"It's a Small World After All: Emerging Protections for the U.S. Media Sued in England," First Amendment Law Letter, Davis Wright Tremaine
What do the New York celebrity ex-wife of a British rock star, the Greek prime minister, an American action movie hero, a Russian businessman turned high-powered government official, a Texas oil tycoon and a California techie all have in common? None of them lived in London, but they all chose to bring libel suits there. It wasn't the weather that attracted them but, rather, British libel laws very favorable to plaintiffs. Two new developments, one in the British courts and one in U.S. courts, have now made the British option much less desirable to out-of-towners seeking to take advantage of British libel law. In three recent cases, British courts have dismissed libel actions brought by foreigners on the ground that England was not a suitable forum. In two other libel cases which went to trial in England resulting in plaintiffs' verdicts, two state courts and one federal court in the U.S. have refused to enforce British judgments against American-based defendants, finding them to be "repugnant" to U.S. or state public policy.
There is common ground between American and British libel law, as one would expect since U.S. law is derived from and owes many of its principles to British common law. Both bodies of law require that a sued-upon statement be harmful to reputation and be published to a third party. Both recognize a defense of fair comment, although the British version can be defeated by malice, and both provide for trial by jury of libel claims. But there the similarities end.
While both American and British law preclude liability if the statement is true, American law places the burden of proof on the plaintiff to show the statement is false. By contrast, British law imposes the burden on defendant to prove truth or "justification" and permits aggravated damages if defendant tries but fails. This is then compounded by the award of legal fees and costs to the prevailing party. The difference is more than academic. Consider, for example, the case Davis Wright Tremaine litigated on behalf of "60 Minutes" regarding the allegation that Alar, the additive to apples, is a carcinogen. The Washington apple-growers ultimately lost because they could not prove false this assertion, which was more in the nature of scientific theory than incontrovertible fact. In that case, the burden of proof on truth proved dispositive.1
If the media defendant in a British libel case cannot prove the statement to be true, it loses. This rule of strict liability was rejected by our Supreme Court in New York Times v. Sullivan,2 to allow some "breathing room" for the inevitable inadvertent errors and to encourage vigorous debate. Under the First Amendment holding of Sullivan, a public figure or public official must prove not only that the statement was a defamatory and false statement of fact, but that the defendant published it with actual malice-that is, with knowledge of falsity or serious doubts as to the truth. The private figure in the U.S. also does not prevail merely by proving factual error; he too must prove fault but by the less demanding test of negligence (or gross negligence in some jurisdictions) measured by reasonable journalistic standards. Proposals to adopt the actual malice requirement for public officials have been repeatedly rejected in Britain.3 In the U.S., both the burden of proof on falsity and the requirement of fault are compelled by the First Amendment, which has no analog in Britain.
For these reasons, well-heeled libel plaintiffs not infrequently bring their suits in the British courts, even when they do not reside there and even when the publication has only minimal circulation in Britain. The late Robert Maxwell, for example, sued The New Republic in Britain, where less than 135 copies of the publication circulated. In this age of electronic and satellite communications, where there are literally no national borders, electronic publishers in the U.S. may be subject to jurisdiction in London without ever having left home.
British Courts Reject Forum Shopping
Now the U.S. media are beginning to fight back, and have found British courts willing to help turn back this blatant forum shopping. In the first of three recent cases, plaintiff Berezovsky, a Russian businessman-turned-high government official, sued Forbes magazine over an article accusing him of being a mobster. Forbes, described by the presiding judge as "an American magazine written in American style,"4 has a British circulation of 2,000, out of a total of 785,000, with 99% of its sales in the United States and Canada. Forbes moved to dismiss on the grounds of forum non conveniens. The Court applied the test set forth in Spiliada Maritime Corp. v. Cansulex  IAC. 560: whether Britain is a suitable forum and whether there is another jurisdiction that is more suitable.
