First Amendment & Media Litigation
The SPEECH Act Provides Protection Against Foreign Libel Judgments
By Dana Green

It is a rare bill that garners a unanimous vote in both houses of Congress, but the recent passage of the SPEECH Act demonstrates that Republicans and Democrats agree on at least one thing: foreign libel laws should not chill U.S. speech. Colorfully entitled the “Securing the Protection of Our Enduring and Established Constitutional Heritage (SPEECH) Act,” and signed into law August 10, 2010, the act bars the enforcement of foreign judgments that do not meet U.S. free-speech standards. The act not only provides a national standard, as opposed to the prior patchwork of state legislation on the issue, but it also authorizes declaratory judgments in federal court and a number of other protections.

Comity and Libel Tourism
The SPEECH Act addresses the concern that plaintiffs are increasingly using foreign courts to sue U.S. writers, journalists, and academics for works published in the United States—so-called “libel tourism.” In particular, in the last 10 years, England has become the preferred litigation destination for Russian oligarchs, Saudi billionaires, and international celebrities. They are attracted by English defamation law, which places the burden of proof on the defendant, as well as English courts’ willingness to assert personal jurisdiction over defendants with little connection to England. Because of the international accessibility of the Internet, online publications were particularly at risk of being hailed into English courts. For example, in 2004 an English court heard a lawsuit by American boxing promoter Don King against a U.S. resident and U.S. entities over comments published on a U.S. boxing website.

U.S. journalists and publishers—even those with no interest in the international market—were increasingly forced to weigh the risk of English judgments, which were enforceable in the U.S. under the doctrine of “comity.” For more than a century, nations have recognized each others’ judgments (including libel judgments) under this doctrine, which is similar to the “full faith and credit” afforded within the U.S. by one state to judgments from another. Under the doctrine, the enforcing court looks only to the basic fairness of the proceedings, disregarding differences in procedure and the underlying law.

Despite this longstanding principle, in the 1990s, U.S. courts became increasingly reluctant to enforce judgments obtained under laws that would violate the First Amendment. In two cases—Bachchan v. India Abroad and Telnikoff v. Matusevitch [PDF]—state courts in New York and Maryland took the unusual step of refusing to enforce English libel judgments on the grounds that English libel laws were “repugnant” to U.S. public policy on speech. These decisions relied on a seldom-used exception to the comity doctrine that permits courts to refuse enforcement where “fundamental values” are threatened. Although the decisions were hailed as important defenses of free speech, they provided little comfort to authors and publishers who still faced expensive litigation and uncertain legal outcomes in other states.

State Legislatures Take Action
A lawsuit in 2005 prompted the first state legislation against foreign libel judgments. Dr. Rachel Ehrenfeld, an American academic, authored a book, Funding Evil, on the financial networks underpinning international terrorism. Although the book was published and distributed only in the United States, 23 copies were ordered online and shipped to England. This was enough to enable a Saudi billionaire, Khalid bin Mahfouz, to sue Ehrenfeld in England, under English law, for defamation. Ehrenfeld refused to acknowledge the jurisdiction of the English court and a $225,000 judgment was entered against her in her absence. She was also ordered to publish a correction and apology. In the wake of the judgment, American publishers not only dropped plans to publish more of her work, but Random House U.K. canceled the publication of Craig Unger’s House of Bush, House of Saud, an American bestseller, and Cambridge University Press withdrew and destroyed all copies of J. Millard Burr and Robert O. Collins’s Alms for Jihad, another American book on terrorism funding.

Ehrenfeld unsuccessfully sought a declaratory judgment in New York that the English judgment was unenforceable in the United States that was dismissed for lack of personal jurisdiction over Mahfouz and—with much greater success—initiated a media campaign to draw attention to the chilling effect of English defamation law. Free-speech advocates, publishers, academics, and journalists joined Ehrenfeld’s call for legislation. As a result of this campaign, New York enacted legislation [PDF] authorizing courts to issue declaratory judgments and refuse enforcement unless the foreign jurisdiction provides “at least as much protection for freedom of speech and press” as the U.S. and state constitutions. Between 2008 and 2010, seven other states introduced or enacted legislation modeled on the New York statute.

However, advocates continued to press for federal legislation. Uniform national protection was still seen as desirable, and the issue clearly affected foreign relations. The dissent in Telnikoff accused states of imposing U.S. views of free speech on the world and claimed they would become a “safe haven for foreign libel judgment debtors [PDF].” Ehrenfeld’s campaign and the resulting state legislation also caused significant embarrassment in the United Kingdom, prompting parliamentary action.

