Trout Point Lodge v. Handshoe
729 F.3d 481 (2013)
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Rule of Law:
Under the Securing the Protection of our Enduring and Established Constitutional Heritage (SPEECH) Act, a foreign defamation judgment is unenforceable in the United States unless the party seeking enforcement proves either that the foreign law provided speech protections equivalent to the First Amendment or that the defendant would have been found liable for defamation under U.S. law.
Facts:
- Doug K. Handshoe, a Mississippi citizen, operated a public-affairs blog called Slabbed.org.
- In 2010, Handshoe began publishing blog posts alleging a connection between Aaron Broussard, a corrupt Louisiana politician, and Trout Point Lodge, a hotel in Nova Scotia, Canada, owned by Vaughn Perret and Charles Leary.
- After a New Orleans newspaper retracted a similar story and its parent company took Handshoe's blog offline, Handshoe found a new web host.
- Handshoe then began what the court described as an "internet campaign to damage Perret and Leary," publishing posts that were "derogatory, mean spirited, sexist, and homophobic."
- The posts accused Trout Point Lodge and its owners of involvement in corruption, misleading investors, financial instability, and being "con artists."
- Handshoe also used offensive insults, referring to Perret and Leary with homophobic slurs and as "first-class b-tches, common thugs, or plain ol’ morons."
Procedural Posture:
- Trout Point Lodge, Vaughn Perret, and Charles Leary sued Doug K. Handshoe for defamation in the Supreme Court of Nova Scotia, Canada.
- Handshoe failed to appear in the Canadian action, and the Nova Scotia Court entered a default judgment against him in December 2011.
- Following a damages hearing, the Nova Scotia Court awarded Trout Point a total of $427,000 in damages and costs.
- Trout Point enrolled the foreign judgment in the Circuit Court of Hancock County, Mississippi, to begin collection proceedings.
- Handshoe removed the enforcement action to the U.S. District Court for the Southern District of Mississippi, invoking the SPEECH Act.
- The district court, on cross-motions for summary judgment, granted judgment for Handshoe, finding the Canadian judgment unenforceable.
- Trout Point, as appellants, appealed the district court's decision to the U.S. Court of Appeals for the Fifth Circuit.
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Issue:
Is a foreign default judgment for defamation enforceable in the United States under the SPEECH Act when the party seeking enforcement cannot show that the foreign law provided speech protections equivalent to the First Amendment, or that the defendant would have been found liable for defamation under U.S. law?
Opinions:
Majority - Judge Jennifer Walker Elrod
No. A foreign default judgment for defamation is unenforceable under the SPEECH Act if the party seeking enforcement fails to meet its burden under the statute. The court analyzed the two distinct prongs of the SPEECH Act's 'First Amendment considerations' provision. First, under § 4102(a)(1)(A), the court found that the law applied by the Nova Scotia court did not provide as much protection for speech as U.S. law. The critical difference is that Canadian law presumes falsity and places the burden of proving truth on the defendant, whereas under the First Amendment and Mississippi law, the plaintiff bears the burden of proving falsity. Second, under § 4102(a)(1)(B), Trout Point failed to show that Handshoe 'would have been found liable for defamation by a domestic court.' The default judgment was based on a complaint that would be considered insufficiently pleaded in a Mississippi court because it made only conclusory allegations of falsity and was unclear which statements were allegedly false. Furthermore, many of Handshoe's statements constituted non-actionable opinion, name-calling, and verbal abuse, which are protected by the First Amendment. Therefore, because Trout Point could not satisfy either prong of the SPEECH Act, the Canadian judgment is unenforceable.
Analysis:
This case provides one of the first significant appellate interpretations of the 2010 SPEECH Act, affirming its role as a strong shield against 'libel tourism.' The court's decision establishes a high bar for enforcing foreign defamation judgments, particularly default judgments, by requiring a de novo assessment of whether the underlying claim would succeed under U.S. free speech standards. It clarifies that U.S. courts will not simply defer to foreign proceedings but will independently analyze the pleadings and facts to see if they meet First Amendment requirements, such as the plaintiff's burden to prove falsity and the distinction between fact and protected opinion. This ruling solidifies protection for U.S.-based speakers and publishers against lawsuits brought in jurisdictions with less protective speech laws.
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