BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 320 S
Senator Corbett B
As Amended March 31, 2009
Hearing Date: April 28, 2009 3
Code of Civil Procedure 2
GMO:jd 0
SUBJECT
Foreign Country Money Judgments: Defamation Judgments
DESCRIPTION
This bill would add, to the list of exceptions from those
foreign money judgments that may be recognized in California, a
judgment for defamation obtained in a jurisdiction that does not
provide at least as much protection for free expression as that
provided under the Constitutions of both the United States and
California.
BACKGROUND
In 2007, the Legislature enacted the new Uniform Foreign-Country
Money Judgments Act (SB 639, Harman, Ch. 212, Stats. 2007). The
Act recast provisions in the Code of Civil Procedure that dealt
with recognition of foreign-country money judgments, setting the
stage for a California court to accept the determination of
legal rights and obligations made by a rendering court in a
foreign country and thus to allow a judgment creditor to invoke
enforcement procedures available in the state against a
California resident or asset. Except in three specific types of
proceedings, the new Act requires California courts to recognize
a foreign-country money judgment, and specifies circumstances
under which a court is not required to recognize such a
judgment. The Act also sets up the rules for raising the issue
of non-recognition of a foreign judgment and the burdens each
side must bear when a court is asked to determine whether or not
a judgment should be recognized for purposes of execution.
California was the first in the nation to adopt the Uniform
Foreign-Country Money Judgments Act.
(more)
SB 320 (Corbett)
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In response to cases involving defamation judgments obtained in
foreign countries considered to be "libel-friendly" such as the
United Kingdom, the New York Legislature last year enacted
protective legislation to create hurdles for the enforcement of
such judgments against defendants who reside in the United
States or who have assets in that state that could be subject to
enforcement of the defamation judgments. In particular, the
California Newspaper Publishers Association (CNPA), sponsor of
SB 320, cites the case of Rachel Ehrenfeld (an Israeli-born
writer living in the United States), who was sued by billionaire
Saudi entrepreneur Khalid Salim bin Mahfouz in London for her
book, Funding Evil, that accused Bin Mahfouz of financing
Islamic terrorist groups. Ehrenfeld's book was not published in
London, but Bin Mahfouz was able to establish jurisdiction
because 23 copies of the book were purchased there online.
Ehrenfeld decided not to submit to the court's jurisdiction, and
Bin Mahfouz obtained a $225,000 default judgment against her.
Ehrenfeld contended in an interview that the judgment not only
affected her, but also publishers who are now "afraid to mention
any Saudi financier of terrorism, even if the evidence is there.
The intimidation factor has worked well to silence the media."
Patterned after the New York law, SB 320 is intended to ensure
that a foreign-country judgment based on defamation or libel is
recognized by a California court only when the laws applied by
the foreign court where the judgment was obtained provide
similar protections to freedom of speech and the press as are
provided under the California and U.S. Constitutions.
CHANGES TO EXISTING LAW
Existing law , the Uniform Foreign-Country Money Judgments
Recognition Act (UFCMJRA), establishes the rules for the
recognition of foreign-country money judgments. (Code of Civ.
Proc. Secs. 1713 - 1724.) (All references are to the Code of
Civil Procedure unless otherwise noted.)
Existing law provides that a foreign-country money judgment is
recognized in California unless it is one of three specific
types of actions : (a) the judgment was rendered under a
judicial system that is incompatible with the requirements of
due process; (b) the foreign court did not have personal
jurisdiction over the defendant; and (c) the foreign court did
not have jurisdiction over the subject matter. (Sec. 1716(b).)
SB 320 (Corbett)
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Existing law specifies eight scenarios where a court does not
have to recognize a foreign-country money judgment, including
where the judgment was obtained by fraud that deprived the
losing party of an adequate opportunity to present its case;
where the defendant was not given sufficient notice and
therefore time to defend the case; and where the judgment was
rendered in circumstances that raise substantial doubt on the
integrity of the rendering court with respect to the judgment.
(Sec. 1716(c).)
This bill would add, to those scenarios where the court has
discretion to recognize or to not recognize a foreign country
judgment, a defamation action obtained outside the United
States, unless the court first determines that the defamation
law applied in the foreign court provided equal or more
protections for freedom of speech and the press in that case as
would be provided by both the California and United Sates
Constitutions.
This bill would specify a court's personal jurisdiction, for the
purposes of rendering declaratory relief or a determination
whether to recognize the judgment in California (1) over a
person who obtained a foreign-country judgment for defamation
against a California resident, or (2) over a non-resident person
or entity who has assets in California or who may have to take
actions in California to comply with the foreign-country
defamation judgment.
