N.Y. protects authors against foreign libel judgments

Monday, May 12, 2008

Surely, somewhere in New York, Rachel Ehrenfeld is smiling.

Since 2005, Ehrenfeld has been fighting to protect her assets from the reach of a libel judgment entered against her in England. The judgment was obtained by Saudi Arabian financier Khalid Salim A. Bin Mahfouz, who sued Ehrenfeld for stating in her book, Funding Evil: How Terrorism Is Financed — and How to Stop It, that Mahfouz and his family financially supported al-Qaida and other Islamist terrorist groups.

Under the judgment, Ehrenfeld was ordered to pay £10,000 (then approximately $18,000) each to Mahfouz and his two sons and to publish an apology. The judgment also prohibited Ehrenfeld from republishing the statements in England and Wales.

Ehrenfeld refused to pay the judgment or issue an apology. Instead, through litigation in the U.S. and public relations, she mounted a frontal assault on the ability of libel plaintiffs to enforce foreign judgments against American authors, reporters and broadcasters. Ehrenfeld obtained her most significant victory in this fight on May 1, when New York enacted the Libel Terrorism Protection Act.

Libel terrorism, as it has come to be known, is the practice of libel plaintiffs’ pursuing their claims against American journalists in foreign courts that offer few, if any, of the protections for speech available in U.S. courts. These foreign courts appear to welcome this practice, even when the offending statements have little connection to their countries. In Ehrenfeld’s case, for example, only 23 copies of her book were purchased in England, and all of those purchases were made over the Internet.

Under the Libel Terrorism Protection Act, however, plaintiffs like Mahfouz have no incentive to bring foreign claims against defendants who live or maintain assets in New York. The act, which amended an existing statute prohibiting the enforcement of other foreign judgments in the state, provides that a foreign defamation judgment cannot be enforced in New York unless a New York court determines the defamation law applied by the foreign court afforded “at least as much protection for freedom of speech and press in that case as would be provided by both the United States and New York Constitutions.”

The act also addresses an issue that plagued Ehrenfeld in her effort to obtain an order from a U.S. court declaring that Mahfouz’s judgment against her was unenforceable in this country. When Ehrenfeld filed her action, Mahfouz moved to dismiss it on grounds that the U.S. courts did not have jurisdiction over him. After being referred the question by the 2nd U.S. Circuit Court of Appeals, the New York Court of Appeals agreed with Mahfouz and dismissed Ehrenfeld’s suit.

The act essentially reverses this ruling, establishing that New York courts have personal jurisdiction over “any person who obtains a judgment in a defamation proceeding outside the United States” against any person who resides in New York — or is amenable to jurisdiction in New York, has assets in New York or may have to take action in New York to comply with the judgment, provided the publication at issue was published in New York.

This new jurisdiction is limited to cases in which the libel defendant seeks an order declaring the judgment unenforceable. In an obvious gesture to Ehrenfeld, this jurisdiction expressly applies to people who obtained foreign libel judgments before the act was adopted.

Not surprisingly, the act was applauded in New York. State Assemblyman Rory Lancman, for example, said: “Today we act to protect our journalists and authors who fearlessly expose terrorism’s enablers from trumped up libel charges in courts in overseas jurisdictions which don’t share our commitment to freedom of the press, and in doing so we also protect all New Yorkers against the scourge of terrorism. Today we reaffirm New York’s place as the free speech capital of the world.”

Manhattan District Attorney Robert Morgenthau agreed. “Terrorism and terrorist financing are matters of vital interest to all New Yorkers, in no small part because New York City remains a target of significance for international terrorists,” he said. “New York authors must have the freedom to investigate, write and publish on terrorism and other matters of public importance, subject only to limitations that are consistent with the U.S. Constitution. This legislation will help to ensure such freedom.”

In signing the act, however, New York Gov. David Paterson recognized a federal response to libel terrorism would be more meaningful than a state-by-state approach.

“Although New York State has now done all it can to protect our authors while they live in New York, they remain vulnerable if they move to other states, or if they have assets in other states,” Paterson said. “We really need Congress and the President to work together and enact federal legislation that will protect authors throughout the country against the threat of foreign libel judgments.”

Paterson undoubtedly was referring to the Free Speech Protection Act of 2008 (H.R. 5814), which Rep. Peter King, R-N.Y., introduced on April 16. The Free Speech Protection Act, which was referred to the House Judiciary Committee, offers protections similar to those in the Libel Terrorism Protection Act.

Additionally, however, the proposed federal law would permit a defendant in a foreign libel action to recover damages from the plaintiff, including the amount of the foreign judgment, the defendant’s legal fees and costs and lost income attributable to the foreign action. If the defendant proved the plaintiff brought the action as part of “a scheme to suppress First Amendment rights,” those damages could be tripled.

Whether federal legislation is adopted and, if so, whether it will provide Ehrenfeld an opportunity to recover damages from Mahfouz remain to be seen. In the meantime, however, Ehrenfeld should take pride in the role she played in creating this country’s first haven against foreign libel judgments.

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