Torts

The Supreme Court

 

CFH 2121/12

 

 

Petitioner:                                  Anonymous

 

                                                            v.

 

Respondents:                          1.  Dr. Ilana Dayan Orbach

                                                2.  Telad Studios Jerusalem Ltd.

 

 

Further Hearing on the judgment of the Supreme Court of Feb. 8, 2012, in CA 751/10, CA 1236/10, and CA 1237/10 (Deputy President E. Rivlin, and Justices U. Vogelman and Y. Amit).

 

Before:  President A. Grunis, Deputy President M. Naor, Justice (Emerita) E. Arbel, Justice E. Rubinstein, Justice S. Soubran, Justice Y. Danziger, Justice N. Hendel, Justice U. Vogelman, Justice Y. Amit

 

Judgment

 

President A. Grunis:

 

1.         The underlying tension of defamation law is expressed in full force in this Further Hearing before the Court. On one side stand the dignity and good name of the person harmed by a publication, and on the other side stand freedom of speech and freedom of the press, with all their significance for the individual journalist and the public at large. The legal questions raised in this proceeding go beyond the borders of the particular case that engendered them. Inter alia, we must address questions concerning the nature of “truth” in the legal sphere, the role and duties of the press in a democratic society, and striking a proper balance among the rights and interests concerned in the specific context before us. We will address all of these in this Further Hearing.

 

Factual Background and History of the Proceedings

2.         On Nov. 22, 2004, the television program “Uvda” [“Fact”] with Ilana Dayan” (hereinafter: Uvda) aired an investigative report (hereinafter: the report) prepared and delivered by Dr. Ilana Dayan-Orbach, Respondent 1 (hereinafter: Dayan). The report was preceded by “promos” by Respondent 2, Telad Studios Jerusalem Ltd., which was the Channel 2 concessionaire at the time (hereinafter: Telad). The report and the promos concerned an incident that occurred in an IDF installation in the Gaza Strip in 2004. The details of the incident were addressed at length in the prior proceedings, and in additional legal proceedings, and certain aspects continue to be disputed. Therefore, I will suffice with a very brief description of the matter, based upon the findings of the courts that addressed these proceedings. On Oct. 5, 2004, a suspicious entity was spotted near the installation, which was at a high state of alert. After the fact, it turned out that it was a girl named Iman Al-Hams, a resident of Rafah, who was thirteen years and ten months old (hereinafter: the deceased). There was weapons fire from the installation, the alarm was sounded, and the public address system was turned on. The deceased threw down her bag, fled, and took cover behind a sand berm. The commander of the company manning the installation at the time – the Petitioner – was alerted, and he ran toward the entity. It should be noted that at the time of the incident, shots were fired from the vicinity of Rafah in the direction of the Petitioner and his soldiers. The Petitioner fired two shots in the direction of the deceased, and retreated. He then retraced his steps, and fired a burst toward the area to the east of where she lie. As a result of the shots fired in the course of the event, the deceased was killed.

3.         The report, which was some 18 minutes long, addressed the said event, which was termed “the kill confirmation affair”. The report was described in detail in the prior proceedings, and I will, therefore, only summarize its main points. The report described the unfolding of the event from the moment the suspicious entity was identified by the installation; the gunfire in her direction from the installation; her flight; the assault in her direction by the force led by the Petitioner to “confirm the kill”; the Petitioner’s fire at her; and, ultimately, the removal of the deceased’s corpse from the area. Among other things, the report noted that the incident concerned a little girl who was on her way to school. In addition, the report described the identification of the deceased by the installation’s spotters, the soldiers’ conjectures as to her age, as well as in regard to her being hit, and her condition. The report also stated that the installation was in a evident state of security readiness and tension, and that the soldiers, including the Petitioner, thought that they were concerned with a terrorist event. In addition, Dayan pointed out that the recording from the communication network ended “with these words, that for some reason it was urgent for the company commander [the Petitioner – A.G.] to communicate now with the HQ”.  Then the Petitioner was heard stating over the communications network: “This is leader. Anyone that moves in the area, even if it is there years old, has to be killed. Over.” The report made use of recordings from the installation’s communications network, video clips recorded by the installation’s security towers at the time of the incident, and testimony of soldiers serving in the company. Illustrative pictures and videos clips showing company life, recorded by the soldiers in various contexts, were also included. In this context, a video clip was presented that shows a kind of party held by the soldiers in their room, and it was stated that these pictures appeared immediately after the shooting incident on the videotape recorded by the soldiers.

4.         The report also addressed developments and investigations that followed the incident. It criticized the army’s investigation of the incident, which found that the Petitioner had acted appropriately. In this regard, it mentioned claims by soldiers that they lied in the investigation out of fear of the Petitioner. In addition, the report described the ugly state of affairs in the company. It was noted that “when they [the Petitioner’s soldiers – A.G.] see him shooting at the little girl’s corpse, they are sure that he carried out a kill confirmation”. In this regard, it was stated that “it is not certain that this story would have gotten out were it not for the state of affairs in the company”. It was further noted that the Petitioner was placed under arrest, and that he was interrogated by the Military Police, and video clips of that interrogation were shown in which he explained, among other things, that he acted to neutralize a threat. It was also reported that an information was filed against the Petitioner in the military court on the day of the report was broadcasted. Finally, the responses of the Military Spokesperson and the deceased’s family were shown. It was also stated that the Petitioner had not yet been given permission to be interviewed, although the representatives of Uvda asked to interview him.

5.         In the broadcast of Uvda that was aired a week later, Dayan added a number of clarifications and emphases in regard to the report. Inter alia, it was emphasized that the installation was operating under threat warnings, and the threats under which the soldiers were operating were mentioned. In addition, further clips from the communications network at the time of the incident were aired. Among them were estimates as to the deceased’s age, and it was noted that one of the questions to be answered is who heard that. Dayan emphasized that the report accurately portrayed the events, but clarified that there was one mistake in the report. According to her, the video clip in which a soldier is seen shooting from a position in the installation was not related to the incident. Nevertheless, it was stated that there is no dispute that there was heavy fire from the positions in the installation, which continued for an extended period.

6.         On July 5, 2005, in an end-of-season review of Uvda, a four-minute summary of the report that is the subject of these proceedings was broadcasted. It was accompanied by remarks by Dayan at the beginning and the end of the report, in which, inter alia, she presented an update of the developments since the original broadcast (hereinafter: the review report). The content of the review report will be described at length below. I would already state that the editors of Uvda approached the Petitioner prior to the broadcast of the review report. In response, the Petitioners attorneys claimed that the broadcast was defamatory, and demanded that the review report not be aired, or in the alternative, that their full response be presented.

7.         As noted, on Nov. 22, 2004, an information was filed against the Petitioner in the Military Court on five charges: unlawful use of a firearm, for the two shots fired in the direction of the deceased; unlawful use of a firearm, for the burst he allegedly fired at her; obstruction of justice; deviation from authority creating a life-threatening danger as a result of the rules of engagement that he allegedly issued to his soldiers; and conduct unbecoming. On Nov. 15, 2005, the Military Court acquitted the Petitioner on all counts. The Petitioner then filed suit against the Respondents in the District Court, under the Defamation Law, 5765-1965 (hereinafter: the Law, or the Defamation Law).

 

The Judgment of the District Court

8.         The Jerusalem District Court (Judge N. Sohlberg) found in favor of the Petitioner, in part (CA 8206/06 of Dec. 7, 2009). It held that the report constituted defamation of the Petitioner, who was presented as having acted in a cruel and evil manner, and the soldiers under his command were presented as having maintained heavy fire at the deceased without regard for the possibility that she might be killed. It was held that this was done in a manner that affected the Petitioner’s good name. In addition, the court ruled that the report gave the impression that the Petitioner forced his soldiers to lie in the military enquiry, that the suspicions against him were whitewashed in the enquiry, and that he feigned innocence in his interrogation and refrained from presenting a consistent version of the events. The District Court held that this, too, constituted defamation of the Petitioner. It was held that the Respondents could not claim the plea-of-truth defense under sec. 14 of the Law, nor the plea-of-good-faith defense under sec. 15 of the Law. Therefore, they were ordered to pay damages to the Petitioner in the amount of NIS 300,000, and it was ordered that the Uvda program would correct the impression that the report created. In that context, the Respondents were ordered to report the fact of the Petitioner’s acquittal, as well as the main points of the Military Court’s judgment, to explain that the report had conveyed a mistaken impression in regard to the Petitioner and in regard to the incident, and to report the outcome in the District Court. All of the parties appealed the decision.

 

The Judgment on the Appeals

9.         On Feb. 8, 2012, judgment was handed down on the appeals (CA 751/10, Deputy President E. Rivlin, and Justices U. Vogelman and Y. Amit; hereinafter – the Appeals Decision or the Decision). All of the justices of the panel agreed that the report that was broadcasted constituted defamation of the Petitioner. However, they were of the opinion that liability should not be imputed to Dayan, inasmuch as she enjoyed a defense under the Law. The justices were divided as to which defense applied. Deputy President Rivlin and Justice Amit were of the opinion that the report met the conditions of the plea-of-truth defense under sec. 14 of the Law. They held, pursuant to CFH 7325/95 Yediot Aharonot Ltd. v. Krauss, 52 (3) 1 (1998) (hereinafter: CFH Krauss), that the first condition of this defense – the truth of the publication – was met in the sense that the publication was “true at the time”. Deputy President Rivlin explained that “the picture of reality as portrayed by the report as a whole is not substantially different from the truth as it was known at that time, as best as could be ascertained with the investigative tools available to a reasonable journalist” (para. 97 of his opinion). That was the case, inter alia, considering that the facts grounding the report at the time of the broadcast also served as the grounds for the charges brought against the Petitioner. Justice Amit concurred with Deputy President Rivlin on this point. He emphasized that the media cannot be demanded to meet “an absolute standard of pure truth” (para. 14 of his opinion). He was of the opinion that in this case, the condition of truthful publication was met, inasmuch as the report reflected the truth as it was known to the investigating authorities and the prosecution at the time of the broadcast. Both justices held that the second condition of the truth defense – a public interest in the publication – was also met. Justice Vogelman, however, was of the opinion that Dayan could claim the good-faith defense under sec. 15(2) of the Law, in circumstances in which the relations between the publisher and the audience to which the publication was addressed “imposed on him a legal, moral or social duty to make the publication”. The Appeals Decision held that the time had come to recognize, in the framework of sec. 15(2) of the Law, a broader journalistic obligation than that previously recognized in CA 213/69 Israel Electric Corporation Ltd. v. Haaretz Newspaper Ltd., IsrSC 23 (2) 87 (1969) (hereinafter: the First Haaretz case). This, while establishing appropriate conditions for the application of the defense. Justice Vogelman was of the opinion that such an obligation would arise upon meeting two conditions. The first is the presence of a significant public interest in the publication, and the second, that the publication is the result of careful, responsible journalistic work. Additionally, Justice Vogelman made a non-exhaustive list of auxiliary tests as aids in ascertaining the meeting of these criteria.

10.       The result was that Dayan’s appeal was granted (CA 1236/10), and the judgment of the District Court in her matter was reversed. As opposed to that, the Court held that the defenses under the Law did not apply to the program’s promos. That being the case, the Court did not find grounds for intervening in regard to Telad’s liability. As a result, the Court decreased the damages awarded against it to NIS 100,000, and rescinded the obligation to publish a correction. Telad’s appeal (CA 1237/10) was granted in part. The Petitioner’s appeal in regard to the damages awarded to him (CA 751/10) was denied.

 

The Petition for a Further Hearing

11.       Following the Appeals Decision, the Petitioner submitted a petition for a Further Hearing. After considering the petition and the responses of the Respondents, on Oct. 3, 2012, I ordered a Further Hearing on the Appeals Decision, in accordance with my authority under sec. 30(b) of the Courts [Consolidated Version] Law, 5744-1984 (hereinafter: the Courts Law). In my decision of Nov. 25, 2012, the issues that would be addressed in the Further Hearing would be as follows:

(a) Can the phrase “the matter published was true”, in sec. 14 of the Defamation Law, also be construed to mean “true at the time”, and if so, under what conditions?

(b) Can the requirement, under the above sec. 14, that “the publication was in the public interest” not be met when legal proceedings are pending in the matter that is the subject of the publication?

(c) Can a journalist, as a journalist, enjoy the defense under sec. 15(2) of the Defamation Law, 5725-1965, and if so, under what conditions?

Pursuant to that, the parties submitted supplementary pleadings, and a hearing was held before us. Following are the main arguments of the parties.

 

…

 

Justice Rubinstein

…

On Defamation in the Jewish Law Ethos

3.         Before doing so, I would first recall where, in my opinion, the historical ethos of Jewish law stands in this area – as we are a Jewish and democratic state, and Jewish law holds an important place among the sources of Israeli law, see: Aharon Barak, Purposive Interpretation in Law, 452-453 (2003) (Hebrew) [English: Aharon Barak, Purposive Interpretation in Law, (Princeton: Princeton University Press, 2005)]; Aharon Barak, The Judge in a Democracy, 290 (2004) (Hebrew) [English: Aharon Barak, The Judge in a Democracy, (Princeton: Princeton University Press, 2006)]; and see my article, “Malkhut Yisrael Le’umat Dina deMalkhuta,” 22 (2)  Mekhkarei Mishpat 489, 496-498 (Hebrew). No proof is required of the fact that our exposure to various kinds of electronic and virtual communication, including television, radio, internet, in addition to the print media, is tremendous, unforeseen by our predecessors, and continuously growing. What seemed like high waves before the internet age, is now an unfathomable ocean and a rising spring. It is an appropriate time for a brief study of the approach of Jewish law and halakha to defamation, and further on, I will return to the Jewish law approach to the defenses. I would first note that Jewish law served as one of the sources of the Defamation Law, 5725-1965, see the Defamation Bill, 5722-1962, H.H. 504 (5722) 142, 145, 147; and see: LCA 531/88 Avneri v. Shapira, IsrSC 42 (4) 20, 25-26; and see: N. Rakover, Jewish Law in Knesset Legislation, 631-639 (1988) (Hebrew), and the references there. The late Professor Elon noted that “this is an example of a respected halakhic institution that served as inspiration for legislation in the criminal field, not in terms of its details, but rather in terms of its general approach” (M. Elon, Jewish Law: History, Sources, Principles, 1380 (1973) (Hebrew) [English: M. Elon, Jewish Law: History, Sources, Principles (Jewish Publication Society, 2003)]).

            Indeed, much of what is openly declared in public is protected by Israeli law as part of freedom of expression, or under other defenses provided by the Defamation Law. Even if that does not mean that a person whose reputation is tarnished has no legal remedy – and there are no few possibilities under the Defamation Law – still, especially where the media is concerned, those remedies are becoming fewer and fewer as a result of judicial interpretation. Jewish law is meticulous in regard to a person’s dignity – human dignity, and respect for a person in the plain sense – including in regard to one’s reputation, and thus its view of disparagement is more extreme than that of the Defamation Law. Its rules concerning defamation form a significant chapter, and the District Court addressed this in the matter before us, in the context of “constructive defamation”, as I shall explain.

4.         The Hafetz Hayim, Rabbi Yisrael Meir Hakohen of Radun, a leading Jewish personage in Russo-Poland in the 19^th-20^th centuries, until his death in 1933, and author of the books Hafetz Hayim and Shemirat Halashon placed the subject of lashon hara [literally: “evil speech”, i.e., defamation –trans.] at the center of his toraitic works (he would also write the Mishne Berura, which may be described as the authoritative commentary to the Shulhan Arukh: Orah Hayim, and more) and endeavors. His book Hafetz Hayim (which was initially published anonymously in the early 1870s) presents the rules of lashon hara in comprehensive detail, while his book Shemirat Halashon, which compliments it, and which was published in the latter half of the same decade, provides aggadic [non-halakhic, rabbinic exegetical texts – trans.] sources and moral insights in regard to the prohibition of defamation and rumor mongering. At the beginning of his book Hafetz Hayim, [literally: “Desires Life” – trans.], which draws its name from the verses “Which of you desires life, and covets many days to enjoy good?  Keep your tongue from evil, and your lips from speaking deceit. Depart from evil, and do good; seek peace, and pursue it” (Psalms 34:13-14), the author lists seventeen negative commandments, fourteen positive commandments, and four instances of “cursed be” that a person may transgress in the framework of lashon hara and gossip.  Hafetz Hayim examines the laws of lashon hara and gossip in detail, and provides an accompanying commentary (“Be’er Mayim Hayim”), while Shemirat Halashon [lit. “Guarding the Tongue” – trans.], whose title is a reference to the verse “He who guards his mouth and tongue, guards himself from trouble” (Proverbs 21:23), completes it, thus constituting an indispensable pair of compositions for anyone who seeks to observe the halakha in this area (many summaries have been written over the years, e.g., Ikarei Dinim by Rabbi Shmuel Huminer). The Hafetz Hayim deemed guarding one’s tongue as possible, despite the widespread phenomenon of defamation, or at least of “quasi-defamation” [“avak lashon hara”, literally “dust – i.e., a “tinge” or “trace”— of lashon hara”—trans.] and gossip, on the presumption that the Torah does not impose obligations and prohibitions that cannot be observed.

5.         The primary, direct prohibition in the Torah is to be found in the verse “You shall not go up and down as a talebearer among your people: neither shall you stand against the blood of your neighbor” (Lev. 19:16). Rashi explains (ad loc.): “since all those who instigate disputes and speak lashon hara go into their friends’ houses in order to spy out what evil they can see, or what evil they can hear, to tell in the marketplace”. And as the Hafetz Hayim (Negative Commandments 1) explains, following Maimonides (Hilkhot De’ot 7:2): “Who is a gossiper? One who collects information and goes from person to person, saying: This is what so and so said about you, and this is what I heard that so and so did to you. Even if the statements are true, they bring about the destruction of the world. There is a much more serious sin than this, which is also included in this prohibition, which is lashon hara, that is also comprised by this prohibition, and which is relating deprecating facts about another, even if he speaks the truth. But one who tells a lie, defames his colleague’s good name” (emphasis added – E.R.). And further on (Lashon Hara, Principle 5:2), the Hafetz Hayim states: “And needless to say, if the matter is false or partly true and he exaggerates it more than it is, this is surely a very great sin, which is more severe than plain lashon hara, and it is in the category of defaming a person’s name, because he humiliates his friend by his lies. Even if it is the absolute truth, all the Rishonim [halakhic scholars active in the 11^th-15^th centuries, prior to the publication of Joseph Karo’s Shulhan Arukh – trans.] have established that … it is lashon hara even if it is true”. This is intended to remind us that we are not concerned with a solely moral issue, as one might mistakenly imagine, but rather with a clearly halakhic issue. And note that the Torah compares gossip, which is the lowest level in the laws of defamation, to standing “against the blood”, and no less, and that lashon hara is prohibited even if true, and thus Jewish law is, as noted, more strict than the prevailing Israeli law.

            The Gemara (TB Arakhin 15a-b and 16a-b) addresses lashon hara. The Mishna that is the basis for the discussion (15a) states: “Thus we also find that the judgment against our ancestors in the wilderness was sealed only because of their evil tongues, as it is written: you have tried me these ten times … (Numbers 14:22).” Those words referred to the affair of the ten spies who spoke ill of the Land of Israel, and R. Eliezer b. Perata says (ibid.), “Come and see how great the power of an evil tongue is. Whence do we know? From the spies [the spies that Moses sent, and who spoke ill of the Land of Isral – E.R.]: for if it happens thus to those who bring up an evil report against wood and stones, how much more will it happen to him who brings up an evil report against his neighbor”. We also find there: “Of him who slanders, the Holy One, blessed be He, says: He and I cannot live together in the world” (ibid., 15b). And on the verse “Death and life are in the power of [literally: “in the hand of” – trans.] the tongue” (Proverbs 18:21) the Talmud states (ibid.): “Has the tongue a hand? It tells you that just as the hand can kill, so can the tongue … One might say that just as the hand can kill only one near it, thus also the tongue can kill only one near it, therefore the text states: ‘Their tongue is a sharpened arrow’ (Jeremiah 9:7) [in other words, lashon hara reaches and causes harm even at a distance – E.R.]”.

            The Sages also said that all are guilty of “avak lashon hara” [“the tinge of defamation” – trans.] (TB Bava Batra 165a), in other words, no one (or at least, almost no one) is entirely innocent of lashon hara. Pursuant to the Gemara in Arakhin (ibid.), Maimonides states (Hilkhot De’ot 7:3): “Our Sages said: There are three sins for which retribution is exacted from a person in this world and he is denied a portion in the world to come: idolatry, forbidden sexual relations, and bloodshed, and lashon horah is equivalent to them all … Our Sages also said: Lashon hara kills three, the one who speaks it, the one who listens to it, and the one about whom it is spoken. The one who listens to it more than the one who speaks it.” Maimonides is of the opinion that transgressing this prohibition may lead to bloodshed – “A person who collects gossip about a colleague violates a prohibition, as it says: Do not go around gossiping among your people. And even though this transgression is not punished by lashes, it is a severe sin and can cause the death of many Jews. Therefore, it is placed next to: Do not stand against your neighbor's blood …” (Hilkhot De’ot 7:1; and see: Sefer Mitzvot Gadol (R. Moses b. Jacob of Coucy, France, 13^th cent.) Prohibitions 9). According to Sefer Hahinukh (R. Aaron Halevy of Barcelona, 13^th cent.), the justification for the prohibition is that “God wishes the good of His creations, and instructed us by this that there should be peace among us, because gossip leads to dispute and strife” (ibid., Commandment 236), in other words, preventing arguments and disagreements in society, and see: I. Warhaftig, The Right to Privacy in Jewish Law, 233-235 (2009) (Hebrew); S. Aharoni-Goldenberg, “On-Line Privacy from Jewish Law Perspective,” 52 (1) HaPraklit 151, 162-164 (2013) (Hebrew). On lashon hara, also see my article Bad Reports – On the Continuing Struggle for the Dignity and Good Reputation of Others, Parashat Hashavu’a Bereshit (A. Hacohen & M. Vogoda eds.), 211 (Hebrew), also published in my book Paths of Government and Law, 336 (2003) (Hebrew); N. Sohlberg, On Lashon Hara, “Lashon Tova”, and Damages – Money isn’t Everything, ibid., Vayikra 117 (Hebrew); M. Vigoda, Do Not Stand Upon Your Neighbor’s Blood – The Duty to Rescue and its Limits, ibid., Vayikra 150, 151 (Hebrew); N. Sohlberg. The Right to Reputation – Freedom of Expression and Defamation for a Constructive Purpose, ibid., Bemidbar 59 (Hebrew); M. Vigoda, How Beautiful are Your tents O Jacob – Privacy and Freedom of Expression, ibid., 208 (Hebrew); Rabbi Y. Unger & Prof. Y. Sinai, Exposing the Identity of a Suspect before filing an Information, (Center for the Application of Jewish Law, Netanaya Academic College, Elul 5774).

6.         In his monograph The Defense of Privacy (2006) (Hebrew), Professor Rakover notes that “anything that can cause a person sorrow falls within the scope of lashon hara, even if it is not denigrating in any way” (p. 31). He adds that “a broad definition of the prohibition of gossip and lashon hara can even comprise a violation of a person’s privacy, inasmuch as every person is sensitive to intrusions into his personal life, and does not consent to his private matters being in the public domain” (ibid., p. 32).

            In his well-known letter, R. Elijah of Vilna wrote that “…as our Sages said (Tosefta Pe’ah 81), the sin of lashon hara in its entirety … ‘and lashon hara is equivalent to them all’, and what need is there for me to elaborate on this sin that is the worst of all transgressions”.

            In his writings, the Hafetz Hayim went above and beyond, and as R. Israel Salanter, one of the founders of the Musar Movement, wrote of him, “he took … one Torah verse, and created an entire Shulhan Arukh around it”. And note that that Hafetz Hayim’s approach did not oppose freedom of expression, but rather sought to combat its abuse, with deep understanding of the complexity of the human experience, but in his view “the prohibition upon lashon hara is so great that the Torah prohibited it even in regard to the truth and in every form …” (Hafetz Hayim, Principle 3:16). Moreover, according to him – and let us think of the media in this regard – “the greater the number of listeners, the greater the sin of the speaker (Hafetz Hayim, Hilkhot Issurei Lashon Hara, Principle B:1). Thus, as noted, Jewish law goes to the extreme.

7.         In a eulogy of the Hafetz Hayim, one of his students said that “his circumspection in speaking was beyond human understanding … and he never made any expression of anger or even avak lashon hara…” (quoted in Rabbi Israel Joseph Bronstein, Hanhagot HaHafetz Hayim, 279 (5767) (Hebrew)). Many stories are told of him, like, for example, that he went so far as to refuse to stay in a home in which he heard lashon hara (ibid., 280-281). His son-in-law, Rabbi Menachem Mendel Zaks, related that “he told me several times, ‘Thank God that I was always careful in regard to avak lashon hara’” (ibid., 280). In other words, the Hafetz Hayim lived as he preached. Rabbi Yehudah Segal of Manchester, one of the most ardent activists for distributing the book Hafetz Hayim, said that a person who is circumspect in his speech acquires the Hafetz Hayim as his advocate. No less.

            Indeed, Jewish history is full of incidents in which lashon hara “killed” people. For example, Rabbi Meir Leibush Wisser, the Malbim (1809-1879), was forced to leave his position as Chief Rabbi of Romania when a public smear campaign depicting him as a dark, boorish character, and the enemy of progress and Jewish integration in general society led to his dismissal. Rabbi Jonathan Sacks (former Chief Rabbi of the United Hebrew Congregations of the Commonwealth) wrote in The Plague of Evil Speech (Metzorah, 5768) [http://rabbisacks.org/covenant-conversation-5768-metsorah-the-plague-of-...

For a people of history, we can be bewilderingly obtuse to the lessons of history … Jews have continued to excoriate, denounce, even excommunicate those whose views they did not understand … Of what were the accusers guilty? Only evil speech. And what, after all, is evil speech? Mere words …Words wound. Insults injure.

            The number of people now studying the Hafetz Hayim’s books Hafetz Hayim and Shemirat Halashon has increased. It would seem to me that even if it is difficult to completely free ourselves of lashon hara in a world like ours in which the possibilities for expressing lashon hara are so great, and so many are harmed for no reason, and only the rare few can succeed,  we may still benefit from its study. In my opinion, contending with this is, in sum, the challenge before the Court in this case as in other defamation cases, and the question is whether or not we will contribute to creating a more decent, moderate society.

8.         In addition, the prohibition upon causing embarrassment is another aspect of protecting a person’s reputation. Of this it was said that a person who embarrasses his fellow in public has no place in the world to come (Mishna Avot 3:11), and “when a person who embarrasses his fellow in public, it is as if he has shed blood” (TB Bava Metzia 58b), and it is also said that “It is better for a man that he should cast himself into a fiery furnace rather than that he should put his fellow to shame in public” (TB Berakhot 43b). And see: The Talmudic Encyclopedia, vol. 9, s.v. Halbanat Panim; and see: A. Cohen, Have Everyone withdraw from Me, Parashat Hashavua (5767) 273 (Hebrew). However, despite the great weight and importance attributed to reputation, even the prohibition upon lashon hara in Jewish law is not absolute, and as the Hafetz hayim states in the preface to his book Hafetz Hayim, if the approach were absolutely strict “it would not be possible to live in this world in this regard, without entirely withdrawing from worldly matters”. Even in Jewish law, the laws of defamation do not exist in a vacuum, and there may be cases – exceptions – in which the prohibition upon publishing lashon hara will retreat before other vital interests.

 

On Freedom of Expression in the Jewish Law Ethos

9.         Jewish law indeed recognizes the great importance of freedom of expression against the government, and as Deputy President Elon pointed out: “The prophets of Israel and their prophecies have long served as the paradigm of impassioned and uncompromising rebuke of governmental abuse of might and power, and of a corrupt public or individual. They condemn oppression of the poor and exploitation of the widowed, the repression of individual and community rights, and deviation from the spirit and substance of the Torah and halakha. The firm stand and struggle of the prophets of Israel, even when they evoke severe and angry reactions, has been an inexhaustible source of inspiration in the struggle for freedom of expression and for contemporary enlightened democratic regimes” (EA 2/84 Neiman v. Chairman of the Central Elections Committee, IsrSC 39 (2) 225, 294 [English: http://elyon1.court.gov.il/files_eng/84/020/000/Z01/84000020.z01.pdf]; and see CFH 7383/08 Ungerfeld v. State of Israel (2011)), paras. 2-3 of my opinion; A. Cohen, Jewish Law and Freedom of Expression, Parashat Hashavua (5765) 205 (Hebrew); H. Cohn, On Freedom of Opinion and Speech in Jewish Law, Parashat Hashavua (5762) 78 (Hebrew)). Here is but one example from among many. In the first chapter of his book, the prophet Isaiah, incisively criticizing the rulers of Jerusalem, states: “Hear the words of the Lord, you chieftains of Sodom … devote yourselves to justice, aid the wronged, uphold the rights of the orphan, defend the cause of the widow … Your rulers are rogues, and cronies of thieves, every one avid for presents and greedy for gifts; they do not judge the case of the orphan, and the widow’s cause never reaches them” (Isaiah 1:10, 17,23). Harsh criticism, without fear. In LCrimA 10462/03 Harar v. State of Israel, IsrSC 60 (2) 70, 92 (2005), I stated that “the idea of freedom of expression is not, in my opinion, conceptually at odds with the approach expressed in Jewish sources in regard to euphemistic language”. However, despite the importance that Jewish law attributes to freedom of expression, there is no denying that the default position – when lashon hara is concerned – is refraining from publication, except in exceptional cases in which the lashon hara is intended to be constructive, to which I will return. Indeed, in our world, refraining from publication is an impractical utopia, but with the help of the courts, it is possible to restrict lashon hara, except when it is constructive, and not broaden it.

…

25.       As noted, the judgment that is the subject of the Further Hearing held that the rule established in the Ha’aretz case should be changed. It was held (para. 26 of the opinion of Justice Vogelman) that “the phrase ‘moral or social duty’ that appears in sec. 15(2) of the Law is an ‘open canvas’ to which the Court must give meaning in accordance with the proper balance among the conflicting rights, values and considerations”, and that the Ha’aretz rule “no longer reflects the proper balance between freedom of expression and freedom of the press, and the right to dignity, reputation and privacy”. It was further stated that the proper solution “is protection of good-faith publication by the media that is of a significant public interest, when it is a publication that meets the strict standards of responsible journalism” (emphasis original). This holding was based, as arises from what I stated above, primarily upon a change in the conception “in regard to the status of freedom of expression in Israeli law, which has been recognized as being of constitutional status” (para. 5 of the opinion of Justice Vogelman), and the change that has occurred in England and the Common Law countries in regard to the application of the “obligation to publish” in regard to factual publications in the media (para. 14). Deputy President Rivlin noted (para. 119) that in view of this conceptual change – in the context of which freedom of expression was recognized as being of constitutional supra-legal status, together with the recognition of the importance of the free press – the Ha’aretz rule has largely become obsolete. In the view of Justice Amit (para. 17 of his opinion), the change of the rule is required in view of the “changing times, and the vicissitudes that have taken place over the last decades, both on the normative-legal plane and in the communications media”. That is, essentially, also the view of the President and those who concur with him in the Further Hearing.

26.       With all due respect, I take a different view. I am of the opinion that even the changes and vicissitudes that have occurred in the world do not justify a change of the Ha’aretz rule, and it would not be superfluous to say that the force of the matter before us – defamation of an IDF officer in a case concerning nothing less than human life – is more serious than the situation in the Ha’aretz case, as described, without taking that affair lightly. I am, as stated, of the opinion that even in the balance between a person’s – any person – right to his good name and freedom of expression, the latter should not be preferred a priori. The grounds for my position are to be found in the exalted value of human dignity, which has been raised to the level of a Basic Law over two decades ago. Human dignity, and a person’s right to his reputation are also related to the approach of Jewish law to lashon hara, as described above. In my opinion, the rule established in the judgment that is the subject of this Further Hearing, and that arises from the opinions of my colleagues in the Further Hearing, may lead – even though this is clearly not the intent – to the trampling of the dignity and reputation of a person, to a “doormat”, as Justice E. Goldberg put it in CFH 7325/95 Yediot Aharonot Ltd. V. Krauss, IsrSC 52 (3) 1, 106 (1998) (hereinafter: CFH Krauss). I will now turn to address the balancing of interests and rights in the Defamation Law – the right to one’s good name on one side, and freedom of expression and freedom of the press on the other. But before proceeding, I would note that in my opinion – absolutely clearly – the Ha’aretz rule should not be viewed as being “archaic”. Is it archaic to hold that in the legal framework of defamation, the purpose of the press, as important as it may be, does not rise to the level of a duty that permits telling a falsehood? My colleagues who are of that opinion surely refer to the strengthening of the status of the media and to developments in the general and legal world. But do values that hold fast to the remnants of reputation and defend human dignity in its plain sense belong in the archives? I do not think so. The justices of the Supreme Court in the sixties and seventies were not conservative dinosaurs that could not see the light. The strengthening of the media does not imply a weakening of the need to insist upon the truth. There are values that are steadfast, for what have not changed at all in the last forty years are the nature and the errors of humanity, which remain as they were since Creation, while the means have become more developed, and what was once available only to the relatively few, now spreads like a brush fire in the electronic and virtual world.

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30.       On the other side of the scales is freedom of expression, the importance of which is undeniable. Freedom of expression is one of the central, most important values of a democratic regime. It has been described as a “superior right” (HCJ 73/53 “Kol Ha’am” Company Ltd. v. Minister of the Interior, IsrSC 7 (2) 871, 878 (1953) [http://versa.cardozo.yu.edu/opinions/kol-haam-co-ltd-v-minister-interior]), and as the “apple of democracy’s eye” (CrimA 255/68 State of Israel v. Ben Moshe, IsrSC 22 (2) 427, 435 (1968)). Thus it was prior to the enactment of Basic Law: Human Dignity and Liberty, and so it is thereafter (see, among many, the Szenes case [HCJ 6126/94 Szenes v. Broadcasting Authority, IsrSC 53 (3) 817, [http://versa.cardozo.yu.edu/opinions/szenes-v-matar]], at pp. 828-830, para. 9 of the opinion of Barak P.); the Ben Gvir case [LCA 10520/03 Ben Gvir v. Dankner – trans.], at para. 13 of the opinion of Procaccia J). For my part, I had the opportunity to point out that “freedom of expression is a supreme right of a citizen in a democratic society, in order to free the human spirit, and combat tyranny and silencing opinions, to facilitate public discussion in the marketplace of opinions, to help liberty conquer oppression and totalitarianism” (LCrimA 10462/03, above, at p. 90). Of course, first and foremost is its importance for criticizing government.

31.       Freedom of the press derives from freedom of expression (CA 723/74 Ha’aretz Newspaper v. Israel Electric Corporation, IsrSC 31 (2) 281, 298 (1977) [http://versa.cardozo.yu.edu/opinions/haaretz-daily-newspaper-ltd-v-israe...). This Court has addressed the importance of freedom of the press in many decisions. Thus, for example, in CFH Krauss, at p. 53, Justice Zamir wrote that “a free press is not only a necessary result of democracy, but a necessary condition for democracy. It is a necessary condition for a representative regime, for good, proper governance, and for human rights. In practice, it can serve as a litmus test of democracy: if there is a free press – there is democracy; if there is no free press – there is no democracy. One of the main tasks of the press in a democracy is to continuously and efficiently monitor all of the state institutions, first and foremost the government”. In LCrimA 761/12 State of Israel v. Makor Rishon HaMeuhad (Hatzofe) (2102) [http://versa.cardozo.yu.edu/opinions/state-v-makor-rishon-hameuhad-hatzo... (hereinafter: the Makor Rishon case)), I wrote: “The press is meant to function as the long arm of the public, and is charged with gathering and publicizing information; the free exchange of opinions is a fundamental condition for a democratic society … A democracy that wishes to enjoy ongoing public debate and discussion of national issues cannot be satisfied with freedom of expression that exists only in theory; the state authorities, including those involved in the criminal and administrative fields, must limit the exercise of their powers, in order to enable the practical exercise of the constitutional right” (para. 73). However, as I noted in my article Stains in the Press (Hebrew), “The problems in the field of freedom of expression that now face us are different from those we have become accustomed to confronting in the past. Today, the competition is not – primarily – between the right to freedom of expression and governmental interests for which the government wishes to limit that right. Today, we can say that in the relationships between the individual and the government, freedom of expression has attained an established status in our society and legal system. The historical fear of government that tyrannically shuts mouths is no longer – not in the electronic media (ever since the Broadcasting Authority Law), nor in the print media. The power of censorship has been reduced incredibly in the era of Basic Laws, and even enforcement in regard to the exposure of secrets is quite rare” (pp. 199-200). Who can seriously say that there is no freedom of the press in Israel? Indeed, criticism of the government is rooted in our national ethos. As noted, the Prophets of Israel raised their voices against the government, and even with the reservation, i.e. that the Prophets spoke as God’s mouthpiece and not of their own (see: A. Hacohen, On the Principles of Freedom of Expression and its Limits in Jewish Law, Parashat Hashavua Vayikra 137, 136), in any case, criticism of the government is not like criticism of an individual. And as Prof. A. Barak wrote (Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, p. 723 (2014) (Hebrew), [published in English as Human Dignity: The Constitutional Value and the Constitutional Right (2015)], “…the scope of the individual’s right of expression against the state is more comprehensive than an individual’s right to freedom of expression against another individual”; and see ibid., 588-599: “an individual’s right too human dignity in regard to the state differs from that individual’s right to human dignity in regard to another individual. Against the state, the individual’s right to human dignity applies in to the full extent of the ideal it is meant to achieve. But against another individual, the individual’s right is subject to a process of balancing and limiting in view of its engagement with other constitutional rights or the public interest”; and see Justice Sohlberg’s opinion in CA 8954/11 Anonymous v. Anonymous (April 4, 2014), para. 122. Indeed, in these contexts, Jewish law, at the very least, sets boundaries for freedom of speech, as A. Hacohen describes in the aforementioned essay, and see the references there.

…

 

40.       Thus, Basic Law: Human Dignity and Liberty expressly established human dignity, including the right to reputation, as a constitutional right, and in my opinion, the time has come to reexamine the balance struck prior to the Basic Law in the Avneri case, so as to reinforce reputation. The clear, express words of Basic Law: Human Dignity and Liberty cannot remain merely declaratory, and remain without practical effect. The Court is required to defend human rights, rights that include the right to one’s good name. It must stand up to the erosion of human dignity not only in respectful, beautiful words. In other words, it must ensure that every woman and man know that a person’s good name is not a doormat. Once the legislature established – in express words, and by all that is holy, and no one can possibly argue that a person’s dignity does not, first and foremost include his reputation – that a person’s right to a good name is a constitutional right, we must give that real, practical content. In my opinion, real content in the context with which we are concerned – the laws of defamation – would mean changing the balance, and returning to the balance rule established in the Further Hearing in the Electric Corporation case, i.e., freedom of expression should not be deemed a superior right that stands above the right to a good name, but on the contrary, where there is doubt, it would be better to err in favor of a good name. I would stress that I have no desire to harm freedom of expression and freedom of the press, which are held undisputedly high in Israeli law and reality. On the contrary, I hold them in high regard. They have a very important role in protecting democratic society, and I am the last who would not contribute to that. However, in my opinion, “freedom of expression is not an unbounded, theoretical concept. The prohibition of defamation is one of the significant boundaries, and the question is how to interpret defenses and licenses in regard to defamation. I believe that Basic Law: Human Dignity and Liberty should play a part in that” (LCA 1104/07 Hir v. Gil (2009), para. 29 of my dissent). “Freedom of the press also applies to biting journalism, but that does not mean that the freedom is unlimited … the basic presumption of freedom of the press is also responsible journalism. A person’s good name is not at forfeit” (the Makor Rishon case, para. 73). The approach protecting a person’s good name is my consistent approach, even when I am in the minority (see my opinion in LCA 4447/07 Mor v. Barak E.T.C. (1995) (hereinafter: Mor v. Barak). A person’s good name is a constitutional right of the highest order, and as such, we are required to accord it its rightful place. This is particularly the case when we are speaking, as in this case, of a suit concerning a story/report that has been published, and not – as was the case in in the Avneri case – a restraining order to prevent publication (on the distinction between preventative relief and retroactive sanctions in these contexts, see CA 409/13 Keshet Broadcasting Ltd. v. Cooper (April 11, 2013) para. 16 of the opinion of Grunis P.). I would reiterate that, in my opinion, freedom of expression, which  is necessary for the oversight of governmental authorities (as see, inter alia, Re’em Segev, Freedom of Expression against Governmental Authorities (Israel Democracy Institute, 2001), is not, as noted, identical – and certainly not necessarily so – to freedom of expression against a person who is not a governmental personage, and see para. 31 above. Indeed, Israeli law protects untrue publications when there is a legal obligation, no less, to publish them (sec. 15(2) of the Defamation Law). Has freedom of journalistic expression attained the level of an obligation that permits untruth and defamation? In my view, it has not. Before explaining why, in my opinion, a journalistic obligation should not be read into sec. 15(2), I will present the Jewish law approach to constructive lashon hara (which, in some cases, may attain the level of an obligation).

 

Constructive Lashon Hara

41.       Indeed, there are possible situations in Jewish law in which refraining from lashon hara may cause harm, and the prohibition upon lashon hara is overridden in such situations due to the attendant benefit: “And know that in interpersonal matters, such as gezel [theft], oshek [exploitation], nezek [damage], tza’ar [suffering], and boshet [shame], and ona’at devarim [verbal deception], one may inform others, and even a pious individual will tell, in order to help the guilty party, and from a devotion to truth” (Sha’arei Teshuva by R. Jonah b. Abraham Gerondi (Spain, 13^th cent.) 3:221); “Along with His [God – E.R.] command against gossip, came the proviso that you shall not stand against your neighbor’s blood, so that if one see that a group wishes to commit murder, he must inform the interested party in order to save his life, and should not think that this is gossip, as if he does not tell his fellow and he is killed, the warning of you shall not stand is abrogated, etc. We can learn from the story of Gedaliah ben Ahikam (Jeremiah 40) who was told, but when he did not heed, what happened (that is, Gedaliah ben Ahikam was warned that he was in danger, but he did not believe the warning, and was ultimately murdered – E.R)]” (and see: Or HaHayim (R. Haim ibn Atar,  a.k.a. Or HaHayim HaKadosh, 17^th-18^th cent.) Vayikra, Kedoshim 19:16 (Hebrew)). It would seem that in such circumstances, the case of Gedaliah ben Ahikam raises the matter to the level of a duty.

42.       The Hafetz Hayim ruled that “if someone witnessed another person harming his fellow, by theft or exploitation, or injury – whether or not the victim of the theft or the harmed person is aware of the damage or theft or not – or by shaming, or causing him suffering, or exploiting him, and the witness knows that the offending party did not return the theft, pay damages, or request forgiveness, etc., even if he was the sole witness, he may discuss the incident with others in order to help the guilty party and also to publicly denounce such evil behavior. However, he must take care that the seven conditions that follow are met” (Hafetz Hayim, Hilkhot Lashon Hara 10:1), that is, conditions were established in order to limit the possibility of unnecessary harm. The Hafetz Hayim warns (ibid., 15): “Now see, my brother, how carefully one must weigh how to relate the matter. For when he speaks he is in grave danger of transgressing the laws of lashon hara, if he is not careful in regard to all the details”. In The Right to Privacy in Jewish Law (p. 244), the learned Dr. Itamar Warhaftig summarizes the Hafetz Hayim’s provisos for permitting lashon hara: the speaker must carefully weigh whether harm may be caused; must not exaggerate, i.e., not make the wrong appear greater than it was; that his intention be only to help; that he must make sure that there is a reasonable possibility that his actions will, indeed, be helpful; that there is no alternative for preventing the harm; that his words will not cause substantive harm to the person about whom he tells lashon hara; and that what he says is in regard to what he has clear knowledge, and not hearsay (in greater detail, see: Hafetz Hayim, Hilkhot Lashon Hara, Principle 10, and Hilkhot Rechilut, Principle 9 (Hebrew)); And see: Rabbi Z. Greenwald, Taharat Halashon – Madrikh Lehilkhot Lashon Hara uRekhilut, 109 (Hebrew) [English: Ze’ev Greenwald, Taharas Halahon – A Guide to the Laws of Lashon Hara and Rechilus (David Landesman, Trans.) (Feldheim, 1994)]. For further reading on the provisos, see N. Sohlberg, A Person’s Right to Good Name, Freedom of Expression and Constructive Lashon Hara, Parashat Hashavua 29 (5761) 29 (Hebrew)). Constructive lashon hara may serve educational purposes, or deterrence from the commission of offenses, under the above conditions (also see: Rabbi Y. Unger & Prof. Y. Sinai, Exposing the Identity of a Suspect before filing an Information (para. 5, above). For my part, I would stress the proviso that permission is granted in a situation in which lashon hara may be constructive, “but if in his estimation it will certainly not be of benefit … even if all the details are verified, it is still forbidden to say anything” Hafetz Hayim, Hilkhot Lashon Hara, Principle 10:4).

43.       The learned Prof. N. Rakover (On Lashon Hara and its Punishment in Jewish Law (5722) (Hebrew)) gives several examples of exceptions to the prohibition of lashon hara for constructive purposes: telling lashon hara in order to save the victim, and lashon hara out of a commitment to truth; telling lashon hara to prevent damage; telling lashon hara by means of a complaint; telling lashon hara about a recidivist offender. According to him, “There are occasions when a person may relate the matters, and may even be obliged to make them public. Such situations also provide the framework for a legal, moral or social obligation to publish lashon hara”; see additional examples in Warhaftig, pp. 244-258, and see Rabbi M. Bareli, Publishing Lashon Hara about Elected Officials, 33 Tehumin 136 (5773) (Hebrew), according to whom there may even be an assumption of forgiveness for the publication of criticism of elected officials, since there would appear to be implied consent on their part, provided that there is benefit in the publication (and see the conflicting view of Dr. I. Warhaftig, ibid., p. 149); on the problematics, also see Rabbi A. Katz, Lashon Hara in Public Databases and Archives, 27 Tehumin 180 (5767) (Hebrew)).

44.       Thus, there may indeed be cases in which permission to convey lashon hara may become an obligation – an obligations of expression. In general, this is the case in which telling lashon hara is necessary to save another person from harm or injury. Maimonides ruled: “Whenever a person can save another person's life, but he fails to do so, he transgresses ‘Do not stand against the blood of your neighbor’. Similarly, when a person sees another drowning at sea or being attacked by robbers or a wild animal, and he can save him himself or can hire others to save him, but does not save him, or he hears gentiles or informers conspiring to harm him or planning to entrap him, and he does not notify him of the danger, or when a person knows of a gentile or a belligerent man who has a complaint against another, and he can appease the aggressor on his behalf but he fails to do so, and in all similar instances, a person who acts thus transgresses the commandment: ‘Do not stand against the blood of your neighbor’” (Maimonides, Mishneh Torah, Hilkhot Rotze’ah uShemirat Hanefesh 1:14). We are not concerned only with saving lives, but also with preventing damage. Thus, the Hafetz Hayim ruled: “If one knows that his friend wishes to do something with someone else, and he believes that his friend would definitely incur some harm by this bad thing, he must inform his friend in order to save him from that harm” (Hafetz Hayim, Hilkhot Rekhilut 9:1), all subject to the aforementioned conditions.

45.       Dr. M. Vigoda summarized the approach of Jewish law in his aforementioned essay “Privacy and Freedom of Expression,” Parashat Hashavua Bemidbar 208, 214-215 (Hebrew):

The scope of freedom of expression in matters concerning other persons is very limited, and exists only in regard to generic matters the exposure of which would not be likely to cause either emotional or monetary harm to the other. Inasmuch as such matters are very rare, it may be concluded that Jewish law severely restricts permission to reveal matters concerning another. As opposed to this, at times, it requires that a person reveal something whose non-disclosure is likely to cause harm to a third party. In such matters, we are not speaking of freedom of expression, but rather of an obligation of expression, inasmuch as in such situations, silence is wrongful.

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On the Absence of Humility and Modesty

60.       Lashon hara has a sister – arrogance. All the justices of the panel in the judgment that is the subject of this Further Hearing, each in his own way, addressed the message conveyed by the television program, which was presented most forcefully and absent any modicum of modesty. Indisputably, the media, printed, virtual, and particularly electronic – television – has tremendous power. “The medium is the message,” said Marshall McLuhan. It is easy for the media to fall into the trap of “my own power and the might of my own hand” (Deut. 8:17), “I am, and there is none but me” (Isaiah 47:8), and the Bible also states (Psalms 36:12) “Let not the foot of the arrogant tread on me”, and our Sages said (Ethics of the Fathers 4:4) “Be exceedingly lowly of spirit”, and see (TB Sota 4b). Every human being is given to arrogance, particularly those whose words travel from one end of the earth to the other in a matter of seconds (“Sin crouches at the door” (Genesis 4:7). The opposite of this in Jewish morality and law is humility. Our Sages said: “What wisdom makes a crown upon its head, humility makes a heel beneath its sole (TJ Shabbat 1:3). In his book of morality Ma’alot Hamidot, R. Yechiel b. R. Yekutiel b. R. Binyamin Harofeh (Italy, 15^th-16^th cent.) devotes a chapter to humility, and quotes the Sages: “What is the quality of humility? One with whom all are at ease, and anyone who is not arrogant towards others…” In his renowned letter, Nahmanides (R. Moses B. Nachman, Spain, 13^th cent.) writes that humility is “the best of all qualities, as it is written: The effect of humility is fear of the Lord (Proverbs 22:4)”. R. Moshe Chaim Luzzatto (the “Ramhal”, 18^th cent.) devotes two chapters of his Mesilat Yesharim to humility, as the opposite of arrogance, writing (chap. 22): “For it is wisdom that has a greater tendency to bring a person to arrogance and pride … while a person of common sense, even if he is a great genius, will observe and contemplate and realize that there is no place for pride and arrogance … This is the examination and contemplation that is proper for every person of common sense …then he will be called truly humble, when he is humble in his heart and being”. Rabbi Yochanan said of God (TB Megilla 31a) “In every place that you find God’s grandeur, you find His humility”. On humility and arrogance in Judaism, see: Beral Wein & Warren Goldstein, The Legacy, 78-80 (2012). At his swearing in ceremony (Feb. 21, 2012), our colleague Justice Zylbertal said: “As part of our duty to conduct ourselves with humility, we must recognize error as inherent to the act of judging. President Barak addressed this in his speech in a ceremony swearing in new judges: ‘Only a judge who admits that he is not the epitome of perfection, but that like every human being, he too may err, can correct his judgement and thus approach perfection. Opposite the truth stands error – not lies – and recognizing error brings one closer to the truth’ (A. Barak, On Law, Judging and Truth, 27 Mishpatim 11 (5756)”.

61.       What is good for judges is also appropriate for the media. Of what relevance is this for the matter before us? I, too, am not of the opinion that the story reflected a lack of good faith. But it did reflect an exaggerated self-confidence that resulted in a lack of appropriate sensitivity for the Petitioner. “What is hateful unto you, do not do to your neighbor,” said Hillel the Elder (TB Shabbat 31a). Respondent 1 should ponder how she would like to be treated herself. And the absence of amends for lashon hara, even after-the-fact, makes the problem worse. The words of the Deputy President in para. 123 of the judgment that is the subject of this Further Hearing are appropriate here, as well: “Indeed, some of Dayan’s statements in the course of the broadcast were gratuitous, to say the least. It would have been better had she adopted a greater degree of self-restraint and modesty in view of the inherent problem in seeing the whole picture prior to the broadcast of the story”. Modesty and humility are appropriate for us all.

62.       In my article Stains in the Press (p. 204) I quoted Walter Cronkite, one of the greatest American television journalists of the last generation, who wrote in A Reporter’s Life (p. 289): “Press freedom is essential to our democracy, but the press must not abuse this license. We must be careful with our power. We must avoid, where possible, publicity circuses that make the right of fair trial a right difficult to uphold … Liberty and, no less, one’s reputation in the community are terribly precious things, and they must not be dealt with lightly or endangered by capricious claims of special privilege.” To which I added (ibid.): “Moderation is a good quality indeed, and it is also good for the press. I believe that there is nothing wrong if, a moment before publishing a story, the reporter and editor take a timeout to consider: Is the report sufficiently grounded to risk the harm that its publication may cause this person?” And further on I wrote (pp. 206-207): “… the duty to report on the basis of reliable, verified information, to report the truth, is a basic requirement that every journalist must observe. The public’s right to know is not the end all, nor unrestricted. Trial by the press can lead to tragedy. This raises the issue of the responsible use of the nearly limitless power of the media. At times, one may observe this in terms of ‘judge not others until you have stood in their place’ (Ethics of the Fathers 2:4), when a journalist or editor is the victim of press reports, and his reaction reflects frustration just like that of any other person, as has happened”.

…

64.       I, of course, do not deny that there are also many responsible journalists, and I would not cast aspersions on the media in their entirety, which would, itself constitute avak lashon hara if not more than that. However, I am sure that when some members of the media read the majority opinion in this case, they will smile with relief, and express wonder at judicial naiveté.

65.       My colleague Justice Hendel notes in regard to establishing a duty under sec. 15(2), that “if the journalist sets lying or deceiving as an objective, then clearly the good-faith defense will not serve him”(para. 6). Of course, and I too am of the opinion that the press must not be deterred from criticizing the government. But the question arises in those gray areas in which you – the reader – do not know the true story, while the journalist is aware of background that he does not publish, such that the product presented to the public is nothing but a half truth, which is worse than a lie. We should remember the “coddling” of a particular politician – a tactic that a well-known media personality openly recommended – that is, the “obligation” and the attendant truth are set aside in favor of a political interest, such that certain facts may intentionally be blurred so as not to harm a political objective. Are we acting responsibly when we make many presumptions to the benefit of the media, even to the point of an “obligation”, when they are accompanied by an inadequate ability to protect a person’s good name, and it is swept under the rug? Does the life’s breath of democracy justify that the individual, at times, be “knocked to the canvas”?

66.       My colleague Justice Hendel (paras. 2 and 8) calls for developing an independent “Israeli approach”. He does not explain what that might be. I would like to join him, but explain that, in my humble opinion, the ethos and culture of Jewish law argue for greater sensitivity to a good name than that resulting from this decision. Perhaps we should create a “good name à la Israel”, a Jewish and democratic state. At this point, I will briefly state that I was glad to learn from my colleague of additional Jewish law sources in regard to constructive lashon hara, from which he attempts to show that even when journalistic publications comprise lashon hara, they may be beneficial in certain cases. The sources are alluring, but I fear that they are peripheral to the subject, and my colleague is aware that he raises questions that await answers, and in my opinion it would be difficult to attribute what may derive from his arguments to the core of Jewish law. The sources he presents are fascinating, but are peripheral, and I am very fearful of a slippery slope in the overall context. I would add that pursuant to reading my colleague’s opinion, I read Rabbi Ari Shevet’s interesting article Newspapers and News – Obligation or Prohibition (Hebrew), and I very much appreciated the many sources included there, and the lovely breeze – mixed with a positive innocence and “happy are those whose way is blameless” (Psalms 119:1) – that wafts from it in regard to the positive potential of journalism (as in the words of Rabbi Isaac HaKohen Kook that he quotes), and clearly, wise contemporary Torah scholars cannot ignore the media and their importance in our daily lives, although the Hafetz Hayim (in his book Zechor LeMiriam) warned not to waste time reading newspapers (in their then limited form, so what might we say nowadays). But when the author moves from the light to the shadows, his solutions – imposing a duty of care upon journalists – ultimately lead to the statement (para. 5 of the conclusion): “In the current format, it may be that journalists are to be ‘deemed bearers of lashon hara’,  and it is therefore better to listen to the news over the radio”. And further: “Our suggestion is not, by any means, intended to detract from the severity of the prohibition upon gossip, lashon hara, and bearers of lashon hara. We must remember the words of the Pele Yoetz (R. Eliezer Papo, Greece-Bulgaria, 19^th cent. – E.R.) (Pele Yoetz, s.v. Lashon Hara) that it is better to “flee through one hundred gates of permission so as to avoid entering one gate of prohibition”. I am not naïve, and I am well aware of the power and ability of the media, but I do not believe that opening the gate of “obligation” that arises from the majority decision will benefit reputation and basic human dignity, inasmuch as it comprises too many assumptions, as already detailed. It is easy to foresee the dangers, but will we merit “responsible journalism”?

67.       Finally, my colleague Justice Danziger (para. 5) explains the need for distinguishing the expression of opinion and facts in the media. I agree with that distinction, even if our era is characterized by post-modern “narratives” that combine the two, such that it is sometimes difficult to distinguish.

 

 

Justice N. Hendel

…

            An article published several months ago by the Columbia University School of Law addressed the relationship between freedom of speech and the state of mind or intent of the publisher. The question was raised as to the relevance of these to defamation. The author’s answer was that the prohibition of defamatory speech is not meant to be absolute. Therefore, the system does not suffice in examining only the publication, but also examines various subjective aspects of the publisher. Moreover, and this is the important point for our discussion, emphasis was placed upon the chilling effect of over extending the prohibition of defamation. From this perspective, it is not enough to examine what was published, but also what would not be published if the law were more strict with the publisher – including the journalist (Leslie Kendrick, Free Speech and Guilty Minds, 114 Colum. L. Rev. 1255 (2014); for an example that examines the matter empirically, see Eric Barendt, Laurence Lustgarten, Kenneth Norrie & Hugh Stephenson, Libel and the Media: The Chilling Effect (1997)).

            The position according to which the press would be endowed with the crown of a “social obligation” also imposes a duty upon the journalist. It is not a one-way street that benefits only the journalist at the expense of another publisher. A note must be paid on demand. And what is the demand? First, as my colleagues held, that the obligation relates to a publication that is of significant public interest, and not merely any public interest. In addition, legitimacy was given to the demand that a journalist act responsibly – “responsible journalism” in the words of my colleagues. I will address these matters below.

            In this context, I will briefly address the approach of Justice Rubinstein in regard to the relationship between the right to one’s good name and freedom of expression. According to his approach, despite the importance of the latter, it is a lower level on the constitutional scale than the right to one’s good name. For my part, I would add my voice to that of President Shamgar (FH 9/77 Israel Electric Corp. Ltd. v. Ha’aretz Daily Newspaper Ltd., IsrSC 32 (3) 337 (1978) [http://versa.cardozo.yu.edu/opinions/israel-electric-corp-v-haaretz]), and to that of Justice Rivlin in the appeal (para. 77), according to which, despite the importance of the two values, freedom of expression is principal. Both according to the approach of Justice Rubinstein and the opposing view, that does not mean that one of the rights “subsumes” the other in every collision. But the argument is of importance in borderline cases. My colleague is of the opinion that in a borderline case, the scales should tip in favor of protecting reputation. I disagree, and thus join the opinion of Justice Rivlin in the appeal, that “to the extent that there may be doubt in regard to whether disputed speech is protected, it is better to err on the side of freedom of expression and freedom of the press” (para. 79, citing Justice Harlan F. Stone).

            I will permit myself to add that this argument is somewhat abstract. But the matter is neither abstract nor theoretical. Following the enactment of Basic Law: Human Dignity and Liberty over twenty years ago, it is, in my opinion, appropriate both for the development of Israeli constitutional law and practically, that such issues as these be considered. Moreover, as I explained in detail in the judgment in the matter of the Nationality Law, in the United States constitutional rights are categorized into three levels for the purpose of establishing the strictness of the required judicial review (HCJ 466/07 Galon v. Attorney General, para 4 (Jan. 11, 2012) [http://versa.cardozo.yu.edu/opinions/gal-v-attorney-general-summary]). Lastly, the case before us comprises liminal elements, as the President pointed out in his opinion. The general view in regard to the proper balance between freedom of the press and the right to one’s good name may, in my opinion, explain the different positions adopted in this Court and in the District Court. To illustrate the matter, even justice Rubinstein noted in his opinion that “I, too, am not of the opinion that the story reflected a lack of good faith”. Thus, the dispute concerns the legal test – the existence or non-existence of a social obligation – and not the professionalism of the publication.

            As for my position in all that regards the constitutional hierarchy between the right to reputation and freedom of the press, I will suffice with a few comments. Indeed, “a good name is better than fragrant oil” (Ecclesiastes 7:1). But I would not go so far as to say that a good name and human dignity are one and indivisible (paras. 35-36 of the opinion of Justice Rubinstein). We are not speaking of alternative terms, despite the strong bond between them. That is not the main thing. As my colleague pointed out, the two competitors – good name and freedom of expression – do not expressly appear in Basic law: Human Dignity and Liberty. But they may be said to derive from human dignity (Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, 616, 708 (2014) (Hebrew), [published in English as Human Dignity: The Constitutional Value and the Constitutional Right (2015)]. I would go one step further and say that freedom of expression – especially journalistic – has been recognized as a supra-legal basic right from the earliest days of our legal system. It was held that this right constitutes the source of other rights (the Kol Ha’am case, ibid.).

…

            In Ireland, as opposed to Israel, freedom of expression appears in a somewhat circumscribed form. Thus, article 40.6.1 of the constitution establishes: “the State shall endeavour to ensure that organs of public opinion shall not be used to undermine public order or morality or the authority of the State”. In Australia, there is no constitutional or statutory provision protecting freedom of expression, and it was the case law that developed the subject was (see, for example, in regard to freedom of political speech: Australian Capital Television v. Commonwealth (1992) 177 CLR 106; Lange v. Australian Broadcasting Corporation (1997) 189 CLR 520). As opposed to this, in Canada freedom of expression expressly appears in sec. 2(b) of the Charter of Rights and Freedoms: “Everyone has the following fundamental freedoms: […] (b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication”. This freedom is, of course, subject to the Reasonable Limits Clause (sec. 1). Canadian case law in this regard is most varied. Thus, I would note the Zundel case, which voided sec. 181 of the Canadian Criminal Code that prohibited knowingly publishing a false statement – e.g., denying the Holocaust – because the criminal prohibition improperly violated freedom of speech (R. v. Zundel [1992] 2 S.C.R. 731). Lastly, in South Africa, freedom of expression is expressly anchored in sec. 16 of the constitution. The right is broad. Interestingly, one exception is incitement to imminent violence, and another is advocacy of hatred that is based on race, ethnicity, gender or religion, and that constitutes incitement to cause harm.

            I have presented the matter in a nutshell only to illustrate my view that we must act in accordance with an internal Israeli system, although I agree that examining the situation in foreign legal systems would enrich the discussion. I would add my personal view that much can be learned from the American legal system’s approach to freedom of speech – which is very developed – and the relationship between it and the strength of democracy there is worthy of thought and admiration.

9.         I would make two points in concluding my remarks on the term good faith. The President is of the opinion that in examining a journalist’s good-faith defense, weight should also be given to the motivation for publication – for example, was the motive a desire for increased ratings or to publish a ringing scoop. The President is correct in that it is good that every professional examine his motives so that the desire for success not clash with the sanctity of the work. However, in my opinion, there is a long way between that and finding that considerations of ratings and scoops constitute a legal accessory for ascertaining good faith.

            There is nothing new in saying that a person is a complex being. Often, a person’s motives are mixed: they comprise both the desire to realize some proper, external objective, and the desire for personal success and advancement. The Sages of Jewish law were also aware of this, and observed that “the jealousy of scribes increases wisdom” (TB Bava Batra 22a). “The jealousy of scribes” and the natural desire to succeed more than others were deemed as means or catalysts for increasing Torah scholarship. In that context, Rabbi Mosheh Lichtenstein, Head of the Har Etzion Yeshiva, noted that King Solomon learned how to properly direct his personal ambitions, and devoted his exceptional talent to the building of the Temple (Mosheh Lichtenstein, The Mishkan of God and the Mikdash of Shelomo (http://ftp.vbm-torah.org/en/teruma-mishkan-god-and-mikdash-shelomo).

            Against this background, I am of the opinion that the desire for personal advancement does not, in and of itself, testify to an absence of good faith. However, such an “egotistical interest” may compromise the principle of good faith if expressed in other forms of conduct, for example, not properly checking sources of information. Only then will those other omissions catch the judge’s eye in reaching a decision.

            The other point concerns the disagreement between the President and Justice Vogelman in regard to the “geometric location” of the responsible journalism requirement. I will briefly state that I concur with the approach of the President that it would be better to examine this requirement in the framework of the good faith element, rather than in the framework of the obligation. That is primarily so as not to blur the difference between fulfilling the obligation and the manner of its fulfillment (and see para. 79 of his opinion).

…

E. Jewish Law

11.       A unique characteristic of the Israeli Defamation Law is that it is rooted in Jewish law. Even the name of the tort [lashon hara] reflects this. But we should not suffice with that. Basic Law: Human Dignity and Liberty has achieved primacy in examining basic rights and conflicts between them. It defines Israel as a Jewish and democratic state. My colleague Justice Rubinstein, as is his practice, provided a fine, broad survey of the laws of lashon hara. I can only add my admiration for the range of sources and their clear presentation. For my part, I would like to emphasize a particular aspect of the Jewish law approach: the application of the laws of lashon hara to the press in a democratic society. In my opinion, this aspect requires a broader view for three reasons. First, the precedents of the Torah and the oral law. Second, the exceptions to the prohibition upon lashon hara arising from halakha, including the writings of the Hafetz Hayim. Third, the laws pertaining to the public in general (as opposed to halakhic decisions concerning individuals), and the State of Israel, in particular.

12.       On the basis of the verse “You shall not go up and down as a talebearer among your people” (Lev. 19:16), Maimonides distinguishes three prohibitions. The first – “Who is a talebearer? One who collects information and goes from person to person, saying: This is what so and so said, and this is what I heard about so and so. Even if he tells the truth, it destroys the world” (Mishne Torah, Sefer Hamada, Hilkhot Deot 7:2). A talebearer is, therefore, one who trades in information, even though it is not disparaging (see the commentary of the Kesef Mishne, a scholar of the Land of Israel of the 15^th cent. [sic] [R. Joseph Karo, 1488-1575 — trans.] ad. loc.), and even of no benefit. The second – lashon hara: “and he speaks deprecatingly of his fellow, even though he speaks the truth” (ibid., 7:2). And third: “but one who tells a lie is called a defamer of his fellow’s good name” (ibid.).  It should be emphasized that gossip [tale bearing] and lashon hara concern “telling the truth”.

            Nahmanides disagrees as to the source of the prohibition. According to him, the prohibition is based upon the conduct of Miriam, and the Torah’s injunction: “Remember what the Lord your God did to Miriam on the journey” (Deut. 24:9). That refers to the story in Numbers: “Miriam and Aaron spoke against Moses because of the Cushite woman he had married” (Numbers 12:1). Miriam challenged her brother Moses as to why he did not maintain family relations with his wife as Aaron did with his wife, and Miriam with her husband.

            Nahmanides’ approach includes two interesting points. One:

In my opinion, this is actually a positive commandment, like “remember the Sabbath day to sanctify it”, “remember this day, on which you went free from Egypt” … which are all commandments. If so, this verse, too, is like those, it being an admonition against speaking lashon hara. He commanded by way of a positive commandment that we remember the great punishment that God imposed upon the righteous prophetess who spoke only about her brother for whom she showed mercy and loved as herself. She said nothing to his face that would shame him, nor in front of others, but only in private, between herself and her holy brother. Yet all her good deeds were of no avail to her. And you, too, if “you are busy maligning your brother, defaming the son of your mother” (Psalms 50:20) you will not be saved… And how is it possible that there is no explicit negative commandment against lashon hara in the Torah, nor even a negative commandment derived from a positive commandment, when it is equated to bloodshed? But this verse comprises a great warning to refrain from it both in public and in private, whether or not to cause harm and shame. And this is one of the 613 commandments (Nahmanides’ commentary on Deuteronomy. 24:9).

Like Maimonides, Nahmanides deems the prohibition upon lashon hara as particularly severe. But he wonders why the matter is related in a story rather than as an explicit command. It should be noted that even according to Maimonides, the explicit Torah prohibition is of gossip, whereas lashon hara is a type of subcategory. One might say that the prohibition is introduced by appending it to a story, contrary to the usual biblical practice, in order to emphasize the uniqueness of the prohibition upon lashon hara as one that arises in the context of social interaction. Moreover, the matter is dependent upon circumstances. From the Bible, it appears that Miriam’s intention was constructive – to help her sister-in-law. She raised the matter, together with Aaron, only before Moses. However, in view of Moses’ humility, as is related further on, she should have been less hasty in judging as she did in presenting the matter to Moses.

            Whatever the case may be, the second point is the one relevant to the matter before us, and is expressed in another of Nahmanides’ insights:

In the matter of Miriam, we were commanded to inform our children and tell it for the generations. And even though it would have been proper to conceal it so as not to deprecate the righteous, Scripture commanded that we make it known and reveal it so that the warning against lashon hara will be in their mouths, because it is a great sin and causes many evils, and people always stumble in its regard (Nahmanides’ commentary to Deuteronomy 25:17).

 

            In other words, if the prohibition is so severe, and those involved were only these three sibling prophets, is not the injunction to remember the incident not itself a form of lashon hara? Is this not something of a contradiction? Nahmanides’ answer is that it is important from an educational perspective to present the matter so that we may learn the about the nature of the prohibition, and that is the source for permitting its publication for posterity. The Bible provides many examples of this approach of not refraining from criticizing the nation’s great leaders – even Abraham, David and Solomon.

            An example of the application of this approach can be found in the Talmud. In the parashat Balak [sic][1] in Numbers, we are told of the gatherer of sticks on the Sabbath who was put to death [Numbers 15:32-36]. His name does not appear in the Bible. Rabbi Akiva teaches us that the man was non other than the father of the five women who requested an inheritance, and their request for non-discrimination against women was accepted. The Talmudic sages were not pleased with Rabbi Akiva’s novel idea. As the Talmud states:

Our Rabbis taught: The gatherer was Zelophehad, and it is said (Numbers 15:32): and while the children of Israel were in the wilderness, they found a man [gathering sticks, etc.], while later it is said (Numbers 27:3): our father died in the wilderness, etc. Just as there it is Zelophehad, so here it is Zelophehad. This is R. Akiva's view. R. Judah b. Batera said to him: Akiva, in either case you will have to give an account. If you are right, the Torah hid him, while you reveal him. And if not, you denigrate a righteous man (TB Shabbat 96b).

            Rabbi Judah b. Batera’s claim is that Rabbi Akiva’s statement is merely a conjecture, and the claim that Zelophehad died in the desert as a result of his sin is not necessarily true. In either case, if Rabbi Akiva told the truth, why did he reveal what the Torah had hidden, and if it was not the truth, why impugn Zelophehad? Nevertheless, and even though neither Rabbi Akiva nor any other rabbis reply to Rabbi Judah b. Batera, the view according to which Zelophehad had sinned has been preserved over the generations. This is not unique to that story. Many midrashic narratives and Torah commentaries are not complimentary to a particular person, and are not necessarily based upon some objective, verifiable truth.

13.       As noted, not only biblical precedent, but the laws of lashon hara, as well, open the door for qualifying the prohibition upon lashon hara.

            The first rule is that of “publicly known”. As stated in the Be’er Mayim Hayim: “No proof can be brought … from what is written in Arvei Pesahim … since this may be publicly known, and lashon hara is not applicable” (commentary of the Hafetz Hayim on his book, Hilkhot Lashon Hara 4:41). In other words: “In any case, everyone saw” (ibid. 5:8). This principle is expressed in a situation of “before three”, regarding which Maimonides ruled: “If such statements were made in the presence of three people, it has already become public knowledge. Thus, if one of the three relates the matter a second time, it is not considered lashon hara” (Mishne Torah, Hilkhot De’ot 7:5). According to this exemption, a private discussion differs from a one that has been made public, even if only partly (three people). This exemption is subject to conditions, but it may be relevant to information that, in any case, is in the public domain.

            To this we can add the exemption in regard to preventing harm, and even more so, to prevent harm to many, on the basis of the commandment “you shall not stand against your neighbor’s blood” that is the continuation of the verse “You shall not go up and down as a talebearer among your people” (Lev. 19:16). As the author of Arukh HaShulhan who lived at the beginning of the 20^th cent. [Rabbi Yechiel Michel Epstein, 1829-1908.—trans.] wrote: “When a person sees another drowning at sea or being attacked by robbers or a wild animal, or other types of evil, and he can save him himself or can hire others to save him, but does not save him, or he hears haters conspiring to harm him, and he does not notify him, or when a person knows of a harmful man who wishes harm his fellow, and he can appease him but he fails to do so, and in all similar instances, transgresses the commandment: ‘Do not stand against the blood of your neighbor’ … and all the more so he is obliged to rescue his fellow from any harm or damage that other seek to cause him, and all the more so he is obliged to prevent harm to the many, and must prevent it if he is able to prevent it” (Hoshen Mishpat 426:1) (emphasis added).

            It should be noted that the prohibition upon telling lashon hara, despite its severity, may retreat before another commandment – “Do not stand against the blood of your neighbor”. Last in this context is lashon hara for a constructive purpose, which I will address below. I would note at this stage that none of the four parts of the Shulhan Arukh – one of the primary legal codices – treats of the laws of lashon hara. This can be explained. Although lashon hara constitutes a legal obligation, it is also viewed in terms of a virtue. That would, therefore, appear to be why Maimonides classified lashon hara under the category of hilkhot de’ot [laws concerning matters of personal development – trans.], and the great moral scholars addressed this in their works (see, e.g., chap. 11, “Details of the Virtue of Cleanliness”, in Mesilat Yesharim  by Rabbi Moshe Chaim Luzzatto (the Ramhal, Italy, 18^th cent.)). The merger between halakha and the duty to distance oneself from vices lead to the situation wherein when the two are in conflict, for example, a negative statement for constructive purpose, the prohibition upon lashon hara may be altered and become permissible and even a mitzvah in the framework of a desire to repair.

14.       Notwithstanding the possibility of developing the laws of defamation on the basis of the halakhic tools cited in the previous section, that it not the heart of the matter. In law, including Jewish law and halakha, a precise definition of the question is essential for an appropriate resolution. The Hazon Ish [Rabbi Abraham Yeshayahu Karelitz, 1878-1953 – trans.] stressed that often the main problem in legal decision making is not knowing the law, but rather recognizing the reality and factual aspect of the decision (Iggerot HaHazon Ish 31 (Bnei Brak, 5737) (Hebrew)); and see Rabbi Yehudah Amital, Not Everything is Halakha, 13 Alon Shevut Bogrim 97-98 (5759) (Hebrew)). The laws of lashon hara are well and good, and they can change the social fabric and the relations among the people living in it. Is suffices to recall the statement that because of baseless hatred and lashon hara “the Temple was destroyed [the Second Temple] and we were exiled from our land” (from the preface to Hafetz Hayim). Still, the question before us does not concern the obligations of individuals, although that is the primary halakhic concern and focus of Hafetz Hayim – Shemirat HaLashon.

            The issue before is different. We are concerned with the halakhic limits upon the free press in a democratic society. This is not a question concerning the individual, but the public. In fact, not only the public, but the state. And not just the state, but the State of Israel. The consideration of preventing damage is known to all, and the halakhic considerations are given to change. Halakha recognized the status of the public as a factor in various connections. This would appear to be particularly true when halakhic scholars address the challenges presented by the State of Israel for the law applicable to the public. The religious view is that halakha has the power to adapt itself to changing realities.

            We will suffice with a few examples. Rabbi Shaul Yisraeli – a member of the Supreme Rabbinical Court in Jerusalem, rabbi of Kfar Haroeh, and Head of the Mercaz HaRav Yeshiva, who died some 20 years ago – addressed the issue of police activities of the Sabbath. In the course of raising several authorizations, including several types of ongoing activities, Rabbi Yisraeli emphasized the principle that “it would not be at all unreasonable to say that all agree with the basic principle that the harm of many is equivalent to saving the life of an individual … saving the public from harm … is a consideration of saving life” (Amud HaYemini 17).

            Rabbi Yechiel Weinberg – author of Seridei Eish, who died in Switzerland some 50 years ago – was asked by the Chief Rabbi of Israel, Rabbi Yehuda Unterman, for his opinion on performing autopsies for medical purposes in Israel. Rabbi Weinberg stressed the general prohibition, but wrote that he did not think it proper that a rabbi who did not live in Israel should decide the matter for the Chief Rabbi of Israel. Nevertheless, he was willing to state his personal opinion, adding:

In out day, the question of autopsies is a state question, and a question for those living in that state. This question was addressed by the great Noda BiYehuda [Rabbi Yechezkel ben Yehuda Landau, 1713-1793 – trans.] as a private question, and he was thus correct in his instruction. Today, it is a question for the entire nation, and a question of the state and for its status in the greater world that listens attentively to everything that occurs in the Land [of Israel]. Needless to say that the way the civilized word relates to our new state is one of the important factors that preserve our country, and one of the most important conditions for the security of the state and the people who reside in it (published in 12 Tehumin 382, 384 (5752) (Hebrew)).

            Another aspect of the health system in halakha was addressed in a book published this year by Rabbi Re’em HaCohen, Head of the Otniel Yeshiva and community rabbi of Otniel. The book treats entirely of the issue of pikuah nefesh [saving life]. It explains that pikuah nefesh must be addressed in the context of the public – whether in regard to public systems, the removal of corpses on the Sabbath, and in regard to desecrating the Sabbath for the purpose of treating mental health issues in an emergency situation (Responsa Badei Ha’Aron: Responsa on Contemporary Issues – Pikuah Nefesh) (Hebrew)).

            On the basis of the halakha of the public and the state, Rabbi Ben-Zion Meir Hai Uziel, the first Sephardi Chief Rabbi of Israel, was willing to be lenient in regard to the admissibility of the testimony of a person who was not halakhically Jewish.  Chief Rabbi Isaac Halevi Herzog ruled similarly in regard to the halakha if the Pope were to contact the Ministry of Foreign Affairs requesting to join with leaders of other religions in the war declared against communism. The responsum was published in 1950, in answer to a question posed by the rabbi’s son Ya’akov, who then served in the Ministry of Foreign Affairs (Decisions and Writings, vol. 2, Responsa on the Laws of Orah Hayim, 112) (Hebrew)). These examples demonstrate that, in appropriate cases, the question of the law applicable to the public or the state may be addressed differently, with the decisor taking account of broader considerations. The difference is not in the halakha, but rather in a question that may lead to a different answer.

            Can a similar argument not be made in regard to the rules of lashon hara and the press? Would the definition of benefit necessarily be the same from the perspective of the state as opposed to an individual? Let us not forget that the rabbis throughout of each generation recognized the uniqueness of the press. Rabbi Jacob Reischer, who lived in Prague in the 17^th century, noted that the desire to know what is happening in the state and the world is a human need (Responsa Shevut Yaakov, III:23) (Hebrew)). Rabbi Jacob Emden, who lived in Germany in the 18^th century, permitted reading newspapers on the Sabbath both because prohibiting it would cause suffering, and because there is enjoyment in reading them (Reponsa Yaavetz, I:162) (Hebrew)). Rabbi Isaac HaKohen Kook, the first Chief Rabbi of Israel, encouraged the establishing of a daily newspaper, but turned down an offer to serve as editor in chief due to his many responsibilities (Iggerot HaRav Kook, I:185) (Hebrew). As for the appropriate content of newspapers, Rabbi Kook was of the opinion that it should treat of a variety of matters, “and clearly such an organ should not ignore any aspect of life in its entirety, even those that do not directly concern religion” Iggerot, I:277).  Moreover, like the popular Talmudic expression: “Go forth and see how the public are accustomed to act” – nowadays, even hareidi journalism is thriving, and it is not limited to matters of Torah, but deals with “matters of the world” and “matters of the country”. Is it even imaginable that an investigative report about a public figure would receive no coverage until after the conclusion of his trial? Is such a report, which may uncover wrongs and injustice in regard to some group, not of great benefit?

            This may be of consequence for the boundaries of constructive lashon hara. Some of the rules that have been established may be relevant, including the requirement not to increase the wrong beyond what it is, and that the publisher intend benefit (Hafetz Hayim, Hilkhot Lashon Hara, 10:2) (Hebrew). We should note in this regard a ruling by Rabbi Ovadia Yosef according to which a person who knows that an applicant for a driver’s license suffers from some hidden, undisclosed condition, he must inform the Licensing Bureau of what he knows (Yeheve Daat, IV:60). We would similarly recall the ruling of Rabbi Chaim Halevi, Chief Rabbi of Tel Aviv, who died some 15 years ago, that it is not prohibited to work as an informant for the tax authorities, even for pay (Aseh Lekha Rav, I:70). These questions also relate to public aspects of lashon hara.

            I admit that the matters are very complex. At most, I have indicated different directions for questioning, rather than answers. Much has been written of the subject from the halakhic perspective. See, for example, the article published about a year ago by Rabbi Meir Bareli in 33 Tehumin on the subject of publishing lashon hara about elected officials (p. 136). In the author’s opinion, an exemption can be found in certain situations on the basis of the principle that entering the public arena constitutes implied consent – consensual lashon hara in certain circumstances. And see additional halakhic articles (ibid., fn 2; and see the article by Ari Yitzhak Shevet, which I found very helpful both conceptually and for its extensive bibliography – Newspapers and News: Obligation or Prohibition (Hebrew); Steven Oppenheimer, Journalism, Controversy, and Responsibility: Halachic Analysis, 41 Journal of Halakha & Contemporary Society (2001); Rabbi Alfred Cohen, Privacy: A Jewish Perspective, 1 Journal of Halakha & Contemporary Society 53 (1981). However, it would appear that none of these provide a halakhic ruling. It is not my intention to innovate in this decision, but rather to ask whether it may be possible to consider the issue in broader terms from the perspective of Jewish law. As for the answer, I can only but make recourse to the approach of the Head of the Har Etzion Yeshiva, Rabbi Aharon Lichtenstein, which I have cited in the past in the context of internet theft (CA 9183/09 The Football Association Premier League v. Anonymous (May 13, 2012)). I will state it mutatis mutandis: In the changing technological and social reality in which the press achieves growing influence, and bearing in mind the potential advantages of this tool, its importance and contribution to democratic life, and its broad readership, on the one hand, and the unquestionable prohibition upon lashon hara, on the other, what is the proper halakhic balance? “The question is posed, the authority exists, and eyes are uplifted. If the great halakhic decisors will succeed in making a decision on the matter”, they will make a real social contribution, “and if they succeed, they will simultaneously contribute to admiration of Torah” (A. Lichtenstein, Lectures of Rabbi Aharon Lichtenstein: Dinei DeGarmei, 200 (5760) (Hebrew)).

            In conclusion, I do not believe that the approach of a good-faith defense for responsible journalism in matters of significant public interest contradicts the principles of Jewish law. In my humble opinion, there is a positive aspect to such an approach.

After these Things

15.       After writing my opinion, I had the opportunity to read the comments of my colleague Justice Rubinstein. I will address them in brief.

            My colleague is of the opinion that the Jewish law sources that I cited are peripheral. I would respond that I am not concerned with the margins but with the core. We are concerned with freedom of journalistic expression on subjects of significant public interest. The issue does not concern a question of private halakha. It is part of state halakha, or more precisely, the halakha of the State of Israel. This is a public issue. I pointed out several examples in areas of importance in Jewish law in which the rabbis of the time found that this is a consideration that defines the answer, and that may lead to different results than those concerning individuals. Can the importance of investigative journalism in a democratic society be denied? I also pointed out that in the framework of the question I present, religious society in all its variety, and with the consent of its rabbis, does not reject reading newspapers, and is even involved in journalism from its own perspectives. That journalism comprises not only Torah subjects, but also news and subjects that have not as yet been resolved and are still under investigation. The solutions for discourse among individuals on the private level are not necessarily identical to those applicable to public discourse. It would seem to me, for example, that the approach cited, inter alia, by my colleague, according to which journalists are deemed bearers of lashon hara, and that it is better to listen to the news on the radio, does not reflect the practice of the religious world, does not express the advantages presented by a free, investigating press, and most of all, does not adequately contend with full variety and complexity of the subject.

            Lastly, my colleague referred to my call for the development of an independent Israeli legal approach to the subject, and notes that I do not explain what it might be. I can only refer to what I wrote in my opinion, above. In my view, an independent Israeli legal approach would recognize the necessity of a responsible press, and that we are concerned with a public duty that grants protection to a journalist, subject to an examination of his good faith. Such a development, proposed by my colleague Justice Vogelman in the judgment under appeal, is appropriate to the present. As for the future, this field is dynamic. It is my hope that the Israeli system will succeed in adopting the positive aspects of the American approach, which has proved its ability to integrate a very robust democratic society and freedom of expression, combined with the approach of Jewish law, along with a serious, thoughtful consideration of the halakha applicable to the state, and its influence upon the laws of defamation. There is much to be done. But that is the present reality, and this is the hope for the future, as is appropriate for the State of Israel as a Jewish and democratic state, in accordance with the Basic Law.

 

 

 

 

LCA 6897/14
Radio Kol BaRamah	Applicant:
v.

 

Kolech – Religious Women’s Forum	Respondent: Attorney for the Applicant: Moti Arad, Adv. Attorneys for the Respondent: Asaf Pink, Adv., Orly Erez-Likhovski, Adv.
The Supreme Court   Before Justices E. Hayut, Y. Danziger, D. Barak-Erez   Application for leave to appeal the judgment of the Jerusalem District Court of September 9, 2014,  in Class Action 23955-08-12, delivered by the Honorable Judge Gila Kanfi Steinitz   12 Tammuz 5775 (June 29, 2015)

 

 

Israel Supreme Court cases cited

[1]        LCA 8671/09 Cellcom Israel Ltd. v. Fattal (6.5.2010).

[2]        LCA 2282/15 Psagot Provident and Pension Funds Ltd. v. Levy  (8.7.2015)

[3]        HCJ 746/07 Ragen v. Ministry of Transport (5.1.2011) [http://versa.cardozo.yu.edu/opinions/ragen-v-ministry-transport]

[4]        HCJ 153/87 Shakdiel v. Minister of Religion [1988] IsrSC 42(2) 221 [http://versa.cardozo.yu.edu/opinions/shakdiel-v-minister-religious-affairs]

[5]        HCJ 4541/94 Miller v. Minister of Defence [1995] IsrSc 49(4) 94 [http://versa.cardozo.yu.edu/opinions/miller-v-minister-defence]

[6]        HCJ 2671/98 Israel Women’s Network v. Minister of Labor and Welfare [1998] IsrSC 52(3) 630

[7]        LCA 8821/09 Prozansky v. Layla Tov Productions Co. Ltd. (16.11.2011) [http://versa.cardozo.yu.edu/opinions/prozansky-v-layla-tov-productions-ltd]

[8]        CA 5378/11 Frankl v. Allsale (22.9.2.2014).

[9]        LCA 9615/05 Shemesh v. Focaccetta Ltd. (5.7.2006) [http://versa.cardozo.yu.edu/opinions/shemesh-v-focaccetta-ltd]

[10]      CA 9494/08 Pan v. Israel Railways (27.6.2013)

[11]      CA 6887/03 Resnik v. Nir Cooperative (20.7.2010)

[12]      LCA 3814/14 Hogla Kimberley Marketing Ltd. v. Mastei (6.7.2015)

[13]      LCA 1868/15 Yetedot T.S.M.V. Publishing and Advertising Ltd. (15.3.2015)

[14]      HCJ 6111/94 Committee for the Preservers of Tradition v. Chief Rabbinical Council of Israel [1995] IsrSC 49(5) 94

[15]      HCJ 1514 Gur Aryeh v. Second Authority for Television and Radio [2001] IsrSC 55(4) 267 [http://versa.cardozo.yu.edu/opinions/gur-aryeh-v-second-television-and-r...

[16]      HCJ 1067/08 Noar KeHalacha Assoc. v. Ministry of Education (6.8.2009) [http://versa.cardozo.yu.edu/opinions/noar-kehalacha-v-ministry-education]

[17]      LCA 8014/09 Dikla Insurance Co. Ltd. v. Friedman (21.4.2011)

[18]      LCA 729/04 State of Israel v. Kav Mahshava Ltd. (26.4.2010)

[19]      CA 10085/08 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel v. Estate of Tufik Raabi (4.12.2011) [http://versa.cardozo.yu.edu/opinions/tnuva-central-cooperative-v-raabi-e...

[20]      LCA 2128/09 Phoenix Insurance Co. Ltd. v. Amossi (5.7.2012)

[21]      CA 4534/14 Daniel v. Direct Teva Ltd. (14.6.2015)

[22]      HCJ 428/86 Barzilai v. Government of Israel [1986] IsrSc 40(3) 505

[23]      HCJ 910/86 Maj. (ret.) Ressler v. Minister of Defense [1988] IsrSC 42(2) 441

[24]      CA 8416/99 E.I.M. Electronics and Computers (1999) Ltd. v. Mifal Hapayis [2000] IsrSC 54(3) 425

[25]      CA 7699/00 Tamgash Management and Project Development Co. Ltd. v. Kishon River Authority [2001] IsrSC 54(4) 873

[[26]    LCA 3489/09 Migdal Insurance Co. Ltd. v. Zevulun Valley Metal Plating Ltd., (11.4.2013)[27]      AA 980/08 Minirav v. State of Israel – Ministry of Finance, (6.9.2011)

[28]      HCJ 7200/02 D.B.S. Satellite Services (1998) Ltd. v. Council for Cable and Satellite Broadcasts [2005] IsrSC 59(6) 21

[29]      HCJ 6792/10 D.B.S. Satellite Services (1998) Ltd. v. Knesset (20.7.2014)

[30]      HCJ 1030/99 Oron v. Speaker of the Knesset [2002] IsrSC 56(3) 640

                       

Israeli District Court cases cited

[31]      Class Action (Econ.) 2484-09-12 Hatzlaha, Consumer Movement for the Promotion of a Fair Society and Economy v. Cohen (18.2.2013)

[32]      CC (Center-Lod District Ct.) 25435-03-15 Kolian v. Yetedot T.S.M.V. Publishing and Advertising Ltd. (13.3.2015)

 

Israeli Magistrates Court cases cited

[33]      CC (Bet Shemesh Mag. Ct.) 41269-02-13 Phillip v. Aboutbul (2015).

[34]      SC (Βeer Sheva) 33424-02-12 Michaeli v. Chevra Kadisha – Ofakim Religious Council (15.6.2012).

[33]      SC (Bet Shemesh) 2917-10-11 Marsden v. Negdi  (5.7.2012).

 

United States courts cases cited

[36]      Wal-Mart Stores, Inc. v. Dukes et al. 564 U.S. 1, 11 (2011).

[37]      Brown v. Board of Education, 347 U.S. 483 (1954)

[38]      Amchem Products, Inc. v. Windsor 521 U.S. 614 (1977)

 

Israeli Legislation cited

Basic Law: Human Dignity and Liberty

Civil Wrongs Ordinance [New Version], sec. 6

Class Action Law, 5766-2006

Equal Rights for Persons with Disabilities Law, 5758-1998, sec. 19(53)

Prohibition against Discrimination in Products, Services and Entry to Places of Entertainment and Public Places Law, 5761-2000

 

Abstract

 

The District Court certified the application of Kolech – Religious Women’s Forum Organization (hereinafter: Kolech) to bring a class action against the radio station Kol BaRamah Ltd. (hereinafter: the radio station), holding that the declared policy adopted by the radio station in the years 2009-2011, whereby women could not be heard on the station’s broadcasts, constituted prohibited discrimination under the Prohibition against Discrimination in Products, Services and Entry to Places of Entertainment and Public Places Law, 5761-2000 (hereinafter: Prohibition against Discrimination Law). (It should be noted that the change in the management of the radio station as of the year 2011 was the result of a regulatory and monitoring process instituted by the Second Authority). Hence this Application for Leave to Appeal, which was heard as an appeal, at the center of which lie the following questions: Does the policy of the radio station, according to which women are not heard on its broadcasts, constitute cause for bringing a class action? Under what conditions is an “organization” authorized to bring such an action?

The Supreme Court (per Justice Y. Danziger, Justices E. Hayut and D. Barak-Erez concurring) dismissed the appeal, except for comments on the question of quantification of damages and subject to the determination that in adjudicating the case, the District Court will not address violations that occurred in the period after the beginning of the process of regulation, for the following reasons:

After a short discussion of the general phenomenon of exclusion of women from the public domain, and after the Supreme Court expressed its feeling of disgust and revulsion at the existence of this phenomenon in those cases in which it amounts to prohibited discrimination, and after setting the parameters of the discussion as a class action on grounds of discrimination, the Court proceeded to examine the central questions presented by the case. The Court concluded that there were no grounds  to intervene in the majority of the determinations of the District Court or in its conclusion that the said action is suitable for adjudication as a class action, both in its substance and in the manner in which it was submitted. In particular, no grounds were found for intervening in the two central determinations according to which Kolech is an organization that is eligible to bring a class action by virtue of section 4(a)(3) of the Class Actions Law, and there is prima facie cause for bringing a class action under the provisions of sec. 3(a) of the Class Action Law and item 7 of the Second Appendix to that Law.

Sec. 4(a)(3) of the Law states that an “organization” (within the meaning of the definitions section of the Law) may bring a class action, provided that the action addresses an area that is among its public purposes, and provided that it would be difficult to submit the application on behalf of a plaintiff who has a personal cause of action. In the opinion of Justice Danziger, narrow, cautious interpretation should normally be adopted in removing the procedural barriers that the above sec. 4(a)(3) places before organizations that wish to submit an application for certification of a class action, out of concern that lack of caution in this regard is liable to encourage the phenomenon of bringing baseless actions, and even affect cases in which there would not seem to be any difficulty in bringing the action in the names of plaintiffs with personal causes of action.

An organization seeking to bring a class action in place of a plaintiff with a personal cause of action must meet the following cumulative conditions:  first, the organization must prove that it complies with the conditions of sec. 2 of the Class Action Law, which include proving that it is an active, recognized organization, that regularly and actually operates, and has been doing so for at least a year, and that the purpose of its activity is clearly a public purpose; secondly, the organization must prove that the lawsuit is within the area of one of its public purposes; thirdly, the organization must prove that a difficulty exists in submitting the application in the name of a person with a personal cause of action. The term “difficult” should be examined in accordance with the case and its circumstances, and with regard to several indicators, among them a lack of financial means among potential plaintiffs; areas or situations in which the direct victims are not aware of the fact of the harm done to them due to gaps in knowledge or an inability to comprehend the harm; and cultural barriers which make it difficult to find a plaintiff with a personal cause of action. All these are relevant to situations characterized by the existence of a cultural gap that deters plaintiffs with a personal cause of action from turning to the courts, and does not constitute a closed list. As a rule, proving this condition will require that evidence be presented showing that the organization acted with “due diligence” to locate a plaintiff with a personal cause of action, in both the quantitative and the qualitative sense, but  subject to the possibility of there being exceptional situations in which the court will be satisfied that there is an inherent difficulty, or that there are special, known and convincing data arising from the circumstances of the case that would suffice to show a difficulty in finding a plaintiff with a personal cause of action.

As the District Court determined, Kolech – whose purpose is promoting the status of women in the religious community and in Israeli society – complies with the above conditions, and it is therefore a “qualified organization” for the purpose of bringing a class action. The main reason supporting the conclusion that it was difficult to find a plaintiff with a personal cause of action in the present case is that there is a reluctance on the part of ultra-Orthodox women to place themselves at the forefront of the struggle to increase gender equality in the ultra-Orthodox community, for fear of harm to their position in the community. In this regard, the cultural aspect carries great weight, and it is sufficient to support the concern that had  Kolech not submitted the application for certification of the class action, it would not have been submitted at all. The Court added that even had it been possible to locate a plaintiff with a personal cause of action who could have submitted the application herself, it would not have been right in the circumstances to order that the request be denied or dismissed in limine, but at most, to order that the organization be replaced by that plaintiff.

As for the cause of action, the Court decided that the Prohibition against Discrimination Law applies in the circumstances of the case. As the District Court determined, the prohibition against discrimination in the provision of a “public service” refers not only to access to the broadcasts of the radio station, but to all the services that the station provides to listeners, including the possibility of listeners participating in programs. Denying this possibility to women because they are women – provided such denial is proved – is certainly liable to amount to discrimination to which the Prohibition against Discrimination Law applies. Pursuant to this, the Court dismissed the argument of the radio station that gender distinction is necessitated by the traditional religious nature of the radio station and is due to the halakhic position of the station’s rabbinical committee, and therefore there is no discrimination, or alternatively, that the exceptions specified in the Prohibition against Discrimination Law apply such that it is not possible to sue the station for its policy. The Supreme Court held that the policy adopted by the radio station does, indeed, constitute discrimination under sec. 3(a) of the Law, and that there are no grounds for applying the exceptions prescribed in secs. 3(d)(1) and 3(d)(3) of the Law, according to which it will not be considered discrimination where “the action is necessitated by the character or nature of the product” and that it is possible to maintain “separate frameworks for men or women, as long as this separation is justified”. In this context, the Court determined that in order for either of the two above exceptions to apply, it must be proven that the religious norm is indeed binding, or at least justifies adopting the differential attitude to women. In the present case, it cannot be said that religious practice mandates or justifies application of the exceptions in the Prohibition against Discrimination Law, particularly when the halakhic opinion upon which the station relies – that of the late Rabbi Ovadia Yosef – stated specifically that the prohibition on allowing women’s voices to be heard is not in the category of a halakhic prohibition, but rather, in the category of “enhancing a precept” [hidur mitzvah]. Moreover, the facts in the present case show that the cultural and the religious character of the radio station was preserved even after the said practice of excluding women from the broadcasts of the station was stopped in the framework of the regulatory process, and what is more, the scope of the activity of the station actually continues to grow. Moreover, the exception specified in sec. 3(d)(3) of the Law does not apparently apply in our case, inter alia, for the reason that it refers to the existence of “separate frameworks” for men and women, i.e., an arrangement of separation. In our case, there was no arrangement of separation but an arrangement that apparently prevented women, and only women, from participating in the broadcasts of the radio station.

Further, no cause was found for intervening in the determinations of the District Court with respect to the immunity provided in sec. 6 of the Civil Wrongs Ordinance.

With respect to harm and calculating the compensation, even though the Court accepted some of the arguments raised by the radio station regarding the harm, it was of the opinion that this element was proved by Kolech at the required prima facie level for this stage of the proceedings, and therefore there is no reason to depart from the final conclusion of the District Court that it had been proven to the required extent that the members of the class incurred harm due to the policy of the station. At the same time, the Court decided to intervene in certain determinations of the District Court in this context, such as the determination regarding the possibility of awarding damages in the suit “without proof of harm”. The Court held that it was not possible to award damages without proof of harm in the circumstances of the case, notwithstanding the possibility of doing so under the Prohibition against Discrimination Law in matters other than a class action. A second comment referred to the matter of the relief that was sought – NIS 104,000,000. It was noted that the case raised questions concerning the appropriate method of calculation of the compensation in the circumstances of the case.

No grounds were found for intervening in the determination of the District Court whereby a common question existed in respect of all the members of the class, i.e., “whether the station acted in a prohibited discriminatory manner against the members of the class in that it prevented women from being heard on air from the time it began operating and until today, Nov. 6, 2011…”; according to the Court, the focus on the issue of the common question should be on the tortious conduct of the radio station during the period of the declared policy. This question is one that stands at the center of the action. The District Court should not address questions that relate to the period of time after the commencement of the regulatory process, in the course of which the two concrete violations occurred. The Supreme Court also found no grounds to intervene in the determination that there is a “reasonable possibility” that the above question will be decided in favor of members of the class.

Neither was reason found to intervene in the determination of the District Court that a class action is the suitable means of conducting the said dispute, insofar as the period prior to the beginning of the regulatory process is concerned. As opposed to this, the Court held that with respect to the period of the particular instances of violation, a class action is not necessarily the most efficient way of conducting the particular dispute, and it is preferable that it be adjudicated in the framework of personal actions brought by the women who were allegedly harmed, to the extent that they wish to do so.

Furthermore, the conditions laid down in secs. 8(a)(3) and 8(a)(4) were met. There is reasonable basis to assume that the interests of all members of the class will be represented and conducted in an appropriate manner and in good faith.

Consequently, it was ruled that the decision of the District Court will stand, except for any changes necessitated by what has been said above.

Justices E. Hayut and D. Barak-Erez concurred with the above and added comments, inter alia, regarding procedural questions related to class actions being brought by means of an organization, and on the substantive issue of the exclusion of women, including reference to an additional aspect relating to the “location” of the present case on the private-public continuum.

.

 

 

JUDGMENT

 

Justice Y. Danziger

Does a radio station’s policy that women will not be heard on its broadcasts constitute cause for bringing a class action,  and under what conditions will an “organization” be permitted to bring such an action? These are the central questions before the Court.

 

Introduction

1.         The Jerusalem District Court granted an application to certify a class action submitted by the organization “Kolech – Religious Women’s Forum” (hereinafter: Kolech) against the Kol BaRamah Ltd. radio station (hereinafter: the radio station or the station), claiming that the station’s declared policy that women would not be heard on its broadcasts constitutes prohibited discrimination under the Prohibition against Discrimination in Products, Services and Entry to Places of Entertainment and Public Places Law, 5761-2000 (hereinafter: the Prohibition against Discrimination Law).  The court dismissed various arguments raised by the radio station regarding the suitability of the action for adjudication as a class action. Thus, for example, the station’s argument that the application for approval should be dismissed because it was not submitted by a plaintiff who has a personal cause of action was dismissed.  In addition, the argument that there was no cause for bringing the action since the Prohibition against Discrimination Law does not apply in the circumstances of the case was dismissed. It was held that the policy adopted by the radio station constitutes blatant gender discrimination under the Prohibition against Discrimination Law, and therefore there is cause for adjudicating the suit as a class action. It was further held that the action raises questions that are common to all members of the class; that it is the efficient and fair way to decide the dispute; that there is a reasonable possibility that the dispute will be decided in favor of the members of the class; and that it is reasonable to assume that the action will be presented and conducted in the appropriate manner. The application for leave to appeal was lodged against this decision

 

The Pertinent Facts

2.         The radio station Kol BaRamah has operated since 2009 by virtue of a concession for radio broadcasts issued by the Second Authority for Television and Radio (hereinafter: the Second Authority). The concession was issued to the station after it won a tender published by the Council for the Second Authority for granting a concession for a radio station intended for the “religious-traditional-Sephardic” community.  As emerges from the material submitted to us, the radio station has significant influence in the communications market, and today it is the fifth-largest regional radio station in the State of Israel. There is no dispute that since its establishment in 2009 and until the end of 2011, the radio station  maintained a declared policy whereby women would not be heard on its various broadcasts. Moreover, there is no dispute that following various regulatory directives, the station changed its policy, and as of November 2011, women’s voices began to be heard in its broadcasts.

3.         The change in the policy of the radio station, which began towards the end of 2011, was the result of regulatory and oversight procedures that were adopted by the Second Authority, in the framework of which various directives were issued to the radio station. The Second Authority began to adopt these procedures after it received complaints against the radio station, which upon investigation, revealed that the policy was based on directives that had been issued by the “Rabbinical Committee”, which is the station’s “halakhic” [Jewish law] committee, and which plays a role in the station by virtue of the terms of the concession. The purpose of the procedure was to establish rules pertaining to women’s voices being aired in the station’s broadcasts, while, insofar as possible, conducting a dialogue with the radio station. Against this background, various directives were issued ordering, inter alia, that the station allow women who hold public office to be heard on the radio broadcasts, and that its broadcasting schedule would devote a “weekly program” intended for its female audience. These directives were first published in a letter sent by the Second Authority to the station on Oct. 10, 2011, as follows:

“1.  News or currently breaking events  transmitting a message to the Israeli public will be broadcast live and unedited. This directive is effective immediately.

2.    When the response of a female public official is required on a particular subject, for journalistic or ethical reasons, or when the public official initiates a request to respond to a particular subject, the station will allow the said official or her representative to participate in the broadcast and to be heard. This directive is effective immediately.

3.    The station will incorporate into its broadcasting schedule a weekly program intended for the station’s female listeners, in the framework of which women will be able to speak and make their position heard. This directive will take effect at the beginning of November, 2011.

       You are requested to inform the Authority of the manner in which the program will be integrated into the schedule of broadcasts no later than Oct. 24, 2011.

4.    The station will continue to provide a complementary response to the station’s male and female listeners by means of the IVR system, inter alia, by means of rabbis’ wives, insofar as necessary, in different and varied areas. This directive is effective immediately.

       As clarified in our discussion, implementation of these directives will be carried out on all the frequencies that serve the station’s broadcasts. As stated, the manner of implementation will be reviewed by the Authority at the end of four months from the times specified above.

4.         In accordance with the terms of the letter, the radio station established a weekly program intended for the female audience, albeit at an early hour. Approximately three months later, the Second Authority approved the broadcasting schedule submitted by the station for the year 2012, but at the same time, added a requirement that the station include broadcasts of women holding public office, and that it incorporate into its scheduled programs a “daily broadcast strip”, amounting to several weekly hours, in which women would be able to speak on the programs. This requirement, too, was issued in writing, as follows:

1.    The station will include women who hold public office in all current events programs of the station. This applies both when the female public official asks to comment on a particular subject that is raised in the program, and when such comment is relevant and required for journalistic reasons.

2.    The station will include women who have expertise in various areas in all its broadcasts. This directive is effective immediately.

3.    The station will air news or currently breaking events on live transmission without editing that includes considerations of gender distinction. This directive is effective immediately.

4.    The station will incorporate into its broadcasts two weekly hours of programming intended for female listeners, with the participation of women. These two hours will be incorporated into the broadcasts of the station as of April 15, 2012, and will be brought prior to that date to the attention of the Board of the Authority.

5.    The station will incorporate into its broadcasts two weekly hours in addition to those specified in sub-section (4), in which women will be incorporated into the programs intended for all listeners. These two hours may be in consumer programs, conversations with listeners, youth programs, etc. These two hours will be incorporated into the station’s broadcasts as of April 15, 2012.

       The Council notes the statement of the station’s owner, Mr. Zvi Amar, on behalf of all the owners of the station, that the station will act diligently and in good faith to include women who are public figures and experts in all broadcasts of the station.

5.         The dialogue in the framework of the regulatory process continued into the years 2013-2014, when the Second Authority approved the broadcasting schedule submitted by the station in relation to those years, but it continued to oversee and to issue directives to the station. Inter alia, the Second Authority decided that the station would increase the number of weekly hours in which women would be permitted to go on air. The latest relevant directive that was issued to the radio station appeared in writing on Jan. 8, 2014, and it determined that there would no longer be any restrictions on women being included in the station’s broadcasts:

1.    There will be no restriction on women being heard in the station’s broadcasts.

2.    At the request of the station, the Council approves one hour of broadcasts daily that will be devoted to sermons and to conversations of listeners with rabbis, in which the station will be permitted to exclude the voices of women. The Council is of the opinion that approval of this limited scope in which women will not be heard also provides a response to the most ultra-Orthodox listeners of the station, and it is reasonable and proportionate.

3.    In light of the long regulatory process on this matter, which already began in 2011 with the station’s declared policy in regard to allowing women to be heard, the Council directs the station’s administration to initiate action to encourage women being included in its broadcasts, including female public figures and female experts in various fields.

4.    The Council stresses that the station must ensure that it acts lawfully, including in relation to the employment of women at the station.

6.         And indeed, the process of gradual regulation that began in 2011, at which time the declared policy of the station stated that women would not be heard in its broadcasts, took shape. By 2014, all the previous restrictions on airing women’s voices in the station’s broadcasts were removed, with the exception of the restriction in sec. 2 of the letter dated Jan. 8, 2014. The Second Authority even emphasized its satisfaction with the dialogue and with the process of “genuine internalization” on the part of the station, and it announced that the station’s concession would be extended for another three years.

 

Report of the Departmental Team for Examining the Phenomenon of “Exclusion of Women”

7.         Parallel to the regulatory procedures undertaken by the Second Authority, the Attorney General also turned his attention to this matter and examined the phenomenon of “exclusion of woman” in the public domain in general, and the activity and policy of the Kol BaRamah radio station in particular. This was pursuant to an increasing number of reports on various manifestations of exclusion of women. On Jan. 5, 2012, the Attorney General appointed a team to investigate all aspects of this phenomenon. The team was asked to examine the legal aspects of some of the manifestations of the phenomenon in the public domain, and to formulate recommendations for addressing them. In this framework, the team also examined the policy of the radio station. On March 7, 2013, the team submitted a report to the Attorney General (hereinafter: Report of the Departmental Team). Insofar as the policy of the radio station was concerned, the Report stated that “exclusion of women” on the part of the station was expressed in that, initially, women were not heard at all. At the same time, the report described the change that had taken place at the radio station in complying with the directives of the Second Authority, noting that over time, women began to be heard over the airwaves, and that a noticeable trend of adding broadcasts and programs dedicated to women could be discerned.

8.         The Report of the Departmental Team added that three meetings had been held on the subject of the activities of the radio station, and that there had been meetings with the representatives of the Second Authority, the Commission for Equal Opportunity in the Workplace, and the representatives of the radio station. The Departmental Team noted that it was impressed by the significant progress that had been made following the actions of the Second Authority, which led to women being heard on the broadcasts of the radio station. Nevertheless, it was noted that at the time of the writing of the Report, the broadcasting of women’s voices by the station was still subject to significant restrictions. The team was of the opinion that these circumstances raised legal and constitutional difficulties. An important point in relation to the case at hand, which is addressed in the Report of the Departmental Team, addresses the application of the Prohibition against Discrimination Law to the activities of the radio station. In this context, the Departmental Team thought that the statutory provision according to which “communications services” constitute a “public service” also applied to the activity of the radio station, and therefore its policy should be “treated” in accordance with the provisions of the Prohibition against Discrimination Law. This point was summarized in para. 198 of the Report of the Departmental Team, which noted that the routine broadcasting arrangements “entail a violation of the basic rights to dignity, equality and freedom of expression and they are contrary to the provisions of the Prohibition against Discrimination Law…”.

9.         The Attorney General adopted the Report of the Departmental Team, and subsequently sent a letter, on May 7, 2013, to a number of government ministers. The letter included specific reference to the activity of the radio station, and mentioned that its broadcast practices entailed a serious violation of women’s basic rights. It should be noted that the Government of Israel also adopted  the Report [Resolution no. 1526 of the 33rd Government of Israel, “Prevention of the Exclusion of Women from the Public Domain” (March 30, 2014)].

 

Arguments of the Parties in the District Court

10.       Kolech submitted its application for certification of the class action as a non-profit organization devoted to social and cognitive change in regard to gender equality in the religious community in Israel. Kolech claims that the station’s policy constitutes unlawful discrimination under the provisions of sec. 3(a) of the Prohibition against Discrimination Law, which prohibits, inter alia, acting in a discriminatory manner in the provision of a public service “due to gender”.  Kolech concentrated its arguments on two major focal points of discrimination that existed, in its view, in the activity of the radio station. The first point of discrimination lay in not allowing women to “appear on air”. In this context, it was alleged that in the relevant periods, the radio station prevented women from appearing on air and speaking in the broadcasts, first in a comprehensive manner, and later, in a partial manner, whereas men were allowed to be heard. The second point of discrimination lay in the “deprivation of content” from the male and female listeners of the radio station. This point of discrimination related to the fact that due to the policy of the radio station, listeners received communications services “purely from the male sex”, with women being excluded from the world of communications content. As a consequence of the policy adopted by the station, the listeners were deprived of the opportunity to listen and to be exposed to the opinions of women. Kolech added that these two focal points of discrimination reflect conduct that is a serious violation of the basic rights of women under Basic Law: Human Dignity and Liberty and its derivatives, including their right to dignity, to equality, and to freedom of expression.

11.       On the legal plane – since we are dealing with the area of class actions – Kolech argued that the suit should be certified as a class action under item 7 of the Second Appendix to the Class Action Law, 5766-2006 (hereinafter: Class Action  Law), namely, for a cause according to the Prohibition against Discrimination Law. In accordance with the various provisions of the Class Action Law, Kolech asked that it be determined that the “class” in the name of which the class action would be conducted would include “all the female listeners of the radio station and all the women who wished to listen to the station but refrained from doing so due to the discrimination against women at the station”, and that the “relief” would be “by way of issuing an order directing [the station] to cease discriminating against women at the Kol BaRamah radio station, and financial compensation for members of the class”. It should be noted that Kolech brought support for its various arguments, both concerning the definition of the class and with respect to the damage caused to its members, in an expert opinion prepared by the Sarid Institute for Research Services Ltd. In the framework of this opinion, a survey was conducted that examined the extent of damage to women from the policy of the station. Based on the data from the survey, Kolech estimated the number of women who were harmed by the policy of the station “to a great extent” at some 64,000 women. Kolech pointed out that, indeed, it is difficult to quantify the non-monetary damage, but at the same time, it is possible to do so based on cases in which compensation was awarded for violation of the Prohibition against Discrimination Law. Against this backdrop, Kolech set the sum of compensation at NIS 104,000,000, explaining that the compensation for each member of the class amounted to between NIS 1,000 and 2,000. Kolech added that the action raises questions common to all members of the class; that a reasonable possibility exists that the action will be decided in its favor; and finally, that the class action is the most efficient way to decide the dispute.

12.       The radio station requested that the application to approve a class action be denied. First, the station contended that Kolech – as an organization that is not an injured party with a personal cause of action – is not qualified to file a class action. It argued that Kolech had not proved that it had acted with due diligence to locate a person with a personal cause of action prior to submitting the class action, as required by the Class Action Law. In that context, it was contended that Kolech is also not qualified to submit the class action because there is a difference between its national-religious world view and the world view of the women who constitute the target audience of the radio station, who are from the ultra-Orthodox Sephardic sector. On the merits, the radio station contended that there is no cause of action because sec. 3(a) of the Prohibition against Discrimination Law does not apply in the circumstances of the case. In this context it was contended that the section requires that there be no discrimination in access to the service or product, whereas in the present case, the service that the radio station provides is accessible to all listeners, and every woman can listen to the radio station, just like any man. Therefore, it was argued, the relevant section of the Prohibition against Discrimination Law does not apply. Alternatively, it was argued that the practice adopted by the station does not in any way constitute “discrimination”, but is rather a “permitted distinction”. The radio station’s version was, therefore, that if it is held that the Prohibition against Discrimination Law applies, then the exceptions enumerated in secs. 3(d)(1) and 3(d)(3) apply, whereby an act is not considered to constitute discrimination when it “is necessitated by the character or nature of the product,”  and by which it is permissible to maintain “separate frameworks … for men or women …  on condition that the separation is justified …”

13.       The radio station further argued that apart from the fact that no grounds exist for submitting a class action, no harm was caused to the members of the class. Inter alia, it was argued that women in the relevant class are not at all interested in being exposed to or having their voices heard in the wider public, and similarly they are not interested in hearing the voices of other women. In this context, the radio station also attacked the findings of the survey, pointing out that Kolech did not submit any substantial proof for the existence of harm, as was claimed. As for the requested relief, the radio station claimed that if it is awarded, the station’s character will be harmed and the purpose for which it was established will be frustrated. The radio station additionally claimed that weight should also be attributed to the regulatory procedures it underwent, and to the fact that it complied with the directives of the Second Authority. In this context, it was argued that due to the fact that its activity was in accordance with the directives of the Second Authority, it has immunity from being sued under sec. 6 of the Civil Wrongs Ordinance [New Version] – immunity that applies to acts that were done in accordance with statutory provisions or by virtue of legal authority. It was argued that this immunity applies as of the date on which the station was established, since the concession to operate the station stated that a “spiritual committee” would be set up that would determine the rules for its broadcasts. It was noted that the station acted in light of these provisions in good faith, in the reasonable belief that it acted in accordance with the valid legal permission of the spiritual committee not to broadcast women’s voices, and upon the basis of the opinions of the leading rabbis in Israel.

 

The Decision of the District Court

14.       The District Court initially addressed the qualification of Kolech to apply for certification. The court noted that the provisions of sec. 4(a)(3) of the Class Action Law allow  an “organization” to submit a class action subject to two cumulative conditions: one, that the action filed is within the area of one of the objectives of the organization; and two, that in the circumstances of the case, submitting the request for certification on behalf of a person who has a personal cause of action would prove problematic. The District Court held that Kolech met these two conditions. It stated that Kolech provided proof that it was an organization that had been acting for years to promote the status of women in religious Jewish society, and as such, the action was clearly within the area of its objectives. It also stated that Kolech proved that it would be difficult to find a woman with a personal cause of action, in that there is an inherent difficulty in placing an ultra-Orthodox woman “at the forefront of the battle”, due to the fear of reprisal by the society in which she lives and the social harm that she would likely incur. The court also found support for its conclusion in the findings of the survey that was submitted on behalf of Kolech, from which it emerges that the percentage of women who stated that they are prepared to take legal action to change the policy of the station is extremely small. Finally, the court remarked that because the action raises issues that are of public importance, the fact that it was submitted by an organization that has resources and knowledge has the potential to realize the objectives of the Class Action Law.

15.       The court subsequently addressed the question of whether, in the circumstances of the case, there were grounds for submitting a class action.  Central to this issue was the question of whether sec. 3(a) of the Prohibition against Discrimination Law applied in the circumstances. The Court dismissed the narrow interpretation of the radio station, whereby the section treats only of prohibiting discrimination in the form of access to a service or a product, and therefore, would not appear to be relevant in our case. It was noted that the language of the section refers to the prohibition of discrimination in providing a “public service”, and the Law defines communications services as such a service. Furthermore, the communications services provided by the radio station include news and commentary broadcasts, as well as offering listeners the opportunity to express their opinions on the air. The court emphasized that this conclusion is also necessitated by the purpose of the Law, which is the prevention of discrimination, and in particular discrimination of the type expressed in the case at hand. The court therefore held that the policy of the radio station may fall within the purview  sec. 3(a) of the Prohibition against Discrimination Law, however it distinguished between two different periods in which discrimination, as defined by the Law, occurred, as follows:

a.  The period of the declared policy (2009 – Nov. 6, 2011): In relation to this period, the District Court held that the policy adopted by the radio station constituted prohibited discrimination within the meaning of sec. 3(a) of the Prohibition against Discrimination Law. It added that the exceptions in secs. 3(d)(1) and 3(d)(3) of the Prohibition against Discrimination Law, according to which an action is not deemed to be discriminatory where it “is necessitated by the character or nature of the product” and by which it is permissible to maintain “separate frameworks … for men or women …  on condition that the separation is justified …” do not apply. Inter alia, the court explained that it was not proven that there was a “relevant difference” between men and women that justified the gender distinction that was adopted, for even according to the radio station, the distinction was not based on an explicit religious precept, but was adopted as a “stringency” (“enhancement of the precept” [hidur mitzvah]) that is not a halakhic requirement. It was also held that the policy of the station in any case does not meet the condition of maintaining “a separate framework”, since the matter at did not involve separation, but rather prevention directed solely at women.

b. The period of specific violations (Nov. 6, 2011 –Aug. 28, 2012). In this period, regulatory procedures were undertaken, but it was alleged that in two instances the radio station violated the directives it was given. The first instance occurred in November 2011, when the station refused to interview Prof. Sofia Ish Shalom of Rambam Hospital because she was a woman. In respect of this event, the Second Authority imposed a fine of NIS 10,000 on the station. The second instance occurred in the same month, when one of the station’s producers requested of Rambam Hospital that a medical resident discuss a certain topic on the air. Here, too, the producer stressed that the interviewee must be a man and not a woman. The District Court held that these two violations constituted cause under sec. 3(a) of the Prohibition against Discrimination Law, and it saw no reason to change its conclusion due to any exceptions in the Law.

16.       In the framework of the deliberations on the cause of action, the court also considered the radio station’s contention that it enjoyed immunity by virtue of section 6 of the Civil Wrongs Ordinance [New Version]. The court considered this argument, even though it pointed out that the radio station had not raised it in its response but only at a later stage, apparently in a “change of front”. On the merits, the court held that the argument should be partially accepted. The court explained that, as of the end of 2011, the radio station began to operate in dialogue with the Second Authority and subject to its directives. In these circumstances, it was held that the station should not be held liable in tort for actions that were conducted in the framework of the regulatory process, and that its actions during this period are covered by the immunity granted under sec. 6 of the Civil Wrongs Ordinance. On the other hand, it held that this immunity did not extend to acts carried out by the radio station prior to the regulatory processes, nor to acts carried out at in the course of the regulatory processes but which deviated from the directives of the Second Authority.

17.       Upon completing its deliberations on the cause for bringing a class action, the court proceeded examine the additional conditions for certification. The court held that under the circumstances of the case, the action raises substantial questions that are common to all the members of the class. One question was “whether [the station] wronged the members of the class through unlawful discrimination in that it prevented women from being heard on the air from the time that it began its operations and until November 6, 2011…”. A second question was “whether [the station] wronged the members of the class through unlawful discrimination in that it prevented women from being heard on the air in the two instances…”. The court further held that a class action was the efficient and fair way to decide the dispute, noting that there is an inbuilt advantage in conducting such an action against the background of concerns about various constraints that exist amongst the female members of the class in relation to filing personal actions. It explained that conducting this action as a class action was likely to facilitate modes of proof and relief that would not be possible in personal suits. It was also likely to enable many women to receive appropriate relief for breach of the law, where it was doubtful that these women would turn to the courts as individuals. In relation to the relief, it was further pointed out that according to the Prohibition against Discrimination Law, it is possible, in the circumstances of the case, to award compensation even “without proof of harm”. Finally, the court noted that it believed that the case of the members of the class would be conducted in a suitable manner and in good faith.

18.       The court summarized its determinations by saying that Kolech had met the burden of proving the fulfillment of all the required conditions for approving a class action. Therefore, and as provided by the legislature in section 14(a) of the Class Action Law, the court held that the class in whose name the class action would be conducted was: “All the female listeners of the Kol BaRamah radio station and all the women who were interested in listening to the station but refrained from doing so due to discrimination against women at the station from the date of the beginning of the activity of the station and until the date of submission of the application for certification”. The court also held that Kolech and its attorneys would serve as the representatives in the action, and that the requested relief is an order requiring the radio station to desist from its discrimination against women, as well as monetary compensation for the members of the class.

 

The Application for Leave to Appeal

19.       The arguments of the radio station essentially restate the arguments it raised in the District Court, and I will therefore repeat only the main points. The radio station believes that filing a class action is not appropriate in the circumstances of the case, inasmuch as it operated in cooperation with representatives of the Second Authority and in accordance with its directives. In addition, the station believes that the court erred in all its determinations and in its decision to certify the class action. Thus, for example, the radio station claims that the court erred in its determination that Kolech was qualified to submit the class action as an organization. It also claims that there was a mistake in the court’s ruling on the existence of a “cause” under sec. 3(a) of the Prohibition against Discrimination Law, and in its ruling that the immunity under sec. 6 of the Civil Wrongs Ordinance applied only from the beginning of the regulatory process and not from the time that the station was set up. Another central argument in the application for leave to appeal is that the court did not explain what “harm” was allegedly caused to the class that would give rise to an entitlement to monetary relief. Inter alia, it was stated that the Court erred in its determination that compensation can be awarded “without proof of harm”, in view of sec. 20(e) of the Class Action Law which precludes the possibility of doing so in a class action. The station also contests the finding concerning the “definition of the class”. According to the station, there was no justification for including all the female listeners of the station in the class. Rather, the class should, at most, comprise only those listeners who requested to be heard on air and were refused. Finally, it was argued that the members of the class do not in any way share common questions. For these and other reasons, the radio station reiterated its position that the class action should not be certified.

20.       Kolech objects to the application for leave to appeal. Kolech argues that the decision of the District Court is well-founded and reasoned, and reveals no flaws. As a preliminary argument, it says that the application for leave to appeal does not meet the criteria laid down in the case law of this Court for granting leave to appeal a decision certifying a class action. On the merits, Kolech supports the findings of the District Court both in relation to its qualification and in relation to the existence of cause under sec. 3(a) of the Class Action Law, and with respect to the extent of immunity by virtue of sec. 6 of the Civil Wrongs Ordinance. Kolech objects to the argument of the radio station whereby women were apparently not harmed, since they could “listen” to the radio station. Kolech argues that preventing the possibility of women having their voices heard does not harm only those women who were not permitted to go on air, but it conveys a harmful and humiliating message to all female listeners that the class to which they belong – that of women – is an “inferior” class. Concerning the damage, Kolech adds that at the stage of certifying the class action it is not necessary to prove the exact harm caused to each of the members of the class, and that the harm will be calculated and assessed in the principal procedure itself. In any case, Kolech argues, harm was certainly caused due to the significant breach of the rights of the members of the class to dignity and equality.

 

Deliberation and Decision

21.       After examining the material that was presented to us, I have reached the conclusion that granting the application for leave to appeal, and adjudicating it as an appeal, is justified. Even though the criterion for granting leave to appeal a decision to certify a class action has been narrowed over the years (see: LCA 8671/09 Cellcom Israel Ltd. v. Fattal [1]; LCA 2282/15 Psagot Provident and Pension Funds Ltd. v. Levy, paras. 11-10 [2]), my opinion is that the present application raises several exceptional legal questions that must be discussed already at this procedural stage. Accordingly, the following discussion will address the arguments of the radio station on the merits. I will begin with a short discussion of the general phenomenon of exclusion of women from the public domain, and I will also define the questions relevant to the class action in the present case. I will subsequently examine whether the conditions for certifying a class action have been met in the present case, focusing particularly on those conditions that relate to the party that is seeking certification and the existence of cause of action.

 

(A)       Exclusion of women from the public domain – Some preliminary comments

22.       The phenomenon known as “exclusion of women” refers to the particular case of generic discrimination on the basis of sex, the main characteristic of which is not allowing women – by virtue of being women – to receive public services or to take part in public activity. In one sense, the phenomenon is liable to manifest itself in gender separation, i.e., in situations in which public services are in fact supplied to women, but separately. This, for example, is the case in relation to gender separation between men and women on buses or in health clinic waiting rooms. In another sense, exclusion of women might also manifest itself in a situation in which women are categorically prevented or constrained from receiving services or from being active participants in activity that is taking place in the public domain, as if there were a sign to the effect that the service is provided “for men only”. This is the situation in respect of the sweeping prohibition on broadcasting women’s voices, as in the present case. The practices suspected of being exclusionary of women inherently give rise to questions on different legal planes, and in particular on the public-constitutional plane, where they emphasize the tensions surrounding the rights of women to equality, dignity, freedom of expression, autonomy and freedom of occupation, as opposed to contrary rights and interests that derive from the principle of multi-culturalism, freedom of religion and a desire to prevent harm to religious sensibility (for a discussion of the various considerations, see, e.g.: HCJ 746/07 Ragen v. Ministry of Transport [3]; Report of the Departmental Team, at 10-34; Ruth Halperin-Kaddari, Women, Religion and Multiculturalism in Israel, 5 UCLA J. Int’l & For. Aff. 339, 362-366 (2000); Susan M. Okin, Is Multiculturalism Bad for Women? in Is Multiculturalism Bad for Women? 9-24 (Joshua Cohen, Matthew Howard & March C. Nussbaum eds., 1999).

23.       The theoretical center of gravity in relation to the exclusion of women in Israel – as reflected in the relevant literature and in the Report of the Departmental Team – lies in various manifestations of the phenomenon in contexts that include religious-halakhic aspects. In particular, disagreement arises in relation to the question of whether these aspects justify according a separate or limited status to women in the public sphere, having regard to the entire range of conflicting interests (see, inter alia: Alon Harel and Aharon Schnarch, Separation of the Sexes on Public Transportation, 3 Alei Mishpat 71(2003)  (Hebrew) (hereinafter: Harel & Schnarch)); Noya Rimalt The Separation between Men and Woman as Discrimination between the Sexes, 3 Alei Mishpat 99 (2003) (Hebrew) (hereinafter: Rimalt); Zvi Triger, Separation  between Women and Men as Sexual Harassment, 35 Iyunei Mishpat 703, 709-713 (2013) (Hebrew) (hereinafter: Triger); Alon Harel, Regulating Modesty Related Practices, 1 Law and Ethics of Human Rights 211(2007)). As we have said, the Report of the Departmental Team dealt in depth with the phenomenon of the exclusion of women in this context. In doing so, specific instances of the phenomenon were discussed, and the various cultural and halakhic interests were considered – including gender separation and distinction in cemeteries, in state ceremonies, on public transportation and the free movement of female pedestrians in ultra-Orthodox neighborhoods. As mentioned in the Report of the Departmental Team, the criterion that was adopted for examining the constitutionality of every instance that was suspect in relation to exclusion of women was that which had been formulated over the course of many years in the case law  of this Court in relation to discrimination. According to this criterion, what must be examined is whether there is a “relevant difference” that derives from the character and nature of the public service that justifies the gender separation. As the Court has pointed out, in the framework of this examination, weight should also be attributed to the unique cultural aspects of the ultra-Orthodox community, including the question of how to relate to the fact that women in the ultra-Orthodox community are members of a class that is a “sub-minority” within the ultra-Orthodox minority (Report of the Departmental Committee, paras. 13, 25 and 242).

24.       Indeed, the practice that is suspected of being exclusionary will be examined on its merits, according to its nature and characteristics, and according to the rules that were laid down in the case law in relation to similar instances of discrimination, all, of course, with the necessary changes by virtue of the various interests resting on the scales (see: Aharon Barak, Human Dignity: The Constitutional Right and its Derivatives, vol. 2, 703-705 (2014) (Hebrew); HCJ 153/87 Shakdiel v. Minister of Religion [4], at 242-243); HCJ 4541/94 Miller v. Minister of Defence [5], at 109-110; HCJ 2671/98 Israel Women’s Network v. Minister of Labor and Welfare [6], at 652-660). Not every activity or policy that is alleged to constitute “exclusion of women” will necessarily be classified, ultimately, as prohibited discrimination. We will already say that the reality of life in these contexts is complex, and does not allow for the adoption of a simplistic, radical approach to all its  manifestations. This was discussed by Justice S. Joubran in HCJ 746/07  Ragen v. Ministry of Transport [3], who explained that the context of the practice of separation is likely to  shed a different light on our view concerning constitutionality, having regard to the circumstances of each individual case, paraphrasing the words of Justice T. Marshall of the United States Supreme Court (Cleburne v. Cleburne Living Ctr. 473 U.S. 468-469 (1985)): “A sign that says ‘Men Only’ looks very different on a bathroom door than on the door of a bus.” This, therefore, will be the starting point for examining suspected incidents of exclusion of women, including in our case.

25.       As I mentioned, the general discussion of the phenomenon of exclusion of women from the public domain is merely an introduction to the main subject with which we are concerned, viz., the class action. However, I have decided to express at the outset my sense of revulsion and repugnance at this phenomenon, which seems only to be increasing in those cases in which it amounts to prohibited discrimination. This is an illegitimate, unworthy phenomenon that has been describes as one that “delivers a mortal blow to human dignity” (HCJ 2671/98 Israel Women’s Network v. Minister of Labor and Welfare [6], at 658-659), and it is a gross violation of the basic, fundamental rights of women. Moreover, the exclusion of women also has the potential of instilling a conception that the public domain belongs to “men only”, and consequently, of perpetuating gender-driven gaps in status and behaviors that by their very nature humiliate, degrade and debase women. This is particularly evident when women are forced to turn to the authorities and the courts for a declaration that they are “permitted” to execute basic acts in the public sphere, and clearly the harm that this involves is not limited only to their individual matter, but involves injury to society as a whole (I had occasion to discuss a matter in this spirit, in a slightly different context, in LCA 8821/09 Prozanski v. Layla Tov Productions Co. Ltd. [7], paras. 17-30).

 

(B)       Class action on grounds of discrimination – the parameters

26.       Both in the District Court and in this Court, the arguments of the parties did not focus on the question of the suitability, in principle, of class actions for dealing with the general phenomenon of discrimination, and in that context, for dealing with the exclusion of women from the public domain. In my opinion, they were correct in not doing so. The absence of any disagreement on this point derives from the understanding that, in principle, insofar as the alleged discrimination is prohibited under any of the sections of the Prohibition against Discrimination Law, a class action can be employed as a means for realizing or protecting the rights that have been violated. This is the legislative desire, and it derives directly from a combination of the provisions of sec. 3(a) of the Class Action Law and item 7 of the Second Appendix to the Law, in which the possibility of filing a class action for a cause pursuant to the Prohibition against Discrimination Law is regulated. A different question, which might require consideration in the future, is whether it would be possible to file a class action for  a discriminatory practice that is not regulated under the provisions of the Prohibition against Discrimination Law, and what (if any) might constitute the appropriate ground for basing such an action. In any case, consideration of this question is not required here, since in the present case, certification of the class action is based on the provisions of the Prohibition against Discrimination Law alone.

27.       The above notwithstanding, and without taking a definitive stand on this matter, I will comment as an aside, that in the past, the professional literature raised the possibility that a class action might provide a possible device for addressing cases of collective harm, such as discrimination, and for repairing the damage it had caused,  apparently even independently of the Prohibition against Discrimination Law  (see, e.g., Guy Halfteck, A General Theory Regarding the Social Value of Class Actions as a Means for Law Enforcement, 3 Mishpat ve-Asakim 247-331, note 31 (2005) (Hebrew); Yifat Bitton, Bringing Power Relations within the Scope of Negligence Liability, 37 Mishpatim 145, 212-213 (2008) (Hebrew); Yifat Bitton, Dignity Aches: Compensating Constitutional Harms, 9 Mishpat uMimshal 137, note 5 (2005) (Hebrew) (hereinafter: Bitton, Dignity Aches); Assaf Pink, Class Actions as an Instrument of Social Change, 6 Maasei Mishpat  157 (2014) (Hebrew) (hereinafter: Pink, Class Actions); and see, mutatis mutandis, Daphne Barak-Erez, Constitutional Torts 296 (1993)). Furthermore, quite apart from the discussion of class actions, recent judgments of the trial courts in “regular” – not class action – civil suits have granted recognition to the right of female injured parties to non-monetary compensation for distress, humiliation and violation of dignity caused by a policy of exclusion of women adopted in their regard (see: CC (Bet Shemesh Mag. Ct.) 41269-02-13 Phillip v. Aboutbul [33]; SC (Beer Sheva) 33424-02-12 Michaeli v. Chevra Kadisha – Ofakim Religious Council [34]; SC (Bet Shemesh) 2917-10-11 Marsden v. Negdi  [35]).

28.       The discussion below – except for a brief discussion regarding the “efficient and fair” way to conduct the proceedings – will not deal with the general argument that a class action should not be used in cases of discrimination because there would seem to be “more suitable” alternatives, such as seeking relief on the constitutional and administrative planes (see the discussion of this argument in Bitton, Dignity Aches, at 139. Bitton argues that in the case of collective harm to the dignity of women and their right to equality, the instrument of class action is, indeed, available, but it may be that “the relief of a court order is a more suitable remedy”). As stated, in our case there is no dispute that on the legal level, compensation for discrimination under the Prohibition against Discrimination Law can be sought in a class action procedure, even if other legal possibilities exist. Moreover, the possibility of being awarded relief on the administrative and constitutional planes does not necessarily rule out the possibility of receiving parallel relief by way of a class action. It must be borne in mind that a class action may include applications for relief of several kinds at once, and that sometimes, the actions on separate legal planes are addressed from the outset to different bodies. Furthermore, a class action sometimes constitutes a vital instrument of enforcement precisely when the administrative sanctions are insufficient (see, e.g.: CA 5378/11 Frankl v. Allsale, para. 34 [8]; LCA 9615/05 Shemesh v. Fucacheta Ltd., para. 5 [9]).

29.       In the absence if a need to discuss the questions mentioned above, our deliberations will focus on the question of whether the conditions for approving a class action are met in the present case. As we know, the Class Action Law states in secs. 3(a) and 8(a) that an applicant who seeks certification of a class action must prove several cumulative conditions: (a) One condition is that the cause of action must be one of the causes of actions for which a class action may be brought; (b) A second condition is that the action raises substantive questions of fact or law that are common to all members of the class, and that there is a reasonable possibility that they will be decided in favor of the class; (c) A third condition is that the class action is the most efficient and fair way in which to decide the dispute; (d) The fourth and fifth conditions are that there are reasonable grounds to assume that the concerns of all the members of the class will be represented, and that the matter will be conducted in an appropriate way and in good faith. Additional conditions  specified in sec. 4 of the Class Action Law require that the plaintiff in the class action be authorized in advance to bring and conduct the action; and that insofar as one of the causes of action is harm, the plaintiff in the class action proves prima facie, already at this procedural stage, that harm was caused to a member of the class or that there exists a reasonable possibility that harm was caused to the class (on the conditions, see: CA 9494/08 Pan v. Israel Railways, para. 5 [10]; CA 6887/03 Resnik v. Nir Cooperative, para. 24 [11]).

 

(C)       Interpretation of section 4(a)(3) of the Law – Is “Kolech” qualified to file the action?

30.       Section 4 of the Class Action Law treats of the question of who may apply for certification of a class action. The section specifies the said persons, and in particular, sec. 4(a)(3) of the Law provides that an “organization” (as defined in the Law) may also submit a class action, provided that the action concerns an area that is included in one of its public objectives, and provided that submission of the application by a plaintiff with a personal cause of action would prove difficult. The Law states as follows:

 

By whom and in whose name may an application for approval of a class action be brought	4(a) The following are entitled to submit to the Court an application for approval of a class action as specified below:
		(1)	A person who has cause for an action or matter specified in section 3(a), which raises substantive questions of fact or law common to all members of a class of persons – in the name of that class;
		(2)	A public authority in an action or matter specified in section 3(a) that is within the sphere of one of the public purposes in which the public authority engages – in the name of a class of persons, if that action or matter raises substantive questions of fact or law common to all its members;
(Amendment no. 4) 5768-2008		(3)	An organization in an action or matter specified in section 3(a) that is within the sphere of one of the public purposes in which the organization engages – in the name of a class of persons, if that action or matter raises substantive questions of fact or law common to all its members, on condition that the Court is satisfied that – under the circumstances of the case – it would be difficult to submit the application in the name of a person specified in paragraph (1); however, the Israel Consumer Council, as defined in the Israel Consumer Council Law 5768-2008, may apply for approval of an action as a class action, even if it is not difficult for a person to submit the application as stated in paragraph (1).

The definitions section of the Law defines “organization” as follows:

 

Definitions

2.

In this Law: “Organization” – a body corporate, other than a body corporate set up by a law or a religious trust, which exists and operates in practice and in a regular manner and has done so for at least one year for the advancement of one or more public purposes, its assets and income being used only for the achievement of public purposes, on condition that its activity is not on behalf of a political party or of some other political body, or in connection with a party or aforesaid body or for the advancement of their purposes;

 

 

31.       The interpretation of sec. 4(a)(3) of the Law has not yet been decided by this Court, but it has been addressed in the past by the Economic Department of the District Court (Judge C. Kabub) in Class Action (Econ.) 2484-09-12 Hatzlacha, Consumer Movement for the Promotion of a Fair Economic Society and Economy v. Cohen [31]). The District Court held that in order for an organization to qualify to bring a class action, it must prove that there are prima facie grounds, that there is a difficulty involved in locating a plaintiff with a personal cause of action, and that it is a suitable organization per se. With respect to interpretation of the word “difficult”, the Court held that this requirement attests to the fact that the legislature did not wish to open too wide a portal through which organizations could bring class actions. However, at the same time, it was held that a narrow, pedantic approach should not be adopted, as it might divest the purpose of the law of content in that it would not be possible at all for organizations to file class actions. Against this background, it was decided that the term “difficult” would be examined “in accordance with each matter and its circumstances” (para. 68), and in that particular case, the court added that “the organization that is petitioning bears the burden of proving that it acted with due diligence to locate a person with a cause of action” (para. 64), and that the attempt to locate such a person will be examined from a “quantitative” as well as a “qualitative” perspective (para. 77). The court also noted that “[I]t must be recalled that a class action is indeed a collection of personal suits, but at the same time it has the status of a public action. Therefore, where there is a public interest in the action, this might lead to a certain leniency with respect to the procedural conditions for its submission” (para. 34).

32.       My fundamental view is that a narrow, cautious approach should be adopted to the question of the interpretation of sec. 4(a)(3) of the Law. Careless removal of the procedural barriers, which would allow organizations to submit applications for approving class actions with no limitations, is liable to increase the extent of the phenomenon of submitting groundless claims, even in cases in which there is apparently no real problem in the applications being submitted by plaintiffs who have a personal cause of action (for a discussion of the general concern about groundless actions, see e.g., Alon Klement, Keren Weinshall-Margel, Ifat Taraboulous and Ronnie Avissar-Sadeh, Class Actions in Israel – An Empirical Perspective 9 (2014) (Hebrew) (hereinafter: Class Actions – Empirical Perspective). Another concern is that removing the barriers will motivate certain elements to unite for the sole purpose of facilitating class actions. As I shall explain below, the narrow approach is also the consequence of reading the provisions of the Class Action Law themselves. In this context, the provisions of sec. 4 of the Law present several significant hurdles which organizations must overcome in order that they be allowed to submit an application for certification of a class action, and which attest to the legislative desire to limit their power and to allow them to submit class actions only in cases which are indeed suitable. Moreover, this conclusion also derives from the legislative history of sec. 4 of the Law, it being evident that the legislature did, indeed, wish to allow organizations to bring class actions, but at the same time it did not totally abandon the model that had prevailed in Israeli law prior to the enactment of the Law, whereby the party that brought the class action had to be a member of the injured class (see: Steven Goldstein, Comments on the Class Action Law, 5766-2006 6 Alei Mishpat  7, 16-18 (2007) (Hebrew)).  

33.       The point of departure in the Law is that it is preferable if the person bringing the class action is “a plaintiff with a personal cause of action” or a “public authority” and not an “organization”. This conclusion can be deduced from a reading of sec. 4 of the Class Action Law, in which the legislature established a clear hierarchy among the three bodies. First, sec. 4(a)(3) of the Law states that the application should not be made by an organization if the action can be brought by a plaintiff with a personal cause of action,. Secondly, it is evident that the legislature similarly prefers that the class action be brought by a “public authority” under sec. 4(a)(2) of the Law, as may be inferred from the broad authority granted to such authorities. And note that the three bodies defined as a “public authority” are authorized to bring class actions in certain areas, in view of the recognition that in these areas, it may be difficult to file suit in other ways. The legislature deemed it advantageous to concentrate bringing class actions in these areas in the hands of public authorities, in view of their accumulated experience , their human resources and the fact that at times they have parallel administrative powers, so that they have a more varied means at their disposal for dealing with the wrongdoers. The legislative preference is evinced primarily from the scope of the authority conferred on public authorities, in that they are authorized to bring class actions without even being required to prove the difficulty involved in bringing the action in the name of a plaintiff with a personal cause of action. The language of the Law and the wide power given to the public authorities attest to a clear legislative preference that the plaintiff in class actions be “a plaintiff who has [personal] cause for an action” or a “public authority”. This preference is significant also from the aspect of the qualification of the organization seeking to bring a class action.

I would incidentally note that I am aware of the argument that, in practice, the public authorities have yet to exercise their power (see: Class Actions – Empirical Perspective, at 15-16; Appeal in Class Actions, at 638). However, I do not think that this argument adds or detracts from the empirical analysis above.

34.       Another point of departure is that the term “organization” must be interpreted narrowly, solely in accordance with its definition in the Class Action Law only, and not according to its definition in other laws. And note that in several laws enumerated in the Second Appendix to the Class Action Law, the status of an organization is recognized in various contexts, and they are sometimes vested with the power to sue. Thus, for example, sec. 7(a) of the Prohibition against Discrimination Law states that a corporate body that is engaged in the defense of rights may bring a civil action for a tort under the Law, even when the tort was perpetrated against an individual, as long as that individual has consented thereto. The legal question is whether the fact that an organization was accorded a status by means of an “external law” exempts it from the conditions pertaining to organizations in the Class Action Law. Apparently, it can be argued that putting the organization in the shoes of the plaintiff with a personal cause is effected by way of an external law, and not by means of sec. 4(a)(3) of the Class Action Law. According to this approach, the organization comes within the bounds of the Class Action Law as a “person with a cause” according to sec. 4(a)(1) of the Law, and it is therefore not required to overcome the hurdles placed before an organization under sec. 4(a)(3) of the Law (on this view, see Pink, Class Actions, at 166).

35.       My position, as stated, is that no analogy can be drawn from the status accorded to an organization under external laws with respect to its status for the purpose of bringing a class action. When the provisions granting a status to organizations in external laws were enacted, no examination was conducted of all the aspects required to grant status to an organization as a plaintiff in a class action. Furthermore, the Class Action Law sets hurdles and conditions with respect to organizations that do not exist in the external laws, such as the requirement of operating in practice and in a regular manner for the duration of at least one year. It may well be added that an understanding of the background to the enactment of the Class Action Law leads to a similar conclusion, bearing in mind that the legislature wished to concentrate all the procedural aspects connected to the filing of class actions under one law (see sec. 1 of the Class Action Law: “The purpose of this law is to prescribe uniform rules on the submission and conduct of class actions, in order to improve the protection of rights …”; and  the memorandum to the Class Action Law 5765-2005). Accordingly, it is clear that adoption of an interpretation that allows an organization to be accorded a status by virtue of external laws for the purpose of submitting a class action will lead, in effect, to the decentralization, contrary to the legislative intent, of those procedural aspects that were deliberately concentrated under the Class Action Law.

36.       The first hurdle placed before an organization that seeks to submit a class action in place of a plaintiff with a personal cause of action appears in sec. 2 of the Law. This section defines the term “organization” for the purpose of sec. 4(a)(3) of the Law, and in so doing, establishes a number of conditions that must be met by the organization. In particular, the section prescribes that the organization must prove that it operates in practice and in a regular manner, and has done so for at least a year, that its activities serve a public purpose, and that its assets and income are used only for achieving the public purpose. As noted above, these preconditions prescribed in the definitions section of the Class Action Law demonstrate that the legislature sought to open the door to the bringing of class actions only to active organizations that have proven records in their clearly public area of activity, and which did not incorporate merely for the purpose of bringing a class action.

37.       On the assumption that an organization that wishes to bring a class action has overcome the hurdle of sec. 2 of the Class Action Law, the next hurdle it faces is to prove compliance with the two central conditions for qualification, namely, the conditions prescribed in sec. 4(a)(3) of the Law. First, the applicant organization must prove that the action is within the area of one of its public purposes. This limitation, too, attests to the legislative desire to allow class actions to be brought by organizations only sparingly, in a manner that will ensure that the organization is in fact fit to conduct the class action in the name of the class, inter alia, due to its expertise in and knowledge of that area. Secondly – and this condition apparently constitutes the main obstacle placed before an applicant organization – the organization must convince the court that it would be difficult to submit the application in the name of a person with a personal cause of action. This condition reveals a clear preference of the legislature that class actions not be pursued by organizations, but by a plaintiff with a personal cause of action, who  has been directly harmed, based on an understanding of the importance that a direct victim insists on his rights.

38.       With respect to the statutory requirement of proving that it would be difficult to locate a plaintiff with a personal cause of action, in principle I accept the interpretative approach whereby the word “difficult” must be understood in accordance with the circumstances of each case. Nevertheless, and without making a categorical statement, one can conceive of several indications that would indicate the existence of such a difficulty. Thus, one can imagine that a lack of financial means among potential plaintiffs may indicate a difficulty. Clearly, the higher the anticipated cost of submitting an application for certification of a class action, the greater the concern that a plaintiff with a personal cause of action who would agree to institute the proceeding will not be found. This concern is relevant, for example, in situations in which the class of victims is from a “weak” sector whose members lack sufficient economic means, particularly when the application for certification of the class action must be accompanied by a costly expert opinion. One can also imagine areas or situations in which the direct victims are not aware of the harm done to them due to gaps in knowledge or the absence of the ability to comprehend the harm. In such situations, when the direct victims have difficulty in assessing the damage done to them, it is liable to be difficult to convince them to submit a class action in their own names. Cultural barriers are also liable to make it difficult, at times, to find a plaintiff with a personal cause of action. These are relevant to situations characterized by the existence of a culture gap that deters plaintiffs with a personal cause of action from turning to the courts (see, mutatis mutandis, Yuval Elbashan Access to Justice of Underpowered Communities in Israel 3  Alei Mishpat  497, 510 (2004) (Hebrew)).

39.       It should be emphasized that the burden of proving the difficulty in finding a plaintiff with a personal cause of action lies with the petitioning organization. In this context, I accept the basic approach of the District Court in Hatzlacha v. Cohen [31] according to which the organization must prove that it acted “with due diligence” to locate a plaintiff with a personal cause of action, both in the “quantitative” and in the “qualitative” sense. My view, too, is that there is no reason to accept the argument that it is difficult to find a plaintiff with a personal cause of action where the said argument has not been supported by a true attempt to find one. The basic assumption is that the organization must prove that it tried to find a plaintiff who would meet the conditions of sec. 4(a)(1) of the Law, even though there should be no automatic dismissal of the possibility that there may be exceptional situations in which the court may be convinced that it is difficult to find a plaintiff with a personal cause of action, even where no attempt has been made to approach potential plaintiffs directly. In this context it is possible that the court may be convinced that there is an inherent difficulty or that there are other special, substantial and convincing circumstances which suffice to lead to the conclusion that it is difficult to find a plaintiff under sec. 4(a)(1) of the Law.

40.       Finally, it should be noted that even if the organization does not overcome the hurdles prescribed in sec. 4(a)(3) of the Law, this does not necessarily mean that the application for certification must be dismissed or denied. It should be recalled that the Class Action Law states that insofar as the application for certification of the class action meets the requirement criteria, the court may approve it even in cases in which the applicant party does not meet the conditions prescribed in sec. 4 of the Law. Thus, sec. 8(c)(1) of the Class Action Law states that the Court may approve the action “if it concludes that those conditions can be assured by the addition or replacement of a representative plaintiff or of a representative attorney, or in some other manner,” and sec. 8(c)(2) of the Law states that “…if the Court concludes that all the said conditions in subsection (a) have been met, but that the conditions in section 4(a)(1) to (3), as the case may be, are not complied with in respect of the application, then the Court shall approve the class action but in its Order it shall order the representative plaintiff to be replaced.” In other words, a finding that the organization does not meet the conditions prescribed in sec. 4(a)(3) of the Law does not automatically preclude the action itself, and it is possible to proceed with it by replacing the plaintiff. Thus, for example, if the organization does not meet the conditions of the Law because there is a plaintiff with a personal cause of action, it is possible to replace the organization with that plaintiff and to proceed to adjudicate the case. In the same manner, if the organization does not meet the conditions of the Law in that, for example, its public purpose is different from that of the subject of the action – it is possible to replace it with another organization whose objectives are consistent with the subject of the action (for a more extensive discussion of this matter, see para. 32 in Hatzlacha v. Cohen [31]).

41.       To sum up this chapter, an organization that wishes to bring a class action in place of a plaintiff with a personal cause of action must meet the following cumulative conditions:

a.     First, the organization must prove compliance with the conditions of sec. 2 of the Class Action Law, including that it is a proven, active corporation, and that it has operated in practice and in a regular manner for at least one year, and that the objective of its activity is a patently public purpose;

b.    Secondly, the organization must prove that the action is within the area of one of its public objectives;

c.     And thirdly, the organization must prove that it is difficult to bring an action in the name of a person who has a personal cause of action, where the term “difficult” will be interpreted in accordance with the case and its circumstances, and having regard to a number of indicators as mentioned above, which is not a closed list. As a rule, proving this condition will require that data be presented showing that the organization acted “with due diligence” to find a plaintiff with a personal interest, both in the quantitative and in the qualitative sense, subject to the possibility of exceptional situations in which the court will be convinced that there is an inherent difficulty or that there are other special, substantial and convincing circumstances which suffice, per se, to demonstrate the difficulty in finding a plaintiff with a personal cause of action.

42.       In our case, the District Court held that the Kolech Organization meets the above conditions, and it is therefore a “qualified organization” to bring the class action. My impression is that this conclusion is justified and that there is no basis for intervention. First, it will be noted that the radio station does not dispute the existence of the first condition, which relates to the organization meeting the condition in sec. 2 of the Class Action Law, as it does not object to the factual findings of the District Court that Kolech is “an organization that has operated for several years” (para. 46 of the decision), its activity is carried out in a regular and actual manner, and its declared objective is primarily the public objective of “promotion of the status of women in religious Jewish society and in Israeli society” (ibid.). As opposed to this, the radio station’s arguments focus on challenging Kolech’s compliance with the two conditions prescribed in sec. 4(a)(3) of the Class Action Law, namely, the second and third conditions. According to the radio station, Kolech did not prove that the action deals with an area in which it operates in practice, and primarily, that Kolech did not prove that it is difficult to bring the action in the name of a plaintiff with a personal cause of action.

43.       I will first note that I see no cause to intervene in the determination that Kolech proved that the action is within the area of its public objectives. The District Court based this determination on evidence that was presented to it, and held that the condition is factually met – a determination in which the appeal court does not customarily intervene. Moreover, the radio station’s argument in this context relies on its opinion that the objectives of Kolech are apparently inconsistent with the class that it purports and seeks to represent. According to the radio station, “the purpose of the organization must be identical to that of the class” (para. 42 of the application for leave to appeal). With all due respect, this argument is baseless. As pointed out in the decision of the District Court, sec. 4(a)(3) of the Class Action Law does not include a condition of identity or congruence in the world view of the organization with each plaintiff in the class that was injured. Section 4(a)(3) of the Law concentrates on the question of whether the action addresses the public aims of the organization, and in the present case it may clearly be said that Kolech has set as its objective, promotion of the status of women in the religious community and in Israeli society. The fact that the action also involves women who belong to the ultra-Orthodox community does not indicate a departure from the area of the objectives of the organization in a way that would negate the qualification of Kolech. This is even more true in view of the court’s determination that in fact, Kolech is also active in the ultra-Orthodox sector; that in any case the concession that was given to the radio station was not defined as being for the ultra-Orthodox community only, but “to establish a ‘Torani-traditional-Sephardic radio,’ i.e. to establish a radio station intended for the religiously observant public and not only for the ultra-Orthodox”; and that the radio station itself declared that its listening public is not limited only to ultra-Orthodox listeners (for elaboration, see para. 46 of the judgment of the District Court).

