Gilles Cuniberti has posted the abstract of Lili Levi’s new paper on The Problem of Trans-national Libel at Conflict of Laws.net, as has Antonin I. Pribetic at the Trial Warrior Blog. The paper discusses the SPEECH Act, 28 U.S.C. §§ 4101-4105, which was enacted last year. Because the SPEECH Act provides a rule of non-recognition of foreign judgments in defamation cases, I thought it would be worthwhile to explain what the Act is and what it does, and to raise some questions about it.

To what foreign judgments does the Act apply? It applies to (1) a “final judgment rendered by a foreign court” for (2) “defamation”. A “foreign court” means “a court, administrative body, or other tribunal of a foreign country.” The definition of “foreign court” does not expressly include arbitral tribunals. “Defamation” means

any action or other proceeding for defamation, libel, slander, or similar claim [sic] alleging that forms of speech are false, have caused damage to reputation or emotional distress, have presented any person in a false light, or have resulted in criticism, dishonor, or condemnation of any person.

In what American courts does the Act apply? It applies in “a Federal court or a court of any State” (including the District of Columbia and U.S. territories and possessions). Indeed, when an action within the scope of the Act is brought in a state court, the action may be removed if there is minimal diversity of citizenship, without regard to the amount in controversy and even if not all defendants agree to the removal. In other words, removal jurisdiction in such cases extends apparently to the limits of Article III. (By way of contrast, the general grant of diversity jurisdiction does not extend to the limits of Article III–it requires at least $75,000 in controversy, complete diversity of citizenship, and, in removal cases, unanimity among the defendants on whether to remove the case).

What judgments will not be recognized or enforced? The Act forbids U.S. courts to recognize or enforce a foreign judgment for defamation unless the party seeking recognition and enforcement shows either: (1) that the defamation law applied in the foreign court provided at least as much protection for freedom of speech and of the press as would the First Amendment and the constitution and laws of the state where the U.S. court is located; or (2) that the party opposing recognition or enforcement of the foreign judgment would have been found liable for defamation by a U.S. court applying the First Amendment and the constitution and laws of the state where the U.S. court is located.

The Act also forbids U.S. courts to recognize or enforce a “foreign judgment for defamation” unless the party seeking recognition and enforcement proves that the foreign court’s exercise of personal jurisdiction over the defendant comported with the due process requirements that are imposed on U.S. courts by the U.S. constitution.

Last, the Act forbids U.S. courts to recognize or enforce judgments against “a provider of an interactive computer service” unless the judgment would be consistent with § 230 of the Communications Decency Act if the case had been a domestic case rather than an international case. The burden, again, is on the party seeking recognition and enforcement.

If the party resisting recognition and enforcement prevails, then absent exceptional circumstances, the court is required to award attorney’s fees.

Declaratory Judgment. If the defendant in the foreign case is a “United States person” (the term includes citizens, lawful permanent residents, aliens lawfully residing in the United States “at the time that the speech that is the subject of the foreign defamation action was researched prepared, or disseminated”, and U.S. business entities), and if a judgment has been entered against the defendant in a foreign case “on the basis of the content of any writing, utterance, or other speech by that person that has been published”, the defendant may bring an action for a declaration “that the judgment is repugnant to the Constitution or laws of the United States.” To win, the defendant in the foreign case must show that the foreign judgment would not be entitled to enforcement under one of the three tests outlined above. The U.S. Person seeking the declaratory judgment has the burden of proof. Despite the Act’s concern for principles of due process, the statute authorizes nationwide service of process in such declaratory judgment cases (ordinarily, service of process is limited by the reach of the law of the state in which the District Court sits).

Anti-Waiver. The statute provides that an appearance in the foreign case “shall not deprive the party of the right to oppose the recognition or enforcement of the judgment under [the Act], or represent a waiver of any jurisdictional claims.”

Some Questions. I am not so worried about the problem of “legal imperialism” or the extra-territorial assertion of the First Amendment, which, according to Levi, is one of the main concerns of the Act’s detractors. Existing law already permits U.S. courts to refuse recognition and enforcement of foreign judgments that are contrary to U.S. public policy, and it seems to me that we have a strong public policy in favor of freedom of speech and of the press. But I do think there are problems with the Act.

In my mind, the biggest question about the statute is whether it is consistent with ordinary principles of federalism. By way of background, traditionally state law, not federal law, has governed the standards to be applied in determining whether to recognize or enforce a foreign judgment. This is most explicit in Johnston v. Compagnie Generale Transatlantique, 152 N.E. 121 (N.Y. 1926). No doubt this approach, which is highly sensible in the American context given the Erie doctrine, is mystifying to foreign lawyers. As Linda J. Silberman & Andreas F. Lowenfeld write, “it is virtually impossible to explain to French or Dutch or Japanese lawyers that a judgment originating in their country may be enforceable in New York but not in New Jersey.” See Robert L. McFarland, Federalism, Finality & Foreign Judgments: Examining the ALI Judgments Project’s Proposed Federal Foreign Judgments Statute, 45 New Eng. L. Rev. 63, 67 n.25 (2010) (quoting Linda J. Silberman & Andreas F. Lowenfeld, A Different Challenge for the ALI: Herein of Foreign Country Judgments, an International Treaty, and an American Statute, 75 Ind. L. J. 635, 636 (2000)). But it does not seem to me that foreign lawyers’ difficulties with our federalism is a particularly compelling reason to federalize what has traditionally been an area governed by state law, particularly because the states (New York, Illinois, Florida, and California are examples) have begun to enact similar non-recognition laws on their own. The SPEECH Act applies only to defamation cases. Looking at the problem of recognition and enforcement of foreign judgments more globally, perhaps the solution most consistent with the current approach to federalism in this area would be for the ALI to recommend an amendment to the Uniform Foreign Country Money Judgments Recognition Act rather than to recommend a new federal statute.

The second big question, in my mind, is whether the federal courts will find that actions for declaratory judgments under the statute are ripe. The Act seems to suggest that any time a judgment in a defamation case is entered against a U.S. Person, a declaratory judgment action will lie. But both under the Declaratory Judgment Act and under Article III, there is a requirement of an actual case or controversy. It seems to me that a threat to seek recognition or enforcement of the action in a U.S. court is probably necessary in order to make the dispute sufficiently concrete; I don’t think we can simply assume that any prevailing plaintiff in a foreign defamation case will seek recognition and enforcement of the judgment in the U.S.

The third big question: Is the statute a good idea? There seem to be two questions. First, as an empirical matter, have there been many attempts to obtain recognition and enforcement of libel judgments here, and if so, how have they come out? Second, what are the risks for enforcement of U.S. judgments abroad? On the empirical question, the Congressional Research Service reports that “state courts have generally declined to enforce foreign libel judgments.” So it is not clear that there is a problem that needs solving (except perhaps to the extent that the attorney’s fees provision of the SPEECH Act address the chilling effect of foreign libel suits in a useful way). On the question of risks, I wonder whether the SPEECH Act will embolden other countries to refuse recognition and enforcement of U.S. judgments in areas where our law is unusual, such as punitive damage awards in tort cases. The rationale of the statute is particularly questionable in light of the UK Ministry of Justice’s proposed Defamation Bill, which, if it becomes law, would reduce the problem of libel tourism without the need for U.S. action.