From today’s decision by Joseph F. Bataillon in DatabaseUSA.com LLC v. Spamhaus Project:
Earlier, the Court entered a default judgment … against defendant The Spamhaus Project (Spamhaus) and in favor of DatabaseUSA. The Court found the allegations of DatabaseUSA’s complaint, deemed admitted by Spamhaus’s default, properly established the elements of its claims and satisfied the standards for entry of a default judgment against Spamhaus for defamation and tortious interference with a business relationship….
DatabaseUSA now seeks damages in the nominal amount of one dollar, as well as injunctive relief. It contends its damages are difficult to ascertain and also argues that it will suffer irreparable harm absent an injunction. DatabaseUSA proposes that the Court enter an injunction ordering defendant Spamhaus to:
- Publish a statement on the blocklist website that com LLC was wrongfully included on the blocklist from May 2017 until the date of this order;
- include in its published statement a reference to this action by name and case number; and
- remove DatabaseUSA from the blocklist going forward, or provide DatabaseUSA with an explanation for why DatabaseUSA is on the blocklist and an explanation for how DatabaseUSA can be removed from the …
Traditionally, American courts have abided by the rule that “equity will not enjoin a libel” because “damages provide an adequate remedy at law … and to enjoin defamation is to effect an unconstitutional prior restraint on speech.” Sid Dillon Chevrolet, Inc. v. Sullivan (Neb. 1997). However, there is an exception to the general rule where there has been a prior adjudication of falsity.
See Pittsburgh Press Co. v. Pittsburgh Comm’n on Hum. Rels. (1973) (stating the Supreme Court “has never held that all injunctions are impermissible” and noting that “[t]he special vice of a prior restraint is that communication will be suppressed … before an adequate determination that it is unprotected by the First Amendment”); Auburn Police Union v. Carpenter (1st Cir. 1993) (stating “a judicial injunction that prohibits speech prior to a determination that the speech is unprotected … constitutes a prior restraint” (emphasis added)); Sid Dillon Chevrolet (“Absent a prior adversarial determination that the complained of publication is false or a misleading representation of fact, equity will not issue to enjoin a libel or slander, unless such libel or slander is published (1) in violation of a trust or contract or (2) in aid of another tort or unlawful act, or injunctive relief is essential for the preservation of a property right.” (emphasis added)). A restraint via an injunction is permissible if the speech has “been adjudicated to be libelous and therefore not to be protected under the First Amendment.” Nolan v. Campbell (Neb. Ct. App. 2004); see also TM v. MZ (Mich. Ct. App. 2018); Hill v. Petrotech Res. Corp. (Ky. 2010); Balboa Island Village Inn, Inc. v. Lemen (Cal. 2007); San Antonio Comm. Hosp. v. S. Cal. Dist. Council of Carpenters (9th Cir. 1997); Lothschuetz v. Carpenter (6th Cir. 1990); Advanced Training Sys., Inc. v. Caswell Equip. Co., Inc. (Minn. 1984); Organovo Holdings, Inc. v. Dimitrov (Del. Ch. 2017) (all holding that a trial court may enjoin a defendant from making defamatory statements after there has been a determination that the speech is, in fact, false).
Once the speech is found to be false, the question becomes whether the injunction is sufficiently narrow to survive strict scrutiny. In order for an injunction to pass constitutional muster, the suppression must be limited to the precise statements already found libelous. Nolan; see also Advanced Training Sys. v. Caswell Equip. Co. (Minn. 1984) (“We therefore hold that the injunction below, limited as it is to material found either libelous or disparaging after a full jury trial, is not unconstitutional and may stand.”); O’Brien v. Univ. Cmty. Tenants Union, Inc. (Ohio 1975) (“Once speech has judicially been found libelous, if all the requirements for injunctive relief are met, an injunction for restraint of continued publication of that same speech may be proper.”).
Further, a determination that statements were false and defamatory may be based upon an adjudication that results from the entry of a default judgment. See Loden v. Schmidt (Tenn. Ct. App. 2015); see also Lothschuetz (reversing district court’s denial of injunctive relief as an unwarranted restraint on freedom of speech and granting a narrow injunction limited to the statements that had been found, on default, to be false and libelous); Baker v. Kuritzky (D. Mass. 2015) (enjoining specific statements that had been found, by virtue of the default, to be libelous). Also, injunctive relief is a common and non-controversial remedy for tortious interference with prospective economic advantage. Organovo Holdings, (recognizing that a request for equitable remedies for tortious interference with prospective economic advantage can provide the requisite basis for equitable jurisdiction that can justify a related injunction against future speech)….
Continuing defamatory conduct has been held to irreparably injure plaintiffs. Also, “[l]oss of intangible assets such as reputation and goodwill can constitute irreparable injury.” … DatabaseUSA has demonstrated an irreparable injury. It has shown damage to its reputation, a loss of customers, and loss of potential revenue as a result of Spamhaus’s defamation and tortious interference. Spamhaus’s continued wrongful listing of DatabaseUSA as a spammer has a potentially to greatly impact DatabaseUSA’s business. DatabaseUSA has shown that its generally good business reputation that was damaged by Spamhaus’s tortious conduct and the loss associated with damage to its brand or goodwill is difficult to quantify. The inability to calculate DatabaseUSA’s future loss with reasonable precision makes legal remedies inadequate in this case….
