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Wednesday, July 21, 2010

Professor Wasserman, why do you hate freedom of speech?

The Senate yesterday passed the latest version of federal libel tourism legislation, the SPEECH ("Securing the Protection of our Enduring and Established Constitutional Heritage Act"*) Act, which now goes to the House, where passage is expected. The bill has bipartisan support in both the House and Senate, which is always a bad thing. I wrote about an version of this bill here and here; here is the Senate's 2009 version, the Free Speech Protection Act.

The version that is gong to become law makes a couple of significant changes. I still am not sure any of this necessary or a particularly good idea, but this is a dramatic improvement over earlier versions.

First, it fortunately drops the clawback provision, under which a U.S. judgment-debtor could bring a federal claim to recover the amount of the foreign judgment as damages, treble damages, and consequential damages from the foreign judgment. Clawbacks are bad policy and bad diplomacy; they also indirectly raise some troubling Petition concerns. So I am happy to see this provision go. There still is a federal cause of action for the judgment-debtor, but only for declaratory relief.

Second, it permits removal any state-court enforcement action on minimal diversity. Helpful, but not strictly necessary, since most enforcement actions at issue are bilateral claims by a foreign judgment-creditor against a U.S. judgment-debtor and already are within federal jurisdiction. The only thing that I can see it doing is eliminating the forum-defendant limitation on removal (a diversity action is not removable if any defendant resides in the forum state). So, under current law, when a Saudi judgment-creditor seeks to enforce a foreign defamation judgment against a NY judgment-debtory in NY state court, the New Yorker cannot remove; under the new law, she can. But I am not sure how applicable that is to these cases. The theory of diversity/alienage jurisdiction is that the Saudi is not going to sue a New Yorker in New York state court; he is going straight into federal court anyway.

Third, it makes foreign defamation judgments unenforceable in three situations, including one new one: 1) the foreign defamation law does not provide the same level of protection for speech as does U.S. defamation law; 2) the U.S. speaker would have been liable for defamation even under U.S. defamation law; or 3) (the new one) the exercise of personal jurisdiction by the foreign court did not comport with Due Process and the U.S. regime of personal jurisdiction. I am somewhat troubled by this as a policy matter, but I can live with it.

Fourth, it drops a potentially problematic provision that would have made the foreign judgment-creditor subject to personal jurisdiction in the United States (on anti-enforcement claim by the judgment-debtor) solely for having sued a U.S. speaker or for serving any documents related to the foreign lawsuit in the United States. I am not sure such a jurisdictional provision would have been valid. The new bill replaces this with provision for nationwide service of process, including any district in which the judgment-creditor transacts business. This still could be some due process concerns, depending on the facts of a given case.

Again, at the end of the day, I remain unconvinced that any of this is necessary. These judgments typically are never enforced in the United States, because every state has a public-policy exception to its enforcement doctrines and most recognize First Amendment concerns as part of that public policy. The federal exclamation point is nice, but ultimately more symbolic than anything else.

    * Think these members of Congress remember that this enduring and established constitutional heritage includes speech attacking even our most sacred symbols, really offensive comments, anti-war protests within earshot of those who make public policy, and dirty words?


Doug Rendleman (Washington & Lee) writes to say that he hates freedom of speech more than I do--he even criticized these laws in a law review: Collecting a Libel Tourist's Defamation Judgment?, 67 Wash. & Lee L. Rev. 467 (2010). Doug and I were part of a panel on libel tourism at SEALS last summer.

Posted by Howard Wasserman on July 21, 2010 at 10:58 AM in Constitutional thoughts, Howard Wasserman, Law and Politics | Permalink


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Does anyone really believe these judgments (or at least most of them) truly are domesticatible?

Moreover, no foreign judgment ever was enforced or sought to be enforced against Rachel Ehrenfeld, so we have no idea what New York's existing public policy exception would have done. She tried to get a preemptive declaratory judgment that the English judgment was not enforceable and the New York Court of Appeals held (properly, in all likelihood) that Mahfouz was not subject to suit in New York because his only contacts with New York were his having papers in the English case served on Ehrenfeld in New York. Frankly, given the narrower jurisdictional rules in the bill that passed, I am not sure the outcome in her case would be different under the new bill. Did Mahfouz do business in other states besides New York (and enough business to be subject to general jurisdiction)?

Posted by: Howard Wasserman | Jul 21, 2010 1:48:48 PM

I have to disagree with one premise here. These judgments are enforced in the US... just not in the courts. The enforcement mechanism is all too often buried inside of royalty statements as the publisher (against whom the judgment was also assessed) invokes the warranty and indemnification clauses to withhold money otherwise due the author. And remember that the purported "public policy concerns" did not protect Rachel Ehrenfeld in front of the New York Court of Appeals, which is was led to this particular legislation in the first place.

Now top that off with the inability of the author to get another publishing contract for another book, even an unrelated one, when there's an outstanding, domesticatible judgment...

Posted by: C.E. Petit | Jul 21, 2010 1:26:41 PM

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