44.       After giving careful thought to the matter, my conclusion is that we should not intervene in the determination that Kolech proved that it was difficult to submit the application in the name of a plaintiff with a personal cause of action. I am not unaware of the fact that Kolech confined itself to noting that “there is an inherent difficulty” in the circumstances of the case, without having tried to prove that difficulty by presenting any facts showing that it acted “with due diligence” to find a plaintiff with a personal cause of action. Similarly, as the radio station contends, with a good deal of justification, it is possible that an approach on the part of Kolech to potential plaintiffs who had been directly harmed by the policy of the radio station would not have been pointless. The argument of the radio station whereby from the findings of the survey that Kolech submitted, it emerges that 2.4% of the women who were asked said that they are prepared to take legal action to change the situation, shows that there are women – albeit only a few – who could and would have been prepared to be plaintiffs in a class action under sec. 4(a)(1) of the Law. However, the District Court found, on the basis of other justified, convincing reasons, that in the circumstances of the case, it is difficult to bring the class action in the name of a plaintiff with a personal cause of action, basing this finding on many logical arguments. I concur with the District Court on this point.

45.       The main reason supporting the conclusion that it would hav been difficult to find a plaintiff with a personal cause of action in the present case is that there is a reluctance on the part of ultra-Orthodox women to stand at the forefront of the battle to promote gender equality in the ultra-Orthodox community, due to their concern that their position in the community will suffer. This conclusion was supported by the testimony of Dr. Hannah Kehat, Director General of Kolech, which was found to be reliable, and I see no cause for intervention. This reason is also consistent with the declaration of the radio station according to which some of the female listeners of the station are accustomed to abiding by the religious code of conduct, such that it is reasonable to assume that they would not rush to initiate a class action, even if they felt degraded and that their dignity had been offended. We encountered a similar phenomenon when we considered the matter of the “Mehadrin bus lines”, when the picture that emerged in relation to gender separation in that case was that “women who did not immediately conform to the new arrangement were subjected to harassment, insults, pressure and threats, and matters reached the point of actual physical violence” (Rimalt, at 117), and that “many of those who objected expressed this position anonymously … for fear of reprisals” (Triger, at 726). Against this backdrop, my conclusion is that indeed, the weight of the cultural aspect in the present case is decisive, and it is of sufficient import to justify the concern that if the Kolech organization had not submitted the application to certify the class action, it would not have been submitted. Moreover – and this is very important in our context – even if I were convinced of the correctness of the argument of the radio station that it would have been possible to find a plaintiff with a personal cause of action who could have submitted the application herself, I do not believe that it would have been right to order that the action be dismissed in limine or denied. At most, an order could have been given to substitute that plaintiff for the organization. For these reasons, my conclusion is that there is no reason to intervene in the determination of the District Court, based on the particular circumstances of the case, that Kolech proved to the extent required that it would be difficult to find a plaintiff with a personal cause of action, within the meaning of sec. 4(a)(3) of the Law.

46.       Hence, the first argument of the radio station whereby Kolech is not “qualified” to bring the class action is rejected. As explained, even though as a rule, a interpretation should be adopted in relation to sec. 4(a)(3) of the Law, in the present case, the conditions for compliance with the section have been proven. Therefore, I recommend to my colleagues that we not intervene in the determination of the District Court in this regard.

 

(D)       Cause of Action

47.       A discussion of the subject of the cause of action must begin with the question of whether the Prohibition against Discrimination Law applies in the circumstances of the case. Insofar as it is found that the Law does indeed apply, and insofar as the policy adopted by the station indeed constitutes prohibited discrimination under the Law, there is no dispute that cause exists for bringing a class action on the basis of a combination of the provisions of sec. 3(a) and item 7 of the Second Appendix of the Class Action Law. The relevant sections for the purpose of analyzing the argument concerning the application of the Prohibition against Discrimination Law are secs. 2(a), 3(a), 3(d)(1), 3(d)(3) and 5(a) of the Law, which state as follows:

   

Definitions	2(a) In this law -
		“Public service” – Transportation Services, communications, energy, education, culture entertainment, tourism and financial services, intended to serve the public.
	[…]
Prohibition against discrimination (Amendment no. 1) 5765-2005 (Amendment no. 3)5774-2014	3(a)	A person who deals in the provision of a product or a public service or in operating a public venue, will not discriminate in the provision of the product or the public service, in allowing access to the public venue or in providing a service in the public venue, for reason of race, religion or religious affiliation nationality country of origin gender, sexual orientation, outlook, political affiliation, age, personal status or parenthood. […]
	(d)	The following shall not be deemed discrimination under this section —
		(1)	If the act is required by the nature or the essence of the product, the public service or the public venue;
		(2)	[…];
		(3)	In the establishment of separate frameworks for men and women, in the event that non-separation will prevent the provision of the product or the public service, or access to the public venue, or provision of the service in the public venue, to part of the public, provided that the separation is justified considering, inter alia, the nature of the product, the public service or the public venue, the extent to which it is essential, the existence of a reasonable alternative, and the needs of the public which is liable to be harmed by the separation.
	[…]
Civil wrong	5(a)	An act or omission contrary to sections 3 and 4 constitutes a civil wrong, and the provisions of the Civil Wrongs Ordinance [New Version] will apply thereto, subject to the provisions of this Law.

 

48.       As stated, the first question on the subject of the cause is whether the Prohibition against Discrimination Law applies. The District Court answered in the affirmative, dismissing the narrow interpretation urged by the radio station to the effect that the Prohibition against Discrimination Law deals only with access to the service or product. The court held that this interpretation is not consistent with the language of the Law or its purpose, and that the prohibition against discrimination in the provision of a “public service” applies not only to access to the broadcasts of the radio station, but to the entire range of services that it provides to its listeners, including newscasts, commentary and programs in which listeners express themselves on the air.

49.       I completely accept the approach of the District Court in this regard, and I see no need to expand at length upon its decision. First, it will be noted that the court discussed the subject of the cause in depth, even though at this procedural stage, an prima facie examination would have sufficed (cf. my opinion in LCA 3814/14 Hogla Kimberley Marketing Ltd. v. Mastei, para. 11 [12]).  On the merits, the interpretation presented by the District Court is compatible with earlier rulings of this Court with respect to the scope of the Prohibition against Discrimination Law, according to which the Law reflects a long-standing trend of extending the scope of application of the principle of equality to areas of private law as well, and that the purpose of the law requires that an interpretation which leaves instances of discrimination in place must be rejected (see, LCA 8821/09  Prozanski v. Layla Tov Productions [7], para. 29; HCJ 746/07 Ragen v. Ministry of Transport [3], per Justice E. Rubinstein, para. 34). An examination of the various legislative proceedings, too, reveals the legislative intent to extend the reach of the Law widely to instances of discrimination, and in particular to phenomena of generic discrimination on the basis of gender (cf., e.g., the Prohibition against Discrimination in Products, Services and Access to Places of Entertainment and Public Places (Amendment no. 4) (Prohibition against Humiliation or Degradation due to Discrimination) Bill, 5774-2013).  It is worth noting that the position taken by the District Court on the question of the prima facie application of the Prohibition against Discrimination Law is also consistent with the position expressed in the report of the Departmental Team, which  stated: Section 3(a) of the Prohibition on Discrimination in Products, Services and Entry to Places of Entertainment and Public Places Law 5761-2000 provides that communications services constitute a “public service”. Therefore it is prohibited for the station to discriminate in the provision of the public service due to gender” (para. 179). This position is also compatible with the approaches that support a narrow interpretation in relation to the application of the Prohibition against Discrimination Law (see: Moshe Cohen-Elia, Liberty and Equality in the Prohibition of Discrimination in Products and Services Law, 3 Alei Mishpat 15, 35 (2003) (Hebrew) (hereinafter: Cohen-Elia)).

50.       I will briefly state that the radio station’s focus on the question of access to the radio broadcasts is not clear to me. The fact that women are permitted to listen to the radio station like men does not negate the argument that, at the same time, discrimination was practiced against them in the provision of other services. Moreover, the argument raised by the radio station displays signs of a practice whereby “entry is permitted – but participation is forbidden.” This is similar, therefore, to a club which allows entry to all those who arrive on its doorstep, but which permits only some of those arrivals to take part in the activity going on inside. Even if women could listen to the broadcasts of the station, they were not permitted to take part in the activity included in the broadcast. Can it be said that this practice does not constitute apparent discrimination? It is clear to me that the answer to this question is negative. There is no doubt that some of the services provided by the radio station to its listeners include the possibility of the listeners participating in the programs and expressing their opinions: this is an “activity” (“service”) that the station offers. Therefore, preventing women from invoking this possibility because they are women – to the extent that such prevention is proved – is certainly liable to amount to discrimination to which the Prohibition against Discrimination Law applies. Therefore, the argument of the radio station that the women have no “vested right” to come on air and express their position must be dismissed. The question is not the right of women to participate in the radio broadcasts – and in any case, we are not concerned here with that question – but the right of women to be treated equally, in a manner in which possibilities will not be closed off to them when they are open and accessible to men.

On this matter, it would not be superfluous to mention that a recent case before the courts concerend the refusal of an ultra-Orthodox newspaper to publish the election propaganda of an electoral list of female ultra-Orthodox candidates to the 20^th Knesset, based on the fact that they were women. The District Court expressed its position that this practice, per se, constitutes prohibited discrimination within the meaning of the Prohibition against Discrimination Law, although the application for leave to appeal was granted for other reasons (see: CF (Center-Lod District Ct.) 25435-03-15 Kolian v. Yetedot T.S.M.V. Publishing and Advertising Ltd. [32], per Judge Y. Spasser; LCA 1868/15 Yetedot T.S.M.V. Publishing and Advertising Ltd .[13], per Justice N. Hendel).

51.       In view of my ruling that rejects the narrow interpretation of the radio station in principle, I will now proceed to address the question of whether the policy adopted by the radio station indeed constitutes apparent discrimination for the purposes of sec. 3(a) of the Law, and to the extent that it does so, whether the exceptions specified in secs. 3(d)(1) and 3(d)(3) of the Law apply – exceptions according to which a case will not be deemed discriminatory where “the act is required by the nature or the essence of the product” and in addition that it is possible to establish “separate frameworks for men and women … provided that the separation is justified…”. The argument of the radio station in this context is, as will be recalled, that gender distinction is required due to the traditional, religious character of the radio station, and due to the halakhic position of the rabbinical council, and therefore there is no discrimination, and alternatively, that the exceptions specified in the Prohibition against Discrimination Law apply, and therefore it cannot be sued in respect of that policy.

52.       With respect to sec. 3(a) of the Law, there would seem to be no doubt that the basic assumption is that the policy of the station constitutes discrimination against women in the sense of the Law. As may already be understood from the general discussion above concerning exclusion of women, a norm that prevents women from taking part in an activity in the public sphere only because they are women is presumed ab initio to be a breach of the women’s right to equality, even if at the end of an investigation that assumption is rebutted, and it is found that the gender discrimination is permitted due to a “relevant difference” or for some other justified reasons (on this assumption, see also sec. 6(2) of the Prohibition against Discrimination Law).  In our context, to the extent that it transpires that women were not permitted to participate in the broadcasts of the station, whereas men were permitted to do so, it is not inconceivable that the activity of the station will fall within the bounds of sec. 3(a) of the Prohibition against Discrimination Law. The question which must now be addressed is whether this assumption is apparently rebutted by proof of a “relevant difference” that justified differential treatment of men and women in the circumstances of the case. This question must be examined in the framework of a discussion of the applicability of the exceptions specified in the Law.

53.       With respect to the exceptions, there is no dispute that the balancing formula that appear in secs. 3(d)(1) and 3(d)(3) of the Law allows for recognition of practices involving gender separation between men and women for religious reasons. The legislature explicitly expressed its opinion on this matter in the framework of the sections, and even included a concrete provision in sec. 3(d)(3) of the Law in the matter of arrangements for separation between men and women. However, in order for one of the above two exceptions to apply, it must be proven that the religious norm indeed mandates or at least justifies the adoption of a differential policy towards women. In the professional literature, we find that in order to reach such a conclusion, an examination must be made, inter alia, of the weight of the religious norm amongst the relevant population in view of its culture, and also whether the weight is so great as to tip the balance in its favor, despite the violation of the rights of the individual. It has also been said that one important distinction that might help in weighing the conflicting interests in the matter is the distinction between norms that the religion requires and those that the religion permits. To the extent that the religious practice of separation between women and men is based on a religious precept (commandment), and to the extent that this requirement is found at the halakhic or cultural core, the scales tip in the direction of applying the exceptions, and vice versa. Professor Amnon Rubinstein discussed this at length in his article The Decline, but Not the Death, of Multi-Culturalism, 49(1) Hapraklit 47, 89-90 (2006) (Hebrew):

Another distinction is that made by the Israeli Supreme Court between norms that the religion mandates and norms that the religion permits. Thus for example, Islam does not mandate polygamy, but merely permits it, and therefore the prohibition against bigamy does not violate a religious norm or freedom of religion.

A question of this type arose in the Knesset in its deliberations on the subject of the Prohibition against Discrimination in Products, Services and Entry to Places of Entertainment and Public Places Law, 5761-2000. The purpose of the Law is “to promote equality and to prevent discrimination in entry to public venues.” The prohibition against discrimination also applies to a person’s gender. The question arose: What is the law in relation to venues that serve ultra-Orthodox Jews or orthodox Muslims in which separation between men and women is required by their culture and their heritage, and without which the women and the men will not use the service or the place? In the Constitution, Law and Justice Committee, which dealt with this subject in a series of sessions in which arguments abounded, opinions were divided. The women’s organizations – which represent those dedicated to equality between the sexes – asked that separation be banned, whereas the ultra-Orthodox representatives, who spoke in the name of multi-culturalism, pointed out that if there is no separation, the ultra-Orthodox community will refrain from using the service or the venue. Ultimately the Constitution, Law and Justice Committee adopted a compromise, which found expression in sec. 3(d)(3) of the Law …

This compromise is problematic in its reference to separation between the sexes, and even more problematic with respect to separation between religions and ethnicities. However, every case must be judged on its merits in accordance with the particular circumstances, and with the criteria for balancing that were proposed above. This, for example, is the case with the Jewish-Haredi or the Muslim community, in relation to which we are concerned with norms that are mandated (and not only permitted) by the religion, and the weight of the religious prohibition is so great and significant that non-separation can prevent use of the service or the product …. It is also necessary to consider the balancing criteria that were proposed above – in relation to the magnitude of the harm to the religious-traditional norm in particular, the weight of the religious norm in the culture, and the question of whether it is a matter of a religious precept or a religious possibility [emphasis partly added – Y.D.].

For a similar approach attesting to the importance of the distinction between an “enabling” religious norm and a religious “prohibition”, see HCJ 153/87 Shakdiel v. Minister of Religion [4], para. 22; HCJ 6111/94 Committee for the Preservers of Tradition v. Chief Rabbinical Council of Israel [14], at 101-102; HCJ 1514 Gur Aryeh v. Second Authority for Television and Radio [15], at 282, in which it was said, for example in the dissenting opinion of Justice D. Dorner, that the criterion is “whether the prohibited action is forced upon those who are observant or whether they are prevented from performing a religious obligation”; and Menachem Elon, The Status of Women – Law and Jurisdiction, Tradition and Transition: The Values of a Jewish and Democratic State 53 (2005) (Hebrew). For criteria that differ slightly from those proposed by Prof. Amnon Rubinstein in his above article, see Harel & Schnarch, at 75; for reservations about the criteria proposed by Harel & Schnarch, see Rimalt, at 127.

54.       In the present case, it cannot be said that religious practice mandates or justifies the application of the exceptions in the Prohibition against Discrimination Law. I find it difficult to accept the position of the radio station whereby its policy is justified by virtue of halakhic norms and the instructions it received, and I certainly do not think that the weight of this norm in the ultra-Orthodox community justifies the apparently severe harm to the basic rights of women. It should be emphasized that even according to the approach of the radio station, the religious norm that underlies the gender distinction in the broadcasts is not a binding norm; rather it is an enabling  norm, and the halakhic opinion upon which the station relies – that of the late Rabbi Ovadia Yosef – stated explicitly that the prohibition on women being heard does not constitute a halakhic prohibition but rather, it is in the category of enhancing the precept (see: para. 62 of the judgment of the District Court; para. 181 of the Report of the Departmental Team). Moreover, the data relating to the present case shows that the cultural and religious character of the radio station has been preserved even after the alleged practice of excluding women from the broadcasts of the station was stopped in the framework of the regulatory processes, and what is more, the scope of the activity of the station has only grown. In these circumstances, it was not proven that the religious norm mandates or justifies adopting a differential attitude towards women, and it is even difficult to argue that ceasing to abide by that norm caused real harm to the radio station. From here it is but a small step to the conclusion that at this prima facie stage, the two exceptions to the Prohibition against Discrimination Law do not seem to apply.

55.       Furthermore, the exception that appears in sec. 3(d)(3) of the Law apparently does not apply in our case, also for the reason that it refers to the existence of “separate frameworks” between men and women, i.e.,  an arrangement of separation, similar, for example, to the circumstances in HCJ 746/07 Ragen v. Ministry of Transport [3]. However, our case does not involve an arrangement of separation, but an arrangement which apparently prevented women, and only women, from participating in the broadcasts of the radio station. For this reason, too, it would appear that the section does not apply in view of its language and its purpose.

56.       It may and should be added with respect to the above two exceptions that despite the fact that the Prohibition against Discrimination Law recognizes them, in any case “not every cultural class practice must be accorded recognition, and the free ‘will’ of a member of a particular cultural class need not always be acknowledged as free will, and not all ‘free will’ need be respected” (per Justice E. Rubinstein in HCJ 746/07 Ragen v. Ministry of Transport [3], para. 10), and clearly in certain cases, in which the harm to the individual is critical, the religious or cultural practice may be ruled out even if it is based on religious precepts and apparently lies at the core of the culture or the religion. This approach has been expressed several times by this Court, which has said, inter alia, that most of the theoretical approaches justify almost categorical subjection of the cultural and religious practices to certain basic criteria, such as that of the right to human dignity in its core sense (cf. the opinion of Justice H. Melcer in HCJ 1067/08 Noar KeHalacha Assoc. v. Ministry of Education, para. 6 [16], and the sources cited there). In this sense, it may be assumed that the exceptions to the Prohibition against Discrimination Law will not apply in those cases in which these criteria are not maintained. In any case, this is over and above what is necessary, for as stated, my conclusion is that there is no apparent ground to invoke the exceptions to the Prohibition against Discrimination Law for the reason explained above, and therefore there was no flaw in the conclusion of the District Court in this context.

57.       I also find no flaw that would justify intervention in the decision of the District Court on the question of immunity by virtue of sec. 6 of the Civil Wrongs Ordinance. On this matter I accept the distinction drawn by the District Court between the period prior to the commencement of regulatory proceedings and the period subsequent thereto. To be precise, there is no dispute that as long as the radio station was subject to close oversight and conducted an ongoing dialogue with the Second Authority, and as long as it operated in accordance with the directives that were addressed directly to it, it had immunity. This determination is also solidly grounded in the case law of this Court (CLA 8014/09 Dikla Insurance Co. Ltd. v. Friedman, para. 5 [17]; CLA 729/04 State of Israel v. Kav Mahshava Ltd., paras. 12-13 [18]). As opposed to this, immunity should not apply to anything pertaining to the period in which the activity of the station was apparently not conducted in accordance with the said directives. In this context, the argument of the station whereby it also enjoyed immunity prior to the commencement of the regulatory process, because in that period it relied on the directives of the Spiritual Committee in the reasonable and good faith belief that this Committee had legal authority by virtue of the terms of the license, cannot be accepted. Even if the terms of the concession recognized the status of the Spiritual Committee, this clearly does not mean that this Committee had the legal authority to confer “legal license” on the radio station to operate in apparent contradiction to the Law. The Spiritual Committee cannot permit an act that is contrary to the terms of the license or unlawful. Moreover, as we have said, the opinion of the Spiritual Committee in our regard did not state that there is a halakhic prohibition on women being heard on air, and therefore the decision to prevent women from participating in the broadcasts was, to a great extent, that of the radio station itself. In these circumstances, and having regard for the prima facie nature of our hearing, the argument of the radio station that its activities were conducted in good faith in the belief that they were legally authorized, in reliance on the position of the Spiritual Committee, must be dismissed.

58.       To conclude the discussion of the issue of cause, I propose to my colleagues that we decide that at this procedural stage, that there are no grounds for our intervention in the determinations of the District Court on this point. As I explained above, no fault can be found in the determination that the Prohibition against Discrimination Law applies, prima facie, in the circumstances of the case. The prima facie determination that the policy of the radio station constitutes “discrimination” within the meaning of sec. 3(a) of the Law is correct, as well. As was further explained, in the circumstances of the case the exceptions found in the Prohibition against Discrimination Law do not pertain, and neither is there room to change the determination of the District Court with respect to the scope of immunity as prescribed in sec. 6 of the Civil Wrongs Ordinance. Hence, the determination of the District Court, namely, that cause by virtue of sec. 3(a) of the Class Action Law has been proved to the extent necessary at this stage, should stand.

 

(E)       The damage and calculation of the compensation

59.       As stated, a large part of the arguments of the radio station deals with the issue of the harm and calculation of the compensation. In this context, the radio station argues that no “harm” was caused to the members of the defined class, and alternatively that the only women who were harmed are the women who asked to be heard and were turned away. It was also argued that calculating the damage is problematic, and that the District Court erred in its ruling with respect to the possibility of awarding compensation “without proof of harm.”  First I will note that I have seen fit to address these arguments immediately following the discussion of the question of cause since, in our case, the two matters are related, as will be explained. On the substantive level, even though I believe that some of the arguments raised by the radio station regarding the harm are correct, my conclusion is that this element was proven to the extent required at this procedural stage, and there is therefore no reason to depart from the final conclusion of the District Court in this regard.

60.       Section 4(b)(2) of the Class Action Law states that in the case of an application for certification of a class action submitted by an organization, the organization must show “that prima facie, harm was caused to a member of the class, or that it is reasonably possible that harm was caused to the class, in whose name the application was submitted.” Clearly, the burden of proof in relation to the element of harm at the stage of approving the application for a class action is not an onerous one. The applying organization is not required to prove the harm to the members of the class in full or a precise manner, but only prima facie; the exact harm will be calculated and assessed in the main procedure. Moreover, the leniency regarding the burden of proof of the harm at the stage of certifying the class action is also expressed in the fact that at this procedural stage, it is already possible to rely on the possibility that ultimately, collective relief will be awarded for the benefit of the class (see: Yuval Procaccia and Alon Klement, Reliance, Causation and Harm in Consumer Class Actions, 37 Tel Aviv U. L.Rev. 7, 33-34 (2014)(Hebrew).

61.       The main question, therefore, is whether Kolech proved, at the prima facie level required at this stage, that harm was caused to the members of the class or to the class itself. This question must be answered in the affirmative. Recognition of the existence of harm and the legal right to receive compensation for it emanate in the circumstances of the case from within the Prohibition against Discrimination Law, even without recourse to other legal frameworks to support the conclusion. The Prohibition against Discrimination Law assumes, as a working assumption, that when there is discrimination within the meaning of its provisions, harm is caused by that discrimination, and that harm is compensable. A basic conception embodied in the provisions of the Law is that “the refusal to allow a person access to a public venue or to supply him with a service or a product, merely because of his affiliation to a class, and particularly a class in respect of which there is a history of past discrimination, constitutes a grave violation of human dignity” (Prohibition against Discrimination in Products, Services and Access to Places of Entertainment and Public Places Bill, 5760-2000). Moreover, the legislature even suggests, in the Prohibition against Discrimination Law, devices for receiving compensation and a ceiling on the amount of compensation that can be awarded without proof of harm.

62.       Prof. Barak Medina adds on this matter as follows:

               The psychological harm involved here is in addition to the direct harm caused to a person who is discriminated against due to the low wages that he earns or due to the inability to purchase some product or service. In terms of economic theory, the psychological harm is calculated according to the sum that the individual would have been willing to pay in order not to incur discrimination. Apparently, the fact that in the absence of legislation, those belonging to the victimized class do not “purchase” their right not to suffer discrimination demonstrates that the monetary value of the harm done to them is less than the utility that the owner of the business derives by virtue of the discrimination, and therefore the efficient consequence is actually to refrain from imposing a prohibition on discrimination.

However, this difficulty can be resolved. First, the special nature of the harm involved here – the feeling of humiliation that derives from the discrimination – rules out a “market solution” to the problem, i.e., it rules out the possibility of preventing discrimination by way of “purchasing” the right not to be discriminated against. As Donohue noted, payment to a business owner in order that he refrain from practicing discrimination creates, of itself, harm and emotional damage of the type that is caused as a result of discrimination (Barak Medina, Prohibition against Discrimination in the Private Sector from the Point of View of Economic Theory, 3 Alei Mishpat 37, 55-56 (2003) (Hebrew) (hereinafter: Barak Medina); emphasis added – Y.D.).

And see also Cohen-Elia:

Israeli law requires individuals to act in accordance with the value of equality, in the sense of discrimination being prohibited. It prohibits discrimination on the basis of race, nationality, sexual orientation and for other analogous reasons, and thereby it realizes a value regarding which there is relatively wide consensus; a value the breach of which is liable to cause acute harm to people and to decrease their autonomy (p. 22, emphasis added – Y.D.).

63.       Another, no less important question that merges with additional questions, particularly with the definition of the class, is: to whom was the harm caused? One could argue that in our case, harm was caused only to women who took active steps and asked to come on air but were refused. However, I think that the discriminatory policy adopted by the station caused harm to additional women as well, even though they did not attempt to participate in the broadcasts, but simply listened to them. The harm to these women is, first of all, the psychological harm inherent in the very knowledge that only because they are women, they are not permitted to participate in the broadcasts of the station. This knowledge is harmful, degrading and humiliating, and it suffices in order to indicate that harm has been incurred by those women. Moreover, harm is also caused in the sense that women refrain from the outset from attempting to be heard on air due to their knowledge that their request would anyway be refused, i.e., there is effective harm to the possibility of access of women to the public service that is being offered. Therefore, it is difficult to accept – at this preliminary stage – the argument that no harm at all was caused to women who “only” listened to the station, even if one may wonder whether a distinction should be made between these women and those who took active steps to be heard on air at the station, on the basis of reasons such as the magnitude of the harm, the degree of distance from the humiliating event and so forth.

What Barak Medina writes later in his article is very apt in this context:

It must be recalled that adopting a discriminatory policy usually has a negative effect on third parties as well, mainly those who belong to the class against which there was discrimination. This is a matter of psychological harm that is caused in light of the knowledge of the existence of the discrimination. These are “external effects”, i.e., the effect of the discriminatory policy on a person who is not party to the transaction between the business owner and the worker or the potential customer …

The negative external effect of adopting a discriminatory policy is significant mainly in the case of supplying a product in the course of “business”, and certainly with respect to providing a public service or operating a public venue. In these cases, even if the business owner does not have a monopoly, and even if he is not supplying an essential product, the policy he adopts is liable to have a negative impact on third parties, beyond the harm to the potential customer of the business owner. In such cases, the assumption is that the extent of the activity of the business – and hence, also, the number of cases in which its potential customers will encounter a discriminatory policy – is relatively high, and so, too, the extent of the “distribution” of the negative impact of its policy. It is thus possible to explain the application of the Prohibition against Discrimination Law with respect to these cases (ibid., at 56-58. Emphasis added – Y.D.).

64.       With respect to the station’s arguments regarding the question of calculation of the harm, it is not necessary that we delve deeply into these arguments at this procedural stage. The entire array of aspects relevant to the issue will be discussed in detail in the framework of the principal proceedings. One cannot deny that, indeed, the task of calculating the value of the compensation in the present case raises complex questions, particularly since the alleged harm deals with subjective, individual feelings of humiliation and violation of dignity. It has been said, in relation to a slightly different issue, that calculation of the damage in cases such as these is liable to be a difficult task, particularly in the case of a class action lawsuit (see, mutatis mutandis, the opinion of my colleague E. Hayut in CA 10085/08 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel v. Estate of Tufik Raabi [19]). Without expressing any position, I do not rule out the possibility that possible models for awarding compensation will be examined as the need arises, including those contained in secs. 20(a)(3) and 20(c) of the Class Action Law, in the framework of which the possibility of awarding comprehensive monetary relief  and relief for the benefit of the class or the public is regulated. It may also be assumed that in examining the question of compensation, the arguments concerning the difference between the injured parties and the extent of the harm they have incurred will be considered in depth, as will the arguments concerning the possibility of invoking models for calculating harm which are used in cases of discrimination in other areas of law.

65.       In any case, I believe it appropriate to make two comments already at this stage about calculation of the harm and the compensation. One is that the radio station is correct in its argument against the ruling of the District Court with respect to the possibility of awarding compensation “without proof of harm.” In this context, the Class Action Law provides in sec. 20(e) that: “The Court will not, in a class action, award exemplary damages, and it will not award damages without proof of harm, except in an action as specified in item 9 of the Second Appendix; however this will not prevent the award of compensation for damage that is not financial damage…” (cf. also Tnuva v. Tufik Raabi [19], para. 39). Hence, it is not possible to award compensation without proof of harm in the circumstances of the case, notwithstanding the possibility of doing so under the Prohibition against Discrimination Law when the suit is not brought by way of a class action.

66.       Another comment relates to the relief that is being sought. Apparently, and without taking a categorical stand, it appears that the relief that is sought in the present case – Kolech is asking for compensation in the amount of NIS 104,000,000 – raises questions about the appropriate method of calculating the harm in the circumstances of the case. We need not put the cart before the horse. Suffice it to say that the question arises as to whether in determining the compensation it would be correct – also due to the complexity of the circumstances – to attribute weight to the change that the radio station has undergone in the framework of the regulatory process. Even though awarding compensation in the framework of a class action “looks to the past”, weight should, perhaps, be attributed to the fact that the radio station changed its practice and mended its ways through dialogue and with openness, in a manner that actually renders the requested declaratory relief unnecessary. Of course, this issue, too, will be examined and elucidated in the principal process by the District Court.

67.       My conclusion as to the question of the damage is that it has been proven to the degree required at this procedural stage that the members of the class incurred harm due to the policy of the station. As I mentioned above, even though there is justification for our intervention in certain determinations of the District Court in this context, such as the determination with regard to the possibility of awarding damages in the action “without proof of harm”, there is no reason to depart from the final conclusion that the element of harm indeed exists.

 

(F)   Does the action raise substantive questions of fact or law that are common to all members of the class, and is there a reasonable possibility that they will be decided in their favor?

68.       The first condition specified in sec. 8(a)(1) of the Class Action Law requires that there be “common questions” vis-à-vis the members of the class. Difficulty in proving that this condition has been met is especially liable to arise when the action does not deal with a single instance of tortious conduct on the part of the wrongdoer that caused harm to a large number of victims, but rather with a series of behaviors in relation to which the “connecting thread” is not clear. Indeed, it is natural that when several separate instances of tortious conduct are involved, there may be a need to examine different factual and economic data, and various issues may arise in relation to each separate case that will not necessarily be relevant to all members of the class (see: Alon Klement, Guidelines for Interpretation of the Class Action Law, 5767-2006, 49 Hapraklit 131, 140-179 (2007) (Hebrew) (hereinafter: Klement, Guidelines for Interpretation)). In the present case, the radio station contends that “common questions” do not arise amongst the members of the class, since there are differences among the members. It claims, for example, that there are differences between women who sought to be heard on air and were refused, and women who simply listened to the radio broadcasts. Similarly, according to the radio station, there are differences between women whose world view is similar to its own and women whose world view differs. Moreover, there are differences among the various women in the class due to the fact that each one’s experience of harm is individual, as explained above. It was further argued in relation to two specific instances of discrimination that allegedly occurred during the regulatory period, that they, too, do not raise questions that are “common” to all members of the class, but only to the specific women who were harmed.

69.       The arguments that were raised by the radio station in this context disregard the fact that the discrimination in the case before us was a matter of policy, and that it is this fact that underlies the common questions of the members of the class. To be precise, where it is a matter of discriminatory policy, the “connecting thread” between the members of the class is the policy itself that was adopted in relation to them. This is different from discrimination that occurred in various factual situations, in departure from the customary practice of the wrongdoer. It must be recalled that the questions common to a class are usually connected to the liability of the defendant (Klement, Guidelines for Interpretation, at 141). Where the matter is one involving the defendant’s policy, the question of liability for the harm caused by that policy is indeed common to all those harmed, even if the compensation awarded to each of them is different (ibid.: “The difference in the relief cannot, of itself, stand in the way of an action being certified as a class action”). 

70.       The United States Supreme Court, too, discussed this distinction in the case of Wal-Mart Stores, Inc. v. Dukes et al. [36], noting that in proving a pattern or practice, and certainly in proving discriminatory policy adopted by the wrongdoer, a rebuttable quasi-presumption arises whereby all the members of the class suffered from that discriminatory pattern, and therefore they share “common questions” that are connected to the liability of the defendant in relation to this pattern:

               In a pattern-or-practice case, the plaintiff tries to “establish by a preponderance of the evidence that … discrimination was the company’s standard operating procedure [,] the regular rather than the unusual practice” … If he succeeds, that showing will support a rebuttable inference that all class members were victims of the discriminatory practice …

(See ibid., note 7 of the opinion of Justice Scalia. See also p. 7 of the opinion of Justice Ginsburg. Emphasis added – Y.D.).

I would stress that in the Wal-Mart case, it was ruled that the “pattern or practice” were not proved, and I am also aware that the subject of that case was discrimination in employment, which of course has somewhat different aspects from those of our case. In addition, needless to say, the American case must be read with due caution in view of possible differences between the legal systems, inter alia, regarding the question of causes of action and relief. Nevertheless, it may be said with respect to the determination on principle to the effect that discriminatory policy establishes questions that are common to members of the discriminated class, that what was said there is also applicable in our case.

71.       In other words, even if there are, indeed, certain differences in our case among the women who make up the class of victims in its entirety, such as the differences relating to the magnitude and extent of the harm, common questions of fact or law arise in relation to them all. In the circumstances of the present case, the spotlight, from the point of view of the common questions, is focused more on the conduct of the station, and less on the differences that there may be among the women who were harmed. The “common questions” in our case concern the lawfulness of the policy that was adopted by the radio station, and the extent of its legal liability for this policy. Thus, for example, the question of whether the policy of the station even constitutes a tort for which compensation could be claimed is certainly a question common to all members of the class. A “connecting thread” exists with respect to these and similar questions among all the plaintiffs in the class. This is so even if it is possible to conclude that not all of them were exposed to the activity of the station in an identical fashion, or that they were all harmed equally. Therefore, I do not think that there is reason to intervene in the first determination of the District Court that there exists a substantive question common to all members of the class and it is “whether the station acted in a prohibited discriminatory manner against the members of the class in that it prevented women from being heard on air from the time it began operating and until Nov. 6, 2011…” (para. 102 of the judgment of the District Court).

72.       The above reason is, of course, not valid in relation to the period in which the discrimination perpetrated by the radio station was not a matter of policy. In this context, the radio station’s argument that the two particular instances of discrimination that occurred during the period of time in which regulatory procedures were under way do not give rise to questions that are “common” to all members of the class, but rather they are individual and specific in nature with respect to each case, is sound. I tend to agree with this argument due to the change in the set of factual and legal circumstances in relation of the period of time in which the particular instances of violation occurred. To be precise, the policy of the radio station in relation to first period constituted prohibited discrimination within the meaning of the Prohibition against Discrimination Law, which does not enjoy immunity under sec. 6 of the Civil Wrongs Ordinance. The situation is different in relation to the period in which the particular instances of discrimination occurred, that is, in the period from Nov. 6, 2011 until Aug. 28, 2012. Owing to the fact that regulatory procedures were under way during this period, it was correctly found that the activity of the radio station in this period is covered by the immunity granted under sec. 6 of the Civil Wrongs Ordinance. Similarly, the instances of violation that were perpetrated during this period are bound by time and place, and they constitute a departure from the practice at that time. In view of the above, I am of the opinion that due to the possible factual and legal disparities between the periods of time, different questions are liable to arise with respect to the tortious conduct of the radio station during the period subsequent to the beginning of the regulatory processes. Moreover, even were I prepared to assume that these cases give rise to the same “common questions”, it is possible that they are better suited to being adjudicated other than in the framework of a class action, and more will be said about this below.

73.       The second condition prescribed by sec. 8(a)(1) of the Class Action Law requires proof of a “reasonable possibility” that the common questions will be decided in favor of the members of the class, the main objective being to prevent situations in which applications are submitted for certification of class actions even though their chances are slim, thus preventing an unjustified risk to defendants (see: LCA 2128/09 Phoenix Insurance Co. Ltd. v. Amossi [20]; Klement, Guidelines for Interpretation, at 142). I do not think that the case before us is of the type that gives rise to such a concern, in that the various determinations until now lead me to the conclusion that the questions arising here reveal, at the very least, a “reasonable possibility” of ultimately being decided in favor of the members of the class.

74.       To summarize: I do not think that there are grounds for intervention in the determination of the District Court that a question common to all the members of the class exists, and it is “whether the station acted in a prohibited discriminatory manner against the members of the class in that it prevented women from being heard on air from the time it began operating and until Nov. 6, 2011…”, with the main focus in relation to the issue of the common question being on the tortious conduct of the radio station during the period of the declared policy. I would recommend to my colleagues that this question be the focus of the lawsuit, and that the District Court not address questions that relate to the period of time after the beginning of the regulatory process, in which the two concrete instances of discrimination occurred. I would also recommend to my colleagues that we not intervene in the determination of the District Court that a “reasonable possibility” exists that the above question will be decided in favor of the members of the class.

 

(G)       Is a class action the efficient and fair means of deciding the dispute?

75.       As mentioned in the section dealing with the parameters of the discussion (paras. 26-29 above), I do not think that this decision is the appropriate place for a fundamental discussion of the extent to which class actions are appropriate for dealing with the range of cases of discrimination, particularly when the parties raised no arguments on point. The examination required, in accordance with the provisions of sec. 8(a)(2) of the Class Action Law, is whether under the circumstances, when deciding the case relies on the provisions of the Prohibition against Discrimination Law, “the efficient and fair means of deciding the dispute” is a class action. The case law has held that for the purpose of responding to this question it is possible to consider, inter alia, factors such as the size of the class and the extent to which deciding the questions common to all the members will help resolve the individual dispute between each of the members and the defendant. It is also possible to bring into the equation the advantages and the disadvantages of conducting a lawsuit by way of class action, as compared to the conducting of personal actions – “cost versus utility” (see LCA 2128/09 Phoenix Insurance Co. Ltd. v. Amossi [20], para. 19; Klement, Guidelines for Interpretation, at 125-146; Eran Taussig, Appeals in Class Actions, in Hemi Ben-Nun and Tal Havkin,  Civil Appeals  (3^rd ed.) 632 (Hebrew) (hereinafter: Appeals in Class Actions)).

76.       The District Court was of the opinion that in the present case, the advantages of conducting the lawsuit as a class action outweighed the disadvantages involved. It was mentioned, inter alia, that precisely because we are dealing with an “action the main cause of which is unlawful gender discrimination, on the basis of declared policy, and not on the basis of individual cases … there is an advantage to conducting it by way of a class action” (para. 103). It was added that the advantage of conducting the lawsuit as a class action in the circumstances of the case is particularly relevant “where there is a concern about various constraints on members of the class bringing a personal action” (ibid.), and that approving the lawsuit as a class action can realize the whole range of objectives that appear in the Class Action Law, inter alia because this will promote the interest of “enforcement of the law and deterrence against its breach” (ibid.), and because in this way, those women who were harmed will be able “to realize the right of access to the court, including those who find it difficult or who are afraid to turn to the court as individuals” (ibid.).

77.       I concur with the reasons of the District Court in their entirety, and I will further add that I did not find substance in the arguments raised by the radio station regarding its determinations. Thus, for example, the argument that the apparent “difference” among the members of the class means that there is no use in conducting a class action must be dismissed for, as stated, the spotlight in our matter must be turned primarily on the tortious conduct of the radio station. In this sense, the utility in adjudicating this tortious conduct in the framework of a class action far outweighs the utility of individual adjudications through personal lawsuits. In addition, I believe that in the present case, bringing a class action will prevent “erosion” of the rights of the potential plaintiffs in relation to some who, it may reasonably be assumed, would not turn to the courts for relief, so that by approving the class action the goals of deterrence and compensation will be achieved in a better manner than by other procedural means (See Alon Klement,  Overcoming the Advantages of a Single Defendant over Multiple Plaintiffs – The Class Action Device, 21 Mehkerei  Mishpat 387, 401 (2004) (Hebrew)). Moreover, as stated in the decision of the District Court, it is possible that it is the actual conduct of the lawsuit as a class action that allows for means of proof and relief that are not possible in personal actions (see a discussion in this context, although dealing with discrimination in the field of employment, in Alon Klement and Sharon Rabin-Margaliot, Employment Class Actions – Did the Rules of the Game Change? 31 Iyunei Mishpat 369, 410-415(2009) (Hebrew)).

78.       From between the lines of the application for leave to appeal, the argument emerges that apparently the class action is not appropriate in the circumstances of the matter due to the fact that the Second Authority acted on the regulatory plane. The uncertainty in relation to this point increases in view of the fact that the regulatory procedures indeed were productive. The answer to this argument is that the fact that the radio station mended its ways is indeed commendable, however, this does not constitute a barrier to an action for compensation relating to past wrongdoing. The fact that the radio station has made positive progress in the framework of the process of regulation, and that it (so it seems) is conducting itself lawfully at this time, does not immunize it from a suit for the wrongs it perpetrated in the past, even though, as stated, this may be taken into consideration in relation to the compensation. Moreover, as explained above, in the circumstances of the present case there is no dispute that on the legal plane, compensation for discrimination by virtue of the Prohibition against Discrimination Law may be claimed in the process of a class action, and the possibility that these and other bodies have of acting in different frameworks does not negate the possibility of receiving parallel relief  in the framework of class actions (as an aside, one may mention that in the United States, recourse has been made to class actions by plaintiffs who were harmed as a result of gender or racial discrimination – see Appeals in Class Actions, at 636; Brown v. Board of Education [37] – where the United States Supreme Court expressed its opinion that these cases of discriminatory policy, in the area of labor,  for example, are clear examples of cases that are inherently suited to being heard in the procedural framework of a class action: Amchem Products, Inc. v. Windsor [38]).  

79.       My conclusion, therefore, is that there are no grounds for intervention in the determination of the District Court that the class action is the appropriate means for conducting the present dispute, insofar as the period prior to the beginning of the regulatory process is concerned. As opposed to this, and as I explained above, with respect to the period of the particular instances of discrimination, I do not think that a class action is necessarily the efficient means of adjudicating the individual disagreements. As stated, these are two instances of concrete violations which, even if it is ultimately decided to litigate them, should not be adjudicated in the framework of a class action, but rather in the framework of personal actions brought by the women who were allegedly harmed, if they wish to do so. In summary, I shall recommend to my colleagues that even in view of the condition prescribed in sec. 8(a)(2) of the Law, there are no grounds for our intervention in the determinations of the District Court, except for the determination concerning the period of the particular instances of violation.

 

(H)  There are reasonable grounds to assume that the interests of all members of the class will be represented and conducted in an appropriate manner and in good faith

80.       Examination of compliance with these conditions, prescribed in secs. 8(a)(3) and 8(a)(4) of the Class Action Law, is marginal in the circumstances of the case, also in view of the fact that the parties hardly argued the point. In any case, in order to complete the picture I will mention that these conditions, too, have been met in the present case. In my opinion, Kolech has the required tools to conduct the class action in a manner that is suited to the needs of the members of the class, inter alia, in view of its professional familiarity with the field, and having regard also to the conclusion of the District Court which conducted the certification hearing. In addition, I do not think that the case before us gives rise to any concern about the action not being conducted in good faith (cf: CA 4534/14 Daniel v. Direct Teva Ltd., para. 5 [21]).

 

Conclusion

81.       No grounds have been found to intervene in the majority of the determinations of the District Court, nor in its final conclusion whereby the lawsuit is suited to being adjudicated as a class action both in its substance and in the manner in which it was submitted. In particular, no grounds have been found to intervene in the two central determinations according to which Kolech is an organization that is qualified to bring the class action by virtue of sec. 4(a)(3) of the Class Action Law, and there is apparent cause for bringing a class action under sec. 3(a) of the Class Action Law and item 7 of the Second Appendix to that Law.

82.       In view of what I have written above, I propose to my colleagues that we dismiss the appeal, subject to my comments in the framework of the discussion of the question of the harm and calculation of the compensation, and subject to my determination in the framework of the discussion of the issue of the questions common to the class, whereby in adjudicating the action, the District Court will not discuss the violations that occurred in the period of time after the commencement of the process of regulation (from Nov. 6, 2011 until Aug. 28, 2012). Consequently, the decision of the District Court will stand, except for the changes required by virtue of the above.

83.       I also recommend to my colleagues that we decide that the radio station bear the costs of the proceeding and the legal fees of the Kolech Organization, in the amount of NIS 50,000.

 

Justice E. Hayut

I concur in the conclusions reached by my colleague Justice Y. Danziger as stated in para. 82 of his opinion, and I would like to add a few comments.

1.         My colleague concluded that the respondent organization complies with the requirements of sec. 4(a)(3) of the Class Action Law in that it is an organization within the meaning of sec. 2 of the Law that engages, inter alia, in a public purpose that is central to the action, in the name of the class of women who have been harmed by the conduct of the appellant radio station.  Justice Y. Danziger is of the opinion that, as a rule, narrow and cautious interpretation should be employed in removing the procedural barriers placed by the said sec. 4(a)(3) in the path of organizations that wish to submit applications to approve class actions, for fear that lack of caution in this context is liable to increase both the scope of the phenomenon of groundless actions being brought, even in cases in which, prima facie, there is no difficulty in applications being submitted in the name of plaintiffs with personal causes of action (para. 32 of the opinion of Justice Danziger).  However, in the particular circumstances of this case, Justice Danziger found that the Respondent proved to the extent required that it would be difficult to find a plaintiff who had a personal cause of action against the Appellant, and he therefore held that the Respondent met the conditions of sec. 4(a)(3) of the Law, even according to the narrow interpretation that he supports (paras. 45-46 of his opinion).

2.         I, like my colleague, am of the opinion that the Respondent complied with all the threshold conditions specified in sec. 4(a)(3) of the Law, and I would add that there is no small measure of symbolism in the fact that an organization by the name of “Kolech” [translator’s note: “Kolech” means “your (female) voice”] should be the one standing in the front line of the class action on grounds of exclusion  and silencing of the women of the religious community who are among the listeners of the appellant radio station. With respect to symbolism, it should be mentioned that the name of the organization, like the name of the appellant radio station [translator’s note: “Kol BaRamah” means “A voice in Ramah”], are taken from our Jewish sources, and in both of these sources, the voice is that of a woman, the power and Jewish significance of which is indeed great. Thus we find in the Book of Isaiah 40:9: “O Zion, that bringest good tidings, get thee up into the high mountain; O Jerusalem, that bringest good tidings, lift up thy voice [kolech] with strength; lift it up, be not afraid”; and in the Book of Jeremiah 31:14, the voice in Rama is the voice of our matriarch Rachel who is weeping for her children, as it is written: Thus saith the Lord: “A voice was heard in Ramah [kol b’ramah nishma], lamentation and bitter weeping; Rachel, weeping for her children…”.

3.         The central objective that the respondent organization has inscribed on its banner, and which my colleague Justice Danziger discussed, is to pioneer a social and cognitive change on the subject of gender equality in the religious community in Israel. This objective is indeed consistent with the matter for which the Respondent sought certification of the class action, and therefore the District Court correctly found Kolech to be qualified as an organization, from this aspect, to serve as a voice for the class of women who are apparently harmed by the silencing policy adopted by the Appellant. I will further mention that on the level of principle, and unlike my colleague, I tend to the opinion that too narrow an approach in interpreting the threshold requirements of sec. 4(a)(3) of the Class Action Law is liable to detract from the power of the class action as an instrument for promoting public interests. The explanatory notes to the Class Action Bill noted that the law was being enacted in “recognition of the public role of the instrument of the class action for enforcing the law and … the desire to encourage the bringing of class actions which are of public importance” (Explanatory Notes to the Bill). One means that the legislature found for promoting the said objective is the flexibility that it adopted, inter alia, in the area of the laws of standing, in that, similar to the standing accorded to public petitioners in the High Court of Justice (HCJ 428/86 Barzilai v. Government of Israel  [22]; HCJ 910/86  Maj.(ret.) Ressler v. Minister of Defense [23]), and to a person who does not have a personal cause in the laws of tenders (CA 8416/99 E.I.M. Electronics and Computers (1999) Ltd. v. Mifal Hapayis [24]; CA 7699/00 Tamgash Management and Project Development Co. Ltd. v. Kishon River Authority [25], at 883), in the Class Action Law, too, standing is accorded to a wide range of bodies that are active in the promotion of public purposes, allowing them to submit applications for certification of class actions; these include public authorities (some of which, like the Israel Consumer Council, achieved a similar status by way of concrete legislation that preceded the Class Action Law. See: Chap. 6.1 of the Consumer Protection Law, 5741-1981, which was repealed in sec. 33 of the Class Action Law), and organizations as defined in sec. 2 of the Law.

4.         The flexibility in relation to formal-procedural requirements that the legislature adopted in this area of class actions as opposed to regular actions, emphasizing the substantive analytical criteria, also finds expression in sec. 8(c)  of the Law, according to which it is possible to replace the representative plaintiff, and in secs. 20(a)(3) and 20(c) of the Law in which the legislature departed from the normal rules of damages in torts. All this was for the purpose of realizing the rationales and the objectives underlying the institution of the class action as an effective instrument of civil-public enforcement (on this, see my article, The Class Action as a Means of Civil-Public Enforcement 19 Mishpat ve-Asakim (forthcoming, 2016).)

 

Justice D. Barak-Erez

1.  I concur in the judgment of my colleague Justice Y. Danziger, and with the comments of my colleague Justice E. Hayut. Nevertheless, I would like to relate briefly both to the procedural question of bringing a class action by means of an organization, and to the substantive issue of the exclusion of women that underlies it all, in general, and in this case, with its special characteristics, in particular.

 

Bringing a Class Action by Means of an Organization and the Special Difficulties of Action within the Community

2.         Under the Class Action Law, bringing an action by an organization whose objectives comport with those of the action is made conditional, inter alia, on the Court being “satisfied that – under the circumstances of the case – it would be difficult to submit the application in the name of a person…”.  Here, the Law expresses its known preference for a specific injured party standing before the court in order to enable the court to form an unmediated impression of the injury. Nevertheless, it is important to note that the Law makes do with it being “difficult” in to bring the action in the name of a person. The bar that the Law sets on this matter is not low, but neither should it be too high. Indeed, it is normally to be expected that an organization that seeks to sue will show in a concrete manner that attempts were made to bring the action in the names of individuals. At the same time, there may be exceptions to this rule, and in any case its implementation must take into consideration the context and the concrete circumstances of the matter. As a rule, recognition of the power of organizations to bring class actions is one of the innovations of the Class Action Law (see: Steven Goldstein, Comments on the Class Action Law, 5766-2006 6 Alei Mishpat 7, 17-18 (2007) (Hebrew)), and overly-high barriers that would cause a reversion to the approach that prevailed prior to the passage of the Class Action Law ought not to be erected in this context.

3.         More specifically, I am of the opinion that weight should be attributed to the legislative recognition of the fact that bringing an action for discrimination against the members of a weak class involves, by its very nature, a “difficulty”. Several of Israel’s laws dealing with equality, and particularly the Prohibition against Discrimination Law, recognize the right of action of an organization that deals with protection of the rights of a person against whom it is prohibited to discriminate. These constitute exceptions to the regular tort laws. Section 7(a) of the Prohibition against Discrimination Law prescribes as follows on this matter:

               An action in tort under this Law may be brought by a corporate body that engages in the protection of the rights of a person against whom it is prohibited to discriminate under this Law, provided that if the cause of action is discrimination against a particular person, that person has agreed thereto.

Similar provisions may be found in additional laws that are concerned with equality (see, e.g.: sec. 19(53) of the Equal Rights for Persons with Disabilities Law, 5758-1998). These provisions are powerful witnesses to the statutory assumption as to the existence of a difficulty in bringing an action for discrimination when the potential plaintiff belongs to a class that suffers from social weakness.

4.                                                            The above applies with even greater force when already at the preliminary stage of submitting the application for approval of the action as a class action, confrontation is expected between the plaintiff and the social/communal class with which s/he is affiliated. This does not come out of nowhere. In effect, the position adopted by the Respondent regarding the fact that its spiritual leadership supported not putting women on the air, i.e., that this is a policy that had the support of the rabbis –  the leaders of the community – attests in itself to the difficulty inherent in an identified representative plaintiff coming forward. In such a situation, the accompanying social barriers are in the category of res ipsa loquitur.  Moreover, this is not the first time that this Court has been called upon to consider situations of separation between men and women in the public domain. After the commencement of the deliberations in the petition against the separation on the “Mehadrin bus lines” in HCJ 746/07 Ragen v. Ministry of Transport [3], a public committee was convened to discuss the matter (The Committee to Examine Transportation Arrangements on Public Transport on Lines that Serve the Haredi Sector – Concluding Report (2009)). In its report, the Committee discussed women who objected to separation, while careful to preserve their anonymity (they were referred to as G. and H.). As opposed to this, religious women who supported the separation appeared before the Committee and were identified by  their personal and family names (pp. 25-26 of the Report). As such, it is precisely when the subject under discussion is the voice that is not given to women within the community that the path to their being given a voice should not be blocked, even if that path is being paved by an organization. More generally, the justification for allowing the action to be brought by means of an organization, for the purpose of protecting rights, increases when such an action helps in giving a voice to all the members of the class. In other words, bringing a class action by means of an organization in order to help those who belong to the community and are interested in remaining affiliated with it is a means of giving a voice to those whose voices are not heard.

5.         On a more general level, it seems that the “bar” that the organization must reach in order to satisfy the Court that it took sufficient steps to ascertain that there is a difficulty in bringing the action by means of a flesh and blood person must also take into account the costs involved in taking such steps, in order not to place obstacles that are too great in the path of the representative plaintiffs, having regard to the context of the particular action. The application for approval of a class action must, in any case, meet a certain level of requirements, which is not marginal (see: LCA 3489/09 Migdal Insurance Co. Ltd. v. Zevulun Valley Metal Plating Ltd., para. 13 of my judgment [26];  AA 980/08 Menirav  v. State of Israel – Ministry of Finance para. 13 [27]). These are joined by additional conditions with which an organization that wishes to act as a representative plaintiff must comply (see para. 41 of the judgment of my colleague). Against the background of all these, I agree with the comments of my colleague Justice Hayut that it is not appropriate to overburden the organization that seeks to act as a representative plaintiff. One might add that at the stage following certification of the class action, too, the Respondents still have the opportunity to try to prove that – as they contend – the number of women who in fact identify with the claim of discrimination on which this action is based is not large. This question ought to be decided at the stage of adjudicating the action itself.

 

The Characteristics of Exclusion of Women in the Present Case: Discrimination and Silencing

6.         I agree wholeheartedly with the apt and incisive words of my colleague Justice Danziger regarding the harm done by the exclusion of women, and in fact, of any class, from the public domain. Such exclusion is by its very nature a type of discrimination. To this it must be added that the present case is particularly grave due to the fact that the exclusion also involves silencing. As my colleague explained, full participation in the modern world of communications includes the element of active involvement in the opportunity to “be heard” and not only the passive component of “hearing”, just as full participation in the democratic process means not only the right to vote but also the right to be elected. In this sense, the discrimination in this case is harmful not only to equality, but also to freedom of expression in its full sense, having regard to its various objectives (both from the aspect of self-realization of women who are prevented from expressing themselves in the public arena, and from the aspect of their potential contribution to the public discourse).

7.         On a wider view, the “shock waves” of  exclusion such as in the present case potentially impact not only the women who listen to the broadcasts of Kol BaRamah and those among them whose path to participation in the broadcasts is blocked. Prevention of participation of women in the broadcasts contributes to impressing and “transcribing” a constitutive world view upon all the listeners of the radio station, both men and women, and there may well be even wider ramifications. This acquires even greater significance in view of the fact that the modern communications reality has a significant role in the way in which we perceive the world (see: Mike Feintuck and Mike Varney, Media Regulation, Public Interest and the Law 1 (2^nd ed., 2006).

8.         The exclusion of a particular class from the public discourse harms not only the excluded class, but also the discourse itself. The “marketplace of ideas”, which is so important, will not express all the positions and the different variations in society when participation in this marketplace is limited in advance, or when the effective means of participation is blocked. Society as a whole loses as a result. In view of these undesirable ramifications of exclusion for other classes – over and above the class included in the class action – as well, it would appear that recourse to the device of class action is especially suitable here. It is well known that recourse to this procedural device, not only in the context of the concrete case before us, creates positive externalities for the wider public, and not merely for the class represented by the representative plaintiff (see: Guy Halfteck, A General Theory Regarding the Social Value of Class Actions as a Means for Law Enforcement, 3 Mishpat veAsakim 247, 269, 287-289 (2005) (Hebrew); William B. Rubenstein, Why Enable Litigation? A Positive Externalities Theory of the Small Claims Class Action, 74 UNKC L. Rev. 709, 720, 723-725 (2006)).

9.         Finally, the harm involved in excluding women in this case is even more marked in view of the special purpose of granting concessions to specialized television channels and radio stations: the encouragement of pluralism, and to hear and make heard the variety of opinions and classes in the population (see: HCJ 7200/02 D.B.S. Satellite Services (1998) Ltd. v. Council for Cable and Satellite Broadcasts  [28],  at 37, 47); HCJ 6792/10 D.B.S. Satellite Services (1998) Ltd. v. Israel Knesset, para. 58 [29]).

 

Extent and Weight of the Obligation Involved in Exclusion

10.       My colleague Justice Danziger discussed the distinction between the religious norm that mandates or justifies adopting differential treatment of women and a religious norm that merely allows this, and he added that since in what is involved our case is not a binding norm but the enhancement of a precept, the weight of the religious argument here is reduced. My colleague did not base his decision on this distinction (as explained in para. 55 of his opinion). Nevertheless, I wish to address this distinction, due to its extensive discussion in my colleague’s opinion, even if it was over and above what was required. I will begin by saying that I agree that the distinction between a binding norm and an enabling norm is important, but I would add that in cases similar to that before us, it is better not to base a decision on it. First, the answer to the question of whether the practice of separation is an “obligation” or an “enhancement” is liable to be controversial, and the Court ought not to be the arbiter on this question. Second, and more importantly, we must bear in mind the possibility that there may be strict religious approaches that view separation or total exclusion of women from the public sphere as a real obligation. In my view, even if this were the case, it would not be right to accord this consideration precedence in those cases in which the violation touches the core of the right to equality (in the spirit of para. 56 of my colleague’s opinion).

11.       In effect, the matter may be presented as follows: when the practice of separation and exclusion does not stem from a binding religious norm, but from a desire to enhance a precept, the weight that must be attributed to following this practice as against protection of the right to equality should be relatively low. However, the opposite conclusion should not be derived from this, namely, that when the practice of separation and exclusion stems from a binding religious law, it ought to take precedence over the right to equality for that reason alone.

 

Between the Private and the Public

12.       I wish to address an additional aspect relating to the “placement” of the present case on the continuum between the private and the public. The cause of action is grounded in the Prohibition against Discrimination Law, which also applies to use of resources, for which there is no formal limitation as to number or extent beyond the constraints resulting from market conditions (such as businesses of various types). At the same time, the cause of action acquires added power and gravity when the exclusion involves activity to which access is limited from the outset, and which is therefore monitored and regulated by the state. In such cases, in which the activity belongs to some extent or another in the “public” arena as well, the weight of the claim of exclusion is even greater, as is the harm. An example of use of a resource of this type is found in the area of public transport (see: HCJ 746/07 Ragen v. Ministry of Transport [3]). Similarly, a broadcast on a radio frequency constitutes a clear use of a public resource which is even subject to quantitative limitations (see: HCJ 1030/99 Oron v. Speaker of the Knesset [30], at 651). It is therefore important to emphasize that this case does not involve intervention in an internal communal area, but rather, it involves fashioning the face of the public sphere – a fact that adds to the justification for certifying the class action.

 

A Final Word

13.       “A voice is heard in Ramah” – may that also be the voice of Rachel.

 

Decided as per the judgment of Justice Y. Danziger

27 Kislev 5776

9 December 2015

 

 

 

 

HCJ 5239/11

HCJ 5392/11

HCJ 5549/11

HCJ 2072/12

 

 

Petitioners in HCJ 5239/11:                1. Uri Avneri

                                                            2. Gush Shalom

 

Petitioners in HCJ 5392/11                 1. Adi Barkai, Adv.

                                                            2. Iris Yaron Unger, Adv.

                                                            3. Anat Yariv

                                                            4. Dr. Adia Barkai

                                                            5. Dana Shani

                                                            6. Miriam Bialer

 

Petitioners in HCJ 5549/11                 1. Arab Movement for Renewal – Ta’al

                                                            2. MK Dr. Ahmed Tibi

 

Petitioners in HCJ 20172/12               1. Coalition of Women for Peace

                                                            2. Supreme Monitoring Committee for Arab Affairs

                                                            3. Jerusalem Legal Aid and Human Rights Center

                                                            4. Association for Civil Rights in Israel

                                                            5. Public Council against Torture

                                                            6. Hamoked: Center for the Defence of the Individual

                                                            7. Religious Action Center of Reform Judaism

                                                            8. Yesh Din – Volunteers for Human Rights

9. Adalah – The Legal Center for Arab Minority Rights in     Israel

 

 

                                                                        v.

 

Respondents in HCJ 5239/11                  1. Knesset

                                                                 2. Speaker of the Knesset

 

Respondents in HCJ 5392/11                  1. Knesset

                                                                 2. Speaker of the Knesset

                                                                 3. Minister of Finance

                                                                 4. Attorney General

 

Respondent in HCJ 5549/11                   Knesset

 

Respondents in HCJ/2072/12                  1. Knesset

                                                                 2. Minister of Finance

                                                                 3. Minister of Justice

 

Requester to join:                                      Legal Forum for Israel

 

Attorneys for the Petitioners in HCJ 5239/11: Gabi Laski, Adv; Neri Ramati, Adv.

Attorneys for the Petitioners in HCJ 5392/11: Adi Barkai, Adv.; Iris Yaron-Unger, Adv.

Attorneys for the Petitioners in HCJ 5549/11: Osama Saadi, Adv.; Amer Yassin, Adv.

Attorneys for the Petitioners in HCJ 2072/12: Hassan Jabarin, Adv.; Sawsan Zaher, Adv.; Dan Yakir, Adv.

 

Attorneys for Respondents in HCJ 5239/11,

Respondents 1-2 in HCJ 5392/11,

Respondent in HCJ 5549/11,

and Respondent 1 in HCJ 2072/12:                Eyal Yinon, Adv.; Gur Bligh, Adv.

 

Attorneys for Respondents 3-4 in HCJ 5392/11

and Respondents 2-3 in HCJ 2072/12:           Yochi Genesin            , Adv.; Uri Kedar, Adv.; Avishai Kraus, Adv.

 

Attorneys for the Requester to join:               Avi Har-Zahav, Adv.; Yifat Segal, Adv.; Tomer Meir Yisrael, Adv.

 

 

The Supreme Court sitting as High Court of Justice

 

Before: President Emeritus A. Grunis, President M. Naor, Deputy President. E. Rubinstein, Justice S. Joubran, Justice H. Melcer, Justice Y. Danziger, Justice N. Hendel, Justice U. Vogelman, Justice I. Amit

 

Responses to an Order Nisi

 

Facts: The petitions sought to void the Prevention of Harm to the State of Israel by means of Boycott Law, 5711-2011 (hereinafter: the Boycott Law or the Law). The Law attributes tortious liability and establishes various administrative restrictions against anyone who knowingly publishes a public call to impose a boycott on the State of Israel, as defined by the Law. The Petitioners argued that the Law was unconstitutional for infringing various constitutional rights (inter alia, freedom of expression, the right to equality, freedom of occupation), without meeting the conditions of the “Limitation Clauses” of Basic Law: Human Dignity and Liberty, and Basic Law: Freedom of Occupation.

 

The High Court of Justice, in an expanded bench of nine justices, held:

 

The Court unanimously decided to void sec. 2(c) of the Prevention of Harm to the State of Israel by means of Boycott Law, 5711-2011, and to deny the petitions in regard to secs. 3 and 4 of the Law. Additionally, the majority (per Melcer J., Grunis P., Naor P., Rubinstein D.P., and Amit J. concurring) denied the petitions in regard to secs. 2(a) and 2(b) of the Law, against the dissenting opinion of Danziger J., Joubran J. concurring, and the separate dissents of Hendel J. and Vogelman J.

Justice Melcer: From the language of the Law, we learn that anyone who knowingly publishes a call for the imposition of a boycott against the State of Israel, as defined by the Law, may be deemed to have committed a tort. Moreover, the participation of such a person, or one who has committed to participate in such a boycott, may be restricted, and it is possible that such a person may be prevented from receiving various financial benefits (governmental grants, tax exemptions, state guarantees, etc.). Thus, most of the sanctions imposed by the Law already apply at the speech stage. Therefore, the Boycott Law indeed infringes freedom of expression and is repugnant to the constitutional right to human dignity. However, in the opinion of Justice Melcer, we are not concerned here with an infringement of the core of freedom of expression, even where political speech is concerned, inasmuch as the infringement is relatively limited, and applies only to a call for a boycott against the State of Israel, as defined by the Law, or anyone who commits to participate in such a boycott, which is a legal act that exceeds speech.

However, that constitutional right, like all other constitutional rights in Israel, is not absolute, but rather relative, and may be restricted if the infringement meets the requirements of the “Limitation Clause” in sec. 8 of Basic Law: Human Dignity and Liberty. As is well known, the Limitation Clause comprises four cumulative tests: the infringement of the constitutional right must be made by a law or by virtue of a law; it must befit the values of the State of Israel as a Jewish and democratic state; it must serve a proper purpose; and it may only infringe the right to an extent no greater than is required. The last condition comprises three subtests, which are: the rational connection test, the least harmful means test, and the proportionality “stricto sensu” test. For the purpose of this examination, Justice Melcer also made recourse to comparative law.

There is no dispute that the first condition is met. As for the remaining conditions, Justice Melcer was of the opinion that the provisions of the Law that are intended to prevent harm to the State of Israel by means of an economic, cultural, or academic boycott of a person or any other entity, merely due to its connection to the State of Israel, one of its institutions, or an area under its control, fall under the doctrine of “defensive democracy”, and promote protection of the state and its institutions, as well as equality and personal liberty, and the Law, therefore, is intended for a proper purpose that befits the values of the State of Israel as a Jewish and democratic state. Justice Melcer was also of the opinion that “calls for a boycott against the State of Israel, as defined by the Law, do not serve the classical purpose of freedom of expression”. This view is based upon Justice Melcer’s distinction between speech intended to “persuade” and speech employed as a “means of coercion”. In his opinion, a call for a boycott is a form of coercive expression, and therefore, it is entitled to less protection that that afforded to other types of political speech.

However, in the context of examining the fourth condition – proportionality – and in accordance with a narrow interpretive approach, Justice Melcer concluded that whereas secs. 2(a), 2(b), 3 and 4 of the Law meet the conditions of the proportionality test, sec. 2(c) of the Law does not meet the demands of the least harmful means test.

In this context, Justice Melcer referred to the chilling-effect doctrine, which addresses a deterrent effect that extends beyond the scope of expression intended by the legislature, and proposed limiting this chilling effect by means of narrow construction that would somewhat restrict the bounds of the tort under sec. 2(a) of the Law. Justice Melcer therefore recommended that the realization of the “boycott tort” be contingent upon the existence of damage, and a causal connection between the tortious conduct and the damage. However, a potential causal connection would not suffice. Rather, there must be awareness of the reasonable possibility that the call and the circumstances of its publication would lead to the imposition of a boycott, and the right to bring suit must be reserved only to the direct victim of the tort.

By accepting this interpretive approach, sec. 2(b) of the Law would also be constitutional. Pursuant to that, it was further held, inter alia, that a person seeking damages under sec. 2(b) of the Law would have to prove not only the element of a call for a boycott, but also the following elements: causation as defined in sec. 62(a) of the Civil Wrongs Ordinance, breach, a causal connection between the boycott and the breach, a mental element of awareness, and monetary loss.

On the other hand, as far as sec. 2(c), concerning damages not contingent upon damage (that might be categorized as “punitive damages”) and which are not capped by any ceiling in this regard, Justice Melcer was of the opinion that this section did not meet the second test of the least harmful means test, and must be voided.

Thus, in accordance with this approach, even if a person calling for a boycott be found liable in tort, the damages that would be imposed upon him would not exceed the harm that he actually caused.

In regard to secs. 3 and 4 of the Law, Justice Melcer was of the opinion that the administrative sanctions – preventing participation in tenders and restricting the possibility of obtaining public benefits – constitute merely “second order” infringements of freedom of expression. Accordingly, these are proportionate sanctions in view of the procedures required for the approval of the restrictions, and in view of the state’s right to withhold benefits from anyone who employs them against the state. He does not distinguish, in this regard, between a boycott against the state and a boycott against the Area. According to his approach, the constitutionality of secs. 3 and 4 of the Law should not be addressed until specific petitions are filed in the matter of an actual decision by the Treasury, on the basis of a concrete factual foundation.

In conclusion, Justice Melcer drew additional support for the proposed approach, inter alia: a construction of a law that places it within constitutional boundaries is preferable to striking it down; respect for the legislature by virtue of deference; the margin-of-appreciation theory; the ripeness doctrine as applied to the matter before the Court requires that, other than the striking down of sec. 2(c) of the Law , the claims of potential claimants or potential defendants in regard to the Law be examined in the course of applied review.

President (Emeritus) A. Grunis, President M. Naor, Deputy President E. Rubinstein, and Justice I. Amit concurred in the opinion of Justice Melcer in separate opinions.

Justice Y. Danziger: The Prevention of Harm to the State of Israel by means of Boycott Law substantially violates freedom of expression. We are concerned with an infringement of the freedom of political expression, which is at the “core” of the constitutional right to freedom of expression, and which forms part of the constitutional right to human dignity. Under his approach, that infringement does not meet the requirements of the Limitation Clause under sec. 8 of Basic Law: Human Dignity and Liberty because the Law does not pass the third subtest of proportionality – proportionality “stricto sensu” – particularly in regard to a call for a boycott of the Area, inasmuch as calling for a boycott of the Area is a subject that is clearly within the bounds of legitimate democratic discourse. In his view, the narrow interpretive approach proposed by Justice Melcer is insufficient.

Despite that conclusion, Justice Danziger was of the opinion that it would be possible to avoid the extreme result of voiding the Law for unconstitutionality through an interpretation that would significantly reduce the Law’s infringement and permit the Law to pass the constitutionality tests. This could be accomplished by establishing that sec. 1 of the Law, which is the Law’s “entry way”, be construed as such that only a boycott of an “institution” or “area” that is a boycott of the State of Israel and derives from the institution or area belonging to the state would fall within the scope of the Law’s definition, whereas a boycott of an “institution” or “area” that is not part of a boycott of the State of Israel in its entirety would not fall within the Law’s definition. In other words, the Law should be interpreted as applying only to calls for a boycott of the State of Israel in its entirety, but not to calls to boycott the Area alone.

Justice N. Hendel accepted the solution proposed by Justice Melcer as a legitimate interpretation of the Law. However, in his view, section 2 in its entirety – sec. 2(a) establishing boycott as a tort, sec. 2(b) establishing that a person calling for a boycott, as defined by the Law, acts without sufficient justification in regard to the tortious inducement of breach of contract, and sec. 2(c) in regard to damages without proof of damage – does not meet the third constitutional test of proportionality – proportionality stricto sensu.  Therefore, Justice Hendel was of the opinion that sec. 2 of the Law should be struck down in its entirety for lack of proportionality, but concurred in the approval of secs. 3 and 4 for the time being.

Justice U. Vogelman concurred with the general approach of Justice Danziger, but was of the opinion that the “blue pencil” rule should be adopted in this regard. Accordingly, the words “an area under its control” should be stricken from sec. 1 of the Law. In his view, sec. 2(c), as well,   should be struck down, while retaining secs. 3 and 4. Additionally, in his view, the validity of the Law requires that it be interpreted in such a manner that it would apply only to those cases in which the sole reason for the call for “refraining from economic, cultural or academic ties with another person” is the connection to the State of Israel or one of its institutions.

Justice S. Joubran was of the opinion that sec. 2(c) of the Law should be struck down, and that sec. 1 should be interpreted as proposed by Justice Y. Danziger in regard to areas under the control of the state. In addition, like Justices Y. Danziger and I. Amit, he was of the opinion that a distinction should be drawn between calling for a boycott against a person due to his connection to the State of Israel or one of its institutions, and a call for a boycott against a person due to his connection to an area under the control of the state.

 

Judgment

 

Justice H. Melcer

1.         The Prevention of Harm to the State of Israel by means of Boycott Law, 5711-2011 (hereinafter: the Boycott Law or the Law) [https://www.nevo.co.il/law/78646], imposes tortious liability and establishes various administrative restrictions upon anyone who knowingly publishes a public call to impose a boycott on the State of Israel, as defined by the Law. Does the Law infringe the right to freedom of expression and other constitutional rights? Does that infringement, to the extent that it may exist, meet the tests of the “Limitation Clauses” of Basic Law: Human Dignity and Liberty and Basic Law: Freedom of Occupation? These are the questions upon which the petitions before us focus.

            I will begin by presenting the relevant, basic information.

2.         On July 11, 2011, the Knesset enacted the Boycott Law. Inasmuch as the Law is concise, I will first present its full text:

                        Definition:

1.  In this law, "a boycott against the State of Israel" means – deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm.

Boycott – Civil Wrong:

2.         (a) Anyone who knowingly publishes a public call for a boycott against the State of Israel, where according to the content and circumstances of the publication there is a reasonable possibility that the call will lead to a boycott, and the publisher was aware of that possibility, commits a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] will apply to him.

(b) In regards to section 62(A) of the Civil Wrongs Ordinance [New Version], anyone who causes a binding legal agreement to be breached by calling for a boycott against the State of Israel will not be deemed as having acted with sufficient justification.

(c) If the court find that a civil wrong, as defined by this law, was committed with malice, it may require the tortfeasor to pay damages that are independent of the actual damage caused (in this section – exemplary damages); in calculating the sum of exemplary damages, the court will consider, inter alia, the circumstances under which the wrong was carried out, its severity and its extent.

Directives restricting participation in tenders:

3.         The Minister of Finance is authorized, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, to issue directives in regard to restricting the participation in a tender of anyone who knowingly published a public call for a boycott against the State of Israel, or who committed to participate in such a boycott, including a commitment not to purchase goods or services produced or supplied in Israel, by one of its institutions, or in an area under its control; in this section, a “tender” is defined as any tender that must be administered in accordance with the Mandatory Tenders Law, 5752-1992.

 Regulations preventing benefits:

4.         (a) The Minister of Finance, in consultation with the Minister of Justice, may decide that someone who knowingly published a public call for a boycott against the State of Israel or committed to participate in a boycott:

(1) Will not be deemed a public institution under clause 46 of the Income Tax Ordinance;

(2) Will not be eligible to receive monies from the Sports Betting Council under section 9 of the Regulation of Sports Betting Law, 5727-1967; exercise of the authority under this section requires the consent of the Minister of Culture and Sports;

(3) Will not be deemed a public institution under section 3A of the Foundations of the Budget Law. 5745-1985, regarding the receipt of support under any budget line item; exercise of the authority under this section requires the consent of the Minister appointed by the Government as responsible for said budgetary line, as stated in section 2 of the definition of  “person responsible for a budget line item”;

(4) Will not be eligible for guarantees under the State Guarantees Law, 5718-1958;

(5) Will not be eligible for benefits under the Encouragement of Capital Investment Law, 5719-1959, or under to the Encouragement of Research and Development in Industry Law, 5744-1984; exercise of the authority under this section requires the consent of the Minister of Industry, Commerce and Employment.

(b)        In exercising the authority according to subsection (a), the Minister of Finance will act in accordance with regulations that he will promulgate in this regard, with the consent of the Minister of Justice, and with the approval of the Knesset Constitution, Law and Justice Committee; however, if no such regulations have been promulgated, it will not detract from the authority under subsection (a).

Implementation:

5.         The Minister of Justice is appointed to implement this law.

Effective Date:

6.         Section 4 shall come into force ninety days from the publication of this law.

(For convenience, the tortious liability imposed under section 2 of the Law shall be referred to hereinafter as “the boycott tort”, and the provisions established under sections 3 and 4 will be referred to hereinafter as “the administrative restrictions”. The three aforesaid sections shall together be referred to hereinafter as “the Law’s sanctions”).

 

3.         The legislative process of the Law was complex, and I will, therefore, briefly present its steps and what accompanied them, immediately below:

A.        On July 5, 2010, the Prevention of Harm to the State of Israel by means of Boycott Bill, 5770-2010, was tabled before the eighteenth Knesset (the text of the Bill was appended to the response of the Knesset as R/1). The Bill was initiated by twenty-five members of Knesset from various parties, both of the coalition and opposition. The Bill was approved in a preliminary reading on July 14, 2010, and was transferred to the Constitution, Law and Justice Committee (hereinafter: the Committee, or the Constitution Committee) for preparation for a first reading.

B.        The Committee conducted its first discussion of the Bill on Feb. 15, 2011 (the protocol of the meeting was appended to the response of the Knesset as R/2). The Bill was presented at the outset of the meeting by one of its initiators, MK Zev Elkin, who explained that the original draft of the Bill was broader, but pursuant to the decision of the Ministerial Committee for Legislation in this regard, the scope of the Bill was limited by the removal of sections of the Bill concerning calls for boycott by a party who is not a citizen or resident of Israel, a boycott imposed by an organ of a foreign state, and retroactive force of the legislation. MK Elkin explained that the Law was intended to provide a response to an absurd situation that had arose, in which, as he explained, states friendly to Israel prohibit the imposition of a boycott upon the state, and impose sanctions upon bodies that seek to join a boycott of Israel, while there is no parallel sanction in Israeli law. Accordingly, in his words: “This law is intended to protect the State of Israel, at least minimally. An Israeli citizen who acts against it must know that he will bear the consequences” [ibid., p. 3 of the protocol of the meeting].

            In the course of that meeting, several members of the Committee expressed their opposition to the Bill. Among other things, they argued that it was an anti-democratic bill that restricted freedom of expression, that boycotting was a legitimate civil means for expressing dissent, and that the Law would ultimately harm the State of Israel. The legal advisor of the Foreign Ministry, Advocate Ehud Keinan, noted that, in his opinion, the Law would not be helpful in the fight against boycotting Israel, and might even harm that effort (ibid., pp. 21-22 of the above protocol). The representative of the Manufacturers Association, Mr. Netanel Heiman, expressed reservations about the Bill, and argued that it should conform to the existing American law on the subject (ibid., pp. 22-23 of the above protocol). Similarly, Prof. Mordechai Kremnitzer, who appeared before the committee, noted that “if this bill were constructed along the lines of existing models in the world, I would not have a word to say on the constitutional level” (ibid., p. 28 of the above protocol). Prof. Kremnitzer, however, added that the Bill – in the form presented – infringes fundamental rights, among them the right to freedom of expression (ibid., pp. 29-30 of the above protocol).

            The representatives of the Ministry of Justice explained at the meeting that even after the removal of certain sections of the Bill, as aforementioned, the prohibitions established under the Bill remain too broad and should be limited (ibid., pp. 17-19 of the above protocol). In response, the legal advisor of the Committee, Advocate Sigal Kogut, explained that changes would be made in the wording of the Bill in order to more precisely define the term “boycott” in the Law, as well as the conduct element it comprises (ibid., p. 32 of the above protocol). At the end of the meeting, the Committee approved the Bill for a first reading by a majority vote.

C.        On Feb. 28, 2011, even before the Bill was tabled before the Knesset for a first reading, the Committee approved a request for a revision of the Bill. Pursuant to that, the Committee was presented a revised draft of the Bill that was the result of discussions between MK Elkin and the Legal Advisors of the Committee and the Knesset (the meeting protocol was appended to the response of the Knesset as R/3). In accordance with the comments of the Knesset Legal Advisor, the definition of the term “a boycott against the State of Israel" in the amended Bill (sec. 1 of the original Bill) was narrowed, and the criminal prohibition of a call for a boycott against the State of Israel was removed (sec. 2 of the original Bill). However, it was agreed that the latter would be reconsidered in the framework of preparing the Bill for a second and third reading (see: the Explanatory Notes to the Bill that were published by the initiating members of Knesset and the Constitution Committee in 5771 H.H. 373, p. 112 of March 2, 2011). Ultimately, at the request of the Committee chair, MK David Rotem, a section was added to the Bill stating that the Minister of Finance, with the consent of the Constitution Committee, may establish provisions restricting the participation of participants in the boycott against the State of Israel in public tenders (ibid., pp. 3-4 of the above protocol).

            At the end of the meeting, the amended Bill was approved for a first reading by a majority vote with eight supporting and four opposing, and it was also approved by the Knesset plenum in a first reading on March 7, 2011 by a majority of 32 in favor and 12 opposed, with no abstentions. The Bill was then returned to the Constitution Committee for preparation for a second and third reading.

D.        On June 27, 2011, the Constitution Committee discussed the Bill in the framework of its preparation for second and third readings (the protocol of the meeting was appended to the response of the Knesset as R/5). Prior to the said meeting, the members of Knesset were presented with an amended version of the Bill, which was prepared in cooperation with representatives of the Ministry of Justice, following the Bill’s approval in the first reading. This draft included a list of additional provisions regarding the denial of financial benefits from the state to anyone calling for a boycott against the State of Israel (as defined in the Bill), or anyone undertaking to participate in such a boycott (the text of the amended Bill was appended to the response of the Knesset as R/6).

            In the course of the meeting, the Deputy Attorney General (Criminal Affairs), Advocate Raz Nizri, explained that the Bill, as presented to the Committee, accords with the course that “the Attorney General agreed to follow” (protocol of the meeting of June 27, 2011, p. 15). However, Advocate Nizri stressed that the Attorney General’s position is that the legal course presented “is very, very marginal” and that it “raises not insignificant problems”, and therefore, in his opinion, any further change in the wording of the Bill “endangers this already unstable structure” (loc. cit.). In this regard, Advocate Nizri noted the importance of retaining the requirement of a mental element of “malice” as a condition for imposing exemplary damages (sec. 2(c) of the Bill), and for retaining the various conditions established in the Bill in regard to denying benefits provided by the state (ibid., pp. 21-26 of the above meeting protocol). The representative of the Ministry of Justice, Advocate Roni Neubauer, also underlined that in light of the exceptionality of “punitive damages” in the civil law, they should be conditioned upon an element of “malice” on the part of the tortfeasor, and should be limited to situations in which the court wishes to express real abhorrence at the tortfeasor’s conduct (ibid., pp. 70-71 of the above meeting protocol).

            The representative of the legal department of the Ministry of Foreign Affairs, Advocate Karin Dosoretz, stressed that the Foreign Ministry shared the desire to fight the boycott phenomenon, but the Ministry was of the opinion that the Bill might lead to the opposite result (ibid., p. 58 of the above meeting protocol).  The Legal Advisor of the Ministry of Finance, Advocate Joel Baris, emphasized that “the Government decided to support the Bill,” and therefore he was speaking “within that framework”, however, in continuing, he took the view that sec. 3 of the Bill was problematic in that it sought to introduce political values into the procedure. He added that that could carry a hidden price that could not be estimated in terms of its budgetary effect. He also expressed his fear of transferring decisions on matters tangential to the political sphere to civil servants (ibid., p. 72-73 of the above meeting protocol). It should be noted that, as will be explained below, this comment by Advocate Baris found expression in the final version of the Law, which established that the exercise of the authority by the Minister of Finance under sec. 4 of the Law would be by in accordance with regulations that would require the approval of the Constitution Committee (however, such regulations have not yet been promulgated).

             The representative of the legal department of the Ministry of Industry, Commerce and Employment, Advocate Deborah Milstein, explained that the restrictions that the Law established in regard to participating in public tenders do not infringe Israel’s international obligations, inasmuch as under the Mandatory Tenders Law, 5752-1992 (hereinafter: the Mandatory Tenders Law), the directives that will be issued under the Law will be subject to the international treaties to which Israel is a party (ibid., p. 72 of the above meeting protocol).

            In the course of the said meeting, many Knesset members expressed their opposition to the Bill, and some of them argued that even the amended version of the Bill was too broad, infringed freedom of expression, and might accelerate the process of Israel’s delegitimization.

            As opposed to this, Prof. Gershon (Gerald) Steinberg of Bar Ilan University, who researches the anti-Israel boycott phenomenon, argued before the Committee that “anyone who thinks that the boycott, BDS (Boycott, Divestment and Sanctions) process, is something narrow, something marginal, something that does not harm the continued existence of the State of Israel, does not understand the phenomenon”. He added that, in his opinion, anyone who opposes the Bill should suggest an alternative solution for the fight against the boycotts initiated against Israel (ibid., p. 63 of the above meeting protocol).

            The Legal Advisor of the Committee, Advocate Sigal Kogut, explained that, in her opinion, there is a distinction between imposing restrictions on someone who calls for a boycott of the State of Israel, which can be justified, and the restrictions imposed upon someone who calls for the boycotting of a person due to his connection “to an area under its control”, which are problematic, in her view, and constitute “the primary constitutional problem in this tort” (ibid., p. 61 of the above meeting protocol).

            At the request of MK Plesner, who was of the opinion that the section regarding the denial of benefits granted by the state to anyone who calls for a boycott constitutes “a deviation from the subject”, under sec. 120(a) of the Knesset Rules of Procedure (now sec. 85 of the Rules), the meeting of the Committee was adjourned, and the matter was referred to the House Committee for its decision. After the House Committee ruled that the matter did not constitute a “new subject”, the Constitution Committee’s meeting was resumed, and in the end, all the reservations in regard to the Bill were removed, and the Bill was approved for second and third readings by a majority vote of eight in favor and five opposed (the protocol of the resumed meeting of the Committee was appended to the Knesset’s response as R/7).

E.         On July 10, 2011, before the Bill was debated in the Knesset plenum, MK Plesner requested that the Legal Advisor of the Knesset state his opinion as to the constitutionality of the Bill. In his response to MK Plesner that same day, the Legal Advisor of the Knesset, Advocate Eyal Yinon, explained the problem that he found in imposing tortious liability upon someone who calls for boycotting a person due to his connection to “an area under the control” of the State of Israel, and wrote, inter alia, as follows:

3. This tort [in the Law], together with the broad definition of the term “boycott against the State of Israel” […] creates a cause of action in tort for the payment of damages for calls for a boycott that are intended to influence the political dispute in regard to the future of Judea and Samaria, a dispute at the heart of the political discourse in the State of Israel for over forty years.

4. Moreover, leaving the section as is in this wording will lead to a situation in which a call for a boycott in regard to one issue, and to one political position, will constitute a tort and grounds for other administrative sanctions, while a call for a boycott for other ideological, social or religious reasons will continue to be legitimate in the framework of public discourse. Thus, for example, a call for a boycott directed at artists who did not serve in the IDF, against universities that do not play the anthem at commencement exercises, against bodies that do not keep kosher, and of late, consumer boycotts against manufacturers and supermarket chains that sell products at prices that are viewed as too high, will not constitute grounds for any sanctions whatsoever, while calls for a boycott in regard to the dispute over the future of the areas of Judea and Samaria will be deemed a wrongful act that justifies the payment of damages.

[…]

5. Under these circumstances, we are of the opinion that the definition of “boycott against the State of Israel” in this broad wording, together with the tort, should be seen as an infringement that goes to the heart of freedom of political expression in the State of Israel that brings these elements of the Bill to the brink of unconstitutionality, and perhaps even over it.

(Emphasis original – H.M.; The letter of Knesset’s Legal Advisor was appended to the response of the Knesset as R/8).

F.         On the following day, July 11, 2011, the Bill was brought before the Knesset plenum for second and third readings. In the course of the plenum debate, MK Elkin clarified the reasoning grounding the extending of the Law to calls for boycotts related to Judea and Samaria (hereinafter: the Area), explaining as follows:

Anyone who examines the legislation on the subject of boycotts and the subject of discrimination in the various countries will discover a very simple thing – that even in France, and even in Germany, and even in other countries, there are types of discrimination and types of boycotts that are forbidden and that are permitted. In general, there is a basic list of characteristics of a person that the law forbids to serve as grounds for discrimination and boycott: religion, race, nationality, sex. […] In my view, a person’s citizenship and place of residence are among the most basic characteristics. One can conduct a political struggle, but boycotting a person merely because he is a citizen of the State of Israel, particularly where this causes him injury, is prohibited. And if not prohibited, then at least a person who does so must be ready to bear the cost of the injury. […] There is no difference between a resident of Ariel and a resident of Tel Aviv. You want to use boycott as a means for a political struggle? Boycott. Boycott me, boycott Likud voters, whatever you like. But to boycott a person because of where he lives? […] The dispute over the borders of the state must be carried out here, and not at the expense of companies, and not at the expense of people who live there at the behest of the State of Israel. Some like it, some do not like it, but [this is] the place for deciding the dispute – not by boycotts [ibid., at pp. 168-169 of the protocol of the plenum debate; emphasis added – H.M.].

            Minister of Finance, MK Yuval Steinitz, also explained that he supported the Bill due to his principled objection to boycotts of distinct groups, in view of the belligerent character of this method, stating as follows:

Boycott of one or another particular community is, in principle, not a proper expression of freedom of expression, freedom of debate, and freedom of speech, because a boycott is belligerent. It is an attempt to use force to harm and defeat a community that thinks differently, and therefore it makes sense for the state to protect itself and its ideological or ethnic communities from such types of boycotts. [Boycott] is a deplorable, belligerent phenomenon that is […] inconsistent with the democratic idea that we debate and decide in accordance with the majority opinion and not in accordance with the power of a group that thinks differently. Not by force, not by boycott, and not by ostracism [ibid., at p. 99 of the protocol of the plenum debate].

            Many members of Knesset expressed their opposition to the Bill, to a great extent for the same reasons expressed earlier in the meetings of the Constitution Committee referenced above.

G.        At the conclusion of the debate, the Bill was approved in a second and third reading by a majority of 47 in favor, 38 opposed, and no abstentions. In the course of the debate, a reservation submitted by the Ministry of Finance was adopted, according to which the exercise of the Minister of Finance’s authority under sec. 4 of the Law would be in accordance with regulations that would require the approval of the Constitution Committee, although it was also decided that if such regulations were not established, it would not detract from the authority granted under the section to the Minister of Finance.

4.         Following the enactment of the Law, the four petitions before us were filed. Three of the petitions ask for the voiding of the entire Law, while one (HCJ 5392/11) argues only for the voiding of section 2-3 of the Law.

            On Dec. 5, 2012, a hearing on the petitions was held before a panel of three justices. Following the hearing, on Dec. 9, 2012, an order nisi was granted, ordering the Respondents to show cause why the Law, or at least sections 2-3 of the Law, should not be voided. In the said decision, it was further decided that the hearing on the responses to the order nisi would be conducted before an expanded panel, which convened on Feb. 16, 2014.

5.         Below, I will present the various parties to the petitions, and following that, I will present the responses of the Respondents. I will already state that, for the sake of clarity, and inasmuch as most of the arguments of the Petitioners and of the Respondents are repeated in the four petitions, with various differences in wording and structure, I will make a unified presentation of the gist of the arguments of the Petitioners and of the Respondents.

 

The Parties to the Petitions

6.         Petitioner 1 in HCJ 5239/11 (hereinafter: the Avneri Petition) is one of the founders of Petitioner 2 in this petition, which is an association that, inter alia, acts to advance a peaceful solution between the State of Israel and the Palestinians. The Petitioners in HCJ 5392?11 (hereinafter: the Barkai Petition) are citizens and residents of the state who see themselves as potential defendants under sec. 2 of the Law, and ask that they be permitted to call for a boycott of the settlements and products produced there (but not against the State of Israel as such). Petitioner 2 in HCJ 5549/11, MK Dr. Ahmed Tibi, is a member of Knesset on behalf of Petitioner 1 of this petition, which is a political party that was elected to the 19^th Knesset (hereinafter: the Ta’al Petition). The Petitioners in HCJ 2072/12 (hereinafter: the Women’s Coalition Petition) are various associations that work, inter alia, for the realization of human rights and for equality among the citizens of the State of Israel.

            Prior to filing the petitions, Petitioner 2 in the Avneri Petition and Petitioner 1 in the Women’s Coalition Petition published lists of products originating in Jewish communities in the Area, in various ways, and called for boycotting them. However, pursuant to the passage of the Law, they ceased to do so, in fear that the Law’s sanctions would be enforced against them.

7.         The Respondents in the above Petitions are: the Knesset and the Speaker of the Knesset (above and hereinafter: the Knesset), the Minister of Finance, the Minister of Justice, and the Attorney General (hereinafter collectively: the Government), and the Legal Forum for Israel (hereinafter: the Legal Forum), which was heard in the proceedings at its request.

8.         The Respondents’ claim, upon which the petitions are grounded, is that the Boycott Law is inconsistent with the constitutional standards and values established in Basic Law: Human Dignity and Liberty and Basic Law: Freedom of Occupation. However, before addressing the arguments of the parties in regard to the constitutional tests in detail, I will present two preliminary questions raised by the Respondents, and the Petitioners’ response to them.

A.        The focus of the Petition: According to the Respondents, the Petitioners’ arguments in the various petitions focus upon the claim that the Law restricts freedom of political expression in all that concerns the policy of the State of Israel in regard to the Area, and that the Law precludes calling for imposing a boycott due to the connection of a person or party to the Area. That being the case, the Respondents argue that the petitions are not directed at the constitutionality of the Law in its entirety, but are directed solely at the term “an area under its control” in the definition of “boycott against the State of Israel” in sec. 1 of the Law, and can, therefore, only lead to the deletion of those words.

            As opposed to this, in the course of the hearing, the Respondents were asked if, indeed their petitions focused only upon the term “an area under its control” in sec. 1 of the Law, and some of them responded that their petitions were directed at the Law in its entirety.

B.        Ripeness: The Respondents are of the opinion that the petitions should be denied for lack of ripeness, lack of concreteness, and for generality. According to the Respondents, the Boycott Law has not yet been applied by the courts, and therefore, there is no need to decide the question of its constitutionality at this time. In regard to the tortious liability imposed by the Law, the trial court is granted broad discretion as to the construction of the elements of the tort, as well as in regard to the conditions for awarding damages. That being the case, the need for constitutional review of the Law – before the trial courts have addressed it in a concrete case – has not yet ripened. This is also the case in regard to the administrative restrictions imposed by the Law, regarding which the Minister of Finance is granted broad discretion in drafting the provisions that would lead to the imposition of the said sanctions.  Moreover, at the time of the hearing (and to the best of my knowledge, to this day) the parameters for the Minister’s exercise of the said authority have not been established, and none of the Petitioners laid a clear foundation attesting to its having suffered injury as a result of the administrative restrictions. In light of the above, and despite the “chilling effect” that the Law may cause, the Respondents are of the opinion that the petitions are not yet ripe, and that should suffice for their denial in limine.

            As opposed to this, the Petitioners argue that the question of overturning the Boycott Law is appropriate for consideration. According to the Petitioners in the Avneri Petition, since 1995 they have published lists of products produced in the Area and called for their boycott. Pursuant to the enactment of the Law, they have been forced to desist from that activity. Therefore, the Law has a “chilling effect” upon them, and therefore, as stated, the Petition to void the Law is ripe for decision. The Petitioners in the Women’s Coalition Petition joined that argument. In addition, all of the Petitioners argue that the scope of the Boycott Law is sufficiently clear, and there is no reason, in principle, to defer its review until after it is actually implmented.

 

Arguments in regard to the Constitutional Tests

9.         As noted, the Petitioners argue on the merits that the Boycott Law is unconstitutional. In their view, the Law infringes various constitutional rights (among them: freedom of expression, equality, and freedom of occupation), without meeting the criteria established in that regard in the “Limitations Clauses” of the aforementioned value-based Basic Laws. The Petitioners further note that this argument is also raised in the position expressed by the Legal Advisor of the Knesset (in his letter of July 10, 2011, referenced in para 3(E) above). As opposed to this, the Respondents are of the opinion that the Law meets the constitutional criteria.

            Therefore, I will now present the arguments of the parties in accordance with the various stages of the model for constitutional review.

A. Infringement of a Constitutional Right

10.       First, the Petitioners argue that the Boycott Law infringes the right to freedom of expression. Infringing freedom of expression, including freedom of political expression, has been recognized in the case law as an infringement of human dignity.  According to the Petitioners, boycotting is a legitimate democratic device, like a demonstration or a protest march, which allows citizens to express their opposition to the policy of a private or public body. Thus, for example, various communities impose a variety of boycotts for such reasons as consumer and religious considerations, and reasons of conscience. Therefore, infringing the possibility of calling for a boycott against the State of Israel, as defined by the Law, by means of imposing sanctions upon anyone who does so, infringes freedom of expression.

            According to the Petitioners, the Law also infringes the right to freedom of occupation. Sections 3 and 4 of the Law make it possible to exclude a person who calls for a boycott, or commits to participate in a boycott against the State of Israel, from participating in (public) tenders, as defined in the Mandatory Tenders Law, and also permit denying him various economic benefits. In so doing, the Petitioners argue, the Law infringes freedom of occupation.

            Moreover, according to the Petitioners, over the last few years there have been states and companies that have objected to the Government’s policy in the Area, and that refuse to do business with companies that operate there. As a result, companies that are interested in breaking into foreign markets, or to continue their overseas activities, may be required to declare that they do not manufacture or purchase goods from the Area, and that they do not operate there, and they should be permitted to make such declarations, as otherwise, their business and freedom of occupation will be harmed.

            The Petitioners further argue that the Law also infringes the right to equality. The right to equality has also been recognized by the case law as deriving from the right to human dignity. The Petitioners argue that the Boycott Law does not oppose boycotts as such, but rather focuses only on those that call for a boycott of the State of Israel, its institutions, or activities conducted in “an area under its control”. According to the Petitioners, distinguishing between one boycott and another is unacceptable, and just as boycotts motivated by consumer or religious concerns, matters of conscience, and so forth are tolerated, the Law should similarly view those who call for boycotting the State of Israel, as defined by the Law. They argue that the provisions of the Law also potentially harm only certain sectors of society, due to their political beliefs. They further note in this regard that the fact that the European Union imposes economic sanctions upon activity in the Area, while Israel nevertheless continues its commercial, cultural and academic relations with  EU members, constitutes a form of unequal treatment by the State in regard to citizens and residents of Israel who independently wish to call for a boycott of goods produced in the Area, as opposed to those who are required to do so by foreign governmental agencies, and whose acquiescence, with certain reservations, is not prohibited.

11.       As opposed to the Petitioners, the Respondents are divided in regard to the question of whether the law infringes the right to freedom of expression. The Attorneys for the Knesset expressed the opinion that while the Law indeed infringes the freedom of expression, that infringement is, in their opinion, proportionate (as will be explained below).  As opposed to this, the representatives of the State Attorney’s Office are of the opinion, expressed before us by their attorney, that although the tortious liability that may be imposed by the Law indeed constitutes a certain degree of infringement of freedom of expression, the administrative restrictions to not pose such an infringement. The reason for this is related to the fact that, according to the Government’s approach, neither a citizen nor any other body has a vested right to enjoy various benefits that the state grants, and clearly, the Government has the right not to transfer funding that may be exploited for activities opposing its policy, or for harming third parties merely due to their connection to the state, one of its institutions, or an area under its control. In regard to the authority to restrict participation in tenders, the Government is of the opinion that although the principle of equality in the participation in tenders must be upheld, that principle is premised upon the obligation to ensure equal, fair distribution of the budgetary “pie”. Therefore, these restrictions should be examined in the same manner as the restriction of benefits under sec. 4 of the Law. The Government adds that the state’s choice not to grant funding to a particular body does not necessarily lead to an infringement of its freedom of expression or freedom of occupation, as its freedom to act in the manner it chose is not impaired (but only its possibility of obtaining public funding intended for given purposes that a governmental agncy wishes to promote).

            In this context of the infringement of freedom of expression, the Respondents add that, actually, calling for and employing boycotts limit freedom of expression in light of their rationales. One of the purposes of the right to freedom of expression is the promotion of a “free marketplace of ideas”. In the opinion of the Respondents, calling for and participating in a boycott introduce economic considerations and constraints into that “marketplace of ideas”, and prevent it from functioning as a “free marketplace of ideas”.

            Insofar as the Petitioners’ claims in regard to the right to equality, the Respondents are of the opinion that the fact that the legislature saw fit to regulate a certain issue in legislation, believing that the matter required an appropriate legislative response (while leaving other issues without parallel regulation) does not give rise to a constitutional cause for annulling the Law by reason of an infringement of equality. They argue that the foundation of the right to equality, as recognized in the case law, is an infringement of “the autonomy of the individual will, freedom of choice, physical and intellectual integrity of the human being and the entirety of a person’s humanity”. In their opinion, the fact that there is no legislation that addresses matters that are similar or close to the boycotts that are precluded by the Law does not constitute such an infringement.

 

B. Is the Law befitting the Values of the State of Israel and intended for a Proper Purpose?

12.       According to the Petitioners, the primary purpose of the Law is to prevent a boycott of the Area, to silence the expression of opposition to the Government’s policy, and thereby to intimidate only a particular side of the political map. The Petitioners further argued that the Law advances a punitive purpose that seeks to impose sanctions upon political speech on the basis of its content. In the opinion of the Petitioners, that purpose of the Law is improper in that it limits the democratic tools that a minority possesses for expressing its legitimate opposition to the settlements and the Government’s policy.

            As opposed to this, the Respondents are of the opinion that the purpose of the Law is to protect the state (or Israeli institutions and entities) against the imposition of a boycott that might harm them merely because of their connection to the state, one of its institutions, or an area under its control. This is a proper purpose, in their view, in that it is an expression of the state’s obligation to protect the individuals and institutions connected to it, and to prevent discrimination against Israeli citizens on an illegitimate basis (such as their place of residence). Moreover, an additional purpose of the Law is to prevent harm to the international standing of Israel, or harm to its relations with other states and its foreign relations, which is also, in the Respondents’ view, a proper purpose.

            The Legal Forum asked to add in this regard that the scope of the boycott phenomenon and calls for boycotts of Israel and its conduct, and the negative potential that inheres therein, is very significant, and for that reason, the enactment of the Law was necessary in order to prevent significant harm to the state and its citizens. In this regard, the Legal Forum pointed to many extreme publications by the BDS movement throughout the world that call for boycott, divestment and sanctions against Israel, and for the rejection of the existence of the state. In the meantime, prior to the writing of this judgment, many books and articles have been published that treat of this phenomenon in various sectors that it affects, and its dangers for the State of Israel and its institutions. See: Cary Nelson & Gabriel Noah Brahm, eds., The Case against Academic Boycotts of Israel (2015) (hereinafter: The Case against Academic Boycotts); Ben-Dror Yemini, The Industry of Lies, especially pp. 271-290 (2014) (Hebrew); Amnon Rubinstein & Isaac Pasha, Sdakim Ba’academia (Academic Flaws: Freedom and Responsibility in Israeli Higher Education), especially pp. 117-132 (2014) (Hebrew) (hereinafter: Rubinstein & Pasha, Academic Flaws); Marc A. Greendorfer, The BDS Movement: That Which We Call a Foreign Boycott, By Any Other Name, Is Still Illegal (January 2015) (unpublished manuscript) (hereinafter: Greendorfer).

 

C. The Proportionality Requirement

13.       The Petitioners are of the opinion that the Law does not meet the requirement of proportionality and its three subtests, as shall be detailed below.

(1) The Rational Connection Test

14.       The Petitioners are of the opinion that the Law does not serve or further its declared purpose. According to them, the Boycott Law is entirely ineffective in the fight against the international boycott that motivates the Law’s initiators, and in practice, it may actually amplify the phenomenon of boycotts against Israel, as it will harm Israel’s image as a democratic state. The Petitioners add that they are of the opinion that the Law will also not lessen the number of people calling for a boycott of Israel, inasmuch as their motivations are ideological, and it is, therefore, unreasonable to imagine that the existence of the Law will cause them to refrain from calling for a boycott.

            As opposed to this, the Respondents are of the opinion that there is a rational connection between the Law’s sanctions and the purpose that the Law seeks to serve. They argue that, on the one hand, the boycott tort and the administrative restrictions may remedy the economic harm, to the extent that it derives from a call to boycott, while on the other hand, they present those who call for boycott with a logical choice between that conduct and the full realization of their freedom of speech (knowing that it may cause harm to third parties), and their desire to enjoy various governmental benefits.

 

(2) The Least Harmful Means Test

15.       The Petitioners are of the opinion that there are tools that could ensure the purpose of the Law even without exercising the means set out in the Law, for example, by means of establishing a system for compensating those who are harmed by the boycott from the public purse. The Petitioners further argue that already existing laws can be utilized to achieve the purposes that the Law’s initiators sought to promote. For example, in their opinion, a person harmed by the boycott can already directly sue someone who harms their business on the basis of the Civil Wrongs Ordinance [New Version] (hereinafter: the Civil Wrongs Ordinance). In their opinion, in regard to tenders, as well, specific conditions can be established in individual tenders that would prohibit the participation in boycotts against Israel, and therefore there is no need to employ primary legislation for this purpose.

            As opposed to this, the Respondents argue that the Law meets the Least Harmful Means Test. According to them, the boycott tort does not normally enable a person to recover more than the actual damage caused to him by the person calling for a boycott (except in regard to damages under sec. 2(c) of the Law, which is limited by the requirement of “malice”, as will be explained below). In regard to the administrative restrictions, as well, the sanctions concern only the depriving of benefits (which do not constitute vested rights) from a person who calls for a boycott of the State of Israel, and therefore this would appear to be a reasonable infringement, under the circumstances, in regard to those who choose to act that manner.

 

(3) The Proportionality Test “Stricto Sensu”

16.       In the opinion of the Petitioners, the interest that Israeli citizens and residents not call for boycotting the State of Israel and the boycotting of produce of the Area is not proportionate to the infringement of the fundamental rights of those who believe that the settlement enterprise in the Area is an impediment to peace and to the future of the State of Israel. The Petitioners further specifically emphasize, in regard to sec. 2(c) of the Law, that under the said section it is possible to impose punitive damages upon a person calling for a boycott even without proof of damage, contrary to the accepted principles grounding tort law.

            As opposed to this, the Respondents argue that the Law meets the Proportionality Test stricto sensu, in view of “narrowing aspects” in the Law that limit the harm that it might cause to constitutional rights. In this regard, the Respondents refer to the following aspects:

a)         The Law does not directly prevent political expression in regard to disputed political issues, but rather it concerns only a call for instituting a (economic, cultural, or academic) boycott against the State of Israel, as the term is defined by the Law, which alone is prohibited.

b)         The call for a boycott to which the Law applies must be public and done knowingly in order that liability for it be imposed in principle.

c)         The criminal sanction incorporated into the Law in its original version was deleted.

d)         The general principles of tort law apply, in principle, to an action under the boycott tort, including the “de minimus” proviso, the requirement of proof of damage, and a causal connection between the tort and the damage, as a precondition to obtaining a remedy.

e)         In regard to the boycott tort, imposing of damages without proof of damage is conditional upon a mental element of “malice”. Therefore, according to the Respondents, this section will only rarely be employed. According to the Respondents, the trial courts asked to award damages under this section will address the Law’s malice requirement.

f)         In regard to the administrative restrictions, the Law establishes a complex administrative process that involves several relevant actors who can oversee the manner of the exercise of discretion, and all of them are subject to the principles of administrative law.

 

Additional Arguments that were raised in general

17.       The Petitioners also argue that the Law is logically flawed. The reason for this is that, in practice, the Law establishes that a call for a boycott is, in their view, more serious than the boycott itself, inasmuch as while the Law imposes various sanctions upon a person who calls for a boycott, a person’s actual choice to institute a boycott (e.g., in regard to products produced in the Area) is not, in their opinion, deemed a tort in the eyes of the Law, and does not, in their view, lead to punitive or administrative sanctions.

            The Respondents denied the logical flaw, but added that even if the Petitioners were correct, that would not give rise to a constitutional claim that would lead to the invalidity of the Law. The Government further argued before us that, at times, the call for a boycott may indeed be more serious than the boycott itself, due to the possible influence of the call for a boycott, which can exceed a particular person’s individual decision.

18.       The Legal Forum addressed the distinction that arose in some of the arguments of some of the Petitioners (to which the Government and the Knesset related, as well), by which – as an alternative to striking down the Law in its entirety – consideration should be given only to the erasure of the term “an area under its control” in sec. 1 of the Law. According to the Legal Forum, even if the term “an area under its control” in sec. 1 of the Law – defining a “boycott against the State of Israel” – were to be erased, that rejection might lead to boycotts against an entire community, and that would suffice to damage the purpose of the Law. Moreover, even if that term were erased, it would still be possible to justify any boycott against the State of Israel, or a community in Israel (such as the residents of the settlements, because they have a connection with the State of Israel).

19.       Additional arguments raised by the parties will be addressed in the course of the next chapter, as necessary. However, before proceeding, we should note that in the course of the proceedings, there was a request for an interim order (in the Ta’al Petition), which was denied on July 27, 2011 (in regard to the considerations for granting an interim order against a law in cases of constitutional review, see HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance, IsrSC 51 (4) 367, 380-382 (1997) (hereinafter: the Investment Managers Association case).

            I shall now examine the case on the merits.

 

Discussion and Decision

20.       I will begin with a necessary observation. The examination that follows will not consider the wisdom of the Law (which was even questioned by some of the Government’s representatives, as noted in para. 3, above), but only its constitutionality. In this regard, we are guided by the words of President A. Barak in the Investment Managers Association case (ibid., p. 386), as follows:

The Court does not come to replace the legislature’s considerations with its own. The Court does not put itself in the shoes of the legislature. It does not ask itself what means it would have chosen if it had been a member of the legislative body. The Court performs judicial review. It examines the constitutionality of the law, not its wisdom. The question is not whether the law is good, effective or just. The question is whether it is constitutional [...] Establishing policy is the role of the legislature, and its realization is the role of the government, which are granted a margin of constitutional appreciation [emphasis added – H.M.].

In view of the above criteria, and having reviewed the copious material submitted to us, and heard the arguments of the attorneys of the parties, I have concluded that the Law can, for the most part, overcome the requirements of the “Limitation Clause” – although not easily – with the exception of sec. 2(c), which must be struck down, and so I shall recommend to my colleagues.

            My reasons for the said conclusions will be set out in detail below. The discussion will proceed as follows: I shall first examine whether or not there is an infringement of a constitutional right, and show that the Law does, indeed, infringe the right to freedom of expression, as well as other constitutional rights. Following that, I will examine whether or not the various provisions of the Law meet the tests established by the “Limitation Clause”, while, inter alia, drawing upon comparative law. Finally, I will provide further support for my conclusion by reference to additional theories that have been developed in the field of constitutional law in regard to the invalidation of laws.

            I will now set out my examination from first to last.

 

Infringement of a Constitutional Right

21.       From the language of the Law, presented above in para. 2, we learn that anyone who knowingly publishes a call for the imposition of a boycott against the State of Israel, as defined by the Law, may be deemed to have committed a tort. Moreover, the participation of such a person, or one who has committed to participate in such a boycott in public tenders, may be restricted, and it is possible that such a person may be prevented from receiving various financial benefits (governmental grants, tax exemptions, state guarantees, etc.).

            Thus we find that most of the sanctions imposed by the Law already apply at the speech stage.

            It is, therefore, hard to deny that the Boycott Law indeed infringes freedom of expression (as argued by the Petitioners, and as Respondent admit, in part), which is “closely and materially bound to human dignity” (as stated by my colleague (then) Justice M. Naor in HCJ 10203/03 Hamifkad Haleumi Ltd. v. Attorney General, IsrSC 62 (4) 715, 763 (2008) [English: http://versa.cardozo.yu.edu/opinions/hamifkad-haleumi-v-attorney-general, at para. 26]; and see: Aharon Barak, Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, pp 708-712 (2014) (Hebrew), [published in English as Human Dignity: The Constitutional Value and the Constitutional Right (2015)] (hereinafter: Barak, Human Dignity), and the case-law cited there). However, we are not concerned here with an infringement of the core of freedom of expression, even where political speech is concerned, inasmuch as the infringement is relatively limited, and applies only to a call for a boycott against the State of Israel, as defined by the Law, or anyone who commits to participate in such a boycott, which is a legal act that exceeds speech.

            Here we must pause for a moment to explain that the laws concerning calls for (and participation in) a boycott have undergone various incarnations in legal and political history. In the ancient world – both in Jewish law and in Greece – there was an institution of ostracism under which people who acted contrary to societal rules, or who were feared might undermine the social order, were ostracized (or, at times, exiled) (see Ha’encyclopedia Ha’ivrit, vol. 18, pp. 51-59,  s.v. “Herem (nidui, schemata) bayahadut” (Hebrew); ibid., vol. 2, pp. 29-30, s.v. “Ostracism”; The Case Against Academic Boycotts, pp. 4-5). However, even early in those days, many began to sense that the institution of ostracism was problematic and harmful to democracy, and in this regard, the renowned Greek philosopher Plutarch (ca. 45-120 CE), in his monumental work Parallel Lives, tells the story of Aristides (a renowned Greek statesman at the beginning of the 5^th cent. BCE, of whom Plato declared that “of all the great renowned men in the city of Athens, he was the only one worthy of consideration”). Aristides was called “the Just” in appreciation of his virtues, but Athenian society nevertheless voted to ostracize and exile him. When a common citizen in the crowd was asked why this was done, he replied that he was “tired of hearing him everywhere called the just”. (At the end of the story, Athenian society realizes its error and returns Aristides to the community and his status, see: Ha’encyclopedia Ha’ivrit, vol. 5, pp. 871-872, s.v. “Aristides” (Hebrew); The Case Against Academic Boycotts, pp. 4-5).

            Since then, and for centuries, religious and political thinking have expressed doubts in regard to ostracism (see, for example, in our sources:  Babylonian Talmud, Tractate Mo’ed Katan 17a). Nonetheless, modern history has seen boycotts employed from time to time, as for example, in the American Revolution, when (on Dec. 16, 1773) the Boston Tea Party saw a cargo of imported tea thrown into the sea, followed by a boycott of various British goods by Americans who sought freedom and emancipation from England. However, the institution was only “officially” revived and given its “modern” name in the 19^th century, following a strike of tenant farmers against Captain Charles Boycott in 1873. After his retirement from the army, Captain Boycott began a campaign to evict Irish tenant farmers from their farms due to their refusal to agree to a raise in rent. The response of the farmers and their supporters was expressed in a successful call to cut off all ties to Boycott, the other landowners, and their produce. The institution has since been called “boycott” in English. In time, criticism and doubts arose in regard to the institution of boycotts, and the 20th century saw the draawing of various distinctions between “permissible boycotts” (such as the Montgomery Bus Boycott, and Gandhi’s boycott of British goods), and “impermissible boycotts” that are prohibited by law. And see: Gary Minda, Boycott in America: How Imagination and Ideology shape the Legal Mind (1999), where the author notes (at p. 197):

                        “Group boycotts may appear to some as acts of political terrorism.”

            That statement is made even though, in the United States, boycotts against expressions of racism, or in the framework of labor disputes, are deemed permissible. See: NAACP v. Alabama ex rel. Flowers, 377 U.S. 288 (1964); and see: NAACP v. Claiborne Hardware Co., 458 U.S. 886 (1982) (hereinafter: the Claiborne case); also see: Yaniv Meno, “Consumer Boycotts, the Ethical Weapon of the Consumers,” 15 Hamishpat 729 (2010) (Hebrew); Nili Cohen, “Law, Play, Game - The ‘Merchant of Venice’ and the ‘Breakdown’,” 51 Hapraklit 407, 433-434 (2012) (Hebrew) http://www.hapraklit.co.il/_Uploads/dbsAttachedFiles/Nili_Cohen_Article.pdf).

22.       In light of the finding that we are faced with an infringement of freedom of expression, which is a “daughter right” of human dignity (to adopt the term coined by Prof. Barak in his book Human Dignity, ibid.), the sanctions in the Boycott Law constitute an infringement of a protected constitutional right. However, that constitutional right, like all other constitutional rights in Israel, is not absolute, but rather relative, and may be restricted if the infringement meets the requirements of the “Limitation Clause” in sec. 8 of Basic Law: Human Dignity and Liberty (see: Aharon Barak, Proportionality in Law, 53 (2010) (Hebrew) (hereinafter: Barak, Proportionality in Law) [published in English as: Aharon Barak, Proportionality – Constitutional Rights and their Limitations, (Doron Kalir, trans.)]; HCJ 2194/06 Shinui- The Center Party v. the Chairman of the Central Elections Committee (2006) (published in Nevo) (hereinafter: the Shinui case); HCJ 236/13 Otzma Leyisrael v. Chairman of the Central Elections Committee for the 19^th Knesset (2013) (published in Nevo)).

            I will, therefore, examine below whether the Boycott Law meets the requirements of the “Limitation Clause”. But before doing so, I would note that we are aware of many instances of legislative prohibitions that were recognized as valid, even though they infringed freedom of expression per se. I would note a few examples: the prohibition of defamation (under the Prohibition of Defamation Law, 5725-1965 [19 L.S.I. 254] , which establishes both a criminal offense and a civil tort); racial incitement (see: sec. 144B of the Penal Law, 5737-1977 (hereinafter: the Penal Law); incitement to terrorism (see: the Prevention of Terrorism Ordinance, 5708-1948, and see: Dafna Barak-Erez & Dudi Zechariah, “Incitement to Terrorism and the Limits of Freedom of Expression: Between Direct and Indirect Limits,” 35 Iyunei Mishpat (2012) (Hebrew) (hereinafter: Barak-Erez & Zechariah); sedition (see; sec. 134 of the Penal Law. And see: Mordechai Kremnitzer and Liat Levanon-Morag, “Restricting the Freedom of Expression Due to Fear of Violence – On the Protected Value and Probability Tests in Crimes of Incitement to Sedition and Incitement to Violence in the Wake of the Kahane Case,” 7 Mishpat U’Mimshal 305 (2004) (Hebrew). A. Dorfman, “Freedom of Speech and the Economic Theory of Uncertainty”, 8 Mishpat U’Mimshal 313 (2005) (Hebrew). Barak, Human Dignity, pp. 737-738); procurement of prostitution (see: secs. 205B and 205C of the Penal Law); publications infringing a person’s privacy (see: sec. 2(11) of the Protection of Privacy Law, 5741-1981, and recently: CA 8854/11 Anonymous v. Anonymous (April 24, 2014) (published in Nevo); restrictions upon political campaign advertising (see: Elections (Means of Propaganda) Law, 5719-1959, and recently, HCJ 979/15 Yisrael Beiteinu Party v. Chairman of the Central Elections Committee for the 20^th Knesset (Feb. 25, 2015) (published in Nevo), and note that this judgment is currently pending in a Further Hearing); offences concerning public services that explicitly include a threat or intimidation by ostracism (see sec. 161 of the Penal Law; as well as contempt of court (see: sec. 255 of the Penal Law), and insulting a civil servant (see: sec. 288 of the Penal Law. And see: Re’em Segev (under the supervision of Prof. Mordecai Kremnitzer), Freedom of Expression against Governmental Authorities, pp. 31-35 (2001) (Hebrew)).

            It should be noted that some of the above provisions fall within the scope of the Validity of Laws provision under sec. 10 of Basic Law: Human Dignity and Liberty. On the interpretation of that section, see: Aharon Barak, “Validity of Laws,” (to be published in the Beinisch Volume); FH 5698/11 State of Israel v. Mustafa Dirani (January 15, 2015) (published in Nevo) (hereinafter: the Dirani case). Moreover, the case law of this Court has approved restrictions imposed pursuant to expressions (that would be deemed to be within the scope of freedom of expression in the United States) that smacked of racism, even though the restriction had no express statutory support. See: HCJ 4646/08 Lavi v. Prime Minister (Oct. 12, 2008) (published in Nevo).

            Thus we see that abstract “freedom of expression” is not the be-all and end-all. Against this background, this Court’s case law has, indeed, quoted with approval the words of United States Supreme Court Justice Brennan that “debate on public issues should be uninhibited, robust and wide-open” (see: CA 723/74 Ha'aretz Daily Newspaper Ltd. v. Israel Electric Corporation, IsrSC 31 (2) 281, 296 (1997) per Shamgar J.) [English: http://versa.cardozo.yu.edu/opinions/haaretz-daily-newspaper-ltd-v-israel-electric-corporation]; and see: HCJ 399/85 Kahane v. Broadcasting Authority, IsrSC 41 (3) 255, 280 (1987) (hereinafter: the Kahane case). However, when it found that the infringement of the said freedom met all of the conditions of the “Limitation Clause” (including the requirement of proportionality) in circumstances in which permitting the expression “could undermine axiomatic foundations in a manner that might threaten the social and national fabric” (HCJ Bakri v. Israel Film Council, IsrSC 58 (1) 278, 249 (2003)), the Court held that the restriction would be approved (and compare: para. 9 of the opinion of Barak P. in the Shinui case).

            23.       At this point we should note that even the case law of the Supreme Court of the United States – where the First Amendment to the Constitution grants particularly broad protection of freedom of expression – has created exceptions:

            First, everyone agrees that protection does not extend to a person falsely shouting “fire” in a packed theater, thus causing unnecessary panic, as Holmes J. stated in Schenck v. United States, 249 U.S. 47 (1919): 

The most stringent protection of free speech would not protect a man falsely shouting fire in a theater and causing a panic.

            These words have frequently been quoted in the past and were most recently referred to by my colleague Justice N. Hendel in LCrimA 2533/10 State of Israel v. Michael Ben Horin (Dec. 26, 2011) (published in Nevo). I would stress that this exception is somewhat artificial in that there is general consensus that falsely shouting fire in a theater may cause harm (and is therefore not protected), whereas the justification for calling for a boycott against the state is the subject of political debate. Nonetheless, along with this agreed exception, the United States – which is the most liberal in this field – has developed additional exceptions and new approaches, insofar as this has become necessary by changing times and needs. I will address these in para. 24A below, and further on.

24.       The constitutional examination that will be presented in my opinion will, as noted, focus on the legal aspects of the relevant provisions of the Law, and will also be aided by comparative law. However, several additional, basic premises underlying the examinations must be laid out:

(a).       It would seem that when expression does not solely concern an attempt to persuade the public in regard to facts, beliefs and worldviews, but also calls for action, we enter an area that goes beyond mere freedom of expression, and the matter also concerns, inter alia, the legality or morality of the referenced act (the boycott), its general context, and other considerations that balance the various interests concerned. Thus, a call to participate in a criminal act, or in a restrictive trade practice, or to breach a contract is generally prohibited (subject to exceptions). Therefore, we do not find a general law treating of boycott, or as Stevens J. stated in the United States Supreme Court decision in the Claiborne case, boycott is a concept that has a “chameleon-like” character that presents “elements of criminality and elements of majesty” (ibid., at p. 888). Thus, even in the United States, where freedom of expression enjoys primacy relative to other fundamental rights, sometimes a call for a boycott is permissible and deemed to fall within the scope of “freedom of speech” (see: the Claiborne case), and sometimes it is limited or prohibited, despite “freedom of speech” (and see: International Longshoremen's Association, AFL-CIO, v. Allied International, Inc., 456 U.S. 212 (1982); Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) (hereinafter: the Holder case); the latter two cases are closer to the material of the case at bar).

            Thus, while almost every expression of opinion is permissible in a democratic state, and the same is true, in principle, in regard to demonstrations (subject to certain restrictions of public safety), a call for a boycott is context-contingent, and involves, inter alia, the “legality” of the said boycott. Thus, for example, a consumer boycott that serves consumer objectives is generally possible (but an “advertising boycott” that harms the freedom of the press is generally deemed to be prohibited, in addition to the antitrust aspects that may be involved), while a boycott for a political end is generally forbidden. (See: Gordon M. Orloff, “The Political Boycott: An Unprivileged Form of Expression,” 1983 Duke L. J. 1076 (1983) (hereinafter: Orloff, “The Political Boycott”); and see: CA 115/75 Israeli Association of Travel and Tourism Agents v. Kopel Tours Ltd., IsrSC 29 (2) 799 (1975).

            Because the determination in regard to a boycott in the United States depends upon its type and circumstances, judicial review in this area is conducted from “the bottom up”, and is carried out as applied review rather than as facial review. On these distinctions and their consequences, see Ronen Polliack, “Relative Ripeness: As-Applied or Abstract Constitutional Judicial Review,” 37 (1) Iyunei Mishpat 45 (Feb., 2014), written following HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance, (Jan. 5, 2012) (published in Nevo) [English:  http://versa.cardozo.yu.edu/opinions/alumni-association-arab-orthodox-school-haifa-v-minister-finance] (hereinafter: the Alumni Association case); and Elena Chachko, “On Ripeness and Constitutionality: HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance and HCJ 3803/11  Israeli Capital Markets Trustees Association v. State of Israel,” 43 Mishpatim 419 (2013) (hereinafter: Chachko, “On Ripeness and Constitutionality”) (for a detailed discussion of the ripeness doctrine in the context of our discussion, see para. 60, below).

(b).       In regard to the issues that are the subject of the petitions at bar, the Law defines itself – even by its name – as intended to prevent harm to the State of Israel by means of a boycott. We thus find that we must assume as a basic fact that the Knesset chose to enact legislation to aid in the state’s battle against those who seek to ostracize it and its residents.

(c).       It would appear that both the legislature and the Petitioners (with the exception of the Petitioners in the Barkai Petition), as well as the BDS (Boycott, Divestment and Sanctions) Movement, which acts against Israel, make no distinction between the State of Israel and its institutions, and areas under the control of the state. In calling for such a boycott, those addressed are asked to refrain from any economic, cultural, or academic connection with a person or other body solely due to their connection to the State of Israel or its institutions, or to areas under its control, and not due to their conduct.

            As noted, we addressed questions in this regard to the parties in the course of the hearing. Some of the attorneys for the Petitioners replied that even if the settlements (which are currently the focus of the calls for boycott) did not exist, it would still be permissible, in their opinion, to call for a boycott of the State of Israel, as defined by the Law, as long as Israel continues to conduct itself in a manner that they view as discriminating against the Arab minority, or does not change its character (as a Jewish state). True to this approach, some of the attorneys of the Petitioners informed us that they believe that it would have been permissible (even prior to the peace accords with Egypt and Jordan, and the “Paris Protocol” with the Palestinian representatives) to call for participation in the Arab League’s economic boycott against Israel – a boycott that, at the time, inflicted significant economic harm to the State of Israel and its residents when many international companies refused to trade with Israel, or conduct business in Israel. According to this view, the same legal approach should apply both to the current situation, in which, in the opinion of the Petitioners, it is permissible to encourage participation in boycotts against Israel, even in the future, and even if an arrangement for coexistence is achieved between Israel and its neighbors, as long as all the other “claims” that they see as justifying the call for a boycott continue to exist.

            At this juncture, we should recall that the State of Israel was rescued from the said “Arab Boycott”, inter alia, thanks to specific American and European legislation that prohibited participation in the boycott, or submission to it – legislation that remains in effect in those countries (for the details of that legislation, see the surveys prepared by the Knesset Research and Information Center that were presented to the Constitution Committee http://www.knesset.gov.il/mmm/data/pdf/m02861.pdf (Hebrew); and see: Greendorfer in regard to the current situation in the United States. The U.S. legislation that prohibited cooperation with the Arab Boycott was not found to be repugnant to the First Amendment of the U.S. Constitution, see:  Briggs & Stratton Corporation v. Baldridge, 782 F.2d 915 (7th Cir. 1984); The Trane Company v. Baldridge, 552 F. Supp. 1378 (W. Dist. Wisc. 1983). On the situation in Europe, see below, para. 49ff.).

25.       As we see from the above, a call for participation in the boycott against the State of Israel, as defined in the Law, organized by various actors in the United States, Europe, or Israel constitutes encouragement to participate in an unlawful act, or conduct that comprises prohibited elements of discrimination, impermissible intervention in contractual relations, or even restrictive trade practices (all in accordance with the relevant law), regarding which, in principle,  liability can already be imposed under the existing law. Nevertheless, the Knesset was of the opinion that it would be appropriate to provide a more tightly defined normative framework for the said wrongful conduct, and therefore three principles were established under sec. 2 of the Law:

(a)        Publishing a call for imposing a boycott against the State of Israel, as defined by the Law, and subject to the conditions set out in sec. 2(a) of the Law, constitutes a tort (sec. 2(a) of the Law).

(b)        In regard to sec. 62(a) of the Civil Wrongs Ordinance, a person who causes a breach of a legally binding contract by calling for a boycott against the State of Israel will not be deemed to have acted with sufficient justification (sec. 2(b) of the Law).

(c)        Under sec. 2(c) of the Law, the court may impose damages that are not contingent upon proof of damage (hereinafter: exemplary damages) upon anyone who commits a tort, as defined by the Law.

            In addition to the above, the Law establishes that, in the context of secs. 3-4, the Minister of Finance is granted the authority – subject to the conditions stated therein – to restrict the participation in a tender (in accordance with the Mandatory Tenders Law), or to withhold economic benefits as defined in sec. 4 of the Law, in regard to anyone who publishes a call for the imposition of a boycott against the State of Israel, as defined by the Law, or who commits to participate in such a boycott.

            I must now examine whether or not the said provisions meet the conditions of the “Limitation Clause”. I will put the cart before the horse and state that, in my opinion, secs. 2(a), 2(b), 3 and 4 of the Law can successfully overcome the constitutional “Limitation Clause”, whereas sec. 2(c) of the Law fails the required tests.

            I will now explain this in orderly detail, but before embarking, I would note that having expressed the view that there is an infringement of freedom of expression, there is no need for a separate examination of the Petitioners’ claims in regard to infringement of freedom of occupation and other constitutional rights, inasmuch as all of those infringements in this case derive from the infringement of freedom of expression, and if that infringement meets the criteria of the “Limitation Clause”, then the same holds for the other infringements. See: HCJ 6427/02 Movement for Quality Government in Israel v. The Knesset, IsrSC 61 (1) 619, 674-675 (2006) per Barak P., pursuant to HCJ 4676/94 Meatrael Ltd. v. Knesset, IsrSC 50 (5) 206 (1998).

 

Examining the Provisions of the Law under the “Limitation Clause”

26.       Section 8 of Basic Law: Human Dignity and Liberty provides as follows, in what is commonly referred to as the “Limitation Clause”:

Violation of Rights

There shall be no violation of rights under this Basic Law except by a law befitting the values of the State of Israel, enacted for a proper purpose, and to an extent no greater than is required.

            I will, therefore, examine the provisions of the Law in terms of the conditions of the Limitation Clause.

27.       The first condition established by the Limitation Clause requires that the violation of a constitutional right “under this Basic Law” be implemented by a law (or by virtue of express authorization in such a law).  This condition is met in the case before us, as the sanctions established under secs. 2-4 of the Boycott Law are established in a statute enacted by the Knesset.

28.       The second condition established by the Limitation Clause requires that the law befit the values of the State of Israel. This clause has been interpreted as pointing, first and foremost, to the values of the State of Israel as a “Jewish and democratic state”, which must be upheld in the spirit of the principles set forth in the Declaration of the Establishment of the State of Israel, as stated in sec. 1 and 1A of Basic Law: Human Dignity and Liberty. Other fundamental values of the State of Israel may also be considered within this framework.

            There is tension between the positions of the Petitioners and the Respondents in regard to whether this condition is met. The Petitioners are of the opinion that the Law infringes freedom of expression and detracts from the democratic character of the state. The Respondents, who justify the Law, argue that the Law falls within the scope of the state’s need to defend itself against those who would seek to destroy it, or those who seek to change its character, and it is thus an implement that a “defensive democracy” must have in its “tool box”. Moreover, the Law is intended to prevent discrimination against the citizens of the State of Israel, whether due to their national identity or due to their residence in areas under the control of the state. This disagreement will be examined below, and I shall try to provide answers to the said question in that framework.

29.       The “defensive democracy” doctrine was recognized – in a majority opinion – in EA 1/65 Yeredor v. Chairman of the Central Elections Committee for the Sixth Knesset, IsrSC 19 (3) 365, although at the time, that approach did not have any express statutory underpinning (and see: Amnon Rubinstein & Barak Medina, The Constitutional Law of the State of Israel, vol. 2, (6^th ed., 2005) pp. 588-591, 604-618). That doctrine must be effected in accordance with the conditions of each state and its residents (see: Jan-Werner Muller, “A ‘Practical Dilemma Which Philosophy Alone Cannot Resolve’? Rethinking Militant Democracy: An Introduction,” 19 Int’l J Crit.Dem.Theory (2012) (hereinafter: Muller, “Militant Democracy”); and see: Svetlana Tyulkina, Militant Democracy (2015)). Accordingly, this approach was adopted through the recognition of Israel as a “Jewish and democratic state”, and this basic constitutional element was recognized and given expression in the Basic Laws enacted since 1992, as well as in the sub-constitutional normative area (for a list of all the relevant legal provisions, see: Hanan Melcer, “The IDF as the Army of a Jewish and Democratic State,” in Rubinstein Volume (2014) pp. 347, 349-351). In this regard, we must take note that in the Boycott Law the legislature expressed its intent that the Law’s provisions were meant to prevent harm to the state of Israel by means of boycott, and thus, on its face, and on the basis of the presumption of constitutionality of the Law, it would appear that the Law falls within the scope of the “defensive democracy” doctrine (and moreover, some of the Petitioners declared, as noted, that in their opinion it is indeed legitimate to call for a boycott as long as the character of the state remains unchanged). On the consequences of the “defensive democracy” doctrine, see my opinion in the Dirani case, and see: G.H. Fox & G. Nolte, “Intolerant Democracies,” 36 Harv. Int. L. J. (1995); Barak Medina, “Forty Years to the Yeredor Decision: The Right to Political Participation,” 22 Mehkerey Mishpat (Bar-Ilan University Law Review) 327-383 (2006) [Hebrew] (hereinafter: Medina, “Forty Years to the Yeredor Decision”) which mentions the decision (although the author criticizes it), stating:

On the basis of the principle regarding “defensive democracy”, it is possible to justify governmental restrictions upon elements that seek to harm important interests recognized as fundamental rights [of third parties – H.C.], even if those elements are committed to non-violent methods in this regard. [But it is questionable whether this comprises calls for boycott, as I shall explain below – H.M].

30.       Moreover, it would appear that a call for a boycott deviates from pure freedom of expression. Thus, for example, as Justice A. Barak wrote in regard to the purposes of freedom of expression in the Kahane case:

The justification for freedom of expression is complex and intertwined. It is the individual’s right to realize himself, to form a worldview and an opinion by giving flight to his spirit, creative and receptive. It is the freedom of the individual and the community to illuminate the truth through a free and unending struggle between truth and falsity. It is the freedom of society’s members to exchange opinions and views in a spirit of tolerance, without fear, with respect for the autonomy of every individual, and to persuade one another in order to strengthen, secure and develop the democratic regime [ibid., p. 272 – emphasis added – H.M.].

            Freedom of expression is thus intended, inter alia, to enhance public discourse and to present even unaccepted views, so that society’s political decisions will be made freely and intelligently, through persuasion, with tolerance, and with respect for the autonomy of the other.

            Thus, calls for a boycott against the State of Israel, as defined by the Law, do not serve the classical purpose of freedom of expression. As opposed to the view of the Petitioners, according to which calls for boycott advance “open and enhanced political discourse”, such calls are not actually interested in political decisions on the basis of free will, but seek to impose views by means of economic and other means (in the field of contracts, as well, influence by means of economic coercion has been recognized in the law and the case law as contrary to free will, and thus gives rise to a cause for rescission of the contract (see: sec. 17 of the Contracts (General Part) Law, 5733-1973; CA 8/88 Shaul Rahamin Ltd., v. Expomedia Ltd., IsrSC 43 (4) 95, 100-101 (1989); CA 1569/93 Maya v. Panford (Israel) Ltd., IsrSC 48 (5) 705, 706 (1994); and cf. Daniel Friedman & Nili Cohen, Contracts, vol. 2, 965 (1992),  who include in the scope of coercion: “also threats of ‘boycott’ or ‘blacklisting’, whose significance is that suppliers will refrain from transacting with a person, or that customers will refrain from transacting with him, or that other employers will refuse to employ him”, and conclude: “In this area , as well, it is conceivable that the threat, if not made in order to protect a justified interest, may constitute coercion”).

            This approach of calling for economic, academic and cultural boycott does not, therefore, serve democracy, but rather harms it, as I shall explain:

(A)       The Petitioners argue that the Boycott Law violates their freedom to conduct political discourse, but in this regard it would be proper to delineate the distinction between freedom of expression as a means of persuasion, which is a cornerstone of a democratic state, and freedom of expression as a means of coercion, which undermines the values of a democratic state. Whereas in order to advance freedom of thought and opinion, a democratic state will seek to encourage a free marketplace of ideas through freedom of expression, when that freedom is employed (by way of calling for boycotts) as a means for violating the right of the individual to choose on the basis of his opinions and beliefs, the protection granted to freedom of expression can be somewhat restricted. See: Orloff, “The Political Boycott” (ibid., pp. 1076-1077):

A political boycott is a coercive mode of expression that, regardless of its goals, deprives its victims of their freedom to speak and to associate as they please… A political boycott uses economic coercion to force its victims to speak or act politically in a way that furthers the goals, not necessarily of the speaker, but of the boycotter.

            Thus, a call for boycott falls within the category referred to in constitutional literature as “the democratic paradox”, in which it is permissible to limit the rights of those who seek to benefit from democracy in order to harm it (see: EDA 11280/02 Central Elections Committee for the Sixteenth Knesset v. Tibi, IsrSC 57 (4) 1, 14-18 (2003), per Barak P.). Calling for or participating in a boycott may thus, at times, smack of “political terrorism”.

            This view can be compared to the provisions of sec. 122 of the Knesset Elections [Consolidated Version] Law, 5729-1969:

122.     The following shall be liable to imprisonment for a term of five years or to a fine of IL 20,000:

(1)        a person who gives or offers a bribe for the purpose of inducing a voter to vote or to refrain from voting, whether generally or for a particular candidates’ list;

…

(3)        a person who threatens a voter with inflicting harm on him or any other person if such voter votes or refrains from voting, whether generally or for a particular candidates’ list;

…

(6)        a person who procures a person to vote or refrain from voting, whether generally or for a particular candidates’ list, by means of an oath, a curse, shunning, ostracism [Hebrew: “ḥerem”],[1] a vow, releasing from a vow, a promise to bestow a blessing, or giving an amulet; for the purpose of this section, “amulet” includes any object that some members of the public believe can cause benefit or harm to a person [emphasis added – H.M.].

 

            In explaining the purpose of this law, Justice M. Cheshin wrote as follows:

The purpose of the law is that voters decide for themselves for whom to vote and for whom not to vote, after free and informed consideration of whom they believe worthy of their vote…the purpose of the law is to prevent the improper phenomenon of people voting or refraining from voting for a party or candidate for prime minister while under the influence of extraneous or other improper considerations [EA 11/01 Pines-Paz v. Shas, IsrSC 55 (3) 168 (2001); emphasis added – H.M.].

(B)       The above is of special concern in regard to the boycotting of Israeli academia. Such a call for the boycotting of the Israeli academic community, or of Israeli lecturers, undermines academic freedom itself and prevents research and instruction whose purpose, inter alia, is the search for truth. It is, in effect, a boycott of intellectualism itself, as boycott silences the discourse. Therefore, the Law that prohibits such activity is appropriate to the values of the State of Israel that, inter alia, ensure full academic freedom and advance research and excellence, which underlie Israel’s qualitative advantages. See: Rubinstein & Pasha, Academic Flaws, pp. 117-119.

31.       All of the above arguments can suffice to show that the Law meets the second condition of the Limitation Clause, and also shed light upon the third condition, which I shall now address.

32.       The third condition established by the Limitation Clause requires that the law under which a protected right is infringed serve a proper purpose. It would appear that the Law before us also meets this condition, which in our context also somewhat overlaps the second condition (and therefore, to the extent that the matters are shared, I will not repeat them).

            As explained in paras. 28-30 above, the Law (without addressing the issue of the wisdom of its enactment) serves purposes that can be explained on the basis of the values of the state, and it is even intended to serve a number of specific purposes that can be viewed as legitimate:

1. It is intended to prevent harm by means of boycott to the State of Israel, as these terms are defined by the Law.
2. It delineates what is permitted and forbidden within the framework of freedom of expression, viz: it is permissible to express any political opinion and to attempt to persuade; it is permissible to demonstrate; it is forbidden to call for a boycott (which may also involve criminal elements (restrictive trade practices, improper violation of equality, or “boycott prohibitions” per se), or tortious elements (tortious inducement of breach of contract; unlawful acts of discrimination), or may be contrary to the fundamental values of the state (or its legal system)). Professor Preuss, in his article “Associative Rights (The Right to The Freedoms of Petition, Assembly, and Association)”, suggests an additional distinction according to which the expression of personal political dissent is permitted, whereas calls for collective action is prohibited, and comprises elements of conspiracy (see: Ulrich K. Preuss, “Associative Rights (The Right to The Freedoms of Petition, Assembly, and Association),” in Michael Rosenfeld & Andreas Sajo, eds., Oxford Handbook of Comparative Constitutional Law,  948, 963 (2012)). This distinction also provides an answer to the Petitioners’ claim of a logical fallacy in the Law.
3. It advances the values of equality and the prohibition of discrimination.

I will permit myself to expand somewhat in regard to the prohibitions of discrimination, which embody the right to equality insofar as they are related to the questions before us, and in relation to the issue of boycott.

33.       As noted, the Boycott Law defines a boycott against the State of Israel as: “deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm” (emphasis added – H.M.). This definition does not speak of a boycott against the conduct of the object of the boycott, but rather it applies only to their connection to the State of Israel, its institutions, or an area under its control.

            I am of the opinion that a law that is intended to prevent such a boycott can be said to advance a proper purpose, in terms of its legal meaning and consequences, in that, inter alia, it expresses the right to equality, which has been recognized in the case law as a fundamental right (see: Barak, Human Dignity, at pp. 691-705), as follows:

(A)       Boycott shares characteristics of unlawful discrimination. Both boycott and discrimination lead to a reduction of economic and other connections with people on the basis of an interest that may be deemed illegitimate. In the case of the Boycott Law, the basis for the boycott is a connection to the State of Israel. A similar basis – connection to a country of origin – is recognized by Israeli law as a justified basis for imposing tortious liability in the framework of the tort of discrimination. The Prohibition of Discrimination in Products, Services and Entry into Places of Entertainment and Public Places Law, 5761-2000 (hereinafter: the Prohibition of Discrimination Law), which treats of a tort regarding discrimination, states, in sec. 3 and 5, as follows:

3. (a) Any person whose business is the supply of products or of public services, or who operates a public place, shall not – in the supply of products or of public services, in admitting to a public place or in providing a service in a public place – discriminate because of race, religion or religious group, nationality, country of origin, sex, sexual inclination, opinion, political allegiance, personal status, or parenthood.

…

5. (a) An act or an omission in violation of sections 3 and 4 constitutes a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] shall apply to them, subject to the provisions of this Law [emphasis added – H.M.].

            The Prohibition of Discrimination Law thus establishes that distinctions on the basis of country of origin are prohibited, and that a provider of products or services who discriminates on that basis exposes himself to an action in tort. It should further be noted that under the said law, a person’s opinion or political allegiance do not constitute a legitimate basis for making distinctions in supplying services or products. In other words, to some extent, the Prohibition of Discrimination Law defines discrimination even more broadly than the Boycott Law.

(B)       Here we should further note that the fact that a person politically objects to the policy of a country does no itself justify discrimination on the basis of country of origin. Discrimination based upon that justification harms the individual on the basis of acts and conduct that are not contingent upon him: This is “collective punishment” that uses an innocent individual as a means for deterring another (and cf: sec. 40G of the Penal Law). Such conduct is unacceptable, just as, for example, boycotting products produced by certain minorities is unacceptable.

34.       It would not be superfluous to note that the Boycott Law is not exclusive to Israel, and such laws – expressed in similar language, and comprising prohibitions upon discrimination on the basis of country of origin – can be found in many other countries. In fact, in some of those countries, the scope of the said prohibition upon discrimination is even broader than in Israel. Thus, for example, in France, the Penal Code includes a prohibition upon any discrimination that disrupts normal economic activity (Penal Code, Article 225-2). In England and Germany, the law defines any less favorable treatment of A towards B because of a protected characteristic as direct discrimination (sec. 13 of the Equality Act 2010 and sec. 3 of the General Act on Equal Treatment, respectively).

            From all the above we can conclude that the Boycott Law, like the Prohibition of Discrimination Law, also advances a proper purpose of equality in that it is intended, inter alia, to prevent discrimination, which is a purpose grounded in additional Israeli legislation, as well as in the legislation of many other countries.

35.       Now that we have established that the Law is consistent with the values of the State of Israel, and is intended for a proper purpose, it remains for us to examine whether the restriction it imposes upon freedom of expression is “to an extent no greater than is required”, which is the fourth condition of the limitation clause. I shall now proceed to that examination.

 

“To an extent no greater than is required” – Proportionality Tests

36.       The fourth and last condition for examining the constitutionality of an infringement of a basic right is that the violation be “to an extent no greater than is required”. The proportionality of the Law must be examined in light of three subtests of proportionality, as established in the case law: the rational connection test, the least harmful means test, the proportionality test “stricto sensu” – sometimes referred to as the “relativity test”— which is a type of “cost-benefit” test (see: the Hamifkad Haleumi case, CrimA 8823/07 Anonymous v. State of Israel (published in Nevo) (Feb. 11, 2010); my opinion in HCJ 6784/06 Major Shlitner v. Director of Payment of Pensions (published in Nevo) (Jan. 12, 2011) (hereinafter: the Shlitner case); Barak, Proportionality in Law, chaps. 9-12).

            We shall address these below.

The Rational Connection Subtest

37.       Under the rational connection subtest, there must be a possible rational connection between the proper purpose and the means that the law chose to advance that purpose (see: Barak, Proportionality in Law, pp. 373-383 [English: 303-307]; on the method for applying this subtest, see the majority opinion in HCJ 1661/05 Hof Azza Regional Council v. The Knesset, IsrSC 59 (2) 481(2005)). In the case at bar, although some of the Petitioners argued that the Law is not effective in advancing the fight against boycotts (and thus it would seem that, in their view, it does not actually infringe freedom of expression), the general tenor of the arguments was that they admit that there is, in effect, a rational connection between the Law and the intention to prevent calls for boycott, inasmuch as that connection (which the Petitioners oppose) motivated the petitions. Indeed, some of the Petitioners stated that they were affected by the “chilling effect” of the Law, and were therefore forced to desist from publishing lists of products produced by Israeli actors in the Area, for the purpose of boycotting them. It is, therefore, clear that the Law, if only according to its initiators, advances its purpose, at least partially, by acting and helping to prevent harm which, in my view, only if caused would constitute the tort established by the Law in a manner that would permit collecting damages from the person calling for the boycott. Therefore, it is not repugnant inasmuch as the tortfeasor has a choice (as distinct from the provision under sec. 2(c) of the Law, which deems the call for a boycott to be a tort that justifies compensation even without proof of harm – which I believe must be voided).

            Thus, the Law passes the first subtest of proportionality. Moreover, one of the objectives of tort law is deterrence (see: Amos Herman, Introduction to Tort Law, 4-7 (2006) (hereinafter: Herman); Ariel Porat, Tort Law, vol. 1, chap. 6 (Optimal Deterrence), pp. 25-53 (2013) (hereinafter: Porat)).

 

The Least Harmful Means Subtest

38.       Under the second subtest of proportionality, we must examine whether the legislature chose the means that is relatively less harmful to human rights in comparison to the other available alternatives. The requirement is not that the means chosen be that which is absolutely the least harmful, but rather it is sufficient that the means fall within the “margin of proportionality” (HCJ 7052/03 Adalah v. Minister of the Interior, IsrSC 61 (2) 202, 234-235, para. 68 per A. Barak P. (2006) [English: http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-rights-israel-v-minister-interior]; the Hamifkad Haleumi case, at p. 784, para. 51, per Naor J.), and that its harm be relatively moderate, even if it is not the least possible harm (HCJ 6304/09 Lahav – Bureau of Organizations of Self-Employed  v. Attorney General (published in Nevo) para. 115, per A. Procaccia J. (Sept. 2, 2010)).

            As noted, the purposes that the Law advances are the protection of the state and its values, equality, and individual liberty. Therefore, in order to avoid infringing freedom of expression as far as possible, the restriction of the right must be limited to that required in order to prevent those harms that might be caused by the boycott and that would intrude upon those purposes. Therefore, the Law may not create an excessive “chilling effect” upon political speech, as such, that is beyond what is required to prevent harm to the said purposes. Do the means incorporated in the Law meet that requirement? In order to answer that question, we must first consider the principles of the boycott tort as they appear in the Law, and in each of its subsections, and examine whether each means set forth in sec. 2 of the Law meets the least harmful means test. Following that, we must also examine whether the administrative restrictions imposed under the Law pass this subtest, as well. I shall now proceed to do so.

 

Section 2(a) of the Law

39.       This provision comprises several elements that must be examined.

(A)       The application of the Civil Wrongs Ordinance to the Boycott Tort

Section 2(a) of the Boycott Law establishes as follows:

Anyone who knowingly publishes a public call for a boycott against the State of Israel … commits a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] will apply to him.

We find language similar to that of this subsection in the Prohibition of Discrimination Law, which also applies the Civil Wrongs Ordinance to the tort that is the subject of that law, as follows:

5. (a) An act or an omission in violation of sections 3 and 4 constitutes a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] shall apply to them, subject to the provisions of this Law.

            The significant difference between the above laws is that the Prohibition of Discrimination Law states “shall apply to them”, that is, to the act and omission, whereas the Boycott Law states “will apply to him”, that is, to the tortfeasor. I do not think that we should split hairs in regard to how application to the tortfeasor as opposed to application to the tort might influence the substantive meaning of the Law. There are two reasons for this:

(1)        It would be contrary to the narrow-construction approach that I have recommended in regard to the Law, which is accepted in constitutional interpretation that tends to prefer narrow construction to voiding a legal provision, and which I will discuss in para. 56, below.

(2)        Such an approach would not be consistent with the opinion of Cheshin J. in CFH 5712/01 Barazani v. Bezeq Israeli Telecommunications Company Ltd., IsrSC 57 (6)  385, 408 (2003) (hereinafter: the Barazani case), in which he held (para. 30) as follows:

I also do not find any merit in the arguments of the Consumer Council comparing the phrase “as a tort” in our case to similar but not identical wording in other statutes. Thus, for example, sec. 11 of the Commercial Torts Law, 5759-1999, states “The violation of the provisions of Chapters One and Two is a tort, and the Civil Wrongs Ordinance [New Version] … shall apply to it…” At times we find this wording and at times other wording, and we will not hang mountains by a hair.^[2] The same is true with regard to other statutes that employ various wordings. See, for example: sec. 28 of the Adoption of Children Law, 5741-1981; sec. 5 (a) of the Prohibition of Discrimination in Products, Services, and Entry into Public Places, 5761-2000; sec. 15 of the Banking (Customer Services) Law, 5741-1981, and others. In my opinion, the purpose of the Law in this case is crystal clear, and comparisons to other laws will not succeed [emphasis added – H.M.].

(B)       A rational connection and damage: If the approach I have recommended above is accepted, and we would, indeed, apply the principles of the Civil Wrongs Ordinance to the boycott tort, then it would seem to follow that some of the elements of the tort established under sec. 2(a) of the Law would require damage, and a rational connection between the tort and that damage, as a condition for obtaining relief. This conclusion derives from the opinion of Cheshin J. in the Barazani case. In that case, Justice Cheshin refers to secs. 2(a) and 31(a) of the Consumer Protection Law, 5741-1981 (hereinafter: the Consumer Protection Law). Those sections establish a tort of consumer deceit, but do not expressly state a requirement of damage or of a rational connection, stating as follows:

2. (a) A dealer must not do anything – by deed or by omission, in writing, by word of mouth or in any other manner, also after the transaction has been contracted – which is liable to mislead a consumer in regard to any material element of the transaction (hereinafter – deceit); without derogating from the generality of the aforesaid, the following matters shall be deemed as material for a transaction:

(1) the quality, nature, quantity and category of an asset or service;

(2) the size, weight, shape and components of an asset;

…                   

31. (a) Any act or omission in violation of Chapters Two, Three, or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version].

            Justice Cheshin noted in this regard that the fact that the requirements of a causal connection and damage do not expressly appear in the above sections does not nullify those requirements, as he states there:

35.       … one doctrine is that of causation, under which – in accordance with sec. 64 of the Civil Wrongs Ordinance – there must be a causal connection between a person’s act or omission – an act or omission that constitute a tort – and the damage incurred by the victim, for which he seeks redress. As stated in sec. 64 of the Civil Wrongs Ordinance: “… a person shall be deemed to be at fault for such damage when the fault was the cause or one of the causes of the damage …

36.       This is also the case in regard to the compensation doctrine. In accordance with sec. 76 of the Civil Wrongs Ordinance, and as has always been the case: a person is entitled to compensation only for damage caused as a result of the tortious act. A person will be entitled to compensation only to the extent of the damage incurred, and as stated in sec 76: “only in respect of such damage which may naturally arise in the usual course of things and which directly arose from the defendant’s civil wrong”. A fundamental principle of tort law is that of restitutio ad integrum, and therefore, a person who did not suffer damage will not be entitled to compensation… Of course, the legislature is free to deviate from this principle, and decide – for various reasons – that a victim be granted compensation without showing that he incurred damage… However, these are but exceptions to the rule [ibid., at p. 401].

            This approach is consistent with the harm principle of the philosopher John Stuart Mill (see: John Stuart Mill, On Liberty (1859); J. Feinberg, Harm to Others (Oxford University Press, 1984); and the principles of corrective justice, see: Porat, at pp. 55-56; Herman, at pp. 9-7), and it also contributes to the distinction that I propose that we make between the validity of secs. 2(a) and 2(b) of the Law, and the voidness of sec. 2(c) of the Law.

