The SPEECH Act Should Not Pre-empt State Law
by Daniel Huff
A federal law passed in late July making it harder to enforce foreign libel judgments is great news for journalists in 46 states. Unfortunately, for those in the remaining four, it may have the unintended consequence of weakening the protection they already enjoy under analogous state law provisions.
Congress passed the Speech Act to combat "libel tourism," the practice of intimidating U.S. authors by suing them in foreign jurisdictions less protective of free speech rights.
Plaintiffs know American libel law provides broad protection for journalists, including a heightened burden of proof on plaintiffs and searching appellate review of jury awards, resulting in 70% of them being overturned.
It is much better to sue in England, where the burden of proof is reversed, the range of defenses for journalists more limited, and a losing defendant pays the winner's legal fees. U.K. courts make it even easier with a willingness to assert jurisdiction in cases with only tangential connection to England.
The canonical example of libel tourism is the case of U.S.-based author Rachel Ehrenfeld. In 2005, a Saudi financier sued her in England after 23 copies of her book on terror financing were sold online into England. Numerous other cases appear in the official record of congressional hearings on the bill.
To dampen libel tourism's chilling effect on U.S. authors, Congress passed the Speech (Securing the Protection of our Enduring and Established Constitutional Heritage) Act, which prohibits state and federal courts from recognizing foreign libel judgments that are inconsistent with the First Amendment. It also permits authors to obtain a court order pre-emptively declaring the foreign judgment unenforceable.
There has been some discussion that the bill does not go far enough. It does nothing to prevent the suits from being filed in the first place, and many prospective libel-tourism victims may have assets overseas that are not shielded by this bill. The committee report details concerns legislators had with some more aggressive proposals that might have addressed these problems.
What the report does not explore are the potential ramifications of the slight differences between the substance of the Speech Act and the New York state law upon which it is based.
New York's Libel Terrorism Protection Act bars enforcement of foreign libel judgments unless the "defamation law applied in the foreign court's adjudication provided at least as much protection for freedom of speech" as the Constitution. This language appears to require courts to compare just the relative protection for speech embodied in the legal principles applicable to the case. It does not call for a fact-specific analysis of whether the foreign plaintiff would still have won had the case been brought in the United States.
The Speech Act does. After tracking New York's language, it provides an alternate ground for recognition: "[E]ven if the defamation law applied in the foreign court's adjudication did not provide as much protection for freedom of speech," recognition is not barred if the libel-tourism victim "would have been found liable for defamation by a domestic court."
To highlight the difference, consider a case in which a public figure sues an American journalist in a British court for statements on a matter of public concern. The facts might not support a finding of "actual malice" but they unambiguously meet the substantially lower English standard of irresponsibility.
If the U.S. author wants the U.K. judgment declared unenforceable, under New York law, he or she wins outright. The lower fault standard means the applicable U.K. law is not as protective of free speech rights. However, if the Speech Act controls the case, that is not sufficient. The author must also demonstrate that he would not have been found liable for libel in a U.S. court.
There are at least two possible reasons why the Speech Act as federal law would control in these cases.
First, there is pre-emption. This bill is actually one of the first times Congress has exercised its authority under the foreign commerce clause to legislate in the area of recognizing foreign judgments. At the hearings, a leading authority on the issue had urged that it no longer be left to the states because it so clearly affects foreign relations. It is possible then that Congress intended pre-emption when it opened the Speech Act's substantive section with "[n]otwithstanding any other provision of Federal or State law."
Even if courts find that Congress has not used its constitutional authority to pre-empt state law, meaning courts could validly apply either rule, they may decide it remains an area of strong federal interest, so the Speech Act still controls. Whether this is the case will depend on a complicated line of precedent that considers factors including the balance between state and federal interests, the desire to avoid forum-shopping and whether the rules on enforcing foreign judgments are arguably procedural rather than substantive.
Admittedly, this problem is more theoretical than practical, particularly since libel tourism is frequently more about intimidating critics than actually collecting damages. However, it is also easy to fix.
Congress can simply add a provision explicitly stating the bill should not pre-empt any state law that provides greater protection to free speech. In fact, Rep. Steve Cohen (D-Tenn.), who sponsored the Speech Act, included just such a proviso in an unrelated bill to stop frivolous libel suits domestically. Doing the same here will ensure the Speech Act is a cause for celebration in all 50 states.
Reprinted with permission from the August 9, 2010 online issue of The National Law Journal. ©2010 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.
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