Mr. Justice Popplewell, one of the two judges who preside over libel cases in London, found that plaintiff failed to make the requisite showing and, accordingly, dismissed the lawsuit. The Court noted that Berezovsky's ties to the U.K. were "tenuous." Although he frequently visited and kept an apartment in London, and his ex-wife and children live in London, the Forbes article did not report on anything to do with his British activities. In examining suitable alternative jurisdictions, the Court concluded that this "is a peculiarly Russian case"-Russian witnesses, Russian companies, Russian personalities.5 The judge was unimpressed by the argument advanced by the alleged mobster that "vindication of the plaintiff in Russia will be of no value" because "the legal system is regarded with great suspicion as being corrupt."6 As for the U.S., Justice Popplewell was persuaded by the affidavit of Robert Sack, now a judge on the Second Circuit, that:
- the falsity or otherwise of this article would be determined by a jury and thereby the plaintiff's reputation vindicated, even if they found that they could not recover monetary damages. ... I do not take the view that thereby substantial justice would not be available in the United States.
Less than two months later, the other London judge who presides over libel trials, Mr. Justice Morland, was presented with a similar motion brought again by Forbes in another libel suit, this one instituted by Texas oil magnate, Oscar Wyatt arising out of an article titled "Saddam's pal Oscar."7 Can Fergie's toes make London a suitable forum? That was a question before Justice Morland. Mr. Wyatt was known in England because his son was the Duchess of York's infamous toe-sucking paramour. In addition, Mr. Wyatt has family in England and, as head of a huge international oil company with subsidiaries in the U.K., he has made frequent trips there. But the article made no reference to any English contacts.
The Court viewed Texas as a suitable jurisdiction since there were already on-going libel proceedings brought by the plaintiff in Texas against another publication on the same allegations. Texas was the center of his business and his social life, and witnesses were likely to be found in Texas. As to the "juridical advantages," after acknowledging the differences, the Court was unpersuaded that "it is right to assume that the true interests of justice are better served by the English law of defamation rather than by the American law." The Court did not believe that "this American plaintiff can legitimately complain" about Texas justice. Any harm to his reputation was done "by the publication in America to Americans. The publication in England was incidental and to a small extent."8
In the last of this trilogy of venue cases, Dow Jones & Company, Inc., the publisher of Barron's, was sued in London by a California-based businessman, Parvinder Chadha and his company, Osicam Technologies Inc., arising from a long investigative article about the company.9 Again, Mr. Justice Popplewell concluded that plaintiffs had failed to carry their burden of demonstrating that the U.K. is the appropriate forum and that the U.S. is not. Only 0.4 % of Barron's circulation is in the U.K., and it is directed to American business people. Unlike the Forbes articles, the Barron's article did refer to the plaintiffs' business contacts in the U.K., but the focus was clearly on their U.S. activities.
The motion was accompanied by dueling "expert" affidavits, with one of this article's co-authors submitting the expert opinion on American law on behalf of Dow Jones. Ironically, it was the expert for the plaintiffs who argued that they would not be able to establish actual malice if the case had to be tried under American law. Dow Jones' expert, in contrast, stated that the actual malice requirement was not an absolute bar to recovery and cited examples of plaintiffs who were able to establish that high level of fault. Dow Jones also pointed out that special verdicts had become standard in U.S. courts, permitting a separate determination of fault-and a measure of vindication even if plaintiff lost on actual malice, citing to the verdict in favor of General Sharon on falsity and in favor of Time on fault.10 Justice Popplewell was persuaded that the "Sullivan defence" provided only "marginal advantage." He found the case for holding the trial in the U.S. "overwhelming."11
Non-Enforcement of British Libel Judgments by U.S. Courts
Whereas English courts are now barring the door to visiting libel plaintiffs on the ground that they can receive "substantial justice" in the U.S., American courts have been concluding recently that American media defendants can receive no justice at all in England.
These American decisions arise in the context of proceedings to enforce English libel judgments. More specifically, in those instances where an American media defendant has all of its assets located here (and none in England), a successful offshore plaintiff must cross the Atlantic and seek enforcement of his or her English libel award in the courts of this country.
