In a case of first impression in Texas, the U.S. Court of Appeals for the Fifth Circuit held that the "single publication rule," which states that the statute of limitations period for libel begins to run when a defamatory statement is first published, applies to publications on the Internet.

Some background on the case: on July 29, 2003, the Dallas Morning News published -- in print and on its website -- an allegedly defamatory article by financial writer Scott Burns about an accelerated mortgage program offered by Nationwide Bi-Weekly Administration, a company that provides mortgage payment services for borrowers. The article, among other things, accused Nationwide of engaging in deceptive business practices.

Nationwide filed a complaint in Ohio state court, near where it is based, on July 28, 2004, asserting claims for defamation, tortious interference with prospective business relations, and business disparagement against the Dallas Morning News, its owner Belo Corp., and Burns. Nationwide did not, however, serve the complaint on any of the defendants until June 2005. (Shortly thereafter, the defendants successfully removed the case to federal court in Ohio, whereupon the court transferred venue to the Northern District of Texas.)

And some background on the law: "statute of limitations" is a term used by courts to describe the maximum amount of time plaintiffs can wait before bringing a lawsuit after the events they are suing over have occurred. This time limit is typically set by state statute and is intended to promote fairness and keep old cases from clogging the courts. In the defamation context, this time period typically begins to run at the time a defamatory statement is first communicated to a third-party. Under Texas law, the statute of limitations for libel actions is one year. See Tex. Civ. Prac. Code § 16.002(a).

Because Nationwide didn't serve its complaint until almost two years after the article was first published, it seems like a rather straightforward application of a statute of limitations defense. This is precisely what the defendants argued in their motion to dismiss.

But Nationwide had its own take on how the law should work. It argued that every time someone does a Google search and finds the article in question, the statute of limitations period begins anew. As Ars Technica reported at the time, "this is like claiming that finding the article in a microfilmed back issue of the paper somehow amounts to 'republication,' and means that the statute of limitations might never run out."

The district court, rejecting Nationwide's argument, commented that such an idea "would hinder the development of a robust marketplace of ideas" and dismissed the lawsuit. (The Judge also found that Nationwide had failed to exercise diligence in waiting almost a year to serve the defendants, and therefore wasn't entitled to the earlier date on which it filed the lawsuit.)

Nationwide appealed the dismissal, and on December 21, 2007 the Fifth Circuit affirmed. In doing so, the court went straight to the heart of Nationwide's argument:

[T]he continued availability of an article on a website should not result in republication, despite the website’s ability to remove it. 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. See Firth [v. State, 775 N.E.2d 463, 466 (N.Y. 2002)] (discussing the “potential for endless retriggering of the statute of limitations, multiplicity of suits and harassment of defendants” and warning of a corresponding chilling effect on Internet communication). We agree that these policy considerations favor application of the single publication rule here and we note that application of the rule in this context appears consistent with the policies cited by Texas courts in adopting and applying the single publication rule to print media: to support the statute of limitations and to prevent the filing of stale claims.

As to Nationwide's business disparagement and tortious interference claims, which normally are entitled to a two-year statute of limitations under Texas law, the Fifth Circuit stated that when allegedly defamatory statements form the sole basis for a business disparagement or tortious interference claim, the one-year statute of limitations for libel applies.

This is an important decision for both traditional and non-traditional publishers. If Nationwide's view of the law were to carry the day, it would eviscerate the statute of limitations for defamation on the Internet. Online publishers would then be faced with only one way to cabin their legal liability and protect against stale claims: delete all content older than one year. No more archives, no more wayback machine, just today's news folks. Is that the kind of Internet we want?

For more on the case, see the CMLP's database entry: Nationwide v. Belo Corp.