```

[House Report 111-154]
[From the U.S. Government Publishing Office]

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-154

======================================================================

 
              RECOGNITION OF FOREIGN DEFAMATION JUDGMENTS

                                _______
                                

 June 15, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2765]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 2765) to amend title 28, United States Code, to prohibit 
recognition and enforcement of foreign defamation judgments and 
certain foreign judgments against the providers of interactive 
computer services, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     7
Committee Consideration..........................................     7
Committee Votes..................................................     7
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     8
Congressional Budget Office Cost Estimate........................     8
Performance Goals and Objectives.................................     9
Constitutional Authority Statement...............................     9
Advisory on Earmarks.............................................     9
Section-by-Section Analysis......................................     9
Changes in Existing Law Made by the Bill, as Reported............    10

                          Purpose and Summary

    H.R. 2765 is intended to dissuade potential defamation 
plaintiffs from circumventing First Amendment protections by 
filing suit in foreign jurisdictions that lack similar 
protections. Specifically, the bill amends title 28 of the 
United States Code to add provisions to prevent U.S. courts 
from recognizing or enforcing a foreign defamation judgment 
when (1) such judgment is inconsistent with the First 
Amendment; (2) enforcement would be inconsistent with Section 
230 of the Communications Act of 1934, providing immunity for 
interactive computer services from suits based on content 
hosted by such services; or (3) the foreign court's assertion 
of personal jurisdiction over the defamation defendant is 
inconsistent with the due process standards of the United 
States Constitution. H.R. 2765 also contains a fee-shifting 
provision that allows a court to award a reasonable attorney's 
fee to a party that successfully resists recognition or 
enforcement of a foreign defamation judgment based on one of 
the grounds enumerated in the bill.

                Background and Need for the Legislation

  DIFFERENCES IN U.S. AND BRITISH LAW GIVING RISE TO ``LIBEL TOURISM''

    The First Amendment to the Constitution limits the 
liability of authors and publishers under state defamation law 
by prohibiting injunctions against defamatory statements in 
nearly all instances,\1\ and by restricting the circumstances 
under which a plaintiff may recover damages for defamation. The 
First Amendment limits liability in three key respects. First, 
it renders non-actionable a defamatory statement of opinion 
that ``does not contain a provably false factual 
connotation.''\2\ Second, it requires the plaintiff to prove 
the falsity of a defamatory statement.\3\ Third, it requires 
the plaintiff to prove fault, with clear and convincing 
evidence, by showing actual malice or negligence, depending on 
the subject matter of the statement and whether the defendant 
is a public figure.\4\
---------------------------------------------------------------------------
    \1\See New York Times Co. v. U.S., 403 U.S. 713 (1971). See also 
Ollman v. Evans, 750 F.2d 970, 995 (1984) (Bork, J., concurring).
    \2\Milkovich v. Lorain Journal Co., 497 U.S. 1, 19-20 (1990).
    \3\Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767 (1986). One 
qualification is necessary: The Supreme Court has reserved decision on 
whether the plaintiff must prove falsity if the he or she is a private 
(rather than a public) figure and the statement concerns a private 
matter. See id. at 775. That narrow category of cases is not likely to 
be implicated by H.R. 2765; but if it ever were to be, the courts would 
be able to address the question.
    \4\If the statement concerns a public official or public figure, 
the plaintiff must prove that the defendant made it with ``actual 
malice''--that is, ``with knowledge that it was false or with reckless 
disregard of whether it was false or not,'' New York Times Co. v. 
Sullivan, 376 U.S. 254, 279-80 (1964), and must do so with ``clear and 
convincing proof.'' Gertz v. Robert Welch, Inc., 418 U.S. 323, 342 
(1974). If the statement concerns a private figure, the plaintiff must 
prove at least negligence. Id. at 347; see also Hepps, 475 U.S. at 768. 
