BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 320|
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THIRD READING
Bill No: SB 320
Author: Corbett (D)
Amended: 3/31/09
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 4/28/09
AYES: Corbett, Harman, Florez, Leno, Walters
SUBJECT : Judgments: foreign-country money judgments
SOURCE : California Newspaper Publishers Association
DIGEST : This bill adds 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.
ANALYSIS : 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
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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).)
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 adds, 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 specifies 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.
Background
In 2007, the Legislature enacted the new Uniform
Foreign-Country Money Judgments Act (SB 639, Harman,
Chapter 212, Statutes of 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
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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.
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 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.
Prior Legislation
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SB 639 (Harman), Chapter 212, Statutes of 2007, enacted the
Uniform Foreign Country Money Judgments Act.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/30/09)
California Newspaper Publishers Association (source)
ARGUMENTS IN SUPPORT : According to the author's office:
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
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.
RJG:nl 4/30/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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