New Jersey Law Journal   Volume 185, No. 1, Index 1  July 3, 2006

OVERSEAS COURTS LIMIT AMERICAN INTERNET SPEECH

FOREIGN JURISDICTION OVER INTERNET PUBLICATION PRESENTS LEGAL DIFFICULTIES

By Jonathan Bick   Bick is of counsel to WolfBlock Brach Eichler of Roseland and is an adjunct professor of Internet law at Pace Law School and Rutgers Law School. He is also the author of 101 Things You Need To Know About Internet Law [Random House 2000].

Australian, English and Canadian court rulings associated with defamatory Internet communications emanating from the United States may limit American speech. For jurisdictional purposes, Internet publications may be subject to world-wide legal difficulties. Using common law theory, foreign courts have found American Internet publishers liable for harm to readers located in foreign jurisdictions and have subjected those publishers to foreign liability law, even though American law holds the sender immune from liability.

Foreign jurisdiction over controversies associated with American Internet publications present two distinct legal difficulties. First, foreign jurisdiction requires Americans to travel outside the United States to participate in a process to resolve a controversy or face default. Second, foreign jurisdiction normally results in the use of the law of the foreign jurisdiction. Other than having an Internet publication reviewed by attorneys from every jurisdiction on earth, self censorship is among the few alternatives available to American Internet publishers seeking to avoid foreign legal difficulties.

The High Court of Australia, in Dow Jones & Co. v. Gutnick, (2002) 210 C.L.R. 575, found Austrian jurisdiction applied to a libel action brought by an Australia citizen over assertions of money-laundering published on a New Jersey Web site. The court sought to use the law of the place where the libel was committed.

Other foreign plaintiffs have successfully applied principles developed for newspapers to Internet publications. In the case of Berezovsky v. Forbes, Inc., (2000) 1 W.L.R. 1004, a person resident in England was permitted to bring libel proceedings in the forum in response to statements in Forbes magazine, which had a small circulation in the U.K.
The Australian Court rejected defendant Dow Jones' argument that New Jersey's law should be applied simply because New Jersey was the place where the publisher maintained its Web servers. Rather, the Australian Court applied traditional common law principles for determining jurisdiction in libel actions to accommodate the Internet. The court said those who provide information via the Internet know of the possible far-reaching effects their information may have and, by implication, take the legal risks associated with the dissemination of that information.

As a result of the successful application of foreign common law to American Internet publishers, Internet publishers must consider the libel laws of every country in which their messages could be downloaded. Such widespread threat of suit is likely to interfere with Internet speech.

The approach of the English courts in libel cases is similar to that taken by the Australian court. The English court, in King v. Lewis, (2005) E.M.L.R. 4, found a Florida resident could bring a libel action in England in response to allegations made by the defendants posted on a California Web site. The English court reasoned that the appropriate jurisdiction for a trial was the place where the defamation was committed. As such, the defamatory statements were downloaded in England. However in a more recent case, Dow Jones & Co. v. Jameel, (2005) E.M.L.R. 16, 374-75, an English court dismissed a claim brought in response to libel allegations accessible by hyperlink from the Wall Street Journal on-line. The court said only two parties not associated with the case accessed it.
A Canadian court, in Bangoura v. The Washington Post, (2004) 235 D.L.R. (4th) 564, applied jurisdictional principles similar to those used by the English and Australian courts. That court reiterated that those who put information on the Internet do so knowing the possible reach of the information.

While the courts in Australia, England and Canada each used common law as a basis for finding jurisdiction, alternative outcomes under common law are possible. Under common law, the place of the tort is often the most appropriate place to hear the case.
Traditionally, the place of 'publication' is the place where the statement is read. The courts in Australia, England and Canada each mechanically found that the statement was read in their own countries. Each court failed to find that the publication was in fact located outside their country; that it was necessary for the reader to electronically travel outside their country and take action to bring the publication in question back to read it. According to Internet protocol, the transaction is more accurately described as one downloaded from servers on the other side of the world, rather than reading from afar.
Consequently, the courts in Australia, England and Canada each erroneously applied the precedents relating to print and broadcast publishing and failed to examine the inherent differences between these traditional methods of publication and the Internet. Had they applied the common law rule accurately, they would have concluded that jurisdiction was properly in the United States.

The Australian court questioned whether the Internet was really different than television services, such as satellite broadcasting. The court found that the Internet operates as a broadcasting service, such as CNN or BBC Worldwide, which sends content to recipients. The court did not consider that Internet recipients must locate, visit and send content to themselves (i.e., download).

Under common law, if a person travels to a foreign jurisdiction and secures a libelous publication, the foreign court has jurisdiction. The fact that such a person subsequently travels to his home jurisdiction does not alter the fact that under common law, he must take action in the foreign jurisdiction. In short, the Internet is different from traditional forms of publication and broadcasting; the differences can be used to argue either for or against the application of traditional jurisdiction under common law, which may lead to liability for libel.

Unless the novel characteristics of the Internet are recognized by courts, Gutnick, and other English decisions adopting libel jurisdiction and choice of law in Internet cases, will allow jurisdiction shopping. In particular, parties will seek the claimant-friendly defamation laws of Australia or England.

Traditionally, courts have not claimed jurisdiction when they cannot enforce their rules. Thus, unless the owner of the foreign server from which the claimant has downloaded the offending content has financial assets in the court's jurisdiction, the court will be powerless to enforce its ruling. For example, the non-enforceability of foreign judgments that contravene the First Amendment may prevent the enforcement of foreign rulings against U.S. defendants. This should provide strong incentive for courts to abstain from exercising jurisdiction, or applying their own defamation laws.