Even then, though, proof of actual malice is required to recover 
punitive damages or presumed compensatory damages if the statement 
concerns a public matter. Gertz, 418 U.S. at 348-350; see also Hepps, 
475 U.S. at 774.
---------------------------------------------------------------------------
    These and related First Amendment doctrines reflect ``a 
profound national commitment to the principle that debate on 
public issues should be uninhibited, robust, and wide-
open.''\5\ With increasing frequency, however, the subjects of 
publications disseminated primarily in the United States have 
sought to circumvent First Amendment protections by bringing, 
or threatening to bring, defamation suits against American 
authors and publishers in Britain. This type of forum shopping 
has come to be known as ``libel tourism.''\6\
---------------------------------------------------------------------------
    \5\New York Times Co., 376 U.S. at 270.
    \6\See, e.g., Libel Tourism: Hearing Before the Subcomm. on 
Commercial and Administrative Law of the H. Comm. on the Judiciary, 
111th Cong. (2009) [hereinafter ``Libel Tourism Hearing''] (statements 
and testimony of Bruce D. Brown and Laura R. Handman); Anna C. Henning 
and Vivian S. Chu, ``Libel Tourism'': Background and Legal Issues, CRS 
Rpt. for Congress, R40497 (2009); Sarah Staveley-O'Carroll, N.Y. U. J. 
Law & Liberty (forthcoming 2009).
---------------------------------------------------------------------------
    Britain's appeal to libel tourists stems from its 
plaintiff-friendly defamation law. In contrast to American law, 
British law imposes on the defendant the burden of proving the 
truth of a defamatory statement; renders opinions actionable 
unless the defendant can successfully invoke the ``fair comment 
exception'' for opinions drawn from facts and made without 
``actual malice.'' In addition, as far as the record before the 
Committee suggests, British law permits at least some 
injunctions against speech that would be condemned as an 
unconstitutional prior restraint if issued in the United 
States.\7\ These and other features of British defamation law 
have drawn criticism from the United Nations Human Rights 
Committee,\8\ and even from some members of the British 
Parliament.\9\
---------------------------------------------------------------------------
    \7\Libel Tourism Hearing (statement of Laura R. Handman).
    \8\U.N. Human Rights Comm., Int'l Covenant on Civil and Political 
Rights, Consideration of Reports by States Parties Under Article 40 of 
the Covenant, Concluding Observations of the Comm., United Kingdom of 
Great Britain and Northern Ireland, 25, U.N. Doc. CCPR/C/GBR/CO/6 
(July 30, 2008).
    \9\See Writ Large: Are British courts stifling free speech around 
the world?, Economist, Jan. 8, 2009.
---------------------------------------------------------------------------
    British procedural law also facilitates libel tourism, 
especially in its approach to the exercise of personal 
jurisdiction over defendants. Whereas the due process clauses 
of the Constitution allow a court in the United States to 
exercise personal jurisdiction over a defamation defendant only 
if his statement was ``expressly aimed at'' the jurisdiction in 
which the court sits,\10\ British law allows a court to 
exercise personal jurisdiction over a libel defendant if his 
statement, wherever it was aimed, caused ``real or 
substantial'' harm or injury to reputation in Britain.\11\ The 
``real and substantial'' requirement has done seemingly little 
to mitigate British courts' liberal approach to personal 
jurisdiction. British courts have been quick to exercise 
jurisdiction over American defendants whose book, magazine, or 
newspaper, though principally or even exclusively distributed 
in the United States, reaches even a few readers in Britain.
---------------------------------------------------------------------------
    \10\Calder v. Jones, 465 U.S. 783 (1984); see also Libel Tourism 
Hearing (responses to questions for record of Bruce D. Brown, Partner, 
Baker & Hostetler LLP, and Laura R. Handman, Partner, Davis Wright 
Tremaine LLP).
    \11\Libel Tourism Hearing (responses to questions for record of 
Bruce D. Brown) (quoting Berezovsky v. Michaels, [2000] 2 All ER 98, 
[2000] WLR 1004, [2000] All ER (D) 643 (House of Lords, May 11, 2000)).
