Judge: Businessman can sue U.S. publisher in Australian court

By freedomforum.org staff

08.30.01

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In a decision that could have global repercussions on Internet publishing, an Australian judge ruled this week that a local businessman can sue a U.S. publication for defamation in the city where the story in question was downloaded.

In a case the Australian Financial Review reported was "believed to be the first of its kind in the common law world," Justice John Hedigan ruled that businessman Joseph Gutnick can sue U.S. publishing giant Dow Jones for defamation in Victoria, Australia, over money-laundering allegations.

Hedigan threw out a claim Aug. 28 that because the allegations were published by Dow Jones on the Internet, Gutnick's lawsuit should be heard in the United States, ruling that defamation takes place on the Internet when people "download" the offending words on their computer, not when they are "uploaded" on the other side of the world, according to a story in the Brisbane Courier-Mail.

"This has been the law for centuries in respect of other forms of communication and I find no persuasive reason that it should not apply to Internet publications," the judge said.

However, according to the Melbourne Herald-Sun, the judge stayed his order until Sept. 11 to allow Dow Jones to decide whether to appeal. Company officials told freedomforum.org that "we plan to appeal the case to the highest levels."

Gutnick sued over an article published in Dow Jones' magazine Barrons last October and placed on its Web site. The article alleged Gutnick was the biggest customer of Nachum Goldberg, who had been convicted of tax fraud and money laundering.

Dow Jones was represented in the pre-trial hearing by London lawyer Geoffrey Robertson, who said the case could determine the Internet's publishing boundaries and that liability for defamation should be limited to where the Web server was based.

Robertson also claimed Australia could become isolated and a laughing stock if it dragged foreign companies into its courts to fight defamation cases.

Hedigan said these arguments "lacked nothing on the scope of boldness."

Gutnick, referred to in local press reports as an Australian mining magnate, said he was delighted the judge had ruled in his favor, and likened his battle to a David versus Goliath situation.

"I would have hoped the whole thing wouldn't have happened in the first place and I pray to God that I will be totally vindicated," Gutnick was quoted by the Herald Sun as saying.

Update

U.S. publisher can appeal decision allowing libel suit in Australian court
In August, lower court ruled that Melbourne businessman could sue Dow Jones & Co. for article published in Barron's, posted on Internet.  12.15.01