Internet libel threat transcends time, space

Analysis
The Internet’s immediacy and global reach means reputations can be ruined with the click of a mouse. The courts have just begun to grapple with allegations of defamation on the Internet, but it’s clear publishers and writers risk being sued in faraway countries. And each “hit” to access archived material could be considered re-publication of a libel, extending the risk of a lawsuit far into the future. By David Crerar.

By David Crerar

The Internet has been celebrated and condemned for its transcendence of political, geographic and economic restraints. With its spread grows the possibility of the ultimate international tort. In terms of notional breadth of harm, a claim in Internet defamation exceeds the potential global liability of a defective product sold internationally. With the ability of a single posting to besmirch the reputation of a person or corporation in every jurisdiction comes potential liability unlimited in space or time.

Although such prognostications may seem hyperbolic; important recent decisions from English and Australian High Courts indicate this potential. Although these decisions deal with newspapers and journals keeping web archives of back issues; they are of importance to all providers of potentially defamatory content and provide guidance to all website owners.

To ensure the efficiency of the courts by cutting down on stale or frivolous claims, most jurisdictions impose tight limitation periods on actions in defamation. In British Columbia, for example, a plaintiff must sue within two years from the date of publication. In England, the limitation period is even shorter; one year. It is simple enough to calculate when the limitation clock starts ticking where the defamation is published in a discrete single issue of a newspaper or an utterance in a speech. The slanderous moment soon vanishes, or passes into dusty archives that may only be accessed with difficulty.

In Internet publishing; however, the defamatory publication is readily renewed every time a web surfer gains access to the page in question. With some search engines preserving web pages for retrieval even after their owners have pulled their contents, the start and cessation of publication becomes more murky.

In Loutchansky v. The Times Newspapers the English Court of Appeal considered the case of Mr. Loutchansky, a international businessman of joint Russian-Israeli nationality. The defendant The Times linked Mr. Loutchansky to the Russian Mafia. Two articles published in autumn 1999 were later republished on a website that The Times maintained for archival material. The plaintiff sued the newspaper within the limitation period of one year from the date of the publication. The plaintiff then brought a second lawsuit after the one-year period had ended, based on the continuing publication of the article in the website archives. The defendant newspaper argued that the limitation period had expired, and that the second claim be struck.

The English Court of Appeal disagreed. It permitted the lawsuit to proceed on the basis that each time a new reader gained access to the article on the website archives, it constituted a new publication for which the Plaintiff could sue. In reaching this conclusion, the Court relied upon an 1849 decision, Duke of Brunswick v. Harmer. In that case, the journal The Weekly Dispatch published a defamatory article in 1830 about the plaintiff, the Duke of Brunswick. Eleven years after the expiry of the limitation period, an agent of the Duke purchased a back issue that contained the defamatory article. Another copy was obtained from the library of the British Museum. The Court concluded that each fresh acquisition of the newspaper by the Duke’s agent constituted a new publication on which a new lawsuit could be based.

The defendant The Times had urged the Court of Appeal in Loutchansky to adopt the U.S. “single publication” rule, in which the limitation period started running on the date of the first publication of the defamatory article, even if it continued to be sold (or in this case, webcast) for months or years afterwards. The Times also argued that unless a “single publication” rule were adopted, it would chill the maintenance of web archives and hinder the general freedom of expression of web publishers. The Court concluded that there was nothing to prevent a web publisher from maintaining a web archive responsibly. The content provider could remove potentially defamatory publications, or post warnings that the reader should not rely upon the truth of the material.

Although Loutchansky was an English decision, the decisions of the English Court of Appeal have a great influence on Canadian courts, especially in the area of defamation. As in England, Canadian courts treat individual publication of a libel as giving rise to a new and separate cause of action. The English decision in Loutchansky is of further importance to Canadian Internet service providers in view of the decision in the Australian case of Gutnick v. Dow Jones & Co., which is discussed below.

Loutchansky is also important given the lack of Canadian cases on this issue. The brief 2001 Ontario Superior Court decision of Weiss v. Sawyer concerned an allegedly defamatory letter published in Realms, a journal targeted at science fiction enthusiasts. On the defendant’s application for summary judgment, the Court dismissed the action. The Court reached a conclusion opposite to that of the English Court of Appeal, holding that Internet archival material does not amount to a continual publication nor does it alter the date of publication for limitation periods. The Court noted that as most newspapers now have online versions, the statutory limitation periods would become meaningless if web archives were treated as continual publications. However, these comments were only obiter dicta, since it was not clear if the allegedly defamatory letter had been actually published on the defendant’s website. As such, this judgment will have relatively little influence on the law.

The 2000 Nova Scotia Supreme Court decision of Butler v. Southam reached the same conclusion as in Weiss, but as an aside without analysis: “I should add, for completeness, that archival material contained on the Internet does not amount to a continual publication nor does it alter the date of publication for the time limitation periods.” The Plaintiffs sued over allegations of sexual abuse at a boys’ school at which they had worked; the impugned articles were published in a daily newspaper, and then archived on the newspaper’s website. Given the brevity of the statement, and the fact that the decision was later overturned on other grounds, Butler too will have limited influence.

