BILL ANALYSIS
SB 320
Page 1
Date of Hearing: June 23, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 320 (Corbett) - As Amended: June 16, 2009
SENATE VOTE : 38-0
SUBJECT : JUDGMENTS: FOREIGN-COUNTRY MONEY JUDGMENTS
KEY ISSUE : SHOULD A CALIFORNIA COURT BE ALLOWED TO NOT
RECOGNIZE A MONEY JUDGMENT OBTAINED IN A FOREIGN JURISDICTION
UNLESS IT FIRST DETERMINES THAT THE DEFAMATION LAW APPLIED BY
THE FOREIGN COURT PROVIDED AT LEAST AS MUCH PROTECTION FOR
FREEDOM OF SPEECH AND THE PRESS AS PROVIDED BY THE U.S. AND
CALIFORNIA CONSTITUTIONS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill, sponsored by the California Newspaper Publishers
Association, seeks to permit a court in California to not
recognize a judgment for defamation obtained in a foreign
jurisdiction that does not provide at least as much protection
for freedom of speech and the press as that provided under the
United States and California Constitutions. This bill seeks to
address the problem of "Libel Tourism," which is the
increasingly popular practice of suing U.S. journalists and
authors in libel-friendly foreign courts (often in Great
Britain) and then attempting to enforce the judgment in a
California court. Because existing state law, the Uniform
Foreign-Country Money Judgments Recognition Act, requires the
recognition of foreign money judgments in the U.S., except as
specified, and because there are stark differences in libel law
and free speech protection between the U.S. and other countries,
there is an incentive for libel plaintiffs to engage in
forum-shopping in order to silence speech they find
objectionable. Past examples of this phenomenon, with their
chilling effect on free speech and which have been well
documented, have spurred lawmakers in the U.S. to propose
legislation similar to and including this bill, with the goal of
protecting free speech from the effects of Libel Tourism. This
bill is supported by free speech advocates, the ACLU, newspaper
SB 320
Page 2
publishers, booksellers and writers, and passed off the floor of
the Senate without a single "no" vote.
SUMMARY : Seeks to 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 freedom of speech and
the press as that provided under the United States and
California Constitutions. Specifically, this bill :
1)Adds to the list of foreign country judgments that a
California court is not required to recognize, a
foreign-country judgment that includes recovery for a claim of
defamation unless the court determined that the defamation law
applied by the foreign court provided at least as much
protection for freedom of speech and the press as provided by
both the United States and California Constitutions.
2)Specifies that the court, for the purposes of rendering
declaratory relief for liability for the foreign country
defamation judgment ("judgment") or a determination that the
judgment is not recognizable in California, has jurisdiction
to determine the declaratory relief action as well as personal
jurisdiction over the person or entity who obtained the
judgment if both of the following are true:
a) the publication at issue was published in California;
and
b) the person or entity against whom the judgment was
obtained either has assets in California that might be used
to satisfy the judgment, or may have to take actions in
California to comply with the judgment.
EXISTING LAW , the Uniform Foreign-Country Money Judgments
Recognition Act ("the Act"), establishes the rules and criteria
for the recognition of foreign-country judgments, as defined, by
California courts. (Chapter 2 (commencing with Section 1713) of
Title 11 of Part 3 of the Code of Civil Procedure.)
Specifically, the Act:
1)Provides that the party seeking recognition of a
foreign-country judgment has the burden of establishing that
the foreign-country judgment is entitled to recognition under
this chapter. (Code of Civil Procedure Section 1715(c).)
SB 320
Page 3
2)Requires the court to not recognize a foreign-country judgment
if any of the following apply:
a) the judgment was rendered under a judicial system that
is incompatible with the requirements of due process; or
b) the foreign court did not have personal jurisdiction
over the defendant; or
c) the foreign court did not have jurisdiction over the
subject matter. (Code of Civil Procedure Section 1716(b).)
3)Permits the court to not recognize a foreign country judgment
if any of the following eight scenarios apply:
a) The defendant in the proceeding in the foreign court
did not receive notice of the proceeding in sufficient
time to enable the defendant to defend.
b) The judgment was obtained by fraud that deprived the
losing party of an adequate opportunity to present its
case.
c) The judgment or the cause of action or claim for
relief on which the judgment is based is repugnant to the
public policy of this state or of the United States.
d) The judgment conflicts with another final and
conclusive judgment.
e) The proceeding in the foreign court was contrary to
an agreement between the parties under which the dispute
in question was to be determined otherwise than by
proceedings in that foreign court.
f) In the case of jurisdiction based only on personal
service, the foreign court was a seriously inconvenient
forum for the trial of the action.
SB 320
Page 4
g) The judgment was rendered in circumstances that
raise substantial doubt about the integrity of the
rendering court with respect to the judgment.
h) The specific proceeding in the foreign court leading
to the judgment was not compatible with the requirements
of due process of law. (Code of Civil Procedure Section
1716(c).)
4)Specifies a non-exclusive list of bases for establishing
personal jurisdiction in an action to enforce a
foreign-country judgment, and provides that courts may
recognize other bases of personal jurisdiction not included in
the list as sufficient to support such a judgment. (Code of
Civil Procedure Section 1717.)
