In the companion piece to this article, Luba Vangelova details the trials and tribulations of Dow Jones lawsuit in Australia with Joseph Gutnick.  Before you conclude that the case doesn't apply to you, reconsider:  The case is important to anyone who publishes any information on the Internet. 

"Not to me," you declare, "What happens 'down under' can't effect my style."

"Besides," you argue, "I've got a First Amendment right to speak my mind."

"And, more importantly, I'm too far away to be sued there."

		Failing to respond to a foreign summons is likely to cause the court to enter a default judgment. Under the Hague Convention, a judgment in one country can be enforced in any of the other member countries -- this includes default judgments.

You don't need Black's Law Dictionary to tell you that jurisdiction is the court's authority to act.  But, Black's doesn't tell you that if the court asserts jurisdiction, it can compel you to attend numerous depositions and court hearings across the globe, that the substantive laws in the foreign location are different -- they allow for additional damages, they have a lower burden of proof, they have no first amendment; the procedural rules are different: the statute of limitations is longer, the ability to subpoena witnesses and how witnesses testify is limited.  And all the while you?re defending yourself, you?re also hemorrhaging thousands if not hundreds of thousands in legal bills.  Welcome to Internet law.

The Dow Jones case matters because of two similar but unrelated issues:  jurisdiction over the defendant, and the choice of law that determines the outcome of the dispute.  Both may be pivotal to legal liability.  They merge in the Dow Jones case because of the use of the word "publish" to confer jurisdiction and apply the substantive law.

"Traditional" notions of jurisdiction

Citizens in the United States take it for granted that they will not be hauled into courts in states where they have never been.  And, for the most part, they are right.  In this country, jurisdiction is predicated upon ?minimum contacts? with the forum's location, such that the exercise of jurisdiction doesn't offend due process.  See, e.g., International Shoe Co. v. Washington (1945) 326 U.S. 310. 

Under our doctrine of constitutional federalism, each court has "jurisdiction" to determine jurisdiction.  As a result, each court must sit in equity and examine the nature of the claims against the defendant, and whether those claims arise from the defendant's activities within the plaintiff's chosen forum. 

In other words, you must have done something within the territory of the state in order to be sued there.  If you haven't been there, or done anything to cause harm there, you?re not likely to face a lawsuit there.  For bloggers and online editors, we thought this meant that unless your article was on a server in the forum state, you wouldn't be expected to go there.  But, if jurisdiction is measured by downloading content, we?re all exposed.

Now, let's get back to Dow Jones. The alleged defamation occurred in an article in Barron's. The article was written and edited in New York and placed on the Internet server in New Jersey.  Accordingly, Dow Jones argued that ?publication? occurred in the United States. The lower court rejected Dow Jones? position, setting the stage for the showdown in the Australian High Court. 

In rejecting Dow Jones' position, Judge John Hedigan concluded that the publication takes place where and when the contents of the publication are seen and heard and comprehended by the reader or hearer.  The defamatory article, according to the judge, was "published in the State of Victoria when downloaded by Dow Jones' subscribers who had met Dow Jones' payment and performance conditions and by the use of their passwords."  In other words, publication confers jurisdiction.  A copy of the lower court opinion is available. And, the expert for Dow Jones (Roger Clarke) has offered his opinion about the case following last May's oral argument.

Applying these rules, if publication occurs where the reader downloads the material; and publication confers jurisdiction, bloggers, editors and publishers better pack their bags and be ready to travel to the ends of the earth, because distant litigation may be on the horizon.  What we thought we knew about jurisdiction is now falling apart in cyberspace.

Substantive law differences

In the United States there are a myriad of protections for journalists, starting with the First Amendment to the Constitution.  In contrast, libel laws differ throughout the world.  For a quick comparison, check out the University of Houston's chart on libel laws in other countries.  After determining jurisdictional issues, the court will typically examine which substantive laws apply to the dispute.  Unless a good reason exists to deviate, it will likely apply the forum's local laws.

	The Dow Jones case matters because of two similar but unrelated issues: jurisdiction over the defendant, and the choice of law that determines the outcome of the dispute.

