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In a precedent-setting case, the highest court in Australia ruled Tuesday that publishers can be sued for defamation in whatever country an individual’s reputation allegedly has been harmed. The case addresses the thorny question of which courts and countries have jurisdiction over disputes in cyberspace. While other courts have taken up the matter of Internet jurisdiction — most notably French and U.S. courts in the dispute over Yahoo Inc.’s online auctioning of Nazi memorabilia — the High Court of Australia is thus far the highest court to issue a ruling. The case arose when Australian businessman Joseph Gutnick sued Dow Jones & Co. Inc. for statements made about him in an article published in Barron’s Online. Gutnick, who lives in Victoria, Australia, filed suit in the Supreme Court of Victoria. Dow Jones subsequently argued that the court had no jurisdiction since the article in question was published on Dow Jones servers located in the United States. The High Court of Australia — which is equivalent to the U.S. Supreme Court — concurred with lower court rulings and denied Dow’s request to dismiss the case. The court found that since the damage to Gutnick’s reputation occurred in Victoria where Dow Jones’ article was downloaded and read, it was appropriate for Gutnick to seek tort damages there. The court dismissed concerns — raised by Dow Jones and several other U.S. publishers who intervened in the case — that a ruling in Gutnick’s favor would allow publishers to be sued anywhere in the world. “The spectre which Dow Jones sought to conjure up in the present appeal, of a publisher forced to consider every article it publishes on the World Wide Web against the defamation laws of every country from Afghanistan to Zimbabwe, is seen to be unreal when it is recalled that in all except the most unusual of cases, identifying the person about whom material is to be published will readily identify the defamation law to which that person must resort,” the court wrote. But many attorneys expressed concern about the breadth of the decision. “The really disturbing aspect of the decision is that if upheld and widely followed, it could render the Internet useless as a form of mass communication,” said David Schulz, a partner in the New York office of Clifford Chance. “Publishers will inevitably tend toward censorship, and people will be unwilling to use the Internet because of civil and criminal liability.” Schulz said the ruling also dismissed the technological differences between the Internet and other forms of mass communication, such as broadcasting, where one can target an audience. First Amendment lawyer Guylyn Cummins, a partner at Gray Cary Ware & Freidenrich’s San Diego office, said one of the first cases to address the issue was the Yahoo suit in France. A French court ordered Yahoo to block French citizens’ access to online auctions of Nazi memorabilia. Rather than appealing to the highest court in France, Yahoo went to a U.S. district court, which found that since the speech on Yahoo’s servers was lawful in the United States, it would not recognize the French court’s decision. Two French civil rights groups appealed the decision to the 9th U.S. Circuit Court of Appeals, which heard arguments in the case last week. But Ian Ballon, a partner in the Palo Alto, Calif., office of Manatt, Phelps & Phillips, cautioned about reading too much into the Australian ruling. The decision “underscores that in speech-based cases there are significant differences between U.S. and foreign laws and that there is a real incentive for plaintiffs to find a more hospitable forum,” Ballon said. “It would be a mistake to extrapolate from this case to suggest that courts are increasingly applying extra-territorial jurisdiction in Internet cases.” Dow Jones said it would now proceed to defend Gutnick’s defamation suit in Australia. While the company expressed disappointment in the court’s decision, it said it was encouraged by a number of the judges’ comments in the ruling. One judge, for example, cited the need “for national legislative attention” and international discussion of the issue. Several U.S. publishers intervened in Dow Jones & Co. Inc. v. Gutnick, 2002 HCA 56, including Yahoo Inc., Amazon.com, The New York Times, The Washington Post Co. and Cable News Network LP.

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