---------------------------------------------------------------------------
    Similarly, British courts have liberally exercised 
jurisdiction over American defendants whose Internet site, 
though established in the United States, is visited by a person 
in Britain. Consequently, concerns have been raised that the 
Internet has rendered American authors and publishers 
especially vulnerable to libel suits in Britain.\12\ As one 
commentator has described the situation, ``in the Internet age 
the British libel laws can bite you, no matter where you 
live.''\13\
---------------------------------------------------------------------------
    \12\Id. (testimony and statements of Bruce D. Brown and Laura R. 
Handman).
    \13\Alan Rusbridger, A Chill on ``The Guardian,'' N.Y. Rev. Books, 
Jan. 15, 2009.
---------------------------------------------------------------------------
    A well known example of a libel suit brought in British 
court against an American author or publisher is the suit 
brought by Saudi billionaire Khalid Bin Mahfouz against Dr. 
Rachel Ehrenfeld, a citizen of the United States. In her 2003 
book Funding Evil: How Terrorism is Financed and How to Stop 
It, Dr. Ehrenfeld accused Bin Mahfouz of financing 
international terrorism. The book was published and circulated 
almost exclusively in the United States. A mere 23 copies 
reached Britain as a result of Internet sales, and only the 
first chapter was accessible online.
    The British court, however, found this sufficient contact 
to support personal jurisdiction over Dr. Ehrenfeld. Dr. 
Ehrenfeld refused to defend against the suit, and the court 
entered a default judgment against her. The court awarded Bin 
Mahfouz substantial damages, and enjoined publication of the 
allegedly libelous statements in Britain.\14\ There appears to 
be no question that the suit could not have been maintained in 
the United States consistent with the First Amendment.
---------------------------------------------------------------------------
    \14\Libel Tourism Hearing (statement and testimony of Rachel 
Ehrenfeld, Director, American Center for Democracy).
---------------------------------------------------------------------------
    Of more concern, perhaps, than the admittedly small number 
of libel-tourist suits like Bin Mahfouz's is the frequency with 
which British lawyers have threatened American authors and 
publishers with pre-publication libel suits in Britain 
involving forthcoming publications in the United States. Two 
prominent media lawyers who appeared before the Subcommittee on 
Commercial and Administrative Law testified that such threats 
have become increasingly commonplace. One of the lawyers 
testified that ``[v]irtually every demand letter we receive 
these days from a U.S. lawyer is accompanied by one from a 
British solicitor.''\15\
---------------------------------------------------------------------------
    \15\Id. (testimony of Laura R. Handman).
---------------------------------------------------------------------------
    The author or publisher who receives such a threat faces a 
dilemma. He or she can either (1) publish the material, and 
risk an expensive libel suit and a large libel judgment that 
could not be entered in the United States because it is 
inconsistent with the First Amendment or (2) relinquish his or 
her First Amendment rights. All too often, authors and 
publishers choose the latter option. This self-censorship not 
only threatens First Amendment rights; it also deprives 
Americans of important information and insights on matters of 
national concern.\16\
---------------------------------------------------------------------------
    \16\See, e.g., id. (statements of Bruce D. Brown and Laura R. 
Handman).
---------------------------------------------------------------------------

     NEED FOR A UNIFORM STANDARD CONCERNING ENFORCEMENT OF FOREIGN 
                          DEFAMATION JUDGMENTS

