Franklin, Andrews, Kramer & Edelstein

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U.S. Congress Passes Historic Libel Tourism Bill

Nationwide legislation prohibits all American courts from enforcing foreign defamation judgments that do not comport with First Amendment protections

By Laura R. Handman, Robert D. Balin, and Erin Nedenia Reid
08.03.10
http://www.dwt.com/LearningCenter/Advisories?find=311967

On July 27, 2010, the U.S. House of Representatives passed by voice vote the Securing the Protection of our Enduring and Established Constitutional Heritage Act (“SPEECH Act”). Sponsored by the chairman of the Senate judiciary committee (Sen. Patrick Leahy) and the ranking member (Sen. Jeff Sessions) in an unusual show of bipartisan support, the SPEECH Act was passed unanimously by the Senate on July 19, 2010. When signed into law by President Obama, it will prohibit the enforcement of foreign libel judgments that are inconsistent with the protections accorded free speech by the First Amendment to the U.S. Constitution.

The SPEECH Act provides American authors, journalists, publishers, and media organizations with an important tool to fight back against “libel tourists”—plaintiffs who choose to file libel lawsuits in foreign jurisdictions over speech published primarily in the United States in order to get a more favorable result. These lawsuits typically involve celebrities or foreigners suing American publishers or authors over content that has little or no nexus to the foreign forum—with London having become a favored destination of visiting libel plaintiffs.

Although a handful of states—New York, Illinois, Maryland, California, Florida, and Utah—have statutes that permit courts in those states to decline enforcement of a foreign defamation judgment if the plaintiff seeks enforcement in the United States, the SPEECH Act is the first nationwide federal legislation to tackle attempts to undermine the First Amendment rights of American authors and publishers.

As set forth in its key provisions, the SPEECH Act:

Applies to all courts—state and federal—throughout the United States. Every “domestic court” is covered by the SPEECH Act. Under the Act, “domestic court” is defined to include both federal and state courts.

Makes nonrecognition mandatory when the foreign libel law is not as protective as American law. The SPEECH Act prohibits any domestic court from recognizing or enforcing a foreign defamation judgment if the foreign jurisdiction’s libel laws do not provide as much protection to speech as does the First Amendment and/or the libel law of the state in which the domestic court sits. There is one exception to this provision: even if the foreign jurisdiction’s libel law is less protective, enforcement is allowed if the party seeking enforcement shows that there would have been defamation liability under the First Amendment and the law of the state where the domestic court sits.

Prohibits enforcement of a foreign defamation judgment if personal jurisdiction does not comport with U.S. principles of due process. The SPEECH Act also prohibits domestic courts from recognizing or enforcing a foreign defamation judgment if personal jurisdiction in the foreign forum did not comport with U.S. due process principles. For example, foreign courts have established personal jurisdiction over American publishers, journalists, and authors based on minimal downloads of content published on American websites. When faced with the same question, American courts have prohibited a plaintiff from establishing personal jurisdiction over a defendant based on content published on a website unless that content is targeted specifically towards the forum state. Under the SPEECH Act, the party seeking recognition of the foreign judgment will bear the burden of establishing that the foreign court’s exercise of personal jurisdiction was consistent with the due process requirements imposed on domestic courts by the Constitution of the United States.

Prohibits enforcement of foreign defamation judgments against providers of interactive computer services who would be immune under U.S. law. As an additional ground for nonenforcement, the SPEECH Act also prohibits a domestic court from recognizing or enforcing a foreign defamation judgment that was rendered against the provider of an interactive computer service, as defined by 47 U.S.C. § 230, unless the judgment would be consistent with Section 230. Under Section 230, providers of “interactive computer services” (a term that broadly encompasses ISPs, websites, chat rooms, and other online forums) receive statutory immunity from defamation suits arising from user-generated content. By contrast, many foreign jurisdictions do not provide any legal protection to computer services that merely host defamatory third-party speech. Now, when a foreign defamation judgment is issued against an interactive computer service provider for third-party content, under circumstances where Section 230 would have prohibited liability in the United States, enforcement of that foreign judgment by U.S. courts is barred by the SPEECH Act.

Creates broad grounds for removing actions to enforce foreign defamation judgments from state court to federal court. The SPEECH Act relaxes the usual statutory requirements for removal from state to federal court. Without regard to the amount in controversy, any action seeking enforcement of a foreign defamation judgment may be removed by the defendant (or the defendants) from state court to the federal district court for the district where the action is pending so long as (1) any plaintiff is a citizen of a state different from any defendant; or (2) any plaintiff is a foreign state or citizen and any defendant is a U.S. citizen; or (3) any plaintiff is a U.S. citizen and any defendant is a foreign state or citizen. In other words, the SPEECH Act requires only minimal diversity between the parties for removal (in contrast to the usual statutory requirement of complete diversity). The Act also eliminates the usual statutory prohibition on removal when the action is brought in the defendant’s home jurisdiction.

Creates a name-clearing remedy. The SPEECH Act also allows any “United States person” against whom a foreign defamation judgment is entered to bring an independent action in federal district court for a declaration that the foreign judgment is repugnant to the United States Constitution or the laws of the United States. Under the Act, service of process may be made on the defendant in the judicial district where the case is brought or in any other district where the defendant may be found, resides, has an agent, or transacts business. The effect of the statutory language is to authorize nationwide service of process in name-clearing actions and to allow personal jurisdiction to be asserted over the foreign judgment holder to the fullest extent permitted by due process principles.

Allows for the award of attorneys’ fees. Where a party successfully opposes domestic recognition or enforcement of a foreign defamation judgment on one of the grounds set forth in the SPEECH Act, the Act requires that the court “shall, absent exceptional circumstances,” award reasonable attorneys’ fees to that party. The Act’s fee provision is a one way street—and does not permit a corresponding award of fees to a party who successfully enforces a foreign defamation judgment.

Conclusion

The SPEECH Act is a victory for American authors, journalists, and publishers who increasingly have seen their First Amendment rights being stifled by foreign libel judgments. It is also likely to have a ripple effect across the pond. “This law should present a clear message to the UK coalition Government. When Britain’s closest ally feels the need to create new laws to protect itself from the High Court in London, it’s clear that the status quo cannot continue,” said John Kampfner, chief executive of Index on Censorship.1

Members of Parliament agree with Kampfner’s assessment. “Our present libel laws are not fit for purpose and we have the chance to change this,” said Baroness Dianne Hayter in a recent speech to the House of Lords. “There has to be a better balance.”2 The House of Lords recently announced that it will bring forward a defamation bill aimed at reforming existing United Kingdom libel laws by the 2011-2012 parliamentary session.

FOOTNOTES

1 Dominic Ponsford, “USA Outlaws ‘Libel Tourism’ in the UK Courts,” Press Gazette, July 29, 2010 (http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=45773&c=1)

2 Rachel McAthy, “Government to Lead Libel Reform with New Defamation Bill,” Journalism.co.uk, July 9, 2010 (http://www.journalism.co.uk/2/articles/539552.php)

Disclaimer

This advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

http://www.dwt.com/LearningCenter/Advisories?find=311967