause of action in American courts is a tougher question,” he said. Sen. Jon Kyl, R-Ariz., floated the idea of enshrining protections for U.S.-oriented speech through trade pacts, as the U.S. often does with intellectual property (WID Feb 23 p2).

A bill (S-449) by Sen. Arlen Specter, D-Pa., would create a cause of action for U.S. defendants who are served in foreign defamation suits for speech that’s protected in the U.S. Federal courts would have jurisdiction if the defendants’ assets were at risk, and could bar enforcement of a foreign order and order damages in favor of defendants. If a jury finds the plaintiff intentionally sought to suppress protected speech by discouraging publishers and employers from working with writers, a court could order triple damages against the plaintiff.

The House passed last summer HR-2765 by Rep. Steve Cohen, D-Tenn., a more-limited measure to block federal courts from enforcing judgments inconsistent with the First Amendment or that improperly exercise personal jurisdiction over a U.S. defendant. It would also block recognition of judgments inconsistent with Section 230 of the Communications Decency Act, which immunizes interactive computer services. Federal courts could grant attorney’s fees to prevailing defendants. Even with positive signs for libel reform in the U.K. and Canada, another country “may just emerge as the next-best-available forum of choice for libel plaintiffs,” Leahy said. “There’s going to be a race to the bottom” if writers and publishers try not to antagonize the least-friendly jurisdiction for speech.

Federal courts’ refusal to enforce judgments isn’t enough, because of the “immediate and damaging effect” on an author from a foreign judgment or a threatened suit, said Kurt Wimmer, a partner at Covington & Burling and general counsel at Gannett until last year. Whether online or in print, publishers have been intimidated, some have agreed to destroy existing works, and others won’t deal with authors who have a judgment against them, he said -- the best-known examples concern national security issues, such as funding for Islamic terrorism. “Based on just a few downloads,” media organizations won’t know which country’s laws should govern its practices, and may decide to simply block IP addresses from problematic jurisdictions, Wimmer said.

Four states refuse to recognize such foreign judgments and four more are considering similar laws, but a broader federal law is needed, said Bruce Brown of Baker & Hostetler, a former reporter. It should let defendants sue for a declaration that the judgment is constitutionally “repugnant” when a plaintiff doesn’t try to enforce in the U.S., and perhaps include a “one-way fee-shifting provision” to cover the cost of declaratory filing, he said. Congress should “keep in mind” damages awards for the “most egregious cases.” A “nationwide service-of-process” provision would ensure that plaintiffs who do business in the U.S., but “purposely” avoid the state where a defendant is based, can be judged to have minimum contacts to be countersued, Brown said.

Wimmer conceded that no federal court yet has enforced a foreign libel judgment, contrary to Wimmer’s expectations following a high-profile French judgment against Yahoo in 2000 for hosting online auctions of Nazi memorabilia. The triple-damages provision in Specter’s bill could be problematic as an overreach of U.S. jurisdiction, though declaratory judgments and attorney’s fees could pass muster as domestic-focused, Wimmer said: “It’s a line-drawing exercise.”

State courts in New York and Maryland that blocked judgments ruled on the basis of state law, not the First Amendment, leaving the door open for upheld judgments in other states, Brown said. “We're telling states how they interpret their own constitutions?” asked Sen. Jeff Sessions, R-Ala. Federal action shouldn’t be “offensive to states” any more than the New York Times v. Sullivan Supreme Court decision that set a floor for speech protection, Wimmer said. Many states also use a “need not” standard for enforcement, rather than a “shall not” standard. The real danger isn’t that lawsuits pile up, but that would-be litigants see they can effectively curb criticism based on a threat, he said. Authors’ freedom to travel is also at stake: They wouldn’t be “thrown into debtor’s court” in the U.K., but one journalist already has avoided traveling back to Zimbabwe after being convicted there for downloaded articles.

Brown told Specter that his bill should be “generally silent” on personal jurisdiction over foreign plaintiffs in U.S. courts, letting case law develop rather than set a constitutionally problematic rule in the statute. Some media lawyers are concerned about the precedent that loose rules for personal jurisdiction could set, Wimmer said: “We [would] get that argument thrown back at us” by other countries that assert jurisdiction over U.S. authors by virtue of Internet publication.

Sen. Sheldon Whitehouse, D-R.I., asked whether a federal law could use an “in rem” proceeding -- jurisdiction over property, such as an allegedly defamatory article -- to get around the personal-jurisdiction hurdle. Wimmer called that an “interesting idea” and promised to follow up on its feasibility in writing. Another compromise could be allowing damages against foreign plaintiffs if they don’t seek U.S. enforcement within their own jurisdiction’s statute of limitations, he said. Asked by Kyl about remedies through treaties and bilateral agreements, Wimmer said the European Union’s e-commerce directive could serve as a vehicle. The problem is “the EU has given this [issue] back to the member states.” The U.S. could pass a barebones protection law “and then begin beating the drum pretty loudly” with trading partners to sign off on protections in bilateral pacts, Kyl said.