             In view of the above, I am of the opinion that a reasonable construction of the Law leads to the conclusion that the tort created under sec. 2(a) of the Law requires damage and a causal connection as preconditions to relief, and that a “potential causal connection” alone would not suffice. Therefore, the requirement of a “reasonable possibility” to show that the call for a boycott might lead to its realization, as it appears in that section, is, in my opinion, a requirement that is additional to that of the normally required causal connection, and that hampers rather than eases the crystallizing of the tort.

            Moreover, from the absence of a requirement of damage in sec. 2(c) of the Law (which I believe should be voided), one might infer a positive requirement of damage in sec. 2(a) of the Law.

            It should be stressed that having found that the boycott tort requires damage as one of the elements of the tort in order for the boycotted party to seek relief from the party calling for a boycott, it is also clear that the tort meets the “near certainty test” (established in HCJ 73/53 Kol Ha’am Co. Ltd. v. Minister of the Interior, IsrSC 7 (2) 871 (1953) [English:  http://versa.cardozo.yu.edu/opinions/kol-haam-co-ltd-v-minister-interior] (hereinafter: the Kol Ha’am case)). On the relationship between the “near certainty test” and the proportionality requirement, see: Barak, Proportionality in Law, pp. 643-650; HCJ 4541/94 Miller v. Minister of Defense, IsrSC 49 (4) 94, 141 per Dorner J. (1995) [English: http://versa.cardozo.yu.edu/opinions/miller-v-minister-defence]; Medina, “Forty Years to the Yeredor Decision”, pp. 377-380; Barak Medina & Ilan Saban, “On the Freedom of a Knesset Member to Oppose the Occupation (following HCJ 11225/03 Beshare v. AG),” 37 Mishpatim (Hebrew University Law Review) 219, 231-232 (2007) [Hebrew]. Under the “near certainty” test, when freedom of expression clashes with another interest, we may prefer the other interest only if there is a high probability that the harm to the interest will actually be realized. From this we learn that in the matter before us, in which the boycott tort gives rise to a right to relief only after the realization of the damage, there is no further need to examine the probability of the realization of the infringement of the protected interest, inasmuch as imposing liability is contingent upon harm that caused damage.

(C)       Potential Plaintiffs: Having reached the conclusion that the principles of the Civil Wrongs Ordinance apply to the boycott tort, it is clear that only the direct victim of the tort can sue upon it, in accordance with sec. 3 of the Civil Wrongs Ordinance:

3.         The matters in this Ordinance hereinafter enumerated shall be civil wrongs, and subject to the provisions of this Ordinance, any person who suffers any injury or damage by reason of any civil wrong committed in Israel shall be entitled as against the person committing or liable for such civil wrong to the remedy hereinafter specified.

(D)       Mental element: The section requires that the publication of the call for a boycott be done “knowingly”. This requirement, as well, should be construed as limiting the scope. Thus, in regard to the elements of the tort regarding which there is a requirement of awareness, it must be shown that “according to the content and circumstances of the publication there is reasonable possibility that the call will lead to a boycott” (sec. 2(a) of the Boycott Law).

40.       The above demonstrates that the scope of the restriction upon calling for a boycott under sec. 2(a) of the Boycott Law is limited. Only a person directly harmed, who can prove a causal connection between the call and the damage he incurred and the tortfeasor’s awareness of the reasonable possibility that the harm would transpire as a result of the boycott, can obtain relief (and see: secs. 10, 64, and 76 of the Civil Wrongs Ordinance). Thus it would appear that we are concerned with a burden of proof not easily met by a claimant. Moreover, the section suffices with establishing a civil wrong, and the Law does not comprise an imposition of criminal sanctions upon a person calling for a boycott (this, for example, as opposed to the similar French legislation, as will be explained in paras. 49-51, below). It would, therefore, appear to me that the legislature reasonably exercised its authority in the framework of the “margin of proportionality”, in order to try to prevent the phenomenon of calls for boycott, which could inflict harm.

 

Section 2(b) of the Law

41.       In order to explain the nature of sec. 2(b) of the Boycott Law, I will first present sec. 62(a) of the Civil Wrongs Ordinance, which treats of the tort of causing a breach of contract:

62. (a) Any person who knowingly and without sufficient justification causes any other person to breach a legally binding contract with a third person commits a civil wrong against such third person; provided that such third person will not recover compensation in respect of such civil wrong unless he has suffered pecuniary damage thereby.

            In other words, in order to pursue a cause of action for causing a breach of contract, the claimant must prove five elements (see: CA 123/50 Bauernfreud v. Dresner, IsrSC 5 (1) 1559 (1950)): (a) the existence of a binding contract; (b) a breach of the contract (which realizes the harm, in principle); (c) causation – comprising a causal connection between the causative act and the breach; (d) “knowingly” – awareness of the contract and of the causative connection between the cause and the breach; (e) without sufficient justification. Additionally, the section establishes that a “third person will not recover compensation in respect of such civil wrong unless he has suffered pecuniary damage thereby”.

            Although much has been written on the nature of these five elements, and about the requirement of damage (see: Nili Cohen, Inducing Breach of Contract (1986) (Hebrew)), what has been said thus far is sufficient for the purpose of this discussion.

            We will now proceed to interpret sec. 2(b) of the Boycott Law, which establishes as follows:

In regards to section 62(A) of the Civil Wrongs Ordinance [New Version], anyone who causes a binding legal agreement to be breached by calling for a boycott against the State of Israel will not be deemed as having acted with sufficient justification.

            What sec. 2(b) of the Boycott Law means is that if a person called for a boycott and caused financial harm, the person who incurred that harm can sue the person who called for the boycott, and the tortfeasor will not have recourse to the defense of sufficient justification. However, the claimant will still have to prove the additional elements of the tort in order to recover damages. That being so, a person wishing to recover damages by virtue of sec. 2(b) of the Law will also have to prove the following elements in addition to the element of a call for a boycott: causation, as defined under sec. 62(a) of the Civil Wrongs Ordinance, breach, a causal connection between the call for boycott and the breach, the mental element of awareness, and pecuniary damage. Thus to the extent that we find that sec. 2(a) of the law is constitutional, sec. 2(b) of the Law will, accordingly, also be constitutional. I am therefore of the opinion that sec. 2(b) also meets the second subtest.

Section 2(c) of the Law

42.       Section 2(c) of the Boycott Law establishes as follows:

(c) If the court find that a civil wrong, as defined by this law, was committed with malice, it will may require the tortfeasor to pay damages that are independent of the actual damage caused (in this section – exemplary damages); in calculating the sum of exemplary damages, the court will consider, inter alia, the circumstances under which the wrong was carried out, its severity and its extent.

            The damages awarded under the above section are not contingent upon damage, and as such, they do not realize the normal rule of tort law in regard to “restitution as integrum”. That being the case, it would be correct to characterize them as “punitive damages”, which are a type of hybrid creation grounded upon purposes both from the civil area and from the criminal area (see: Elyakim Rubinstein, “Punitive Damages – A View from the Bench,” in Orr Volume – Articles in Honor of Justice Theodore Orr, 99, 99-105 (2013) (Hebrew) (hereinafter: Rubinstein, “Punitive Damages”)). My colleague Justice Rubinstein also addressed the rationale grounding the granting of punitive damages in his opinion in CA 9656/03 Estate of Marciano v. Zinger, (published in Nevo) (April 11, 2005) (hereinafter: the Estate of Marciano case):

The rationale behind punitive damages is not to “rectify” or “repair”, in accordance with the usual approach of tort law, but to punish and deter.  This rationale is neither simple nor self-evident in civil law, but can be justified in particularly severe cases or instances of infringement of constitutional rights, and it can serve to reinforce effective deterrence where the criminal law does not apply [ibid., para. 34].

43.       Punitive damages are not generally awarded. The courts are reticent to grant such damages, which are imposed upon the wrongdoer only in exceptional cases (see: the Estate of Marciano case; CA 140/00 Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter in the Old City of Jerusalem Ltd., IsrSC 58 (4) 486 (2004) [http://versa.cardozo.yu.edu/opinions/ettinger-estate-v-jewish-quarter-co... CA 2570/07 Lam v. Hadassah Medical Organization (published in Nevo) (July 7, 2011); CA 9225/01 Zeiman v. Qumran (published in Nevo) (Dec. 13, 2006), and cf: Rubinstein, “Punitive Damages”, p. 117). Even where the legislature chose to establish damages that are not contingent upon damage, it generally set limits to such damages, and did not leave them “unlimited”, as in the case before us (see, e.g.: sec. 31A of the Consumer Protection Law, sec. 4 of the Right to Work while Sitting Law, 5767-2007; sec. 11 of the Aviation Services (Compensation and Assistance for Flight Cancellation or Change of Conditions) Law, 5772-2012).

            Thus, the imposition of a regime of unlimited punitive damages in regard to the boycott tort deviates, in my opinion, from the bounds of proper proportionality. Where a delicate balance must be achieved in order to ensure minimal infringement of the basic right of freedom of expression, and to refrain as far as possible from creating any unnecessary “chilling effect” upon political expression and vibrant public debate, recourse should not be made to tools that are exceptions in civil law, and that deviate from the classic requirement of damage that is generally a condition for the imposition of a civil obligation, and one of the primary jurisprudential justifications for governmental intervention in the affairs of the individual (see: Mill, On Liberty; the Holder case). Imposing punitive damages would thus make the boycott tort unnecessarily proximate to the criminal sphere, and would overly deter expression (to the extent that it does not have the potential for causing proven harm to society or an individual).

            In light of the above, in my opinion, sec. 2(c) of the Boycott Law does not meet the requirements of the second, least-harmful-means, subtest, and must be declared void.

 

Sections 3 and 4 of the Law

44.       I will first cite the language of sections 3 and 4 of the Law:

                        Directives restricting participation in tenders:

3.         The Minister of Finance is authorized, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, to issue directives in regard to restricting the participation in a tender of anyone who knowingly published a public call for a boycott against the State of Israel, or who committed to participate in such a boycott, including a commitment not to purchase goods or services produced or supplied in Israel, by one of its institutions, or in an area under its control; in this section, a “tender” is defined as any tender that must be administered in accordance with the Mandatory Tenders Law, 5752-1992.

                        Regulations preventing benefits:

4.         (a) The Minister of Finance, in consultation with the Minister of Justice, may decide that someone who knowingly published a public call for a boycott against the State of Israel or committed to participate in a boycott:

(1) Will not be deemed a public institution under clause 46 of the Income Tax Ordinance;

(2) Will not be eligible to receive monies from the Sports Betting Council under section 9 of the Regulation of Sports Betting Law, 5727-1967; exercise of the authority under this section requires the consent of the Minister of Culture and Sports;

(3) Will not be deemed a public institution under section 3A of the Foundations of the Budget Law. 5745-1985, regarding the receipt of support under any budget line item; exercise of the authority under this section requires the consent of the Minister appointed by the Government as responsible for said budgetary line, as stated in section 2 of the definition of  “person responsible for a budget line item”;

(4) Will not be eligible for guarantees under the State Guarantees Law, 5718-1958;

(5) Will not be eligible for benefits under the Encouragement of Capital Investment Law, 5719-1959, or under to the Encouragement of Research and Development in Industry Law, 5744-1984; exercise of the authority under this section requires the consent of the Minister of Industry, Commerce and Employment.

(b)        In exercising the authority according to subsection (a), the Minister of Finance will act in accordance with regulations that he will promulgate in this regard, with the consent of the Minister of Justice, and with the approval of the Knesset Constitution, Law and Justice Committee; however, if no such regulations have been promulgated, it will not detract from the authority under subsection (a).

            From the language of the Law, we learn that the administrative restrictions imposed thereunder are contingent upon a procedure that involves supervision by the Government and by the Knesset. Thus, in order for the Minister of Finance to issue directives that would restrict participation in a tender of someone who calls for or committed to participate in a boycott, as defined by the Law, he must first obtain the consent of the Minister of Justice and the approval of the Knesset Constitution Committee. Denying benefits to someone who calls for or committed to participate in a boycott must be done in consultation with the Minister of Justice, and issuing directives in that regard requires the consent of the Minister of Justice and the approval of the Knesset Constitution Committee. It would seem that the above procedures, required in order to approve the imposition of the restrictions, would serve to lessen the possible infringement of freedom of expression, if only by ensuring that the restrictions would not be imposed arbitrarily.

            But over and above this procedural restriction, I am of the opinion that the infringement caused by preventing the participation in a tender, and all the more so the infringement caused by denying state benefits, are inherently second order infringements, inasmuch as, in principle, the Government enjoys broad discretion in choosing with whom to do business, or to whom to grant financial support. Thus, in the matter of financial support granted by the state, it has been held on more than one occasion that a person or body does not have a vested right to receive state grants. See, in this regard: HCJ 1438/98 Masorti Movement v. Minister of Religious Affairs, 53 (5) 337, 385 (1999), where we find:

The state is entitled to grant or not grant support. The state is authorized to provide – or not provide – this and that activity with financial support, and in granting support to a particular activity, to decide how much money it will receive.

            And also see, inter alia: HCJ 5264/05 Shavei Shomron Yeshiva v. Minister of Education, Culture and Sport, (published in Nevo) (Nov. 16, 2005).

            We should further note that in regard to the participation in tenders, sec. 3B of the Mandatory Tenders Law states as follows:

The government, with the approval of the Knesset Foreign Affairs and Defense Committee, may direct, by order, that the State or a government corporation may not enter into a contract for the execution of a transaction as stated in section 2 with a particular foreign country or with a particular foreign supplier for reasons of foreign policy.

            If the Government may do so by order (with the approval of the Knesset Foreign Affairs and Defense Committee), it would seem, a fortiori, that the Knesset may enact a statute (like that before us) in regard to the possibility of denying participation in tenders to certain bodies for reasons that are, by nature, related to reasons of foreign policy or defense of the state (preventing a boycott of the State of Israel, as defined by the Law).

45.       One may also deduce the power of the state to deny benefits from those who use them against the state by analogy to the judgment in HCJ 10104/04 Peace Now – Shaal Educational Enterprises v. Ruth Yosef, Supervisor of Jewish Settlement in Judea and Samaria, IsrSC 61 (2) 93 (2006), which held that local and regional councils in the Area could not use government grants to finance protest activity against the Disengagement Plan. In this regard, Deputy President Cheshin wrote (ibid., pp. 185-186):

We cannot accept that a local council may use support funding provided by the state in order to fight against a state-initiated plan. A person will not be permitted to slap the hand extended to help him.

I concur with the opinion of Justice Dorner and with the opinion of my colleague Justice Rubinstein that it is improper and unacceptable that monies that the state granted to a local authority in support of its day-to-day municipal activity be used to fund the council’s struggle against a state decision. A local council that fights against a state plan, and funds that fight with support funding given by the state for other purposes, does something that should not be done. Such conduct by the council is incompatible with the principle of fairness, as well as with the rules of good governance. This rule is self-evident, and I think there is no need to elaborate [emphasis added – H.M.].

Indeed, the prohibition of “ingratitude” is everywhere a matter of conventional wisdom – both moral and legal –and various cultures have idiomatic expressions for it (in the U.S. “Do not bite the hand that feeds you”, in traditional Jewish sources: “To act like Zimri and be rewarded like Pinchas” (Babylonian Talmud, Sanhedrin 82a).

            Moreover, the administrative restrictions against those who call for a boycott have a kind of internal logic of their own, inasmuch as how can people who call for a boycott request aid from the very bodies that they believe should be boycotted? In this regard, the standard that the Law applies to those who call for a boycott is the standard that they themselves suggest.

            I would further emphasize that the infringement caused by the administrative restrictions also meets the “near-certainty” test. As I shall explain below.

46.       In the context of this case, the “near certainty” test requires that the in order to permit an infringement of freedom of expression, a nearly certain infringement of the protected interest must be shown to exist. Thus, for example, the Kol Ha’am case held that it must be proven to a near certainty that, under the circumstances, granting freedom of expression would cause “nearly certain” harm to public security.

            In the matter before us, the protected interest is not public security. As explained, one of the purposes of the administrative restrictions is the interest in preventing the funding of organizations or persons who call for a boycott against the State of Israel, as defined by the Law, in a manner that discriminates against the state’s citizens by coercive means that, in effect, infringe the free marketplace of ideas, and seeks to impose the views of the boycotters upon those harmed by the boycott. In addition, the administrative restrictions seek to prevent a situation in which a person or organization would “bite the hand that feeds them”, and act with premeditated ingratitude in seeking to exploit the benefits they would receive in order to expand their activities against the one who granted them those very benefits (and compare: the Holden case, and see: Barak-Erez & Zachariah, pp. 574-575).

            Thus, in the event that the benefits and various grants would be given to those who call for a boycott against the State of Israel, the said interest would certainly be harmed. That would be the case whether or not the call would lead to real damage. The reason for this is that, as noted, the very granting of the benefits to those who call for a boycott would involve a transfer of state resources to the benefit of organizations seeking to harm the state and discriminate among its citizens. This is a separate category, also recognized in comparative law, which permits authorities to predetermine situations of “expected ingratitude”, and deny benefits in advance. See: South Dakota v. Dole 483 U.S. 203 (1987; Regan v. Taxation with Representation 461 U.S. 540 (1983); Rust v. Sullivan 500 U.S. 173 (1991) (hereinafter: the Rust case), which held:

A legislature's decision not to subsidize the exercise of a fundamental right does not infringe the right.

            That rule was somewhat narrowed by the majority in Agency for International Development et al. v. Alliance for Open Society International, Inc., et al. 570 U.S 1 (2013), in that it held that an organization receiving governmental funding to fight AIDS abroad, cannot be forced to publicly profess – in accordance with the Government’s policy – that it does not support legalizing prostitution, or provide funding for organizations that have not explicitly declared that they are opposed to prostitution. However, that case differs from the one at bar, inasmuch as our case does not require that those who call for a boycott support the Government’s policy against the boycott, but only not to encourage the boycott, and such cases fall within the scope of the rule enunciated in Rust (and compare: HCJ 7245/10 Adalah – The Legal Center for Arab Minority Rights in Israel v. Ministry of Social Affairs, (published in Nevo) (June 4, 2013) [English: http://versa.cardozo.yu.edu/opinions/adalah-%E2%80%93-legal-center-arab-minority-rights-israel-v-ministry-social-affairs], and in Jewish law in regard ingratitude: Babylonian Talmud, Avoda Zara 5a-b. And see: Nili Cohen, “On Parents, Children and Ingratitude: The Transaction of King Lear,” 14 Hamishpat 381 (2011) (Hebrew); Nili Cohen, “Law, Morality and Ex Turpi Causa,” Orr Volume 259 (2013) (Hebrew)).

            In light of all the above, it would appear that the infringement caused by the administrative restrictions also meet the least-harmful-means subtest.

 

The Proportionality Stricto Sensu Test

47.       Even after finding that the Law serves permissible purposes and falls within the “margin of proportionality” in achieving those purposes, it remains that we examine the Law’s proportionality “stricto sensu”, which is the third subtest of “proportionality”. Prof. Barak explains that the comparison here is not between the advantage in realizing the law’s purpose and the harm caused by infringing the right. “Rather, the comparison focuses only on the marginal effects – on both the benefits and the harm – caused by the law.  In other words, the comparison is between the margins”. In this regard, he adds: “we must consider the hypothetical proportional alternative to the limiting law. If indeed, such an alternative exists, then the comparison between the marginal benefits and marginal harm is made in light of that proportional alternative. Although this alternative was not adopted by the limiting law itself, the lawmaker can still adopt it as an amendment to the limiting law.” (See: Barak, Proportionality in Law, p. 432 [English: p. 350] (emphasis added – M.C.); and see my opinion in the Shlitner case).

            At this stage, we must therefore examine whether the balance between the harm caused to freedom of expression by the Law and the values grounding the Law, and ultimately decide whether one can say that the Boycott Law does not deviate from the proper balance between those values and interests, and therefore passes the “relativity” subtest. In this regard, I am of the opinion that the Law manages, if just barely, to meet the third subtest of relativity, as I shall now explain.

48.       As noted, the Boycott Law applies to those who call for the imposition of a boycott against anyone who has a connection to the State of Israel or an area under its control. In so doing, a person calling for a boycott may inflict harm upon an individual and violate his liberty. Imposing tortious liability upon a person whose call may cause harm to another is not exceptional in Israeli law. For example, sec. 12 of the Civil Wrongs Ordinance states as follows:

12. For the purposes of this Ordinance, any person who joins or aids in, authorises, counsels, commands, procures or ratifies any act done or to be done, or any omission made or to be made, by any other person will be liable for such act or omission.

            The above section also presents a certain infringement of freedom of expression, in that a person who procures another (even if only by speech) to commit a tort is exposed to a tort suit, see: CA 5977/07 Hebrew University of Jerusalem v. Schocken Publishing House Ltd. (published in Nevo) (June 20, 2014); CA 10717/05 Florist de Kwakel B.V v. Baruch Hajaj, (published in Nevo) (Sept. 3, 2013) [English: http://versa.cardozo.yu.edu/opinions/de-kwakel-bv-v-hajaj]; Paul S Davis, “Aid, Abet, Counsel or Procure,” in Chamberlain, Neyeres & Pitel, eds., Tort Law: Challenging Orthodoxy 413 (2013).

            Thus we see that in weighing the overall considerations, the legislator of the Law before us was of the view that the interest in preventing harm justified imposing tortious liability upon the wrongdoer, even at the expense of a certain infringement of freedom of expression. This constitutes something of a complement to the long-accepted principle in our case law that where a person encourages illegitimate discrimination by wrongful speech, the law recognizes the possibility of limiting his freedom of expression. Thus, for example, there is a provision in the Prohibition of Discrimination Law (sec. 4) that somewhat infringes freedom of expression in order to protect the right of an individual to equality:

4.         A person, whose business is the supply of products or of public services, or the operation of a public place, shall not publish any advertisement that includes any discrimination prohibited under section 3 [emphasis added – H.M.].

            However, the infringement of freedom of expression caused as a result of the Boycott Law is somewhat different from the infringement resulting from the torts listed above, inasmuch as the Law may have a “chilling effect” on the freedom of political expression, which is of particular importance in the public arena (see, for example: HCJ 606/93 Kidum Enterprises and Publishers (1981) Ltd. v. Broadcasting Authority, IsrSC 48(2) 1, 12 (1994)). It therefore remains for us to examine whether such an infringement nevertheless meets the requirements of the third subtest of proportionality. On this freighted point, I will “travel” abroad to bring back support from decisions that treated of related subjects and concluded that the infringement is, indeed, proportionate.

49.       The European Court of Human Rights in Strasbourg addressed the infringement of freedom of political expression in the context with which we are concerned, and this is the story:

            In the course of a town-council meeting, Jean-Claude Fernand Willem, the mayor of the French town of Seclin, called for a boycott of Israeli products (primarily citrus juice) due to Israel’s policy towards the Palestinians. That call was also published on the town’s Internet site. Pursuant to that call, a criminal complaint was filed against the Mayor with the public prosecutor, who decided to bring criminal charges against the Mayor for provoking discrimination on national, racial and religious grounds, which is an offense under secs. 23-24 of the French Law on the Freedom of the Press (Loi sur la liberté de la presse du 29 juillet 1881), which establish as follows:

Article 23: Seront punis comme complices d'une action qualifiée crime ou délit ceux qui, soit par des discours, cris ou menaces proférés dans des lieux ou réunions publics, soit par des écrits, imprimés, dessins, gravures, peintures, emblèmes, images ou tout autre support de l'écrit, de la parole ou de l'image vendus ou distribués, mis en vente ou exposés dans des lieux ou réunions publics, soit par des placards ou des affiches exposés au regard du public, soit par tout moyen de communication au public par voie électronique, auront directement provoqué l'auteur ou les auteurs à commettre ladite action, si la provocation a été suivie d'effet.

Cette disposition sera également applicable lorsque la provocation n'aura été suivie que d'une tentative de crime prévue par l'article 2 du code pénal.

Article 24: …Ceux qui, par l'un des moyens énoncés à l'article 23, auront provoqué à la discrimination, à la haine ou à la violence à l'égard d'une personne ou d'un groupe de personnes à raison de leur origine ou de leur appartenance ou de leur non-appartenance à une ethnie, une nation, une race ou une religion déterminée, seront punis d'un an d'emprisonnement et de 45 000 euros d'amende ou de l'une de ces deux peines seulement.

And in English translation:

Article 23: Will be punished as accomplices to an action qualified as a crime or a misdemeanor, those who, either by speech, calls or threats spoken in public places or public assemblies, or by writing, printed, drawings, engravings paintings, emblems, images or all other written support (format), spoken format, or visual image sold or distributed offered for sale or exposed in (public) places or public assemblies, either through billboards or via posters exposed for public access (viewing), or by any method of communication to the public by electronic means, which would have directly provoked the perpetrator (instigator) (single) or perpetrators (instigators)(plural), if the provocation was followed by the effect (or followed by a reaction).

This clause will be equally applicable in situations where the provocation would have been followed just by an attempted crime as provided by section 2of the penal code.

Article 24: … Those who, by one of the methods outlined in article 23, did provoke to discrimination, to hatred or to violence towards a person or towards a group of people by reason of their origin or of their membership (part of) or of their non-membership to a determined ethnic group, a nation, a race or a religion. Will be punished by a one year prison sentence and of a 45 000 Euro fine, or to either of these sentences alone.

            The Mayor was acquitted by the Lille Criminal Court, but the Court of Appeals ruled that the Mayor’s call was tainted by discrimination on national, racial and religious grounds, found him guilty, and imposed a fine of 1000 Euro. That decision was later upheld by the French Cour de Cassation.

50.       The Mayor appealed the judgment to the European Court of Human Rights, which denied the Mayor’s appeal (see: Willem v. France (application no. 10883/05), 10.12.2009).

            The panel of the European Court of Human Rights, composed of judges from Denmark, France, Germany, Liechtenstein, Monaco, Macedonia and the Czech Republic, held, in a majority ruling of 6 to 1 (the Czech judge), that the Mayor was not convicted for his political opinions, but rather because he called for discrimination against Israeli producers and their products. The European Court of Human Rights also found that the French law met the conditions of the European limitation clause, which is essentially similar to the Israeli “Limitation Clause”. The European Court of Human Rights further held that under the French Law, the Mayor was not entitled to undermine the French governmental authorities by calling for an “embargo” on the products of a foreign country, and noted that the penalty imposed upon him was relatively moderate.

            The European Court of Human Rights further held that the decision of the French courts to convict the Mayor was not inconsistent with the right to freedom of expression enshrined in sec. 10 of the European Convention on Human Rights. According to the European Court of Human Rights, the fine imposed upon the Mayor was lawful and intended for a proper purpose – protection of the rights of Israeli producers. The Court based its decision (ibid., para 20), inter alia, on another decision of the French Constitutional Court, in which it was held that a declaration made by a French company that sought to contract with another company from the United Arab Emirates, according to which it would not trade with Israel or transfer goods to it, was unlawful under sec. 225-1 and 225-2 of the French Penal Code. And see: the decision of the European Court of Human Rights in Leroy v. France, Application no. 36109/03 of Oct. 2, 2008.

51.       A similar matter, adjudicated in France and similarly decided, concerned the conviction of Saquina Arnaud-Khimoun by the Criminal Court in Bordeaux for labeling Israeli products with the sticker “Boycott Apartheid Israel”. The court held that Khimoun had hindered the normal exercise of economic activities by making a distinction on the basis of nationality. After the verdict was affirmed by the Appeals Court of Bordeaux, an appeal was filed with the Cour de Cassation (No B 10-88.315), which, in May 2012, reaffirmed the decision of the Appeals Court. For a discussion of the matter, see Rubinstein & Pasha, Academic Flaws, at pp 118-119, which also provides some answer to the Petitioners’ argument that the above cases differs from the Law under consideration, in that the European judgments concerned sanctions imposed upon persons calling for a boycott of a foreign state, whereas the Israeli Law imposes a prohibition upon persons calling for a boycott of their own state. In their book, the learned authors address the exceptional phenomenon of calling for a boycott of one’s own state, and suggest that this is the reason why there are no direct precedents on the matter, stating:

We have not found a parallel example in the United States [to Israeli calls for boycotting Israeli academia – M.C] of academic calls for boycotting the United States – not even in the turbulent times of the Vietnam War. Not even after four students were killed by the National Guard at Kent State University [ibid., p. 118].

52.       Having touched upon comparative law, it would be appropriate to add that in American law, in which freedom of expression is particularly broad, the call for a boycott in the Claiborne case was not disallowed due to the fact that the objects of the boycott had themselves behaved in a discriminatory manner towards African-Americans, and the boycott was intended to eradicate that discriminatory phenomenon by a focused attack upon those boycotted. As opposed to that, in the matter at bar, those being boycotted merely have a connection to the State of Israel, and it is the state that those who call for the boycott claim acts illegitimately. Therefore, it would seem that such a case, to the extent that it results in harm, would not fall within the scope of freedom of expression even in the United States (see the reasoning in the Holder case, as well as the article of Dafna Barak-Erez & Dudi Zechariah, ibid.).

53.       We may thus conclude that in accordance with the above European decisions and the approach we may deduce from the American Holder case, the Law that is the subject of the Petitions falls within the “legislative discretionary space”, sometimes referred to as the “margin of proportionality” or “zone of proportionality” (see: Barak, Proportionality in Law, pp. 505-508) [English: pp. 415-418]). Therein, the question posed before us is not whether the chosen arrangement is the best, but rather whether the chosen arrangement is lawful, that is, whether it falls within the “discretionary space” in which the legislature may act (see my opinion in the Shlitner case).

            I am of the opinion, as stated, that in this case, the arrangement enacted in the framework of the Boycott Law falls within the “legislative discretionary space”, even if one might say that it is at the outer limit of that space.

            The Law, in this case, does not impose a criminal prohibition upon political expressions as such, and the tort that the Law creates applies only to a call for the imposition of a boycott, but does not attribute tortious liability to a person who expresses the political views that underlie the call for a boycott (as long as they do not constitute a call for a boycott). Moreover, the injury to the person calling for a boycott is, as noted, limited: in order for a cause of action for relief under the tort to reach fruition, many conditions must be met: proof of harm, a causal connection between the tort and the harm, and awareness of a reasonable possibility for the realization of the harm. In addition, if tortious liability is attributed to a person calling for a boycott, the damages imposed upon him will not exceed the actual harm that he caused (subject, of course, to my holding as to the unconstitutionality of sec. 2(c) of the Law). The administrative restrictions imposed upon a person calling for a boycott are also proportionate, in view of the procedure required for their approval, and particularly in view of what I pointed out in paras. 44-45 above in regard to the broad discretion granted to a government in regard to the allocation of benefits and grants.

54.       The above holding can also be supported by several additional doctrines that all lead to the same result, which serves to show that in terms of jurisprudence (particularly in the field of public law), the conclusion is correct (see: my opinion in CA 4244/12 Haaretz Newspaper Publication Ltd. v. Major General Ephraim Bracha (published in Nevo) (February 19, 2014)). I will refer to those doctrines below.

 

Additional Approaches supporting the Proposed Conclusion

55.       The conclusion that I have reached is also required by additional constitutional law theories on the subject of annulling laws, which will now be surveyed.

An Interpretation of a Statute that upholds its Constitutionality is preferable to one that would annul it

56.       The above proposition validates the approach that nullifying a law should be the last resort, which should be adopted only when there is no other choice, as Justice Rivlin stated in HCJ 9098 Ganis v. Ministry of Building and Housing, IsrSC 59 (4) 286 (2004) (English: http://versa.cardozo.yu.edu/opinions/ganis-v-ministry-building-and-housing] (hereinafter: the Ganis case). In this regard, our case law has developed a preference for the interpretive approach described by Justice Beinisch in the Ganis case:

Everyone agrees that when the validity of a statute is questioned and a doubt arises as to its constitutionality, the court should first consider whether it is possible to find a reasonable interpretation that will make it unnecessary to decide upon its constitutionality and will allow the statute to exist in harmony with the basic principles of the constitution and the legal system. [ibid., at pp. 290-291, and see the sources cited there in support of that proposition; and see HCJ 5113/12 Friedman v. Knesset, (published in Nevo) (Aug. 7, 2012) (hereinafter: the Friedman case)].

            That is the approach that was adopted by the expanded panel in HCJ 3809/08 Association for Civil Rights in Israel v. Israel Police, (published in Nevo) (May 28, 2012) (hereinafter: the Association for Civil Rights case). Thus, the path of narrow construction that I proposed for the provisions of sec. 2(a) and 2(b), and secs. 3 and 4 of the Law is preferable to invalidating the said provisions.

            At this point, three additional comments would be appropriate:

(A)       Certain matters are indeed unclear in the provisions of sec. 2 of the Law. However, as noted, that lack of clarity can be mitigated through interpretation. Moreover, ambiguity does not constitute grounds for voiding a law. As a rule, in judicial review we must be careful to observe the difference between the grounds for review under constitutional law (in which the grounds are much more limited) and administrative law (where the grounds are inherently broader). See the Association for Civil Rights case.

(B)       The fear expressed that it might be possible to exercise prior restraint upon a call for boycott by means of a restraining order under the boycott tort is unfounded, inasmuch as it has already been held in a related matter that prior restraint in matters of freedom of expression must be very limited (see: CA 214/89 Avneri v. Shapira, IsrSC 43 (3) 840 (1989); and also cf: Avigdor Klagsbald, “Criminal Offense and Prior Restraint,” 2 Plilim 93 (1991)).

(C)       My proposal to void sec. 2(c) of the Law shows that there are limits to interpretation, and in the absence of an interpretive solution, the provision must be annulled.

 

The Legislature should be granted Deference

57.       In his book Proportionality in Law (ibid., pp. 488-491) [English: 396-399], Prof. Barak sought to reject the doctrine of deference that is accepted in many countries (both in Europe and in the United States), and that constitutes a certain constraint upon the judicial review of laws. Consequently, he characterized the concept of deference as “submission”.

            Justice E. Rivlin – who called for the adoption of this doctrine in appropriate cases – took the view that the term deference should be referred to as respect (for the legislature), see: HCJ 466/07 MK Zahava Gal-On v. Attorney General (published in Nevo) (Jan. 11, 2012), paras. 20-24 of his opinion [English: http://versa.cardozo.yu.edu/opinions/gal-v-attorney-general-summary]. A similar position was adopted by my colleague Justice E. Rubinstein in the Friedman case.

            I would like comment in this regard that I believe that the Deference Doctrine can be situated in the framework of the proportionality tests (as for possible alternatives to the legislation – these would be examined in the framework of the second subtest, and the “overall relativity” would be examined in the framework of the third subtest – see: Alan D.P Brady, Proportionality and Deference under the UK Human Rights Act: An Institutionally Sensitive Approach, 30-34 (2012)).

            If we apply this approach to the matter before us, the result that I have proposed is necessary.

 

The “Margin of Appreciation” Theory also justifies the Proposed Result

58.       The Margin of Appreciation Theory was developed in European law, beginning with the decision of the European Court of Human Rights in Handyside v. The United Kingdom, App. No. 5493/72, 1 EHRR 737 (1979). It was held in that case that the margin of appreciation grants preference to the national legislature and the authorities of the state (that is part of the European Union), including its courts, in interpreting and applying domestic law, by reason of the relevant constitutional principles and circumstances of that state. On the development of the Margin of Appreciation Doctrine over the years, see: John Wadham, Helen Mounfield, Caoilfjionn Gallagher & Elizabeth Prochaska with Anna Edmundson, Blackstone’s Guide to The Human Rights Act 1998, 40-42 (5th ed., 2009).

            In his book Proportionality in Law, Prof. Barak explains the distinction between the “margin of proportionality” [which Barak terms the “zone of proportionality” – ed.] and the “margin of appreciation” as follows:

The notion of the zone of proportionality examines the constitutionality of a limitation on a human right from a national standpoint. It determines the framework of factual and normative data from which the legislator may derive a valid limitation on a human right. The doctrine of the “margin of appreciation” examines the constitutionality of the limitation of a right from the standpoint of the international community. It determines the framework of factual and normative data whose existence allows the international community to provide considerable weight to the factual and normative determinations made by contracting state actors. (ibid., p. 511) [English: pp. 419-420].

 

            Against the background of the similarity and difference between the two doctrines, Prof. Barak considers the place of the “margin of appreciation” in national (domestic) law, and finds that examining this doctrine is important in that it explains the international and foreign case-law to the local judge, and comparative law has a recognized place in constitutional interpretation (see: Barak, Proportionality in Law, pp. 91-94). He concludes:

First, the study of the concept is of major importance, as it may explain and clarify much of the international law decisions and rulings that can also apply locally…But these contributions conclude the role of the concept of margin of appreciation for the national (domestic) judge (see: Rivers “Proportionality and Variable Intensity of Review” 65 Cambridge L.J 175 (2006)). While ruling on domestic issues, the judge should base his or her decisions on the notion of the “zone of proportionality.” At the basis of such a decision is that legal system’s notion of the proper balance between the public interest and individual human rights. (ibid., p. 512) [English trans., p. 421].

            However, there those who are of the opinion that the margin of appreciation theory can also be situated in the “proportionality tests”, and that the “margin of appreciation” even applies to the relationship between domestic law and international law (see: Andrew Legg, The Margin of Appreciation in International Human Rights Law, 194-196 (2012); Paola Bilancia, The Dynamics of The EU Integration and The Impact on The National Constitutional Law, 147 (2012)).

            In view of the decisions of the European Court of Human Rights cited above, it would seem that the provisions established by the Israeli legislature in secs. 2(a) and 2(c) of the Law fall within the Israeli “margin of proportionality”, particularly in light of the “margin of appreciation”. And cf. my opinion in AAA 5493/06 Emanuel Peled v. Prison Service (published in Nevo) (Oct. 12, 2010).

            Moreover, a contrary holding by this Court might undermine the “margin of appreciation” that the European Court of Human Rights has recognized (in regard to France) in connection with the boycott against the State of Israel.

 

The Claim of Discrimination in regard to the enactment of the Boycott Law (in comparison to other boycotts not prohibited by law) must be dismissed

59.       The Petitioners argue that the Knesset chose to enact only a law against calling for a boycott against the State of Israel, as defined by the Law, but refrained from legislatively prohibiting other forms of boycott (such as consumer boycotts, religious boycotts, etc.), which constitutes a form of discrimination that should result in the voiding of the Law.

                        This argument is of no merit. As a rule, a claim of discrimination cannot be raised against the legislature for choosing to address a specific subject while refraining from addressing another, similar situation.

            Such an administrative cause of action cannot be claimed against the legislature, even if we ignore the subject of “lacuna”, “negative arrangement”, and legislative void in constitutional contexts. See: the Association for Civil Rights case.

 

The Ripeness Doctrine in Constitutional Law, as applied to the Matter at Bar, requires that other than the voiding of Section 2(c), the Claims of the Potential Claimants and Potential Defendants in regard to the Law will be examined in Application

60.       The Ripeness Doctrine was adopted into Israeli constitutional law in the Alumni Association case, and was further developed of late in HCJ 2311/11 Uri Sabah v. Knesset (published in Nevo) (Sept. 17, 2014) (hereinafter: the Acceptance Committee case), and see: Chachko, “On Ripeness and Constitutionality”. This doctrine “allows the Court to decide that a decision in regard to a constitutional question before it will be made at a later stage, if at all” (see: HCJ 7190/05 Lobel v. State of Israel (published in Nevo) para. 6 of the opinion of M. Naor J. (Jan. 18, 2006) (hereinafter: the Lobel case)), “due to the absence of a complete set of clear, concrete facts necessary for making a fundamental judicial decision” (the Lobel case, para. 4 of the opinion of M. Naor J.)). Also see: HCJ 3803/11 Israeli Capital Markets Trustees Association v. State of Israel (published in Nevo) (Feb. 5, 2012); HCJ 5440/11 David Hananel (Chen) v. Minister of Justice (published in Nevo) (March 11, 2012); HCJ 7872/10 Jaffa Moslem Council v. Prime Minister (published in Nevo) (June 7, 2012); the Acceptance Committee case.

            In his article cited in para. 6(A) above, Ronen Polliack tried to show that this doctrine should be applied in a relative manner, such that two additional pathways be added, which he views as preferable to the existing pathway: applied judicial review by the High Court of Justice, and applied judicial review by the trial court. In his opinion, the proposed model reflects a more careful balance between applied review and facial review, a subject that has recently been the subject of considerable discussion in the United States (see: Richard H. Fallon, Jr., “Fact and Fiction about Facial Challenges,” 99 Calif. L. Rev 915 (2011)).

            In fact, a similar approach was adopted in the decision in the Acceptance Committee case.

            In my opinion, applying the constitutional ripeness doctrine to the matter before us requires that – other that the striking down sec. 2(c) of the Law – the claims of potential claimants and potential defendants in regard to the Law should be subjected to applied review in the trial courts in the course of suits that may be filed in regard to secs. 2(a) and 2(b), or alternatively, when individual petitions are filed in regard to secs. 3 and 4 of the Law against a concrete decision of the Minister of Finance. We would thus follow the accepted American approach in which constitutional issues generally arise and are examined in the course of an “indirect challenge” and “from the bottom up”. This approach is also accepted in Continental Europe, as we see from the evolution of the case concerning the French mayor, which began in the local criminal court and reached the European Court of Human Rights. This development is particularly apt in the matter before us because, as I have explained, the law views boycotting as a “chameleon concept” that is sometimes acceptable and sometimes prohibited. This approach affects the legal outcome, which is also contingent upon the circumstances.

Conclusion

61.       In light of all the above, only sec. 2(c) of the Law should be struck down, while the remaining provisions should be left in force. This conclusion does not preclude the possibility of raising constitutional questions that have not been decided here at the “applied stage” (when actions brought under the law are examined), however, it would seem that it would be preferable to follow the American and European approach under which cases regarding “calls for boycott” begin in the trial courts (where the claims are examined in the context of concrete facts), and the matter then rises through the judicial system.

62.       Before concluding, I would add that I have, of course, read the opinions of my colleague the President, the Emeritus President, and my other colleagues, and I naturally agree with all of the reasons of those who concur with my position and added other considered reasons to it, as they saw fit. I also have the greatest respect for the views of those who disagree with me, but I have chosen not to open a round of responses and counter-responses, so as not to further lengthen my opinion, and inasmuch as the main points are set out for all, and now that we have decided, the reader can review and criticize in the appropriate forums.

63.       I will conclude in stating – above and beyond the result that I have reached – that, as a rule, it is preferable to follow the historical approach that saw fit to restrict boycotts in their various forms, at home or abroad, except for limited exceptions (among which the boycott against the State of Israel, as defined in the Law, is not included),. Boycotts are generally bad for the entire state (including the Jewish State), and bad both for democracy and for society.

 

Justice Danziger:

I have received my colleague Justice Melcer’s comprehensive opinion, read it, and concluded that I hold a different opinion. In my view, the Prevention of Harm to the State of Israel by means of Boycott Law, 5711-2011 (hereinafter: the Law or the Boycott Law) substantially infringes the right to freedom of expression. In my opinion, that infringement does not meet the tests under the Limitation Clause in sec. 8 of Basic Law: Human Dignity and Liberty. Despite this conclusion, I believe that the degree of that infringement can be substantially lessened by means of interpretation, such that the Law can successfully ford the constitutional tests. Therefore, if my opinion were accepted, we would order that the Law be understood such that – as I shall explain more fully below – only a boycott of an “institution” or “area” that is a boycott against Israel, and that derives from their connection to the state, would fall within the scope of the Boycott Law, whereas a boycott against an “institution” or “area” that is not part of a boycott against the State of Israel would not fall within the scope of the Law’s definition.

1.         My colleague Justice Melcer surveyed the Law’s provisions in detail, as well as its legislative background and the arguments of the parties, and I see no need for repetition. The Petitioners present constitutional arguments. They ask that we strike down the Boycott Law for being repugnant, in their opinion, to Basic Law: Human Dignity and Liberty and Basic Law: Freedom of Occupation. The examination of these claims must be carried out in three stages. At the first stage, the question to be examined is whether a constitutional right is violated. If so, then we must proceed to the second stage of constitutional review, in which the constitutionality of the violation is examined in light of the tests set out in the Limitation Clause. In the third stage, which would be addressed only if the Law were to be found unconstitutional, we would decide the consequences of that unconstitutionality (HCJ 10203/03 Hamifkad Haleumi Ltd. v. Attorney General, IsrSC 62 (4) 715, 757 (2008) [English: http://versa.cardozo.yu.edu/opinions/hamifkad-haleumi-v-attorney-general] (hereinafter: the Hamifkad Haleumi case); HCJ 1661/05 Hof Azza Regional Council v. The Knesset, IsrSC 59 (2) 481(2005) (hereinafter: the Hof Azza Regional Council case).

 

The Boycott Law and its Infringement of Political Freedom of Expression

2.         My colleague Justice Melcer is of the opinion, with which I concur, that the Boycott Law infringes freedom of expression, and that it, therefore, violates the constitutional right to human dignity. However, my colleague believes that “we are not concerned here with an infringement of the nucleus of freedom of expression, even where political speech is concerned” (para. 21 of his opinion). I cannot agree.

3.         Freedom of expression is a constitutional human right. Its strict defense is an inseparable part of the Israeli constitutional tradition. Freedom of expression was granted far-reaching protection even before the enactment of the Basic Laws. It was made clear already then that freedom of expression is a “supreme value”, and that it “constitutes the pre-requisite to the realisation of almost all the other freedoms” (HCJ 73/53 Kol Ha’am Co. Ltd. v. Minister of the Interior, IsrSC 7 (2) 871, 878 (1953) [English:  http://versa.cardozo.yu.edu/opinions/kol-haam-co-ltd-v-minister-interior] (hereinafter: the Kol Ha’am case)). It has further been held that it is “the apple of democracy’s eye” (CrimA 255/68 State of Israel v. Ben Moshe, IsrSC 22 (2) 427, 435 (1968)). With the enactment of Basic Law: Human Dignity and Liberty, freedom of expression was established as a constitutional right. A long line of decisions by this Court have established that certain aspects of freedom of expression – including freedom of political expression – are part of the constitutional right to dignity (see, for example: CA 4534/02 Schocken Chain Ltd. v. Herzikowitz, IsrSC 58 (3) 558, 565-566 (2004); HCJ 2557/05 Majority Camp v. Prison Service, IsrSC 62 (1) 200, 215-218 (2006) [English: http://versa.cardozo.yu.edu/opinions/majority-camp-v-israel-police] (hereinafter: the Majority Camp case); PPA 4463/94 Golan v. Prison Service, IsrSC 50 (4) 136, 156-157 (1996); LCA 10520/03 Ben Gvir v. Dankner (published in Nevo) para. 10 per E. Rivilin J. (Nov. 12, 2006) (hereinafter: the Ben Gvir case); the Hamifkad Haleumi case, paras. 22-26 per M. Naor J, at pp. 760-763; Aharon Barak, Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, pp 708-712 (2014) (Hebrew), [published in English as Human Dignity: The Constitutional Value and the Constitutional Right (2015)] (hereinafter: Barak, Human Dignity).

4.         The importance of freedom of expression can be learned from its purpose. In its extensive case law on the subject of freedom of expression, this Court has presented three primary purposes grounding the right (see, for example: Ilana Dayan-Orbach, “The Democratic Model of Freedom of Speech,” 20 Iyunei Mishpat 379-384 (1996) (Hebrew); Aharon Barak, “The Tradition of Freedom of Speech in Israel and its Problems,” in Aharon Barak, Selected Essays, (H. Cohn & I. Zamir, eds.) vol. 1, 531, 535-536 (2000) (Hebrew)).

            The first purpose is the search for truth. Grounding this purpose is the approach by which “sunlight is said to be the best of disinfectants”. Only in a free, spirited, and “sophisticated” marketplace of ideas and opinions allows the truth to overcome lies. John Milton expressed this justification in his famous saying: ““Let her [Truth] and Falsehood grapple; who ever knew Truth put to the worse in a free and open encounter?” (John Milton, “Areopagitica; A speech for the Liberty of Unlicensed Printing, to the Parliament of England,” quoted by Dorner J. in HCJ 316/03 Bakri v. Israel Film Council, IsrSC 58 (1) 249, 270 (2003) [English: http://versa.cardozo.yu.edu/opinions/bakri-v-israel-film-council] (Hereinafter: the Bakri case); the Kol Ha’am case, p. 877).

            The second purpose of freedom of expression concerns autonomy and individual self-fulfillment. “Without the freedom to be heard and to hear, to write or read, to speak or be silent, the individual’s personality suffers, as a person’s spiritual and intellectual development depends upon the ability to freely shape one’s worldview” HCJ 399/85 MK Rabbi Meir Kahane v. Managing Board of the Israeli Broadcasting Authority, IsrSC 41(3) 255, 274 (1987) (hereinafter: the Kahane case); and see: CA 8954/11 Ploni v. Plonit, (published in Nevo), para. 62 per N. Sohlberg J. (April 24, 2014)). Freedom of expression allows the individual, in the words of Agranat J., “to nurture and develop his ego to the fullest extent possible; to express his opinion on every subject that he regards as vital to him; in short, to state his mind, in order that life may appear to him to be worthwhile” (the Kol Ha’am case, p. 878).

            The third purpose concerns democracy. “The principle of freedom of expression is closely bound up with the democratic process” (the Kol Ha’am case, p. 876, per Agranat J.; and see: HCJ 372/84 Klopfer-Naveh v. Minister of Education and Culture, IsrSC 38 (3) 233, 238 (1984) (hereinafter: the Klopfer-Naveh case)). Freedom of expression is a precondition for the free flow of the information relevant to living as a community. Indeed, “elections in a democratic system would be unimaginable without a prior exchange of opinions and mutual persuasion” (the Klopfer-Naveh case, p. 239, per Shamgar P.). “A regime that usurps the right to decide what the citizen should know, will ultimately decide what the citizen should think. There is no greater contradiction than this for a true democracy that is not ‘guided’ from above” (HCJ 243/62 Israel Film Studios v. Levy, IsrSC 16 2407, 2415-2416 (1962)). The exchange of opinions and ideas in the free marketplace of speech is a condition for the possibility of changing the government. It is vital to preventing tyranny of the majority. It makes participation in the democratic process possible, and it is, therefore, fundamental to the political community. The right to freedom of expression ensures the legitimacy of the regime. Moreover, freedom of expression provides a means for “letting off steam” that might otherwise be stored up and vented in undesirable ways for lack of a legitimate avenue for release (see: the Bakri case, p. 262).

5.         These objectives of freedom of expression define its scope and the strength of its defense. Freedom of expression comprises a broad spectrum of speech. It applies to commercial and artistic expression, comprises political speech and news reporting, it extends to lies, tasteless statements, pornography, and even racism. But its wide range is met with differing levels of protection of the particular forms of expression. “A violation of the very heart of the right is not equivalent to a violation at its periphery” (the Hamifkad Haleumi case, pp. 760-761, para. 22, per Naor J.). Thus, as a rule, commercial speech will be afforded less protection than artistic expression. Racist speech will generally receive especially less protection. Political speech stands at the top of the ladder. “Freedom of political expression lies at the heart of the right to freedom of speech” (the Hamifkad Haleumi case, p. 761, para. 23, per Naor J.); and see: HCJ 6226/01 Indor v. Mayor of Jerusalem, IsrSC 57 (2) 157, 164 (2003) (hereinafter: the Indor case); the Kahane case, p. 293).  The protection of political speech, more than any other form of expression, ensures a free exchange of the opinion and positions relevant to our communal life. Freedom of political expression allows the individual to express himself within his community. It allows the individual to advance his views and objectives. It is a precondition to political assembly and association. Freedom of political expression is also “more exposed to political harassment by the regime than any other form of expression”, and therefore its protection is of particular importance (HCJ 6396/96 Zakin v. Mayor of Beer Sheva, IsrSC 289, 303, per Zamir J. (1999)).

6.         And so we arrive at the Law before us.

            The Boycott Law prohibits – in the manner set out therein – “a public call for a boycott” and “committing” to participate in a boycott. In general, a boycott may have various objectives. For example, a boycott may be motivated by economic, consumer or political considerations. The boycott that is addressed by the Law is a political-ideological boycott. The purpose of such a boycott is to “reflect the ethical position of the imposers of the boycott” and “express ideological discontent” (Nili Cohen, “Nili Cohen, “Law, Play, Game - The ‘Merchant of Venice’ and the ‘Breakdown’,” 51 Hapraklit 407, 433-434 (2012) (Hebrew) http://www.hapraklit.co.il/_Uploads/dbsAttachedFiles/Nili_Cohen_Article.pdf) (hereinafter: Nili Cohen, “Law, Play, Game”)). By means of the boycott, the boycotter refrains from supporting and encouraging actions that, in its opinion, are unworthy of its support. In certain senses, the boycott testifies to the “seriousness” of the expression, in that it embodies a readiness to act or refrain from acting. In addition, there are characteristics of a boycott that are not merely declaratory. Boycott is meant to lead change. It advances a practical result. The “tools” of the boycott are economic and social pressure. Boycott is a non-violent means for political change. It is intended to change, lessen or condemn the boycotted conduct.

            A call for a boycott, and a political boycott itself, are consistent with the three primary purposes of freedom of expression. Thus, the call for a boycott contributes its underlying political position to the marketplace of ideas. It allows the boycotting position to vie for its place, attempt to influence other positions and succeed or fail in that attempt. Theresa J. Lee addressed this in her article “Democratizing the Economic Sphere: A Case for the Political Boycott”, 115 W. Va. L. Rev. 531 (2012) (hereinafter: Lee, “Political Boycott”).

'Free trade in ideas' means free trade in the opportunity to persuade to action, not merely to describe facts. The boycott is precisely a means to persuade others to action, including those being targeted and those inspired to join. This "free trade" in persuasion is why the boycott finds a natural home under the marketplace of ideas theory…

In addition, even when a boycott does not necessarily achieve its ultimate end, it remains a vehicle for forcing the dissemination of an idea. Boycotts make the perhaps otherwise latent dissent visible to a greater number of participants in the marketplace of ideas, highlighting not only their position but also the very existence of the debate [ibid., p. 549].

            In the democratic context, political boycott is a means for achieving political objectives by peaceful means. “Indeed, public boycotting is a tool in the democratic game: it seeks to engender change by non-violent means, and it can be as effective as a legal sanction” (Nili Cohen, ““Law, Play, Game,” p. 433; and see: Lee, “Political Boycott,” pp. 553-556). The political boycott is also a means for self-fulfillment. It allows an individual to express his political views, influence his future, and decide for himself what values will be supported by his resources (see: Lee, “Political Boycott,” pp. 556-558); for further discussion of political boycotts, see: Notes, “Political Boycott Activity and the First Amendment,” 91 Harv. L. Rev. 659 (1977-1978)).

7.         My colleague Justice Melcer is of the opinion that “calls for a boycott against the State of Israel, as defined by the Law, do not serve the classical purpose of freedom of expression” (para. 30 of his opinion). The source of this position is the distinction that my colleague made between the terms “persuade” and “means for coercion”. According to his approach, a call for a boycott is a coercive form of expression, and therefore it should be afforded less protection than that granted other forms of political speech. I do not agree with that position. As I stated, I believe that calling for a boycott is consistent with the objectives of freedom of expression. Indeed, calling for a boycott, like imposing a boycott, comprises coercive characteristics. Calling for a boycott seeks, inter alia, to influence the object of the boycott to change its policy or conduct by inflicting economic, cultural or academic harm. However, that is not its sole purpose. A boycott expresses revulsion for the boycotted conduct. It testifies to a lack of desire to support and finance conduct that the boycotter finds objectionable. These characteristics of boycott justify its protection as a form of expression. True, we should not ignore the coercive elements of boycotting. A boycott can make political discourse superficial. It may put a “price tag” on political or other conduct that is inconsistent with the views of the boycotter. That can result in a “chilling effect” that will remove the boycotted expressions from the marketplace of opinions and ideas. However, as stated, that is not the only characteristic of boycotts. Along with the chilling effect, political boycott also has the potential of enriching the marketplace of opinions. Moreover, even if boycotting harms the boycotted positions, that is insufficient to automatically justify infringing it as a form of expression. The “harm” to the boycotted view as a result of the boycott is imposed by the members of society in the framework of their free activity in the marketplace of ideas. Prohibiting boycotts is not part of the free competition in the marketplace of ideas. As Lee aptly explains in “Political Boycott”:

Claims that boycotts fail to satisfy the values of the marketplace of ideas because they coerce others into not speaking, thus depriving the market of those ideas, must fail. Such claims give the boycott too much credit. Boycotts are only one voice among many; they are a costly form of speech for the speaker and within the market, they can be combated with further speech. As the Court has often made clear, just because one voice is louder does not mean that other voices are being silenced, and even if the danger of drowning out arises, the way to combat it has never been to temper the louder voice… [ibid., p. 549].

            And further on:

While a successful boycott may appear to drown out another position, the remedy is not to silence the boycott but instead for those on the other side to endeavor to make themselves 'louder' [ibid., p. 550].

8.         The decision of the United States Supreme Court in NAACP v. Claiborne Hardware Co., 458 U.S. 886, (1982) (hereinafter: the Claiborne case) reflects this position. In 1966, Afro-American residents of Claiborne County declared a boycott against white businessmen in the county. The purpose of the boycott was to persuade the government to act against racial discrimination and to promote integration. The boycott inflicted financial harm upon the white businessmen, some of whom filed suit against the boycott’s organizers and its supporters. The businessmen won the suit, and 92 of the boycotters were ordered to pay the businessmen damages in a total amount of 1.25 million dollars. The case ultimately reached the Supreme Court of the United States, which reversed the judgment. The Court held that boycotting, organizing a boycott, and supporting it are activities that fall within the compass of protected speech under the First Amendment of the Constitution. In so doing, the Court also held that the fact that the purpose of the boycott was to persuade others to change their views or conduct, and even to coerce them to do so, does not change its character as protected speech. As Justice Sevens wrote:

Petitioners admittedly sought to persuade others to join the boycott through social pressure and the “threat” of social ostracism. Speech does not lose its protected character, however, simply because it may embarrass others or coerce them into action [ibid., p. 909-910].

And further on:

The claim that the expressions were intended to exercise a coercive impact on respondent does not remove them from the reach of the First Amendment. Petitioners plainly intended to influence respondent's conduct by their activities; this is not fundamentally different from the function of a newspaper… Petitioners were engaged openly and vigorously in making the public aware of respondent's real estate practices. Those practices were offensive to them, as the views and practices of petitioners are no doubt offensive to others. But so long as the means are peaceful, the communication need not meet standards of acceptability [ibid., p. 911].

            And see: Barbara Ellen Cohen, “The Scope of First Amendment Protection for Political Boycotts: Means and Ends in First Amendment Analysis: NAACP v. Claiborne Hardware Co.,” 1984 Wis. L. Rev. 1273 (1984).

9.         The Boycott Law is not directed at any political boycott in general. It treats only of a boycott of a specific type – “a boycott against the State of Israel”. The Law defines this term as “deliberately refraining from economic, cultural or academic ties with another person or body solely because of his connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm (sec. 1 of the Boycott Law). According to its plain meaning, it “grasps” several types of boycotts. The first, self-evident, “type” is a comprehensive boycott against the State of Israel as such. An additional “type” of boycott that is apparently included in the definition is a boycott applying solely to the areas of Judea and Samaria (hereinafter: the Area), even when not ancillary to a boycott of the entire state. Such a boycott would appear to be deemed one that harms an individual or other element solely for its connection to “an area under its control” by the State of Israel. The future of the Area and the settlements located there is the subject of heated political and public debate in Israel. Many publics largely define their political loyalties by their stand on this debate. It would not seem an exaggeration to count the “subject of the territories” as one of the most politically disputed issues in Israel. Indeed, this issue has held a central place in Israeli public discourse for a generation (and compare: Kalman Neuman, Territorial Concessions as an Issue of Religion and State, Policy Paper No. 96, (IDI, 2013) (Hebrew) [http://en.idi.org.il/media/2108337/PP96.pdf]; Yael Hadar, Naomi Himeyn-Raisch, and Anna Knafelman, “Doves and Hawks in Israeli Society: Stances on National Security,” (2008) [http://en.idi.org.il/analysis/articles/doves-and-hawks-in-israeli-societ... Ephraim Yaar & Zev Shavit, eds., Trends in Israeli Society, vol. 2, 1165, 1224 (2003); Menachem Hofnung, Israel - Security Needs vs. the Rule of Law, 282-283 (Nevo: 1991) (Hebrew); Tamir Magal, Neta Oren, Daniel Bar-Tal & Eran Halprin, “Views of the Israeli Occupation by Jews in Israel: Data and Implications,: in Daniel Bar-Tal & Itzhak Schnell, eds., The Impacts of Occupation on Israeli Society (2013) (Hebrew) [http://lib.ruppin.ac.il/multimedia_library/pdf/45558.pdf]; Elisha Efrat, “Return to Partition of the Land of Israel,” in 23 New Directions 78, 81 (2010) (Hebrew); Chaim Gans, “Is There a Historical Right to the Land of Israel?” 24 Tchelet 103, 118 (2006) [English: 27 Azure (2007) http://azure.org.il/article.php?id=32]). And as Justice D. Beinisch so aptly described this in HCJ 7622/02 Zonschein v. Military Advocate General, IsrSC 57 (1) 726 (2002) [English: http://versa.cardozo.yu.edu/opinions/zonstien-v-judge-advocate-general]:

Political conflicts in Israeli society agitate its most sensitive nerves. Israeli society is characterized by its intense ideological conflicts, including conflicts based on reasons of conscience and reasons of religious faith [ibid., p. 735].

            In that case, this Court addressed the lawfulness of the Chief of Staff’s decision not to exempt the Petitioners from military reserve duty in the Area (on this, compare: Chaim Ganz, “Right and Left: Ideological Disobedience in Israel,” 36 Israel L. Rev. 19 (2002)).

            Calling for a boycott in order to express dissatisfaction with the Government’s policy in regard to the Area, to refrain from supporting that policy, or to persuade others to oppose that policy is a form of speech that clearly falls within the scope of political expression, and that is entitled to the full protection that our constitutional regime grants to political speech.

 

The Constitutionality of the Infringement

10.       Even expression that falls within the scope of political expression can be limited by the legislature. Various statutes limit, in one way or another, the voicing of political statements. Many of those laws were surveyed in the opinion of my colleague Justice Melcer (para. 21 of his opinion). That is clear. In spite of its importance, freedom of expression, like other constitutional rights, is not absolute. Other rights and interests may justify its restriction. In order for an infringement of freedom of expression to be constitutional, it must meet the criteria of the Limitation Clause in sec. 8 of Basic Law: Human Dignity and Liberty. As is well known, the Limitation Clause comprises four cumulative tests: the infringement of the constitutional right must be made by a law or by virtue of a law; it must befit the values of the State of Israel as a Jewish and democratic state; it must serve a proper purpose; and it may only infringe the right to an extent no greater than is required. The last condition comprises three subtests, which are: the Rational Connection test, the Least Harmful Means test, and the Proportionality “Stricto Sensu” test.

11.       The application of these criteria differs in accordance with the infringed right. In the case before us, we are concerned with freedom of political expression. I addressed the importance of this right above. Particularly careful, strict review is required in order to justify an infringement of political expression. Justice D. Dorner addressed this in HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance, IsrSC 51 (4) 367 (1997) (hereinafter: the Investment Managers Association case):

As for the test in regard to matching the means to the purpose, the degree of certainty that will be required for matching the means and its effectiveness is influenced by the importance of the right and the reasons that ground it. Where we are concerned with an important right, “near certainty”, perhaps even nearly absolute, that the means will effectively and comprehensively realize its purpose may be required. As opposed to this, where a less important right is concerned, it may be possible to suffice with a “reasonable possibility” for the promotion of the purpose.

As for the test regarding the choice of the means that infringes the right to the minimally required extent, which as noted, is not an absolute test, the choice will be influenced by the infringed right. Where a particularly important, fundamental right is concerned, we will be stricter as to the choice of a means that only minimally infringes it, even if this means choosing a means of significant cost. The rule may be different where a less important right is concerned, whose protection will not require that the state adopt means that may be particularly burdensome.

As for the test in which a balance is struck between the benefit achieved by the purpose and the harm caused by the means for its achievement, that test will be applied – as accepted in the case law that I addressed above, treating of decisions of administrative authorities – in consideration of the nature of the relevant right, the reasons that ground it, and the values and interests harmed in the specific case [ibid., pp. 422-423].

12.       I will already state that, in my opinion, the Boycott Law disproportionately infringes the constitutional right to freedom of expression. This conclusion makes an examination of the other criteria of the Limitation Clause superfluous. In short, I will note that I concur with my colleague Justice Melcer that the Boycott Law befits the values of the State of Israel, and that it is intended to serve a proper purpose. I will address the proper purposes that I believe ground the Law in greater detail in addressing the third subtest of proportionality, when I examine whether the benefit from achieving the purpose justifies the infringement of freedom of political expression. Needless to say, the infringement of the right to freedom of expression by the Law is “by a law” or “by virtue of a law”.

 

Proportionality – Rational Connection

13.       In my view, the Boycott Law meets the first subtest of proportionality – the rational connection test. That test examines whether the means chosen by the Law serve the purposes that the Law is intended to achieve (see, e.g.: Aharon Barak, Proportionality in Law, 373-376 (2010) (hereinafter: Barak, Proportionality in Law)). The purpose of the Law, which I shall address at greater length below, is the prevention of harm to the State of Israel by means of boycott. That purpose is clearly promoted by the Law, the provisions of which are intended to impede the conduct of those calling for a boycott against the State of Israel, and to encourage them to refrain from doing so. On this point, we should note that some of the Petitioners pointed to various statements made by some persons or others in the course of the Knesset deliberations prior to the completion of the legislative process. From these statements, it would seem that those persons were of the opinion that the Law would not promote its intended purpose. An example of such a statement is the position taken by the representative of the Ministry of Foreign Affairs at a meeting of the Constitution, Law and Justice Committee (hereinafter: the Constitution Committee) on Feb. 15, 2011, according to which: “Not only does this bill not help in the fight against the international boycott, it may even harm it”. Another example is the position expressed by the representative of the legal department of the Ministry of Foreign Affairs in the Constitution Committee on June 27, 2011, according to which: “This bill, if passed, may yield the opposite result of its purpose, and increase the boycott phenomenon”. I do not think that we can learn from these statements that there is no rational connection between the provisions of the Law and its purpose. First, the purpose of the Boycott Law is not limited to preventing harm to the State of Israel by an international boycott, but is also intended to apply, perhaps primarily, to “homegrown” boycotts. Moreover, other professional positions were expressed beside those of the representatives of the Ministry of Foreign Affairs. Indeed, as my colleague Justice Melcer pointed out, the fact that some of the Petitioners reported that they, themselves, had been influenced in practice by the Law, and had ceased to call for boycotting products from the Area after its enactment, testifies to a rational connection between the provisions of the Law and it objective of preventing boycotts.

 

Proportionality – the Least Harmful Means

14.       I am of the opinion that the Boycott Law, in all its parts, also meets the requirements of the second subtest of proportionality – the least harmful means test (also referred to as the “necessity test”).  This second subtest examines whether the legislative means adopted least infringes the constitutional right from among the possible means that would realize the proper purpose of the Law. President Barak addressed this test in the Investment Managers Association case:

The legislative means can be compared to a ladder that the legislature climbs in order to reach the legislative purpose. The legislature must stop at that rung at which the legislative purpose is achieved, and that least harms the human right. The legislature must begin at the least harmful “rung”, and slowly climb until it reaches that rung that achieves the proper purpose without infringing the human right more than is required [ibid., p. 385].

            This subtest is grounded upon two premises. The first examines whether there is a hypothetical alternative that can achieve the “same level” of the purpose grounding the law. “However, if a hypothetical alternative means that equally advances the law’s purpose does not exist, or if this alternative means exists but its limitation of the constitutional right is no less than that of the limiting law, then we can conclude that the limiting law itself is necessary. The necessity test is met” (Barak, Proportionality in Law, p. 399) [English: p. 323]. “The second element of the necessity test examines the question whether the hypothetical alternative limits the constitutional right to a lesser extent than the limiting law” (Barak, Proportionality in Law, p. 405) [English: p. 326]. It has been held in this regard that “the means chosen must be of a kind whose infringement of the human right is moderate, but not necessarily the least possibly harmful in the range of possibilities” (HCJ 6304/09 Lahav – Bureau of Organizations of Self-Employed and Businesses in Israel v. Attorney General, (published in Nevo), para. 115, per A. Procaccia J.); and see: HCJ 4769/95 Menachem v. Minister of Transportation, IsrSC 57 (1) 235, 280 (2002); the Investment Managers Association case, p. 420).

15.       It would appear that the Boycott Law meets these criteria. The Petitioners did not propose alternative means that might equally achieve the purpose – preventing harm to the State of Israel by means of a boycott – while harming freedom of political expression to a lesser degree. Thus, some of the Petitioners suggested that the state treasury compensate anyone who is harmed by a boycott against the state as a less harmful means. In my view, such a measure cannot yield the same measure of protection to the purpose. That suggested means, as opposed to the arrangements in the Law, could not be expected to deter those calling for a boycott from continuing to do so. Therefore, it cannot be expected to result in the same chilling effect as the Boycott Law. In practice, in this case, the Law’s infringement of rights and its effectiveness are closely tied. The harm that the Law causes to those who call for a boycott, which is expressed in civil and administrative sanctions, is the means that the legislature chose to achieve the Law’s purpose. Lessening the harm to those who call for a boycott would inevitably result in a lessening of the chilling effect, and would thus render the Law less effective in achieving its purpose. Additionally, compensating those private actors harmed by the boycott would not result in fully attaining the Law’s purpose. The Law is not solely meant to prevent harm to citizens and private actors. The boycott phenomenon harms the public in its entirety. Imposing the costs of the boycott on the public pocket, as the Petitioners suggest, would indeed lessen the harm to private actors, but would not lessen the public harm. In practice, the public harm, in turn, would translate into harm to the pockets of the citizens of the state. It is elementary that “harm to the public pocket … harms the public in its entirety” (CFH 3993/07 Jerusalem Assessment Officer 3 v. Ikafood Ltd., (published in Nevo), para 10, per E. Arbel J. (July 7, 2011)). In this regard, my colleague Justice Rubinstein aptly wrote in  AAA 7335/10 Rehabilitation Officer, Ministry of Defense v. Lupo, (published in Nevo) (Dec. 29, 2013), in regard to the importance of public resources:

It is elementary that the public pocket is not infinitely deep. Slicing and distributing the budgetary pie is like a blanket that is too short to cover the entire bed in view of the responsibilities and challenges facing the state in the fields of education, security, public welfare, etc. [ibid., para. 27].

            Another of the Plaintiffs’ claims is that there are existing legal devices that would suffice to achieve the Law’s purpose without infringing constitutional rights. This argument is not persuasive. Even if existing legal apparatuses could make it possible to contend with the boycott phenomenon to some extent, they cannot realize the said purpose to a similar extent. The fact that the Petitioners think that the existing apparatuses are less harmful to those calling for boycotts demonstrates this problem and shows that even according to the Plaintiffs’ approach, the chilling effect created by the existing law is not equivalent to that created by the Boycott Law.

16.       My colleague Justice Melcer takes the view that sec. 2(c) of the Law does not meet the criterion of the least harmful means. I, too, believe that this section unjustifiably infringes freedom of political expression and must be struck down. However, in my opinion, the reason for this is a lack of proportionality “stricto sensu”, and not a failure to meet the least harmful means test. It should be emphasized that the conclusion that there are no alternative means to be found that would achieve the Law’s purpose to the same “extent” while posing a lesser threat to freedom of political expression, does not mean that the Law is constitutional. However, “the same is true in those cases where the alternative, less limiting means are available, but the advancement of the law’s purpose is lesser than that of the limiting law. Here, too, the necessity test is of no assistance to the limited right” (Barak, Proportionality in Law, p. 415 [English: p. 338]). In such a case, the focus of constitutional review moves to the third subtest. As Barak writes in his book Proportionality in Law:

Judges should be honest with themselves. They must speak the truth and the truth is that in many cases the judge reveals that an alternative means that limits the right in question to a lesser extent does exist; but upon further examination it turn out that these means may not achieve the law’s purpose in full, or that in order to achieve those purposes in full the state has to change its national priorities or limit other rights. In those cases, the judge should rule that the law is necessary, and that the less limiting means cannot achieve the intended legislative purpose. Then, the judge must proceed to the next stage of the examination – and determine the constitutionality of the law within the framework of proportionality stricto sensu [ibid., pp. 416-417 [English: pp. 338-339]].

 

            We will now turn to the application of this subtest.

 

Proportionality – Proportionality “Stricto Sensu”

17.       The third subtest – that of proportionality “stricto sensu” – is a balancing test. “This is the most important of proportionality’s tests” (Barak, Proportionality in Law, p. 419 [English: p. 340]). It examines the proportionality between the social benefit inherent in achieving the Law’s purpose and the harm that may be caused to the protected right – in this case, freedom of political expression – as a result of the Law’s application. It focuses upon the marginal addition – positive and negative – of the examined law. This subtest addresses the “comparison between the proper purpose before and after the enactment of the law, and the situation of the human right before and after the enactment of the law” (Barak, Proportionality in Law, p. 433). Conducting this comparison requires an examination of the extent of the harm to the constitutional right, on the one hand, and the social benefit from achieving the legislative purpose, on the other. After placing the harm and benefit on the scales, they must be balanced, and it must be decided thereby which is to be afforded the greater weight. As noted, the balancing equation changes in accordance with the nature of the infringed right. In the matter before us, we are concerned with a “heavy” right – freedom of political expression. We are thus concerned with the “Kol Ha’am equation”, which requires a “near certainty” of real harm to an important public interest in order to justify infringing freedom of expression (the Kol Ha’am case, pp. 893-887; and see: the Bakri case, p. 263; Barak, Proportionality in Law, p. 631).

 

Proportionality “Stricto Sensu” – The Infringement of the Right

18.       The Boycott Law clearly and directly infringes the right to freedom of political expression. It establishes civil and administrative sanctions for political statements. The right to freedom of expression indeed includes the right not to be harmed by its realization (compare: the Majority Camp case, pp. 218-219). In the instant case, we are concerned with a particularly severe infringement, inasmuch as it is premised upon the content of the speech (compare the American rule of thumb, by which “[An] act would be content based if it required 'enforcement authorities' to 'examine the content of the message that is conveyed to determine whether' a violation has occurred” (McCullen v. Coakley, 134 S. Ct. 2518, 2531 (2014) per Roberts CJ). The Boycott Law does not prohibit every type of call for a boycott. For example, it does not prohibit a call for a boycott of a person by reason of his association with any political position, whatever it may be. It also does not prohibit calls for boycotting a person by reason of his place of residence, wherever it may be. Its effect is limited to calling for a boycott against a person by reason of his connection to the State of Israel or the Area. In the Israeli political reality, calls for boycotting the State of Israel, and primarily calls for boycotting the Area, are voiced by only one side of the political map. A content-based limitation of freedom of expression, especially freedom of political expression, is particularly suspect. It comprises a breach of the neutrality that the state should exercise when acting as a “regulator” of the marketplace of ideas. Such intervention in the “rules of the game” endangers the marketplace of ideas and the free flow of information. It violates the democratic process. It undermines the protection that freedom of expression provides against tyranny of the majority. Discrimination also inheres in such a breach of state neutrality. It reflects a measure of preference for one opinion as against another. Such a preference harms the ability of those who hold a “silenced” political position” to compete on an even playing field for the place of their view in public opinion (and compare the Indor case, which struck down a decision by the Jerusalem Municipality to prohibit the publication of an advertisement due to its content).

19.       The rejection of content-based restrictions on freedom of expression while creating viewpoint discrimination, is a fundamental principle of American constitutional law. The principle has two main purposes. The first is the prevention of governmental action motivated by extraneous considerations or improper justifications. The second is the prevention of skewing the marketplace of ideas (see: Cass R. Sunstein, “Half-Truths of the First Amendment,” 1993 U. Chi. Legal. F. 25, 26-27 (1993) (hereinafter: Sunstein); and see the discussion of these purposes in Amnon Reichman, "The Voice of America in Hebrew – The US Influence on Israeli Freedom of Expression Doctrines," in Michael Birnhack, ed., Quiet, Someone is Talking: The Legal Culture of Free Speech, 185, 192-193 (2006) (Hebrew) (hereinafter: Reichman); and see: Elena Kagan, “The Changing Faces of First Amendment Neutrality: R.A.V. v. St. Paul, Rust v. Sullivan, and the Problem of Content-Based Underinclusion,” 1992 Sup. Ct. Rev. 29 (1992)). As Sunstein explains:

The notion that the First Amendment bans skewing effects on public deliberation is connected with the idea that government may not distort the deliberative process by erasing one side of a debate. Above all, government may not distort the deliberative process by insulating itself from criticism. The very freedom of the democratic process depends on forbidding that form of self-insulation [ibid., p. 27].

            Indeed, in a long line of decisions, the United States Supreme Court held that content-based prohibition of expression is incompatible with the First Amendment of the Constitution. Thus, for example, R.A.V. v. St. Paul, 505 U.S. 377 (1992) concerned the review of an ordinance that prohibited the placing of symbols – including a burning cross or a swastika – on private or public property in a manner that arouses anger, alarm or resentment in others on the basis of race, color, creed, religion or gender. The Court held that the ordinance was incompatible with the right to freedom of speech. The Court found that the statute prohibited only “fighting words” that could insult or provoke violence, and it is, therefore, possible that the government could comprehensively prohibit such expressions. However, the government is not permitted to prohibit only certain expressions of this type while permitting others. In this case, expressions arousing anger or resentment on the basis of race were prohibited, while, for example, expressions arousing anger or resentment on the basis of, for example, political views or sexual orientation were not prohibited. As Justice Scalia explained:

[T]he ordinance applies only to “fighting words” that insult, or provoke violence, “on the basis of race, color, creed, religion or gender.” Displays containing abusive invective, no matter how vicious or severe, are permissible unless they are addressed to one of the specified disfavored topics. Those who wish to use “fighting words” in connection with other ideas -- to express hostility, for example, on the basis of political affiliation, union membership, or homosexuality – are not covered. The First Amendment does not permit St. Paul to impose special prohibitions on those speakers who express views on disfavored subjects… [ibid., p.391].

            The Supreme Court further held that the problem with the ordinance was, inter alia, that it prohibited the use of certain expressions – “fighting words” – only on one side of the political divide. Thus, one side is permitted to “fight freestyle” while the other side must show good sportsmanship, and fight by the Marquis of Queensberry rules. Justice Scalia wrote:

In its practical operation, moreover, the ordinance goes even beyond mere content discrimination, to actual viewpoint discrimination. Displays containing some words – odious racial epithets, for example – would be prohibited to proponents of all views. But “fighting words” that do not themselves invoke race, color, creed, religion, or gender – aspersions upon a person's mother, for example – would seemingly be usable ad libitum in the placards of those arguing in favor of racial, color, etc., tolerance and equality, but could not be used by those speakers' opponents. One could hold up a sign saying, for example, that all “anti-Catholic bigots” are misbegotten; but not that all “papists” are, for that would insult and provoke violence “on the basis of religion.” St. Paul has no such authority to license one side of a debate to fight freestyle, while requiring the other to follow Marquis of Queensberry rules [ibid., p. 391-392].

            These words are also appropriate to the matter before us. The Boycott Law does not prohibit all forms of boycotts. It only prohibits a specific type of boycott that expresses a particular political view. The law thereby creates viewpoint discrimination. Such discrimination grants an advantage to one side of the political divide, while forcing only one of the sides to act according to the Marquis of Queensberry rules in the political arena. Such influence is particularly serious when the view protected by the law is, in effect, the view of the government. In this regard, the words of Justice Kennedy (who was in the minority in regard to the result in the case) in Hill v. Colorado, 530 U.S. 703 (2000) are appropriate:

Laws punishing speech which protests the lawfulness or morality of the government's own policy are the essence of the tyrannical power the First Amendment guards against [ibid., p. 787].

20.       My colleague Justice Melcer is of the opinion that the administrative sanction – preventing participation in a tender and restrictions on obtaining benefits – constitute merely “second order” infringements of freedom of expression. Indeed, as my colleague notes, the state enjoys broad discretion in deciding with whom to transact and which entities to support. Private entities do not enjoy a vested right to government support (see: HCJ 1438/98 Masorti Movement v. Minister of Religious Affairs, 53 (5) 337, 384 (1999) (hereinafter: the Masorti Movement case); HCJ 5364/05 Shavei Shomron Yeshiva v. Minister of Education (published in Nevo) (Nov. 16, 2005) (hereinafter: the Shavei Shomron case); HCJ 11020/05 Panim For Jewish Renaissance v. Minister of Education, Culture and Sport (published in Nevo) (July 16, 2006) para. 10 (hereinafter: the Jewish Renaissance case)). However, once the state has decided to support a certain type of activity, it must do so in accordance with the rules of administrative law. In doing so, it must employ “relevant considerations grounded upon considerations that relate to the substance of the supported activity, as distinct from the entity receiving the support” (HCJ 11585/05 Israel Movement for Progressive Judaism v.   Ministry of Immigrant Absorption (published in Nevo) May 19, 2009) para. 11) (hereinafter: the Movement for Progressive Judaism case)). It must distribute the support monies “among public institutions of the same type on the basis of equal criteria” (Sec. 3A of the Budget Foundations Law, 5745-1985). An authority is not allowed to distinguish among entities that are substantively members of the same “equality group” in a discriminatory manner, and may not make distinctions that violate protected fundamental rights. Justice I. Amit addressed these principles in AAA 343/09 Jerusalem Open House for Gay Pride v. Jerusalem Municipality (published in Nevo) (Sept. 14, 2010) (hereinafter: the Open House case) [English translation: http://versa.cardozo.yu.edu/opinions/jerusalem-open-house-gay-pride-v-jerusalem-municipality]:

As a rule, no entity has a vested right in the receipt of support from the state ... However, once an authority has declared its intent to provide support and establishes criteria under which institutions will receive support, these criteria must comport with the principle of equality... The same principle applies to both support in general and to any specific benefit [ibid., para. 34].

            Justice Amit further stated in the Open House case that in distributing financial support or subsidies “require the administrative authorities to exercise their powers in a manner that protects the values protected by said Basic Laws” (ibid., para 35).

21.       These principles are a common thread in a long line of decisions treating of criteria for granting support (see, e.g: HCJ 59/88 MK Tzaban v. Minister of Finance, IsrSC 42 (4) 705, 706-707 (1989); HCJ 2196/00 Israel Camerata Jerusalem Orchestra v. Minister of Science, Culture and Sport, IsrSC 58 (4) 807, 814-816 (2004); HCJ 3354/12 Zankol Ltd. v. Government of Israel (published in Nevo) (Aug. 18, 2014) para. 15; HCJ 2021/11 Vaaknin v. Minister of Finance (published in Nevo) (June 6, 2013) para. 16). Thus, for example, the Movement for Progressive Judaism case addressed the validity of the rules for the distribution of support to conversion institutes. Those rules established that only Orthodox conversion institutes would be eligible for support. This Court held that the state is not required to support private conversion institutions. However, having decided to support such institutions, it must distribute the funds on the basis of relevant considerations, and without creating distinctions that violate fundamental rights. Therefore, it was held that the state was not permitted to discriminate against the Progressive Movement’s private conversion institutes on the basis of their religious views. It was held that such a distinction violated the right of the Reform conversion institutes to freedom of religion. As President D. Beinisch wrote:

It would appear undeniable that, in practice, the state does not wish to support the Petitioner because it has a religious outlook that is different from the one the state chooses to advance.  That is an irrelevant criterion for funding, on its face.  Furthermore, by doing so, the government shows preference for one religious outlook over another, consequently causing inappropriate damage in the proper "free market" of religious views that should be preserved.  This leads to the conclusion that the criteria for funding stand in contradiction to the state's duty to protect the religious freedom of the Petitioner, and discriminate on the basis of its religious outlook [ibid., para. 16].

            The above also applies to the matter before us. Just as the state may not discriminate among entities on the basis of their religious beliefs, so it cannot discriminate among them on the basis of their political statements. Both the first form of discrimination and the second form of discrimination constitute a violation of a constitutional right. Both harm the “free marketplace” of ideas. In the absence of relevant justification related to the nature of the supported activity, the state’s duty to maintain neutrality in exercising its regulatory authority does not permit it to distinguish among entities seeking support due to the manner by which they realize their right to freedom of expression. It must be emphasized that the state may support one type of activity but not another, It may promote its policy, inter alia, by providing financial support for matters that are the subjects of public debate. But, having decided to support an activity – no matter how hotly debated – the state may not distinguish among entities involved in such activity on the basis of considerations that are not relevant to the purpose of the support and that might violate constitutional rights. Thus, for example, the state may allocate funds in support of Torah study institutes, a matter that may be the subject of public debate (see: the Shavei Shomron case; the Masorti Movement case), but it may not distinguish among institutions operating in that area without relevant justification related to the purpose of the support. It cannot, for example, distinguish between two otherwise identical institutions, even in terms of their religious merits, simply because one of the institutions publicly expresses support for the political views of the ruling party or of a coalition partner, while the other does not.

22.       An example of this distinction can be found in Agency for International Development. v. Alliance for Open Society International, Inc., 133 S. Ct. 2321 (2013). In that decision, the United States Supreme Court addressed a law that provided generous federal grants to private agencies working to fight the spread of the HIV virus and AIDS. The law required that in order to receive the funding, the supported agency must adopt a policy explicitly opposing prostitution. The United States Supreme Court held that the restriction violated the constitutional right to free speech. It held that, as a rule, the fact that activity does not receive funding does not violate the rights of an entity that does not receive support. However, in order for a restriction related to the applicant’s views to be valid, it must be relevant to the funding program, and must be related to the funded activity itself. A restriction that lies “outside the contours” of the program in a manner that “leverages” the grant in order to interfere in the marketplace of ideas may not stand up to constitutional review. As Chief Justice Roberts wrote:

[T]he relevant distinction that has emerged from our cases is between conditions that define the limits of the government spending program – those that specify the activities Congress wants to subsidize – and conditions that seek to leverage funding to regulate speech outside the contours of the program itself [ibid., p. 2328].

            The Court further held that the said restriction conditioning the grant upon adopting the government’s position on prostitution did not meet the tests of constitutionality. It was held that such a restriction was not relevant to the definition of the nature of the supported activity – in this case, the fight against AIDS/HIV – and was intended to influence those receiving the funding in a manner unrelated to that fight. As Chief Justice Roberts explains:

By demanding that funding recipients adopt – as their own – the Government's view on an issue of public concern, the condition by its very nature affects “protected conduct outside the scope of the federally funded program”… A recipient cannot avow the belief dictated by the Policy Requirement when spending Leadership Act funds, and then turn around and assert a contrary belief, or claim neutrality, when participating in activities on its own time and dime. By requiring recipients to profess a specific belief, the Policy Requirement goes beyond defining the limits of the federally funded program to defining the recipient [ibid., p.2330].      

            That is consistent with the view of this Court in the cases cited above. In my opinion, they also serve to show that the Law’s administrative sanction substantially violates freedom of political expression. In sec. 4, the Boycott Law authorizes the Minister of Finance to establish that a person who publishes a call for a boycott against the State of Israel will not receive various governmental benefits. The Law does not limit its scope to those activities and forms of support that are relevant to the boycott phenomenon or to promoting the international standing of the State of Israel. The general authorization that it grants for denying support to any entity that calls for imposing a boycott against the State of Israel, and primarily, to any entity that calls for the imposing of a boycott against a person by reason of his connection to the Area, permits a priori consideration of the political views of the funded entity, divorced of any connection to the purpose of the actual grant. This problem can be demonstrated by means of sec. 4(a)(2) of the Boycott Law. This section authorizes the Minister of Finance, with the consent of the Minister of Culture and Sports, to decide that anyone calling for a boycott against the State of Israel will not be entitled to receive funds granted under sec. 9 of the Regulation of Sports Betting Law, 5727-1967 (hereinafter: the Regulation of Sports Betting Law). Section 9 of the Regulation of Sports Betting Law establishes that monies distributed thereunder be used “to promote and develop physical culture, physical education, and sports in Israel”. The subsections of sec. 9(b1) of that law itemize the particular details of that purpose, establishing that grant funds be used, inter alia, to support “the basic infrastructures of sports”; “sports associations and clubs”; “women’s sports and sports in areas of national priority”; and to support “popular amateur sports”. The declared political view of a funded entity is a consideration that deviates from the above criteria. The fact that a particular entity calls, for example, for a boycott of certain products produced in the Area is irrelevant to its contribution “to promote and develop physical culture, physical education, and sports in Israel”. It is a consideration that concerns the funded entity and not the nature of its funded activities. Taking account of that consideration in the context of the Regulation of Sports Betting Law violates the funded entity’s freedom of expression and forces it to refrain from realizing its constitutional rights in areas that are unconnected to its funded activities. As earlier noted, taking that consideration into account may even lead to discrimination against those who call for a boycott against the State of Israel or the Area as opposed to those that hold other political views, even if they choose to express those views by means of calling for imposing a boycott. This situation can be compared, for example, to denying benefits to entities that have a particular religious character.

23.       It is fitting in this context to draw a distinction between calls for a boycott against the State of Israel and calls for a boycott against the Area. The question of Israeli control over the Area is a subject of heated political debate (see para. 9 above, and the references cited there). Calling for a boycott against the Area is “within” the Israeli political debate, and is not comparable to calls for a boycott of the entire state. Therefore, one might be of the opinion that while the consideration of preventing a boycott of the Area is irrelevant to the purposes of some of the types of funding mentioned in the Boycott Law, the consideration of preventing a boycott of the State of Israel might be deemed relevant to such funding. That relevance is grounded upon the general principle that a democratic state may defend itself against those who seek to do it harm. Indeed, in the past, this Court has recognized the authority of administrative authorities to weigh general public considerations, even when such considerations are not directly connected to the exercised authority. Thus, for example, in HCJ 612/81 Shabo v. Minister of Finance, IsrSC 36 (4) 296, 301 (1982), the Court held that the Director of Customs and Excise may weigh road-safety concerns as “general public considerations”. In AAA 8840/09 Bauer v. National Planning and Building Board Appeals Subcommittee (published in Nevo) (Sept. 11, 2014) para. 13 per H. Melcer J., it was held that planning boards could take account of considerations of harming religious sentiments as a “general consideration”. It has also been held that planning authorities may weigh general considerations “of protection of the rule of law and deterrence of criminal behavior” (AAA 9057/09 Inger v. Hashmura Ltd. (published in Nevo) (Oct. 20, 2010) per U. Vogelman J.), and that in declaring a particular phenomenon to be a “natural disaster”, the Minister of Agriculture may weigh, as a “general consideration”, the financial burden on the state treasury (HCJ 3627/92 Israel Fruit Growers Association Ltd. v. Government of Israel, IsrSC 47 (3) 387, 391 (1993)). In the instant case, no significant question of authority arises, inasmuch as the consideration of preventing boycotts is explicit in the Boycott Law. However, by analogy to the above decisions, one might take the view that the consideration of preventing a boycott against the State of Israel may be a general consideration that would justify withholding governmental support from those who frontally oppose the state. That general consideration is not extraneous to any provision authorizing administrative agencies to grant support, inasmuch as it derives from the general principle that permits the state to refrain from directly supporting those who oppose it.

24.       My colleague Justice Melcer is of the opinion that the administrative sanctions in the Boycott Law are consistent with “the power of the state to deny benefits from those who use them against the state” (para. 45 of his opinion). My colleague does not distinguish in this regard between a boycott against the state and a boycott against the Area. He basis that position on HCJ 10104/04 Peace Now – Shaal Educational Enterprises v. Ruth Yosef, Supervisor of Jewish Settlement in Judea and Samaria, IsrSC 61 (2) 93 (2006) (hereinafter: the Peace Now case), which addressed the question of whether a local council in Judea and Samaria could use its budget in order to oppose the implementation of the Disengagement Plan. The opinion of the Court was divided in that case. Deputy President Cheshin, who was in the minority in this matter, was of the opinion that local councils, as statutory bodies, were not authorized to act against the Disengagement Plan, inasmuch as, in his opinion, that plan would not directly affect the municipal welfare of the residents of the local councils. Justice Cheshin further held that even if the local councils were authorized to do so, they could not use state funding for that purpose. Justice Cheshin held that a local council’s use of state funds in order to oppose governmental policy “is inconsistent with the fairness doctrine and the principles of good government”. In doing so, Justice Cheshin adopted the view of Justice D. Dorner in HCJ 2838/95 Greenberg v. Katzrin Local Council, IsrSC 53 (1) 1, 23 (1997) (see the Peace Now case, p. 186, para. 39, per M. Cheshin DP), in which Justice Dorner noted that “indeed, the possibility of protesting against the Government’s policy is vital to a democratic state, but it is not within the scope of authority of local councils”. Thus, Justice Cheshin’s opinion in the Peace Now case was based upon the fact that the authorities that were the subject of the opinion were statutory bodies that are subject to the principle of administrative legality. That is the general context of the decision, which primarily focused upon the question of authority. The opinion of Justice D. Beinisch in the Peace Now case clarifies in this regard:

In my view, we must distinguish between the clear interests of the residents in regard to their continued residence and life in the area of the local council and the interest of the local council in this regard. A decision to dissolve the local council may be of decisive importance in the lives of its residents. They may, of course, adopt every lawful democratic means at their disposal to fight the Government’s decision in regard to the local council. However, the local council itself was established in order to realize the purposes that inhere in the powers granted to it by law, and therefore, its continued existence as a local council is not, in my view, an independent purpose [ibid., p. 200, para. 3, per D. Beinisch J].

            Such reasoning is not relevant to private entities, and they – and not administrative agencies – are the objects of the Boycott Law. In regard to private entities, the legality principle applies in reverse (and cf: LCrimA 10141/09 Ben Haim v. State of Israel (published in Nevo) (March 6, 2012) para. 3 of my opinion). Individuals in a society, as opposed to local councils, are not part of the government. Their opposition to its policies does not violate the rules of good governance. It does not give rise to the problem inherent in an action of an organ against the body to which it belongs. Moreover, as opposed to a local council, individuals enjoy the constitutional right to freedom of expression in its full scope. While the role of governmental agencies is, in the sphere of their authority, to ensure the freedom of speech to the members of the society (sec. 11 of Basic Law: Human Dignity and Liberty), the members of that society are the subjects of that right, not its defenders. Therefore, even if it is possible to countenance a certain limitation upon funding those who call for a boycott against the State of Israel, that restriction cannot be based upon the reasoning of the Peace Now case. That is not to say that it would not be proper to recognize a general principle that, in certain cases,  would justify refraining from granting support to those who call for action against the supporting body – in this case, the state. Where a boycott against the State of Israel is concerned, such a justification may be derived from the principle of defensive democracy, which I shall address presently. However, inasmuch as the Boycott Law is directed at private entities, and because the Law substantially infringes freedom of political expression, that infringement must pass the tests of the Limitation Clause and be justified by a substantial interest in preventing nearly certain, substantial harm to an important public interest.

25.       One might further add that the tortious and administrative sanctions of the Law, which impede those who call for a boycott against the State of Israel, and particularly those who call for a boycott against the Area, are inconsistent with the principle of pluralism. This principle, which has been recognized in the case-law of this Court as an expression of the principle of equality (the Progressive Judaism case, para. 17), supports granting a voice to the entire spectrum of views and positions of society. Pluralism is tightly bound to freedom of expression. Without freedom of expression, there can be no pluralism. Without granting the possibility of expressing different opinions, including extreme positions that are not at the heart of the consensus, pluralism and the democratic process suffer. In this regard, the words of Justice I. Zamir in the Masorti Movement case are apt:

In a democratic society, different groups among the public, including spurned minorities, have the right to express themselves in the fields of culture, religion and tradition, each in its own way, and each according to its own beliefs. Moreover, it is advantageous to society that there be a variety of beliefs, lifestyles and institutions.  Variety enriches. It expresses vitality; it contributes to the improvement of life; it gives practical meaning to freedom. Freedom is choice. Without the possibility of choice between alternative paths, the freedom to choose one’s path is mere rhetoric. This is the heart of pluralism, which is a vital, central element of democratic society not only in politics, but also in culture and religion: a variety of paths and the possibility to choose among them [ibid., pp. 375-376].

            And see Justice E. Arbel in the Jewish Renaissance case:

The assumption is that pluralism is a basic, vital element of proper democratic life, because it is variety that expresses democracy in practice. A democratic state respects all of its streams, views and differences, grants them the space to live and thrive, and even supports them equally. A democratic society cannot merely suffice in providing the possibility for allowing different streams to exist; it must grant equal financial support to all of them. This does not mean that the state must support any particular activity. But once the state has decided to support a certain activity, it cannot discriminate against a particular group that performs that activity simply because of its identification with a particular stream [ibid., para. 90].

26.       Additionally, I would note that, in my opinion, no analogy can be drawn in this matter fron sec. 3B of the Mandatory Tenders Law, 5752-1992, to which my colleague Justice Melcer referred. That provision authorizes the Government to prevent governmental agencies from transacting with “a foreign state” or “a foreign supplier” “for reasons of foreign policy”. As opposed to that provision, the Boycott Law is not limited to reasons of foreign policy. It also applies, and perhaps primarily applies, to the residents and citizens of the state. It acts to prevent boycotting of the State of Israel, as well as boycotting of the Area. Of course, in regard to the residents and citizens of the state – who are members of Israeli political society and who enjoy the full scope of the constitutional right to freedom of expression – a significantly more substantial justification is required than that needed to categorically restrict the possibility of certain foreign actors to participate in tenders (and in regard to the consideration of a person being a foreigner, cf., for example: HCJ 5627/02 Saif v. Government Press Office, IsrSC 58 (5) 70, 75 (2004) [English trans: http://versa.cardozo.yu.edu/opinions/saif-v-government-press-office]; and on the different treatment due to an enemy detained by the state as opposed to an enemy operating from a foreign state: CFH 5698/11 State of Israel v. Dirani (published in Nevo) (Jan. 15, 2015)).

27.       We thus see that the Boycott Law prohibits the voicing of statements based on their content. It does so by means of ex post harm to a person expressing himself in a manner prohibited by the Law, by imposing civil and “administrative” sanctions. Along with this, the Law also comprises an ex ante harm that is expressed in the deterrent, chilling effect created by its provisions. Freedom of expression can, of course, be infringed by restricting it in advance. That is the case, for example, with censorship (and cf., for example: HCJ 4804/94 Station Film Co. Ltd. v. Film Review Board, IsrSC 50 (5) 661 (1997) [English trans: http://versa.cardozo.yu.edu/opinions/station-film-co-v-film-review-board]; the Bakri case), when holding a demonstration is prohibited (see, e.g: HCJ 153/83 Levi v. Commander of the Southern Police District, IsrSC 38 (2) 393 (1984)), when posting advertisements is prohibited (e.g: the Indor case, p. 164), or when voicing statements in any other way is prohibited (cf., for example: HCJ 2194/06 Shinui - The Center Party v. Chairman of the Central Elections Committee (published in Nevo) (June 28, 2006); the Mifkad Haleumi case; HCJ 7192/08 Hamateh Lehatzalat Ha’am Veha’aretz v. Second Authority for Television and Radio (Oct. 10, 2009)). It is customarily said that prior restraint of speech has a “chilling effect” on freedom of expression. However, freedom of expression can be indirectly harmed by imposing post facto burdens on the speaker or deterring expression. Such deterrence may cause those who might otherwise express themselves in a particular way to refrain from doing so in fear of being harmed. In this manner, potential speakers are harmed, the marketplace of ideas is impoverished, and democracy suffers. Justice A. Barak addressed the distinction between prior restraint of freedom of expression and ex post burdening of the speaker in HCJ 806/88 Universal City Studios Inc. v. Film and Theater Review Board, IsrSC 43 (2) 22 (1989):

The restriction of freedom of expression takes various forms. The most severe restrictions are those which prevent the expression in advance. An a priori ban prevents publication. The damage caused to freedom of expression is immediate. A less severe restriction is the criminal or civil liability of the person uttering the expression. The expression sees the light of day, but the person uttering the expression bears the responsibility “post-facto”. If the a priori prohibition “freezes” the expression, then after-the-fact responsibility “chills” it… [ibid., p. 35].

            The chilling effect’s infringement of freedom of expression has been recognized in the decisions of this Court. For example, it was held that a chilling effect upon freedom of expression may be relevant to establishing the extent of liability under the Prohibition of Defamation Law, 5725–1965 (hereinafter: the Prohibition of Defamation Law) and the application of the defenses that it provides, and may affect the interpretation of the provisions of the law (see, in regard to the defenses under that law, e.g., LCA 3614/97 Avi Yitzchak, Adv. v. Israel News Co. Ltd., IsrSC 53 (1) 62, 71-72 (1998); LCA 1104/07 Advocate Hir v. Advocate Gil, IsrSC 63 (2) 115, 517-518 (2009); CFH 2121/12 Ploni v. Dr. Dayan Urbach (pubished in Nevo) (Sept. 18, 2014) paras. 38, 50, 55, 78 and 83 per A. Grunis P.) (hereinafter: the Dayan case); the Ben Gvir case, para. 33, per E. Rivlin J. (dissenting). On the interpretation of sec. 4 of the Prohibition of Defamation Law, see: CA 8345/08 Ben Natan, Adv. v. Bakri (published in Nevo) (July 27, 2011), paras. 45-54 of my opinion, and para. 8 of the opinion of I. Amit J.). In regard to calculating the amount of damages, see: CA 89/04 Dr. Nudelman v. Scharansky (pubished in Nevo) (Aug. 4, 2008) para. 61; CA 5845/05 Hoter-Yishai v. Gilat (publlished in Nevo) (Sept. 20, 2007) per E. Rivlin DP (dissenting on the matter of damages)). Also, in his dissent in HCJ 6706/14 MK Zoabi v. Knesset Ethics Committee (published in Nevo) (Feb. 10, 2015) para. 15, (hereinafter: the Zoabi case), S. Joubran J. expressed his opinion that in a disciplinary hearing of a Knesset member for statements made by that member, the Ethics Committee must consider the chilling effect that may result from its decision. The minority in CrimFH 7383/08 Ungerfeld v. State of Israel (published in Nevo) (July 11, 2011) para. 29 (hereinafter: the Ungerfeld case), expressed the view that the possibility of a chilling effect is a relevant consideration in interpreting the offense of insulting a public servant under sec. 288 of the Penal Law, 5737-1977. In addressing the danger of a chilling effect on political expression as a result of imposing sanctions on a speaker, Deputy President E. Rivlin aptly wrote (concerning criminal sanctions in the Ungerfeld case):

Criticism directed against governmental policy, even if expressed before a public servant, is at the heart of freedom of expression. Its contribution to democracy, to enriching the marketplace of ideas, to the search for truth, and to the advancement of the principle of individual self-fulfillment is significant and central. It is also important to the very ensuring of the proper and appropriate functioning of government. A chilling effect upon criticism of the government would be destructive to the democratic system [ibid., para 29, per E. Rivlin DP].

28.       The chilling-effect doctrine has also earned a place in American law. In a long line of decisions, the United States Supreme Court recognized the possibility of violating freedom of expression through the creating of a chilling effect (see, e.g: Frederick Schauer, “Fear, Risk and the First Amendment: Unraveling the  ‘Chilling Effect’,” 58 B.U. L. Rev. 685 (1978) (hereinafter: Schauer); Notes, “The Chilling Effect in Constitutional Law,” 69 Colum. L. Rev. 808 (1969); Monica Youn, “The Chilling Effect and the Problem of Private Action,” 66 Vand. L. Rev. 1473 (2013); Leslie Kendrick, “Speech, Intent, and the Chilling Effect,” 54 Wm. & Mary L. Rev. 1633 (2013)).

29.       In my opinion, both aspects of the Boycott Law – the tortious and the administrative – may create a substantial chilling effect. As regards the tortious sanctions, the matter would appear to be self-evident. Imposing tortious liability for expression increases the “price” of expression in the estimation of the potential speaker. It adds an additional consideration – tortious liability – to the relevant set of considerations. This additional possible cost may cause a lessening of motivation to speak out, and may even cause certain potential speakers to entirely refrain from expressing themselves in “prohibited” ways. In practice, this deterrent effect is one of the objectives of tort law. Israel Gilead addressed this effect in his book Tort Law: Limits of Liability (2012) (Hebrew):

Imposing tortious liability on a wrongdoer is, by its nature, usually accompanied by a deterrent result. Deterrence, in this regard, is a change in the patterns of conduct of one who is influenced by the tortious liability.

First and foremost, deterrence affects potential wrongdoers, in other words, those involved in activity that results or may result in future liability. Imposing liability in tort, and the associated discomfort, are a sort of notice to anyone who may undertake such activity that he will bear the burden of any damage that the tortious activity may cause. That notice raises the price of the activity, inasmuch as bearing the cost of the damage for which liability will be imposed is added to the cost of the activity. Making the activity more expensive may lead to all of the following: a cessation of the activity if and to the extent that increased cost makes it not worthwhile for the potential wrongdoer; a change in the activity so that the cost of liability will be lessened; attempts at risk protection through of insurance or other means [ibid., pp. 45-46].

            The presence of a chilling effect in this case is not at all speculative. The creation of a chilling effect is the primary means chosen by the legislature for achieving the Law’s purpose. The state even addressed this in its response to the petition. It noted in regard to the “rational connection” that “it is clear that creating a cause of action in tort and imposing administrative sanctions on those who call for a boycott against people for their connection to the State of Israel or a area under the control of the State of Israel will deter such actors from acting to impose such a boycott, and will make the phenomenon less common”.

30.       My colleague Justice Melcer proposed that the chilling effect be reduced by means of narrow construction that would somewhat limit the boundaries of the tort under sec. 2(a) of the Law. To that end, my colleague proposed that the realization of the “boycott tort” be contingent upon actual damage; the existence of a causal connection between the tort and the damage; awareness of the reasonable possibility that the call and the circumstances of its publication would lead to the imposition of a boycott; and reserving the right to bring suit only to the direct victim of the tort. In my opinion, that construction, narrow as it may be, does not significantly reduce the Law’s chilling effect. The above “restricting” provisions are, as my colleague also notes, part of general tort law. They apply, as a rule, to most torts. Inasmuch as tort law is understood as promoting deterrence, and capable, as such, of directing human conduct, I do not think that applying the “regular” restrictions of tort law to the boycott tort is sufficient to significantly lessen the Law’s chilling effect.

            Nonetheless, I wish to note that I agree with my colleague’s proposed interpretation that the Law’s requirement of a “reasonable possibility that the call will lead to a boycott” (sec. 2(a)) joins with the requirement of the regular causal connection. It adds an additional requirement to the existence of general causation, which examines “whether the negligence was likely to cause damage of the type incurred by the claimant” (CFH 4693/05 Carmel-Haifa Hospital v. Maloul (published in Nevo) (Aug. 29, 2010), para. 128 per Naor J.). The potential causal connection does not replace the requirement for the standard causal connection. Justice Naor addressed this in regard to a negligence suit for exposure to poisonous substances (CA 1639/01 Kibbutz Maayan Zvi v. Krishov (published in Nevo) (June 2, 2004):

We have addressed the traditional rule that a person is held liable only for the harm that he caused: accordingly, when the question of the potential factual causation arises, the claimant must show not only potential factual causation (the exposure was capable of causing illness), but also specific factual causation (the exposure connected to the defendant caused the claimant’s illness) [ibid., para. 14 per M. Naor J].

31.       Another reason why I believe that the restrictive interpretation proposed by my colleague Justice Melcer is insufficient is the chilling effect caused by the very existence of the boycott tort. The existence of a tort of calling for a boycott, regardless of its scope, exposes those who call for a boycott to the possibility of a civil suit. That possibility creates uncertainty by its very nature. Indeed, a legal proceeding is not a sterile laboratory – “all litigation, and indeed the entire legal process, is surrounded by uncertainty” (Schauer, p. 687). A person calling for a boycott may have difficulty in assessing the results of the possible proceedings that may await him. That uncertainty increases the cost of his expression. It comprises the theoretical possibility of the imposition of liability where it is unjustified. It exposes the speaker to the possibility of bearing the heavy financial and emotional costs of litigation. That exposure, itself, imposes a burden upon potential speakers in a manner that creates a chilling effect. In this regard, Justice S. Joubran (dissenting) aptly noted in HCJ 1213/10 Nir v. Knesset (Feb. 23, 2012):

It should be noted in this regard that, in many cases, even if some law is not enforced, a law can create a chilling effect upon the performance of a particular action, and indirectly violate human rights… [ibid., para. 16 per S. Joubran J].

            And see the relevant statement of Justice Scalia in Virginia v. Hicks, 539 U.S. 11 (2003), which addressed the constitutionality of a policy that prohibited trespass on certain streets:

Many persons, rather than undertake the considerable burden (and sometimes risk) of vindicating their rights through case-by-case litigation, will choose simply to abstain from protected speech… harming not only themselves but society as a whole, which is deprived of an uninhibited marketplace of ideas [ibid., p. 119].

            A relevant example for our case can be found in Thornhill v. Alabama, 310 U.S. 88 (1940). In that case from the past, the United States Supreme Court considered an Alabama law that prohibited “loitering or picketing” near a place of business with the intent of influencing others to refrain from purchasing its products or to conduct business with it. In that, the law addressed in the Thornhill case is not unlike the one before us, inasmuch as it, too, concerns expression – demonstrating – in order to persuade a person to refrain from commercial trade with another, as in the case of a boycott. The United State Supreme Court found the law to be unconstitutional for violating freedom of political speech. The Court explained that the violation of freedom of speech derived from the very existence of the law itself, as just the possibility of imposing sanctions upon speech could deter a person from speaking, much as the actions of a censor. Justice Murphy, delivering the opinion of the Court, wrote:

The existence of such a statute… results in a continuous and pervasive restraint on all freedom of discussion that might reasonably be regarded as within its purview. It is not any less effective or, if the restraint is not permissible, less pernicious than the restraint on freedom of discussion imposed by the threat of censorship [ibid., p. 98].

            On the chilling effect created by imposing tortious liability, also see, e.g: Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974); N.Y. Times Co. v. Sullivan, 376 U.S. 254, 279 (1964).

32.       Those words are appropriate to the three types of tort sanctions in sec. 2 of the Boycott Law. I agree with my colleague Justice Melcer’s statement that “to the extent that we find that sec. 2(a) of the law is constitutional, sec. 2(b) of the Law will, accordingly, also be constitutional” (para. 41 of his opinion). Therefore, the conclusion in regard to the violation of freedom of expression by sec. 2(a), even under the “narrow” interpretation, is relevant to sec. 2(b), as well. Moreover, clearly the chilling effect created by the Law is particularly significant in the case of exemplary damages without proof of damage. On this point, I agree with my colleague’s conclusion that sec. 2(c) of the Law does not meet the proportionality tests. I also agree with my colleague’s reasoning that damages in the absence of proof of damage are an “exception” that deviates from the basic rules of civil law, and comprise an element of punitive fine. For these reasons, I am of the opinion that sec. 2(c) must be struck down.

            The administrative sanctions may also have a chilling effect of freedom of expression. The source of that effect is the possible fear of groups entitled to support to express themselves in the manner prohibited by the Law out of a fear of being denied support. The broad application of the administrative sanction creates a real danger of a broad violation of political views.

33.       We have addressed the Law’s infringement of freedom of expression. It is now time to evaluate its benefits.

 

Proportionality “Stricto Sensu” – The Social Benefit Aspect

34.       The Boycott Law comprises several purposes. One clear purpose, as its title testifies, is “prevention of harm to the State of Israel by means of boycott”. One aspect of this purpose is to be found in the desire to protect the citizens and residents of the state against economic, cultural, and academic harm. It would appear that the Law is primarily directed at combatting the BDS movement, which my colleague Justice Melcer addressed at length. Indeed, the damage caused by the boycott phenomenon is not inconsiderable (see, e.g: Lior A. Brinn, “The Israeli Anti-Boycott Law: Balancing the Need for National Legitimacy Against the Rights of Dissenting Individuals,” 38 Brooklyn J. Int'l L. 345, 352 (2012); Marc A. Greendorfer, “The BDS Movement: That Which We Call a Foreign Boycott, By Any Other Name, is Still Illegal,” (2015) (Available at SSRN: http://ssrn.com/abstract=2531130) (hereinafter: Greendorfer)). Mitigating the damage of this phenomenon is a proper and important purpose.

35.       However, it should be noted that the Boycott Law is an Israeli municipal law. Its sanctions are therefore intended primarily to influence calls for boycott “performed” in Israel. This is primarily so in regard to the Law’s tort sanctions. The rules of choice of law in tort law establish that the applicable law in regard to torts is the place of the performance of the tort – lex loci delicti (CA 1432/03 Yinon Food Products Manufacture and Marketing Ltd v. Kara'an, IsrSC 59 (1) 345, 372-374 (2004) (hereinafter: the Yinon case); CFH 4655/09 Schaller v. Uviner (published in Nevo) (Oct. 25, 2011) para. 8, per Rivlin DP). Therefore, as a rule, the tort law of the State of Israel – including the Boycott Law – apply to “boycott torts” perpetrated in Israel. Of course, there are several exceptions to this rule. In the Yinon case, it was held that “when the place in which the tort was perpetrated is a fortuitous factor, lacking any real connection to the event” it is possible to apply tort law that is not the lex loci delicti (the Yinon case, p. 374). Moreover, it is not inconceivable that the development of additional exceptions may, under certain circumstances, allow for the application of Israeli law to torts that affect the State of Israel (cf. the “effect doctrine” that might make it possible, under certain circumstances, to apply Israeli law to acts occurring outside the borders of the state if their perpetration negatively impacts the state. (On the application of this doctrine on restrictive trade practices, see, e.g: Michal Gal, “Extra-territorial Application of Antitrust – The Case of a Small Economy (Israel),” New York University Law and Economics Working Papers No. 09-03 (2009)). Inasmuch as we may assume that the “tortious” effect of the Law will be more focused upon its influence on internal Israeli political discourse, and less upon its influence on international calls for boycotting Israel or the Area, this would somewhat reduce the Law’s potential contribution to the fight against international boycotts and the BDS movement. In addition, the arguments presented by the parties before us show that the “type” of boycott relevant to the internal Israeli discourse is, primarily, a boycott against the Area rather than a boycott against the State of Israel in its entirety. The result is that a call for a boycott against the Area will, it would seem, be prohibited when performed in Israel, and of a type that would be hard to prevent by means of the Law if it were performed outside on the state. This is a problematic result wherein protests that are permissible in international discourse would be prohibited internally, and a form of protest recognized in international discourse will be prohibited precisely to those seeking to advance their political views “internally”, within our political public rather than externally.

36.       Another aspect of the purpose of preventing harm to the State of Israel concerns the principle of defensive democracy. The declarations of some of those calling for a boycott of the State of Israel express a rejection of the state as such. Those speakers do not act within the Israeli political discourse, but rather seek to deny it. Some find such characteristics in the BDS movement. Greendorfer addresses this:

The BDS Movement is not a grass roots movement, nor is it a peace movement. In charitable terms, the BDS Movement is simply the latest iteration of the longstanding Arab League mandate to eliminate the only non-Arab state from the Middle East. In less charitable terms, the BDS Movement is the non-violent propaganda arm of the modern Islamist terror movement [ibid., p. 35].

            These characteristics are not unique to the BDS movement. Greendorfer is of the opinion that some of the global players calling for a boycott of Israel share those views. “While the names change, the objectives of many such groups remain the same: the demonization, marginalization and destruction of Israel” (ibid., p. 29).

            Defense against those who oppose the state is a proper and important purpose. Moreover, the very call for a boycott of the State of Israel, regardless of the objectives and characteristics of the caller, is a serious phenomenon that the state cannot ignore. I am of the opinion that the state may have a justified interest in restricting such calls. That interest can be premised upon the principle of defensive democracy. That principle permits the restricting of fundamental rights – including freedom of political speech, and even the right to vote and to run for office – in order to protect the fundamental principles of the democratic state (see, e.g: in EA 1/65 Yeredor v. Chairman of the Central Elections Committee for the Sixth Knesset, IsrSC 19 (3) 365, 390 (1965); EDA 11280/02 Central Elections Committee for the Sixteenth Knesset v. Tibi, IsrSC 57 (4) 1, 66 (2003) (hereinafter: the Tibi case); HCJ 6339/05 Matar v. IDF Commander in the Gaza Strip (published in Nevo) (Aug. 1, 2005) para. 10; and cf. the Zoabi case, which held that a call by a member of Knesset for the imposition of a blockade against the State of Israel justifies imposing disciplinary sanctions of suspension from plenum and committee sessions. And see: Barak Medina & Ilan Saban, “Widening the Gap? On the Freedom of a Knesset Member to Oppose the Occupation (following HCJ 11225/03 Beshara v. AG),” 37 Mishpatim (Hebrew University Law Review) 219, 229 (2007) (Hebrew) (hereinafter: Medina & Saban, “Widening the Gap”). Justice A. Barak addressed this in EA 2/84 Neiman v. Chairman of the Central Elections Committee for the Eleventh Knesset, IsrSC 39 (2) 225 (1985), IsrSJ 8, 83 [English trans: http://versa.cardozo.yu.edu/opinions/neiman-v-chairman-elections-committee]:

On the one hand, the fundamental right to political expression is not to be denied merely because of the nature of the political view. Quite the contrary, the power of democracy lies in the freedom it allows to express opinions, however offensive to others. On the other hand, democracy is allowed to protect itself, and it need not commit suicide so as to prove its vitality [ibid., p. 315, (English trans: para. 12)].

37.       However, the purpose concerning defensive democracy does not apply in the same manner and to the same extent to all the various forms of expression that fall within the compass of the Boycott Law. While one can accommodate applying that principle to calls for a boycott against the State of Israel per se, it is hard to harmonize that principle of defensive democracy with calls for a boycott only against the Area. A boycott of the Area is not directed at denying the State of Israel’s right to exist, but rather expresses opposition to one of the “expressions of its policy”. Israel’s policy in regard to the Area is not one of the fundamental characteristics of the state, like it Jewish character or its democratic regime, and opposing that policy is not equivalent to opposing the state’s right to exist. One can learn something about this from the decision in the Tibi case, in which the Court did not approve the decision of the Central Elections Committee to bar Knesset Member Tibi from participating in the elections. In so doing, it was held that MK Tibi’s statements reflecting non-violent opposition to the “occupation” did not justify disallowing his candidacy. President A. Barak wrote:

Knesset Member Tibi does not deny that he opposes the occupation and envisions its end. At the same time, he expressly and unambiguously declares that the opposition that he supports is not armed struggle, but rather non-militant, popular resistance. That is a form of opposition that does not involve the use of weapons. Indeed, the evidence before us does not reveal expressions or actions that evoke support for the armed struggle against the State of Israel…

For these reasons, the decision of the Elections Committee disallowing Knesset Member Tibi’s participation in the elections cannot be approved [ibid., pp. 49-50].

            I am of the opinion that, as a rule, great care should be taken in making recourse to the “defensive democracy” principle as justification for violating freedom of political expression. “Defensive democracy” draws rigid lines between legitimate and illegitimate views – between those views that are part of the political discourse and those that should properly remain outside of it. Drawing those lines is no easy task. “If the line is drawn too far, democracy will not endure, and to the regret of its supporters, it will collapse. But if the line is drawn too close, the apple of its eye will suffer, and those who cherish it will no longer recognize it. The resilience of the state in which democracy abides makes a decisive contribution to deciding the location of the borderline. The stronger the state, the further away the line, and vice versa” (EA 2600/99 Erlich v. Chairman of the Central Elections Committee, IsrSC 53 (3) 38, 48 (1999) per Y. Kedmi J). Restricting calls for boycott against the entirety of the State of Israel infringes freedom of expression. But such calls reside in a “gray area” that may justify their restriction in order to protect the state’s power to defend itself against those who seek to do it harm. However, calls for boycotting the Area are clearly located within the boundaries of legitimate democratic discourse. Calling upon the principle of defensive democracy in order to infringe non-violent political expression against a particular state policy is unacceptable.

38.       Another proper purpose grounding the Boycott Law is the prevention of discrimination. Calling for a boycott is not merely an expression of an opinion. Calling for a boycott is a call to action (or, more precisely, to refrain from performing an action) – the imposition of a boycott. Bboycott action harms the objects of the boycott. That harm may not be worthy of the protection of freedom of expression. Thus, clearly, a call for a boycott that would prevent the provision of products or services to publics on the basis of race, or for racist motives, would be deemed wrong. That would also be true for a boycott based upon “religion or religious group, nationality, country of origin, sex, sexual inclination, opinion, political allegiance, personal status, or parenthood”  (sec. 3(a) of the Prohibition of Discrimination in Products, Services and Entry into Places of Entertainment and Public Places Law, 5761-2000 (hereinafter: the Prohibition of Discrimination Law). And see sec. 4 of that law, as well as sec. 12 of the Civil Wrongs Ordinance [New Version]). Indeed, boycotting a person solely by reason of his connection to the State of Israel is a discriminatory act. It is an instance of treating a person differently – ostracizing him – by reason of his belonging to the group of which he is a member. In addition, the boycott that the Law addresses is a “secondary” boycott”. It is not directed at harming the state – for example, by refusing to trade with it – but at harming those who have a “connection” to the state. Such harm, arising from connection or membership, does not relates to the unique characteristics or conduct of the person ostracized. Such harm is particularly severe because a person’s connection to the state (despite the theoretical possibility to emigrate) may be viewed as an immutable characteristic. In that sense, a distinction based upon a connection to a state is comparable to a wrongful distinction based upon “country of origin”, which is included in the list of prohibited distinctions in the Prohibition of Discrimination Law.

39.       The state sought to argue that this reasoning also applied to a call for a boycott against the Area. It argued that calling for a boycott against a person due to his connection to the area is, in practice, discrimination on the basis of place of residence. To its thinking, such discrimination is wrongful, inter alia, because a person’s place of residence is “inherent to a person’s identity”. In this context, it should be noted that place of residence is considered to be “more” given to a person’s choice than connection to his state. In addition, and this is the main point, the Boycott Law does not prohibit discrimination on the basis of place of residence, or even the boycotting of a person due to his place of residence (for bills in that spirit, see: Employment (Equal Opportunities) Bill (Amendment No. 22) (Prohibition of Discrimination due to Place of Residence), 5773-2012, H.H. 499). The Boycott Law only prohibits calling for a boycott due to residence in the Area. Therefore, we are not concerned with “classic” anti-discrimination law, but rather with state intervention in the field of political debate. The attempt to clothe that in the garb of preventing discrimination can only fail. Anti-discrimination law must, by its very nature, be neutral. We cannot countenance a law prohibiting discrimination on the basis of one sexual orientation but not another, or a law prohibiting discrimination against one race while permitting discrimination against another (a certain exception to this is found in the principle of affirmative action, but that principle is justly viewed as promoting equality. See, in this regard, e.g: HCJ 10026 Adalah Legal Center for Arab Minority Rights in Israel v. Prime Minister of Israel, IsrSC 57 (3) 31, 38-40 (2003); HCJ 453/94 Israel Women’s Network v. Government of Israel, IsrSC 48 (5) 501, 516-521 (1994) [English trans: http://versa.cardozo.yu.edu/opinions/israel-women%E2%80%99s-network-v-government-israel]). The Boycott Law does not show such neutrality. Therefore, I am of the opinion that one cannot “muster” the full force of the interest in preventing discrimination in its defense.

            This conclusion does not apply to a boycott directed against the state in its entirety. While the Law does not prohibit boycotting a person by reason of his connection to any state whatsoever, but only in regard to his connection to the State of Israel, the state has a justified right to prevent discrimination between its citizens and residents and those of other countries. However, it must act in an equal, pertinent manner towards the residents of the various areas of the state and the areas under its control. 

 

Proportionality “Stricto Sensu” – A Final Balance

40.       As we have seen, the Boycott Law infringes the right to freedom of expression. We are concerned with the infringement of freedom of political expression, which is at the “core” of the constitutional right to freedom of expression, and constitutes part of the constitutional right to human dignity. This infringement results from the complex of the Law’s provisions as a whole. The tort sanction and the administrative sanction retroactively harm anyone who calls for the imposition of a boycott against the State of Israel or the Area. We are concerned with a severe infringement, as it specifically applies only to those who express political opinions of a certain type. The Boycott Law also infringes freedom of expression by deterring potential speakers from expressing themselves politically. These infringements of freedom of political speech are most severe in regard to calling for boycotting the Area. The “territories issue” is a subject of heated public debate. The viewpoint harmed by the Law is one that is critical of the Government’s policy. Changing the rules of the game in a manner that harms this viewpoint is inconsistent with the state’s obligation to maintain neutrality in regulating the “marketplace of ideas”. In order to justify these infringements of the constitutional right to freedom of political expression, the public benefit of the law must outweigh its harm. That balance must be struck in accordance with the near-certainty formula for significant harm to a public interest. Indeed, the Law does promote some important public purposes. The Boycott Law is expected to lessen the phenomenon of boycotting the State of Israel. That phenomenon inflicts economic, cultural, and academic harm upon the citizens and residents of the state. It challenges the fundamental principles of the state, and it harms equality between the objects of the boycott and those who are not exposed to it. The social benefit of the Law changes in accordance with the character of the specific boycott under consideration. Preventing a boycott against the State of Israel is consistent with the state’s right to defend itself against those who seek to do it harm. That is not the case in regard to a boycott directed at the Area. A boycott of this type concerns an internal Israeli political issue (although various entities around the world also express their opinions on this issue). Such a boycott cannot be deemed as targeting the state per se. It clearly falls within the bounds of legitimate political discourse.

            It would appear that the Law’s infringement of freedom of expression is particularly severe, but I am of the opinion that the method of interpretation that I shall propose below can prevent the extreme result of declaring the Law unconstitutional. Indeed, the Law serves several important purposes, but I do not believe that it is necessary in order to prevent the nearly certain realization of real harm, and that is certainly the case in regard to the Law’s effect in regard to calls for boycotting the Area. The sanctions imposed upon those who express themselves in this manner lead to a severe infringement of freedom of political speech. Lessening the prevalence of such calls yields a social benefit that is significantly less than the benefit inherent in imposing restrictions upon boycotts against the state in its entirety.

 

Consequences of Unconstitutionality

41.       I have considered the possibility that it might be proper to go over the Law with a “blue pencil”, in a manner that would let it ford the constitutionality tests. By this I mean writing out of the Law the words “or an area under its control” in the definition of a “boycott against the State of Israel”. This would abate the Law’s primary harm inherent in intervening in the political discourse by prohibiting calls for boycotting the Area. Eliminating that phrase would remove such boycotts from the Boycott Law. Indeed, “The Court is not liable to order the voidance of the law in its entirety. It may order the law to be split, so that those provisions of the law that suffer from a constitutional defect are declared void, while the other provisions remain valid” HCJ 7052/03 Adalah – The Legal Center for Arab Minority Rights in Israel v. Minister of the Interior, IsrSC 61 (2) 202, 350 per A. Barak P. (2006) [English trans: http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-rights-israel-v-minister-interior]. And see HCJ 9098/01 Ganis v. Ministry of Building and Housing, IsrSC 59 (4) 241, 267-268 (2004) [English trans: http://versa.cardozo.yu.edu/opinions/ganis-v-ministry-building-and-housing] (hereinafter: the Ganis case); Aharon Barak, Interpretation in Law – Constitutional Interpretation, 736 (1994) (hereinafter: Barak, Constitutional Interpretation)). But the blue-pencil rule should not be employed when the result will upset the law’s internal balance and its purposes (HCJ 2605/05 Academic Center of Law and Business, Human Rights Division v. Minister of Finance, IsrSC 63 (2) 545, 638 (2009) [English trans: http://versa.cardozo.yu.edu/opinions/academic-center-law-and-business-v-minister-finance]; Barak, Constitutional Interpretation, p. 737).

42.       Ultimately, I have come to the conclusion that this approach should not be adopted. The reason for this, in my view, is that a similar result can be achieved through interpretation, without having to strike down one of the Law’s provisions. In my view, the interpretive solution is a proportionate one that limits judicial intervention in Knesset legislation, giving appropriate weight to the principle of separation of powers among the branches of government. The Knesset is the legislative branch. But the Court is the authorized interpreter of every piece of legislation. Indeed, “upon the completion of the legislative process, the law leaves the courtyard of the legislature. It lives independently, and its interpretation – in the broad meaning of the term – falls, at the end of the day, to the courts, and to them alone” LCrimA 1127/93 State of Israel v. Klein, IsrSC 48 (3) 485, 501 (1994) per Cheshin J.). And see: HCJ 73/85 Kach Faction v. Shlomo Hillel – Speaker of the Knesset, IsrSC 39 (3) 141, 152 (1985); Aharon Barak, Interpretation in Law – Statutory Interpretation, 57-58 (1993) (hereinafter: Barak, Statutory Interpretation). This approach is expressed in the well-known talmudic story of the “Oven of Akhnai” (TB Bava Metzia 59b). In that story, according to one of the interpretations, God the Legislator “admits” – saying “My sons have defeated Me, My sons have defeated Me”, for even though God was of the opinion that a particular interpretation – that of Rabbi Eliezer – was the correct one, the decision was not His but was in the hands of the Sages. Thus, after the norm is created, its creator loses the power to interpret it. The authorized interpreter may declare that it is not bound by a later interpretation presented by the legislator – “It is not in heaven”).[3]

            Indeed, this Court has held in a long line of decisions that interpretation is the preferred solution for resolving constitutional problems. In this manner, we can resolve the apparent contradiction between the law under examination and the constitutional norm without activating the “doomsday weapon” of declaring total or partial voidance (see, e.g: HCJ 5771/12 Moshe v. Board for Approval of Embryo Carrying Agreements under the Embryo Carrying Agreements (Agreement Authorization & Status of the Newborn Child) Law, 5756-1996 (published in Nevo) (Sept. 18, 2014) para. 5 of the opinion of H. Melcer J. [English trans: http://versa.cardozo.yu.edu/opinions/moshe-v-board-approval-embryo-carrying-agreements-under-embryo-carrying-agreements-law]; HCJ 2311/11 Sabah v. Knesset (published in Nevo) (Sept. 17, 2014) para. 5 of the opinion of H. Melcer J.; LCA 7205/06 Erlich v. Advocate Bartal (published in Nevo) (Aug. 22, 2012) para. 40 of the opinion of H. Melcer J.; HCJ 5113/12 Friedman v. Knesset, (published in Nevo) (Aug. 7, 2012) para. 5 of the opinion of E. Arbel J.). Grounding this approach is the idea that every legislative act is intended to advance – in addition to the concrete purposes that the legislature sought to promote – the fundamental values of our regime. Those fundamental values include the principles of democracy and the protection and advancement of human rights. The practical effect of this approach is expressed in the presumption that “the purpose of every legislative enactment is to realize the principles of the system and advance human rights within it” (HCJ 693/91 Dr. Efrat v. Director of the Polulation Registry in the Ministry of the Interior, IsrSC 47 (1) 749, 763 (1993) per A. Barak J.), and the presumption according to which “the legislature is presumed to be aware of the contents of the Basic Laws and their ramifications for every statute that is enacted subsequently” CrimA 6659/06 Anonymous v. State of Israel, IsrSC 62 (4) 329, 351 (2008) per D. Beinisch P. (hereinafter: the Anonymous case) [English trans: http://versa.cardozo.yu.edu/opinions/v-state-israel-1]).

43.       One of the primary techniques that enable the Court to employ interpretation to remove apparent contradictions between a “regular” law and the provisions of a Basic Law is narrow construction. By this approach, the normative effect of the law is limited such that the semantic field that does not stand in contradiction to the Basic Laws is isolated from among the linguistic possibilities (see, e.g: Aharon Barak, “Judicial Lawmaking,” 13 Mishpatim 25, 30-32 (1983) (Hebrew); the Ganis case, p. 273; HCJ 4562/92  Zandberg v. Broadcasting Authority,  IsrSC. 50 (2) 793, 808 (1996); HCJ 4790/14 Torah Judaism – Agudath Yisrael – Degel HAtorah v. Minister of Religious Affairs (published in Nevo) (Oct. 19, 2014) para. 26 of the opinion of U. Vogelman J; HCJ 3809/08 Association for Civil Rights in Israel v. Israel Police (published in Nevo) (May 28, 2012) para. 15 of the opinion of D. Beinisch P.; Barak, Constitutional Interpretation, p. 737). Justice Barak’s words in the Zandberg case are apt in this regard:

Indeed, the judge must not “sit on his hands” and observe the failure of the legislative purpose. He must interpret the law in accordance with its purpose. At times, that interpretation will lead to the conclusion that the language of the law can be broadly construed. At times – as in the case before us – that interpretation leads to the conclusion that the law must be narrowly construed…

Thus, where the language of the statute is broad, the judge is permitted and competent to give it a narrower meaning, which extends only to some of the options inherent in the language, provided that by doing so he realizes the purpose of the legislation. [ibid., p. 811].

            And see President Barak’s opinion in the Ganis case:

Is the interpreter permitted to narrow the broad language of the text in order to achieve the purpose of the text? When the text provides a legal arrangement that applies to “every person”,”with regard to “every object” or “in all circumstances”, may the interpreter — who wishes to achieve the purpose underlying the text — interpret the text in such a way that it does not apply to a particular class of persons (not “every” person) or such that it does not apply to a particular class of objects (not “every” object) or such that it does not apply in a particular class of circumstances (not “all” circumstances)? The answer given to this question in Israel and in comparative law is yes [ibid., p. 277].

44.       As for the matter before us, sec. 1 of the Boycott Law, which establishes its scope, is the entry way into the Law. Only a boycott that can be deemed “a boycott against the State of Israel”, as defined in that section, allows for the imposition of the Law’s tortious or administrative sanction upon the caller. Establishing the dimensions of the entry way in sec. 1 of the Law is an interpretive endeavor. It is carried out with the interpretive tools. First and foremost, we must address the language of the Law, which is the starting point of any interpretive endeavor. But the language of the Law is not necessarily the end point. The interpretation of the Law must take its purpose into account. In so doing, one must, as noted, address the specific purpose of the Law, but also, as explained above, the fundamental principles of our legal system and the general purpose of protecting human rights.

45.       I am of the opinion that the dimensions of that normative “entry way” in sec. 1 of the Law should be construed narrowly. The interpretation must allow only a certain “type” of boycott to cross the threshold – a general boycott of the State of Israel as such. As opposed to that, we must establish that other “types” of calls for boycott – primarily calls for the boycotting of the Area alone – will not cross the threshold, and not be deemed a “boycott against the State of Israel”.

            Section 1 of the Law instructs as follows:

In this law, "a boycott against the State of Israel" means – deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm.

            Thus we find that in order to enter the compass of the Law, the boycott must be “because of its connection” to the State of Israel, one of its institutions, or an area under its control. The relationship between the “State of Israel” and the institutions and areas mentioned in the definition in sec. 1 is a relationship of belonging. In order for a boycott against a person due to his connection to an institution to enter into the compass of the law, the institution must be “one of the institutions” of the state. In order for a boycott against a person due to his connection to an area to enter this definition, the area must be “under its control” of the state. In my view, that belonging of “the institution” or “the area” to the State of Israel cannot remain merely technical. That requirement must be given normative significance. The belonging requirement must pertinently connect the boycott “against the State of Israel” and the boycott of the institution or the area. Its effect is the broadening of the scope of belonging, such that it also extends to the relationship between the boycott against the state and the boycott against the institution or against the area. Therefore, not every boycott of an institution or an area physically “belonging” to the state will fall within the definition of the Law. Only a boycott of an institution or of an area because of the boycotting of the state in its entirety should fall within this definition.

            Actually, this is a necessary interpretation. Clearly, the Boycott Law was not intended to apply, for example, to a call to boycott a public institution because of that institution’s particular characteristics. Consider, for example, a call to boycott a person due to his connection to a public institution because that institution conducts experiments on animals. Or, for example, a call to boycott a person due to his connection to a public institution because that institution promotes a policy that harms the environment. Or a call to boycott a person due to his connection to an Israeli community (which is “an area under [the state’s] control”) because of the community’s policy in regard to membership (cf. the Sabah decision).  On its face, according to the language of the Law, such boycotts might fall within the scope of the law and be prohibited by it. The reason for this is that they are calls for a boycott against a person merely because of his connection to one of the state’s institutions or an area under its control. Clearly, however, that was not “what the author had in mind”. The purpose of the Boycott Law, as its name shows, is to prevent harm to the State of Israel by means of boycotts. The law is intended to contend with the phenomenon of boycotts against the state. It is not intended, for example, to harm those who call for a boycott of an institution because of its destruction of natural treasures simply because that institution, coincidentally, “belongs” to the State of Israel and is not a private body. The fact that the institution in the example is a public institution may, of course, show that the policy that is the target of the boycott is a public policy. However, it would not be proper to interpret the Law as opposing calls for boycotts targeting any public policy, when the boycott does not comprise a dominant factor of opposition to the state as such. As the state’s attorneys noted before the Court, the Boycott Law is not intended, for example, to affect calls to boycott cottage cheese. I am of the opinion that this conclusion must stand even if it transpires that some of the boycotted cottage-cheese producers are state owned.

46.       Therefore, the terms treating of an “institution” and “area” were not intended to direct the Law at “new” types of boycotts. They were intended to reinforce the arrangement treating of the typical boycott with which the Law was intended to contend – a boycott against the State of Israel. Their purpose is to create a tight arrangement that will not permit calls for boycotting the State of Israel to evade the Law simply by targeting institutions or areas. In order to achieve that purpose, while not extending the Law beyond its proper scope, the connection between the “institution” and the “area” to the State of Israel must be interpreted as a material connection that also extends to the nature of the boycott. Only a boycott against an “institution” or “area” that is part of a boycott against the State of Israel and derives from the connection of the institution or area to the State of Israel will fall within the compass of the Boycott Law. As opposed to this, a boycott of an institution or area that is not part of a boycott against the State of Israel will not fall within the scope of the Law’s definition.

            The practical result of this distinction is the application of the Boycott Law only to calls for a boycott against the State of Israel in its entirety or as such. Accordingly, a call to boycott one of the state’s institutions, which is not accompanied by a call for a comprehensive boycott of the State, would not fall within the compass of the Law. Similarly, calls for boycotting areas under the state’s control, including boycotting the Area, that are not accompanied by a call to impose a boycott on the State of Israel, will not fall within the Law’s definition. This result is also applicable to the interpretation of the phrase “a commitment not to purchase goods or services produced or supplied in Israel, by one of its institutions, or in an area under its control” in sec. 3 of the Law.

            This interpretation is consistent with the language of the Law. It is “dependent” upon the relationship of a connection between the State of Israel and its institutions or areas under its control. It is consistent with the plain meaning of the phrase “boycott against the State of Israel” in colloquial language (see: Barak, Statutory Interpretation, pp. 117-118, 587-589). This phrase is the Law’s linguistic center of gravity. It impacts all of the Law’s provisions, including the definition of the very term “boycott against the State of Israel” in sec. 1 of the Law. It shows that the main point of the Law is the prevention of a boycott against the State of Israel, and not a boycott against its institutions or areas under its control. This interpretation does not make reference to institutions and areas superfluous. Without such reference, some calls for boycotting a person for his connection of an Israeli institution or area under the state’s control as part of a call for a boycott of the entire state might evade the Law’s embrace. That would be the case, for example, where the person under discussion has a connection only to the institution or controlled area, but lacks a direct connection to the state.

            This interpretation is also consistent with the Law’s purpose. The Law’s main purpose, as its name testifies, is the prevention of harm to the State of Israel by means of a boycott. This purpose is clearly delineated by applying the Boycott Law to calls for boycotting the State of Israel. It is not entirely realized when a boycott of the Area is concerned. Calls for a boycott of the State of Israel are directed at the state as such. The state may defend itself against such boycotts. A boycott against the State of Israel, as such, discriminates against the residents of the state on the basis of their connection to the state. The state may prohibit such discrimination. However, a boycott of the Area is not directed at the state, as such, but against one manifestation of its policy. Prohibiting boycotts of the Area cannot be justified by a desire to prevent discrimination, as it would not represent a comprehensive prohibition of boycotting or discrimination on the basis of place of residence. And primarily, the future of the Area is a matter of heated public debate. The “objective purpose” of the Boycott Law, and the presumption in regard to its consistency with the Basic Laws, cannot tolerate an interpretation that “lowers” the Law to the level of political debate in a manner that would limit the available arsenal of expressions to one side of the debate alone. That purpose would not be consistent with an irrelevant infringement of the possibility of those holding a particular political view to obtain government funding or to participate in tenders, on the basis of considerations that are unrelated to the nature of the funded activity, and while placing a burden on the constitutional rights of the funded entities. That purpose is also inconsistent with creating a chilling effect that would act as a deterrent to voicing one particular view from among the competing political views.

47.       In addition, as we know, the purpose of a Law is derived both from the objective purpose noted above – in regard to the objectives and values that a legislative act is meant to realize in a democratic society – and from the subjective purpose – in regard to the objectives that the legislature sought to realize by means of the legislation. Thus, we learn a law’s subjective purpose from its language, legislative history, and the historical, social, and legal background at the time of its enactment (see, e.g: Barak, Statutory Interpretation, pp. 201-202; CA 8622/07 Rothman v. P.W.D. - National Roads Company of Israel Ltd. (published in Nevo) (May 14, 2012) para. 49 of the opinion of U. Vogelman J.; HCJ 10771/07 Gewirtzman v. National Insurance Institute (published in Nevo) (Feb. 1, 2010) paras. 56-59 of my opinion). In this case, the parliamentary history of the Law shows that the proposed interpretation would seem to contradict the positions held by some of the members of Knesset who were involved in its legislation, and is consistent with the positions held by others (see, e.g: Protocol of meeting no. 342 of the Constitution, Law and Justice Committee of the 18^th Knesset, 4-5, 25-27 (Feb. 15, 2011) Protocol of meeting no. 416 of the Constitution, Law and Justice Committee of the 18^th Knesset, 49, 61 (June 27, 2011); Protocol of session no. 259 of the 18^th Knesset, 167 (July 11, 2011)). However, legislative history is but one source that the interpreter may use to learn the legislative purpose. President Barak aptly observed in this regard:

We are not interested in the judgment of the members of the legislature, but rather in their legislative act…The data about the legislative purpose that can be discovered in the parliamentary history are not “binding”; they are not the final word for all investigation and examination; they do not override the purpose that arises from the language of the law or other sources…the relative weight of this source depends on its importance and its reliability relative to other sources [Barak, Statutory Interpretation, p. 372].

I am of the opinion that no great weight should be assigned to this interpretive source in this case. This, inter alia, because various views were expressed about the purposes of the Law in the committee meetings and in the plenum debate, and as President Barak goes on to state:

It is very difficult to separate “personal” opinions of members of the legislature about what is ideal, and “institutional” opinions about what is real. This is especially true of spontaneous responses expressed in the legislature in the absence of extensive research or reflection. But even “considered” responses are sometimes expressions of the subjective view of the speaker…The interpreter must be able to distinguish between the wheat and the chaff, between personal opinions of members of the legislature in regard to the meaning of the law, and objective opinions about its purpose. The weight to be given to the results of the examination will change in accordance with the reliability that can be attributed to the sources of that examination [ibid., p. 380, emphasis added – Y.D.].

            Thus, it would seem appropriate, in my view, to interpret the Law such that it would apply only to calls for boycotting the State of Israel in its entirety, but not to calls for boycotting the Area alone. Although this interpretive result contradicts the express position of some of the Law’s initiators, the subjective views of the members of Knesset who took part in the legislative process does not obligate the Court. Indeed, interpretation concerns the “analysis” of the law, and not the “psychoanalysis” of the legislature (the Sabah case, para. 26 of the opinion of Grunis P.; HCJ 246/81 Agudat Derekh Eretz v. Broadcasting Authority, IsrSC 35 (4) 1, 17 (1981), IsrSJ 8 21 [English trans: http://versa.cardozo.yu.edu/opinions/agudat-derekh-eretz-v-broadcasting-authority]). As noted, the position of one Knesset member or another, or even the view of those who proposed and initiated the Law, does not necessarily reflect the view of “the legislature”, which is a body composed of many members, and who represent the spectrum of political views of the state’s citizens. Thus we have the well-known approach according to which: “We must not seek to establish a Knesset Member's attitude towards a particular problem confronting us from the legislative history of an enactment. The solution of such problems is our responsibility, and ours alone” HCJ 428/86 Barzilai, Adv. v. Government of Israel, IsrSC 40 (3) 505 (1986) 593; IsrSJ 6 1 [http://elyon1.court.gov.il/files_eng/86/280/004/Z01/86004280.z01.pdf].  Along with the interpretive sources offered by the parliamentary history, we have such additional interpretive sources as the language of the law, its normative context, and the principles of the fundamental rights that stretch a “normative umbrella” above it. Justice A. Barak addressed this is HCJ 142/89 Laor Movement v. Knesset Speaker, IsrSC 44 (3) 529 (1990):

Legislative history, in general, and parliamentary history, in particular, are among the sources that we may turn to in seeking and discovering the legislative purpose. Nevertheless, legislative history should not be viewed as the end-all, and its overall weight in establishing the purpose and in interpreting the law is not significant. Indeed, the information that it provides about the law’s purpose must be integrated into the information about the law’s purpose that derives from the language of the law and other reliable sources, such as its structure, the legal system, and the various presumptions about the purpose of the law, and the overall sense of the matter. Moreover, a judge seeks information about the purpose of the law from the legislative history. He does not seek the interpretive understanding of the members of Knesset and how they understood a concept or term, or how they would solve the legal problem facing the judge … [ibid., p. 544].

            I am of the opinion that there is no alternative in the case before us but to find that, despite various statements made in the course of the legislative process, the language of the Law and its purposes, including its objective purpose, do not allow the Law’s application to boycotts directed solely at the Area.

48.       In conclusion, it only remains to address several matters raised in the opinion of my colleague Justice Melcer.

 

Gleanings

49.       Ripeness – My colleague Justice Melcer is of the opinion that the petitions – with the exception of the part concerning sec. 2(c) of the Law – are not ripe for decision. My colleague believes that the Petitioners’ claims should be examined in the “applied review” track, attendant to suits or petitions directed against the concrete application of the Law (para. 59 of his opinion). The ripeness doctrine has, indeed, been incorporated into Israeli constitutional law (see, e.g: HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance, (published in Nevo) (Jan. 5, 2012) paras. 26-33 of the opinion of M. Naor J. [English:  http://versa.cardozo.yu.edu/opinions/alumni-association-arab-orthodox-school-haifa-v-minister-finance] (hereinafter: the Alumni Association case); HCJ 7190/05 Lobel v. State of Israel (published in Nevo) (Jan. 18, 2006) para. 6 of the opinion of M. Naor J.; Elena Chachko, “On Ripeness and Constitutionality: HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance and HCJ 3803/11  Israeli Capital Markets Trustees Association v. State of Israel,” 43 Mishpatim (2013)). The ripeness doctrine permits the Court to refuse to hear a petition directed against a statute by reason of the fact that it has not been applied in practice, and therefore there are no “factual grounds” that would allow for an adequate evaluation of its harm or benefit. However, when the constitutional question raised is primarily legal, there is no justification for “waiting” until factual foundations have been laid, inasmuch as that foundation may not be relevant to the final disposition of the case. That is the case, for example, when “the Court is persuaded that any future application of it will lead to an infringement of a constitutional right or when the harm that will result from the law in the future is certain” (the Sabah case, para. 15 of the opinion of Grunis P.). Even when assembling a factual foundation may contribute to the final disposition of the dispute, there are a number of exceptions that justify addressing a petition on the merits despite that fact. One of those exceptions is when the law under scrutiny may have a chilling effect. By means of the chilling effect, the law infringes the violated right by its very existence. In addition, the chilling effect can create a vicious circle in which the Court refrains from addressing the law’s constitutionality in the absence of actual application, but the law is not applied due to the chilling effect, which deters – sometimes unlawfully – actions contrary to the law. President A. Grunis addressed this in the Sabah case:

The best known exception to addressing the constitutionality of a law even before it has been put into effect is the fear of a “chilling effect” … What we are referring to is situations in which allowing the law to remain in force may deter people and cause them to refrain from otherwise lawful conduct due to the fear of the enforcement of the law. In such cases, the very existence of the legal authority may violate constitutional rights, and therefore the Court’s review is required even before the law is applied. The chilling effect is cited in American case-law as an exception that justifies examining a matter even if it is not yet ripe. For the most part, the exception is applied to petitions in regard to the violation of freedom of speech … [ibid., para. 16 of the opinion of A. Grunis P.).

50.       An example of the application of the chilling-effect exception can be found in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). In that case, the United States Supreme Court reviewed a federal law that prohibited corporations from providing funding to campaigns for or against a candidate for election. The United States Supreme Court held that corporations could not comprehensively be forbidden to expend monies in that manner, as such a restriction was repugnant to the constitutional right to freedom of speech. One of the arguments of the respondents in the case was that the constitutional claims raised by Citizens United should be considered “as applied”. The Court rejected that argument. It held, inter alia, that postponing the hearing of the claims would lead to a chilling effect upon freedom of speech. The Court explained that substantial litigation of the law’s provisions could require a lengthy process. In the meantime, the right to freedom of speech might be violated as a result of the chilling effect, which might also result in potential petitioners not challenging the law. This effect is particularly problematic where political speech is involved, and where the restriction under review concerns speech in regard to elections. Justice Kennedy wrote:

[S]ubstantial time would be required to bring clarity to the application of the statutory provision on these points in order to avoid any chilling effect caused by some improper interpretation... Here, Citizens United decided to litigate its case to the end. Today, Citizens United finally learns, two years after the fact, whether it could have spoken during the 2008 Presidential primary--long after the opportunity to persuade primary voters has passed [ibid., pp. 333-334].

            These word are also appropriate in the case before us. As explained above, the Boycott Law may have a real chilling effect on freedom of political speech. Such a violation of freedom of expression exists whether or not the Law’s sanctions are actually put into effect. Denying the petition for lack of ripeness, and waiting for the law to be given effect in practice would allow this ongoing violation to continue. In practice, the chilling effect may even lead to extending the time that would pass until the “case-by-case” examination of the Law, or until enough data is collected to justify its review in the framework of a petition to this Court. The chilling effect deters potential speakers from calling for a boycott as defined by the Law in a manner that reduces the number of those who might bring the Law before the courts. In my opinion, the Boycott Law violates freedom of expression by its very enactment. Therefore, we should review its constitutionality now, and not wait, as my colleague proposes, for its review “indirectly” or “from the bottom up”.

51.       Comparative Law – My colleague Justice Melcer referred to a number of laws of different countries that treat of calls for boycott in one way or another.  Indeed, various countries have arrangements for limiting the imposition of boycotts in one way or another. Thus, for example, the American Export Administration Act, 50 USCS Appx (1977) (hereinafter: EAA) empowers the President to establish directives that would prohibit participating in a boycott declared by a foreign state against a friendly state. I do not believe that this legislation is relevant to our discussion. The purpose of the EAA, as presented by the state in its response to the petition, is the protection of American foreign policy. The EAA does not directly address “private” boycotts, and it appear not to directly treat of boycotts related to the specific policies of the friendly state, such as Israel’s policy in regard to the Area. As opposed to the arrangement in the EAA, the Boycott Law – particularly the arrangement in regard to the Area – does not exclusively concern Israeli foreign policy, but rather imposes restrictions on internal Israeli public discourse. My colleague also referred to the “anti-discrimination law” of various countries, including France and Germany. In my opinion, these, too, are irrelevant to the matter before us. Even if there is justification for prohibiting calls for boycott that comprise certain discriminatory aspects, as can be seen in those comparative law provisions, and even in Israeli anti-discrimination laws, there is no justification for doing so only in regard to a certain type of political positions.

52.       A comment on recourse to American law – In my opinion, I referred several times to doctrines and cases from American law. It should be noted in this regard that there are significant differences between our legal system and the American legal system in regard to the scope of protection granted to freedom of expression. As a rule, the protection granted to freedom of expression in the United States is broader. The constitutional balancing equations employed in the United States in cases of violation of freedom of speech are different from those that we employ, particularly in regard to content-related restrictions on freedom of speech (see, e.g.: United States v. Alvarez, 132 S. Ct. 2537, 2543-2544 (2012); United States v. Stevens, 130 S. Ct. 1577, 1584 (2010); Brown v. Entertainment Merchants Association, 131 S. Ct. 2729, 2733 (2011); Reichman, pp. 192-193; Aharon Barak, “The American Constitution and Israeli Law,” in Selected Essays, vol. 1, 385, 388-391 (2000)). In view of those differences, it should be clear that the American rules cannot be applied as such. However, the principles and methods of analysis that were presented are relevant to the matter before us. They allow us to examine the challenges that the American legal system confronted in regard to freedom of expression, and they can shed light on the relevant problems. Thus, for example, reference to American law elucidates the dangers attendant to content-based state intervention in the marketplace of expression. It focuses a spotlight on some of the relevant considerations for protection (or lack of protection) of coercive speech. It proposes a equilibrium point between freedom of expression and the state’s power to decide whom to fund, and sheds light on the various considerations relevant to invoking the ripeness doctrine. The decisions of the United States Supreme Court in these matters are, in my opinion, worthy of examination and study, even if we ultimately decide not to adopt them. In any case, the final decision is one “made in Israel”. It is founded upon Israeli legal principles, and upon the Israeli constitutional tradition. These Israeli principles – and only they – ground my above opinion.

53.       Public trust – The Boycott Law concerns one of the most heated and charged political issues in Israeli society. My conclusion is rooted in legal considerations. It derives from the supreme importance of freedom of political expression. However, despite its being a legal conclusion, our decision in regard to this petition will be of political significance. Leaving the Law intact, as written, will be celebrated by part of the public, while striking it down or restricting it will be welcomed by another part of the public. Every result may negatively affect public trust in the judiciary. We have no control over that. However, “the desire to ensure public trust in the judicial system does not mean that a judge must decide contrary to his conscience. Judges must know how to ignore the passing winds of the moment, which sometimes blow in one direction and sometimes in another, sometimes as a blessing and sometimes a curse” (CrimA 8080/12 State of Israel v. Olmert (published in Nevo) (July 6, 2014) para. 12 of my opinion). In this regard, we may return to the relevant insight of Justice M. Landau in HCJ 390/79 Dwiekat v. Government of Israel, IsrSC 34 (1) 1 (1979):

In this instance, we have appropriate sources for ruling and we have no need, and indeed we must not, when sitting in judgment, take our personal views as citizens of the country into account. Yet, there is still grave concern that the Court would appear to be abandoning its proper place and descending into the arena of public debate, and that its ruling will be applauded by some of the public and utterly, vehemently rejected by others. In this sense, I see myself here as one who’s duty is to rule in accordance with the law on any matter lawfully brought before the Court. It forces me, to rise above the disputes that divide the public, knowing full well in advance that the wider public will not note the legal argumentation but only the final conclusion, and that the appropriate status of the Court, as an institution, may be harmed. Alas, what are we to do when this is our role and our duty as judges [ibid., p. 4].

