The SPEECH Act: The Federal Response to “Libel Tourism”
Released: 2010-09-16T00:00:00

Background

"Libel tourism" describes the act of bringing a defamation suit in a country with plaintiff-friendly libel laws, even though the parties might have had relatively few contacts with the chosen jurisdiction prior to the suit. Libel tourism, like "forum shopping," may be negatively associated with plaintiffs who attempt to strategically manipulate legal processes to enhance the likelihood of a favorable outcome. However, a "libel tourist" could also be described as a plaintiff seeking favorable law under which to obtain redress for a grievance which he perceives as legitimate. Regardless of the characterization, given the increasingly globalized market for publications, some have warned that the libel tourism trend will cause an international lowest common denominator effect for speech, whereby "every writer around the globe [will be subjected] to the restrictions of the most pro-plaintiff libel standards available."

The practice has affected U.S. persons in several suits brought by litigants who wish to avoid the relatively high burden of proof necessary to win defamation claims in the United States. U.S. courts interpret the First Amendment to protect speech that would be considered defamatory under traditional common law and in many other countries. For that reason, U.S. authors and publishers have been especially vulnerable to the possibility that a foreign libel judgment will impose penalties for speech that is protected in the author's home country.

Although a committee of the English House of Commons has recommended reforms, England has a long history of providing redress for reputational injuries. Modern English law appeals to potential libel tourists primarily because it offers a dual advantage to plaintiffs: plaintiff-friendly libel laws and a relatively low bar for personal jurisdiction in libel suits. As a result, although England is not the only country with plaintiff-friendly libel laws, English courts have been an especially popular venue for defamation suits against U.S. nationals.

Because obtaining a judgment and actually receiving the money awarded constitute two separate components of a successful lawsuit, winning a judgment in a foreign court does not end the discussion. If a defendant chooses not to appear in a foreign court, the court will typically award a default judgment against the defendant. In such circumstances, plaintiffs in foreign libel suits might involve U.S. courts when they seek to enforce judgments against U.S. defendants because foreign courts typically lack jurisdiction over assets located in the United States. Thus, the U.S. response to libel tourism has focused primarily on subsequent actions to recognize or enforce foreign court judgments in U.S. courts. For example, the first federal law on point, the Securing the Protection of our Enduring and Established Constitutional Heritage Act (SPEECH Act), bars U.S. courts, both state and federal, from recognizing or enforcing a foreign judgment for defamation unless certain requirements, including consistency with the U.S. Constitution and section 230 of the Communications Act of 1934 (47 U.S.C. § 230), are satisfied.

Obtaining Defamation Judgments Overseas

Distinctions Between U.S. and English Libel Laws9

U.S. and English defamation laws derive from a common origin, but the latter have evolved into a comparatively plaintiff-friendly approach to defamation that has made England a common destination for libel tourists. Traditionally, at common law, defamation liability under both U.S. and English law was strict, meaning that a defendant did not have to be aware of the false or defamatory nature of the statement, or even be negligent in failing to ascertain that character. Instead, a plaintiff had to prove only that a statement (1) was defamatory; (2) referred to the claimant; and (3) was communicated to a third party. However, this common law liability evolved differently under U.S. and English jurisprudence. Today, the differences between the U.S. and English defamation law is primarily attributable to the U.S. Supreme Court's interpretation of the First Amendment to the U.S. Constitution. Today, U.S. defamation law places the burden of proof on plaintiffs, making it more difficult for them to win.

The U.S. Supreme Court first established a federal constitutional privilege in defamation law in New York Times v. Sullivan , a landmark First Amendment case. The Court held that a public official is prohibited from recovering damages for a defamatory falsehood relating to his official conduct unless he or she can prove with "convincing clarity" that the statement in question was made with "actual malice," defined by the Court as "with knowledge that it was false or with reckless disregard of whether it was false or not." The Court derived this constitutional restriction from the text of the First Amendment, which prohibits any law "abridging freedom of speech or of the press," and which has been applied to the states through the Fourteenth Amendment. The Court further stated, "It would give public servants an unjustified preference over the public they serve, if critics of official conduct did not have a fair equivalent of the immunity granted to the officials themselves." The Court subsequently extended this constitutional protection to all "public figures."

