MANHATTAN (CN) - Defamation claims by Republican-funding casino magnate Sheldon Adelson could hinge upon whether a "naked hyperlink" to allegations is akin to describing them, 2nd Circuit judges said Thursday.
Adelson, whom Forbes ranked as the world's 10th richest person, sued the National Jewish Democratic Council, its president David Harris and its chairman Mark Stanley two years ago for publishing a petition that urged then-Republican candidate Mitt Romney to stop accepting the billionaire's donations before the 2012 presidential elections.
Linking to an Associated Press article, the petition said in block capital letters that Adelson "was accused of putting 'foreign money' from China in our elections & reportedly approved of prostitution" at his casino in Macao.
Though not disclosed in the petition, the AP had attributed the allegations to a court declaration from a fired former Sands casino executive, and Adelson had denied the claims as a "blatant and reprehensible attack" on his character.
U.S. District Judge Paul Oetken nevertheless found on Sept. 30 that Adelson did not have a case for defamation because the hyperlink is "twenty-first century equivalent of a footnote."
"Indeed, as a form of attribution, a hyperlink provides benefits that a footnote does not," Oetken's 57-page opinion states. "Unlike a footnote on a piece of paper - which merely provides one with directions to the source - the hyperlink instantaneously permits the reader to verify an electronic article's claims."
The judge ordered Adelson to pay attorneys' fees for violating Nevada's anti-SLAPP statute, which prohibits "strategic lawsuits against public participation." The Nevada law penalizes parties from using the courts to silence, censor and intimidate critics.
During the nearly hour-long appeal before the 2nd Circuit on Thursday, a three-judge panel let both parties speak well beyond their allotted time and scoured for legal precedent involving a hyperlink defeating a defamation lawsuit.
Judge Guido Calabresi, an 81-year-old jurist appointed by the Clinton administration, broached the issue with a self-deprecating comment that he had an "antediluvian" understanding of the Internet.
Later, his 60-year old colleague, Judge Denny Chin, asked, "Why isn't this better than a footnote?"
Drawing chuckles among the spectators, Calabresi quipped: "See what someone younger than me says?"
Adelson's lawyer James Ferguson replied that the underlined blue text, denoting the link, "doesn't provide the reader with sufficient notice that it has anything to do with a judicial proceeding."
Ferguson urged the panel to certify two questions to a state court in Nevada, where Adelson's business is based.
The panel should ask the Nevada court to decide whether secondhand reports of allegations should refer to court proceedings, and whether a "naked hyperlink" suffices as a footnote, the attorney said.
"I don't know what a 'dressed' and 'naked' hyperlink are," Calabresi replied, to laughter in the court.
Their colleague, George W. Bush-appointed Judge Reena Raggi, pressed the National Jewish Democratic Council's lawyer Lee Levine on what the group's petition did not say.
"That's what I find curious here," Raggi remarked. "There is nothing to suggest that this is a court proceeding until you click on the link."
Levine replied that courts should support this form of citation.
"In the 21st century, we want to encourage people to do what we did in this petition, which is including the hyperlink," Levine said, describing linking as a "valuable tool for expanding human knowledge."
The panel reserved decision on the matter.