In the only decisions to address the issue-Matusevitch v. Telnikoff, 702 A.2d 230, 347 Md. 561 (1997), and Bachchan v. India Abroad Publications, Inc., 585 N.Y.S.2d 661 (Sup. Ct. N.Y. Co. 1992)-American courts have refused to enforce British libel judgments on the broad ground that England's libel laws are repugnant to the fundamental protections afforded speech by the First Amendment and state law.12 Widespread adoption of Matusevitch and India Abroad by other U.S. courts could provide welcome relief to the many U.S.based publishers who distribute overseas, but whose assets are located in this country (particularly, electronic publishers). Faced with the prospect of being unable to collect on English libel awards that do not comport with First Amendment standards, many prospective libel plaintiffs may now think twice before instituting off-shore suits.13
The non-enforcement decisions in Matusevitch and India Abroad flow from traditional principles of international comity, which are now codified in the Uniform Foreign Money-Judgment Recognition Act (the "Uniform Act").14 Under the comity doctrine, American courts will ordinarily enforce the judgments of foreign tribunals.15 Nonetheless, recognizing that in exceptional cases enforcement of a foreign award may offend American principles of individual liberty, the Uniform Act expressly provides that comity need not be accorded a foreign award if it is based on laws that are "repugnant to the public policy of [the] state."16 And, as noted by Maryland's highest court in Matusevitch, English libel law "is totally different" from First Amendment principles "in virtually every significant respect" and these "differences are rooted in historic and fundamental public policy differences concerning freedom of the press and speech."17
These fundamental differences resulted in hefty English jury awards in India Abroad and Matusevitch arising from statements that would never have been actionable here-an outcome that the American courts found "repugnant" and, hence, declined to enforce.
In Bachchan v. India Abroad, a small New York-based publication neutrally reported that, according to Sweden's leading newspaper (called "DN"), kickbacks from arms sales to the Indian government had been deposited into the Swiss bank account of Ajitabh Bachchan-an Indian citizen who was a close friend of then-Prime Minister Rajiv Ghandi and a well known public figure to Indians around the world. Although the publication, India Abroad, was distributed overwhelmingly in the United States, Bachchan (claiming London residency) sued India Abroad for libel in England based on distribution of 1,000 copies of a wire version of the India Abroad story. Bachchan and DN (the original source of the story) subsequently entered into a settlement in which they agreed that DN had been the "unwitting victim of a story planted by some unscrupulous ... persons in India." Even though India Abroad (as well as every major Indian newspaper and wire service) had relied in good faith on DN's story and even though Bachchan was a public figure, he was not required to prove any fault by India Abroad (not even negligence) under English common law. Instead, India Abroad was held strictly liable in England to the tune of £40,000 for another newspaper's "unwitting" error.
Bachchan had considerably less success in a New York state trial court, where he subsequently instituted a proceeding to enforce his English award against India Abroad's New York assets. Finding English libel law fundamentally at odds with First Amendment jurisprudence, the court declined enforcement on grounds so broad that virtually every British libel judgment is potentially open to attack in American courts as repugnant to our public policy. Using language that should hearten any American publisher or broadcaster, the India Abroad court ruled that:
- It is true that England and the United States share many common law principles of law. Nonetheless, a significant difference between the two jurisdictions lies in England's lack of an equivalent to the First Amendment. The protection to free speech and the press embodied in [the first] amendment would be seriously jeopardized by entry of foreign libel judgments granted pursuant to standards deemed appropriate in England but considered antithetical to the protections afforded the press by the U.S. constitution.18
A similar conclusion was reached by Maryland's highest court in Matusevitch. There, Soviet émigré turned English citizen, Vladimir Telnikoff, complained in an op-ed column published in London's Daily Telegraph that the BBC's Russian Service had too many "Russian-speaking national minorities" and too few of "those who associate themselves ethnically, spiritually or religiously with Russian people." This prompted an angry letter to the editor (also published in the Telegraph) from Soviet Jewish émigré Vladimir Matusevitch-an American citizen by birth then living in London-who protested that Telnikoff was advocating a "switch from professional testing to a blood test" and was stressing "a racialist recipe" under which "no matter how high the standards of 'ethnically alien' people ... they should be dismissed." Matusevitch's letter to the editor was a classic example of heated hyperbole uttered in the course of vehement public debate-language that would receive First Amendment protection in this country as non-actionable opinion. In England, however, after a tortured procedural journey that included a stop at the House of Lords, Telnikoff secured a £240,000 pound award against Matusevitch from a jury, which found that Matusevitch's letter to the editor conveyed the "fact" that Telnikoff was a racialist.
