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Dow Jones & Company Inc v. Gutnick: The Australian Court’s Conclusion Essay

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Updated: Mar 12th, 2022

Introduction

The fast and often explosive development of such a modern means of communication and information transmission as the Internet has raised numerous controversial points in human society. Law practice has also been affected by this topic, especially in the aspects of rights for the information published on the Internet, and the effects of that information upon the physical and social images of certain persons. In this respect, the notion of defamation, and the ideas associated with the court decision regarding various defamation lawsuits, are of special importance to scholars, who admit that the Internet is the means of communication through which defamation publications can be spread to the wider scopes that through traditional communication means and have, respectively, more serious effects on defamed people.

This paper focuses on the analysis of one of the milestone cases in the Australian law practice in the area of the Internet, defamation, and the choice of forum rules, i. e. Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575. The paper starts with the details of the case, including the factual and procedural background thereof, proceeds to the judgment summary of the case and the analysis of the questions that the court ruling have left unanswered. The final parts of the paper include the analysis of the Australian High Court’s decision in Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 as it reconciles with other international jurisdiction decisions.

Case Details

Factual Background

The case under analysis started around 2000, when the Dow Jones Company Inc., a U.S. – based company dealing with various publishing matters in the areas or economy, commerce, and businesses of all scopes, developed and made available the content on six of its web servers in New Jersey, USA, that defamed Joseph Gutnick. The latter was a businessman residing in Victoria, Australia and carrying out his business activities both in Victoria, Australia and overseas, including the United States. The major point for the defamation proceedings that Mr. Gutnick started against Dow Jones Company Inc. was the fact that the latter’s online publications defamed him as a person and as a businessman, who was rather popular in Victoria, Australia.

The peculiarity of the case lied in the fact that Mr. Gutnick claimed for the lawsuit and court hearing to take place exclusively in Victoria, Australia as the place where his dignity was damaged and where his major partners, being simultaneously the main Dow Jones subscribers in this area, resided. The seriousness of the case was constituted by the direct accusations that the article by Dow Jones took at Mr. Gutnick, including the alleged money laundering activities, tax evasion practices, etc.

Procedural History

After the Supreme Court of Victoria ruled the case in favor of Mr. Gutnick, Dow Jones Company Inc. appealed to the High Court wishing the latter to set aside its former writ and stay the whole hearing procedure permanently on the basis of the claim that Victoria was an unacceptable place for the process. The company was an American business entity, and it claimed its right to undergo litigation under the laws and statutes that govern defamation allegations in the USA. The main arguments of the defendant, i. e. Dow Jones Company Inc., were that very phenomenon of defamation, if any, took place in New Jersey, USA, where their headquarters and Internet servers are located.

Accordingly, if the publishing of the materials that Mr. Gutnick considered to be defamatory took place in the USA, the plaintiff, as Dow Jones argued, could sue the company only in the United States and only fulfilling the requirements of the U.S. laws and legal acts governing this very clause of information transmission and defamation. The very right to appeal was granted to the defendant by their honors Gleeson and Hayne, who ruled that his honor Hedigan erred in holding that the place of publishing was synonymous to the place of downloading of the defaming material and that its original purpose of the tort of defamation was attributed to it where it was downloaded but not where the publisher, i. e. Dow Jones Company Inc., made it available for users of the Internet.

At the start of the hearing, the court, by its majority, granted leave to intervene to such companies as Amazon.com Inc, Bloomberg LP, Cable News, Network LP, Media/Professional Insurance, The New York Times Co, Tribune Co, and The Washington Post Co. Next, the court ruled that three major points should be clarified as a result of the hearing:

  1. The actual place of the Internet libel publishing (further used for the purposes of long-arm jurisdiction);
  2. The lex loci delicti of the tort of defamation, if any;
  3. The possibility of remitting the case for another consideration, afresh, to the Supreme Court (provided that the lex loci delicti of the tort of defamation is considered to be New Jersey, USA, not Victoria, Australia).

Further on, it was identified during the process of appeal consideration by the High Court, that the plaintiff would face two disadvantages if the case of defamation is heard in the United States and according to the local laws that regulate the issues of defamation and responsibility for it. First, the plaintiff will have to present proof of the falsity of the alleged defaming information; the plaintiff will have to prove the actual malice, i. e. the fact that the publisher, i. e. Dow Jones Company Inc., carried out the defaming activity with the knowledge of the falsity of the data it used for it. At the same time, the defendant claimed that its vital interest was in the hearing of the case in the United States as far as all its businesses were located there and the servers that contained the allegedly defaming article were also U.S. – based.

