Steward SLAPP: Spanish court says Mediatoday in procedural default

Mediatoday Co. Ltd has been declared in default of an ongoing SLAPP proceeding filed by the floundering healthcare company Steward in Spain, against the newspaper and former editor Matthew Vella.

The private hospitals group Steward International, whose multi-million deal in Malta was rescinded by a Maltese judge, filed a damaging lawsuit in Spain where it is now headquartered, alleging defamation from a 2023 report on allegations made by financial investigators Viceroy. It is demanding €25,000 in damages from the newspaper.

Mediatoday did not file a legal response to the court, nor had it been notified officially of the case in the first instance.

The prohibitive costs of any lawsuit in a foreign court, made in the wake of Steward Healthcare’s call to the Maltese government to have Vella himself investigated over his report back in February 2023, amount to a SLAPP action (strategic lawsuit against public participation).

Steward Health Care International (SCHI), now based in Madrid, was running three Maltese state hospitals in a controversial public-private concession that suffered a court-ordered rescission in 2023. The matter is now the subject of international arbitration between Steward and the Maltese government.

Furthermore, in a separate criminal case in Malta, Steward’s top people have been charged with corruption alongside several public officials and politicians, including former prime minister Joseph Muscat.

In February 2023 – shortly before the rescission case – Steward accused Matthew Vella of “colluding” with Viceroy, by reporting on its allegations that American real estate giant Medical Properties Trust (MPT) and Steward had over-inflated asset values in various business transactions. MPT is suing Viceroy in the United States over these allegations. 

In their Spanish lawsuit, Steward takes issue with MaltaToday’s reporting of the Viceroy reports and set the cost to their international reputation at €25,000. If found guilty, Steward wants the Spanish court to order MaltaToday to communicate the decision in the Financial Times, Le Soir, and the Wall Street Journal. 

Steward knew in advance of report 

Vella, who had already queried Steward back in February 2022 about a separate joint venture between its management and MPT, shared with Viceroy’s researchers the comments he had received from the hospitals’ Malta spokesperson at the time. 

Viceroy’s research, based on Maltese, English, and Spanish company filings, alleged that SCHI is connected to Steward Systems and MPT in the United States, by means of a small group of Delaware companies called Manolete. 

Vella then requested a comment from SCHI’s media representatives in Malta, JPA, on the Viceroy reports about MPT. JPA first said the hospital group would not comment on the allegations; then came back with a comment, which was reported in full. Vella also told the JPA representative that he had shared the original reply from SCHI he had received back in February 2022 with Viceroy, which were published in their latest report on MPT.

ECJ decision

Malta can refuse the enforcement of SLAPP lawsuits that demand exorbitant damages to be paid out when these are decided by other courts in European Union member states.

Earlier this year the anti-SLAPP European directive was transposed into Maltese legislation.

In a case that mirrors the SLAPP lawsuit filed against MaltaToday by Steward Healthcare in a Spanish Court, an opinion from the Advocate General of the European Court of Justice, shows that enforcing onerous court damages ordered by foreign courts, should be refused.

According to the Advocate General, an order to pay damages the amount of which is “manifestly unreasonable” has a deterrent effect that affects both journalistic freedom and freedom of information.

The opinion was declared in the case brought to the EU Court by the Real Madrid football club against a decision by the French Court of Cassation not to enforce a Spanish court ruling for damages to be paid by the Le Monde publisher.

Almost 10 years ago, the newspaper Le Monde and one of its journalists were ordered in Spain to pay a penalty for the publication, in 2006, of an article claiming that there were links between the football club Real Madrid and Dr Eufemiano Fuentes, the head of a doping ring in the cycling world.

Ruling that the article was defamatory, the Spanish courts ordered the newspaper company Société Éditrice du Monde to pay a fine of €390,000 and the company and its journalist, jointly and severally, to pay a fine of €33,000.

Real Madrid applied for enforcement of those Spanish judgments in France but, in 2020, the Paris Court of Appeal dismissed its application, having recourse to the public policy clause: according to that court, being ordered to pay that penalty has a deterrent effect on the involvement of journalists and media organisations in the public discussion of matters of community interest, thereby breaching freedom of the press and freedom of expression.

Hearing the case, the French Court of Cassation then asked the European Court of Justice whether, the freedom of the press guaranteed by the Charter of Fundamental Rights of the European Union constitutes a fundamental principle the breach of which can justify recourse to the public policy clause.

Against public policy

In his Opinion, First Advocate General Maciej Szpunar considered that a member state in which enforcement of a judgment is sought, must refuse or revoke enforcement where it would give rise to a manifest breach of freedom of expression.

The Advocate General also said the risk of a deterrent effect going beyond the situation of the person directly concerned, justifies refusal of enforcement because this would be a manifest and disproportionate breach of freedom of the press in the member state.

In this sense, the overall sum that a natural person is required to pay must be considered “manifestly unreasonable where that person would have to struggle for years to pay it in full or where that sum is several dozen times the standard minimum salary in the member state concerned.”

The Advocate General also said that the amount of damages which media companies are ordered to pay “must not be such as to threaten their economic foundations”.

“Given its importance in a democratic society and a State governed by the rule of law, freedom of the press is an essential principle of the EU legal order the manifest breach of which may constitute a ground for refusal of enforcement. Recourse may be had to public policy only in exceptional cases. That is the case where a party has been ordered to pay compensatory damages and enforcement of the judgment is likely to have a deterrent effect on the exercise of that freedom in the Member State concerned.”