Saudi billionaire can pursue British default judgment in US court

The United States Court of Appeals for the Second Circuit ruled on Monday that Saudi billionaire Khalid Salim A. Bin Mahfouz can try to enforce a British default judgment against author and terrorism expert Rachel Ehrenfeld in a United States court in New York. British libel law allows much fewer defenses than American libel law.

The Saudi businessman, Khalid Salim A. Bin Mahfouz, has made claims against authors and journalists more than two dozen times over writings on terrorism and those who fund it, including Manhattan author Rachel Ehrenfeld's 2003 book, "Funding Evil: How Terrorism is Financed - and How to Stop It."

Ehrenfeld wrote that Bin Mahfouz and his family provided financial support to al-Qaida and other "Islamist terror groups."

The 2nd US Circuit Court of Appeals on Monday rejected Ehrenfeld's lawsuit to stop the Bin Mahfouz from trying to collect on a default judgment obtained against Ehrenfeld in London.

Eleanor Duckwall has more about this case:

A 2005 ruling by London's High Court of Justice ordered Ehrenfeld to pay Bin Mahfouz $225,000, declare her writings about him to be false, destroy existing copies of the book and apologize.

 

Ehrenfeld had then asked a Manhattan court to declare that the London judgment was unenforceable in the United States. A lower court previously said the matter was out of its jurisdiction.

 

Bin Mahfouz has not tried to collect on the London judgment in the United States.

 

New York state has a so-called "long-arm" law, which establishes jurisdiction for almost anyone who does business in New York. But New York's Court of Appeals previously found that it does not apply to Bin Mahfouz's case.

 

The 2nd Circuit also said Monday that Ehrenfeld had failed to asked the lower court to decide whether the First Amendment entitled her to a ruling in her favor and thus could not argue for such a ruling from the appeals court.

 

Two state lawmakers are trying to pass legislation that would protect authors and journalists who write about terrorism from limitations imposed as a result of foreign libel lawsuits. The court refused to delay its decision until that legislative effort is concluded.

 

Here's what the proposed legislation would do:

The proposed legislation would amend New York's code of civil practice to prohibit enforcement of a foreign libel judgment unless a New York court determines that it satisfies the free speech and press protections guaranteed by the U.S. and the New York State constitutions. The legislation would also amend New York's “long-arm” statute to allow courts, under certain circumstances, to exercise personal jurisdiction over nonresidents who win foreign libel judgments against New York residents in order to grant resident writers declaratory relief in those cases.

But here's the most amazing part about this case:

Bin Mahfouz sued Ehrenfeld [in Great Britain. CiJ] even though the book was never published in Great Britain and neither he nor Ehrenfeld resides there.

Ehrenfeld is safe as long as she stays in the US:

Ehrenfeld will not be subject to the U.K. ruling as long as she stays in the U.S. “Why doesn't [bin Mahfouz] sue me here? Because he doesn't have a chance here,” she said. She will not travel to England because the judge there issued a ruling of contempt of court against her. But Ehrenfeld hopes the bill “will encourage others to write about the people who are funding terrorism without any fear of persecution in foreign lands.”

Yes, but in the meantime, the British ruling and this whole story have a chilling effect on freedom of speech.

The rest of Eleanor Duckwall's post is well-worth reading.

More on this case here. More on another book that has been the subject of a similar ruling here.

Cross-posted to Israel Matzav.