    While some disagreement has arisen as to the appropriate 
response to libel tourism, nearly all serious defenders of the 
First Amendment agree on one essential point; American authors 
and publishers should be able to write and publish for an 
American audience on matters of public concern secure in the 
knowledge that no foreign defamation judgment inconsistent with 
the First Amendment can be enforceable against them or their 
assets in a court of the United States.\17\
---------------------------------------------------------------------------
    \17\Europeans do not enjoy this security. British libel judgments 
``are now easily enforceable against assets throughout European Union 
(except for Denmark).'' Id. (responses to questions for record of Bruce 
D. Brown).
---------------------------------------------------------------------------
    The enforcement of foreign judgments for defamation in the 
United States, like the enforcement of any foreign judgment, is 
currently governed by State law.\18\ Every State's law 
governing the enforcement of foreign judgments denies 
recognition or enforcement of foreign judgments that contravene 
the State's public policy under what is often called the 
``public policy exception.'' Courts have interpreted a few 
States' public policy exception to bar the enforcement of 
foreign judgments inconsistent with the First Amendment,\19\ 
and two States have recently enacted statutes that codify that 
interpretation.\20\ However, the absence, in most States, of 
case law or statutes to that effect leaves open the disturbing 
possibility that a foreign judgment inconsistent with the First 
Amendment could be enforced.\21\ A Federal rule that protects 
the First Amendment rights of American authors and publishers--
without regard to the particular State in which they happen to 
be located--is therefore needed.\22\
---------------------------------------------------------------------------
    \18\That was not always so; the enforcement of foreign judgments 
was, until the early twentieth century, governed by Federal law. See, 
e.g., American Law Institute, Recognition and Enforcement of Foreign 
Judgments: Analysis and Proposed Federal Statute 1-3 (2006).
    \19\See, e.g., Telnikoff v. Matusevich, 347 Md. 561, 702 A.2d 230 
(1997). See also, e.g., Yahoo!, Inc. v. La Ligue Contre le Racisme et 
L'Anti-semitisme, 433 F.3d 1199 (9th Cir.), cert. denied, 126 S. Ct. 
2332 (2006). For other examples, see, Sarah Staveley-O'Carroll, Libel 
Tourism Laws: Spoiling the Holiday and Saving the First Amendment?, 
N.Y.U. J. Law & Liberty (forthcoming 2009).
    \20\The two States are Illinois and New York. See 735 ILCS 5/12-
621(b)(7) (Illinois) (providing that an Illinois court ``need not 
[recognize]'' a foreign judgment for defamation unless the court 
``first determines that the defamation law applied in the foreign 
jurisdiction provides at least as much protection for freedom of speech 
and freedom of the press as provided by both the United States and 
Illinois Constitutions''); McKinney's N.Y. CPLR Sec. 5304(b)(8) (New 
York) (prohibiting a court from enforcing a foreign defamation judgment 
unless the foreign forum provides ``at least as much protection for 
freedom of speech and press'' as does the First Amendment).
    \21\See, e.g., Libel Tourism Hearing (responses to questions for 
the record of Linda Silberman); see also American Law Institute, supra 
note 18, at 80.
    \22\See, e.g., Editorial, Libel Tourism, N.Y. Times, May 25, 2009 
(``Congress needs to pass a law that makes clear that no American court 
will enforce libel judgments from countries that provide less 
protection for the written word.''). See also, e.g., Michael J. Broyde 
and Deborah E. Lipstadt, Editorial, Home Court Advantage, N.Y. Times, 
Oct. 11, 2007.
---------------------------------------------------------------------------
    In the 110th Congress, the House of Representatives 
addressed this need by passing, under suspension of the rules, 
H.R. 6146, sponsored by Representative Steve Cohen of 
Tennessee. The bill would have amended title 28 of the United 
States Code to prohibit a court within the United States ``from 
recognizing or enforcing a foreign judgment for defamation that 
is based upon a publication concerning a public figure or a 
matter of public concern, unless the domestic court determines 
that the judgment is consistent with the First Amendment to the 
Constitution.''\23\ First Amendment advocates applauded the 
House passage of H.R. 6146.\24\
---------------------------------------------------------------------------
    \23\H.R. 6146, 110th Cong. Sec. 2.
    \24\See, e.g., Libel Tourism Hearing (statement of the American 
Civil Liberties Union); Editorial, Bringing an End to ``Libel 
Tourism,'' N.Y. Times, Sept. 29, 2008.
---------------------------------------------------------------------------
    H.R. 2765 builds on H.R. 6146. Like its predecessor, H.R. 
