Fifth Circuit Rejects Canadian Libel Judgment Against Blogger

The case is Trout Point Lodge, Ltd. v. Handshoe (5th Cir. Sept. 5, 2013), and it applies the SPEECH Act, a federal statute that, among other things, provides:

Notwithstanding any other provision of Federal or State law, a domestic court shall not recognize or enforce a foreign judgment for defamation unless the domestic court determines that:

(A) the defamation law applied in the foreign court’s adjudication provided at least as much protection for freedom of speech and press in that case as would be provided by the first amendment to the Constitution of the United States and by the constitution and law of the State in which the domestic court is located; or

(B) even if the defamation law applied in the foreign court’s adjudication did not provide as much protection for freedom of speech and press as the first amendment to the Constitution of the United States and the constitution and law of the State, the party opposing recognition or enforcement of that foreign judgment would have been found liable for defamation by a domestic court applying the first amendment to the Constitution of the United States and the constitution and law of the State in which the domestic court is located.

Here’s an excerpt from the facts:

Handshoe, a Mississippi citizen, owns and operates Slabbed.org, a public-affairs blog with the tagline “Alternative New Media for the Gulf South.” He describes Slabbed.org as a “forum for local residents and other interested parties to gather and share information regarding various political and legal issues that impact the Gulf Coast.”

One of the blog’s focal points over the last few years has been Aaron Broussard, the former Parish President of Jefferson Parish, Louisiana. Broussard was indicted in the United States District Court for the Eastern District of Louisiana and pleaded guilty to charges of bribery and theft in September 2012. Handshoe claims that Slabbed.org has been “instrumental” in reporting the “ongoing corruption scandal, indictment, and guilty plea” involving Broussard.

During his time in office, Broussard owned property in Nova Scotia. The property sat on Trout Point Road, very close to Trout Point Lodge, a hotel that Perret and Leary own and operate. In about January 2010, Handshoe began publishing entries on Slabbed.org alleging a link between Broussard and Trout Point Lodge, Perret, and Leary. At or near the same time, the Times–Picayune, a New Orleans newspaper, published an article indicating that Broussard had an ownership interest in Trout Point Lodge and that Jefferson Parish contractors had paid to rent the premises. The Times–Picayune retracted this assertion and issued a correction after Perret and Leary alerted the paper to purported “factual errors in [its] reporting.” It appears that the corporate parent of the Times–Picayune also took the Slabbed.org blog offline after Perret and Leary demanded this retraction. The district court determined that Handshoe, “apparently in reaction to his blog being taken offline,” found another web host for his site and “began an internet campaign to damage Perret and Leary.” Specifically, Handshoe posted several updates regarding Trout Point Lodge, Perret, and Leary, which the district court noted “can be characterized as derogatory, mean spirited, sexist, and homophobic.”

Trout Point sued for defamation in Nova Scotia. Handshoe didn’t appear, so the Nova Scotia court entered a default judgment against him. “Ultimately, the court awarded Trout Point Lodge $75,000 in general damages, and Leary and Perret each $100,000 in general damages, $50,000 in aggravated damages, and $25,000 in punitive damages. It also awarded $2,000 in costs.” Plaintiffs then tried to enforce the judgment in Mississippi.

The Fifth Circuit concluded that the judgment was unenforceable. First, the court pointed out that Canadian defamation law doesn’t have the same protections for defendants that have been imposed under the First Amendment on American defamation law. Most significantly for this case, the court noted, Canadian law requires the defendant speaker to prove the truth of the assertions, while American law requires the plaintiff to prove falsehood (at least for statements on matters of public concern).

Second, the court concluded that there wasn’t enough evidence that Handshoe would have been found liable under American defamation law. Here’s a longish excerpt, but one that, I think, helps show how this sort of SPEECH Act analysis would likely go in such cases:

Although Handshoe’s failure to answer or otherwise defend the case satisfies the basic prerequisite for [a default judgment], the allegations in the First Amended Statement of Claim — particularly those regarding the falsity of Handshoe’s statements — are not particularly well-pleaded for at least three reasons.