In contrast, the burden on Spamhaus in complying with the terms of the narrowly drawn injunction appears slight. Spamhaus did not appear or respond to Database’s allegations in this case. The effort required to post a notice in the nature of a retraction on its website is negligible. The Court finds the negligible harm inflicted on Spamhaus by a narrowly drawn injunction is outweighed by the potential harm to DatabaseUSA in denying the injunction. The public’s interest is furthered by allowing vindication of tortious conduct.
The Court also finds that entry of a narrowly drawn injunction in this case will not implicate constitutional concerns. This is a case involving commercial speech, which is afforded less deference under the First Amendment. Because there has been an adjudication, by virtue of the default judgment, of the falsity of the challenged statements, the constitutional problems associated with a prior restraint are not present. Enjoining Spamhaus’s continuing course of repetitive defamatory conduct does not affect an improper and unconstitutional prior restraint on protected speech.
DatabaseUSA’s proposed injunction passes constitutional muster in part. Its proposed injunction is directed only at the speech that has been adjudicated to be false—the 2017 inclusion of DatabaseUSA on the spammer list. It is properly limited to prohibiting Spamhaus from repeating statements that have been determined to be defamatory. Accordingly, the Court will adopt the plaintiff’s proposal to the extent it is directed at Spamhaus’s past conduct…
Nonetheless, an injunction on future speech must be no more broad than necessary to remedy the wrongful conduct alleged in the complaint. In its complaint, DatabaseUSA challenged its inclusion on a domain block list represented to contain only the domain names of entities “that send emails including phishing, fraud, ‘419,’ malware, or viruses” despite the fact that Database “has never partaken in any of [those] prohibited actions,” without providing “any reason or justification for placing Database on the blocklist.” The conduct addressed in this action is Spamhaus’s wrongful listing of DatabaseUSA.com on its DBL without justification. Going forward, the Court will tailor the injunction as precisely as possible to the needs of the case and the injunction will be aimed only at the conduct that has been found objectionable.
A blanket injunction ordering the defendant not to include DatabaseUSA.com on the DBL in the future would be overly broad and could prohibit speech that is not defamatory. The Court will not enjoin all future listing of DatabaseUSA.com on the DBL but will require Spamhaus to provide a rationale for the listing to DatabaseUSA. Spamhaus is not prevented from including DatabaseUSA.com on its list if it furnishes legitimate reasons for doing so.
The court therefore issued an injunction that said,
- Defendant The Spamhaus Project shall publish a statement, referring to this action by name and case number (i.e., DatabaseUSA.com LLC v. The Spamhaus Project, No. 8:19-CV423 (D. Neb), on its domain block list website stating that DatabaseUSA.com LLC was wrongfully included on the blocklist from May 2017 until the date of this order.
- If defendant The Spamhaus Project lists DatabaseUSA.com on its blocklist from and after the date of this order, it shall provide DatabaseUSA.com LLC with an explanation for doing so and an explanation as to how DatabaseUSA.com can be removed from the blocklist.
My quick reaction:
[1.] I agree that properly tailored injunctions against repeating material that had been to be libelous are constitutional (see my Anti-Libel Injunctionsarticle); most states allow such injunctions, as do federal courts in most circuits.
[2.] I have seen only two decisions on the question before in the Eighth Circuit (Vickland v. Am. Royal Ass’n, Inc., 2008 WL 4748184 (W.D. Mo.), which generally held, though without much discussion, that such injunctions “are not ordinarily appropriate,” and American Dairy Queen Corp. v. Blume, 2013 WL 1748434 (D. Minn.), which generally just mentioned that anti-libel injunctions pose “First Amendment concerns”). This decision may therefore prove influential there.
[3.] This injunction, though, doesn’t just ban repeating such material, or require the removal of the material from defendant’s web site: It requires Spamhaus to affirmatively publish a retraction, and to affirmatively explain to DatabaseUSA the basis for any future block. Though the judge tried to make the injunction narrow, I think it is broader than the precedents allow.
[4.] I also think the judge erred in characterizing this case as involving “commercial speech.” The commercial speech doctrine provides lesser protection for commercial advertising—speech that proposes a commercial transaction between the speaker (or the speaker’s business partners) and readers. Spamhaus is providing something more akin to a third-party review of a product or a service, which doesn’t fit within the commercial speech doctrine.
[5.] Finally, and unrelated to the merits of the judge’s decision, Spamhaus is a British nonprofit, which says that it has “no U.S. ties or presence and therefore does not recognize orders issued against it by U.S. courts.” And while DatabaseUSA could try to enforce the injunction in English court, I suspect that would work only if English courts conclude that Spamhaus was subject to personal jurisdiction in Nebraska—which seems far from clear (though I can’t speak with confidence about how English courts resolve such matters).