A second U.S. Supreme Court case, Gertz v. Robert Welch , marked another shift in U.S. defamation law away from the common law approach used by England. In that case, which addressed a defamation suit brought by a non-public figure, the Supreme Court rejected the English law of strict liability, holding that even a private plaintiff is required to show fault amounting to the defendant's negligence or higher to recover damages. Accordingly, a plaintiff in a U.S. court must prove (1) a false and defamatory communication that concerns another and is (2) an unprivileged publication to a third party; (3) fault that is at least negligence by the publisher; and (4) in certain instances, special damages.

English courts, on the other hand, have not modified the traditional common law elements that a public official must prove to recover for defamation. Instead, they allow a defendant to invoke, as a defense, a qualified or conditional privilege, known as the Reynolds privilege. The Reynolds privilege is a relatively new defense, often referred to as "the test of responsible journalism." In the case of Reynolds v. Times , the court considered that statements in the newspaper, which related to the conduct of individuals in public life, should be covered by a qualified privilege. Thus, while Members of Parliament or other public officials need only prove the traditional common law elements of defamation, they may be barred from recovery if the defendants are members of the media who can show that the publication in question falls under the Reynolds privilege.

The Reynolds privilege, however, has limited application. First, it does not appear to be available to authors or others who publish outside the realm of journalism, and, second, the judge decides whether the statement at issue was privileged (i.e., in the public interest), a decision that determines whether the Privilege will apply to the defendant. Defendants in libel tourism suits brought in England have typically not been able to invoke the Reynolds privilege because they either do not qualify as media or the judge has not deemed their statements privileged.

In reporting the SPEECH Act out of committee in 2009, the House Committee on the Judiciary noted that British libel law has become more protective of free speech after the House of Lords issued a decision expanding the scope of Britain's Reynolds privilege. However, this may have little effect on the majority of libel cases brought against U.S. persons in Britain. Nevertheless, the U.S. response to libel tourism may motivate a re-examination of English libel law, and, indeed, some proposals to reform libel laws in England have already garnered attention. Among the changes that have been recommended are shifting the burden of proof in some cases and creating a one-year statute of limitations for libel cases arising from Internet speech, however future changes cannot be predicted.

Key Cases and the Rationale for Legislative Action

A prominent example of libel tourism is the suit brought by a Saudi billionaire, Sheikh Khalid Bin Mahfouz, against a New York author, Rachel Ehrenfeld, whose book documented his alleged role in financing terrorism. Although the book was published in the United States, an English judge allowed the case to proceed in England because 23 copies of the book were sold through the Internet to English residents. Ehrenfeld did not defend herself in the litigation, and the English court ultimately entered a default judgment against her, awarding more than $200,000 in damages and ordering her to destroy copies of the book and apologize. In subsequent testimony before the House Judiciary Committee, Ehrenfeld expressed a concern that libel tourism was "limiting [scholars'] ability to write freely about important matters of public policy vital to our national security." This prompted concerns among lawmakers about the possible negative impact of libel tourism on the fight against terrorism.

Other cases have involved U.S. plaintiffs suing U.S. defendants. An English court dismissed at least one such case on forum non conveniens grounds (i.e., because England was an inappropriate forum for litigation given the parties' circumstances) despite finding that it had the requisite ground for jurisdiction. On some occasions, however, English courts allowed the suits to proceed in England as long as a book or other publication had at least some exposure there.

These suits against U.S. defendants in foreign courts prompted many lawmakers and editorial boards to characterize the libel tourism phenomenon as a threat to the U.S. Constitution's strong free-speech protections. A key concern was that foreign libel suits would have a "chilling effect" on speech because the possibility of civil or criminal liability for expression would deter or stifle speech that is protected within the United States. In turn, without a strong national law in the area, the possibility of foreign libel suits could inhibit the exchange of ideas vital to a functioning democracy.

Recognition of Foreign Judgments in U.S. Courts

Principles Governing Domestic Recognition of Foreign Judgments

Except where preempted by federal law, state law governs the recognition and enforcement of foreign judgments in U.S. courts. No federal law provides uniform rules, nor is the United States a party to any international agreement regarding treatment of such judgments. Although states generally must recognize judgments from sister states under the Full Faith and Credit Clause of the U.S. Constitution, that requirement does not apply to judgments from foreign courts. For that reason, even if one state enacts a law prohibiting its courts from enforcing foreign libel judgments, the judgment might be enforceable in another state where a defendant has assets.

