Case of the Day: InvestorsHub.com v. Mina Mar Group
Posted on July 15, 2011
Mina Mar Group, the Canadian firm featured on March 22, is back in the Letters Blogatory news today. The last time we discussed Mina Mar, it was in the context of Belmont Partners, LLC v. Mina Mar Group, Inc., a case where Mina Mar tried, both in Canada and in the US, to escape from an unfavorable arbitral award. In today’s case of the day, InvestorsHub.com, Inc. v. Mina Mar Group, Inc. (N.D. Fla. 2011), Mina Mar again finds itself on the losing side. According to the complaint, InvestorsHub.com ran a website on which investors could post comments on “investment-related topics.” Apparently, one of the “investment-related topics” was Mina Mar, and the investors’ comments were less than flattering. Mina Mar sued InvestorsHub.com and some of its employees for defamation in Ontario. The Ontario Superior Court entered a default judgment against them, awarding $75,000 in compensatory damages and $10,000 in punitive damages. The judgment, curiously, also contained a declaration that “all of the negative, defamatory and libellous postings made by Posters and members on the InvestorsHub.com web site are untrue and were made without any foundation nor basis for any of their content.” It ordered InvestorsHub and its employees to “apologize and publicly retract the libellous statements” and to provide the names and addresses of the posters who actually wrote the supposedly defamatory posts, and it enjoined InvestorsHub.com and its employees from “making or allowing to be made by any party or Poster, any statements or broadcast, whether orally or in writing and whether libellous, defamatory or not, in any newspaper, broadcast or electronic publication or on the web site(s), InvestorsHub.com, about the Plaintiffs” (emphasis mine). That’s quite a judgment!
Armed with this somewhat draconian judgment, Mina Mar came to Florida, filed the judgment in the Leon County clerk’s office, and apparently sought to enforce the judgment. But Mina Mar’s lawyers didn’t reckon with the SPEECH Act.
In an earlier post, we reviewed the main provisions of the Act, notably the provision allowing U.S. residents and businesses to bring declaratory judgment actions to obtain a declaration that foreign defamation judgments are not entitled to recognition or enforcement in the United States. And in fact foreign defamation judgments are not entitled to recognition and enforcement if the foreign country’s protections for freedom of speech are less vigorous than the First Amendment’s protections, or, in the case of a web site operator, the judgment is inconsistent with the limitations on liability in § 230 of the Communications Decency Act, which, summarized very colloquially, provides that web site operators that post comments written by others are not liable for defamation on account of what others have posted on their sites.
In light of the Act, Mina Mar surrendered, agreeing to entry of a judgment that contained the following terms:
14. The Mina Mar Parties now acknowledge that the Foreign Defamation Judgment is not enforceable in the United States and are agreeable to the entry of a final judgment in favor of the InvestorsHub Parties on both Counts of the Complaint.
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19. The parties acknowledge, and the Court finds, that Canadian law does not provide as much protection of speech as the First Amendment, federal law, and Florida law. For example, the First Amendment requires that a defamation plaintiff who is either a public official or public figure must prove that the defendant made the defamatory statement with actual malice, meaning that the defendant either knew the statement was false or acted with reckless disregard to the statement’s truth or falsity. See New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 111 L. Ed. 2d 686 (1964); Curtis Publ’g Co. v. Butts, 388 U.S. 130, 87 S. Ct. 1975, 18 L. Ed. 2d 1094 (1967). The Canadian Supreme Court has specifically refused to adopt the Sullivan actual malice standards for Canadian defamation actions. See Hill v. Church of Scientology,  2 S.C.R. 1130 (Can.) (stating that Court will not adopt Sullivan standard in Canada). See also Grant v. Torstar Corp.,  3 S.C.R. 640 (Can.) (modifying Canadian defamation law while still rejecting First Amendment standards); Rodney A. Smolla, Law of Defamation § 1:9.75, at 1-17 – 1-29 (describing differences between United States law and “the more plaintiff-friendly” Canadian defamation law).
20. Nor does Canadian law provide the protections for freedom of on-line speech provided by the Communications Decency Act, 47 U.S.C. § 230.
I think this case is a good illustration of why the SPEECH Act makes sense. Maybe the posts on the website were libelous and maybe not. But a judgment that requires defendants to retract a statement, make an apology, and refrain from publishing even true statements on a topic is so far beyond the pale of US public policy that it can’t come as a surprise that the US courts would refuse to enforce it.
H/T to the Trial Warrior Blog, which points out that Mina Mar has not given up. Apparently, Mina Mar is seeking to hold the US defendants in contempt in Ontario. My prediction: the defendants refuse to appear, and whatever ruling Mina Mar obtains in Ontario will continue to be completely unenforceable in the US. The individual defendants may want to be careful about travel to Canada, though! Mina Mar’s lawyer’s letter on the contempt issue says that the company has spent “hundreds of thousands of dollars” in legal fees on the case. I wonder whether this was money well spent, given US law in this area.