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Dow Jones V Gutnick

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  • Pages: 10
  • Word count: 2435
  • Category: Company

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The case of Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575, [2002] HCA 56 raised the legal principle of defamation and its application when committed over the internet. In this instance, an article published on 30 October 2000 in a weekly financial magazine, a magazine which in turn was published by Dow Jones & Company Inc (‘Dow Jones’). The article, entitled ‘Unholy Gains’ alleged that Joseph Gutnick (‘Gutnick’) was connected to a jailed money launderer and tax evader and was involved in these activities himself. The article was accompanied by a large photograph of Gutnick. The edition of the magazine sold 305,363 copies and 550,000 subscribers accessed the article online, with 1,700 of the online subscribers using an Australian credit card to pay for the article. Gutnick brought an action against Dow Jones claiming that the article was defamatory. The initial claim was made in Victoria, as this is where the majority of Gutnick’s social and business life was and where the consequences of the alleged defamatory material would be most felt. Dow Jones refuted this claim and sought to have the case heard in the United States.

As Freedom of Speech is a fundamental right of all United States citizens, Dow Jones were eager to take advantage of this fundamental right and evade the right of protection of reputation the Australia Courts are so eager to uphold. The case was held, initially, in the Supreme Court of Victoria. At the commencement of the trial, Dow Jones sought to have the proceedings stayed or permanently set aside due to an apparent breach of order 701(i), being that service of the claim was not appropriate as the defamation was not committed in Australia and, based on order 701(j), there was no evidence of damage suffered within the jurisdiction, which Dow Jones believed should be where the article was published, arising from publication of the article in New Jersey.

Dow Jones argued that the case should, in fact, be heard in New Jersey as this was where the server was located to which the article had been uploaded and, as such, was the articles place of publication. Dow Jones’ application for an order that service be stayed or permanently set aside was dismissed as the trial judge, Hedigan J, stated that the tort occurred when contents of the publication were comprehended by the reader, which in this case occurred in Victoria, and not where the article was published, being in New Jersey. Following this, Dow Jones appealed the decision of Hedigan J, to the Court of Appeal of Victoria, who upheld the decision of the lower court. Dow Jones was then granted special leave to take the appeal to the High Court of Australia.

An International Comparison
In handing down their decision, Glesson CJ, McHugh, Gummow and Hayne JJ considered three issues namely, (1) where had the material the Gutnick complained about been published, (2) whether the material had been published in Victoria and (3) whether Victoria was the appropriate jurisdiction for the case to be heard. From these questions, it is apparent the issue of jurisdiction was an important legal question that needed to be resolved. In addition, Hedigan J, in the initial hearing, gave wider consideration to the issue of internet jurisdiction and its application to defamation.

He considered three (3) other cases on jurisdiction, some of which are considered below. These international cases, together with the Court’s approach in the Dow Jones Case is that if a plaintiff can show that the material, which is subject to the defamation claim, was read by at least one person in the relevant jurisdiction, a claim for defamation in that jurisdiction is almost automatic. Lee Teck Chee v Merrill Lynch International Bank Ltd [1998] 4 C.L.J. 188 (Malayan High Court) This case involved the publication of an article in an online newspaper based in Singapore. The focus of this determination was based on actual access to the publication and this assisted the court in determining whether they had jurisdiction or not. The Court held that a publication made on a newspaper website in Singapore could only be considered to have been published all around Malaysia if there was evidence that an independent party within Malaysia had accessed the publication and read it and as such the court exercised jurisdiction.

Kitakufe v Oloya Ltd (1998) 67 O.T.C. 315 (Ontario Court of Justice) This case involved a newspaper article published both in hard copy in Uganda and online. Both plaintiff and defendant were of African-Canadian descent . The Court held that the place where the defamation occurred, and therefore the subsequent jurisdiction where any claim could be heard, concerning online publications is, in fact, the jurisdiction where the publication is accessible and available to be read by any third party users. It was for this very reason the Court held that the Ontario Court was the appropriate jurisdiction for the case to be heard as this was where the most damage was suffered by the plaintiff. This position was reaffirmed in the Italian case of Investors Group Inc v Hudson [1999] Recueil en Responsabilite et Assirance 185. Calder v Jones (1984) 465 US 783

This case involved a famous entertainer who made a claim for defamation against the National Enquirer for an article published in Florida and circulated nationally. At the time the article was published the plaintiff resided and worked in California. The court determined that ‘jurisdiction may be exercised over a foreign defendant who directs his or her defamatory message at the forum and the plaintiff suffers harm there’ This pre-internet case has become the foundation for the US Courts consideration of jurisdiction. Further consideration to the US approach to jurisdiction will be discussed below.

A matter of forum.
The case of Dow Jones raises two issues namely, publication of material on the internet and jurisdiction. In Dow Jones, the two are interconnected as the determination of the place of publication led to an assessment of the appropriate jurisdiction in which the case should be heard. The impact the Dow Jones Case has on online publications is great. Whilst it is apparent that the point made by Dow Jones that in order for a publisher to have certainty, the ‘single publication’ rule should be adopted so that a commercial complaint can only be brought once in the jurisdiction that is the place of upload of a publication as ‘a defamatory statement is made available on a website, jurisdiction may lie in all the countries where access to that website can be obtained’. Iin considering the above, one must also take into account the alternate view in that the global growth of the internet should not be used as a shield for online publishers to avoid the basic principle that an individual has the right to maintain their reputation in their home jurisdiction. The fact that the internet is global does not and should not mean that publishers can hide behind this globalisation as a way of avoiding action for defamatory publications.