Nonetheless, many states' recognition statutes share identical language, because most are based on one of a few common sources—namely, rules articulated in Hilton v. Guyot , a 19 th -century U.S. Supreme Court case, or one of two uniform state acts, which in turn draw from Hilton . Principles of international comity (i.e., "friendly dealing between nations at peace" ) undergird all of these sources. Comity need not be applied reciprocally, and reciprocity has been disregarded as a basis for recognition in some recent U.S. cases. In contrast, countries such as England have adopted a reciprocity-based approach to recognition of foreign judgments. Such countries will generally decline to recognize U.S. judgments if U.S. courts would not recognize a similar judgment rendered by its courts.

In Hilton , the Supreme Court explained that international comity is "neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, on the other." Rather, "it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens[.]" Under this principle, a foreign judgment should be recognized "where there has been opportunity for a full and fair trial ... under a system of jurisprudence likely to secure an impartial administration of justice ... and there is nothing to show either prejudice in the court, or in the system of laws under which it was sitting, or fraud in procuring the judgment." Although states are not bound by that interpretation, most states have adopted the basic approach from Hilton as a matter of statutory or common law.

Two uniform laws —the 1962 Uniform Foreign Money-Judgments Recognition Act and the 2005 Uniform Foreign-Country Money Judgments Recognition Act, which clarifies and updates the 1962 version—provide statutory language which many state legislatures have enacted to codify the basic principles articulated in Hilton . More than 30 states have enacted one of the two model laws, in whole or in part. The model acts provide, as a general rule, that "any foreign judgment that is final and conclusive and enforceable where rendered," and in which an award for money damages has been granted or denied, shall be recognized.

However, exceptions apply. Both the common law comity principles and the uniform statutes provide grounds for refusing to recognize foreign judgments. Most relevant is the discretionary public policy exception, which is based on the idea that "no nation is under an unremitting obligation to enforce foreign interests which are fundamentally prejudicial to those of the domestic forum." In states that have enacted the 1962 model act, a court may refuse to recognize a judgment arising from a cause of action or claim for relief that is "repugnant to the public policy of the state." The 2005 version, which only a handful of states have adopted, offers an even broader public policy exception. Under this exception, a state court may refuse to recognize a foreign judgment if the judgment itself, as opposed to the underlying cause of action, is repugnant to the public policy of the state. In addition, it provides a similar ground for nonrecognition if the judgment or cause of action is repugnant to the United States as a whole. By including the foreign judgment itself within the scope of the exception, the act allows a judicial examination of the laws and procedures under which the foreign judgment was rendered. However, although the 2005 act's public policy exception is explicitly broader than the 1962 act's exception, it appears that the change merely incorporates the trend among state courts to interpret the 1962 provision to include judgments, rather than only causes of action, and to include policies of the country as a whole rather than only of the states.

These public policy exceptions have been raised as grounds for nonrecognition in the small number of actions brought in U.S. courts to enforce foreign libel judgments. Even prior to the enactment of the SPEECH Act, courts in such cases generally declined to enforce foreign libel judgments on the basis of the public policy exceptions, concluding that the foreign libel laws upon which the judgments were based are repugnant to the U.S. Constitution.

Nonrecognition Provisions in State Libel Tourism Laws

Although state courts have generally declined to enforce foreign libel judgments, some states enacted statutes addressing the libel tourism phenomenon. The first was New York's Libel Terrorism Protection Act, which makes foreign defamation judgments unenforceable in New York state courts unless a court finds that the foreign country's defamation law provides "at least as much protection for freedom of speech and press" as U.S. law provides. The other state statutes include similar "at least as much protection" language. For example, under the Illinois and Florida statutes, courts "need not [recognize]" a foreign defamation judgment 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 the press as provided for by both the United States and [Illinois or Florida] Constitutions." In general, these statutes appear to codify, and perhaps expand, the public policy exceptions as applied to libel suits under the states' foreign judgment recognition statutes. Although courts applying state law before the statutes were enacted might have rejected enforcement under the states' existing public policy exceptions, these libel-specific nonrecognition provisions made it more likely that courts in these states would decline to enforce foreign libel judgments.

New York, Florida, and California took the additional step of expanding the categories of people over whom courts in those states (and, by implication, federal courts applying state law there) may assert personal jurisdiction (i.e., persons over whom courts may exert power and whose rights and liabilities they may determine). New York's statute, for example, authorizes personal jurisdiction over "any person who obtains a judgment in a defamation proceeding outside the United States" against (1) a New York resident, (2) a person with assets in New York, or (3) a person who may have to take actions in New York to comply with the judgment. Under all three statutes, the extension of personal jurisdiction permits a cause of action for injunctive relief, whereby courts in those states may declare foreign defamation judgments unenforceable and rule that defendants in the foreign suits have no liability related to the judgments. This change in law would prevent the problems faced by New York author and prominent libel tourism defendant Rachel Ehrenfeld, whose action for a declaratory judgment establishing that Bin Mahfouz's judgment against her was unenforceable in the State of New York was dismissed for lack of personal jurisdiction in 2006.