54.       In conclusion, if my opinion be heard, we would instruct that the Law be interpreted as stated in paras. 45-47 of my opinion, in order to avoid the severe result of striking down the Law as unconstitutional.

 

Justice N. Hendel

The Constitutional Discourse in this Case

1.         A constitutional petition may take many forms. At times, it concerns the boundary of a legal norm, and at times it may accentuate the importance of a particular legal value that may have been neglected. And sometimes a petition contends with a conflict created by the clash of two revered, fundamental values. Such a conflict may counterpose the one and the many, the individual and the public, as opponents in a constitutional contest. That is the case in the matter before us. It places freedom of political expression on one side, and Israeli society’s desire to protect itself against harmful activities that continually harass it, on the other.

2.         Freedom of expression is the lifeblood of democracy. In my view, it is a substantive, practical factor that distinguishes a democratic society from one that is not. It should come as no surprise that, already in the early days of the state,  freedom of expression was established as a fundamental constitutional principle (HCJ 73/53 Kol Ha’am Co. Ltd. v. Minister of the Interior, IsrSC 7 (1) 871, 878 (1953), IsrSJ 1 90 [http://versa.cardozo.yu.edu/opinions/kol-haam-co-ltd-v-minister-interior] (hereinafter: the Kol Ha’am case). That case was decided long – some forty years – before the enactment of Basic Law: Human Dignity and Liberty. Judicial recognition of the singular importance of freedom of expression came into being decades before the modern constitutional discourse that now characterizes Israeli society and many others.

            Of course, freedom of expression is not an absolute right. It must be balanced and weighed opposite other rights and interest of independent importance, even if not necessarily of the same weight and power. I will address this below. Nevertheless, as I pointed out in the Further Hearing in the Ilana Dayan case:

The preeminent status of freedom of expression in the State of Israel cannot be questioned. As early as the Kol Ha’am case, freedom of expression was deemed a “supreme value” that “constitutes the pre-requisite to the realisation of almost all the other freedoms” (HCJ 75/73 Kol Ha’am Co. Ltd. v. Minister of the Interior, IsrSC 7 (1) 871, 878 (1953)). That is the first example of recognition of a constitutional right “ex nihilo”, as is only proper for the first days of creation [CFH 2121/12 A v. Dayan, (published in Nevo) para. 3 of my opinion].

And as my colleague Deputy President E. Rivlin wrote in the decision that was the subject of the Further Hearing:

This liberty, which is not second to none but which nothing precedes, was intended, first and foremost, to allow a person to express his personal identity. Freedom of expression allows every person to express his personal feelings and characteristics, to express his concerns, and thereby to develop and cultivate his identity […]. In that sense, freedom of expression is part of human autonomy, part of one’s right to self-definition, and part of one’s ability to give expression to one’s uniqueness. It is the right to self-fulfillment [CA 751/10 A v. Dayan (published in Nevo) (Feb. 8, 2012) para. 62].

            This is especially true in all that concerns freedom of political expression, that is: the individual’s right to express his opinions and views on various aspects of governance in a clear voice. In practice, the primary rationales grounding the recognition of freedom of expression are all the more pertinent in regard to freedom of political speech. In this regard, Justice Agranat’s word in the Kol Ha’am case are particularly apt:

The principle of freedom of expression is closely bound up with the democratic process. In an autocratic regime, the ruler is looked upon as a superman and as one who knows, therefore, what is good and what is bad for his subjects. Accordingly, it is forbidden openly to criticise the political acts of the ruler, and whoever desires to draw his attention to some mistake he has made has to do so by way of direct application to him, always showing an attitude of respect towards him. Meanwhile, whether the ruler has erred or not, no one is permitted to voice any criticism of him in public, since that is liable to injure his right to demand obedience […]. On the other hand, in a state with a democratic regime - that is, government by the “will of the people” - the “rulers” are looked upon as agents and representatives of the people who elected them, and the latter are entitled, therefore, at any time, to scrutinize their political acts, whether with the object of correcting those acts and making new arrangements in the state, or with the object of bringing about the immediate dismissal of the "rulers", or their replacement as a result of elections [p. 876 (English: para. “A”, per Agranat J.)].

And let us emphasize: Freedom of expression is not practically tested when we are concerned with the expression of views that are at the very heart of the consensus. The problem arises when a person wishes to express opinions that are somewhat – or even very – remote from society’s accepted views. Those are views that the majority may see as extreme, outrageous, and even harmful. “A strong, true democracy must ensure that the manner for confronting such opinions not be by way of prohibition of their dissemination from on high, but rather through free, open debate in which every member of society can arrive at his own opinion” (HCJ 399/85 MK Rabbi Meir Kahane v. Board of the Broadcasting Authority, IsrSC 41 (3) 255, 310 (July 27, 1987), per G. Bach J.). Thus we find that the Kol Ha’am decision stands tall when an individual voice confronts the nation on a political matter.

The great importance of freedom of political expression is premised upon a number of grounds.

First, the claim that freedom of expression aids in the exchange of opinions is of particular importance in the political arena. The most significant and influential normative arrangements in the political public are established in that forum.

            Second, freedom of expression aids in realizing the democratic component of majority decision. According to various conceptions, the value of the election process rises to the extent that the public votes intelligently, on the basis of a position grounded in familiarity with facts and various claims of the candidates. One might even say that the centrality of freedom of political expression derives precisely from the fact that there is no right answer to political questions. In this area, there is no examination of facts or desire to reach the absolute truth. Politics treats of questions that can and should be the subjects of debate. The hope in a democratic society is that the majority is right. But a 51% majority does not guarantee that the majority view is necessarily more intelligent than that of the minority. Therefore, the ideological “give and take”, the discourse of different views – including those that reside at the periphery – is necessary in the extreme. Freedom of expression is important not only on Election Day, but always, as the public debate continually influences the decision making of the leaders of the political branches.

This second ground for the great importance of freedom of political expression also comprises the third. The latter serves as a means for the constant monitoring of the activities and decisions of the various governmental agencies.

Fourth, according to certain approaches, the participation of individuals in the political process is of independent value. This derives from a recognition of their dignity and their role as social creatures with values. This ground stand on its own, and goes beyond the influence upon the decisions actually made (see: Re’em Segev, Freedom of Expression: Justifications and Restrictions, 124-148 (2008)).

On a more general level, freedom of political expression is protected not only because we are a democratic state, but also because we are a Jewish state. Thus from the earliest days of our existence. We are told that our Patriarch Abraham was called “Ivri” [“Hebrew”] because he maintained his opposition to the idolatrous regime: “And told Abram the Hebrew [ha-‘ivri] … Rabbi Judah said: The whole world was on one side [‘ever], and he was on the other side [‘ever]” (Genesis Rabba 48:8). The first holiday of the Jewish nation – in fact, its constitutive holiday – is Passover. It is a holiday that counterposes individual liberty and the slavery regime of the Egyptian Pharaoh. These points accentuate the centrality of freedom of political speech as integral to freedom of the individual confronted by the existing regime that limits his choice. The issue is not only the “marketplace of ideas”, but a person’s right to freedom of expression in opposition to the ruling political regime. The power of the individual to make his own decisions and express his views without society – even a democratic society – deciding for him in the public’s name.

I note these matters first, because the petitions before the Court require that we examine the borders of freedom of expression. The petitions all focus upon the constitutionality of the Boycott Law, while emphasizing different aspects. It would seem that our decision in this matter may depend upon the weight to be accorded to freedom of political expression.

3.         As the bill explains, the purpose of the Law is “to prevent harm caused by the phenomenon of imposing boycotts on various entities due to their connection to the State of Israel. The boycotts may harm commercial, cultural or academic activity that is the object of the boycott, or inflict serious loss thereto” (H.H. 373 (2.3.2011).

            It is clear that the Law’s initiators considered the importance of freedom of political speech. Thus, for example, the final version of the Law does not include a criminal sanction against a person calling for a boycott. Another example is that the Law is not directed at every person calling for a boycott, but only one who “knowingly publishes a public call for a boycott against the State of Israel” (hereinafter: the  “caller” or the “call for a boycott”). My colleague Justice Melcer also provided an excellent review of additional aspects of the values comprised by the Law, for example the desire to prevent discrimination on the basis of a connection to a country of origin (para. 32 of his opinion). Nevertheless, the matter in its entirety must be examined from the perspective of constitutional judicial review.

            The decision in this case is not an easy one. It raises legal, extra-legal and social questions. As judges, our role is, first and foremost, to examine the law as it is. In other words, the conflict –which must be evaluated and decided – arises in a concrete manner, and affects particular aspects of specific rights. It concerns a particular legal text. That text – the Boycott Law, in the matter before us – is the basis for that decision.

            The Law consists of a number of provisions. First, it defines the boycott (sec. 1), which is the cornerstone of the other provisions of the Law. That is followed by a number of sanctions that may apply to a person calling for a boycott under the established conditions. The sanctions can be divided into three categories: torts (sec. 2), prevention of participation in tenders (sec. 3), and denial of benefits (sec. 4). I will separately address each element in that order.

Definition of the Boycott

4.         Section 1 of the Law states:

In this law, "a boycott against the State of Israel" means – deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm.      

            It should be noted that the definition comprises three elements: refraining from economic, cultural or academic ties; connection with the State of Israel, one of its institutions or an area under its control; economic, cultural or academic harm.

            As noted, the definition section focuses upon “boycott”. However, one cannot learn from that, alone, what action by an individual might lead to the imposition of the three sanctions. The answer to that may be found in the relevant sections, 2-4. Common to all of those is that the particular sanction – payment of damages, prevention from participating in a tender, or denial of benefits – will apply to one who knowingly publishes a public call for a boycott. To complete the picture, it should be noted that sections 3-4 also refer to one who committed to participate in a boycott. The emphasis is upon the commitment, and not on the participation. Either way, this means that in order to fall within the scope of the sanctions, the very call for participation in a boycott suffices, even in the absence of any actual participation. Participation in a boycott is not required in order to fall within the purview of the sanctions. A concrete examination of the Law reveals that it targets freedom of expression in the range of freedom of political expression – for example, the State as such, or even parts of it.  We thus see that the Law is intended to restrict the freedom of political expression. However, when we look at the call, we find that that we are not concerned with the highest degree of freedom of expression, which is the pure expression of an opinion or a position, or the publication of facts. The Law does not apply to an individual’s expression by which he, personally, imposes a boycott on Israel, as defined by the Law. The expression is calling for a boycott by another. But still, we are concerned with a “call”, which is clearly part of freedom of expression (on this point, see the para. 6 of opinion of my colleague Justice Y. Danziger, as well as the references to the articles by Theresa J. Lee and Prof. Nili Cohen). Moreover, we are not concerned with a call for the perpetration of a criminal offense or a civil tort. As noted, a boycott, itself, is not prohibited by the Boycott Law. Therefore, even if there are more “pure” expressions of freedom of political expression, we are still within its compass, with all that derives therefrom in terms of the recognition of the proper weight of the infringement. That is to say, the type of infringement and its importance are of significance in a democratic state.

            As noted, the right to freedom of expression stands at the highest level. I have elsewhere expressed my opinion that when the Court conducts judicial review, it is important to consider the location of the relevant right on the scale of rights. I believe that even if this is not the place to decide a hierarchic structure of rights, and even if that may not be desirable in a relative and proportionate constitutional system, it would be proper – even in accordance with the instructions of the legislature in sec. 8 of Basic Law: Human Dignity and Liberty – to consider the type of right being infringed, while establishing principles. That is also the case in the United States, where three levels of rights are customarily distinguished for the purpose of deciding the requisite level of judicial review. In short, one can summarize that the Rational Basis Test is employed in regard to an arbitrary governmental decision; discrimination on the basis of age or sex will be judicially reviewed through Intermediate Scrutiny; while racial discrimination – which is viewed as a particularly severe form of discrimination – will be subjected to Strict Scrutiny (see: HCJ 466/07 Galon v. Attorney General (published in Nevo) (Jan. 11, 2012), para. 4 of my opinion [http://versa.cardozo.yu.edu/opinions/gal-v-attorney-general-summary]).

            This is the required approach. To paraphrase George Orwell’s Animal Farm, one might say that “not all rights are equal; some rights are more equal than others”. This is all the more so when the Court must examine a law under the proportionality test, in both its broad and narrow senses. Clearly, this does not mean that due to the importance of freedom of expression, or even freedom of political expression, it will always prevail in any competition with another right. However, the status of freedom of expression does influence the constitutional analysis in the concrete case.

             Reference to American law may help sharpen the point. That system recognizes the restriction of freedom of expression in certain cases. However, the list of cases is very limited, and focuses primarily upon a situation in which one person’s freedom of expression causes harm to another. The leading case in this regard is Brandenburg v. Ohio, 395 U.S. 444 (1969), which established when certain expression crosses the line distinguishing protected speech and a criminal offense. It was held that there is a two-part test: direct incitement, and likelihood of imminent lawless action. A causal connection must be shown between the speech under review and the expected harm or unlawful conduct.

            There are, of course, Israeli laws that limit freedom of expression, such as the Prohibition of Defamation Law, 5725-1965, sec. 12 of the Civil Wrongs Ordinance [New Version], or sec. 122 of the Knesset Elections [Consolidated Version] Law, 5729-1969. The restriction in those laws was intended to prevent harm of a certain magnitude, for example, limiting freedom of speech that disgraces or humiliates another person. Here we are concerned with speech that may harm income, occupation, employment, and academic research.  But in the background, and not only there, we should again emphasize that a public call for a boycott will suffice to fall within the scope of the sanctions, even if the caller does no participate in the boycott. We point this out not so as to reject such a distinction a priori, but only to show that the Law, as drafted, was primarily intended to limit freedom of expression. That, in my opinion, provides a different perspective of the Boycott Law, as per its language. Just as the law depends upon the facts, so judicial review depends upon the legal text – upon what is says and what it does not say.

 

A Civil Wrong – Section 2

5.         The section, whose heading is “Civil Wrong”, states as follows:

(a) Anyone who knowingly publishes a public call for a boycott against the State of Israel, where according to the content and circumstances of the publication there is a reasonable possibility that the call will lead to a boycott, and the publisher was aware of that possibility, commits a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] will apply to him.

(b) In regards to section 62(A) of the Civil Wrongs Ordinance [New Version], anyone who causes a binding legal agreement to be breached by calling for a boycott against the State of Israel will not be deemed as having acted with sufficient justification.

(c) If the court find that a civil wrong, as defined by this law, was committed with malice, it may require the tortfeasor to pay damages that are independent of the actual damage caused (in this section – exemplary damages); in calculating the sum of exemplary damages, the court will consider, inter alia, the circumstances under which the wrong was carried out, its severity and its extent.

            In effect, sec. 2 comprises three different elements: creating a new tort treating of a call for imposing a boycott (ss. (a)); a determination in regard to a certain element of the tort of inducement of breach of contract (ss. (b)); establishing the possibility of awarding damages without proof of damage (ss. (c)). I will begin by stating that, in my opinion, section 2 in its entirety does not stand up to constitutional review, and should therefore be struck down. In order to understand that position, I will make it clear that I am willing to assume that the Law passes the three preliminary tests: by a law and for a proper purpose befitting the values of the State of Israel. I am also willing to assume that the Law passes the first two subtests of proportionality – that of a rational connection and of an alternative, less harmful means. Nevertheless, I am of the opinion that sec. 2, in its entirety, does not pass the third subtest of proportionality: proportionality stricto sensu. I will first examine subsections (a) and (c), which would seem to be more closely related.

6.         The elevated status of freedom of political expression requires a detailed examination of the innovation introduced by the Law, which infringes that right. At first glance, it would appear that sec. 2 of the Law makes it easier for a plaintiff seeking damages in two ways.

            First, damages can be awarded without proof of damage – subsection (c). It is true that this possibility is contingent upon the tort being committed with malice. However, this would not appear to be a sufficiently high bar. The term “malice” is not defined by the Law. It would seem that the legislative intent was to remove cases of negligence or cases in which there was awareness of the possibility of a boycott without intention to cause it (compare with the malice requirement in sec. 131 of the Tenant Protection Law [Consolidated Version], 5732-1972, which was interpreted as referring to an intentional act. See, e.g.: CA 774/80 Badawi Arslan v. Daad Fahoum, IsrSC 35 (3) 584 (1981); LCA 4740/02 Ibrahim Halil Alamad v. Muhammad Zaki Albudari (published in Nevo) (June 23, 2005)). Alternatively, it may be that the requirement refers to a particularly negative motive – a desire to cause harm, like the requirement of malice in the Civil Wrongs Ordinance (see: Israel Gilead, Tort Law: The Limits of Liability, 1160-1162(2012) (Hebrew) (hereinafter: Gilead); Izhak Englard, The Law of Civil Wrongs – The General Part, 2^nd ed., 130, 150 (Gad Tedeschi, ed.)  (1976) (Hebrew)). However, practically speaking, the action of calling for a boycott generally indicates – by its nature – the publisher’s intention that his call will lead to an actual boycott, which fulfils the requirement of a negative motive. That is true even if it is employed as a means for achieving another end, and not with the ultimate objective of harming those boycotted. Thus, the question of how hard it would be to prove the element of malice arises in all its force. It would appear, without making any definitive statement on the issue, that the answer is that it would not present any great difficulty.

            Second, prima facie, it would appear that, under the language of sec. 2(c), it would be possible to impose tort liability without proving some of the classic elements of a tort – a causal connection and causing damage – and that, prima facie, this would also be true under the language of sec. 2(a).  Liability could be imposed under the latter when, according to the content of the call and the circumstances of its publication, there “is a reasonable possibility that the call will lead to a boycott, and the publisher was aware of that possibility”. In other words, there is no requirement of proof of causal connection between the call for a boycott and the damage in accordance with the balance of probabilities, but only proof of a reasonable possibility. It would be germane to ask whether lightning the burden of proof in a civil suit, while eroding and infringing freedom of political expression, is proportionate. It has the potential for excessively limiting freedom of political speech. That freedom requires constitutional protection. The legislature chose the sanction of tortious liability while abandoning the approach of criminal responsibility, and rightly so. However, one might argue that this two-pronged relaxing of the tort requirements makes the tort quasi-punitive.

            I find this disturbing, but I accept the solution proposed by my colleague Justice Melcer to be a legitimate interpretation.  His position is that sec. 2(c), treating of exemplary damages, should be struck down, and that the elements of the tort under sec. 2(a) be construed in a manner consistent with the elements of a tort as established by the Civil Wrongs Ordinance. In other words, in proving a tort under the Boycott Law, the plaintiff would be required to show both damage and a causal connection between the call and that damage he incurred. In my view, one might ask whether that proposed interpretation is necessarily what the legislature subjectively intended. However, the interpretation of sec. 2(a) proposed by my colleague is possible under the language of the Law (and there is even some support for it in the bill). It is the accepted rule that a construction that prevents the voiding of a law is preferable to one that renders it void. According to the proposed approach, the phrase “[according to] circumstances of the publication there is a reasonable possibility that the call will lead to a boycott, and the publisher was aware of that possibility” is an additional condition.  In other words, it places an additional hurdle before proof of the tort. However, “Anyone who knowingly publishes a public call for a boycott … commits a civil wrong and the provisions of the Civil Wrongs Ordinance will apply to him”. In other words, the tests for the causal connection and the proof of damage derive from the Civil Wrongs Ordinance. That interpretation renders sec. 2(c), regarding the imposition of exemplary damages, void, while sec 2(a) – boycott as a tort – is preserved subject to the requirement of proof of a causal connection and damage as required under tort law.

            However, this is not the end of the road. In other words, while I accept the proposed construction, I do not believe that sec. 2(a) meets the requirements of constitutionality. My focus will now be upon the third test of proportionality – proportionality stricto sensu, harm versus benefit.

 

Section 2(a) – The Proportionality Stricto Sensu Test

7.         My conclusion that this section does not pass the proportionality stricto sensu test rests upon a number of tiers. First, there is the near-certainty test. My colleague Justice Melcer explained that an infringement of freedom of expression in order to protect a competing interest must meet the criterion of near certainty. Under this test, the call under discussion must have a high probability of infringing the protected interest (see: the Kol Ha’am case, pp. 887-889). But he argues that this presents no difficulty in in the present case. The reason for this is that having established the need for proof of a causal connection between the conduct and the damage, we are no longer concerned with a near certainty of damage, but rather with certainty. This clever argument appears logical. However, I am not sure that it is precise. The reason for this is that the factual causal connection test examines the relationship between the speech and the result ex post. It does not examine the a priori reasonableness of the connection. As opposed to this, the near certainty test is a substantive test that applies ex ante, at the time of the call for a boycott. It is intended to filter from the scope of liability those expressions that should not be prevented. The quasi-evidentiary test is meant to regulate conduct or speech in “real time”. The information collected thereafter is but hindsight.

            Consider, for example, a call for a boycott in a closed, small forum of students. It might “leak” out and actually lead to the boycotting of a large commercial company. Near certainty is absent at the moment of speaking, but there may be a causal connection. Indeed, the legal causal connection test is meant to address this. In its framework, the situation is examined at the time of the call itself. That is also true of the “reasonable possibility” test established under sec. 2(a) of the Law. But those tests are not of “near certainty”, but rather are more lenient tests. We thus find that the substantive requirement of near certainty need not be met in order to give rise to the “tort of calling for a boycott”. I am aware that my reservation is not entirely free of doubt, and it, too, is clever. I will, therefore, buttress my conclusion that the constitutional harm exceeds the benefit of retaining sec. 2(a) even without granting weight to this argument, although I believe it has merit.

            The second tier is that we are concerned with the creation of a new tort. The assumption is that in enacting the Law, and particularly sec. 2(a) – a tort of calling for a boycott -- the legislature intended an innovation. Inasmuch as this innovation infringes freedom of political speech, as earlier noted, this requires careful constitutional examination. That examination must attribute the proper weight to the infringement, on the one hand, and to the proper purpose of preventing harm to the State of Israel by means of a boycott, on the other hand. The innovative nature of the Law cannot be denied. As the bill stated:

This bill is intended to establish a new tort that would also apply to cases that do not fall within the scope of the said torts [of inducing breach of contract and negligence], and will make it possible for a person or other entity harmed as a result of a boycott imposed upon it due to its connection to the State to sue for his injury.

            In other words, the legislature did not wish to reiterate what already existed, but rather to break new ground.

8.         The third tier, and with the purpose of thus pinpointing the innovation, treats of the uniqueness of sec. 2(a) as opposed to secs. 3 and 4. The former provides a tool for an individual to sue another individual in tort for his call for a boycott. The latter concern administrative sanctions by the state. This distinction is very significant. Granting such a tool to an individual does not create a proportionate balance between the (proper) purpose and the infringement of freedom of political expression. The reason concerns the relative ease in filing and conducting the suit. Imagine that a person calls for a boycott as defined by the section. During the course of the following three months, there is a drop in the profits of the factories and stores in the boycotted area. That would be sufficient to ground filing a tort suit against the caller, which, prima facie, would meet the threshold requirements. After all, there is a call for a boycott, and injury. The plaintiff can attempt to prove the causal connection in regard to the entire loss: assuming a twenty-percent loss, it may be argued that the entire loss derived from the call. Alternatively, it may be argued that only part of the loss derived from the call – for example, fifty percent. In the latter example, the plaintiff would be able to claim that even though three was a recession during the relevant period, were it not for the call, the loss would have amounted only to fifteen percent. Such a suit could be brought by every factory, business and store in the area. Even a profitable factory would be able to argue that were it not for the call for a boycott, the profit would have been greater, and therefore it incurred damage.

            I am willing to assume that there will be suits in which the damage would be proven by means of the regular tests of tort law. However, many suits would become an instrument – a means for filing suits in order to create a new, harsh reality for various people and entities. The harm of such a situation would be inflicted even if the suit does not succeed. One may even assume that various lawyers will muster for this, also as part of an ideological struggle. Such suits will become a means for political “goring”, with the courts serving as the horns. The harsh result will be a chilling effect that will influence freedom of expression, particularly in the case of an individual defendant. He will have to evaluate (in every sense) his conduct before calling for a boycott, and this in relation to freedom of political speech. As Justice Danziger put it: “The presence of a chilling effect in this case is not at all speculative. The creation of a chilling effect is the primary means chosen by the legislature for achieving the Law’s purpose” (para. 29 of his opinion). And see the clear, comprehensive summary in his opinion, as well as the opinion of my colleague President (Emeritus) Grunis in HCJ 2311/11 Sabah v. Knesset (published in Nevo) (Sept. 17, 2014) para 16 of his opinion).

            This point highlights the difference between the tort under sec. 2, and the administrative sanction under secs. 3 and 4. The latter is exercised by the state, which is entrusted with protecting the interests of the entire general public and of specific groups. As such, it must act in accordance with the criteria of public and administrative law in regard to such matters as selective enforcement, establishing criteria and internal procedures, reasonableness, the rules of natural justice, and so forth. An individual is under no similar duty. This point is expressed both in Israeli and comparative law.

            In Israeli law, we can point to the arrangement under sec. 4 of the Prohibition of Defamation Law [19 L.S.I. 254]:

Defamation of a body of persons, or any group, other than a body corporate […] shall not be a ground for a civil action or private complaint.

            An individual cannot sue another individual for a publication defaming a public of which he is a member. He also cannot file a private complaint. This arrangement does not derive from the view that groups do not require protection of their good name, or under an assumption that the members of a group are not harmed by a publication that disparages or humiliates the group. Those are protected by a criminal prohibition. Why, then, is a member of the group prevented from making recourse to the courts in regard to the publication?

            There are several reasons for this. Among other things, there is a fear that such cases may have a chilling effect upon freedom of expression. Due to this fear, the ability of individuals to “flood” the publisher with civil suits is denied. This is so even in regard to a low degree of expression – “a public falsity” that disparages an entire public (see CA 8345/08 Ofer Ben Natan v. Muhammad Bakri (published in Nevo) (July 27, 2011) para. 8 of the opinion of Justice I. Amit). The proper balance between the conflicting values grants the state the power to institute proceedings. The assumption is that, from the outset, it will wield its power in an appropriate, balanced manner that will prevent a chilling effect and harm to freedom of expression. An additional reason is the view that the protection of a particular public – of the entire public – is a governmental rather than an individual interest. That interest should be protected by the authorities, and not be “privatized” and granted to individuals (ibid.; Khalid Ghanayim,  Mordechai Kremnitzer & Boaz Shnoor, Libel Law: De Lege Lata and De Lege Ferenda, 250 (2005) (Hebrew) (hereinafter: Libel Law).

            To return to the matter at hand, a call for a boycott differs from a “publication of a public falsehood”. There, we may be may be concerned with a false fact. Here, we are concerned with expression that is similar to an opinion. There, the publication may be of no public value. Here, we are concerned with political speech. We should learn from this that if the legislature exercised caution in regard to the less severe case, we should be exponentially more careful in regard to the more severe case. It would not be superfluous to recall that the subject of defaming the public arose in the debate on amending the Defamation Law. The possibility of establishing a civil tort was barely mentioned. As opposed to that, there was support for the view that even establishing a criminal offense would be extreme. Similar situations can be found throughout the world (see: Libel Law, at pp. 248-240).  Protecting the public interest – yes. But, at the same time, entrusting it to the authorities and not to the public. And this due to the care that must be exercised in regard to limiting freedom of expression. Let me put this differently. One of the defenses to a defamation suit is a plea of truth (sec. 14 of the Defamation Law). That defense cannot be sustained in reply to political speech because, as explained above, we are concerned with an opinion rather than a fact.

            As for comparative law, my colleagues Justice Melcer and Justice Danziger presented a broad comparative picture of legislation and case law. In my opinion, comparative law is of particular importance in this case. The reason is that the background of the Law includes acts for and against the boycotts, including boycotts against the State of Israel. It should come as no surprise that the bill’s Explanatory Notes refer to the American Export Administration Act of 1979 (hereinafter: EAA). However, in my opinion, even if we were to accept the comparative law analogies in this regard, they concur with and lend support to my position. The comparative examination reveals that the sanctions in the other legal systems are not between individuals, as in the case of a tort suit, but are granted to the state, for example, in the form of administrative sanctions. Consider, for example, the United States. The two primary pieces of legislation referred to by the Respondents are the EAA and the Ribicoff Amendment to the Tax Reform Act of 1976 (hereinafter: TRA). These pieces of legislation were enacted against the background of the Arab Boycott against the State of Israel, and were intended to help protect the interests of the State of Israel and the United States. In both laws one can find sanctions directed at anyone who participates in a boycott against a country that the United States does not boycott. Thus, in the framework of the amendment to the TRA, certain tax benefits are denied to anyone participating in a boycott (26 USC § 908). In addition, administrative sanctions can be imposed upon such a participant by virtue of sec. 11(c) of the EAA. The law does not comprise a section permitting a citizen who views himself as harmed by the boycott to file a civil suit. Additional laws that appear in the survey submitted to the Constitution Committee also do not establish calling for or participating in a boycott as a civil wrong (see: http://www.knesset.gov.il/mmm/data/pdf/m02861.pdf).

            According to the Boycott Law Bill, it is not the only legislation treating of calls for a boycott. According to that view, a suit can be filed for the torts of negligence or inducement of breach of contract. Even if we were to assume that to be wholly or partly correct in accordance with the circumstances, we are, in any case, concerned with exceptions that certainly do not allow for suits to the extent and in the circumstances permitted under the current language of section 2 of the Law.  That is true both for Israel and for other countries. Let us again consider the situation in the United States. Attempts to sue for calling for a boycott, even under existing tort causes of action, failed due to the importance of freedom of expression. My colleague Justice Danziger addressed the Caliborne case, in which a similar tort suit was denied, at some length. In that case, as noted, residents boycotted a group of merchants in order to influence governmental policy. As a result, those merchants suffered financial losses. As was held: “Speech does not lose its protected character, however, simply because it may embarrass others or coerce them into action”. And even if it were possible to present circumstances or an example in which such a suit might prevail – which would appear to be the position of my colleague Justice Melcer – that claim should not be accepted in its comprehensive form. The Supreme Court’s case law has recognized the conflict between opposing the boycott and the right to freedom of expression, and has preferred the latter over the former. To return to our legal system, the language of the section is broad – too broad. The criteria of the proportionality stricto sensu test are not met. So it would seem to be in the entire world, and so in the State of Israel.

            And note that I am not stating that we must follow in the footsteps of American law in regard to the judicial review of sec. 2. In the United States, the result derives from the force of the First Amendment to the Constitution, whereas in our legal system, the Law is examined in accordance with the constitutional test under sec. 8 of Basic Law: Human Dignity and Liberty. Of course, however, the status of freedom of political expression is recognized by this Court, and weight can be given to the American approach in that regard. From this perspective, both in principle and in practice, I am of the opinion that the harm is greater than the benefit of the Law. The section does not meet the test of proportionality stricto sensu.

9.         The fourth tier is of a practical nature. There is, in my opinion, a problem created in terms of judicial policy considerations. Sec. 2 of the Law requires that the court contend with additional factors as a trial court of first instance rather than an instance performing administrative review and examining the margin of proportionality. For example, the court must weigh the content of the call and the circumstances of its publication (sec. 2(a)), as well as the circumstances of the commission of the tort, its severity and its scope (sec. 2(c)). Experience shows that in quantifying various forms of damage, a court must get into the thick of things and perform various estimates. For example, in order to decide the fate of a private complaint before it, it will have to evaluate, compare and distinguish different cases and calls for boycotts of various scopes and types. In that regard, the judicial task differs from evaluating suffering or even libel, regarding which there are factual issues rather than disagreements in the political arena. There is a fear that the new Law will require – or, at least may drag – the courts examining tort suits – the Magistrates Court and the District Court – to delve into and decide purely political matters. In my opinion, it would be better that such tasks not be performed within their walls.

            Another aspect of this tier is the problematic nature of the Law from a tort-law perspective. The Law makes it possible for a large number of plaintiffs to sue for purely economic damage. Questions relating to proving the necessary causal connection were not clarified. It would seem that sec. 2 suffers from inherent ambiguity. Even if that does not lead to invalidation, the ambiguity carries weight in the constitutional review of freedom of political expression in a civil proceeding. In this regard, we should note the American doctrine of “void for vagueness” in regard to criminal offenses. Nevertheless, it carries weight in constitutional review of civil proceedings. Of course, if I were of the opinion that the section could survive constitutional review, then considerations of judicial policy – or more precisely, policy considerations in regard to the judicial task – would probably not tip the scales on their own. But, inasmuch as I do not believe that to be the case, it would be worthwhile to present the said problem. This information reinforce the possibility of a violation of freedom of political expression. The more fundamental the infringed right, and the more severe its ramifications, the greater the need for precision in its delineation. The language of sec. 2 does not meet that requirement.

            The fifth tier is the very statement that we are treating of a tort. This is related to the innovation in the enactment of sec. 2. The bill stated:

In order to prevent such damage, it is proposed to establish that knowing publication of a public call for the imposition of a boycott on any entity due to its connection to the State of Israel be deemed a tort to which the provisions of the Civil Wrongs Ordinance [New Version] will apply. In other words, it will be possible to seek damages for the damage caused by the tort … Even now, a person harmed as the result of such a boycott may sue in tort, in the appropriate circumstances, for the tort of inducement of breach of contract or the tort of negligence.

            Without setting anything in stone, I would say that I am not convinced that it would be possible, at present, to file a negligence suit, except, perhaps, in exceptional cases. A central element of that tort is the existence of a duty. Is a person normally subject to a duty not to call for a boycott? This is not comparable to calling for prohibited conduct like racism (cf. LCrimA 2533/10 State of Israel v. Michael Ben Chorin (published in Nevo) (Dec. 26, 2011) paras. 5-7). It is also not comparable to procuring a civil wrong under sec. 12 of the Civil Wrongs Ordinance. In the above examples, a person calls for the perpetration of an act that is, itself, an offence or a tort. Calling for a boycott, at least in some of situations, is a person’s basic right of conscience. There are people whose conscience will not permit them to purchase an automobile produced by a certain country. Others are upset by the very thought of patronizing certain stores that sell non-kosher products alongside kosher ones. They do not wish to empower those that they perceive as “offenders”. To each his choices, and to each his conscience. Such choices stand at the core of a person’s freedom to realize his values in his lifestyle. At times, a call for a boycott is a call to act in accordance with one’s conscience. Conscience may be the compass of freedom of expression, including the freedom of political expression. Various policy considerations may indeed justify prohibitions upon the imposing of boycotts, and more widely, calls for boycotts. It is not my intention to loosen all restraint. The weight on each side of the scales will decide.

10.       Looked at in its entirety, and for all the reasons stated, it is my opinion that a detailed examination of sec. 2(a) of the Boycott Law leads to the conclusion that the harm caused by the infringement of freedom of political speech exceeds the benefit accruing from the protection it affords to the purpose of the Boycott Law. I would again emphasize that the freedom of political speech does not grant comprehensive immunity. There are possible situations in which the call would justify its restriction by appropriate means. In that, sec. 2(a) – which establishes a civil wrong – differs from secs. 3-4 and their administrative sanctions. These section are consistent with the necessary balance required by proportionality stricto sensu, as I shall explain in greater detail.

 

Section 2(b) – Proportionality Stricto Sensu

11.       Section 2(b) establishes that a person calling for a boycott, as defined by the Law, does not act with sufficient justification in regard to the tort of causing a breach of contract. Does this meet the requirements of the proportionality stricto sensu test? Pursuant to the above, I am of the opinion that this section of the Boycott Law passes the other tests set out by the Limitation Clause, and therefore, I shall proceed to examine proportionality stricto sensu.

            The tort of causing a breach of contract is set forth in sec. 62 of the Civil Wrongs Ordinance [New Version] as follows:

Unlawfully Causing Breach of Contract

62. (a) Any person who knowingly and without sufficient justification causes any other person to break a legally binding contract with a third person commits a civil wrong against such third person; Provided that such third person will not recover compensation in respect of such civil wrong unless he has suffered pecuniary damage thereby.

            The rationale is clear – protecting performance of contracts. We cannot discount the possibility that a statement or commercial act may cause a breach of contract. Therefore, the legislature limited tortious liability by means of two primary liability filters: the first, a requirement of a mental element of subjective awareness that the conduct would cause a breach of conduct, and the second, the requirement of a lack of sufficient justification (and cf. Gilead, at p. 1168, fn. 53). Thus there is recognition of the complex – protection of contracts along with “sufficient justification”. The nature of the justification is not explicitly stated in the law. An examination of Israeli law, comparative law, and the legal literature reveals that we are concerned with a “safety-valve concept” [Ventilbegriffe; concetti volvola] in the scope of which concerns of justice and various interests may be considered (see: CA 406/59 Lindsay v. Scheiber, IsrSC 14 (3) 2422, 2427 (1960); Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 495-496, [1942] 1 All ER 142 at 175, HL, per Lord Porter). Not surprisingly, the opinion has been expressed that “this element is the most difficult to delimit”, and “it requires that the court exercise broad discretion” (Nili Cohen, Inducing Breach of Contract (The Law of Civil Wrongs – The Particular Torts, G. Tedeschi, ed., 207 (1986)) (Hebrew) (hereinafter: Cohen).

12.       Despite the complexity of the Law’s provisions and the subject, I would conclude that a call for a boycott for political reasons is constitutionally protected. The reasons given in regard to sec. 2(a) also hold in regard to the existing tort of causing breach of contract. Therefore, there cannot but be a similar result. I will clarify my position.

            The emphasis of this discussion will center upon the element of justification, which is the core of the amendment in the Boycott Law. As the language of the Law states: “In regards to section 62(A) of the Civil Wrongs Ordinance [New Version], anyone who causes a binding legal agreement to be breached by calling for a boycott against the State of Israel will not be deemed as having acted with sufficient justification.” In other words, the consideration of freedom of political speech by means of a call for a boycott, as defined by the Law, does not grant a person who causes a breach of contract a justification that would exempt that action from the compass of tortious liability.

            Several types of justification have been recognized in the case law in Israel and abroad. One type concerns causing a breach that is desirable, or by the exercise of a lawful right. One example is the case of conflicting contracts. The first buyer who insists upon his rights, justifiably causes a breach of contract with the second buyer, inasmuch as his right has priority (See Cohen, p. 219). Another example is the “necessity defense”, as in causing a person to breach an employment contract in order to save the life of another (see Cohen, pp. 212-218). Another type of defense may be available to a person causing a breach of contract even when the breach itself is not deemed justified or desirable. A person may have a justification if he acted in good faith (see: CA 3668/98 Best Buy Marketing Ltd. v. PDS Holdings Ltd, IsrSC 53 (3) 180, 189-190 (1999); Cohen, pp. 233-235). In other situations, a public interest can lead to an exemption from tortious liability. In CA Yosef Etzion v. Naftali Stein, IsrSC 45 (3) 554, 560-561 (1991), it was held that a lawyer has a defense of justification for giving advice to a client that causes a breach of contract. The reason for that is desire to prevent a chilling effect that would harm a lawyer’s ability to properly protect his client’s interests. Another example can be found in sec. 62 of the Civil Wrongs Ordinance itself, which establishes that “a strike or lockout will not be deemed to be a breach of contract”. That may be viewed as a sort of defense intended to protect the ability of workers to realize the freedom to strike (see: Ruth Ben-Israel, “Tort Liability for Strike Action,” 14 Iyunei Mishpat (Tel Aviv University Law Review) 149, 169-170 (1989) (Hebrew)). Does the protection of the freedom of political expression also serve as justification?

            In the United States, tortious interference with contractual relations, under sec. 766 of the Restatement of Torts (Second) (hereinafter: the Restatement), has been addressed in the context of political boycotts. This tort has been interpreted, inter alia, as including an action lacking justification (see sec. 767 of the Restatement). Whereas a boycott for economic reasons may fall within the scope of this tort, it was held that a political boycott is protected by the constitutional right to freedom of speech. In Environmental Planning & Information Council v. Superior Court, 36 Cal. 3d 188 (1984) (hereinafter: the EPIC case), the California court addressed this issue and concluded:

Most of the cases in which claims of tortious interference have been considered have involved either pure commercial relationships or union-management relationships. There is a paucity of authority in the application of common law principles to a situation such as this, in which a group organized for political purposes allegedly undertakes a consumer boycott to achieve its ends. What authority does exist in this arena strongly suggests, even apart from constitutional doctrine, that such action will not give rise to liability [p. 194].

            In other words, most cases of tortious interference in contracts are connected to purely economic relationships or labor relations. As opposed to this, the case law supports the conclusion that, even in the absence of constitutional doctrine, a politically motivated boycott does not create liability. The court arrived at this conclusion, inter alia, after surveying the relevant case law, including the Claiborne case. It would not be superfluous to quote Justice Stevens, delivering the opinion of the Court, whose words were considered there, and which are appropriate to the case before us, as well:

While States have broad power to regulate economic activity, we do not find a comparable right to prohibit peaceful political activity such as that found in the boycott in this case. This Court has recognized that expression on public issues “has always rested on the highest rung of the hierarchy of First Amendment values.” Carey v. Brown, 447 U.S. 455, 467. “[Speech] concerning public affairs is more than self-expression; it is the essence of self-government.” Garrison v. Louisiana, 379 U.S. 64, 74-75. “There is a profound national commitment” to the principle that “debate on public issues should be uninhibited, robust, and wide-open.” New York Times Co. v. Sullivan, 376 U.S. 254, 270 [p. 913].

            Freedom of political expression in public matters merits the greatest protection. Incidentally, we should note the reference to New York Times Co. v. Sullivan, 376 U.S. 254, 270, whose principles have been adopted in our legal system in the law of defamation (see: CA 323/98 Sharon v. Benziman, IsrSC 56 (3) 245, 266 (2002)). To return to the tension between causing a breach of contract and freedom of expression, the EPIC case held that that in the typical case of causing a breach of contract for commercial reasons, the court must balance the interests of the parties and of the public. However, where the “defendant’s activities constitute a ‘politically motivated boycott designed to force governmental and economic change,’” the Court is “precluded by the First Amendment itself from gauging the degree of constitutional protection by the content or subject matter of the speech: ‘[There] is an equality of status' in the field of ideas’” (ibid. at p. 197). In other words, when we are concerned with acts that constitute a political boycott intended to bring about a change in the policy of the authorities, the law will protect freedom of political speech. There is an equality of status in the field of ideas. Under this approach, the court will not decide by “grading”, so to speak, one political opinion as opposed to another. As may be recalled, the true test of freedom of political expression is not when it is in the consensus, or even near it, but when it is very far from it, and not merely by a stone’s throw.

            This is also true in regard to a call for a boycott as defined in the Boycott Law, and also when the call is intended to cause a breach of binding contracts, as for example, in the case of Cincinnati Arts Association v. Jones et al., 120 Ohio Misc. 2d 26; 2002-Ohio-5428. In that case, the defendants called for a boycott following the death of a person at the hands of the police. In the framework of that boycott, there was a call for artists to cancel their appearances in the city concerned. The court held that the call was constitutionally protected, and dismissed the tort suit filed by the promoters of the events that were cancelled.

13.       The result arrived at by the American courts should come as no surprise. The balance that we performed in the examination of sec. 2(a) of the Boycott Law also holds in regard to the examination of the constitutionality of sec. 2(b). Practically speaking, many calls for boycott concern existing contractual relations – calls for artists to cancel their appearances, calls for the media to cancel existing commercial ties, and so forth.

            True to my above approach, constitutional review is not conducted in light of the First Amendment of the United States Constitution. We are concerned with the proportionality test established under sec. 8 of Basic Law: Human Dignity and Liberty, in general, and at this stage, the proportionality test stricto sensu, in particular. From that standpoint, entrusting the power to impose sanctions for the expression of a political position in the hands of an individual is not proportionate. I will refer to the reasons given above in regard to the constitutional analysis of the tort established in sec. 2(a), including the chilling effect that derives from filing a suit by one individual against another. As stated, there is no effective “filter” that would prevent the filing of multiple, political tort suits in the various judicial instances. An after-the-fact dismissal of a suit by the court will not prevent the overall influence of the effect upon freedom of expression. It is a priori improper to conduct political debates in the courts. And it is also certainly undesirable, in terms of judicial policy, to allow such conflicts to be brought before the courts for judicial decision. It should again be emphasized that we are concerned, inter alia, with subjects that are at the heart of the political debate. This is as opposed to entrusting this sensitive matter in the hands of the government, which enforces the protection of the interests of the boycotted group while employing a filter from the start, as will be explained below. This allows for the achievement of a proportionate balance between the purpose and the means adopted to protect it. Moreover, judicial review can be conducted in advance, by examining the directives or criteria established by the authorities.

            One might raise objections to this approach. One possible argument is that it cannot definitively be stated that a politically motivated call for a boycott will always be immune to a claim of inducing breach of contract. “Justification” is a broad safety-valve concept. Within its bounds considerations of justice, personal interests and public interests are examined. The scope of judicial discretion is broad and flexible. Moreover, sec. 62(a) of the Civil Wrongs Ordinance comprises other elements – “knowingly” and “causal connection”. Each of the elements comprises a broad spectrum of situations. As for knowingly, in one case a person converses with another and asks him to breach a specific contract. In another case someone makes a general call for the breach of contracts in a particular field, knowing that people may respond to the call. The causal connection may also be complicated and difficult to untangle. Is it sufficient that the defendant presented convincing arguments in expressing his political position? Is procuring required? Is there a difference between a situation in which the caller for a boycott initiates the call, and one in which the party in breach asks his opinion? (See and compare: CA 123/50 Bauernfreud v. Dresner, IsrSC 5 (1) 1559, 1573 (1951), Cohen, pp 233-236).

            From these question we see that, even absent the condition of justification, it is possible that the tests of causal connection (“caused”) and mental element (“knowingly”), each independently erects challenging hurdles in the path of proving the tort of inducing breach of contract by means of a call for a boycott. The three terms have mutual influence. The terms “knowingly”, “causation”, and “justification” must be defined against the background of their mutual interaction. Moreover, Israeli legal experience shows that plaintiffs have not made broad recourse to this section on the basis of political stands. This, as opposed to commercial considerations. And we would again recall what was held in the American EPIC case, according to which the case law in this area strongly supports the thesis that, even without recourse to constitutional considerations, it is doubtful whether a call for a political boycott, by its nature, would result in tortious liability (the EPIC case, p. 194).

            Of course, these considerations are not primary, but are a helpful device for understanding the nature of the issue. We should not forget that according to the language of sec. 2(b), the Boycott Law enters the lion’s den of conditions for proving the tort of inducing a breach of contract. The position adopted is one sided – freedom of political expression in the form of a call for a boycott is never a justification. Even if we were to assume that, under certain circumstances, the justification would not be available to a person causing the breach, it would appear that the comprehensive result is not proportionate. We are, after all, concerned with the test of proportionality stricto sensu under sec. 8 of Basic Law: Human Dignity and Liberty. The assumption is that the section is intended for a proper purpose. However, a proper purpose does not ensure that the law is proportionate in the narrow sense. We should bear in mind that we are concerned with a suit filed by one individual against another. This situation reinforces the need to maintain the accepted principles of tort law, and not so sharply deviate therefrom. This is particularly so when the need to protect freedom of political speech is poised on the other side of the scales. Section 2, together with its subsections, is aimed at the person calling for a boycott and not the boycotter. A call for participation in a boycott focuses the debate in the field of freedom of expression. Freedom of political speech is center stage. The prohibition created under the Boycott Law treats not of the action but of the call. The rule is that it is easier to restrict the freedom of political speech when it is intended to promote an unlawful purpose. And at its most fundamental level, it would appear that the disproportionality of sec. 2 derives from the concrete form that it takes in regard to freedom of political expression: granting an individual a means for suing another individual on the basis of his position on a political issue.

            The end of a section: From the perspective of interpretive harmony, there is no room for drawing distinctions among the subsections of sec. 2 of the Boycott Law. In our view, even if some distinctions might be found among them, they would be distinctions without a constitutional difference. I therefore join my colleagues Justice Melcer and Justice Danziger, though each following his own approach. My conclusion is that sec. 2 – as drafted – is not proportionate, and it must be struck down in its entirety. On the scales of proportionality stricto sensu, the value of freedom of political expression must prevail, both in principle and in practice.  On the level of principle, a different outcome may inadvertently deprive freedom of political speech of its proper protection. Of course, I am aware that the enacting of the Law reflects the position of the majority of the Knesset that a call for a boycott of the State of Israel and its academic institutions, or part of its territory, is a severe matter that harms the state. Nevertheless, the real test of freedom of political speech is precisely when freedom of speech is “problematic” and may even anger. A defensive democracy must also protect its character by protecting freedom of speech. On the practical level, an approach that would not invalidate the Law might open a door. The majority will be left to decide, in accordance with its view, when to create a chilling effect by means of a civil suit against political positions. Such an approach is inappropriate to a democracy. I would therefore recommend to my colleagues that sec. 2 must be struck down.

 

Section 3 – Denying Participation in a Tender

14.       Common to sections 3 and 4 of the Law is the imposition of administrative sanctions. Section 3 treats of the precluding participation in tenders. Section 4 concerns provisions in regard to the denial of certain benefits, for example, denying tax incentives Just as there is a connection between the constitutional analysis of sections 2(a) and 2(b), there is a connection between sections 3 and 4. I will begin by examining sec. 3. This section, entitled “Directives restricting participation in tenders”, establishes as follows:

The Minister of Finance is authorized, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, to issue directives in regard to restricting the participation in a tender of anyone who knowingly published a public call for a boycott against the State of Israel, or who committed to participate in such a boycott, including a commitment not to purchase goods or services produced or supplied in Israel, by one of its institutions, or in an area under its control; in this section, a “tender” is defined as any tender that must be administered in accordance with the Mandatory Tenders Law, 5752-1992.

            Thus, a connection is created between a public call for imposing a boycott or a commitment to participate in a boycott and restricting the participation in a tender. I am of the opinion that, as opposed to sec. 2, this section clears the constitutional hurdle. The infringement is by a law; the purpose of preventing harm to the State of Israel by means of boycott – which appears in the Law’s title – is a proper purpose that befits the values of the State of Israel.

            As for proportionality stricto sensu, I believe that there is a rational connection between the means and the purpose. Moreover, there would not appear to be a less harmful means that would achieve the same purpose. That, bearing in mind the objective of giving real expression to the consequences of calling for a boycott or committing to participating in a boycott.

15.       As for the third subtest, I will say as follows. In general, a careful distinction should be drawn between sec. 2, which treats of a civil tort, and sec. 3, which treats of participation in a tender. Taking a broad view, this section differs from sec. 2 in two primary ways: the first is the character of the harm to the publisher or the person committing to participate in the boycott. The second is the identity of the entity that initiates the process.

            As for the first sense, both sections impose a restriction upon freedom of political speech. However, in my opinion, it is easier to restrict freedom of expression by means of restricting participation in a public tender than by creating a new tort or a sweeping principle concerning the tort of inducing breach of contract. By nature, a tender establishes conditions for participation. That does not mean that any condition may be imposed. However, in the matter at hand, there would appear to be a certain logic to an approach by which a person wishing to participate in a state-sponsored tender cannot oppose the state while enjoying absolute immunity.

            As for the second sense, I explained above the problematic nature of granting a legal permit to individuals to act against other individuals on the basis of political expression. For the same reasons, when the entity imposing restrictions upon the caller for a boycott is the state, there are mechanisms that make the sanction more proportionate. As noted, the state is subject to the principles of administrative and public law, including the principles of natural justice, fairness and reasonableness. These two considerations – the character of the infringement and the identity of the initiating party – join at the point where the process meets the criteria for a proportionate action. We thus find that the combination of the character of the infringement – a tender as opposed to a tort suit, and the identity of the party initiating the process – the state as opposed to an individual, points to the advantage of sec. 3 over sec. 2 of the Boycott Law in all that relates to proportionality stricto sensu.

            As I will explain in detail below, the balance inherent in sections 3 and 4 between the sanction and the act that invites it also meets the comparative-law test. For the moment, I will suffice in referring to a law of the State of New York that comprises a similar sanction in the context of boycotts. Section 139-h of the New York State Finance Law establishes that contracts with the state will include a clause in regard to any contractor that “has participated or is participating or shall participate in an international boycott”, where such participation is prohibited. A contract with an entity that meets that criterion is deemed void. On one hand, the clause does not concern one who calls for a boycott, but rather a participant or one who will participate in the future. On the other hand, the clause does not only prohibit participation in a tender, but establishes a mechanism that leads to the voiding of contracts that have already been signed.

16.       Nevertheless, I am of the opinion that two elements of sec. 3 may raise a constitutional problem: the first – the need for due process, and the second – the lack of directives or rules may lead to the absence of a rational relationship between the denial of participation and the call for boycott. I will explain.

            I will begin with the issue of due process. The Law authorizes the Minister of Finance, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, to issue directives in regard to participation in a tender. In this regard, account should be taken both of the infringement of freedom of political expression and the infringement of equality. I extensively discussed the importance of freedom of expression above. As for equality, the significance of the provision is that were it not for call for boycott, the bidder might have met the other threshold conditions of the tender.  In other words, he will only be prevented from participating due to the call for a boycott. It should be borne in mind that a public tender supports the principle of equality. It is, therefore, vital to ascertain whether there is a legal mechanism that allows such a bidder, whose bid was rejected for non-fulfillment of the conditions of sec. 3, to challenge the decision.

            It would seem that the answer to that is in the affirmative. The key to this conclusion is to be found in sec. 5(1) of the Administrative Affairs Courts Law, 5760-2000. That section concerns the Administrative Court’s jurisdiction over various matters. The section refers to Appendix 1, and sec. 5 of that Appendix addresses tenders. Therefore,  on the face of it, a person deprived of the possibility of participating in a tender on the basis of a call for a boycott has the right to bring the matter before the Administrative Court, and in accordance with the rules of procedure, even submit an appeal to this Court.

            The second problem concerns the specific provisions that will be established in regard to restricting the participation in a tender. It must be assured that the application of the section to a bidder will be rational. We would emphasize that we are not referring to the second test of proportionality – rational connection. In my opinion, as explained, sec. 3 passes this test. But here we are concerned with the application of the third subtest – harm versus benefit. In this regard we may ask if it is imaginable that, for example, anyone who calls for a boycott would automatically be prevented from participating in a tender. But one can even learn from the language of the Law that such is not the intention. Otherwise, how are we to understand the various levels of the mechanism for establishing directives for the purpose of making individual decisions – the involvement of three different authorities?

            It should again be emphasized that the decision is that of the Minister of Finance, subject to the consent of the Minister of Justice and the approval of the Knesset. This is a structured administrative process that may justify the belief that the decision will be made thoughtfully. Nevertheless, it would seem that it will be necessary to show a rational connection between the nature of the tender and the nature of the call for a boycott. I will present an example that is not intended as a basis for my decision but only to illustrate the complexity: The owner of a transportation company calls for a boycott – as defined by the Law – against the Judea and Samaria territories. Despite that conduct, he submits a bid in a tender for the transport of school children in Ariel. In another case, the tender is for the transport of school children in Tel Aviv, and the bidder calls for denying services to the residents of Judea and Samaria. It would appear that from the viewpoint of a rational connection, it would be easier to justify the first case as opposed to the second. This would seem to be the difference that must be taken into consideration. As noted, it is not my purpose to permit precluding participation in the tender in the first case, or to deny it in the second. But I do believe that we can expect some rational relationship between the nature of the tender and the nature of the call for a boycott.

17.       Any other result might intensify the infringement of freedom of political expression in an unjustifiable manner. And note that I am not defining what a “rational relationship” might be. But, clearly, this must be expressed in the directives that the Minister is required to establish.

            To allay any doubts, I would like to clarify the matter of the Minister’s duty to establish directives as a condition for restricting participation in tenders. Section 3 states: “The Minister of Finance is authorized… to issue directives…” I would address two points in this regard. First, there is no need in this context to address the linguistic difference between “directives”, “criteria” or “internal procedures”. In any case, criteria will have to be established, which will be published, and that will allow various entities to plan their steps accordingly. The Law itself says as much. A tripartite mechanism is established that requires the consent of the Minister of Justice, approval of the Constitution, Law and Justice Committee, and the establishing of the directives. We can learn from this that the Law requires the exercise of discretion. That discretion is “fortified” by the consent of the Minister of Justice and the approval of a Committee, as opposed to mere consultation with those entities whose concern is the field of law. Secondly, it is clear from the language of the Law that authority granted the Minister permits him to establish or not establish directives. He does not have authority to prevent participation in a tender without establishing directives. That is to say, the promulgation of procedural directives, as provided in the section, is a precondition to precluding participation in a tender. This interpretation is reinforced by the language of sec. 4, which expressly states that the Minister may exercise his authority under that section even without promulgating regulations. A similar provision in regard to directives does not appear in sec. 3. In any case, criteria that will accompany and preceed any decision are required for any decision by the Minister.

            Therefore, there is an infringement of freedom of political expression, but even if the case is liminal, it would appear that the legislature’s decision is within the boundaries of the constitutional margin.

17.       To summarize this chapter: There is a complex administrative mechanism for establishing the directives for restricting participation in a tender. In addition, there is a mechanism for judicial review. I am, therefore, not of the opinion that sec. 3 should be struck down. This view is based upon the nature of the sanction and the identity of the party initiating the proceeding. Additionally, the comparative-law review supports imposing sanctions of this type as a response to participating in a boycott and other activities associated with it. This matter is somewhat complex, and operates in two directions in all that relates to calling for a boycott. I will address this below. In any case, nothing in the conclusion not to void this section would prevent judicial review of the manner of its application. On the contrary, in the absence of directives at this stage, judicial review may be necessary. I believe that sec. 3 of the Law should be understood such that the directives that the Minister is meant to establish must reflect – in manner and in some level of detail – a rational relationship, as explained. It should be noted that in this matter, as opposed to sec. 2, I believe that we may take the path of constitutional interpretation – for example, the need for a rational relationship – rather than voiding the section. This difference derives from the fact that in regard to sec.3, we are at most concerned with a lacuna, whereas the language of sec. 2 is clear and does not leave room for alternative interpretation, in my view.

            Subject to the aforesaid, I would recommend that my colleagues deny the petitions to the extent that they concern sec. 3.

 

Section 4 – Denial of Benefits

18.       This section concerns “Regulations preventing Benefits”:

(a) The Minister of Finance, in consultation with the Minister of Justice, may decide that someone who knowingly published a public call for a boycott against the State of Israel or committed to participate in a boycott:

(1) Will not be deemed a public institution under clause 46 of the Income Tax Ordinance;

(2) Will not be eligible to receive monies from the Sports Betting Council under section 9 of the Regulation of Sports Betting Law, 5727-1967; exercise of the authority under this section requires the consent of the Minister of Culture and Sports;

(3) Will not be deemed a public institution under section 3A of the Foundations of the Budget Law. 5745-1985, regarding the receipt of support under any budget line item; exercise of the authority under this section requires the consent of the Minister appointed by the Government as responsible for said budgetary line, as stated in section 2 of the definition of  “person responsible for a budget line item”;

(4) Will not be eligible for guarantees under the State Guarantees Law, 5718-1958;

(5) Will not be eligible for benefits under the Encouragement of Capital Investment Law, 5719-1959, or under to the Encouragement of Research and Development in Industry Law, 5744-1984; exercise of the authority under this section requires the consent of the Minister of Industry, Commerce and Employment.

(b)        In exercising the authority according to subsection (a), the Minister of Finance will act in accordance with regulations that he will promulgate in this regard, with the consent of the Minister of Justice, and with the approval of the Knesset Constitution, Law and Justice Committee; however, if no such regulations have been promulgated, it will not detract from the authority under subsection (a).

            The heart of the matter is the denial of five benefits: tax credits for contributions; funding from the Sports Betting Council; support from the state budget; state guarantees; and benefits under the Encouragement of Capital Investment Law.

            For the reasons set out in regard to sec. 3. I am of the opinion that this section, as well, clears the first hurdles of constitutional review – “by a law” and for a proper purpose that befits the values of the state. It also passes the rational connection and the least harmful means tests. Our focus, then, is on the third subtest, and again the spotlight is upon the infringement of freedom of political speech. Section 4 is similar to sec. 3 in important ways. Both are distinguished from sec. 2 in the character of the sanction and the identity of the initiator of the process. I will make three comments in regard to sec. 4 that are intended to show that the problems related to sec. 4 are greater than, or at least different from the problems that characterize sec. 3.

            The first comment concerns the nature of the sanction. In my view, from a constitutional standpoint, it is easier to limit participation in a tender than to deny benefits established by law. A tender inherently includes a variety conditions. As a result, every tender creates group that is defined by the conditions of the tender as precluded from participation. As opposed to that, benefits are directed at known groups whose activity is constantly influenced by the benefits provided by law. Of course, the state is not required to grant benefits. But once it has decided to do so, that decision comprises an obligation to allocate those benefits in an equal manner. I shall put that that differently. What is common to sections 3 and 4 – denying benefits and limiting participation in tenders – is the allocation of resources, but in two different ways. A participant in a tender is interested in profiting from a framework established by the state. As opposed to this, the various benefits of sec. 4 derive from the public character of the organizations, or from the public interest in their activities. In general, the conduct of such organizations is more closely connected to the public benefits to which they are entitled in accordance with the existing legal criteria. Such harm to the expectations of such groups it more severe than the commercial and general harm of sec. 3 to entities interested in winning a public tender.

            But why do I believe that the Law clears the hurdle of proportionality despite this observation? According to my approach, the weight of the considerations stated in regard to sec.3 tilt the scales: the difference between a civil action for damages by an individual as opposed to a denial of benefits by governmental authorities. That serves to limit the harm to freedom of political expression and balance the scales of proportionality. Moreover, although the sanctions under sec. 4 are more severe than those under sec. 3, they have an “advantage” over them in another area. The benefits under discussion are intended to promote objectives that the state views positively by granting benefits or funding to organizations that work to realize them. If the organization also – or only – works to undermine those desired objectives – for example, economic prosperity -- then denying the benefit can contribute to their achievement. Such a rational connection does not necessarily exist between permitting participation in a tender and the realization of various objectives. In that regard, the administrative sanction is “external” to the tender and does not derive from its character. The overall result is that even if sec. 4 is more borderline than sec. 3 from the constitutional point of view of freedom of political speech, it meets the test of proportionality.

19.       A second comment. With a view to restraining the Minister of Finance, the Law requires that he establish regulations. This is a proper approach. The regulations provide context for the exercise of the Minister’s discretion. Nevertheless, the end of sec. 4(b) raise a problem – even if regulations are not established, it will not detract from the Minister’s authority to implement the Law. Section 4(b) requires that the Minister of Finance promulgate regulations, with the consent of the Minister of Justice and the approval of the Knesset Constitution Committee. In other words, the procedural mechanism we also find under sec. 3, except that here it concerns regulations rather than directives. The requirement of establishing regulations may clarify what needs to be clarified. But the end of sec. 4(b) – stating, as noted, that notwithstanding the requirement for regulations, the Minister can deny benefits even without establishing those regulations – remains.

            In my opinion, the possibility that the Minister might act in the absence of regulations, and without the consent of the Minister of Justice and the Constitution Committee is problematic where the sensitive issue of freedom of political expression is concerned. Moreover, it would hardly be an exaggeration to say that legislative experience shows that time – even a long time -- may elapse before regulations are promulgated. As long as the Law permits the Minister to exercise his authority under sec. 4 in the absence of regulations, the problem remains. On the other hand, this Court has not adopted an approach of making the implementation of a law contingent on the promulgation of regulations, except where the language of the law and its purpose show that it cannot be implemented in their absence (see: Itzhak Zamir, Administrative Authority, vol. 1, 209-210 (2^nd ed., 2010) (Hebrew); HCJ 28/94 Bezalel Zarfati v. Minister of Health, IsrSC 49 (3) 804, 815, 825 (1995)). In the present case, the Law expressly states that there is no requirement of establishing regulations. It would be far-reaching to prevent the possibility of implementing the Law for this alone, when the Law otherwise clears the constitutional hurdle.

            We know arrive at the third comment – the procedure for denying the benefit by the Minister of Finance.  Section 3 authorizes the Minister to issue directives, and conditions denying participation in a tender on their issuance. The directives must receive the consent of the Minister of Justice and the approval of the Constitution Committee. As opposed to this, sec. 4 grants the Minister of Finance himself the authority to deny a benefit, and not merely to establish directives. Moreover, in exercising that authority, he is required to consult with the Minister of Justice. To “consult”, without need for approval or consent. Even if this consultation is substantive and not formal, the discretion is that of the Minister of Finance alone. The mechanism falls upon his shoulders. This comment is particularly important in a situation in which the Minister might exercise his authority in the absence of regulations established with the consent of the Minister of Justice and the approval of the Constitution Committee. But this comment is also of importance even if the Minister were to act after the establishing of regulations. The reason for this is that the person responsible for making a legal decision is not one who fulfils an operative legal function. In any case, it is clear that this third comment is of greater weight if regulations are not promulgated.

            But if my conclusion is that the Law is proportionate, what are the consequences of the second and third comments? My answer to this is that it is important to point out the necessity for establishing regulations, to the extent possible. It is not clear why the Minister of Finance is given the broadest authority particularly in regard to the more “harmful” sec. 4. It may be that the legislature thought that the harm inflicted by sec. 3 is greater for the reason stated above or for other reasons. In any case, establishing regulations is needed even if not required. Moreover, the legislature did not establish how the Minister of Finance might exercise his authority in the absence of regulations. There is no linguistic basis for interpreting the Law as saying that the procedure established under sec. 3 – promulgating directives with the consent of the Minister of Justice and the approval of the Constitution Committee – is required. However, we can learn the nature of the requirement from those procedures – at the very least, the establishment of directives or procedures. The criteria that will be established will have to meet the rationality and reasonableness tests (see and compare HCJ 4540/00 Labar Abu Afash v. Minister of Health (published in Nevo) paras. 5-6 (May 14, 2006)). One might say that precisely because sec. 4 does not require the consent or approval of the Minister of Justice or the Constitution Committee, the rules to be established are of greater importance. In my opinion, serious consideration should, perhaps, be given to not implementing the Law until regulations have been promulgated. Although the Law allows for its implementation even without regulations, and while the legislature’s word should, of course, be respected, the matter is given to the discretion of the executive branch. What this means is that if regulations are not promulgated, the Court will have to exercise stricter scrutiny, not as an incentive for promulgating regulations at an earlier date, but rather in response to the situation that will be created prior to their promulgation. While the Minister of Finance indeed enjoys broad discretion, which is properly exercised in the context of taxation and benefits, we are here concerned with a restriction upon freedom of expression. One cannot exaggerate the care that must be exercised in this regard.

            An additional point is that of appropriate adjudicative procedures. The matter should properly be arranged expressly in the regulations, and without wishing to prejudice the issue, one might consider that the matter initially be addressed by a trial court, such as the District Court or the Administrative Affairs Court.

19.       To summarize, I am of the opinion that the petitions should be denied in regard to sections 3 and 4. However, section 3 is borderline, and section 4 even more so. I have explained my reasons for that. In my view, in order to meet the proportionality stricto sensu test, the mechanisms for establishing the criteria for the implementation of the sections must be put into operation in accordance with the interpretive guidelines that have been delineated. 

            In order to present the complete picture, recourse should be made to comparative law, both in regard to sections 3 and 4, as well as in regard to the entire Law.

 

More on Comparative Law

20.       We are concerned with a transnational legal issue. The issue is the right to freedom of political expression versus protecting the state against the imposition of a boycott upon it, or upon part of it, or upon its institutions. As we shall see, the “Made in Israel” version of the Boycott Law has unique characteristics that more directly and clearly affect freedom of political speech. Nevertheless, an examination of comparative law will be helpful in deciding this case. Over and above the fact that recourse to comparative law is accorded a place of honor in our legal system, such recourse appears especially justified in the case at bar. The reason for this is that the State of Israel is the object of a boycott in certain states, whereas other states have enacted laws in order to combat the phenomenon. My colleagues, and the various parties to the petition, dived deeply into the waters of American law. This was also given significant emphasis in the Explanatory Notes of the original bill (the Prohibition of Boycott Bill, 5770-2010, was presented to the Speaker of the Knesset on July 5, 2010. The Explanatory Notes can be found on the Knesset website: knesset.gov.il/privatelaw/data/18/2505.rtf). The Explanatory Notes begin by saying that “in the United States there is a similar law protecting its friends against third-party boycotts, with the basic assumption that a citizen or resident of the country should not call for a boycott against his own state or its allies … if the United States protects its friends by law, then a fortiori, Israel has a duty and right to protect itself and its citizens by law” (this part does not appear in the official Explanatory Notes). In view of the aforesaid, and considering the impressive American tradition of defending freedom of speech, and freedom of political speech in particular, it would, therefore, be useful to examine the American laws on point.

            As noted, the two primary American laws treating of boycotts are the Export Administration Act of 1979 (EAA), and the Ribicoff Amendment to the Tax Reform Act of 1976 (TRA). We will briefly review what is stated in those laws. Both laws relate to participation in a boycott (other than a boycott imposed by the United States), or the performance of acts connected to the imposing of such a boycott, the nature of which will be explained below (see para 8, above). By virtue of the EAA, criminal sanctions of imprisonment or fine can be imposed, as can various administrative sanctions, such as an administrative fine. By virtue of the amendment to the TRA, certain tax benefits can be denied. Additional laws have been enacted by various states. We have seen an example of that in the state of New York. As noted, sec. 9 of the New York STF establishes that contracts between the state and bodies that have participated or are participating or shall participate in a prohibited boycott are void. Several laws address this issue in the state of California. For example, sec. 16649 of the California Government Code includes a reference to the Arab League boycott of the State of Israel. Inter alia, various sanctions are imposed upon the use of state funds in the framework of contracts with companies participating in that boycott. The state of Florida prohibits, inter alia, the transfer of information requested for the purpose imposing a boycott. The possible sanctions include a fine or imprisonment (Florida, Statues, Title XXXIII §542).

            Comparing the Boycott Law and the various American laws is instructive. It will aid in clarifying what they share in common and in what they differ. This will sharpen the delicate balances that the Law strikes between the protected interest and the scope of its protection, and the extent of the harm to freedom of expression.

21.       The most salient difference is the absence of a civil tort of calling for a boycott in the American legislation. Those laws do not permit a party harmed by a boycott to initiate a civil suit. It should be emphasized that the legislation also relates to situations in which one company refuses to contract with another company within the United States (see, e.g., sec. 8(a)(1)(A) of the EAA: “Refusing… to do business with… any other person, pursuant to… a request from… the boycotting country”). The law does not recognize situations in which another person incurs damage as exceptions. As opposed to this difference, there is a striking similarity in the authority’s ability to impose sanctions that are comparable to those appearing in sections 3 and 4. The state’s right to act to protect its interests is recognized, even at the expense of restricting various forms of self-expression. Nevertheless, it is both proper and important that we emphasize the differences in this regard, as well.

            The emphasis of the Israeli Boycott Law is upon the call for a boycott. Sections 3 and 4 retain the prohibited call alongside the alternative of an undertaking to participate in a boycott. It is not clear whether this refers to a legally binding commitment, such as a contractual obligation. Moreover, it is unclear whether the phrase “who committed to participate in such a boycott” refers to present participation in a boycott, or even to a commitment to participate in a boycott the future. In either case, it would seem that the alternative of committing to participate in a boycott is shared in common by the Boycott Law and its overseas cousins. Thus, sec. 999(a)(3)(A) of U.S. Code 26 gives the following definition: “For purposes of this section, a person participates in or cooperates with an international boycott if he agrees as a condition of doing business… with… a company… to refrain from doing business with… companies of that country [which is the object of the boycott]”. In other words, a person who agrees to refrain from doing business with companies from a certain country as a condition to doing business with another company is considered as participating in a boycott. Thus also the alternative “…has participated or is participating or shall participate in an international boycott” in sec. 9 of the New York STF. It should come as no surprise that a commitment to participate in a boycott is commonly found in boycott legislation. We are more concerned with a (legal) act than a mere expression. It would seem no coincidence that the legislature established a requirement of a “commitment” as opposed to a general declaration or non-binding expression of desire.

            The alternative of calling for a boycott presents a different picture. There is not prohibition upon calling for a boycott. While some laws do refer to actions related to boycotts other than active participation, they do not reach the level of a “call”. For example, the alternatives in the EAA define the prohibited conduct as “refusing” or “requiring another person to refuse” (sec. 8). As we see, the section concerns a demand from a third party to participate in a boycott in the course of a transaction. Section 16649 of the Cal. Gov. Code addresses a party that expresses “Compliance with the Arab League's economic boycott of Israel”. Similar language can be found in other laws. One can also find restrictions concerning freedom of speech, or at least indirect, non-participatory support of a boycott in American law. Thus, for example, sections 8(a)(1)(D-E) of the EAA impose a prohibition upon providing information about persons or bodies where the information is intended to lead to boycotting. A similar alternative can be found in Florida: “It is an unlawful trust and an unlawful restraint of trade for any person… to… furnish information with regard to… a person’s… national origin… in order to comply with, further, or support a foreign boycott” (Florida, Statues, Title XXXIII §542.34). Nevertheless, there is a difference between providing information for the purpose of a boycott and calling for a boycott. Providing information is part of the boycott activity itself – in the sense of “aiding” or “participation in a common purpose”. As opposed to this, a call remains in the sphere of “procuring” – addressing another with the purpose of persuasion. Therefore, restrictions upon the latter directly infringe freedom of political expression. Nevertheless, one might say that the prohibition upon providing information – without participating in the boycott – reduces the distance between the two. Ultimately, the two laws are comparable for other reasons as well. For example, the Israeli law does not impose a criminal sanction, as opposed to the above-mentioned laws.

            And now to return to sections 3 and 4 of the Boycott Law. As I noted above, a comparative examination of these provisions is complex. As opposed to sec. 2, secs. 3 and 4 also extend to one who commits to participate in a boycott. This approach, including its sanctions, is consistent with the comparative law. The problem lies in the first alternative – calling for a boycott. I noted above my belief that whereas sec. 2 does not succeed in overcoming the constitutional hurdle, secs. 3 and 4 do. There are four reasons for this. The first consists of the reasons stated above in regard to the identity of the party initiating the process and the nature of the harm (see paras. 15 and 18 above). The second, although not a primary reason, is that while these sections do not establish a prohibition upon participating in a boycott, they do establish a prohibition upon committing to do so. This paves the way for a certain leniency as opposed to sec. 2. We should not ignore the fact that there are sanctions for participating in a boycott and for other actions, which is not the case in our system, and rightly so. Overall, the American law strikes various balances that decrease the distance between the United States and Israel.

            A third reason is that there are states, like France, that adopt a closer approach to calls for boycott (see, e.g., the survey presented to the Constitution Committee, para. 8 above, at pp. 12-13). Although we are speaking of legislation that prohibits discrimination on the basis of origin or nationality, and I am not sure that the two are necessarily congruent, it does carry some weight. Fourth, some weight must be given to the fact that the State of Israel is the object of a boycott in various countries. This influences the proportionality stricto sensu of secs. 3 and 4, which infringe freedom of political expression to a lesser degree than sec. 2. The test is one of benefit versus harm, and one cannot ignore the harm to the State of Israel as a result of these boycotts. This is also true when the boycott is directed at a particular, law-abiding public, which the state is duty-bound to protect. The above can serve to justify secs. 3 and 4 in the face of constitutional review, even if they are borderline, as is particularly the case in regard to sec. 4. We should recall the statement made by Prof. Mordechai Kremnitzer before the Constitution Committee: “if this bill were built along the lines of existing models in the world, I would not have a word to say on the constitutional level” (p. 28 of the protocol of the session of Feb. 15, 2011). That position falls upon open ears. Even if one may take the view that the balance achieved abroad differs from that appropriate to the Israeli system, there is a constitutional margin in this regard, and secs. 3 and 4 of the Israeli Law fall within its bounds, subject to the reservations expressed above.

            At the end of the day, section 3 is borderline. Section 4 pushes the limits. But both remain – even if just barely – on the constitutional side of the border. I have, therefore, added the requirement of a rational relationship in regard to the implementation of those provisions, and I emphasized the need for close review of the implementation of the Minister of Finance’s authority under sec. 4. For example, it would appear that the criteria to be established must take account, inter alia, of the nature of the call, its content, character and force.

            As opposed to that, all of the above reinforce my conclusion in all that regards sec.2 of the Law. Overall, that provision is deviant even in terms of comparative law, which should come as no surprise inasmuch as its danger greatly exceeds the relief that it provides.

22.       I shall now move from legislation to case law. My colleagues and I addressed the Claiborne case at length. My present purpose is not to reiterate, but rather to address the reservations expressed and the distinctions suggested. My colleague Justice Melcer expressed the opinion that two precedents erode that rule – the Holder case and Longshoremen’s case. I do not agree with him in all that concerns the interpretation and development of American law. In my opinion, that also arises from the cases themselves.

            In Holder v. Humanitarian Law Project, 561 U.S. 1 (2010), the plaintiffs sought to aid groups that were designated as terrorist organizations. Their claim was that the aid was intended solely for lawful purposes and to promote peace. The aid involved the study of various legal practices. The petition challenged a law that prohibited providing support to foreign terrorist organizations. The majority opinion of the Court held that the case concerned providing support for a terrorist organization, which was provided in the form of “speech”. Therefore, that speech was not protected under the First Amendment of the Constitution. The opinion of the Court does not refer to the Cliaborne rule, and that rule has neither been overturned nor eroded. Israel, too, has a criminal offense of providing support to a terrorist organization. Support by means of “political expression” is not protected. However, no analogy can drawn between this and calling for a boycott by peaceful means. The case of International Longshoremen's Association, AFL-CIO, v. Allied International, Inc., 456 U.S. 212 (1982) concerned stevedores who refused to handle cargoes from ships arriving from or destined for the Soviet Union, against the background of its invasion of Afghanistan. The Court held that the case concerned an illegal boycott prohibited by the National Labor Relations Act. This did not concern freedom of political expression, but rather conduct that did not amount to a political boycott, and it was certainly not a call for a boycott. Moreover, the context was conduct contrary to labor laws that directly addressed the subject. In other words, the relevant considerations concerned the special status of the labor union. Its power in relation to the employer is so great that it was held that the powers afforded it should not be extended to third parties in commercial relationships with the employer that are unrelated to the labor union. That is to say that no analogy can be drawn from this case to boycotting that is part of normal public discourse, and the related issue of freedom of political expression.

            The cited decisions do not, therefore, detract from the Claiborne rule. As opposed to this, Orloff does express a different opinion in his article cited by my colleague Justice Melcer (see Gordon M. Orloff, The Political Boycott: An Unprivileged Form of Expression, 1983 Duke L. J. 1076 (1983)). However, that view can be seen as an isolated opinion that was written about a year after the Claiborne decision. The author expressly states that he disagrees with it on the merits. But those reservations have not been adopted in practice. In the thirty years that have passed since the publication of that article, the courts of the United States have charted their course for the protection of freedom of speech. My colleague suggests that we see those two cases as proposing a different direction for the future. In my opinion, a different conclusion is indicated. In any case, the current case case law clearly disagrees with that view, as I shall explain below.

            Truth be told, the Claiborne case did not introduce a revolutionary innovation. For the purpose of illustration, let us consider the case of Missouri v. Nat’l Org. for Women, Inc., 620 F.2d 1301 (8th Cir. 1980). In that case, which preceded Claiborne, women’s groups boycotted states that had not ratified the Equal Rights Amendment. As a result, businesses in the state of Missouri were harmed. Their tort suit was denied on First Amendment grounds. The situation following Claiborne remains unchanged. The background of the dispute in Searle v. Johnson, 709 P.2d 328 (Utah 1985) was a call by the defendants for a tourism boycott of Uinitah County. Their purpose was to raise public awareness of the poor conditions and suffering of animals in the county dog pound. The court exempted the defendants from tortious liability in reliance upon Claiborne. While other cases did not expressly refer to the Claiborne rule, freedom of political speech was shielded against tortious liability (see, e.g., Hotel Saint George Assocs. v. Morgenstern, 819 F. Supp. 310 (S.D.N.Y. 1993); A Fisherman's Best v. Rec. Fishing Alliance, 310 F.3d 183 (2002)).

23.       Another decision that received significant attention was that of the European Court of Human Rights in Strasbourg in the matter of the mayor of Seclin (Willem v. France (application no. 10883/05), 10.12.2009). As may be recalled, the court denied the mayor’s appeal of his conviction for discrimination on national, racial and religious grounds. I will briefly refer to two point in this matter. The first is that the case concerned a sanction imposed by the state. We are not aware of the granting of damages in favor of any of the companies whose products gathered dust on supermarket shelves in Seclin. This result is, therefore, not at odds with the striking down of sec. 2, which establishes a civil tort.

            The second is the uniqueness of the judgment. We learn from the court’s reasoning that the conviction was grounded upon the combination of the defendant’s identity and the circumstances of the call for a boycott. Paragraph 32 of the decision emphasizes that “the fact that the applicant is the mayor is central to this case” (translation here and below are mine – N.H.). Paragraph 37 explains that “as mayor, the applicant has duties and responsibility. In particular, he is required to maintain neutrality…in municipal matters, in which he represents the public”. In addition, para. 36 refers to the special circumstances of the call: “Consideration must be given not only to the oral declaration of a boycott in the city council, but also to the announcement published on the municipal website. This announcement intensified the discriminatory character of the call for a boycott, and the use of controversial expressions in that regard”. Thus, it was the combination of circumstances that led to the finding that the conviction did not disproportionally infringe freedom of political expression. The call for a boycott defined in the Israeli Law does not apply solely to such circumstances, but encompasses every person or body without consideration of personal status or public function. Without wishing to express a definitive opinion on the matter,  it would seem that the question of how to deal with a call for a boycott of the state by an individual is different from the question of how to deal with a mayor who allocates public funds in contravention of the requirements of administrative law.

24.       Conclusion. The situation with which we are concerned is not simple. The State of Israel was unwillingly drawn into it even in the international arena. The conclusion I have reached – the striking down of sec. 2 and the approval of secs. 3 and 4, subject to certain reservations – gives what I believe to be a balanced, proportionate expression to all the conflicting values and interests. At the same time, it recognizes the legitimate interest of the state to defend itself and its communities. It does not leave the state vulnerable to the actions of those who seek to harm it or any particular pubic that it is duty bound to protect. It merely draws the boundaries within which the legislature may act without leading to a disproportionate result. We can summarize this as follows: The state is allowed to contend with the boycott phenomenon by means of appropriate administrative sanctions, whereas an individual cannot do so by means of a new tort against the freedom of political expression. And note that this is an integrated change. It is not merely “the state versus the individual”, but rather an administrative sanction depriving a benefit as opposed to exposure to a new kind of tort suit. This, in particular, when a call for a boycott is an element of that tort, while there is no prohibition upon participating in it.

            It can be said that this result creates a defensive democracy that defends itself against those who rise up against it, but that preserves the democratic character of society and the ideal of freedom of expression. This is an important element that distinguishes between a democratic state and one that is not. The meeting of real and ideal can make for a rocky path. That path, with all its prohibited entries and its permitted ones, is also subject to judicial review.  I would, therefore, recommend to my colleagues that we strike down sec. 2 in its entirety. As opposed to that, I believe that, in the context of this petition, we should not order the revocation of the other sections of the Law.

 

Deputy President E. Rubinstein:

Preface

1.         The Yom Kippur prayers begin with a declaration called Kol Nidre, for which the entire evening is referred to as the Kol Nidre service, and which concerns the revoking of vows, among them ostracism [ḥerem]:

“All vows, obligations, oaths, and ostracisms, restrictions or interdictions, or by any other name, which we may vow, or swear, or pledge, or whereby we may be bound … we do repent. May they be deemed absolved, forgiven, annulled, and void, and made of no effect; they shall not bind us nor have power over us. The vows shall not be reckoned vows…” What the Knesset sought to achieve in the Law that is the subject of this proceeding is, in short, a battle against ostracism, a malignant disease of which Israel is a victim. The focus of this petition is boycotts [ḥerem][4], not the freedom to use the term.

2.         I concur in the learned, comprehensive opinion of my colleague Justice H. Melcer, and would like but to add a few observations. I must begin on the level of principle. We are concerned with a central subject in the political history of the State of Israel and the region. This Court’s expertise in this regard is limited. We must, therefore, be particularly careful in considering whether constitutional intervention is appropriate. This Court decided not to intervene in the matter of the disengagement (HCJ 1661/05 Hof Azza Regional Council v. Knesset, IsrSC 59 (2) 481) in regard to the decision on the disengagement itself, as opposed to the extent of compensation for those displaced, first and foremost because it concerned a political matter, even though it involved infringement of basic – and not merely economic – rights of the Israeli residents of Gaza and northern Samaria who were forcibly evicted from their homes. The judgment stated (pp. 575-596) that the issue concerned a disagreement “that was of broad scope, pertaining to entire range of dangers and prospects related to the solution of the Israeli-Palestinian dispute. It is not at all possible to expect that this Court – and we may go as far as to say: any other court in the world – will decide these questions. The probability of the realization of the objectives of the disengagement plan rests at the heart of political, national and security activity. The Court cannot take any stand except in extreme, exceptional cases”. The matter before us concerns a delicate, sensitive situation in which the State of Israel finds itself hounded by boycotts by organizations like BDS (see the examination of the NGO Monitor website) that are not offended merely by settlement in Judea and Samaria, but by the very existence of the State of Israel, as my colleague Justice Melcer noted, and – in my opinion – the Court must not adopt an approach that may, God forbid, be viewed by a large part of the public as if “they join also unto our …” (Exodus 1:10). My colleague Justice Danziger addressed the issue of the Court’s duty, following the unforgettable words of Deputy President Landau in the Dwiekat case (HCJ 390/79 Dwiekat v. Government of Israel, IsrSC 34 (1) 1 (1979)). Indeed, at times, human rights must be defended even when that defense is unpopular. However, it seems to me that the Law under review represents a kind of cry and fear for the human rights of the citizens and residents of the State of Israel, and not only those residing in Judea and Samaria, and this carries great weight in light of what is occurring in many countries in their regard, as if to say, if someone comes to boycott and even destroy you, arise to combat him first.[5] That is the Law, that is its purpose, even if there may be other or additional means for defense, and it must be examined with a broad view and eyes open to reality. I respect the fear for freedom of expression. The right to freedom of expression is very broad in the State of Israel, but as we shall see below, the picture is complex, and the situation is not one sided.

 

A brief history

3.         My colleague Justice Melcer also addressed history (para. 23). We cannot ignore the sad facts, which have been forgotten by some with the passing years, that the Arab Boycott against the State of Israel began even before its establishment (in a 1946 decision by the Arab League imposing a boycott against the Jewish community in Palestine), was especially broadened in 1951, and has formed a particularly severe element of the pressure placed by the Arab states upon Israel over the course of many years. The boycott was run from a central office in Damascus, and operated against thousands of international firms and others that, as a result, refused to conduct business in Israel. Eventually, various states enacted laws against the boycott, particularly the United States, and the State of Israel itself fought with all its might against the boycott in various ways.

            It should be added that immediately following the Six Day War, on July 27, 1967, the military commander promulgated the Order concerning the Revocation of the Boycott Laws against Israel (Judea and Samaria) (No, 71) 5727-1967, which establishes (sec.2) that “all boycott laws against Israel are void” (sec. 1 enumerated those laws) (and see E. Zamir & E. Benvenisti, The Legal Status of Lands Acquired by Israelis before 1948 in the West Bank, Gaza Strip and East Jerusalem, (1993) 140 (Hebrew)). The peace agreements between Israel and Egypt – the Camp David Accords of Sept. 19, 1978 and the Peace Treaty of March 26, 1979 – included an obligation to normal relations between the two states, including “termination of economic boycotts and discriminatory barriers to the free movement of people and goods” (Camp David Accords, and art. 3(3) of the Peace Treaty). That is also the case in regard to the Peace Treaty between Israel and Jordan, in which art. 7(2)(a) includes the obligation “to remove all discriminatory barriers to normal economic relations, to terminate economic boycotts directed at each other, and to co-operate in terminating boycotts against either Party by third parties”. As a result of these, the boycott was significantly eased, but did not disappear (see E. Kaufman, “Analysis of the Possible Consequences of an Economic Boycott of Israel,” (Knesset Research and Information Center), presented to the Knesset Finance Committee on Dec. 31, 2014 (Hebrew); Haya Regev & Dr. Avigail Oren, The Arab Boycott (1995) (Hebrew)).

 

On the Boycott and Freedom of Expression

4.         At this point we should note, as does my colleague Justice Melcer, that even though our colleague Justice Danziger emphasizes the distinction between calling for boycotting Israel in general and calling for a boycott of products of the Jewish settlements, the attorneys for the Plaintiffs were not willing to state that they would retract their petition if the section concerning the territories were removed. In other words, even a boycott against the State of Israel, of the old sort that Israel – and other states, with the United States at the forefront – worked to combat, falls within the scope of freedom of expression. Woe unto such freedom of expression if its objectives be achieved. It might join – without drawing a comparison – Holocaust denial and antisemitic and racial slurs, which I do not believe should enjoy the protection of freedom of expression. We are not the United States, we are not obligated to an extreme interpretation of the First Amendment to the Constitution of the United States, and no one can truly claim that Israel does not enjoy exceptional freedom of expression. On Holocaust denial and its close relationship to the denial of the State of Israel, see Professor Elhanan Yakira’s instructive book, Post-Holocaust, Post-Zionism: Three Essays on Denial, Forgetting, and the Delegitimation of Israel, (Am Oved, 2006) pp. 40-53 [English: Cambridge, 2007]; and my essay “On Antisemitism” (Information Center, Ministry of Education and Culture, 1990), also published in Moshe Yegar, Yosef Guvrin & Arye Oded, eds., The Ministry of Foreign Affairs: The First Fifty Years (2002) 930, which treated of the Israeli government’s tracking of this subject.

5.         Therefore, I do not find any great difficulty in deciding this case along the lines of the overall approach of Justice Melcer’s opinion. In the broad context, if Israel’s enemies who seek to do it harm do not distinguish in this regard between “little” Israel and the territories it controls, and if the Petitioners, in their own right, were unwilling to do so, as arose in the hearing before us, why should we be making that distinction, with all due respect to the good intentions of my colleagues who support freedom of expression. One who has, like us, been scalded by boiling water, may also blow on cold water, and all the more so on boiling water.

6.         As my colleague Justice Melcer noted, freedom of expression is a two-way street. Indeed, calling for a political boycott of Israel is presented in the petitions as realizing that freedom of expression that is granted to all, and the legislation they argue against is, therefore, repugnant. My colleagues Justices Danziger and Hendel are fearful for freedom of speech, including that of those who call for boycotts, which explains their (different) opinions. But it is the call for boycott itself that may clearly silence the discourse and harm freedom of expression, such that those boycotted will be deprived of true expression for their positions in fear for their livelihoods and property, which is not to be taken lightly. Thus, because as opposed to other courses of action, boycotting is a means for imposing the boycotter’s view upon those who disagree, rather than persuading the other of its justice. This type of coercion may have severe consequences:

“The coercive power of a political boycott should not be underestimated. Merchants depend on sales for their livelihood; an effective boycott of their stores deprives them of their source of income. Although attempts to persuade individuals to act are usually protected by the first amendment, attempts to coerce individuals to act are not so immunized” (Gordon M. Orloff, “The Political Boycott – an Unprivileged Form of Expression,” D.Law.Jour. 1076, 1092 (1983)) (hereinafter: Orloff).

7.         Even American law, which is undeniably one of the most liberal legal systems in all that pertains to freedom of expression under the First Amendment of the United States Constitution, which is foundational to the American public existence, does not grant blanket permission to political boycotting. Thus, for example, some American courts distinguish between a political boycott intended to protect legally or constitutionally protected values, such as racial discrimination, and other political boycotts. The protection afforded freedom of expression is greater in regard to the former as opposed to the latter (see, e.g., Note, “Political Boycott and the First Amendment,” 91 Harv. L. Rev. 659, 661 (1977-1978); Isaiah Madison, “Mississippi's Secondary Boycott Statutes: Unconstitutional Deprivations of the Right to Engage in Peaceful Picketing and Boycotting,” 18 Howard L.J. 583, 593-594 (1973-1975)). In the Claiborne case, as well, although on its face, the United States Supreme Court appeared to broaden protection for political boycotts significantly, the case concerned a boycott in protest of racial discrimination, with the purpose of compelling the state and the commercial sector to grant equal rights to the African-American public. The Court emphasized that that fact justified the broad protection of the boycotters:

Petitioners sought to vindicate rights of equality and of freedom that lie at the heart of the Fourteenth Amendment itself. The right of the States to regulate economic activity could not justify a complete prohibition against a nonviolent, politically motivated boycott designed to force governmental and economic change and to effectuate rights guaranteed by the Constitution itself" (NAACP v. Claiborne Hardware Co., 458 U.S. 886, 914, per Justice Stevens (1982)).

8.         In addition, American federal law in the field of labor relations prohibits a secondary boycott, establishing, inter alia, that a labor union is prohibited from adopting a course of action intended to compel a person to refrain from commercial ties with another (Labor Management Relations Act of 1947, s. 8(b)(4)(B)). In the Allied case, it was held that the said prohibition also includes the possibility of a political boycott by a labor union – in that case, a boycott within the company in which the union operated, in order to express its opposition to the foreign policy of the Soviet Union and its invasion of Afghanistan. As a result, the union was found liable for the harm that it caused to the company in which it operated, owing to the political boycott it imposed. Of particular interest is the following statement in regard to the relationship between the First Amendment to the Constitution of the United States, which enshrines freedom of speech, and a political boycott:

It would seem even clearer that conduct [a political boycott – E.R] designed not to communicate but to coerce merits still less consideration under the First Amendment… There are many ways in which a union and its individual members may express their opposition to Russian foreign policy without infringing upon the rights of others (Int'l Longshoremen's Ass'n v. Allied Int'l, 456 U.S. 212, 226-227, per Justice Powell (1982)).

            Although this was stated in the concrete circumstances of labor law, as I will explain below, the same logic applies in the matter before us. I would further note that Justice Melcer rightly pointed out that Israeli law comprises restrictions upon freedom of expression, as in regard to defamation.

 

From the general to the particular

9.         My colleague Justice Melcer noted that in seeking to protect the State of Israel against those who seek to boycott it, the Boycott Law meets the tests of the Limitation Clause in that it is intended for a proper purpose, befits the values of the State of Israel as a Jewish and democratic state, and proportionately infringes freedom of expression. As I have already stated, I concur with that view, but in my opinion, although the Petitioners unreservedly insist upon their right to call for the imposition of a boycott against the State of Israel itself, we cannot ignore the fact that an additional purpose of the Law, which the Petitioners addressed at length, as did my colleague Justice Melcer, is the protection of businesses specifically operating in the areas of Judea and Samaria, such that a “boycott against the State of Israel” is defined under sec. 1 of the Law as one that includes a boycott against “an area under its control”, and those objecting to the Law are particularly opposed to that clause. It was not the Law’s central purpose at present – we do not know what the future may bring – to protect businesses in Tel Aviv, or the Negev or the Galilee, but rather to protect against boycotts of businesses in the Jewish settlements in Judea and Samaria, which are indeed suffering economically due to those calling to boycott them, at home and from abroad. In this regard, see the exchange in the Knesset Constitution, Law and Justice Committee from Feb. 15, 2011, between the committee chairman MK David Rotem and MK Dov Henin:

Chariman David Rotem: My dear sir, Dov Henin, this law is intended to protect the settlement that you call “illegal”, and I call “residence”.

Dov Henin: Then tell the truth.

Chairman David Rotem: On Jewish residence in Judea, Samaria, and the Gaza Strip (p. 27 of the protocol).

10.       Thus, in certain ways, the Law grants preference to the freedom of expression of one political group as opposed to another. For example, a person who – in theory – calls for a boycott of those who support returning areas of Judea and Samaria to the Palestinians in order to achieve peace would not be exposed to the tort sanction of the Law, whereas a person who calls for a boycott of a person who chose to reside in the Judea and Samaria area would be exposed to the tort sanction. Indeed, this creates an apparent infringement – creating a constitutional problem – of the freedom of expression afforded the former as opposed to the latter, although we should not exaggerate the extent of that infringement. In my view, as far as sec. 2(a) and sec. 2(b) are concerned, it is certainly a proportionate infringement, and as opposed to my colleagues Justices Danziger and Hendel, I believe that it meets the proportionality stricto sensu test. The Law restricts political expression in a very limited way, in that it its provisions reserve the tort sanction to one who calls for a boycott of another “solely because of their connection with the State of Israel … or an area under its control” (emphasis added – E.H.). Thus, on its face, a person calling for the boycott of a factory operating in the Judea and Samaria Area for reasons other than its connection to the Area, would not necessarily be exposed to the tort sanction under the Law, as, for example – legally speaking, and the example being theoretical – in the case of a call to boycott a factory operating improperly towards the local population.

11.       As opposed to this, the Law will help in providing tort protection for anyone who has chosen to act in a place that the state sees as permissible for Jewish settlement against those who harm them solely because they are located there. It would not be superfluous to note that settlement in the Judea and Samaria area over the years was not the policy of governments from one side of the political map, but rather all of Israel’s governments supported it in one way or another. These and those provided support, in the form of various incentives, to settlement in the Judea and Samaria area, as well as in Gaza, from the Six Day War and to this very day. And we should not forget that in the view of many of those calling for a boycott, even the Jewish neighborhoods in East Jerusalem fall within the scope of the boycott. It therefore seems very reasonable to me that a person who acted lawfully and in accordance with government policy be entitled to the legislature’s protection. Moreover, in addition to the examples presented by my colleague Justice Melcer, and those that I presented from American Law, above, we are not actually concerned with a boycott intended to defend a legal or constitutional right under Israeli law, but rather to attack the subjects of the boycott solely because of where they are located. And I would again emphasize that the law does not impose any restrictions upon boycotting a person or party for its opinions or actions. In other words, we continue to “respect” the desire of a person who does not wish to visit Israel or Judea and Samaria, or purchase their products. All that the Law seeks to do is to restrict those who call for a boycott “solely” due to a connection to the state or an area under its control, that and nothing more. That does not, in my opinion, involve that “silencing” of which the learned M. Kremnitzer and A. Fuchs have spoken (see Amir Fuchs, Dana Blander & Mordechai Kremnitzer, Anti-Democratic Legislation in the 18th Knesset (2015) and the material presented in their opinion at pp. 66-71 (Hebrew)).

12.       In the same vein, according to my approach the logic grounding the Allied case is applicable here, as well. The parties that the Law seeks to protect are not “punished” for their actions or views. They are punished solely as a means for influencing the policy of the State of Israel, primarily on the issue of the territories, by means of calling for a boycott against them, which is a hypocritically coercive means by its very nature. As was noted in the in the Allied case, when an individual seeks to impose his views upon another by the callous means of calling for a boycott against him, as opposed to persuasion, the protection of his right to freedom of expression will clearly be diminished a priori. To paraphrase what was stated in that case, there are many ways for the Petitioners to continue to express their political views – and an undeniably broad spectrum of possibilities is available to them in Israel – but without infringing the rights of those whose only sin is that they chose to reside and act in an area permitted them by the State of Israel. If any should nevertheless choose to call for a boycott of companies conducting business in the State of Israel or in an area under its control solely by reason of their connection with the state or the Area, they will be exposed to a tort action for damage caused. The limited restriction of their freedom of expression is meant to protect third parties harmed through no fault of their own, but rather due to a political boycott against a policy of the state:

In prohibiting or providing recovery for damages caused by secondary political boycotts the government is not seeking to ban certain ideas. It is attempting only to outlaw a mode of expression which by its nature injures third parties regardless of the ideas it happens to communicate (Orloff, at p. 1084).

            Indeed, why should a person who chose to live or act in the Area pay the price of the policies of successive Israeli governments by granting “free reign” to those who call for a boycott against them?

13.       The Petitioners further argue that the Law leads to a legal anomaly by creating a tort of calling for a boycott, while actual boycotting is legally permitted. I cannot accept that argument. In my view, and as my colleague Justice Melcer noted, this is similar to the situation in the Prohibition of Discrimination in Products, Services and Entry into Places of Entertainment and Public Places Law, 5761-2000 (hereinafter: the Prohibition of Discrimination Law). That law clearly distinguishes – in practice – between an individual’s conduct in the private domain and his conduct in the public domain. A person may decide, for personal reasons, that he does not wish to shop in a particular market because he is does not accept the seller’s sexual preference, or because he is of a different race, or does not share his religious beliefs. One may strongly criticize or object to that, but it remains that person’s privilege. However, the seller cannot act in that manner. He is required to sell without discriminating on the basis of sexual preference, racial origin, or religion, for example, on the basis of sec. 3(a) of the Prohibition of Discrimination Law (also see in this regard, F. Raday, “Privatising Human Rights and the Abuse of Power,” 23 Mishpatim (2004) (Hebrew) [English: 13 Canadian Journal of Law and Jurisprudence 103 (2000)]). The reason for this is not – of course – that the legislature wishes to encourage the former conduct, but rather because the individual’s freedom of conduct in the private domain is far broader than in the public domain, and a situation in which the enforcement and judicial authorities would enquire into a person’s intentions in not patronizing a particular establishment is problematic in a democratic society, not to mention the practical difficulty, and as M. Cohen-Elia noted in this regard:

The purpose of the accepted liberal distinction between the “public” and the “private” is to limit the areas in which the state may employ its coercive power in the public, political domain, and to allow citizens greater freedom in private spheres. The liberal demand that the state refrain from intervening in the private domain is essentially intended to realize the individual’s right to privacy, which is generally justified primarily by reason of autonomy. A person who enjoys privacy is autonomous, inasmuch as the right to privacy affords him a sense of security from governmental intrusion into those most intimate areas in which he forms the values and positions of his worldview (Moshe Cohen-Elia, “Liberty and Equality in the Prohibition of Discrimination in Products and Services Law,” 3 Alei Mishpat 15, 28 (2003) (Hebrew); and see: Barak Medina, “Economic Justifications of Antidiscrimination Laws,” 3 Aley Mishpat 37, 44-46 (2003) (Hebrew)).

            In my view, that is the difference between one who personally boycotts and one who calls for a boycott in this context. We cannot – and the Knesset’s attorney addressed this in the hearing before us – prevent a person from boycotting some entity or another, whatever his reasons, and whatever our opinions. The reasons for this are constitutional – the broad freedom granted an individual when he acts in the private domain, as well as evidentiary – the practical impossibility of knowing a person’s intentions in choosing not to buy a product from someone. Thus, in transitioning from boycotting to calling for a boycott, an individual largely removes himself form the private sphere and into the public sphere. Therefore, in my view, it is not at all unreasonable that the legislature would find it proper to impose greater obligations upon him for that conduct, including a prohibition upon calling for the boycott of a person or other entity by reason of its place of residence or activity, which as I and my colleague Justice Melcer noted, is discriminatory in nature.

 

Sections 3 and 4 of the Law

14.       We will now address sec. 3, which restricts the participation in a public tender of a person who calls for a boycott, subject to directives to be established by the Minister of Finance, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, and sec. 4, which restricts granting state benefits to a person calling for a boycott, subject to regulations to be promulgated by the Minister of Finance, with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee, and the decisions of the Minister of Finance accordingly. I will already state that I do not see any reason to declare them unconstitutional.

            First, as a preliminary comment, I am doubtful as to whether the constitutionality of these provisions should be addressed at this stage. As is well known, this Court will not lightly strike down a law enacted by the Knesset that, by its very nature, reflects the public will (HCJ 7111/95 Center for Local Government v. The Knesset, IsrSC 50(3) 485, 496 (1996); HCJ 3434/96 Dr. Menachem Hoffnung v. Knesset Speaker, Prof. Shevach Weiss, IsrSC 50(3) 57, 67 (1996); HCJ 8425/13 Eitan – Israeli Immigration Policy Center v. Government of Israel, (published in Nevo), para. 23 of the opinion of Vogelman J. (2014) [English: http://www.refworld.org/cgi-bin/texis/vtx/rwmain/opendocpdf.pdf?reldoc=y&docid=54e607184]). In the matter before us, as long as the Minister has not established directives, has not promulgated regulations, and has not issued decisions, and needless to say, it is not yet clear what the nature of the above will be, how they will restrict participation in public tenders, and which benefits will be denied, there is no place for the exceptional intervention of this Court in the form of striking down a statutory provision. In effect, this is an a fortiori application of the ripeness doctrine, under which the Court must refrain from striking down a law when the constitutionality of the law is contingent upon the manner of its implementation in concrete circumstances which have not yet come into being (HCJ 2311/11 Sabah v. Knesset, (published in Nevo) paras. 11-23 of the opinion of Grunis P. (2014) (hereinafter: the Admissions Committees case); HCJ 8276/05 Adalah Legal Center for Arab Minority Rights in Israel v. Minister of Defense, (published in Nevo) para. 31 of the opinion of Barak P. [English: http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-rights-israel-v-minister-defense];  and see: Elena Chachko, “On Ripeness and Constitutionality: HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance and HCJ 3803/11  Israeli Capital Markets Trustees Association v. State of Israel,” 43 Mishpatim 419 (2013) (hereinafter: Chachko)). In the matter before us, not only do we lack concrete circumstances in which the Law has been implemented, but at present it is not actually possible to implement these provisions (with the exception of sec. 4(b), which will be discussed below). Establishing directives and promulgating regulations is required for the legislation to proceed to the stage of implementation, and therefore the matter would seem unripe.

            Indeed, as my colleague Justice Melcer noted, a chilling effect has been recognized as possible grounds for the annulling of a law, even in the absence of ripeness (the Admissions Committees case, para 16; Chachko, at p. 446; and see Notes, “The Chilling Effect in Constitutional Law,” 69 Colum. L. Rev. 808 (1969)).  As I will explain below, this argument can be considered in regard to sec. 2(c) of the Law. However, I believe that the force of this argument is diminished in regard to secs. 3 and 4, as noted. The directives and regulations that might create a chilling effect have not yet been established, we do not know when they will be, if at all, and if and when they are established, what there scope might be. The idea that someone might choose to speak or not speak in a particular way on the basis of directives and regulations that do not exist is not, in my opinion, well founded. Therefore, I cannot agree with the opinion of Justice Danziger in this regard, according to which “the broad application of the administrative sanction creates a real danger of broad violation of political views” (para. 32 of his opinion). Such a sanction has not yet emerged – with the exception of the end of sec. 4(b), which will be addressed presently – and as noted, we cannot know what it may be and to what extent it may infringe anyone’s freedom of expression. I will go one step further: I do not think that the expression “chilling effect” is the end all. In my opinion, there are forms of expression for which “chilling” is appropriate. No one would deny that a call for violence is an example. No one would deny that shouting “fire” in a crowded theater is another. Therefore, the test is contingent upon the circumstances, and in my opinion, a call for racism – for example – is also such a case. All of these are “fighting words”.

            Nevertheless, as my colleague Justice Hendel emphasized, the end of sec. 4(b) of the Law permits the Minister to deny the benefits enumerated in sec. 4(a) even in the absence of appropriate regulations. I would concur with my colleague’s comment in that I agree that the regulations should be promulgated promptly so that matters may be appropriately clarified. However, the Law, as it presently stands, permits the Minister to act as stated, and therefore it is nevertheless necessary that we examine whether sec. 4 meets the tests for constitutionality. Over and above that need, we will also examine sec. 3 from a constitutional perspective.

15.       On the merits, I am of the opinion that sec. 3 and sec. 4 meet the tests of the Limitation Clause. In HCJ 10104/04 Peace Now – Shaal Educational Enterprises v. Ruth Yosef, Supervisor of Jewish Settlement in Judea and Samaria IsrSC 61(2) 93 (2006) (hereinafter: the Peace Now case), which treated of the use of public funds to oppose the Disengagement Plan, which was cited by Justice Melcer and Justice Danziger, the conclusion was as follows (p. 201):

(1)        By the majority opinion of President Barak and Justices Grunis and Rubinstein, and as opposed to the dissenting view of Deputy President (Emeritus) Cheshin and Justice Beinisch, that under the circumstances before the Court, a local authority may transfer funds to another entity or other entities in order to oppose the implementation of the Disengagement Plan;

(2)        By the majority opinion of President Barak, Deputy President (Emeritus) Cheshin, and Justices Beinisch and Grunis, and as opposed to the dissenting view of Justice Rubinstein, that in every case in which a local authority transfers monies to the opposition of the implementation of the Disengagement Plan, the state may set off from the funding of that council a sum equal to the amount of money that the authority transferred to another entity or other entities for the purpose of that campaign. Justice Rubinstein, dissenting, was of the opinion that monies for the campaign could be taken only from the municipal taxes of the residents of the authority, and in such a case, there should be no set off.

            Deputy President Cheshin stated, inter alia (p. 186):

…that we not decide that the local authority use the support granted to it by the state in order to oppose a plan initiated by the state. A person will not be permitted to bite the hand that feeds him.

            My colleague Justice Danziger is of the opinion that no analogy should be drawn between the Peace Now case and the matter before us, inasmuch as that case concerned statutory bodies, whereas the matter before us applies to all, including private bodies. I respectfully disagree. I am of the opinion that what was said in the Peace Now case applies a fortiori to the matter before us. Clearly, if the state is permitted to withhold funds from a public authority, which is an organic element of the state by its very nature, when it uses the monies to act against the state, then the state is also permitted to withhold benefits from private bodies when they do so, as “no entity that carries out activities has a vested right in the receipt of governmental support” HCJ 11020/05 Panim For Jewish Renaissance v. Minister of Education, Culture and Sport (published in Nevo) para. 10 of the opinion of Justice Arbel (2006); and see: HCJ 1438/98 Masorti Movement v. Minister of Religious Affairs, 53 (5) 337, 385 (1999); AAA 343/09 Jerusalem Open House for Gay Pride v. Jerusalem Municipality, (published in Nevo), para. 34 (2010) [http://versa.cardozo.yu.edu/opinions/jerusalem-open-house-gay-pride-v-je....

            I will unequivocally state: in my opinion, the state would have to be the world’s greatest fool to grant benefits at its expense to private entities, or to contract with private entities, that call to boycott individuals or companies by reason of their connection to the state, one of its institutions, or areas under its control. It is like a victim giving his assailant a stick to hit him harder. In the words of Justice Barak: “A constitution is not a prescription for suicide, and civil rights are not a stage for national extinction” EA 2/84 Neiman v. Chairman of the Elections Committee, IsrSc 39 (2) 225, 311 (1985) [http://versa.cardozo.yu.edu/opinions/neiman-v-chairman-elections-committee], and with all due respect for pluralism and freedom of expression, I do not think that this requires granting funding and various benefits to, or that the state contract by means of public tenders with, those who act against state policy, and in effect, against the state itself, as if to thank those who spit upon you for the blessed rain. Even insanity requires some sense (see in this regard, D. Barak-Erez and G. Sapir, “The Anger and Insult Law,” Ha’aretz (July 18, 2011) (Hebrew); or to quote Justice Melcer, as if to “bite the hand that feeds them” (para. 46). And note that this is being stated in view of the said unique character of a call for a boycott – a coercive measure that may have far-reaching and even existential consequences – and in no way affects anyone’s ability to express criticism, protest, or attempt to convince of is rightness by means of the many means that a democratic regime puts at his disposal, without fear that the state might deprive him of benefits or refrain from contracting with him by reason of such criticism or protest. Therefore, like my colleagues Justice Melcer and Justice Hendel, and as opposed to the view of my colleague Justice Danziger, I am of the opinion that to the extent that sec. 3 and sec. 4 infringe the Petitioners’ freedom of expression, that infringement is proportionate and clearly meets the tests of constitutionality, as long as they are implemented in a proper, transparent manner. I find no need to elaborate on the additional tests, which my colleagues agree are met in this case, and I, of course, do not disagree.

Section 2(c)

16.       After all the preceding, how does sec. 2(c) differ? It would seem that it goes one step too far. The primary purpose of tort law is the restoration of the victim, to the extent possible, to his situation prior to the commission of the tort. This is achieved by awarding damages for the harm he incurred as a result of the tortious conduct (I. Englard, A Barak & M. Cheshin, The Law of Torts – The General Theory of Torts, 571-574 (G. Tedeschi ed.) (2^nd ed., 1977) (Hebrew)); I. Gilead, Tort Law: The Limits of Liability, vol. I, 78-79 (2002) (Hebrew) (hereinafter: Gilead). Damages without proof of damage – sometimes called statutory damages, or also punitive damages – are an exception. Their purpose is to express society’s condemnation of the tortfeasor’s conduct in severe cases by means intended to deter the tortfeasor, or others like him, from such tortious conduct, even in the absence of damage, or at least, where damage, or its extent, has not been proven (CA 140/00 Ettinger v. The Company for the Reconstruction and Development of the Jewish Quarter, IsrSC 58 (4) 486 (2004) paras. 73-9 [http://versa.cardozo.yu.edu/opinions/ettinger-estate-v-jewish-quarter-co... CA 9656/03 Estate of Marciano v. Zinger, (published in Nevo) (April 11, 2005) para 34; CA 89/04 Dr. Nudelman v. Scharansky (published in Nevo) (Aug. 4, 2008) para 45; Gilead, 44-44; T. Kremerman, “Ruling Damages with No Damage in the New Amendment to the Israeli Defamation Law,” 43 Mishpatim 899, 907-908 (Hebrew)). Thus, for example, over the years the legislature provided for the possibility of awarding damages without proof of damage in regard to sexual harassment or persecution (sec. 6(b) of the Prevention of Sexual Harassment Law, 5758-1998); discrimination in the providing of a service or product on the basis of religion, race or sexual inclination, etc. (sec. 5(b) of the Prohibition of Discrimination Law); and publishing anything likely to humiliate or debase a person due to his conduct, actions, religion, etc. (sec. 7A(b) and sec. 7A(c) of the Defamation Law, 5725-1965). Thus, we are concerned with conduct that is deemed improper by a broad social consensus, and that should be deterred even at the price of deviating from the basic principle of tort law that a victim should be compensated only for the damage incurred (and see the Explanatory Notes to the Prevention of Sexual Harassment (Amendment 8) (Damages without Proof of Harm) Bill, 5758-1998; and in regard to punitive damages, also see the sources cited by my colleague Justice Melcer in paras. 41-42 of his opinion).

17.       The matter would appear to be different in all that regards sec. 2(c). As noted, the main reason – but certainly not the only one – for the enactment of the Law is the protection of the residents of Judea and Samaria from the harm caused them by the actions of those who call to boycott them, which is a subject of public debate in Israel. This, as noted, is of significance in the context of damages without proof of damage and punitive damages (see, also, E. Rubinstein, “Punitive Damages – A View from the Bench,” in A. Barak, R. Sokol, O. Shaham (eds.), Orr Volume 97, 102-105 (2013)). Sections 2(a) and 2(b) are sufficient for achieving that purpose, and as stated, do not disproportionately infringe the Petitioners’ freedom of expression by imposing an obligation to compensate those harmed by their actions. Section 2(c) upsets this delicate balance. It significantly restricts the Petitioners’ freedom of expression by creating an intensified chilling effect, even for someone who, like myself, holds a more moderate view of the fear of chilling effects, while protecting the objects of the call for a boycott, even if they incur no damage. It would therefore appear that there is an alternative means that would serve the purpose that the Law’s intended purpose while infringing the Petitioners’ right to freedom of expression to a lesser extent. That is sufficient for determining that sec. 2(c) is unconstitutional.

Before Concluding

18.       Out of a love of Jewish law, I would add that while it does recognize the concept of boycott [ostracism] as a prerogative of the public, it is imposed for the purpose of facilitating societal life rather than its division, in order to prevent misconduct by means of an act that is not legally required or prohibited (see: HaEncyclopedia HaTalmudit, vol. 17, s.v. Ḥerem (Ḥaramei Tzibbur) 343 (Hebrew)). As Gideon Libson writes in his article “The Ban and Those under It: Tannaitic and Amoraic Perspectives,” Annual of the Institute for Jewish Law, vol. VI-VII (1979) 177–202 (Hebrew):

In our sources, we find not only a rejection of the ostracism of sages or a denial of facts that deprives an act of the justification for employing ostracism, but even apology for the use of ostracism and an explanation of its need. Thus, Rabban Gamaliel apologizes for ostracizing Rabbi Eliezer ben Hyrcanus, according to the Babylonian Talmudic tradition regarding the ostracizing of Rabbi Eliezer ben Hyrcanus: “Sovereign of the Universe! You clearly know that I have not acted for my honor, nor for the honor of my paternal house, but for your honor, so that divisiveness may not multiply in Israel.” We have before us various expressions of the sensitivity displayed by the Sages in regard to the ostracizing of their fellows: rejection of ostracism itself, denial of the facts that would ground its imposition, apology for its imposition. All of these express reticence and reservation in regard to the use of ostracism.

19.       As stated above, I concur in the opinion of my colleague Justice Melcer, according to which the Boycott Law meets the tests for constitutionality, with the exception of sec. 2(c) that would appear to infringe freedom of expression disproportionately, and which must, therefore, be struck down. I respect the differing views of my colleagues Justices Danziger and Hendel (which differ in their results). But in my opinion, the balance struck by my colleague Justice Melcer is more appropriate to the circumstances of the State of Israel. In conclusion: these lines are written on the eve of Passover. The Passover haggadah speaks of the Divine promise of the survival of the Jewish People in spite of its enemies – “It is this promise that has sustained our ancestors and us, for not just one enemy has arisen to destroy us; rather in every generation there are those who seek our destruction, but the Holy One, praised be He, saves us from their hands.” There is nothing wrong with Israel’s Knesset giving legal expression to the fight against those who would seek our destruction.

20.       After writing and distributing my opinion, I came across an article by Prof. Lawrence Summers, President Emeritus of Harvard University and Secretary of the Treasury under the Clinton administration, who also held other senior economic positions. The article is entitled “Academic Freedom and Antisemitism” (ISGAP Policy Paper Series No. 1, March 2015), and I would like to quote the abstract:

In the broader context of rising antisemitism on college campuses, the response of universities to proponents of Israeli boycotts, divestiture, and sanctions must unite the preservation of academic freedom with a clear and forceful condemnation of the vilification of Israel. During his tenure as president of Harvard, the author delivered a set of widely noticed remarks in which he described the calls for divestiture and boycott as “antisemitic in their effect if not their intent.” Refusing to frame his critique in more generic terms, the author instead drew attention to the way in which divestment advocates focused solely on Israeli universities and scholars. The more recent intensification of pressure for boycotts, divestment, and sanctions against Israel, as evident in the American Studies Association boycott, likewise calls for a morally clear rejection of the demonization of Israel. Rather than resorting to overly broad language that criticizes boycotts in general, uni­versities should specifically reject the singling out of Israel for persecution, and should take steps to dissociate themselves from any organizations or movements that do so. A zealous minority that utilizes the resources and prestige of the acad­emy to pursue antisemitic objectives poses a genuine threat to academic freedom. Protecting academic freedom demands that this threat be addressed directly.

            At the end of the article, Prof. Summers concludes (p. 10):

If zealous minorities, no matter how well intentioned, are able to hijack the prestige and resources of the academy in pursuit of objectives that are parochial and bigoted, why should the broader society refrain from seeking to set the academy’s agenda. The right to say, advocate, or propose anything must always be protected. But it must come with the right or even obligation of others to call out words and deeds that threaten the com­munity and the values of moral concern and rational inquiry for which it stands.

Simply stated: even freedom of expression has its limits. This, I believe, should be borne in mind, a fortiori, in the matter before us.

 

Justice I. Amit

1.         The strength of a state is the product, inter alia, of its standing among the nations of the world, the legitimacy of its existence and its actions, and its economic strength. Over the last years, the State of Israel has faced the three D’s: Demonization, Dehumanization, and Delegitimization, and the BDS (Boycott, Divestment, Sanctions) movement is the vanguard of these three (some recommend a different reading of the acronym BDS: Bigoted, Dishonest and Shameful, as suggested in Gabriel Noah & Asaf Romirowsky, “Anti-Semitic in Intent if not in Effect: Questions of Bigotry, Dishonesty and Shame,” in Cary Nelson & Gabriel Noah Brahm (eds.),  The Case Against Academic Boycotts of Israel 75, 80 (2015).

            However, the Israeli legislature was of the opinion that it lacked capacity to combat those who called for a boycott against Israel abroad, and therefore, the Prevention of Harm to the State of Israel by means of Boycott Law, 5771-2011 (hereinafter: the Prevention of Boycott Law, or the Law) is directed internally, at citizens and residents of the state who call for an academic-cultural-economic boycott against their own state.

            Does the Law withstand the “test of fire” of the Limitation Clause of the Basic Laws?

2.         My colleagues Justices H. Melcer, Y. Danziger and N. Hendel each set their own course, and I will begin by stating that I concur with the opinion of Justice Melcer according to which the Law passes – albeit with great difficulty – the proportionality test, with the exception of subsec. 2(c), which treats of punitive damages.

            I, too, am of the belief that the Law infringes freedom of political expression, which stands at the heart of freedom of expression. However, in my opinion, a close examination of the matter leads to the conclusion that although our subject is freedom of political expression, when a public call for boycott is concerned, we are not faced with a high level of freedom of expression, and the infringement is less than it initially appears. In view of the Law’s purpose to protect the rights of Israeli citizens to dignity and property – which are also rights of the first order – I believe that the Law meets the tests of the Limitation Clause, with the exception of subsec. 2(c).

            Inasmuch as my colleague Justice Melcer reviewed the elements of the Law, the background of its enactment, and the arguments of the parties in detail, I will not reiterate. I shall proceed as follows: I will begin with a preliminary remark and a remark in regard to comparative law, and then continue with the reasons grounding freedom of expression, and that a call for a boycott stands in contradiction to some of those rationales, which has consequences for the extent of the infringement of freedom of expression, I will address the second and third subtests in view of the purposes of the Law and the secondary harm to the objects of the boycott, I will consider the Law from the standpoint of tort law and in the context of the “chilling effect”, and I will conclude with a brief consideration of secs. 3 and 4 of the Law and the interpretation proposed by my colleague Justice Danziger.

 

Preliminary Remark

3.         The Law has prepared a “masked ball” for us, both in regard to the legislature and the Petitioners. I will explain.

            By its language and declared purpose, the Law is intended to protect the State of Israel against cultural-academic-economic boycotts. But the Knesset proceedings and the background of the Law reveal that its midwives were motivated by a desire to protect industries and institutions in the Area against internal and external boycotting, which is why the phrase “or an area under its control” was added to the definitions section (the bill was introduced at the height of a public debate that arose following a call to boycott the public auditorium in Ariel – see Amir Fuchs, Dana Blander & Mordechai Kremnitzer, Anti-Democratic Legislation in the 18th Knesset, 59 (Israel Democracy Institute, 2015)).

            For their part, the Petitioners made hay of the phrase “or an area under its control”. The Petitioners complained up and down their petitions that the Law infringes freedom of expression in regard to a subject that stands at the center of Israeli political debate. But in the course of the hearing, they removed their masks and showed their true colors.  With the exception of the Petitioners in HCJ 5392/11 (the Barkai petition), it turned out that the other Petitioners do not distinguish between the State of Israel and the Area. As far as the Petitioners are concerned, even a call to join the Arab Boycott that was imposed on Israel at the time, is a call that falls within the scope of freedom of expression that should not be restricted, such that their position would remain unchanged even if the legislature were to remove the phrase “or an area under its control” from the definition of “a boycott against the State of Israel”. In other words, it is not the protection of institutions, organizations and industries in the Area that keeps the Petitioners up at night, but the restriction of the very right to call for a boycott against the State of Israel for any reason whatsoever.

            With all due respect for the subjective intention of the legislators and the intentions of the Petitioners, as my colleague Justice Danziger pointed out, the business of this Court is analysis of the law and not psychoanalysis of the legislature. Therefore, even if the legislature primarily intended to combat the boycotting of industries and institutions in the Area, the law that it enacted was expressly intended to combat boycotts against the state, and it is in that light that we must examine its provisions.

On Comparative Law

4.         Before embarking upon an examination of the Law’s infringement of the constitutional right to freedom of expression, I will devote a few words to the use of comparative law in legal interpretation. The debate unfolding on these pages on the subject of freedom of expression and its infringement is bursting at the seams with references to foreign cases, particularly from American law. Indeed, no one would deny that the study of foreign law and cross-pollination is good and desirable. “It is appropriate for an interpreter to be open to the fundamental principles of enlightened legal systems ‘that form the world’s cultural view’” (Aharon Barak, Interpretation in Law – Constitutional Interpretation, 236 (1994) (hereinafter: Barak, Constitutional Interpretation). However, “the use of comparative law in our case — like in every case — must be made sensitively and carefully, after thorough examination as to whether the legal arrangements practiced in one country or another are compatible with the law in Israel and the reality of life with which we contend” (HCJ 7052/03 Adalah v. Minister of the Interior, IsrSC 61 (2) 202, 419 (2006) perm. Cheshin D.P. [English: http://versa.cardozo.yu.edu/opinions/adalah-legal-center-arab-minority-rights-israel-v-minister-interior]). As my colleague Justice Danziger noted, the protection afforded freedom of expression, in general, and freedom of political expression, in particular, is broader in the United States than the protection afforded freedom of expression in Israel. There are many reasons for this difference, and I will note one central reason, which is the constitutional text that is the source of the right.

            The right to freedom of expression in American constitutional law derives from the First Amendment to the Constitution, which states:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

            The right to freedom of expression in the American Constitution thus comprises the right to freedom of the press, the right to assemble, and the right to petition for governmental relief. This special constitutional context led the United States Supreme Court to emphasize, for reasons that are at the foundation of freedom of expression, the reason of defense of the democratic regime (see: Eric Barendt, Freedom of Speech, 48 (2^nd ed., 2005), and see: Laurence H. Tribe, American Constitutional Law, 804 (2^nd ed., 1988) (hereinafter: Tribe)). This explains the centrality of freedom of political expression in the American constitutional system, as well as the severe requirements that American law has established for justifying an infringement of that right. In the United States, freedom of speech is directly connected to the freedom of political expression.

            As opposed to this, in Israeli constitutional law, freedom of expression is a right that is inferred and derived from the right to dignity in Basic Law: Human Dignity and Liberty, as a subsidiary of human dignity. This reflects the concept that “what is human dignity without the basic liberty of an individual to hear the speech of others and to utter his own speech; to develop his personality, to formulate his outlook on life and realize himself?” (CA 4463/94 Avi Hanania Golan v. Prison Service, IsrSC 50 (4) 136, 153 (1996) per Mazza J. [http://versa.cardozo.yu.edu/opinions/golan-v-prisons-service]). The source of Israeli freedom of expression is human dignity, and the core of Israeli freedom of expression is human dignity (Aharon Barak, Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, 730 (2014) (Hebrew), [published in English as Human Dignity: The Constitutional Value and the Constitutional Right (2015)] (hereinafter: Barak, Human Dignity); “the right under discussion – freedom of political expression – is, according to our juridical conception, closely and materially bound to human dignity”, HCJ 10203/03 Hamifkad Haleumi Ltd. v. Attroney General, IsrSC 62 (4) 715, 753 (2008) per Naor J. [http://versa.cardozo.yu.edu/opinions/hamifkad-haleumi-v-attorney-general]).

            The source of the right to freedom of expression, along with many additional reasons that I see no need to address, result in a different approach to freedom of expression in general, and freedom of political expression in particular, in the United States and the State of Israel, and to different balancing formulas (Barak, Constitutional Interpretation, p. 236).

            In American law, a finding that something is protected speech is often the end of the road, which is not the case in our legal system, with its various balances between freedom of expression and other conflicting values. It is, therefore, appropriate to learn from other countries that have liberal democratic legal systems and values similar to our own. Israel is not an island unto itself, and we should not adopt an approach according to which “we have nothing to gain in this regard from foreign fields” (HCJ 5771/93 Citrin v. Minister of Justice, IsrSC 48 (1) 661, 676 (1994) per Mazza J. in a different context). However, we should bear in mind that recourse to foreign law is an additional resource from among many interpretive resources, and “the status of comparative law is no different than a good book or a good article. Its bearing is determined by the quality of its rationale” (Barak, Human Dignity, 195 [English edition: p. 93]). Enrichment from such sources must, therefore, be approached with care, and with due consideration of the differences between the foreign system and our own.

            In conclusion, we can enjoy and be inspired by American law on the subject of freedom of expression, but we cannot entirely adopt it in the matter before us. Some say that boycotts are impressed upon the American DNA, as a nation whose founding fathers employed boycotting in their struggle for independence (Yaniv Meno, “Consumer Boycotts, the Ethical Weapon of the Consumers,” 15 Hamishpat 729, 756 (2010) (Hebrew) (hereinafter: Meno “Consumer Boycotts”)). However, it should be noted that while consumer boycotting is well-developed and protected in the United States, that is not the case in regard to political boycotting, despite, or perhaps because of the special place of freedom of expression in the United States. We do not make this “cautionary note” to derogate from the value and importance of freedom of expression in Israeli law, which I will address below.

 

The Reasons for the Right to Freedom of Expression

5.         It would be hard to exaggerate the importance of freedom of expression in general, and freedom of political expression in particular. Even prior to the enactment of Basic Law: Human Dignity and Liberty, this Court recognized the importance of this “supreme value” HCJ 73/53 Kol Ha’am Co. Ltd. v. Minister of the Interior, IsrSC 7 (2) 871, 878 (1953) [English:  http://versa.cardozo.yu.edu/opinions/kol-haam-co-ltd-v-minister-interior] (hereinafter: the Kol Ha’am case)). With the enactment of Basic Law: Human Dignity and Liberty, the right to freedom of expression won supra-legal constitutional status as a right derived from human dignity:

The case law has repeatedly established that freedom of expression forms an inseparable part of the right to dignity, inasmuch as freedom of expression is essential to personal development and the fulfillment of one’s human potential. We are the heirs to a longstanding legal tradition that views freedom of expression as a constitutional freedom that derives from the fundamental values of the State of Israel as a Jewish and democratic state. Freedom of expression and democracy have a reciprocal relationship – democracy is a necessary condition for freedom of expression, and freedom of expression gives democracy its meaning. It is not without reason that freedom of expression has been referred to as a “supreme value”, the “apple of democracy’s eye”… and other such expressions and idioms that have been coined, and praises that have been sung over the years in honor of “that giant that is called freedom of expression”… (my opinion in CA 751/10 A. v. Dr. Ilana Dayan-Orbach (published in Nevo) para. 4 (Feb. 8, 2012) (hereinafter: the Ilana Dayan case)).

6.         My colleagues addressed the reasons underlying freedom of expression, and I will only briefly mention them: freedom of expression is an end in and of itself, it is a part of human dignity and the right to autonomy that makes it possible to realize one’s potential and express one’s opinions; freedom of expression is a means for achieving social and democratic objectives, inasmuch as only the public can only form its opinions through free, open debate; freedom of expression serves to promote knowledge and uncover the truth in a competitive free marketplace of ideas and opinions, and the assumption is that the best opinion is the one that will survive, and the truth will conquer lies (see, e.g., the Ilana Dayan case, para 17, per Vogelman J., and the references there).

            Distilling the above shows that freedom of expression rests upon three primary, intertwined and integrated rationales: human self-fulfillment; exposing the truth; ensuring a democratic regime (and see: Barak, Human Dignity, 712-719 and references there). The cumulative force of those three reasons grants freedom of expression a place of honor in our liberal democratic conscience, and in our constitutional legal system. But note that not every form of expression corresponds with all three of those reasons. There are forms of expression that promote scientific or other “truths” that are unrelated to a democratic regime. There are forms of expression that express a person’s “credo”, but do not make any special contribution to the free marketplace of ideas. However, that neither adds nor detracts from the value of such forms of expression nor from the extent of their constitutional protection. Nevertheless, considering the rationales grounding freedom of expression helps us achieve a better understanding of what it is that we seek to protect in the framework of freedom of expression. Expression that is unconnected to any of those reasons, or that is only tenuously connected to one or another, may be granted different weight when we examine the proportionality of its infringement. It is at this juncture that we arrive at the Law before us.

The Prevention of Boycott Law and the Infringement of Freedom of Expression in light of the Rationales grounding Freedom of Expression

7.         The Prevention of Boycott Law establishes that “anyone who knowingly publishes a public call for a boycott against the State of Israel” commits a civil wrong (sec. 2 of the Law), and his right to participate in public tenders or receive benefits or funding from the state may be denied (secs. 3 and 4 of the Law). According to the Petitioners, the law infringes, inter alia, their right to freedom of expression because the Law “expropriates […] the right of a certain part of Israeli society to state its opinion in opposition to the lawfulness […] of actions performed by the Government of Israel and/or the State of Israel in the territories that were conquered […]” (para. 10 of the petition of the Petitioners in HCJ 5549/11). The Petitioners point out that imposing a boycott is an important democratic tool, and that “there are those who choose to boycott in obedience to the dictates of their conscience, which does not permit them to use a particular product […and] there are those who choose to boycott in order to apply pressure upon the object of the boycott so that it will change its course” (para. 18 of the petition in HCJ 5239/11). These arguments are, indeed, consistent with the reasons grounding freedom of expression. However, in my opinion, the provisions of the Law do not prevent the Petitioners from realizing their right to freedom of expression. I shall explain.

8.         I will begin in praise of the boycott. Boycotting is considered a tool for the voicing of non-violent opposition of a type that has the potential for initiating change in various areas, such as in the political and consumer areas. It can serve society’s weaker groups, and it  also realizes the right to assemble, such that it may be seen as one of the tools of the democratic process.

            As noted, no one disputes that the Law infringes the Petitioners’ right to freedom of expression. However, the Law does not apply to a person who publishes criticism of the State of Israel, its policy in the Area, or of entities or persons who support that policy. The law does not apply to a person who boycotts the State of Israel or an area under its control. As opposed to the impression that might be gained from reading the petitions, the Law does not prevent any person or entity from expressing a position on the question of continued Israeli control of the Area, and does not prevent anyone from boycotting a particular dairy or winery due to its connection to the State of Israel or the Area. The Law does not prohibit or in any way restrict expression against any particular institution or factory, and does not even prevent action to boycott, and therefore, a person can persuade another not to purchase goods from a particular factory. The Law only prohibits publishing a public call. A person can boycott and participate in a boycott, but cannot publicly call for a boycott, just as a person may hold racist views, but may not publish incitement to racism, and a person may identify with a terrorist or violent act, but may not call for or support such acts (see secs. 144B and 144D (2) of the Penal Law, 5737-1977 (hereinafter: the Penal Law)). A distinction should therefore be drawn between using words to express an opinion, and the use of words as a form of action. While we are, indeed, concerned with a call for a boycott, which American law would categorize as speech, as opposed to participation in a boycott, which is deemed as conduct, in my opinion, a call for a boycott – as a motivation to action – is not normal speech, but rather falls within the interstice between speech and conduct.

            The Law therefore applies solely to a publically calling for a boycott. It is through this lens that I will examine the question of whether a call for a boycott, as distinct from participation in a boycott, corresponds with the reasons grounding freedom of expression enumerated above, and if so, to what extent.

9.         Autonomy and self-fulfillment: Participation in a boycott involves an element of self-fulfillment. It can provide a feeling of inner satisfaction that is something of an end in itself (Meno, Consumer Boycotts, 750-751). But a call for a boycott, as a form of expression intended to motivate a specific action by another, is expression that is outwardly directed. The purpose of a call for boycott is to change the conduct of others – to cause part of the public to boycott, and to cause the objects of the boycott to change the conduct at which the boycott is directed. This aspect of a call to boycott is not at the core of the rationale of a person’s self-fulfillment and autonomy. As noted, the Law does not prohibit a person from obeying the dictates of his conscience and refrain from purchasing from a factory located in the Area, just as a person who objects to animal testing may refrain from using products produced on the basis of animal testing. Indeed, no one denies that the ability to motivate others and bring about a change of their conduct is part of a person’s “selfhood”, but infringing this rationale is less severe, considering that a person has many options at his disposal for expressing his opinion in the marketplace of ideas, and other possibilities for explaining and for persuading another of the justice of his cause. There are even those who are of the opinion that boycotting, and certainly cultural-academic boycotting, should be the last arrow – if it is there at all – in the quiver of a person who believes in freedom of expression. The Law can also not be said to infringe the dictates of a person’s conscience. Conscience is threatened when a person is required and actively compelled to act against the principles in which he believes. Restricting a person from calling others or preventing others to act in a manner that he conceives to be improper is not an infringement of conscience (Daniel Statman & Gidi Sapir, State and Religion in Israel, 120 (2014) (Hebrew)).

            In conclusion, while the Law does infringe the reason of fulfillment of selfhood underlying freedom of expression, that infringement is not as great as us claimed by the Petitioners.

10.       Exposing the Truth and Defending Democracy: A call for a boycott is a form of expression intended to motivate a specific action (boycott) by others, as opposed to expression that concerns persuasion, study and the stating an opinion. As opposed to the Petitioners’ claim, the right of part of society to have its say has not been “expropriated”, and they may express their opinion aloud, even and especially on subjects that are the subject of debate, like the state’s control of the Area. The Law does not contradict the statement that “debate on public issues should be uninhibited, robust, and wide-open” (New York Times v. Sullivan 376 U.S. 254, 270 (1964) per Brennan J.) (hereinafter: the Sullivan case). Therefore, it would appear that the Law does not substantially infringe the first reason grounding freedom of expression – exposing the truth.

11.       But the Petitioners argue that restricting the ability to call publically for boycotting deprives them of a key tool in the democratic toolbox of freedom of expression.

            It cannot be denied that a boycott can serve to bring pressure to bear upon various bodies and, in the short or long term, bring about dramatic change. However, it is hard to conceive of a call for boycotting as serving the “exposure of the truth”, which is also of consequence in regard to the motive of defending democracy, and as will be explained, the two motives are closely related.

            Freedom of expression protects democracy in two primary ways. The first is closely tied to the principle of exposing the truth and the free marketplace of ideas. “Only by considering ‘all’ points of view and a free exchange of ‘all’ opinions is that ‘truth’ likely to be arrived at” (Kol Ha’am, p. 877, per Agranat J. (emphasis original – I.A.)). Without freedom of expression, we cannot know what is good for us, we cannot persuade others of the rightness of our ideas, and we cannot arrive at wise decisions and chart our course. The second way that freedom of expression protects democracy is in providing a safe, agreed platform for expressing disagreements and attenuating public tensions (see Barak, Human Dignity, 716). Indeed, “thanks to freedom of expression, social pressure can be vented in words rather than deed” (HCJ 399/85 Kahane v. Broadcasting Authority, IsrSC 41 (3) 255, 276 (1987)). Freedom of expression primarily concerns speech rather than actions. Freedom of expression primarily concerns the expression of opinions through discourse, and not through coercion.

12.       Boycott is an exceptional tool in the freedom-of-expression toolbox. It is intended to impose change through harmful means. Rather than debate and discuss conflicting views, a boycott is intended to oppose a particular policy by silencing other opinions, whether by economic means or through cultural and academic ostracism. Rather than respect the opinion of others and grant them a place in the free marketplace of ideas, a person calling for a boycott denies the legitimacy of those holding opposing views, and banishes them.

            My colleague Justice Danziger holds the view that boycotting is an effective democratic tool, and he marshalled support from the legal literature, as follows (para. 7 of his opinion):

While a successful boycott may appear to drown out another position, the remedy is not to silence the boycott but instead for those on the other side to endeavor to make themselves “louder” (Theresa J. Lee, “Democratizing the Economic Sphere: A Case for the Political Boycott,” 115 W. Va. L. Rev. 531, 550 (2012)).

            I cannot agree with that statement, neither in terms of the free marketplace of ideas, nor in regard to the protection of democracy. It would seem that in the learned author’s marketplace of ideas, opinions are measured in decibels rather than their merits. The sellers in the author’s market do not try to persuade buyers, but rather to drown out the competition. But democracy is not a shouting match. It is a forum for discourse, for sharing opinions, and for patient, tolerant attention to differing views.

            Bearing in mind the rationale of the free marketplace of ideas as a means for exposing the truth – a rationale that undergirds our adulation of freedom of expression – there is something Orwellian to the Petitioners’ argument that the Law restricts freedom of expression. An academic-cultural boycott muzzles expression in the plain meaning of the term. Granting a monopoly to one stand in the marketplace of ideas is the absolute antithesis of freedom of expression and the idea of a free marketplace of opinions. The cultural-academic boycott of Israel is intended to paralyze and silence political expression, impose one opinion and one “truth” (on the “facts” that guide the BDS movement, see Ben-Dror Yemini, The Industry of Lies (2014) (Hebrew); and Cary Nelson & Gabriel Noah Brahm (eds.), The Case against Academic Boycotts of Israel (2015)). Against this light, the Boycott Law appears to promote freedom of expression, and defend it against those who would seek to restrict it. Voltaire was ready to fight for an opponent’s freedom of expression, but surely would not have been willing to shed his own last drop of blood to defend that opponent’s right to silence him. The academic-cultural boycott is largely symbolic. It is a crude device that targets the entire academic community and the institution itself, without distinction, and as such, in flagrant contradiction of academic freedom, and it is worthy only of contempt (for an in-depth argument against academic boycotts, see Martha Nussbaum, “Against Academic Boycotts,” in Cary Nelson & Gabriel Noah Brahm (eds.), The Case Against Academic Boycotts of Israel 39 (2015)).

            From this perspective, it is somewhat naïve to compare political and consumer boycotts. We conceive of freedom of political expression as more exalted than the freedom of commercial-consumer expression. In view of that very importance of political expression, a consumer boycott of a factory that exploits child labor or the environment – which is essentially an economic boycott – is unlike a boycott intended to silence another political opinion, including a cultural-academic boycott. It is the supreme value of freedom of expression that justifies placing restrictions upon calls for boycott that are intended to silence the expression of the other.

13.       As we see, boycott is an aggressive device in the democratic toolbox, whose legitimacy in extreme cases does not derive from reasons based upon freedom of expression. Similarly, the right to strike is a democratic tool, but the case law has rejected its forceful use. Thus, in HCJ 525/84 Hativ v. National Labour Court IsrSC 40(1) 673 (1986) (hereinafter: the Hativ case), this Court addressed the issue of political strikes, and rejected the plaintiffs’ argument that it was a legitimate democratic device:

The political strike — which attempts to force an act or an omission on government authorities that they would not have tolerated had it not been for the strike — raises many constitutional and social problems: in a democratic regime, this opens the gates for strikers to impose their will on democratically elected institutions, and to direct processes by means of the coercive power of organizations outside the government and even of minority groups who in practice have such coercive power. There may be countries where a national electric power cut, including for electricity being supplied to hospitals and nurseries, can compel the legislator to enact any legislation required of him. But there is no doubt that, together with the collapse of morality, this also harms most seriously the functioning of democracy as such (ibid., at p. 703).

            This is also true, by analogy, of the coercive force of an economic-academic-cultural boycott.

            In summary, the Prevention of Boycott Law infringes freedom of expression primarily in terms of autonomy and fulfillment of “selfhood”, but does so with less force than may appear at first glance. I shall now address the second stage of constitutional review: whether the Law meets the conditions of the Limitation Clause.

The Limitation Clause

14.       In order to decide whether a law that infringes constitutional rights meets the conditions of the Limitation Clause, we must examine the whether the arrangement established by the law falls within the “margin of proportionality”. This margin delineates the boundaries of legislative discretion. The Court does not examine whether the arrangement established by the law is optimal, or whether the Court would have chosen that arrangement were it the legislature. It is common knowledge that the Court will not replace the legislature’s discretion with its own, and “will not place itself in the authority’s shoes to select the appropriate alternative from among the possible choices”  (HCJ 6304/09 Lahav – Bureau of Organizations of Self-Employed  v. Attorney General (published in Nevo) para. 113, per A. Procaccia J. (Sept. 2, 2010)). The legislature is granted the power to choose among the possible alternatives in the “margin of limitation”, and the Court will show judicial restraint – although not judicial torpidity – in regard to the legislature’s choice (HCJ 1715/97 97 Israel Investment Managers Association v. Minister of Finance, IsrSC 51 (4) 367, 389 (1997) per Barak P.).

            We must, therefore, exercise restraint in navigating the Limitation Clause. We will not annul a provision of a law merely because we are uncomfortable with it, as long as that law falls within the margin of proportionality. Even if we do not find the form and concept of the law to be attractive, this Court is not a plastic surgeon who erases wrinkles and removes fat upon request. It is, of course, good for a law to be attractive, balanced and optimal, but it is solely required to meet the conditions of the Limitation Clause. As my colleague Justice Melcer emphasized in his opinion, we are concerned with the constitutionality of the law, and not with the legislature’s wisdom in equating a winery in the Area with one in the territory of the State of Israel. “The Court must determine the constitutionality of the law, not its wisdom. The question is not whether the law is good, efficient, or just. The question is whether the law is constitutional” (CA 6821/93 United Mizrahi Bank Ltd. v. Migdal Cooperative Village IsrSC 49 (4) 221, 438 (1995), IsLR 1995 (2) [English: http://versa.cardozo.yu.edu/opinions/united-mizrahi-bank-v-migdal-cooper... and see HCJ 8425/13 Eitan – Israeli Immigration Policy Center v. Government of Israel (published in Nevo) (Sept. 22, 2014), para. 1 of the opinion of Grunis P. [English: http://www.refworld.org/cgi-in/texis/vtx/rwmain/opendocpdf.pdf?reldoc=y&docid=54e607184]).

15.       My colleagues Justices Melcer, Danziger and Hendel examined the Law under the proportionality tests, and I, too, am of the opinion that the Law is consistent with the values of the State of Israel as a Jewish and democratic state, that it is intended for a proper purpose, and that there is a rational connection between the Law and its purpose. On the issue of the matter of the third subtest of proportionality – proportionality stricto sensu – I concur in the opinion of my colleague Justice Melcer.

Proportionality Stricto Sensu

16.       In examining the proportionality of the infringement of a right (stricto sensu), we balance the benefit of realizing the law’s purpose against the harm it poses to the right. We place the benefit and the probability of achieving it on the positive side of the scales, and balance it against the importance of the right, and the severity and probability of its violation on the negative side of the scales (see: Aharon Barak, Proportionality in Law 438-445 (2010) (Hebrew)).

17.       On the negative side, I would note our point of departure that the Law infringes the fundamental right of freedom of expression. To that we must add the Law’s chilling effect, which I will address below. However, in examining the infringement of freedom of expression, we do not consider the harm in abstract terms, but rather in terms of the concrete context of its circumstances (Barak, Proportionality 440). We earlier noted that a call for a boycott of Israel does not “correspond” with the reasons undergirding freedom of expression, and that infringing the possibility for publically calling for a boycott – as opposed to participating in a boycott – as one of the tools available in a democratic system, is not a significant violation.

18.       On the positive side, I would point to my colleagues’ opinions that addressed the purposes of the Law in preventing harm to the State of Israel by means of boycott, and the protection of its citizens form economic, cultural and academic harm. These objectives concern constitutional rights of the citizens of Israel, like the right to freedom of expression, the right to property, the right to freedom of occupation, the right to equality, and the right to human dignity, some of which the state is obligated to defend (sec. 4 of the Basic Law states: “All persons are entitled to protection of their life, body and dignity”).

            An academic or cultural boycott of Israel infringes the freedom of expression of every individual connected with the institutions that are the objects of the boycott. It harms the ability for a lecturer in a boycotted academic institution to participate in academic discourse, it harms the ability of an actor in boycotted theater to express his “selfhood” by means of stage performance. A boycott against Israel harms the property rights of the boycotted individuals and companies, their vocation and freedom of occupation. The matter is clear, and I see no need to elaborate.

19.       A public call to boycott a person due to his connection to the State of Israel violates the core of human dignity by exploiting that person as a means for achieving a political end (HCJ 10843/04 Hotline for Migrant Workers v. Government of Israel, IsrSC 62 (3) 117, 147 (2007) per E. Levy J. [http://versa.cardozo.yu.edu/opinions/hotline-migrant-workers-v-governmen.... This conception, referred to as the “object formula” in philosophical and legal literature, views a specific person as a means or an object for achieving the goals of another, and seriously violates the dignity of that person (on the object formula, see Barak, Human Dignity, 64, 254, 453).

            We have noted that a boycott is intended to pressure the object of the boycott in order to cause him to change his ways. Boycotting a clothing manufacturer for violating the rights of workers is intended to cause that manufacturer to change its ways and treat it workers properly. Boycotting a bus company that discriminates against blacks is intended to cause that company to change its ways and treat all of its customers properly. Such is not the case in regard to the boycott against the State of Israel, which is intended to apply pressure to the objects of the boycott – persons with a connection to the State of Israel – in order that they might, in turn, apply pressure upon a third party (the state) in order that the state will change its ways. When A calls for a Boycott of B for the racist opinions he disseminates among his students, there is an identity between the purpose of the boycott and its object. Those who call for a boycott of the State of Israel take aim at the State of Israel and its policies, but the individuals who are the objects of the boycott are the ones who pay the price, and serve solely as a means for achieving the ends of those who call for the boycott. That constitutes a severe violation of the dignity of the objects of the boycott, who are discriminated against, through no fault of their own, as victims of a secondary boycott.

Secondary Boycotts

20.       A secondary boycott inflicts harm upon a party that is not directly connected to the reason underlying the call for a boycott, and who is not always able to respond to the boycotters’ demands for a change of general political policy (in the consumer-economic sphere, a distinction is customarily drawn between a direct, first-order boycott, such as when a manufacturer refuses to supply a product to a particular distributer, and a secondary boycott, in which a business refuses to purchase a product from a particular manufacturer who continues to supply the product to a boycotted competitor – Yitzchak Amit, “Prohibition of Unfair Competition Bill,” 23 HaPraklit 223, 231 (1996) (Hebrew) (hereinafter: “Prohibition of Unfair Competition”)).

            The United States Supreme Court addressed this in NAACP v. Claiborne Hardware Co., 458 U.S. 886 (1982) (hereinafter: the Claiborne case), mentioned by my colleague Justice Hendel as a decision that recognized the constitutional protection of political boycotting as free speech, which stated: “Secondary boycotts and picketing by labor unions may be prohibited, as part of ‘Congress’ striking of the delicate balance between union freedom of expression and the ability of neutral employers, employees, and consumers to remain free from coerced participation in industrial strife’” (p. 912). The Court cited the case of International Longshoremen's Association v. Allied International, Inc., 456 U.S. 212, 222-223 (1982) (hereinafter: the Longshoremen case), to which my colleague Justice Hendel referred. In that case, American stevedores refused to unload cargo from the Soviet Union in protest its invasion of Afghanistan. The Supreme Court held that the boycott was secondary and political, and therefore prohibited by law.

            There would appear to be two differences between the matters discussed in Claiborne and Longshoremen that explain the different conclusion arrived at by the Court, and which are of consequence in the matter before us. First, the former case addressed a consumer boycott for racially discriminatory conduct that was aimed directly at the employer (although some of the demands were directed at the state), whereas the Longshoremen case concerned a purely secondary boycott in the sense that the victim was not the Soviet government, but rather third-party merchants. Second, the cause of action in Claiborne was a common-law tort, whereas the secondary boycott in Longshoremen was prohibited by an express statute – sec. 8(b)(4) of the National Labor Relations Act – that provides:

8(b) Unfair labor practices by labor organization

It shall be an unfair labor practice for a labor organization or its agents:

—

 (4)

—

(ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is

—

(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees […]

            This section was examined in light of the First Amendment of the United States Constitution on several occasions, and was not found to be constitutionally repugnant to freedom of speech. In the Longshoremen case, Justice Powell even wrote: “Application of 8(b)(4) to the ILA's activity in this case will not infringe upon the First Amendment rights of the ILA and its members. We have consistently rejected the claim that secondary picketing by labor unions in violation of 8(b)(4) is protected activity under the First Amendment. […] It would seem even clearer that conduct designed not to communicate but to coerce merits still less consideration under the First Amendment” (ibid., 226). The import of these distinctions for the case before us, in which we are concerned with the constitutionality of an express statutory provision prohibiting secondary boycotts, should, I believe, be self-evident (for a comparison of the Claiborne and Longshoremen cases, and a critique of the Supreme Court’s decision in Claiborne, see: Gordon M. Orloff, “The Political Boycott: An Unprivileged Form of Expression,” Duke L. J. 1076, 1089 (1983)).

            The parallel drawn in Claiborne between a secondary boycott and a political boycott, as cited above, is not accidental. In both situations, the direct victim is not a party to the dispute, but rather someone “caught in the crossfire” between the party choosing to employ economic power to bring about political change by deviating from the democratic highroad and the state. This problematic aspect of political boycotts has long been recognized by the case law, and it has been held that one who employs his coercive power to influence political policy indirectly is not entitled to the protection of the law (see: the Hativ case; HCJ 1074/93 Attorney General v. National Labor Court, IsrSC 49 (2) 485 (1995) [English: http://versa.cardozo.yu.edu/opinions/attorney-general-v-national-labour-... HCJ 1181/03 Bar-Ilan University v. National Labor Court (published in Nevo) (April 28, 2011) [English: http://versa.cardozo.yu.edu/opinions/bar-ilan-university-v-national-labo... (hereinafter: the Bar-Ilan case)). The accepted view is that a purely political boycott does not enjoy the protections of the freedom to strike against an employer (on the distinctions between an economic boycott and a political boycott, also see: Ruth Ben-Israel, “Strikes as Reflected in Public Law: Strikes, Political Strikes and Human Rights,” Berenson Commemorative Volume, vol. III, 111 (2007) (Hebrew); Michal Shaked, “A Theory of Prohibition of the Political Strike,” 7 Yearbook of Labor Law,  185 (1999) (Hebrew); Frances Raday, “Political Strikes and Fundamental Change in the Economic Model of Labor Law,” 2 HaMishpat 159 (1994) (Hebrew). For a comparative survey of the law prohibiting political strikes, see: Haim Berenson & Assaf Berenson, “Sympathy Strike – Its Status and Proportionality,” Berenson Commemorative Volume, vol. II, 763 (2000) (Hebrew)). American judge Learned Hand addressed this in stating: “The gravamen of a secondary boycott is that its sanctions bear, not upon the employer who alone is a party to the dispute, but upon some third party who has no concern in it” (International Bhd. of Elec. Workers v. NLRB, 181F.2d 34, 37 (2d Cir. 1950)).