This will require particular consideration for countries such as the US, with its liberal application of free speech, in respect of defamation cases and whether they will enforce judgements of international jurisdictions. A claim of defamation is contrast in that it seeks to protect the reputation of individuals and organisations however this would appear to oppress the right to freedom of speech. As noted above freedom of speech is a fundamental right embodied in the US through its Constitution. As such, the US is less stringent on verbal defamation that most other jurisdictions. Whilst it is beneficial to have clear and concise rules in Australia about when and where a defamation case involving a publication is heard in Australia which damages an Australian reputation, where those publications are made outside of Australia, if a judgement cannot be enforced in jurisdictions such as the US, the Australian rules will do little to promote justice in the eyes of plaintiff Australians who suffer such international defamatory acts.

A further complication to the way the US considered matters of jurisdiction is the Due Process Clause of the 14th Amendment in the Constitution. As is the case in Australia, the starting point for the US in determining matters of jurisdictions starts with a party’s presence in the forum. The US Courts then determine whether the cause of action asserts general jurisdiction, where a party lives in the relevant jurisdiction or carries out a large number of activities there, or specific jurisdiction where there must be a high amount of contact between relevant forum and a defendant who does not reside in the jurisdiction. Other decisions in the US have reflected a different approach to jurisdiction in determining that ‘a plaintiff would need to prove than an out of state defendant’s internet activity was expressly targeted at, or directed to, the forum state in order to establish jurisdiction in the courts of that state’.

The case of Stanley K. Young v New Haven Advocate (2002) 315 F.3d 256 supported this single publication approach which focuses on the place of upload of a publication in determining jurisdiction by determining that the online newspaper had intended to direct the publication at a specific audience (in this case Connecticut) being the same place as the place of upload of the article, even though the article was available in other jurisdictions given its online nature. When considering matters of jurisdiction and forum and whether the traditional rules of jurisdiction can be applied to online defamation, the Australian test of forum non conveniens, where a court is persuaded that another forum or jurisdiction is better placed to hear a matter, is in contrast to the US Courts who look at the potential unfairness against a party having to defend a case in a foreign jurisdiction. In order to satisfy the forum non conveniens test one must satisfy themselves whether the jurisdiction that is under attack is ‘a clearly inappropriate forum’. In Dow Jones, Dow Jones themselves argued that defending a claim of defamation in Australia would be burdensome due to the fact that calling witnesses, producing documents and accessing material would be that much more difficult.

In support of this, Dow Jones suggested that Gutnick would not be faced with these difficulties as the evidence would be readily available in the US. Ultimately, the forum non conveniens test was rejected by Hedigan J who stated ‘the weakness in the arguments [of Dow Jones] is that the aspect sued on by Mr Gutnick is indelibly Victorian, connected with no other place and that nay documentation or evidence concerning the matter will all be found in Victoria’. A number of US cases regarding jurisdiction have been determined based on the defendant’s operation of a website that was deemed accessible in the relevant forum and which caused harm to the plaintiff in such forum. This US approach is consistent with the Australia approach which revolves around the place of access of an online publication. Alternatively, some US Courts have rejected the above view on jurisdiction in favour of an approach where more evidence is required that a defendant who publishes material online must have published it with the intention to target people who reside in a specific forum for the material posted online to be defamatory.

The ruling given by Hedigan J has set a precedent for online publications. Any online publisher must now be aware that they might not only be subject to the defamation laws of the jurisdiction where the physical computer on which the publication was uploaded but also to the laws of other countries where the publication can be accessed. It is apparent from review of the various cases that the place of publication is at the very heart of determining a course of action for defamation. Therefore, publication in the jurisdiction of the court is in fact irrelevant. By the very meaning of defamation on the internet, material can only be considered published at the place where it is read, heard or seen as opposed to the place from where the material originates. To expand this definition, a separate publication and new cause of action occurs each time the material is read, heard or seen which furnished the basis for jurisdiction to all places in the world because of modern day publication to a global audience through the internet.

It is apparent that with the growth of the internet comes growth of internet publications and with such growth disputes regarding jurisdiction for online defamation will become more common place. It is for this very reason that it is imperative that jurisdictions form a concrete basis in how to determine matters of jurisdiction. It appears that whilst Dow Jones has helped Australia develop a common practice in determining jurisdiction based on the place of harm cause and not the place of publication, the constitutional right of free speech in the US is constantly battling the right to protect ones reputation. As much of the population of the US believes freedom of speech to be the most fundamental of all constitutional rights this view does not adequately represent the beliefs of an ever increasing multicultural internet user base.

Alternatively, some may argue that as the laws governing defamation in Australia differ from state to state this lack of uniformity has also spread internationally. Given that the US appears to have the least stringent laws on jurisdiction given their application of freedom of speech it is my view that Australia has one of most appropriate and effective tests for determining jurisdiction and one that will stand the test of time as the use of the internet grows, specifically in terms of online publications. In turn Australia is now favouring towards exercising jurisdiction in internet based cases. The case of Dow Jones has set a precedent nationwide on how to apply jurisdiction when dealing with online publications. Therefore, while the notion of free speech has not disappeared forever, the power of the internet and a simple google search from anywhere in the world should make anyone think twice about posting what may be considered a harmless article from the other side of the world. If there is one piece of advice a reader can take from this it would be to be wary. The internet can be a dangerous forum when used inappropriately. Once something is published it is stored in the world wide web for life as on the internet, ‘a defamatory statement can be instantaneously available throughout the world’.

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