NY court: Saudi billionaire can pursue British claims in the U.S.

By LARRY NEUMEISTER Associated Press Writer,  NewsDay.com March 3, 2008

NEW YORK - The author of a book about financing terrorism can't prevent a Saudi billionaire from trying to enforce a London libel verdict in the United States, a federal appeals court said Monday.

The 2nd U.S. Circuit Court of Appeals rejected Manhattan author Rachel Ehrenfeld's lawsuit to stop the billionaire, Khalid Salim A. Bin Mahfouz, from trying to collect on a default judgment obtained against Ehrenfeld in London.

Ehrenfeld's attorney, Daniel Kornstein, said he was disappointed by the ruling.

"This is a matter that's not only about Rachel Ehrenfeld. It's about New York writers and publishers generally and their ability to investigate and speak their minds on matter of urgent public interest," he said.

Stephen J. Brogan, a lawyer for Bin Mahfouz, did not immediately return a phone message requesting comment.

The Saudi businessman has made claims against authors and journalists more than two dozen times over writings on terrorism and those who fund it, including Ehrenfeld's 2003 book, "Funding Evil: How Terrorism is Financed _ and How to Stop It."

Ehrenfeld wrote that Bin Mahfouz and his family provided financial support to al-Qaida and other "Islamist terror groups."

A 2005 ruling by London's High Court of Justice ordered Ehrenfeld to pay Bin Mahfouz $225,000, declare her writings about him to be false, destroy existing copies of the book and apologize.

Ehrenfeld had then asked a Manhattan court to declare that the London judgment was unenforceable in the United States. A lower court previously said the matter was out of its jurisdiction.

Bin Mahfouz has not tried to collect on the London judgment in the United States.

New York state has a so-called "long-arm" law, which establishes jurisdiction for almost anyone who does business in New York. But New York's Court of Appeals previously found that it does not apply to Bin Mahfouz's case.

The 2nd Circuit also said Monday that Ehrenfeld had failed to asked the lower court to decide whether the First Amendment entitled her to a ruling in her favor and thus could not argue for such a ruling from the appeals court.

Two state lawmakers are trying to pass legislation that would protect authors and journalists who write about terrorism from limitations imposed as a result of foreign libel lawsuits. The court refused to delay its decision until that legislative effort is concluded.