2765 would prohibit a Federal or State court within the United 
States from enforcing a foreign defamation judgment 
inconsistent with the First Amendment.\25\ In addition, H.R. 
2765 deters libel tourism in three new respects.
---------------------------------------------------------------------------
    \25\H.R. 2765, 111th Cong. Sec. 1(a).
---------------------------------------------------------------------------
    First, H.R.2765 would prohibit a court within the United 
States from enforcing a defamation judgment if the foreign 
court's exercise of jurisdiction over the defendant failed to 
comport with the fundamental due process requirements imposed 
on courts within the United States under the Fifth and 
Fourteenth Amendments.\26\
---------------------------------------------------------------------------
    \26\Id.
---------------------------------------------------------------------------
    Second, the bill would prohibit a court within the United 
States from enforcing a foreign judgment for defamation 
inconsistent with section 230 of the Communications Decency 
Act.\27\ This provision shields the providers of an 
``interactive computer service,'' such as blogs, from liability 
under defamation laws for the content of postings on their 
sites.\28\
---------------------------------------------------------------------------
    \27\47 U.S.C. Sec. 230 (2007).
    \28\H.R. 2765, 111th Cong. Sec. 1(a). This provision was included 
in response to a submission from Public Citizen which cited instances 
in which the providers of interactive computer services have been 
threatened with libel tourism suits. Libel Tourism Hearing (statement 
of Public Citizen).
---------------------------------------------------------------------------
    Third, the bill would allow a court within the United 
States to award attorneys' fees to a defendant who successfully 
resists the enforcement of a foreign judgment under one of the 
above-specified grounds set forth in the bill.\29\ This 
provision, modeled on the fee-shifting provision governing 
civil rights actions,\30\ is intended to dissuade libel 
tourists from subjecting American authors and publishers to the 
burden and expense of having to defend against non-meritorious 
enforcement actions--and to require that when they do subject 
the authors and publishers to that undue burden and expense, 
they compensate them for at least the resulting attorney's 
fees.
---------------------------------------------------------------------------
    \29\See H.R. 2765, 111th Cong. Sec. 1(a).
    \30\42 U.S.C. Sec. 1988(b) (2007).
---------------------------------------------------------------------------
    Some lawmakers and commentators, while supportive of H.R. 
2765, have urged Congress to take a more aggressive approach to 
the problem of libel tourism. The starting point for such 
proposals is New York's recently enacted Libel Terrorism 
Prevention Act, which expands the ``long-arm'' jurisdictional 
provision in New York's code of civil procedure to facilitate 
the maintenance of a counter-suit--for declaratory relief in 
particular\31\--by the defendant against the plaintiff in the 
foreign libel action.\32\ The New York law provides, in 
particular, that New York courts ``shall have personal 
jurisdiction over any person who obtains a judgment in a 
defamation proceeding outside the United States against any 
person who is a resident of New York . . . who has assets in 
New York or may have to take actions in New York to comply with 
the judgment. . . .''\33\
---------------------------------------------------------------------------
    \31\See McKinney's CPLR Sec. 302(d).
    \32\The statute was passed in response to a decision of New York's 
highest court holding that New York could not exercise personal 
jurisdiction over Bin Mahfouz in a counter-suit brought against him by 
Rachel Ehrenfeld arising from the British libel judgment he obtained 
against her. Ehrenfeld v. Bin Mahfouz, 881 N.E.2d 830 (N.Y. 2007).
    \33\Id.