COMMENT
1. Stated need for the bill
The author states:
SB 320 is intended to stop the increasingly popular practice
of suing U.S. journalists and authors in libel-friendly
foreign courts, and then attempting to enforce the judgment
(usually obtained by default) in a California court.
British libel law, for example, presumes a statement is
false and places the burden of [proving] truth on the
defendant. It has become a jurisdictional Mecca for the
rich and famous. On the other hand, U.S. law, and
especially California, places difficult burdens on
plaintiffs to prove falsity and defamatory content [of a
published statement] and requires them to clear many other
tall hurdles intended to protect free expression under the
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First Amendment?
While [in the case of Ehrenfeld] Bin Mahfouz has not
attempted to enforce the judgment in the U.S., [the
judgment] has had an intense chilling effect on writing
about terrorism ? SB 320 will limit the exposure to
California writers, diminish the chilling impact of libel
tourism on aggressive reporting about important
international issues, and, ultimately, pressure foreign
jurisdictions like Britain to change its laws to place
greater protections on free speech.
2. To be recognized in California, a court must first find
that the court rendering the foreign-country defamatory
judgment applied defamation law that protects freedom of
expression as provided by both the United States and
California Constitutions
The UFCMJA requires the courts of this state to recognize
foreign country judgments, except in specified cases. The Act
also enumerates eight scenarios where a court is not required to
recognize a foreign-country judgment, thus requiring the court
to first make a determination whether any of the scenarios
listed applies to the foreign-country judgment.
This bill would add, to those scenarios in which the court is
not required to recognize a foreign-country judgment, a
situation where the defamation law applied by the foreign court
in adjudicating the defamation claim provided "at least as much
protection for freedom of speech and the press in that case as
would be provided by both the United States and California
Constitutions."
Freedom of speech and freedom of the press have been among the
most litigated issues since the First Amendment to the United
States Constitution was adopted. The First Amendment is
embodied in the California Constitution as Section 2 of Article
I: "[e]very person may freely speak, write and publish his or
her sentiments on all subjects, being responsible for the abuse
of this right. A law may not restrain or abridge liberty of
speech or press."
Thus a large body of law exists to which a court of this state
may look in determining whether the law applied to a defamation
action in a foreign jurisdiction would pass muster in terms of
protecting these very important rights. Once a state court
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determines that the law applied to the foreign-country
defamation claim that resulted in the judgment provides as much
protection to the published speech as there would be under the
United States and California Constitutions, the court may then
determine whether to recognize the judgment or not.
It should be noted that Section 1716, as amended by SB 320,
would not require that the foreign-country judgment for
defamation be recognized, but it would require that the
equivalency of protections be predetermined prior to a decision
on recognition being made.
3. Court's personal jurisdiction over a person or entity
seeking relief
In order for a court to make a predetermination of equivalency
of laws applied to a defamation claim in a foreign jurisdiction
to the United States and California Constitutions, and to
entertain any action that may have to be taken to enforce or
challenge such a judgment against a California resident or upon
an asset located in California, this bill would confer personal
jurisdiction of a court over the parties to the foreign-country
defamation judgment.
This is necessary, so that California's residents may seek
protection for themselves and their assets against onerous
foreign-country defamation judgments. By extending personal
jurisdiction to persons or entities amenable to jurisdiction in
California, a non-resident may also protect assets located in
California, and a judgment creditor from a foreign jurisdiction
(other states or countries) may seek assistance of the
California courts in enforcing an otherwise recognizable foreign
country defamation judgment.
4. Stopping "libel tourism" now a popular cause
Since "Rachel's Law" was enacted in May, 2008, the U.S. Congress
has held hearings on "libel tourism." Resulting from these
hearings is S. 2977, introduced by Senators Specter and
Lieberman, which would create a federal cause of action to
determine whether defamation exists under United States laws in
cases in which defamation actions have been brought in foreign
courts against United States persons on the basis of
publications or speech in the United States. The bill is in the
Senate Committee on Judiciary, awaiting a hearing.
Support : American Civil Liberties Union; Californians Aware
SB 320 (Corbett)
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Opposition : None Known
HISTORY
Source : California Newspaper Publishers Association (CNPA)
(Sponsor)
Related Pending Legislation : None Known
Prior Legislation :
SB 639 (Harman, Ch. 212, Stats. 2007) enacted the Uniform
Foreign Country Money Judgments Act.
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