Judgment Summary

Joint Judgment: Defamation

As a result of the hearing of the appeal by the Dow Jones Company Inc., the High Court of Victoria ruled that the defamation actually took place through the publication that was uploaded to the Internet servers of the Dow Jones Company Inc. in New Jersey but was downloaded, and this is of crucial importance, by registered users and subscribers in Victoria. Drawing from this, the court held that the defamation took place in Victoria because usually this malice is located for the convenience of the Australian common law choice of law rules at the location where the defaming publication causes damage to the reputation of a person or an organization. Finally, the defaming material is considered such and can thus be considered by court if it is used at the location, where a person allegedly defamed by the content has proper reputation, which is damaged by the content in question. So, the judgment on this part of the case was joined for all the honors including Gleeson, Mchugh, Gummow and Hayne.

Publications

Regarding the publications that served as the major point for Mr. Gutnick to sue the Dow Jones Company Inc., judges Gleeson, Mchugh, Gummow and Hayne held that although they originated from New Jersey, USA, their major effect was directed at Mr. Gutnick, who resided and had the headquarters of his business in Vitoria, Australia. Accordingly, the High Court ruled, referring to Australian Broadcasting Corporation v Waterhouse (1991) 25 NSWLR 519 at 535-537, that the defendant, i. e. the Dow Jones Company Inc., should submit to the unconditional appearance ruled by the court, or otherwise the plaintiff, i. e. Mr. Gutnick will be granted leave to carry out further court proceedings against Dow Jones and its defaming publication. At the same time, the court ruled by the cases like John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 521 and Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 566 to stress once again that the location of the tort of defamation serves as the major condition of dismissing the very appeal by the Dow Jones Company Inc.

Final Decisions

Thus, the final decision that the High Court held regarding the appeal by the Dow Jones Company Inc. was as follows: “Appeal dismissed with costs”. The major claim of the defendant, i. e. the idea of the forum non conveniens, was thus also dismissed by the court referring to the cases Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458 at 466-467 and Jackson v Spittall (1870) LR 5 CP 542 at 552, where the similar disputes arose and were solved by holding that the location of the defamation is the place where the effects of the defamation to a person’s/organization’s reputation were observed, but not where the allegedly defaming material was produced or provided for public access. The result of the joint judgment of the honors Gleeson, Mchugh, Gummow and Hayne was that the Dow Jones Company Inc. could not count on the hearing of the case in the United States and had to fulfill the decision of the Supreme Court of Victoria or be subject to further proceedings taken by the plaintiff, i. e. Mr. Gutnick.

Separate Judgments

Although the case was decided and the appeal was dismissed by the joint judgment of the High Court, three of the judges expressed their additional remarks in their separate judgments. Thus, her honor Gaudron focused mainly on the idea of single publication and its various interpretations. In more detail, her honor Gaudron referred to court cases like Henderson v Henderson (1843) 3 Hare 100 at 115 and Anshun (1981) 147 CLR 589 at 598, to explain that the single publication rule is nothing but a “legal fiction”. In this respect, her honor Gaudron stressed the importance of the extended principle, i. e. the state when the court might refuse the consideration of a case if all relevant materials are not presented in full but separated as alleged single publications according to the “legal fiction” concept.

Further on, his honor Kirby also issued his separate judgment on the case, in which he addressed the three fundamental points that served as the major reasons for the appeal by Dow Jones Company Inc. and outlined the possible impacts that the case of Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 might have on the court systems of all countries, as well as on their social and economic developmental directions. Finally, his honor Callinan discussed the issues of radical transformations that the Internet, as the judge Callinan supposed, could bring in the area of the law of defamation. At the same time, his honor Callinan found no positive implications that the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 would have on the improvement of the relations between those who posted content on the Internet and those, who were potentially affected by those posts.

Questions without Answers

Numerous scholarly opinions appeared in the world of justice regarding the impact of the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 on the further development of the legal systems of various countries, as well as the modernization of the Internet and its role in the life of human beings. One of the opinions, expressed over two years after the hearings on the mentioned case took place, was that the court ruling would make Internet services more ordered, while the server owners would become more concerned about the legislations of the countries and regions in which the objects of their publications, and potential defamations, resided.