21.       We can draw an analogy to our case from the inapplicability of the usual defenses of the right to strike to political strikes. A call for a secondary boycott is a form of expression intended to coerce the authority to adopt decisions in an extra-democratic manner, while secondarily harming third parties who are the objects of the boycott. Therefore, a call for such a boycott is not a form of expression over which Olympian freedom of expression will fully spread its aegis.

            The realization of the purposes of preventing harm to the State of Israel and the protection of the constitutional rights of the objects of the boycott as against a moderate violation of one of the grounds freedom of expression that is achieved by the unpopular means of a call for a boycott, should be given weight in the framework of the balancing required under the third subtest of proportionality.

22.       The Prevention of Boycott Law stands on three operative legs: a tort – sec. 2 of the Law – non-participation in public tenders – sec. 3 of the Law, and withholding State benefits and support – sec. 4 of the Law. Against this background, I will turn to an examination of the tort.

Section 2 of the Law – The Civil Wrong

23.       Like the tort of defamation, the tort established under the Prevention of Boycott Law is one that restricts expression. The tort is distinctive in transferring the issue to the civil-law arena, and thus “privatizing” the fight against calls for boycott. Section 2 of the Law creates a new tort, and it is therefore appropriate to address the tort from the tort-law perspective. That perspective will aid us in evaluating whether the provision meets the proportionality tests.

24.       I will begin by reminding the reader of the wording of the tort:

                        Boycott – Civil Wrong:

2.         (a) Anyone who knowingly publishes a public call for a boycott against the State of Israel, where according to the content and circumstances of the publication there is a reasonable possibility that the call will lead to a boycott, and the publisher was aware of that possibility, commits a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] will apply to him.

(b) In regards to section 62(A) of the Civil Wrongs Ordinance [New Version], anyone who causes a binding legal agreement to be breached by calling for a boycott against the State of Israel will not be deemed as having acted with sufficient justification.

(c) If the court find that a civil wrong, as defined by this law, was committed with malice, it may require the tortfeasor to pay damages that are independent of the actual damage caused (in this section – exemplary damages); in calculating the sum of exemplary damages, the court will consider, inter alia, the circumstances under which the wrong was carried out, its severity and its extent.

 

            The section, in its current wording, suffers from a lack of clarity and ambiguity that impede an evaluation of the scope and implementation of the tort. I harbored some uncertainty as to whether that should lead to a conclusion that the petition should be dismissed for lack of ripeness in regard to the tort, due to its abstract nature and the absence of a clear set of facts that could be addressed in examining the elements of the tort. In any case, my colleague Justice Melcer discussed the primary problems raised by the tort at some length, and skillfully suggested an interpretation that resolves a major part of the difficulties, while leaving an examination of arguments concerning implementation for such time that they may arise (para. 58 of his opinion). That being said, I shall briefly address the main points, and conclude with an examination of whether the defects and flaws that I shall enumerate would justify annulling the tort in its entirety, as recommended by my colleague Justice Hendel.

25.       As a rule, torts are thought of as a closed list, to which various statutes contribute new torts such as consumer protection, violation of privacy, defamation, and so forth. We have before us a new particular tort that, at first sight, would appear to address a tort of conduct rather than result. But a more in-depth examination shows it to be a tort intended to protect against pure economic loss, that is, harm expressed in financial loss without any physical harm to the person or to property (on the reticence of Anglo-American law to impose liability for the negligent infliction of pure economic loss, see Ariel Porat, Tort Law, vol. I, 223-230 (2013) (Hebrew) (hereinafter: Porat). As opposed to this, pure economic loss is not foreign to Israeli law. On the contrary, denying liability for purely economic harm is the exception (see: Israel Gilead, Tort Law: The Limits of Liability, vol. II, 806 (2012) (Hebrew) (hereinafter: Gilead, Limits of Liability)). By its wording, the tort before us demonstrates some of the characteristic problems of a tort that concerns pure economic loss, such as increased litigation, over deterrence, causal connection, the nature of the victim (direct or indirect), etc. (on the policy considerations and the various categories of pure economic loss, see Tamar Gidron, “The Non Liability of a Bank (in England) and the (Potential) Liability of the State (in Israel): Pure Economic Loss in Light of Recent Developments - A Comparative Analysis and Evaluation,” 50 HaPraklit 95 (2008) (Hebrew) [English: https://www.researchgate.net/publication/228141641_The_Non_Liability_of_a_Bank_in_England_and_the_Potential_Liability_of_the_State_in_Israel_Pure_Economic_Loss_in_Light_of_Recent_Developments_-_A_Comparative_Analysis_and_Evaluation]; Tamar Gidron, “The Duty of Care in the Tort of Negligence and Pure Economic Loss,” 42 HaPraklit 126 (1995) (Hebrew). On pure economic losses incurred by a secondary plaintiff as a result of harm to the primary victim, see Ronen Perry, Economic Ricochets: Pure Economic Losses deriving from Tortious Harm to the Person or Property of a Third Party or Ownerless Property (2002) (Hebrew)).

26.       Expanding the plaintiff pool: According to the plain language of the section, any Israeli citizen can join a dispute in which he has no personal interest, and sue a person who called for a boycott against some bank that has a branch in Judea and Samaria. That would appear to be so in light of the tort’s wording “…commits a civil wrong and the provisions of the Civil Wrongs Ordinance [New Version] will apply to him”. In other words, the tort would appear to apply to the tortfeasor-defendant rather than the victim-complainant. We may arrive at this conclusion through a comparison of other particular torts external to the Civil Wrongs Ordinance, such as sec. 31 of the Consumer Protection Law, 5741-1981, which establishes: “Any act or omission in violation of Chapters … shall be treated like a wrong under the Civil Wrongs Ordinance [New Version]” (and see similar wording in sec. 31B of the Protection of Privacy Law, 5741-1981 – “… shall be a wrong under the Civil Wrongs Ordinance [New Version]”, and sec. 11 of the Commercial Torts Law, 5759-1999 (hereinafter: the Commercial Torts Law) “… is a tortious act, and the Civil Wrongs Ordinance [New Version] shall apply …”). It might be argued that the fact that the same language was not adopted in sec. 2(a) of the Law shows that the Law applies the Civil Wrongs Ordinance to the tortfeasor-defendant rather than the plaintiff, such that a person might join a fight that is not his own.

            My colleague Justice Melcer addressed this problem in his opinion, and concluded that we should not parse the language, and I concur with that conclusion, which is based upon the legislative intent and the Law’s Explanatory Notes that state that the Law is intended to allow a suit by one who is harmed as a result of a boycott.

            In any case, even according to that construction granting a cause of action only to one actually harmed by the call for a boycott, we are concerned with a tort that expands the potential plaintiff pool.

27.       Causal connection: One of the inherent problems of pure economic loss is that of the causal connection between the tortious conduct of the tortfeasor and the infliction of the pure economic loss. Policy considerations justify caution in awarding damages for pure economic loss, and one of the proposed solutions in this regard is not to suffice with the normal burden of proof required under tort law (Porat, p. 230, fn. 443).

            My colleague Justice Melcer concluded that the near-certainty test could be applied, and in his opinion, the plaintiff would also be subject to an additional burden above and beyond the regular burden of proof. However, based upon the language of the tort, it would appear that no causal connection at all need be shown between the call for a boycott and the harm resulting from the boycott. Rather, “a reasonable possibility that the call will lead to a boycott” would suffice. According to the plain meaning, the plaintiff need prove, only at the level of probability, the potential of the imposition of a boycott, while the requisite causal connection between the call for a boycott and the imposition of the boycott, as opposed to a causal connection between the call for a boycott and the damage incurred as a result of the boycott (compare to the language of sec. 144D2(a) of the Penal Law, concerning the publication of incitement to violence or terror, which refers to a person publishing a call to commit an act of violence or terror “and because of the inciting publication's contents and the circumstances under which it was made public there is a real possibility that it will result in acts of violence or terror …”).

            Here, too, I am willing to concur with my colleague Justice Melcer, and read a requirement of a causal connection to the damage into the tort, as this Court did in regard to the consumer tort of  deception mentioned by my colleague (CFH 5712/01 Barazani v. Bezeq Israeli Telecommunications Company Ltd., IsrSC 57 (6)  385 (2003) (hereinafter: the Barazani case). If the legislature, cognizant of the Barazani rule, was of the view that there is no need of proving a causal connection to the damage, we would expect that it would have been stated expressly (compare sec. 1144B(b) of the Penal Law, concerning publication of incitement to racism, which states that “it does not matter whether or not the publication did cause racism...”). Having recognized the need for proof of damage, as will be explained in the next paragraph, the question of the probability that the damage will result would appear to become irrelevant, as it has already been realized. But that is not the case. The purpose of the tort is deterrence. It is a tort intended to direct an individual’s conduct in real time – at the time of the publication of the call for a boycott, when the content of the call is examined in terms of the probability that it will lead to the imposition of a boycott (that will later result in damage). And note: the legislature chose the reasonable possibility test, rather than a real possibility or near certainty test. Bearing in mind that we are concerned with a type of political expression, this low threshold has a chilling effect, and I will not deny that on that basis I seriously considered following the approach of my colleague Justice Hendel, who was of the opinion that the tort should be annulled in its entirety. However, in light of the special nature of a call for a boycott in the arsenal of means and forms of expression, which we addressed above, and in view of the moderating construction proposed above, I have concluded that the tort passes the third test of proportionality, if just barely (the legislature refrained from including a criminal sanction in the law, which would have raised the question of the appropriate test with full force).

            Clearly, it is not easy to prove a causal connection in regard to a tort of pure economic loss with a large plaintiff pool. Thus, there may be many reasons for a particular reduction in the sales of a factory operating in area threatened with a boycott, and in order to estimate the loss, the element of the call for a boycott must be isolated from among all the reasons. As opposed to this, a plaintiff might argue that when there is an “ambiguous reason”, in terms of the number of possible reasons for the harm, the plaintiff’s evidentiary burden is to prove the relative weight of the boycott among the total number of possibilities (the chances for the success of such an argument are not high, inasmuch as ambiguous causality is currently recognized in the framework of only three doctrines – loss of chance, inherent evidential damage, and recurring distortion – Guy Shani, “Loss of Chance, Evidential Damage and Recurring Distortion: Points of Concurrence and Sites of Conflict among the Models for Resolving the Ambiguous Causation Problem,” in A. Grunis, E. Rivlin & M. Karayanni (eds.), Shlomo Levin Book: Essays in Honour of Justice Shlomo Levin 395 (2013) (Hebrew)).

28.       Damage: The question of the causal connection is related to the requirement of damage. It might be argued that applying the Civil Wrongs Ordinance to the tort does not necessarily imply that the requirement of proving damage be read into the tort. There are torts in the Civil Wrongs Ordinance, like assault and false imprisonment (secs. 23 and 26 of the Ordinance), in which damage does not constitute an element of the tort. When the legislature wished to establish damage as an element of a tort, it did so expressly. For example, the tort of negligence (sec. 35 of the Ordinance) states: “Any person who causes damage to any person by his negligence commits a civil wrong”. In the torts of trespass to immovable property and trespass to movable property (secs. 29 and 31 of the Ordinance), the legislature took care to state: “Provided that no plaintiff will recover compensation in respect of trespass to immovable/immovable property unless he has suffered pecuniary damage thereby”.

            In this matter, as well, I am willing to accept the conclusion of my colleague Justice Melcer that the legislature did not waive the requirement of damage, by analogy to the consumer tort under the Barazani rule. I would also draw an analogy to the provisions of the Commercial Torts Law, in which the legislature details a list of specific torts (passing off, false description, unfair interference) by reference to the Civil Wrongs Ordinance, and regarding which it is self-evident that damage is an element of the torts. To this we may add the position of the Plaintiffs and the Explanatory Notes of the Law according to which the Law was intended to compensate the objects of the boycott for damage. In light of all the above, I am of the opinion that the tort of calling for a boycott can easily be construed to comprise an element of damage.

            My colleague also bases his conclusion in regard to the damage requirement upon the fact that sec. 2(c) of the Law does not require damage where the tort is perpetrated with malice. From this he infers that damage is required under subsec. (a). In theory, punitive damage can be awarded even in the absence of damage, where the legislature seeks to punish and compensate for malicious conduct. However, normally, punitive damages are awarded for torts that involve damage, and the punitive award goes beyond the damage. Subsection 2(c) of the Law permits the court to impose punitive damages that are not contingent upon damage, but that does not necessarily imply that the legislature waived the demand for damage. On the contrary, one of the considerations in awarding punitive damages – alongside the tortfeasor’s malicious conduct – is the damage caused by that tortious conduct, which I will address presently (and see: Israel Gilead, “Comments on the Tort Provisions in the Proposed New Civil Code,” 36 Mishpatim 761, 811 (2007) (Hebrew) (hereinafter: Gilead, “Comments on Tort Provisions”), in which the author distinguishes between compensation for damages the extent of which is unknown, and “situations of compensation that is not for damage, such as punitive damages”. From this one might conclude that the author is of the opinion that punitive damages are awarded even in the absence of any damage. However, that would not appear to be the author’s view, and see: Gilead, Limits of Liability, vol. I, 221, where the author notes as self-evident that, as a rule, “punitive damages” are awarded in situations of intentional causing of damage).

29.       The mental element – the difference between ss. 2(a) and ss. 2(c): In subsection (a), the legislature refers to one who “knowingly” publishes a call for a boycott, where the publisher is “aware” of the reasonable possibility that the call will lead to a boycott, whereas subsection (2) refers to committing the tort with “malice”.

            How are we to understand the term “knowingly”? In this regard, I am hesitant to draw an analogy form criminal law to tort law. The term “knowingly” alludes to a subjective, intellectual knowledge, while the term “malice” alludes to an emotional attitude towards the result. While that may be so in theory, in practice it is difficult to avoid associating an element of intent to the term “knowingly”. For example, the tort of assault, under sec. 23 of the Civil Wrongs Ordinance, which is one of strict liability, is defined as follows: “Assault consists of intentionally applying force of any kind … to the person of another”. The drafters of the new Israeli Civil Code chose to replace the term “intentionally” in the tort of assault with the term “knowingly”, as can be seen from Part IV, Chap. I, sec. 388 of the Civil Law Bill, 5771-2011 (hereinafter: the Civil Code):

Assault it the knowing use of direct or indirect force against the person without his consent, or a real threat to use such force.

            In the tort of unlawfully causing breach of contract, under sec. 62(a) of the Civil Wrongs Ordinance, the legislature employs the same term – “Any person who knowingly and without sufficient justification causes any other person to break a legally binding contract with a third person” – where the term “knowingly” is understood, in practice, to mean intent (Nili Cohen, Inducing Breach of Contract (1986) (Hebrew). The author is of the opinion that the mental element required under the tort is no less than required under English law, which also initially speaks of malice, and then of intention or causation accompanied by intention and knowledge). Similarly, sec 7A(a) of the Civil Wrongs Ordinance grants immunity from tortious liability to a public servant, except for “action knowingly committed with the intent to cause damage or carelessness of the possibility of causing said damage”. In other words, the legislature reserved the term “knowingly” to the mental element of intention to cause damage, as opposed to indifference/carelessness/willful disregard/recklessness to the realization of the result.

            If we interpret the term “knowingly” in subsection (a) as intention to cause damage, then the question of the difference between “knowingly” in subsection (a) and “malice” in subsection (c) automatically arises. I would note that the element of malice is mentioned in regard to two torts in the Civil Wrongs Ordinance – that of “injurious falsehood” under sec. 58, concerning “the publication maliciously by any person of a false statement”, and the tort of “malicious prosecution” under sec. 60, concerning “actually and maliciously … instituting or pursuing” frivolous proceedings. The tort of malicious prosecution was left out of the Civil Code (along with the tort of fraud requiring an element of intent), and the tort of injurious falsehood has, in any case, become irrelevant and has been replaced by the tort of “false description” under sec. 2 of the Commercial Torts Law, which does not require malice (Gilead, Limits of Liability, vol. II, p 1168, fn. 53).

            The term “malice” is ambiguous. It is not clear whether it refers to intentional causing of damage arising from an improper motive, or to any intentional causing of damage, whether even carelessness would be deemed malice (Gilead, “Comments on Tort Provisions” 810), or whether only damage deriving from an intention to harm another is “malice”, as opposed to “intent” to cause damage that is not motivated by a desire to inflict harm upon another (ibid., 1160-1661). The term “malice” indeed suggests a higher level of moral culpability, a desire to inflict harm upon another, and I am, therefore, willing to assume that the legislature sought to distinguish between “malice” and “knowing”, with the latter indicating a lesser mental element. But it is hard to imagine a call for a boycott being carried out negligently, recklessly or carelessly, and not intentionally. In the normal course of events, a person who calls for a boycott does so with direct intention, such that it is unclear what difference there might be between doing so “knowingly” or “with malice”. There is, therefore, a fear that every call for a boycott may automatically fall within the compass of subsec. (3), which allows for punitive damages. The exception would thus become the rule, along with an attendant “excess” chilling effect, which I will address below. For this reason, as well, I concur with my colleague Justice Melcer that subsec. (3) should be annulled. In other words, in order to fall within the scope of the tort of calling for a boycott against Israel, the call must reflect an “intention”, “desire” or “purpose” of achieving a result. This interpretation is consistent with the deterrent purpose of the tort, deterrence being one of the recognized purposes of tort law.

30.       A specific tort and a framework tort: The specific torts enumerated in the Civil Wrongs Ordinance or elsewhere do not detract from the scope of incidence of the tort of negligence, by which liability can be imposed even in situations addressed by a specific tort requiring a mental element or actus reus. A prime example is the “circumvention” of the malice requirement in the tort of malicious prosecution (CA 243/83 Jerusalem Municipality v. Gordon, IsrSC 39 (1) 113 (1985)). Above, we arrived at the conclusion that the tort under subsec. (a) should be understood as requiring a mental element of intent or desire to achieve a result, like the requirement of “malice” in subsec. (c) of the Law. Can this mental element be circumvented by means of the tort of negligence? And what consequences might flow from the possibility of employing the new tort as a basis for the framework tort of breach of statutory duty? These are questions lacking clear answers at this stage.

31.       Defenses: Will the defenses provide by the Civil Wrongs Ordinance apply? For example, would the defense of contributory fault, under sec. 68 of the Civil Wrongs Ordinance, or the defense of “conduct of plaintiff”, under sec. 65 of the Civil Wrongs Ordinance, apply?

65. Where a defendant has caused damage by his fault, but his fault was brought about by the conduct of the plaintiff, the court may exempt him from liability to pay compensation or may reduce the amount of compensation payable, as the Court may think just.

            I fear that raising such claims by a defendant in an action for the boycott tort might drag the courts, against their will, into the political arena – a fear addressed at length by my colleague Justice Hendel. As opposed to this, just as the legislature barred the justification defense in subsec. 2(b) in regard to sec. 62(a) of the Civil Wrongs Ordinance, it would also be possible to deny the above defenses by analogy. Thus, for example, a defendant’s claim of contributory fault against the plaintiff, by reason of his erecting his factory in the Area, or for prominently printing on the label that his product was “made in Israel”, or such like, would be denied.

32.       Remedies: The Civil Wrongs Ordinance grants both damages and injunctive relief (sec. 72 of the Ordinance). Consequently, it would be possible, under sec. 2 of the Law, to request preliminary relief in the form of an injunction preventing a person to call for a boycott, which would be deemed “prior restraint” and an ever more serious infringement of freedom of expression. My colleague Justice Melcer addressed this in his opinion, and I am willing to concur with his conclusion that the Court will refrain from granting preliminary injunctive relief in light of the case law regarding prior restraint of expression. I would note that in the more than twenty years that have passed since the adoption of Basic Law: Human Dignity and Liberty, the case law has not deviated from the rule established in CA 214/89 Avneri v. Shapira, IsrSC 43 (3) 840 (1989) (and see LCA 10771/04 Reshet Communications and Productions (1992) Ltd. v. Professor Ettinger, IsrSC 59 (3) 308, 319 (2004) (between marginal letters E-F) per Beinisch J.).

33.       Joint tortfeasors: In order for a call for a boycott to be effective, it must be published, and  thus in subsec. (a): “Anyone who knowingly publishes a public call for a boycott against the State of Israel …”. Might the application of the Civil Wrongs Ordinance also lead to imputing liability as joint tortfeasors to broadcast media that publish the call? In my opinion, it would not. Had the legislature so desired, it should have said so explicitly, as it did in sec. 11 of the Defamation (Prohibition) Law, 5725-1965 [19 L.S.I. 254; amended 21 L.S.I. 132, 38 L.S.I. 176] (hereinafter: the Defamation Law), which imposes liability upon “… the editor of the communication medium and the person who actually decided upon the publication of the matter, and civil liability shall be borne also by the person responsible for the communication medium”.

34.       Private Enforcement: Section 4 of the Defamation Law establishes:

                        Defamation of a Group

                        4.         Defamation of a body of persons, or any group, other than a body corporate, shall be treated in like manner as the defamation of a body corporate, provided that it shall not be a ground for a civil action or private complaint. An information for an offence under this section shall only be filed by, or with the consent of, the Attorney General.

In the Defamation Law, the legislature chose to deny an individual’s right to bring civil action, preferring to grant the state power to bring criminal action. I was disturbed by this central point raised by my colleague Justice Hendel. The tort of calling for a boycott represents a kind of “privatization” of tort law by providing that individuals initiate actions that would seem to be within the state’s province, as is attested by the Law’s title: “Prevention of Harm to the State of Israel by means of Boycott Law”. This, as opposed to the approach adopted under sec. 4 of the Defamation Law.

            However, several distinctions can be drawn between the tort of defamation of a public and that of a call for a boycott, which I will briefly address: Section 4 of the Defamation Law raises a question of interpretation in regard to the terms “public” and “body of persons”, and in regard to the identification of the injured group and the injured members of that group. Recognizing an individual right to sue in regard to statements made about a group would result in a broad “chilling effect” upon freedom of expression, bearing in mind that, in most cases, such statements about a “public” or “group” consist of criticism or the expression of an opinion concerning social phenomena or matters of public interest. In the case of a false statement about a public, the harm is “diluted” and dispersed among all the members of the group, such that the power of the false statement is mitigated by the size of the group. And most importantly, when we are concerned with a false statement about a group, it is not the individual who should bear the burden of defending the public, and therefore, “privatization” of the right to sue by granting it to individuals would be inappropriate (see the matter concerning the film “Jenin-Jenin” in CA 8345/08 Ofer Ben-Natan v. Muhammad Bakri [published in Nevo] (July 27, 2011)).

            That is not the case in regard to a call for a boycott against Israel, which may be either a general call or a specific call for the boycott of particular enterprises, institutions or products that are connected with Israel. The harm is not inflicted solely upon the state, but rather, as we have already noted, the direct harm is incurred by the individual, the business whose sales are affected, the academic who is denied a research grant, or the ballet company whose performance is cancelled as the result of a call for a boycott. We might make an analogy to the tort of “unfair interference” under sec. 3 of the Commercial Torts Law, under which: “A business shall not unfairly prevent or burden the access of customers, employees or agents to the business, goods or services of another business”. One form of unfair interference is the imposition of a boycott by one business against another (Amit, “Prohibition of Unfair Competition,” p. 231). From this perspective, calling for an economic boycott against a particular enterprise is equivalent to unfairly preventing or burdening access to the business, and inasmuch as it is the business that is harmed by the call, it should be permitted the right to sue. This can justify the distinction between sec. 4 of the Defamation Law and sec. 2 of the Boycott Law that allows a person or private body to bring suit in tort for a call to boycott.

35.       Interim summary: From the perspective of tort law, the specific tort of calling for a boycott raises a number of issues as a result of the ambiguous language adopted by the legislature in defining the tort. But ambiguity and questions of interpretation do not justify annulling a law on constitutional grounds. This was addressed by my colleague Justice Melcer, who chose not to await the coming of Elijah the Prophet to provide the answers to unresolved questions, but rather suggested interpretive solutions for some of the problems raised above, while adopting a reserved approach to the elements of the tort.

            For the above reasons, I have decided not to join Justice Hendel’s dissent that would annul the entire tort of calling for a boycott. Rather, I concur with the view of my colleague Justice Melcer that sec. 2(c) of the Law be annulled, as I shall explain below.

Section 2(c) of the Law – Exemplary Damages

36.       Section 2(c) of the Law permits the court to impose “damages that are independent of the actual damage caused (in this section – exemplary damages)” upon a person maliciously calling for a boycott against Israel. The intention is to punitive damages, and three distinctions should be drawn in this regard: regular damages (monetary and non-monetary), damages without proof of damage, and exemplary (punitive) damages.

            Two principle reasons may be adduced to justify the imposing of damages without proof of damage: the absence of the possibility of proving the precise extent of the damage caused by the tort, and the desire to deter potential tortfeasors (CA 3559/02 Toto Zahav Subscribers Club v. Sports Betting Board, IsrSC 59 (1) 873, 903 (2005) (hereinafter: the Toto Zahav case)). The Israeli legislature allows the imposing of damages without proof of damage when the damage is inherent to the tort or the injurious act, and there is a high probability of concurrence of both of the above conditions, as for example: sec. 7A of the Defamation (Prohibition) Law, 5725-1965; sec. 10 (a) of the Employment (Equal Opportunities) Law, 5748-1988; sec. 6 (b) of the Prevention of Sexual Harassment Law, 5758-1998; sec. 13 (a) of the Commercial Torts Law, 5759-1999; and sec. 56 (a) of the Copyright Law, 5768-2007. Both of the conditions are met in regard to the tort of “calling for a boycott”.  Due to the difficulty in proving the causal connection between the call for a boycott and the resultant damage incurred by the boycotted party, and due to the difficulty in precisely quantifying the damage, it can be argued that not permitting the court to impose damages without proof of damage arising from the tort, would lessen the Law’s deterrent value and prevent the Law from achieving its purpose.

            However, the legislature did not establish “damages without proving damage” in the Law, but rather employed the term “exemplary damages”, with the intent of punitive damages. That is precisely the term currently employed in sec. 461 of the Civil Code Bill, titled “Exemplary Damages”, which states that “the court may award the victim damages that are not contingent upon damage, if it find that the violation was perpetrated with malice” (for laws establishing exemplary damages, see: sec. 33K (b) (1) of the Collective Agreements Law, 5741-1981; sec. 26A (b) (1) of the Wage Protection Law, 5718-1958; sec. 31A of the Consumer Protection Law, 5741-1981; sec. 30A (j) (1) of the Telecommunications (Bezeq and Broadcasts) Law, 5742-1982; sec. 3 (a) (1) of the Protection of Employees (Exposure of Offences, of Unethical Conduct and of Improper Administration) Law, 5757-1997; sec. 5 (b) (2) of the Notice to Employee (Terms of Employment, Vetting Procedures and Hiring Process) Law, 5762-2002; sec. 4 (b) (1) of the Right to Work while Seated Law, 5767-2007; sec. 11 (a) of the Aviation Services (Compensation and Assistance for Flight Cancellation or Change of Conditions) Law, 5772-2012). (I would note that all of these laws establish a ceiling for damages). Punitive damages, as a type of retribution from the tortfeasor, is not among the primary purposes of tort law (Gilead, Limits of Liability, vol. I, 224), and it constitutes an exception to the principle of restitutio ad integrum underlying tort law. Punitive damages are intended to achieve two objectives: punishment and deterrence (CA 140/00 Estate of Ettinger v. The Company for the Reconstruction and Development of the Jewish Quarter in the Old City of Jerusalem Ltd., IsrSC 58 (4) 486, 564 (2004) per Rivlin J. [http://versa.cardozo.yu.edu/opinions/ettinger-estate-v-jewish-quarter-co... (hereinafter: the Ettinger case). Punitive damages are not common in our legal system, and are viewed as “exceptionally exceptional” to the usual remedial damages in cases that are particularly egregious (see, for example: CA 2570/07 Lam v. Hadassah Medical Organization [published in Nevo], para. 5 and the citations there (Jan. 29, 2009); LCA 9670/07 Plonit v. Ploni [published in Nevo], paras. 24 and 26 per Rubinstein J, and the opinion of Danziger J (July 6, 2009)). Punitive damages are intended to express society’s condemnation and extreme revulsion in regard to the tort, and not without reason it concerns violent crimes or heinous sexual offenses (CA 4576/08 Ben-Zvi v. Hiss [published in Nevo], para. 45, per Rivlin J. (July 7, 2011)).

            The punitive aspect of the damages requires that some moral blame attach to the tortfeasor’s conduct, which is expressed in a mental element of malice that reflects contempt for the victim’s right. There are those who are of the opinion that punitive damages are justified in only three primary situations: when the tort is committed with intent/malice; when the damage is the result of conduct that has no redeeming social value; and when the tort causes catastrophic damage and the tort is shameful in terms of its result (Orr Karsin, “The Doctrine of Punitive Damages in Israeli Law – A Re-examination,” 29 Mehkerey Mishpat 571, 582-583, 640-644 (hereinafter: Karsin); and on exemplary damages, see, e.g: Amos Herman, Introduction to Tort Law 413 (2006). On calls for exemplary damages as a means for restoring mutual respect to individuals in society, see: Avihay Dorfman, “What is the Point of the Tort Remedy?” 55 Am. J. Juris. 105, 140 (2010)).

            Exemplary damages are an accepted, recognized tool of tort law in the common-law world (see: A. Burrows, “Damages,” in Michael A Jones (ed.), Clerk & Lindsell on Torts, 1965 (20th ed., 2010); W.V.H Rogers, Winfield & Jolowicz on Tort, 948 (12th ed., 2006). For the recommendation of the English Law Commission to expand the use of exemplary damages, see: Law Commission, Aggravated, Exemplary and Restitutionary Damages, Law Com. ([247] (1997)). For a similar recommendation for the expansion of the circumstances that would justify imposing punitive damages in Israeli law, see Karsin, above).

37.       We have already noted that, in practice, under the current wording of the Law, every call for a boycott against Israel, as defined by the Law, would fall within the scope of sec. 2(c), and would expose the defendant to the possibility of punitive damages, with all the special characteristics of such damages. At the bottom line, the punitive character of sec 2(c) places the defendant in a worse situation than would a criminal sanction, first, due to the lower evidentiary burden in civil cases, second, because civil law does not afford a defendant the defenses available in criminal law, and third, because a criminal procedure is instituted by the state, while a civil tort action can be initiated by anyone.

If that were not enough to explain why sec. 2(c) should be annulled, I would add that the absence of a cap on exemplary damages (as opposed to the situation in the other laws cited above that place a limit on exemplary damages), further intensifies the “chilling effect”, which I will address below.

The Chilling Effect

38.       At times, the legislature adopts legal arrangements that infringe an individual’s freedom of expression, but with a proper purpose, as in the case of prohibiting the publication of defamatory material (see: the Sullivan case), or a  law prohibiting publications that may incite to violence (see: Winters v. New York 333 U.S. 507 (1948); and see Tribe, p. 863). These arrangements infringe an individual’s freedom of expression, but the infringement does not present a constitutional problem as long as it is proportionate. However, an arrangement intended to restrict certain forms of expression may have a deterrent effect that extends beyond the scope of the conduct targeted by the sanction, and deter other forms of expression that are beyond the legislature’s original intent. For example, a law that imposes a civil or criminal sanction for publishing defamatory statements may deter people from expressing their opinions in fear of the publication being deemed defamation.

            The chilling-effect doctrine was developed in the United States in the context of the restriction of constitutional rights (such as freedom of assembly, Law Students Research Council v. Wadmond, 401 U.S. 154 (1971); freedom of movement, Thompson v. Shapiro, 270 F. Supp. 331, 336 (D. Conn. 1967); due process, Bankers Life & Casualty Co. v. Crenshaw 486 U.S. 71 (1988), Colautti v. Franklin, 439 U.S. 379 (1979), Berger v. New York, 388 U.S. 41 (1967); privacy, Lankford v. Gelston 364 F.2d 197 (4th Cir. 1966)), and especially in the context of the First Amendment right to freedom of speech. “A chilling effect occurs when individuals seeking to engage in activity protected by the first amendment are deterred from doing so by governmental regulation not specifically directed at that protected activity” (Fredrick Schauer, “Fear, Risk, and the First Amendment: Unraveling the Chilling Effect,” 58 B.U.L. Rev. 685, 693 (1978) (hereinafter: Schauer). As noted, the chilling-effect doctrine concerns unintentional deterrence, that is, a deterrent effect that exceeds the scope of expression intended by the legislature, and thus allows for the striking down of the entire arrangement due to the unintended deterrence (“the chilling effect”).

            In an ideal world, the question of the chilling effect would not arise. The legislature would adopt an arrangement that would limit certain forms of expression in a proportionate manner, and anyone who would deviate from that arrangement established by law would expose himself to a civil or criminal sanction. But in practice, it is not possible to ascertain in advance what forms of expression will be caught up in the net of the arrangement established by the law, and which will fall outside the scope of that arrangement. An arrangement may be drafted in a vague manner, such that an individual seeking to adapt his conduct will not be able to know with certainty whether some expression falls within the ambit of the arrangement. Or an arrangement may be entirely clear but overbroad, such that it also applies to forms of expression that the legislature did not intend, and whose infringement deviates from the scope of proportionality (see: Schauer, p. 698; Tribe, p. 1030). One of the early cases in the development of the chilling-effect doctrine, Walker v. City of Birmingham, 388 U.S. 307, 342 (1967) concerned an order prohibiting parades and demonstrations supporting the rights of blacks in the city of Birmingham, Alabama. Justice Brennan noted:

We have molded both substantive rights and procedural remedies in the face of varied conflicting interests to conform to our overriding duty to insulate all individuals from the “chilling effect” upon exercise of First Amendment freedoms generated by vagueness, overbreadth and unbridled discretion to limit their exercise.

There is almost no legal arrangement that is unaffected by a chilling-effect halo, inasmuch as reality is almost never absolutely clear (Schauer, p. 700), and uncertainty is inherent to the interpretation of the legal arrangement. Therefore, in order to strike down an arrangement by reason of its inherent chilling effect, that effect must be substantial, and not some negligible chilling (see: Tribe, p. 1024). “Overbreadth […] must not only be real, but substantial as well, judged in relation to the statutes' plainly legitimate sweep” (Broadrick v. Oklahoma, 413 U.S. 601, 615 (1973)).

39.       In the matter before us, sec. 2(c) indeed “chills” freedom of expression by means of over-deterrence and punishment of a call for “a boycott against the State of Israel” as defined by the Law. We have addressed the vagueness of the wording of the tort, and inter alia, the mental element of intent that it requires, as well as the possibility that every call for a boycott might be ensnared in the net of sec. 2(c). The ambiguity in regard to the scope of the tort, in and of itself, raises a fear of an “excess” chilling effect upon freedom of expression. This fear is particularly forceful in regard to subsec. (c), which permits the awarding of exemplary damages without any criteria and without any cap. The combined effect of the ambiguity of the tort and a sanction that is unrestricted in any direction doubles and triples the halo of the Law’s attendant chilling effect in the form of over-deterrence. Inasmuch as we are concerned with tort law, and inasmuch as the primary purpose grounding the tort is deterrence, we would recall that maximal knowledge is a precondition to effective deterrence. A tortfeasor who despises risks that present unquantifiable “price” cannot carry out a loss-benefit calculation in choosing his conduct and words, such that he is subject to absolute deterrence, or over-deterrence at the very least, and such deterrence presents a particularly strong “chilling effect” (see: John C. Coffee, Jr., “Paradigms Lost: The Blurring of the Criminal and Civil Law Models and What Can Be Done About It,” 101 Yale L.J. 1875, 1882 (1992)).

            This, too, must be taken into account in subjecting the section to the crucible of the second subtest of proportionality. Fixing defined damages in the absence of proof of damage as opposed to exemplary damages, or capped exemplary damages, as established in other laws, might have served to blunt somewhat the extent of the infringement. But as currently drafted, the marginal benefit of the arrangement established under sec. 2(c) of the Law is smaller than the infringement of freedom of expression, in view of the uncertainty and ambiguity of the boycott tort together with the severe chilling effect that derives from the uncertainty in regard to the scope of exemplary damages.

40.       Interim Summary:  Considering that the mental element of intent is inherent to a call for boycott, such that there is a fear that every call for a boycott would fall within the ambit of sec. 2(c) of the Law and place the defendant at risk of punitive damages; considering that punitive damages is a stepchild of the normal purposes of tort law, and to date, has only been awarded in exceptional, outrageous cases that engender contempt and revulsion; considering that a call for boycott falls within the scope of freedom of expression, and realizes some of the rationales of freedom of expression, such that it cannot be said that a call for boycott is of no social benefit; considering the centrality of freedom of expression; and considering that uncapped punitive damages may lead to absolute deterrence, and at the very least, to a broad chilling effect in the sense of over-deterrence – considering all of the above, sec. 2(c) does not pass the third subtest of proportionality. At the bottom line, I therefore concur with the opinion of my colleague Justice Melcer that the harm caused by sec. 2(c) of the Law to freedom of expression exceeds what is required.

Sections 3 and 4 of the Law – Restricting Participation in Public Tenders, Tax Benefits and Subsidies

41.       My colleagues are unanimous in the view that secs. 3 and 4 meet the criteria of the Limitation Clause, and I concur.

            At first glance, one might be struck by the shamelessness, and even hypocrisy of a person who calls for a boycott of the state – and thus harms the state economy and the livelihood and employment of others – knocking at the state’s door asking to enjoy state benefits and subsidies. There is even something of the absurd in the Petitioners’ suggestion that the state treasury bear the costs of the harm inflicted by the boycott upon private entities, that is, that the state should directly subsidize the call for boycotting it. In general, harm to the state economy, and harm to the property of a citizen or resident of the state, as such, is viewed as a serious matter, such that it should come as no surprise that sec. 13 of the Penal Law, 5737-1977 establishes extraterritorial jurisdiction in regard to such offences:

                        Offenses against the State or against the Jewish people

13. (a) Israel penal laws shall apply to foreign offenses against –

(4) State property, its economy and its transportation and communication links with other countries;

                        (b) Israel penal laws shall also apply to foreign offenses against –

(1) the life, body, health, freedom or property of an Israel citizen, an Israel resident or a public servant, in his capacity as such;

            (Hanan Melcer, “The I.D.F. as the Army of a Jewish and Democratic State,” in Law and the Man, Festschrift for Amnon Rubinstein, 347, 354 (2012)).

42.       As my colleague Justice Melcer noted, a person does not have a vested right to receive a benefit or subsidy from the state, and when the state grants a subsidy or benefit, it must examine whether the receiving entity serves the public with the monies it receives. Thus, when the state grants an entity a tax advantage by defining it as a “public institution” for the purposes of sec. 46 of the Income Tax Ordinance, it recognizes that entity as one fulfilling an important public function that is worthy of public funding. It is difficult to imagine that the public would participate in funding an entity that calls for harming the public, and as noted, a call to boycott a person solely due to his connection to the State of Israel constitutes a serious violation of that person’s rights, and even a violation of our democratic system. “Recognition of a body as a ‘public institution’ reduces the state’s revenues from taxes, and is equivalent to increasing the state’s expenses by means of distributing funds. Recognition of a ‘public institution’, and thus recognition of a ‘public purpose’ as well, must be carried out in a reasonable, relevant manner, while strictly maintaining equality” (HCJ 637/89 A Constitution for the State of Israel v. Minister of Finance, IsrSC 46 (I) 191, 200 (1992); and also see: HCJ 10893/08 Vipassana Association v. Minister of Finance, [published in Nevo], para 29 (Aug. 23, 2012)). My colleague Justice Danziger is of the opinion that the state is not permitted to discriminate among entities on the basis of their political statements. I, of course, agree. But the Law does not claim to deny a benefit or subsidy by reason of political expression, and not even for political boycott, but rather for a public call for boycott – a call intended to motivate others to harm others on the basis of their connection to the state. Thus, a particular theater may decide that it is unwilling to stage its productions in one of the auditoriums in one of the settlements in the Area without fear that sec. 4 of the Law might apply to it.

            A part of that “reasonableness and relevance”, the state may, and indeed must, distinguish between entities that contribute to the public and entities that seek to harm the public or a particular group that is part of that public. For example, in 1970, the American Internal Revenue Service (IRS) decided not to grant tax exemptions to educational institutions that maintained a discriminatory policy toward black students. As a result of that decision, the definition of “charitable organization” was changed in the tax regulations, such that it applied to non-discriminatory educational institutions. Bob Jones University, a religious university that, for religious reasons, maintained a policy that discriminated against blacks, lost certain tax exemptions, and petitioned on the basis of the claim that the IRS lacked the authority to amend the definition of a “charitable institution” as it had, and that the amendment had violated the institution’s right to freedom of religion. In Bob Jones University v. United States, 461 U.S. 574, 591 (1983), Chief Justice Burger held: “The institution's purpose must not be so at odds with the common community conscience as to undermine any public benefit that might otherwise be conferred”. That is all the more the case when the reason for harming that group is the connection of the group’s members to the state itself.

43.       Nevertheless, I do not believe that the time is ripe to decide that the provisions of secs. 3 and 4 of the Law are necessarily constitutional (and obviously they do not render the responsible minister “immune” from judicial review in exercising his authority under these provisions). In my view, this would require that we examine the application of the Law’s provisions and the minister’s exercise of authority in regard to a concrete set of circumstances, when the appropriate case arises. This brings me back to the ripeness doctrine to which I referred at the outset of my examination of sec. 2 of the Law (para. 24, above), and connects me to the end of the opinion of Justice Melcer. Inasmuch as the matter has already been addressed by him, I will be brief.

44.       Sections 3 and 4 of the Law grant the Minister of Finance powers, while establishing a mechanism for their exercise. Thus, sec. 3 provides that the decision of the Minister of Finance in regard to restricting participation in a tender must be made “with the consent of the Minister of Justice and the approval of the Knesset Constitution, Law and Justice Committee”, while sec. 4(a) of the Law provides that a decision by the Minister of Finance to deny benefits must be made “in consultation with the Minister of Justice”, and in some of the cases, also requires the consent of the responsible minister (the Minister of Culture and Sport (sec. 4(a)(2)); the minister appointed by the Government as responsible for relevant budgetary line (sec. 4(a)(3)); and the Minister of Industry, Commerce and Employment (sec. 4(a)(5)).

            We should also bear in mind that sec. 4(b) of the Law, which provides that the exercise of the Minister of Finance’s authority under sec. 4(a) must be “in accordance with regulations that he will promulgate in this regard, with the consent of the Minister of Justice, and with the approval of the Knesset Constitution, Law and Justice Committee” (and I am not unaware of the provision at the end of sec. 4(b) that not promulgating such regulations will not detract from the authority granted under sec. 4(a) of the Law).

45.       Thus we find that while the powers established under secs. 3 and 4 are granted to the Minister of Finance, before he may exercise those powers he must obtain the consent of the relevant organs and confer with them, and it would also be appropriate that he do so after promulgating regulations. In any case, even if the provisions of secs. 3 and 4 of the Law remain in force, that would not necessarily mean that the powers granted under those provisions will be exercised in the near future, and it is conceivable that they may never be exercised.

            This point recently formed the basis for this Court’s decision in HCJ 3429/11 Alumni Association of the Arab Orthodox School in Haifa v. Minister of Finance, (Jan. 5, 2012) (published in Nevo) [English:  http://versa.cardozo.yu.edu/opinions/alumni-association-arab-orthodox-school-haifa-v-minister-finance] (hereinafter: the Alumni Association case), in which the ripeness doctrine was expressly invoked. There would appear to be certain similarities between the circumstances of that case and the matter at bar. Both raised the problem of the tension between freedom of (political) expression and economic sanctions that might infringe it in all its force, and the issue of ripeness arose in both.

46.       As may be recalled, the Alumni Association case focused upon a provision of the Foundations of the Budget (Amendment no. 40) Law, 5771-2011. That provision granted the Minister of Finance the power to decrease the budget allotted by the state to a budgeted or supported body in a number of situations, such as when that body expended monies in regard to marking the day of the establishment of the state as a day or mourning. Similar to secs. 3 and 4 of the Boycott Law, the relevant provisions of the Foundations of the Budget Law comprised a mechanism for exercising the authority granted therein (a mechanism that included obtaining the consent of the responsible minister, holding a hearing for the relevant body, obtaining an opinion from the legal adviser of the Ministry of Finance, and obtaining a recommendation from a professional team in regard to the scope of the relevant expenditure and the consequences of the budget decrease).

            Ultimately, this Court denied the petition on the grounds that the case was not yet ripe for decision, or in the words of Justice Naor:

Thus, the Law requires that a long road must be travelled before the sanction created by the Law can be imposed. I will not take any position at this stage regarding the mechanism established in the Law or regarding the Law’s constitutionality. However, at this stage, before the Law has been implemented and when the mechanism established therein has also not yet entered into operation, I do not believe that there is any reason to engage in speculations and estimations regarding the manner in which the power granted in the Law will be exercised. As I noted in Lobel, a well-informed judicial determination must be tightly connected to concrete facts that are presented in the case before the court, even if a constitutional question has arisen. (See: Lobel, at para. 6. See also HCJ 3248/09 Sari v. Minister of Justice, at para. 3; HCJ 6972/07 Lakser v. Minister of Finance, at para. 26). In this case, there have not yet been any incidents in which a question has arisen regarding the application of the Law, its interpretation or its consequences [the Alumni Association case, para. 29].

            In my opinion, applying the ripeness doctrine in the case before us – as it was applied in the Alumni Association case – leads to a similar result in regard to secs. 3 and 4, and deciding the Petitioners’ constitutional arguments requires that we wait for petitions directed against a concrete decision by the Minister of Finance, on an appropriate factual basis. As Justice Naor noted, “it may also be the case that the passage of time will render a deliberation of a petition irrelevant, as the petitioners’ concerns may never be realized … either because the Minister of Finance may fail to exercise the power conferred upon him by the Law, or because the provisions will be exercised in a manner that does no harm to the petitioners; other factors may allay the petitioners’ original concerns as well. However, in the current situation, the operative significance of the Law is not yet clear and it is not yet the right time for us to respond to the substance of the claims” (ibid., para. 32 of her opinion). As stated, this I true for the case before us, as well.

47.       And note: secs. 3 and 4 of the Law differ in this regard from the tort established under sec. 2 of the Law. Whereas the implementation of the provisions established in secs. 3 and 4 are contingent upon the Minister of Finance’s choice to exercise his authority, obtain the consent of the relevant ministers, and confer with them (and to promulgate regulations, as well), sec. 2 of the Law permits any person who deems himself harmed by a call for a boycott to initiate a tort suit, the submission of which is not subject to the rules of administrative law or any review mechanism, but entirely contingent upon the desire of the plaintiff. Hence the severe infringement of freedom of expression posed by sec. 2 of the Law, which, if allowed to stand, has the potential for creating a real chilling effect, and which must, therefore, be struck down (on the two-stage evaluation of the ripeness of a petition, and on the recognition of the need to proceed with its examination where a chilling effect may be created, see HCJ 2311/11 Sabah v. Knesset (published in Nevo), paras. 16-17, per Grunis P. (Sept. 17, 2014); on the doctrine of partial ripeness, which draws a distinction between different arguments directed at different provisions, some of which may be ripe while others not, see ibid., paras. 3-8, per Hendel J, and para. 3, per Naor J.).

            I therefore concur with the opinion of my colleague Justice Melcer that, for the present, the issue of the constitutionality of secs. 3 and 4 of the Law must wait until a specific petition challenges a concrete decision by the Minister of Finance on the basis of concrete facts.

 

“Or an area under its control” – The Opinion of my Colleague Justice Danziger

48.       I began my opinion with the “masked ball” presented to us by the Law, with the above phrase at its center, as part of the definition of “boycott against the State of Israel”, which would appear to have been the primary concern of the Law’s initiators, and was the focus of the Petitioners’ attack on the Law. For the reader’s convenience, here is that definition:

In this law, "a boycott against the State of Israel" means – deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, one of its institutions or an area under its control, such that it may cause economic, cultural or academic harm.

            Those words [“an area under its control”] address an issue that is at the heart of an Israeli political debate, and it is not surprising that the Petitioners’ arrows centered on the claim that the Law intervenes in political speech in such a highly charged issue among the Israeli public. My colleague Justice Danziger proposed a creative interpretation in an attempt to square the circle, in employing – in practice, although not in law – a sort of “blue pencil” for the phrase, such that, according to his approach, only a call for a boycott of Israel per se, only a boycott of an institution or area deriving from their connection to the state, as part of a boycott of the state per se, would fall within the scope of the definition. In support of that view, my colleague presented a call for a boycott of a person due to his connection to a public institution involved in animal experimentation as an example of a call that might fall within the scope of the Law, inasmuch as that institution is connected to the state. But that fear is unwarranted in light of the requirement that the call for a boycott be “solely because of their connection with the State of Israel, one of its institutions or an area under its control”. The word “solely” means that the only reason for the boycott – and it would not be sufficient that it be the dominant reason among others – be the connection to the state. Therefore, if the reason for the boycott derives from environmental harm or animal experimentation, the boycott would not fall within the scope of the definition.

            The construction proposed by my colleague deviates, in my opinion, from the plain meaning. Indeed, the phrase “boycott against the State of Israel” shows that the primary concern of the Law is preventing a boycott of Israel, and the legislature established “anyone who knowingly publishes a public call for a boycott against the State of Israel …”, and defined what would constitute a boycott against the State of Israel by an accepted legislative technique (compare, for example, the definition of “road accident” in the Compensation for Victims of Road Accidents Law, 5735-1975, as “an occurrence in which bodily damage is caused to a person as a result of the use of a motor vehicle”, and thereafter defines what  would constitute use of a motor vehicle). On the main point, my colleague acknowledges that the state may defend itself against boycotts, but bodies, institutions and people stand behind the state. According to my colleague’s approach, a call to boycott a particular bank because it has a branch in the Area, or a call to boycott an Israeli university because of a scientific experiment it conducted in the Area, or because its academic staff did not adequately express solidarity with universities in the Area, would not fall within the scope of the tort. Such a result would eviscerate the tort.

            For this reason, and despite the weighty reasons raised by my colleagues Justice Danziger and Justice Vogelman, at the end of the day I have chosen to prefer the approach of my colleague Justice Melcer, rather than the effective nullification of the loaded words “an area under its control”.

 

Summary and Conclusion

49.       The Law serves a proper purpose, although there is no denying that it causes “collateral damage” in restricting and chilling one of the tools in the democratic arsenal in an area at the core of Israeli political debate.

            At the bottom line, I find that the Law can pass the proportionality filter – even if not easily – inter alia, for the following reasons:

(-)        The Law does not prohibit the expression of an opinion concerning the state or the Area, and does not prohibit participating in a boycott, but only prohibits a public call for a boycott, which is an act in the interstice between expression and conduct.

(-)        While calling for a boycott is one of the tools in democracy’s toolbox, it is a coercive tool, and as such, it does not enjoy the full protection afforded to freedom of expression.

(-)        A call for a boycott does not meet or correspond with most of the reasons grounding freedom of expression.

(-)        A call for a boycott infringes the constitutional rights of the objects of the secondary boycott, and inflicts direct harm upon them.

(-)        The narrow construction given to the civil wrong in sec. 2 of the Law, including the demand for a causal connection and damage, together with the annulment of sec. 2(c) of the Law.

(-)        Lastly, taking a comprehensive overview: The United States has legislation prohibiting or restricting a boycott of Israel. The European courts, including the Court for Human Rights, are willing to recognize that calling for a boycott of Israel constitutes a criminal offense, such that Israel, all the more so, may decide that a call by its own residents and citizens for a boycott against their own state and country of origin is a civil wrong.

 

Justice U. Vogelman:

            I have read the comprehensive opinions of my colleagues, and in my opinion, the appropriate constitutional relief should be a declaration annulling sec. 2(c) of the Law, as well as the erasure of the phrase “or an area under its control” in sec, 1 of the Boycott Law (in the spirit of the proposal of my colleague Justice Y. Danziger). In addition, in my opinion, upholding the Law requires that it be construed as applying solely to such cases in which the only reason for the call for “deliberately refraining from economic, cultural or academic ties with another person or body” is its connection to the State of Israel or one of its institutions. These are the reasons grounding my conclusion.

1.         The Prevention of Harm to the State of Israel by means of Boycott Law, 5711-2011 (hereinafter: the Law or the Boycott Law) establishes three arrangements that, each in its own way, infringe constitutional rights, primarily the right to freedom of expression. The first – a civil wrong that would apply to “anyone who knowingly publishes a public call for a boycott against the State of Israel” (sec. 2 of the Law); the second – restricting the participation in a public tender “of anyone who knowingly published a public call for a boycott against the State of Israel, or who committed to participate in such a boycott” (sec. 3 of the Law); the third – provisions denying various benefits from the state treasury to “someone who knowingly published a public call for a boycott against the State of Israel or committed to participate in a boycott” (sec. 4 of the Law). The question before us is whether these arrangement pass constitutional review. In view of the reasons addressed by my colleague Justice Danziger (para. 49 of his opinion), I, too, am of the view that the Petitions are ripe for decision.

2.         As we know, every expression is protected in the framework of the constitutional right to freedom of expression (see, for example, HCJ 4804/94 Station Film Co. Ltd. v. Film Review Board, IsrSC 50 (5) 661 (1997) [English trans: http://versa.cardozo.yu.edu/opinions/station-film-co-v-film-review-board]; HCJ 316/03 Bakri v. Israel Film Council, IsrSC 58 (1) 249, 270 (2003) [English: http://versa.cardozo.yu.edu/opinions/bakri-v-israel-film-council]; CA 9462/04 Mordov v. Yediot Aharonot Ltd., IsrSC 60 (4) 13, 26 (2005), but we have a deeply entrenched rule that political expression enjoys particularly broad constitutional protection, as such expression enables the very existence of political debate, and is an indispensable condition of democracy (HCJ 869/92 Zvili v. Chairman of the Central Elections Committee, IsrSC 46 (2) 692, 703 (1992); HCJ 6226/01 Indor v. Mayor of Jerusalem, IsrSC 57 (2) 167, 164 (2003); HCJ 10203/03 Hamifkad Haleumi Ltd. v. Attorney General, IsrSC 62 (4) 715, 761 (2008) [English: http://versa.cardozo.yu.edu/opinions/hamifkad-haleumi-v-attorney-general]. Among the forms of expression that fall within the scope of the Boycott Law are expressions concerning calling for a boycott of the Judea and Samaria area (hereinafter: the Area). Calling for a boycott of the Area is pure political expression. My colleague Justice Y. Danziger addressed at some length the fact that the subject of Israel’s belligerent occupation of the Area has been the subject of political debate among various sectors of the Israeli public for decades. Indeed, the question of the Area’s future and the status of its residents has been defined as “the cardinal question of Israeli public debate”, that has disrupted the system of internal alliances and understandings that existed on issues of state, society and economy, and has led “to the creation of a party system whose primary variable for defining the left-right continuum, and for the creation of political alliances is the moral stand on the question of the future of the administered territories” Menachem Hofnung, Israel - Security Needs vs. the Rule of Law, 282-283, 2^nd ed. (1991) (Hebrew)).

3.         This debate, in and of itself, does not arouse a constitutional problem. The constitutional problem is in the Law (see and compare: HCJ 1661/05 Hof Azza Regional Council v. The Knesset, IsrSC 59 (2) 481, 543 (2005)). The Law infringes freedom of political expression. The Law may silence political expression concerning the Area. The very enactment of the Law places a dilemma before a person seeking to express himself: if he should choose as he wishes, he will be exposed to the sanctions provided by the Law.  If he refrains from expressing his opinions due to the “chilling effect”, the Law will do its job, and expression will be prevented. What is the appropriate scope of protection in this regard? My colleague Justice Melcer is of the opinion that because calls for a boycott of the State of Israel, as defined by the Law, “are not actually interested in political decisions on the basis of free will, but seek to impose views”, “the protection granted to freedom of expression can be somewhat restricted” (paras. 30 and 30(A) of his opinion, emphasis original, and see para 6 of the opinion of my colleague Deputy President Rubinstein). I do not concur with that view. Indeed, a boycott can apply pressure, and such pressure may lead the person boycotted to change his position. But applying pressure is not the same as coercion. Repeated demonstrations in front of a person’s office can also pressure him to do something. Would we therefore argue that a demonstration is “coercive expression”? After all, the boycotted person (or one who is the object of a demonstration) can stick to his position and refuse to change his conduct. No one prevents him from doing so. In any case, as my colleague Justice Danziger notes, a call for a boycott is consistent with the purposes of freedom of expression (para. 7 of his opinion). Freedom of expression is not meant to protect only accepted views. Its primary importance is precisely in defending the ability to express and hear opinions that deviate from the social consensus and that grate on the public ear (HCJ 6126/94 Szenes v. Broadcasting Authority, IsrSC 53 (3) 817, 838-839 (1999) [English: http://versa.cardozo.yu.edu/opinions/szenes-v-matar]. As we pointed out in another affair: “We must again reiterate and again recall that the primary purpose of freedom of expression is to guarantee protection particularly for extreme expression that gives rise to dispute and even disgust. Pleasantries that are pleasing to the ear, pleasurable to watch and easy to digest do not require the protection of freedom of expression” (LCA 10520/03 Ben Gvir v. Dankner, (published in Nevo) para 33 (Nov. 12, 2006); CA 4534/02 Schocken Chain Ltd. v. Herzikowitz, IsrSC 58 (3) 558, 573 (2004)). As the power of the interest, so the power of the defense (see and compare: AAA 3782/12 Tel Aviv-Jaffa District Police Commander v. Israel Internet Association, (published in Nevo) para. 10 of my opinion (March 24, 2013) [English: http://versa.cardozo.yu.edu/opinions/tel-aviv-jaffa-district-commander-v-israel-internet-association]).

4.         Do the provisions of the Boycott Law infringe freedom of expression? The Boycott Law does not prohibit calling for a boycott of the Area in the sense that such a call would constitute a criminal offense. Nevertheless, the Law establishes economic sanctions that can be imposed upon a person making such a call. The infringement of freedom of expression is thus carried out by placing a burden upon the possibility for expression, inasmuch as a person may be liable in tort for his call, and he may even risk not being able to participate in a public tender or being denied various benefits granted by the state. Each of the responses established by the Law imposes a significant burden upon anyone seeking to realize his right to expression. A person who chooses to continue to call for a boycott of the Area risks economic harm and the loss of possible employment through winning a public tender published by the authorities. These are significant consequences:

Such a result has the effect of “shutting mouths” that has no place in a democratic regime, as what is the message of such silencing? The very knowledge that expressing an unpopular opinion may eventually have consequences in an area that is professionally related, even in regard to the awarding of a prize, is inconsistent with a culture of freedom of expression in a democratic regime [HCJ 2454/08 Legal Forum for the Land of Israel v. Minister of Education, (published in Nevo) para. 10 (April 17, 2008)].

5.         Freedom of expression is not only infringed by the expected reaction to a case of calling for a boycott (both by another individual who may sue the person calling for a boycott, and by the state). The very fact that the legislature chose to create specific arrangements in regard to the said expression gives rise to an infringement of freedom of expression. A legislative act has a known declarative effect. Laws are intended to direct behavior. Most law-abiding citizens will choose to act in a manner consistent with the law’s provisions (compare the significance attached to the repeal of the Penal Law’s prohibition upon homosexual acts, despite the preexisting policy not to enforce it: Yifat Bitton, “The Effect of Basic-Law: Human Dignity and Liberty on the Legal Rights of Homosexual Couples,” 2 Kiryat Hamishpat L. Rev. 401, 403-404 (2001) (Hebrew)).

6.         My colleagues discussed at length the purposes that the right to freedom of expression is intended to realize, and there is no need to repeat that discussion. For our purposes, I would only emphasize that the restrictions that the Law imposes upon a call for a boycott of the Area infringe each of those purposes. As for the purpose of uncovering the truth, the Law’s restrictions prevent public debate, and do not allow for fair competition among differing ideological views. A person seeking to boycott can not display his “wares” in the marketplace of ideas, and others cannot be exposed to his position, or reinforce or change their own position through discourse. Mill addressed this as follows:

But the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race […] those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they [those who oppose the opinion – U.V.] lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error. (John Stuart Mill, On Liberty, chap. 2; and see: HCJ 399/85 Kahane v. Managing Board of the Israeli Broadcasting Authority,  IsrSC 41 (3) 255, 273 (1987)).

7.         Along with that, restricting political expression, and in the matter before us – indirectly – the act of boycotting the Area, which is a non-violent response to a particular policy, also infringes the democratic process. My colleague Justice Danziger correctly pointed out: “The exchange of opinions and ideas in the free marketplace of speech is a condition of the possibility of changing the government. It is vital to preventing tyranny of the majority” (para. 4 of his opinion). Moreover, the Law does not, indeed, prohibit the act of boycotting itself. A person may continue to express his political dissent. However, the Law harms the possibility of a person disseminating his views and making them heard by others (who may be persuaded that their views are mistaken), as well as the possibility for others to respond and decide how they wish to act. The Law chills expression. Freedom of expression is also an essential part of an individual’s right – the listener as well as the speaker – to realize his autonomy. That is a person’s ability to tell the story of his life, to state opinions, and express his worldview. That autonomy is part of the human dignity enjoyed by all, and is a condition for spiritual and intellectual development (see and compare: HCJ 8425/13 Eitan – Israeli Immigration Policy Center v. Government of Israel, (published in Nevo), para. 121 (Sept. 22, 2014) [English: http://www.refworld.org/cgi-bin/texis/vtx/rwmain/opendocpdf.pdf?reldoc=y&docid=54e607184]).

8.         In light of all the above, I concur with the conclusion of my colleague Justice Y. Danziger – for his own reasons – that in all that concerns expressions related to the Area, the infringement of expression does not meet the tests of the Limitation Clause. My colleague is of the opinion that this problem can be resolved through interpretation. He proposes that we read the law such that “Only a boycott against an ‘institution’ or ‘area’ that is part of a boycott against the State of Israel and derives from the connection of the institution or area to the State of Israel will fall within the compass of the Boycott Law. As opposed to this, a boycott of an institution or area that is not part of a boycott against the State of Israel will not fall within the scope of the Law’s definition” (para 46 of his opinion). Indeed, as a rule, a construction that upholds the law should be preferred to annulling it. “[…] the law still expresses the intent of the sovereign, which is the people, and therefore it is the law that goes before the camp, of which the Court is also a part” HCJ 7111/95 Center for Local Government v. The Knesset, IsrSC 50(3) 485, 496 (1996)). However, in the absence of an appropriate linguistic foothold, the appropriate relief, in my view, is the erasure of the phrase “or an area under its control” from the Boycott Law, in a manner that would separate the invalid part of the Law from the healthy, valid one (see and compare: HCJ 9098/01 Ganis v. Ministry of Building and Housing, IsrSC 59 (4) 241, 267-268 (2004) [English trans: http://versa.cardozo.yu.edu/opinions/ganis-v-ministry-building-and-housing]).

9.         We are, therefore, left with the question of the constitutionality of a call for a boycott against the State of Israel or one of its institutions. Would it be constitutional that such a call give rise to a civil wrong, and prevent participation in a public tender and a restriction upon receiving state subsidies?

10.       In my opinion, an interpretive path can be found that would preserve the validity of the Law (which, of course, is preferable to striking it down). Before addressing that proposed interpretive path, I would like to clarify one matter. My colleague Justice Melcer noted: “Boycott shares characteristics of unlawful discrimination” (para. 33(A) of his opinion). I only agree with that statement in part. Not every boycott comprises characteristics similar to unlawful discrimination. I will demonstrate this with an example: In one type of boycott, A wishes to boycott B because he is a member of a minority. In another type of boycott, A wishes to boycott B, who is a member of a minority, because B does not pay his employees fair wages. Do both types of boycott comprise characteristics similar to unlawful discrimination? The answer is no. A boycott of the first type is like that form of “generic” discrimination that is at the “hard core” of discrimination, which derives solely from a characteristic of a person’s identity (for example, his religion, ethnicity or gender). Such discrimination has been described as  “mortally wounding human dignity” (HCJ 2671/98 Israel Women’s Network v. Minister of Labor and Welfare [1998] IsrSC 52(3) 630, 658-659 (1998); AAA 343/09 Jerusalem Open House for Gay Pride v. Jerusalem Municipality, IsrSC 64 (2) 1, 41-41 (2010) [English: http://versa.cardozo.yu.edu/opinions/jerusalem-open-house-gay-pride-v-jerusalem-municipality]). The prohibition of such discrimination is anchored in various areas of law (see, for example, sec. 1A(a) of the Equal Rights for Women Law, 5711-1951; sec. 2(a) of the Equal Opportunity in Employment Law, 5748-1988; sec. 3(a) of the Prohibition of Discrimination in Products, Services and Entry into Places of Entertainment and Public Places Law, 5761-2000; and see: Aharon Barak, Human Dignity: The Constitutional Value and its Daughter Rights, vol. 2, 685-688 (2014)). As opposed to that, a boycott of the second type does not express unlawful discrimination. It expresses a critical view of B’s conduct, rather than of B himself.

11.       In my opinion, an interpretation that would preserve the validity of the Boycott Law would lead to the conclusion that the Law applies only to boycotts of the first type, viz., boycotts directed against the State of Israel or one of its institutions as such. I shall explain. Section 1 of the Boycott Law, the “definition” section of the Law (worded in accordance with the constitutional approach that I propose), would read as follows:

                        Definition:

1.         In this law, "a boycott against the State of Israel" means – deliberately refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, [or] one of its institutions, such that it may cause economic, cultural or academic harm.

12.       What, then, is a boycott according to this section? A boycott under this section is the refraining from (or termination of) one of the relationships listed in the Law (economic, cultural or academic ties) with someone for one reason alone: due to its connection to the State of Israel or one of its institutions. The emphasis in this regard is one the word “solely” in the definition: “refraining from economic, cultural or academic ties with another person or body solely because of its connection with the State of Israel, [or] one of its institutions, such that it may cause economic, cultural or academic harm”. What does “solely” normally mean? It means “for this, and only for this”. If a person does not buy merchandise “solely” because of its price, that means that if its price were different, he would buy it; if a person does not wear an item of clothing “solely” because of its color, it means that were its color different, he would wear it, etc. Adding the word “solely” removes from the Law’s incidence a person who intentionally calls for refraining from the connections listed in the law for “mixed reasons”: both due to the connection to the state and for other reasons – for example, the policy of the State of Israel in regard to some other matter.

13.       This is an important distinction. Whereas “mixed” expression expresses a critical view of the state’s policy (or one of its institutions) in a particular area, the other form of expression (that is “solely” due to the connection of one of these) is criticism regarding the very existence of the State of Israel (or one of its institutions). For example, a person declares: “Do not buy ‘made in Israel’ products. Israel’s policy in the Judea and Samaria area is wrong”. What would that person do if Israel were to change its policy in the Area? He would no longer call for avoiding Israeli products. In other words, that person does not seek to boycott the State of Israel as such. If Israel’s control of the Area were brought to an end, that person would no longer call for a boycott. When the caller does not call for a boycott due to the connection to the State of Israel (or one of its institutions per se, but calls for a boycott, for example, due to the policy of the authorities in regard to the Area, the caller is not calling for a boycott “solely” due to the connection to the State of Israel or one of its institutions, but rather expresses a critical view of the state’s conduct. His conduct does not, therefore, fall within the purview of the Law. As opposed to this, if a person were to call for a boycott of a body or person solely due to the connection to Israel – for example, if a person were to call for a boycott of Israeli businesses because they are Israeli businesses, and for that reason alone, such that some change in circumstance, whether political or otherwise, would not change his position – that call, which is essentially similar to a discriminatory call, would fall within the scope of the Boycott Law. It would seem that that was what my colleague Justice Danziger intended in saying that the practical result of his proposed interpretation of the Law is “the application of the Boycott Law only to calls for a boycott against the State of Israel in its entirety or as such” (emphasis added – U.V.). I would add that this position is consistent with the manner in which the Law’s purpose was presented by the Knesset. The Knesset emphasized that “combatting discrimination directed at a citizen of Israel as such, is a proper purpose”, and explained that this purpose is consistent with the various provisions regarding the prohibition of discrimination in Israeli legislation.

14.       I would emphasize: My colleagues Deputy President E. Rubinstein and Justice I. Amit also stressed the importance of the word “solely” in interpreting the Law. However, there would seem to be a difference in our interpretive approaches. My colleagues presented examples of boycotts for reasons that are not “the connection to the Area”. My colleague Deputy President E. Rubinstein addressed a case of “a call to boycott a factory operating improperly towards the local population (referring to a factory operating in the Area; para. 10 of his opinion). My colleague Justice I. Amit explained that “if the reason for the boycott derives from environmental harm or animal experimentation, the boycott would not fall within the scope of the definition” (para. 48 of his opinion). While it is clear that those examples would not fall within the scope of the Boycott Law, in my view, they do not exhaust the situations that should be removed from the purview of the Law. As earlier stated, in my opinion, even when the call for a boycott is a “mixed” critical call, the Law should not apply.

15.       Having arrived at the interpretive conclusion that the Law “catches” only expression that is essentially very similar to discriminatory statements, and subject to the change proposed in regard to sec. 1 of the Law, it cannot be said that this Law, by which the state seeks to contend with such forms of expression by creating a civil wrong (sec. 2 of the Law) or by means of the distribution of its resources (secs. 3 and 4 of the Law) does not meet the requirements of the Limitation  Clause (also see paras. 36-37, 46 of the opinion of my colleague Justice Y. Danziger, which point out that the restrictions established there are an expression of “defensive democracy”). I would add that this conclusion also derives from the fact that I concur with the opinion of my colleague Justice H. Melcer in regard to the application of the Civil Wrongs Ordinance to the boycott tort and the interpretation he proposes for sec. 2 of the Law, and therefore, for the reasons addressed by my colleague, I am of the opinion that there is no alternative to striking down sec. 2(c) of the Law.

            In conclusion, subject to the annulling of sec. 2(c) of the Law and the erasure of the phrase “or an area under its control”, and subject to the interpretation according to which the Boycott Law would apply only when the sole reason for the call for “deliberately refraining from economic, cultural or academic ties with another person or body” is its connection to the State of Israel or one of its institutions, I find no reason to fully annul the Law that is the subject of this case.

 

President M. Naor:

1.         I share the view of my colleague Justice H. Melcer and of my colleagues who concurred in his opinion. That being the case, my comments will be brief.

2.         Freedom of political expression enjoys enhanced protection. My colleagues have already addressed this, and there is no need for me to elaborate. Indeed, every person in Israel can express his views in regard to what is referred to by the Law as “an area under its [the state’s] control”. Every person can publically call for a withdrawal from what he views as “occupied territories”, while others may call for the extension of Israeli law, jurisdiction and administration over the entire area of “Judea and Samaria”. Both, and all the hues between them, are views that one may express without fear in a democratic state.

3.         Although a call for a boycott also falls within the scope of freedom of political expression, it is a special type of expression. Our colleague Justice Y. Danziger described it well in this case, in saying: “Calling for a boycott is not merely the expression of an opinion. Calling for a boycott is a call to action (or, more precisely, to refrain from performing an action) – the imposition of a boycott. The boycott action harms the objects of the boycott. That harm may not be worthy of the protection of freedom of expression. Thus, clearly, a call for a boycott that would prevent the provision of products or services to publics on the basis of race or for racist motives would be deemed wrong” (para. 38 of his opinion). At the same time, under certain circumstances, a call for a boycott may be deemed a non-violent means of protest, intended to encourage others to take action that the law does not prohibit. Clearly, freedom of expression does not merely comprise the possibility of stating an opinion or providing information, but also allows taking such actions as demonstrating and striking, and permits a person to harness others to such actions.

4.         In light of the above, the Boycott Law does, indeed, infringe freedom of political expression. However, even the freedom of political expression may be infringed if the conditions of the Limitation Clause, by which constitutional review is conducted, are met. As my colleague Justice Melcer noted, we are not called upon to examine the wisdom of a law in the course of judicial review, but only its constitutionality. It would appear that many of my colleagues do not dispute that the state may adopt proportionate measures to prevent harm to itself by a call to boycott. The State of Israel finds itself defending itself against boycotts in the international arena, and its attempts to defend against the various harms that may be caused as a result is a proper purpose. At the bottom line, our disagreement concerns the proportionality of the provisions of the Law under review in the petitions before us. I will return to this disagreement further on. In my opinion, there is no reason to intervene in the legislature’s decision not to distinguish between a call for a boycott of the state and a call for a boycott due to a connection to an area under the state’s control. We should bear in mind that the prohibition in regard to the Area applies solely to a call for a boycott due to the connection to an area under the state’s control. A classic example of this is a call to boycott the products of an industrial enterprise for the sole reason that it is located in the Area. Such a call may lead to the imposition of the Law’s sanctions. As opposed to that, if, for example, a factory located in an area under the state’s control were to discriminate between Jews and Arabs, and the call for a boycott was premised upon that, it would not incur the imposition of the Law’s sanctions. In my opinion, that would also be the case if the factory were located in an illegal settlement of the type that has been or that must be evacuated in accordance with the decisions of this Court due to its location on the private land of Palestinian residents. In my opinion, calling for a boycott of such a factory because the settlement was built illegally would not lead to the imposition of the Law’s sanctions. That would not be a call for a boycott due to a connection to the Area, but rather due to unlawful conduct. However, a call for a boycott solely due to a factory having a connection with an area under state control falls within the scope of “a boycott against the State of Israel”, as defined by the Law.

            In my opinion, as noted, there are no grounds for intervening in the legislature’s decision not to distinguish between a connection to the Area and a connection to the state. Ultimately, the calls for a boycott of the state are often tied and linked to the matter of the state’s connection to an area under its control. The close relationship between a boycott of the state and a boycott of the area held by it is attested to by the approach of most of the Petitioners, who made it clear that they insist upon the repeal of the sanctions for a call for a boycott of the state. I also believe that the analogy made by my colleague Deputy President E. Rubinstein to our non-intervention in the question of the disengagement from the Gaza Strip (HCJ 1661/05 Hof Azza Regional Council v. The Knesset, IsrSC 59 (2) 481(2005)) is apt. The views of the Israeli public on the relationship between the state and the Area are not merely those of extremes. There is broad spectrum of views among the public. There are those who, apparently like the Petitioners, are of the view that the state should leave the Area, while others are of the view that the Area should be made an indivisible part of the state, while others would say that they would like to hold on to the Area, but that it is not possible, and still others would say that the state should wait and continue to hold the Area as a bargaining chip in the framework of a political settlement. In my opinion, we should stay out of that political debate in all that relates to the Area, while recognizing that in the margin of discretion granted to the legislature, there are no grounds for the Court to prevent it from defending against a boycott not only of the state itself, but also of enterprises and institutions erected in the rea with the consent of the state, and at times, with its encouragement, as part of the Government’s overall policy, and that of the Governments that preceded it. The law-abiding residents of the Area are entitled to the state’s defense of their property and income.

5.         As for the question of proportionality, I fully concur with my colleagues who found that secs. 3 and 4 of the Law establish a proportionate arrangement, while making it clear that it will be possible to attack the arrangements that will be made, if they be made, under those sections. As for sec. 2(c), like my colleagues, I am of the opinion that the section does not meet the proportionality tests. I deliberated in regard to the other provisions of sec. 2 of the Law, primarily concerning the question raised by my colleague Justice N. Hendel on the matter of leaving enforcement in the hands of individuals rather than the state. However, the construction of the section proposed by my colleague Justice H. Melcer limits its scope to the necessary minimum, and it is better to interpret it as he does than to annul it.

6.         I therefore concur in the opinion of Justice H. Melcer and those who joined him.

 

President (Emeritus) A. Grunis:

1.         I have read the various opinions of my colleagues. The opinions reflect a broad spectrum of views concerning the constitutionality of the Prevention of Harm to the State of Israel by means of Boycott Law, 5771-2011 (hereinafter: the Law). My opinion on the matter is like that of my colleague Justice H. Melcer, who presented his view in thorough detail. I will, therefore, only add brief observations.

2.         A point that I believe should be emphasized, and which justifies striking down sec. 2(c) of the Law alone, concerns the effect of a boycott. Indeed, “the boycott silences the discourse” (Amnon Rubinstein& Isaac Pasha, Academic Flaws: Freedom and Responsibility in Israeli Higher Education 118 (2014) (Hebrew)). The fear of a “boycott against the State of Israel” (as defined in sec. 1 of the Law) may result in reducing the discourse on the future disposition of the Judea and Samaria area. While a call for a boycott, including, of course, a public call, falls within the scope of freedom of expression, the fear of the harm inflicted by the boycott may, itself, harm freedom of expression. A person who holds a view that differs from that of one calling for a boycott may fear that if he makes his views on the political debate known, he may find himself or his business boycotted. In other words, the view of my dissenting colleagues leads to a paradoxical situation: the freedom of expression of the person calling for a boycott may infringe the freedom of expression of a person holding a different view. In other words, freedom of expression may become a means for silencing the other. For this reason, as well, secs. 2(a) and 2(b) of the Law pass the constitutional tests, even if just barely, at this stage, prior to the implementation of the Law and in the absence of concrete facts.

3.         However, and due to the fear of infringing freedom of expression, if and when a tort action is brought on the basis of sec. 2(a) of the Law, or if another proceeding is instituted in regard to the implementation of the Law, it may be expected that, against the background of the factual background of a concrete case, the Court may construe the Law very narrowly. This, in order to mitigate any possible violation of the right to freedom of expression of a person claimed to have made a public call for a boycott against Israel.

4. As stated, I concur in the opinion of my colleague Justice H. Melcer.

 

Justice S. Joubran:

1.         The law before us, the Prevention of Harm to the State of Israel by means of Boycott Law, 5771-2011 (hereinafter: the Law), raises a number of complex legal issues. My colleagues discussed these issues in broad detail, including various references to the history of the institution of boycotts in general, and the legislative history of boycott law in particular, drawing upon far-reaching comparisons, and examining the principles of tort law. My colleagues did so while separately evaluating the civil wrong under sec. 2 of the Law and the administrative sanctions established under secs. 3 and 4 of the Law. At the end of day, the opinions of my colleagues present a number of approaches: President (Emeritus) A. Grunis, President M. Naor, and Justices E. Rubinstein, H. Melcer and I. Amit are of the opinion that only sec. 2(c) should be struck down, and that the Law’s remaining provisions should be upheld, while for the present, the question of the constitutionality of secs. 3 and 4 should await the submission of specific petitions against them. My colleague Justice N. Hendel is of the opinion that sec. 2 should be annulled in its entirety, but concurs in upholding secs. 3 and 4 of the Law for the present. My colleague Justice Y. Danziger is of the opinion that sec. 2(c) should be annulled, and that the infringement of freedom of political expression can be mitigated by means of interpretation in regard to a call for a boycott of a person due to his connection to an area under the control of the state. And lastly, my colleague Justice U. Vogelman concurs with the spirit of Justice Y. Danziger’s interpretation, but is of the opinion that we should make recourse to the “blue pencil” rule in this regard, and accordingly strike out the phrase “an area under its control” in sec. 1 of the Law. According to his approach, as well, sec. 2(c) of the Law must be annulled, and secs. 3 and 4 upheld. For my part, I would note that my opinion is as that of my colleagues Justices Y. Danziger and U. Vogelman in all that relates to a call for a boycott against a person or other entity by reason of its connection to the Area under the control of the state, as I shall explain.

2.         Like my colleagues, I, too, am of the opinion that sec. 2(c) of the Law must be annulled. Moreover, like my colleagues Justices Y. Danziger and U. Vogelman, I am of the opinion that a distinction must be drawn between a call for a boycott of a person due to his connection to the State of Israel and a call for a boycott of a person due to his connection to an area under the state’s control. In my view, the approach that should be adopted is that of my colleague Justice Y. Danziger in regard to the expressions related to the connection to “an area under its control”. As my colleague noted, the relationship between the “State of Israel” and the institutions and areas mentioned in the definition in sec. 1 of the Law is one of belonging. The requirement of belonging must relevantly connect the boycott of the state to the boycott of the institution or the Area. Therefore, only a boycott of an institution or of an area because of a boycott of the state in its entirety should fall within the scope of this definition. The practical outcome of this distinction is the application of the Law solely to calls for a boycott of the State of Israel in its entirety and as such (and see, in depth, paras. 45-47 of the opinion of my colleague Justice Y. Danziger). As opposed to this, my colleague Justice U. Vogelman chose to strike out the phrase “an area under its control” from the language of the Law, rather than preferring an interpretive path.

3.         As for the administrative sanctions established under secs. 3 and 4 of the Law, like my colleagues, I, too, am of the opinion that they meet the conditions of the Limitation Clause, and that at this stage – before the Minister of Finance has exercised his authority to implement the provisions of the Law – there are no grounds for their annulment.

4.         Therefore, in my opinion, sec. 2(c) of the Law should be struck down, and sec. 1 should be construed in the spirit of the interpretation proposed by my colleague Justice Y. Danziger in regard to areas under the control of the State.

 

 

The Court therefore unanimously holds that section 2(c) of the Prevention of Harm to the State of Israel by means of Boycott Law, 5771-2011, be annulled, and to deny the petitions in all that regards sections 3 and 4 of the Law. In addition, by a majority decision of President (Emeritus) A. Grunis, President M. Naor, Deputy President E. Rubinstein, and Justices H. Melcer and I. Amit, to deny the petitions in regard to sections 2(a) and 2(b) of the Law, contrary to the dissenting opinions of Justices Y. Danziger and S. Joubran and the separate opinion of Justice N. Hendel and the separate opinion of Justice U. Vogelman.

Given this 26^th of Nissan 5775 (April 15, 2015).

 

In the Supreme Court

CFH 5712/01

 

 

Before:                                                            The Hon. Chief Justice A. Barak

                                                            The Hon. Deputy Chief Justice T. Orr

                                                            The Hon. Justice E. Mazza

                                                            The Hon. Justice M. Cheshin

                                                            The Hon. Justice T. Strasberg-Cohen

                                                            The Hon. Justice D. Dorner

                                                            The Hon. Justice D. Beinisch

 

The Petitioner:                                     Yosef Barazani

 

                                                                        v.

 

The Respondents:                               1. Bezeq – Israeli Telecommunications Company Ltd.

                                                            2. Israel Consumer Council    

 

A Further Hearing on the judgment of the Supreme Court of July 2, 2001 in CA 1977/97 by the Hon. Chief Justice A. Barak and Justices T. Strasberg-Cohen and I. Englard

 

Date of submission of briefs: 17 Shevat 5763 (Jan. 20, 2003)

Attorney for the Petitioner:                Avigdor Feldman, Adv.

 

Attorneys for Respondent 1:              Avner Gabbai, Adv.

                                                            Gil Lotan, Adv.

                                                            Shiri Kasher-Hitin, Adv.

Attorney for Respondent 2:                Prof. Sinai Deutch, Adv.

Facts:  Respondent 1 (hereinafter: Bezeq) advertised an international dialing service (hereinafter: the Service), and represented that a customer would be charged only for the exact amount of time that he used Service. In practice, it turned out that the method that Bezeq used for its calculations resulted in overcharging the users of the Service relative to what was expected according to the advertisement.

            The Petitioner, who used the Service supplied by Bezeq, but who had not seen the said advertisement, initiated a suit in the District Court for pecuniary damages against Bezeq. He claimed that the advertisement was one “liable to mislead a consumer” under sec. 2 (a) o the Consumer Protection Law, 5741-1981 (hereinafter: the Law), in regard to the actual cost of international calls. He also requested that the suit be certified as a class action.

            The District Court certified the suit as a class action. However, on appeal, the Supreme Court reversed that decision, based upon the provisions of sec. 31 (a) of the Law, according to which an act or omission in contravention of sec. 2 of the Law “shall be treated as a tort under the Civil Wrongs Ordinance [New Version]”. Therefore, and despite the finding that the advertisement was one that was “liable to mislead a consumer”, the Court applied the causal-link test established by the Civil Wrongs Ordinance [New Version] (hereinafter: the Ordinance), and found that since the Petitioner had not been exposed to Bezeq’s misleading advertisement, a causal link was not established between the advertisement and the damage putatively caused him. That being so, the Court held that the Petitioner did not have a personal cause of action against Bezeq under sec. 2 (a) of the Law, and in any case, was not a proper plaintiff in a class action.

            The Further Hearing focused upon the question whether or not the prohibition of misleading under sec. 2 (a) of the Law constitutes a “regular tort” like every tort in the Ordinance, subject to the doctrines established under the Ordinance, among them the causal-link doctrine.

            Held:  

The Supreme Court held:

1. (1)        The provisions of sec. 2 (a) of the Law, prohibiting deceit, create a prohibition upon conduct. A “dealer” contravenes that prohibition even if the thing that he does by act or omission is “liable to mislead”, that is, whether or not a person was actually misled by that thing that he did. The standard of conduct required by the provisions of this section is one that is higher than that required by many statutes, which require a direct causal link between an act and a result – the harm caused the victim – whereas sec. 2 (a) prohibits conduct, as such, even if it does not lead to harm. That requirement is intended to protect consumers and ensure that they receive reliable information about the goods or services being offered, so that they can make informed choices about whether or not to make the transaction.

 

(2)        Under sec. 31 (a) of the Law, an act or omission proscribed by sec. 2(a) shall be treated as a tort under the Ordinance. Nothing in the language of sec. 31(a) of the Law would show that the tort under sec. 2 (a) removes it from the fundamental principles or the doctrines of the Ordinance, and nothing therein might show that a consumer is entitled to compensation merely because a dealer contravened a provision of the Law. On the contrary, the Law unconditionally refers to the provisions of the Ordinance.

 

(3)        In addition to the clear language of the Law, expediency also argues that the sec. 2 (a) of the Law establishes a tort like any other tort under the Ordinance, for if those same acts and omissions external to the Ordinance are tortious in nature, it is but natural that we should employ the same traditional, familiar doctrines that tort law created and developed over so many years such that they have become foundational to the legal system, subject, of course, to special, exceptional cases

 

(4)        Nevertheless, there is a difference between the native torts of the Ordinance and those external to it that are treated as torts under the Ordinance. A tort external to the Ordinance should be scrutinized carefully in order to determine whether or not a particular doctrine of the Ordinance is compatible with the elements, nature and construction of the external tort.

B.        (1)        In accordance with the causal-link doctrine in sec. 64 of the Ordinance, there must be a causal connection between a person’s act or omission – an act or omission that constitutes a tort – and the harm caused to the victim, for which he demands compensation. In the instant case, there was no causal connection between the advertisement and the “harm” caused to the Appellant, inasmuch as the Appellant did not read that advertisement, and in any case, was not influenced by it and did not rely upon it. While Bezeq perpetrated a tort by publishing that advertisement to the public, the existence of a tort is insufficient to entitle a person to compensation. Rather, that person must show that he was harmed as a result of that tort, and that precondition was not met in regard to the Appellant.

            (2)        Similarly, the compensation doctrine, enunciated in sec. 76 of the Ordinance, states that a person is not entitled to compensation except in regard to damage that arose from a tort. In regard to compensatory relief, the Law requires that the plaintiff prove the damage arising from the misrepresentation, that is, the existence of actual deceit, and an act arising from that deceit. In the circumstances of this case, the publication of something that might tend to mislead – the advertisement itself – is not sufficient to for a consumer to acquire a right to compensation if he suffered no actual damage. The rule is that damages will not be awarded unless harm was caused, and damages will be awarded only to the extent of the harm caused. In the absence of an express, unequivocal provision granting a person damages for virtual harm without the proof of actual harm, it is difficult to imagine that a court will award damages. Such significant creativity is intended for the legislature, and not the courts.

            (3)        The causal connection (both factual and legal) required under sec 2 (a) of the Law does not require a consumer’s explicit reliance upon the representation presented by the dealer. Unlike other legal provisions, which explicitly require a causal connection of reliance, it is possible that a consumer will not directly rely upon the dealer’s representation, and the required causal connection will, nevertheless, exist, that is, that the dealer’s representation “was the cause or one of the causes of the damage”, as stated in sec. 64 of the Ordinance. That would be the case, for example, where it can be shown that an advertisement – capable of misleading the consumer – that was published by a dealer, initiated a factual chain of events that ultimately caused damage to the consumer. In such a case, it would be appropriate to interpret the concept of reliance broadly, such that it would not be restricted exclusively to direct reliance.

            (4)        However, there must be an appropriate causal connection between the misleading publication and the injury that a consumer incurs. The fact that the purchase of the goods or services occurred after the publication is not, in and of itself, sufficient to show a causal connection between the potentially misleading publication and the consumer’s acquisition of the advertised goods or services. There must be an appropriate causal connection between the two occurrences, and that link will be deduced from the circumstances of each and every case with the help of the relevant evidence.

C. A class action is, in effect, an extension of the personal right to sue, and in the absence of a personal right to bring suit, there can be no class action. The import and scope of the personal suit will only be influenced marginally, if at all, by the class action. A class action does not grant a consumer an independent cause of action. It is merely a procedural tool for joining individual suits in a single proceeding. Class actions were added to the Law some thirteen years after its enactment, and its addition to the Law merely expanded the personal suit – procedurally – into many personal suits, but the principles of the personal suit remained unchanged. Therefore, sec. 2 (a) of the Law should be construed as it was prior to the addition of class actions to the Law, that is, without reference to such a class action.

D. (Justice T. Strasberg-Cohen, dissenting):

     (1)   The phrase “shall be treated as a tort under the Civil Wrongs Ordinance” should be construed as establishing a new cause of action that is like a tort. This cause of action is not identical to a tort, but is equivalent to a tort in the sense that it applies the same doctrines of the Ordinance to the act or omission – in the present case, the compensation and causal link doctrines. However, it is a cause of action that is unique to this Law. It is substantively independent, and must be construed in its own context, in light of the objective it was intended to serve, while taking the said doctrines into account, and which must be given content that corresponds to the objectives of the Law and its enforcement in the framework of a class action.

     (2)   For the purpose of establishing a cause of action for compensation for damage caused by a publication liable to mislead, it must be shown, prima facie, that the publication was liable to mislead, that damage was incurred, and that there is a factual and legal causal connection between the publication and the damage. However, even in the absence of the consumer’s reliance upon the potentially misleading publication, there may be a causal link between the publication and the damage. This is so because, first, establishing a prohibition upon conduct that is liable to mislead without recognizing the remedy of compensation for its contravention without proof of actual deception, renders the Law’s primary prohibition lacking any real civil remedy. Second, there is little possibility that a consumer will devote significant effort and money solely for the purpose of obtaining a restraining order for the benefit of the general public. Third, over the years that the Law has been in force, the criminal sanction has been applied with measured restraint, and it would seem that the criminal sanction cannot provide significant deterrence for powerful dealers that expect to garner huge profits from misleading the public, and the same is true of administrative sanctions. Fourth, an approach that would require actual deception in order to obtain compensatory relief would limit the scope of a dealer’s liability only to those consumers who could actually prove that they were indeed misled by the dealer’s representations, and would make deception worthwhile from the perspective of the dealer. Fifth, a construction that would grant relief only to those consumers who were actually deceived would create an artificial distinction between the consumer public that used the goods or services that were the subject of the misleading advertising, but who were not exposed to it, and the consumer public who were exposed to the misleading information. Sixth, in other cases in the past, the Supreme Court did not hesitate to expand the available types of relief beyond those set out in a law, in order not to eviscerate the law. Seventh, the Law establishes other prohibitions that do not require proof of reliance, the violation of which grants the consumer a broad right to compensation. There is little reason to granting an independent remedy of compensation, which includes granting broad discretion to the court, for the violation of those prohibitions, while not doing so in regard to the Law’s central prohibition – the prohibition upon misrepresentation.

(3)   The tort perpetrated by publishing something liable to mislead does not require reliance in order for the consumer to be entitled to compensation for damage incurred due to the publication, and it is not tied to the demand of reliance. Had the legislature intended to limit the prohibition of deceit to one of the torts requiring reliance, one would expect that it would have done so explicitly. Reliance is not required by the language of the Law or by its objective for the purpose of the existence of a causal connection. Thus, there can be a causal connection without reliance.

(4)   Holding that there is no requirement that the consumer rely upon the misleading publication does not obviate the need for a causal connection, and in the instant case, the representation made by the dealer should be deemed a binding promise to the consumer public that requires that it act in accordance with the promise. That promise bestows a right upon the consumer, and places the dealer under an obligation in regard to the consumer public. If the dealer does not meet the obligation it undertook by means of the advertisement, and charges more than what was promised in the advertisement, it breaches its duty, and as a consequence of that breach, the consumer incurs damage. Therefore, even if the consumer was not exposed to the misleading publication, and did not change his behavior in regard the use of the product or service, he will still be deemed harmed, since the price he was charged for the product or the service was higher than the price at which he was entitled to purchase the product or service.

(5)   The consumer incurs injury in the form of a “price differential”, which is a real loss. Appropriate construction of the required causality would see this injury as connected to the breach of the proscribed misrepresentation, as due to the misleading advertisement and the difference between it and the manner in which the dealer actually acted, the consumer suffered injury. Such a construction would meet the requirement of a causal link, both factually and legally. Factually, the said injury caused to the consumer is a consequence of the fact that the dealer made a representation that it did not honor. Legally, the injury is causally related to the representation under the foreseeability test, in that when a dealer makes a false representation, it foresees that charging contrary to the representation will cause harm due to the “price differential”, under the risk test, since that harm falls within the scope of risk of the dealer’s act, and under the common-sense test, by which we examine the overall actions of the tortfeasor and their contribution to the harmful result.

E. (Justice E. Mazza, dissenting):

(1)   It is possible and proper to restrict the application of traditional tort law to consumer causes of action. Such restriction is clearly required by the significant, substantive difference between the purpose of consumer torts and the purpose of regular torts.

(2)   The consumer laws of deceit must contend with the requirements of reliance and causality differently than tort law. Instead of the personal reliance of each and every consumer – that of traditional tort law – we should adopt a doctrine that recognizes “constructive reliance” of the consumer public to which the advertiser directed its misleading advertisement, while instead of requiring proof of a factual causal connection between the deception and the injury caused to each of the complaining consumers, we should adopt a doctrine that recognizes a “consumer causal link” that would be inferred from the merger of the potentially misleading publication and the intention of the advertiser that the advertisement reach the consumers, mislead them, and thus influence their conduct.

(3)   Consumer deception would give rise to a (personal or class) cause of action for monetary relief upon the fulfillment of three elements: an offending publication, injury, and a “consumer causal link”. As opposed to this, we should also recognize a defense that would be available to the advertiser if he can show that the plaintiff was aware of the true facts, and that the offending advertisement could not, therefore, negatively influence his situation.

(4)   The reliance requirement undermines the objectives of consumer protection laws –leveling the playing field for the parties; increasing personal autonomy; the concept of consumer sovereignty; protection of the public welfare and of social rights; advancing commercial fairness; protecting the credibility of the local market and public confidence in the social regime – and it frustrates their realization. Once a potential to mislead is proved, and it is shown that the advertiser indeed intended that the misleading advertisement reach the public and influence its consumer conduct, we should properly hold that there is constructive consumer reliance upon the misleading advertisement. The question whether the dealer actually achieved its purpose, i.e., that the misleading publication actually reached its audience and actually influenced it, is of limited importance.

            F. (Justice D. Dorner, dissenting):

(1)   The Law, which intervenes in contracts between unequal parties, and subjects the stronger party – the supplier – to an increased duty of fairness towards the weaker party – the consumer – is firmly anchored in the established doctrines of contract law. Many consumer transactions are anchored in the accepted contractual doctrines under which if a supplier charges a higher price than the correct, advertised price, consumers are entitled to a refund of the difference. In the reality created by those doctrines, and in which consumers actually operate, consumers trust suppliers without verifying that each and every transaction conforms to the advertised price.

(2)   A supplier’s advertisement of a specific price creates a consumer right not to pay a higher price. If the supplier charges a higher price, that will, in any event, constitute a breach of contract that would give rise to monetary relief even for consumers who were not exposed to the advertisement.

(3)   That entitlement can be grounded at least three ways. The first deems the dealer’s publication about the price an irrevocable offer to the public, which can be accepted by the objective performance of its conditions, while the supplier is bound to the publicized price, and provides an opportunity for the public to purchase the product or service for a price that will not be higher. In accepting the offer, the parties agree to the published price, and the supplier must refund any additional amount charged. The second approach deems the contract to have an implied term under which the supplier undertakes not to charge the consumer more than the advertised price. Such a term reflects the expectations of the parties. Overcharging constitutes a breach of that term. The third approach would classify such overcharging – particularly if it targets only consumers who were not exposed to the publication – as a breach of contractual good faith.

 

Judgment

 

Justice M. Cheshin:

            A Further Hearing on the judgment of the Supreme Court in CA 1977/97 Yosef Barazani v. Bezeq – Israeli Telecommunications Company Ltd. (55 (4) IsrSC 584).

2.         The Consumer Protection Law, 5741-1981 (the Consumer Protection Law or the Law) – true to its name – places various obligations upon a “dealer” – one who sells goods or provides a service by way of dealer – to a “consumer” – one who purchases an commodity or obtains a service from a dealer in the course of his business for use that is primarily personal. One of those obligations is stated in sec. 2 (a) of the Law: “A dealer must not do anything…which is liable to mislead a consumer in regard to any material element of a transaction …”. Section 31 (a) further informs us that “Any act or omission in contravention of Chapters Two, Three or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version]”. And this is the heart of the matter before us: To what extent do the doctrines and principles of the Civil Wrongs Ordinance apply to the “tort” created under sec. 2 (a) of the Law? Shall we treat it as a “normal” tort – as if it were a tort comprised by the Civil Wrongs Ordinance – that integrates itself into the fundamental principles and doctrines of the Civil Wrongs Ordinance, or shall we say that the legislature created a special quasi-tort – a sui generis tort – that is not subject to the doctrines and fundamental principles of the Civil Wrongs Ordinance as they are usually construed?

             A company advertises one of its products in a way that is “liable to mislead a consumer” in regard to a material matter. Reuben buys the product without having seen the misleading advertisement, and thus, without having been misled. Reuben later discovers the misleading advertisement, and sues the company for monetary compensation for his claimed loss, solely because the company did not keep its advertised promise. Reuben does not make do with a personal suit, but requests that the court certify it as a class action: He asks to sue on behalf of the entire public that purchased that product, and obtain relief for that entire public. Can Reuben prevail in that suit?

3.         The Supreme Court ruled – by the majority opinion of Chief Justice Barak and Justice Englard – that Reuben cannot prevail in his personal suit. The reason is that in purchasing the product, Reuben did not rely upon the publication that was liable to mislead, and therefore no causal connection was shown between the publication and the injury allegedly caused to Reuben. As he could not prevail in his personal suit, he was not an appropriate plaintiff in a class action. Justice Strasberg-Cohen, dissenting, thought otherwise. In her opinion, considering the purpose of the Consumer Protection Law and the nature of a class action suit, such a person should be entitled to proceed with the suit, and there is, indeed, an appropriate causal link. Those, therefore, are the disagreements and the core of the issue that we will address in this Further Hearing. But first, the facts.

The Basic Facts

4.         I will begin with a brief, preliminary statement: Reading the briefs submitted to the Court surprisingly reveals that the parties do not only disagree on the legal questions – as is usual in a Furhter Hearing – but on no small number of factual issues. The appeal is even directed at findings of fact in the Supreme Court’s judgment. We will not address those disputes, and the factual foundation that we will address is the factual foundation that grounded the Supreme Court’s judgment.

5.         And now to the matter before us. Over the course of the years 1989 through 1996, the Respondent, Bezeq – Israeli Telecommunications Company Ltd. (Bezeq), conducted an advertising campaign to encourage the use of its international direct-dialing service, a service meant to replace the “188” service by which international calls were placed through an operator. The advertising campaign emphasized that “the call will be charged only for the exact time that you spoke, even if you only spoke for half a minute…”, and published the tariff that Bezeq was meant to charge for calls to various places around the world. The advertisement added that the quoted price was for a time unit of “one minute of conversation”. For example, a direct-dial call to the United States…NIS 3.53 per minute; a direct-dial call to France…NIS 3.14.

6.         In practice, it turned out that call time was not calculated on the basis of minutes, but rather on the basis of meter units. The length of each meter unit – whose length is set according to the country called – was several seconds, and Bezeq calculated the last meter unit of a call as if it had been entirely used, even if the customer spoke for only part of the unit. The customer did not, therefore, pay for the “exact time” that he spoke on the phone, as several seconds were added from the meter unit to every call – or to be precise – to almost every call. Due to that manner of calculation, the price of (nearly) every call was higher than the advertised price. For example, a “one-minute call” to the United States – 60 seconds – was calculated as comprising 14.23 meter units, the price of which was NIS 3.53, which was the advertised price. But in practice, Bezeq charged more for a (precisely) one-minute call. The reason for that was that Bezeq “rounded up” the 14.23 units to 15 units, and charged the customer for 15 units, whose price – needless to say – was higher than the advertised price. That, of course, was also the case for every call that was longer than a minute. The caller was charged for the last meter unit even if he did not completely use it.

7.         The Petitioner, Barazani (Barazani or the Petitioner) was a “consumer” as defined by the Consumer Protection Law, and Bezeq was a “dealer”. In 1996, Barazani initiated a monetary suit against Bezeq, along with a request that the suit be certified as a class action. Barazan claimed that Bezeq’s advertisements were “liable to mislead” consumers in regard to the true price of international phone calls, and that Bezeq had, therefore, contravened the prohibition of deceit under sec. 2 (a) of the Consumer Protection Law. Barazani claimed that the injury incurred by him was equal to the difference between the price that Bezeq advertised and the price that it actually charged him for international calls. Although Barazani incurred negligible injury, the total harm to Bezeq’s consumers – all those who had made international direct-dial calls in the relevant period – amounted to tens of millions of shekels. And, Barazani argued, Bezeq had pocketed those vast sums by misleading its customers. Barazani therefore asked that his suit be certified as a class action under the Consumer Protection Law, viz., that he be permitted to sue on his own behalf, and on behalf of all of Bezeq’s customers who made direct-dial international calls, and that he be awarded compensation for the injury incurred, i.e., compensation for the difference between the advertised price and the price actually paid by all of Bezeq’s customers.

8.         But Barazani himself was never exposed to the misleading advertisement. When he made his international calls, he had no knowledge of the misleading advertisement, and thus, in any case, did not rely upon it, was not influenced by it, and was not misled by it. The question, therefore, arose whether Barazani had a personal cause of action against Bezeq by reason of the misleading advertisement of which he was not aware. We would add – and this is the main point – that under the provisions of the Law, a person cannot present himself as a plaintiff in a class action unless he has a personal cause of action. Therefore, the absence of a personal cause of action by Barazani led to the collapse of the entire suit.

9.         The District Court decided that the conditions for a class action had been met, but further held that the class action could be submitted solely for declaratory relief and not as a suit for a monetary remedy. Both parties appealed that decision, and the Supreme Court decided (by a majority decision) to grant Bezeq’s appeal and deny Barazani’s appeal.

 

The Relevant Legal Provisions

10.       The three key legal provisions in this matter are as follows: first, sec. 2 (a) of the Consumer Protection Law, which establishes the prohibition upon deceit:

                        Prohibition of Deceit

2. (a)    A dealer must not do anything – by deed or by omission, in writing, by word of mouth or in any other manner … which is liable to mislead a consumer in regard to any material element of the transaction …

This provision limits itself to relations between a “consumer” and a “dealer” as defined under sec. 1 of the Law: A “dealer” is “a person who sells a commodity or performs a service by way of dealer and includes a producer”, and a “consumer” is “person who buys a commodity or receives a service from a dealer in the course of his business for mainly personal, domestic or family use”. The prohibition is one of conduct, and a dealer contravenes the prohibition even if he does something – by act or omission – that is only “liable to mislead” a consumer, i.e., even if no one was misled by it. Therefore, as stated in sec. 23 (a) (1) of the Law, a dealer commits an offense and is liable to punishment if “did anything liable to mislead a consumer in violation of the provisions of section 2”. The standard of conduct required under sec. 2 (a) is higher than the usual standard in other laws. Such is the case, for example, in regard to the torts of fraud and injurious falsity under secs. 56 and 58 of the Civil Wrongs Ordinance, and misrepresentation under sec. 15 of the Contracts (General Part) Law, 5733-1973. In those provisions – and in many others – a direct causal connection is required between an act and a result – injury to a victim – whereas sec. 2 (a) of the Consumer Protection Law prohibits the conduct per se, even in the absence of resultant injury. This requirement of the Consumer Protection Law is, of course, intended to protect the consumer – to ensure that the consumer will receive reliable information about a commodity or service offered to him, so that he may make a reasoned decision whether or not to make the transaction. See: Explanatory Notes to the Consumer Protection Law Bill, 5740-1980, 5740 H.H. 302; and compare: CA 1304/91 Tefahot Mortgage Bank for Israel Ltd v. Liepart, 47 (3) IsrSC 309, 326.

11.       The second legal provision is that found in sec. 31 (a) of the Consumer Protection Law, from which we learn that an act or omission under sec. 2 (a) – and many other provisions – is to be treated as a tort:

                        Compensation

31. (a) Any act or omission in violation of Chapters Two, Three, or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version].

It would appear, therefore, that contravening the prohibition of deceit – as specified in sec. 2 (a) of the Law – is to be treated as a tort under the Civil Wrongs Ordinance, and therefore, should be adjudged according to the principles and doctrines established by the Civil Wrongs Ordinance that apply to torts under Ordinance.

12.       The third relevant legal provision is sec 35A of the Law, which treats of class actions under the Law:

                        Class Action

35A. (a) A consumer… (hereinafter – the plaintiff), may bring suit subject to the provisions of this chapter, on behalf of a group of consumers for a cause of action under which, in accordance with this law, he could personally bring suit, and against every defendant that the consumer could personally sue (hereinafter – a class action).

(b) Where the cause of action is damage, it is sufficient that the plaintiff show that damage was caused to a consumer.

(c) …

The plain-meaning of this legal provision is that an individual victim can present himself as a representative plaintiff in a class action – subject to these and other provisions – if and only if he has a personal cause of action. In other words: there is no “public” class action. The possibility of an actio popularis in the field of class actions is ruled out by the Consumer Protection Law.

13.       Let us examine the opinion stated in the judgment before us in light of these provisions.

 

The Opinion in the Judgment under Appeal in the Further Hearing

14.       The starting point for this interpretive journey is that Bezeq’s advertisement was (purportedly) something that was “liable to mislead a consumer in regard to any material element of the transaction”, as stated in sec. 2 (a) of the Consumer Protection Law. Therefore, as all three justices agreed, Bezeq breached a prohibition established by under sec. 2 (a) of the Law. However they disagreed on the question whether Barazani was harmed as a result of the advertisement. Did Barazani incur damage even though he had not rely upon those advertisements, and even though there was no causal connection, in the accepted sense, between the advertisement that ex hypothesi did not mislead him, and the harm he claims that he incurred? Or, as Justice Strasberg-Cohen stated the matter (ibid., 594):

Section 2 (a) of the Law, titled “Prohibition of Deceit”, forbids a dealer from doing anything that “is liable to mislead” a consumer in regard to any material element of a transaction, and sec. 31 of the Law establishes that violating the prohibition upon deceit is to be treated like a tort, which entitles the victim to compensation. We learn from the two sections that in order for a consumer to have a cause of action against the dealer for a breach of the “prohibition of deceit”, the consumer must show that the dealer breached the duty imposed by the “prohibition of deceit”, that the consumer suffered harm as a result of the breach of that duty, and that there was a causal connection between the breach of the prohibition established under sec. 2 (a) of the Law and the harm suffered by the consumer.

15.       In her dissent, Justice Strasberg-Cohen argued that the purpose of the Consumer Protection Law – and the purpose of class actions, as well – both require that we interpret the provision of sec. 2 (a) of the Law as granting a consumer a cause of action even if he did not rely upon the misleading representation. After all, the Law speaks of something that is “liable to mislead”, and not about something that “misleads”. Therefore, once an advertisement that is “liable to mislead” is published, the dealer is under an obligation to fulfill what it promised in the advertisement, while opposite that duty stands the right of the consumer that the dealer will act in conformance with the advertisement. If the dealer breach that duty, the consumer incurs damage that entitles him to compensation. The dealer causes damage to the consumer by the very breach of the duty imposed upon him, even if the consumer was unaware of the advertisement. Indeed, the causal connection between the advertisement and the damage is not the accepted one that we know from tort law, but one that is not bound by the provisions of the Civil Wrongs Ordinance in this regard.

16.       That view was not acceptable to Chief Justice Barak. The Chief Justice agreed, as we noted, that Bezeq had breached the prohibition upon publishing an advertisement that was “liable to mislead a consumer”, but he did not share the opinion that that breach entitled Barazani to sue for compensation. The reason for that was that, as we know, Barazani did not rely upon the advertisement when he made international calls – inasmuch as he was unaware of it – and there was, therefore, no (factual or legal) causal connection between Bezeq’s breach and the alleged damage caused to Barazani. In the opinion of Chief Justice Barak, as stated in sec. 31 (a) of the Law, the normal doctrines of tort law – among them the causal-link doctrine, and the rule that compensation is granted only for damage that is causally connected to the tortfeasor’s wrongful act – apply to the breach of the duty established by sec. 2 (a) of the Consumer Protection Law. Thus, in light of that, in the matter before us there was no causal connection – a causa sine qua non connection – between the advertisement and Barazani’s alleged damage, and a necessary condition for compensation was not met. Since Barazani did not have a personal cause of action for a suit for damages, he could not, in any case, act as a representative plaintiff for compensatory relief.

17.       Justice Englard was of the opinion that Bezeq’s advertisements were not liable to mislead the consumer public, and that Bezeq had not, therefore, breached its duty under sec. 2 (a) of the Law. In regard to the disagreement between my colleagues Justice Strasberg-Cohen and the Chief Justice, Justice Englard concurred with the view of the Chief Justice, holding that compensation should not be awarded to a consumer who was not actually misled by the misleading advertisement. The reason for this was that “no obligation for compensation should be imposed in the absence of a causal connection between the wrong and the damage”.

 

The Question at Issue

18.       This, therefore, is the question at issue: Reuben, a dealer who sells commodities or supplies services, publishes an advertisement that is “liable to mislead a consumer” in regard to a material element. We all agree that by doing so, Reuben violates a prohibition established under sec. 2 (a) of the Consumer Protection Law. Simon, a consumer, purchases one of those commodities or services that Reuben offers for sale. Does Simon acquire a cause of action against Reuben for damages even if he never saw the advertisement, and thus was neither influenced nor misled by it? Is a consumer who purchased some commodity or service from a dealer entitled to damages from that dealer merely by virtue of the fact that the dealer violated sec. 2 (a) of the Law by publishing an advertisement liable to mislead the consumer public in regard to that commodity or service – which is the view of Justice Strasberg-Cohen – or, as Chief Justice Barak and Justice Englard argue, is the burden upon the consumer to show not merely that he purchased the commodity or service, but also that he did so in reliance upon the misleading advertisement?

 

A Methodological Note concerning the Core

19.       Before delving into the heart of the dispute, we would preface with a methodological observation that we deem of singular importance.

20.       When Barazani’s petition for a Further Hearing on the Supreme Court’s judgment was granted, the Israel Consumer Council (the Consumer Council or the Council) requested to join as a party to the proceedings. The Court granted that request, and in lengthy pleadings, brimming with arguments and supporting sources, the Council lent its support to Barazani’s position and arguments. Central to the Council’s arguments is the view that adopting the majority’s opinion would eviscerate class actions in the framework of the Consumer Protection Law, and would thus entirely frustrate the purpose of sec. 2 (a). Here is a typical example of the Council’s arguments:

It would be hard to overstate the importance of the rule established in the Barazani case. As will be explained below, in accordance with that rule, in every instance of a misleading advertisement it will be necessary to prove that each of the consumers saw the advertisement, read it, understood it and acted in reliance upon it. Where we are concerned with a consumer class action in which tens of thousands were harmed, it is not at all practical to examine which of them saw the advertisement, which of them relied upon it and to what extent the advertisement influenced their discretion in purchasing the commodity or service.

Inasmuch as consumer class actions generally represent a very large number of consumers, and are often the result of advertisements by the relevant companies, all such cases will be denied at the stage of requesting certification, based upon the argument that personal reliance of each and every member of the class cannot be proven. In other words, it will be possible to block almost every consumer class action. Moreover, as will be explained below, this construction will inflict substantial harm upon the Consumer Protection Law, at least in regard to the civil remedies that the Law provides.

If the construction under which personal reliance of each consumer is accepted as the relevant construction for the remedy of damages under the Consumer Protection Law, the result will be that it will be impossible to sue for damages by way of a class action in cases of false advertising. This rule is liable to result in abuse, and a situation in which advertisers will not worry about making imprecise statements, as the primary remedy of a class action will not be available to the consumer public.

The Council and Barazani (the Petitioners) further explain that the Consumer Protection Law – and sec. 2 (a) thereof, with which we are concerned – was intended to protect consumers from large companies, and to deter such companies from harming consumers. In the opinion of the Petitioners, class actions are vital to the realization of that objective, as without them, the Law will not be enforced, and the obligations it places upon dealer will come to nothing. The other enforcement measures in the Law are secondary measures and inadequate. The primary means for enforcing the Law is by class actions, which place enforcement in the hands of the individual consumer, and thus appropriately lead to a distribution of enforcement. The Petitioners argue that the majority opinion would sound the death knell for class actions and should, therefore, be rejected. The Petitioners find further support for their position in the American consumer protection laws, which, they argue, do away with the need for reliance, and that, they claim, is also the case in regard to Israeli securities law. They therefore pray that we interpret secs. 2 (a) and 31 (a) of the Law broadly and generously, as does Justice Strasberg-Cohen. I believe that I would not exaggerate in saying that the class action constitutes the central pillar of the Petitioners’ argument, as if class actions are the whole Torah on one foot, and all the rest of the Consumer Protection Law is but commentary.

            Bezeq replies to the Petitioners’ arguments at length and in detail, and we shall briefly refer to part of that reply.

21.       We have no intention of delving into the subject of class actions for the purpose of deciding the instant case. However, we will make some observations in regard to how class actions are integrated into the provisions of sec. 2 (a) of the Law, and primarily in regard to the consequences of such actions upon the interpretation of sec. 2 (a).

22.       In accordance with the provisions of sec. 35A (a) of the Law (see para. 12 above), a person cannot initiate a class action unless he has a personal right to bring suit. Compare (in regard to actions under the Securities Law, 5728-1968): CA 2967/95 Magen vaKeshet Ltd. v. Tempo Industries Ltd. IsrSC 51 (2) 312, 329, and in regard to an action on the basis of sec. 29 of the Civil Procedures Regulations, 5744-1984, see: LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220, at para. 24 of the opinion of Strasberg-Cohen, J. A class action is a type of extension of the personal suit, and in the absence of a right to bring a personal suit, there can be no class action. A class action is like a chamber within a chamber. You cannot enter the inner chamber without first passing through the outer one. If that be the case – and I believe that to be so – then it would be difficult to conjecture from class actions to personal actions. If a person must first show that he has a personal right to sue, and if overcoming that hurdle is a precondition to a class action, then the interpretation and scope of personal actions can be influenced but little, if at all, by class actions. If that is the general case, then clearly class actions cannot be seen as independently granting causes of action. A class action is nothing but a procedural means for joining several personal actions into a single proceeding. That being the case, we cannot say that class actions might provide inspiration for interpreting sec. 2 (a) of the Law, let alone that the fundamental basis for its construction is to be found in class actions.

23.       Moreover, the provisions of sec. 2 (a) of the Law, along with sec. 31 (a) –  legal provisions that grant a consumer a personal right – were part of the original Law as enacted in 1981. At the time, class actions were not included in the Law. Class actions only boarded the moving train of consumer protection some thirteen years later in the Consumer Protection (Amendment No. 3) Law, 5754-1994. And see: the Explanatory Notes to the Consumer Protection Law (Amendment No. 3) Bill, 5754-1994, H.H. 5754, 396:

It is recommended that an additional chapter be added to the Consumer Protection Law, 5741-1981, that would make it possible to initiate a class action.

A class action, which saves the need for submitting a large number of individual consumer suits, is the efficient, and sometimes the only way by which consumers can contend with powerful economic bodies for which an independent suit of a single consumer, or even of several consumers together, is meaningless.

Knowing this to be the case, we can return to the question of how class actions influence the interpretation of personal suits, and say: until the institution of class actions, we had to interpret sec. 2 (a) on its own, from within and in the general context of the Law as it then was, and in the broad context of the existing legislation and the general principles for the interpretation of statutes, as normally applied. Class actions were not part of that interpretive process, as they had not yet been recognized, and therefore could not have influenced our interpretation. The interpretation of sec. 2 (a) of the Law was thus grounded before class actions were part of the Law. With the introduction of class actions in 1994, we find nothing among its provisions but the procedural expansion of the personal suit into very many personal suits.  The fundamentals of personal suits did not change. As Justice Strasberg-Cohen notes in LCA A.S.T. (above, at para. 26 of her opinion):

The arrangement for submitting a class action is essentially a procedural one. It facilitates joining the individual suits of many, mostly unknown, plaintiffs, into one suit. The fact that a class action has many ramifications for various areas does not change its basic procedural nature.

Indeed, “a situation in which a single plaintiff (or a number of plaintiffs) sue on behalf of a group of individuals for harm (of a similar kind), where each member of the group was harmed by an identical breach of duty, stands at the base of class actions” (LCA 4556/94 Tazat v. Zilbershatz, IsrSC 49 (5) 774, 783). A class action “represents a collection of personal suits” (the Magen vaKeshet case, above, 324), and it does not create causes of action for the representative plaintiff or for the members of the group. Class actions are an important tool – of great value and power – and in being what they are, they influence the material rights of the parties – the defendants, the representative plaintiff, and the members of the group. However, their influence is in providing an opportunity to realize rights, rather than in the creation of new causes of action. The power and importance of a class action are expressed in its size, and in making it possible to join a large number of existing actions in one procedure, where treating each action individually would lack significance. At the same time, the class action does not grant the representative plaintiff, or any member of the group, a cause of action that he would not have were it not for the class action. How, then, do class actions influence the interpretation of what preceded them in time, as alleged?

24.       We would emphasize that, of course, it is not our intention to say that a later law – that of 1994 – cannot influence the interpretation or scope of prior rights. However, in a case such as ours, we would expect that the new law would send us some sign or signal that would inform us – expressly or impliedly, directly or indirectly – that it is intended to change the mode or manner of the prior law, or, in the case before us, that it would entirely change the interpretation of sec. 2 (a). But in the 1994 law “there was no response, no one answered, no one paid attention”.[1] It is simply that sec. 2 (a) of the Law should be interpreted after 1994 as it was understood before that year, i.e., without reference to class actions as such (see and compare: HCJ 6194/97 Nakash v. National Labor Court, IsrSC 53 (5) 433, 455-456; and see: A. Barak, Interpretation in Law, v. 2 (Nevo, 1993) 51-54).

25.       We would add that we do not mean, and have not said, that the provisions regarding class actions cannot, by their very nature, affect the interpretation of the personal suit. It can be argued that had the class action been created in the original law – joined at birth to the personal suit – then it could retroactively, so to speak, influence the interpretation of the personal suit. “There is no early or late in the law”,[2] and all of its provisions are part of a unified whole. Thus, provisions that, in terms of the internal logic of the law, appear to “precede” other provisions of the same law, will not be interpreted independently, in isolation from the “later” provisions. The law is like a living creature, and each of its organs affects the others, and vice versa (see and compare: CrimA 4389/93 Mordechai v. State of Israel, IsrSC 50 (3) 239, 260 ff.). However, in this regard, we would expect that the later law would send us some message telling us that it is intended to shed new light on the preexisting law. But the 1994 amendment – that which introduced class actions – says absolutely nothing that might affect the interpretation of sec. 2 (a) as it stood prior to the amendment.

26.       Our conclusion is, therefore, that, as opposed to the argument of the Petitioners, class actions will not play a decisive role in the interpretation of the provisions of sec. 2 (a) or of sec. 31 (a) of the Law. That is not to say that we may not glance in the direction of class actions in the course of interpretation, since, after all, after the amendment of the Law, a class action is one of the organs of the Law (and that, bearing in mind, as we said, that had class actions been created with the Law, then it would be appropriate to interpret personal suits differently). However, the influence of class actions, to the extent that they may exert some influence – which is a separate question – will only be marginal.

27.       This matter of interpretation that we just addressed is of singular importance. As we all know – and as stated – class actions are an important, valuable tool. But first and foremost – and this is the main point – it is a powerful tool. However, the synergetic power of a class action makes it a non-conventional weapon, and not surprisingly, it strikes fear into the hearts of dealers. For that reason – and primarily for that reason – we must take special care in treating of the class action, as it is a hand-grenade with the pin pulled out.  We celebrated the birth of the class action, as in the “balance of terror” between dealers and consumers – particularly in a society such as our own, in which we are assured that “it will be alright” and “you can rely on me” – consumers require that power they would not otherwise have in confronting dealers. But that joy can be a mixed blessing, and we must take care that the class action not exert undue influence over the scope of personal suits.

            Let us now, first and foremost, turn to the question of Barazani’s right to bring a personal suit against Bezeq.

 

The Nature and Category of the Right established under Section 2 (a) of the Law

28.       Section 2 (a) of the Law does not inform us of the remedy that a consumer may seek from a dealer that did something “liable to mislead a consumer” in regard to a material element of the transaction. This gap – if it is a gap – is filled by the provisions of sec. 31 (a) of the Law, which informs us that an act or omission contrary to Chapters Two, Three or Four of the Law is to be treated as a tort under the Civil Wrongs Ordinance (see para. 11, above). Section 2 (a) is located in Chapter B of the Law – the chapter comprising secs. 2 through 7, titled “Deceit and Exploitation” – and we therefore know that an act or omission prohibited under sec. 2 (a) is to be treated as a tort under the Civil Wrongs Ordinance. It would appear as if the Consumer Protection Law planted sec. 2 (a) – like many other provisions – into the “Civil Wrongs” chapter of the Civil Wrongs Ordinance, and that sec. 2 (a) is the same as any of the other torts under the Ordinance. One of the necessary conclusions to be drawn from that would be that sec. 2 (a) is subject to the doctrines and principles set out in the Civil Wrongs Ordinance, which are applicable to all the torts in the Ordinance. And as Justice Strasberg-Cohen instructed us in LCA 6567/97 Bezeq – Israeli Telecommunications Company Ltd. v. Estate of Eliahu Gat, IsrSC 54 (2) 713, 717:

In practice, Bezeq cannot be directly attacked in regard to the applicable tariff, as its actions are under the aegis of the Regulations [Bezeq Regulations (Payments for Bezeq Services detailed in Schedule Two of the Law – Services in Israel), 5756-1996], and, therefore, enjoy apparent immunity by virtue of sec. 6 of the Civil Wrongs Ordinance [New Version], which grants a defense to an action under a statute, and according to sec. 31 (a) of the Law, an act or omission contrary to Chapters Two, Three or Four is to be treated as a tort under the Civil Wrongs Ordinance [New Version].

 

29.       My colleague now reads sec. 31 (a) of the Law differently, and sec. 31 (a) no longer directs us to the Civil Wrongs Ordinance as it stands, but rather to a general law that is similar but not identical to the Civil Wrongs Ordinance, or as she describes it (at p. 605):

 

In my opinion, we should bear in mind that an act or omission contrary to the prohibition upon deceit established by the [Consumer Protection] Law is not a “regular” tort but it is to be treated “as a tort”. Therefore, we are not limited to “traditional” tort law – upon which my colleague the Chief Justice bases his opinion – and we should also give appropriate weight to the purpose of the Law and the purpose of class actions … [emphasis original – M.C.].

 

I find it hard to accept such reasoning.

 

30.       In my opinion, sec. 31 (a) should be read and understood in accordance with its plain meaning, and the plain meaning is that the prohibition stated in sec. 2 (a) of the Consumer Protection Law is a tort for the purpose of the Law. Or, as stated in the Explanatory Notes of the bill (Consumer Protection Law Bill, 5740-1980, H.H. 5740, 302, 313), Explanatory Notes to secs. 30 through 33):

 

The granting of civil remedies to the harmed consumer allows him to compensate himself with relative ease for damage he incurred as the result of an act or omission contrary to Chapters B through D.

 

And further on (ibid., 314, in the Explanatory Notes to sec. 35):

 

The basic concept grounding the law is that deceiving a consumer, defrauding a consumer, and similar acts or omissions stated in the law are torts, and the consumer should be compensated for the damage caused him.

 

My colleague does not interpret the prepositional “kaf of comparison” prefix “as”[3] in forming the phrase “as a tort”[4] in the usual way. In my opinion, the interpretation of the prefix is “as this so this, the two are exactly identical” (Even Shoshan, The New Dictionary, 1991, s.v. “kaf”  (Hebrew)), or as Jehoshafat King of Judah said to Jehoram King of Israel: “ I am as thou art, my people as thy people, my horses as thy horses” (I Kings 22:4; II Kings 3:7) (and notwithstanding the statement of the Sages that “an egg is superior to anything as an egg…” (Babylonian Talmud, Tractate Berakhot 44b), which is clearly not applicable here, as is easily seen from the context[5]). Of course, the legislature could have worded the provision of sec. 31 (a) such that an act or omission etc. would constitute a tort under the Civil Wrongs Ordinance – it would be a tort rather than be treated as a tort – but I fear that the preposition is not strong enough to support the superstructure that my colleague wishes to build upon it. 

            I also do not find any merit in the arguments of the Consumer Council comparing the phrase “as a tort” in our case to similar but not identical wording in other statutes. Thus, for example, sec. 11 of the Commercial Torts Law, 5759-1999, states “The violation of the provisions of Chapters One and Two is a tort, and the Civil Wrongs Ordinance [New Version] … shall apply to it…”. At times we find this wording and at times other wording, and we will not hang mountains by a hair.[6] The same is true in regard to other statutes that employ various wordings. See, for example: sec. 28 of the Adoption of Children Law, 5741-1981; sec. 5 (a) of the Prohibition of Discrimination in Products, Services, and Entry into Public Places, 5761-2000; sec. 15 of the Banking (Customer Services) Law, 5741-1981, and others. In my opinion, the purpose of the Law in this case is crystal clear, and comparisons to other laws will not succeed.

31.       Indeed, nothing in the language of sec. 31 (a) of the Law would show that the tort under sec. 2 (a) removes it from the fundamental principles or doctrines of the Civil Wrongs Ordinance, and nothing therein might serve to show that a consumer is entitled to damages merely because a dealer contravened a provision of the Law. On the contrary, the Law refers us clearly and unreservedly to the Civil Wrongs Ordinance. Section 2 (a) situates itself as one of the native torts of the Civil Wrongs Ordinance, and it would therefore appear that the fundamental principles and doctrines of the Civil Wrongs Ordinance apply, in their entirety, with the same effect and force with which they apply to the native torts.

            Moreover, not only is the language of the Law crystal clear, but efficiency also points to the solution presented by the Law. Inasmuch as the acts and omissions external to the Ordinance are tortious in nature, it is but natural that we should employ the same traditional, familiar doctrines that tort law created and developed over so many years such that they have become foundational to the legal system, subject, of course, to special, exceptional cases.

 

Application of Fundamentals Principles and Doctrines of the Civil Wrongs  Ordinance to Torts external to the Ordinance

32.       We have stated that the doctrines of the Civil Wrongs Ordinance “appear” to apply to the prohibited acts under sec. 2 (a) of the Consumer Protection Law. Indeed, there are differences between the native torts of the Ordinance and those external to it that are treated as torts under the Ordinance. The native torts were created together with the Ordinance’s doctrines, and they reside in the same structure. Other than in exceptional cases, the doctrines of the Ordinance will apply with full force to every tort in the Ordinance. In regard to those exceptions, see Cheshin, Chattels in the Law of Torts (Magnes, Jerusalem, 1971), secs. 168-172 (pp. 167-170). As opposed to the native torts, the external torts, among them those under sec. 2 (a) of the Consumer Protection Law, are different. Indeed, the general doctrines of the Ordinance apply to them, however, here we must take special care. Since we are concerned here with transplanting a new organ into the body of the Civil Wrongs Ordinance, we must closely examine whether any particular doctrine of the Ordinance is compatible with the foundations, essence and structure of the new tort. This question was addressed in I. Englard, A. Barak & M. Cheshin, The Law of Civil Wrongs – General Principles of Tort Law, G. Tedeschi, ed. (2^nd ed., Jerusalem, 1977) pp. 74 ff. and especially p. 81, and we shall elaborate no further. And see: CA 3666/90, 4012/90 Zukim Hotel Ltd v. Netanya Municipality IsrSC 46(4) 45, 73 [1992]; CA 804/80 Sidaar Tanker Corporation v. Eilat-Ashkelon Pipeline Company Ltd., IsrSC 39(1) 393. And so we stated in CrimA 3417/99 Har Shefi v. State of Israel, IsrSC 55 (2) 735, 766-767 [English translation: http://versa.cardozo.yu.edu/opinions/har-shefi-v-state-israel]:

 

And indeed, this is – in general – the relationship between the general definitions and doctrines which cut across the law lengthwise and widthwise, and specific statutory provisions.  General definitions and doctrines will attach themselves to all statutory provisions and laws they wish to apply to. But where a certain specific statutory provision seeks to expel from within its bounds the general definition or doctrine—and this expulsion is derived by way of “interpretation”, in the broad sense of the concept of interpretation, including from the basic tenets of the system: logic, justice, first principles, social doctrines, etc. — the specific statutory provision prevails, while the general definition and doctrine will retreat. The general definition and doctrine will apply, as per the language of the Interpretation Law 5741-1981 in section 1, “… if there is no other provision as to the said matter, and if there is nothing in the said matter or its context which cannot be reconciled with…” the general definition or doctrine.

Elsewhere I raised the theory that the term “tort” in the Civil Wrongs Ordinance [New Version] is not limited only to those torts listed in the Ordinance.  I opined that the concept “tort” is a conceptual term, and from this I concluded that there are “torts” outside of the Civil Wrongs Ordinance [New Version].  Against this background I further asked myself, what is the relationship between the doctrines that were established in the Civil Wrongs Ordinance [New Version] and those unspecified torts.  I answered the question by saying that an unspecified tort will not “be controlled mechanically by the doctrines established by the Ordinance.”  And that the doctrines in the Ordinance will apply to unspecified torts only “… if the application of a certain doctrine from the Ordinance is consistent with the foundations, essence, and structure of the tort at issue, and with the framework in which it is found”.

 

Causal Connection and Awarding Damages

33.       Barazani claims damages from Bezeq by virtue of the advertisement that it published, and which – as stated in sec. 2 (a) of the Consumer Protection Law – was liable to mislead a consumer in regard to a material element. We are all in agreement that Barazani did not see the advertisement, that he was not influenced by it, and that he did not rely upon it when he made international calls. Nevertheless, and deeming himself wronged, he demands damages – and asks to sue for those damages in a class action on behalf of all those harmed – claiming that he incurred harm for which he is entitled to compensation. The damage, he argues, is the difference between the advertised price and the price he actually paid Bezeq. Here, Barazani confronts the doctrines of the Civil Wrongs Ordinance, and the question is whether those doctrines bar his path to compensation.

34.       Among those doctrines, two concern us here. My colleague Chief Justice Barak addresses those doctrines in his opinion, and inasmuch as I agree with his opinion, I will be brief rather than elaborate at length.

35.       One doctrine is that of causation, under which – in accordance with sec. 64 of the Civil Wrongs Ordinance – there must be a causal connection between a person’s act or omission – an act or omission that constitute a tort – and the harm incurred by the victim, for which he seeks redress. As stated in sec. 64 of the Civil Wrongs Ordinance: “… a person shall be deemed to be at fault for such damage when the fault was the cause or one of the causes of the damage”. In the matter before us, there was no causal connection between Bezeq’s advertisement and the “damage” caused to Barazani, if only by reason of the fact that Barazani never read that advertisement, and therefore, in any event, he is not entitled to sue on that basis. Indeed, Bezeq committed a tort by publishing the advertisement – that is the basic assumption in this case – but the mere existence of a tort is insufficient to entitle a person to redress. That person must show that due to that tort, he incurred harm, and that precondition was not met in regard to Barazani.

36.       This is also the case in regard to the compensation doctrine. In accordance with sec. 76 of the Civil Wrongs Ordinance, and as has always been the case: a person is entitled to compensation only for harm caused as a result of the tortious act. A person will be entitled to compensation only to the extent of the harm incurred, and as stated in sec 76: “only in respect of such damage which may naturally arise in the usual course of things and which directly arose from the defendant’s civil wrong”. A fundamental principle of tort law is that of restitutio ad integrum, and therefore, a person who did not suffer harm will not be entitled to compensation. See and compare: LCA 378/96 Sagi Weinblatt v. Moshe Burstein Ltd., IsrSC 54 (3) 347, 361; CA 5465/97 Kenny Housing Ltd. v. Netanya Local Planning and Building Board, IsrSC 53 (3) 433, 440-441.

            That is also the opinion of Prof. Sinai Deutch in his book Consumer Protection Law, vol. 1 (2001) 376 (Hebrew), who wrote the following about the causal link required under sec. 2 of the Law and the compensation to which a victim is entitled:

 

In a tort claim under the Consumer Protection Law (sec. 31 of the Law), there is no need to prove a causal connection between the mistake and the contractual agreement, but a causal connection must be shown between the deceit and the harm caused to the consumer. While sec. 2 of the Consumer Protection Law prohibits doing anything liable to mislead the consumer, and it would therefore appear that there is no requirement of actual misleading, the sanction attendant to such an act can only be administrative or penal. If, in fact, there was no misleading and no harm, damages cannot be awarded. Compensation owing to a tort can be awarded only for demonstrated harm.

 

Thus, publishing something that is liable to mislead, per se, does not grant a consumer a right to compensation if he was not actually harmed. That is also the view of Dr. Orna Deutch, who writes in her book The Legal Status of Consumers (Nevo, 2002) 414-415 (Hebrew):

 

As far as the remedy of damages is concerned, a suit under the Consumer Protection Law would require proof of the harm deriving from the deception, in other words, the existence of actual deception and action on the basis of that deception. There must be a causal connection between the deception and the harm, as is the normal rule in regard to damages. That was the majority opinion in Barazani v. Bezeq. Indeed, there is no justification for allowing a person to collect damages where he did not incur harm as a result of the deception. The purpose of damages is to require that the person responsible make restitutio ad integrum. There is no need for a causal connection in relation to any harm when a declaratory order is sought to stop the misrepresentations…

And see: Prof. Miguel Deutch, Commercial Torts and Trade Secrets (Nevo, 2002) (Hebrew) 48-50.

            And if that is not sufficient, we would note the opinion of Chief Justice Shamgar in the Liefert case (Note to editor: I assume the reference is to CA 1304/91 Tefahot Mortgage Bank v. Liefert, IsrSC 47 (3) 309). In that case, the Court addressed sec. 3 of the Banking (Service to Customers) Law, 5741-1981, that prohibits a banking corporation from doing anything “liable to mislead a customer as to anything material to the performance of a service to the customer”. In that regard, Chief Justice Shamgar wrote (at p. 326):

 

The prohibition in the Banking (Service to Customers) Law is broad, and prohibits any act or omission liable to mislead. In other words, it is not necessary that there be actual deception (although in the absence of such deception, it is doubtful that it would be possible to point to some harm that might support a cause of action for damages under the law) [emphasis original – M.C.].

 

Of course, the legislature is free to deviate from this principle, and decide – for various reasons – that a victim be granted compensation without showing harm. See, for example: sec. 7A of the Defamation Law, 5725-1965; sec. 11 of the Contracts (Remedies for Breach of Contract) Law, 5731-1970; sec. 10 (a) (1) of the Employment (Equal Opportunities) Law, 5748-1988; sec. 6 (b) of the Prevention of Sexual Harassment Law, 5758-1998; sec. 3A of the Copyright Law; sec. 13 (a) of the Commercial Torts Law, 5759-1999. However, these are but exceptions to the rule. The rule is that compensation will be granted only if harm was done, and compensation will be granted only to the extent of the harm done. In the matter before us, and inasmuch as Barazani was unaware of Bezeq’s advertisements and did not rely upon those advertisements, we cannot say that he is entitled to compensation. Indeed, depriving Barazani of the right to compensation primarily derives from the absence of a causal connection between the tort and the “harm” he allegedly incurred, and the compensation doctrine simply confirms the lack of a claim for compensation against Bezeq.

37.       The absence of Barazani’s right can also be demonstrated in another way. An action in tort that concerns an injury to a person, begins with that injury. When a person incurs injury as a result of the act or omission of another, we examine whether that injury was caused by a tort perpetrated by that person against the injured party, or whether that person breached some duty toward that injured party. See and compare: LCA 5768/94 A.S.I.R Import, Manufacture, and Distribution v. Forum Accessories, IsrSC 52(4) 289, 334. If that examination show that a tort was committed or that a duty was breached, and that the tort or breach of duty was the cause of the harm, then the tortfeasor will be liable for damages. However, if no connection be found between the act or omission of the tortfeasor and the harm, then damages will not be awarded, and the injury will be damnum sine injuria – a loss without a wrong.

38.       In the matter before us, things appear topsy-turvy. Unlike the situation of a normal tortious event, Barazani cannot show the actual “harm” that was caused him unless we first say that the provision if sec. 2(a) of the Consumer Protection Law entitles him to damages. In that case, we would say that Barazani incurred “harm” because he is entitled to damages by virtue of the Law. His “harm” is a sort of “statutory harm” – harm ex lege. However, unlike other statutory provisions that grant a consumer a monetary right – see, for example, the provisions of secs. 10 and 17B of the Consumer Protection Law – sec. 2 (a) of the Law does not establish a consumer’s right to damages in the absence of proof of injury, or a consumer’s right to pay a particular price advertised by a dealer. And see: LCA 8733/96 Robert Langbert v. Israel Lands Administration, IsrSC 54 (1) 168. Thus, while in a normal tort case, the injured party can easily point to the harm he incurred, in the matter before us, Barazani cannot show that he suffered any real “injury”, if only because he never saw Bezeq’a advertisement. The existence of an “injury” must be derived from sec. 2 (a), which does not address compensation. We thus find ourselves locked in a vicious circle. We assume the existence of “injury”, and then find that injury has been caused on the basis of that assumption. We therefore state that just as a person is not entitled to sue a person for negligence unless that negligence caused him harm, a person cannot sue a dealer for publishing something liable to mislead in regard to a material element of a transaction if that deceit did not cause him harm. We therefore declare that in the absence of an explicit, unambiguous provision granting damages for virtual harm, like that suffered by Barazani, we cannot imagine that a court will award damages. Such significant creativity is a matter for the legislature, not the courts. The legislature did not say what the petitioner wishes to put in its mouth, and we will not usurp the role of the legislature to say what it did not.

39.       Having said all that in regard to causation and damages, we would add that the (factual and legal) causal connection required by sec. 2 (a) of the Law does not unambiguously require a consumer’s explicit reliance upon a dealer’s representation, as opposed to sec. 56 of the Civil Wrongs Ordinance that explicitly requires a causal connection of reliance. It is possible for the necessary causal connection to exist even where a consumer does not directly rely upon a representation, as where the dealer’s representation (as stated in sec. 64 of the Civil Wrongs Ordinance) “was the cause or one of the causes of the damage”. That would be the case, for example, where it can be shown that a dealer’s representation that was liable to mislead a consumer in regard to a material element motivated a chain of events that resulted in injury to the consumer. For example: a certain advertisement misled a person, and it is possible to show a sufficiently proximate causal link between that person and the consumer who suffered the injury. In other words, in this context, we should broadly interpret the concept of reliance such that it comprises more than just direct reliance.

            However, there must be some (appropriate) causal connection between a misleading advertisement and the injury incurred by the consumer. Thus, the two successive events for our purposes are: first, a publication that is liable to mislead a consumer in regard to a material element of the transaction, and the second, that the consumer purchased the commodity or the service that was the subject of the advertisement. In this regard, the fact that the purchase of the commodity or the service followed the advertisement in time is not sufficient, in and of itself, in order to show a causal connection between the two events, or to put it in terms of the well-known Latin fallacy, post hoc, ergo propter hoc? – after this, therefore because of this? The mere fact that event B follows event A does not mean that event B was caused by event A. There must be an appropriate causal connection between the two events, and we learn of that connection from the circumstances of each case, by the usual procedure of examining the relevant evidence.

40.       A publication that is liable to mislead a consumer gives rise to a tort under sec. 2 (a) of the Law, and when there is an appropriate causal connection between that publication and the injury caused – whether a direct connection deriving from reliance, or an indirect connection deriving from an appropriate chain of causation from the publication to the consumer – the consumer will be entitled to compensation. In other words, the complaining consumer must show that the misleading publication initiated a chain of events that reached him and caused him injury.

            Let us look at the case of securities. In accordance with the Securities Law, 5728-1968, the tort resulting from deceptive conduct does not require a consumer’s reliance upon a misleading publication. A party signing a prospectus that comprises a misleading element “is liable to anyone who bought securities from the offeror … for damage caused to them by the inclusion of a misleading item in the prospectus” (sec. 31 of the Securities Law. And further see: secs. 32 and 52K of that law). And as held in LCA 8268/96 Dan Reichert v. Moshe Shemesh, IsrSC 55 (5) 276 (per Strasberg-Cohen, J.), there must be a causal connection between the misleading publication and the injury incurred by the consumer (reduction of value of the security), although it is not necessary that there be direct reliance upon the publication. And see, ibid., 311-312. What applies there can be instructive here, and I believe that it should be.

41.       In conclusion, what we set out above merely establishes general guidelines for the interpretation of sec. 2 (a) of the Consumer Protection Law. In the case before us, we would say that since Barazani was unaware of Bezeq’s misleading advertisement, and knowing that Barazani was neither directly nor indirectly influenced by that advertisement, we have no need to explore the issue of reliance or that of the appropriate causal connection between a misleading advertisement and the injury incurred by a consumer who purchased an commodity or service that was the subject of the advertisement. In the future, the courts will address those issues and corollary issues, and the law will develop from case to case. For our purposes, the main point is that we will always require the existence of an appropriate causal connection between a misleading publication and the injury incurred by a consumer, and in establishing that causal connection, we will find a place for including “constructive reliance” where appropriate. In other words, sec. 2 (a) will be interpreted as comprising not only direct reliance – as would be the case were we addressing the tort of fraud under sec. 56 of the Civil Wrongs Ordinance – but also indirect reliance, reliance whose practical import is an appropriate causal connection between the publication and the injury such that we might say that the plaintiff was misled in purchasing the commodity or service. The questions that present themselves are not simple at all, as the sharp disagreements testify. Indeed, American jurisprudence overflows with examples in both directions, upon which we will not elaborate for the purpose of the matter before us, but by way of example, see Mark Oliveira v. Amoco Oil Co., 776 N.E. 2d 151 (2002) and the cases cited there.

 

On the Uniqueness of the Consumer Protection Law

 

42.       “We cannot suffice with literal interpretation, and must continue to seek the purpose of the law in order to discern the appropriate interpretation”. Having said this (at p. 598 of the judgment), my colleague Justice Strasberg-Cohen turned to the purpose of the Consumer Protection Law. In doing so, she found that the provision under sec. 2 (a) of the Law – in terms of its substance – does not accord with the fundamental principles of injury and the causation doctrine established in the Civil Wrongs Ordinance. In my colleague’s opinion, we are have a duty to interpret the Consumer Protection Law in accordance with its purpose, and that purpose leads to the conclusion that sec. 2 (a) would award damages to a consumer even if he did not himself rely upon the dealer’s offending advertisement. As my colleague writes:

 

The Law is meant to impose modes of conduct upon the commercial sector, and establish fair rules-of-the-game in the relationship between consumers and dealers. The Law intends to ensure that a dealer will not exploit its greater economic power in order to profit unlawfully at the expense of the consumer. In order to protect the consumer, the Law established “… a line of obligations and prohibitions for dealers – producers, importers, dealers and service providers – with the overall purpose of preventing deception of consumers, providing the consumer with as much information as possible about the nature of the transaction he intends to make, and giving him the tools for realizing his rights …” … the tool of class actions was intended to ensure efficient enforcement of the norms established by the Law, and to deter those with an economic advantage from any attempt to abuse the consumer’s innocence, his weakness in the contest between the two, and the inherent lack of worthwhileness in bringing suit against dealers for the injuries caused by their conduct, which may be very small relative to each consumer, yet a source of unlawful wealth for the dealer. The prohibition of deceit under sec. 2 (a) of the Law should be interpreted against the background of these objectives. Therefore, in my view, the legislature did not choose its words by accident. The statement that the “prohibition of deceit” applies to any act or omission liable to mislead a consumer was intended to establish an objective-normative test for evaluating a dealer’s conduct, and to raise the normative bar that a dealer must pass in order to meet the requirement that the Law establishes to protect consumers. A construction that would grant relief only to those consumers who were actually deceived would create an artificial distinction between the consumer public that used the goods or services that were the subject of the misleading advertising, but who were not exposed to it, and the consumer public who were exposed to the misleading information. An approach that would require actual deceit would limit the liability of a dealer only to those consumers who could show that they were actually misled by the dealer’s representation. Such an approach would reduce the deterrence that is one of the purposes of the Law, if not its main purpose.         It would make deception worthwhile from the point of view of the dealer, and would undermine enforcement of the Law. Such an approach would undermine the achievement of the Law’s purpose, in general, and class actions in that framework, in particular.

And further on (ibid., 602):   

 

In my opinion, a consumer suing on the basis of the Law is not required to show that he was actually misled in order to for him to enjoy a cause of action for damages due to a breach of the “prohibition of deceit” established under sec. 2 (a) of the Law. It is sufficient that he show that the dealer committed an act “liable to mislead a consumer”.

 

43.       Needless to say, the Petitioners agree with the opinion of Justice Strasberg-Cohen, and add that another interpretation of sec. 2 (a) – one that would require reliance upon the misleading representations of a dealer in order for a consumer to demand compensation from the dealer – would eviscerate the Law. How? An interpretation like that of the majority would, in practice, prevent the submission of class actions for deceit, and seeing as an individual action (like that of Barazani) would not be initiated, if only due to the negligible injury to each individual consumer, the result would be that the Law would not be given effect. It would be a voice crying out in the wilderness. The benefit of the Law would be lost, and we would be left with an empty shell.

44.       We addressed the issue of class actions above (see paras. 19-26), and we will comment only briefly. We do not intend to minimize the distinguished place of class actions, nor in any way detract from their importance. We would, however, add that in the absence of a clear, explicit provision –which there is not – we will not permit class actions to rule the entire field of consumer protection, while allowing it to trample fundamental principles and doctrines that have been adopted over the course of time. In this regard. We would particularly note that, from its inception, the class action was not created as a substantive right or a cause of action. A class action, for all its importance – and it is of great importance – is nothing but a procedural tool for the joining of many actions under one roof. Being what it is, we find it hard to interpret it such that it would have the retroactive power, so to speak, to change substantive principles of tort law, and among them the rules concerning causation and the principles for awarding damages. While one can question the conception created by my colleague Justice Strasberg-Cohen, it cannot be entirely ruled out. But that conception deviates so drastically from what has long been accepted, that we would expect that the Law would explicitly instruct us in this regard, and it does not.

45.       When a new law is enacted, it becomes an integral organ of the legal corpus. That is true of every law, and it is true in regard to the Consumer Protection Law. A new law is not a Robinson Crusoe who comes to a place uninhabited by laws, fundamental principles, doctrines, classifications, modes of thought and legal culture. A new law must find its place and integrate itself into the thick forest and become part of the landscape. That is the background of sec. 31 (a) of the Law, which instructs us that a prohibited act under sec. 2 (a) of the Law is to be treated as a tort. Chief Justice Barak instructs us that even without sec. 31 (a), we would classify conduct contrary to sec. 2 (a) of the Law as a tort of breach of a statutory duty. But by enacting sec. 31 (a), the legislature made that unnecessary. But either way, the main point is that the Law recognized the need to weave the new law into the cloth of the general law, and found a place for it in the Civil Wrongs Ordinance. The Law thus informs us that a prohibited act in contravention of sec. 2 (a) of the Law – and contrary to other legal provisions as well – is a tort, and thereby saved us the trouble of classifying it in one way or another. As we stated elsewhere (Cheshin, Chattels in the Law of Torts, sec. 161 at p. 161, fn. 2 (Hebrew)):

 

Classification organized “Julian laws”, and is based upon fundamental principles established therein. Commonalities and distinctions among the rules to be classified is a fundamental principle of thought. The doctrines that apply to the rules that unify a category (capacity, consideration, proximity, etc.) are causes and effects of classification. At a given point in time, classification is made on the basis of the equivalence of doctrines that apply to various rules of law. After making the classification, and the creation of the doctrine that applies to a particular cluster of laws, the doctrine will govern all that is within that cluster because they are members of a single legal class. That will also hold, mutatis mutandis, with the creation of any specific legal rule that is a member of a particular legal class (whether explicitly or by its “explication”), which will then be governed by the doctrine pertaining to that class.

 

Classification in law (and in general), is intended to simplify the task of the researcher and the interpreter, but we must always bear in mind that what we are concerned with is “nothing more than a guideline, and while it would seem proper that we employ it, there is no a priori requirement that it apply, in practice, to a given legal issue” (ibid., 161). Indeed, functionality is the main thing, while “doctrines, classifications, and definitions, we have created these for our own use; they were intended to serve us; we will control them and not allow them to control us; the power is in our hands, and we will now allow our own creations to rise up against us” (the Har Shefi case, 767, and see: CrimA 4675, 4961, 4962/97 Yisrael Rozov v. State of Israel, IsrSC 53 (4) 337, 377). As for the matter before us, we find no good reason to distinguish the cause of action under sec. 2 (a) of the Consumer Protection Law, and treat it differently than any other tort.

 

The Consumer Protection Law – A Multidisciplinary Law

 

46.       The Petitioners place class actions at the center of Creation, and in reading their briefs, it is hard to rid oneself of the impression that the substantive provisions of the Consumer Protection Law were created solely, or at least primarily, to honor class actions. Thus they conclude that in denying Barazani a right granted under sec. 2 (a) of the Law, we render the Law an empty vessel. The claim is readily refuted by the fact that class actions were introduced into the Consumer Protection Law only in 1994, that is, some thirteen years after the Law was enacted. It seems to me that portraying class actions as the prime purpose of the Consumer Protection Law, around which all other provisions of the Law orbit and bow down, does injustice to the Law.

47.       We can all agree that the purpose of the Consumer Protection Law is to achieve an appropriate balance between the individual consumer and dealers – particularly large dealers – and the Law achieves this by placing greater burdens upon the dealers. See, e.g., the Consumer Protection Law Bill, 302; LCA 8733/96 Langbert v. State of Israel, IsrSC 55 (1) 168, 175; LCA 2701/97 State of Israel v. Chertok Daniel, IsrSC 56 (2) 876, 884. For a general survey, see especially, Dr. Orna Deutch, ibid., 27-37; Prof. Sinai Deutch, ibid., 118-128. However, the Consumer Protection Law is a multidisciplinary law. It simultaneously situates itself in private law and in public law, in public administrative law, and in criminal law. The Law integrates provisions form these various fields of law in order to serve the purpose of protecting the consumer.

48.       Indeed, we find three different enforcement mechanisms in the Consumer Protection Law: an administrative enforcement mechanism, a criminal enforcement mechanism, and a civil enforcement mechanism. These three mechanisms can be found in Chapter Five (The Consumer Protection and Fair Trade Commissioner), Chapter Six (Penalties and Remedies), and Chapter Six 1 (Class Actions).  These mechanisms are separate from the substantive provisions that impose specific obligations upon dealers.

49.       In regard to the Consumer Protection and Fair Trade Commissioner, an examination of the relevant provisions of the Law reveals that the Commissioner enjoys many potent powers for overseeing the execution of the Law, for addressing complaints, etc. As stated in the Bill (ibid., 301, 311):

 

For the purpose of enforcing the law, a Consumer Protection and Fair Trade Commissioner will be appointed, who will be granted many powers to enable him to ensure that the provisions of the law are indeed carried out, and to enforce them upon dealers that do not comply.

…

The powers granted by the law to the Commissioner will grant him the status of an independent authority that can act efficiently … to this end, the Commissioner is granted powers that are not generally granted to authorities, among them – the authority to obtain an undertaking by a dealer to abstain from repeating offenses, accompanied by a guarantee of up to NIS 10,000, and the authority to publish the findings of his examinations, and to obtain a restraining order from the court. In addition to those powers, the Commissioner will have the authority to investigate, to seize documents and chattels, and additional executionary powers.

 

The above receives full expression in the Law. Here are a few of the powers of the Commissioner, as set out in secs. 21-22 of the Law:

 

Powers of the Commissioner

21.       If the Commissioner or the person appointed by him for that purpose concludes that it is necessary to do so for the implementation of this Law, then he may –

(1)        Enter any place used for a business, and there check whether the provisions of this Law are observed, examine documents, samples and goods, and seize anything, if it is reasonable to presume that in its respect an offense against the provisions of this Law was committed or is planned;

(2)        Interrogate any person who is connected to the matter or has information about it, and demand that he appear before him, deliver to him documents, samples and information related to the investigation, on condition that the date of a person's appearance under this paragraph shall – as far as possible – be set in coordination with him and be at a reasonable time;

(3)        Carry out tests of goods or services and publish their results, but he shall not publish anything that is liable to injure any person, if he had not been given an opportunity to present his arguments;

(4)        Inform dealers of their obligation to stop or not to repeat practices that constitute prima facie violations of the provisions of this Law.

                        Auxiliary Powers

22. (a)              The Commissioner or a person appointed by him for that purpose shall have the powers of a police officer of the rank of inspector under the provisions of section 2 of the Criminal Procedure Ordinance (Testimony), and section 3 of the said Ordinance shall apply to information recorded by him.

 

In addition, the Commissioner also enjoys additional powers, such as the power to demand an undertaking that a dealer will abstain from violating the Law (sec. 28), the authority to apply for a court order that a dealer abstain from violating the Law (sec. 30), and more.

            In addition to the Commissioner, the Law backs up the obligations that it imposes upon dealers with criminal sanctions, upon which we need not dwell. However, we would especially note sec. 23 (a) (1) of the Law, under which a dealer is subject to a year imprisonment and a fine “if it did anything liable to mislead a consumer in violation of the provisions of section 2”.