The Federal SPEECH Act

The 111 th Congress considered several proposals to address libel tourism, and ultimately passed the Securing the Protection of our Enduring and Established Constitutional Heritage Act (or the "SPEECH Act"), which was signed into law on August 10, 2010.

The SPEECH Act avoided the constitutional questions that accompanied some of the other proposals. For example, S. 449 and H.R. 1304 , which were collectively referred to as the Free Speech Protection Act, would have authorized counter-suits and a basis for exercising personal jurisdiction over a person who served documents related to a foreign defamation lawsuit on a U.S. person. Had this approach been adopted, it may have been viewed as authorizing federal courts to exercise personal jurisdiction beyond the boundaries permitted by due process, which requires the defendants to have "minimum contacts" in the judicial forum, such that the court's assertion of jurisdiction over them conforms with traditional notions of fairness. For these reasons, as well as concern for international comity, the House Committee on the Judiciary indicated that this approach would be too aggressive.

Accordingly, the SPEECH Act does not authorize counter-suits against plaintiffs in foreign libel cases. Instead, the SPEECH Act bars U.S. courts from recognizing or enforcing a foreign judgment for defamation unless certain requirements are satisfied. However, advocates of a federal cause of action have argued that, without the threat of a counter-suit, bars on enforcement like the one created by the SPEECH Act are insufficient to prevent a chilling effect on the speech of U.S. persons.

The SPEECH Act prohibits domestic courts from recognizing or enforcing foreign judgments for defamation in any one of three circumstances:

1. When the party opposing recognition or enforcement claims that the judgment is inconsistent with the First Amendment to the Constitution, until and unless the domestic court determines that the judgment is consistent with the First Amendment, 2. When the party opposing recognition or enforcement establishes that the exercise of personal jurisdiction by the foreign court failed to comport with the due process requirements imposed on domestic courts by the U.S. Constitution, or 3. When the foreign judgment is against the provider of an interactive computer service and the party opposing recognition or enforcement claims that the judgment is inconsistent with section 230 of the Communications Act of 1934 (47 U.S.C. § 230) regarding protection for private blocking and screening of offensive material, until and unless the domestic court determines that the judgment is consistent with those provisions.

Moreover, in any of those three circumstances, a U.S. citizen opposing recognition or enforcement of the foreign judgment may bring an action in a federal district court for a declaratory judgment that the foreign judgment is repugnant to the Constitution. The SPEECH Act also permits any action brought in a state domestic court to be removed to federal court if there is diversity jurisdiction or one party is a U.S. citizen and the other is either a foreign state or citizen of a foreign state.

The SPEECH Act ensures that a party who appeared in a foreign court rendering a foreign judgment to which the act applies is not deprived of the right to oppose recognition or enforcement of that subsequent judgment. If the party opposing recognition or enforcement of the judgment prevails, the act allows the award of reasonable attorney fees under certain conditions.

Finally, the SPEECH Act appears to preempt state laws related to foreign judgments.

Preemption of State Libel Tourism Laws

The enactment of the federal SPEECH Act may raise questions about its effect in state court proceedings in states with a libel tourism statute. It appears that, to the extent that the federal law places greater restrictions on the nonrecognition of foreign defamation judgments, it will be deemed to conflict and consequently preempt the relevant state law pursuant to the Supremacy Clause of the U.S. Constitution. The Supremacy Clause states that the U.S. Constitution and laws made in pursuance thereof "shall be the supreme law of the land; and the judges in every state shall be bound thereby, any thing in the Constitution or laws of any [s]tate to the contrary notwithstanding."

In general, federal preemption of state law can occur where the federal law has an express provision to that effect, where there is a perceived conflict between the state and federal law, or where the scope of the statute indicates that Congress intended to occupy the field exclusively. The Court has identified two forms of implied conflict preemption: situations in which it is impossible for private parties to comply with both state and federal requirements and situations in which the state law frustrates the purpose of Congress. However, these categories should not be interpreted formalistically because the ultimate touchstone of the preemption analysis is whether, and to what extent, Congress intended, explicitly or implicitly, for the federal law to preempt relevant state law. Like many other federal statutes, the SPEECH Act does not contain an express preemption provision, but its language and legislative history strongly suggest that Congress intended to preempt state laws that conflict with the accomplishment of its purpose.

