New York's highest court decided Thursday a state law can't help a Manhattan author block a libel verdict brought against her in London by a Saudi billionaire over her book "Funding Evil: How Terrorism is Financed _ and How to Stop It."
The unanimous decision interpreting a New York law now goes to a federal court. There, author Rachel Ehrenfeld has sought to combat what her attorney argued was a chilling effect on free speech by the billionaire, Khalid Salim A. Bin Mahfouz. The Saudi businessman has sued more than two dozen times over writings on terrorism and those who fund it, including Ehrenfeld's 2003 book.
"The chill continues," said Ehrenfeld's attorney, Daniel Kornstein of Manhattan.
Kornstein said the businessman hasn't tried to collect on his judgment, which includes an apology and a halt on book sales. But he said the London court verdict is a threat to authors.
"That's the danger and the risk and the problem that we tried to stress," Kornstein said. "It creates a sword of Damocles that prohibits authors and publishers _ and readers can't read about it."
New York's Court of Appeals had been asked by a federal court if the state's "long-arm" law could apply to the case. But the state court found the law, which establishes jurisdiction for almost anyone who does business in New York, doesn't apply to this case.
"We are pleased that the New York Court of Appeals has today issued an opinion finding that Mr. Bin Mahfouz is not subject to jurisdiction in New York, thereby effectively ending Dr. Ehrenfeld's misuse of U.S. courts to attack the very appropriate and necessary judgment entered by the English court in favor of Mr. Bin Mahfouz and his family," said Mahfouz's attorney, Timothy Finn.
Mahfouz sued Ehrenfeld for libel in the High Court of Justice in London, although Ehrenfeld didn't appear or acknowledge the court's jurisdiction in the 2005 case. A default judgment requires her to declare her writings about Mahfouz to be false, publish a correction and apology, and stop further publication of the disputed statements in Britain.
In U.S. Circuit court, Ehrenfeld sought to declare the British decision unenforceable in the United States. The suit claims that Mahfouz chose to sue Ehrenfeld in England because its libel laws favor plaintiffs. Ehrenfeld's attorney said Mahfouz was engaging in a kind of "libel tourism."
Mahfouz had defended the choice of venue, saying 23 copies of the book had been purchased in England over the Internet and a chapter of the book was available from the ABCnews.com Web site.
Ehrenfeld's book said Mahfouz "and his family have provided direct and indirect monetary support to al-Qaida and other `Islamist terror groups,"' according to the state court record.