50.       These consumer protection mechanisms do not impress the Petitioners. They argue that public enforcement by means of the provisions of the Law is not enough, and add that in practice, there is under-enforcement by the authorities. They further argue that class actions are the – with a capital “T” – primary tool for the enforcement of the provisions of the Law, and we must not let this valuable tool slip from our hands. And see and compare: the A.S.T. case, para. 7 of the opinion of Beinisch, J.; the Consumer Protection Law (Amendment No. 3) Bill, 5754-1994, H.H. 396; Bar-Niv (Bornowski), “The Limits of the Consumer Class Action,” 19 Iyunei Mishpat 251 (1994) (Hebrew); Bar-Niv, “Enforcement of the Consumer Protection Law by the Commercial Sector,” 17 Iyunei Mishpat 299 (1992) (Hebrew). And compare: M. Agmon & D. Lachman-Messer, “Theories of Enforcement in the New Companies Law Bill,” 26 Mishpatim 543, 577 (1996) (Hebrew).

51.       We would answer the Petitioners’ arguments as follows. First, we have not said – and will not say – that class actions are not an important means for the enforcement of the substantive provisions of the Consumer Protection Law. Second, and this is the main point, examining the Law from within shows that, in principle, the Law rests upon several foundations. Reviewing the powers of the Consumer Protection Commissioner and examining the penal section of the Law will show that the legislature is of the opinion that those powers and sanctions greatly strengthen the position of consumers. If the authorities have demonstrated laxity in enforcing the Law, that retrospective laxity cannot influence the interpretation of the law. We would recall how other authorities operated in the past and how they operate today. We would recall the Antitrust Commissioner and the Securities Authority – how those two operated in days gone by and how they stand today. We should remember, and hope that the Consumer Affairs Commissioner will similarly gain strength, and that the enforcement authorities of the Consumer Protection Law will follow suit in regard to penalties. But that is for the future. As for the present, the Petitioners’ arguments say nothing that would directly influence the interpretation of the Law.

52.       One last comment in this regard. We have stated elsewhere (see para. 12, above) that the Consumer Protection Law does not accept the actio popularis “in blank”. The proof is that a person does not acquire a right to bring a class action unless he also has an actionable personal right (see sec. 35A (a) of the Law). If we were to adopt the interpretation of sec. 2 (a) of the law advanced by the Petitioners, we would find ourselves indirectly introducing the actio popularis into the Law, if not in its fullest sense, at least in principle. By this interpretive process, we borrow a concept of public law – from constitutional law, administrative law, and primarily, from criminal law – and make it part of private law. It is as if we have returned to the days of old, when the enforcement of the law – civil and criminal – was in the hands of the individual. In those days, and in the absence of a central government that could impose its will upon the entire state, law enforcement was decentralized, and the powers and authority of the individual were of primary importance for the enforcement of the law. Granting Barazani a right to sue, as the Petitioners understand the Law, returns us to those early days, if by a sophisticated, modern apparatus. We would immediately add that we do not mean to criticize the need for decentralization of enforcement. We say this because we do not believe that the Law intended, as the Petitioners argue, to affect such a mini-revolution as that we have described without saying anything expressly to that effect. But we have not heard the Law say anything – neither loud nor clear.

 

Presumption

 

53.       Justice Strasberg-Cohen recommends that we establish a presumption that would assist consumers in their battle with dealers, or in her words (at p. 603):

 

Were I of the opinion that actual deception of the consumer, and reliance upon the dealer’s representation were required – and I do not – then, in light of the relative power in the relationship between the consumer and the dealer, and in order to deter the commercial sector, I would favor a presumption by which when a dealer makes a representation that is liable to mislead the consumer, and that representation is widely publicized in order that it reach the consumer public, the consumer who purchases the goods or services that were the subject of representation would be deemed to have been exposed to the representation and had relied upon it…

 

Chief Justice Barak preferred to leave that question in abeyance, inasmuch as there was no need to decide it (ibid., 621). Careful examination – even without delving deeply into it – shows that the subject of the presumption raises no small number of difficulties. Inasmuch as it is not necessary that we decide the issue, we will leave it for the future.

           

Does this spell the End of Collective Actions on the basis of the Consumer Protection Law?

 

54.       The Petitioners raise the fear, and even argue, that the conditions of reliance, or if you prefer, the conditions of causation – as established in the judgment under review – between the conduct of the dealer and the harm to the consumer will put an end to class actions under the Law, by which we will call down great harm upon ourselves. I cannot agree. Our opinion is centered upon the question of when, and under what circumstances, does a plaintiff under the Consumer Protection Law acquire a personal cause of action against a dealer. Indeed, each one of the plaintiffs in a class action must himself have a personal right to compensation – like the representative plaintiff – and have suffered harm causally connected to the conduct of the dealer. So much for the right itself. However, the legislature and secondary legislature took a significant step toward the members of the class insofar as proving the cause of action. Thus, if the consumer prove the existence of a personal cause of action, and if the complaint be certified as a class action, then the court may decide how the members of the class are to prove the injury they incurred. Or, as set forth in reg. 9 of the Consumer Protection (Procedures in regard to Class Actions) Regulations, 5755-1995:

 

                        Actions deriving from Judgments

                        9.  (a)   If a court decides that a cause of action has been proven, it may order that every member of the class prove his right to the requested remedy by means of an affidavit in which he details the harm he incurred.

                             (b)   …

                             (c)   Subsection (a) notwithstanding, the court may, at the request of the plaintiff, exempt the members of the class, or part of them, from submitting affidavits if it finds, under the circumstances of the case, that submitting them will unduly burden the members of the class, and it may order that the damage be proven in another manner as it shall see fit.

 

In terms of the matter before us, if Barazani had a personal cause of action, and the court had recognized his right to submit a class action, and if the court had accepted the class action as such, then the court would have been free to establish appropriate means for proving the causal connection between the misleading advertisement and the harm caused each of the members of the class, as well as the harm caused to each of them, as it saw fit. Or, as stated in reg. 9 (a) above: “that every member of the class prove his right to the requested remedy by means of an affidavit in which he details the damage he incurred”. So, by affidavit, or as stated in reg. 9 (c), even in any other way that the court shall see fit.

55.       Moreover, in CA 1337/97 Tnuva v. Rabi (recently delivered and as yet unpublished), Justice Naor (dissenting) stated that, in her opinion, the Consumer Protection Law should adopt an arrangement called “indemnification and special compensation” which is found in regard to class actions in several laws, among them sec. 46I of the Restrictive Trade Practices Law, 5748-1988, sec. 16I of the Banking (Service to Customer) Law, 5741-1981, and sec. 62I of the Insurance Business (Control) Law, 5741-1981. These provisions are identically worded, and we shall quote sec. 46I of the Restrictive Trade Practices law:

 

Indemnification and Special Compensation

46I.      (a) In the case that a ruling of pecuniary compensation is handed down by a Court in a Class Action, such Court may:

…

(b) In the case that the Court believes that pecuniary compensation of all or some of the members of the group is impractical under the circumstances, either because they cannot be identified and the payment cannot be made at a reasonable cost or for any other reason, it may provide for any other remedy as it deems fit under the circumstances, whether in favor of all or some of the group, or in the public interest.

 

A similar – though somewhat different – arrangement can be found in sec. 216 (b) of the Companies Law, 5799-1999, which addresses damages in class actions under that law. From these provisions, we learn that where awarding separate compensation to each member of the class is impractical, the court may impose special compensation arrangements or other remedies upon the defendant, as it may deem appropriate, as long as the defendant is not required to pay more than the damage it caused. And see: Daar v. Yellow Cab Company, 433 P. 2d 732 (1967).

 

Comparative Law

 

56.       The attorneys for the parties, each in its own cause, relied upon comparative legal precedents, primarily from American consumer protection law. An examination of the case law serves to show that support can be found for (virtually) every approach. American law is state based, and despite the reciprocal influences of the laws of the various states, each state follows its own path. While the language of the laws is similar – and even similar in certain ways to our own Consumer Protection Law – the interpretive policy of the courts differs from place to place. The primary differences center, not surprisingly, upon the subject of reliance and causation. Thus, for example, there are places where a precondition to the tort of consumer deception is that the consumer relied upon the misleading representation. In other places, no reliance is required at all. And still in others, the case law has created a presumption of reliance. And we need not point out that each is unlike the others.

            Moreover, reading the American case law reveals variations in the application of the various laws, both in regard to the conditions for reliance and in regard to causation. Thus, for example, in the case of Miller v. General Motors Corp., 2003 U.S. Dis., Lexis 1467 (a case decided in January 2003 by the United States District Court for the Northern District of Illinois, Eastern Division), the court addresses some of the differences between the laws of the various states – primarily in regard to issues of reliance – and we find the following marginal note by the court:

Some of the issues on which differences exist include: … differences in standards of reliance.

The court adds that the law of the state of Illinois is also insufficiently clear in regard to reliance. And also see, for example: the Oliveira case (above, para. 41), Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584 (1996); Zekman v. Direct American Marketers, Inc., 695 N.E.2d 853 (1998).

            Precedents are thus brought to us from the four corners of the earth, and there is much confusion. Indeed, the legal provisions differ, as do the trends and social, economic and legal outlooks that characterize the different states and that guide the courts – each according to its own path – and we would be hard pressed to distinguish the universal from the particular. We may learn techniques and modes of thought from American law, but I fear, not much more.

57.       In reviewing the sea of citations imported from the United States and laid out before us, I cannot but be reminded of the words of Justice Haim Cohn in FH 12/63 Leon v. Ringer IsrSC 18(4) 701 [1964], where the Supreme Court was asked to decide upon the “eggshell skull” rule. This is how Justice Cohn began his opinion in that case (ibid., 706):

 

The rule established in CA 378/62 … it that the tortfeasor is responsible for the harm caused by his negligent act, even if – due to the “eggshell skull” of the victim – the extent of the injury exceeded anything that could be expected or foreseen. In the Further Hearing on this doctrine, the learned counsels called down upon us an abundant rain of precedent, sources, articles and comments, among them Israeli, American, South African, and Australian, to the point that the waters of the foreseeability doctrine flooded the banks. In fear of being swept away by such a torrent, and drowning in a sea of various decisions and statements, I cleared my desk of all the books – among them a compendium of nineteen articles published on the subject in various journals, which the attorney for the National Insurance Institute compiled and bound for us with discerning taste – and I commenced writing with only the Civil Wrongs Ordinance, 1944, and the said decision of this Court in CA 378/62; 390/62 set before me.

 

Indeed, in a moment of such distress – a distress of lémbarras du choix (de richesse) – we can but latch onto the fundamental principles of the law. That is what we have done, to the best of our ability, in this opinion. And see, for example: Gary L. Willson & Jason A. Gilmer, “Minnesota’s Tobacco Case: Recovering Damages without Individual Proof of Reliance under Minnesota’s Consumer Protection Statutes”, 25 Mitchell L. Rev. 567 (1999); Samuel Issacharoff, “Class Actions in The Gulf South Symposium: The Vexing Problem of Reliance in Consumer Class Actions”, 74 Tulane L. Rev. 1633 (2000).

 

Conclusion

 

58.       The Petitioner before us, Barazani, did not see the misleading advertisement, did not rely upon it – either directly or indirectly – and in any case, was not misled. There is no appropriate causal connection between the advertisement and the injury allegedly incurred by Barazani, and, therefore, his suit must be denied. I would, therefore, recommend to my colleagues that we dismiss the petition and affirm the judgment of the Supreme Court.

 

And it came to pass after these things[7]

 

59.       I have read the opinion of my colleague Justice Mazza. My colleague comments rather sharply upon my opinion. He primarily seeks to smash the wall I built around the judgment, and pulverize the foundations upon which I built my legal conclusions. Inasmuch as my colleague’s opinion was not before me when I wrote my opinion, I would ask that what I wrote be seen as an answer to my colleague’s remarks. And having thus replied to my colleague, I would add two observations in regard to the disagreements that have arisen between us.

60.       My colleague is of the opinion – and so he holds – that in interpreting and deciding upon the scope of the Consumer Protection Law, we must bear in mind that we are in a “consumer environment” as distinguished, for example, from a tort-law environment, and that we must give special force to the “uniqueness of the consumer cause of action”. Because we are acting in a consumer atmosphere, we must realize that the causal connection between a prohibited act and the injury in the Consumer Protection Law must be a “consumer causal connection”, that a prohibited act of deception is “consumer deception”, that the injury incurred by the consumer is “consumer injury”, etc. The borders and scope of each of these concepts – concepts whose core is the consumer as such – remain somewhat blurry. However, it is unambiguously clear that appending the term “consumer” to each of these long acknowledged concepts – the concepts of “causal connection”, “deception”, “injury”, etc. – shows that the interpretation of those concepts is not the usual one, and may contradict the usual interpretation. A “consumer causal connection” is not a regular “causal connection”, “consumer deception” is not the usual “deception”, “consumer injury” is not regular “injury”, etc. Thus, even though the Law clearly instructs us that acts and omissions prohibited under Chapters Two, Three and Four of the Consumer Protection Law are to be treated as torts under the Civil Wrongs Ordinance, my colleague intends to disengage himself – in practice – from the doctrines of tort law, while seeking to construct a new conceptual universe whose terms and expressions are the terms and expressions of concepts familiar to us from tort law, but whose content is a “consumer content” that is remote from tort law.

61.       In essence, my colleague’s words destroy the existing world – the old world – and create a new world in its place. Thus, the passes the old world and a new world comes into being, all on the basis of the purpose of the Consumer Protection Law. For my part, I would argue that I find such an interpretation problematic, and I fear “the disengagement from firmly-rooted, ancient legal traditions” (Prof. Sinai Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” (2 Moznei Mishpat 97, 126 (2001-2002) (Hebrew)). Not only do I not find any firm anchor in the Law for my colleague’s far-reaching interpretation, but the fears gnaw at me if only because the boundaries of the new world are not sufficiently clear, and the consequences that may result from the new conception are beyond me. My colleague seeks to disengage us from the gravitational center that we have become accustomed to orbit for so many years, but he does not provide us with a firm footing to tread upon. I would go so far as to say that in this new world that my colleague creates, we must begin from the beginning. The sensation is of floating in space, and the spirit of God hovers upon the waters.

            Thus we see that sec. 35A (b) of the Consumer Protection Law states: “Where the cause of action is injury, it is sufficient that the plaintiff show that the consumer suffered injury.” On this provision, my colleague states as follows:

 

I am of the opinion that we may learn from sec. 35A (b) that for the purpose of filing a class action, it is sufficient to show the existence of a consumer injury, and there is no need to show a factual causal connection between the breach and that injury. This construction accords with the special purposes of the consumer class action, which I addressed above, which are also not consistent with the requirement of personal reliance.

 

For my part, I would say that I tried but could not understand how we could award one person damages from another person for an injury that was not causally connected to that other person’s acts or omissions. What would that be like? It would be like saying that Reuben and Simon make a binding agreement between themselves solely on the basis of Reuben’s offer. Then, even if Levi breaches an obligation placed upon him, and even if Judah incurs the injury, Judah will not collect damages from Levi for that injury – so it appears to me – unless he can show some rational causal connection between Levi’s breach and the injury that he, Judah, incurred.

            My colleague’s construct may have been appropriate to the formative period of the Common Law, but today, with statutes from horizon to horizon, I find it difficult to free myself from the feeling that adopting my colleague’s approach – on its face – would tresspass the boundaries of the legislature by no small measure, and first and foremost, lead us into unknown territory. I would quickly add this: I did not say – and do not mean to say – that my colleague’s approach (at least in part) is not the lex ferenda. I did not say – and do not mean to say – that it is not proper that we interpret the Consumer Protection Law in a “consumer spirit” and more broadly than tort law. I agree that it would be appropriate to do so. But I fear that my colleague may have gone too far in his interpretation of the Law.

62.       A second comment: Over the course of his entire opinion, my colleague attacks the reliance doctrine, as well as my opinion allegedly based upon that doctrine. I am afraid that my colleague is mistaken. My opinion is expressly based upon the subject of the proper causal connection, and not upon the reliance doctrine in the narrow sense, and I believe that, in that regard, there are no deep disagreements between us. See, for example, paras. 39 through 41 of my opinion.

63.       Unlike my colleague Justice Mazza, whose approach is a torts approach – “torts” in the broad sense of the term – my colleague Justice Dorner chose to follow a different path, one beginning in contract law and ending in the Consumer Protection Law. My colleague is of the opinion that a consumer’s right against a dealer in circumstances like those before us “is firmly anchored in established doctrines of contract law,” and upon those doctrines, she grounds her conclusion that the Petitioner is entitled to the status of a class-action plaintiff. More precisely, my colleague is of the view that the Petitioner incurred compensation-worthy injury even though he was not exposed to the misleading advertisement, and that injury can serve as a springboard to the status of a representative plaintiff.

64.       I do not intend to argue with my colleague on the matter of the lex ferenda. The matter is too complex for me even to wish to express an opinion upon it, and we have heard no arguments grounded upon contract law. Our common assumption was, and is, that we are concerned with tort law. That was the field that was plowed by the plowers, and the one that we, too, plowed. For my part, I can say that to the best of my understanding, sec. 2 of the Consumer Protection Law – by its plain language and on its face – does not state what my colleague seeks to find there. The case law has always assumed that Section 2 of the Law addresses precontractual deceit, and in any case, it was the (alleged) existence of “deceptive advertising” that formed the basis of the Further Hearing with which we are concerned. That is the basis of the disagreement before us, and that – and only that – was addressed in our opinion above. See and compare: Prof. Sinai Deutch, Consumer Protection Law, ibid., 398-400, and the sources cited there.

            Contract law indeed adds causes of action and remedies to those causes of action and remedies provided by the Consumer Protection Law, but consumer protection as expressed in the Consumer Protection Law did not situate itself in the field of contract law. On the contrary, consumer protection law distanced itself from the field of contracts, seeking to reside in the field of tort law. That is, after all, what the Law says in stating that a deception such as that before us is to be treated “as a tort under the Civil Wrongs Ordinance [New Version]”. Consumer protection law lives its civil life in the field of tort law, the doctrines of that field serve as the basis for the rights that the Consumer Protection Law grants to consumers, and the general atmosphere is one of tort law. Knowing that, we further know that a class action under the Consumer Protection Law – as provided under sec. 35A of the Law – treats of that “tort” action that the Law created. Thus, when sec. 35A of the Law states that a consumer may bring a class action “on behalf of a group of consumers on a cause of action under which he can bring suit in his own name under this Law, and against any defendant that the consumer may sue in his own name”, it is speaking of nothing other than that cause of action in “tort” that the Law grants the consumer. Even if the consumer has a cause of action against a dealer in “contract law” – whether directly based upon contract law or more closely related to contract law – that suit will find its place – to the extent that it has one – in general contract law and not specifically in the Consumer Protection Law. In any case, the consumer will not be able to initiate a class action based upon the Consumer Protection Law for such a cause of action.

 

                                                                                                            Justice

 

Chief Justice A. Barak:

 

            I concur in the opinion of my colleague Justice Cheshin. I also concur with his comments in regard to the opinion of my colleague Justice Mazza. As for the opinion of my colleague Justice Dorner, I, too, am of the opinion that, inasmuch as arguments were not heard in regard to the application of contract law to this case in the District Court, or before the three-judge panel of the Supreme Court or in this Further Hearing, I would not wish to take a stand upon that issue in these proceedings.

 

                                                                                                            Justice

 

Deputy Chief Justice T. Orr:

 

            I concur in the opinion of my colleague Justice M. Cheshin.

 

                                                                                                                        Justice

 

Justice D. Beinisch:

 

            I concur in the opinion of my colleague Justice Cheshin, and thereby also add my voice to that of the majority in CA 1977/97.

            The approach of my colleagues, who seek – each in his own way – to construe the provisions of the Consumer Protection Law in a spirit of a consumer doctrine that would protect class actions, is very appealing. Protecting consumers against economically powerful dealers by levelling the playing field is not merely an appropriate purpose, but also expresses values that we seek to further as part of an overall economic vision. I also agree with the approach that sees class actions as an important tool for advancing consumer protection and for restraining economically dominant bodies from abusing their power.

            Nevertheless, I do not see how one can extricate oneself from the legal framework that the legislature established, under sec. 33(a) of the Consumer Protection Law, for damages for a “consumer tort”, which is a tort-law framework. For my part, I do not share my colleagues’ fear that a demand for a causal connection between the tort and the injury will eviscerate the remedy of damages that the Law provides. One must distinguish between the substance of applying tort-law doctrines and the nature of the causal connection and its proof. The nature of the causal connection, the strength of its proof and the means for its proof may be decided in accordance with the circumstances of each case, and the consumer background may result in more lenient rules. One must not, in principle, confuse that with the foundations upon which the legislature grounded the remedy of damages. The wording of sec. 31 (a) of the Consumer Protection Law bars the way to developing a theory of consumerism as a branch of compensation divorced from the foundational concepts of tort law.

            We may assume that a theory of consumerism will develop, and that consumer suits will find their path in regard to the remedy of compensation, as well, and case law and practical experience will lay the appropriate groundwork for proving the causal connection, without casting off the foundational principles of the theory of compensation for loss.

 

                                                                                                            Justice

 

Justice Tova Strasberg-Cohen:

 

1.         The suit before us was filed on the basis of the Consumer Protection Law, 5741-1981 (hereinafter: the Law). It is based upon a cause of action and a remedy established in the Law, and it was filed as a class action in accordance with it.

            The provisions of the Law that are relevant to these proceedings are sec. 2 (a), secs. 31 (a) and (a1), and sec. 35A of the Law. The central question that we must consider and decide is whether, under the prohibition upon deceit established in sec. 2 (a) of the Law, a plaintiff can be awarded pecuniary damages even if he was not exposed to the misleading representations and therefore, did not rely upon them. I addressed this question at length in my dissent in the Appeal that is the subject this petition (CA 1977/97 Barazani v. Bezeq – Israeli Telecommunications Company Ltd., IsrSC 55 (4) 584 (hereinafter: the Appeal). I have reviewed all of the relevant material in the Appeal, and especially the opinions of my colleagues Chief Justice Barak and Justice Englard, who formed the majority, as well as that of my colleague Justice Cheshin in these proceedings, and the conflicting opinions in the publications of the various scholars (Prof. Sinai Deutch, whose opinion coincides with mine, and Prof. M. Deutch and Dr. O. Deutch, whose opinions correspond with that of my colleagues, see: S. Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” 2 Moznei Mishpat 97, 121 (2001-2002) (Hebrew) (hereinafter: Deutch, “The Demand for Personal Reliance”); O. Deutch, The Legal Status of Consumers (Nevo, 2002) 414 (Hebrew); M. Deutch, Commercial Torts and Trade Secrets (Nevo, 2002) 49 (Hebrew). After reading all of the above, I have concluded that my opinion remains unchanged. I will, therefore, clarify my position and focus upon the questions under debate, and preface my opinion with a few words on the integration of a cause of action under the Consumer Protection Law in a class action under that law.

 

The Consumer Protection Law

 

2.         The Consumer Protection Law, which forms part of the consumer legislation, serves many purposes, but at their heart is the protection of consumers against economically advantaged dealers, and narrowing the power gap and lack of equality in the relative negotiating positions of the parties. Its purpose is to impose proper conduct upon the commercial sector, and to establish rules of fair play in the relationship between consumer and dealer. It was intended to reinforce the personal autonomy of the consumer and his right to dignity by ensuring his ability to make informed choices in regard to products and services on the basis of accurate, relevant information, and by preventing abuse of the consumer’s relatively weaker position. It was intended to deny a dealer the ill-gotten gains obtained from the consumer for a product or service, and thereby restore to the consumer what had been unlawfully taken, and to make such conduct not only improper but also unprofitable. Consumer protection also serves to encourage fair competition among dealers, which is an important factor in proper market and economic activity (for a survey of the purposes of consumer law, see: O. Deutch, supra, at pp. 27-37, and see the Explanatory Notes to the Consumer Protection Law Bill, 5740-1980, at p. 302).

3.         As for as consumer contracts, there are those who view them as a separate branch of general contract law. Each of those branches has its own point of reference. That of general contract law is the glorification of the autonomy of the parties. Its provisions are dispositive, and governmental intervention through criminal and administrative provisions is limited. As opposed to this, consumer protection law is obigatory, and in achieving its objectives, it comprises criminal and administrative sanctions. (For a survey of the characteristics of civil law as opposed to consumer law, see: S. Deutch, “Consumer Contracts Law versus Commercial Contracts Law,” 23 (1) Iyunei Mishpat 135, 150-152 (5760) (Hebrew); S. Deutch, Consumer Protection Law – Fundamentals and Principles, vol. 1 (5761) 294-289 (Hebrew)).

 

Class Actions

 

4.         The Consumer Protection Law provided consumers with efficient enforcement mechanisms for the protection of their rights, and primary among them is the class action. I have had the opportunity to address the purposes of class actions on more than one occasion, and I shall not repeat what I have already stated (see: CA 2967/95 Magen veKeshet Ltd. v. Tempo Beer Industries Ltd. [1997], IsrSC 51(2) 312, 322-323; LCA 4474/97 Tatzet v. Silberschatz, IsrSC 54 (2) 577, 586-587; LCA 8268/96 Reichert v. Shemesh, IsrSC 55 (5) 276, 288-289; LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220). I will suffice in saying that in the broad sense, class actions are intended to prevent the unjust enrichment of powerful economic actors that concentrate production, industry and services for mass consumption at the expense of the man in the street who turns to such actors for the goods and services that he uses. They are also a means for enforcing the law at the civil level. The possibility afforded to the individual consumer of bringing suit, by class action, in the name of an anonymous group of consumers who were harmed by a violation of the law, achieves proper enforcement and prevents situations of under-enforcement that harm the individual consumer, the group of consumers and the general public. Under-enforcement leads to the undermining of public faith in the general social order and the rule of law. Class actions also serve the public interest in efficiency and economy of resources, and prevent a lack of uniformity in the decisions of the courts in similar individual cases (see: Nina Zaltzman, Res Judicata (Ramot, 1991) 427 (Hebrew).

 

Interpretation

 

5.         The suit before us is based upon a cause of action in the Consumer Protection Law, and the request that it be certified as a class action is based upon the same Law. This brings about an merger that has consequences for the proper interpretation of the provisions of the Law relevant to our examination. That interpretation begins with the language of the Law but does not end there. From among the possible interpretations that the language of the Law makes available, we must choose the possibility that is consistent with the objective and purpose of the Law. We can learn the purpose from the Law, the placement of the provision in the Law, the general structure of the Law, from the normative economic and social context of the Law’s provisions in relation to one another and in relation to other laws of similar character, and from extra-legal sources, such as the legislative and parliamentary history, all against the background of the accepted values of our legal system (CA 165/82 Kibbutz Hazor v. Rehovot Assessment Officer, IsrSC 39 (2) 70).

            From reading the relevant legal provisions, and especially secs. 2 (a) and 31 (a) and (a1) of the Law, we find that the words of the Law alone are insufficient to exhaust the substance of these provisions. It seems to me that the use of the procedural device of initiating a suit as a class action, and the nature of the Law as a consumer law, pave the way for an appropriate interpretation of the Law, and for providing the correct meaning to its provisions.

 

What is Agreed and What is Disputed

 

6.         At the outset, I would like to remove the stumbling blocks from the path that my colleagues and I are travelling, clarify what is and what is not in dispute, and focus upon what is in dispute.

            There is no dispute that a class action does not create new causes of action and that it is but a procedural device that allows for the joining of many actions into one, for procedural and substantive reasons. There must be a personal cause of action as a precondition to making a class action available to the plaintiff. This requirement is common to all the laws that regulate class actions (in this regard, see, for example, my opinion in CA 2967/95, above). My colleague Justice Cheshin addresses this matter at length, and I will not add to that. I will only state that, like him, I was and remain of the opinion that a class action does not create new causes of action and is nothing other than a procedural device available to a person who has a personal cause of action under the Law (sec. 35A (a) of the Law).

7.         From here I will now proceeed to the cause of action of “prohibition of deceit”, which is the cause of action in the matter before us, and I will begin by pointing out the questions that are not in dispute in regard to this cause of action established under sec. 2 (a) of the Law, which states as follows:

 

                        Prohibition of Deceit

2. (a) A dealer must not do anything – by deed or by omission, in writing, by word of mouth or in any other manner, also after the transaction has been contracted – which is liable to mislead a consumer in regard to any material element of the transaction … (emphasis supplied – T.S.C.).

 

There is no dispute that the prohibition of deceit established under sec. 2 (a) of the Law is not a prohibition of “result” that requires actual deceit, but rather a prohibition of “conduct” according to which one may not do anything “liable to mislead a consumer”. Therefore, in order for a cause of action to arise, there is no need to show actual deceit in practice. And so I stated in my opinion in the judgment under appeal:

 

…in my opinion, the consumer who files suit under the Law is not required to show that he was actually deceived…it is sufficient that he show that the dealer committed an act that was “liable to deceive a consumer” (p. 602).

 

Similarly, Chief Justice Barak states in the same judgment:

 

…sec. 2 (a) of the Law does not require deceit in actual practice. What is prohibited thereby is doing something “liable to deceive a consumer”. The purpose of the prohibition is to ensure that the consumer receive full and accurate information. The prohibition established by sec. 2 (a) of the Law is not a prohibition of “result”; it is a prohibition of “conduct”. The prohibition established in sec. 2 (a) of the Law… (p. 617).

 

And thus states Justice Cheshin in this Further Hearing:

 

The prohibition is one of conduct, and a dealer contravenes the prohibition even if he does something – by act or omission – that is only “liable to mislead” a consumer, i.e., even if no one was misled by it. …The standard of conduct required under sec. 2 (a) is higher than the usual standard in other laws. … whereas sec. 2 (a) of the Consumer Protection Law prohibits the conduct per se, even in the absence of resulting injury (para. 10, emphasis supplied – T.S.C.).

 

            (And see: Deutch, “The Demand for Personal Reliance”; O. Deutch, supra, p. 390; M. Deutch, supra, p. 49).

8.         There is no question that Bezeq’s advertisements appeared to be “liable to mislead a consumer” in regard to the manner of calculating charges for direct-dial international calls and their price (see: my opinion in the Appeal, at pp. 594-596); the opinion of the Chief Justice in the Appeal, at p. 617, opposite the marginal letter B). That being so, the consumer acquired a cause of action under sec. 2 (a) of the Law, and a restraining order and declaratory relief could be granted (the Chief Justice, ibid., at p. 617, opposite the marginal letter B). However, in the matter at hand, the class action that the court was asked to certify was not for declaratory relief, but rather for damages arising from injury incurred by consumers as a result of the advertisement that was liable to mislead. Here, too, my colleagues and I travel the same path, inasmuch as I agree that in order to acquire a cause of action for damages for injury caused by a publication that is liable to mislead, one must make a prima facie showing that the publication was liable to mislead, that injury was incurred, and that there was a factual and legal causal connection between the publication and the injury (see my opinion in the Appeal, at p. 602, opposite marginal letter A, and at p. 604, opposite marginal letter C).

9.         No one disputes that, in the case before us, the requirement of “liable to deceive” in sec. 2 (a) of the Law was met. My colleagues and I part ways in regard to the question of whether the Petitioner-consumer suffered harm, and whether there can be a causal connection between the publication and the injury in the absence of the consumer’s reliance upon the potentially misleading publication. My answer to both questions is in the affirmative for a number of reasons. First, establishing deceit as a prohibition of conduct but recognizing a remedy of damages for its violation only if actual deceit is proven, renders the primary prohibition of the Consumer Protection Law lacking of any real civil remedy. Although sec. 32 of the Law grants the remedy of cancelling the sale, the limitations of that remedy are so numerous that there is almost no reason to employ it, and indeed, not a single example of the application of this provision of the Law is to be found in the case law. Second, it is unlikely that a consumer will go to the effort and expense involved in obtaining a restraining order for the benefit of the general public. Third, over the years of the existence of the Consumer Protection Law, only limited recourse has been made to the criminal sanction, and it would appear that the criminal sanction does not significantly deter a powerful dealer from misleading the consumer public when he can pocket large profits (ibid., at p. 106). The same is true of administrative sanctions. Fourth, an approach that makes damages contingent upon actual deceit limits the dealer’s liability only to those consumers who can prove that they were actually misled by the dealer’s misrepresentations, and makes deception worthwhile from the dealer’s perspective. Fifth, an interpretation by which damages can be sought only by those consumers who were actually misled will create an artificial distinction between those consumers who actually used the misrepresented product or service but were not exposed to the misrepresentation, and those consumers who were aware of the misrepresentation. Sixth, in other cases in the past, this Court did not hesitate to broaden the choice of remedies beyond those delineated by a law, so as not to empty the law of content (thus, for example, in regard to sec. 12 (b) of the Contracts (General Part) Law, the case law established that even though the provision provides only the remedy of damages, the available remedies should not be limited only to those set out in the law when broader remedies, like enforcement, are justified (CA 829/80 Shikun Ovdim v. Zepnick, IsrSC 37 (1) 579; CA 579/83 Sonnenschein v. Gebso Bros., IsrSC 42 (2) 278; CA 986/93 Kalmar v. Guy, IsrSC 50 (1) 185)). Such an expansion is also appropriate in regard to the interpretation of secs. 31 (a) and 31 (a1) of the Law for the purpose of protecting consumers. Here I should note that such a partial expansion was made by my colleague the Chief Justice, who was of the opinion that even a consumer who was not misled and who did not suffer injury could be granted a restraining order against a dealer, although such a remedy does not appear in the Consumer Protection Law. Seventh, the Consumer Protection Law establishes other prohibitions that do not require proof of actual reliance, and their breach entitles the consumer to a broad right to damages (thus, for example, in regard to a failure to supply particulars in regard to a credit transaction (sec. 9), the court may – in addition to the provision for cancelling the transaction and refunding the consideration or part thereof to the consumer – “charge the dealer with the expenses caused to the consumer, and it may issue any other direction which it deems just” (sec. 11)). What reason is there to grant an independent remedy of damages that includes granting broad discretion to the court in regard to a violation of these prohibitions, while not for a violation of the Law’s central prohibition – the prohibition upon deception? (also see: Deutch, “The Demand for Personal Reliance,” at pp. 106, 121-127).

 

As a Tort

 

10.       All of the above reasons constitute a conceptual foundation for examining whether it is possible to interpret the relevant sections of the Law in a manner that would grant damages to a consumer in the circumstances of this case, while remaining faithful to the principles grounding the rules of interpretation. The provisions of the Law relevant to the remedy of damages are secs. 31 (a) and 31 (a1) which state as follows:

 

Compensation            

31. (a) Any act or omission in violation of Chapters Two, Three, or Four "A" shall be treated as a tort under the Civil Wrongs Ordinance [New Version].

(a1) Consumers injured by the wrong are entitled to remedies for the wrong and so are dealers, who in the course of their business are injured by deceit, as said in section 2 (emphasis added – T.S.C.).

 

The upshot of these sections is that the “prohibition of deceit” shall be treated “as a tort” under the Civil Wrongs Ordinance, and that the right to a remedy for the tort is granted to an injured consumer. The wording of these sections is problematic, and raises a question as to the meaning of the phrase “as a tort”. Much was written on the meaning of that phrase in the Appeal and in the opinion of my colleague Justice Cheshin in this Further Hearing. It might be noted that a review of the statutes reveals a number of laws comprising various statements in regard to the definition of “tort” in regard to the Civil Wrongs Ordinance. Conduct in violation of the law has been defined as “constituting a tort and the provisions of the Civil Wrongs Ordinance [New Version] shall apply thereto” and a wrongful act has been defined as being “as a tort under the Civil Wrongs Ordinance [New Version]” or “as an injury for which damages may be sought under the tort law” [for a list of the laws, see: Deutch, “The Demand for Personal Reliance,” at pp. 128-129). The differences in wording may be intentional or may be accidental. In any case, it is clear that this expression makes certain legal prohibitions into prohibitions that are like torts under the Civil Wrongs Ordinance. The question is whether they thus become torts for all intents and purposes. In my view, the statement “Any act or omission … shall be treated as a tort under the Civil Wrongs Ordinance...” should be understood as creating a new cause of action that is like a tort. Such a cause of action is not parallel to a tort but comparable to a tort in the sense that it applies the doctrines of the Civil Wrongs Ordinance to the act or omission. In the matter before us, it applies the compensation doctrine and the causation doctrine (see the opinion of Justice Cheshin, para. 34). However, this cause of action is special to the Consumer Protection Law. It is independent in nature, and it must be interpreted within its context, in the framework of the purpose it was intended to serve, and in relation to the said doctrines, which must be interpreted in a manner that is consistent with the purpose of the Consumer Protection Law and its enforcement by means of class actions. Chief Justice Barak’s statement in his recent opinion in CA 2622/01 Director of Property Improvement Tax v. Aliza Levanon (not yet published) are apt to the matter before us:

           

A statute is a living entity that resides in its social environment. With changes in social conceptions, the meaning of the statute changes in the understanding of the social environment in which it operates. … Life is in constant motion, and with it, the law. This is the basis of the interpretive approach – accepted in England and Israel – that “the law is always speaking”, and that the law must be given an updated interpretation. Interpretation is a renewing process. Old language must be given modern meaning that is consistent with the needs of modern life. Thus the statement of Prof. Radbruch, that “The interpreter may understand the law better than its creators understood it; the law may be wiser than its authors” (see G. Radbruch, “Legal Philosophy,” in The Legal Philosophies of Lask, Radbruch and Dabin,   K. Wilk, trans. (1950) 141). … The laws of a society move with it over the course of its history, and in that movement, their meaning changes in order to serve the society in which they act. I addressed this is the Lindorn case, noting:

“The meaning to be given to a legal statement – like the statement ‘his spouse’ – is not fixed for all times. The law is part of life, and life changes. As reality changes, the meaning of the law changes. The language of the law remains as it was, but its significance changes along with the ‘changing conditions of life’ (ibid., p. 32).”

 

I need only adopt this appropriate, correct approach in the matter before us, and applying it requires an interpretation that is appropriate and proper to the issue of injury and causation. In my opinion – as opposed to the opinions of my colleagues – the requirements of injury and causation between the violation of the “prohibition of deceit” and the injury are met in the matter before us.

 

Injury

 

11.       Injury how? Section 31 (a1) of the Law states: “Consumers injured by the wrong are entitled to remedies for the wrong…”, while sec. 35A (b) states: “Where the cause of action is injury, it is sufficient that the plaintiff show that the consumer incurred injury”. In the matter before us, monetary injury is claimed as the result of overcharging consumers in comparison to what should have been charged had the calculation been made as advertised. That differential is sufficient to meet the Law’s requirement of injury. The injury incurred by a consumer who utilized the international direct-dialing service is expressed in the difference between the price advertised by Bezeq, and the price actually charged (hereinafter: the “price differential”). The price differential is an injury, inasmuch as had the advertised price been charged, the consumer would have saved the excess payment. That differential is an actual out-of-pocket loss that should be deemed an injury as required by the Law.

 

Causation

 

12.       Causation how? As no one doubts that there was a publication liable to mislead, and having found that injury was caused to the consumer, we must consider whether there was a causal connection between the publication and the injury. I addressed the nature of causation in general in the Appeal, and I will not repeat what I wrote in that regard (p. 605). I will, therefore, consider the disputed issue of whether the consumer meets the requirement of causation when he was not actually misled by the misrepresentation. In my view, the required causal connection exists for the purpose of the cause of action granting a consumer damages for the injury incurred by him.

13.       Inasmuch as the Law establishes that an act or omission (including a misleading publication) is to be treated as a tort under the Civil Wrongs Ordinance, and does not create a parallel to specific torts in the Civil Wrongs Ordinance, we cannot say that the prohibition of deceit under sec. 2 (a) of the Law is like the tort of fraud or the tort of negligent misrepresentation, which require reliance as a precondition (on the tort of negligent misrepresentation, see: CA 106/54 Weinstein v. Kadima Cooperative Association Ltd., IsrSC 8 1317; and on the tort of fraud, see: CA 614/84 Sapir v. Eshed, IsrSC 41 (2) 225, 239). My position is that the tort perpetrated by a publication that is liable to mislead does not require reliance in order to entitle a consumer to damages for injuries incurred by him due to that publication, and we are not bound by the reliance requirement of those torts. Had the legislature intended to draw a parallel between the prohibition of deceit and one of the torts requiring reliance, we would have expected that it would have done so expressly. Moreover, there is no logic behind creating a separate tort in a special law with a special purpose that corresponds to a tort that already exists in the Civil Wrongs Ordinance, for if that were the case, what would be achieved by enacting the separate tort? We should not assume that the legislature wasted its words, and moreover, the Consumer Protection Law was enacted in order to create special causes of action for the special area of consumer protection. In addition, it should be noted that there is no small number of torts that do not require reliance, both in the Civil Wrongs Ordinance and outside it. It would appear to me that the reliance requirement is not required for establishing causation by the wording of the Law and its purpose.

14.       As a rule, the reliance requirement comprises the assumption that were it not for the representation upon which you relied, and were it not for your reliance thereupon, you would not have negatively altered your situation, and would not have acquired the service or product misleadingly represented. In other words, you would have chosen to refrain from acquiring the product or service. In the case of the service in this matter – direct-dialed international calls – there was no such choice at the relevant time. It was a monopoly of Bezeq, which was a government corporation. The service itself is one that is incomparable. Modern life is inconceivable without it. And at the relevant time, it could not be obtained from any other provider. In such circumstances, one can say that the reliance requirement is of no consequence or significance. Moreover, in the modern age, in which the consumer receives services from large public corporations – sometimes exclusive in the field – the consumer public cannot be expected to keep abreast of the “flood” of advertisements published by the various corporations in regard to discounts, promotions, etc., as a condition for obtaining damages for injury incurred as a result of misleading advertising. Consumers cannot be expected to scrutinize the accounts and calculations of those corporations, and investigate whether they correspond to their advertisements. It is not even clear that they could do so. In the matter before us, Bezeq conducted ongoing advertising campaigns, and the consumers cannot be asked to keep track of those advertisement as a condition for an award of damages. They should be able to rely upon the assumption that if a company decides to conduct a campaign or grant discounts or make calculations that are more beneficial to the consumers, and publishes that, then it will act in accordance with what it published and will grant the benefit to the consumers regardless of whether or not the consumers saw, read or relied upon the advertisements when making use of the service. Moreover, a large proportion of the consumers pay their telephone bills by means of standing bank orders. The details of the bills are not always examined before payment. I find no economic or other logic to awarding a refund for overcharging only to those few who keep track of advertisements and check bills. I do not believe that it is just or fair to “punish” the consumer who does not do so, and to allow the company to profit from the loss of the consumer that derives from the supplier’s misleading advertisements. Indeed, Bezeq is under no obligation to advertise discounts, campaigns or beneficial charging plans, but if it does so, it must stand behind those advertisements and put them into practice for the entire consumer public. Having failed to do so, it committed a tort that resulted in injury for which it is liable for damages to all the consumers who used the service, whether or not they relied upon the advertisement and whether or not they were aware of it, and it must refund the overcharged fees to the consumers. All of the above leads me to the conclusion that there is no need of reliance in order to meet the causation requirement for the purpose of obtaining damages.

15.       If I were of the opinion that actual deception of the consumer, as well as reliance upon the supplier’s representation were required as a precondition to the remedy of compensation – and I do not so hold – I would favor adopting a presumption that when a supplier makes a representation that is liable to mislead a consumer, a consumer who purchases the product or service would be deemed to have been exposed the representation and to have acted thereupon. My reasons for adopting that presumption partially correspond to those that lead me to conclude that reliance is not required.

            The import of the said presumption is that a consumer who purchases a product or service from a supplier may assume that the price charged for the product or service is the correct price in accordance with the supplier’s advertisements, without regard for whether or not he was exposed to the advertisements. This assumption is all the more justified when we are concerned with a product or service provided by a monopoly. Such a presumption would prevent the artificial distinction between the consumer public that used the product or service misleadingly advertised, while unaware of the misrepresentation, and the consumers who were aware of the misleading information. (in regard to the presumption of reliance, see; LCA 8332/96 Shemesh v. Reichert, IsrSC 55 (5) 276, and what was stated there in regard to securities is equally applicable to the matter before us).

16.       Holding that there is no need for the consumer’s reliance upon the misleading publication does not render the need for causation superfluous. In regard to the need for a causal connection between the publication and the injury, I am in full agreement with my colleague the Chief Justice and my colleague Justice Cheshin, but as opposed to them, I am of the opinion that such a causal connection exists in the case before us, as I explained in the Appeal, and I will quote what I stated there: “In my view, the representation created by the supplier should be deemed as a promise to the consumer public, which binds it and requires it to act in accordance with the representation. That promise grants the consumer a right, and places an obligation upon the party making the representation to the consumer public. When the supplier fails to meet the obligation that it assumed by means of the representation, and charges a price higher than that promised in the representation, it breaches its obligation, and the consumer incurs injury in consequence of that breach. Therefore, even if the consumer was not exposed to the misleading publication and did not alter his manner of use of the product or service – in the matter before us, the number or duration of calls – he still incurs injury, inasmuch as the price he was charged for the product or service was higher than the price at which was entitled to purchase the product or service” (the Appeal, at p. 605, between marginal letters D and E). Take, for example, a situation in which a consumer purchases a product in a supermarket, regarding which there is an advertisement at the entrance of the store stating that the price has been lowered. The consumer does not see the advertisement (or due to a language problem, does not understand it). He purchases the product, paying the full price at the checkout. Clearly, the advertisement that the price was lower than that actually charged is liable to mislead a consumer. Similarly, I believe that the consumer incurs an injury in the form of a “price differential”, which constitutes a real, tangible loss. By an appropriate interpretation of the necessary causation, that injury is causally connected to the prohibition upon deceit, inasmuch as due to the misleading advertisement and the difference between it and the actual conduct, the consumer suffered injury. That is sufficient to meet the causation requirement both factually and legally. Factually, the said injury caused to the consumer is a result of the fact that the supplier published a representation that it did not put into practice. Legally, the injury is causally connected to the representation by the foreseeability test, inasmuch as when a supplier makes a false representation, it foresees that charging contrary to the representation will cause a loss in the form of a “price differential”. It also meets the risk test, as the injury falls within the scope of risk of the supplier’s conduct, and the common-sense test, which looks at the total conduct of the tortfeasor and its contribution to the injurious result (on the legal tests for causation, see: CA 145/80 Vaakin v. Beit Shemesh Local Council, IsrSC 37 (1) 113, 145-146; CA 576/81 Ben Shimon v. Barda, IsrSC 38 (3) 1, 7; CA 119/86 Keny Housing v. Netanya Local  Planning and Building Board, IsrSC 46 (5) 727, 749).

            The issues before us in this case, and the proposed solutions, are not exclusively ours. In interpreting Israeli law in regard to the subject of consumer deception in general and class actions in particular, we should also look to American law, which inspired the adoption of class actions in our legal system.

 

Comparative Law

 

17.       The consumer protection laws of various states of the United States establish the prohibition of deceit in language such as “an act liable to mislead a consumer”, similar to the wording adopted in sec. 2 (a) of the Consumer Protection Law. Thus, secs. 349 and 350 of New York’s General Business Law establishes that deceptive acts or practices by a business are unlawful, as are misleading advertisements. Although the sections speak of deception and its prohibition, the New York courts have held that they should be understood as prohibiting any act that is liable to mislead a consumer (Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 623 N.Y.S.2d 529 (Ct.App.1995); BNI New York Ltd. v. DeSanto, 675 N.Y.S.2d 752 (City Ct.1998), at p. 755; Small v. Lorillard Tobacco Co. Inc., 679 N.Y.S.2d 593 (A.D. 1 Dept.1998, at p. 599).

            Section 2 of the Consumer Fraud and Deceptive Business Practices Act of the State of Illinois expressly establishes that deception is unlawful, whether or not any person has actually been deceived or damaged thereby. Identical wording appears in the law of the State of Minnesota (sec. 325F.69 of the Consumer Fraud Act).

18.       The various wordings there are similar to the wording of our Consumer Protection Law. It is worth noting that the construction given to similar sections in various states is not uniform insofar as the requirement of reliance upon the misrepresentation for the purpose of receiving a compensatory remedy. Three basic trends can be identified: The first requires proof of reliance upon the deceptive representation. The second does not require reliance upon the representation, and it is sufficient to prove a causal connection between the deception and the injury incurred. The third does not completely abandon the requirement of reliance, but it is a reduced requirement that is met by assumptions, presumptions and conclusions drawn from the circumstances (for a survey of the American legal situation in this regard, see the comprehensive article of G. Wilson & J. Gilmer, “Minnesota’s Tobacco Case: Recovering Damages without Individual Proof of Reliance under Minnesota’s Consumer Protection Statutes,” 25 Wm. Mitchell L. Rev. (1999) 567). Below, I will note a number of cases from among the many available that demonstrate each of the said approaches. For the first approach, see Oliveira v. Amoco Oil Co., 201 Ill. 2d 134, 776 N.E.2d 151, 201 Ill. 2d 134, 267 Ill. Dec. 14 (2002); and see: Zekman v. Direct American Marketers, Inc., 695 N.E.2d 853, 182 Ill. 2d 359, 231 Ill. Dec. 80 (1998). For the second approach, see: Brooks v. Midas-International Corp, 47 Ill. App. 3d 266, 361 N.E. 2d 515 (1977) in which the defendant guaranteed in its advertisements that it would replace a muffler for only an installation charge but charged the full replacement price. The suit was certified as a class action for the purpose of seeking damages, holding that reliance is not a requirement for the purpose of obtaining damages for consumer deception. This approach is consistent with mine. The same is true in regard to the judgment in Connick v. Suzuki Motor Co., Ltd., 174 Ill. 2d 482, 675 N.E.2d 584, 174 Ill. 2d 482, 221 Ill. Dec. 389 (1996), in which a class action was certified against a company, inter alia, for publishing the safety features of an automobile based upon allegedly incorrect information that the company gave to a magazine. The Supreme Court of Illinois held that the plaintiffs did not have to prove reliance as a condition to establishing a cause of action. It further held that in the absence of proof of an intervening cause, it was sufficient that the plaintiffs show that the automobiles were purchased after the misleading information was published in order for there to be causation between the misleading publication and the injury incurred. For the third approach, see Vasquez v. Superior Court of San Joaquin County, 484 P.2d 964(S.Ct.Cal.1971), in which the Supreme Court of California held that there was no need to prove reliance upon the misrepresentations of the sellers by direct evidence, and that it could be proved implicitly by inference from the circumstances of the case, or even by a presumption of reliance. Similarly, in Amato v. General Motors Corp., 463 N.E. 2d 625 (Ct. App. Ohio, 1982), the majority of the Ohio court certified a class action against General Motors for equipping Oldsmobiles with less prestigious engines without informing the buyers.  The court did not entirely waive the reliance requirement, but held that it could be inferred from the circumstances of the case, or by establishing a presumption of reliance.

            As we see, people are the same everywhere, and not only are the issues and problems similar, but so are the disagreements among jurists in various states with similar, if not identical, legal foundations.

            Weighing all of the considerations, balancing them, and giving due weight to each of them, tilts the scales in favor of the trend that deems misleading advertising to be an act that establishes a cause of action for damages, if injury was caused, without requiring reliance for the purpose of establishing causation between the act and the injury.

19.       In conclusion, in my view, the Petitioner has a cause of action for damages for the injury caused him by the misleading advertisement, due to the overcharging. Therefore, if my opinion were adopted, the petition would be granted and the Petitioner’s suit would be certified as a class action.

 

                                                                                                                        Justice

 

Justice E. Mazza:

 

            I have reread the opinions of the majority in the Appeal – my colleagues the Chief Justice and Justice Englard – and the dissent of my colleague Justice Strasberg-Cohen. I have also read the opinions of my colleagues Justice Cheshin and Justice Strasberg-Cohen in this Further Hearing. I cannot concur in the opinions of the majority in the Appeal and that of Justice Cheshin in this proceeding. In my view, that approach does not give proper expression to the special purpose of the consumer class action. Instead, it transfers the traditional doctrines of tort law – foremost among them the doctrine of tortious causation – to the consumer environment, in which they are inappropriate, and sanctifies them as is. As a result of this view, the approach focuses too much upon Barazani the man, and too little upon the group of consumers that he seeks to represent, and the injury that it suffered. In this regard it is important to emphasize that it was never positively proven in the proceedings before the District Court that Barazani was not exposed to the misleading advertisement. The factual assumption in this regard, upon which the majority largely relied in the Appeal, as did Justice Cheshin in the Further Hearing, is based exclusively upon the fact that Barazani did not claim that he was exposed to the advertisement. Here, too, I believe that the view of my colleagues is deficient in its almost mechanical adoption of traditional rules of proof. That approach, which I do not believe represents the desired law, is also not required by the existing law. In presenting my dissenting opinion, I will first consider the uniqueness of the consumer cause of action and the appropriate scope of consumer class actions for misleading advertising. I will conclude by addressing the matter of Barazani and the question of whether he has a personal cause of action and for which remedies.

 

The Purposes of Tort Law as opposed to the Purposes of the Consumer Class Action

 

2.         The purposes of traditional tort law are not congruent with the purposes of consumer protection law and do not exhaust them. It is commonly said that the primary purposes of tort law are achieving corrective justice, effective deterrence of potential nuisances, and distributive justice (see, for example: D. More "Human Rights from a Tort Law Perspective" 12 Tel-Aviv U. Stud. L. 81, 90-93 (1994); A. Porat, “Collective Responsibility in the Law of Torts," Mishpatim 23 (1994) 311, 330-333, 344-349, 369-371). We can agree that corrective justice and effective deterrence are common to both tort law and consumer protection law. However, other important purposes are served by consumer protection law with which traditional tort law is not generally concerned. In her book, Dr. Orna Deutch lists no less than seven purposes that are special to consumer protection law: levelling the playing field; reinforcing personal autonomy; the concept of consumer sovereignty; protecting the rights to prosperity and social welfare; ensuring the credibility of the local market; and maintaining trust in the social order (O. Deutch, The Legal Status of Consumers (2002) 27-37 (Hebrew). She emphasizes that “the purpose of consumer protection is not limited to the law’s support of the individual consumer. Improper conduct toward consumers harms not only the consumer, but also honest business people and the entire commercial sector, as well as public trust in the local economy and the public authorities that oversee the commercial sector” (ibid., p. 15). Prof. Sinai Deutch suggests a somewhat different division and definition of the purposes of consumer protection law (S. Deutch, Consumer Protection Law, vol. 1 (2001) 119-126, and see the purposes listed in paragraphs 2-3 of the opinion of Justice Strasberg-Cohen in this Further Hearing). However, each of the approaches undeniably leads to the conclusion that consumer protection law is intended to realize special objectives that go significantly beyond the basic objectives of traditional tort law.

3.         To these general objectives of consumer protection law one may add the special objectives of consumer class actions. We can find an expression of this in a case recently decided by this Court:

 

As a legal institution, the class action is of special importance in realizing objectives that individual actions cannot attain. It serves the interest of the individual by providing a remedy for injury in circumstances in which filing suit would not be worthwhile without the other members of the group. It serves the public interest that strives to deter large economic institutions from violating the law, and that seeks to achieve more effective enforcement of behavioral norms intended to protect citizens and prevent the exploitation of their weakness as individuals. It may also advance the objectives of procedural efficiency, uniformity of decisions, and reducing litigation (CA 1338/97 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd. v. Rabi Tawfiq (not yet published), para. 2 of the opinion of Procaccia, J.).

And also see LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220, paras. 7-8 of the opinion of Justice Strasberg-Cohen, and the citations there.

4.         The material difference between the purposes of tort law and consumer protection law yield the conclusion that the traditional legal doctrines of tort law must be examined carefully – and changed and adapted as necessary – before applying them to consumer law in general, and class actions in particular. Generally speaking, one might go so far as to say that no traditional doctrine is self-evident in the context of consumer law. We are concerned with a unique area that requires distinct treatment that accords with its special purposes.

 

The Meaning of Section 31 (a) of the Consumer Protection Law

 

5.         Against this background, we can proceed to the interpretation of sec. 31 (a) of the Consumer Protection Law. This provision states: “Any act or omission in violation of Chapters Two, Three, or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version]”.  My colleagues are divided as to the meaning of the prepositional prefix “as” – referred to by Justice Cheshin as the “kaf of comparison” ^[8]  – in the phrase “as a tort”. In my opinion, this question is of little importance. Even were we to assume that the prefix was of no significance, and that sec. 31 (a) should be read as if it stated that an act or omission as stated were torts, it would not mean that certain parts of the Consumer Protection Law should be treated as if they were actually comprised by the Civil Wrongs Ordinance. And clearly, changing the physical location of consumer provisions does not alter their special objectives. So, let us take go even further: even were the Consumer Protection Law, in its entirety, comprised by the Civil Wrongs Ordinance, and even if it were subject to sec. 3 of the Civil Wrongs Ordinance, according to which “the matters enumerated hereinafter in this Ordinance shall constitute civil wrongs,” even then we would have to interpret and apply these special torts in accordance with their consumer purposes, which, in general, are not identical to the purposes of the other torts established under the Ordinance.

6.         Consider, for example, sec. 4 of the Civil Wrongs Ordinance, which states:

 

                        Trivial Act

4.      An act shall not be considered a civil wrong where had it been a repeated act it would not lead to establishing an adverse claim, and where a person of ordinary sense and temper would not complain with regards to it.

 

Obviously—and so it has also been held – sec. 4 expresses the traditional doctrine of de minimis in the context of tort law. See: CA 3901/96 Ra’anana Local Planning and Building Board v. Horowitz, IsrSC 56 (4) 913, pp. 928-929, and the citations there. Adopting the approach that would apply the doctrines of the Civil Wrongs Ordinance – as is and in in their entirety – to the consumer causes of action defined in sec. 31 (a) of the Consumer Protection Law would require that we apply sec. 4 of the Civil Wrongs Ordinance to those causes of action. One will readily realize that such an approach would entirely nullify the primary purpose of the consumer class action, which is of particular importance specifically in regard to cases in which each individual claim is, itself, de minimis, and “a person of ordinary sense and temper would not complain with regards to it”. We would note that the facts of the case before us in this Further Hearing constitute a good example of such a situation. Applying the traditional de minimis doctrine to class actions would, therefore, lead to the result that most legitimate potential plaintiffs would have no personal cause of action, inasmuch as under the plain language of sec 4, the act (or omission) of the dealer who harmed them “shall not be considered a civil wrong”. The conclusion to be drawn from this is that not only is it necessary to adapt the de minimis doctrine of sec. 4 of the Civil Wrongs Ordinance to collective consumer protection before applying it (and compare: the Tnuva case, ibid., at para. 11 of the opinion of Naor, J.), but that the same is true for all the other doctrines of the Ordinance as a precondition to applying them to the consumer causes of action and to consumer class actions.

7.         My colleague Justice Cheshin concludes from the absence of any provision to the contrary in sec. 31 (a) of the Consumer Protection Law, that there is no alternative to applying the doctrines of the Civil Wrongs Ordinance to a consumer tort under sec. 2 (a) of the Law. As he states:

 

Indeed, nothing in the language of sec. 31 (a) of the Law would show that the tort under sec. 2 (a) removes it from the fundamental principles or doctrines of the Civil Wrongs Ordinance … On the contrary, the Law refers us clearly and unreservedly to the Civil Wrongs Ordinance. Section 2 (a) situates itself as one of the native torts of the Civil Wrongs Ordinance, and it would therefore appear that the fundamental principles and doctrines of the Civil Wrongs Ordinance apply, in their entirety, with the same effect and force with which they apply to the native torts.

 

With all due respect, I am of the opinion that even in the absence of an express provision to that effect in sec. 31 (a) – and I question whether such an express provision is needed at all – the application of traditional tort law to consumer causes of action can and should be restricted. The need for such restriction is clearly required by the substantial material difference between the purposes of consumer torts and of the regular torts. Indeed, one can understand the problem and discomfort involved in new and different interpretation of first principles. My colleague Justice Cheshin explained it well in the case before us:

 

Moreover, not only is the language of the Law crystal clear, but efficiency also points to the solution presented by the Law. Inasmuch as the acts and omissions external to the Ordinance are tortious in nature, it is but natural that we should employ the same traditional, familiar doctrines that tort law created and developed over so many years such that they have become foundational to the legal system.

 

However, despite the difficulty, it is unavoidable. Prof. Sinai Deutch (the attorney for the Israel Consumer Council in this Further Hearing) addressed this in an article that referred to the case under appeal:

 

The Consumer Protection Law is an innovative law, inasmuch as Israel’s highest court is first addressing its interpretation only at the present time. It may also be reasonably assumed that, in the early stages of its interpretation, there will be some fear of disconnection from firmly-rooted, ancient legal traditions. However, it is the understanding of the importance of the subject that must lead to reconsideration in this regard…there is no reason to apply the rules of civil law in their entirety to the Consumer Protection Law. Independent interpretation of the Consumer Protection Law’s legal terminology is needed in accordance with its purpose and objective (S. Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” (2 Moznei Mishpat 97, 126 (2001-2002) (Hebrew) (hereinafter: “Consumer Class Actions”).

 

Even Justice Cheshin would appear to agree that the traditional tort doctrines are not “revealed truth”. He expressly notes that, “Since we are concerned here with transplanting a new organ into the body of the Civil Wrongs Ordinance, we must closely examine whether a particular doctrine of the Ordinance is compatible with the foundations, essence and structure of the new tort”. But after stating that – and referring to the sources he cited – he did not set out to “closely examine” whether the traditional doctrines were indeed compatible to the cause of action of consumer deception, but rather assumed their compatibility as if it were self-evident.

 

The Compatibility of the Tort-Law Causation Doctrine to a Class Action for Deceptive Advertising

8.         As we have seen, the traditional doctrines of tort law must be adapted to the special purposes of the consumer class action. In regard to the case before us, it will suffice to focus upon the adapting of the doctrines of tortious causation to the special needs of a class action filed in regard to the mass publication of a misleading advertisement.

            I refer to the “doctrines of causation” in the plural, inasmuch as even in traditional tort law, the subject of the existence of a causal connection between the tortious conduct and the harmful result is subject to a number of doctrines, which occasionally compete and occasionally operate in unison (see, in general: I. Englard, “Causal Connection” in The Law of Civil Wrongs – General Principles of Tort Law, G. Tedeschi, ed. (2^nd ed., Jerusalem, 1977) 178; I. Gilead, “Causation in Israeli Tort Law – A Reexamination,” 14 Mishpatim 15 (5744) (Hebrew)). The need for creating different doctrines of causation derived from the need to contend with different aspects of a complicated and complex phenomenon that earned the nickname “indeterminate causation” (see: A. Porat & A. Stein, Tort Liability under Uncertainty (2001); A. Porat & A. Stein, “The Evidential Damage Doctrine: A Positive Analysis of the Law,” 21 Iyunei Mishpat 191 (Hebrew); A. Stein, “How to Resolve the Indeterminate Causation Problem that Arises in Medical Malpractice Litigation,” 23 Iyunei Mishpat 755 (Hebrew)).

            Traditional tort law proposes practical solutions for situations of “indeterminate causation” in which it would be too much to ask the plaintiff to prove positively the existence of a direct, factual causal connection between the tort of the defendant and the injury incurred, under the “but-for” test (i.e., the “sine qua non test”). Under such circumstances, when the plaintiff proves the defendant’s tortious behavior, that his injury, and the possible existence of a factual causal connection between the tort and the injury, then tort law may come to his aid and fill in what is missing for proving the existence of a factual causal connection. This legal “aid” may be expressed in various recognized ways: by transferring the burden of proof to the defendant, who will be required to prove the absence of a causal connection; by establishing presumptions against the defendant in regard to various aspects of the causal dispute; by imposing liability upon “joint tortfeasors”, where their relative part in causing the injury is unknown; in defining an injury as an “indivisible injury” that the tortfeasor must bear in its entirety, even if he caused only part; and by recognizing alternative tests to the but-for test for factual causation (such as the “common man” test or the “substantial factor” test. See: Englard, ibid., at pp. 193-195; Gilead, ibid., at pp. 17-19; Porat, ibid., at p. 376). It should also be noted that new doctrines have been added to the traditional doctrines of causation over the last few years, which primarily serve to circumvent the problems and injustices that are sometimes involved in the strict application of the traditional but-for test. Among these new doctrines, some of which have already been adopted (in various contexts) by the case law, one can find the doctrines for probabilistic damages for the loss of a chance of recovery, or for loss of chance and creation of risk, and for MSL (Market Share Liability) suits; as well as the doctrine of mass liability and the doctrine of evidential damage (see the survey in Porat & Stein, in the second, fifth and seventh chapters of their above book).

9.         We can conclude from the above that even in traditional tort law – and all the more so in modern tort law – the but-for test is no longer the answer to everything. In many cases – where the purposes of tort law justify it – the right of a plaintiff to damages is recognized even when he is unable to show that no injury would have been caused but for the tort of the defendant. Against this background we may more sharply ask why the majority in the Appeal, and why Justice Cheshin in this Further Hearing, found it necessary to be so demanding in regard to the proof of reliance of Bezeq’s customers upon the misleading advertisements, as part of their insistence upon the demand for a causal connection in accordance with the but-for test. As the Chief Justice stated in the Appeal (IsrSC 55 (4) 584, 622-623), in referring to the approach of Justice Strasberg-Cohen:

 

As we know, the meaning of the factual causal connection is that but for the tort, the injury to the victim would not have occurred. This is the sine qua non test. In the matter before us, the factual causal connection requires that but for the prohibited deceit, the consumer would not have talked on the telephone in the manner that he actually did. Such a causal connection occurs only if the consumer relies upon the misleading character of the advertisement. If the consumer does not rely upon the misleading advertisement, then the extent of his phone calls is not influenced by the content of the advertisement. My colleague emphasizes the creation of the representation, but she does not prove the existence of the factual causal connection between creating the representation and the occurrence of the injury. In the absence of a factual causal connection, there is no possibility of examining the existence of a legal causal connection, which is based upon the factual background of the factual causal connection.

 

Justice Cheshin also notes – although in less emphatic language – that:

 

…there was no causal connection between Bezeq’s advertisement and the “harm” caused to Barazani, if only by reason of the fact that Barazani never read that advertisement, and therefore, in any event, he is not entitled to sue on that basis. Indeed, Bezeq committed a tort by publishing the advertisement – that is the basic assumption in this case – but the mere existence of a tort is insufficient to entitle a person to redress. That person must show that due to that tort, he incurred harm, and that precondition was not met in regard to Barazani.

 

What derives from this approach is that in order to ground a (personal or class) action for pecuniary damages for misleading advertising, the plaintiff must show that he relied upon the misleading advertisement, which led to a direct change in consumer conduct. With all due respect, I am of the opinion – which I will explain below – that this demand is not necessarily required by the language of the Law. The question, then, is what is the purpose of this demand, and what rationale does it serve? To this, I have found no convincing answer in the opinions of my honorable colleagues. It would appear that their only explanation is that class actions are a powerful tool, comprising many dangers, and should, therefore, be used with caution (see, in this regard, the opinion of my colleague the Chief Justice in the Appeal, at p. 620). That is, of course, undeniable. But defining Barazani as not being a “proper plaintiff” for a class action is based solely upon the finding that he does not meet the reliance requirement. Even if that finding were well founded – and I have questioned that from the outset – I cannot agree that Barazani’s non-reliance upon Bezeq’s misleading advertisement disqualifies him as a representative plaintiff in a class action.

10.       A requirement by which a consumer can acquire a cause of action only if he can prove that he relied upon the misleading advertisement and changed his consumer conduct as a direct result would frustrate ab initio the possibility of many potential suits based upon a cause of action of consumer deception by mass advertising. The reason for this is that in many such cases the requirement cannot be met. Few consumers can recall the details of the commercial advertisements to which they are exposed, directly or indirectly, and few consumers can honestly testify that were it not for the exposure to a particular advertisement, they would not have acquired the advertised product or service, or would have used it to a lesser extent. After all, it is well known that modern mass advertising is often intended to influence consumers in strange and mysterious ways, and not necessarily by speaking directly to their consumer consciousness. Often, consumers are not even aware of being influenced by an advertisement, neither when they are exposed to it, nor after the advertisement is supposedly forgotten. And we need hardly mention that these assumptions are particularly true in regard to advertisements in regard to matters of little consequence, which are the ones that hold the primary potential for consumer class actions. Thus, the procedural solutions that Justice Cheshin mentions in paras. 54-55 of his opinion – such as that each consumer prove his right to a remedy by means of an affidavit – cannot be deemed practical.

            Moreover, in many cases of consumer deception through advertising, it can be established positively that, as a result of the advertisement, there was no direct change in modes of consumer conduct of the sort that my colleagues require for “reliance”. The case before us provides a good example of this. The deception in Bezeq’s advertisements concerned a fraction of a meter unit – of several seconds – at the end of every international phone call. Would anyone imagine that a Bezeq customer, assuming he were aware of the deception, would put down the phone precisely at the end of a meter unit in order to avoid being charged for fractions of a unit as for whole unit? The obvious conclusion is that Bezeq’s deceptive advertising did not lead to customer reliance upon the content of the advertisement, and certainly did not lead to a direct change in the modes of consumer conduct. The change that the advertising may have caused in consumer consciousness – and conceivably the one that Bezeq sought to achieve by the said advertisement – was a change of a general nature in the perception of Bezeq as a reliable, fair company that charges only for the services it provides. Such a change in the advertiser’s reputation could cause – and we may assume that it indeed causes – a change in consumer consumption habits, which may be expressed in generally greater frequency of use of the advertised product or service, as well as other products or services of the advertiser. But this is an indirect – and generally unconscious – change in consumer consumption habits. It is doubtful that any of the consumers whose consumption habits were indirectly influenced by the advertisement could prove that he relied upon the advertisement, and the extent of the advertisement’s influence upon his consumption habits. But the advertiser benefits from its deceptive advertising, which indirectly led to an increase in its market share. The additional profits that the advertiser realizes from the increase in its market share – which also involve unjust enrichment at the expense of both its customers and its competitors – are, truth be told, the true injuries inflicted upon the consumer interest as a result of the misleading advertisement. It is only because those injuries are impossible – or, at least, are very difficult – to measure and quantify that the examination typically focuses only upon the direct damages that my colleague Justice Strasberg-Cohen refers to as “price differentials”. As a result, insisting upon reliance in regard to misleading mass advertising would severely impact upon the very possibility of initiating class actions for misleading advertising.

11.       In his opinion in the Appeal, the Chief Justice noted the possibility of creating a “presumption of reliance” in favor of consumers, but left the matter open for future consideration (ibid., at p. 621). In his opinion in this Further Hearing, Justice Cheshin adopted a similar position. He also notes that “we should broadly interpret the concept of reliance such that it comprises more than just direct reliance”. These solutions present something of a desirable development, but I fear that their practical advantage is limited. Proving a consumer’s reliance is no simple task, and it is sometimes impossible. That is not the case in regard to an advertiser’s ability to contradict the presumption of reliance. It is sufficient that it ask each of the consumers if and how he would have changed the manner of his use of the advertised product or service were it not for the misleading element in the advertisement. At the very least, those consumers who used the product or service prior to the misleading advertisement will find it very difficult to answer that question. We can almost assume that most, if not all, will have to answer in the negative, or that they do not recall the advertisement or its details, or that they do not know the answer, and the dealer will be deemed to have met the burden of proof and refuted the presumption of reliance. On the other hand, it is clear that my colleagues do not suggest creating an absolute presumption of reliance in favor of consumers. Such a presumption would greatly improve the chances of success of a consumer class action, like that before us, but would entirely nullify the requirement – to which my colleagues cling – of a factual causal connection between the misleading advertisement and the injury incurred by the consumers.

12.       It should be obvious that the requirement that a misleading advertisement lead to a direct change in modes of consumer behavior – which is what the “reliance requirement” demands –not only does not advance the special purposes of the consumer class action. Let us return to the seven objectives as set out by Dr. Orna Deutch: levelling the playing field; reinforcing personal autonomy; the concept of consumer sovereignty; protecting the rights to prosperity and social welfare; ensuring the credibility of the local market; and maintaining trust in the social order. Clearly, the demand for reliance advances none of these objectives. Rather, it leads to negating many consumer causes of action that might advance those objectives. In practice, the demand for reliance undermines those objectives and frustrates their realization. The same is true in regard to the special purposes of consumer class actions. As Justice Procaccia pointed out in the aforementioned Tnuva case, the class action “serves the interest of the individual by providing a remedy for injury in circumstances in which filing suit would not be worthwhile without the other members of the group. It serves the public interest that strives to deter large economic institutions from violating the law, and that seeks to achieve more effective enforcement of behavioral norms intended to protect citizens and prevent the exploitation of their weakness as individuals”. In those case in which the personal injury of each of the individuals is very small, one might say that there is no real importance to the personal interest involved in the class action. The primary importance of such cases is focused upon the public interest. But the public interest in enforcing law and integrity in the consumer field has little in common with the reliance requirement, and certainly not with requirement of a direct, factual, causal connection between the misleading advertisement and the harm to the consumers. The public interest focuses primarily on the violation itself and the possible harm to the public as a whole, and not upon the question of whether there was an actual causal relationship between the violation and the harm caused to some consumer. We thus find that strict observance of the demand for a causal connection – like the requirement of proof of reliance – will lead to the frustration of many consumer class actions, and the public interest that they were meant to serve suffers.

 

Constructive Reliance and a Consumer Causal Connection

 

13.       From the perspective of the laws of consumer deception in advertising, the main thing is the very existence of an advertisement with the potential to mislead in regard to a material aspect of a transaction, which the advertiser intended to reach as large a public as possible, and influence modes of consumer behavior. Once the potential to deceive is proven, and once it is proven that the advertiser indeed intended that the misleading advertisement reach consumers and influence their consumer behavior, it is only right that we hold that there is a basis for the existence of constructive reliance by the consumers upon the misleading advertisement. The question of whether the dealer actually achieved its goal – i.e., that the misleading advertisement indeed reach its intended audience and actually mislead it – is of limited importance. This expresses a central difference between the law of consumer deception and general tort law (as opposed to certain particular torts, such as the torts of fraud, deceit, etc.). The normal starting point in tort law is that the tortious event was not planned by the tortfeasor, and that the tortfeasor was not interested in its occurrence. The assumption is that potential tortfeasors do not have an interest in causing injury, and that they generally have an interest in preventing injury, unrelated to the risk of being required to pay damages to the victims. From this, inter alia, we derive the principle that tort law is not intended to punish the tortfeasor, but rather to compensate the victim for his loss. For the same reason, tort law does not impose liability for the mere creation of a danger, which, in and of itself, is not deemed an injury (for a broader discussion, see: A. Porat, "Compensation for Risk-Creating and Loss of Chances," 23 Iyunei Mishpat 605 (2000) (Hebrew)). That is not the case in regard to consumer deception. The typical situation that these laws address is one in which the supplier of a product or service who publishes a misleading advertisement is interested in and intends to cause the consumer injury, inasmuch as, from its perspective, it reaps direct profit from that injury. Therefore, the incentive to cause harm in the area of consumer deception is inestimably greater than the incentive to invest in preventing harm, which is the typical fear in the field of torts. Experience shows that the fear that consumer deception may harm the reputation of the advertiser is often distant and ineffective. In any case, when it is shown that the advertiser intended to mislead, the necessary conclusion is that, at least in that case, the said fear was not sufficient to deter. Indeed, the temptation to deceive consumers – as a means for increasing an advertiser’s profits – is not inconsequential. The purpose of the tort regarding misleading advertising does not focus upon the harm caused by the advertisement to a particular consumer, but rather upon the existence of a potential for the causing of harm to the consumer public, and the advertiser’s intention to cause that harm in order to reap profits. Conceivably, that was the reason that, in defining the prohibition of deceit in sec. 2 (a) of the Consumer Protection Law, the legislature chose the phrase “liable to mislead”. Moreover, another interpretive conclusion that derives from the definition of the tort is that the legislature also intended to create a unique definition of the causal connection required for consumer deception. With all due respect, assuming that this wording is relevant only to actions for declaratory and preventative remedies renders the definition of a publication “liable to mislead” as a tort nearly devoid of all practical content, inasmuch as it is hard to imagine that any consumer would be interested in filing a suit for the sole, ultimate purpose of merely obtaining declaratory or preventative relief.

14.       The conclusion required from the distinctions I addressed above is that the laws of consumer deception must contend with the reliance requirement and the issue of causation differently than tort law. Instead of the requirement of personal reliance by each and every consumer – which is the requirement of traditional tort law – we should adopt a doctrine that recognizes “constructive reliance” of all the consumers at whom the advertiser directed its misleading advertisement. And rather than the requirement of proof of a factual causal connection between the misleading advertisement and the injury of each and every one of the plaintiff consumers, we should adopt a doctrine that recognizes a “consumer causal connection” that would be derived from the combination of a potentially misleading advertisement and the intention of the advertiser that the advertisement reach the consumers, mislead them and thereby influence their behavior. The elements of the suggested formula for establishing a consumer cause of action overturn the accepted formula for a cause of action in tort to some degree. Whereas in an action in tort, meeting the reliance requirement is a precondition to the existence of a causal connection, in a consumer action, the existence of constructive reliance is derived as a necessary result of proof of the elements of the consumer causal connection. But this reversal does not detract from the completeness of the formula, in all of its elements. And note: adapting the tort doctrines to the consumer tort does not contradict the legislative imperative. On the contrary, such an adaptation is part of an interpretive process that makes it possible to advance the special objectives of the consumer cause of action in general, and of consumer class actions in particular, and as I shall demonstrate below, does not contradict the language of the law.

 

A Pecuniary Remedy for Consumer Deception

 

15.       When can consumers obtain a pecuniary remedy due to a potentially misleading advertisement? In my opinion, it would be proper to establish that consumer deception gives rise to a (personal and class) cause of action for pecuniary relief upon the fulfillment of three conditions: a violating advertisement, injury, and a “consumer causal connection”. As opposed to this, we should also recognize a defense that would generally be available to the advertiser if it be found that the consumer-plaintiff knew the actual facts, and the violating advertisement could not, therefore, negatively influence his behavior.

            The first element (the element of breach) is fulfilled upon proof of a breach of one of the prohibitions upon deceit established under the Consumer Protection Law for which one may sue for damages under sec. 31 (a) of the Law. For our purposes, the relevant prohibition is that established under sec. 2 (a) of the Law, according to which even an advertisement that is “liable to mislead” in regard to a material element of a transaction is deemed a violating advertisement. And note: once it is proved that the advertisement is liable to mislead, there is no further need to address the question of actual deceit.

16.       The second element is that of injury. While achieving the consumer objectives could suffice with the potential for causing harm to the consumer interest that is presented by an advertisement liable to mislead, in the absence of proof of injury, damages cannot be awarded to consumers claiming to have been injured by the violating advertisement. That is the import of the reference of sec. 31 (a) – titled “Compensation” – to the Civil Wrongs Ordinance. That is also the import of sec. 31 (a1), which states: “Consumers injured by the wrong are entitled to remedies for the wrong and so are dealers, who in the course of their business are injured by deceit, as said in section 2” (for a different view, see M. Deutch, Commercial Torts and Trade Secrets (2002), p. 49). This is simply the legislature’s decision to limit the scope of potential plaintiffs to that group of consumers and dealers who were actually injured and that, therefore, have a direct interest in suing and obtaining a pecuniary remedy. However, the injury that the plaintiffs must prove is not necessarily the injury that each victim can prove by direct evidence. Provable injury caused to a group of consumers can also entitle the group to global damages from the advertisers without a need for the court to determine the personal injury of each member of the group (see, in this regard, reg. 9 (c) of the Consumer Protection (Procedures in regard to a Class Action) Regulations, 5755-1995, and paras. 13-20 of the opinion of Naor, J. in the Tnuva case, above). We should also recognize the possibility that bringing evidence of the profit that accrued to the advertiser from the misleading advertisement be deemed sufficient proof of the injury to the injured consumers. My assumption is that, on the basis of such evidence, the court can award pecuniary damages, which are not necessarily restitution, to the injured consumers. As we have stated, the injury to the consumers from a misleading advertisement constitutes profits for the advertiser, and evidence proving the extent of that profit would therefore prove the extent of the injury. I would parenthetically note that, in my opinion, defining consumer deception as a tort does not detract from the victims’ right to sue for restitution, whether by force of contract (where the product or service was provided to the consumer in the context of a contractual undertaking), or upon a cause of unjust enrichment.

17.       The third element addresses the existence of a consumer causal connection. As explained above, I am referring to a causal connection adapted to the special objectives of consumer protection law – both personal and collective – and in the case before us, the special needs of the laws of consumer deception. Some form of causal connection between the breach and the injury is, indeed, required. That, as my colleagues have shown, is required by the Civil Wrongs Ordinance referred to by sec. 31 (a) of the Consumer Protection Law, and it is also required by sec. 31 (a1) of the Law, under which (as earlier noted) the right to relief is granted to one “injured by the wrong”. However, an examination of secs. 2 (a) and 35A (b) of the Consumer Protection Law reveals that the existence of a causal connection – required, as noted, by secs. 31 (a) and 31 (a1) of the Law – cannot be construed as identical to the requirement of the traditional causal connection of the Civil Wrongs Ordinance. Section 2 (a) expressly suffices with a publication that is “liable to mislead”, and does not require that there be actual deception, while sec. 35A (b) of the Law – treating of “class actions” – states that “where the cause of action is an injury, it is sufficient that the plaintiff show that injury was caused to a consumer”. In addressing the meaning of sec. 35A (b), Dr. Orna Deutch writes:

 

The legislature provided a certain leniency in regard to consumer actions in that when injury is an element of the cause of action (such as in the tort of negligence), there is no need that the plaintiff show that he himself incurred an alleged injury, but rather it is sufficient that an injury was caused to some consumer (O. Deutch, in her abovementioned book, at p. 244).

 

I am of the opinion that we may learn from sec. 35A (b) that, for the purpose of filing a class action, it is sufficient to show the existence of a consumer injury, and there is no need to show a factual causal connection between the breach and that injury. This construction accords with the special purposes of the consumer class action, which I addressed above, which are also not consistent with the requirement of personal reliance.

18.       It would appear that in regard to the question of the existence of a causal connection between consumer deception and the injury caused to the victim, secs. 2 (a) and 35A (b) of the Law contradict secs. 31 (a) and 31 (a1) of the Law. Whereas the latter (which are of a “general” nature) appear to reflect a requirement of a causal connection, it would appear that one may understand from the former (which are of a “specific” nature) that no causal connection be proved. However, I do not believe that the contradiction between the general provisions and the specific provisions in this matter can be resolved by preferring the specific provisions (by virtue of their being lex specialis). In the matter before us, we should prefer the interpretive principle that requires that we find a way to harmonize the provisions so that they may coexist. The formula that I suggested above for a “consumer causal connection” accords well with the appropriate interpretive approach. The requirement of a consumer causal connection – based upon a merger of the requirements for injury together with potential causation and intention to injure – prevents the possibility that liability might be imposed for the mere creation of a danger by a tortfeasor acting in good faith, and thereby gives proper expression to the purposes of the general provisions. At the same time, this formula grants preference to the consumer objectives of the specific provisions. That is expressed in the replacement of the requirement for an actual factual causal connection between the misleading advertisement and the injury under the but-for test with a requirement that suffices with proof of a potential factual causal connection (similar to the concept of apportioning tort damages based upon probability), together with proof that the advertiser intended to create an actual factual causal connection. In other words, meeting the demand for a consumer causal connection would not require proof that the advertisement actually misled the victim and caused his injury, and not even that he was aware of the advertisement and relied upon it in some way, but rather it would suffice to show that the advertisement was liable to mislead the victim and cause his injury, and that the advertiser intended that.

            It would appear to me that, in the context of the prohibition of consumer deception, the requirement of a consumer causal connection also reflects the lex ferenda. Adoption of the said formula would advance the special objectives of consumer protection law and of consumer class actions, and would ensure protection of good-faith advertisers who do not intend to mislead and cause harm when the factual causal connection between their advertisements and the injury is in doubt (needless to say, when the factual causal connection is not in doubt, nothing would prevent the filing of a class action even for injury resulting from an advertisement that was not intended to mislead, but that nevertheless, actually misled). I would like to emphasize that even in the absence of secs. 2 (a) and 35A (b), which support my suggested interpretation, the tort requirement of a factual causal connection can and should be made more flexible and should be adapted to the special needs of consumer deception. I have already pointed out that such flexibility has been adopted in a variety of ways in tort law itself, for the purpose of realizing appropriate objectives of tort law. Thus, for example, Israeli law recognized the possibility of awarding tort damages based upon probability in cases in which it was not proved – as would be required by the balance of probabilities – that but for the tortious conduct of the defendant, the plaintiff would not have incurred injury. This was held in regard to the loss of a chance of recovery (see the landmark case, CA 231/84 Histadrut Health Fund v. Fatach, IsrSC 42(3) 312., which has been followed repeatedly in later cases), as well as in regard to not obtaining informed consent for medical treatment (CA 4384/90 Vaturi v. Leniado Hospital, IsrSC 51 (2) 171, 191-192, and compare CA 2781/93 Daaka v. Carmel Hospital, Haifa, IsrSC 53 (4) 526 (English translation:  http://versa.cardozo.yu.edu/opinions/daaka-v-carmel-hospital). Having found that it is possible to arrive at a desired result by means of interpretation even within the confines of the Civil Wrongs Ordinance, that should be the case a fortiori in the framework of the Consumer Protection Law, whose special objectives justify and require that we not subject it to the regular doctrines of tort law.

19.       On the other hand, as stated, a defense should be allowed to an advertiser on the claim that the victim was actually aware of the true facts of the situation and, therefore, the violating advertisement could not have negatively affected him. The reason for this is that the prohibition upon consumer deception is not intended to protect such victims. The prohibition upon consumer deception is intended to protect consumers who are liable to be misled, and not those who cannot be misled. In effect, this can be seen as an aspect of the good-faith duty that applies to every person seeking pecuniary redress for consumer deception. After all, it would not be appropriate to obligate a supplier of a product or service, who published a misleading advertisement, to compensate a person who was not a potential victim of the deception, and an action for compensation in such circumstances might be deemed to constitute abuse of process.

            The said defense must be positively proven by the advertiser. In other words, in order to meet the burden of proof, uncertain answers like “I don’t know” or “I don’t recall” to questions put to the consumer-plaintiffs will not suffice. It may be assumed, therefore, that an advertiser may make effective use of this defense primarily in response to suits by “special” plaintiffs, such as its employees, commercial competitors, or other experts in the relevant field, regarding whom it would be possible to bring evidence in regard to the state of their knowledge at the time they acquired the service or product.

 

The Matter of Barazani

 

20.       At the outset I noted that the approach of the majority in the Appeal and of Justice Cheshin in the Further Hearing focuses overmuch upon Barazani himself, and too little upon the large pubic of victims of the misleading advertisement whose case Barazani sought to press. A perfect expression of this can be found in the very establishing of the Archimedean assumption that Barazani was not exposed to the misleading advertisement and did not rely upon it, and that this is sufficient for the conclusion that Barazani is not an “appropriate plaintiff”. Of course, I do not disagree that a precondition for certifying a class action is that the representative plaintiff have a personal cause of action against the defendant. That is expressly required by sec. 35A (a) of the Consumer Protection Law. But, in my view, we should not exaggerate the importance of that condition. In ascertaining whether it has been met, the court need not split hairs in its examination of the details of the personal suit of the representative plaintiff, but should suffice with facial proof that he has a personal cause of action, and that we are not concerned with a person who is merely hitching a ride on someone else’s dispute. The court should concentrate its examination upon two other questions: Is the subject of the suit appropriate to a class action? And is the representative plaintiff qualified and equipped to properly represent the interest of the public on behalf of which he seeks to sue? These considerations are of special importance in a consumer class action. Dr. Orna Deutch addresses this (in her abovementioned book, at pp. 245-246):

 

The personal interest of the injured plaintiff who files the class action is, in any case, negligible in relation to the amount of the suit for the entire class. In a realistic view of the significance of the suit, it is of no consequence whether the personal suit of the victim constitutes a negligible part of the entire suit, or is actually nonexistent. In both cases, he presumably “defends the honor” of the entire group, and actually advances a different personal interest, which is the benefit that accrues from his representative standing in the suit, which is expressed in the special damages and compensation awarded to the plaintiff for his efforts. Why condition standing in the suit upon a formal demand for the existence of such minimal involvement on his part?

It would seem that it is, indeed, difficult to justify the said requirement. What must be ensured is that the representative of the group be a proper representative who can bear the burden of conducting the suit both in terms of its material and its costs, and that he not have a conflict of interests. However, there is nothing in common to these requirements and the question of whether the plaintiff was personally harmed by the act at issue. His personal injury represents but an insignificant part of the whole suit. In any case, the matter pursued is a “public suit”, while the significance of the personal suit of the plaintiff is but symbolic. In that light, I think it proper to refrain from this demand in its entirety.

The reason given for this demand, which I noted above, according to which if the plaintiff has no personal cause of action, the proceedings will focus upon the personal defense against the plaintiff, and the matter of the entire group will be sidelined, begs the question. If the law establishes that the question of the existence of a personal cause of action is irrelevant, then the defenses against the individual plaintiff are irrelevant, and the proceedings will, in any case, focus upon the entire class of plaintiffs.

In the consumer framework, the requirement of a personal cause of action leads, in practice, to one of two results: either no appropriate plaintiff will be found who is willing to “contribute” his cause of action to the proceedings in the service of the general public, or, if such a consumer be found, he will often be nothing more than a kind of “straw man” backed by some commercial group organized for the purpose of obtaining the compensation attendant to succeeding in a class action.

And indeed, the demand for the existence of a personal cause of action in the consumer context has drawn criticism in the legal literature.

(and see: M. Bar-Niv, (Bornowski), “The Limits of the Consumer Class Action,” 19 Iyunei Mishpat 251, 257-258 (1994) (Hebrew).

 

21.       On point, I am of the opinion that Barazani showed that he had a prima facie personal cause of action – and most important – that Bezeq’s misleading advertisement, upon which his suit was based, was appropriate for a class action. Indeed, Barazani did not claim that he had been exposed to the advertisement, but he also did not state the opposite. In fact, in the proceedings before the District Court – which did not focus upon this question – Barazani was never asked if he had been exposed to the advertisement. Under these circumstances, we may, and should, assume that Barazani’s situation is no different than that of most of Bezeq’s other customers. Whether the consumers were exposed to the advertisement and remember it, or whether they learned of the matter of the advertisement at a later stage, it is clear that it would only have aroused their attention when it was discovered that the advertisement was misleading, and that as opposed to what Bezeq had promised its customers, it continued to charge them for whole meter units. It  is clear from the apparent facts that the advertisement was intended to influence Bezeq’s customers to increase their use of the advertised service, and that would appear, on its face, to lead to a conclusion that the misleading advertisement could justify recognizing the concrete reliance of all the customers to whom Bezeq directed its advertisement.

            The suit that Barazani submitted to the court was appropriate, by its nature, to be addressed as a class action. We are concerned with a large community of Bezeq subscribers whose accounts were charged for international telephone calls at a rate that was higher than the rate that Bezeq was entitled to charge according to its advertisement. Addressing the class action on the merits would allow the court to decide whether Bezeq’s advertisement indeed comprised the elements of a misleading publication that warranted pecuniary relief. If the court were to answer this question in the affirmative, it could easily determine the extent of direct injury. Proving the direct injury is not contingent upon the question of whether the customers made greater use of the specific service as a result of the advertisement, but upon the difference between the amounts the customers who used the service were charged and the amounts that Bezeq was entitled to charge its customers based upon its advertisement. This can easily be determined, inasmuch as Bezeq undoubtedly has all of the necessary data for calculating the difference in regard to each customer, and I cannot imagine that Bezeq would seek to conceal that information from the court.

22.       One last comment in conclusion. While the District Court decision that was the subject of the Appeal dismissed Barazani’s request to permit him to file a class action for pecuniary relief, it accepted his alternative request to file a class action for declaratory relief. However, the majority in the Appeal granted Bezeq’s counter-appeal and rescinded the permission granted to Barazani to submit the suit for declaratory relief. In stating the reasons for that decision in the Appeal, the Chief Justice wrote:

 

Should we not recognize Barazani’s ability to serve as a representative plaintiff for declaratory relief stating that Bezeq’s advertisement was “liable to mislead” a consumer? This question raises several problems, which can be left for future consideration for the following reasons: In his complaint, Barazani defined the members of the group as the community of Bezeq customers who paid a higher fee than that advertised by Bezeq, and as a result incurred monetary harm. Barazani does not “properly represent the interests of all the members of the group” (sec. 43B (4) of the Law), inasmuch as he did not himself suffer monetary harm as a result of the deception. Therefore, Bezeq’s we should grant the appeal, and find that Barazani is also not an appropriate representative plaintiff in regard to the declaratory remedy.

 

Was it proper to deny Barazani the limited permission granted him to file a class action for declaratory relief? The answer to this question – that Justice Cheshin did not address in his opinion – must, in my opinion, be no. After all, even according to the approach of the Chief Justice in the Appeal, Barazani has a personal cause of action against Bezeq because its advertisements were “likely to mislead” him, in which framework he could have petitioned for non-monetary relief, such as a restraining order. The basis for denying his request to file his personal suit for declaratory relief as a class action could accord with the opinion of the majority in the Appeal if there were another representative plaintiff before the court – who met the reliance requirement and even suffered monetary harm as a direct result of the deception – who might represent the interests of the consumers better than Barazani. But I fear that such was not the case. To date, no such alternative representative plaintiff has presented himself before the court, and even if we were to assume that such a plaintiff may yet appear in the future, I fear that his suit may be denied in limine by reason of prescription.

 

Conclusion

 

23.       Subject to the above, I concur in the opinion of my colleague Justice Strasberg-Cohen that the petition for a Further Hearing should be granted, and that the Petitioner should be allowed to file a class action, as requested.

 

                                                                                                            Justice

 

 

Justice Dalia Dorner:

 

            In my opinion, the Petition should be granted. The reason for this is that the Petitioner relied upon the misleading representations of Bezeq and was harmed as a result of that concrete reliance. In any case, all of the elements of the tort were present, and the Petitioner is an appropriate plaintiff for a class action.

 

The Legal Foundation

 

1.         The Consumer Protection Law, 5741-1981 (hereinafter: the Law), intervenes in contracts between unequal parties, and imposes an increased duty of fairness upon the stronger party – the supplier – toward the weaker party – the consumer. See LCA 8733/96 Langbert v. State of Israel, IsrSC 55 (1) 168 (hereinafter: CA Langbert), at p. 174. The Law is firmly anchored in established doctrines of contract law. See Sinai Deutch, “Consumer Contracts Law versus Commercial Contracts Law,” 23 (1) Iyunei Mishpat 135 (2000). The purposes of the Law – among them, reinforcing personal autonomy, advancing commercial fairness and the protection of market integrity – well accord with the freedom of contract, which requires the full realization of a true meeting of minds of the parties to a transaction. This freedom is infringed when the consumer is misled into believing that he is undertaking obligations under transaction conditions that are different from the actual ones. Moreover, the duties of the dealer clearly reflect the overarching good-faith principle of Israeli contract law, which justifies eroding the once accepted principle of caveat emptor. See Gabriela Shalev, Contract Law (2^nd ed., 1995), 221.

            The Law was intended to provide an additional layer of defense to the consumer public that is exposed to deception by means of well-developed marketing and advertising methods (see the Consumer Protection Law Bill, H.H. 5740 at p. 302). This is achieved both by augmenting the duties of suppliers, and by broadening the means available to consumers for enforcing their rights. These means include criminal offenses and civil causes of action, among then the tort prohibiting deceit in sec. 2 (a).

 

The Contractual Framework for the Relationship between Dealers ad Consumers

 

2.         Many consumer transactions are premised upon a significant amount of consumer faith in the suppliers. In the framework of such relationships, consumers are not expected to check, before purchasing a service, that they will be charged the declared price, and they can rely upon the suppliers not to charge more than that price. If the consumer should discover at a later date that he was overcharged, he can demand and receive a refund. That is well-established in the accepted contractual doctrines that require that if a supplier charge more than the correct, advertised price, the consumers will be entitled to a refund of the difference, as well as in the social reality grounded upon them, in which consumers actually tend to place their trust in suppliers without checking that every transaction conforms with the advertisements.

            A supplier’s advertisements concerning a specific price grants the consumers a right not to pay more. In any case, if the supplier charge a higher price, that would constitute a breach of contract that would entitle even consumers who were not exposed to the advertisement to a pecuniary remedy. That right can be grounded in the following three different ways.

            The first way sees a supplier’s advertisement of a price as an irrevocable offer to the public, which can be accepted by the objective performance of its conditions, while the dealer is bound by the advertised price, and makes the possibility of purchasing the product or service for a price that will not exceed it, available to the public.  See Daniel Friedman & Nili Cohen, Contracts, vol. 1 (1991) 182; Shalev, ibid., at p. 115. The consumers are not expected to check the price prior to the transaction. In any case, by accepting the offer, the parties agree to the advertised price. The supplier will be required to refund any additional charge to the consumer.

The second way sees the contract as comprising an implied term that requires the supplier not to charge a consumer more than the advertised prices. Such a term is required by the expectations of the parties. Overcharging constitutes a breach of that term.

The third way classifies the said overcharging, particularly where it concerns consumers who were not exposed to the advertisement, as a bad-faith performance of the contract.

3.         It is on the basis of this legal conception, independent of the precise manner of its grounding, that consumers actually behave in practice. Typical Israeli consumers do not check, and are not expected to check, that the prices they are charged for each and every product in the supermarket are identical to the price printed on the product, and certainly do not check, and are not expected to check, that they received the discounts that were advertised by the chain from which they made the purchase. Consumers rely that they will be charged the prices, and credited with the discounts, as advertised. Similarly, the consumers of the telephone companies do not check the prices and current discount campaigns before each and every phone call, relying that they will be charged in accordance with the correct advertised prices.

 

Section 2 (a) of the Law

 

4.         When a supplier publishes notice that the price of a service is lower than a specific price, the consumer public to which the advertisement is directed – including consumers who are not exposed to the advertisement – acquires a right to receive the service at the price stated by the supplier. When consumers purchase the services of the supplier, they rely, in practice, on the fact that the price they will be charged will be the advertised price.

            That reliance exists regardless of whether the advertisement is innocent and clear or whether it is ambiguous and misleading (and see, for example, CA Langert, above). In both cases, the consumers acquire a right, and the suppliers are subject to an obligation, that they will not be charged more than the maximum price reflected in the advertisement, less the deceit, that they would be have been charged in accordance with the advertisement. The difference between the two types of cases regards the consequences that directly result from the advertisement. Only in the case of a misleading advertisement can one acquire those remedies established by law that do not require proof of injury, such as restraining orders. Moreover, only a misleading advertisement can be deemed tortious conduct. The potential to mislead must be evaluated at the time of publication, in accordance with the factual situation at that time. An innocent advertisement cannot be deemed misleading if its content is unambiguous, only as the result of the future conduct of the supplier. Otherwise, every advertisement would be deemed “liable to mislead”, as suppliers always have the ability to breach their obligations.

            However, a supplier commits a tort under sec. 2 (a) of the Law even in the absence of a misleading advertisement both when he presents a consumer with an invoice based upon a price that is different and higher than the advertised price, and when he charges a consumer – e.g., by means of a standing bank order – a higher price than that advertised. Such conduct constitutes an instance of doing “anything – by deed or by omission, in writing, by word of mouth or in any other manner … which is liable to mislead a consumer on any substantive element of the transaction”. That is so because when a supplier demands or charges a particular price, he makes a representation upon which consumers rely, and according to which, that is the correct price as advertised. The consumers are entitled to purchase the service at the advertised price, whatever it may be, and when they pay the supplier the amount in the invoice, or permit the supplier to charge their accounts, they do so on the basis of reasonable reliance that the supplier will not charge more than what was advertised. There is a kind of “integrity of the price” (see Basic v. Levinson, 485 U.S. 224, 247 (1988)).

            The difference between the amount the consumer should pay according to the advertisement and the amount actually charged is the injury caused to that consumer. This injury caused to the consumer is connected by a direct, factual connection to the tortious conduct of the supplier. The consumer paid the additional amount due to the supplier’s deceit. Had the supplier not breached its duty, and had it charged the consumer the correct price, the consumer would have paid the correct price and would not have been injured.

            Therefore, there is no need to prove exposure to the advertisement and conduct resulting from that advertisement in order to be entitled to damages for that deceit, and it is not required under current Israeli law. Other countries that have similar tort and consumer protection laws do not all have a similar requirement, particularly in regard to class actions. Compare, for example, Slaney v. Westwood, Inc. 366 Mass. 688 (1975); Amato v. General Motors Corporation, 463 N.E.2d 625 (1982); Carpenter v. Chrysler Corporation, 853 S.W.2d 346 (1993); Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972); Seth William Goren, “A Pothole on the Road to Recovery: Reliance and Private Class Actions Under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law”, 107 Dick. L. Rev. 1.

 

From the General to the Specific – Bezeq and Barazani

 

5.         Bezeq does not currently expect its customers – and certainly did not expect its customers at the time relevant for this case, when it was a monopoly – to use its telephone services only after checking their price. Thus, there is a “standing payment order” arrangement by which the consumer grants Bezeq the right to access his bank account, and the consumer absolutely relies upon Bezeq, while Bezeq des not usually append to a consumer’s bill the full details of phone calls charged. In doing so, Bezeq intends to create an equal arrangement for those who were exposed to the advertisement in regard to its fees and acted thereupon, and those who were not exposed to the advertisement and, therefore, did not act thereupon. As noted, according to the factual findings in the earlier proceedings, the meaning of the advertisement was simple and clear. Nevertheless, Bezeq made a different representation to the consumers, whether in the telephone bill or in charging their accounts, according to which the correct method for calculating was different from the method of calculation in the advertisement, and led to a higher charge. In doing so, Bezeq deceived the consumers, and committed the tortious act. There is no difference between this conduct by Bezeq’s and a case in which it would include the advertised method of calculation in the telephone bill, except that, in practice, it charged a higher fee.

            Considerations of “legal causation” also do not require reducing the tortious liability. Compare sec. 16 of the opinion of Justice Tova Strasberg-Cohen in this Further Hearing, and see FH 12/63 Leon et al. v. Meshullam Ringer, IsrSC 18 (4) 701, at p. 715 per Witkon, J.; CA 145/80 Vaaknin v. Beit Shemesh Local Council, IsrSC 37 (1) 113, at p. 145; and compare Itzhak Englard, Aharon Barak & Mishael Cheshin, The Law of Civil Wrongs, Gad Tedeschi, ed., (1970) 187.

            It should be noted that in light of the finding that the meaning of the advertisement – that Bezeq would not charge “for the time period not actually used for the call” – was clear, the conduct could not have constituted tortious conduct under sec. 2 (a) of the Law. But even if it had been found that the advertisement was misleading, there still would have been legitimate, concrete reliance by the consumer that he was being charged the correct amount as advertised, and therefore the elements of the tort would have crystalized on the basis of the tortious conduct committed in the charging.

            Barazani therefore has a personal cause of action against Bezeq. The existence of Barazani’s personal cause of action having been proved, whether or not he was exposed to the misleading representation, the path to representing the group in a class action is open to him.

            I, therefore, concur with the result recommended by my colleagues Justices Tova Strasberg-Cohen and Eliahu Mazza, according to which the Petition should be granted and the filing of the class action should be allowed.

 

                                                                                                                        Justice

 

The petition is dismissed in accordance with the majority opinion, and the judgment of the Supreme Court in CA 1977/97 is affirmed.

Given this 13 day of Av 5763 (11 August 2003).

 

The Chief Justice                                The Deputy Chief Justice                               Justice

Justice                                                 Justice (ret.)                                                     Justice

           

 

 

In the Supreme Court

LCA 3973/10

 

Before:                                                President (ret.) A. Grunis

                                                Justice U. Vogelman

                                                Justice N. Sohlberg

 

The Petitioner:                         David Stern

 

                                                v.

 

The Respondent:                     Verifone Holdings, Inc.

 

A motion for leave to appeal the decisions of the  District Court (Cent. Lod) of April 26, 2010 and August 25, 2011 in Class Action 3912-01-08 by President H. Gerstl

 

On behalf of the Petitioner:    Adv. Gil Ron; Adv. Aharon Rabinovitz;

                                                Adv. Jacob Aviad; Adv. Nadav Miara

 

On behalf of the Respondent:            Adv. Josef Ashkenazi; Adv. Moshe Yacov;

                                                Adv. Hanan Haviv

 

Judgment

 

President (ret.) A. Grunis:

1. A court in the United States approves a settlement in a class action being heard before it. According to the terms and conditions of the settlement, it applies to the members of the represented class who are located both in and outside of the United States. What effect does approval of the settlement have on a class proceeding on the same issue in Israel? This is the question before us.

The chain of events

2. The motion at bar for leave to appeal has undergone many twists and turns since being filed. I will, therefore, briefly describe the chain of events, focusing on the issue that is now to be decided. The Respondent, Verifone Holdings, Inc. (the Respondent) is a foreign company that was incorporated in the State of Delaware in the United States. The Respondent engages in the development of secure electronic payment systems and solutions. The Respondent’s shares are traded on the New York Stock Exchange (NYSE), and in the period between July 2006 and July 2010 they were also traded on the Tel Aviv Stock Exchange (TASE). In December 2007, the Respondent published immediate reports on the stock exchanges in the U.S. and in Israel, in which it was stated that errors had been discovered in its periodic financial statements in relation to the first three quarters of the financial year ended October 31, 2007. After this publication, there was a sharp drop in the value of the Respondent’s stock. These circumstances led to the filing of 16 actions in the United States against the Respondent by its shareholders, ten of which were motions for class certification, and six of which were motions for approval of derivative suits. The hearing of nine of the class proceedings was consolidated before the Federal Court in California (In re Verifone Holdings, Inc. Securities Litigation, Civil Action C 07-6140 MHP, decision of January 18, 2008; this consolidated proceeding shall hereinafter be referred to as the “Class Proceeding in the U.S.”). Various entities contended in the California court for appointment to the position of the lead plaintiff in the consolidated proceeding (“Lead Plaintiff”), including several Israeli institutional bodies (“Phoenix”, “Harel”, “Clal Finance”, “Prism”, “Batucha Investment Management” and “Yashir Investment House”). Ultimately, the California court chose to appoint a body named “National Elevator Fund” as lead plaintiff.
3. On January 27, 2008, the Petitioner, David Stern (hereinafter: the Petitioner) filed a motion for class certification against the Respondent (hereinafter: the Motion for Class Certification in Israel) in the District Court (Cent. Lod). In this proceeding, the District Court was asked to certify a class action against the Respondent on behalf of any person who purchased shares of the Respondent on TASE between March 7, 2007 (the date of publication of the first erroneous financial statement) and December 2, 2007, and who held the stock on December 3, 2007 (the date of publication of the immediate report in Israel in which the error was exposed). The Petitioner asserted that following the discovery of the errors that occurred in the Respondent’s financial statements, the value of its shares fell by approximately 46%. It was asserted that the Respondent bears responsibility to its shareholders for inclusion of the misleading details in the financial statements (pursuant to Section 38C of the Securities Law, 5728-1968 (hereinafter: the Securities Law)). The Petitioner stated that he estimates that the damage to the class members (in Israel) is in the sum of NIS 2.48 billion.
4. As aforesaid, I will review the rest of the chain of events only in brief. The Respondent filed a motion for dismissal in limine of the Motion for Class Certification in Israel, and alternatively to stay the proceedings (it is noted that the Respondent did not file an answer in response to the Motion for Class Certification in Israel, and in fact, such an answer has not been filed to date). The main grounds of the motion were the proceedings which were pending in the U.S. and which concern the same issue, and forum non conveniens considerations. The Respondent asserted, inter alia, that the law applicable to the Motion for Class Certification in Israel is U.S. law. At the hearing held before the District Court on May 25, 2008, the parties reached a stipulation whereby the court would first address the issue of the law applicable to the Motion for Class Certification in Israel. On September 11, 2008, the District Court ruled that the law applicable to the Motion for Class Certification in Israel is U.S. law ( H. Gerstl, P.). A motion for leave to appeal (LCA 8517/08) was filed from this decision. In a decision of January 27, 2010, this Court ordered the dismissal of the motion for leave to appeal, ruling that the District Court must also address the issue of staying the hearing of the Motion for Class Certification in Israel until the class proceeding in the United States is decided (A. Grunis, E. Arbel and N. Hendel, JJ.). It was further ruled that once the matter was decided, this Court could hear both the stay of proceedings issue and the issue of the applicability of foreign law. On April 25, 2010, the parties filed joint notice with the trial court whereby they agreed that the hearing of the Motion for Class Certification in Israel be postponed “based on the Honorable Court’s ruling regarding the applicability of the foreign law”, and without derogating from the Petitioner’s ability to seek to appeal the ruling regarding the applicability of the foreign law. The District Court (H. Gerstl, P.) ordered the postponement of the continued hearing of the proceeding, as agreed (decision of April 26, 2010).
5. On May 24, 2010, the motion for leave to appeal at bar was filed, from the trial court’s decision of April 26, 2010, in which the District Court ordered a stay of the proceedings (although the grounds of the motion for leave to appeal relate to the issue of the applicability of the foreign law, which was decided in the District Court’s decision of September 11, 2008). On September 1, 2010, the Petitioner filed with this Court (after being granted leave) new evidence -- a judgment that had been issued by the Supreme Court of the United States, after the granting of certiorari, in which the extraterritorial applicability of U.S. securities law was addressed (Morrison v. Nat'l Austl. Bank Ltd., 561 U.S. 247 (2010), judgment of June 24, 2010 (hereinafter: the Morrison case)). The Petitioner asserted that in Morrison, it was ruled that U.S. securities law is not applicable outside of the U.S., and therefore, so he claims, the law applicable to the Motion for Class Certification in Israel is the law in Israel, and there is no room to order the continued postponement of the hearing of the proceeding. In my decision of October 13, 2010, I ordered that the handling of the motion for leave to appeal be suspended and that the District Court decide the consequences of the ruling in the Morrison case on the Petitioner’s case. On August 25, 2011, the District Court decided that the judgment in Morrison does not change its position with respect to the applicability of the foreign law, and therefore the stay of the hearing of the proceeding would remain in place. In accordance with my decision, on November 13, 2011, the Petitioner filed an amended motion for leave, in which the District Court’s decision of August 25, 2011 was also challenged. On February 4, 2013, the Petitioner gave notice (after hearing this Court’s comments at the hearing that was held on January 9, 2013) that he agrees that in view of the existence of the Class Proceeding in the U.S., the hearing of the proceeding that he instituted in Israel be postponed, while he retains the possibility of “resuming the proceedings upon circumstances so justifying”. Accordingly, we ordered, in our decision of February 10, 2013, that the hearing of the proceedings being conducted in Israel between the parties be postponed, and that if the Petitioner would petition for resumption of the hearing of the motion for leave to appeal at bar, the hearing would be resumed from the point at which it was left off.
6. In the meantime, there were developments in the proceedings in the United States. On August 9, 2013, the parties in the Class Proceeding in the United States filed a motion for approval of a settlement that was reached between them (hereinafter: the Settlement, or the Agreement). It is this Settlement which now stands at the center of the hearing before us (the Settlement was filed for our inspection in a notice on behalf of the parties of May 1, 2014). According to the Settlement, the Respondent’s shareholders in the relevant period will be entitled to financial compensation. According to the provisions of the Agreement, the class to which the Settlement applies includes any person who purchased shares of the Respondent between August 31, 2006 and April 1, 2008 (with the exception of officers of the Respondent and members of their families), “on any domestic or foreign exchange or otherwise”; sec. 1.3 of the Agreement). It is already possible to see that this definition of the class includes the class, as defined in the Motion for Class Certification in Israel, in terms of both geography and time (since the definition of the class in the Motion for Class Certification in Israel relates to whoever purchased shares of the Respondent on TASE between March 7, 2007 and December 2, 2007). The sum total of the settlement is U.S. $95 million (sec. 1.22 of the Agreement; this amount includes the representing counsel’s fees, secs. 1.16 and 5.2(c) of the Agreement). The representing counsel requested the award of fees in his favor at a rate of 20% of the settlement (i.e., 20% of U.S. $95 million; Annex A1 to the Agreement). The Agreement stated that the average compensation amount that would be due to the class members, before deduction of the fees of the Lead Plaintiff’s counsel, was U.S. $0.71 per share (ibid.).

In accordance with the provisions of the Settlement, the notice regarding the Agreement would be sent by mail to the class members who may be located with reasonable effort (sec. 6(a) of Appendix A to the Agreement). It was further agreed that an announcement would be published regarding the Agreement in three newspapers, “Investor’s Business Daily”, “Globes” and “The Business Wire” (sec. 6(b) of Appendix A to the Agreement). According to the Agreement, every member of the class is required to prove his entitlement to receive compensation by sending an appropriate form within 90 days after delivery of the notice regarding the Agreement (sec. 5.4 of the Agreement) (hereinafter: the “Entitlement Forms”). The representing counsel has discretion to permit submission of the Entitlement Forms also after this period if an undistributed balance remains in the settlement account (sec. 5.5 of the Agreement). It was further agreed that any balance that would remain in the settlement account after a period of six months would be distributed, insofar as possible, to the class members who applied for receipt of compensation and who proved their entitlement. If a balance remains after this additional distribution, it was agreed that it would be donated to a public cause (an organization which gives legal aid to the needy; sec. 5.6 of the Agreement). The Settlement further determined that each member of the class may be heard at the court hearing the proceeding, and object to approval of the Agreement (secs. 10 and 12 of Appendix A to the Agreement). Each member of the class may also give notice that he wishes to leave the class, in which case he will not be entitled to compensation by virtue of the Agreement and will not be subject to the decision in the proceeding (sec. 11 of Appendix A to the Agreement). The settlement further determined that approval of the Settlement will constitute res judicata vis-à-vis all of the class members (sec. 8 of Appendix A to the Agreement).

7. On October 15, 2013, the Federal Court in California issued “preliminary approval” for the Settlement (Edward M. Chen, J.). On December 30, 2013, the Petitioner filed with the Californian court (according to the date scheduled therefor) objection to approval of the Settlement. The objection was filed on his behalf and on behalf of the class that he seeks to represent in the Motion for Class Certification in Israel. On February 14, 2014, a hearing was held at the Federal Court in California on the objection filed by the Petitioner. The Petitioner, two of his Israeli counsel (Adv. Gil Ron and Adv. Nadav Miara) and a U.S. attorney whom they retained, were present at the hearing. On February 18, 2014, the Federal Court in California rejected the Petitioner’s objection to the Settlement. In its decision, the court addressed in detail the claims raised by the Petitioner against approval of the Agreement. We will address the court’s rulings in this context in greater detail below. The Federal Court in California further found that the settlement was fair and fitting, and that the fees at the rate requested by the representing counsel should be approved. However, the California court ordered that further publications be made in Israel regarding the fact of the Agreement. With respect to the applicability of the approval of the Settlement to the members of the class in Israel, the court added as follows: “However, as the Court noted on the record and reiterates here, this order granting final approval is not intended to dictate to the Israeli courts (nor does this Court opine on) the enforceability of the releases contained in the settlement agreement or the applicability of Morrison should the Israeli investors’ claims be permitted to proceed in Israel”. On February 20, 2014, the lead plaintiff in the Class Proceeding in the U.S. announced that notice in Hebrew would be sent by mail to many class members in Israel, that an announcement would be published in Hebrew in the “Globes” newspaper, and that the last date for the class members in Israel to submit the Entitlement Forms would be extended. The final approval of the Settlement was granted on February 25, 2014.

The parties’ claims in the supplementary pleading

8. In accordance with my decision of June 26, 2014, the parties filed a supplementary pleading in which they addressed the applicability of the Settlement that had been approved in the U.S. to the Motion for Class Certification in Israel. The Petitioner claims that the Settlement gravely discriminates against the class members in Israel, and therefore should not be recognized as preventing the continued hearing of the Motion for Class Certification in Israel. The Petitioner claims that defects occurred in the manner in which the class members in Israel were informed of the Agreement, and that, in fact, they were denied the right to withdraw from the class and object to approval of the Settlement. According to the Petitioner, the notice in Hebrew regarding the Agreement was delivered to the class members in Israel after the date for filing objections to the Agreement, and the date for withdrawing therefrom had lapsed, and the information that was provided therein was only partial and was inarticulately presented. The Petitioner adds that there are differences between the securities law in Israel and such law in the United States He claims that in the United States, the security holder is required to prove the mens rea of fraud or gross negligence in order to establish a cause of action due to an error that occurred in a financial statement, while in Israel, there is no need to prove such grounds. Therefore, so the Petitioner asserts, there was room to set apart the class members in Israel from the rest of the represented class in the United States, and to award the Israelis higher compensation. Despite these differences between the various class members, the Petitioner asserts that the Settlement makes no explicit reference to the existence of the class members in Israel, and that, in fact, the attention of the United States court was drawn thereto only at a later stage, following the objection that he filed. Thus, for example, the Settlement states that the settlement will be published in the “Globes” newspaper, without stating that it is an Israeli newspaper. On the Entitlement Forms, the class members were even required to declare that they were not aware of a legal proceeding that had been filed on their behalf on the same issue, which is not true in respect of the class members in Israel. The Petitioner adds that the United States court expressed grievance that its attention had not been drawn to the existence and uniqueness of the class in Israel. The Petitioner further states that, on the merits, the compensation that was granted to the class members in the Settlement is too low.

The Petitioner further refers, in the supplementary pleading, to the conditions for recognition of a foreign judgment pursuant to the Foreign Judgment Enforcement Law, 5718-1958 (hereinafter: the Foreign Judgment Enforcement Law). The Petitioner asserts that a class settlement issued in a foreign country should only be recognized if the right of the class members in Israel to a fair proceeding is not prejudiced. According to him, the right to a fair proceeding of the class members includes the right to receive notice of the settlement, to withdraw from the settlement, to object thereto, and the settlement being fair. According to the Petitioner, the Settlement in the case at bar does not meet these conditions. The Petitioner emphasizes in his arguments the fact that the California court explicitly ruled that it was not deciding the issue of the applicability of the settlement to the class members in Israel. Finally, the Petitioner believes that the issue of the applicability of the Settlement should be decided by the District Court. The Petitioner further seeks that we decide the issue of the applicability of the foreign law, since this decision bears consequences for the fairness of the settlement vis-à-vis the class members in Israel.

9. The Respondent, conversely, claims in the supplementary pleading on its behalf that the settlement that was approved in the United States is fitting and fair, and that it establishes res judicata in respect of the Motion for Class Certification in Israel. The Respondent rejects the Petitioner’s claims whereby the rights of the class members in Israel were denied. The Respondent specifies in its arguments the considerable efforts made to locate the class members in Israel and inform them of the Settlement and the terms and conditions thereof. The Respondent states that many class members from Israel submitted the Entitlement Forms, and a considerable portion of the “entries” to the designated website that was set up for purposes of implementation of the Settlement was from Israel. Thus, although the scope of the trade on TASE in shares of the Respondent in the relevant period was approx. 7-8% of the entire scope of the trade in its shares, it was found that 28% of all of the entries to the website mentioned were from Israel and approx. 25% of the Entitlement Forms that were submitted by way of delivery of documents arrived from Israel (as distinguished from forms that were submitted online, in respect of which the Respondent did not have full data to classify the identity of the persons submitting the forms by place of residence). In the Respondent’s opinion, the intense participation of the class members in Israel in the settlement that was reached reveals that they were well aware of the fact of the Agreement, and that many of them believed that it was a fair and fitting agreement. The Respondent adds that the Petitioner does not present even a single case of a member of the class in Israel who sought to object to the Settlement or to withdraw therefrom and was prevented from doing so. The Respondent emphasizes in its claims that the Petitioner played an active part in the hearing on approval of the Settlement in the United States, and that his claims were addressed there and rejected. The Respondent adds that the Petitioner even admitted to the California court that in his opinion, the settlement is fair. Therefore, the Respondent asserts that the judgment approving the Settlement in the United States should be recognized pursuant to the Foreign Judgment Enforcement Law, and the Motion for Class Certification in Israel denied due to the existence of res judicata. The Respondent attached to the supplementary pleading on its behalf an expert opinion regarding the foreign law, whereby approval of the Settlement in the United States establishes res judicata vis-à-vis the class members. It is noted that the Petitioner filed, after leave was granted, a response to the Respondent’s supplementary pleading, in which it added a response to its claims.

Discussion and decision

10. We decided to hear the motion as if leave had been granted and an appeal filed according to the leave granted. As aforesaid, the motion for leave to appeal before us has undergone various twists and turns since it was filed. The issue now before us is the applicability of the Settlement that was approved in the United States to the class proceeding that the Petitioner filed in Israel. The question is whether approval of the Settlement in the United States establishes res judicata vis-à-vis the Petitioner and vis-à-vis the class that he purports to represent in Israel, so as to bring an end to the proceeding that he initiated.

Res judicata arising from a judgment issued in a foreign country

11. In order for the Respondent to establish a claim of res judicata due to a judgment that was issued in a foreign country, the judgment must undergo a process of “acceptance” in Israel, pursuant to Israeli law. “So long as the foreign judgment has not undergone a process of acceptance, it has no status in Israel at all, either for the purpose of enforcement thereof in Israel or for the purpose of recognition thereof as a res judicata; it is treated as never having existed” (Celia Wasserstein Fassberg “On the Finality of Foreign Judgments”, 18 Mishpatim 35, 53 (1988); also see CApp 499/79 Ben Dayan v. ADS International Ltd., IsrSC 38(2) 99, 103 (per M. Ben-Porath, D.P.) (1984) (hereinafter: the Ben Dayan case)). The acceptance of a foreign judgment in Israel is mainly regulated in the Foreign Judgment Enforcement Law. The Foreign Judgment Enforcement Law comprises several “tracks” for acceptance of a foreign judgment: declaration of the foreign judgment as an enforceable judgment (secs. 3-10 of the Law), direct recognition of the foreign judgment (sec. 11(a) of the Law) and indirect or “incidental” recognition of the foreign judgment (sec. 11(b) of the Law) (see the survey in CApp 4525/08 Oil Refineries Ltd. v. New Hampshire Insurance Co., paras. 16-19 of the opinion of E. Arbel, J. (December 15, 2010); CApp 1297/11 Levin v. Zohar, paras. 5-6 of the opinion of N. Hendel, J. (December 29, 2013) (petition for further hearing dismissed in CFH 304/14) (hereinafter: the Levin case); Nina Zaltzman Res Judicata in Civil Proceedings, 565-566 (1991) (Hebrew)). It was ruled that when a party in a proceeding in Israel claims the existence of res judicata due to a foreign judgment, the appropriate track is that of indirect recognition of the judgment, pursuant to Section 11(b) of the Law (see Ben Dayan at p. 112 (per A. Barak, J.); CApp 490/88 Basilius v. Adila, IsrSC 44(4) 397, 404 (1990) (the Basilius case); C.A. 970/93  Attorney General v. Agam, IsrSC 49(1) 561, 568 (1995) (per E. Goldberg, J.); CApp 3294/08 Goldhar Corporate Finance Ltd. v. S.A. Klepierre, para. 6 (September 6, 2010) (hereinafter: the Goldhar case)). Section 11(b) of the Law prescribes that “incidentally to a hearing on a matter that is within the jurisdiction thereof and for the purpose of such matter, a court or tribunal in Israel may recognize a foreign judgment, even if subsection (a) does not apply thereto, if it deems it is lawful and just to do so”.
12. Among the considerations that the court must examine as to whether “it is lawful and just” to recognize the foreign judgment, it has been held that it may look to sec. 6 of the law, which lists events, upon the occurrence of which a foreign judgment will not be enforced in Israel. Another source to which it is customary to refer in this context is English law (see Goldhar, para. 6, and the authorities cited there). One of the considerations usually examined is whether the court issuing the foreign judgment held jurisdiction. However, in this regard it was ruled that if a person cooperated with the conduct of the proceedings at the foreign court and did not challenge the court’s jurisdiction there, he may not argue that they were conducted ultra vires ( the Goldhar case, para. 7; Ben Dayan, at p. 106 alongside the letter D (per M. Ben-Porath, D.P.); Amos Shapira “Recognition and Enforcement of Foreign Judgments” (Part Two), 5 Iyunei Mishpat 38, 51-52 (1976)). 

13. Another central criterion to be considered is whether the right of the counter-litigant to due process was prejudiced at the foreign court, or whether the proceedings conducted therein were inconsistent with the rules of natural justice. The main argument that is usually raised in this context is that the litigant with respect for whom the recognition of the foreign judgment is requested was denied a fair opportunity to raise his arguments before the foreign court (see the Levine case para. 6 of the opinion of N. Hendel, J; Basilius, p. 406; CApp 221/78 Ovadia v. Cohen, IsrSC 33(1) 293, (1979)hereinafter: the Ovadia case)). The burden of proof with respect to the violation of the right to due process is imposed on that litigant who argues the violation (see, ibid., p. 296 (per M. Ben Porath, J.); CApp 1268/07 Greenberg v. Bamira, para. 13 (March 9, 2009) hereinafter: the Greenberg case)).
14. Various additional  considerations that case law notes in this respect are whether the recognition of the foreign judgment is repugnant to public policy (see the Ben Dayan case, p. 107 (per M. Ben Porath, D.P.); for regarding broader discussion, see also Amos Shapira "The Recognition and Enforcement of Foreign Judgments", 4 Iyunei Mishpat 509, 530-534 (1974)), and whether the seeker of recognition acts in good faith (see:. Goldhar, para. 8). It should be noted that an indirect recognition of a foreign judgment pursuant to sec. 11(b) of the Law, does not require mutual treaty between Israel and the country wherein the judgment was issued (as distinguished from direct recognition pursuant to sec. 11(a) of the Law; see: Levine, para. 6 of the opinion of N. Hendel, J.). It should be further be emphasized that within the recognition of the foreign judgment, the correctness of the judgment on its merits is not to be examined (see: Basilius, p. 406; Greenberg, para. 10).
15. A finding by the Israeli court that the foreign judgment should be (incidentally) recognized does not conclude the matter, and the court must still determine whether the recognized judgment establishes res judicata in Israel. Different opinions have been expressed in the case law in this regard as to whether such a review should be carried out according to Israeli law or also according to the laws of the foreign country (see: Basilius, p. 411; Goldhar, para. 6). In any case, the foreign law applicable to the matter is a fact that requires proof (ibid., para. 9). However, one can also make recourse to the parity of laws presumption, whereby there is a presumption that the foreign law is identical to the Israeli law (see: Basilius, p. 411).

Indirect recognition of a judgment in a class action issued in a foreign country

16. In this age of globalization, more and more class actions cross international borders and comprise class members from different countries and even continents (see: Guidelines for Recognizing and Enforcing Foreign Judgments for Collective Redress, International Bar Association 6 (2008) (hereinafter: the IBA Guidelines)). This is also relevant to class actions under securities law, since in this area the trading of securities is also becoming increasingly cross-border (see: ibid., p. 17). That being the case, how should we examine whether it would be "lawful and just" (as per the language of sec. 11(b) of the Enforcement of Foreign Judgments Law) to recognize a judgment in a class action that was issued in a foreign country? How is the recognition of a foreign judgment in a class action different from the recognition of a foreign judgment pertaining to a non-class action?
17. In a proceeding (in personam) that is not a class action, only the rights and obligations of the litigants who are present in court are heard and decided. Conversely, a class action is a proceeding which contemplates, inter alia, the rights and obligations of additional players, who are absent from the court room, namely the class members. In a class action, the lead plaintiff seeks to conduct a proceeding on behalf of the class members, and the outcome of the class action might bind them, for better or for worse (see Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550 (2011): "The class action is 'an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only' (quoting Califano v. Yamasaki, 442 U.S. 682, 700-701 (1979); Hansberry v. Lee, 311 U.S. 32, 40-41 (1940)). Hence, prior to a recognition of a foreign judgment in a class action, the rights of the class members should be considered, as well as the concern regarding the violation thereof (see: John P. Brown, “Seeking Recognition of Canadian Class Action Judgments in Foreign Jurisdictions: Perils and Pitfalls,” 4(2) Canadian Class Action Rev. 220, 222 (2008)) (hereinafter: Brown).
18. The aforesaid is particularly relevant in relation to a class settlement certified by a court in a foreign jurisdiction. A class settlement has a great potential of discrimination against the rights of the class members, since the lead plaintiff and the defendant may collaborate in negotiation and reach agreements that harm the class members and at their expense. There is a concern that the two may agree to high legal fees and compensation to the lead plaintiff and his counsel, in return for an agreement that is not optimal for the represented class. The agreement can be harmful to the class members in two main ways: compensation which is lower than what would be reasonable for each one of the class members, or an expansion of the scope of causes of action in respect of which res judicata shall be established following the certification of the agreement (see: Amir Weizenbluth "Adequate Representation in Class Settlements") 43(1)  Mishpatim 351, 366-367 (2012) (hereinafter: Weizenbluth); Greenberg v. Procter & Gamble Co. (In re Dry Max Pampers Litig.), 724, F. 3d (6^th Cir. 2013) 713, 715).
19. In the case of a number of class proceedings pertaining to the same issue and conducted in different tribunals, and when a settlement is achieved in one of these proceedings, the said concern for harming the class members is further intensified. First of all, from the perspective of the lead plaintiffs and their counsel in the various proceedings, the situation generates competition over the compensation and counsel fees which will be awarded upon the conclusion of the proceeding, since even if the proceedings are not consolidated, it is unlikely that compensation and legal fees will be awarded against the same defendant in more than one proceeding (however, see para. 21 below). Therefore, the lead plaintiffs and their counsel have an incentive to rush the negotiations and reach a settlement with the defendant as quickly as possible. The faster they reach the settlement, and the more expansive the settlement is, the better they can "ploy" their competitors, the lead plaintiffs and their counsel in the other proceedings. On the other hand, a lead plaintiff who chooses to pursue the proceeding to its conclusion, or to start negotiating at a later stage thereof, may leave empty handed. There is no doubt that at times such conduct might be at the expense of the class members and involve their inadequate representation (see John C. Coffee, Jr., “Class Wars: the Dilemma of the Mass Tort Class Action,” 95 Colum. L. Rev. 1343, 1370 (1995) (hereinafter: Coffee, “Class Wars"): "The first team to settle with the defendants in effect precludes the others (who may have originated the action and litigated it with sufficient skill and zeal that the defendants were eager to settle with someone else"; Samuel Issacharoff & Richard A. Nagareda, “Class Settlements Under Attack,” 156 U. Pa. L. Rev. 1649, 1666 (2008) (hereinafter: Issacharoff & Nagareda). We explained elsewhere the lead plaintiff’s incentive to be the first to file the motion for class certification (see LCA 4778/12 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd. v. Naor, para. 7 (July 19, 2012); LCA 4253/14 Halfon v. Shemen Oil and Gas Resources Ltd., para. 10 (December 29, 2014)). When several class proceedings treat the same causes of action and are conducted concurrently in several courts (whether in the same country or in different ones), the lead plaintiffs and their counsel have another incentive, which is to be the first to conclude the proceeding. These two incentives (to be the first to initiate the proceeding and the first to conclude it), might prejudice the quality of representation of the class members.
20. The concern for harm to the class members also exists from the perspective of the defendant. In view of the "competition" between the various lead plaintiffs, the fear arises that the defendant may choose to focus on the proceeding in which he deems the lead plaintiff and the forum to be most convenient, in an attempt to promote negotiation for settlement in that proceeding. By such conduct, which American law refers to as  "reverse auction", the defendant attempts to identify a class proceeding, among those filed against him, in which he can reach a favorable settlement, and which encompasses the causes of action that are contemplated in the remaining proceedings (see: Reynolds v. Benefit Nat'l Bank, 288 F.3d 277, 282 (7^th Cir. 2002); Coffee, “Class Wars,” p. 1372; Myriam Gilles & Gary B. Friedman, “Exploding the Class Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers,” 155 U. Pa. L. Rev. 103, 161-162 (2006)). We would note that also in cases in which no settlement is achieved, the defendant can act to expedite the hearing of a class action that he deems convenient, and procrastinate in others, thus influencing the forum before which the arguments against him shall be heard (see Arthur R. Miller & David Crump, “Jurisdiction and Choice of Law in Multistate Class Actions After Phillips Petroleum Co. v. Shutts,” 96 Yale L.J. 1, 24 (1986); also see Henry P. Monaghan, “Antisuit Injunctions and Preclusion Against Absent Nonresident Class Members,” 98 Colum. L. Rev. 1148, 1160-1161 (1998) (hereinafter: Monaghan)).
21. Indeed, a defendant who follows this path assumes the risk that an unfair settlement that he entered into shall eventually not be recognized by other tribunals, and he may be charged with additional payment to the class members or any part thereof (see Brown, p. 220; IBA Guidelines, p. 9-10; Tanya J. Monestier, “Is Canada the New Shangri-La of Global Securities Class Actions?” 32 NW J. Int'l L. & Bus. 305, 334 (2012)). That risk might be an incentive to the defendant to avoid executing an unfair settlement that prejudices the rights of class members. However, sometimes this is a calculated risk taken by the defendant.
22. As we can see, there is a difference between the recognition of a foreign judgment in a class action and the recognition of a foreign judgment in a non-class action, in terms of the identity of the litigant whose rights are feared to be harmed. In a non-class proceeding, the recognition would normally not raise any particular difficulty for the plaintiff in the foreign tribunal, since he is the one who initiated the proceeding there. Usually, the question under consideration would be whether the rights of the defendant in the foreign tribunal were prejudiced. On the other hand, in class proceedings, the recognition of the foreign judgment is usually requested by the defendant, attempting to establish res judicata in regard to the represented class (after the defendant has completed, successfully according to him, a class proceeding in a foreign tribunal). In that case, the question is whether the rights of the class members were prejudiced by the local tribunal. The Canadian court explained this issue, as follows (Currie v. McDonald's Restaurants of Canada Ltd. 74 O.R. (3d) 321, 330 (Ont. C.A. 2005) (hereinafter: the Currie case)):

"In a traditional non-class action suit, there is no question as to the jurisdiction of the foreign court to bind the plaintiff. As the party initiating proceedings, the plaintiff will have invoked the jurisdiction of the foreign court and thereby will have attorned to the foreign court's jurisdiction. The issue relating to recognition and enforcement that typically arises in whether the foreign judgment can be enforced against the defendant.

Here, the tables are turned. It is the defendant who is seeking to enforce the judgment against the unnamed, non-resident plaintiffs. The settling defendants, plainly bound by the judgment, seek to enforce it as widely and as broadly as possible in order to preclude further litigation against them".

The considerations to be taken into account for incidental recognition of a foreign judgment in a class action

23. We shall now return to the Enforcement of Foreign Judgments Law. It would seem that nothing prevents the application of sec. 11(b) of the Law even to the incidental recognition of a foreign judgment issued in a class action. However, there is a question regarding the manner of implementation of the various criteria that the court must consider in this context, in view of the aforementioned special characteristics of the recognition of a foreign judgment in a class proceeding (on the need to adapt the regular rules for the enforcement and recognition of a foreign judgment in a class action, see Brown, p. 222; for a review of the guidelines established in this respect by the International Bar Association, see the abovementioned IBA Guidelines). We would note that the discussion below suits both a foreign judgment that approves a class settlement and a foreign judgment deciding a class action on its merits.
24. As stated above, one of the relevant considerations for the purpose of incidental recognition of a foreign judgment is that the judgment was issued with authority. Presumably, this consideration should also be taken into account also with respect to a foreign judgment that was issued in a class action. However, in my opinion, in the case of a class action conducted abroad, and in view of the various interests that we addressed above, it would be appropriate to require that the foreign court also have a substantial connection to the dispute in the class action. This will reduce the concern for "ploy" by a foreign lead plaintiff and by the defendant in a court which they find convenient and which is unrelated to the dispute, while prejudicing the rights of the represented class. This appears to be the approach in Canada (see the Currie case, p. 328-329, where this test is referred to as a "real and substantial connection" to the forum wherein the judgment was issued; and also see, in English law: Mark Stiggelbout, “The Recognition in England and Wales of United States Judgments in Class Actions,” 52 Harv. Int'l L. J. 433, 464 (2011) (hereinafter: Stiggelbout)). Indeed, in various contexts it was ruled that in order to recognize a foreign judgment incidentally, a sufficient connection is required between the foreign  court and the subject of the proceeding, according to the rules of private international law jurisdiction, in force in Israel (see, for example, regarding the recognition of a bankruptcy order that was issued in a foreign country, MApp 10359/01 Sussman v. the Official Receiver, IsrSC 56(3), 160 (2002); Shlomo Levin & Asher Grunis, Bankruptcy 415 (3rd ed., 2010) (Hebrew)). In this regard, questions arise such as whether a significant part of the represented class is present in the foreign country. Another relevant question is whether the class members could have reasonably anticipated, at the time of engagement with the defendant, that future disputes between them would be decided by the foreign court (see: Currie, p. 332; and cf. LCA 10250/08 Katziv v. Zao Raiffeisenbank, para. 7 (March 18, 2010)). Obviously, also with respect to class proceedings, a litigant who cooperated in a proceeding conducted in the foreign court, and did not challenge the court's jurisdiction, may be deemed as having accepted the jurisdiction of the foreign court (see para 12 above).
25. As noted, an additional consideration that we addressed in regard to the recognition of a foreign judgment is whether the right to due process of the litigant against whom the recognition is requested has been violated. As we saw, in addressing the recognition of a judgment in a class action, the question that would normally arise pertains to the protection of the class members' rights. How must we examine whether the class members right to due process has been violated? United States case law customarily includes three elements in the right of the class members to due process, as follows (Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-812 (1985) (hereinafter: the Phillips Petroleum case)): first, receipt of proper notice regarding the proceeding, and being afforded an opportunity to participate therein; second, being afforded the opportunity to withdraw from the proceeding; and third, appropriate representation by the lead plaintiff (and his counsel) throughout the proceeding (some refer to these elements as "voice"; "exit" and "loyalty", by analogy to the discussion of shareholders rights in corporate law; see Issacharoff & Nagareda, p. 1701; John C. Coffee, Jr., “Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation,” 100 Colum. L. Rev. 370, 376-377 (2000)). These three elements, according to diverse United States case law, are the ones required to secure "due process" for the class members. These elements were recognized as the considerations to be weighed for the recognition of a class action decided by one court as binding the class members in a class action that is heard by another court (see, e.g.: In re Diet Drugs Prods. Liab. Litig., 431 F.3d 141, 145 (3d Cir. 2005) (hereinafter: the Diet Drugs case)); Gotthelf v. Toyota Motor Sales, U.S.A., In., 525 Fed. Appx. 94 (3d Cir. 2013) (hereinafter: the  Gotthelf case)); Debra Lyn Bassett, “U.S. Class Actions Go Global: Transnational Class Actions and Personal Jurisdiction,” 72 Fordham L. Rev. 41 (2003)); this is also the common approach in Canada, see the survey in Brown, p. 231-234; also see IBA Guidelines p. 14 and 26-27; Stiggelbout p. 470 and 499-500).  
26. I shall briefly review each of the three aforesaid elements. Regarding a proper notice of the proceeding, it seems there is no need, in the matter at bar, to set hard and fast rules regarding the question what would be considered sufficient notice. In Canada, it was held that personal delivery of notice to each one of the class members is not required (see Canada Post Corp. v Lépine 1S.C.R. 549, para. 43 (hereinafter:  the Lépine case)). On the other hand, there is   a view that personal delivery of notice to each class member is preferred, whenever possible (see: IBA Guidelines p. 27). Obviously, the costs of such publication or delivery of notice should be considered, according to the circumstances of the matter. Regarding the content of the notice, it must include a description of the legal proceedings and the settlement (if any), and an update of the class members of their rights and the expected implications of the proceeding for them. Furthermore, they should be updated regarding their right to appear before the foreign court and to object to a settlement reached there (see: the Lépine case para. 45;the Phillips Petroleum case p. 812).

The right of a class member to withdraw from the class has also been recognized as a central aspect of the right to due process. (see: Currie, p. 333-334). The notice delivered to the class members should also inform them of that option (see: IBA Guidelines, p. 27).

As for the condition that the class members must be adequately represented, in the legal literature we find the opinion that claims of inadequate representation should focus upon conflicts of interests between the lead plaintiff (and his counsel) and the class members, in whole or in part, or conflicts of interests among the class members, as distinct from arguments that representation was inadequate because the compensation awarded by the foreign court is insufficient on its merits, whether by a judgment or by a settlement (see the article of Issacharoff & Nagareda; and also see IBA Guidelines, p. 26; Stiggelbout, p. 474-475; the Gotthelf case, p. 102-103; and also cf: Restatement of the Law, Second, Judgements, para. 42(d)-(e)). A possible conflict of interests may derive from a difference in the applicable law in each one of the countries. If Israeli law favors the class member as compared to the applicable law in the foreign country, a settlement abroad awarding uniform compensation to all class members may raise a concern of improper representation of the class members in Israel. This is the case, inasmuch as uniform compensation will result in the transfer of wealth from the class members in Israel to the class members abroad. In such case, it may not be proper to negotiate on behalf of all of the class members (both in Israel and abroad) in their entirety (see: Issacharoff & Nagareda, p. 1681-1683; Lépine, para. 56; Wolfert v. Transamerica HomeFirst Inc., 439 F.3d 165, 173 (2d Cir. 2006) (hereinafter: the Wolfert case)). Obviously, additional differences among class members in each of the various countries may also lead to conflicts of interests. Similarly, a settlement whereby some of the class members are treated differently, while the whole class was represented as one by a single lead plaintiff, raises concern of misrepresentation of that part of the class (see: Weizenbluth, p. 386-387).

27. Nevertheless, it would seem that an examination of the compensation level and other terms and conditions of a class settlement that was certified overseas, on their merits, should not be ruled out when such compensation, terms, and conditions clearly and manifestly deviate from what is reasonable (see IBA Guidelines, p. 14, where it was recommended that such an examination be conducted when compensation is "patently inadequate"; and also cf: Celia Wasserstein Fassberg Foreign Judgments in Israeli Law – Deconstruction and Reconstruction, p. 76-77 (1996) (Hebrew)). In extreme instances, it would seem that recognition of a foreign judgment in a class proceeding may be denied for repugnance to public policy (see: Stiggelbout, p. 471-472).

28.Another issue that arose in United States case law concerns the circumstances in which a party will be permitted to raise a claim that the right of the class members to due process was not properly protected ina class proceeding heard in another court. Various opinions have been expressed on this issue. According to one approach, such an “indirect challenge” of the proceeding at the other court may be permitted only if no fair opportunity was given to raise the said claimsin the challenged proceeding. In other words, according to this approach, it is enough that an opportunity was available – even if not exploited -- in the challenged proceeding, in order to bar an “indirect challenge” of the outcome of the proceeding (see the majority opinion in Epstein v. MCA, Inc., 179 F.3d 641, 648-649 (9th Cir. 1999)). Conversely, a different position was also expressed in United States case law whereby an indirect challenge of class proceedings should be permitted in a broader spectrum of cases. According to this position, the possibility of claiming that a defect occurred in a class action decision will be barred only vis-à-vis a party who appeared at the challenged proceeding, and only in regard to claims that he raised and that were explicitly decided (see the dissenting opinion of Thomas, J. in Epstein, ibid., at p. 655). According to a third opinion (which may be referred to as the middle approach), if various claims in connection with the right of the class members to a due process were heard and decided by the court hearing the challenge, each party, including a party who did not appear himself at the other court, will be barred from raising the same for a second time in the framework of an indirect challenge. Thus, if a member of the class objects to a class settlement at a foreign court and the foreign court explicitly addresses his claims and rejects them, any other member of the class will also be barred from raising the same claims in an Israeli court (see the dissent of Wiggins J., In re Epstein, ibid., at p. 651;. Diet Drugs, at p. 146; and also see: Wolfert, at p. 172, in which the position was expressed that the class member will be barred from raising in an indirect challenge a claim that was heard and decided in the challenged proceeding, even if the claim was raised therein by the defendant; for a survey of the various positions, see: Issacharoff & Nagareda, at pp. 1652-1653 and pp. 1714-1718, and see: Patrick Wooley, “Collateral Attack and the Role of Adequate Representation in Class Suits for Money Damages,” 58 U. Kan.. L., 917 (2010); also see: IBA Guidelines, at p. 25).

In the matter before us, there is no need to decide among the different approaches. Suffice it to say that weight should certainly be afforded to the foreign court’s decision concerning claims of a denial of due process by the class, if these claims are raised for a second time in an Israeli court. In any event, it appears that according to all of the approaches described above, when the party who raises claims of a denial of due process to the class members is the same party who raised those claims in the foreign court (as occurred in the case at bar), decisive weight should be afforded to the fact that his claims were rejected by the foreign court. In such a case, the rulings of the foreign court may be deemed as establishing a quasi “collateral estoppel” vis-à-vis the party whose claims were rejected, which prevents him from trying his luck for a second time by raising the same claims. In such a case, the party seeking class certification in Israel, who is barred from claiming against defects in the foreign judgment, may also be deemed as lacking a personal cause of action to represent the class members in Israel. See Issacharoff & Nagareda (at p. 1715-1716):

“At the very least, adaptation of preclusion principles for collateral attacks should guard against the situation of a literal ‘do-over’. It would be intolerable to allow a collateral-attack plaintiff to escape the binding effect of a class settlement by raising the same structural defects in the class representation that she previously had raised on direct review in the original court and where she had lost on that precise point… Clearly, there must be finality where the very same class member made the same structural claims in the form of an original objection in the rendering court. No plausible conception of adequate representation can countenance a literal re-presentation of the same structural claim collaterally”.

29.A further matter that should be emphasized pertains to the court’s involvement when deciding whether to recognize a foreign judgment in a class action. In regards to recognition of a foreign judgment that is not in a class action, it was held that “the process of recognition of the foreign judgment, checking all of the recognition conditions, need not be performed in each and every case, and such an examination of the fulfillment of a condition or the existence of a defense against recognition will be performed in accordance with the claims of the party opposing recognition” (the Basilius case, at p. 404, emphasis original – A.G.), as an expression of the adversarial approach prevailing in Israel. However, it is highly doubtful that such an approach is appropriate when we are concerned with class proceedings. It should be borne in mind that, usually, the class members will not have an interest in appearing before the court and raising claims in connection with the consequences of the foreign judgment, due to the low value of the personal cause of action to each of them. Moreover, there is also no assurance that the claims of possible harm to the class members will be presented properly by the party seeking class certification, since the issue of recognition of the foreign judgment will often arise before class certification and before a ruling that the petitioner represents the class members in an appropriate manner and is eligible to act as lead plaintiff. Therefore, and in view of the fact that we are concerned with the rights of persons absent from the courtroom, considerable supervision and involvement are required by the court (see: the Raynolds case, at p. 279-280).

30.A further comment is that when dealing with a proceeding concerning securities, it is necessary to consider sec. 35Z of the Securities Law, whereby, “If action was brought before a Court in Israel under any enactment, on grounds that derive from an interest in the securities of a foreign corporation, the Court may – on application by a party – stay the proceedings in the action, if it learns that action was brought before a Court abroad on the same grounds or on similar grounds, and that until a judgment that is no longer subject to appeal is handed down in that action”. This provision reflects the legislature’s inclination to respect and not frustrate proceedings that are being conducted at a foreign court in connection with companies whose securities are “dual-listed” (see: Amir Licht “Dual Listing of Securities,” 32(3) Mishpatim 561, 617 (2002) (Hebrew)). However, if the proceeding in the foreign country ends in a judgment, the recognition and enforcement thereof must be performed pursuant to the provisions of the Foreign Judgment Enforcement Law. In the proceeding at bar, there is no need to decide whether, in view of Section 35Z above, there is room to relax the conditions for recognition or enforcement of a foreign judgment in regard to a company whose securities are “dual-listed”. 

31.To complete the picture, I will note that the issue of recognition of a judgment in a class action may also arise in the court in which the cross-border class action is heard. In the United States, it has been held that when  a class certification, in which some of the class members are located overseas, is concerned, it is necessary to consider, at the class certification stage, whether foreign courts will recognize the outcome of the proceeding. If the chances that the judgment in the class action will be recognized in the foreign country are not high, this constitutes grounds for not certifying the class action with respect to class members located in such country, in the context of the requirement that for purposes of class certification, it is necessary to examine whether it is the most efficient method of deciding the dispute (see: In re Vivendi Universal, S.A. Sec. LitigIn re Alstom SA Sec. LitigThus, in one case that arose in the United States, the court denied certification of a class action against members of the class located in various countries, including Israel (Anwar v. Fairfield Greenwich, 289 F.R.D. 105, 121 (2013)).

32.If a foreign judgmentin a class action is recognized (indirectly), it is necessary to further enquire as to its significance for the proceeding being heard in Israel. Aside from the question of the foreign judgment’s consequences under the applicable law of the court that issued it (which must be proved as a fact, or if necessary, by recourse to the parity of laws presumption), the significance of the foreign judgment will also be decided according to Israeli law (see para.15, above). It should be borne in mind that if the proceeding is at the stage of the hearing of the motion for class certification, denial of the motion does not establish res judicata vis-à-vis the class members (and see: Smith v. Bayer Corp., 131 S. Ct. 2368, 2379-2382 (2011) (the Smith case)). The consequences of recognition of the foreign judgment affect only the party filing the class certification motion. It may of course be wondered what is the practical reason for the filing of an additional, identical class proceeding by another class member, but this is the outcome whenever a class certification motion is denied (although it has been ruled that the denial of a class certification motion may also have certain repercussions for a later class certification motion concerning the same issue and filed by another lead plaintiff; see CC (Tel Aviv District Court) 1043/00 Rosenfeld v. The Social Security Covenant Implementation Organization (October 24, 2002) (Justice E. Hayut), appeal denied in CApp 10688/02 (March 27, 2003); CApp 2505/06 Becker v. Cellcom Israel Ltd., paras. 16-17 (December 9, 2008)).

In addition, if the party seeking class certification (or the lead plaintiff, if the class action has been certified) has asserted his claims at the foreign court and his claims there were rejected, as we have seen above, he himself will be barred from raising these claims for a second time in the Israeli court (see the discussion in para. 28). In such a case, too, the consequences of the recognition of the foreign judgment apply only to him, and it is possible that if another member of the class files a new proceeding on the same issue, the court will be required to address the claims regarding the due process claims of the class members on the merits.

33.To summarize our discussion thus far: a foreign judgment in a class action may be recognized incidentally. This recognition is conducted pursuant to sec. 11(b) of the Foreign Judgment Enforcement Law, according to which the foreign judgment may be recognized if “it is lawful and just to do so”. A first consideration that must be taken into account is whether the foreign judgment was issued by a court with jurisdiction to hear the proceeding. In this context, it is also necessary to examine whether the foreign court has a substantial link to the issue being heard in the class action. The participation of the lead plaintiff or the party seeking class certification in the proceeding in the foreign court may be deemed as consent to the foreign court’s jurisdiction. A further consideration is whether the right to due process of the members of the represented class was violated. In this regard, three main elements must be addressed: serving proper notice to the class members of the class proceeding in the foreign court and affording the class members an opportunity to participate therein; giving the class members an opportunity to withdraw from the proceeding; and adequate representation of the class members by the lead plaintiff (and his counsel) at the foreign court throughout the conduct of the proceeding. Examination of the outcome of the class action in the foreign court on the merits (or examination of a settlement that was approved in a foreign country on the merits) will only be performed in cases in which the outcome is clearly and manifestly unreasonable. Similarly, the foreign judgment will be denied recognition for repugnance to public policy only in exceptional cases. Weight should further be afforded to the fact that the claims being raised against recognition of the foreign judgment were already heard and decided by the foreign court. In addition, decisive weight should be afforded to the fact that the party raising the claims against recognition of the foreign judgment in Israel raised these claims himself in the foreign court, and his claims there were rejected.

If the court finds that the foreign judgment should be recognized, what is its significance for the proceeding being held in Israel? The consequence of the foreign judgment pursuant to the foreign law is a fact that needs to be proven, and insofar as necessary, the parity of laws presumption may be drawn on. According to Israeli law, if the proceeding in Israel is a class proceeding which is at the stage of class certification, denial of the class certification motion does not establish res judicata vis-à-vis the class. In such a case, recognition of the foreign judgment applies only to the party filing the class certification motion. In a case in which the foreign judgment is recognized without hearing the claims in connection with the right of the class to due process on the merits, because the party seeking class certification (or the lead plaintiff) are barred from raising the same, recognition of the foreign judgment is applicable only to the party seeking class certification (or the lead plaintiff).

From the general to the particular

34.There is no doubt that the manner in which the motion for leave to appeal at bar was heard is irregular. The proceeding underwent many twists and turns while it was pending before this court. In this framework, the parties submitted evidence regarding the developments that occurred over time in a manner which is inconsistent with the regular conduct of a proceeding in a court of appeals (although it is emphasized that the parties did not object to the filing of this evidence). There is a dispute between the parties on the adequacy of the notice that was given in Israel regarding the class proceeding in the United States, on the opportunity that was given to the class members in Israel to withdraw from the Settlement, and on the adequate representation of the class members in Israel before the foreign court. Hence, the question arises as to whether it was correct to remand the case to the trial court in order that it hear such new evidence and decide these disputes between the parties.

35.However, ultimately I reached the conclusion that there is no point in remanding the case to the trial court. Based on the material before us, it appears that it may clearly be ruled that the foreign judgment that was issued in the class proceeding in the United States should be recognized, and that such recognition leads to denial of the Motion for Class Certification in Israel. First, and with regards to the issue of jurisdiction, the Petitioner appeared at the court in the United States and raised his claims on the merits in his objection to approval of the Settlement. The Petitioner did not refer us to where he denied the jurisdiction of the court in his pleadings that were filed in the United States  (I would add that inspection of the Petitioner’s claims in the supplementary pleading reveals that he, indeed, did not deny the jurisdiction of the court in the United States to hear the proceeding; paras. 50-52 of the supplementary pleading on behalf of the Petitioner, and para. 12 of the Petitioner’s response to the supplementary pleading on behalf of the Respondent). The Respondent referred us to a pleading that was filed by the Petitioner with the California Federal Court in which he explicitly asserted that his claims against the Settlement ought to be heard in the United States and not in Israel (para. 32 of the supplementary pleading on behalf of the Respondent, which refers to Chapter III of Exhibit 27 to the supplementary pleading on behalf of the Petitioner). By his said conduct, and in the absence of an argument from the Petitioner on the issue of the convenient forum for a factual hearing at the trial court, he should be deemed as having agreed to the jurisdiction of the court in the United States It also appears that there can be no real dispute that the class proceeding has a substantive link to the United States in view of the fact that it concerns trade in securities of a United States company which was mainly performed in the United States.