---------------------------------------------------------------------------
    The Committee has two concerns with this model of counter-
suits against libel tourists. The first is that many such suits 
would require a court within the United States to exercise 
personal jurisdiction over a foreign libel-tourism plaintiff 
who lacks sufficient contacts with the United States to permit 
the exercise of personal jurisdiction consistent with due 
process.\34\ The second is that such counter-suits, depending 
on the nature of the relief sought, may represent too great an 
intrusion into the legal systems of other countries. Some 
countries might even respond in kind by authorizing suits to 
interfere with counter-suits in defamation cases or, more 
broadly, by authorizing suits to counter other types of suits 
in the United States to which they object.\35\ Principles of 
international comity counsel moderation.\36\
---------------------------------------------------------------------------
    \34\See, e.g., Libel Tourism Hearing (written statement of Linda 
Silberman; response to questions for record of Linda Silberman); David 
B. Rivkin Jr. & Bruce D. Brown, ``Libel Tourism'' Threatens Free 
Speech, Wall St. J., Jan. 10, 2009.
    \35\See id. (testimony and statement and testimony of Linda 
Silberman).
    \36\See id. (testimony of Linda Silberman).
---------------------------------------------------------------------------
    In reaching this conclusion, the Committee is mindful that 
British libel law has recently become more protective of free 
speech. Last year, the House of Lords issued a decision that 
put British law closer to the First Amendment by expanding the 
scope of Britain's ``responsible journalism'' (or Reynolds) 
privilege. The Reynolds privilege allows a journalist to defeat 
a libel action by establishing that his or her inaccurate 
statements about a subject were the product of ``responsible 
journalism'' if, among other things, they concern matters of 
public interest and the journalist acted ``fairly and 
reasonably'' in obtaining the material on which the statements 
were based.\37\ While the Lords' decision is not as speech-
protective as New York Times v. Sullivan,\38\ it may signal a 
trend toward greater protection for the free-speech values 
embodied in the First Amendment.\39\
---------------------------------------------------------------------------
    \37\Jameel v. Wall St. J. Europe S.P.R.L. [2006] UKHL 44, [2007] 1 
A.C. 359 (appeal taken from Britain) (H.L.).
    \38\See, e.g., Libel Tourism Hearing (statement of Bruce D. Brown).
    \39\See, e.g., Libel Tourism Hearing (responses to questions for 
record of Bruce D. Brown and Laura R. Handman). See also Kyu Ho Youm, 
Liberalizing British Defamation Law: A Case of Importing the First 
Amendment?, 13 Comm. L. & Pol'y, 415, 417 (2008).
---------------------------------------------------------------------------
    Finally, the Committee notes that it was recently briefed 
by a delegation from the Culture, Media and Sport Committee of 
the House of Commons. As confirmed in a follow-up letter, that 
committee of the House of Commons informed this Committee that 
it is currently undertaking an inquiry into the problem of 
libel tourism. A report of the inquiry is expected later this 
year.\40\ The Committee is especially reluctant to recommend 
that the House authorize more aggressive measures to address 
libel tourism until it reviews the report's findings and 
recommendations.
---------------------------------------------------------------------------
    \40\See Libel Tourism Hearing (letter from Hon. John Whittingdale, 
Chairman, Culture, Media and Sport Comm., House of Commons, to Hon. 
Steve Cohen, Chairman, and Trent Franks, Ranking Member, Subcomm. on 
Commercial and Administrative Law, dated April 20, 2009).
---------------------------------------------------------------------------

                                Hearings

    No legislative hearing was held on H.R. 2765. On February 
12, 2009, the Committee's Subcommittee on Commercial and 
Administrative Law held an oversight hearing on the problem of 
libel tourism and possible legislative alternatives for 
addressing it. Testimony was received from Bruce D. Brown, a 
partner at the law firm of Baker & Hostetler LLP; Rachel 
Ehrenfeld, Director of the American Center for Democracy; Laura 
R. Handman, a partner at the law firm of Davis Wright & 
Tremaine; and Linda J. Silberman, the Martin Lipton Professor 
of Law at New York University School of Law.

                        Committee Consideration

    On June 10, 2009, the Committee met in open session and 
ordered the bill H.R. 2765 favorably reported without 
amendment, by a voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during the Committee's consideration of 
H.R. 2765.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 2765, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 12, 2009.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2765, a bill to 
amend title 28, United States Code, to prohibit recognition and 
enforcement of foreign defamation judgments and certain foreign 
judgments against the providers of interactive computer 
services.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Leigh Angres, 
who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 2765--A bill to amend title 28, United States Code, to prohibit 
        recognition and enforcement of foreign defamation judgments and 
        certain foreign judgments against the providers of interactive 
        computer services.
