The Wall Street Journal / Barron’s online published allegations of criminal activity by Gutnick, and Australian citizen and resident. The article was accessible to paying online subscribers, some of whom (.3%) paid with credit cards linked to Australian addresses. Defendant publisher’s editors and their web servers were all in the United States.
Gutnick sued for defamation. Defendant argued that Australian courts lacked jurisdiction. It said that jurisdiction should be determined by the location of servers, unless that location was “adventitious or opportunistic,” that is, intended to avoid legitimate assertions of jurisdiction. Plaintiff countered that jurisdiction existed in any place where content could be downloaded by authorized subscribers.
The court considered at length defamation-specific doctrines such as the single publication rule. It ultimately ruled in plaintiff’s favor, hold that, “[o]rdinarily, defamation is to be located at the place where the damage to reputation occurs… assuming, of course, that the person defamed has in that place a reputation which is thereby damaged.” Although the court acknowledged potential downsides to this rule, it reasoned that
- “[A] claim for damage to reputation will warrant an award of substantial damages only if the plaintiff has a reputation in the place where the publication is made.”
- “The value that a judgment would have may be much affected by whether it can be enforced in a place where the defendant has assets.”
- “[I]n all except the most unusual of cases, identifying the person about whom material is to be published published will readily identify the defamation law to which that person may resort.”