Defeating “Libel Tourism” under Mississippi law and the SPEECH Act

by Butler Snow LLP
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In Trout Point Lodge, Ltd. v. Handshoe, 729 F.3d 481 (5th Cir. 2013), the Fifth Circuit became the first appellate court in the country to interpret the Securing the Protection of Our Enduring and Established Constitutional Heritage Act, Pub. L. No. 111-223, § 2, 124 Stat. 2380; 28 U.S.C. § 4101 (the “SPEECH Act”).  Congress enacted the SPEECH Act to redress “libel tourism” where defamation or privacy plaintiff obtains a judgment against a defendant in a country that is hostile to the freedoms of expression found in the First Amendment.  The SPEECH Act explicitly bars U.S. state and federal courts from recognizing and enforcing foreign judgments unless the foreign nation’s laws satisfies First Amendment and due process considerations afforded by the United States Constitution. The Act is designed to ensure that individuals and members of the media and entertainment industry be able to enjoy the same free speech and press rights abroad that they have in the U.S. Adopted to aid defamation defendants located in the United States from having to defend such suits brought by public officials or public figures in totalitarian countries, the first decision interpreting the act involved a judgment obtained in Canada against a public affairs blogger in Mississippi.

Mr. Doug Handshoe had published entries on Slabb.org alleging a link between the former President of Jefferson Parish, LA, who was indicted and plead guilty to bribery and theft, and two Canadian citizens, who owned a hotel in Nova Scotia, Canada. The blog included, among other allegedly offensive comments, that the two owners of Trout Point Lodge “had Champagne taste on a beer budget,” and “worked as a unit to grift their way through life.”  The Canadian plaintiffs filed suit for defamation in Nova Scotia, alleging that Handshoe’s blog injured their reputation, and they sought general and punitive damages.

The plaintiffs obtained a default judgment of approximately $427,000. Trout Point sought to enforce the judgment in Mississippi, and Handshoe argued that it was unenforceable under the SPEECH ACT as applied to Mississippi defamation law.  Chief Judge Guirola of the U.S. District Court of the Southern District of Mississippi ruled in favor of Handshoe, and Trout Point appealed.

The Fifth Circuit held that the judgment was unenforceable under the First Amendment and Mississippi law. The Court noted that “the SPEECH ACT provides that a domestic court ‘shall not recognize or enforce a foreign judgment for defamation,’ unless it satisfies both First Amendment and due process considerations.”  The Court continued:

A party may enforce a foreign defamation judgment in a domestic court if either (A) the law of the foreign forum . . . provides free-speech protection that is coextensive with relevant domestic law, or (B) the facts . . . are sufficient to establish a defamation claim under domestic law.

The Fifth Circuit interpreted the SPEECH Act as being designed to prohibit plaintiffs from filing defamation suits in those foreign jurisdictions “that do not provide the full extent of free-speech protections to authors and publishers that are available in the United States. . . .’”  The Court noted that even though the comments in the blog were offensive, this alone could not sustain an action for defamation because Mississippi law requires plaintiffs to prove the statements are also false.

Trout Point provides future U.S. defendants, sued in other countries, the assurance that the SPPECH Act has not only been upheld but enforced to set aside a foreign judgment for defamation. As a result, the SPEECH Act and Trout Point are a substantial deterrent to libel tourism.

Co-authored by Anastasia Lampton, who will be a 3L at the University of Mississippi Law School in the Fall of 2014.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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