36.With regard to the Petitioner’s claims of a violation of the right of the class members in Israel to due process, as specified above, decisive weight should be afforded to the fact that the Petitioner himself already raised these claims before the California court, and that they were heard there and rejected. I will briefly review the California court’s rulings on the matter (decision of February 18, 2014, Exhibit 29 to the supplementary pleading on behalf of the Petitioner). After having heard the Petitioner’s claims at the hearing held before it, the California court found that the Settlement was reasonable and fair vis-à-vis investors from Israel. The court added that the Petitioner’s claims regarding inadequate representation of the class members were not proven. In this context, it was held that the Petitioner did not prove that the class members from Israel ought to receive higher compensation due to a difference between securities law in Israel and such law in the United States The California court referred to the ruling of the District Court in Israel, whereby the law that applies to the Motion for Class Certification in Israel is United States law. The California court further added that the class proceeding in Israel is still in its infancy. Under these circumstances, the California Federal Court ruled that the Petitioner had “a long road ahead” in order to succeed in the proceeding that he had initiated in Israel. The California court’s said conclusion appears quite logical under the circumstances. The California court also referred in its decision to the relatively high rate of participation of investors from Israel in the Settlement. It transpires from the data presented in such decision that the rate of participation of Israeli investors in the settlement was considerably higher than their percentage in the entire class represented in the class proceeding in the United States It was held that these data reveal that the class members in Israel were aware of the Settlement, and also that they undermine the Petitioner’s claims in connection with the manner of representation of these class members. The court also rejected the Petitioner’s claim in connection with the implications of the judgment in the Morrison case. Finally, the United States court ordered the publication of an additional notice regarding the fact of the Settlement among the class members in Israel, and extension of the date for the filing of the Entitlement Forms by them.

37.As we can see, the Petitioner’s claims were heard in detail by the California court and rejected. Under these circumstances, there is no room to permit the Petitioner to raise his claims yet again in the Israeli court, even according to the broadest approach to an “indirect challenge” of a class proceeding (see the discussion in para. 28 above). Indeed, there is no claim before us on the part of any member of the class in Israel, apart from the Petitioner, asserting that he did not receive adequate notice of the class proceeding in the United States, or that his rights were violated in any way. All we have before us is the Petitioner whose claims were already raised and rejected by the foreign court. Hence, there is no reason to accept the Petitioner’s claims regarding a violation of the class’s right to due process, and there is also no reason to remand the case to the trial court to hear his claims. I will add that the Petitioner has no serious, arguable claim with regards to the body of the terms and conditions of the Agreement, which claim, as aforesaid, will only be heard in exceptional cases. The conclusion is that there is no impediment to recognizing the foreign judgment pursuant to sec. 11(b) of the Foreign Judgment Enforcement Law.

38.Notwithstanding my said conclusion, I will not deny that I am dissatisfied with the manner in which the Respondent conducted itself. In the Settlement itself, no explicit reference is made to the fact that a considerable portion of the class members are persons who are located in Israel and purchased shares of the Respondent on TASE. This matter was subsumed in the manner in which the represented class was defined (sec. 1.3 of the Settlement, whereby the class members are any person who purchased shares of the Respondent in the relevant period “on any domestic or foreign exchange or otherwise”). The manner in which it was stated that the notices of the fact of the Agreement would be announced in the newspapers is particularly puzzling: “once in Investor’s Business Daily, once in Globes, and once over the Business Wire” (sec. 6(b) of Appendix A to the Agreement), without stating that the second of the three newspapers is an Israeli newspaper. In addition, on the Entitlement Form the class members were required to declare that they had not initiated a proceeding in connection with the subject matter of the Settlement, and that they are not aware of such a proceeding having been filed on their behalf (sec. IV of Appendix A2 to the Settlement). Clearly, this declaration is not true with respect to the class members in Israel in view of the filing of the Motion for Class Certification in Israel. Moreover, in one of the pleadings that was filed in the framework of the hearing on approval of the Settlement (on behalf of the lead plaintiff in the United States), an attempt was made to convince the court that the class is homogeneous, and then too, without saying a word about the difficulty presented by the fact that a considerable portion of the class members is located in another country, and in whose regard there is an additional class proceeding (Exhibit 7 to the supplementary pleading on behalf of the Petitioner).

Moreover, it transpires from the documents that the Respondent attached to the supplementary pleading on its behalf, that it filed several affidavits with the California court regarding the manner in which the Settlement was announced and regarding the pace of implementation thereof (Exhibit 2 to the supplementary pleading on its behalf). In the first of the affidavits that were attached, of December 16, 2013, no explicit mention was made of the existence of the class members in Israel. Then, too, the notice in the “Globes” newspaper was described alongside the other notices that were published in the United States, without stating that this notice was made in Israel. On December 30, 2013, the Petitioner filed his objection to the Settlement (Exhibit 20 to the supplementary pleading on behalf of the Petitioner). Subsequently, on January 16, 2014, an additional affidavit was filed by the Respondent, and this time providing substantial details regarding the existence of the class members in Israel, the notices that were sent to them, and the rate of response on their part according to the Settlement. This affidavit finally stated that the “Globes” newspaper is a newspaper distributed in Israel, and that this notice of the settlement was made in Israel. This conduct raises a suspicion that, prior to the filing of the objection by the Petitioner, the Respondent, together with the lead plaintiff in the United States, tried to underplay the fact of the existence of the class members in Israel.

Indeed, at the time of the hearing in the California court on the Petitioner’s objection to approval of the Settlement, the court expressed irritation that it was not aware of this problematic aspect of the Agreement (pp. 56, 62 and 68-69 of the transcript of the hearing of February 14, 2014, Exhibit 28 to the supplementary pleading on behalf of the Petitioner). The court was also troubled by the adequacy of the notice that was given to the class members in Israel, and even informed the Respondent of the concern of a future indirect challenge of the approval of the Settlement (ibid., at p. 24, line 22ff., and at p. 63). In view of the court’s comments at the hearing, the Respondent published an additional notice of the Settlement in Israel, this time in Hebrew, and the date for the filing of the Entitlement Forms by the class members in Israel was also extended.

39.In my opinion, there is no doubt that the Respondent ought to have clearly informed the California court of the problem presented by the existence of the class members in Israel, at its initiative and at the stage of the filing of the Settlement for the court’s approval. A separate and in-depth hearing on the Settlement and the motion to approve it ought to have been dedicated to the issues concerning the existence of no few class members from outside of the United States However, although this was not done, ultimately the California court was informed of the foregoing difficulty, it explicitly addressed it, and decided the issue. This was done following the objection that the Petitioner filed to the Settlement, and to his credit, it is noted that the objection led to the publication of an additional notice of the settlement in Israel and to the extension of the date for the filing of the Entitlement Forms. In any event, once the California court addressed the matter, and decided as it did, there is no room to permit the Petitioner to try his luck by raising the same claims once again in Israel.

40.Having reached the conclusion that the judgment approving the Settlement in the class proceeding in the United States should be recognized, the question arises as to the implications thereof for the Motion for Class Certification in Israel. The Respondent filed an expert opinion in respect of the significance of the judgment in the United States, but it appears that in this regard too, there is no point in remanding the case to the trial court for a factual hearing of the issue. The fact that the foreign judgment establishes res judicata pursuant to United States law is quite clear in view of the provisions of the Settlement, and in view of the definition of the represented class according to the Settlement. The Petitioner has no good claim in connection therewith. It is noted that the judgment that was issued in the United States is final (it is noted that another class member filed an appeal from the judgment with the Federal Court of Appeals and the appeal was denied by consent: Exhibit 1 to the supplementary pleading on behalf of the Respondent). Although the California court ruled that it was not deciding upon the consequences of approval of the Settlement in respect of the proceeding being held in Israel, this is inconsequential. Leaving the significance of a judgment to a proceeding in another country as an open issue to be decided by the court in the other country is a technique used by courts from time to time (see the survey in Brown’s article, at pp. 224-226; and see the Smith case, at p. 2375). The question of the significance of the foreign judgment in Israel is determined by the court in Israel, as we shall now do.

With respect to the implications of the foreign judgment in Israel pursuant to Israeli law, the proceeding is at the class certification stage. Therefore, the implications of recognition of the foreign judgment are vis-à-vis the Petitioner only, and not vis-à-vis the class in Israel. This is particularly true when the claims regarding violation of the right of the class members to a process were not heard by us on the merits, since the Petitioner himself is barred from raising the same.

41.We find, under the circumstances created, there is no point in remanding the case to the trial court for a factual hearing on the parties’ claims. The parties were given a full opportunity to present their claims on the matter before us. It should be recalled that a court of appeals has broad jurisdiction to decide disputes between the parties, and in this context the court of appeals is granted jurisdiction to issue any decision that may be issued by the trial court, and to issue a decision in favor of the respondent even without the filing of an appeal or a counter-appeal on its part (see sec. 462 of the Civil Procedure Regulations, 5744-1984).

42.However, I would reemphasize that as aforesaid, in my judgment no examination was performed on the merits of the claims in connection with the right of the class members in Israel to due process, since the Petitioner himself is barred from raising such claims after he raised them in the United States and they were rejected there. Therefore, if, in the future, these claims are raised by another member of the class in Israel, the competent court may be required to address the same on the merits. In such an examination, weight will probably also be afforded to the rulings made at the California court (and see para. 32 above). I, of course, express no position with regard to the fate of such a proceeding.

Final comment

43.In CApp 3441/01 Anonymous v. Anonymous, IsrSC 58(3) 1, 23 (2004), Chief Justice A. Barak stated (not in connection with class actions):

“In today’s reality, many Israeli citizens litigate outside of Israel. We are indeed living in a world that is becoming ‘one large village’ (LCA 2705/97 Hageves A. Sinai (1989) Ltd. v. The Lockformer Co., at p. 114). In this reality, motions to recognize foreign judgments of all types and varieties are becoming commonplace. The various dilemmas arising from the issue must be regulated in legislation. The dilemmas revolving around this proceeding will prove the extent to which the issues are complex, and ought to be given a detailed and structured legislative solution”.

With this I concur. The manner in which foreign judgments in class actions are recognized ought to be regulated in legislation. Thus, the certainty with regards to the conditions required for recognition of a foreign judgment in a class action will increase, and the parties will be able to plan their steps accordingly.

44.In conclusion, I propose to my colleagues that we hold that the Settlement that was approved in the class proceeding in the United States be recognized in Israel for purposes of the class proceeding in Israel. Hence, the motion for class certification that was filed in Israel should be denied, and we so order. In view of the Respondent’s conduct, which I specified above, I propose that we make no order for costs.

President (ret.)

Justice U. Vogelman:

 

I concur.

                                                           

 

Justice N. Sohlberg:

 

I concur.

                                                           

 

 

Decided as stated in the judgment of President (ret.) A. Grunis.

 

Given this day, Nissan 13, 5775 (April 2, 2015)

 

 

 

President (ret.)                        Justice                         Justice

 

CA 10085/08 and

Counter Appeal

CA 6339/09

CA 7607/09

 

Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel

 

v.

 

1. Estate of the late Tufik Raabi

2.  Israeli Consumer Council

 

 

The Supreme Court sitting as the Court for Civil Appeals

[29 November 2010]

 

Before Justices E. Hayut, U. Vogelman,  Y. Amit

 

 

Israeli Legislation  Cited

Class Actions Law, 5766-2006, ss. 20, 22, 23

Restrictive Trade Practices Law,  5748-1988

Banking  (Service for Customer) Law, 5741-1981

Equal Rights for Disabled Persons Law, 5758 – 1998, ss. 19 (54)   - 19 (64)

Male and Female Workers Equal Pay Law 5756- 1996, s. 11

Standards Law 5713-1953, ss. 9(a), 17 (a) (1), 17 (b)

 

 

Israeli Supreme Court Decisions Cited

 

[1]        CA 1338/97  Tenuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd v. Raabi,  IsrSC 57 (4) 673 [2003]

[2]        CA 1977/97 Barazani v. Bezeq Israel Telecommunications Company Ltd, IsrSC 55 (4)  584 (2001);

[3]        FHC 5712/01 Barazani v. Bezeq Israel Telecommunications Company Ltd, IsrSC 57 (6)  385 (2003);

[4]          CA 2781/93 Daaka v. Carmel Hospital, Haifa   IsrSC 53(4)  526 [1998-9] IsrLR 409

[5]          LCA 3126/00 State of Israel v. E.S.T. Project Management and Manpower Ltd, IsrSC 57 (3), 220 (2003)

[6]        FHC 5161/03  E.S.T   Project Management and Manpower Ltd v. State of Israel, IsrSC  60 (2) 196 (2005)

[7]        CA. 8430/99 Analyst I.M.S. Trust Funds Management (1986) v. Ard Industrial Investment and Development, 256  IsrSC 56 (2)

[8]        LCA 4556/94 Tetzet v. Zilbershatz, IsrSC 49(5) 774 (1996);  

 

[9]        CA 345/03 Reichart v. Raabi Moshe Shemesh Heirs  (not yet reported) 7.6.2007)

 

[10]      CA 3506/09 Zaig v. Waxelman, Waxelman Accountants (not yet reported)( 4.4.2011)

 

[11]      CA 3613 Ezov v Jerusalem Municipality  IsrSC 56 (2) 787 (2002).

 

[12]      LCA 8733/96 Langbert v. State of Israel – Israel Lands Administration, IsrSC 55 (1) 168  (1999).

 

[13]      CA 7028/00 A.B.A. Trust Funds Management Ltd v. Elsynth Ltd (not yet reported, 14.12.2006)

 

[14]      HCJ 2171/06 Cohen v. Knesset Speaker (not yet reported, 29.8.2011)).

 

[15]      CA 10262/05 Aviv Legal Services Ltd v. Hapoalim Bank, Head Management  (not yet reported, 11.12.2008)

 

[16]      CA 3901/96 Local Planning and Building Committee v. Horowitz, IsrSC 56 (4) 913, 328 (2002)

 

[17]      CA 4576/08 Ben-Zvi v. Prof. His  (not yet reported, 7.7.2011)

 

[18]      CA 8126/07 Estate of the Late Bruria Zvi  v. Bikkur Holim Hospital (not yet reported, 3.1.2010);

[19]      CA 9590/05 Rahman Nuni v. Bank Leumi LeIsrael Ltd , (not yet reported  10.7.2007)

 

[20]      CA 6153/97 Shtendal v. Prof. Yaakov Sadeh , IsrSC 56 (4) 746 (2002)

 

[21]      CA 9936/07 Ben David v. Dr. Entebbe (22.2. 2011)

 

[22]      CA 9817/02 Weinstein v. Dr. Bergman, (not yet published, 16.6. 2005)

 

[23]      LCA 9670/07 Anon v. Anon (not yet reported,6.7.2009)

 

[24]      CA 2967/95 Hanan Vakshet Ltd v. Tempo Beer Industries Ltd,  IsrSC 51 (2), 312 (1997)

 

 [25]     FHC 4693/05 Carmel Haifa Hospital v. Malul  (not yet reported, 29.8.2010)

 

[26]      355/80 Anisimov Ltd v. Tirat Bat-Sheva Hotel. IsrSC 35 (2) 800 (1981)

 

[27]      CA 4022/08 Agbaba v. Y.S. Company Ltd],(21 October 2010 paras 10 – 24; 

 

[28]      C.A. 754/05 Levi v. Share Zedek Hospital) (2007) IsLR 2007  131

 

[29]      CA Reznik v. Nir National Cooperative Association for Workers Settlement [not yet published]   (20.7 2010]

[30]      CA  1509/04 Danush v  Chrysler Corporation (not yet published, 22.11.2007)

[31]       CA 9134/05  Adv. Eliezer Levit v. Kav Of Zafon, Cooperative Association for Services Ltd  [not yet reported, 7.2.2008)

[32]      AAA 2395/07  Accadia Software Systems Ltd v. State of Israel – Director of Tax and Stamp Duty 27.12.2010)

[33]      CA 7094/09 Borozovsky  Conveyancing Ltd v. Ichurn Itur Veshlita Ltd (14.12.2010) 

           

 

American Cases

 

[34]Affiliated Ute Citizens of Utah v. United States 406 U.S. 128, 153-154 (1972) ;

 

[35 ]Binder v. Gillespie 184 F.3d 1059, 1063-1064 (9th Cir. 1999)

 

[36]; Poulos v. Caesars World Inc. 379 F.3d 654, 666 (9th Cir. 2004

 

[37] Kennedy v. Jackson National Life Insurance Company, 2010 U.S. Dist. Lexis 63604, 25-28 (N.D.Cal 2010)

 

[ 38]  Negrete v. Allianz Life Insurance Company of North America 238 F.R.D 482, 491-492 (C.D. Cal. 2006)[.

 

[39]Klay v. Humana, Inc.382 F.3d 1241, 1259 (11th Cir. 2004)

 

[40] Johnson v. The Goodyear Tire & Rubber Company, Synthetic Rubber Plant, 491 F.2d 1364, 1379-1380 (5th Cir. 1974);

 

[41]Cooper v. Allen, 467 F.2d 836, 840 (5th Cir. 1972)

 

[42]Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417 (5th Cir. 1998);

 

[43 ]Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639, 650-651 (6th Cir. 2006);

 

[44] Fuhrman v. California Satellite Systems, 179 Cal. App. 3d 408, 424-425 (1986);

[45] Altman v. Manhattan Savings Bank, 83 Cal. App. 3d 761, 767-769 (1978);

 

[46] Stilson v. Reader's Digest Association, Inc., 28 Cal. App. 3d 270, 273-274 (1972);

 

[47] Birnbaum v. United States, 436 F. Supp. 967, 986 (1977).

 

[48] Bates v. UPS 204 F.R.D. 440, 449 (N.D. Cal. 2001)

 

[49]  Olden v. LaFarge Corp. 383 F.3d 495, 509 (6th Cir. 2004)-

 

[50] Hilao v. Estate of Ferdinand Marcos, 103 F.3d 767, 782-787 (9th Cir. 1996)

 

[51 ] Wal-Mart Stores, Inc. v Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011)

 

[52] Midwestern Machinery v. Northwest Airlines 211 F.R.D. 562, 572 (D. Mn. 2001)

 

[53 ] McLaughlin v. American Tobacco Co.

 

[54 ]: Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974);

 

[55] Stewart v. General Motors, 542 F.2d 445 (7th Cir. 1976);

 

[56]  Bowe v. Colgate-Palmolive Co., 489 F.2d 896 (7th Cir. 1973); 

 

[57] United States v. Wood, Wire & Metal Lathers Int. Union, Local Union 46, 328 F.

 

[58]Hood v. Eli Lilly & Company 671 F. Supp 2d  397, 434-453 (E.D.N.Y. 2009)

 

[59] Long v. Trans World Airlines, Inc., 761 F. Supp. 1320 (N.D. Ill. 1991))

 

[60] Allison v. Citgo Petroleum, 151 F.3d 402, 414-415 (5th Cir. 1998);

[61] Lemon v. Int'l Union of Operating Engineers, Local No. 139, AFL-CIO 216 F.3d 577 (7th Cir. 2000);

[62] Jefferson v. Ingersoll Int'l, Inc. 195 F.3d 894 (7th Cir. 2001); 

[63] Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639 (6th Cir. 2006).

[64]  Fibreboard Corp., 893 F.2d 706, 712 (5th Cir. 1990).

 

[65]  Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977)

 

[66]  Redish; Powell v. Georgia-Pacific Corporation, 119 F.3d 703, 706 (8th Cir. 1997)

 

[67]  Airline Ticket Commission Antitrust Litig, 268 F.3d 619, 625 (8th Cir 2001)

 

[68] Folding Carton Antitrust Litig. 744 F.2d 1252 (7th Cir. 1984)

 

[69]  Houck v. Folding Carton Admin. Comm., 881 F.2d 494 (7th Cir. 1989)

 

[70]  Cuisinart Food Processor Antitrust Litig38 Fed. R. Serv. 2d (Callaghan) 446 (D. Conn.1983).

 

[71] Democratic Cent. Comm. v. Washington Metro. Area Transit Comm'n

 

[72]  Domestic Air. Transp. Antitrust Litig

 

 

 

For the petitioners — T. Feldman, Y. Elam, F. El-Ajou, H. Jabarin.

For the respondents — A. Helman, A. Segal-Elad, H. Gorni.

 

 

JUDGMENT

 

Justice E. Hayut

 The decision forming the subject of the appeals before us was given in a consumer class action that was approved for filing against Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd (hereinafter – “Tnuva”).  The suit concerns the misleading of the consumer public and the production of a dairy product in contravention of the official standard in force on the dates relevant to the suit, by reason of the addition of silicon to  long lasting low fat (1%) milk, that was manufactured and marketed by Tnuva, without making any mention of the silicon component on the product.

Factual Background and the Process of Approving the Suit as a Class Action

     1. At the end of 1993 a problem of over-frothing arose in the process of mixing long lasting milk containing 1% fat (hereinafter: “the milk”) as a result of a problem in one of the machines on the production line. Given the high cost of the malfunctioning machine (about 300 – 400 thousand  U.S dollars) the personnel of the Rehovot dairies decided to solve the problem of  frothing  by adding a chemical substance known as “Polydimethyilsiloxane” , the trademark for which is E-900, to the milk.  This substance is known as “silicon” and was purchased by the dairy in Rehovot, from Amgal Production of Chemicals (1989) Ltd (hereinafter: "Amgal")  without informing the central management of Tnuva.  The Amgal company purchased the silicon from an English company. The aforementioned addition of the silicon to the milk continued from 25 January 1994 until 6 September 1995, just after the affair was exposed. During that period the Tnuva dairy in Rehovot produced and marketed to the public an overall amount of 13 million liters of milk.

The addition of the silicon to the milk was first exposed in the media on 30 August, 1995 and Tnuva's initial reaction consisted of a sweeping denial  of the allegation against it.  This was the case both in an interview of the director of the  Tnuva Milk department, Mr. Yosef Yudovitz and in the official press releases on behalf of Tnuva published in a number of papers on 31 August, 1995, in which it stated that the Tnuva long life milk was free of the silicon supplement and that independent laboratory tests verified this (similar pronouncements also appeared on  1 September, 1995).  The Tnuva representatives continued to deny the addition of silicon in a hearing conducted in the Knesset Economic Committee on 5 September 1995, but soon after that, on 10 September 1995 an internal commission of inquiry appointed in the wake of the publication determined that indeed a silicon supplement had been added to the long life milk that contained 1% fat, in the Tnuva dairy of Rehovot, and the commission's conclusions were published in the media. In the wake of these conclusions, Tnuva recalled all of the cartons of 1% long life milk from the shelves of the stores, to which it was feared that the silicon had been added, and the manager of the Rehovot dairy was suspended from his position.   The National Food Service of the Ministry of Health likewise decided  that Tnuva would have to destroy all of the milk containing silicon and it was prohibited to use it, even as food for animals.  It was further decided on 12 September 1995 to revoke the permit that had been given to Tnuva confirming appropriate conditions of production. Tnuva on its part decided on the same day to establish a commission to investigate the affair, which would give recommendations on "lessons to be learnt and conclusions to be drawn in each and every area that it found appropriate, including personal conclusions"  The committee  headed by Prof. Yehuda Danon, and after it had heard the testimonies and examined the documents,  it published the "Committee's Report on the Examination of Long Life Milk" (hereinafter: the Danon Committee Report"). In the framework of the Report criticism was leveled against senior workers in the Tnuva dairy, against the senior management of Tnuva by reason of the absence of supervision and inspection in the Tnuva dairy, and even against the Food Service in the Ministry of Health, and the Institute for Inspection and Quality in the Trade and Industry Office that was supposed to have conducted supervision and inspection of the quality of the food.

2.    The state on its part on 30 January, 1996 filed an indictment against Tnuva in the Magistrates Court of Rehovot, and against  its CEO and against the manager of the Milk Department and the manager of the dairy for offences of misleading in an advertisement, pursuant to ss. 2(a), 7 (a)(1), 23 and 27 of the Consumer Protection Law 5741-1981 (hereinafter:
"Consumer Protection Law") and against Tnuva and the manager of its dairy in Rehovot for the offences of failing to comply with an official standard pursuant to ss.  9(a), 17 (a)(1) and 17 (b) of the Standards Law 5713-1953 (hereinafter:"Standards Law"). On 4 March 1997 the defendants were convicted by force of their confessions for the offences that were ascribed to them, and the Court accepted the plea bargain that was reached between them and the state, in accordance with which a financial penalty was imposed on Tnuva and the other defendants  (the financial penalty imposed on Tnuva was for the sum of NIS 28,000).

Another proceeding instituted against Tnuva was the present proceeding, which began in a suit filed in the Tel-Aviv Jaffa District Court  on 14 September, 1995 by the late Tufik Raabi (hereinafter:  "Raaabi") along with an application for the certification of the suit as a class action (CF 1372/95, Mot. 11141/95. In his (amended) suit, Raabi claimed that he had consumed long lasting low fat (1%) milk during the relevant period and that the silicon was not specified as one of the ingredients on the packaging of the product, and as such Tnuva had violated the provisions of sections 2,4, and 17 of the Consumer Protection Law.  Raabi further alleged a infringement of an “unwritten contract” with him and with the consumer public in its entirety and negligence on the part of Tnuva in all of the stages involved in “production, supervision, marketing and advertising of the facts related to the addition of the prohibited material to the milk and the fact of the reasonable probability of a real and/or potential health hazard in the product that it marketed”.  In his petition Raabi requested restitution of the sums he had paid in consideration for the milk that he had purchased in the relevant period and compensation for the mental anguish caused to him by the addition of the silicon and by reason of the “misleading and contemptuous” conduct of Tnuva. Raabi’s request for his suit to be recognized as a collective action relied on Chapter F’1 of the Consumer Protection Law, which at that time included an arrangement for the filing of a collective action based on the grounds specified therein. 

3.    The Tel-Aviv District Court (the late Honorable Judge M. Telgam), on 13 June 1996 certified Raabi’s request to file a class action in the name of all of the milk consumers during the relevant period, but the court stressed that in this case it would not certify the remedy of restitution because Raabi had already consumed the milk and had not claimed that any real damage had been caused by its consumption, and he further stressed that even though there was nothing to prevent Raabi from proving that his health had been damaged thereby,  he was not permitted to represent the members of the group regarding “future bodily damage”.

An appeal and a counter appeal against the certification decision were filed by the parties to the Supreme Court (CA 1338/97 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd v. Raabi  [1]  (hereinafter: Decision on the Certification Request)). Tnuva challenged the certification of the suit as a class action and Raabi challenged the determination that the class action would not include the remedy of restitution, and the fact that there was no award for legal fees in his favor. The Israeli Consumer Council joined as a party to the hearing (Raabi and the Israeli Consumer Council will hereinafter be referred to as “the representative plaintiffs”), and in the Attorney General joined as a party in the appeal proceedings, in support of the confirmation of the class action

4.    On 19 May, 2003 in a majority decision, this Court rejected the aforementioned appeals filed by the parties and left the decision of the District Court intact in the sense of certifying the filing of a class action. Regarding this, Justice M. Naor held that the damages claim by Raabi concerns the  non-pecuniary damage that was caused to him by negative feelings, and feelings of disgust, which stem from the consumption of milk that contains silicon “with all of the associations attendant thereto” and that damage of this kind was prima facie “remunerable damage”. The justice further ruled that the addition of the silicon supplement to the milk in defiance of the standard constitutes an  infringement of individual autonomy, and that under the circumstance this not a “trivial matter) (de minimis), and that despite the fact that the Consumer Protection Law does not contain a provision that enables a compensatory award for the benefit of the public or the benefit of a group (all or in part) the court is permitted to award this kind of remedy in a suit under the Consumer Protection Law in appropriate cases in which there is a structural difficulty in locating the consumers. All the same, Justice Naor ruled that the Court would not intervene with the District Court’s decision not to award restitution in this case. Regarding the plaintiffs’ group Justice Naor ruled that it would include all those who had consumed  long life milk of 1% to which silicon was added  during the period between 23 October 1994 and September 1995”, having regard for the fact that the provision in the Consumer Protection Law that allowed the filing of a collective action came into effect on the 23 October 1994 and the fact that in the month of September 1995 the dairy products containing silicon were removed from the shelves.

Deputy President, S. Levin concurred with the ruling of Justice Naor (subject to the issue of awarding a remedy to the public being left as requiring further consideration), and Justice Proccaccia ruled in her minority opinion that the suit should not be recognized as a class action.  She held that the chances of Raabi’s personal suit succeeding are not “self evident” and in her view, "the claim concerning the injury as a result of the inclusion of the supplement in the food product, in deviation from the standard, but without having caused any damage to health, does not dictate, "self evidently" that damage flows naturally in the regular course of events".  Justice Proccaccia added that she would also have refrained from approving the suit as a class action in accordance with the discretion conferred to the court in this matter  (s. 35A of the Consumer Protection Law), inter alia given the fact that the nature of the alleged damage  is not necessarily common to the entire consumer public, and "it is connected to the individual health threshold of each consumer and significantly dependent upon it."

The Class Action Proceedings

5.    Once the suit was certified as a class action, the District Court (Judge Dr, E. Benyamini)  ordered the publication of a notification to the public and the filing of amended claim sheets in accordance with the prescribed conditions of the certification. In the amended statement of claim that they filed, the representative plaintiffs claimed that the approximate number of members in the plaintiff group was estimated at about 43% of the population, which constitutes over two million consumers, and that the members of the group should be compensated for infringement of their autonomy and negative feelings occasioned by inter alia deception, contempt, mental anguish, nausea, aversion to essential food products, fear and anxiety.  According to the representative plaintiffs, the members of the group in their entirety should receive compensation of NIS 8000 for each consumer included in the plaintiff group.  Tnuva on its part argued that the claim relating to the infringement of individual autonomy should be rejected, because no such infringement was actually  caused, and if caused, it was minor and peripheral, in the category of de minimis.  In this context Tnuva stressed,  inter alia  that the addition of silicon to the milk  did not harm the consumers and that silicon was a recognized, approved, and frequently used food supplement all over the world.

6.    The first stage of preliminary proceedings in the Lower Court was intended,  inter alia to crystallize the proceedings for the hearing and the means of proving the suit. In this framework the Lower Court  ruled that the evidentiary stage would not be divided into separate hearings for the question of responsibility and the question of damage.  The court further rejected Tnuva's request to establish a system for proving the non-pecuniary damage on an individual basis, ruling that already at the preliminary stage  "it was clear that the only way of proving damage in this case, if at all, in the absence of any method for locating the purchasers of the milk, is by way of market surveys for the entire consumer public, or even a few sample affidavits of milk consumers, along with the affidavit of [Raabi]” (para. 14 of the decision). On the other hand, the court left open the question of whether it was possible to award general compensation to the entire plaintiff group based on this form of proof.  In addition the court ruled that insofar as in accordance with the standard silicon was prohibited for the use of cows'  milk for drinking, there was no need to rule on the question of whether its use constitutes a health hazard, but it added that when examining the non-pecuniary damage caused by an infringement of autonomy and negative feelings, importance attached to the question of whether there are studies that show the possibility of damage to health as a result of the use of silicon and the question of the quantity necessary to cause such a risk. The reason for this is that if there are experts who contend that there is a possibility of damage to health, then it becomes necessary to address the question of  the consumer’s right “to decide whether he was interested in refraining from taking any risk involved in the consumption of the  milk”. The court further ruled that to the extent that there was proof for the ground of the claim and the alleged damage, and it was determined that compensation should be ruled for the benefit of the group or the public, it would consider the appointment of an expert- examiner and Tnuva would be obligated to supply him with the required economic data.

On 13 October, 2004 the Court actually appointed an expert-examiner in accordance with Regulation 124 of the Civil Procedure Regulations, 5744-1984  (Prof. Yechezkel Ofir, an expert in economic and marketing (hereinafter – Ofir)), and in its decision of 17 March, 2005  the Court further ruled that “the relevant population for this claim is, essentially, the people who actually purchased the milk” and that the intention was to those who purchased the milk in Israel (para. 16 of the decision). All the same, in that decision the Court ruled that the plaintiff group would also include persons who had consumed the milk in hotels, restaurants, and cafes (as distinct from those who consumed it at places of work and who did not actually purchase the milk that was consumed), notwithstanding that with respect to them it would be difficult to prove an infringement of autonomy because they did not choose the category of milk that they had drunk..

 

The Partial  Decision of the District Court

7.    In its partial decision of 7 October 2008 the District Court ruled that the class action suit should be accepted.  In its opening comments the Court noted that the Class Action Law, 5766-2006 (hereinafter – “the Law” or the “Class Action Law”) which was enacted and came into force after the certification of the suit as a class action, would also apply to suits pending at the time of its publication, and hence would also be applicable to this particular class action suit. Even so, the Court ruled that “regarding the ground of claim and the plaintiff group, a decision would be given in accordance with the Consumer Protection Law, which as stated, only applies to the a “consumer” as defined in the law”, while also pointing out that with the enactment of the Class Actions Law, the representative plaintiffs had not petitioned to amend the statement of claim and broaden the scope of the group in accordance with the broadened grounds of claim for which a class action can be filed under the Law.

In the partial decision the Court conducted an extensive survey of the evidentiary material submitted to it, including, inter alia, the Report of the Danon Committee, an expert opinion and public opinion surveys. Regarding the criminal proceedings, the Court held that for purposes of the class action it was not possible to base "factual findings" on the holdings of the Court in the criminal proceedings, inter alia because in that proceeding, witnesses were not heard and evidence was not submitted. Still, the Court ruled that Tnuva's admission to the commission of the offences and the convicting verdict also constitute evidence against it in the proceeding at hand ( whether by force of an admission of a litigant or by force of the provision of section 42A of the Evidence Ordinance [New Version] 5731-1971).  

As a preliminary remark, with implications for both the grounds of the suit and the proof of damage, the Court ruled that it was not required to rule on the "scientific question" pertaining to the existence of a health risk in the drinking of milk containing silicon, and that for purposes of the suit it was sufficient to examine the question of whether it was possible to rule out the possibility of such a health hazard. The Court determined that based on the evidentiary material presented, it could rule that even if there was no proof that the drinking of milk containing silicon caused, or was liable to cause immediate health damage to the consumers, it was not possible to rule out the existence of a health hazard in the long term, especially for children. The Court added that according to its approach, the consumers were entitled to know that the milk contained silicon  in defiance of the law and the relevant standard,  and that in these particular circumstances it was not possible to rule out the health risk involved its consumption, and it also added that had it been required to rule on the aforementioned scientific question  it would answered it in the affirmative, given  the existence of a standard which was presumably based on considerations of  public health and which would transfer the onus of proving the absence of a health hazard to the party in breach, and Tnuva, had not discharged that onus.

8.    In adopting Raabi's version, which was that he purchased within the State of Israel (and not within the areas of Judea and Samaria) as claimed by Tnuva, low fat long life mile of Tnuva which was produced in the Tnuva dairy in Rehovot in the period relevant to the suit, the Court held that Raabi has a personal ground of claim against Tnuva. The Court likewise held that even had its conclusion been different it would not have determined the fate of the class action, inasmuch as following the certification, the suit was that of all of the members of the group, and at all events, it was possible to replace a representative plaintiff who lacked a person grounds of claim, by force of s.8(c) (2) of the Class Actions Law

Regarding the existence of the ground of misleading, the Court noted that in fact it was not disputed that Tnuva misled its consumers and added that "misleading" is too delicate a word to describe Tnuva's conduct, which bordered on consumer fraud". This act of misleading, he added ,was done intentionally with respect to matters that were most definitely essential from the consumers' perspective, because it was an act of misleading regarding the essence and nature of the product (s. 2(a)(1) of the Consumer Protection Law), its components (section 2(a) (2) of the Consumer Protection Law), the risks involved in its use (s. 2(a)(4) of the Consumer Protection Law), and relating to its compliance with the standard (2(a) (11) of the Consumer Protection Law). The Court stressed in this context that the milk was a product that was supposed to be "as pure and natural as possible" and that to a large degree it was consumed by a relatively vulnerable population. It should also be added that the misleading in this case was compounded with the breaching of the obligations imposed on Tnuva by force of the Standards Law, and in this context the Court addressed the fact that the Israel Standard relating to drinking milk which prohibited the addition of silicon to milk is a binding official standard which also involves (as opposed to the "general" Israeli standard) "significant obligations", and it is prohibited to produce or to trade in a product that does not comply with its conditions.  By the same token, Tnuva did not indicate the existence of the silicon supplement on the packaging, and in doing so breached its disclosure duties pursuant to section 4(a) of the Consumer Protection Law, because the product that did not meet the requirements of the standard and was substantively defective and in accordance with section 17 (a) of the Consumer Protection Law.  The Court further held that once it was proved that Tnuva as a dealer had made a misleading representation, the assumption should be that the consumers were exposed to the representation and acted upon it, and the Court emphasized that misleading with respect to the Consumer Protection law can also take place by way of failure to make proper disclosure. In this context the Court further ruled that it was not necessary to prove what exactly each consumer knew and the presumption was that the consumer placed his trust in the dealer and there were no grounds for imposing a duty upon the consumer to clarify whether the product he had purchased complied with the requirements of the Law or the standard.  In view of this the Court ruled that in the case before us the foundation of misleading was fulfilled.

9.    In referring to the rule established in CA 1977/97 Barazani v. Bezeq Israel Telecommunications Company Ltd, [2] at p. 584 (hereinafter "Barazani"); and FHC 5712/01 Barazani v. Bezeq Israel Telecommunications Company Ltd [3] at p. 386  (2003) (hereinafter Further Hearing Barazani the Court noted that the misleading of a consumer constitutes a grounds in tort, by force of the provision of s. 31 (a) of the Consumer Protection Law, and that as such, it was subject to the "doctrinal first principles of the Tort Ordinance [New Version]. The Court further added that even if it was a conduct based grounds (as opposed to consequential) for the purposes of the receiving compensation it was necessary to prove damage and a causal connection between the act of misleading and the damage, as wall as the consumer's awareness of the misleading picture and his reliance thereupon. In our case, so ruled the Court, there was misleading by way of omission, "and it is undisputed that the consumers relied on the fact that the milk that Tnuva produced complied with the requirements of the Law and the standard also indicating that Tnuva never claimed to the contrary.

Regarding the categories of damage by dint of which the action was approved as a class action, the Court noted that these included "non pecuniary, non-tangible, damage that included  negative feelings, such as the feelings of disgust, mental anguish and discomfort, as well as the infringement of individual autonomy" , the thrust of which was the right to formulate a decision  whether to agree to a certain proceeding, in a considered, intelligent and informed manner and with knowledge of the relevant facts. The Court further noted that the non-pecuniary damage caused as a result of the infringement of autonomy admitted of compensation even in the absence of bodily damage, in accordance with the criteria established CA 2781/93 Daaka v. Carmel Hospital, Haifa  [4] 526 (hereinafter – Daaka).  In that context the Court rejected Tnuva's claim that the suit should be rejected given that the injury falls into the category of a "trivial matter", holding that that fact of the damage being mild need not stand in the plaintiff's way, and the very fact that the act damaged the public at large indicates that the act is not trivial.  According to the Court's approach, the severity of the act in this case must be assessed from the perspective of the group in its entirety and not that of the individual consumer.  According to this approach an act consisting of the misleading of the broad consumer public regarding the contents and legality of the production of milk, which is a basic product, cannot be considered as "trivial"..

Regarding the proof of personal damage that was caused to  Raabi, the Court adopted the essence of his claim, which was that as a result of his exposure to the case he experienced negative feelings such as disgust, anger and annoyance by reason of the fraud  and anxiety regarding the consequences of drinking.  The Court noted that though it could be argued that Raabi's feelings were "exaggerated" it was not possible to argue with subjective feelings., and it rejected Tnuva's claim that his feelings stemmed from the publications in the media according to which silicon is suspected of being a carcegengous product. Regarding the damage caused to the members of the group, the Court noted that in principle they were obligated to prove the alleged damaged that they sustained, but that in a mass collective action, as in the case before us, it is not practically possible for each one of the members of the group testify, or even to actually locate all of the milk consumers.  Referring to Regulation 9 (c ) of the Consumer Protection (Procedure for a Class Action), 5755-1995, and s. 20 of the Class Actions Law, the Court ruled that under these circumstances it would suffice to prove the damage in "from a general perspective". The Court noted that the representative plaintiffs had sufficed with the testimony of Mr. Raabi and in the expert opinion prepared by the experts Prof. Mevorach and Dr. Katz on behalf of Maagar Mohot based on a telephone consumer survey (hereinafter: “computer survey”), and that they should rather have filed the affidavits of a number of consumers; however, its position was that the evidence filed was sufficient for the proof of the damage and the determination of its rate, and in this context the Court rejected the claims raised by Tnuva against the consumer survey and its reliability, noting inter alia that drafters of the expert opinion had made a reliable impression, and that they had knowledge and experience in their field.

10.  Giving detailed consideration to the results of the consumer survey the Court noted that the survey indicates that the range of negative feelings (including revulsion, anxiety, fear, anger hatred, disappointment) were to a large or intermediate degree shared by about 66% of the milk consumers. At the same time, the Court accepted Tnuva’s claim concerning a certain inconsistency between the data presented and its claim that in the fifth question, (pertaining to the time at which the negative feelings emerged) the interviewees should not have been presented with the representation whereby the publications concerning the health hazards of silicon were verified both by the Ministry of Health and by Tnuva. However, since the two questions defined by the Court as “cardinal” questions in the survey  (the feelings of the interviewees and the grading of their severity) were asked before the question tainted with the aforementioned defect,  the Court deemed that there was no concern  that the survey  was  biased. The Court was prepared to assume, to be on the safe side,  that the survey’s findings tended to somewhat exaggerate the negative feelings, but ruled that this did not lead to the conclusion that the survey was defective in its entirety, and it further held that it had been persuaded that the survey was adequately grounded and that its findings were consistent with plain common sense.

In this context the Court further added that Tnuva on its part had sufficed with claims against the consumers survey presented by the representative plaintiffs, but did not present its own consumer survey from the relevant period and one can only wonder why. Accordingly, despite the element of exaggeration evident in the survey data presented by the plaintiffs, the Court deemed that its conclusion should be accepted, namely that various non-pecuniary damages were caused to the majority of the consumers, unrelated to the question of the health hazards involved in the consumption of milk containing silicon. On this count the Court dismissed Tnuva’s claims, based on the survey conducted by Prof. Gotlieb on its behalf in 2004 and the expert opinion of Prof. Hornik and Prof. Perry that it had submitted.  The Court stated that indeed there is a hierarchy in the categories of infringements of individual autonomy, but this, and the conceivable existence of damages graver than those in the case at hand, does not compel the conclusion that Tnuva’s conduct did not cause a substantial infringement of the consumer’s autonomy. The Court also rejected additional arguments made by Tnuva concerning the proof of the damage in this case, pointing out, inter alia, that for purposes of proving the damages head of infringement of autonomy it was not necessary to prove that the plaintiff would have refrained from acting in the manner that he acted had he been aware of the true situation, and for our purposes – that the consumers would have refrained from purchasing the milk had they known that it contained silicon.  A fortiori there is an infringement of the  consumers’ autonomy when it can be reasonably assumed that most of them, indeed, would not have purchased the milk had they known that the “classic health product” was actually manufactured in defiance of the Law and the standard, using silicon at a rate that was ten times greater than the rate permitted in other food products, and especially if they had known that some of the experts maintain that consumption of milk containing silicon may be a health hazard.  In this context the Court rejected Tnuva’s argument that silicon is a food supplement in other food products and is not harmful, pointing out that the silicon was purchased by Tnuva as a cleaning product, and which was not supposed to have been in the milk. The Court further noted that the infringement of individual autonomy emerges clearly from the consumers’ survey, but its approach was that it was not necessary to produce evidence of this damage – “the infringement of autonomy occurs along with the violation of the obligation to provide the consumer with all of the information, and the violation is an immanent result of tortuous conduct. The denial of the consumers’ right to decide whether to purchase and consume Tnuva milk, in a balanced, informed and knowing manner, being aware of the relevant facts, constitutes independent remunerable  damage, even in the absence of any other damage, and even absent proof that the consumers would have avoided purchasing the milk had they known all the facts”.  The Court added that the fact that Tnuva concealed  the insertion of the silicon into the milk from its consumers, combined with the fact that this was a matter critical for the consumers, is proof of the infringement of the consumer's autonomy in terms of being denied the right to choose the product of his choice in a considered, intelligent and informed manner, in other words the right to prefer a product that does not contain silicon manufactured in compliance with the requirements of the law and the standard. The Court further ruled that the right to autonomy is a basic constitutional right, the infringement of which mandates a appropriate and significant compensation.

11.  Regarding the evaluation of the damage the Court held that it was appropriate to have consideration for the gravity of the infringement of the right on Tnuva’s part in this case, and the infringement’s influence on the consumers’ decision and its degree of importance for them (in as much as the issue concerns a basic, “pure” product consumed by a vulnerable population. The Court added that even after giving consideration for the fact that the feelings of the interviewees may have been significantly affected by the media publications concerning the health hazard attendant to the consumption of milk containing silicon, half of those asked experienced negative feelings that are unrelated to anxiety, and it ruled that feelings of anxiety do not necessarily stem from the publications, but rather from Tnuva’s conduct. In this context the Court rejected the claim that the media publications severed the causal connection between the acts of Tnuva and the damage, stressing that the consumer cannot be expected to undertake an in-depth investigation of medical studies before he purchases milk, and if the addition of silicon to the milk was proscribed by law and the standard, and there are experts who deem that it may constitute a health hazard under certain circumstances, then the fear of the consumers is understandable and natural. This concern, it was ruled intensifies the infringement of the consumer’s autonomy,  just as it intensifies the accompanying negative feelings. The consumer is permitted to assume, and presumably did assume that the milk standard is intended to protect his health , and when Tnuva absolutely ignored the standard, the fear for health is justified and well based, even without the publications to the effect that silicon is suspected of being carcegenerous.

Accordingly, it was held that it had been proved that the group in its entirety had incurred damage by reason of infringement of individual autonomy.  The Court further determined that about a half of the group’s members suffered non-pecuniary damage that found expression in various negative feelings, based on the consumers' survey and an estimation that took into account the possibility that exaggerated media publications had partially contributed to the negative feelings.

Regarding the size of the group, in other words, the number of consumers in Israel who purchased the silicon during the determining period (between 23 October, 1994 and September 1995) for domestic needs, or for hotels, restaurants and cafes, the Court endorsed the expert opinion of  Ofir, the court expert, being impressed by his reliability and expertise, and preferring it over the expert opinions submitted by Tnuva.   The Court further mentioned that Ofir had determined (based on the weighted average of the various methods of calculation) that 166, 307 households had purchased the milk, but given that in an average household a number of people purchase milk, Ofer determined that the number of people who had purchased the milk ranged between 166,307 (number of households) and 330,000  (adult purchasers) with a tendency towards the lower number. This being so, the Court determined that the number of members in the group, i.e. the adults who purchased the milk during the relevant period, was 220,000 people, and that the members of this group were entitled to compensation for an infringement of their autonomy and a half of them were entitled to additional compensation by reason of negative feelings.  

12.  The plaintiffs requested that the remedy be calculated the sum of the damages to be awarded to each one of them  multiplied by their total numbers and in this context the Court noted that the high road was indeed that of individual compensation for each member of the group (sections 20(a)(1) and 20 (a) (2) of the Class Actions Law). This however is only possible when the number of members in the group is not large, when their identities are known and where they are able to prove their damage in the customary manner. On the other hand, there is a need for a certain degree of flexibility in proving damage when there is a practical difficulty of requiring each group members to prove his claim in the customary manner (by reason of their large numbers or because they cannot be expected to retain the relevant documents), and also where there is no practical means of locating all the members of the group  or where many of them will simply not bother to prove their damage due to its low rate. To overcome the difficulties involved in proving damage, its allocation and quantification in such cases, case law in the U.S.A developed a mechanism known as (FCR) Fluid Class Recovery, which was dwelt upon extensively by this Court. The Court did not ignore the fact that the case law in the U.S.A in this context is not uniform  but deemed that with the necessary caution “ideas can be drawn from it” for our purposes, while stressing that from the Explanatory Note to the Class Actions Law it emerges that the Israeli legislator “had this mechanism”. The Court referred to section 20(a) (3) of the Class Actions Law in accordance with which the Court is entitled to award overall compensation to a group, indicating that this section refers to the granting of a personal remedy to the members of the group and seeks to overcome the difficulty in calculating personal damage. The Court likewise referred to section 20 (c ) of the Law that allows an award of a general compensation to the public  or to the members of group, all of them or in part, while pointing out that this section is intended for cases in which it is not possible to locate the members of the group or to pay them compensation on a personal basis, notwithstanding that for purposes of granting this remedy too it is appropriate “to attempt to evaluate the sum of personal compensation owing to each individual member of the group in order to determine the sum of the overall compensation, and to ascertain that the sum of overall compensation does not exceed the estimated sum of aggregate damage that was caused to the group members…. it is likewise important to determine, at least by way of estimation the number of members in the group. This will assist the court to determine in the most accurate manner possible the overall sum for the group, for purposes of granting a remedy to the group or to the public” (para. 107 of decision).

On the other hand, the Court stressed that this sum of overall compensation does not necessarily reflect the product of the sum of personal damage suffered by each member multiplied by the number of members in the group, and some of the group’s members may actually not receive compensation at all, whereas other, non-members, will benefit from the compensation. The Court further added that the infringement of autonomy and the “negative feelings” in this case are at all events non-pecuniary damages the determination of which by definition requires estimation and hence by nature cannot be precise.  Accordingly, it is possible to determine the compensation for non-pecuniary damage by way of estimation alone and then to multiply it by the number of members in the group, which can similarly be determined on the basis of estimation, or the global payment can be determined by way of estimation. The Court mentioned that at all events, the unavoidable reality of it being an estimate need not negate the granting of a remedy in the group’s benefit. The Court did not ignore the fact that section 20 (a)(3) of the Law states that the court may award an overall pecuniary compensation that will be divided between the members of the group, provided that it admitted of “precise calculation” but it deemed that this term should be interpreted in accordance with the purpose of the law and the section.  The Court further mentioned that this term is missing from section 20 (c ) of the Law, which deals with a remedy for the benefit of a group or the public and that s. 20 (e) of the Law stressed that the demand for the proof of damage would not prevent compensation for non-pecuniary damage. The Court further mentioned that occasionally the practical goal of the legal process requires that compensation be awarded in accordance with a uniform criterion even if it is clear that there are differences between the various plaintiffs, and this is the case at hand. The Court addressed the consumers survey that was presented and ruled that it proved the damage relating to the negative feelings in accordance with the degree of certainty required in a civil proceeding, especially having consideration for the fact that it only concerned the criterion or calculating the global compensation that could be determined on the basis of an evaluation. Similarly, the Court noted that in the decision pertaining to application for confirmation of the suit as a class action, the Supreme Court assumed that there was no escaping the award of compensation for the benefit of the group, and it further mentioned that Tnuva’s claims in the respect undermine the decision to approve the suit as a class action. The Court further rejected Tnuva’s alternative claim to the effect that at the very most it was possible to base the compensation on “wrongful profit” that it gained by reason of the acts forming the subject of the suit. The Court likewise rejected Tnuva’s claim that at the end of the day it had only incurred losses by reason of the affair and as such it had no wrongfully gained profits. The additional claim raised by Tnuva as an alternative claim, argued that the profit made reached amounted to NIS 350,000 only and it was likewise rejected by the Court

Regarding the determination of the damage, the Court stressed that in its claim sheets Tnuva did not refer to section 20 (d)(2) of the Class Actions Claim which authorized the court to have consideration for the damage liable to be caused to the defendant or to the public requiring its services due to the payment of the compensation.  All the same, and even though no claims or explicit data was presented to it regarding this matter, the Court ruled that the evidential material indicated that the compensation would not impair the ongoing activity of Tnuva or jeopardize its economic stability and that at the very most, the compensation would have a negative effect on its profits in the near future. The Court similarly emphasized that in order to achieve the aims that are at basis of the class action, the remedy for the plaintiff groups must be efficient and substantive.    

13.  For all of the reasons mentioned, the Court decided on a monetary remedy in favor of the group, by force of s. 20 (c) of the Class Actions Law, to be calculated on the basis of an identical sum for each member of the group. The Court further ruled that awarding compensation for the sum of NIS 8000 for each member of the group, as requested by the representative plaintiffs, was perhaps appropriate for a personal claim, but in this particular class action would have meant a monetary remedy amounting to an overall sum of NIS 1.76 billion, which is unreasonable. Having consideration for the entirety of the data, the Court ruled that Tnuva should pay a global sum of NIS 55 million, which reflects personal damage at the sum of NIS 250 for each member of the group (NIS 250 X 220,000), while pointing out that this sum, and even in excess thereof, was most definitely suffered by each members of the group, even if only by reason of the breach of individual autonomy.

The Court further determined that the sole practical remedy was the remedy in favor of the group, which should be divided in accordance with three objectives:

       (1)        Awarding a benefit to the members of the group by  reducing the price of the product (or increasing its contents without raising the price). The Court noted the difficulties involved in the realization of this remedy, noting that its certification would require an economic expert opinion, the certification of the Director of Antitrust and the position of the Attorney General, and supervision of its execution by force of s. 20 (f) of the Law;

2. Transfer of  part of the compensation sum to a research and scholarship fund in the field of food and nutrition which have implications for public health
3. Distribution of milk free of charge to populations in need via non-profit organizations so involved.

The Court further ruled that “the allocation of the sum between the three approved objectives will be determined after it becomes possible to confirm the discount from the price, in accordance with the conditions determined, and after an allocation plan is filed for the two other objectives”, and it noted that it could be expected that the parties would reach agreement concerning the manner of allocation of the sum of compensation in accordance with the above, so that the Court would not be compelled to enforce a settlement upon them.

Regarding the compensation for the representative plaintiffs and the legal fees for their attorney, the Court noted that the application for a legal fees award for the sum of NIS 400 million is unreasonable and unfounded. It further ruled that at that stage the compensation and legal fees should not awarded given that the final conclusions had yet to be drawn regarding the manner of allocating the overall sum of compensation, but after having considered the criteria for the determination of the rate of  legal fees and compensation, the Court ordered the payment of an intermediate sum “against the account of the final sums” as follows: compensation to Raabi's heirs for the sum of NIS 150,000; compensation to the Consumers Council for the sum of NIS 250,000; legal fees for the sum of NIS 500,000; and court expenses for the sum of NIS 100,000.

Tnuva rejected the partial decision of the trial court and appealed against it in this Court (CA 10085/08; hereinafter – the Tnuva appeal); the representative plaintiffs on their part filed a counter appeal against the decision (hereinafter: the appeal of the representative plaintiffs) but before the hearing of these appeals, the District Court gave a supplementary decision

The Supplementary Decision of the District Court –

The Final Compensation and Legal Fees Awarded and the Manner of Allocating the Compensation

14.  In the supplementary decision of 17 June 2009, the District Court gave effect to the agreements reached by the parties, with the cooperation and the agreement of the Attorney General. The agreements were as follows: (a) The allocation between the three objectives would be – the discounts arrangement 22%, the research and scholarship fund 33.33%, and the distribution of milk products to the needy 44.6%; (b) the distribution of milk products (not only the long lasting milk forming the subject of the suit) would be over a period of five years, beginning as of the commencement of fulfillment of the decision, via a NPO known as "Latet" ["To give" – Trans.] and Mishulhan leShulhan  ["From One Table to another Table" – Trans.]; (c )For purposes of transferring the compensation for research purposes in the field of food and nutrition, a research fund would be established, headed by the Chief Scientist of the Ministry of Health. The management of the fund (whose members are stipulated in the agreement) will select the research programs that will be entitled to the scholarships and supervise them. The sum of the compensation will be utilized over a period of five years, unless the need arises to continue to use the sum thereafter as well; (d) the particulars of the discounts arrangement will be formulated following the decision on the appeal filed against the partial decision and will be based on the existing data at that time and will apply to all categories of long lasting milk (1% to 3% fat)  and will be completed within five years from the commencement of execution. This arrangement merited the certification of the Director of Antitrust but the Court noted that there might be a need to return to the Court in the event of a significant time period passing until the beginning of its execution. The Court further mentioned that should the parties fail to agree on the details of the discounts arrangements, it would appoint an expert to determine its details. The Court further added that the execution of the partial decision in accordance with the agreements specified would be delayed until  a decision was given on the appeal that was filed against it.

Regarding the final compensation and legal fees the Court ruled that the interim sums determined in the decision were to be supplemented by the following sums: Raabi’s heirs would receive compensation for the sum of NIS 350,000; the Consumer Council would receive compensation for the sum of NIS 750,000; the attorneys of the representative plaintiffs would receive the sum of NIS 2,000,000 and regarding this the parties agreed that the compensation would be paid within thirty days of handing down the supplementary decision, as well as 60% of the fees that was to be awarded and that payment of the balance would be postponed until after the decision on the appeal. Finally, the Court ruled that an advertisement should be published in the three main newspapers, including the central elements of the decision.

The parties have also challenged the supplementary decision before us.  The representative plaintiffs on their part appealed this decision ( CA 6339/09) and Tnuva too  has requested our intervention (CA 7607/09). The parties' claims in the appeals against the partial decision and the supplementary decision (which will hereinafter be jointly referred to as “the decision” were filed together). 

Tnuva’s Claims

15. Tnuva claims that the Lower Court's decision should be overturned, and alternatively that the sum of compensation ruled against it should be significantly reduced. They claimed that the District Court had aimed at accepting the class action and had avoided the accepted procedural rules. Tnuva further argues that from the decision it emerges that the basic principles of tort law do not apply to consumer class actions for non-pecuniary damage, and that this unlawfully defies the parameters of the Class Actions law contrary to its language, its guiding principles and in defiance of the law determined in the further hearing in the matter of Barazni [2] . Tnuva claimed that the Lower Court actually cancelled the requirement for a causal connection between the misleading and the damage, and emphasizes that in the decision in the matter of Daaka [4] the infringement of the autonomy stemmed from the urgency of the information and its centrality in the individual decision making process. It follows that when the information does not influence the individual decision making process there is no basis for awarding him compensation. Alternatively Tnuva claims that if the  Daaka  [4]  decision is interpreted as a decision that which abandons the requirement of the causal connection, it should be restricted to its specific context and the exceptional circumstances in that case that pertained to the infringement of  informed consent to medical treatment, and it claimed that a deviation from the classical rules of tort is not justified in the context of the tort consumer deception and deviates from the Supreme Court’s decision in the Barazani Further Hearing [3]  Here, Tnuva refers to the Court’s decision to the effect that for purposes of compensation under the tort head of infringement of autonomy, there is no requirement for an examination of the personal particulars of each victim, and the conclusion is that the victim himself does not constitute a factor in the calculating formula

Tnuva further claims that the representative plaintiffs did not prove that they incurred any damage as a result of its acts and that in fact, the damage was caused as a result of media publications and not as a result of the negating of their choice in purchasing milk. Tnuva further claims that  the Court erred in its estimation of the  sum of compensation in a uniform manner for all members of the group, notwithstanding the differentiation in the sum of compensation that the members of the group are prima facie entitled to based on their personal particulars. Its claim, which it seeks to anchor in the Israeli and American case law, is that non-pecuniary damages are by definition individual and cannot be assessed in a uniform manner, and that they include the damage caused by infringement of autonomy which likewise is individual-subjective. Furthermore, Tnuva claims that in the case at hand compensation for the group and the public should not have been awarded and that at all event there was no basis for calculating the overall damage based on a simple multiple of the number of members in the group by the rate of personal damage. Tnuva also claims that the sum assessed by the Court as representing the damage from which each member of the plaintiffs group suffered  - NIS 250 – is an arbitrary sum that was determined without any supporting evidence and without giving any substantive reasons for the manner of its determination.  In addition, Tnuva points out that in awarding a uniform damage the Court failed to distinguish between the members of the group, who according to its own determination had suffered from negative feelings as a result of the consumption of the milk, and those who did not suffer these feelings; nor did it distinguish between those for whom the fact of the addition of the silicon would have influenced the decision to consume the milk and those for whom it would not have influenced is consumer conduct.

16.  Tnuva also claims that the overall compensation awarded by the Court is exaggerated and unprecedented and it stressed that its entire profits from the sale of milk during the relevant period stood at  NIS 3.4 million. The claim was that the Court actually awarded penal compensation as attested to by the “penal” terminology that is used in the decision, even though this has not place in the framework of a class action, in accordance with the provisions of section 20 (e) of the Law.

Tnuva found an outstanding example of this in the Court’s rulings regarding the health hazard in the consumption of food containing silicon and argued that the sole purpose of the discussion of the matter was to clarify to the reader exactly “why Tnuva is deserving of a punishment”. Tnuva claims that in this matter the Court handed down contradictory decisions as well as decisions that contradict that which was stated in the decision relating to the certification application. It further argues that the trial court avoided the exercise of its authority to rule on the veracity of the claims of the representative plaintiffs, and that it imposed a “featherweight” evidentiary because it contented itself with the existence of a few studies (which were presented to it incidentally), without ruling on their veracity, and without having been presented with a detailed expert opinion on the matter. Tnuva emphasized that the official standard prohibited the addition of any substance to the milk (apart from Vitamin A or D  in particular circumstances) and did not relate specifically to the addition of silicon. Similarly, Tnuva claimed that the official force of the standard had already expired in 1998 and that it was no longer binding upon milk producers, and that in other standards it had been permitted to add silicon to food products, even to such as are consumed by infants, in quantities similar to those that it added to the long standing milk and in dimensions in excess of those involved in the case at hand. Tnuva further added that the trial court’s determination that the health hazard could be inferred from the very violation of the standard was unfounded and was actually in contravention of the provision of s. 17C (a) of the Standards Law. Tnuva further argued that the absence of a health hazard from the consumption of silicon may be inferred from the Danon Committee Report and the holdings of the court in the criminal proceeding conducted against it. At all events, its approach was that even given a determination of the possibility of a health hazard, this would not constitute sufficient basis for a ruling of compensation, because compensation cannot be ruled  based on a possibility, not proven, of negative feelings being caused by a theoretical risk to health.  In this context Tnuva added that the Court’s determination to the effect that milk is a “natural and pure” product cannot stand, because the consumer conception is that milk is a processed product that contains different food supplements and only a minority of consumers are of the opinion that was presented by the Lower Court.  Tnuva also dwelt on the discrepancy between the compensation awarded in the case at hand and the compensation ruled in other class actions.

17.  Tnuva further claimed that s. 20 (c ) of the Class Actions Law establishes  compensation for cases in which there is  no possibility of determining or locating the members of the plaintiff group, and hence the Lower Court erred when determining that the section applies when it is not possible to determine the sum of the damage.  Tnuva stresses that the section was not intended to “supersede” the regular rules of evidence and to enable an arbitrary determination of the amount of scope of the damage and sums of compensation. Furthermore, Tnuva argues that the Lower Court erred in determining that the compensation mechanism of s. 20 (a)(c) of the Law differed from that of s. 20 (c) of the Law, claiming that compensation under s.20( c) was also subject to the requirement of “precise calculation” prescribed in s. 20 (a)(c ) of the Law.  Accordingly, compensation for the public benefit or for the benefit of a particular group can only be awarded when personal compensation would not be practical were the requirement of “precise calculation” to be complied with.  Tnuva submitted that insofar as the case at hand does not admit of accurate calculation of the damage or even estimation based on “stable” statistical data, the Court had no choice other than to reject the suit. Tnuva further added that in the U.S.A., when there is no possibility of accurately calculating the damage to a group or where the damage is non-pecuniary, the Court does not approve the filing of a class action.

Alternatively, Tnuva claims that even if the case at hand warrants the ruling of compensation for the benefit of the group’s members, it should not have been assessed in the manner adopted by the Lower Court.  Its argument was that since the damage caused to each member of the group cannot be determined it is not correct to arbitrarily determine the compensation based on multiplying any particular sum of damage by the number of members in the group. Rather, it should be based on the "wrongful profit" that it accumulated.  Tnuva claims that compensation based on calculation of profit overcomes the difficulties in the case before us: it would  reflect the consequences of the event that gave rise to the suit; it would prevent the difficulty of assessing non-pecuniary damage and the unified "pricing" of the negative feelings, despite the differences between the members of the group. It will also prevent the difficulty of assessing damages in accordance with unsubstantiated surveys. According to Tnuva, the profit it gained from the execution of the wrong is NIS 1,645,900 in the terms of the principal, and with the addition of the interest and linkage differentials (from the middle of the period) it  comes out to NIS 4,981,616.  Alternatively, Tnuva claims that the compensation should be calculated based on the sum saved by using the silicon to solve the problem of frothing, which comes out to  USA$400,000 (which with the addition of linkage differentials and interests comes out to NIS4, 346,991). It was claimed that this sum can be supplemented by a reasonable deterrent factor. In addition, Tnuva claims that even if it be determined that the number of members of the group should be multiplied by any particular sum of damage, certain substantive defects in the method of evaluation  conducted by the Lower Court must still be remedied. Its claim was that this multiplication should only include consumers who suffer from substantive negative feelings due to the consumption of milk and it should not include feelings related to "positions or viewpoints" which they hold as a result of the Tnuva's conduct (such as temerity and contempt).  Tnuva's position is that based on the data presented in the court, consumers who answer that definition constitute about 15% of the members of the group defined by the District Court. Tnuva also maintains that the number of members in the group should be fixed at 166,000 (the minimal threshold determined in Ophir's expert opinion) and alternatively at 200,000 (allegedly claimed by Ophir in his testimony.

18.  Tnuva further claims that the sum awarded by the Lower Court for remuneration and legal fees is excessively high, emphasizing that it constitutes 7% of the total sum of compensation. In addition, it claims that this sum deviates from the  guiding criterion for such matters, prescribed in the Law (ss. 22 and 23 of the Law)  and in settled case-law. Regarding the Israeli Consumer Council Tnuva argues that the former did not invest significant work, nor did it assume any risk; that it is a budgeted statutory body and not a private person who requires incentives; that the Consumer Council did not initiate the proceeding and joined it at a relatively late stage; and finally, that its degree of involvement was minimal and negligible. Regarding the legal fees of the representative plaintiff's attorneys, Tnuva claims that the fee is unprecedented, that has no consideration for the manner in which the suit was handled and the discrepancy between the remedies that were requested and those that were ultimately awarded, and adds that the sums awarded by the  Lower Court are liable to pave the way towards abuse of the tool of the class action.

Claims of the Representative Plaintiffs

19.  In the counter appeal, the representative plaintiffs claim that  given the Court's holding that the sum of NIS 8000 for each consumer is appropriate for a personal claim, there is no justification for reducing it to NIS 250 just because the context is that  of a class action. They stressed that Tnuva too did not claim that the defense under s. 20 (d)(2) of the Class Actions Law was applicable to this case.  The representative plaintiffs further claim that the reduction of the compensation empties the class action proceeding of its contents and is inconsistent with the Court's determinations to the effect that grave damage was caused, justifying commensurate compensation. The representative plaintiffs add that increasing the compensation sum will not harm the public, inter alia having consideration for the sales data and profits of Tnuva, and they complain that the group of those represented was significantly reduced, to include only those who purchased the milk regularly, whereas it should also have included incidental purchasers.  They add that the sole reason for the reduction of the group was that Tnuva provided partial information to the court expert who was appointed for purposes of assessing the size of the group.

The representative plaintiffs further claim that Tnuva's pleadings ignore the decision given on the certification application, in an attempt to revisit an already settled matter. Regarding Tnuva's claims concerning the health risks posed by the milk, the representative plaintiffs claim that the Lower Court ruled on this matter in the wake of Tnuva's request to present evidence on the matter and that the findings themselves were over and above what was required. According to the representative plaintiffs, the very prohibition on the addition of silicon to the milk in an official, binding standard (published as a regulation of legislative effect) and its breach, combine to establish the grounds for claim in the framework of the suit. In addition, there was proof of the grounds for action under the Consumer Protection Law (also having consideration for the provisions of the Standards Law). It was proven that silicon posed a potential health hazard, and it was proven that Silicon was aware of the problem and of the defect involved in the addition of silicon to the milk. In this context the representative plaintiffs stress that when Tnuva purchased the silicon from the Amgal company, it made a representation that it was purchasing it as a cleaning material and they also stress that silicon was added to the milk at a rate that was ten times higher than the level permitted under the provisions of the silicon producer for purposes of using silicon in food (they claim that the silicon was added at a rate of one liter per 10000 liters of milk, whereas according to the manufacturer’s instructions it is permitted to add it at the rate of a “ten parts for a million”). The representative plaintiffs further claim that both in relation to Raabi and in relation to the group as a whole, damages had been proved with respect to infringement of autonomy and negative feelings relating to the consumption of milk. The representative plaintiffs stress that in this context it was proved that had the consumers been aware of the existence of silicon in the milk they would not have purchased it, and this is by virtue of both the importance of the official standard and the fact that its breach renders the product “worthless at best”. The representative plaintiffs also add that there are likewise no grounds for interfering with the findings of the Court regarding the occurrence of damage and the gravity of Tnuva’s acts in view of the positive impression made by the witnesses and the experts on behalf of the court. They also stress that the autonomy of the individual is a constitutional right, and hence its infringement should merit commensurate compensation, and they claim that this does not constitute an award of punitive compensation.

The representative plaintiffs add that there are no grounds for interfering with the Lower Court ’s holding that the damage caused as a result of the infringement of autonomy is an inherent element of the tortuous conduct, and that this is also the conclusion from the Daaka [ 4 ] ruling. In addition, they claim that in the present case it is appropriate to award uniform compensation based on an assessment stating that inasmuch as the right to autonomy is a constitutional right, it is an identical right for each member of the group, and that the provisions of the Class Actions Law enable a cumulative calculation of the damage incurred by all the members of the group. They further add that the damage caused in this case is essentially given to assessment by way of estimation; that the arrangements in the Law enable the proof of damage in a manner that is not particularistic and individually based but rather general and all inclusive and that the tendency in case law is consistent with the need to award uniform and equal compensation to all of the plaintiffs as such. The representative plaintiffs stress that this result does not contradict the ruling given in the Barazani Further Hearing [3] and they add that as opposed to Tnuva’s argument, the FCR mechanism does not negate awarding compensation in cases of this kind, indicating that in certain cases American case law awarded “average compensation” multiplied by the estimated number of members in the group. They further state that the FCR mechanism is essentially intended for the distribution of overall compensation, and that the current criticism of this mechanism pertains to the question of distribution of compensation to a group or the public and not to the manner of evaluation of the compensation in accordance therewith.  

20.  The representative plaintiffs further request to dismiss Tnuva’s argument for reducing the sum of compensation owing to them, emphasizing that the compensation  awarded to them constituted a mere  2.5% of the sum ruled in favor of the group as a whole. The attorneys for the representative plaintiffs argue that in fact the Court “punished” them for the discrepancy between the sum ruled in favor of the group (which was unjustifiably reduced) and the remedy which they petitioned for in the name of their principals. Their argument is that in this context the Court mistakenly applied the provision of s. 23 (b) (5) (which provides that in ruling attorneys fees the court may have consideration for the discrepancy between the remedy sued for and the remedy actually awarded), and that it failed to consider all the relevant factors  The attorneys for the representative plaintiffs claimed that they had done a significant amount of work, directing attention to the novel claims that they raised in the proceeding, and they challenged the Lower Court ’s determination that part of the proceeding had not been properly conducted, pointing out that all of their objections had been relevant.

The Class Action and the Consumer Protection Laws -  Meeting of Principles

21.The class action is a special procedural tool for the effective and efficient promotion of principles, values and substantive legal rights. This legal institution is currently regulated in the Class Actions Law which is a comprehensive and detailed framework law that established standard rules for the filing and conducting of class actions. The Law was enacted in 2006 after this Court called upon the legislator to regulate the institution of a class action in a comprehensive statutory arrangement (see LCA 3126/00 State of Israel v. E.S.T. Project Management and Manpower Ltd [5]; FHC 5161/03  E.S.T  Project Management and Manpower Ltd v. State of Israel [6],  but the importance of the class action had been recognized in Israel many years before the enactment of the Class Actions Law. Thus, a series of laws and “local” arrangements relating to the filing and conduct of class actions was already in place, most of which were incorporated as chapters in those laws during the nineties of the previous century. They included provisions that are essentially similar to  the criteria and conditions the fulfillment of which enables the filing of a class action in that particular realm. See Chapter F’1 of the Restrictive Trade Practices Law,  5748-1988 (hereinafter – the Restrictive Trade Practices Law); Chapter F’1 of the Banking  (Service for Customer) Law, 5741-1981 (hereinafter – the Banking Law); ss. 19 (54)   - 19 (64) of the Equal Rights for Disabled Persons Law, 5758 – 1998; s. 11 of the Male and Female Workers Equal Pay Law 5756- 1996. All of these specific arrangements were repealed with the enactment of the Class Actions Law (see ss. 32 – 35, 38 – 40, and 42 of the Class Actions Law) and even before its enactment, the E.S.T [6] decision negated the possibility of basing a class action on Regulation 29 of the Civil Procedure Regulations, 5744-1984, which until that time had served as a normative source and a procedural framework for the filing of class actions in areas lacking a specific statutory arrangement as mentioned above.

This  importance of the class action was discussed by this Court both before and after the enactment of the Class Actions Law in a series of decisions that address its advantages as a legal tool for enabling the realization of the right to file a personal claim in cases where the filing of a claim was not profitable or not feasible for the individual. In addition, this Court’s case-law has dwelt upon the importance of the class action in the promotion of public interest as a legal tool that assists in the efficient enforcement of the law and deters financial magnates who rely on the passivity of the individual, abuse their power, and harm unincorporated groups such as consumers or investors in securities. An additional element of importance of the class action considered in the case-law is that this procedure prevents the multiplicity of suites and hence saves judicial resources, and from this perspective too, the institution of class actions makes its contribution from a public interest perspective (for the definition of the objectives and goals of the Class Action, see s.1 of the Class Actions Act; on this matter see also: CA. 8430/99 Analyst I.M.S. Trust Funds Management (1986) v. Ard Industrial Investment and Development, [7] at p. 256; 8 LCA 4556/94 Tetzet v. Zilbershatz, pp. 783-785 [8]; CA 345/03 Reichart v. Raabi Moshe Shemesh Heirs, paras. 8 – 9 of opinion of the President Beinisch [9]; Sinai Deutch “A Decade for the Class Action  Suit – Interim Summary and Looking to the Future  Shaarie Mishpat 4, 9, 21- 24 (5765) (hereinafter – Deutch -  Decade for the Class Action); Steven Goldstein and Talia Fisher “Interaction Between Mass Actions and Class Action:  Procedural Aspects”  Mishpatim 34, 21, 24- 26 (5764) (hereinafter – Goldstein and Fisher)).

Along with the inherent advantages of the class action it should be remembered that incorrect use of this tool involves not insignificant dangers (see Analyst  [7], at p 256; Tetzet [8], FHC E.S.T [6] at p. 785 [6] at p. 237; Alon Klement “The Boundaries of the Class Action in Mass Tort”,  Mishpatim 34, 301, 325- 331 (5764) (hereinafter – Klement, Boundaries of the  Class Action)). The laws of class action and their judicial supervision are thus intended to maintain an appropriate balance between the risks and chances of the proceeding and to ensure  that it realizes the legal, economic and social goals for the promotion of which it was established (see CA 3506/09 Zaig v. Waxelman, Waxelman Accountants [10] paras. 7 – 8 ; and Tetzet [ 8] at pp. 785 – 786).

22.  One of the outstanding areas in which the advantages of the class action are demonstrated is the laws of consumer protection. Israeli legislation contains a large series of legislative acts intended for consumer protection. The central law in this context is the Consumer Protection Law, enacted in 1981. This law includes detailed provisions concerning the duties and prohibitions applicable to dealers, in other words, to manufacturers, importers, tradesmen  and providers of services, with the aim of subjecting the business sector to a regime of appropriate conventions of behavior, to establish fair game rules in dealer-consumer relations, and to prevent the misleading of consumers with regard to an asset or service that he consumes (on the goals of the Consumer Protection Law - see Sinai Deutch, Consumer Protection Law 120 – 126 (Vol. A. 2001); Explanatory Note for the Draft Bill (Hatza’ot Hok 1469, 302- 303, 5740).  Other laws intended for a similar purpose are for example, the Banking Law (Service to Customers), Supervision of Financial Services (Insurance) Law, 5741-1981 and the Restrictive Trade Practices Law. These laws and additional laws admitting of classification in the category of consumer protection law regulate various aspects of this protection and are intended to prevent unjust enrichment on the part of large financial concerns or on the part of State authorities, at the expense of the individual.  

The point of departure for consumer protection law is the structural imbalance that characterizes the consumer transaction when struck between a financial body, occasionally a large and multi-tentacled company, or even a retail trader and the individual consumer (assuming that he lacks the size advantage of organized consumption).  The legislator accordingly pinpointed this population sector as requiring intensified legislative protection to ensure that the dealer, having the advantages of knowledge and economic ability, does not misuse these advantages for reaping quick profits at the consumer’s expense, while deceiving him in essential matters affecting the nature of the transaction.  For example, the Consumer Protection Law seeks to ensure that when entering into a transaction the consumer has full and fair information concerning the nature and the details of the transaction, the assumption being that this will enable the consumer to plan his actions and enter into a transaction that is optimal and desirable from his perspective. Additional prohibitions in the Consumer Protection Law concern the exploitation of the consumer’s distress, exploitation of his physical or mental weakness, or his ignorance of the language, and the prohibition of exerting undue influence upon him (see CA 3613 Ezov v Jerusalem Municipality [11 ], at p. 801; LCA 8733/96 Langbert v. State of Israel – Israel Lands Administration [12], pp. 175- 176 (hereinafter – Langbert); Sinai Deutch “Consumer Class Actions: The Requirement for Personal Reliance on the Misrepresentation of the Deceiver” Nethanya Law Review 2, 97, 110 – 114 (5762) (hereinafter – Deutch, The Requirement for Personal Reliance). Apart from the importance of the consumer protection laws in redressing the imbalance of power between the dealer and the consumer and strengthening the consumer’s personal autonomy, these laws are also important in realizing public interest of inestimable importance such as: the notion of consumer sovereignty; protection of the right to welfare and social rights, promotion of the principle of fairness in trade, protection of the reliability of the local market, and maintaining trust in the social order and the provisions of the law.

23.  Having synoptically outlined the underlying objectives and goals of consumer protection law, and the objectives and goals of the class action as a legal procedural institution, we can easily identify the “meeting of principles” between the goals intended to be promoted by the class action tool and the values and rights that these laws seek to protect. Hence, the class action can overcome both the inbuilt balance of power between the dealers – those with the economic advantage - and the consumers, and the lack of profitability that frequently accompanies the filing of a claim by the isolated consumer, given the relatively small amount of damages he has incurred (See Barazani [2]; Deutch - The Requirement for Personal Reliance, 115. Regarding the systems for civil enforcement in the area of consumer protection, see Moshe Bar-Niv (Bornovski)).

Indeed, the tool of the class action is actually one of the most significant measures placed by the legislature at the consumer’s disposal for the enforcement of his rights under the laws of consumer protection (see Deutch – a Decade for the Class Action, 18 – 20 according to which most of the class actions filed in Israel are “consumer actions” by force of the various consumer laws.  On the other hand, the implementation of the provisions pertaining to consumer class actions has also been criticized. See Deutch “Consumer Class Actions – Difficulties and Proposed Solutions” Bar Ilan Law Studies 20,  299 (2004); see also CC (Center) 5567-06-08 (Nazareth) Bar v. Ateret Industries 1996 Ltd, para. 39  [  ] where the court observed that in many of the cases it would have been preferable had the consumer deception been handled in an alternate framework, such as the imposition of punitive compensation rather than as a class action proceeding). As mentioned, the provisions for filing a class action under the Consumer Protection Law used to be included in Chapter F’1 of that law, along with additional enforcement measures included therein, inter alia - the administrative mechanism in the charge of the Commissioner of Consumer Protection, and the Consumer Protection Authority, and the criminal system which purported to enforce the norms established by this law via the criminal law  With the enactment in 2006 of the Class Actions Law and the establishment of a comprehensive framework arrangement for the filing and conduct of class actions, came the revocation inter alia of Chapter F’1 of the Consumer Protection Law, so that as of today, as mentioned, the provisions of the Class Actions Law govern the filing and the conduct of class actions in all areas, including in the areas of consumer protection (see s. 3 of the Class Actions Law, and item 1 of the Second Schedule of the Law). 

Tnuva’s Act of Misleading

24.  The proceeding before us began with an application for the certification of a class action, filed in 1995 in reliance on the provisions of Chapter F’1 of the Consumer Protection Law. As described above in the chapter on the facts, already in 1996 the District Court approved the filing of Raabi’s personal claim as a class action, and Tnuva’s appeal against the certification decision was rejected by this Court in the year 2003 (CA 1338/97). The proceedings for the certification of the class action were similarly handled in accordance with the provisions of Chapter F’1 of the Consumer Protection Law then in force.  However, after the District Court began hearing the approved class action, the Class Actions Law was enacted, and as indicated by the decision of the Lower Court, its provisions provided the basis for the decision on various issues, including the provisions pertaining to the compensation and fees. The application of these provisions to our proceeding was correct, given the provision of s. 45 (b) of the Class Actions Law, which determines that the provisions of the Law (apart from the provision of s. 44) “shall also apply to application for a  certification of a class action and a class action that was pending before the court on the date of publication of this law” (see CA 7028/00 A.B.A. Trust Funds Management Ltd v. Elsynth Ltd [13] paras 16-18 ; HCJ 2171/06 Cohen v. Knesset Speaker [14] para. 46.  The Lower Court further added, and rightly so, that even though the Class Actions Law did not limit the grounds for a class action exclusively to the “consumer”, as defined in the Consumer Protection Law, the class action in this case should be adjudicated in accordance with the original grounds that were based on the Consumer Protection Law  and in relation to a consumer group answering the definition of “consumer” in that law (“one who purchases an asset…..primarily for his personal, domestic or family use”, given that the representative plaintiffs did not apply to amend the claim  and file additional evidence in the  wake of the new law, that broadened the circle of potential plaintiffs in this context (and see Alon Klement “Guidelines for the Interpretation of the Class Actions Law, 5766-2006), Hapraklit 49, 1354-135 (5767) (hereinafter – Klement).

25.    In the class action before us it is claimed that Tnuva violated the prohibition on misleading  established in s.2 of the Consumer Protection Law, which provides that

A dealer shall do nothing—by an act or an omission, in writing, by word of mouth or in any other manner—likely to mislead a consumer as to any matter material to a transaction (any such act or omission hereinafter referred to as a “misleading act”…)

The thrust of the misleading act ascribed to Tnuva is that Tnuva added silicon to low fat (1%) long lasting milk without this ingredient being mentioned on the packaging and in defiance of the official and binding standard in force at that time, and in so doing mislead the members of the group, consumers of long lasting milk regarding a “material aspect of the transaction” pertaining to the “the quality, nature, quantity and type of any commodity or service” (s. 2 (a) (4);  and “the conformity of the commodity or service to a standard, specification or model” (s. 2 (a)(11).

It was further claimed that Tnuva breached the duty of disclosure imposed on it as a dealer, pursuant to s. 4 (a) of the Consumer Protection Law, to disclose to the consumer, inter alia:

(1) any defect or qualitative inferiority or other feature known to him that materially diminishes the value of the commodity;

   Likewise it was claimed that Tnuva had breached the obligation of indication  as prescribed in section 17 of the Consumer Protection Law, which likewise expresses the broad duty of disclosure imposed on the dealer and which provides  inter alia that:

A dealer shall indicate the following particulars upon, or upon a thing attached to, goods intended for the consumer:

                          ------

(a)  the quantity of the commodity and a detailed statement of the basic materials of which it consists.

The prohibition on misleading and the duty of disclosure and indication imposed on dealers in accordance with the Consumer Protection Law, were intended to realize one of the Law’s central underlying goals, namely providing all of the information required by the consumer in order to enter into an intelligent engagement that gives true expression to the principle of the freedom of contractual engagement (see Langbert  [12], p. 175 – 176).

26.              The Lower Court accepted the claims of the representative plaintiffs, and in its decision ruled that the Tnuva had committed an act of misleading that was prohibited under the Consumer Protection Law and had breached its statutory duties of disclosure by adding silicon to the milk without disclosing that fact to the consumers and without disclosing that the addition of silicon as stated contravenes Standard No. 284 of the Israeli Standards Institution, which at that time was the official and binding standard for purposes of “cow’s milk for drinking” (hereinafter: “the standard).

Evidently,  at this stage of the hearing of the appeal, Tnuva no longer contests the fact that it mislead its consumers. Indeed, in the summations filed on its behalf in the appeal it confirms that it “mislead the consumers by way of omission in its failure to indicate on the packaging of the long standing milk that a froth preventing food supplement was added, bearing the trade name “E-900” (section 2.1 of Tnuva’s summations).  Similarly, it would seem that there can be no doubt regarding the consumer’s right to be aware of the ingredients of the product that consumes . This right is the basis of the duties of disclosure and indication imposed on the dealer in this context, which we addressed above, and it may be asserted that these duties become doubly important when considering that the issue concerns milk which is a basic food product consumed by numerous consumers.

As mentioned, one of the substantive matters to which the prohibition of misleading applies under the Consumer Protection  Law is the “conformity of the asset or service to the standard, specification or model” (s. 2 (a)(11)). In our case Tnuva contravened the prohibition in this sense too because the definition in  s. 105 of the standard enumerates the materials that can be added to the various milk products and silicon is not included among these products.  Our concern is with a standard  that was declared as the Official Standard on 13 October. 1987 (O.G. 3473, 2274). As such Tnuva is bound by s. 9 (a) of the Standards Law, which prohibits the production and the sale of a milk product that does not comply with the requirements of the standard (for an analysis of the grounds for declaration of a standard as official and the duties established by the standards (see Eliyahu Hadar, Behind the Standards Law, 56- 92 (1997)), and accordingly Tnuva mislead its consumers with respect to the product’s conformity to the standard (see also s. 107.5 of the standard, which establishes that the supplements – if added -  must be indicated, and see Official Standard No. 1145 regarding the “Indication of Prepackaged food”).  Parenthetically, it bears note that nonetheless, in 1998 the declaration concerning the official status of some of the sections, including s. 105, was cancelled, and today they have the status of recommendations only (see Notification of Expired Validity of Standards (Food Standards) as Official Standards, O.G. 4649, 5759, 334, 336). Tnuva argues this issue is also of substantive significance for purposes of this proceeding too, and this claim will be discussed below. 

27.  As mentioned, Tnuva no longer disputes the fact that its acts are tainted by having been misleading within the meaning of the Consumer Protection Law and by its violation of the disclosure duties imposed on it by force of that Law. Nonetheless, Tnuva maintains that the Lower Court erred in ruling that it must compensate the group members for the non-pecuniary damage allegedly caused to them under the circumstances. The thrust of Tnuva’s claims as dwelt upon above, is that the act of misleading did not cause any real and compensable damage to any of the group members , and that even if thy incurred real damage,  the causal connection between the alleged damage and the act of misleading was not proved. At all events, Tnuva further added that the Court erred in holding that compensation must also be awarded under the head of infringement of autonomy to group members in respect of whom it was not proved that they had experienced negative feelings due to their consumption of milk containing silicon.

Misleading a Consumer as a Wrong in Tort in  the Representative Context

28.  The legal field in which the consequences of the Tnuva’s actions must be examined in this case is the field of Tort, referred to by s.31 (a) of the Consumer Protection Law, which instructs us that:

“Any act or omission in contravention of Chapters Two, Three or Four shall be treated as a civil wrong under the Civil Wrongs Ordinance (New Version)”

Our concern is with a consumer tort rooted in the Consumer Protection Law, but the body and head of which are formulated in accordance with the basic principles and doctrines of Tort Law.  In other words, to merit a pecuniary remedy based on a consumer tort the plaintiff must prove damage and demonstrate the causal connection between his tortuous conduct and the alleged damage. This applies both to an individual suit relying on a Consumer Protection Law and to a class action relying on that kind of tort (see comments of Justice (former title) M. Cheshin in Barazani Further Hearing [3]. Still, it bears note that to the extent that our concern is with a class action, the court’s application of Tort Law must also be based on the specific principles and rules drawn from the specific field of class actions, which occasionally pose practical problems relating to the location of the members of the group and awarding compensation to each one of them, as well as difficulties in proving the causal connection and proving the damage caused to each one of the group members. There may also be cases in which had a single plaintiff filed a monetary suit by reason of a consumer tort his suit would have been rejected by reason of the negligibility of the remedy – being in the category of des minimis, which does not justify compensation under the general law of Tort (see s. 4 of the Tort Ordinance). On the other hand, when concerned with a consumer tort committed against an entire group of consumers and not just against the single plaintiff, the court will be required to take a different perspective of the remedy requested in the name of the group in the framework of the class action. In such a case the court will be required to examine the class action and the requested remedy taking into account the underlying principles of this specific proceeding, which is intended inter alia to provide a solution to sub-enforcement in cases in which the individual claim would be considered as a negligible claim. When hearing a class action the court cannot limit itself to examination of the remedy in accordance with the regular laws of Tort that would be applicable to an individual suit, and its decision must incorporate the principles and rules drawn from the specific field of class actions.

The need to combine the general laws of Tort with the principles and rules drawn from the laws of class actions, inter alia by relaxing the requirements pertaining to the proof of the damage caused to the members of the group, was dealt with by Justice M. Cheshin (former title) in Barazani Further Hearing [3]  (ibid,  423 – 425). Today, with the enactment of the Class Actions Law, the legislature has equipped us with a detailed statutory arrangement that consolidates the principles and the rules to be applied to the various kinds of class actions and provides a solution to the typical difficulties, some of which we dwelt upon above, and which may arise in this particular proceeding. For example, s. 20 of the Law, to which we will return below, relates to “proof of entitlement to a remedy and payment of financial compensation” and prescribes the specific arrangements for the award of remedies in class actions. The unique nature of the class action proceeding and the need for awareness thereof in the application of principles of the general law of Tort to such an action were addressed by Deputy President E. Rivlin in CA 10262/05 Aviv Legal Services Ltd v. Hapoalim Bank, Head Management [15] where he stated that:

It cannot be denied that that in certain cases the collective-representative character of the proceeding may affect the manner of examining the causal connection, just as it has implications for other elements. The subject of the causal connection in class action suites was discussed at length in Barazani Further Hearing [3]. The majority view as penned by Justice Cheshin dwelt on the basic need for fulfillment of the elements of a personal claim as a condition for the certification of the representative proceeding, specifically the  foundation of the causal connection required for certain grounds of claim. The court noted that the representative context may influence the interpretation of the foundation of the personal grounds, but noted that this possibility was limited and qualified. Conceivably and without making a definite determination on the matter at this time, the Class Actions Law may extend this possibility in view of its emphasis on the collective aspect and its relaxation of the conditions required to be fulfilled for the collective action, all with the purpose of realizing the objectives of the class action…  A strict and case specific interpretation of the foundation of the causal connection would thus be liable to seal the fate on numerous class actions, contrary to the objective of the Class Actions Law. According to another approach, in suitable cases there would be an examination of the causal connection from the perspective of a “meta-plaintiff” who reflects the shared interest of all of the potential plaintiffs, and takes the cumulative damage into account.  Such an examination of the causal connection could fulfill the requirement of the causal connection even in cases where it would not have existed in accordance with the individual case based examination.

   De Minimis

29.  The representative plaintiffs claimed that the group members should be compensated for the non-pecuniary damage caused to them under the circumstances, under two heads of damage: One of them is the infringement of the personal autonomy of the group members and the other for the negative feelings that they experienced upon being informed that they had drunk milk containing silicon.

Upon certifying Raabi’s claim as a collective suit this Court, per Justice M. Naor, in the decision on the certification application, ruled that:

 “The damage claimed by Raabi consists of non-pecuniary damage; negative feelings and feelings of repulsion. The non-pecuniary damage claimed by the plaintiff is the feeling of repulsion stemming from the fact that the case concerns silicon, with all of its negative associations. In my view, damage of this kind is prima facie compensable damage. The act of misleading regarding the contents of the milk in this case is prima facie an infringement of individual autonomy” (p. 681- 682 of the decision).

In that decision, this Court further noted that the infringement of individual autonomy had already been recognized in Tort Law as a compensable head of damage, referring to the decision in Daaka [4].  In its discussion of the class action that was certified as stated, the Lower Court deemed that in the circumstances of our case the group members suffered non-pecuniary damage and in this context dismissed Tnuva’s claim that the failure to specify all of the product’s ingredients did not gave rise to an infringement of autonomy and did not justify the alleged negative feelings. This is Tnuva’s argument before us.

Indeed, a defect in the indication of a food product’s ingredients will not always warrant compensation for infringement of autonomy and negative feelings, and there may certainly be cases in which notwithstanding the existence of a particular defect in reporting the contents of a product, compensation will not be justified.  Justice Naor dwelt on this point in the decision on the certification of the application, noting that:

The insertion of a silicon supplement in the milk, in defiance of the standard constitutes an infringement of individual autonomy, but my comments should not be taken to mean that any case of a deviation from a provision of a standard or of inaccurately reporting its contents will justify a suit. There may be quite a few cases in which a slight deviation from the provisions of any particular standard, even where it concerns food, will not justify a personal suit and by extension a class action. A suit will not be justified where the infringement is de minimis ….  (p, 684).

I concur with Justice Naor’s comments, but they are of no avail to Tnuva in this case, for as noted by the Lower Court, the harm in this case is not in the category of de mimimis from the collective-representative aspect.  

30.  In support of its claims in this matter Tnuva presented the expert opinion of Prof. Hernik who evaluated “from the perspective of a researcher of consumer behavior (the marketing person) whether and if so to what extent, there was an infringement of what is referred to as the consumers' 'autonomy of will'". In his expert opinion, Prof. Hernik acknowledged that in principle and conceptually there was an infringement of the autonomy of will in any case in which the list of contents does not actually conform to the ingredients of the product, except that in order to assess the degree of harm one must evaluate the influence of the misleading act on the consumer’s ability to choose. Prof. Hernik determined that according to his approach, the harm to infringement of autonomy caused to the consumers in this case was negligible and that the misleading media publications had generated a public storm, and lead to an 'imaginary infringement'  of autonomy of the consumers' will.” Tnuva also presented the expert opinion of Prof. Michael Perry who reached a similar conclusion and noted that in accordance with the criterion he had established for examining whether substantive harm had been caused to the autonomy of the consumer’s will, the harm in this case did not exceed a harm that was “trifling” and did not justify compensation.

I do not accept this approach and as I mentioned above, my view is that the Lower Court was correct in its dismissal of Tnuva’s claim that the harm was “trifling” and “negligible” and not deserving of compensation.

The concept of “de minimis” is one that does not admit of advance demarcation and in another context it has already been ruled that:

The question is how to measure harm and when to consider harm as being minimal, The answer depends on the nature of the right that was violated, the purpose of the infringement and additional circumstances of each particular case, and in accordance with which it may vary from case to case (see citation in CA 3901/96 Local Planning and Building Committee v. Horowitz [16]

In the case at hand Tnuva added silicon to low fat long lasting milk to overcome the problem of over frothing  and it chose this solution to save the cost of replacing a machine that was broken. In doing so Tnuva contravened the official standard then in force, according to which it was prohibited to add supplements to the milk that were not specified in that standard. Furthermore, Tnuva failed to indicate on the packaging that the milk contained silicon and the Lower Court established a factual finding that the silicon added to the milk was purchased by Tnuva as a cleaning material from the Amgal company (paras. 35 and 144 (b) of the decision ). In its appeal Tnuva challenges this factual finding but I have not found grounds for interfering with it, and given that this finding remains intact it supports the conclusion that in the first place Tnuva sought to conceal the fact that it had added silicon to the milk.  A similar conclusion also emerges from Tnuva’s conduct after the exposure of the case, when it denied having added silicon to the milk. Tnuva’s problematic conduct as described supports the presumption that the omission of silicon from the list of the ingredients specified on the relevant package was not incidental and that its purpose was to  blind the consumers to the fact that the milk it produced and marketed included this ingredient, in the knowledge that this was a substantive matter that was likely to influence the consumers’ decision whether to purchase the milk.

This was therefore a conscious and illegitimate act of misleading by the intentional concealing of information with all of its attendant severity in terms of the relations between Tnuva as a dealer and the relevant consumer group. Furthermore, silicon is an artificial chemical substance which has absolutely no nutritional value and should not be found  in milk. Accordingly, the reasonable consumer does not expect to find it in milk. Tnuva’s effort in its summations to present the silicon, post facto as a popular “food supplement” in food products lacks sufficient anchorage in the evidence and cannot be accepted,  especially given that it emerged that the Tnuva’s sole reason for adding the silicon was its desire to resolve the problem of frothing for a low cost.  Likewise, no substantive significance can be given to the fact that the standard for cows milk for drinking was officially cancelled already back in 1998. Tnuva repeatedly stresses this fact in its summations and attempts to derive therefrom that adding supplements to the milk, including the addition of silicon, is not a negative act  However, it would seem undisputed that even after the cancellation of the aforementioned standard as a binding standard, silicon did not become a supplement for milk with any of its producers, including Tnuva.   We may therefore continue on the assumption that even in the absence of a binding standard, this was a substance that the reasonable consumer would not expect to be added to the milk that he consumed.  

31.  Another claim stressed in Tnuva’s summations is that silicon is not likely to cause damage to health.  Regarding this matter Tnuva relies inter alia on the conclusion of the Danon committee and the findings of the Magistrates Court in the criminal proceeding, as well as on the expert opinion of Dr. Aharon Eizenberg and Prof. Nissim Garti,  submitted on its behalf. In the absence of damage to health Tnuva contends that no damage was caused to the milk consumers that we are concerned with and that at the most this is a trifling matter that does not warrant compensation. Indeed, the representative plaintiffs did not present an expert opinion on their behalf to prove the allegation hat silicon is injurious to health and neither did the District Court rule on this matter, writing that:  

Indeed, it has not been proved that drinking milk containing silicon caused or is liable to cause immediate harm to the health of consumers. However, in the view of Health Ministry experts, also representing the position of the Ministry of Health as presented by the Attorney General in the appeal against the decision to certify the suit, it is not possible to rule out the existence of a health hazard in the long run, primarily to children, in the wake of drinking milk that contains silicon in view of the fear of consumption in excess of the acceptable daily intake (ADI)…

In the framework of this proceeding there is no cause for ruling on the scientific question of the degree to which the drinking of milk containing silicon poses a health risk. For purposes of this claim it suffices that the existence of such danger cannot be ruled out, at least according to some of the experts. From the plaintiffs’ perspective, it suffices that it was proved that Tnuva’s consumers were entitled to know, upon deciding to purchase milk that it had produced, that it contained silicon in defiance of the law and the standard and that under certain circumstances one cannot rule out the risk to health posed by its consumption” (para. 35, emphasis added).

In this ruling, the Court relied largely on the position of the Attorney General that was submitted to this Court in the framework of an appeal against the decision concerning the certification of the suit as a class action, which it stated that:

In an examination conducted by the National Food Authority of the Ministry of Health, it was not found that this substance is harmful to health, but the fact that there was a determination of ADI [acceptable daily intake) indicates that in excess of ADI there is no certainty concerning its safety in terms of health and the existence of a long term risk cannot be ruled out.  Given that in Israel large quantities of milk are consumed (not necessarily long lasting milk) primarily by children, then with respect to the consumption of milk containing silicon the consumption may exceed the ADI level.  The position of the Ministry of Health is therefore that it lacks information indicating that silicon is harmful to health, but it cannot rule out the existence of a long term risk, in cases involving the consumption of large quantities [para.3, emphasis added]

In addition,  regarding this matter it would not be superfluous to refer to the Danon Report which Tnuva seeks to rely upon.  The Danon Commission did indeed conclude that experience shows that silicon is not harmful to health, does not cause birth defects and that there is no scientific proof of it being carcinogenous (p. 55 of the Danon Commission Report). All the same, the Commission took into consideration the fact that Tnuva had added silicon to the milk “to a degree that exceeded what was permitted according to the manufacturer’s instructions, without examining and considering the effects of its heating and the attendant dangers. The Report further mentioned that “attempts were made in the dairy to reach a dosage that would be suffice for the required blocking of the froth, but without consulting with any entity in the Ministry of Health or any other licensing authority”, and that the silicon was added to the milk in a quantity and dosage that exceeded the level approved for foods other than drinking milk that this fact “necessitates an additional investigation of matters relating to the ordering of the material and the use thereof (p. 14-15 of the Danon Commission Report).

Accordingly it is difficult to accept Tnuva’s claim that there are unequivocal conclusions regarding the influence of the silicon added to the milk with respect to its influence on the consumers’ health, and this is sufficient grounds for not interfering with the Lower Court ‘s conclusion that under certain circumstances one cannot rule out the possible health risk involved in the consumption of milk containing silicon. Similarly, I also accept the Lower Court’s position that at all events every person has the right to choose whether he wishes to expose himself and his family to the material the nature of which is unknown to him. Hence, the fact that it was not positively proved that silicon is actually liable to harm consumers’ health has implications for the intensity of the infringement of autonomy (see Daaka  [4 ], p. 583; Nili Karako-Ayal, “Estimation of Compensation Due to Damage from Infringement of the Right to Autonomy”  - in the wake of CA 2781/93 Ali Daka v. Carmel Hospital, Hamishpat, 11,  267, 270-271 (5767) (hereinafter – Karako-Ayal)), but not on its infringement per se as a result of the fact that the consumer introduced a chemical substance into his body, the essence and character of which were unknown to him without having had the opportunity of deciding whether he wanted it (see s.1 of the Attorney General’s response to Tnuva’s application to submit additional evidence in the framework of the hearing on the application for certification in this Court. Regarding the significance of the health risk in class action proceedings in the case law of the District Court, see also CF 2593/05 (Tel-Aviv Jaffa) Solomon v. Guri Import and Distribution Ltd, para. 44 [   ] ; CF 1624/07 (Capp 8767/07)(Tel-Aviv Jaffa) Hova v. Milko Industries Ltd  [   ](27.1.2020); CF. 1126/07 (CApp 3058/07) (Tel-Aviv Jaffa) Arges v. Tnuva Central Cooperative for Marketing of Agricultural Products in Israel Ltd, para. 16 [   ] ; CF 1545/08  Alfasi v. Super Pharm Israel Ltd  [     ] and CF 1424/09 ((Tel-Aviv Jaffa) Guttman v. Neviot – Teva Hagalil Ltd.

In view of all the above, there is grounds for the Lower Court’s determination that under these circumstances there was an infringement of the consumer’s autonomy to decide whether or not he desired to consume  milk containing silicon and prima facie this is not a “trifling” infringement falling into the category of de minimis,  not warranting compensation.

32.  This conclusion gains added force inasmuch as our concern is with a class action in which it was proved that Tnuva’s act of misleading harmed the broad consumer public and the Lower Court  rightly ruled that under these circumstances the severity of the harm must be examined from the perspective of the entire group and “not from the perspective of an isolated consumer”. Indeed, I already mentioned the approach whereby the de minimis  rule does not apply, in the simple sense, to the foundation of damage in a typical class action,  insofar as “its central feature is the accumulation of insignificant instances of damage, which when considered individually would not have materialized into a legal proceeding; this approach has established itself in the case law of this court (see Aviv Legal Services Ltd [15], para. 10; also see comments of Justice Mazza in Barazani Further Hearing [3], 447). All the same, it should be emphasized that the fact that a large group of plaintiffs in a class actions alleges an accumulation of minor damages, does not necessarily negate the possibility that the matter is de minimis  from the group perspective as well. As noted, the precise borders of this concept do not admit of determination in advance and in a class action proceeding the answer to the question of whether the damage is of a minimal nature that does not warrant compensation depends on the circumstances of each case and may change having consideration for the particular circumstances of each case.

At all events, in the case before us, given the existence of a large group that  alleges damage as a result of Tnuva’s actions, the severity of which from a consumer perspective has already been discussed, precludes the conclusion that the matter is de minimus, even in the context of a class action. This is the case even though one cannot rule out the possibility that the existing discrepancy between the members of the group in terms of the intensity and scope of the injury may lead to the conclusion that had each member of the group filed a  personal claim the remedy claimed by each one of them separately would be de minimis.  Another question  concerns the number of group members who are entitled to compensation for this injury and what is the rate and the model of compensation for purposes of ruling in our case. When considering the number of the members of the group entitled to compensation attention should also be given to the issue of splitting up the compensation for non-pecuniary damage in the current case.  The reason for this is that the Lower Court held that compensation should be awarded for the Tort head of infringement of autonomy and separately for the tort head of negative feelings.  It will be recalled that in this context the Lower Court accepted the position of the representative plaintiffs and in reliance on the consumer survey that was presented to it (adjusting its results downwards), and ruled that: "a uniform rate should be ruled for the infringement of individual autonomy, whereas with respect to about half of the members of the group it will be supplemented by damage by reason of negative feelings" (para. 84 of decision).  Nonetheless, it bears note that ultimately the Lower Court ordered the payment of overall compensation (NIS 55 million), stating that this sum "reflects the personal damage that is estimated for each individual of the group, of the sum of NIS 250 (para. 134 of decision), and without actually distinguishing between the heads of damage that were mentioned and without differentiating between the members of the group in its entirety whom it had determined were entitled to compensation for the infringement of autonomy and half of the members of the group, who were additionally entitled to compensation for negative feelings. Accordingly in their appeal the representative plaintiffs challenge this ruling, and we must therefore address the fundamental issue of the splitting up of the non-pecuniary compensation, as mentioned.

However, prior to addressing the subject of the scope of the compensation  awarded we must first address the essence of the central damages head  which was at the forefront of this class action.

 Infringement of Autonomy

       33.  In the Daaka  [4] case, Israeli law recognized for the first time that the non-pecuniary damage involving the infringement of autonomy is "damage" in the sense of the Torts Ordinance, and that as such is compensable (on compensation for non-pecuniary damage in Tort Law in general, see s. 76 of the Torts Law. Also see CA 4576/08 Ben-Zvi v. Prof. His  [17] (hereinafter: Ben Zvi); Eliezer Rivlin " Compensation for Non Pecuniary Damage –Broadening Tendencies" -  Shamgar Volume,  Part 3, 21, 45 (2003); Yifaat Biton Dignity Aches: Compensating Constitutional Harms, 9 MISHPAT UMIMSHAL (Haifa University LR) 137 (2005) (hereinafter: Biton).   In the Daaka [4] case the court held that the  fundamental right to autonomy means the right of every person "to decide his or her deeds and wishes in accordance with his or her choices, and to act in accordance with those choices". It ruled that this right encompasses all of the central aspects of a person's life, from which it may be derived inter alia that "every person has freedom from unsolicited non-consensual interference with his of her body". It further held that this freedom is one of the expressions of the right to dignity given to every person, and is anchored in Basic Law: Human Dignity and Freedom.

These rationales, which in Daaka [4] lead to the recognition, protection and compensation for an infringement of autonomy of the body, are relevant and applicable to cases in which there is an infringement of the victim's autonomy in central aspects of his life due to the denial of his freedom to choose and the breach of the duty of disclosure to him. For example, the court recently recognized the damages head of infringement of autonomy in a case in which the autonomy violated was that of the family relatives of the deceased person, and pertained to the manner of treating his body (see in Ben- Zvi [17]. Hence, contrary to Tnuva's claim, the recognition of the damages head of infringement of autonomy is not, and should not be limited to cases of medical negligence or exclusively to autonomy of the body. The principles underlying the recognition of this head of damages and the constitutional right protected by such recognition, in appropriate cases, will justify compensation for infringement of autonomy even where other torts are concerned, such as the consumer tort in our case (see Tzachi Keren-Paz "Compensation for Violation of Autonomy: Normative Evaluation, Developments and Future Trends" Hamishpat 11, 187, 192-194 and the examples cited in the footnotes) (2007) (hereinafter – Keren-Paz); Dafna Barak – Erez, "Constitutional Torts in the Era of Basic Rights" Mishpat UMimshal 9, 103, 121-122, 129 (2006)).  In her in her decision to certify Raabi's suit as a class action, Justice Naor was guided by the approach that rejects the limitation of the boundaries of the damages head of non-pecuniary damages for infringement of autonomy to Tort of negligence in general and specifically medical negligence.  Her approach was rightly adopted by the Lower Court when it awarded compensation for the damages head of infringement of autonomy, having found that by its actions Tnuva had committed an act of misleading against Raabi and against the group of consumers that he represented, by failing to disclose the existence of silicon on the packaging of the milk that it produced and marketed.

34.  It is important to note that in the Daaka [4] case the infringement of autonomy was classified as a head of non-pecuniary damage in the framework of the tort of negligence, and not as a separate tort in its own right. Following the decision in Daaka [4] the view was expressed that it was appropriate to recognize the infringement of autonomy as a constitutional tort that gives rise to an independent grounds of claim (on this, see the comments of the Deputy President in CA 8126/07 Estate of the Late Bruria Zvi  v. Bikkur Holim Hospital [18]; Ben-Zvi [17] in para. 54 of his decision and in the same vein, the opinion of Justice Amit, in Ben Zvi  para. 21.  Also see Rivlin, 45 and see and compare to Keran Paz;  Nili Krako Ayaal "The 'Informed Consent' Doctrine – An appropriate Ground of Claim where the Patient's Right to Autonomy was Violated" Hapraklit 49, 181, 222-223 (2006)). However, our case law  has yet to give deep consideration to this weighty issue of recognizing a new tort created by case-law and the case at hand does not require  a discussion and decision on the matter. The reason is that the representative plaintiffs in this case took the path of settled case -law, and classified the infringement of autonomy as a  non-pecuniary head of damage in the framework of the tort of misleading which it attributed to Tnuva in accordance with the Consumer Protection Law. Inasmuch as the representative plaintiffs did not claim in the Lower Court or before us that in this context the plaintiff's  right to compensation for infringement of autonomy should be recognized as a  (sic)right ,should be recognized as an independent tort based on the violation of a constitutional right entitling the plaintiff the issue can be left pending further examination and there is not cause for us to address the matter on refer to it on our own initiative.

The Requirement of a Causal Connection

35.  Tnuva further added that the Lower Court erred by deviating from the law set forth in FHC Barzani [3 ] dwelt on above, and had actually waived the requirement for a causal connection between the act of misleading and the damage. Tnuva claimed that the representative plaintiffs failed to prove that their decision would have been influenced by having been informed in advance.  Since the grounds of misleading, by definition, requires that the consumer rely upon the dealer’s conduct, then absent proof of such reliance, according to Tnuva, there are no grounds for an act of misleading under the Consumer Protection Law.

On the other hand, the representative plaintiffs claim that to the extent that the concern is with the head of damage in the form of infringement of autonomy, then it will be regarded as having been proved, even if the victim would have acted in the same manner had he been presented with all of the information, and that at all events, in the case at hand it had positively been proved that the consumers would not the purchased milk containing silicon.

36.  Indeed, in the Further Hearing Barazani [3] and we already addressed this point above, the court ruled that the requirement for a causal connection in s. 64 of the Tort Ordinance also applies to consumer torts pertaining to misleading advertising, and even where the tort is grounds for a class action. All the same, the court also ruled that to the extent that the matter concerns consumer torts, the requirement of reliance deriving from the requirement for a causal connection will be interpreted broadly so as not to include to direct reliance only” but also “an indirect causal connection by way of a reasonable chain of causes from the publication and until the consumer” (ibid.,  414- 415). In Barazani [2] it was further ruled that in a class action proceeding based on the provisions of Chapter F’1 of the Consumer Protection Law and its relevant regulations enacted by force thereof  (provisions that as stated were cancelled in the interim in the Class Actions Law) it may be necessary to relax the stringency in proving the causal connection having consideration for the nature of this unique proceeding, and the fact that “the court is entitled to prescribe appropriate methods of proof at its own discretion for the causal connection between the misleading publication and the damage caused to each one of the members of the group, including the damage that was caused to each and every one of them (ibid.,  424). In that matter there was no proof at all of a causal connection, not even indirect, as claimed by Barazani, given that Barazani was not actually exposed to the publication. For this reason the court dismissed Barazani’s application to approve his personal claim as a class action and ruled that his personal suit does not show any grounds.

Tnuva’s attempt to rely on the Barazani ruling and to claim that in this case too it was not proved that there was a causal connection between its conduct and the non-pecuniary damage being claimed, cannot stand, for a number of reasons:

First, the claim was raised by Tnuva at the stage following the certification of the class action and to the extent that it is directed against the group as such, it must be remembered that three years after the decision in the  Further Hearing Barazani  [3], the Class Actions Law was passed, unifying all of the principles and rules to be applied to the various categories of class actions. The Law consists of a comprehensive, detailed statutory arrangement, including the methods of proving entitlement to the remedy being claimed, and inter alia it enables the granting of remedies for the public good in appropriate cases where it is not practical to prove the damage caused to each member of the group and  a fortiori the causal connection between the damage and the tortfeasor’s conduct (s. 20 (c ) of the Law). As specified below, this outline was adopted by the Lower Court and under these circumstances the demand to prove the causal connection between Tnuva’s conduct and the damage in respect of each individual of the group is problematic.

Second, the decision in Barazani [3] concerned misleading by action due to the misleading advertisement of Bezeq concerning the tariffs per conversation, and as mentioned it was held that insofar as Barazani was not even exposed to the misleading advertisement, there was no causal connection between the publication and his alleged damage.  Our case on the other hand concerned misleading by omission committed by Tnuva in its failure to disclose the fact of the silicon being added to the milk. Tnuva claims that the plaintiffs must prove that had they been exposed to that fact in a timely manner they would not have purchased the milk. It would seem that a requirement of a plaintiff to prove that had he been aware of the fact he would have acted otherwise would be particularly difficult to prove and in many cases even impossible. Indeed, this position is reinforced to the extent that our concern is with a class action. On the difference between misleading by an act and misleading by omission with respect to proving a causal connection in the representative context, see our comments in CA 9590/05 Rahman Nuni v. Bank Leumi LeIsrael Ltd [19] which overturned the District Court’s decision to dismiss the application for certification of a class action because of the plaintiff’s failure to prove the causal connection. In our judgment in the appeal we reversed this decision and ordered that the file be remanded to the lower court, indicating that “it seems that the question of the requirement of the causal connection in this case is also worthy one further consideration. This matter involves complex questions, the first of which is whether to apply the rule set by this Court for purposes of the ground of misleading, in FHC 5712 Barazanai  [3] even where it concerns the grounds of “non-disclosure” (ibid., para. 6) (regarding the similar approach taken in American Law in various contexts, see: Affiliated Ute Citizens of Utah v. United States 406 U.S. 128, 153-154 (1972) [34]; Binder v. Gillespie 184 F.3d 1059, 1063-1064 (9th Cir. 1999) [35]; Poulos v. Caesars World Inc. 379 F.3d 654, 666 (9th Cir. 2004) [36 ]. See also, CF (Tel-Aviv-Jaffa) 2405/04 Ben Ami v. Hadar Ltd [  ] paras. 72- 73 (14.2.2010).

We may thus conclude that to the extent that the consumer tort on which the class action is based on is misleading by way of omission, (by way non-disclosure) this may justify leniency regarding the proof of the causal connection between the wrongful conduct and the alleged damage.

Third, as opposed to the Barazani case [2], which was a monetary claim (tariff differentials), the head of damage being sued for in this case pertains to non-pecuniary damage  in the form of infringement of autonomy. Regarding this head of damage it was ruled that there was no need to prove a causal connection between the failure to disclose relevant information and the choice made by the victim (see: Daaka [4], 567-570; CA 6153/97 Shtendal v. Prof. Yaakov Sadeh [20], at p. 760; CA 9936/07 Ben David v. Dr. Entebbe [21] para 11 of Justice Hendel’s decision; CA 9817/02 Weinstein v. Dr. Bergman,[22]  para. 18). For a critique of the Daaka [4] decision, see Assaf Yaakov “Informed Consent and Duty to Disclose, Tel-Aviv University Law Review  31, 609 (2009). The rationales in this context that guided the court in Daaka [4] and in other matters pertaining to medical negligence are applicable to the same degree with respect to an infringement of autonomy caused as a result of the consumer tort committed by a dealer who misled a consumer.  Indeed, the non-disclosure per se involves the denial of the consumer’s freedom of choice. In our case, by failing to specify silicon as one of the components of the product, Tnuva deprived the consumers of the possibility of making an intelligent choice and deciding whether they wish to purchase and consume it. This suffices as proof of an infringement of autonomy. Another question is whether this suffices to establish a right to compensation or whether it must further be shown that consequential damage was also caused to the plaintiff, finding expression in negative feelings given the denial of his freedom of choice. I will address this point further on. 

37.  At all events, even had we ruled that the circumstances of this case necessitated bringing proof that the members of the group would not have purchased the milk had they known that it contained silicon, this requirement for a causal connection in a class action  might conceivably have been satisfied by a determination in the manner of a "collective causal connection" (on this see Aviv Legal Services [15]para. 10). This kind of collective causal connection may be substantiated by the assumption that the group members, and at least the majority thereof, would have replied in the negative had they been asked in advance whether they would purchase milk to which Tnuva had added an artificial  supplement the  nature of which they were ignorant, and in defiance of the standard,  in order to overcome the problem of excessive frothing (compare C.F. 1036/66 (Capp. 1877/06) (Tel-Aviv Jaffa) Tal v. Rabin Medical Center (Beilinson Campus), para. 12) [  ] See also regarding the use of "generalized evidence" in American Law: Kennedy v. Jackson National Life Insurance Company, 2010 U.S. Dist. Lexis 63604, 25-28 (N.D.Cal 2010) [37];   Negrete v. Allianz Life Insurance Company of North America 238 F.R.D 482, 491-492 (C.D. Cal. 2006)[38]; Klay v. Humana, Inc.382 F.3d 1241, 1259 (11th Cir. 2004) [39]. Regarding the exception to the application of the doctrine in cases in which extensive differentiation between the members of the group was proved, see Poulos v. Caesars World, Inc. [36]. Further support for the application of this doctrine in the circumstance of the case before us can be adduced from the fact that it was Tnuva's intentional actions that created the situation which encumbered the process of locating the members of the group and the conduct of an individual examination of each of the elements that must generally be proved in the according to the law of tort.  Additional support for the existence of a causal connection between the act of misleading committed by Tnuva and the consumers' choice to consume the milk, can be fond in the trends evidenced in the consumers survey that was presented, and which we will address further on.

   38.  Tnuva further adds that at all events, the publications in the press concerning the damage to health caused by silicon consumption severed  the causal connection between its own acts and the bad feelings experienced by consumers, which it claims were  by and large the result of publications that post facto turned out to be unfounded.  This claim regarding the causal connection is not grounded in evidence, and in this matter as the one whose act of mass misleading caused uncertainty regarding the precise influence of the publications on the feelings of the consumers, it is Tnuva that bears the onus of proving the opposite (compare: Johnson v. The Goodyear Tire & Rubber Company, Synthetic Rubber Plant, 491 F.2d 1364, 1379-1380 (5th Cir. 1974)[40]; Cooper v. Allen, 467 F.2d 836, 840 (5th Cir. 1972) [41]. Accordingly, this argument is rejected.

Assessment of the Compensation for the Infringement of Autonomy – The Objective Approach and the Splitting Up of the Compensation for Non-Pecuniary Damage.

39.  How does one assess the compensation for the tort head of infringement of the right to autonomy?

Based on the constitutional features of the right to autonomy some favor the objectification of the assessment of the compensation for its infringement. For example, Dr. Tzahi Keren-Paz argues that "freedom of choice can be viewed ….as an asset with objective value" and hence "it is appropriate to award a sum that reflects the social value attaching to the denial of freedom of choice. This sum should even be awarded absent proof of consequential, subjective damage (feelings of shock and anger) by reason of the denial of freedom of choice" (Keren-Paz, 196-198). Keren-Paz sees special justification  for an objective assessment of compensation for infringement of autonomy in the consumer context. In his view, "the deterrent consideration (that focuses on the dealers) must also justify the compensation award in circumstances in which the compensatory factor (that focuses on the legitimate damaged interest of the consumer) does not provide sufficiently strong support for the compensation due to the problem of under-deterrence of the dealers…"(Keren-Paz, 242).  The scholar Dr.Nili Karko-Ayal likewise suggests that compensation should be assessed  in accordance with the value of the right to autonomy on the one hand, and the gravity of its infringement, on the other hand (see Karko-Ayal and see the opinion of Judge Strasbourg-Cohen in the Daaka case [4], at p. 619).

This approach deviates from the traditional principles of the laws of tort, that are based on a subjective, individual assessment of amount of compensation, and from the conception of compensation as being intended to restore the victim's position to the status quo ante and to provide him a remedy for the damage caused to him, including non-pecuniary damage. This point was mentioned by Justice Or in the Daaka case [4 ] when he awarded compensation for a  victim under the tort head of infringement of autonomy, where he said:

Naturally, matters relating to the proof and the extent of damage are determined in accordance with the particular data in each individual case and the evidence submitted in court. The substantive criterion for generally determining the amount of compensation to which the victim is entitled is the criterion of restoring the situation to its original [ex ante – ed.] state. This criterion is an individual one. It requires an individual assessment of the gravity of the harm caused to the specific victim (p. 582-583)

The difficulty involved in application of a "pure" objective criterion for purposes of determining the sum of the compensation for an infringement of autonomy was likewise addressed by scholar Prof. Dafna Barak-Erez in her discussion of claims filed by the individual against an authority, where  she emphasized that in this context as well:

…the principles of tort should not be deviated from  by awarding compensation that is detached from the concrete infringement and its circumstances. The sum of the damages cannot and need not reflect the universal value of the right… compensation that purports to reflect the general value of the right should be rejected  for a number of reasons. First it is illegitimate from a principle-value based perspective, because it purports to attach a price tag to the right itself. Second, it benefits the plaintiff in a manner that extends beyond his own particular damage, and thus deviates from the principle of restoring the status quo ante. In the realm of Tort law, compensation is determined in accordance with the damage to the victim himself, and not in accordance with the value of his right from the perspective of the other person (Dafna Barak-Erez, Constitutional Torts 277 (1993) (hereinafter – Barak-Erez)).

It is not superfluous to mention that in academic writing in the field of tort one can discern trends that deviate from the traditional perception whereby Tort law is intended to grant remedial damages to the specific victim in order to restore the status quo ante. Hence for example, there are some who contend that punitive damages that are not derived from the victim's damage may in appropriate cases provide a solution to sub-enforcement and therefore constitute an efficient form of deference A. Mitchell Polinsky & Steven Shavell, Punitive Damages: An Economic Analysis, 111 Harv. L. Rev. 869 (1998), as well as to heal societal damages caused by the tortfeasor to the victims who did not come to court  (Catherine M. Sharkey,Punitive Damages as Societal Damages, 113 Yale L. J. 347 (2003). Deputy President, E. Rivlin recently addressed this matter in the matter of Ben Zvi  [17] in  where he treated the matter of punitive damages, noting that today, the case law in Israel too has recognized the court's authority to award damages of this kind in the framework of the law of tort, and he also mentions that :"despite the sharp analytical distinction between punitive damages and remedial damages, on a practical level the contradiction is not so sharp, at least in the realm of non-pecuniary damage"  (paras. 37- 39 of his opinion, see also in LCA 9670/07 Anon v.Anon [23], paras 22-27 or the opinion of Justice E. Rubinstein, and the opinion of the Deputy President E. Rivlin).

However, to the extent that the compensation to be evaluated and awarded is claimed as part of a class action, one must remember the provision of section 20 (e) of the Class Action Law, which provides that: 

In a class action the Court shall not adjudge exemplary compensation and it shall also not adjudge compensation without proof of damage….but the aforesaid shall not prevent the award of compensation for other than monetary damage.

    Thus, the Class Actions Law stymied the possibility of awarding punitive damages in a class action. All the same, the Law established other special compensatory mechanisms that enable realization of the principle of remedial justice, for example, by way of imposing a cy-pres obligation on the tortfeasor for the damage caused, and principles of efficient deterrence, such as obligating the tortfeasor to provide a remedy for the public interest for the widespread social damage that he caused, and I will address this matter below.

40.  I do not accept the objective approach to the evaluation of the sum of damages for infringement of autonomy that I reviewed above. The head of damage of infringement of autonomy is encapsulated in the negation of the victim’s freedom of choice, and in the majority of cases involves the non-disclosure of a matter that is critical for the victim. Accordingly at the very least as far as it concerns class actions, a presumable starting point for evaluation of the non-pecuniary damage caused to those whose autonomy was violated, is that as a result of that infringement they experience anger, frustration and insult (of varying degrees of intensity, according to the concrete circumstances of the case).  These feelings which resulted from the tortfeasor’s conduct, justify compensation for non-pecuniary damage. However, there is no conclusive presumption that these feelings are experienced by the victim in every case of an infringement of autonomy. Accordingly, should the tortfeasor successfully prove that notwithstanding that his conduct negated the freedom of choice of the plaintiff or of the members of a group, they remained indifferent and unmoved, it may be determined that they are not entitled to damages under this head of damage because in truth, despite the denial of their freedom of choice, they did not sustain any non-pecuniary damage as a result. My approach, whereby the compensation for infringement of autonomy is awarded by reason of the subjective consequential damage expressed in feelings of anger, frustration and other similar negative feelings caused by the tortfeasor’s conduct, gives rise to the another conclusion – that there are no grounds for severing the compensation for infringement of autonomy from the compensation for mental anguish and negative feelings caused to the victim by that infringement (as distinct from the non-pecuniary head of damage relating to other infringements in framework of the same claim). A different approach to this matter was expressed by the Lower Court, even though, at the end of the day, as mentioned, the Lower Court awarded a sum total of NIS 250 as non-pecuniary damages for each member of the group without distinguishing between those members of the group who experienced negative feelings and those regarding whom it was proved by the consumers survey did not suffer feelings of this kind (regarding this matter, see the dispute between the Deputy President E. Rivlin and Justice Y. Amit, in the matter of Ben – Zvi [17] (see Keren-Paz, 203-208). 

A conclusion similar to my conclusion on the matter also emerges from the findings of Justice M. Naor in the decision given in the appeal on the decision to approve Raabi's suit as a class action.  In that context Justice Naor relates in the same breach to the non-pecuniary damage caused by the infringement of autonomy and to the negative feelings attendant to that damage. In her own words:

…..[t]he damage claimed by Raabi is non-pecuniary damage, negative feelings and feelings of revulsion. The non-pecuniary damage which he claims is characterized by the feeling of revulsion that stems from the fact that the material concerned is silicon with all of its attendant associations. In my view damage of this kind is compensable damage. The act of misleading concerning the contents of the milk in this case, prima facie, constitutes, an infringement of individual autonomy. Our concern is with a food product.  Consumers are entitled to determine what to ingest into their mouths and bodies and what to avoid. For example, if a person wishes to only eat kosher food and post facto it becomes clear to him that the food that was misleadingly presented to him, was not of that nature, will feel a sense of revulsion and an infringement of his autonomy…  (ibid.  681-682, emphases added).

     Indeed, to the extent that it concerns Raabi  - the representative plaintiff – after hearing his testimony and the testimony of his son, the Lower Court ruled that Raabi had experienced substantial negative feelings upon becoming aware that the milk that he had consumed contained silicon, and that Tnuva had refrained from specifying this component on the packaging; in the words of the Lower Court:

,,,[a]s a result of these acts the plaintiff was denied the ability to make an intelligent and informed choice concerning the purchase of an alternative product, that does not contain  a supplement that it prohibited by law for use in milk for drinking. It is likewise clear that the negative feelings experienced by Raabi stem from the acts of Tnuva. It could be claimed that these feelings were exaggerated, having consideration for the fact that it was not proved that silicon causes a health risk. But one cannot dispute his [Raabi's] feelings as such: [Raabi] subjectively felt a sense of disgust (nausea), anxiety,  as a result of having drunk the milk containing silicon as well as anger and rage by reason of the fraud.  All of these fall into the category of non–pecuniary damage that is neither peripheral nor negligible and is indeed compensable… " (para. 57, emphases added).

     There is no justification for interference with these rulings of the Lower Court, for as stated they are based on the testimonies of  Raabi and his son, and on the Court's direct impression from those testimonies. However, in order to determine the precise compensation to be awarded, if at all, in favor of the group on whose behalf Raabi handled the class suit, proof of subjective damage caused to Raabi will not suffice and additional complex questions must be addressed, relating to proving the entitlement of the members of the group to the pecuniary compensation that was claimed, including, inter alia,  the question concerning the difference between the group members who experienced negative feelings as a result of the denial of their right to chose whether nor not to consume milk containing silicon and the group members who remained indifferent to the aforementioned denial of their free choice.

41.  As mentioned above, under the circumstances, at the time of the handing down of the decision on the class action it was not possible to individually identity each member of the group and to determine the individual right of each one of them to  a remedy. As such it was not possible to rule on the class action in favor of the group in accordance with the evidentiary paths  set forth in section 20(a) of the Class Actions Law. In order to determine the compensation, the Court was required to utilize the framework of s.  20 (c) of the Class Actions Law, which was intended for those cases in which "Court concluded that, under the circumstances, pecuniary compensation for all or some members of the group is not practical, either because they cannot be identified and the payment cannot be made at a reasonable cost, or because of other reason".

Based on the opinion of Prof. Ofir, who was appointed as expert on the Court’s behalf, the Lower Court ruled that during the relevant period 220,000 consumed the long-lasting milk containing silicon.  Basing himself inter alia on the data he received from Tnuva, Prof. Ofir estimated that the number of households that had purchased the milk stood at NIS 166,307, and in his testimony in Court Prof. Ofir noted that the number of adult purchasers during the relevant period stood at 330,000. As such, according to his approach, the number of members in the group ranged from between 166,307 to 330,000 (p. 672 of the protocol). The Court’s determination that in this context one should consider a group number about 220,000 persons is therefore a cautious and conservative estimate (see comments of Prof. Ofir, p. 672 – 674 of the protocol), which will not be interfered with.

What remains to be examined is how many of those belonging to the aforementioned group of milk consumers actually experienced negative feelings as a result of the infringement of their autonomy.

The representative plaintiffs submitted an expert opinion drawn up by Dr. Katz and Prof. Mevorach, based on a consumers survey, from which it emerges that 26% of those questioned, who represent the general population, were indifferent to the publication to the effect that the milk contained silicon. Under the assumption that this percentage, pertaining to the general population, is also likely to reflect the interviewees who did not actually consume the long lasting low-fat milk during the relevant period, it would be appropriate to address the essential findings of the expert opinion that reflect the percentage of consumers of this milk before the publication from out of the total population (43%), and the percentage of consumers from out of these who continued to drink this milk even after the publications concerning the inclusion of silicon therein (30% out of the 40%, which represents 13% of the entire population). The expert opinion of Dr. Mevorach and Dr. Katz indicates that 66% of those who previously consumed long lasting, low fat milk of Tnuva (which they claim represent 28% of the total population) experienced negative feelings  in the wake of that publication, at various levels of intensity, including "revulsion, nausea, anxiety, fear, anger, hatred, disappointment, deceit, lying, fraud, temerity, contempt, irresponsibility, bad feelings (section 3 of the survey), whereas 30% continued to consume the milk even after the publication.

In our case and based on the data presented by the representative plaintiffs, there are grounds to conclude that some of the group members remained indifferent to the addition to the silicon to the milk.  26% of those asked specifically stated that this was their feeling: "indifference, no problem, not correct and other feelings that are not negative"- page 5 of the expert opinion of  Dr. Katz and Dr. Mevorach, subsection (b) of the answers to question 3, and "nothing, unmoved and indifferent" and "they made a mountain out of a molehill" – (the encryption page of the answers to question 3), and in the absence of a datum in the survey conducted regarding how many of those questioned had consumed silicon in the past, I think that the percentage of "indifferent consumers" can be derived from the datum in the expert opinion relating to those who continued to consume long lasting milk even after the publication of the silicon matter (30% of the overall number of consumers in the past, and 13% of the entire population). Accordingly, from out of the overall number of consumers of long lasting low fat milk during the relevant period, the number of whom stood at 220,000 according to the determination of the Lower Court there should be a reduction of  30% of "indifferent consumers" who did not experience negative feelings even after having been informed that the milk that they had consumed contained silicon, and that Tnuva refrained from indicating this element on the packaging.  The scope of the group entitled to compensation for the infringement of autonomy that caused them negative feelings, therefore stands at 154,000 people.

42.  In its pleadings, Tnuva objected on a number of counts to the  Lower Court's willingness to base findings and conclusions on the consumer survey relied upon in the expert opinion of Dr. Katz and Dr. Mevorach. Basing findings concerning subjective feelings on surveys is problematic. Even so, inasmuch as the Lower Court ruled that the structure for proving the pecuniary compensation to be awarded in this case is the one prescribed by s. 20 (c ) of the Class Actions Law in view of the practical impossibility of identifying the group members and in ruling individual compensation, under the circumstances, the reliance on an expert opinion based on a consumers survey gives expression to a degree of leniency regarding the modes of producing evidence which is occasionally required in the context of class actions. The need for such leniency was already addressed by the court in Barazani [3], as mentioned above and is now grounded in explicit legislation in the provision of s. 20 (c ) of the Class Actions Law (on the "enlisting" of statistic data for proof of damage where there is structural vacuum in terms of the possibility of presenting individual data, see and compare: Eliezer Rivlin and Gai Shani "A Rich Conception of the Principle of Restoring the Status Quo Ante in the Doctrine of Compensatory Damages"  ,  (hereinafter: Rivlin and Shani); Gai Shani: "The Principle of 'the Matter Speaks for Itself' in the Law of Torts – Revisited”; A. Porat & A. Stein Tort Liability under Uncertainty 87-92 (2001);  Naturally, the court's reliance on the expert opinion based on the consumers survey is conditional upon the court having found the expert opinion to be worthy of reliance, having considered the entirety of claims raised regarding it.

In the case before us, having examined the survey's findings,  the expert opinion of the Dahaf Institute on Tnuva's  behalf (drawn up by the expert, Dr. Mina Zemach), and the expert opinion of the Court expert who gave his opinion on the survey, the Court held that "The testimony of Professor Mevorach and Prof. Katz made a reliable impression, and  my impression is that they are professionals with experience and knowledge in their field" (para. 60). The Court rejected Tnuva's claim that the survey's results are biased, and that the questions presented to the interviewees included the assumption that silicon causes health hazards. For example, Dr. Mina Zemach on Tnuva's behalf mentioned question three that was presented to the interviewees ( "What did you feel in the wake of the publications  concerning  Tnuva's insertion of silicon into long lasting low fat milk, and its health risks?"). She claimed that the final clause of the question relating to health risks was altogether unnecessary and that there was reasonable grounds to fear that "this biased wording contributed to part of the serious defects of the study" (page 4 of the expert opinion, page 11 of the expert opinion).  Rejecting this assertion, the Court ruled that the presentation to the interviewees was authentic because it was proved that at that time there were publications concerning the health risks of silicon.  All the same, to be on the safe side, the Court was prepared to assume that the survey’s findings that tended to exaggerate the negative feelings somewhat, even if not to the extent of justifying the survey’s disqualification, as claimed by Tnuva, should be taken into account when determining the number of consumers who experienced negative feelings (about half according to the Lower Court’s holding as opposed to 66% according to the survey).  There was no justification for interfering with the conclusion that the wording of question number three did not warrant interference (regarding this, see comments of Prof. Mevorach in his testimony, p. 287 – 291, 296- 298 of the protocol). Furthermore the Court further ruled, correctly, to disqualify the fifth question of the survey, in which the interviewees were asked “Did your negative feelings emerge immediately with the initial publications or after that publications were also verified by the Ministry of Health and by Tnuva. The Court noted that this question contains potentially misleading information because of the possible implication that Tnuva and the  Ministry of Health had verified the publication concerning the health hazard, when in fact this was not the case/

  Accordingly no defect can be found in the Lower Court’s willingness in this case to rely on the expert opinion of Dr. Katz and Prof. Mevorach (that relies on a consumers survey) for purposes of determining the portion of the group that experienced negative feelings as a result of the infringement of their autonomy. By extension  our own reliance on this expert opinion cannot be negated as a means of determining the size of the group, along with the deletion of the “indifferent consumers” as set forth in section 41 above.

The Degree of Damage

     43.  We are required to determine the degree of damage, which in this case means the non-pecuniary damage incurred by consumers as a result of drinking milk containing silicon. Assessing the degree of damage expressed in victim’s negative feelings of anger, frustration and insult, and other like feelings caused by the tortfeasor’s wrongful conduct, and determining the compensation owing to him by reason of such damage, is no easy task. The reason is that damage of this kind is essentially subjective-individual damage, largely dependent upon the personal emotional barometer of each individual. This point was addressed by Justice T. Or in the Daaka [4] case in his ruling on the specific, non-pecuniary damage incurred by the plaintiff  due to the infringement of his autonomy. He wrote the following:  

The damage in this kind of case involves a predominantly subjective aspect, giving rise to inevitable difficulties in assessing it. Ultimately, the sum of compensation in each particular case, similar to compensation for other non-pecuniary damages, is a matter of judicial discretion, and it is thus determined by making an evaluation based on all the relevant circumstances and the impression of the court. The court must therefore adopt a balanced approach. It should give the appropriate weight to the fact that basic human rights were violated, which dictates an award of appropriate compensation as opposed to a symbolic compensation. On the other hand, considering the difficulties inherent in the procedure of accessing the damage, judicial restraint is required, and exaggerated compensation awards should be avoided.

    If the assessment of non-pecuniary damage for infringement of autonomy poses difficulties in individual cases, the difficulty is multiplied sevenfold when the court is required to assess the damage in a class action, and particularly when it is impossible to locate the members of the group and form an individual assessment regarding each member concerning the intensity of the infringement of autonomy and the subjective negative feelings experienced by reason of the infringement.  The subjective nature of the damage also impedes upon ‘damage averaging’  and for this reason in the U.S.A. there is a reluctance to approve a class action for compensation for non-pecuniary damages (see Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417 (5th Cir. 1998)[42]; Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639, 650-651 (6th Cir. 2006)[43]; Fuhrman v. California Satellite Systems, 179 Cal. App. 3d 408, 424-425 (1986) [44]  ]; Altman v. Manhattan Savings Bank, 83 Cal. App. 3d 761, 767-769 (1978) [45]; Stilson v. Reader's Digest Association, Inc., 28 Cal. App. 3d 270, 273-274 (1972)[46]; Birnbaum v. United States, 436 F. Supp. 967, 986 (1977) [48].

See also the comments of Justice A. Proccaccia in a minority opinion in the decision on the application for certification, 697.

In Israel, this approach was rejected by Justice Naor, with whom the Deputy President S. Levine concurred. In the application for certification, Justice Naor held as follows:

The court will not award penal compensation in a class action, and similarly will not rule compensation without proof of damage, other than as specified in item 9 of the Second Schedule. However, the aforementioned does not preclude the ruling of compensation for non-pecuniary damage (emphasis added).

 All the same, while there is no impediment in principle to the awarding of non-pecuniary compensation, in the framework of a class action, cases may arise in which the difficulty of determining the rate of damage will justify non-certification of the filing of a class action or its dismissal on its merits (regarding this, see the case law of the district courts before and after the enactment of the Class Actions Law (CC (TA-Jaffa) 388/96 Yaari v. Israel Lands Administration, [   ] s. 6 (e) and (f); CC  (TA-Jaffa) 2331/06 Lubinsky v. Nazrian, [    ] 5- 6  ; CApp (Naz.) 1528/05 Barzilai v. Frinir (Hadas 1987)  Ltd,[    ]s. 27.2  (d). On the other hand, see CC (TA-Jaffa) 1586/09 Hayyut v. Telran Immediate Messages Ltd [   ]para. 4 (b) (5); CC (TA) 1341/00 Mazal v. Discovery International Modelling Agency Ltd [   ].

44. In our case, the Lower Court deemed that the difficulties in assessment of damage by reason of it being pecuniary damage and by reason of the practical difficulty of locating the members of the group and forming an individual impression of the damage caused to each one of them, do not justify the dismissal of the class action.  For purposes of assessing the damage and fixing the compensation, it resorted to the specific mechanisms of s.20 of the Class Actions Law,  and fixed the complex model for compensation that we described above, and in accordance with which it ultimately determined the remedy.

In this appeal, Tnuva again argues that our concern is with tortuous compensation that is generally assessed on an individual basis, and that given the representative plaintiff’s failure to prove the precise damage caused to each member of the group, the Court erred in its failure to dismiss the suit for that  reason. Tnuva further claims that the damage in this case does not admit of “uniformity"” because  the degree of damage incurred by each consumer differed, hence it argued that the sum awarded by the Court to each member of the group (NIS 250) was arbitrary and with no evidentiary grounding and should thus be set aside.

The representative plaintiffs claim on the other hand that the Lower Court rightly determined that this case admits of  an “average reasonable compensation” which when multiplied by the number of the members of the group would constitute the overall sum of compensation and that its determinations in this regard are consistent with the legislative intention as well as with the American case law in this context. However, their claim is that the sum per individual as determined by the Court is too low and in their appeal they seek to fix it at a minimum of NIS 8000, in view of the Court’s own determination to the effect that had it been confronted with an individual claim, this is the sum that is could have awarded for non-pecuniary damage.

45.  Section 20 of the Class Actions Law, titled “ “Proof of Entitlement to Remedy and Payment of Pecuniary Compensation” provides as follows:

(a) If the Court decided all or part of a class action in favor of all or part of the group in whose name the class action was conducted, than as part of its decision to award pecuniary compensation or other relief to members of the group it may make, inter alia, an Order specified below, as the case may be, on condition that doing so will not place an unnecessarily heavy burden on members of the group or on the parties:
	(1) to pay pecuniary compensation or to provide some other relief, at a rate and in a manner that it will prescribe, to each member of the group whose entitlement to the said compensation or relief has been proven;
	(2) that each member of the group prove his entitlement to the compensation or other relief;
	(3) to pay pecuniary compensation in an overall amount and how to calculate the share of each group member, on condition that the total compensation can be calculated exactly on the basis of evidence before the Court: if the Court ordered compensation to be paid in a said overall amount, then it may order how the remaining amount is to be divided among the members of the group in proportion to their damage, if one or several members did not claim their share, did not prove their entitlement to compensation or relief, were not located or could not be paid their share for some other reason; however, no member of the group shall receive pecuniary compensation or other relief in excess of the full compensation or relief due to him; if, after the said distribution to the members of the group an amount is left, then the Court shall order it to be transferred to the State Treasury.
(b) If the Court ordered that every group member prove his entitlement to pecuniary compensation or other relief, then it may make Orders about:
	(1) how and when entitlement shall be proven by members of the group and how it is to be divided, and for that purpose it may appoint a person with suitable qualifications (in this section: the appointee); if the Court decided to appoint an appointee, then any person who deems himself injured by an act or omission of the appointee may apply to the Court that ordered the appointment and the Court may approve, cancel or change the act or omission and make any Order on this matter, all as it finds proper; the appointee's pay and expenses, as well as how they shall be paid, shall be prescribed by the Court;
	(2) the payment of expenses to a group member, in an amount to be set by the Court or by the appointee, for the trouble involved in proving entitlement to the said compensation or relief.
c) If the Court concluded that, under the circumstances, pecuniary compensation for all or some members of the group is not practical, either because they cannot be identified and the payment cannot be made at a reasonable cost, or because of some other reason,

In the  Reichart [9] case, Justice Adiel pointed out in that in class actions there are a variety of methods of determining the damages, which are applied to a broad range of circumstances and in addressing the provisions of section 20 of the Class Actions Law he stated that:

…[O]n the other hand the point of departure may be the means of proof prescribed in s. 20 (a) (2) of the Class Actions Law….

whereby damage is proved by affidavits filed by each member of the group. Additional means of proof, essentially similar to the individual process, are based on the determination of damage for each member of the group, but without the conduct of the detailed process of filing affidavits, but rather by a general calculation based on undisputed factual data or admitting of simple proof.  Naturally, the two methods may be combined by drawing up a general formula to be applied to each individual of the group, in accordance with data specifically concerning him. On the other hand, there are additional ways of determining compensation, based on determining an overall sum of damages that was caused to the group in its entirety, using the methods outlined above. Finally, in cases in which the damage cannot be calculated (even where it is undisputed that it was incurred) there is the possibility of determining the sum of compensation by way of estimate (para. 67 of his opinion).   

    Justice Adiel further noted that Israeli law, similar to American law outlines two principal methods for determining damages in class actions. The first is the individual calculation whereby the damage is determined giving distinct consideration to each member of the group. According to this approach, after establishing the responsibility of the defendant in the question common to all of the group members, a separate decision is made regarding the damage caused to each one of its members and the cumulative sum of damages proved by the group members will constitute the sum of the defendant’s final liability.  This method of calculation is anchored in s. 20 (a) (1) and (2) of the Class Actions Law, cited above. Its advantage is that is consistent with the method of compensation prescribed in the General law and the principles of rectificatory justice on which it is based. It is generally involves the acceptance of affidavits from the group members or a calculation based on undisputed factual data or such as admits of simple proof (see Reichart [ 9 ], para. 67). In American law various additional  mechanisms were established, intended to assist in the individual assessment of damages in an efficient and economic manner (see e.g. Bates v. UPS 204 F.R.D. 440, 449 (N.D. Cal. 2001) [48] – the conduct of separate actions following the date of establishing the tortuous liability); Olden v. LaFarge Corp. 383 F.3d 495, 509 (6th Cir. 2004) [49]- the appointment of an expert whose role was to conduct separate hearings for each victim).  Some of these found their way into Israeli law (see se\. 20 (b)(1) of the Class Actions Law (see E.S.T  Project Management[6], pp.. 246-347; and Tetzet  [8], 788)

46.  Given the advantages of the approach based on individual calculation, it would seem that it is to be preferred or purposes of determining the remedy in class actions, to the extent that it is possible and this indeed was the approach taken  by the court in Reichart where it stated that “inasmuch as our case enables the determination of damages on an individual basis, I see no grounds for taking the path of the overall calculation (see Reichart para. 72). However this approach is not always applicable. The difficulty in applying it arises for example when the group members cannot be identified or located; when under the circumstances it is not possible to present data or documents sufficient for proving individual damage; when the damage incurred by each member of the group is minimal and presumably the group members or most of will be  unwilling to cooperate for purposes of proving it on an individual basis. Likewise, where the clarification of the individual damage caused to each one of the group members requires the investment of expensive resources and considerable judicial time  which have no justification under the circumstances, (see Steven Goldstein “The Class Action Suit – For What and Why” Mishpatim  9 (5739 416, 430 – 431) (hereinafter:  Goldstein))

The first difficulty that we addressed, of locating the members of the group is characteristic of representative plaintiffs in consumer matters (see decision in the certification application, p. 685) and  as mentioned, this difficulty also arose in our case given the impossibility of locating all of the consumers who consumed long lasting low fat milk during the relevant period. In confronting difficulties of this nature and others, some of which we mentioned, American law developed a second method of calculation – the method of overall calculation which was also adopted in Israeli law. According to this method, a “group compensation” can be determined on the basis of the damage caused to the group as a whole, even if the damage incurred by each member of the group was not proved prior to the determination of the overall compensatory sum. The purpose is to prevent the frustration of the goals of the class action in cases in proving individual damage is problematic. In the same vein, there were cases in which American case law resorted to “hybrid mechanisms” such as: an expert using a statistical formula to calculate the damages of the group members; an expert who conducts hearings and individual evaluations in relation to a representative sample of victims  (Hilao v. Estate of Ferdinand Marcos, 103 F.3d 767, 782-787 (9th Cir. 1996)[50](even though it appears that the use of this mechanism was restricted in a recent case: Wal-Mart Stores, Inc. v Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011) [51] (hereinafter  Wal-Mart); the division of the group into sub-groups bearing typical features and the determination of an overall compensatory sum for each sub-group (see also LabA (NLC) 633/08 Erez v. Gal Maton Newspaper Marketing and Distribution Ltd [23], para. 18 (11 January, 2011)

The development of the system of overall calculation in American law began with the establishment of the Fluid Class Recovery mechanism (FCR), dwelt upon by the District Court in its decision. In its classical format, this is a three stage mechanism intended for compensation of the group members, and was described by the Californian Supreme Court as follows:

First, the defendant's total damage liability is paid over to a class fund. Second, individual class members are afforded an opportunity to collect their individual shares by proving their particular damages, usually according to a lowered standard of proof. Third, any residue remaining after individual claims have been paid is distributed by one of several practical procedures that have been developed by the courts" (The State of California v. Levi Strauss & Co. 41 Cal. 3d 460, 472-473 (1986)

       (hereinafter: Strauss)

The first stage of this mechanism is the determination of the sum of the group compensation which the defendant must pay and which he will deposit in a special fund established for that purpose.  At the second stage members of the group are given an opportunity to prove (at level of proof lower than the accepted level in personal suits)  the individual damage and in doing so receive their portion as personal compensation. At the third stage the balance of the sum is allocated in accordance with the various models that were developed by the court for that purpose. It is quite apparent that the three stages of the FCR process described do not provide an answer to all of the difficulties we mentioned. For example, in cases which preclude a determination of the sum owing to each member of the group, or such as the case before us, in which there is no possibility of locating the members of the group.   In order to provide a solution for these cases American law developed a variety of methods that deviate from the classic FCR model, some of which will be considered in what follows, along with the challenges raised against them, as we will presently show. (until here Case Review)

47.  In Israeli case law, the overall calculation approach was mentioned as a possible method of calculation already before the enactment of the Class Actions Law. For example, Justice (former title) Cheshin wrote in the Barazani Further Hearing [3] that: "Where awarding separate compensation for each of the group members is not practical, the court is permitted to obligate the defendant to pay compensation using special compensatory systems or other remedies, as it deems appropriate, provided obviously that the defendant is not compelled to pay more than the damage that was actually incurred" (ibid, at p. 425. See LCA E.S.T.  [5]; the decision on the certification application, at pp. 685-688; CC (TA – Jaffa) 2036/01 Mannela v. Mifal HaPayis  [  ]  para. 8). The mechanism of the overall calculation method was further established as part of the individual arrangements interspersed among the various legislative acts and by force of which class actions could be brought in the past (see e.g. the provisions established in s. 216 (b) of the Companies Law, 5759-1999; in s. 46I of the Restrictive Trade Practices Law, 5748; s. 16 I of the Banking (Customer Service) Law 5741-1981). This mechanism appears in s. 20 (a)(3) of the Class Actions Law, that as mentioned, replaced the individual arrangements and which regarding this matter states that the court may rule that:

"payment of pecuniary compensation in an overall amount and how to calculate the share of each group member, on condition that the total compensation can be calculated exactly on the basis of evidence before the Court…."

Furthermore, s. 20 (a)(3) of the Law contains a provision regarding the division of the compensation according to which in the event of a balance remaining after the distribution of the compensation to those victims who proved their damages and claimed compensation, it will be allocated proportionately between the group members, "provided that no member of the group shall receive pecuniary compensation or other relief in excess of the full compensation or relief due to him" and in that case the balance will be transferred to the State Treasury.

This provision is essentially similar to the classic format of the FCR mechanism mentioned above, and it enables the Court to determine overall compensation subject to the conditions prescribed in the section. In  Reichart  [   ] the court emphasized in this regard that the condition for the determination of overall compensation under s. 20 (a) (3) of the Law is that "the sum of overall compensation admits of precise calculation based on evidence before the court", and the court further added that "in terms of the principles for calculating the damage and its manner of determination, including the evidentiary law concerning weight and admissibility, there is no substantive difference between the methods used for an overall calculation and the methods used  for establishing individual damage…". The court further stressed in Reichart  [9] that even at the stage of allocating compensation among the group members consideration may be given to special individual data that is proved with respect to its individual members (para. 64 of the decision).

The difference between the various alternatives established in s. 20(a) relating to the manner of calculating the compensation and its allocation among the group members is that in first two alternatives (s.s. (1) and (2) the method of calculating damage  proceeds from the individual to the general, and the sum imposed on the defendant is the sum total  of the amounts to be received by each one of the group members.  In the third alternative, on the other hand (s.s. (3))  the process is reversed in the sense that initially the overall sum for the which the defendant is liable is determined, after which  that sum is allocated between the group members in accordance with the court's instructions, and subject to the caveat that overall compensation will not be awarded unless admitting of precise calculation based on the evidence before the court.

   48.  We already mentioned that the classic format of the FCR mechanism did not resolve all of the problems that arose in American Law concerning entitlement to a remedy and pecuniary compensation in class actions. This is also true with respect to the overall calculation method prescribed in s. 20 (a)(c), under the inspiration of that mechanism. The Israeli legislator was aware of this and hence added further mechanisms in s. 20 (c) of the Class Actions Law for determining remedies in class actions. Given the importance of this section for our purposes, we will again present the provision verbatim, which provides as follows:

"If the Court concluded that under the circumstances pecuniary compensation for all or some of the members of the group is not practical either because they cannot be identified and the payment cannot be made at a reasonable cost or because of some other reason then it may order other relief to be given for the benefit of all or part of the group or for the benefit of the public, as it deems appropriate under the circumstances of the case"

Is the court's permission to grant a remedy under this section "for the benefit of all or part of a group" or "for the benefit of the public" subject to the conditions enumerated in s. 20(a)(3) of the Class Actions Law, including the condition concerning "exact calculation" of the sum of overall compensation, as argued by Tnuva?.

The Lower Court dismissed this claim and ruled that:

Section 20 (a)(3)  [enables] the calculation of the overall compensatory sum for the group, and the waiver of individualized proof of damage. However, this is still considered as personal  compensation or a remedy for those members of the group who can be located and whose entitlement was proved, by way of allocating the sum of overall compensation between the those members. This must be clearly distinguished from the additional possibility at the court's disposal under s. 20(c ) of the Law, to rule a relief for the benefit of all or part of the group  or for the benefit of the public in those cases in which the Court concluded that under the circumstances pecuniary compensation for all or some of the members of the group is not practical either because they cannot be identified and the payment cannot be made at a reasonable cost or because of some other reason" (para. 104 of the decision, emphasis in source).

