5th Circuit Addresses Statute of Limitations in Internet Based Libel Case

December 21, 2007. The U.S. Court of Appeals (5thCir) issued its opinion [15 pages in PDF] in National Bi-Weekly v. Belo Corp., affirming the judgment of the District Court, which dismissed on statute of limitations grounds. The opinion addresses the application of a statute of limitations to a complaint alleging that an article published on the internet is tortious.

Introduction. The Court of Appeals held that for content on a free access web site, the time limitation begins to run at the time of original publication, and that the continued availability on the internet does not restart or interrupt the running of the time period.

However, this opinion applies only to free access web sites where the content alleged to be libelous is static. The Court of Appeals leaves uncertain the status of suits that involve content published in subscription web sites and closed networks. It also does not reach information that is acquired as a consequence of querying a database.

Also, while the plaintiff and defendants are located in places distant from each other, this opinion does not address venue or jurisdiction. This case addresses when internet based defamation takes place for the purpose of applying a statute of limitations. It does not address where internet based defamation takes place for the purpose of applying jurisdiction and venue rules.

Background. Scott Burns is a financial writer for the Dallas Morning News (DMN), which publishes a daily newspaper in the Dallas, Texas, area. The DMN also publishes a web site. The DMN is owned by Belo Corp.

Burns wrote, and the DMN published in its print edition and web site, a commentary on Nationwide Bi-Weekly Administration (NBWA). Burns' commentary was published in the print edition on July 29, 2003. The Court of Appeals wrote that the date of internet publication is not in the record; but it assumed it to be close to print publication.

Proceedings Below. On July 28, 2004, NBWA filed a complaint in state court in Ohio against Belo, the DMN and Burns alleging defamation, tortious interference with prospective business relations, and business disparagement.

The Dallas defendants removed the action to the U.S. District Court (SDOhio), which, due to lack of personal jurisdiction over the defendants, and pending motions, transferred the action to the U.S. District Court (NDTex).

On May 30, 2006, the Dallas defendants moved to dismiss. The District Court applied Texas law, including its statute of limitations. Texas statute provides a one year statute of limitations for libel claims. NBWA filed its original complaint just within one year of the publication of the commentary at issue.

However, NBWA did not obtain service for another ten months. The District Court held that as a result of this unexplained failure to exercise due diligence in serving the defendants, the filing of the complaint did not toll or interrupt the running of the one year statute of limitations.

The District Court in Dallas then dismissed the case for failure to state a claim, pursuant to Rule 12(b)(6), FRCP.

Court of Appeals. NBWA brought the present appeal. The Court of Appeals affirmed.

NBWA argued that because the commentary at issue was also published in the DMA web site, there was a republication of the commentary every time an internet user accessed it. NBWA argued that this starts the statute of limitations running again.

Texas case law provides that the one year limitations period begins to run when publication of the libelous statement is complete. This is also known as the single publication rule. However, Texas case law has not yet addressed the applicability of this rule in the context of continuous internet publication.

The Court of Appeals held that continued availability to the public of internet content does not continuously trigger a new limitations period in libel actions regarding that content.

However, the Court of Appeals suggested that a different rule may be warranted if the content is in a "restricted-access online database" that is not available to the public for free. The Court of Appeals noted that a Tennessee state court rejected the single publication rule in a libel suit regarding just such a restricted access web site.

The Court of Appeals declined to apply this Tennessee opinion, since "the article at issue here was undisputably posted on the website and made widely available to the public via the Internet", and no other court has followed the Tennessee opinion. It added that all courts that have addressed this factual scenario have held that "the single publication rule applies to information widely available on the Internet".

The Court of Appeals also wrote that "Perhaps more important than the similarities between print media and the Internet, strong policy considerations support application of the single publication rule to information publicly available on the Internet."

This opinion provides some relief, and certainty, for major newspapers that operate free public web sites. Yet, considerable uncertainty remains.

First, the opinion applies to "widely available" web sites. The opinion does not define the term widely. This leaves open an argument for plaintiffs to bring stale and/or repetitive actions for defamation involving free web sites. For example, what if the web site is free, but requires registration? What if the web site is free, but requires the use of software other than a browser?

Also, the opinion does not reach web sites that provide access only to those who purchase subscriptions. Nor does it does not reach closed networks. Nor does it reach content that is free, but displayed to a user as a result of queries to a database.

This case is Nationwide Bi-Weekly Administration Inc. v. Belo Corp., The Dallas Morning News, and Scott Burns, U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 06-11283, an appeal from the U.S. District Court for the Northern District of Texas. Judge DeMoss wrote the opinion of the Court of Appeals, in which Judges Dennis and Owen joined.