INTERNET PRESS FREEDOM CONFERENCE

Where in the World Can Internet Publishers Be Sued? Which Countries’ Laws Should Apply?

By Aimee Saginaw

New York City, June 30, 2003 -- On June 27, some of the country’s leading media lawyers converged at a World Press Freedom Committee Internet Press Freedom conference to discuss a vexing problem for Internet publishers: the increasing willingness of foreign courts to assert jurisdiction over, and apply foreign law to, libel complaints based on articles published on the Internet.

David A. Schulz, Esq., a partner at Levine Sullivan Koch & Schulz, moderates a panel focusing on where Internet publishers can be sued.

The problem arises, the lawyers explained, because foreign nations often grant fewer press protections than the United States and thus prove friendlier for libel plaintiffs. In the past, US-based publishers could avoid being hauled into foreign courts and subjected to foreign libel laws by arguing that such courts lacked the jurisdiction, or, authority, to hear such cases because the allegedly defamatory articles were published in the United States. However, with the advent of the Internet and online publishing, foreign courts are beginning to assert their jurisdiction over lawsuits involving articles physically published in the US but disseminated globally via the Internet. In so doing, these foreign courts may also apply their own libel laws, another cause of concern to publishers.

Indeed, Stuart Karle, Associate General Counsel to Dow Jones and self-described “Roadkill of the Internet,” discussed a recent case involving the Dow Jones publication, Barron’s Magazine, which illustrates this legal conundrum. In October 2000, Barron’s published an article in its print and online editions entitled “Unholy Gains,” detailing how investors sometimes use charities to further their stock schemes. One of the investors mentioned in the article, Joseph Gutnick of Victoria, Australia, sued Dow Jones in an Australian court, claiming that the portion of the article involving him (approximately 200 words of a 7,000 word article) was read on the Barron’s online site and thus damaged his reputation in Australia.

Dow Jones sought to have Gutnick’s complaint dismissed, claiming the Australian court lacked jurisdiction over the case because the article was published in the United States. However, the Australian trial court, and later, the High Court of Australia, concluded that, because the Australian test to determine where libel occurred focuses on the site of comprehension, rather than the site of actual physical publication, the fact that the article was read online in Australia was sufficient to establish that country as the site of any alleged tort. Thus, the high court determined that it had jurisdiction over the case, which is currently pending down under. Interestingly, one judge published a concurring opinion railing against Dow Jones’ effort to “impose American legal principles on the entire world, to the financial advantage of the publishers and the disadvantage of those being libeled.”

Commenting on the Gutnick case, Kevin Goering, a partner at Coudert Brothers law firm, noted that Dow Jones might not be so worried about having to go to Australia if it thought the Australian court would apply the United States’ press-friendly libel laws in evaluating Gutnick’s claims. However, unlike US courts, which typically separate the issues of jurisdiction and “choice of law” (or, which forum’s law to apply), foreign courts often automatically apply their own laws once they have established their jurisdiction over a case.
 
According to Goering, this runs contrary to the trend in US courts to apply the law of the “place of the wrong,” or, the place where the harmful conduct actually occurred, as opposed to the law of the place where the plaintiff lives. Thus, for example, a court in California could determine that it had jurisdiction to hear a case brought against an Internet publisher based in New York, but might further determine that, in so doing, it would apply New York’s, rather than California’s libel law to the case if it concluded that the harmful conduct occurred in New York.

Returning to the issue of jurisdiction, Goering noted that, in the United States, a party must establish certain “minimum contacts” with the state in which they seek to sue in order to establish the court’s jurisdiction over the defendant in that particular state. However, in England and much of the world, a court may assert jurisdiction over a libel action merely because a few people within the court’s locality read the article on the Internet. Not surprisingly, this has made England the “forum of choice” for libel plaintiffs, prompting some to refer to London as “A Town Called Sue.”

Indeed, more than one plaintiff has realized the wisdom of bringing suit in England against a US-based Internet publisher. Jan Constantine, Executive Vice President and Senior Deputy General Counsel of News America Incorporated, which publishes The New York Post, discussed a case involving a prominent oversized English model who sued the Post for attributing to her the statement that she’d spent her 16th birthday “getting buggered by [rocker] Brian Ferry.”

In response to the lawsuit, the Post issued a retraction and removed the article from both the Factiva and Lexis/Nexis electronic archives. However, the article was still available on the paper’s online subscriber archive, and two people availed themselves of it, including the model’s UK-based lawyer, who then used his ability to access the article online as a means to establish jurisdiction over the case in England.

Constantine, who expects the case to go to trial, said she was inclined to take her chances and defend the case in England (where the Post is not distributed and has no assets), rather than risk a default judgment. Nevertheless, she insisted that, “even after Gutnick, The New York Post does not take into account the laws of any foreign jurisdictions, but conducts its legal review in accordance with US libel law.”

Such statements notwithstanding, the lawyers’ discussion illustrated the problem that such cases pose for Internet publications. Constantine also mentioned a lawsuit involving Chris Byron, a freelance journalist for the Post who wrote a story for the technology magazine Red Herring alleging that a Canadian company named Imagis was a “plaything for denizens of the penny stock world.” The article appeared in both the Herring’s online and print editions, prompting Imagis to sue both the Herring and Byron in Canada. Byron, who lives in Connecticut, and the Herring, which is published by San Francisco-based RHC Media, Inc., argued that they were not subject to Canadian libel law. A Canadian court found otherwise, however, and the case is currently proceeding there.

What’s more, Byron subsequently wrote an article for the Post discussing Donald Trump’s corporate stock offerings and building ownership, prompting Trump’s lawyer to demand both a retraction and the removal of the article from the Post’s electronic archives. Citing the Imagis case, Trump’s lawyer threatened that, if the Post did not comply, it could be subject to a lawsuit in both the US and Canada.

In the end, the panelists outlined several possible solutions to these problems. David A. Schulz, partner at the law firm of Levine Sullivan Koch & Schulz, suggested devising an international treaty establishing rules governing jurisdiction or choice of law, to give publishers some sense of where they might be sued, and under whose law.

Schulz also advocated for an international “single publication rule,” which would establish a single time and place of publication for all articles, regardless of when and where they are downloaded and read. This would not only help to inform publications of where they might be sued, but would also enable them to defend against untimely actions by claiming that the statute of limitations had passed. However, given that the panelists were “not sanguine” about the possibility of any such international treaty in the near future, media lawyers are advised to keep their travel bags packed.