N.Y. Appeals Court Opens Door to 'Libel Tourism'

New York's highest court has passed up an opportunity to protect American authors from the libel judgments of foreign courts. In a decision handed down yesterday, the Court of Appeals in Albany told a New York-based researcher that she could not use the courts here to challenge a British judgment ordering her to pay 30,000 British pounds — more than $60,000 — for defaming a Saudi billionaire.

The case was a test of how New York's courts will respond to concerns that the First Amendment rights of American authors are undermined by libel judgments imposed abroad, especially in Britain.

Libel law in Britain is far more plaintiff-friendly than libel law in America. This discrepancy has given rise to a practice that critics call "libel tourism." In recent years, American authors and journalists have found themselves sued by non-British nationals in British courts over articles and books published in America.

The researcher, Rachel Ehrenfeld, had asked a court in New York to declare the British judgment against her unenforceable under the First Amendment.

But the Court of Appeals said a New York court first needed jurisdiction over the Saudi financier who brought the case, Khalid bin Mahfouz, before it could take up Ms. Ehrenfeld's countersuit. The court found that Mr. Mahfouz had so few dealings involving New York that no local court had jurisdiction over a suit against him.

The decision does not preclude Ms. Ehrenfeld from challenging the judgment if Mr. Mahfouz goes to court in New York to try to collect. But Ms. Ehrenfeld's attorney, Daniel Kornstein, has said having the judgment hanging over Ms. Ehrenfeld has affected her research and writing, regardless of whether Mr. Mahfouz tries to collect in a New York court.

The decision, written by Judge Carmen Beauchamp Ciparick, an appointee of Governor Cuomo, sidestepped Ms. Ehrenfeld's claims that the British judgment was hampering her free speech. Of "libel tourism," the decision states: "However pernicious the effect of this practice may be, our duty here is to determine whether defendant's New York contacts establish a proper basis for jurisdiction."

A lawyer in Boston who has written on the case, Harvey Silverglate, said: "The New York Court of Appeals could have done a better job of protecting our constitutional rights than it did here with this rather technical opinion."

At issue is Ms. Ehrenfeld's 2003 book, "Funding Evil: How Terrorism Is Financed — and How to Stop It," in which she accuses Mr. Mahfouz of backing organizations with alleged ties to terrorism. Mr. Mahfouz denies the accusation, and he sued Ms. Ehrenfeld and other researchers who have made similar allegations against him in court in London. Ms. Ehrenfeld's work has appeared in many publications, including The New York Sun.

Ms. Ehrenfeld never appeared before the British court, which in 2005 ordered her to print an apology, keep her books out of the country, and pay Mr. Mahfouz the fine.

Last year, Britain's highest court, the House of Lords, made it significantly more difficult for journalists to be sued for libel. That decision came in a case against the Wall Street Journal Europe brought by another Saudi businessman.