Tough and feisty, acclaimed author Rachel Ehrenfeld has been battling Saudi sponsors of terrorism in print for years. Now she’s taking the fight to the courtroom. While she didn’t start the current face-off – she was sued first by a prominent Saudi billionaire – she is trying to blaze a new path for other authors who otherwise might be gun shy about taking on petro princes. After publishing “Funding Evil” in 2003, which boasts an introduction by former CIA Director Jim Woolsey, Ehrenfeld became the latest victim of the litigious former banker for the Saudi royal family, Khalid bin Mahfouz. He sued her for libel, though not in American courts, which properly balance plaintiffs’ concerns about harm to reputation with freedom of speech. No, bin Mahfouz – whose name may sound familiar from the collapse of BCCI (Bank of Credit & Commerce International) in 1991 – chose the forum that has been kindest to him and myriad others seeking an easy win in a libel case: British courts.
Though American common law is largely derived from the British system, defamation cases on the other side of the Atlantic start out from a fundamentally different perspective. British courts force authors to prove that what they wrote was true – which is not as easy as it sounds when evidentiary rules and other procedural hurdles are factored in. And the real kicker is that the scales start out tipped in favor of the plaintiff – which is sort of like giving the person suing a five-mile head start in a 10-mile race. As you’d expect when starting out at such a tremendous disadvantage, defending yourself against defamation in British courts carries an eye-popping price tag. So it’s of little surprise that few non-Brits voluntarily choose to do so. And since the only way damages ordered by a British court must be paid is if the plaintiff asks an American court to enforce the foreign judge’s ruling, an author is generally better off taking his chances by waiting to see if the lawsuit comes stateside. But playing it safe has a huge downside: It calls into question an author’s veracity and does immeasurable harm to his reputation. And the obvious benefit for the plaintiff is the ability to hold up a default judgment that supposedly “clears” his “good name.” Ehrenfeld wasn’t having any of that.
True to her nature, she refused sit still while her name got sucker punched, so she and her lawyer crafted a novel legal theory. She’s countersuing bin Mahfouz – but in America, not in England. No one’s ever tried anything quite like it. Ehrenfeld is hoping to get the U.S. District Court in Manhattan to rule that whatever damages bin Mahfouz wins in Britain will be unforceable in the United States. Her argument is sound: The Saudi billionaire is forum-shopping by suing in Britain – a country where neither he nor Ehrenfeld resides and where “Funding Evil” wasn’t even published or widely available – because there’s no way he’d win a libel case in America. Ehrenfeld’s contention that bin Mahfouz has significant links to terrorism generally and al-Qaida specifically is backed by no less an authority than the U.S. Treasury Department, which called one of his Islamic charities an “al-Qaida front.” The Saudi billionaire founded the Muwaffaq Foundation in 1992, and his son is quoted in Forbes magazine as having funded it with as much as $30 million.
The U.S. countersuit is still at an early stage, and Ehrenfeld is testing out a new legal theory against the best legal counsel a billionaire can buy. The judge might tell her to wait until bin Mahfouz actually attempts to collect damages in the United States. Bin Mahfouz already won an uncontested default judgment last December, and the damages phase of the trial won’t happen until next month. He is seeking ￂﾣ100,000 (U.S. $180,000). But if the court waits for bin Mahfouz to bring his lawsuit across the Atlantic – which he may never do – then there won’t be a precedent that would apply in future cases. Such a precedent would likely free writers and publishers of concern that their names will be sullied and their bank accounts potentially wiped out for simply pursuing the truth. If Ehrenfeld is as successful in her countersuit as she was in writing her book, then many authors will feel safe in following in her footsteps. That’s good news for everyone – except bin Mahfouz.