In the facts leading to, the Australian decision of Gutnick v. Dow Jones & Co., the magazine Barrons, which was owned by the defendant Dow Jones, published an article entitled “Unholy Gains”, alleging that the plaintiff was a tax evader and money launderer. The issue of Barrons sold 305,563 copies, of which a very small number of the print copies made it to Australia. A smaller number of them were sold in the Australian State of Victoria, where the plaintiff brought the lawsuit. The article, however, was also put online on the defendant’s subscription website. It was unclear how many of the website subscribers were Australian, but some 1,700 subscribers paid by way of Australian credit cards.

The issue for the Court was whether the case should be heard in Australia or New Jersey, which was the site of the Dow Jones corporate campus, and of its six web servers from which the article was webcast. The defendant stressed that the vast majority of people who saw the article were not located in Victoria; indeed, only about 300 Victorians saw the online article, and 14 Victorians saw the hard copy of the article. The defendant argued that the article was written by Americans for Americans interested in American stock markets, and that the United States was the appropriate place for trial.

Ultimately, the issue turned on the plaintiff’s strategic decision to limit his lawsuit to the monetary damages caused by the limited publication of the article in Victoria to the 314 Victorian readers mentioned above. The Court also noted that Mr. Gutnick was a citizen and resident of Victoria, with his business headquarters and family there.

Given these factors, it may not seem surprising that the Court decided to take jurisdiction and have the case tried in Victoria rather than New Jersey. With the borderless nature of the Internet, all web publishers are at risk of having to defend their website in every country of the globe, no matter how remote from their corporate offices, or the site of the servers hosting the website. A plaintiff in a far off country could tilt the scales in favour of a trial in that country by limiting the scope of the lawsuit to damages within the country, a strategy followed by Mr. Gutnick. Even though any damages awarded to Mr. Gutnick for the exposure of the article to only 314 readers would likely be low, the costs of litigation for the defendant will be high. A web publisher could thus be subjected to the time and expense of a legal action or trial on the other side of the planet. Even if the web publisher were successful in having a claim struck against it, this would be a matter of some expense and complexity. The defendant would have to hire foreign lawyers and cope with foreign laws. The obligations of document production and deposition examinations, not to mention a full trial itself, could be logistically and financially crushing.

Certainly a, web publisher may take precautions, such as by posting warnings about potentially defamatory publications, or establishing gates and firewalls (however ineffectual) limiting access to readers from the domestic country With sites inviting public postings, stated guidelines can bar defamatory material. The defence of qualified privilege may be strengthened by stating that the website contents are only aimed at a discrete community, having special interest in the specific content posted. Registration, individual sign-ins, and possible indemnification agreements and systems could be erected. With respect to especially controversial or contentious material, a web publisher may consider requiring the web viewer to click on a button affirming that he or she is a resident of the local territory. A provider should be alert to complaints and have a system in place to rapidly review and neutralize potentially defamatory postings. Such steps may convince a court that the defendant provider took steps to limit publication, and may affect a judicial decision as to the appropriate jurisdiction for litigation, or as to the quantum of damages. In the end, insurance for litigation or liability is also prudent, although insurers are increasingly cautious about the terms on which they grant protection to Internet service providers.

Like Loutchansky, the Gutnick case will influence future Internet defamation decisions in Canada, another Commonwealth jurisdiction with little case law on the subject.

The widest discussion on the subject of Internet defamation in a Canadian case is found in the 1999 British Columbia Court of Appeal decision in Braintech v. Kostiuk. The decision did not arise in the same legal context as Gutnick; instead, the British Columbia Court refused to recognize the default judgment of a Texas court in an action for defamation, because there was no “real and substantial connection” between the defamatory Internet postings and Texas. The mere fact that a Texan Internet user in theory could read the allegedly defamatory bulletin board posting was not a sufficiently strong link to that territory to give its courts the right to decide the action. In reaching its practical conclusion, the Court of Appeal noted that:

The Court held that more was needed, such as intent to publish within a certain region, or to target the plaintiff, to prove publication in a specific jurisdiction through the Internet.

This decision will provide some solace for Internet content providers and service providers outside British Columbia, that they will not be brought before a British Columbia court unless there is a in more significant connection between the local territory and some or all of the plaintiff, the defendant, the place of publication, or the targeted readership. The fact that the courts of Texas, well known for their willingness to wrap their legal “long-arm” around defendants from other territories, would permit the suit in the first place, illustrates the risks faced by Internet service providers.

There are only two brief 1998 Canadian trial court decisions which dealt with fact situations similar to those in Gutnick. In Kitakufe v. Oloya (Ontario) and Investors Group inc. v. Hudson (Quebec), the defendants claimed that the local courts had no power to try the cases because the Internet servers hosting the allegedly defamatory articles were located outside Canada. In brief decisions, the Courts concluded that the location of the servers was not in itself a determinative factor. In the end, both cases turned on the relative convenience to the parties of the provinces in which the courts were located – as shown by the fact that the defendants both resided in the respective provinces. Nonetheless, these cases also illustrate the principle expressed in Gutnick that in the Internet age, liability is potentially international for distant servers.

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David Crerar, a lawyer the Vancouver office of Borden Ladner Gervais LLP and an adjunct professor at the University of British Columbia Faculty of Law, has a special interest in defamation and media law. This article was co-written with David Wotherspoon of the law firm Fasken Martineau DuMoulin LLP.

Information and Technology Law in May 2002. Republished with permission.

Links to rulings featured in this article:

Loutchansky v. The Times Newspapers
Ganick v. Dow Jones & Co.
Braintech v. Kostiuk

Dean Jobb