On April 30, 2008, the “Libel Terrorism Reform Actbecame law in New York. The new law prohibits New York courts from enforcing foreign libel judgments unless the country where the judgment was entered provides speech protection that is equal to or greater than the protection provided by the U.S. and New York Constitutions. The law also gives New Yorkers who are subject to such a libel suit the ability to go to New York courts to get an injunction that declares the foreign libel suit invalid in New York.

Many countries do not protect speech to the extent that the U.S. does, making it much easier for plaintiffs to win libel judgments. The United Kingdom in particular has become a destination for “libel tourism.” British law places the burden of proof on the defendant to prove that the allegedly libelous statement in question is true, while American law places the burden on the plaintiff to prove that the statement is false. Furthermore, the U.S. gives extra protection to statements regarding elected officials and public figures (see New York Times v. Sullivan), while British courts generally do not afford such protection (although a 2006 case in England’s highest court indicated that this might change by allowing reporters a “public interest” defense to libel claims). British courts will assert personal jurisdiction over individuals’ libel claims, even if neither the plaintiff nor the defendant have contacts with the UK. Moreover, courts in the UK will hear libel claims based on writings that are available in the UK on the internet.

Although it is unlikely that these foreign libel judgments will be enforced in New York, writers will no longer have such judgments looming over them as a result of the Act.

Representative Steve Cohen (D-TN) recently proposed a similar bill in Congress that would prohibit enforcement of such judgments in federal courts and would allow those subject to foreign libel judgments to obtain a declaratory judgment in federal court proclaiming that the foreign judgment is unenforceable.

The “Libel Terrorism Reform Act” was passed in response to the New York Court of Appeals’ decision in Ehrenfeld v. Mahfouz in December 2007. In that case, author Rachel Ehrenfeld was sued for libel in England by Saudi financier Khalid bin Mahfouz because she wrote in her 2003 book, Funding Evil: How Terrorism is Financed and How to Stop It, that Mahfouz had directly or indirectly funded terrorism. Though the book was written and published in the United States, the British courts asserted jurisdiction in the case because 23 copies of the book had been purchased in the UK via the internet, and one chapter of the book was available on ABCNews.com, which is accessible in the UK. Because it would have cost a great deal for Ehrenfeld to win the lawsuit in the UK (as the burden was on her to prove that the claim was true), she decided not to defend herself in England, and the English courts entered a judgment against Ehrenfeld. The judgment against Ehrenfled was the equivalent of $225,000, which included Mahfouz’s attorney’s fees.

Ehrenfeld filed a countersuit against Mahfouz in the Southern District of New York (federal court), seeking a declaratory judgment stating that Mahfouz’s British award was unenforceable in New York. The federal court declined to do this, stating that it did not have personal jurisdiction over Mahfouz. Ehrenfeld appealed to the Second Circuit, which certified this question of New York law to the New York Court of Appeals, New York’s highest court.

The New York Court of Appeals also declined to give Ehrenfeld the judgment she sought based on jurisdictional grounds. The court ruled that New York’s long-arm statute did not extend to the constitutional due process limit and therefore did not reach Mahfouz. Because Mahfouz never availed himself of the protection and benefits of the laws of New York, the court determined that it did not have personal jurisdiction over him. The fact that Mahfouz had sued a New Yorker in a foreign court, that he had owned real estate in New York, and that he had previously been a party in a lawsuit in New York, were not enough for the court to assert personal jurisdiction over him.

The New York legislature expressed its displeasure with this decision by proposing the Libel Terrorism Reform Act in January 2008, only one month after Ehrenfeld v. Mahfouz was decided. The new law gives New York courts jurisdiction in cases like Ehrenfeld’s, effectively overturning the Ehrenfeld decision. Much of the justification behind the law was that the New York legislature wanted to protect those who expose the funding of terrorism from foreign libel suits.

There is some concern that this new law might be unconstitutional, as giving New York courts personal jurisdiction in these cases may actually go beyond the constitutional limits of due process.

Jason Katz

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