The SPEECH Act provides the same protections as prior state legislation. It requires state and federal courts to deny recognition or enforcement of foreign defamation judgments unless the foreign jurisdiction provides at least as much protection of free speech as the U.S. Constitution and the constitution and laws of the state in which the court is located. The act also authorizes federal courts to issue declaratory judgments, which enables defendants to challenge the enforceability of the foreign judgment as soon as it is rendered, rather than having to wait for the plaintiff to initiate enforcement proceedings in the United States. However, the SPEECH Act also includes a number of additional protections not included in many state acts.

Personal Jurisdiction
The foreign court’s exercise of personal jurisdiction must meet U.S. standards for personal jurisdiction, or the judgment “shall not” be recognized or enforced. The party seeking enforcement bears the burden of demonstrating personal jurisdiction was proper. One of the strongest objections to English judgments has been the exertion of personal jurisdiction over parties with little connection to the English forum or no purposeful availment to the U.K. market. For example, in Ehrenfeld, neither the defendant nor the plaintiff were residents or citizens of Britain, and only 23 copies of the publication reached Britain. Most state legislation failed to address the issue of personal jurisdiction, but even if the substantive law of England were the same as that of the United States, the prohibitive costs of litigating in a far-flung forum would have a chilling effect on defendants. The SPEECH Act effectively addresses this concern.

Section 230
State and federal courts “shall not” recognize or enforce judgments that are contrary to Section 230 of the Communications Decency Act. The party seeking enforcement bears the burden of demonstrating the judgment is consistent with Section 230. Section 230 protects online publishers from liability for content posted by others, regardless of whether the content is moderated. In contrast, in Europe [PDF], online publishers generally are liable for user-generated content unless it is unmoderated and the host complies with notice-and-takedown provisions. Most prior state legislation focused only on constitutional protections for speech, which overlooked the critical role that Section 230 plays in online publishing. Because online publications are the most likely to result in foreign liability due to ease of access on the Internet, including Section 230 protections is a significant improvement over state legislation.

Foreign Appearances
Defendants who participate in foreign court proceedings—for example, by appearing in English court—may still challenge the enforcement of a foreign judgment in U.S. court, including whether the foreign court’s personal jurisdiction was proper. Normally, if a defendant appears in a foreign court, jurisdiction cannot later be challenged, and the grounds for challenging enforcement on the merits is limited. The SPEECH Act enables publishers to both defend the case overseas anddefend against enforcement in the United States.

Attorney Fees
If an enforcement action is brought in the United States and the defendant successfully opposes enforcement, the plaintiff must pay the defendant’s attorney fees. This provision creates an additional deterrent to foreign plaintiffs seeking to enforce a foreign libel judgment in the United States.

Impact on Domestic and International Publications
The result of the SPEECH Act is that most U.S. journalists, bloggers, authors, academics, and publishers—the vast majority of whom have no assets overseas—only need to worry about liability for defamation under U.S. law, even if their work is sold or downloaded overseas. Plaintiffs will have little incentive to sue under plaintiff-friendly foreign libel law when the judgment cannot be enforced in the United States. By extending Section 230 to foreign judgments, the act provides significant protection for online publishing. All in all, this is an outstanding development for free speech.

For institutional publishers with assets overseas, the SPEECH Act is not as significant because it provides no protection against enforcement actions outside the United States. However, the act may have positive secondary effects, at least in Britain. The political and diplomatic embarrassment caused by state legislation and the SPEECH Act led to public calls for legal reform. A bill to amend the defamation laws is currently before the House of Commons, and important changes have taken place within the judiciary. On September 30, 2010, Justice David Eady, the High Court judge responsible for overseeing defamation cases, was replaced in that role by Justice Michael Tugendhat. Eady presided over a significant percentage of English libel cases, including the Ehrenfeld case, and was criticized for a plaintiff-friendly approach and expansive interpretation of personal jurisdiction. Justice Tugendhat is widely perceived to be more media-friendly. Because of the structure of the English judicial system, this change may have a significant effect.

The act’s symbolic significance, as an expression of the depth of Congressional commitment to free speech, should be heartening to free speech advocates. Its influence overseas, in prompting reforms to reign in “libel tourism,” may also prove significant.

Keywords: litigation, First Amendment, comity, free speech, SPEECH Act, Ehrenfeld, foreign judgments, declaratory judgments, libel tourism, defamation

Dana Green is the First Amendment Fellow in the legal department of The New York Times Company.

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