    H.R. 2765 would prohibit U.S. district and State courts 
from enforcing foreign defamation judgments that are 
inconsistent with Constitutional protections and certain 
telecommunications laws. In general, foreign courts do not have 
jurisdiction over the United States, and U.S. courts would not 
recognize a foreign judgment against the United States. (Under 
the Federal Tort Claims Act, the Federal Government waived its 
sovereign immunity and consented to being sued in Federal 
courts only in particular cases.) Therefore, CBO estimates that 
H.R. 2765 would have no significant effect on the Federal 
budget.
    H.R. 2765 contains an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA) because it would 
preempt State laws related to foreign judgments. CBO estimates 
that State courts would incur no significant costs to comply 
with the preemption; therefore the costs of the mandate would 
not exceed the annual threshold established in UMRA for 
intergovernmental mandates ($69 million in 2009, adjusted for 
inflation).
    The bill also would impose private-sector mandates as 
defined in UMRA on individuals seeking to have certain foreign 
defamation judgments enforced in the United States. New 
requirements on those individuals would limit an existing right 
to recover damages. The direct cost of the mandate would be the 
net value of forgone awards and settlements in such claims. 
Based on information about foreign defamation cases, CBO 
expects that the cost of the mandate would fall below the 
annual threshold established in UMRA for private-sector 
mandates ($139 million in 2009, adjusted annually for 
inflation).
    The CBO staff contact for this estimate is Leigh Angres. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
2765 is designed to preclude the recognition or enforcement (in 
Federal or State court) of a foreign defamation judgment that 
is inconsistent with either the First Amendment or Section 230 
of the Communications Act of 1934, as amended, 47 U.S.C. 
Sec. 230, or that was entered by a foreign court whose exercise 
of personal jurisdiction over the defendant failed to comport 
with the requirements's set forth in the due process clauses of 
the Fifth and Fourteenth Amendments.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, Section 8, of the Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2765 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Section 1(a) of the bill amends part VI of title 
28, United States Code by adding new Sections 4101, 4102, and 
4103 as follows:
    New section 4101 contains definitions for ``domestic 
court,'' ``foreign court,'' ``foreign judgment,'' and 
``State.'' ``Domestic court'' means a Federal or State court. 
``Foreign court'' means a court or other tribunal of a foreign 
country. ``Foreign judgment'' means ``a final judgment rendered 
by a foreign court.'' ``State'' means ``the several States, the 
District of Columbia, and any commonwealth, territory, or 
possession of the United States.''
    New section 4102(a) prohibits a domestic court from 
recognizing or enforcing a foreign defamation judgment if the 
party resisting recognition or enforcement of the foreign 
judgment claims that the foreign judgment is inconsistent with 
the First Amendment, unless the domestic court finds that the 
foreign judgment is consistent with the First Amendment. The 
party seeking enforcement bears the burden of proving that the 
foreign judgment is consistent with the First Amendment.
    New section 4102(b) prohibits a domestic court from 
recognizing or enforcing a foreign defamation judgment if the 
party resisting recognition or enforcement establishes that the 
foreign court's exercise of personal jurisdiction over such 
party does not comport with the U.S. Constitution's due process 
requirements.
    New section 4102(c) prohibits a domestic court from 
recognizing or enforcing a foreign defamation judgment against 
the provider of an interactive computer service, as defined in 
section 230 of the Communications Act of 1934, if the party 
resisting recognition or enforcement of the foreign judgment 
claims that the foreign judgment is inconsistent with section 
230. The party seeking enforcement bears the burden of proving 
that the foreign judgment is consistent with section 230.
