Writer Counter-Sues In States Over ‘Forum Shopping’ Row

By Mike Dodd
Monday, May 23rd, 2005 @ 8:25PM

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An American academic who was sued in London by a Saudi Sheikh and his two sons over a book published in the United States has ignored the case – and instead launched a counter-claim in New York.
Dr. Rachel Ehrenfeld, an expert on terrorism and terrorist funding, was sued in the High Court by the billionaire banker and businessman Sheikh Khalid Bin Mahfouz and his sons over allegations in her latest book linking them and the Muwafaq Foundation they founded to Osama Bin Laden’s Al Qaida organization. But Dr. Ehrenfeld, director of the New York-based American Centre for Democracy, and the Centre for the Study of Corruption and the Rule of Law, ignored the English litigation, refusing to recognise the court’s jurisdiction. The case has heightened the controversy over so-called forum shopping – Dr. Ehrenfeld lives and works in New York, and Sheikh Khalid and his sons are based in Saudi Arabia, although their solicitor, Laurence Harris of Kendall Freeman, says they also have homes and business interests in the United Kingdom.
On May 9, following an application by Kendall Freeman, Mr. Justice Eady ordered that Dr. Ehrenfeld and her publisher, Bonus Books Ltd., should pay Sheikh Khalid and his sons ᆪ10,000 each in damages – a total of ᆪ30,000 – and make an interim costs payment of ᆪ30,000. Mr. Justice Eady also made a declaration in his order that six statements made in the book were “defamatory of the claimants and false”. These included that the three men “supported and assisted in terrorism”, were among the principal funders of terrorism and had given millions of dollars to Al Qaida and other groups.

The judge also ordered Dr. Ehrenfeld and the publisher to publish a suitable correction and apology. Sheikh Khalid sued over Dr. Ehrenfeld’s book, entitled Funding Evil: How Terrorism is Financed, and How To Stop It, which was published in Chicago in 2003.
An updated edition was published recently. It is understood that some 26 copies of the book, which was only published in the US, have been sold in the UK, via Internet bookshops. But Mr. Harris said the first chapter was also published on the Internet – and that in just the first month of online publication the site was accessed by some 200,000 people in the United Kingdom.
Dr. Ehrenfeld has applied to the United States District Court for the Southern District of New York for a declaratory judgment that what she wrote about Sheikh Khalid was not libelous under US law, and that he would be unable to enforce Mr. Justice Eady’s order in the United States because it was contrary to the US Constitution. She could not have defended the case in the High Court in London, she said. “I could not have asked Madeleine Albright (the former US Secretary of State) to go to London to give evidence – and even if she had gone, she would not have been able to supply the intelligence information,” Dr. Ehrenfeld said. “It would have been impossible for me to defend the case there. So I denied the court’s jurisdiction.” It was also unclear how many of the people who visited the website had actually read the chapter of the book which was on it, she said.

She was ignoring Mr. Justice Eady’s orders about damages and costs. Her action in the US, she said, was aimed at establishing a precedent to give all writers and journalists protection against forum-shopping libel actions. Mr. Harris rejected suggestions that Sheikh Khalid and his sons were “forum-shopping” by suing Dr. Ehrenfeld in London. “Libel is about reputation – and Sheikh Khalid and his sons have homes, business interests and reputations in the United Kingdom,” he said.

The three men had so far been involved in four sets of proceedings in the UK and had won every one of them, he said,and they were determined to keep defending their reputations.
They could not sue Dr. Ehrenfeld in the US courts because they did not have business interests or homes there. Mr. Justice Eady was “very much alive” to the forum-shopping allegation, he said, adding that when he made the order on May 9 the judge had specifically rejected the suggestion. “We don’t accept at all that we have been forum shopping and trying to pick a helpful jurisdiction,” Mr. Harris said. Sheikh Khalid and his sons would wait until the expiry of the time limits given in Mr. Justice Eady’s order before making any decision on whether to try to enforce it, he said. Dr. Ehrenfeld’s application to the US District Court for a judgment is being based on the protection for freedom of speech in the First Amendment to the US Constitution, and in the 14th Amendment, which prohibits any State making or enforcing “any law which shall abridge the privileges or immunities of citizens of the United States”. These provisions were used by the US District Court in the District of Columbia to affirm a refusal by the lower courts to enforce a High Court judgment in the case of Matusevich v. Telnikoff (877F.Supp. 1 (DDC 195), despite the doctrine of comity, under which the decisions of foreign courts would normally be enforced in the US.

The decision highlighted the differences between the libel laws in England and the United States. The English Court had not required the claimant to prove that the allegedly defamatory statement was actually false – this was a requirement under US law. But in English law, the defendant had to prove that an allegedly libelous statement was true. In addition, the so-called Sullivan defence also came into play – it required that anyone who might be described as a public figure who sued for libel had to be able to show malice on the part of the defendant. Mr. Harris said Sheikh Khalid would seek to get Dr. Ehrenfeld’s case struck out on the grounds that the court had no jurisdiction over him and no power to decide on such issues, relying on the case of Dow Jones and Company Ltd. v. Harrods Ltd. and Mohammed Al Fayed (237 F. Supp.2d 394 (SDNY 2002)). The case concerned litigation in London over a piece which appeared on the Wall Street journal website about an April Fool spoof published on the Harrods website. The Second Circuit Court of Appeals affirmed the decision of a lower court to refuse to give a declaratory judgment that the material published by the US firm was not libelous as a matter of law, on the grounds that that the action was non-justiciable because it was not ripe for adjudication; that there was no “actual controversy” as required by the Declaratory Judgment Act; and that the district court would exercise its discretion not to exert jurisdiction over the action.


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