To most people, the notion that a country’s legal system should only decide cases regarding actions occurring in that country is common sense. After all, when an American tourist visiting Great Britain gets in trouble with the law, their case is handled by British courts, not American courts. Conversely, when a British tourist gets in trouble in the U.S., their case is handled by U.S, not British, courts.
The Supreme Court apparently agreed with this principle when it recently ruled that the same standard should apply in securities litigation. In the case of Morrison vs. National Australia Bank, the court ruled that lawsuits against foreign companies regarding activity on foreign stock exchanges should not be allowed in U.S. courts. In its ruling, the court highlighted the longstanding principle of American law “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.”
Despite the seemingly common sense nature of the ruling, securities plaintiffs’ lawyers are outraged. They have already filed scores of frivolous securities lawsuits against U.S. companies and were hoping to bring similarly costly lawsuits against foreign companies in U.S. courts.
Their efforts cannot be allowed to succeed. Permitting foreign securities lawsuits in U.S. courts would discourage foreign investment and further damage the U.S.’s already poor global reputation for excessive litigation. It might also lead to other countries allowing lawsuits in their courts regarding activity by U.S. companies in the U.S.
Congress and the public should ignore the self-serving outrage of the plaintiffs’ bar. The Supreme Court ruling was consistent with U.S. legal principles and common sense. Lawsuits regarding foreign activity should be heard in foreign, not U.S., courts.
San Francisco - In a decision with likely wide-ranging impact, a judge in Las Vegas today dismissed as a sham an infringement case filed by copyright troll Righthaven LLC. The judge ruled that Righthaven did not have the legal authorization to bring a copyright lawsuit against the political forum Democratic Underground, because it had never owned the copyright in the first place. The Electronic Frontier Foundation (EFF), Fenwick & West LLP, and Las Vegas attorney Chad Bowers are defending Democratic Underground.
"We are pleased that the Court saw through Righthaven's sham assignment of the copyright and dismissed its improper claim," said EFF Senior Staff Attorney Kurt Opsahl. "Today's decision shows that Righthaven's copyright litigation business model is fatally flawed, and we expect the decision to have wide effect on the over 270 other cases Righthaven has brought."
Righthaven sued Democratic Underground last fall over an excerpt of a Las Vegas Review Journal news story that a user posted on the forum, claiming that the newspaper had transferred copyright to Righthaven before it filed the suit. However, a document unearthed in this litigation showed that the copyright assignment was a sham and that Righthaven was merely agreeing to undertake the newspaper's case at its own expense in exchange for a cut of the recovery.
"In dismissing Righthaven's claim in its entirety, Chief Judge Hunt's ruling decisively rejected the Righthaven business model of conveying rights to sue, alone, as a means to enforce copyrights," said Laurence Pulgram, head of copyright litigation at Fenwick & West in San Francisco. "The ruling speaks for itself. The court rejected Righthaven's claim that it owned sufficient rights in the copyright, stating that claim was 'flagrantly false--to the point that the claim is disingenuous if not outright deceitful.'"
Judge Hunt also noted that "Righthaven has made multiple inaccurate and likely dishonest statements to the Court" and rejected Righthaven's efforts to fix things after the fact with a May 9, 2011, amendment to the original assignment agreement. The judge expressed "doubt that these seemingly cosmetic adjustments change the nature and practical effect" of the invalid assignment.
As part of his ruling today, the judge ordered Righthaven to show why it should not be sanctioned for misrepresentations to the court. The Court permitted Democratic Underground's counterclaim to continue against Stephens Media -- the publisher of the Review Journal -- allowing Democratic Underground to show that it did nothing wrong in allowing a user to post a five-sentence excerpt of a 50-sentence article.
"This kind of copyright trolling from Righthaven and Stephens Media has undermined free and open discussion on the Internet, scaring people out of sharing information and discussing the news of the day," said Opsahl. "We hope this is the beginning of the end of this shameful litigation campaign."
"To Righthaven and Stephens Media, the Court has issued a stinging rebuke," added Pulgram. "For those desiring to resist the bullying of claims brought by pseudo-claimants of copyright interests, the ruling today represents a dramatic and far reaching victory."
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