First, the First Amended Statement of Claim is unclear regarding whether all, or just some, of Handshoe’s statements are false. At the outset, it indicates that Handshoe’s statements were “defamatory by both true and false innuendo.” In explaining the particular statements at issue, the First Amended Statement of Claim repeatedly emphasizes that the statements were “defamatory,” in that they would tend to lower one’s opinion of Trout Point. But it specifically alleges falsity with respect to only a limited few of the statements, and offers no facts to rebut or undermine most of Handshoe’s statements. Although Trout Point includes some generic allegations of falsity towards the end of its defamation claim — specifically in paragraphs 113, 115, 116, and 118 — this catch-all language offers little guidance regarding whether some or all of the statements are allegedly false, especially in light of the First Amended Statement of Claim’s earlier reference to “true innuendo” as a source of harm.

For this reason, Trout Point cannot show that a state or federal court in Mississippi would grant a default judgment based on the First Amended Statement of Claim. Indeed, a Mississippi court has affirmed dismissal where a complaint failed to specify which of a series of statements constituted slander. Similarly, here, a Mississippi court could deny a default judgment because the First Amended Statement of Claim does not clearly and specifically allege that each of the relevant statements is false.

Second, some of the publications at issue are statements of unverifiable opinion. For example, Trout Point based its defamation claim, in part, on the allegation that Handshoe used “unabashed anti-gay, anti-homosexual rhetoric and rants of the defendants” intended to “engender[ ] discrimination and hatred.” The First Amended Statement of Claim complains that Handshoe referred to Perret and Leary as “ ‘girls,’ ‘blow buddies,’ ‘queer f-g scum,’ and ‘b-tches,’ published more than one reference to a gay-themed movie, and posted video clips of movies and music videos commonly associated with gay stereotypes.” While less grotesque, many of the other statements at issue also involve expressions of opinion; for example, that Trout Point had “Champagne taste on a beer budget,” that Perret and Leary were a “litigious bunch,” and that the Nova Scotia action was “foolish and frivolous.”

Though offensive, these statements generally are not actionable in Mississippi. The Mississippi Supreme Court has recognized that “name calling and verbal abuse are to be taken as statements of opinion, not fact, and therefore will not give rise to an action for libel.” “[N]othing in life or our law guarantees a person immunity from occasional sharp criticism, nor should it…. [N]o person avoids a few linguistic slings and arrows, many demonstrably unfair.” Thus, statements of opinion are actionable “only if they clearly and unmistakably imply the allegation of undisclosed false and defamatory facts as the basis for the opinion.” Here, although some of Handshoe’s opinions certainly imply facts ( e.g., that Trout Point was involved in the Aaron Broussard scandal), his bare “linguistic slings and arrows” do not. Indeed, counsel for Trout Point conceded at oral argument that Handshoe’s offensive insults and opinion statements would not be actionable in Mississippi. Thus, Trout Point cannot show that a state or federal court in Mississippi would grant a default judgment on these opinion-based allegations.

Finally, a state or federal court in Mississippi could view some of the allegations in the First Amended Statement of Claim as legal conclusions, as opposed to well-pleaded facts…. Here, Trout Point’s allegations of falsity are unaccompanied by any facts that contradict or otherwise undermine the allegedly defamatory statements. Given the legal significance attached to the word “falsity,” Mississippi law requires Trout Point to do more than merely cry “false” to prove its claim. Therefore, even deemed admitted, the allegations likely would have been insufficient — without subsequent evidence, analysis, and fact-finding — to satisfy Trout Point’s burden in a Mississippi court. [Footnote: Because statements that are “substantially true” are not actionable in Mississippi, whether a statement is false as a technical matter may differ from whether it is “false” as a legal matter.] …

As a threshold matter, the plain language of the SPEECH Act suggests that the purported “factual findings” of the Nova Scotia Court are irrelevant to the enforceability inquiry. The critical question is not whether the Nova Scotia Court found falsity, but rather whether a state or federal court in Mississippi faced with the allegations in the First Amended Statement of Claim would have done so….

But even assuming, arguendo, that the Nova Scotia Court’s factual findings have some bearing on the enforceability inquiry, they are insufficient to demonstrate falsity…. Indeed, despite repeated entreaties at oral argument, Trout Point could not identify a single specific allegation in the Statement of Claim that the Nova Scotia Court found was actually false. Rather, the Nova Scotia Court noted generically that some statements were “erroneous,” but remained silent as to the truth of others….

Thanks to How Appealing for the pointer. For a post on an earlier SPEECH Act opinion, from 2011 — SPEECH Act opinions aren’t plentiful — see here.