Australia doesn't have a First Amendment or equivalent; nor do China, Singapore, Saudi Arabia, Syria and a host of other countries which view "free expression" with a critical eye.  Now, imagine being forced to litigate in those countries over the finer points of defamation law while cooling your heels and pacing the floor in a local hotel.  When you finally get your date with the local magistrate, you have to ask, was it worth publishing that commentary? 

Even in the U.S., this is becoming more common.  Site operators are increasingly at risk for defamation claims from citizens in other states.  As Rod Dreher comments in reference to a blog critical of a writer who criticizes the catholic church, "[o]ne great thing about the Internet is how it allows ordinary citizens to bypass the old-line media, and bring fresh, sometimes-urgent commentary and reporting directly to readers.  Yet, the temptation all bloggers face is to post first, ask questions later, if at all ... [T]hat can be a costly mistake."  Without question, lawsuits are costly.  They drain resources, time, and money.

So, what's the likelihood, really?

OK, you argue, I'm overreacting.  Dow Jones presents a large, deep-pocket target.  With offices in Australia, it can even afford to litigate there.  A smaller, inconsequential publication remains at low risk, right?  Won't happen to you? 

Consider this: According to Eugene Gulland, writing in the National Law Journal on February 11, 2002, "foreign courts are increasingly asserting jurisdiction over U.S. companies based on the site of the alleged injury, rather than the location of the allegedly harmful act."  And, he argues, these courts are "increasingly reaching out to penalize U.S.-based companies for perceived harms arising from the content of Web sites accessible abroad."  So much for hiding behind the notion of being inconsequential.

Faced with the high costs, some might be tempted to ignore a summons from a foreign land and let the chips fall where they may.  After all, it isn't enforceable if I don't show up, is it?  And, even if they get a judgment, how can they enforce it?  Before concluding that's a good idea, read on.

Failing to respond to a foreign summons is likely to cause the court to enter a default judgment.  Under the Hague Convention, a judgment in one country can be enforced in any of the other member countries -- this includes default judgments.  So, if a judgment is entered in Australia, it can be enforced here. 

Any number of collection agencies would be willing to take on the enforcement proceedings for a contingent fee, say, 50%.  Because of the speed of Internet communication, the collection agency can begin working on the case the same day the judgment is rendered.  Unless there are real good reasons why the judgment is unenforceable, the judgment will be enforced against the defendant's assets.  It means trouble.  It means inconvenience.  It means expense.

This is not to say that there aren't defenses to a judgment rendered in a foreign court.  Certainly, the district court in Yahoo, Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme (2001) 169 F.Supp.2d 1181, found that enforcement of the order prohibiting sales of Nazi memorabilia on the Web site violated Yahoo's free speech rights.  That court saw the issue as suppression of political speech. 

But, remember, even in the U.S., you have no right to commit libel.  So, while Yahoo may have dodged enforcement of the French judgment for now, that might not be the case if the basis of the judgment had been French libel law.

The uncertain future

If jurisdiction can be asserted in the place where content is read, then anyone -- that's right, you, me, anyone -- can go from the comforts of our homes to the front lines of a raging Internet battle in Timbuktu; And, if the law that will apply to the dispute is the law where the article is read, how can we possibly conform our behavior to each and every legal system worldwide? 

It is unclear what role the subscription played in the judge's decision against Dow Jones.  I've argued elsewhere that "using a site's terms and conditions of use" to restrict jurisdiction and choice of law questions to more favorable locations may be a solution.  Whether that would have worked for Dow Jones we will never know. 

Unfortunately, it is not inconceivable that a journalist would be summoned to a foreign jurisdiction that may not allow confronting the accuser -- or, no right to subpoena witnesses; or, no right to procure or review evidence in advance of trial.  These safeguards we take for granted simply do not exist to the same extent elsewhere.

We watch the Dow Jones case from the sidelines, but if the pundits are correct, that the High Court will side with the plaintiff,  the case is already decided.  So, who's next? 
 

Michael S. Overing teaches Internet Law at the USC Annenberg School for Communication. He is a practicing attorney in Los Angeles County, California. He frequently assists individuals and businesses with Internet and media-related legal issues.