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Funding Evil: How Terrorism is Financed and How to Stop It is a book written by counterterrorism researcher Dr. Rachel Ehrenfeld, director of the American Center for Democracy and the Economic Warfare Institute. It was published by Bonus Books of Los Angeles, California in August 2003.
The judge noted that "the nature of the allegations which were made in the book... are of the most serious and defamatory kind." He added that under English law, the defendants had the opportunity to counter the suit by attempting to "prove, on the balance of probabilities, that the defamatory allegations were substantially true". The Mahfouz family published a statement on their website, declaring that a number of "serious errors of fact" had been published about the family and that they "abhor violence as a way of achieving political or other objectives".Larry Neumeister, " Book Author Sues Saudi Billionaire". New York Sun. Associated Press, 10 December 2004 Mahfouz had posted similar statements on his website regarding more than 40 similar libel cases and threats to sue against authors and publishers from many countries including the U.S.
Ehrenfeld accused Mahfouz of "forum shopping", using English libel law to chill investigations ("libel tourism"). Her argument was based on the fact that Mahfouz resided in Jeddah, Saudi Arabia at the time of the suit and had sued her in England as opposed to the United States because the libel law framework in England was more favorable to plaintiffs. This was rejected by David Eady. Mahfouz's English lawyer argued that "Our clients have brought proceedings in England because they maintain residences, transact business and have reputations to protect in this jurisdiction."
Ehrenfeld's actions following the initiation of Mahfouz's lawsuit were also noted by the court. A second edition of Funding Evil was published in the US with a new introduction commenting on the lawsuit and the book's cover was amended with the tagline "The book the Saudis don't want you to read".
Her case was supported by free-press advocates in the United States, who argued that the case underlined the incompatibility of the English legal system with US constitutional rights. Sandra Baron, the executive director of the Media Law Resource Center in New York, argued that "it's critically important that American journalists and scholars be able to publish on topics of profound importance without having to look over their shoulders to make sure someone isn't suing them in the United Kingdom."Sara Ivry, MediaTalk; Seeking U.S. Turf for a Free-Speech Fight. New York Times, 4 April 2005 A number of major media organizations supported her case, including the Authors Guild, Forbes, the American Society of Newspaper Editors, the Association of American Publishers, and Amazon.Brendan O'Neill, " A town called Sue". New Statesman, 24 July 2006Samuel A. Abady & Harvey Silverglate, Libel tourism' and the war on terror". Boston Globe, 7 November 2006 Major newspapers also supported the cause, including the New York Times, the Washington Post, and the Los Angeles Times.
Mahfouz sought to have the New York case dismissed, claiming that the court had no jurisdiction over him and no power to rule in the issues raised by Ehrenfeld. Judge Richard C. Casey found in his favour and dismissed the case in April 2006, ruling that the court lacked personal jurisdiction over Mahfouz under New York state law. Memorandum and Order of April 25, 2006, Rachel Ehrenfeld v. Khalid Salim a Bin Mahfouz, United States District Court Southern District of New York, 04 Civ. 9641 (RCC)
Ehrenfeld appealed the case to the United States Court of Appeals for the Second Circuit. Ehrenfeld's appeal was again supported by many media organisations in a consolidated amicus curiae brief, which argued that the "growing and dangerous threat of 'libel tourism' – the cynical and aggressive use of claimant-friendly libel laws in foreign jurisdictions ... has chilled and will continue to chill Dr Ehrenfeld's exercise of her free speech".
The Second Circuit referred the case to the New York Court of Appeals, New York's highest appellate court, emphasizing that the case had implications for all U.S. authors and publishers whose First Amendment rights were threatened by foreign libel rulings. The Court of Appeals was asked specifically to determine whether § 302(a)(1) of New York's civil procedure rules conferred personal jurisdiction over a person who "(1) sued a New York resident in a non-U.S. jurisdiction; and (2) whose contacts with New York stemmed from the foreign lawsuit and whose success in the foreign suit resulted in acts that must be performed by the subject of the suit in New York." Opinion of the New York Court of Appeals in Rachel Ehrenfeld v. Khalid Salim a Bin Mahfouz, 20 December 2007 Based on the Appellate Court's response, the Second Circuit, in its final decision, noted that if the law on New York State court jurisdiction were to change, Ehrenfeld could bring suit again.
The bill passed the New York State Legislature unanimously and was signed into law on April 29, 2008.James Oliphant, " Saudi wields British law against U.S. author". Chicago Tribune, 17 March 2008 The law enables New York courts to assert jurisdiction over anyone who obtains a foreign libel judgment against a New York publisher or writer, and limit enforcement to those judgments that satisfy "the freedom of speech and press protections guaranteed by both the United States and New York Constitutions".Samuel A. Abady & Harvey Silverglate, " Rachel's Law: NY's 'Libel-Tourism' Fix". New York Post, 25 February 2008 The Libel Terrorism Protection Act "offers New Yorkers greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution". Governor Paterson Signs Legislation Protecting New Yorkers Against Infringement Of First Amendment Rights By Foreign Libel Judgments
As of July 2010, six other states have passed analogs to Rachel's Law: Illinois, Illinois Florida, Florida California, California Tennessee, Tennessee Maryland, Maryland and Utah. Utah
A federal bill based on Rachel's Law, the SPEECH Act, was passed in the 111th Congress, by unanimous vote of both the House of Representatives (as HR 2765 in 2009) and the Senate (as S 3518 in 2010), and signed into law by President Barack Obama in August 2010. Like Rachel's law, the SPEECH Act declares foreign libel judgments to be unenforceable in the US unless they meet the criteria set forth by the First Amendment. The act contains further provisions allowing the libel plaintiff to be counter-sued for a declaration if the foreign libel judgment is "repugnant" to American constitutional law, with the possibility of recovering damages.
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