The Dow Jones slander of Australian miner, Joe Gutnick

December, 2002

Mr Gutnick

How would you like someone to proclaim to hundreds of thousands of people worldwide the accusation that you are "a schemer given to stock scams, money laundering and fraud"? Not nice? Yet that is what Dow Jones did to Australian miner Joe Gutnick, despite his having no convictions for any such offences and hence being entitled to the full presumption of innocence. And apparently US libel law allows a newspaper to say that sort of thing about people. Dow Jones would hardly have said that in the first place otherwise and Joe Gutnick would certainly have sued them in the US for saying it if his advisers had told him he stood any chance of success.

Instead, of course, Gutnick sued in Australia where individual rights are better protected in such matters. There has been much breastbeating on the internet about the Australian High Court accepting jurisdiction in the matter but it seems to me that the breastbeating should have been about the scandalous inadequacy of US libel law.

In any case, legal co-operation between different countries is governed by international treaties so if the US is so attached to its bad law in this matter it can renegotiate the relevant treaties and accept the consequences -- the major consequence being that the other countries concerned will also limit their co-operation with the USA when it wants to enforce the judgements of its courts.

So if the USA wants to protect its internet publishers from foreign law it can do so -- at a price. The price would probably be low in the case of a country like Zimbabwe but high in the price of a country like Australia.

Mr Gutnick is a devout Australian-Jewish mining entrepreneur and well-known friend of Israel, so describing him as "a schemer given to stock scams, money laundering and fraud" is a remarkably gross and intemperate accusation. Given his community position, Mr Gutnick of course sued and has just won the first round against Dow Jones in the Australian courts. The Australian High Court ruled that it had jurisdiction and the case will now be heard under Australian libel law -- which is less permissive than libel law in US jurisdictions.

Any rational and decent chief executive would long ago have decided to cut his losses and make a full apology. But big media just hate backing down, of course, and you have to have a deep pocket to make them. So I think Mr Gutnick has done us all a favour if he helps puncture some of that arrogance.

The "Opinion Journal" tentacle of Dow Jones indexes its article on the subject (on December 11th) with the words: "Free speech on the Internet? Not if an Aussie judge has his way". and in the body of the article concerned says:

"U.S. libel law, consistent with the speech protections afforded by the First Amendment, makes it fairly difficult to win a libel suit. The burden of proof is on the plaintiff to show the allegedly defamatory statement is false; the statement must be the result of negligence in the case of a private figure, willful falsehood in the case of a public one. That's one reason so many Web sites advocating change in repressive regimes are located in the U.S.

In Britain and the Commonwealth countries, the reverse holds. It is up to the defendant to prove a statement is true, without reference to fault or intent. This Draconian standard has been used in recent years to shutter political publications"

But this is just hiding behind free speech. Thankfully all legal systems have limits on slander and it certainly seems to me that newspapers should be restricted to making true statements.

Captain Clueless, that well-known Democrat voter and supporter of affirmative action, has opined that any judgment obtained would not be enforceable in US courts. I am no more of a lawyer than the good Captain is, but it seems to me not remotely likely that Dow Jones would have spent hundreds of thousands of dollars in defending the case so far if that were so.

My main point is that it is Dow Jones that has let us all down with its egregious insults and its refusal to do the decent thing and apologize. If they had been half way decent none of this would have arisen. Judges are only human and I think our High Court could well have been moved in its decision by the gravity of the slander and a wish to protect Australian citizens from future such outrageous attacks.

And while Gutnick may be able to afford advertisements etc. in an attempt to clear his name, that is going to be a much less satisfactory corrective than getting a retraction from the original slanderer. And for the great mass of us who cannot afford even advertisements, getting newspapers to be more responsible in the first place is a signal service that Gutnick has probably done for us.