At the same time, there is also a point that by taking decisions similar to the one in the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575, “overseas courts limit American Internet speech”. Viewing the case from this perspective, one might have assumed that the location of defamation can thus be any place where the Internet was freely accessible, and such a situation would make any online publications into potential defamation sources. Finally, the opinions of the judges that ruled the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575, as well as of numerous other scholars, focused on the ideas that the mentioned case had the potential to drastically change the essence of the Internet and the defamation laws in many countries, but still none of those who expressed their ideas provided detailed and proper account that would contain not mere ideas but also suggested ways to solve the predicted problems.

Conclusion

Drawing from the above discussion, it is possible to see that the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 is a milestone in the Australian legal practice, and this milestone has potentially global consequences. Interestingly, several other cases in counties like England, USA, and Canada were solved similarly to the one discussed either before or after the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575.

Thus, the first cases that touched upon the determination of jurisdiction and involved the Internet took place in the USA, where the courts ruled that the jurisdiction can be established for the interactive sites, and cannot be established for passive, i. e. merely advertising, web pages through the cases Zippo Manufacturing Co. v Zippo Dot Com Inc. 952 F Supp 1119, 1124 (WD Pa 1997) and Calder v Jones [1984] USSC 53; 465 US 783. However, after the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 had been ruled, two most notable cases of the same nature were heard in England and Canada. In the first one, King v Lewis (2005) E.M.L.R. 4, the court ruled that although the California website published the defaming materials, the location of defamation was England and the local court had jurisdiction for hearing it.

In the second one, i. e. the case Bangoura v Washington Post & Ors. 235 D.L.R. (4th) 564, the Canadian Supreme Court ruled that despite the fact that there were no Washington Post branches in Ontario at the time of publishing the defaming publications, there was the website of this American newspaper, and the materials in question were widely available there. Based on this, the case was heard and solved in Canada. Accordingly, one can see that the court decision in the case Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 can be reconciled with decisions and other international jurisdictions observed in the cases that took place after the discussed one and touched upon the same issues, i. e. defamation, Internet, and the place of actual damage to reputation.

Bibliography

Books/Journal Articles

Baird, Matthew, Case Comments (2005) Washington Post 548. Bick, Jonathan, Overseas Courts Limit American Internet Speech (2006) New Jersey Law Journal 185.

Cyberlaw, Australian Ligislation (2010) WebLaw – Cyberlaw 2. Fitzgerald, Brian, Copyright Law, Digital Content and the Internet in the Asia-Pacific (2008) 381.

Gray, Anthony, Before the High Court (2007) Sydney Law Review 30. Kenyon, Andrew, Defamation – Comparative Law and Practice (2006) 11.

Keyes, Mary, Jurisdiction in international litigation (2005) 3.

Lunney, Mark, Tort Law: Text and Materials (2008) 725.

NZLJ, Freedom of Speech (2010) The New Zealand Journal of Law 5.

Reidenberg, Joel, Technology and Internet Jurisdiction (2005) University of Pennsylvania Law Review 153.

Rolph, David, Reputation, celebrity and defamation law (2008) 73.

Symeonides, Symeon, Choice of Law in the American Courts in 2005: Nineteenth Annual Survey (2005) 53 American Journal of Comparative Law 559 at 598.

Svantesson, Dan, Private international law and the internet (2007) 416.

Tao, Hong, Transmission of Copyrighted Works over the Internet (2003) 11.

Thompson, Belinda, Moving Targets: Defamation over the internet (2004) Society for Computers and Law 58.

Case Laws

Anshun (1981) 147 CLR 589 at 598.

Australian Broadcasting Corporation v Waterhouse (1991) 25 NSWLR 519 at 535-537.

Bangoura v Washington Post & Ors. 235 D.L.R. (4th) 564.

Berezovsky v Michaels [2000] 1 WLR 1004 at 1012.

Henderson v Henderson (1843) 3 Hare 100 at 115.

Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458 at 466-467.

Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575.

Gertz v Robert Welch Inc (1974) 418 US 323.

Jackson v Spittall (1870) LR 5 CP 542 at 552.

John Fairfax & Sons Ltd v Vilo (2001) 52 NSWLR 373.

John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 521.

Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 565.

New York Times Co v Sullivan (1964) 376 US 254.

Philadelphia Newspapers Inc v Hepps (1986) 475 US 767.

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 566.

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