Gutnick not the end of the world
Gutnick. The very word strikes fear into the hearts of internet publishers across the globe. It’s the name of a recent Australian case that seems to subject anyone who posts something on the web to the defamation laws of every other country on earth. It’s triggered a wave of panic in the web publishing world. The case “could strike a devastating blow to free speech online,” wrote the New York Times in an editorial. “To subject distant providers of online content to sanctions in countries intent on curbing free speech – or even to 190 different libel laws – is to undermine the internet’s viability.”
David Shulz, a lawyer for a group of publishers and internet companies, went even further. “If that becomes the law of the internet, the problem isn’t that individuals will be suing all over the world – though that is a problem. The problem is that rogue governments like Zimbabwe will pass laws that will effectively shut down the internet.”
This certainly would be a problem – if it were true. But I don’t think it is. There are lots of reasons for thinking that the Gutnick result was not only correct in law, but also the only sensible outcome. And there are lots of reasons for thinking that Gutnick is not as devastatingly far-reaching as is commonly supposed.
But first: some background. Joe Gutnick is an Australian tycoon, nicknamed “Diamond Joe” for his multi-million dollar mining interests. A Hasidic Rabbi, he sports a beard and black coat, and has reportedly spent millions backing conservative politicians in Israel.
He is also – reportedly – involved in money laundering and tax cheating. That report came from Barron’s magazine, owned by Dow Jones, and was published in hard copy and on Barron’s website in October 2000.
Outraged, Gutnick sued for defamation. But he didn’t sue in New York, where the article was edited, or in New Jersey, where it was uploaded onto Barron’s website, or anywhere in the United States, where 98 percent of Barron’s readers reside. He sued in the Australian state of Victoria, where he lives, along with five of the 14 Australian subscribers to Barron’s. (To be fair, the evidence also showed that 17,000 subscriptions had been paid for with Australian credit cards, and that at least five copies of the magazine had been sold in Victoria.)
Why sue there? Gutnick said that’s where his reputation had been hurt. The fact that Victoria’s defamation laws are an awful lot more congenial to plaintiffs than those in the United States might well have played into his thinking too.
Gutnick’s action sparked widespread hand-wringing. If the case were allowed to proceed, wouldn’t that mean that Gutnick could sue Dow Jones in any country in the world? Couldn’t he launch several lawsuits at once, in different countries? Couldn’t he pick the countries with the most plaintiff-friendly defamation laws? Wouldn’t this mean that anyone who posted anything on the web would need to take advice from lawyers in 191 different countries about their defamation laws? Wouldn’t the harsh defamation laws of just one country have the potential to deter all internet publication?
Dow Jones made all these arguments and more. It was joined by a consortium of other interests from giants in the publishing world, including CNN, Amazon.com, the New York Times, AOL Time Warner, and Yahoo! Their strategy: try to persuade the Australian courts that publication occurred at the point of uploading: New Jersey. (Or, as the consortium argued, the place where the publisher last exercised control over dissemination: New York.) If publication occurred in the United States, then US law should govern any defamation dispute. Publishers (the vast proportion of them being US-based) would know where they stood. Free speech on the internet would be properly protected. The world would be a lovelier place.
This may sound like a happy solution to you (or it might seem, as Justice Callinan put it, “to impose upon Australian residents…an American legal hegemony in relation to Internet publications.”) But it has two huge – and probably insurmountable – flaws. First, it’s a licence for abuse. Second, it’s not the law.
As to the first: if the point of uploading were the point of publication (and therefore the source of the applicable law) anyone who wanted to defame someone could simply locate a server in a country without defamation laws, and go right ahead. (Dow Jones tried to rescue its argument by making an exception for “adventitious or opportunistic” placement of web servers, but as the majority judges pointed out, it’s difficult to know when this might apply.)
