A British Court's Libel Judgment Is Reviewed by American Judges

A federal appellate court heard arguments yesterday in the case of a New York-based counterterrorism researcher who was ordered by a British court to pay and apologize to a Saudi billionaire she accused of funding terrorism.

One judge on the three-judge panel yesterday expressed reservations about the British court order. Still the questions from the judges of the 2nd U.S. Circuit Court of Appeals suggested that they had significant doubts that the court has jurisdiction to toss out the British court's judgment in the libel case.

Publishers and news organizations are bound to read the American court's forthcoming decision in the case. The case comes at a time of raised interest in "libel tourism"— the phenomenon of foreigners filing libel suits in British courts based on claims that American judges would quickly toss out on First Amendment grounds. Whether American courts can block those judgments, or at least certain of their provisions, is a question none of the judges yesterday appeared especially eager to tackle. And the court expressed little interest in the First Amendment concerns that legal observers say are present in the case.

One judge on the panel, Jose Cabranes, seemed worried that a ruling in the researcher's favor could open up American courts to suits challenging the judgments of other courts across the globe.

The case before the court was brought on behalf of an American researcher, Rachel Ehrenfeld, whose articles have appeared in many publications, including, The New York Sun. It is not her periodical journalism that is at issue in this case but her 2003 book, "Funding Evil: How Terrorism is Financed — and How to Stop It," which accuses a Saudi financier, Khalid bin Mahfouz, of backing organizations with alleged ties to terrorism. It is a charge that Mr. Mahfouz denies. Mr. Mahfouz sued Ms. Ehrenfeld and other researchers who made similar accusations against him in court in London. He has also set up an informational Web site to clear his name and to catalogue his growing list of legal victories in British courts against those he said have libeled him.

Ms. Ehrenfeld never appeared before the British court, which last year ordered her to pay 30,000 British pounds, print an apology, and keep her books out of the country. She filed suit in U.S. District Court in Manhattan seeking to block enforcement of the judgment. A judge, Richard Casey, dismissed the suit last year on the grounds that Mr. Mahfouz did not conduct any business here giving the court jurisdiction.

Ms. Ehrenfeld's attorney, Daniel Kornstein, switched strategies yesterday, seeking to convince the court it has jurisdiction because aspects of the British judgment amount to "intrusion into New York."

This is "the grinding down of Doctor Ehrenfeld," Mr. Kornstein said.

Mr. Kornstein said the British court order required Ms. Ehrenfeld to write a letter of apology and to keep her books out of Great Britain.

Mr. Kornstein said the effect of the British judgment went further by making Ms. Ehrenfeld and other journalists think twice before pursuing investigative projects. Ms. Ehrenfeld has "adapted her writing" and is no longer "writing with the same degree of acerbity," Mr. Kornstein said.

This line of argument seemed to spark the interest of two of the judges, Wilfred Feinberg and Pierre Leval.

Judge Leval suggested the part of the order requiring Ms. Ehrenfeld to keep her books out of Britain might be enough to allow Ms. Ehrenfeld's countersuit to go forward.

"If a foreign litigant seeks and obtains from a foreign court an order that requires action in the U.S. why should that not be sufficient to give jurisdiction to U.S. courts?" asked Judge Leval. More than 20 years ago Judge Leval presided as a district court judge over General Westmoreland's libel suit against CBS.

Mr. Mahfouz's attorney, Timothy Finn, replied that the order did not ask Ms. Ehrenfeld to "do anything in the United States."