The recently enacted federal ban on libel tourism is making it more difficult for plaintiffs to sue U.S. defendants in countries that afford weaker free speech protections.  Last week, in the first federal appellate opinion to apply the new statute, the U.S. Court of Appeals for the Fifth Circuit held that plaintiffs cannot collect damages from U.S. defendants from a Canadian court’s defamation judgment.

In 2010, Congress enacted the Securing the Protection of our Enduring and Established Constitutional Heritage Act (the “SPEECH Act,”), which states that U.S. courts shall not recognize foreign defamation judgments unless:

• the foreign court applied defamation law that protects free speech at least as much as the First Amendment and the state’s constitution, or
• the defendant would have been found liable for defamation under domestic law.

The SPEECH Act faced its first major test in Trout Point Lodge v. Handshoe.  The defendant, Doug K. Handshoe, is a Mississippi citizen who operates a public affairs blog. Slabbed.org.  The blog has reported on Aaron Broussard, the former Parish President of Jefferson Parish Louisiana.  Broussard pleaded guilty to federal bribery and theft charges in September 2012.  

Broussard owned land in Nova Scotia, which was close to Trout Point Lodge. Handshoe alleged a link between Broussard and Trout Point Lodge’s owners, Vaughn Perret and Charles Leary. Trout Point filed suit in the Supreme Court of Nova Scotia, alleging defamation and related claims.  Although Trout Point alleged that the statements were false and malicious, it did not refute any of the individual claims. 

Handshoe did not appear in the Nova Scotia action, causing the court to enter a default judgment against him.  The court awarded Trout Point Lodge $75,000 in general damages, Leary and Perret each $100,000 in general damages, $50,000 in aggravated damages, and $25,000 in punitive damages.

Trout Point sought to collect on the judgment in Mississippi court.  The U.S. District Court for the Southern District of Mississippi ruled against Trout Point, holding that Trout Point failed to meet its burden under the SPEECH Act. 

In an opinion filed on September 5, the Fifth Circuit affirmed, holding that there is “no meaningful dispute that the law applied by the Nova Scotia Court provides less protection of speech and press than First Amendment and Mississippi law.”  Unlike the United States, Canada does not require that defamation plaintiffs prove falsity.  Instead, Canadian defendants must demonstrate that their statements were true.  Moreover, the Fifth Circuit found that a Mississippi would not have found the defendants liable for defamation.

The Fifth Circuit’s opinion is particularly significant because Canadian defamation law is largely based on the laws of the United Kingdom, whose weak free speech protections make it a popular venue for defamation plaintiffs.  Indeed, a number of high-profile and extreme U.K. defamation lawsuits against U.S. defendants helped mobilize support for passage of the SPEECH Act.  The Fifth Circuit’s opinion indicates that it will be difficult for U.K. plaintiffs to collect judgments from U.S. defendants.