This leads right in to the second problem. The defendants have made this rule up. It’s the way they’d like the law to be. But it’s not the way the law is. Every Australian judge who considered the question reached the same conclusion: to publish a defamatory statement, you need to convey it in comprehensible form to someone else. Under this definition, a bunch of electric impulses sitting in a server in New Jersey waiting to be downloaded is plainly not a publication. Game to Joe Gutnick. (He hasn’t won the match, though. The actual defamation case hasn’t even started, and he may yet lose, even under Aussie law.)
The defendants tried to argue that the internet was so revolutionary – so ubiquitous and accessible and difficult to target at particular geographical consumers – that new rules were in order. The judges didn’t buy it. “Those who make information accessible by a particular method do so knowing of the reach that their information may have,” wrote the majority judges. However, they did call for a global effort to lay down some workable ground rules.
So what does this mean for internet publishers and readers? Will publishers have to check defamation laws “from Afghanistan to Zimbabwe” before they post anything, as Dow Jones claimed? Will readers’ choice of internet material be reduced “to an exceptionally low level”?
No. Here are ten reasons why people who think they’re defamed by a website will probably not sue in 190 countries:
1. They can’t afford to. Defamation lawsuits are expensive, and never more so than when you’ve got to hire foreign lawyers. Such lawsuits are also high-risk.
2. They don’t qualify. Few people have reputations to protect in more than one or two countries. You need to have an established reputation in a particular country before you can sue to protect it.
3. The local law won’t let them. Defamation laws vary. For instance, prominent Americans often face big hurdles trying to sue in the US. If foreign laws are more defendant-friendly (as most are) publishers in countries like New Zealand may not have much to worry about.
4. They haven’t in the past. After all, the potential of an explosion of international libel litigation has been around ever since outlets like the New York Times and CNN have been exported around the planet. Lots of news agencies publish American and European wire service stories that don’t seem ever to have seen the desk of a common law legal adviser. Yet multiple lawsuits are rare.
5. They won’t want to. Most people just want to have their reputation vindicated in the place where they live.
6. It won’t be worth the candle. Why would a plaintiff sue a news agency in a country unless the agency has assets there to satisfy the judgment? Otherwise, the plaintiff will have to persuade the defendant’s court system to execute the judgment, and inevitably be confronted with the foreign rules and standards he or she tried to avoid.
7. Judges may treat multiple lawsuits as an abuse of process.
8. Judges may use principles of res judicata or issue estoppel to prevent multiple lawsuits.
9. Judges may use the doctrine of forum non conveniens to rule that the case should be heard elsewhere.
10. Judges may stretch the usual local defamation defences to encompass arguments that the news organisation defendant complied with its own jurisdiction’s laws.
It’s even possible that other courts around the world won’t agree with the Australian judges. US courts are more inclined to insist that jurisdiction is only conferred when the defendant deliberately aimed its publication at another country, with intent to interact there. That may not be satisfied in the Gutnick situation.
Other courts could easily find grounds for not following the Australian decision. After all, it’s based on a particular statute that confers jurisdiction on Australian courts. It’s based on Australian precedents. And it’s based on an agreement by Gutnick not to sue in any other jurisdiction. So the rule laid down in Gutnick is technically a very narrow one.
Still, it does lay the groundwork for very wide potential liability. Big publishers ought to start thinking about these issues. If they plan to bag on a foreigner online, they should ask themselves questions like these:
– Where is that person well-known? Is the story likely to be read there?
– Are the laws of defamation substantially more favourable to plaintiffs there?
– Is he or she likely to sue (ie do they have the money and inclination)?
– If the person were to pick one jurisdiction to sue in, where would it be likely to be?
– Does your organisation have assets in the person’s jurisdiction?
Most of these questions don’t even involve any specialist legal knowledge. But if you’re running a media outlet that makes a habit of criticising particular people overseas, it’s probably a good idea to brief your journalists or subbies on the basic standards applying in their home countries – to the extent their laws are tougher on news organisations, anyway.
If internet publishers are tempted to panic about Gutnick, they should bear in mind the sage words of the majority judges: “in all except the most unusual cases, identifying the person about whom the material is to be published will readily identify the defamation law to which that person may want to resort.”