International Jurisdiction-Libel

By Edgar Palomino

Edgar Palomino is a senior at the University of Pennsylvania studying political science.
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In 2002, wealthy Australian businessman Joseph Gutnick sued Dow Jones and Company Inc. for publications in its affiliated Barron’s magazine. He charged that the article about him published in Barron was defamatory and sued for damages. Gutnick’s lawyers advised him to file the suit in Australia, where it was perceived that individual protections were stronger and the courts more favorable. Dow Jones, an American company, argued that Australian law could not apply to it. However, the court reasoned that Australian law did apply to Dow Jones and Gutnick won his suit. [1]

The rationale of the courts was as follows: in order for a plaintiff to claim damages, the allegedly defamatory material must be targeted to their forum state. Mere dissemination across the globe is not sufficient grounds for a suit; the material in question must have been targeted to the forum state of the plaintiff. The forum state is identifiable if the plaintiff has “significant contacts” there; for example, their home, their business, etc.  Since the Barron journal had a high number of Australian readers, and since Dow Jones did target Australia, the alleged damages to Gutnick’s reputation and business were deemed valid. Australian law could thus be applied.  

This case highlights a trend seen inside the domestic U.S. as well. For a variety of cases, “significant contacts” in one area serves as a grounding agent, allowing suits even if the principle residence of an entity or individual is elsewhere. For example, a 2013 case (Overstock v. NY) saw a vendor liable inside a state where it had no physical offices, due to the argument that its Associate program effectively made those enrolled and acting on its behalf employees, which counted as “significant contacts” in the state.  [2]

This principle of “significant contacts” is very important to bear in mind as the world continues to become ever more interconnected. The principle is applied to individuals as well as corporate entities. It is frequently one of the key factors influencing decisions on jurisdiction.  In a world where the Internet is challenging millennia-old thinking about borders, making them more fluid, “significant contacts” may come to serve as a solid anchor.
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[1]. Grimmelman, James. 2016. “Internet Law: Cases and Materials” 6th Ed. Lake Oswego: Semaphore Press. Pg. 68
[2]. Ibid, pg. 80
Photo Credit: Flickr User  James Robinson

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