    New section 4102(d) clarifies that an appearance by a party 
in a foreign court to defend against a foreign defamation suit 
on whatever grounds does not deprive that party of the right to 
oppose recognition or enforcement of a foreign defamation 
judgment in the U.S. on the grounds outlined in new sections 
4102(a)-(c).
    New section 4103 is a fee-shifting provision that allows a 
court to award the party resisting recognition or enforcement 
of a foreign defamation judgment a reasonable attorney's fee if 
that party prevails on a ground specified in new Sections 
4102(a)-(c).
    Section 1(b) of the bill makes a conforming clerical 
amendment to part VI of title 28.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                      TITLE 28, UNITED STATES CODE

           *       *       *       *       *       *       *
                    PART VI--PARTICULAR PROCEEDINGS

Chap.                                                               Sec.
      Declaratory Judgments.........................................2201
     * * * * * * *
4101.oreign judgments.................................................

           *       *       *       *       *       *       *

                     CHAPTER 181--FOREIGN JUDGMENTS

Sec.
4101.  Definitions.
4102.  Recognition of foreign defamation judgments.
4103.  Attorneys' fees.

Sec. 4101. Definitions

  In this chapter:
          (1) Domestic court.--The term ``domestic court'' 
        means a Federal court or a court of any State.
          (2) Foreign court.--The term ``foreign court'' means 
        a court, administrative body, or other tribunal of a 
        foreign country.
          (3) Foreign judgment.--The term ``foreign judgment'' 
        means a final judgment rendered by a foreign court.
          (4) State.--The term ``State'' means each of the 
        several States, the District of Columbia, and any 
        commonwealth, territory, or possession of the United 
        States.

Sec. 4102. Recognition of foreign defamation judgments

  (a) First Amendment Considerations.--Notwithstanding any 
other provision of Federal or State law, a domestic court shall 
not recognize or enforce a foreign judgment for defamation 
whenever the party opposing recognition or enforcement of the 
judgment claims that the judgment is inconsistent with the 
first amendment to the Constitution of the United States, 
unless the domestic court determines that the judgment is 
consistent with the first amendment. The burden of establishing 
that the foreign judgment is consistent with the first 
amendment shall lie with the party seeking recognition or 
enforcement of the judgment.
  (b) Jurisdictional Considerations.--Notwithstanding any other 
provision of Federal or State law, a domestic court shall not 
recognize or enforce a foreign judgment for defamation if the 
party opposing recognition or enforcement establishes that the 
exercise of personal jurisdiction over such party by the 
foreign court that rendered the judgment failed to comport with 
the due process requirements imposed on domestic courts by the 
Constitution of the United States.
  (c) Judgment Against Provider of Interactive Computer 
Service.--Notwithstanding any other provision of Federal or 
State law, a domestic court shall not recognize or enforce a 
foreign judgment for defamation against the provider of an 
interactive computer service, as defined in section 230 of the 
Communications Act of 1934 (47 U.S.C. 230), whenever the party 
opposing recognition or enforcement of the judgment claims that 
the judgment is inconsistent with such section 230, unless the 
domestic court determines that the judgment is consistent with 
such section 230. The burden of establishing that the foreign 
judgment is consistent with such section 230 shall lie with the 
party seeking recognition or enforcement of the judgment.
  (d) Appearances Not a Bar.--An appearance by a party in a 
foreign court rendering a foreign judgment to which this 
section applies for the purpose of contesting the foreign 
court's exercise of jurisdiction in the case, moving the 
foreign court to abstain from exercising jurisdiction in the 
case, defending on the merits any claims brought before the 
foreign court, or for any other purpose, shall not deprive such 
party of the right to oppose the recognition or enforcement of 
the judgment under this section.

Sec. 4103. Attorneys' fees

  In any action brought in a domestic court to enforce a 
foreign judgment for defamation, the court may allow the party 
opposing recognition or enforcement of the judgment a 
reasonable attorney's fee if such party prevails in the action 
on a ground specified in subsection (a), (b), or (c).

                                  
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