When Telnikoff sought to enforce his English judgment in Maryland, where Matusevitch was now living, Matusevitch instituted a civil rights action in federal district court in Washington, D.C. The district court found that the British award was repugnant to both Maryland public policy and First Amendment principles; and, after argument on appeal, the D.C. Circuit certified to Maryland's highest court the question of whether recognition of Telnikoff's English libel judgment would contravene the public policy of Maryland. Similar to the India Abroad court, the Maryland state court in Matusevitch broadly held that:
[t]he principles governing defamation actions under English law ... are so contrary to Maryland defamation law, and to the policy of freedom of the press underlying Maryland law, that Telnikoff's judgment should be denied under principles of comity.19
The decisions in Matusevitch and India Abroad-and, hopefully, others like them-may well deter vacationing libel plaintiffs from jetting off to London, since plaintiffs will obviously have little incentive to cross the Atlantic merely to secure judgments that cannot be enforced here. Moreover, even if a media defendant has assets abroad, these decisions may provide additional support for motions to transfer in lawsuits against U.S. publishers in England or, at least, tip the balance in favor of application of U.S. law on choice of law questions. Finally, and perhaps most significantly, they provide substantial ammunition for those seeking to reform British libel law to bring it into conformity with modern jurisprudential notions of press freedom.
FOOTNOTES1 Auvil v. CBS "60 Minutes", 67 F.3d 816 (9th Cir. 1995).
2 376 U.S. 254 (1964).
3 See Derbyshire County Council v. Times Newspapers, Ltd.,  3 All ER 65, 81 ("[t]he American law of libel, including as it does no protection for individual politicians as well as political institutions, goes further along the road to freedom of the press than the English law; nor would [we] wish to extend it") (per Lord Butler-Sloss).
4 Berezovsky v. Forbes, Inc., Slip Opinion at 7 (High Ct. of Justice, Queen's Bench Division Oct. 22, 1997).
5 Id. at 8.
6 Id. at 7.
7 Wyatt v. Forbes, Inc., Slip Opinion (High Ct. of Justice, Queen's Bench Division, Dec. 2, 1997).
8 Id. at 11, 13.
9 Chadha v. Dow Jones & Co., Slip Opinion (High Ct. of Justice, Queen's Bench Division, 1997). Ms. Handman submitted an expert affidavit on behalf of Dow Jones in the English action.
10 D. Margolick, "Sharon Case and The Law", The New York Times, 25 January 1985, pg. B4).
11 Chadha v. Dow Jones & Co., Slip Opinion at 20, 22.
12 Ms. Handman and Mr. Balin represented India Abroad Publications, Inc. in the American proceeding in Bachchan v. India Abroad. They also represented a large group of media organizations as amici in the federal and state proceedings in Matusevitch v. Telnikoff.
13 Unfortunately, as a practical matter, the opportunity to oppose foreign libel judgments in U.S. courts will rarely (if ever) be available to the largest American news organizations, which presumably have significant assets dedicated abroad (and are therefore subject to foreign enforcement proceedings).
14 The Uniform Act has been adopted in 21 states,including California and New York. This article cites to the New York version of the Uniform act.
15 See Hilton v. Guyot, 159 U.S. 113 (1895); N.Y. CPLR § 5303. "Comity" has traditionally been defined as "that reciprocal courtesy which one member of the family of nations owes to the others." Russian Socialist Federated Soviet Republic v. Cibrario, 235 N.Y. 255, 258, 139 N.E. 259 (1923). Comity "is not a rule of law, but one of practice, convenience, and expediency." Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 440 (3d Cir. 1971).
16 CPLR § 5304(b)(4). The "public policy" exception of the Uniform Act is merely a codification of pre-existing common law principles. See, e.g., Hilton v. Guyot, 159 U.S. at 113 (recognition will not be accorded a foreign judgment that is "contrary to [our] policy, or prejudicial to [our] interests").
17 Matusevitch, 347 Md. at 598.
18 India Abroad, 585 N.Y.S.2d at 664.
19 Matusevitch, 317 Md. at 594.