The primary evidence of Congress's preemptive intent is the explicit language of the SPEECH Act itself. The statute states that its provisions are applicable in all "domestic" courts and defines a "domestic court" to include both state and federal courts, "notwithstanding any other provision of [f]ederal or [s]tate law." In addition, House and the Senate Judiciary Committee reports indicate that Congress believed the SPEECH Act would preempt "[s]tate laws related to foreign judgments." Finally, the importance of ensuring a uniform approach towards foreign libel judgments is also likely to weigh in favor of preemption.

Congressional intent aside, the preemptive effect of the Supremacy Clause can be constrained by other constitutional principles, notably federalism and separation of powers, leading courts to apply a presumption against preemption when the federal law in question appears to interfere with a traditional area of state law. Ultimately, whether such a presumption applies depends primarily on how the federal law is best characterized. In the context of the SPEECH Act, the law's subject matter could be described as state courts and state judicial procedure, subjects that typically fall within the purview of the state legislation. However, the SPEECH Act is perhaps more aptly characterized as a law that ensures uniformity and predictability in the federal and state posture towards foreign libel judgments and, therefore, it will likely be perceived as a law addressing foreign affairs, a subject over which the Congress has the primary lawmaking authority. Accordingly, principles of federalism or separation of powers should not dissuade a court from deeming relevant state law preempted by the SPEECH Act.

Implications for International Comity

A decision by a domestic court pursuant to the SPEECH Act not to enforce particular foreign libel judgments could have negative repercussions on the enforcement of U.S. libel judgments in foreign courts. As discussed, some countries condition recognition of foreign judgments on the foreign country's reciprocal recognition of judgments of the same type. In such countries, U.S. courts' refusal to enforce libel judgments would likely serve as a ground for refusing to enforce libel judgments rendered by state or federal courts in the United States. In particular, in some areas of civil tort liability (e.g., antitrust law) the United States has developed what many believe are exceptionally plaintiff-friendly laws, and some countries have tried to undermine their extraterritorial effect. Any U.S. diplomatic efforts to oppose these efforts by a foreign country, however, could be compromised if the SPEECH Act is perceived as employing a similar tactic.

Conclusion

Prior to the enactment of the Securing the Protection of our Enduring and Established Constitutional Heritage Act (SPEECH Act), concern existed over the effect the threat of foreign libel suits was having on the exercise of Americans' freedom of speech rights. Although the U.S. Constitution provides relatively strong freedom of speech protections, it did not prevent courts in countries with a less protective view of speech from entering libel judgments against U.S. persons. The SPEECH Act is intended to address this libel tourism phenomenon and reduce or eliminate the potential "chilling effect" foreign libel suits may have on speech protected by the First Amendment to the U.S. Constitution.

Accordingly, the SPEECH Act prohibits domestic courts from recognizing or enforcing foreign judgments for defamation that are inconsistent with the First Amendment of the Constitution, that were entered by a court that exercised personal jurisdiction in contravention of the due process requirements imposed on U.S. courts by the Constitution, or that were inconsistent with section 230 of the Communications of 1934. Some have argued, however, that, without the threat of a counter-suit, this bar on enforcement will prove insufficient to prevent a chilling effect on the speech of U.S. persons.

There are several state libel tourism laws that predate the enactment of the SPEECH Act; however, the SPEECH Act appears to preempt state lawmaking in this area. Although the SPEECH Act lacks an explicit preemption provision, it applies to all "domestic" courts and defines a "domestic court" to include both state and federal courts, notwithstanding any other provision of state law. Furthermore, the legislative history of the act indicates that Congress believed, one, that the SPEECH Act would preempt state laws related to foreign judgments, and, two, that a uniform national approach towards foreign libel judgments was necessary.

The passage of the SPEECH Act may have implications for international comity. A decision by a state or federal court in the United States not to enforce particular foreign libel judgments could have negative repercussions on the enforcement of U.S. libel or other judgments in foreign courts. This will be particularly true in those countries that condition recognition of foreign judgments on the foreign country's reciprocal recognition of judgments of the same type. Similarly, in some areas, U.S. law is perceived as plaintiff-friendly, and the United States may find its diplomatic efforts to ensure that foreign countries recognize judgments pursuant to these plaintiff-friendly laws are opposed by countries' whose libel judgments are negatively affected by the SPEECH Act.