COMMENTS : This bill, sponsored by the California Newspaper
Publishers Association, seeks to permit a court in California to
not recognize a judgment for defamation obtained in a foreign
jurisdiction that does not provide at least as much protection
for freedom of speech and the press as that provided under the
United States and California Constitutions.
The sponsor has written in support of the bill:
SB 320 addresses the problem of Libel Tourism-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. . . On the other hand, U.S. law, and
especially California, places difficult burdens on
plaintiffs to prove falsity and defamatory content,
and requires them to clear many other tall hurdles
intended to protect free expression. . .
SB 320 will limit the exposure of California writers
[to libel tourism], diminish the chilling impact of
libel tourism on aggressive reporting. . . and,
ultimately, pressure foreign jurisdictions like
SB 320
Page 5
Britain to change its laws to place greater
protections on free speech.
The incentive for "Libel Tourism" arises because of stark
differences between U.S. libel law standards and those in
foreign countries . The First Amendment right to free speech, as
embodied in Section 2 of Article I of the California
Constitution, guarantees that "every 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." Accordingly, our
state's laws favor freedom of expression and make it relatively
difficult for a plaintiff to establish defamation through
writing (libel) or speech (slander).
For example, under California law, libel is defined as "a false
and unprivileged publication by writing, printing, picture,
effigy, or other fixed representation to the eye, which exposes
any person to hatred, contempt, ridicule, or obloquy, or which
causes him to be shunned or avoided, or which has a tendency to
injure him in his occupation." (Civil Code Section 45.) Thus,
a plaintiff wishing to establish a prima facie case of libel in
California courts must prove that the writing is false and
exposed the plaintiff to harm or injury, as provided. In
addition, defamatory language deemed not libelous on its face is
not actionable "unless the plaintiff alleges and proves he has
suffered special damages as a proximate result thereof." (Civil
Code Section 45a.) Thus, for some allegations of defamation,
the plaintiff must prove she has suffered special damages in
order to prevail.
Not all foreign countries, however, employ a similar standard
for proving defamation. Under British law, an offensive
statement is presumed defamatory and the burden of proving the
truth of the statement rests not with the plaintiff, but with
the libel defendant who made the statement. The discrepancy
between British and California law in this area obviates the
fact that British courts in particular are perceived to be quite
favorable for defamation plaintiffs.
The so-called "Libel Tourism" problem is enabled by existing
law, the Uniform Foreign-Country Money Judgments Recognition Act
("the Act"), which provides that final and conclusive
foreign-country money judgments, as defined, are enforceable in
California with specified exceptions. The Act effectively
SB 320
Page 6
permits a judgment creditor to invoke enforcement procedures
available in this state against a California resident or asset,
even when the determination of legal rights and obligations were
rendered by the foreign court under applicable law in that
jurisdiction. Thus, the combination of the Act and the
favorable defamation laws outside the U.S. provide an incentive
for certain plaintiffs to practice libel tourism rather than
suing in an American court where there are well-established
constitutional protections for speech. Libel tourism, according
to supporters of this bill, is essentially a form of
"forum-shopping" for parties seeking libel damages.
Recent amendments clarify the court's jurisdiction and ability
to implement the law. The author has recently amended the bill
to clarify the way in which the court shall implement these
modest changes in civil procedure. In order to entertain any
action to enforce or challenge a foreign-country judgment
against a California resident or upon an asset located in
California, a court of this state must have personal
jurisdiction over the parties to the foreign-country judgment.
The author has recently amended the bill to clarify that a
California court not only has jurisdiction to determine
declaratory relief with respect to (1) liability for the
judgment, and (2) determination that the judgment is not
recognizable under CCP Section 1716, but also has personal
jurisdiction over the person or entity who obtained the
foreign-country judgment if certain conditions, as specified,
are met.
These jurisdictional provisions are necessary to enable
California residents to seek protection for themselves and their
assets from foreign-country defamation judgments. In addition,
because the bill extends 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 another state or country may seek
assistance of the California courts in enforcing an otherwise
recognizable foreign-country defamation judgment.
Finally, before a court can use its statutorily authorized
discretion to not recognize a foreign-country judgment, there
must be a determination that the defamation law applied by the
foreign court provided at least as much protection for freedom
of speech and the press as provided by both the U.S. and
California Constitutions. In the previous version of the bill,
SB 320
Page 7
this determination was referred to as if another court had
already made the determination (i.e. "A court of this state is
not required to recognize a foreign country judgment if . . . a
court of this state has determined that . . .") The author's
amendment clarifies that the present court may make this
determination, if it has not been made already, and then the
same court may use that determination to decide whether to
recognize or not recognize the foreign-country judgment, as long
as the court does so in that order.
Advocacy for Libel Tourism legislation arising from the case of
author Rachel Ehrenfeld .
