Research

Casenote - HCA upholds Gutnick v Dow Jones (December 2002)

Francis Vierboom, Galexia

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Published

Internet Law Bulletin, volume 5, number 8, 2002

Dow Jones v Gutnick was handed down by the High Court on the morning of December 10^th. Dow Jones’ appeal against the decision of the Victorian Supreme Court was dismissed unanimously. It leaves Gutnick free to sue Dow Jones for damage to his local reputation in a Victorian court under Victorian law for an article written in New York and put on a web server in New Jersey.

Gleeson CJ, and McHugh, Gummow & Hayne JJ gave the main judgement in the case. It discusses the law at some length, including a consideration of the American single publication rule and a general discussion of how jurisdictional questions have been dealt with before in widely distributed publications. It concludes that the exercise of jurisdiction by the Supreme Court of Victoria is entirely proper in the current case. However the judges also recognise the political significance of the case and add a concluding section to deal with the concerns of free speech advocates and media companies.

It points out that the threat of a myriad of suits for the same publication could be dealt with by common principles of vexation, and forum shopping would be countered by forum non conveniens tests
It also points out that a case would only be brought where both the plaintiff had a reputation and the defendant had significant assests.
It quietly suggests to judges that a new defence to defamation suits might be developed, where the publisher acted reasonably and within the laws of their own country
It reinforces that only damage caused in Australia could be judged by Australian defamation standards. A claim for damage caused by separate publications in the US would be judged by US standards (and further confused by the US single publication rule).
Finally, it reminded publishers that the only laws they needed to know were those of the country of the person they were defaming.

Gaudron J agreed with the main judgement and added a short discussion of Anshun estoppel to the concluding section of the main judges.

Kirby J leaves the facts to the other judges and embarks on a different approach to the case by laying out Dow Jones’ three possibilities for success: that Victoria lacks jurisdiction, that the applicable law is that of New Jersey, or that Victoria is an inappropriate forum. He continues with a consideration of Dow Jones’ call for a reformulation of the elements of defamation with respect to the internet. He then proceeds with a lengthy discussion of the Internet and the features of it that might lead the Court to make such a reformulation.

He then returns to his three original issues:

Jurisdiction: Kirby J finds it is clear that 7.01(1)(j), which states that a proceeding can be brought ‘in respect of damage suffered wholly or partly in Victoria’ gives the Victorian Supreme Court jurisdiction over the case
Choice of law: Kirby spends a long time discussing the possibility of creating a single publication rule specific to the internet, which, if held, would mean the defamation trial would be judged under New Jersey law. He (almost reluctantly) decides against this path
Inappropriate forum: Kirby hints at his own dissatisfaction with the test the HCA has adopted with regard to forum non conveniens, but finds that the primary judge (Hedigan J) made no error in finding Victoria to be appropriate, and this he has no right to review that decision.

In concluding, Kirby expresses slight dissatisfaction at leaving the law at the status quo but says it is the responsibility of others (the legislature) to make the necessary reforms.

Callinan gives a judgement entirely lacking in Kirby’s sympathy for the appellant’s case. He rejects each of Dow Jones’ submissions one at a time:

the fact that the server is a passive participant is irrelevant; Callinan refers to the criminal concept of complicity in holding Dow Jones responsible
the fact that Dow Jones has not specifically marketed their product to Victoria is also irrelevant; it is sufficient that the publisher’s intention is to gain as wide an audience as possible
academic discussions of the law suggesting a different approach to defamation online are rejected; Callinan re-emphasises the importance of the locale of the damage rather than composition
Callinan also refuses to allow Internet publishing to be differentiated from any other kind of multinational business, such as car manufacturing, saying that by availing themselves to the business or infrastructure of a country Dow Jones must also expect to be subjected to the country’s laws.

Callinan poignantly concludes by accusing Dow Jones of seeking ‘an American legal hegemony in relation to Internet publications.’

The decision in Dow Jones v Gutnick was one of the most widely covered legal decisions of the year. This was hardly surprising given its significant effect on media companies. Nor was it surprising to find several news sites railed against the decision. Indeed, many of the stories might be classed as uninformed panic and rather questionably biased sensationalism. The Sydney Morning Herald, Australian IT, and The Guardian (UK), all ran columns heralding the end of publishing on the internet, and suggestions in The Age (Melbourne) that Mick Jagger could sue a Dutch online publisher in an Australian court are plain wrong (Australia being a forum non conveniens). Of course not every news outlet chose to print the apocalyptic prophets. The SMH and AFR both ran more lucid opinion pieces on the decision, and it was notable that most of the news sites operated by interveners in the case, such as CNN, Yahoo and the Associated Press, avoided taking sides in their coverage.

The Case:

http://www.austlii.edu.au/au/cases/cth/high_ct/2002/56.html

Coverage:

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