I am inclined to agree that newspapers should indeed be free to report rumours -- but they should report them as rumours not as facts. What was said of Gutnick was not a rumour -- it was a gross, direct and slanderous insult that anybody would be most grieved to hear of themselves. I certainly would be. I would not be able to defend myself so I am glad Gutnick did.

But, in any case, our High Court is the equivalent of the US Supreme Court so the deed is done now. It is a precedent that is most unlikely ever to be overturned. And it is a precedent that should have considerable influence in other common-law countries such as Britain.

Practically the whole of the internet seems to be of the view that Dow Jones SHOULD be allowed to describe an Australian businessman who has been convicted of no crime as "a schemer given to stock scams, money laundering and fraud". I think this is an appalling disregard for individual rights and freedoms and I would have expected conservative bloggers at least to stand up for such freedoms. Mr Gutnick's right not to be slandered is the obligation of Dow Jones not to slander him. All rights imply duties.

The altar on which internet and mass-media writers are willing to sacrifice Mr Gutnick appears to be some view that no laws should have worldwide reach. Yet this principle seems to be a totally new invention. Nobody has ever doubted that murderers should be pursued across international boundaries, for instance. So why not slanderers? The difference seems to be a quibble about where the crime was committed. Because the utterance that damaged Mr Gutnick's reputation in his home town was forged and launched overseas it is argued that Mr Gutnick should have no redress. So if I fire a bullet across an international border and kill someone, should the person I kill have no redress? Obviously not.

So the real issue comes down to what is a crime -- and that something which has redress as a crime in Australia has no redress in the USA. And the reason that an obvious crime has no redress in the USA is thought to be compelling: That effective libel laws restrict a free press. But this is nonsense. All law consists of finding a balance and drawing lines between what is acceptable and what is not -- and Australian law draws the line in a way that both protects the individual and also allows a vigorously critical press that pursues wrongdoers on a daily basis. The press has to employ lawyers to see that it does not overstep the boundaries and report rumour or mere allegation as fact but that is as it should be.

So the remaining question is whether a small degree of international "forum shopping" for redress of grievances should be allowed. Should those who utter a slander have to consider not only the law in their own country but also the law in the country of the person slandered? I can see no earthly reason why not and nor could the High Court of Australia. And if the effect of the High Court judgement is for good law to drive out bad law to a small degree who should mourn? I think it is highly desirable that big media in the USA should be made more careful about speaking only what is demonstrably true --- even if it is only about foreigners that they are made to speak the truth.

A lot of people seem to have bought the scary argument put forward by Dow Jones in Gutnick v. Dow Jones, to the effect that their liability in Australia is a "thin-end of the wedge" phenomenon and that Americans will now have to obey the laws of rogue states like Zimbabwe. This is utter nonsense. It is of course true that an infinite extension of the Australian judgment would be problematical but any such extensions will have to be fought out case by case -- with no certain outcome. All we have at the moment is a judgment that when you defame someone you have to consider the defamation law in that person's own country. That does not seem to me at all onerous -- particularly where the truth of what you say will normally be an adequate defence in any subsequent proceedings.

And the impact of any future judgements similar to the Australian one will be very much dependant on whatever law-enforcement treaties the USA has with the countries concerned. The USA could for instance renegotiate all such treaties to exclude defamation from their ambit. Such a move would probably succeed in most cases though probably not in the case of Australia. I can well imagine that any Australian government would refuse to renegotiate a treaty if the result was to leave Australian citizens effectively unprotected against defamation just because the defamation emanated from the United States.

So now that the internet has made the world into the "global village" long ago envisioned by Marshall McLuhan, we may have to accept that a small body of global law will grow up to deal with that.

November, 2004

The outcome of the case has now been announced: After 4 years and 27 court appearances, Mr Gutnick finally got his public apology and retraction from Dow Jones plus $180,000 in damages and $400,000 in costs. Common decency and a respect for truth would have saved Dow Jones a lot of money. I hope that they learn from it and am pleased that Australian law administered the lesson.

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