Rachel Ehrenfeld is an Israeli-American writer living in the
United States who was sued in a British court by billionaire
Saudi entrepreneur Khalid Salim bin Mahfouz for contentions
Ehrenfeld made in her book, Funding Evil, that Bin Mahfouz had
financed Islamic terrorist groups. Ehrenfeld's book was not
published in the United Kingdom, but Bin Mahfouz was able to
establish jurisdiction because 23 copies of the book were
purchased there over the Internet. Ehrenfeld decided not to
submit to the court's jurisdiction, and Bin Mahfouz obtained a
$225,000 default judgment against her, as well as an order to
destroy remaining copies of her book.
According to press accounts of the Ehrenfeld case:
In response to the bin Mahfouz judgment, Ehrenfeld
countersued for a declaratory judgment in New York,
asking the federal court to rule that the British
judgment was unenforceable in New York (meaning, among
other things, that her assets could not be seized)
because British libel law contravened her First
Amendment rights. Mahfouz argued that Dr. Ehrenfeld's
case against him should be dismissed because the New
York court did not have jurisdiction over him. In the
end, the New York Court of Appeals agreed with bin
Mahfouz, but suggested that the state legislature
should change the law.
On May 1, 2008, it did. The "Libel Terrorism
Protection Act," or "Rachel's Law" was signed into law
permitting New York courts to exercise jurisdiction
over non-residents like bin Mahfouz. The bill empowers
New York courts to assert jurisdiction over anyone who
obtains a foreign libel judgment against a New York
SB 320
Page 8
publisher or writer and limits enforcement only to
those judgments that satisfy "the freedom of speech
and press protections guaranteed by both the United
States and New York Constitutions." In effect,
"Rachel's Law" (as it is now being called) has given
Ehrenfeld and other writers, journalists, authors,
researchers and the press who have been successfully
sued for libel in foreign courts the right to obtain a
declaration in the U.S. that they are protected under
American law. ("Rachel's Law", Mark Silverberg, New
Media Journal , June 9, 2008;
http://www.newmediajournal.us/staff/silverberg/2008/
06092008.htm)
Since New York enacted "Rachel's Law," Ehrenfeld has been a
leading advocate for enacting legislation in the U.S. to prevent
libel tourism from chilling free speech. This bill is modeled
after the New York law.
ARGUMENTS IN SUPPORT : Rachel Ehrenfeld, in a written statement
to the Senate Judiciary Committee, emphasizes that the chilling
effect on free speech resulting from Libel Tourism is not merely
conceptual, but has real and substantial consequences:
According to a prominent libel lawyer in London, at
least 40 to 50 authors and publishers, including many
Americans he advised, opted to cancel books and
articles for fear of being sued in England [after the
British court's judgment in Ehrenfeld's case.] Libel
tourism forced [writers] to engage in self-censorship
and has led American publishers with assets abroad to
cancel several books under contract or consideration.
Those who once willingly courted my work now refuse to
publish me.
My case demonstrates the chilling effect [on free
speech] is no mere abstraction. I cannot travel to
the U.K., lest I be arrested to enforce Mahfouz's
extant judgment, and I run the same risk in Europe,
due to the European Community's reciprocal enforcement
of member states' judgments.
The American Civil Liberties Union contends that upholding
American and international standards of free speech protection
justifies the proposed exception to the Uniform Foreign Money
SB 320
Page 9
Judgments Recognition Act, writing in support of the bill:
While as a general rule, those within the family of
nations ought to respect each other's court judgments,
in this case our free speech standards are much closer
to international standards than those of Great
Britain. In fact, recently the United Nations Human
Rights Committee recommended that the U.K. revise its
libel laws to bring them into accord with
international standards. SB 320 stands for the
preservation of individual free speech rights in
California and helps uphold standards against
challenges arising out of foreign laws that fall short
of accepted international standards.
ARGUMENTS IN OPPOSITION : Paul Tweed, a media lawyer based in
Great Britain, contends that the bill is unnecessary, writing in
opposition:
[The proposed legislation] is unnecessary given that I
am unaware of any actual instances of the enforcement
of foreign judgments in the U.S. Indeed, I personally
have never once had to seek the assistance of U.S.
courts during the course of the past three decades,
and in any event, I believe that the U.S. courts are
more than capable of taking the appropriate decision
on enforcement without the need for legislative
intervention.
Pending Related Legislation : In response to the passage of
"Rachel's Law" in New York in 2008, the U.S. Congress held
hearings on "libel tourism." Senators Specter and Lieberman
subsequently introduced S. 2977, which would create a federal
cause of action to determine whether defamation exists under
U.S. laws in cases where defamation actions have been brought in
foreign courts against Americans on the basis of publications or
speech in the United States. The bill was referred to the
Senate Committee on Judiciary, where it awaits hearing.
REGISTERED SUPPORT / OPPOSITION :
Support
California Newspaper Publishers Association (sponsor)
American Civil Liberties Union (ACLU)
SB 320
Page 10
California Anti-SLAPP Project (CASP)
Californians Aware
California First Amendment Coalition
American Booksellers Foundation for Free Expression
Dr. Rachel Ehrenfeld
Opposition
Paul Tweed (UK-based media lawyer)
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334