K.   Digital Defamation: Drudge Case Settled, Global Telemedia Suit Dismissed

     The Internet libel suit that had been most closely watched – and seemed sure to produce a major appeals court ruling – suddenly vanished from the screen on May 1, 2001, when Sidney and Jacquelyn Blumenthal settled their long-running legal feud with online gossip columnist Matt Drudge.   

     In another digital defamation case, a federal judge in Los Angeles invoked California’s SLAPP statute to dismiss a suit by two disgruntled investors against Global Telemedia International.

Drudge and Blumenthals Reach Accord

     Federal District Judge Paul Friedman had issued a preliminary opinion in 1998, holding on one hand that Mr. Drudge was a proper defendant (and that his court in Washington, D.C., had jurisdiction over the California-based columnist), but ruling on the other hand that America Online should be dismissed as a defendant under the immunity that Section 230 of the Communications Decency Act grants to Internet service providers.  Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998).

     The parties sparred contentiously in Judge Friedman’s court for more than two years, causing the judge in a later opinion to remark that the behavior of their attorneys was “the kind of conduct that rightly gives the legal profession a bad name.”  A settlement thus seemed an unlikely prospect until, perhaps coincidentally on Law Day, the parties announced that they had agreed to drop the case. 

     The terms of the settlement were as curious as the fact of such an accord.  The Blumenthals agreed to pay Mr. Drudge $2,500 to cover his costs – though one suspects that the actual cost of such protracted litigation must have exceeded that figure many fold.  Sidney Blumenthal offered only this public explanation: “We just decided for nuisance value that we would pay him off and make him go away,” while insisting that the suit had been warranted to establish the falsity of Mr. Drudge’s attack upon him and his wife.

     The settlement drew curiously little media attention, given the massive interest the original filing had evoked.  One commentator ventured that, given the virtual certainty that the Blumenthals would eventually have prevailed on their libel claim, the settlement “was a dramatic victory for Drudge.”  The columnist himself was a bit more modest, though he did observe that “the First Amendment protects mistakes” and proclaimed that “the great thing about this medium I’m working in is that you can fix things fast.”  In any event, we will never know how  an appeals court would have resolved what Washington Post media critic Howard Kurtz accurately termed “potentially groundbreaking issues about electronic journalism,” such as the court’s jurisdiction over Mr. Drudge and his Web site,  or the potential role of AOL as a defendant.

SLAPP Statute Bars California Suit

     One other Internet libel case during the year warrants attention.  In late February 2001, a federal district judge in Los Angeles dismissed a defamation suit brought by Global Telemedia against two investors who had posted disparaging comments about the company and its performance on a financial bulletin board.  The suit claimed the comments were false and legally actionable.  But the district judge dismissed the complaint, finding that such an action was barred by California’s SLAPP (Strategic Litigation Against Public Participation) statute.