   Thus, according to the approach of the Lower Court s. 20(a)(3) of the Law establishes an independent for the determination of remedies and compensation in collective suits, existing alongside the other tracks prescribed in this context in s. 20(a)(1) and (2) and in s. 20(a)(3).  The Lower Court further added that in any case it was also unable to accept the interpretation that Tnuva attempted to give to the requirement for “precise calculation” included in s. 20(a)(3) of the Law, writing that:

Regarding that requirement for “precise calculation” of the overall sum of pecuniary compensation, it bears note that this requirement is implemented in a liberal manner in the U.S.A.  and it would seem that the legislative intention in Israel was to the take the path of American judicial experience. As noted by Hon. Justice Adiel (paras. 63 and 67) the overall calculation in U.S.A. relies on statistical calculations,  such as sample testing, or the use of mathematical models, which by definition do not lead to a “precise” calculation of the damage caused to the group. Likewise, and this point too was mentioned by Judge Adiel, the overall calculation system is used to overcome the difficulty of “simply calculating the damage of each individual of the group”, for example, in the absence of admissible documents or the difficulty of locating all of the members of the group.  Likewise, there is a difficulty in “precisely” calculating non-pecuniary damage, which necessarily involves estimation. Under these circumstances it is clear that the calculation of the compensation cannot be mathematically precise, and this was not the legislative intention. It is further important to point out that the requirement for “precise calculation” of the sum of the overall compensation was established in section 20(a)(3) of the Law, which deals with personal  compensation, for the group members, but not in s. 20(c) of the Law which relates to the a remedy for the for the benefit of the group (para. 100 of the decision, emphasis in source).

 49.   I accept the Lower Court's  position that the mechanisms of s. 20  (c ) of the Class Actions Law are intended to provide an answer for those cases in which it is not possible to precisely calculate the damage and distribute it according to one of the mechanisms prescribed in s. 20 (a) of the Law. Indeed, contrary to the position presented by Tnuva, s. 20(a) is not limited to difficulties in distributing the compensation between the members of the group ("because they cannot be identified and the payment cannot be made at a reasonable cost"). Section 20 (c) of the Law enables the award of a flexible remedy "for the benefit of the group" or "the benefit of the public" even in cases in which the awarding of compensation to the members of the group is not practical "for some other reason". Another reason of this kind may exist in those cases that preclude a precise calculation of the overall damage given that the data indicating the damage are not external data, such as a price hike of defined sum, but rather a collection of individual damages the precise proof of which depends on the testimony of each and every member of the group and  obtaining these testimonies is problematic – by way of example – if there is no possibility of identifying the members of the group.  In that situation, adherence to the regular rules of compensation in tort would frustrate the rationale and the underlying goals of the institute of the class action, which is intended to "protect the interest of the individual harmed who does not bother bringing an action; it represents a public interest in enforcing the provisions of the Law of which the class action is a part; it has a deterrent value against the violation of Law; it prevents the abuse of power by holders of control, whose portion of the capital is occasionally totally disproportionate to their power, and hence prevents manipulations at the expense of the "small investor"; it saves resources and prevents the multiplicity of suits" (CA 2967/95 Hanan Vakshet Ltd v. Tempo Beer Industries Ltd [24] at p. 323. See also the goals enumerated in s. 1 of the Law). It is for these reasons that the Class Actions Law outlines special arrangements that "occasionally deviate from the regular law and leave a broad margin of discretion for the court) Hanan Vakshet Ltd v. Tempo Beer Industries Ltd (as per President D. Beinisch, para. 6 of her opinion).

Structural failures of the kind discussed above in terms of the ability to prove "by precise calculation" the overall damage that was caused to the group or the individual damage caused to each member of the group, are particularly typical of consumer class actions. In cases of this kind there is an increased risk that the tortfeasor will profit and the profits reaped as a result of the tort committed will remain in his hands purely because of the difficulty of arriving at a precise calculation of the damage  which is spread over a large group of victims who cannot be identified (see Deutch, "A Decade for the  Class Action Suit", 33). American case-law refers to these profits as "ill-gotten gains". Regarding the justification for deviating from the classic principles of rectificatory justice in tort in this context, the Supreme Court of California wrote the following in the aforementioned Strauss case:

Fluid recovery may be essential to ensure that the policies of disgorgement or deterrence are realized. Without fluid recovery, defendants may be permitted to retain ill gotten gains simply because their conduct harmed large numbers of people in small amounts instead of small numbers of people in large amounts" (Strauss, p. 472).

50.  Indeed, s. 20 (c) of the Class Actions Law deviates substantially from the correlative principle underlying the regular principles of compensation which mandate total correlation between the circle of victims and the circle of the compensated. Compensation funds are not transferred to the victims and are used for "the benefit of the group" as such or "the benefit of the public", the assumption being that the victims  will derive indirect benefit. As such, the victims' interest in receiving compensation for the damage incurred is not realized in full.  However, from the victim's perspective the alternative of no remedy at all being awarded would support the award of a  remedy for the benefit of the group or the public, because partial and indirect benefit is preferable to not receiving any remedy at all.

A similar rationale also underlies the developing trend  that has developed in general Tort law, other than in the context of the class action, in cases of repetitive tendency. This tendency reflects the recognition that when applying the balance of probability rule in examining the causal connection between the acts of a particular tortfeasor and the damages caused to the victims at large it is preferable to promote the principle of rectificatory justice, even by way of cy pres comme possible, because the application of the principle in the classical sense, will in many cases achieve a result that is altogether remote from the restoration of the status quo ante.  This point was addressed  by Deputy President E. Rivlin in FHC 4693/05 Carmel Haifa Hospital v. Malul  [25] where he noted:

…in certain cases the principle of rectificatory justice  should be adjusted so that it focuses on the overall picture and not just on the isolated claim of a particular plaintiff before the court.  This enables a harmonization between the conception of rectificatory justice and the notion of relative compensation (para. 52 of his opinion. See also in para. 48 of Justice M. Naor's opinion).  

If the general law of tort is prepared to deviate from the principle of correlativity in suitable cases then a fortiori  it is both appropriate and correct to do in class actions. This is because in the class action and primarily those concerning consumer wrongs, the fundamental principle and goal that we seek to realize focuses on the achievement of effective and efficient deterrence against the dealers who breach the law and the consumers' rights ( see Deutch. "A Decade for the  Class Action Suit", 33). For otherwise the ones who profit are the tortfeasors who are large bodies that provide services to immense numbers of clients, and as such spread their damages among a large group of victims whose identity is not known, and their ill-gotten gain will remain in their own hands.  Redressing the injury caused to the individual victim on the other hand, is a less dominant interest in the class action given the fact that in most cases the damage caused to the individual consumer is relatively minor.

   Regarding the awarding of a remedy in the area of class actions in the U.S.A. by application of the principle of cy pres comme possible which originates in the laws of trust and means "as near as possible" and is also referred to as "next best recovery" see Natalie A. DeJarlais, The Consumer Trust Fund: A Cy Pres Solution to Undistributed Funds in Consumer Class Action, 38 Hastings L.J. 729 (1987); Stewart R. Shepherd, damage Distribution in Class Actions: The Cy Pres Remedy, 39 U. Chi. L. Rev. 448 (1972))for a critique of the expansive application of this principle, see  M. H. Redish, P. Julian & S. Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative And Empirical Analysis, 62 Fla. L. Rev. 617 (2010) (hereinafter" Redish).

Hence, in terms of policy considerations both those anchored in the general rules of tort and those specific to the laws of class actions, we should strive to ensure that inability to identify the victims does not create an insurmountable obstacle to filing a claim in court (see A. Porat, "Collective Liability in Tort Law", Mishpatim 23, 311, at pp. 384-385), and see also comments of Justice E. Mazza in Barazani Further Hearing [3], at pp. 449 – 451).  In this context, for purposes of the class action proceedings the possibility of awarding a remedy for the benefit of a group or the public as established in s. 20 (c ) of the Class Actions law constitutes an important component.    

51.  All the same, we should not forget that another one of interests to be pursued in the class action proceeding is that of fairness to the defendant and protection of his substantive and procedural rights. From this perspective, and given that our concern is with a monetary remedy, we are obligated to ensure that the relaxing and flexibility of the procedural rules anchored in the Class Actions Law do not produce a situation in which obligation imposed upon him exceeds the sum of the damage that he caused) (regarding the dismissal of the motion to certify a class action inter alia by reason of this concern, see McLaughlin v. American Tobacco Co. [53 ]. Indeed, from the tortfeasor's perspective less importance attachés to the question of how the compensation is distributed. His substantive interest concerns the extent of the sums that he will be obliged to pay, and less with the question of how they are utilized thereafter. The desire to protect the interest of the defendant as mentioned underlies, inter alia, the provisions of the s. 20 (e) of the Class Actions Law, which negates the awarding of exemplary damages against the defendant and also negates the awarding of compensation without proof of damages (apart from in a suit in accordance with s. 9 of the Second Schedule). Another balance between the public interest of the victims on the one hand, and the defendant's interest on the other hand may also be found in the provision of section 20 (d)(2) of the Class Actions law in accordance with which in the awarding of the remedy the court may also have consideration for "the damage that is liable to be caused – by the payment of compensation, its amount or the manner of its payment – to the defendant, to the public that uses the defendant's services or to the general public by damaging the defendant's economic stability, as opposed to the expected benefit for members of the group  or for the public".  Parenthetically, it should be noted that Tnuva did not make any claims in court in reliance on the provisions of s. 20(d) (2) of the Law. It was for this reason that the Lower Court found no reason to consider these provisions and there are no grounds for us to address them at the appeal stage.

52.  American case-law offers a variety of approaches to the question of whether and under what circumstances the sum of compensation in class actions can be determined other than by a precise calculation. Some have contended that where there is no possibility of determining the overall sum in a precise manner, there are generally no grounds for using the FCR doctrine (on this interpretation of the FCR doctrine, see Michael Malina, Fluid Recovery as a Consumer Remedy in Antitrust Cases, 47 NYU L. Rev. 477, 488-491 (1972)). All the same, in order to resolve the difficulties that arise in this context the various U.S.A. courts, the courts have developed statistical mechanisms that enable the evaluation of the damage caused to a group, while waiving to certain degree the demand for "precision" (hence  damage was determined in relation to the average wage which was determined based on statistical means, see: Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974) [54]; Stewart v. General Motors, 542 F.2d 445 (7th Cir. 1976)[55]; Bowe v. Colgate-Palmolive Co., 489 F.2d 896 (7th Cir. 1973)  [56]; United States v. Wood, Wire & Metal Lathers Int. Union, Local Union 46, 328 F. Supp. 429, 442 (S.D.N.Y. 1971)[57].  Similarly, the court enabled proof of damage by way of sampling and by means of other statistical methods. See e.g. Hilao v. Estate of Ferdinand Marcos [50].  For a different approach see Hood v. Eli Lilly & Company 671 F. Supp 2d  397, 434-453 (E.D.N.Y. 2009)  453 [58].

In Another case  (Long v. Trans World Airlines, Inc. 761 F. Supp. 1320 (N.D. Ill. 1991 [[59]) the court wrote that:

"Defendant has no "right" to an individualized determination of damages for each plaintiff; the desire for accuracy must be balanced against other factors such as the burdens of discovery in relation to the size of the individual claims." (Id. at 1327).

Even among scholars it has been contended that creative use should be made of "aggregate proof) in order to assess the rate of collective damage caused to the members of a group. This was noted by the scholars A. Conte & H.B. Newberg, in their book Newberg on Class Actions (Vol. 3, 4^th ed.2002):   

"There are occasions when it is feasible and reasonable to prove aggregate monetary relief for the class from an examination of the defendant's records, or by use of a common formula or measurement of damages multiplied by number of transactions, units, or class members involved, or by reasonable approximation with proper adherence to recognized evidentiary standards". (Id. 476).

53.  The interests we have examined that underlie the class action lead to the conclusion that where a remedy is awarded for the benefit of a group or the benefit of the public under s. 20 (c ) of the Class Actions Law, we should aspire to ensure that the overall sum of liability is consistent with the overall damages caused by the defendant. In order to determine this sum there is no impediment to adopting a method of estimation, which is an accepted and recognized method in our system for quantifying damages  in cases in that do not admit of precise calculation of the  damage incurred by the individual victim. This point was addressed by this Court in CA 355/80 Anisimov Ltd v. Tirat Bat-Sheva Hotel  [26],:

In those cases, in which, the nature and character of the damage, enable the production of accurate data, the victim-plaintiff must do so, and should he fail to do so damages will not be awarded to him. On the other hand, in cases in which the character and the nature of the damage render it difficult to prove the degree of damage and rate of compensation with certainty and accuracy, it will not frustrate the victim's claim, and it will suffice if adduces such data as can reasonably be obtained, while granting discretion to the court to make an estimate that supplements that which is missing  (p. 899).  

It was further ruled that in appropriate cases statistical data can be used for determining the scope of the damage (see; Rivlin, Shani, at pp. 506 – 507), and the expert opinion. As such, and a fortiori, this method may be used where it concerns a group. All the same, it is stressed that the evaluation of the damage by estimation does not mean the determination of an arbitrary amount which seems to be no more than a guess, and the court using its discretion in such a case must base the sum it determines upon  appropriate anchors that enable the evaluation of damage by way of estimation, as stated (see Daaka [4] at p. 583, Barak Erez, 277).

54.  The non-pecuniary damage which the Lower Court was requested to award in this class action is in the genre of damages the nature and character of which  do not admit of precise calculation and in cases of individual claims too, will always be subject to the court's estimation (apart from compensation claims for road accidents in respect of which the Compensation for Road Accident Victims (Calculation of Compensation for Non-Pecuniary Damages)  Regulation 5736-1976 (hereinafter Road Accident Regulations), prescribes  formula for determining non-pecuniary damage as a derivative of the rate of disability and a ceiling sum determined in the ss. 4 (a)(3) and 4 (b) of the Compensation for Road Accident Victims Law, 5735-1975). Regarding the essence and the methods for calculating non-pecuniary damage in differing contexts, see CA 4022/08 Agbaba v. Y.S. Company Ltd [27], paras 10 – 24;  C.A. 754/05 Levi v. Share Zedek Hospital [28]).

In s. 20 (e) of the Class Actions Law, the legislator authorized the court to  award compensation for non-pecuniary damage caused to the group member. However, the determination of non-pecuniary damage in the present case is no simple task. As mentioned, there is no possibility of identifying the group members who consumed long lasting, low fat milk during the relevant period for the suit, and hence the Court availed itself of statistical data and expert opinions in reliance upon which it reached a conservative, cautious determination that the group comprised 220,000 members. We concluded that the reference group for purposes of compensation for damage occasioned by infringement of autonomy is limited to that portion of the consumers group who incurred consequential damage due to the infringement of autonomy and who experienced negative feelings in various forms upon becoming aware that the milk they drank contained silicon.  Our determination regarding the number of group members included in the group of those entitled to the said compensation (154,000) was also based on statistical data and the expert opinions presented in the proceeding. Our concern is therefore with a group numbering over 100,000 people, whom can be neither identified nor located, and even were it possible to locate them, it is doubtful whether it would even be appropriate to instruct each one of them, or even some of them to submit an affidavit specifying the intensity of the negative feelings that they experienced in order to award compensation in accordance with one of the mechanisms established in s. 20 (a) of the Class Actions Law. Given the impossibility of determining compensation based on individuated evidence or precise calculation and the impossibility of identifying the members of the group entitled to compensation, we are left with the compensatory mechanism established in s. 20 (c ) of the Class Actions Law, which enables the determination of overall compensation based on an estimation for the benefit of the group or the public. The question that presents itself is how, if at all, to estimate the "collective" non-pecuniary damage in this case, and whether the fact of its being non-pecuniary damage that is characterized by subjective, individualistic features, should preclude the possibility of "uniformity" in determining the overall sum of compensation, due to the differences between the victims in terms of the results of the damage.

In rejecting Tnuva's claim in this context, the Lower Court ruled that "It is no longer possible to make a sweeping claim that uniform compensation cannot be awarded for non-pecuniary damage, absent the possibility of proving individuated damage" (para. 128) and hence the court fixed the sum of compensation at NIS 55 million, stating that this sum reflects uniform compensation for the sum of NIS 250 for each victim (220,000 X 250) for the non-pecuniary damage caused to the members of the group. The Court further mentioned that had a non-pecuniary compensation for Tnuva's action been awarded in the framework of an individual suit, the sum of the compensation would have been higher, but the court's approach was that this context demanded consideration of the fact that the issue was one of overall compensation being ruled for the group in its entirety or for the benefit of the public, in the absence of the possibility of having consideration for the individual damage caused to each one of its members. In the courts' words:

 [a]fortiori the court does not examine the individual damage of each member of the group, given that  not only is the remedy awarded to the group as a whole, but it is also given to the group and not to its individuals. The court is even entitled to fix the overall sum of compensation for the group based on estimation. This does not mean that the court should avoid the determination of important parameters for purposes of calculating the overall damage. The court must definitely determine the number of members in the plaintiff group, at least by way of estimate. Similarly, the court must assess the scale of the individual damage caused to  each one of the group members, to ascertain that the overall sum of compensation awarded to the group does not exceed the aggregate damage caused to its individuals. However, at the end of the day, the court must determine an overall sum of compensation to be awarded to the group having consideration for the totality of considerations, but it must not ignore the fact that the compensation is not intended as individual =  compensation for each of the group members. The overall compensation  must be commensurate and in proportion to the wrongful act and the circumstances of its commission, even if the division of the sum by the number of group members would indicate a lower rate of compensation by comparison to the rate of individual compensation that would have been awarded had a personal claim been filed against the defendant by reason of that tort.   

Granting the plaintiffs' request would have meant determining Tnuva's liability for an overall sum of NIS 1.76 billion (NIS 8000 X 220,000 members of the group). It is absolutely clear that this result is unreasonable and unrealistic. Having considered all of the circumstances as set detailed above, I determine an overall sum of compensation for the group of NIS 55 million which reflects an estimated rate of damage for each members of the group of the sum of NIS 250. This degree of damage, and even higher, was most definitely caused to each member of the group, even if only by reason of the infringement of individual autonomy (para, 134 (b) of the decision, emphasis in source).

55. In this appeal, Tnuva challenges the determination of the compensation according to the mechanism prescribed in s. 20 (c ) of the Law, arguing that  given the type of the damage (non-pecuniary damage, with subjective-individual features), and given the impossibility of proving the damage to the group in terms of its individual members due to the impossibility of identifying its members, there were no grounds for determining uniform compensation for the group, even at a minimal rate  NIS 250 for each individual). On the other hand, Raabi claims that given the Court's view that the appropriate compensation for the infringement of autonomy had it been a personal suit was not less than NIS 8000, it should have awarded that rate of compensation multiplied by the number of members in the group (which was similarly challenged on the part of Raabi, as detailed above), and the fact that such a significant figure was received as a result

Indeed, in cases in which there is significant differentiation between the group members it may yield the conclusion that the matter is not suited for adjudication as a class action (see s. 8 of the Class Actions Law; CA Reznik v. Nir National Cooperative Association for Workers Settlement  [29] paras. 24 – 27 (hereinafter: Reznik), See also LabApp (Nat.) 425/00 Goldberger v. Guards Association Ltd  [    ] para. 8 ; Civ.App. (Naz) 1528/05 Barzilai v. Ferinir (Hadas1987 ) Ltd (para. 27.2) [  ]; on the other hand, see TM 105/06 (CivApp.30858/06) (Tel-Aviv-Jaffa) Feldman v Municipalities Sewage Association (Dan Region) para. 52 ; CF (Tel-Aviv-Jaffa) 2719-06 Levi v. Israeli News Company Ltd para. 17; and see also Klement, "Boundaries of the Class Action", at pp. 345-346).   It would seem however that the claim concerning differentiation between the group members has the power to bring about the non-certification of the suit as a class action and even its rejection if certified, in those cases in which the differentiation has implications for the establishment of liability or even the very existence of an actionable cause.  The main concern in this context is that it may prejudice the defendant's right to a fair proceeding and to be able to defend himself against each and every one of the group members. This happened in the Resnik [29] case where the defendants raised the prescription claim, the decision on which was not necessarily identical with respect to each and every member of the group, and for that reason the court did find grounds for its certification as a class action.  In that case Justice Gronis stated that "Certain solutions for the absence of homogeneity between the group members are found in ss. 20 (a) – (c) of the Class Action Law, that includes provisions  regarding the remedy that will be awarded by the court".  The court further added that it was not required to rule on the question of the "cases in which the suit should be certified as a class action notwithstanding the existence of individual features, by having resort to the mechanisms of s. 20 of the Class Actions Law, or other solutions" but it still saw fit to stress that there are cases in which "these solutions are unable to provide a solution" and as a result they cannot be certified for filing  as a class action (ibid, para. 27). The issue of differentiation (the foundation of commonality) between the group members was likewise the subject of discussion in  recent decision of the Supreme Court of the U.S.A in the Wal-Mart  issue. In that case a request for certification of a class action was filed in the name of a million and a half employees of the Wal-Mart network based on illegal discrimination against them as women with respect to matters of salary and promotion.  The trial instances and the appellate instance certified the suit as a class action Dukes v. Wal-Mart Stores, Inc. [51] . The Supreme Court however reversed the decision, ruling that the suit should be be certified in view of the plaintiffs' failure to prove that the company had conducted a general policy of discrimination, in other words, it failed to prove the existence of a grounds for claim regarding every single group member. It also held that under the circumstances it was not possible to calculate a compensation sum by statistical methods and by way of a representative sampling, inter alia  in view of the defense claims in the law itself, which the company was able to raise regarding each and every company in the group.

Tnuva's argument concerning differentiation is to no avail in our case.  Its argument relates exclusively to negating the possibility of awarding uniform compensation for the non-pecuniary damage sustained by the group members under the circumstances, in view of what it claims is the lack of uniformity among the victims in this context.  In the Court's eyes, this differentiation did not justify the non-certification of the suit as a class action and I concur with the stance of the Lower Court that neither does it preclude the award of a remedy after the clarification of the class action that was certified as stated.   First, even in suits that are not conducted as class actions in which there are multiple plaintiffs, such as suits for building defects, the court does not refrain from awarding uniform compensation by way of estimation for the non-pecuniary head of damage (on "uniformity of damage" for mental anguish in regular suites filed on behalf of a number of plaintiffs, see the district court decisions cited in para. 121 of the decision). Second, as distinct from differentiation among the members of the potential group, that may have implications for the existence of an actionable cause and the basic entitlement of each member to a remedy, where the differentiation concerns the sum of compensation, it finds its solution in the various mechanisms of s. 20 of the Class Actions Law that deal with the remedy that the court is authorized to award. The establishment of these mechanisms is intended to ensure that the differentiation among the group members regarding the determination of the remedy, just like other difficulties in proving damage which stem from the inability to identify or locate the group members, will not frustrate in limine  the clarification of the matter by way of a class action and the realization of the goals upon which this proceeding is based in terms of the public interest and in terms of the group concerned, which we dealt with above at length.  Accordingly, differentiation relating to the rate of the damage, will not  in general prevent the clarification of the class action and the award of a remedy in the framework thereof, including with respect to the award of uniform compensation that will be determined by way of estimation, unless under the circumstances of the particular case prevent the award of an appropriate remedy in accordance with one of the mechanisms set forth in s. 20.

56.       That said, it would not be superfluous to note that differentiation between the group members may occasionally be raised as an argument for denying certification of suit as a class action, or against the award of a uniform compensation in the framework thereof, specifically from the perspective of the potential group members, in those cases in which awarding uniform compensation prejudices the rights of those group members who wish to prove their suit on an individualized basis and thereby merit larger compensation. American case-law treated this concern as a potential violation of due process rights, which  in turn lead to the rejection of the certification applications for class action suits, stressing the fact that the mechanisms established in the relevant statutory provisions do no include the right to opt-out of a class action proceeding, see  - Federal Rules of Civil Procedure,  Allison v. Citgo Petroleum, 151 F.3d 402, 414-415 (5th Cir. 1998) [60]; Lemon v. Int'l Union of Operating Engineers, Local No. 139, AFL-CIO 216 F.3d 577 (7th Cir. 2000) [61]; Jefferson v. Ingersoll Int'l, Inc. 195 F.3d 894 (7th Cir. 2001) [62]; Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639 (6th Cir. 2006) [63].

For additional cases in which class actions were not certified in the U.S.A. against the background of the differentiation between the group members, see In re Fibreboard Corp., 893 F.2d 706, 712 (5th Cir. 1990) [64]; Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977) [65]. However, in the U.S.A. this approach is not relevant to certification applications for class actions in accordance with legislative provisions that contain mechanisms for an opt-out right.

 Israeli law in this context differs. The Class Action Law mandates the registration of the application to certify the suit as a class action, and the registration of its certification in the Class Actions Register (ss. 6 (a) and 14 (b) of the Law, and irrespective of the nature of the suit each and every group member is entitled to give notice that he does not wish to be included therein (s. 11 of the Law).   Moreover, proponents of the approach that views the group as an entity in its own right have  opined that there is need for a "sacrifice" on the part of each member of the group of with respect to his individual rights as a litigant, in view of his obligation to "tie his fate" with the fate of the group  (see David L. Shapiro, Class Actions: The class as Party and Client, 73 Notre Dame L. Rev. 913, 919 (1998).

The claim raised by Raabi in his appeal concerning the paucity of the uniform sum  that was awarded is not based on the claim of differentiation and the claim that any particular member of the group suffers as a result.  Raabi does not dispute the fact that in this case, in the framework of a class action, it was not possible to clarify the individualized damage incurred by each and every group members nor does he dispute that it was not possible to identify or locate them.  His claim relates solely to the smallness of the sum awarded as uniform compensation (NIS 250), given the fact that the Lower Court expressed its view that had the case been adjudicated as an individual claim it would have been appropriate to award far higher compensation (NIS 8000). Accordingly, Raabi claims that the sum of uniform compensation for purposes of calculating the overall compensation for the benefit of the group should be set at  NIS 8000.

57.  Examination of the Raabi's testimony (pp. 71-81 of the protocol) indicates that over a period of years that included the entire period that was relevant for the class action (23 October 1994 until September of 1995) he consumed significant quantities of  long lasting low fat milk. However, the range of consumers of long lasting milk is varied both in terms of the duration of the consumption period and in terms of the scope of consumption. Hence, it may be assumed that the relevant group includes those who did not consume the milk for the duration of the period, those who consumed it in far smaller quantities than those consumed by Raabi and those who drank fresh milk on a regular basis and who only consumed the long lasting milk that they had purchased on rare occasions, when under various circumstances it served as substitute for fresh milk.  This varied range of consumers of long lasting milk that contained silicon must be taken into consideration when determining the uniform compensation to be awarded for the violation of the autonomy of the group members who suffered consequential damage as a result.  The claim of the  representative plaintiffs' that the group in its entirety should be awarded the same compensation (NIS 8000) that was demanded by Raabi as the main plaintiff, fails to consider the differentiation between the group members that we discussed above, and for that reason alone we can dismiss the claim.   Furthermore, contrary to the position of the Lower Court, even on an individual level I see no justification for awarding Raabi compensation for the sum of NIS 8000 (as valued on the date of the suit) for the damage head of infringement of autonomy. This takes into account the fact that we are no concerned with an infringement of the highest conceivable level and the fact that as distinct from compensation awarded in other contexts of non-pecuniary damage, our concern is with negative feelings experienced by the group members for a limited time, the peak of which was presumably when it became known to those who had consumed the milk, post factum, that it contained silicon.  In other words, the non-pecuniary damage is not of the kind that accompanies the victim for life, such as pain and suffering in the wake of permanent physical disability as a result of medical negligence.  As such I think  that on an individual level too, even where it concerns a permanent consumer of long lasting  low-fat milk for the entire relevant period, the compensation sum awarded for consequential damage (feelings of anger, frustration, revulsion, anxiety, fury etc)  resulting from the infringement of his autonomy should not be exaggerated.  A fortiori, the uniform  compensation to be awarded to the entire group should not be exaggerated, given the differentiation between its members in terms of the scope of the damage and its intensity.

58.  This brings us back to the question of what constitutes the group compensation to be awarded in the case at hand, and whether the path taken by the Lower Court was appropriate for its ruling. As mentioned, the Lower Court concluded that compensation amounting to NIS 1.76 billion, which is arrived at by multiplying NIS 8000 for an individual by the number of group members (220,000), is a result that "is unreasonable and unrealistic" and it therefore set the sum of the overall group compensation at  NIS 55 million, stating that this sum "reflects an estimated individual damage of  NIS 250 for each of the individuals of the group".

In view of the great variety in the group in terms of its habits of consumption of long lasting milk containing silicon and in view of other features of the infringement of autonomy which we discussed above, including: the intensity of the infringement, and the fact that one can imaging higher rates of intensity, and the limited duration of the time during which the members of the group experienced negative feelings, I believe that the sum of NIS 250 can be accepted as a sum that is commensurate for purposes of setting the individual, uniform compensation.  The multiplication of this sum by the number of group members who suffered consequential damage by reason of the infringement of autonomy gives us an overall compensation sum of NIS 38,500,000 (250 X 154,000).   In its pleadings, Tnuva proposed that to the extent that it be obligated to pay compensation, it would be appropriate that the profit it made should serve as a basis for its calculation, indicating that the profit was NIS 1,645,900 in terms of the principal and with the addition of interest and linkage differentials (from the middle of the period)  - NIS 4,981, 616. In principle, this model for calculating compensation should not be negated (on the approach whereby compensation based on denial of the tortfeasor's profits realizes the principle of corrective justice in the law of tort, in appropriate cases, see Ernest J. Weinrib Restitutionary Damages as Corrective Justice 1 Theoretical Inquiries in Law 1 (2000).  It has even been claimed that this model is preferable for class actions in which the compensation awarded is a compensation for the benefit of the public under s. 20 (c ) of the law. This is because in cases like these there is no real correlation between the obligation imposed upon the tortfeasor and the public of those who are compensated, and the purpose of remedying the damages of the victims is not really achieved due to the practical inability to identity the members of the group, to identify them or to compensate them. As such, the emphasis should be placed on the other objectives of the law of tort, including effective deterrence and prevention of unlawful enrichment of the tortfeasor. Indeed, the use of unlawfully obtained profit as a departure point for calculating compensation maintains the correlation between the intended purpose of the compensation and the manner of its calculation. However, even though on the level of principle the model based on the denial of profit for calculating compensation for the benefit of the public under section 20 ( c) of the Class Actions Law  should not be dismissed, it must be remembered that this model is not appropriate and not applicable in all of the cases. For example, it would difficult to apply it in a case which the tortfeasor did not profit as a result of the wrongdoing.  As such, when awarding compensation for the benefit of the public the court must examine all of the data before it, and in accordance therewith to formulate the model best suited for its ruling. In our case, at the very outset Tnuva did not present us with detailed, substantiated and reliable data on the basis of which it would have been possible to examine the possibility of calculating overall compensation based on the denial of profit model.  For example, Hagit Adler (who was employed in Tnuva as of 1996 and who served as the marketing manager when she gave her affidavit), stated that at the time of giving the affidavit (November 2004) “Tnuva does not have ….precise data regarding the rate of profitability of long lasting milk of 1% fat during the relevant period (section 17 of the affidavit). Adler did propose to base the findings in this case on the rate of the profitability of long last milk with 1% fat on the later years (1999 – 2001), but regarding these years too, the only thing that was attached was a page of pricing relating to these years, taken from a document that was not presented in full, the authorship of which is not clear nor the data on which it is based, One of the other possible models or purposes of determining compensation for the benefit of the public, is the model that was adopted by the Lower Court and which we too endorsed. This formula, based on statistical data (regarding the number of victims) and uniform individual compensation, complies – albeit in the form of cy-pres calculation -  with the traditional and accepted method of calculating compensation in torts law. All the same, and given that our concern is with cy-pres calculation, the application of the this model must be subject to the caveat that the cy-pres calculation must be done with the requisite caution and tend to be conservative, so that the sum of overall compensation will not spill over into the realm of punitive exemplary compensation which are not to be awarded in representative suits, pursuant to the legislative fiat in section 20 (e) of the Class Actions Law.

In conclusion, the overall compensation that should be imposed on Tnuva in this case according to the model that we endorsed is fixed at NIS 38, 500,000 as valued at the date of the decision of the Lower Court, (17.10.2008).

The Method for Distributing the Compensation Awarded for the Benefit of the Public

59.       In order to balance between the public objectives and the private objective, American law has formulated a variety of mechanisms for providing a remedy for the benefit of the group in its entirety or for the public benefit, including discount mechanisms (“price rollbacks”); the transfer of the compensation funds to government body by way of their designation for goals that will benefit the actual victims (“earmarked escheat”);  a “consumer trust fund”; and in appropriate cases, the relative participation (pro rata) of the current group members in balance of the funds (“claimant fund sharing” (regarding this, see Strauss, at pp. 473- 476). All the same, there are those who have sharply criticized the use of collective compensatory mechanisms for the public benefit in cases in which it is difficult or impossible to the individually compensate the members of the group (see e.g. Redish; Powell v. Georgia-Pacific Corporation, 119 F.3d 703, 706 (8th Cir. 1997) [66]; In re: Airline Ticket Commission Antitrust Litig, 268 F.3d 619, 625 (8th Cir 2001) [67].Regarding the variety of approaches adopted in American case-law on this matter and the differing approaches to the most optimal correlation between the distributive mechanism and the goals of the particular suit and the interests of the group members, see  In re Folding Carton Antitrust Litig. 744 F.2d 1252 (7th Cir. 1984) [68] ; Houck v. Folding Carton Admin. Comm., 881 F.2d 494 (7th Cir. 1989) [69]; In re Cuisinart Food Processor Antitrust Litig.38 Fed. R. Serv. 2d (Callaghan) 446 (D. Conn.1983) .[70]; Democratic Cent. Comm. v. Washington Metro. Area Transit Comm'n [71]   ], 84 F.3d 451 (DC cir. 1996); In re Domestic Air. Transp. Antitrust Litig,    148 F.R.D. 297 (ND Ga 1993) [72] . 

On the approaches adopted by scholars on this issue, see Newberg, 505-543; Anna L. Durand, An Economic Analysis of Fluid Class Recovery Mechanisms, 34 Stan. L. Rev. 173 (1982); Kerry Barnett, Equitable Trusts: An Effective Remedy in Consumer Class Actions, 96 Yale L.J. 1591 (1987); Christopher R. Leslie, A Market-Based Approach to Coupon Settlements in Antitrust and Consumer Class Action Litigation, 49 UCLA L. Rev. 991 (2002).

See also Goldstein, 430- 431. on the use of systems of collective compensation in the Common law states, see Rachel Mulheron, The Class Action in Common Law Legal Systems: A Comparative Perspective, 426-430 (2004)

As indicated by the provision of section 20 (c ) of the Class Actions Law, the Israeli legislator chose an approach that enables an award of compensation for the benefit of the group as a whole and for the benefit of the public according to a system of collective compensation, even in the cases in which technical reasons preclude individuated compensation for the group members. In doing so the legislator expressed the view that the public goals which the Class Actions Law is designed to serve and which we dwelt on at length above are of no less importance than the private goals and hence the  reason to strive to realize those goals even where various difficulties prevent the proving of the precise aggregate of the individual damages caused to the group and the maintenance of conformity between the public of victims and the public of those who are compensated. At the same time, it is important to note that according to the hierarchy prescribed by section 20 (c ) of the Class Actions Law, preference should be given, to the extent possible, to compensatory mechanisms that reflect such conformity, and even when awarding compensation according to section 20 (c ), in the absence of the possibility of awarding it under sub-sections (a) and (b), every effort should be made to structure the mechanism for distribution of compensation in a manner that achieves at least an element of connection between the public of those compensated and the public of victims.

60.  In the case before us, regarding the distribution of the Lower Court held as follows regarding the distribution of the

“Having consideration for the difficulties involved in the solution of the reducing the price of milk, given the immense sum of overall compensation ruled in favor of the group (NIS 55 million) and for reasons of the benefit of the group and the public – the sum of the compensation should be designated for three essential goals – First, benefitting the group members by reducing the price of the product (or increasing the contents without raising the price); second – research and scholarship fund in the field of food and nutrition which have implications for public health; third - distribution of milk free of charge to populations in need via non-profit organizations so involved (para. 144 (O), of the decision, emphasis in source).

In holding that one of the objectives for which part of the compensation sum should be awarded is the providing of a benefit via a discount from the product price, the Court, by its own account,  was at the every least attempting to establish a group connection between the victims of Tnuva’s conduct and those who would gain from the benefit. However, in our case it is doubtful whether such a connection actually exists. The connection which the Lower Court sought to establish in this context proceeds from the assumption that those who consumed long lasting low fat milk of Tnuva during the relevant period continue to do so today as well. The problem is that there is only a low probability that this assumption actually materialized, inter alia because of the passage of time and changes in consumption habits and even more so when considering our conclusion to the effect that compensation for infringement of autonomy during the relevant period (23 October 1994 – September 1995) should not be awarded exclusively according to objective criteria and the victims group should be limited to those who suffered consequential damage as a result of the infringement and experienced revulsion, frustration, anger, and other similar negative feelings. When supplementing this by the considerable dangers generally involved in a discounts arrangement that requires a detailed examination of the influence manner in which the arrangement affects the relevant market (see Amir Israeli “Settlement in a Class Actions that Infringes Free Competition, in the wake of CF 1012/02 Yifaat v. Delek Motors Ltd   [   ] Hearat Din 2 (2) 112, 118 – 125) (5665), and the need to receive a reconfirmation from the Director of Antitrust (due to the passage of time from the time of that the gave the previous confirmation in this context) it would seem that in the current case it is preferable to waive the allocation of part of the compensation for the purposes of the discounts arrangement and to focus on the two other objectives determined by the Lower Court, which serve worthy interests for the benefit of the public in its entirety. The portion deducted for purposes of the discount arrangement will be divided equally between these two objectives and hence the compensation sum shall be distributed in the following manner:

       a.         For the study and research fund – 44.33% and for the distribution of milk products to the needy 55.66%.

       b.         The distribution of the  milk products (and not just long lasting milk that formed the subject of the claim) will be effected over a period of five years from commencement date for the execution of the decision, by way of the 2 non-profit organizations "latet" and “Mishulhan leShulhan”  both of which supply food to dozens of other non-profit organizations around the country, as held by the Lower Court in its decision of 17 June 2009, which gave force to the agreements reached between the parties with the cooperation of the representative of the Attorney General and with his consent, attached to the notification of the parties dated 10 June 2009, in the Lower Court (hereinafter: “the supplementary decision”).

       c.         For purposes of transferring the compensation for research purposes in the field of food and nutrition, a study fund will be established, headed by the Head Scientist of Ministry of Health. The fund management will choose the studies that are to receive scholarships, and will supervise them. The members of the management will be the entities specified in section 6C of the agreements reached between the parties and which were approved in the supplementary judgment.  The intention is to use the entire sum of compensation earmarked for the study fund within 5 years, unless it becomes necessary to use the sum thereafter as well, in keeping with the Lower Court’s decision in the supplementary decision.

       Compensation for the Representative Plaintiffs and

    61.          In its partial decision and its supplementary decision the Lower Court ordered the payment of compensation and advocates fees to the representative plaintiffs and their attorneys, and all told ordered Tnuva to pay the sum of NIS 500,000 to the Raabi heirs; the sum of NIS 1,000,000 to the Israel Consumer Council and the sum of NIS 2,500,000 to the attorneys of the representative plaintiffs.

       Tnuva argues that according to the criteria outlined regarding this issue in the Class Actions Law, there were no grounds for awarding such high sums to the representative plaintiffs and their attorneys. In this context Tnuva contends inter alia that the involvement of the Israeli Consumer Council in this context was only minimal, that it did not assume any risk and did not require any monetary incentive for acting in consumer related matters.  It further submits that the rate of the compensation and advocates fees awarded is far in excess of the rate awarded in other cases, and that in this context it would have been appropriate to have consideration for the discrepancy between the sums demanded by the representative plaintiffs (who initially set their at NIS 4 billion) and the sum that was finally awarded.

The representative plaintiffs on the other hand claim that there are no grounds for interfering in the rate of compensation fixed by the Supreme Court, which does not deviate from the criteria prescribed by statute and case law in this context. On the other hand, they see cause for interfering in the sum of fees awarded to their attorneys and contents that the considerations that guided the court in this matter were mistaken. Inter alia they argued that there was no basis for the finding of the Lower Court to the effect that "the case was not always handled in "the best and most efficient manner" and that under the circumstances there were no grounds for attaching weight to the discrepancy between the sum demanded and the sum awarded  and that their attorneys invested extensive and intensive work over the years in this precedential case, which is tremendously important from a public and consumer perspective.  As such they claim that an order should be given for fees amounting to 20% of the overall sum of compensation.

62.  The criteria for the determination of compensation for the representative plaintiffs are set forth in section 22 of the Class Actions law, which states:

 

Compensation for the representative plaintiff

22. (a) If the Court decided all or part of a class action in favor of all or part of the group, including by way of approving a compromise, then it shall order compensation to be paid to the representative plaintiff,

taking into account considerations said in subsection (b), unless it concluded – for special reasons that shall be recorded – that that

is not justified under the circumstances of the case.

 (b) When it sets the amount of compensation the Court shall, inter alia, take these considerations into account:

 (1) the effort exerted and the risks assumed by the

representative plaintiff by bringing and conducting the class action, especially if the relief requested in the action is declaratory relief;

 (2) the benefit which the class action yielded for members of the group;

 (3) the degree of public importance of the class action.

 (c) In special cases and for special reasons that shall be recorded, the Court may:

 (1) adjudge compensation to the petitioner or representative plaintiff, even if the class action was not approved or if the  

class action was not decided in favor of the group, as the

case may be, taking the considerations said in subsection (b) into account;

 (2) adjudge compensation to an organization that participated in hearings of the class action under the provisions of section 15, if it found that to be justified by the trouble taken and the  contribution made by its said participation in the hearings.

 

Section 23 of the Law established criteria for the ruling of the legal fees of the representative attorney, as follows

23. (a) The Court shall set the representative attorney's legal fees for conducting the class action, including the petition for certification; the representative attorney shall not accept legal fees in excess of the sum determined by the Court as aforesaid.

 (b) When it sets the representative attorney's legal fees under subsection (a), the Court shall, inter alia, take the following considerations into account:

 (1) the benefit which the class action yielded for members of the group;

 (2) the complexity of the proceeding, the trouble taken by the representative attorney and the risk he assumed by bringing and conducting the class action, as well as the expenses he  incurred for that purpose;

(3) the degree of public importance of the class action;

 (4) the manner in which the representative attorney conducted the proceeding;

 (5) the gap between the relief sought in the petition for approval and the relief adjudged by the Court in the class action….".

   The criteria for determining compensation and legal fees are essentially similar and reflect the desire to incentivize the filing of class actions (on the importance of this consideration see Moshe Telgam, "The Class Action – Considerations for the Determination of Fees and Compensation" Shaarei Mishpat 4, p. 227 (5768). All the same, it should be noted that an overincentive in this context could encourage the filing of trivial suits or "inflated" suits with no justification, given that those filing these suits would be primarily interested in the compensation and legal fees that they could expect to receive (on the negative influence of trivial suits and the attendant concern of a weakening of the standing of the class action, see CA  1509/04 Danush v  Chrysler Corporation [30] para. 15).  An additional, and important criteria for the determination of legal fees, reflected in s. 23 of the Law cited above, is the existence of a commensurate relationship between the legal fees and the effort invested in the suit and the benefit it produced. The Law further adds and prescribes in this context a number of criteria intended to guide the conduct of the attorney of the representative plaintiff' so as to create a positive incentive for conducting the suit efficiently and fairly (see CA 9134/05  Adv. Eliezer Levit v. Kav Of Zafon, Cooperative Association for Services Ltd  [31] para. 12 (hereinafter – Levit), regarding s. 23 of the Law.  And see also AAA 2395/07  Accadia Software Systems Ltd v. State of Israel – Director of Tax and Stamp Duty [32] para. 20 (hereinafter – Accadia);  CA 7094/09 Borozovsky  Conveyancing Ltd v. Ichurn Itur Veshlita Ltd [33] paras 11- 14).  As evidenced by the wording of ss. 22 and 23 of the Law, the list of considerations enumerated is not exhaustive and is intended to outline "general guidelines which attest to the general intention of the law and the objectives it seeks to realize" (see Levitt, para. 12). That said, in general the criteria enumerated in the law may be divided into three principal categories: considerations of expenses, considerations of yield for the group represented, and considerations of public guidance (see Klement, at pp. 158 – 162).

63.  A central question to be considered in determining the rate of compensation and the legal fees is whether the filing of the class action was necessary in order to merit the particular remedy (Levit [31] para. 14). The case before us is a classic example of a case which would not have been decided had it not been for the class action. In determining the compensation the court gave consideration to this central consideration as well as to the other pertinent considerations, indicating that the task of differentiating between the representative plaintiffs was done for the main part by the Consumer Council, and in dwelling on the importance of creating incentives for the filing of suits for the Consumer Council as well. The Court further dwelt on the fact that this case made an important contribution to the group and the public and addressed the protracted time period during which the suit was conducted. Regarding the legal fees to be awarded to the representative attorneys the Court addressed the immense amount of work that they had invested, the tremendous benefit bestowed by the suit itself, its importance for the group and for the public as a whole, and the complexity of the issues raised in the file. At the same time, the Court stressed the gap between the remedies demanded and what was ultimately granted, noting that the suit had not always been conducted in the best and most efficient manner"

The rule that the appellate forum does not interfere in the rate of legal fees awarded by the trial forum applies to and is implemented with respect to the rates of legal fees and compensation awarded in class actions, other than in cases where one of the sums awarded is legally flawed or where the decision of the trial forum is otherwise fundamentally flawed in a manner that warrants intervention (see Accadia [32] para. 28, Analyst [7] at p. 263). The policy of non-intervention in sums awarded as legal fees and compensation by the trial forum is even more appropriate where it concerns considerations pertinent to the manner in which the proceeding was conducted.  In the case at hand, the Lower Court examined all of the relevant considerations and balanced between them as required.  Accordingly, had we not reached the conclusion that the sum of compensation to be imposed on Tnuva should be significantly reduced, we would not have intervened in the sums of compensation and legal fee that it awarded. However, since we set the sum of compensation at NIS 38,500,000 instead of NIS 55,000,000  awarded by the Lower Court I think that this also warrants a reduction in the sum of compensation that Tnuva has to pay to the representative plaintiffs and the legal fees to be paid to their attorneys. I therefore propose that we set the sum of compensation for the Raabi heirs at the sum of NIS 300,000, the compensation for the Israeli Consumer Society at NIS 550,000 and the rate of legal fees for the representative attorneys at NIS 1,500,000. In order to remove all doubt, it is clarified that the sums specified above, like the sum of compensation awarded, are according to their value on the day of the decision of the Lower Court (7 October 2008).

 

       Final Word

For all of the reasons set forth above I propose to my colleagues to partially allow Tnuva’s appeal with respect to the rate of the compensation (CA 10085/08) and its appeal regarding the compensation for the representative plaintiffs and the fees of their attorney (CA 7607/09). I further propose to my colleagues to dismiss the counter appeal of the representative plaintiffs in CA 10085/08 and their appeal against the decision in CA 6339/09)

Under the circumstances and bearing in mind that these appeals raised questions of principle that were fleshed out for the first time since the enactment of the Class Actions Law, I would propose to my colleagues not to make any order for the costs of the appeal proceeding

 

                                                                   Justice

Justice I. Amit

 

 I concur with the comprehensive and thorough judgment of my colleague Justice Hayut. My colleague concluded that compensation for infringement of autonomy should only be awarded to those group members who experienced various negative feelings upon becoming aware that they had drunk milk containing silicon. My colleague's approach is consistent with the view that I expressed in CA 4576/08 Ben Zvi v. Prof. His [ 17] paras. 25 – 29, according to which an infringement of autonomy is now included within the framework of non-pecuniary damage. An infringement of autonomy means negating the victim's freedom of choice by failing to disclose a substantive detail, but the infringement of autonomy is expressed by negative feelings such as anger, frustration, insult, revulsion,shock etc.  

                                                                   Justice

 

 

Justice  E.  Vogelman

 

 I concur with the comprehensive judgment of my colleague, Justice E. Hayut.   I am a partner to my colleague's conclusion that the objective approach to the assessment of compensation for infringement of autonomy should not be accepted and that accordingly, where proved that some of the members of the group remained indifferent to the infringement of autonomy, there are no grounds for awarding compensation for that head of damage.

 

                                                                                    Justice

.                      

                  

 

 

 

 

 

 

 

                       

 

 

"

 

 

 

 

 

 

 

 

said in subsection (b) into

account. 

 

            CA 723/74

"Ha'aretz" Daily Newspaper Ltd. and Others

v.

The Israel Electric Corporation Ltd. and Another

 

 

 

 

The Supreme Court sitting as the Court for Civil Appeal

            [24.2.1977]

Before Berinson J., Shamgar J. and Ben-Porat J.

 

 

 

Editor's synopsis -

                This is an appeal from a judgment for the Respondents, the Plaintiffs in the lower court, in a civil action for defamation, based on an article published in the Defendant newspaper. During a period of national recession, the Plaintiff company, a public government corporation, purchased an expensive luxurious car for the use of its Director General, the second Plaintiff-Respondent, who was close to retirement. After considerable public criticism of the purchase, the Plaintiffs announced that the Director General would continue to use the old car he had previously used and that they would put the new car up for sale.

           

                The article published by the Appellants, the Defendants below, charged that the sale was a sham and that the Plaintiffs did not really intend to sell the car. It stated that the Plaintiffs did not make any serious effort to sell the car, that they turned down offers to purchase the car at a reasonable price and that they actually placed impediments in the way of its sale. The article alleged that the Plaintiffs really sought to gain time so as to weather the storm of public protest until the public furor will have passed, after which the car would be returned to the Director General's use.

           

            Having failed to establish their defense that the allegations contained in the article were true (under Israeli law, the burden of proof in this matter rests on the defense), the Defendants sought to defend the article as an expression of opinion in good faith concerning the injured party's conduct in a public function or in connection with a public matter. The lower court rejected this defense as well, on the ground, among others, that the defamatory contents of the article were primarily statements of fact rather than opinions.

           

                In a divided decision, the Supreme Court reversed the lower court's judgment. Justice Shamgar wrote the majority opinion in which he held:

               

I.       Freedom of expression is a fundamental right recognized as such in Israeli law. The Law Forbidding Defamation, 5725-1965, which is intended to protect persons' reputations from being besmirched, should be interpreted and applied in a manner that does not infringe upon or unduly limit the proper exercise of this right.

 

2.      This point is all the more significant when what is at issue concerns the criticism of a public official or of a public body in connection with its official conduct. Aggressive, even strident criticism should be encouraged in such matters, in the public interest. The law's provisions concerning the defense that the defamatory publication was the expression of an opinion concerning a public matter, made in good faith, should not be whittled down by narrow interpretation and application.

 

3.      Just as the defense of truth is not lost when the defamatory matter contains inaccuracies that are minor in nature and not themselves injurious, so too the defense of good faith expression of opinion in a public matter will not be lost even if some of the factual grounds on which the opinion expressed was based turn out to be erroneous.

 

4.      It is not correct to require that the opinion be correct as a condition of this defense, else it would be unnecessary to relie on this defense, which applies even when the defense of truth fails.

 

5.      The author's criticism of the plaintiffs' conduct need not be the only reasonable conclusion that can be drawn from the underlying facts, in order for this defense to prevail. It certainly should not be required that the author's conclusion comport with that which the judge would have concluded in the circumstances. All that is required by the condition of reasonableness is that there should be a logical connection between the facts and the author's conclusion so that he could have concluded as he did in good faith.

 

                Justice Ben-Porat filed a dissenting opinion. She would have denied the appeal on the grounds, among others, that the factual inaccuracies in the article, on which the author based his conclusions, were not incidental and that the article did not separate clearly facts from conclusions. The broad defense allowed for expressions of opinion in public matters, in her opinion, is conditioned upon the author making such a separation clearly, so that the reader can distinguish between them, can discern how the author reached his conclusion and can reach his own independent conclusions in the matter.

           

            Note - The instant case was reconsidered by a panel of five Justices in Further Hearing 9/77, in which Justice Ben-Porat's dissenting opinion prevailed and the District Court's verdict for the Plaintiffs was reinstated. The opinions in Further Hearing 9/77 are published in this volume, immediately following this case.

           

           

Supreme Court Cases Cited:

[1] C.A. 68/6 Rabinowitz v. Mirlin, 11 P.D. 1224; 30 P. E. 66.

[2] C.A. 534/65 Diab v. Diab, 20(2) P.D. 269.

[3] H.C.73/53, 87/53 Kol Ha'am Co. v. The Minister of the Interior, 7 P.D. 87; 13 P.E. 422.

[4] H.C. 7/76 "Hilron" Agricultural Products Export-Import Company, Ltd. v. The Fruit Production and Marketing Board, 30 (3) P.D. 645.

[5] Cr.A. 24/50 Gorali v. The Attorney General, 5 P.D. 1145; 6 P.E. 3.

[6] H.C. 206/61 The Israel Communist Party v. The Mayor of Jerusalem, 15 P.D. 1723.

[7] C.A. 90/49 Bentov v. Kutik, 5 P.D. 594; 4 P.E. 190.

[8] C.A. 160/70 Hubayshi v. Disenchik, 24(2) P.D. 394.

[9] C.A. 326/68 Assa v. Livneh, 23(2) P.D. 23.

[10] C.A. 382/58 Tax Assessor v. Ziso-Brantel, 12 P.D. 1732; 36 P.E. 384.

[11] H.C. 14/51 The Attorney General v. Rotem, 5 P.D. 1017; 5 P.E. 304.

[12] C.A. 36/62, 92/62 Ozri v. Gilad, 16 P.D. 1553.

[13] C.A. 34/71 Friedman v. Chen, 26(1) P.D. 524.

[14] C.A. 250/69 Modi'in Ltd. v. Chatouka, 23(2) P.D. 135.

[15] C.A. 134/67 Eban v. Disenchik, 21(1) P.D. 527.

[16] Cr.A. 215/58 Ben Avraham  v. The Attorney General, 13 P.D. 393; 38 P.E. 349.

 

English Cases Cited:

[17] Youssoupoff v. Metro-Goldwyn-Mayer Pictures, Ltd. (1934) 50 T.L.R. 581; sub nom. Princess Alexandrova v. Metro-       Goldwyn-Mayer picturwes, Ltd. 78 Sol. Jo. 617 (C.A).

[18] Scott v. Sampson (1882) 8 Q.B.D. 491; 46 L.T. 412; 46 J.P. 408; 30 W.R. 41 (D.C.).

[19] London Artists, Ltd. v. Littler (1969) 2 W.L.R. 409; (1969) 2 Q.B. 375; sub nom. London Artists v. Littler (and Associated Actions) (1969) 2 All E.R. 193 (C.A.).

[20] Lewis v. Daily Telegraph, Ltd. (1963) 2 All E.R. 151; sub nom. Rubber Improvement Ltd. v. Daily Telegraph, Ltd. (1964) A.C. 234; (1963) 2 W.L.R. 1063; 107 Sol. Jo. 356 (H.L.).

[21] Slim v. Daily Telegraph, Ltd. (1968) 2 Q.B. 157; (1968) 2 W.L.R. 599; 112 Sol. Jo. 97; (1968) 1 All E.R. 497 (C.A.).

[22] Plato Films v. Speidell (1961) A.C. 1090; (1961) 2 W.L.R. 470; 105 Sol. Jo. 230; (1961) 1 All E.R. 876 (H.L.).

[23] Grech v. Odhams Press, Ltd. (1958) 2 Q.B. 275; (1958) 3 W.L.R. 16; 102 Sol. Jo. 453; (1958) 2 All E.R. 462 (C.A.).

[24] Merivale v. Carson (1887) 20 Q.B.D. 275; 58 L.T. 331; 2 J.P. 261; 36 W.R. 231; 4 T.L.R. 124 (C.A.).

[25] Campbell v. Spottiswoode (1863) 3 B. & S. 769; 3 F. & F. 421; 2 New Rep. 20; 32 L.J.Q.B. 185; 8 L.T. 201; 27 J.P. 501; 9 Jur. N.S. 1069; 11 W.R. 569; 122 E.R. 288.

[26] Peter Walker & Son, Ltd. v. Hodgson (1909) 1 K.B. 239; 78 L.J.K.B. 193; 99 L.T. 902; 53 Sol Jo. 81 (C.A.).

[27] Hunt v. Star Newspaper Co., Ltd. (1908) 2 K.B. 309; 77 L.J.K.B. 732; 98 L.T. 629; 24 T.L.R. 452; 52 Sol. Jo. 376; (1908-10) All E.R. Rep. 513 (C.A.).

[28] Turner v. Metro-Goldwyn-Mayer Pictures (1950) 1 All E.R. 449; (1950) W.N. 83; 66 T.L.R. (Pt.1) 342; 94 Sol. Jo. 145 (H.L.).

[29] Thomas v. Bradbury, Agnew & Co., Ltd. (1906) 2 K.B. 627; 75 L.J.K.B. 726; 95 L.T. 23; 54 W.R. 608; 22 T.L.R. 656 (C.A.).

[30] Carr v. Hood (1808) 170 E.R. 983; (1808) 1 Camp. 33.

[31]Popham v. Pickburrn (1862) 18 E.R. 730.

[32] Kemsley v. Foot (1952) 1 All E.R. 501; (1952) A.C. 345; (1952) 1 T.L.R. 532; 96 Sol. Jo. 165 (H.L.).

[33] Watkin v. Hall (1868) L.R. 3 Q.B.D. 396; 9 B. & S. 279; 37 L.J.Q.B. 125; 18 L.T. 561; 32 J.P. 485; 16 W.R. 857.

[34] McQuire v. Western Morning News Co., Ltd. (1903) 2 K.B. 100; 72 L.J.K.B. 612; 88 L.T. 757; 51 W.R. 689; 19 T.L.R. 471; (1900-03) All E.R. Rep. 673 (C.A.).

 

New Zealand Cases Cited:

[35] Gooch v. N.Z. Financial Times (No. 2) (1933) N.Z.L.R. 257.

 

American Cases Cited:

[36] Chaplinsky v. New Hampshire 315 U.S. 568; 62 S.Ct. 766 (1942).

[37] Beauharnais v. Illinois 343 U.S. 250; 72 S.Ct. 725 (1952).

[38] New York Times v. Sullivan 376 U.S. 24; 84 S.Ct. 710 (1964).

[39] Gertz v. Welch Inc. 418 U.S. 323; 94 S.Ct. 2997 (1974).

[40] Roth v. United States 34 U.S. 476; 77 S.Ct. 1304; 1 L.Ed.2d 1498.

[41] Stromberg v. California 283 U.S. 39; 51 S.Ct. 532; 75 L.Ed. 1117.

[42] Sweeney v. Patterson 76 U.S. App. D.C. 23; 128 F.2d 457 (1942).

 

 JUDGMENT

 

            Shamgar J: 1. We have before us an appeal against the judgment of the Tel Aviv District Court in an action for defamation in which the Appellants were ordered to pay compensation in the amount of 10,000 Israeli pounds to the second Respondent and one pound to the first Respondent.

           

            2. The following are the main facts:

           

            (a) On 14.3.67 the following article was published in the Ha'aretz newspaper:

           

"The Electric Corporation Director General's Car, by the 'Ha'aretz' Transport Correspondent.

 

On 26.10.1966, a news item appeared in Ha'aretz to the effect that the Electric Corporation had acquired a 1966 Chevrolet Impala for its Director General, Mr. Yaacov Peled. The price - 33,500 Israeli pounds.

 

After there appeared in the press letters from readers and articles criticizing this 'wasteful practice' by a State company that suffers from deficits, raises prices and is unable to distribute dividends, Mr. Peled reacted as follows, in Ha'aretz of 8.11.66: '... [A]lthough I do not agree with the opinions that relate the replacement of the car to the policy concerning the recession, I have decided to sell the new car and to continue to use the old one – so as to remove any and all cause for criticism, even if it is unjustified.' Mr. Yaacov Peled (70), who is due to retire in October, resumed using his old car, a 1963 Chevrolet Impala.

 

The new car, in which Mr. Peled had already driven about 6000 kilometers, was returned to the agent in Tel Aviv, Mr. Leo Goldberg, so that he should sell it and return the proceeds to the Corporation.

 

More than four months have passed since the car was returned to the Goldberg agency, supposedly for sale, but actually. the Electric Corporation is not really interested to get rid of the car. It hopes that after some time, when the public will have forgotten the incident, the car will be returned to serve the retiring Director General, for it will then be a 'used' 1966 model, since the end of the 1967 model year is approaching.

 

The Goldberg agency was instructed to sell the car, subject to the Corporation's prior approval. After considerable effort, the agency's staff found a purchaser who offered 24,000-25,000 pounds for the car. The Electric Corporation's transport officer refused to approve the sale. He advised the agency that even if it found a buyer for 28,000 pounds (which will never happen) they would have to receive his approval of the sale.

 

From this, the Goldberg agency's clerks concluded that the Electric Corporation was not interested in selling the car and was only interested in gaining time until the public furor would die down, since, if they had decided to sell the car for reasons of public hygiene, what difference would it make what price they received for it? All that had to be ensured was that the car should fetch the proper price in the used car market.

 

It is not so easy to sell a luxury Impala such as that ordered by the Corporation for its Director General, Mr. Peled: with an automatic gear, an imported radio, an electric antenna and other luxury items which raise its price several thousand pounds above the standard price.

 

The Ministry of Development should instruct the Electric Corporation management to sell the car without any further manoeuvering".

 

            Passages from this article served as the basis for the claim, which is the subject of this appeal, in which each of the Respondents sued the newspaper Ha'aretz, its editor, its owner and the correspondent who wrote the article for 50,000 Israeli pounds damages.

           

            (b) The evidence produced before the District Court established the following:

           

            The episode began, as claimed in the article, in 1966, during the period of the recession, when the second Respondent ordered the car described in the article from the Chevrolet agent in Israel, the Leo Goldberg Company (hereinafter the Goldberg agency) for 33,500 Israeli pounds. At that time, the Respondent had at its disposal a car of the same make, which was a 1963 model, and which had already been driven 150,000 kilometers and was beginning to cause problems. Hence the decision to exchange it. This decision was not presented before the Corporation's management institutions for consideration and decision. To the car which was ordered - which was one of the biggest and most luxurious cars on the Israeli roads during that period there were added an electronic antenna, white wheels and power steering, all of which were novel appurtenances at that time.

 

            News of this acquisition, which was published first in the Maariv newspaper, apparently following upon the overture of an employee of the Corporation, aroused public criticism which was expressed in letters to the newspapers and the complaints of at least one of the members of the Corporation's Board, who had not been consulted in advance. As a result, the second Respondent decided to return the car to the Goldberg agency, after he had it for about two months and had driven about 5000 kilometers. The Goldberg agency refused to cancel the sale and return the payment made, but it agreed to handle the sale of the car as a used model. The second Respondent thought, according to his testimony in court, that he was not obliged to call for tenders for the car. On 8.11.1966, the Respondent published a notice in the press announcing its intention to sell the car. It was transferred to the Goldberg agency on 29. 11. 1966 and the article, which is the subject of this action, was published on 14.3.1967.

           

            When the car was brought to the Goldberg agency, the Corporation's representatives did not fix a price for which the Corporation would be prepared to sell the vehicle and did not empower the agency to act within a particular price range as a basis for negotiating the sale to a potential buyer. Instead, the agency was asked to present every offer, without exception, for the Corporation's prior approval. Save for the second Respondent's notice in the press, mentioned above, there was no other public announcement concerning the offer to sell the car. At first, the car was placed in the agency's sales lot, but when time passed and it was not sold, it was decided to keep it in a nearby closed storage place belonging to the agency, for its protection. Naturally, as a result, it was not exposed to the view of potential buyers who visited the agency.

 

            Several offers ranging between 22,000 and 25,000 Israeli pounds were made for the car, but they were all turned down after the person in charge of sales at the agency ascertained the first Respondent's position. The crux of the matter was that because of the cumulative weight of various circumstances - such as the failure to fix a price, the rejection of offers to purchase the car at a price which appeared reasonable in the light of the economic situation and the car's nature, the passage of time and the advanced process of aging of the model in consequence thereof, the Corporation's apathetic and even discouraging attitude whenever a potential buyer contacted it by telephone and the absence of any urgency in the effort to find a buyer the person in charge of sales at the Goldberg agency, Mr. Ben-Ami Amir, received the impression that the Corporation did not really intend to sell the car. According to him, he usually succeeded in selling a used vehicle within several weeks. Mr. Amir said in his testimony in court that:

 

"I received offers. I asked Shagal. He replied in the negative. The offers which I received were 24,0000 Israeli pounds and again 24,000 pounds and 25,000 pounds.... After several offers from agencies and private individuals the reply was that even if there were an offer of 28,000 pounds I should ask again. At that time, the price of 28,000 pounds appeared to me to be a dream and I therefore concluded that the car was not for sale. This was the first time that I was unable to sell a car.... The main basis for my conclusion that the Corporation did not want to sell the car was that I received no reply at first. I have been a sales manager for many years.... Here, for the first time, I did not receive a single satisfactory reply concerning a sale for a certain price. I concluded that they did not intend to sell because no price was fixed for the sale of the car, not at the beginning and not during the course of the weeks that followed ... until I went to Goldberg and told him I would no longer handle the matter...."

 

            According to Mr. Shraga Kantor, who was in charge of the first Respondent's service department and a member of the management, he too had heard the opinions quoted above "which were widespread amongst the Electric Corporation employees who thought that it was all a bluff”. Mr. Amir passed on his impression, as described above, to the fourth Appellant who was, at the time, the first appellant's transport correspondent. He maintained close contact with Mr. Amir who was, as already stated, the sales manager of the Goldberg agency, as well as with those who perform parallel functions in other agencies. Through them he was able to keep up to date with respect to the state of the market for used vehicles. Mr. Amir's statements appeared reliable to him and were corroborated later by one of the potential buyers. After receiving the information and before publishing his article, the first Appellant approached the first Respondent's spokesman, told him what he had heard and asked for his reaction. The spokesman refused to react because, as it appears, of a general directive given him by the second Respondent not to give any information to the Ha'aretz newspaper.

           

            On 21.3.1967, after publication of the article, the late Mr. Leo Goldberg wrote to Ha'aretz seeking to describe the sequence of events and pointing out, among other things, that "we received no offer of 24,000-25,000 pounds" save from several second-hand car dealers. It appeared that what was said in the letter was not consistent with the facts known to Mr. Ben-Ami Amir or with those known to the Corporation: that a certain fruit wholesaler had offered Amir 25,500 pounds for the car and that he had repeated his offer by telephone directly to the Corporation. The Corporation did not propose, as is customary, any counterprice which appeared to it to be more reasonable, and did not even reply to the offer.

           

            In May, 1967, after publication of the article and after the action, which is the subject of the appeal, had been brought, the second Respondent contacted the manager of the Hadera Paper Mills and the Chairman of its Board of Directors and persuaded them to buy the car for 28,000 pounds. The deal was closed.

           

            3. The Respondents' claim was brought on 20.3.1967. It was based on a part of the article, beginning with the words, "More than four months have passed since the car was returned to the Goldberg agency, supposedly for sale ..." (the fifth, sixth and seventh paragraphs quoted above), and on the article's concluding sentence: "The Ministry of Development should instruct the Electric Corporation management to sell the car without any further manoeuvering." The full text of the article was attached to the statement of claim. The Respondents claimed that the above extracts implied that the first Respondent had been guilty of -

 

          "corruption, deceiving the public, mismanagement of its affairs and its business, management by way of manoeuvering, bothering the Leo Goldberg agency and its employees in vain and misleading them."

           

            According to the statement of claim, the article charged the second Respondent with -

           

          "corruption, deceiving the public, lack of integrity in his office, mismanagement of the affairs of the Corporation and conducting the affairs and business of the Corporation by way of manoeuvering."

           

            These matters come within the definition of defamation for which the Respondents claimed the damages referred to above.

           

            The appellants, in their statement of defense, took exception to the Respondents' interpretation of their article, denied that it contained anything defamatory and pointed out that "what was said in the article is true and the publication was in the public interest" (section 14 of the Law Forbidding Defamation, 5725-1965 (hereinafter the Law)), and, that they will further contend that the publication is protected by sections 15(2) of the Law (the defense of good faith because of a legal, moral or social duty to publish the matter), 15(4) (expression of an opinion concerning the injured party's conduct in an official or public capacity or in connection with a public matter) and 15(6) (criticism of an act which the injured party performed in public).

           

            In a motion brought before the court of first instance, the Respondents asked that the defense under section 15(2) of the Law be struck out in limine. This application was dismissed by the Registrar and suffered the same fate in their appeal to the District Court. However, the further appeal to the Supreme Court was allowed and this defense was stricken (C.A. 213/69, The Israel Electric Corporation v. Ha'aretz, 23(2) P.D. 87). There remained, therefore, at the opening of the original action, only the defenses under sections 14, 15(4) and 15(6) of the Law.

 

            4. The main issue before the court of first instance was whether to classify the article's contents as being matters in the nature of facts or as expressions of opinions, and this continued to be an issue before us. The Appellants were of the opinion that most of the published matter was of the nature of conclusions and therefore constituted opinions. This matter could not, therefore, be examined under the aegis of section 14 of the Law, and was subject only to the defenses laid down in sections 15 and 16 of the Law.

           

            In its judgment, the District Court broke down the publication into its substantive elements and its drafting and concluded that it consisted entirely of matters of fact, save for the following two short items, which are in the nature of expressions of opinion:

           

"which will never happen" (i.e. - finding a buyer for 28,000 pounds).

 

and -

 

"The Ministry of Development should instruct the Electric Corporation management to sell the car without any further maneouvering."

 

            The District Court found signs of both opinion and fact in two other extracts. It stated in this regard:

           

"The statement: 'If they had decided to sell the car for reasons of public hygiene what difference would it make what price they received for it? All that had to be ensured was that the car should fetch the proper price in the used car market', could be seen to be a continuation of the matters quoted above concerning the Goldberg agency's clerks' conclusions that the Electric Corporation was not interested in selling the car. It could also be seen as the journalist's statement, to give strength and foundation to the employees' conclusion. If we view these words as those of the employees themselves, that is to say, this is their logic and the reason for their conclusion, then it would be an argument of fact, whereas, according to the other alternative, it is an expression of the author's opinion. The same applies to the following paragraph, concerning the question whether it is easy or difficult to sell a luxury Impala. It could be seen as an expression of the author's opinion concerning the state of the car market and it could be said - and I tend toward this view - that the general state of the market is a matter of fact."

 

            The District Court rejected the Appellant's defense that the article constitutes a "matter of opinion". In its view, expressions of opinion, too, must be grounded in truth. Just as presentation of data which is not true does not benefit from the defense provided in section 14 of the Law, so too, the expression of an opinion not grounded in truth does not benefit from the defense of good faith. According to the court:

           

"Good faith and truth, although not synonymous, are bound together for purposes of the defense against defamation."

 

            Furthermore, expressions of opinion, which may be understood by a reasonable reader to be assertions of fact, will be seen to be and will be classified by the court as factual claims and not as expressions of opinion.

           

            In applying the above principles to the issue under consideration, the District Court noted that in its opinion the Appellants had no factual basis for imputing the serious allegations contained in the article to the Respondents. Only three and a half months had expired from the time that the car was returned, not four, as stated in the article. The incident occurred during a period of recession and for this reason there were no eager buyers of the car. The criticism of the original acquisition of the car was not at all relevant.

           

            The assertion that the car was "supposedly" for sale, implied an intention to mislead from the very beginning. This was without foundation, just as the imputation to the second Respondent of an intent to acquire the car after his retirement was nothing more than speculation by the Appellants. The argument that the end of the model year was imminent was also proved to be incorrect, since the article was written in March of the particular year, and the model year of American cars, unlike that of European cars, is determined by the Gregorian year. The Goldberg agency did not make any effort to sell the car and the conclusion attributed to its clerks was clearly baseless. The Appellants' reliance on Ben-Ami Amir's words does not relieve them of liability because -

 

"by publishing Mr. Ben-Ami's statements, they took defamatory matter conveyed to them privately by Mr. Ben-Ami Amir and multiplied it many thousands of times, as the number of their readers, and gave it credence among all those persons whom the paper reaches, so as to bring the Plaintiffs into disrepute and to sully their names."

 

            There was also no basis for the suspicion that the Respondents had hidden the car, since it was the Goldberg agency that decided to store it in the closed warehouse.

           

            It is true that the Electric Corporation refused to react when asked to do so by the fourth Respondent before publication of the article, but since this refusal was prompted by the bad relations which existed between the newspaper and the Corporation, he should have known that the Corporation's silence was not connected to the merits of the issue but to their relations with the article's author. The writer was not released, therefore, from his duty to check the facts in some other way.

           

            The Appellants' statement that -

           

"if they had decided to sell the car for reasons of public hygiene what difference would it make what price they received for it? All that had to be ensured was that the car should fetch the proper price in the used car market",

 

does not meet the test of reasonableness and, therefore, bears directly on the claim of good faith. Furthermore, the use of the word "maneouvering" was without foundation.

 

            The District Court analysed the events at length to explain that, in its opinion, a completely different conclusion should have been drawn from the facts instead of that which the Appellants drew, and noted that the article contained an element of -

 

            "stigmatizing the Appellants [the Plaintiffs] as liars and not serious people".

           

            This constitutes defamation, as the Supreme Court had already concluded when it allowed the motion to strike out the defense under section 15(2) of the Law (C.A. 213/69, supra).

           

            After the District Court announced its decision that there was defamation and that it dismisses the defense claims, the parties agreed that the court should fix the amount of damages and costs at its discretion, as well as the form which an apology should take, without hearing any further evidence and arguments. The court awarded the second Respondent 10,000 Israeli pounds compensation, since he had suffered the main injury. The Corporation was awarded compensation in the amount of 1 Israeli pound, primarily in consideration of the fact that it had refused to respond to the fourth Appellant's question when he turned to it before the article was published. The court ordered publication of an apology and determined its wording.

           

            5. The appeal before us covers a wide expanse, from minor arguments concerning matters of procedure and evidence to major issues concerning the principles of the law of defamation. We will not fulfil our duty if we do not make special mention of the comprehensive and clear arguments made by both parties who appeared before us, which were of great assistance to us in fixing the bounds of the dispute and determining its essence.

           

            And now to discuss the rules of law which apply to the matter before us and their application to the facts of the case.

           

            6. A. The Respondents' argument was that the article in question imputed to them "dishonesty and hypocrisy" and stigmatized them as "liars and not serious people". Imputing such characteristics, if in fact this was done, would constitute defamation within the meaning of section 1 of the Law. The test applicable to the existence of defamation according to section 1 is not confined to the subjective insult suffered by the individual against whom the verbal or written injurious matter is aimed, but has an objective basis: that is, what is the influence or relationship of the defamatory matter on the specific plaintiff’s estimation in the eyes of others (C.A. 68/56, Rabinowitz v. Mirlin [1], at p. 1226; C.A. 534/65, Diab v. Diab [2], at p. 274). The prohibition against defamation is intended to fix firmly in enacted law the right of every person that his reputation not be demeaned or injured by false statements that denigrate him (Justice Scrutton, in Youssoupoff v. Metro-Goldwyn-Mayer Pictures, Ltd. (1934) [17], 50 T.L.R. 581, 584, referring to Scott v. Sampson (1882) [18], 8 Q.B.D. 491, 503.

 

          But the issue before us cannot be resolved by merely applying the definition of defamation in section 1 of the Law to a particular expression. The Law frames rules, whose purpose it is to create effective protection of the individual against being injured by the publication of defamatory matter, so that this area resembles the laws of privacy which seek to prevent unlicensed or uncontrolled intrusion into the private domain (see Thomas I. Emerson, The System of Freedom of Expression, 1970, p. 517). The problem that arises in this field of the law is not confined to the need to define the nature of the act in question or of the injury resulting from it, but that both the law forbidding defamation and that protecting privacy, raise the question where should the line be drawn between them and the right of freedom of expression.

         

          B. The relationship between defamation and freedom of expression has been defined in various ways and approaches. The difference between these approaches is expressed principally in fixing the status of the two subjects in relation to each other, that is, whether they are treated as two separate fields with equal status, or whether they are regarded as values, one of which deserves preferential treatment and whose importance therefore outweighs the other, either in general or in particular circumstances. There were those who regarded the laws of defamation as an exception to the right of freedom of expression and defined them as prohibitions which impinge on this right and limit its absoluteness (see the words of Justice Murphy in Chaplinsky v. New Hampshire 315 U.S. 568, 571-572 (1942) [36], and of Justice Frankfurter in Beauharnais v. Illinois 343 U.S. 250 (1952) p. 266 [37], according to whom defamatory matter is not protected by the right of freedom of speech).

         

            But the attitude giving exceptional preference to the prohibition against publishing defamatory matter over and above the right to freedom of expression has been abandoned in the United States, for example, with regard to defamatory matter concerning holders of official or public office, and the principle which gives superior status to freedom of expression concerning subjects of public interest connected with holders of official or public office has been entrenched there (see New York Times v. Sullivan (1964) [38] and the subsequent judgments based thereon). The tendency to add constantly to the types of office holders to which this principle applies was restrained lately by the judgment in Gertz v. Welch Inc. (1974) [39], but there was no erosion of the basic approach described above with respect to the mutual relationship between defamation of office holders and freedom of expression.

           

            There is no need to try our hand at describing the tendencies and considerations that lie at the basis of any decision which is required to be made, in the varying circumstances, to resolve the conflict between one party's right to an unsullied name and another party's right, in a free society, to give expression at will to his opinions and ideas. The issue before us is more limited as it concerns a publication about the holder of a public office and relates to a public matter. We can, therefore, confine ourselves to this subject only. The first Respondent is one of the largest government companies with respect to the scope of its operations and the number of its employees; it provides a vital service to the general public, and it has a meaningful and daily relationship with every citizen. The second Respondent is the Director General of the corporation which, as a Government company, is responsible to a Government Ministry (at the time, the Ministry of Development), and because of the nature of its objectives and its economic and public standing, he must be deemed to be the holder of an office in the public service. There is also no disputing the fact that the issue before us, in light of its nature, is also a matter of public interest, for, in Lord Denning's words in London Artists, Ltd. v. Littler (1969) 2 W.L.R. 409, 418 [19]:

           

   "... Whenever a matter is such as to affect people at large so that they may be legitimately interested in or concerned at what is going on ... then it is a matter of public interest on which every one is entitled to make fair comment...."

           

            In light of the nature of the matter before us, as described above, it is therefore sufficient that we direct our discussion only to the leading conceptions and approaches that govern the examination of the question of publications concerning holders of public or official office and the relationship between them and freedom of expression. Afterwards we will examine whether and how these rules have been applied in our enacted law.

           

            7. The absence in Israel of a unitary piece of legislation of preferential legal status that embodies its constitutional principles does not mean that we have no statutes with constitutional content or that constitutional legal principles defining the basic rights of man and the citizen are absent from our system of law. The law in Israel embraces, according to our understanding and concepts, basic rules concerning the existence and protection of the freedoms of the individual, even before the bill Basic Law: Rights of Man and Citizen has become enacted law.

           

            The new draft Basic Law is intended to crystallize principles and to designate their boundary lines; its central task is to fix them firmly in enacted law so as to ensure their protection against the ravages of time. Its purpose is to give expression to values according to which the ordinary citizen should be educated and to block in advance the progress of those who seek to trespass on his rights. But even now basic rights are protected and first and foremost among these, in our basic legal conception, is the freedom of expression, and they are a substantive part of the law of Israel. The integration of these rights into our law is, as is well known, the consequence of the system of government which we so coveted (H.C. 73/53, 87/53, Kol Ha'Am Co. v. The Minister of the Interior [3], at p. 876), but the obligation to honor them is not merely a political or social-moral one; it also has legal status.

 

            Thus far as concerns the existence of the right. Now with regard to its standing in the system of law that applies in the State.

           

            The basic right of freedom of expression is of decisive importance for establishing the nature of the regime that rules in a given political or social framework. Furthermore, it is the fundamental basis of, and a condition precedent for, the existence and faithful preservation of most other basic rights. Without freedom of expression the stability of other basic rights, such as, for example, freedom of religion, is threatened and the danger that they will not be fulfilled increases. In addition, the previously described character of freedom of expression as one of the fundamental constitutional rights gives it superior legal status. The obligation to maintain this right serves as a guideline to fashion and shape laws and to test the legality of acts of the authorities. This also has consequences for the legal interpretation of every written law. Any limitation of the boundaries of this right and of its extent, which arises from legislation, will be narrowly construed so as to give the aforesaid right maximum scope and not to restrict it in the slightest beyond what is clearly and expressly required by the legislature's words (H.C. 75/76, "Hilron" v. The Council for the Production and Marketing of Fruits, [4], at p. 653). Freedom of expression and a provision of law that limits it do not have equal and identical standing, but rather, to the extent consistent with the written law, one should always prefer the maintenance of the right over a provision of law that tends to limit it. In sum, the standard of judgment that establishes the protection of freedom of expression as the primary consideration when it clashes with another right should be given full expression, not only when the legislature enacts the law's provisions, but also in the interpretation of the law and the application of its provisions to circumstances in which its actual essence and performance are tested in practice.

 

            The above-described approach is generally accepted by all when one is considering the relationship between freedom of expression and the totality of governmental powers, but the maximal restriction of the powers of official authorities in the fields of criminal and administrative law is but a fraction of the measures whose object is the protection of this foundation of a democratic regime. Despite this, it does happen that the said understanding of the mutual relationship is accepted to a lesser degree when in the circumstances of the case there is a clash between the right of the individual to give expression to his opinions and ideas and the right of an office holder who may feel injured by this expression of opinion. It would be superfluous to emphasize the importance of applying the yardstick described above correctly in these latter circumstances as well, since the right to freedom of expression can easily be diminished if, while direct administrative intervention is stymied, the individual is exposed at the same time to litigation within the framework of the laws forbidding defamation for any critical or negative expression of opinion against a public servant in connection with his official conduct, which hurts his standing in the public eye (section 1(3) of the Law) (see in this matter the words of Justice Brennan (p. 724) and Justice Goldberg (p. 737), with which Justice Douglas concurred in the said Sullivan case [38]). It was to such circumstances that Justice Agranat referred in Cr. A. 24/50, Gorali v. The Attorney General, [5], at p. 1160, when he said:

 

"The law recognizes that in known circumstances and under certain conditions the general good demands - so that the said basic right not be emptied of its content – that a person not be punished for publishing slanderous matters, since the harm which would be caused to the public by excessive restriction of freedom of speech and freedom of writing is preferred in the eyes of the law to the causing of any private injury."

 

            B. As said, we deal here with matters alleged against a Government company and its employee, concerning matters connected with the use of its funds, the observance of its required pactices and the granting of privileges to its employees.

           

            The possibility and opportunity for political, social and other criticism of the functioning of the government, its institutions, companies, representatives and employees is a sine qua non for the existence of a properly functioning democratic regime, as stated by Justice Sussman in H.C. 206/61, The Israel Communist Party v. The Mayor of Jerusalem, [6], at p. 1728:

           

"True democracy will be judged by whether criticism is published and heard, without which the democratic-parliamentary regime will descend to nothingness."

 

            In this context Justice Brennan commented, in the said Sullivan case [38], which dealt with a libel claim centering on an advertisement which contained incorrect factual data:

           

"... freedom of expression ... 'was fashioned to assure unfettered interchange of ideas for the bringing about of political and social changes desired by the people.' Roth v. United States 354 U.S. 476, 484, 77 S.Ct. 1304, 1308 [40]. 'The maintenance of the opportunity for free political discussion to the end that government may be responsive to the will of the people and that changes may be obtained by lawful means ... is a fundamental principle of our constitutional system', Stromberg v. California 283 U.S. 359, 369, 51 S.Ct. 532, 536, [41] ... and this opportunity is to be afforded for 'vigorous advocacy' no less than 'abstract discussion'.... We consider this case against the background of a profound national commitment to the principle that debate on public issues should be uninhibited, robust and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials...." (Id. at p. 721).

 

            Factual error may enter a critical statement, as happened in the Sullivan case [38], as to which Justice Brennan asks:

           

"The question is whether it forfeits that protection [of the right to free expression of opinion - M.S.] by the falsity of some of its factual statements and by its alleged defamation of respondent...." (My emphasis - M.S.)

 

            And he refers in this matter to the words of Judge Edgerton in Sweeney v. Patterson 76 U.S. App. D.C. 23, 24; 128 F.2d 457, 458 (1942) [42] that -

           

"... errors of fact, particularly in regard to a man's mental state and processes are inevitable.... Whatever is added to the field of libel is taken from the field of free debate."

 

            Justice Brennan sums up, one cannot condition the defenses provided by law on the absence of factual errors or inaccuracies. According to him:

           

"A rule compelling the critic of official conduct to guarantee the truth of all his factual assertions - and to do so on pain of libel judgments virtually unlimited in amount - leads to a comparable 'self-censorship'. Allowance of the defense of truth, with the burden of proving it on the defendant, does not mean that only false speech will be deterred. Even courts accepting this defense as an adequate safeguard have recognized the difficulties of adducing legal proofs that the alleged libel was true in all its factual particulars.... The constitutional guarantees require, we think, a federal rule that prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with 'actual malice' - that is, with knowledge that it was false or with reckless disregard of whether it was false or not."

           

            C. Freedom of the press is only one of the specific forms of the right of free expression. Furthermore, this is the central area in which the extent and actual existence of the said right are tested.

           

            I will not enter here into the special question of whether the press has a special duty and status with respect to the provisions of the Law, since this question was already answered with regard to the publication before us in the above C.A. 213/69, when the defense under section 15(2) of the Law was struck out in limine. There is no doubt that this is a very important question, and any further study of it will contribute to its additional clarification (see also in this connection C.A. 90/49, Bentov v. Kutik, [7], at pp. 601, 603). As a tentative thought only, it might perhaps be regrettable that these proceedings were fragmented at the Respondents' initiative on the basis of rule 96 of the Civil Procedure Regulations, 5723-1963, so that there was no opportunity to examine all the defenses simultaneously, that is, after hearing the testimony (cf. C.A. 160/70, Hubaishi v. Disenchik, [8], at p. 395).

           

            There is no room for doubt that adoption of the rules granting special standing to the right of criticism in matters of public interest that concern holders of public office does not permit the media to indulge in unbridled writing or release them from all restraints. Later on, we will discuss the provisions of both parts of section 16 of the Law, which contain the rules that create the necessary balance between that which is permitted and what is prohibited, and that the media will not be able to avail itself of any plea of justification when a publication goes beyond the permitted. But any tendency to add to or further limit this balance creates many hazards: the rules concerning freedom of expression are tested in accordance with their long term general advantage and meaning and they should not be evaluated under the influence of events of the moment. The maintenance of basic rights is not disputed when affairs are conducted peacably and when the various authorities earn only compliments. But the real test of freedom of expression comes when there is confrontation accompanied by decisive and unpleasant criticism. Furthermore, the standing and function of the media in a free society are not measured according to how each of their elements and entities meets the expectations of the balanced and moderate citizen, but mainly in light of the media's mission and general importance in the complex network of factors which contribute to the formation of the citizen's opinion and enable him to exercise free evaluation and choice, with knowledge of what is happening and the ability to evaluate the quality and nature of every event, proposal and criticism.

 

            8. Within the framework of the proceedings before us our attention was drawn by both parties to English precedents in defamation cases. Uncontrolled reliance on such precedents could lead to erroneous conclusions. Even in the Civil Wrongs Ordinance, 1944 - which to a considerable extent adopted the law existent at the time in England - there are differences of terminology from that in the English source: in section 20 of the Ordinance, for example, under the heading of "conditional privilege" are included the defenses of "qualified privilege" and "fair comment", although in the country of origin of these rules there are differences between the two. Since then, not only have sections 16 and 22 of the said Mandatory Ordinance disappeared, but the provisions of section 2 of the Ordinance, which tied interpretation of the Ordinance to the rules of legal interpretation prevailing in England, have also been abrogated (Law Amending the Administration and Law Ordinance (No. 14), 5732-1971). In Britain the Defamation Act was enacted in 1952. The Law which we apply here was enacted in 1965 and these two laws differ in many aspects from each other and from the Mandatory Ordinance (compare, for example, section 20(1)(a) of the Mandatory Ordinance with sections 15(2) and 16(a) of the Law.)

           

            One must, therefore, classify and examine the matter very carefully before relying on quotations from English judgments or

           

 having recourse to English legal literature, some of which is already out of date in England (see, for example, Odgers, A Digest of the Law of Libel & Slander, (191l) 6th ed., p. 161, on which the Respondents relied, in comparison with section 6 of the Defamation Act, 1952). It is superfluous to add that equal care must be taken with regard to reliance on those Israeli precedents that are still anchored in the provisions of the Mandatory Ordinance.

 

            9. A. I am of the opinion that the provisions of our law with respect to defamation and the approach on which they are based are consistent with the principles and the values referred to above.

           

            The protection of the individual's good name is realized in the definition of defamation (section 1 of the Law) and in the provisions laying down that defamation is, depending on the circumstances, a criminal offense or a civil wrong. Protection of freedom of expression is formulated in the provisions of chapter 3 of the Law, which contains a list of permitted publications (section 13) and lays down the scope of the defenses of "truth" (section 14) and "good faith" (section 15). The special defense for criticism in connection with public matters appears in section 15(4) of the Law.

           

            B. When the defense of truth is pleaded, the defendant seeking to make this defense successfully is entitled to try to prove that the matter published was true and that the publication was in the public interest. This defense consists, therefore, of two cumulative components and the presence of one of them without the other will not avail the defendant (incidentally, in Britain the cumulative condition that the publication was in the public interest applies only in criminal actions).

           

            The burden of proof in a plea of "truth" is on the person making it (C.A. 326/68, Assa v. Livneh [9], at p. 25; C.A. 382/58, Tax Assessor v. Ziso-Berenthal, [10], at p. 1735).

           

            C. When the defense of good faith is pleaded, the defendant is entitled to argue that he published the matter concerned in one of the circumstances set out in section 15 of the Law and that the publication did not exceed what was reasonable in those circumstances. In the case of this defense, too, there are two interconnected cumulative components and the defense cannot succeed in the absence of either one.

           

            10. A. Clearly, the heart of any dispute in a defamation case is the meaning of the words which it is claimed are defamatory. When examining the meaning of such words they must be interpreted in accordance with what the reasonable reader or listener would understand from them, and recourse must not be had to the legal interpretations by which a legal document would be examined and its content analyzed. Lord Reid said in this context (in Lewis v. Daily Telegraph (1964) A.C. 234, p. 258 [20]:

           

            "... There is no doubt that in actions for libel the question is what the words would convey to the ordinary man: it is not one of construction in the legal sense. The ordinary man does not live in an ivory tower and he is not inhibited by a knowledge of the rules of construction. So he can and does read between the lines in the light of his general knowledge and experience of wordly affairs....

 

What the ordinary man would infer without special knowledge has generally been called the natural and ordinary meaning of the words. But that expression is rather misleading in that it conceals the fact that there are two elements in it. Sometimes it is not necessary to go beyond the words themselves, as where the plaintiff has been called a thief or a murderer. But more often the sting is not so much in the words themselves as in what the ordinary man will infer from them, and that is also regarded as part of their natural and ordinary meaning."

 

            That is to say, the natural and ordinary meaning of the words will sometimes be found in their simple literal meaning and sometimes by reading between the lines. The natural and ordinary meaning of the words cannot be gleaned by isolating and severing them from their context. On the contrary, they must be seen against their general background and within the context of the publication in which they appear. So that, for example, when the court examines matters published in a newspaper and attempts to apply the test of the ordinary reasonable person, it must evaluate the significance and meaning of the words in the eyes of the ordinary reader and judge how he would have understood them. There is an additional aspect to this rule that directs us to the ordinary meaning of words: the words must be interpreted within the context of the publication in which they appear, without reference to additional extraneous factors which could change or broaden their meaning, unless it can be proved that these additional factors, as well, are within the ordinary knowledge of those who heard or read the words.

 

            B. When examining the significance of matters in the eyes of the ordinary reasonable reader, the publisher's intention is generally of no importance. That is, subject to the provisions of section 16(b)(3) of the Law, this question is altogether irrelevant (H.C. 14/51, The Attorney General v. "Davar", [11], at p. 1053). No evidence is to be brought in connection with the question of what meaning the ordinary reader, or one or another type of reader, would ascribe to the publication, and there is no need to hear testimony about how the published matters were understood, since it is the court itself which must judge the matter (C.A. 36/62, 92/62, Ozri v. Gilad, [12], at p. 1559). According to Lord Diplock in Slim v. Daily Telegraph (1968) 2 Q.B. 157, 165, 173 [21]:

           

            "What does matter is what the adjudicator at the trial thinks is the one and only meaning that the readers as reasonable men should have collectively understood the words to bear. That is 'the natural and ordinary meaning' of words in an action for libel."

           

            11. A. The meaning and the sense of the article in question is clear on its face: from its wording it appears that the author concluded from the Respondents' actions and omissions that they intended to misrepresent and to deceive the public: that is, at the same time that the second Respondent declared publicly his desire to sell the vehicle, that had been purchased for what was at that time a great deal of money, the hidden intention that is discerned from the circumstances is the opposite.

           

            This comes within the definition of defamation in section 1 of the Law.

           

            On the other hand, I did not find in the article any explicit or implied allegation that the second Respondent intended to retain the car in the corporation's possession in order to acquire it upon his retirement, as the Respondents contend. This contention was raised in the course of a heated argument in court concerning why the second Respondent's imminent retirement was mentioned in the article, but the reasonable reader could not have learned about these matters from the article itself. In the eyes of one who is not familiar with the hidden ways of public authorities, the reference to the imminent retirement only stressed the absence of any justification for acquiring the car in the first place, that is, as a comment to the effect that if the matter concerns a person who is about to retire, why should he not be patient and complete his final year of service with the car he had. That explains the reference to the Respondent's retirement in connection with the story about the acquisition of the car, and that in any event is how it should be understood. Therefore, the dispute before the lower court, which was repeated before us, whether it was permissible to adduce evidence of precedents concerning acquisition of cars by employees of the corporation who retired on pension, had no relevance to the matter of the publication which is the subject of the proceedings before us.

 

            B. Once we have determined that the article contains defamatory matter, the question arises whether the Appellants can benefit from one of the defenses provided by the Law. The relevant defenses are two:

           

            (a) that the matter published is true;

           

            (b) that the publication was made in good faith.

           

            One plea does not obviate the other and it might be that one would suffice without the other. In this connection the question whether we are talking about facts or expressions of opinion, or both, is significant. We must therefore first classify the published matter according to whether it was factual or an expression of opinion and then decide whether the defenses referred to above apply in the circumstances.

           

            C. When an injured party complains about a certain publication because of its contents, one may not restrict the defendant, in presenting his defense to the particular words in the relevant publication on which the plaintiff bases his claim. The defendant is entitled to have recourse to the entire publication, including those parts not referred to by the plaintiff, in order to justify his defense, whether it be based on "truth" or on one of the alternatives in the plea of good faith. The essence of defamation is injury suffered by a person in the eyes of others and the published writings which were brought to the attention of other persons constitute a single entity. There is no justification to dissect them arbitrarily in order to stress a part of the publication which contains defamatory matter and to prevent the publisher from presenting the entire publication, since it is his right that the court view the matters in their natural light as, it may be assumed, they were seen and read by the ordinary reasonable reader (cf. C.A. 34/71, Friedman v. Chen, [13], at p. 529). This does not mean that the part of the publication containing defamatory matter is purified and cleansed of all contamination by the fact that the rest of the publication contains only truthful statements. The other parts of the publication are relevant for the purpose of presenting a complete picture and to reach a conclusion concerning the author's good faith.

 

            The defendant's said right is especially important when the publication contains several facts, some of which are proved, established and true, and do not constitute a ground for the claim, while a small number, concerning which the plaintiff complains, are not true. The relevancy of the other parts of the publication as providing the basis for the expression of the opinion increases, naturally, in proportion to the measure and extent of the truthful statements contained in the publication and is conditioned on these facts being interwoven and integrated into the expression of opinion which is the subject of the action. The approach common in England, which differs to some extent from ours (see Plato Films v. Speidel (1961), [22]), is substantively unreasonable, and recommendations were recently made aimed at changes in the legal position in England (cf. Report of the Committee on Defamation, H.M. Stationery Office, 1975, Cmnd. 5909, p. 34).

           

            D. The publication at issue before us presents a list of facts, alongside of which, or following upon which, are conclusions and evaluations of the author, that are in the nature of expressions of opinion. In order to judge its nature the publication must be read as a whole, because its factual beginning constitutes the basis for understanding the expressions of opinion contained therein. Furthermore, prima facie, any doubts or disputes concerning the classification of any part or selection of the defamatory matter quoted in the complaint can be dispelled by examining the publication as a whole and in context. This method makes eminently clear the stages of the fourth Appellant's evaluation of the situation, beginning with the factual data and ending in his conclusion that the active intervention of the Ministry of Development was called for.

 

            The court of first instance was therefore correct in considering the article as a whole and the Appellants' complaint in connection therewith is unfounded. On the other hand, I do not accept the lower court's ignoring of the influence which the inception of the incident had on the fourth Appellant's considerations and conclusions, but since this subject comes within the ambit of the defense of good faith, I will return to it when I deal with this distinct problem.

           

            E. I am not satisfied with the conclusions drawn by the lower court concerning the division of the article's contents into facts and opinions. Everyone agrees that the following were of the nature of facts:

           

(a)        the acquisition of the car.

 

(b)   the text of the Director General's reply to the criticism leveled against him.

 

(c)   the impending retirement in October 1967 of Mr. Peled, who was 70 years old, and his resumption of the use of his previous car.

 

(d)   the return of the new car to the Goldberg agency.

 

(e)   the instructions with regard to the price and the sale of the car that were given to the Goldberg agency, except the words "which will never happen".

 

(f)    the selection noting that "it is not easy to sell a luxury Impala" up to the words "above the standard price".

 

            From the evidence brought before the court of first instance, as detailed at the beginning of this judgment, it can be concluded that all the above facts, without exception, were satisfactorily proved and that no one disputes that their publication was in the public interest, as required by section 14 of the Law.

           

            It follows, therefore, that insofar as these facts are concerned, the appellants can enjoy the defense of "truth" based on section 14, even if the facts were defamatory.

           

            12. The remaining parts of the publication whose meaning demands our attention, are the following:

           

"More than four months have passed since the car was returned to the Goldberg agency, supposedly for sale, but actually, the Electric Corporation is not really interested to get rid of the car. It hopes that after some time, when the public will have forgotten the incident, the car will be returned to serve the retiring Director General, for it will then be a 'used' 1966 model, since the end of the 1967 model year is approaching."

 

[finding a buyer at the price of 28,000 Israeli pounds] "... will never happen."

 

"From this, the Goldberg agency's clerks concluded that the Electric Corporation was not interested in selling the car and was only interested in gaining time until the public furor would die down, since, if they had decided to sell the car for reasons of public hygiene, what difference would it make what price they received for it? All that had to be ensured was that the car should fetch the proper price in the used car market."

 

"The Ministry of Development should instruct the Electric Corporation management to sell the car without any further maneouvering."

 

            Before expressing our opinion concerning the nature of these selections and their legal classification, I will make several preliminary observations about the meaning of section 15 of the Law in general and of section 15(4) in particular, and its relationship to the presumptions in section 16.

           

            13. A. With regard to the mutual relationship between section 15 and section 16: In their arguments before us, the Respondents sought to set forth the provisions of the Law as creating an absolute divide

           

 between facts, on the one hand, and expressions of opinion, on the other hand. While section 14 of the Law deals exclusively with matters of fact, which must be examined solely according to the yardsticks fixed therein, section 15, according to them, deals exclusively with expressions of opinion. However, if we examine the provisions of sections 15 and 16, which are inter-connected, we will see that this is, in fact, not so. Section 15 does not consist solely, as one solid piece, of subjects that are in the nature of opinions (see, for example, the circumstances described in sections 15(1), 15(2) and 15(10)). It follows, therefore, that the presumptions set forth in section 16, which are linked with all the variegated provisions of section 15, do not apply to expressions of opinion alone.

 

            The issue at stake in every case is whether the defendant made the publication in one of the circumstances provided for in section 15. If so, then, the presumption in section 16(a), that he made the publication in good faith, applies, whether the publication contained facts or matters of opinion (see C.A. 250/69, Modi'in Press v. Chatouka, [14], at p. 137, in which the question of good faith, for purposes of section 16(a), was considered in connection with a publication in a newspaper stating that a certain woman was committed to a hospital because of mental disease and the author of the publication sought the protection of the defense contained in section 15(2) of the Law). A similar approach was adopted in Grech v. Odhams Press, Ltd. (1958), [23] in which a publication containing factual inaccuracies was allowed the defense of fair comment by the court after it was shown that the publication was made in circumstances deemed to be privileged.

           

            B. With regard to the unique nature of section 15(4): The defense provided in section 15(4) refers to a publication in the nature of an expression of opinion on the conduct of the injured party in an official or public capacity, in the public service or in connection with a public matter. That is to say, while some of the subsections of section 15 do, indeed, describe circumstances which create a basis for the defense of section 16(a) with respect to the publication of facts, this does not teach us anything about the remaining elements and paragraphs of section 15, as can be seen from the fact that section 15(4), like section 15(5), deals expressly with expressions of opinion only and cannot be stretched beyond that.

  

          The question may be asked, what is the law when a factual assertion is intermingled with the expression of an opinion in respect of which the defense of good faith contained in section 15(4) is sought. The answer is that the circumstances set out in the various sections of section 15 classify the publication according to its dominant character. In other words, the type and category of the publication as establishing a fact or expressing an opinion will be determined by its essential nature that is divined from its general import in the eyes of a reasonable reader, and it will not lose its character as a publication expressing an opinion merely because some fact was included, if that does not change its essential feature as described. The integration of all the subsections of section 15 with section 16, with the two types of presumptions contained therein, teaches us that it was not the legislature's intention that the courts should examine the wording of the publication as if with a magnifying glass in order to separate out every fragment of fact and deny it the protection afforded by section 16(a) of the Law.

         

          The approach of the Israeli legislature to this matter can be learned also from section 14: in order to decide whether the matter published was true, regard is had to the fundamental facts which reflect the essence of the publication and not to incidental details as to which any injury caused is secondary (see the last sentence of section 14).

         

          Incidentally, it would be difficult to learn anything for the purposes of the issue before us, as the Respondents sought to do, from the above cited London Artists case [19], in which it was held that the words, "... on the face of it appears to be a plan..." were, in their special context, the determination of a fact rather than an expression of the writer's opinion. I doubt very much if this court would have so understood them. But the main point is that the argument concerning the classification of the publication as an expression of opinion was dismissed in that case, first and foremost, because it was raised for the first time in the midst of the proceedings. In any event, there, too, Judge Denning reached his conclusion about the classification of the publication as a totality of facts on the basis of "... a fair reading of the whole letter ...", that is, on the basis of an examination of the document as a whole.

         

          A similar approach, stamping a publication with its dominant hallmark and deciding its fate in accordance with its classification as an expression of opinion even when it contained some facts, found expression in Justice Brennan's opinion in the Sullivan case [38].

 

            C. With regard to the element of truth in an expression of opinion: Criticism of the functioning of a public authority may be aggressive and determined, uncompromising and overtly expressive of the writer's feelings, and it will be protected even if the writer drew wrong conclusions and made a mistaken evaluation, so long as the circumstances laid down in section 16(b) do not exist, that is:

           

"(l) the matter published is not true and he did not believe it to be true;

 

(2) the matter is not true and he had not, prior to publishing it, taken reasonable steps to ascertain whether it was true or not;

 

(3) he intended to inflict greater injury by the publication than was reasonable in defending the values protected by section 15."

 

            The burden of proof concerning section 16(b) is on the Plaintiff (C.A. 134/67, Eban v. Disenchik [15]; C.A. 250/69, [14]), and if the circumstances set forth in section 15 have been proved and the publication did not go beyond what was reasonable, it would not be sufficient for the Plaintiff to show that the publication was not true in order to overcome the presumption of good faith. In other words, it is not enough that the Plaintiff show, for example, that the expression of opinion concerning the conduct of a director general of a public company was not true, but he must also prove additional elements, collected in subsections (1) to (3) of section 16(b), in order to rebut the presumption of good faith. Therefore, there is no basis for the lower court's opinion that:

           

"the concepts of good faith and truth ... are bound together for purposes of the defense against defamation."

 

            With regard to the connection between expressions of opinion and the truth, we have nothing other than the provisions of section 16(b), according to which the absence of truth per se does not negate the defense of good faith, unless additional elements are present as enumerated in this subsection. The lower court's decision would have the effect of emptying section 16(b) of all meaning.

 

            As indicated in subparagraph B above, publications are classified according to their dominant character, so that even if incidental factual details of minor importance become interwoven with expressions of opinion, this would not affect the classification of the publication for purposes of applying section 15(4) of the Law, even if it transpires that some of the factual details are untrue, so long as there are other truthful elements in the publication upon which the expression of opinion was based.

           

            A similar idea appears in the provisions of section 6 of the English Defamation Act, 1952, which states that when the words about which the plaintiff complains are composed -

           

"... Partly of allegation of fact and partly of expression of opinion, a defence of fair comment shall not fail by reason only that the truth of every allegation of fact is not proved if the expression of opinion is fair comment having regard to such of the facts alleged or referred to in the words complained as are proved."

 

            D. With regard to the matter of reasonableness: A substantial part of the lower court's judgment is devoted to the dispute about the reasonableness of the Appellants' assertions. This, for example, is how the lower court reacted to the Appellants' assertion -

           

"if they [the Respondents] had decided to sell the car for reasons of public hygiene, what difference would it make what price they received for it? All that had to be ensured was that the car would fetch the proper price in the used car market."

 

The court said:

 

"As stated above, this assertion could be construed as the continuation of the above conclusions of the Goldberg agency employees or it could be construed as an expression of opinion on the part of the author of the article. It is irrelevant which of these is chosen since in any case it does not satisfy the test of reasonableness and reasonableness is a basic element of good faith" (My emphasis - M.S.).

           

            Following upon these words, the lower court set out in detail why it thought the appellants had erred in their conclusion concerning the price of the car and why it was preferable in the circumstances of the case not to have rushed to sell the car but to have continued to search for a buyer who would offer a higher price.

           

            It follows clearly that the lower court was mistaken about the nature of the good faith defense and the element of reasonableness included in it. Section 16(a) provides that the defendant will be presumed to have made the publication in good faith if the following two conditions are met: (a) the publication was made in one of the circumstances referred to in section 15 and (b) it did not exceed what was reasonable in such circumstances. The reasonableness demanded here does not mean that the opinion expressed in the publication must be the only, single and exclusive conclusion which can be drawn from the circumstances by pure logical reasoning. The condition not to exceed what was reasonable in the circumstances does not mean that in order for the publication to be protected it must contain only that one interpretation of the events, among several, which the court selects as the most reasonable. The element of reasonableness dealt with by Section 16(a) means that the publication should not diverge, in its wording and its relationship with the events upon which it is based, from every possible logical connection with the facts, such as if someone is called a robber and thief only because he was one day late in settling a debt. There is no attempt in the Law, even indirectly, to coerce any single uniform line of thought and it should not be interpreted as doing so.

           

            The defense of expression of opinion also does not fail because of the derogatory criticism or absence of objectivity in the publication and that does not derogate from its reasonableness. The fact that the publication's wording may not be to the taste of a moderate balanced person does not make it unreasonable. The court may not impose its taste and its logic on the publisher. It must leave room for the strong expression of opinions. The test is as laid down by Lord Esher:

           

            "Would any fair man, however prejudiced he may be, however exaggerated or obstinate his views, have said that...." (Merivale v. Carson 1887, 20 Q.B.D. 275, 291, [24]).

 

Lord Denning commented in similar vein:

 

"These comments are capable of various meanings.... One person may read into them imputations of dishonesty, insincerity and hypocrisy.... Another person may only read into them imputations of inconsistency and want of candour.... In considering a plea of fair comment, it is not correct to canvass all the various imputations which different readers may put on the words. The important thing is to determine whether or not the writer was educated by malice. If he was an honest man expressing his genuine opinion on a subject of public interest, then no matter that his words contained derogatory imputations: no matter that his opinion was wrong or exaggerated or prejudiced; and no matter that it was badly expressed so that other people read all sorts of innuendoes into it; nevertheless, he has a good defence of fair comment. His honesty is the cardinal test. He must honestly express his real view. So long as he does this, he has nothing to fear, even though other people may read more into it.... I stress this because the right of fair comment is one of the essential elements which go to make our freedom of speech. We must ever maintain this right intact. It must not be whittled down by legal refinements. When a citizen is troubled by things going wrong, he should be free to 'write to the newspaper': and the newspaper should be free to publish his letter. It is often the only way to get things put right...." (Slim v. Daily Telegraph, Ltd. (1968), 1 All E.R. 497, 503, [21]).

 

            14. In the matter before us - that is, the failure to prove the truth of a defamatory publication containing imputations of dishonorable and corrupt motives - the English precedents are noteworthy for their lack of uniformity and even contradictions. Contrary to the strict approach toward such publications and the tendency to grant a defense only to such publications which are founded in truth (as laid down by Justice Cockburn in Campbell v. Spottiswoode, 3 B. & S. 769, 776, 777, [25] on which my learned colleague, Justice Ben-Porat relied) the view of the law expounded by Justice Buckley in Peter Walker, Ltd. v. Hodgson (1909), [26], which differs to no small extent with the former opinion, is now the more accepted one. According to Justice Buckley:

 

"The defendant may nevertheless succeed upon his defence of fair comment, if he shows that that imputation of political bias, although defamatory, and - although not proved to have been founded in truth -, yet was an imputation in a matter of public interest made fairly and bona fide as the honest expression of the opinion of the defendant held upon the facts truly stated and was in the opinion of the jury warranted by the facts, in the sense that a fair minded man might upon those facts bona fide hold that opinion." (My emphasis - M.S.).

 

            That is to say, for this purpose, it is sufficient that a reasonable person could have reached the defamatory conclusion from the facts contained in the publication and that the facts on which he relied appeared in the body of the publication. In the opinion of the authors of the British Report on Defamation mentioned above, this approach clashes also with what was held in another judgment on which my esteemed colleague Justice Ben-Porat relied, that in Hunt v. Star Newspaper (1908) [27]. The opinion contained in the Walker case [26] was approved by the Commission and was also adopted by Gatley (7th edition, paragraph 728) and apparently is the accepted one today in England (paragraphs 164 and 166 of the Report and the judgments referred to therein).

           

            In light of the lack of uniformity in the judicial precedents, it is not surprising that the British jurists are displeased by the state of unclarity in the law of defamation in their country and that, for example, Lord Diplock (in the Slim case [21] referred to above) should conclude that

           

"... the law of defamation ... has passed beyond redemption by the courts."

 

These words should give us cause for extra thought before we draw upon the English precedents for the purpose of interpreting our own enacted law, whose principles are perfectly clear.

 

            All the less, therefore, is it important that we resolve the dispute between the parties before us whether the said Hunt precedent [27] is still valid and binding. In any event, the said English Commission expressed some doubt about this (paragraph 164 of the Report) and we need not re-examine its opinion.

           

            15. A. As can be gathered from the lower court's judgment, it set true cumulative conditions for allowing the defense contained in section 15 of the Law:

           

(a)        the published matter, both facts and opinions, must be true and

 

(b)   the expression of opinion must be reasonable in the eyes of the court sitting in judgment, with regard both to the considerations on which it is founded and to its logic.

 

            The court thus whittled down the defense under section 15 so critically as to empty it of all content: because, in any event, if the truth of the publication can be proved, then there is no longer any need to resort to the defense under section 15, and the lower court's interpretation of the Law would make this section superfluous. As was said in the above Grech case [23], (at p. 281):

           

"otherwise, it seems to me that the defence of fair comment would be almost valueless; for if the jury found that the words were not defamatory or - being defamatory - were true, then the defence of fair comment would not be needed."

 

            But the legislature did not commit the sin of tautology, as would follow by implication from acceptance of the lower court's theory. The function of the defense under sections 15 and 16 is substantially different from that described by the District Court: as explained above, the purpose is to open the door to criticisms and to protect them against defamation actions, even if it transpires that the opinions expressed are not founded on truth and even if the thinking expressed therein is not consistent with what the court considers logical. The provisions of sections 15 and 16 do not invest the courts with the power of judicial censorship of truth and logic. They are a set of cumulative conditions whose aim is to deny the defense of good faith only to malicious publications, that is, those made in the knowledge that they were false or in reckless disregard of whether they were false or not.

 

            B. The clear nature and content of the extracts from the publication, quoted above in paragraph 12, which were the subject of the complaint, render them obviously expressions of opinion - that is, they are the author's conclusions founded on a set of factual particulars. This is their dominant characteristic, even if here and there certain factual assertions of secondary importance may have been attached to them. Hence, we must examine these extracts in the light of sections 15(4) and 16.

           

            Even if these ancillary facts contain inaccuracies, these are so secondary in their meaning and their importance that there is nothing in them to change the writer's conclusion. Similarly, I fail to grasp the importance of the claim that since the car was returned to the Goldberg agency on 29.11.1966 (not immediately after the Respondent's public statement of 8.11.1966) it was in the agency's custody only for three and a half months instead of "more than four months" as said in the article. So, too, it is of no importance that it was not "the agency's clerks" who drew the conclusion described in the article, but only one clerk, since this particular clerk was the one directly responsible for carrying out the assignment to sell the car, who dealt with the matter directly until he concluded what he concluded and reported that his assignment was finished. Who was more familiar with the matter than he and more competent to convey his impressions of the matter? The court concluded that his statements were not merely some malicious irrational personal speculation when it learned that many of the Electric Corporation's employees also thought that the offer to sell the car was a bluff. The factual description of the offers for sale which preceded the publication of the article is well founded and the lower court made no finding rejecting Mr. Sapir's testimony on this point. Moreover, Mr. Goldberg's letter of 15.3.1967, on which the Respondents relied, also shows that there were offers from car dealers "who thought they could get the car at this price," and the price set forth in the letter is "24,000-25,000 Israeli pounds".

           

            C. As stated, these extracts teach us that, save for the factual assertions to which we alluded above, we deal here with the expression of opinion, that is, conclusions drawn from a set of factual particulars, some of which were mentioned in the article and some not. The reasonable reader could not have mistakenly understood that these extracts conveyed factual information about a particular, express decision of the corporation not to sell the car, but it is evidently clear that the author drew conclusions, which seemed reasonable to him, from the facts of the case. If there remains any doubt whatsoever about whether this is anything more than an expression of opinion, then the words

 

          "if they had decided to sell the car for reasons of public hygiene, what difference would it make what price they received for it"

           

emphasize that this was a conclusion and an analogy, even argumentative in style, according to the author's logic, which sought to pinpoint the inconsistency in the acts and omissions of the corporation and its representatives.

 

            D. The claim that the author's conclusion is incorrect does not deprive it of the defense provided in section 16, since once the presumption of good faith arises, the Respondents must prove the existence of one of the circumstances set out in section 16(b), if they wish to rebut this presumption, and in this they did not succeed at all.

           

            With regard to section 16(b)(1): In the light of Mr. Amir's testimony, there is no basis to attribute to the fourth Appellant the lack of faith in the publication's truthfulness. On the contrary, Mr. Amir apparently believed sincerely in the truth of his impression and conclusions and conveyed them to the fourth Appellant. The lower court was of the opinion that this did not add an aura of veracity to the author's conclusion, but that is not so. The circumstances as a whole gave Mr. Amir's story the image of truth and reason, since the corporation had shown no initiative and outstanding passivity in everything related to the sale: no offers of sale were published in the press and no notice of tenders was announced, no price was fixed for the car by the Respondents, the offers made received no attention and no attempt was made to negotiate with the bidders in order to persuade them to raise their offers. Instead of cleaning the car, which was covered by dust, to impress potential purchasers, it was confined, to the Respondents' knowledge, in a warehouse in which it disappeared completely from view and the passing of time reduced the prospects of selling it. In this last connection, it was immaterial whether the beginning of the 1968 model year had already arrived, or whether it was a few months off, as, in any event, the natural passage of time, if not halted, brought the former event closer every day, and the aging process of the car, which was a 1966 model, continued to progress. All of these facts, which were mentioned in part in the article, gave Amir's words the appearance of authenticity, and this had direct implications concerning the conclusion as to the author's good faith.

 

            Nor can one charge the fourth Appellant with failing to take reasonable measures to discover whether the publication was true, since he approached the first Respondent whose spokesman refused to speak to him. The lower court was of the opinion that since the fourth Appellant was well aware of the reasons for this refusal, he should have sought alternative sources of information in order to fulfil the obligation set forth in section 16(b)(2). I do not see any basis for this opinion. The corporation's refusal, whatever its real reason may have been, could only have added to the suspicions in the circumstances, and that is a considered risk which anyone who refuses to react must take. Whoever approaches a public authority with a request to react is not obliged to interpret silence on the part of the authority to its advantage, but is entitled to suspect that there is something behind it. In any event, anyone who refuses to react cannot complain afterwards that the publisher did not find an alternative source of information in order to circumvent the barrier he himself created by his refusal.

           

            The court is not one of the contesting parties but must examine whether the presumption of good faith arises or whether the Plaintiff has succeeded to rebut it, and to this end it has at its disposal the criteria laid down by Law. From the wording of section 16(b)(2) it follows, inter alia, that the plaintiff may try to prove the absence of good faith by producing evidence that the publisher "had not, prior to publishing it [the matter published], taken reasonable steps to ascertain whether it was true or not". But this provision of the Law does not merely provide a way to rebut the presumption. It also provides ground to infer that if the Defendant took steps in advance to ascertain whether the matter published was true or not, that is a sign that he has passed one of the good faith tests, and the defense remains valid as long as it is not rebutted in one of the other ways laid down in section 16(b).

 

            I would like to note, incidentally, that I very much doubt whether the spokesman for a public authority may take it upon himself within the scope of his duties to apply sanctions against any section of the media. When an employee of a public authority is entrusted with the task of conducting public relations with the authority's clientele, he cannot behave, in the course of his duties, as though he is in his, or his employer's, own private domain. The justification for establishing such a function lies in the existence of the public's right to receive information about what is happening and it is only proper for the spokesman to behave accordingly.

 

            E. The District Court excluded from its considerations the criticism aimed against the very acquisition of the car. In this, too, I take issue with it. The description of this episode at the beginning of the article was not alleged to be defamatory, but when examining whether facts were presented which furnish a basis for the expression of the doubt and suspicion in the article, these matters should not be taken out of their general context. It is reasonable to assume that it was this very event which first and foremost triggered the doubts about the Respondents' judgments: when office holders in a government company have seen fit to provide themselves with a luxury, eye-gouging car in a period of recession, or before or after one, instead of meticulously observing the rules of modesty, which obligate them, and when they have persisted in denying the justice of criticism, then doubts and even scepticism may arise whether they had any proper sense, in this context, about what is proper and what is not, and about what is permissible and what should not be done. When all the events are links in one chain, it would be artificial if one did not recognize this element, too, as a possible factual basis for the criticism in the article. As already noted above more than once, the author does not have to convince the court of the justice of his evaluation but has only to show a factual foundation for his opinions and suspicions; and even if we might have come to a different conclusion, that is not sufficient in itself to undermine any conclusion about the author's good faith.

 

            F. Finally, the Respondents did not succeed in founding the argument based on section 16(b)(3).

           

            16. The Respondents could have put the Appellants' good faith to an immediate test had they taken action according to the provisions of section 17 of the Law which provides:

           

"(a) Where defamatory matter has been published in a newspaper, the plea of good faith shall not avail the editor of the newspaper, the person responsible for the publication of the defamatory matter or the publisher of the newspaper if, having been asked by the injured party or by one of the injured parties to publish a correction or denial on behalf of the injured party, he has not published the correction or denial in a manner as similar as possible to the publication of the defamatory matter and within a reasonable time from the receipt of the demand, provided that the demand was signed by the injured party, that the correction or denial contained no defamatory or other illegal matter and that the length of the correction or denial was not greater than was reasonable in the circumstances of the case.

 

(b) If the newspaper appeared less frequently than once a week, the correction or denial should also be published, upon demand of the injured person, in a daily newspaper."

 

            It is superfluous to add that section 17 is of the nature of a counter-measure against the burden of proof created by section 16(b) and is an efficient instrument for the immediate correction of the injury caused by a defamatory publication. Action in accord with section 17 in the case under consideration could have led to the immediate presentation of the matter in a true light, without waiting for the completion of legal proceedings, ten years later.

           

            17. The article expressed the author's beliefs and those of his sources of information and imputed to the Respondents an intention which they apparently did not have. But that in itself was not sufficient to deny them the defense of good faith anchored in sections 15(4) and 16(a) of the Law.

           

            These provisions of the Law are expressly designed to protect, also, those expressions of opinion which it transpires afterwards were not the truth, as long as the defense of good faith, bolstered by the presumptions in the Law, is available to the publisher of the defamatory matter. It is our task to maintain this defense, in practice and according to the letter of the Law and its intention and the tendencies that lie at its base. I would, therefore, allow the appeal and dismiss the judgment of the District Court.

           

Berinson J.:

 

            I concur with Justice Shamgar's opinion that the appeal should be allowed. Without entering into the details of his reasons and my own for justifying this result, I would like to clarify, in a few remarks only, my general stand in this matter.

           

            My first remark concerns the supreme value that must be accorded to the freedom of expression of the individual with respect to criticism of the conduct of a public functionary in a matter of public interest. In this matter, I understand there is no difference of opinion between my distinguished colleagues, and I join them. Nonetheless, I must repeat and emphasize what was expressly held by this court in the previous proceeding before it (C.A. 213/69, Electric Corporation v. Ha'aretz), that the press as such has no special standing and privilege vis-a-vis anyone else and it must take equal care not to violate the rules of the game laid down in the Law Forbidding Defamation, In Justice Witkon's words:

           

            "Where the ordinary citizen is entitled to regard himself as obliged to speak in criticism of another, a newspaper is also entitled to do so. Like the one so the other, no more and no less."

           

            My second remark is that one should attach special importance to the fact that the journalist, Mr. Kotler, drew both the information and the conclusion that he presented in his article, from a source which was more competent than any other to judge the Respondents' behavior in connection with the sale of the car - none other than the sales manager of the agency to which the car was given for sale - and the principal matters were given in his name. It is true that repetition of a libel is not forgivable and, on the contrary, repetition of a libel in a newspaper can greatly exacerbate matters. But in the case before us, account should be taken of the fact that the publication was based on information received from a competent person who was well-acquainted with the matter and the author himself, who was the Transport Correspondent for the newspaper, was not a "lightweight" and he had asked for the Corporation's comments on the matter before publication and was snubbed. There is no room for doubt that the publication was made in absolute good faith and without malicious intent, and good faith is the main basis for the defense under section 15 of the Law. Great support for the opinion expressed in the article and for the criticism can be found in the Corporation's employees. According to Mr. Kantor, senior employees of the Electric Corporation also thought that the car was returned for sale in order to deceive the public because of the criticism that had been leveled against its purchase. It is true that Mr. Kotler did not know about this at the time his article was published, but it does strengthen the reasonableness of the publication greatly, so that it may benefit from the presumption contained in section 16(a) of the Law to the effect that it was made in good faith. As Justice Shamgar explained in his judgment, the Respondents did not succeed in rebutting this presumption on the strength of one of the grounds contained in section 16(b) of the Law, and the appellants were accordingly entitled to the defense under sections 15(4) and 16(a) of the Law.

 

            Finally, I agree that from a legal point of view the author would have done better to have separated facts from opinions, to have commenced with facts and ended with an opinion; and he did not do that. In one part of the article he also mixed and joined together facts and opinions. To my mind this is not significant. What is important is whether the article established an adequate factual foundation for the conclusions expressed and the criticism contained in it. The criticism itself could be exaggerated and unjustified, and this would not render the publication unreasonable. I agree with Justice Shamgar's analysis of the facts and his finding that basically they are correct, and that any inaccuracies are of secondary importance. In this conection I concur with the words of Lord Denning in Slim v. Daily Telegraph, Ltd. (1968) 1 All E.R. 497, 503, [21] quoted by my colleague, which also reflect my general approach in this matter of expression of opinion in good faith about the conduct, acts or omissions of a public functionary in a matter which, according to all opinions, is of public importance.

 

            I therefore agree that the appeal should be allowed.

           

Ben-Porat J.:

 

            On 20.9.1966, the Israel Electric Corporation (the first Respondent) and its ex-Director General, Mr. Y. Peled (the second Respondent) bought a Chevrolet Impala car, model 1966, from the Leo Goldberg Company (the Goldberg agency) for Mr. Peled's use, to replace a similar model 1963 car, which had been in use until then. The price of the car, after a 500 Israeli pound reduction, was 33,500 Israeli pounds.

           

            On 22.10.1966, there appeared an article in the Ha'aretz newspaper which leveled severe criticism against the acquisition of a luxury car with public money during the period of recession which reigned in the country at the time. In light of the public criticism - which is not the subject at issue before us - the Respondent published a notice in the Ha'aretz and Maariv newspapers, on 8.11.1966, in which he sought to justify the purchase on economic grounds because of the condition of the old car, but stated, nevertheless, that:

           

          "I have decided to sell the new car and to continue to use the old one - so as to remove any and all cause for criticism, even if it is unjustified."

           

            On 17. 11. 1966, at a meeting of the Electric Corporation Board of Directors, a majority of the members approved of the Respondent's decision to sell the car and of his notice to the public to that effect. The Chairman even praised the Respondent "for the courage of his decision and the good example he had given which will have a positive response and will improve the Corporation's public image."

           

            On 29.11.1966, the car was transferred to the Goldberg agency to be sold. Before it was transferred, the Corporation offered to return the car to the Goldberg agency at a loss of several thousand pounds, but the agency refused to accept it. Nevertheless, they did agree to accept it for resale, promising to find a suitable buyer. An agreement was reached between Mr. Goldberg and Mr. Shagal, the Corporation's national transport manager, according to which Goldberg would inform Shagal about the price offered by any potential buyer so as to receive his approval.

 

            While the car was at the Goldberg agency, Mr. Yair Kotler, a journalist, published an article in Ha'aretz under the headline "The Electric Corporation Director General's Car". The Respondents had no complaints about the first part of the article, which we will skip over. But they found defamatory matter in the second part of the article (which will be quoted later) on which they based their action in the Tel Aviv District Court against the Ha'aretz newspaper, Messrs. Gershon Schocken and Eliahu Salpeter, and against the journalist, Mr. Yair Kotler (the first three hereinafter "Ha'aretz" and the fourth - Kotler). The action was allowed and hence the appeal before us, which concerns the allowing of the action and not the amount of the damages.

           

            2. At the beginning of the article it was pointed out that the price paid by the Corporation for the car was 33,500 Israeli pounds. After discussing the public criticism of the acquisition of the car and the Respondent's notice of his intention to sell it, the article goes on to say:

           

"Mr. Yaacov Peled (70), who is due to retire in October, resumed using his old car, a 1963 Chevrolet Impala.

 

The new car, in which Mr. Peled had already driven about 6000 kilometers, was returned to the agent in Tel Aviv, Mr. Leo Goldberg, so that he should sell it and return the proceeds to the Corporation."

 

            After this begins the part which the District Court thought condemned the Respondents as liars, not serious and cheaters (paragraph 28 of the judgment):

           

"More than four months have passed since the car was returned to the Goldberg agency, supposedly for sale, but the Electric Corporation is not really interested to get rid of the car. It hopes that after some time, when the public will have forgotten about the incident, the car will be returned to serve the retiring Director General, for it will then be a "used" 1966 model, since the end of the 1967 model year is approaching.

 

The Goldberg agency was instructed to sell the car, subject to the Corporation's prior approval. After considerable effort, the agency's staff found a purchaser who offered 24,000-25,000 Israeli pounds for the car. An official in the Electric Corporation's Transport Department refused to approve the sale. He advised the agency that even if it found a buyer for 28,000 pounds (which will never happen) they would have to receive his approval of the sale.

 

From this, the Goldberg agency's clerks concluded that the Electric Corporation was not interested in selling the car and was only interested in gaining time until the public furor would die down, since, if they had decided to sell the car for reasons of public hygiene, what difference would it make what price they received for it? All that had to be ensured was that the car should fetch the proper price in the used car market.

…

 

The Ministry of Development should instruct the Electric Corporation management to sell the car without any further maneouvering."

 

            The paragraph which was omitted (indicated by the three dots), in which the Respondents found nothing wrong, says:

           

"It is not so easy to sell a luxury Impala such as that ordered by the Corporation for its Director General, Mr. Peled: with an automatic gear, an imported radio, an electric antenna and other luxury items which raise its price several thousand pounds above the standard price."

 

            3. The Appellants' learned counsel, Advocate Lieblich, argued before us that the District Court erred in several respects and that it should have accepted one of the two pleas which had been argued in defense: "truth" or "an expression of opinion in good faith". His arguments will be analysed, to the extent required, later. At this stage, I will deal with only one of them:

 

            At a certain stage in the proceedings, the Respondents petitioned the court to strike out one of the Appellants' defense pleas in limine. The issue went as far as the Supreme Court, which in fact ordered it stricken out (in C.A. 213/69). In the judgment the Supreme Court quoted, amongst other things, the following statement by the lower court judge in his judgment (paragraph 8):

           

"The insult which is the subject of the action is the condemning of the Appellants as liars and not serious people. The Appellants did not sue with regard to the first article which criticized the acquisition of an expensive new car during the period of recession. They sued with regard to the second article which imputed to them dishonesty and deceit."

 

            Later on in his judgment, which is the subject of the appeal before us, when discussing the question whether "the publication was 'defamatory' within the meaning of the Law", the District Court judge says (paragraph 27):

           

"After the Supreme Court held as it did in its judgment quoted above and said that the article 'condemned the Appellants [the Plaintiffs] as liars and not serious people', it would appear that I need not say anything further and am not required to decide anything in this matter."

 

            Advocate Lieblich argues that the learned judge was mistaken in regarding himself as bound by some supposed holding of the Supreme Court when in fact that court had merely set forth the Plaintiffs' arguments and nothing more.

           

            There is no doubt that the language of the paragraph quoted above supports this argument. However, not only did the learned judge later interpret the article independently and arrive at the same conclusion, but the Plaintiffs (the Respondents) made it clear in the lower court that they were not claiming that the writing had any special meaning, but were relying on its ordinary, natural meaning. I also have no doubt that if the Director General of a public institution announces publicly that he has decided to sell the car at his disposal, while handing it over for sale only in theory, with the intention of taking it back as soon as the incident will be forgotten, this would be improper, irresponsible conduct, tainted with prevarication and deceit. This would, to the best of my understanding, also be every reasonable reader's interpretation of what was written. As Lord Diplock said in the case of Slim v. Daily Telegraph (1968) 1 All E.R. 497, 501, 507, [21]:

 

            "This court is in as good a position as the judge to determine what is the natural and ordinary meaning of the words."

           

            The question is not, therefore, whether what was written imputes to the Respondents the conduct described above, but whether it was permissible for the Appellants to impute such conduct to them, because it is true or because it is an expression of opinion in good faith on a public matter.

           

            4. As is well known, the difference between these true defenses is considerable. As to the defense of truth, section 14 of the Law Forbidding Defamation, 5725-1965 (hereinafter the Law) puts the onus on the Defendant to prove that the expressions he used, which besmirch the Plaintiff s good name, reflect reality. The Defendant "established" a fact and he must show that it is true (save in the case of an incidental detail, as provided in the last part of section 14).

           

            On the other hand, the legislature's approach to the expression of opinion in good faith in a matter of public interest is very liberal, since freedom of expression and discussion concerning public matters constitutes one of the basic principles of every advanced society. Every unjustified limitation on freedom of expression necessarily prejudices this sacred principle which must be protected against any infringement.

           

            This defense is similar to the well-known English defense of "fair comment", although we must remember that we have before us an original Israeli law which must be interpreted according to its contents. We can, therefore, have recourse to an English precedent only to the extent that what it says is consistent with the provisions of our law and is acceptable to us as an interpretion of those provisions.

           

            As to the extent of liberality of the "fair comment" defense, I agree with Lord Esher in the well-known case of Merivale v. Carson (1887) 20 Q.B.D. 275, 191, [24]:

           

"Every latitude must be given to opinion and to prejudice and then an ordinary set of men with ordinary judgment must say whether any fair man would have made such a comment.... Mere exaggeration, or even gross exaggeration, would not make the comment unfair. However wrong the opinion expressed may be in point of truth, or however prejudiced the writer, it may still be within the prescribed limit."

 

The determining question according to him is:

 

"Would any fair man, however prejudiced he may be, however exaggerated or obstinate his views, have said that which this criticism has said of the work [I would add, or conduct] which he criticized?"

 

            This test appeals to me, but subject to Lord Porter's comment in Turner v. Metro-Goldwyn-mayer Pictures (1950) 1 All E.R. 449, 461. [228] that one should exchange the word "fair" to "honest". The exaggeration, the obstinacy and the prejudice of the publisher, which do not necessarily deny the defense to the criticism, are inconsistent with the concept of "fairness", but are not inconsistent with the concept of "good faith", which is nothing other than honesty.

           

            I find support for the test laid down by Lord Esher, on the one hand, with the change suggested by him, on the other hand, on page 38 of the Report of the Committee on Defamation, of March 1975. See also Thomas v. Bradbury, Agnew & Co. (1906) [29], and Lord Attenborough in Carr v. Hood (1808) 170 E.R. 983, 985, [30].

           

            This approach accords with the wording of section 15(4) of the Law, but at the same time attention must be paid to the presumptions concerning the presence or absence of good faith in section 16 - that is, that the publication "did not exceed what was reasonable under such circumstances".

           

            What justifies the great difference between the stringent demand that truth be proved, in section 14 of the Law, and so liberal an attitude toward expressions of opinion in good faith? Why, for example, should a prejudiced critic be protected, even if his criticism be exaggerated and his language biting, only because he honestly believed in the opinion he expressed, whereas someone who made a factual assertion (as opposed to an opinion) will suffer the consequences, even though his error is honest, and even reasonable?

 

            The explanation can be found in very old English judgments to the effect that a person who relies on "the expression of opinion in good faith" must bring the factual basis for his opinion to the reader's attention - and those facts must be true. In this way he enables the reasonable reader to judge for himself whether the opinion is well-founded or not. In the words of Judge Wilde in Popham v. Pickburn (1862) 158 E.R. 730, 733, [31]:

           

"To charge a man incorrectly with a disgraceful act is very different from commenting on a fact relating to him truly stated, - there, the writer may, by his opinion, libel himself rather than the subject of his remarks."

 

            A second, logically necessary, demand is that it be made sufficiently clear in the publication what is claimed as fact and what constitutes an expression of opinion. Therefore, if the subject matter of the criticism is a book, an artistic creation, a newspaper and the like - then, since they are available to the interested reader, it is sufficient if the publication refers to that source and it is not expected that it actually produce the creation. As Lord Porter commented in Kemsley v. Foot and Others (1952) 1 All E.R. 501, 505, [32]:

 

"Accordingly, its contents and conduct are open to comment on the ground that the public have - at least - [my emphasis] the opportunity of ascertaining for themselves the subject-matter on which the comment is founded."

 

            The distinguished judge later refers approvingly to Odgers on libel and Slander (5th ed. 1911). Since the passage which he quotes in his judgment is appropriate, in my opinion, to our case, I shall reproduce it here, while emphasizing those words which appear to me of particular importance:

           

            "Sometimes, however, it is difficult to distinguish an allegation of fact from an expression of opinion. It often depends on what is stated in the rest of the article. If the defendant accurately states what some public man has really done, and then asserts that 'such conduct is disgraceful,' this is merely the expression of his opinion, his comment on the plaintiff’s conduct. So, if without setting it out, he identifies the conduct on which he comments by a clear reference. In either case, the defendant enables his readers to judge for themselves how far his opinion is well-founded; and therefore, what would otherwise have been an allegation of fact - becomes merely a comment. But if he asserts that the plaintiff has been guilty of disgraceful conduct, and does not state what that conduct was, this is an allegation of fact for which there is no defence but privilege of truth. The same considerations apply where a defendant has drawn from certain facts an inference derogatory to the plaintiff. If he states the bare inference - without the facts on which it is based, such inference will be treated as an allegation of fact. But if he sets out the facts correctly, and then gives his inference, stating it as his inference from those facts, such inference will, as a rule, be deemed a comment.

 

But even in this case the writer must be careful to state the inference as an inference, and not to assert it as a new and independent fact; otherwise, his inference will become something more than a comment, and he may be driven to justify it as an allegation of fact."

 

            I see no need to take a stand in this case on the question of whether it is necessary to detail all the facts on which the critic's opinion is founded. At least from Lord Oaksey's judgment in the above Kemsley case it follows that there is no such obligation and the same has been understood to be Lord Denning's opinion in London Artists, Ltd. v. Littler (1969) 2 All E.R. 193, 198, [19]. In the absence of any such express demand in the provisions of our Law, I am prepared to assume (without reaching any final decision on the matter) that here, too, there is no obligation to publish all the facts which led the publisher to form the opinion he expressed. However, at the same time, one must always remember the idea that lies at the basis of the substantial difference between the defense of "truth" and that of "expression of opinion in good faith". As explained above, the justification for the broad scope of the latter defense lies in the reasonable possibility afforded the reading public - and the subject is after all of interest to it - to judge for itself if what appears in the facts detailed in the article leads to the opinion founded on those facts. Hence, the double obligation imposed on the person seeking the protection of this defense: first, to reveal at least the main facts on which his opinion is founded; and, second, to make it clear, to a sufficient degree, to the ordinary reading public that what is derogatory to the person's good name is purely an expression of opinion. Therefore, if the general impression made by the publication is that the derogatory part is a determination of fact, or that it is an expression of opinion founded on extrinsic facts within the publisher's knowledge, then the defense of "expression of opinion in good faith" will not be available to the publisher, and only the defense of "truth" (or "permitted publication" within the meaning of section 13 of the Law) will be at his disposal. Concerning an opinion ostensibly founded on extrinsic facts I refer to Judge Fletcher Moulton's judgment in Hunt v. Star Newspaper Corp. (1908), [27] , which is still valid.

 

            The question arises whether the publisher of defamatory matter can resort to the argument that he received his information from a reliable source, or that he relied on rumors whose credibility he believed. The answer is in the negative, although when the court fixes the damages, it may take into consideration, in the defendant's favor, the fact that this was a repetition of something said before and the publisher had indicated the source on which he relied (section 19(1) of the Law).

           

            I emphasized the word "may" because sometimes the very repetition exacerbates the injury. In this connection, I am in accord with the words of Judge Morris in Lewis v. Daily Telegraph Ltd. (1963) 2 All E.R. 11, 161-167, [20]:

           

            "To say that something is rumoured to be the fact is, if the words are defamatory, a republication of the libel. One cannot defend an action for libel by saying that one has been told the libel by someone else, for this might be only to make the libel worse.... Blackburn J. in Watkin v. Hall (1868) L.R. 3 Q.B.D. 396, 401 [33] ."

 

Further on he said:

 

"If one repeats a rumour one adds one's own authority to it, and implies that it is well founded, that is to say that it is true."

 

            At any rate, if the publisher does not make it absolutely clear that he is only repeating what someone else said then it will not even be a consideration for reducing the compensation to be awarded.

           

            Finally, before I analyse the article which is the subject matter of the issue before us, I wish to concur with those who distinguish between expressions of opinion on matters of taste, such as the quality of a work of music, a literary work or some known policy, and an expression of opinion concerning motives or intentions. Although a public functionary exposes himself to the criticism of the public by virtue of his functions, unfounded defamation of him should not be permitted. The classical form of this rule can be found in the words of Cockburn C.J. in the well-known case of Campbell v. Spottiswoode (1863) 122 E.R. 288, 290 [25]:

           

"But then a line must be drawn between criticism upon public conduct and the imputation of motives by which that conduct may be supposed to be actuated; one man has no right to impute to another, whose conduct may be fairly open to ridicule or disapprobation, base, sordid or wicked motives - unless there is so much ground - - for the imputation that a jury shall find, not only that he had an honest belief in the truth of his statements but that his belief was not without foundation. -"

 

            This approach is consistent with the language of section 15(4) of the Law: "the publication was an expression of opinion on the conduct of the injured party ... in connection with a public matter ... as revealed by such conduct". If the motive or intention of the injured party are not "revealed" by such conduct, the publisher's good faith will not avail him (here, too, save with respect to the amount of compensation to be awarded - section 19(2)).

  

                      5. I have examined the article as a whole, based on the above legal analysis, and have reached the conclusion that the Appellants' plea based on the defense of "expression of opinion in good faith" is not acceptable for several reasons:

         

          A. The Respondents' intention to deceive the public was presented in the article as an existing fact and not as the expression of the author's opinion based on facts presented. The words "supposedly" and "actually," which are not qualified in any manner whatsoever, appear in the first paragraph of that part of the article on which the action is based, as part and parcel of the other facts which precede and follow them.

         

          I have no cause for assuming, as a real possibility, that the newspaper's reading public, for whom the article was intended, understood, or could have understood, from a perusal of the whole article that there was any room for doubt about the Respondents' bad intentions. The article in this case is completely different from the letter published by a person lacking any legal education in Slim v. Daily Telegraph, Ltd. (1968) [21]. There, a lawyer who was the legal adviser of a local authority, signed an order prohibiting the passage of vehicles, including motorcycles, on a certain road, and then, after joining a certain company, changed his position and argued that the company was entitled to use the road for its lorries. The Respondent wrote in his letter that in light of the lawyer's conflicting opinions, which varied according to the interests of his clients, one could not disagree with those who view such conduct with a measure of cynicism. The lawyer argued that the readers could interpret these words as referring to conduct unbecoming to his profession. The court held, rightly with all due respect, that the deciding factor was not the interpretation of one particular reader or another but the fact that this was an expression of opinion in good faith in a matter of public interest. Each reader was given the opportunity, on the strength of the conduct described, to judge for himself whether the comment was well-founded or not and the critic could not be held responsible for others' opinions. Furthermore, even if the writer expressed himself in a rough and unsuccessful manner and even if he were prejudiced against lawyers as such, that would still not remove the matter from the defense of criticism in good faith.

         

            The present case is not similar. Rather, it resembles to some extent, despite many differences, the subject matter of the above London Artists case [19]. Four leading actors announced, separately but at the same time and in the same language, that they were resigning their posts. Such an occurrence was unprecedented at that time in the theatrical world and could have led to the termination of the production which the defendant had been presenting very successfully for two years in a prestigious theater. Some time before the letters of resignation were received, the defendant was asked by the management to move the production to another, more modest, theatre, but he refused to do so unless he were offered attractive consideration. The defendant was convinced that the "combined" resignation after his refusal was nothing more than a conspiracy against him in order to effect his departure from the theater. He was so convinced of this that he organized a press conference at which he read his reply to the actors who had resigned. In his letter to one of the actresses (that was quoted in the judgment) he complained that she had not seen fit to come to him

           

            "before being a party to what, on the face of it, appears to be a plan to close the run of 'The Right Honourable Gentleman'...."

 

            Despite the guarded language (at the beginning of the letter), the court decided, upon a reading of the whole letter, that the allegation of a plot was a statement of fact. In the words of Lord Denning:

           

"... on a fair reading of the whole letter, I think the allegation of a plot was a statement of fact. The first paragraph runs in guarded language 'it appears' and the fourth paragraph says 'in other words', but the last paragraph speaks of 'the combined effort'. Reading the letter as a whole, I have no doubt that it stated as a fact that there was a plot ...."

 

            Edmund Davies L.J., as well, regarded the plot as a statement of fact, the fruit of the defendant's invention, and quoted from the above Hunt case [27], as a rule with which he concurred, that an expression of opinion must appear as an expression of opinion and must not be so entangled with facts that the reader cannot distinguish between them.

           

 Incidentally, the very reliance on the Hunt judgment [27] in 1969 undermines the Appellants' counsel's argument that its ruling no longer holds.

 

            In our case, the impression made by the first paragraph described above is not weakened, and is certainly not negated, by a reading of the continuation. On the contrary, even the few facts in the second paragraph (on which I shall tarry later) are connected mainly, if not only, with the paragraph after it:

           

          "From this, the Goldberg agency's clerks concluded that the Electric Corporation was not interested in selling the car and was only interested in gaining time until the public furor would die down ...."

           

            The words "from this" indicate that the facts in the previous paragraph are what moved those same employees to reach their conclusion.

           

            It follows that the first paragraph - in which there is no hint of reliance on someone else's conclusions - appears as the correspondent's factual finding and, in my opinion, it must therefore be regarded as such despite the fact that he actually relied (as appeared from his testimony) both on the information from, and the conclusion of, the Goldberg agency's sales manager. The repeated reference (later in the article) to the conclusion of the "employees" (in the plural) does not (as should be recalled) relieve Mr. Kotler of his responsibility.

           

            B. Even if I should assume, contrary to my view, that Mr. Kotler's imputation that the Respondents intended to deceive the public is an expression of opinion in good faith, this would not change the conclusion which I reached. The reason is that there must always be some mutual relationship between the facts and the opinion expressed. True, it is not necessary that the court's opinion be more lenient than that contained in the publication. Nor does it matter that different readers could draw different conclusions from a reading of the article. But as was stated in the interesting article, Van Vechten Vieder, Freedom of Public Discussion, (1909) 23 Harv. L. Rev. 412, 424:

           

          "... it must not introduce new and independent defamatory matter, or draw inferences or conclusions wholly irrelevant or out of all proportion to the given facts which supply the basis of comment."

           

            (And see also McQuire v. Western Morning News Co., Ltd. (1903), [34].)

           

            The absence of any such minimal connection converts what is assumed to be an expression of opinion into a fact whose truth has to be proved.

           

            In London Artists [19], there was a fortuitous combination of several unusual events which led the respondent to believe in all honesty that the plaintiffs had plotted against him. If he had been required to prove the truth of his allegation (as he attempted to do initially) his defense would very soon have foundered as, in fact, there was no connection between the events. But when presenting these facts to the reasonable reader, before the circumstances were clarified, some persons might - perhaps - have argued that some of the readers could have suspected a plot, as the respondent did. It should be remembered that in the case of an expression of opinion, the defense will not fail merely because in fact it was not true: Merivale v. Carson (1887) 20 Q.B.D. 275, 281, [24]. Lord Denning held, in the said judgment, that there was not a sufficient mutual relationship between the events and the conclusion concerning a plot, so that the defense of criticism in good faith was not applicable to the case.

           

            All the more is this so in our case. Even if the Respondent erred by conditioning the sale upon its own prior approval and by not accepting the buyer's (singular) offer of 24,000-25,000 Israeli pounds, and by declaring that even an offer of 28,000 pounds would require its approval, this did not provide sufficient grounds for the conclusion that the whole affair was bluff and deception. It is most certainly permissible to criticize the manner in which an institution chooses to sell its vehicle and the fact that it sought an unrealistic price (on the assumption that the price of 28,000 pounds at a time of recession was such), but from this to the conclusion contained in the article is a far cry. Incidentally, the testimony of the experts concerning a realistic price at the time was contradictory (see Orbach at page 237 and Gonen at page 220). It should not be forgotten that the article stated that the car had cost the Respondent 33,500 pounds and that the Respondent had used it for only a very short time and had driven only 6000 kilometers. In the circumstances, since the car was almost new, is the reluctance to lose more than 5,000 or 5,500 pounds, so extraordinary as to justify an imputation of deceit and prevarication? It should also not be forgotten, as was mentioned in the article, that the Respondent had published his decision to sell the car in two newspapers (Ha'aretz and Maariv). Very strong evidence was required in order to refute the sincerity of the Respondent's intention, as appears prima facie from such a notice, to adhere to his public promise. As said in Odgers, 6th ed., at p. 162:

 

"... the distinction cannot be too clearly borne in mind between comment or criticism and allegations of fact, such as that disgraceful acts have been committed or discreditable language used. It is one thing to comment upon or criticize, even with severity, the acknowledged or proved acts of a public man, and quite another to assert that he has been guilty of particular acts of misconduct."

 

            C. It may be noted that there are inaccuracies in the facts detailed in the article whose accumulated weight is not negligible, some of which even raise prima facie doubt as to the author's good faith.

           

            It is well-known that minor inaccuracies do not cause the plea to fail: Gooch v. N.Z. Financial Times (1933), [35], although there is a contrary opinion with which, with all due respect, I do not concur: see Lord Porter in the Kemsley case, [32], at p. 506:

           

"In a case where the facts are fully set out in the alleged libel, each fact must be justified and if the defendant fails to justify one, even if it be comparatively unimportant, he fails in his defence."

 

            It appears to me that just as section 14 of the Law provides that the defense of "truth" shall not be denied by reason only that an incidental detail which is not actually injurious has not been proved, so too should the same rule apply to the defense of "expression of opinion in good faith". Nevertheless, I emphasized the word "only" as it hints at the possibility that inaccuracies might carry some weight which might be combined with other considerations, if there be such, to the disadvantage of that defense. This can be understood also from the judgment in Gooch [35], in which the applicability of the defense of "fair comment" was recognized in circumstances in which

         

   "the errors of fact were of minor importance and the article, which was written in good faith, deserved no condemnation but commendation."

 

            It is apparent from the content of the article referred to there that the minor inaccuracies in that case stood alone.

           

            I shall now consider the inaccuracies (in the article in our case), skipping, naturally, those matters which directly impute to the Respondents the intention to deceive (and which according to my assumption at this stage, in contrast to my opinion, constitute "an expression of opinion"):

           

(a) "More than four months have passed since the car was returned to the Goldberg Agency ... for sale."

 

            As will be recalled, the car was not transferred to the Goldberg agency until 29.11.1966 and from then until the article was published (14.3.67) only three and a half months passed. Mr. Kotler testified that the sole source of his information was Mr. Ben-Ami Amir, the Goldberg agency's sales manager. The latter testified that he had been in charge of the sale of the car from the beginning. It could be thought that Mr. Amir, by virtue of his duties in general and this special mission in particular, knew or at least could have found out, what the real passage of time was. In these circumstances, the very fact of the inaccuracy calls for further explanation, even though, in and of itself, it is of little weight.

           

(b) ("but actually, the Electric Corporation is not really interested to get rid of the car. It hopes that after some time, when the public will have forgotten the incident, the car will returned to serve the retiring Director General,) for it will then be a 'used' 1966 model, since the end of the 1967 model year is approaching." (I quoted in parenthesis the portion referring to the Corporation's intention for purposes of continuity.)

 

            The District Court found in its judgment, on the strength of testimony which the learned judge found credible, that the model year of an American car, as distinguished from a European one, starts at the beginning of the Gregorian year, although a new model car can  already be obtained toward the end of the previous year. For example, a l 967 model can be acquired in December (and in exceptional cases even in November) 1966. This finding contradicts Mr. Kotler's argument that the 1967 model was already being sold in September 1966, when the Respondents received the car. The Goldberg agency deals mainly with the sale of Chevrolets and it is difficult to believe that their sales manager of many years was not aware of this detail. It follows that by the middle of March 1967, less than a quarter of the model year had passed. In light of this fact, the words "since the end of the 1967 model year is approaching" do not, in my view, constitute an incidental detail of little importance, and they even cast additional doubt on Mr. Kotler's good faith, or that of his source of information - Mr. Amir.

 

            (c) The next paragraph states:

           

"After considerable effort, the agency's staff found a purchaser who offered 24,000-25,000 pounds for the car. The Electric Corporation's transport officer refused to approve the sale."

 

            If we had had to depend on the Appellants' witnesses I would have held without any hesitation - although I did not have the advantage of seeing and hearing the witnesses - that there was no evidentiary basis even for this claim. My reasons for reaching this conclusion are as follows:

           

            The witness Shlomo Yaacobi said that he had been at the time the only bidder (and this actually fits in with the word "buyer" in the singular in the article) and added that at first he offered Goldberg 25,000 Israeli pounds but afterwards raised the price to 25,500 pounds, which he claimed was comparatively higher than the market rate at that time. But he said in his testimony that during the course of negotiations he had telephoned Ha'aretz and told Mr. Kotler that he (Mr. Kotler) was correct in alleging that the car was not for sale. It is clear that the article had already been written at the time of that conversation, and (it must be assumed) that the witness gathered from its contents what the opinion of the author was. And when he was cross-examined on this he said: "it is possible that my first (my emphasis) contact was after 25.3.1967" (p. 11) and that "it is possible that in the light of the fact that the publication concerning the presence of the car with Goldberg was on 14.3.1967, my contact was after that date" (p. 12). It is clear that what is determinative is the state of affairs at the time the article was published and this testimony therefore becomes valueless, particularly since the burden of proof rests on the Defendants.

 

            The witness Yaacov Beckerman related that he was in the habit of getting in touch several times a week with all of the companies dealing with cars, including the Goldberg agency. That way he learned from Mr. Amir that there was an "almost completely new" car. According to him, he had to take the trouble to come no less than three times before he was able to see it, since this required special permission from Mr. Goldberg. He went with Mr. Amir to the warehouse where the car was. "It looked nice, but very dusty." When he asked what the price was he was told that he had to make an offer and this appeared unusual to him. He offered 22,000 pounds and Mr. Amir promised to give him an answer. After this visit, three months passed before he met Mr. Goldberg (p. 51). He again started with an offer of 22,000 pounds and raised it to 24,000 pounds, but he was informed that the Electric Corporation's approval had to be obtained. Up to this point the testimony appears reasonable, but elsewhere (p. 57) he declares, surprisingly, "I told Ben-Ami my offer to buy the car for 22,000 pounds without seeing it, and I saw it for the first time after the article" (my emphases). This did not prevent him from saying in another place (p. 83): "After I saw it I thought to myself that it was worth 22,000 pounds."

           

            The lapse of time of three months between his first visit, when Mr. Amir showed him the car, and his meeting with Mr. Goldberg, also goes up in smoke, as he says later (p. 62), "When I came to Goldberg it was already, as far as I can remember, after I had seen the car on that same day. It seems to me that all this happened at the same time. When I went in to examine the car and had just seen it Ben-Ami told me that it had done 6000 kilometers."

           

            Furthermore: Mr. Amir said in his testimony that the location of the car did not disturb his efforts to sell it, a matter I shall discuss more fully later. In any event, it is clear that Mr. Amir's testimony is not consistent with the great difficulty Mr. Beckerman had when he sought to see the car.

           

            But the Appellants' work was done for them in this matter by Mr. Shagal, the Respondent's transport manager, who said (at p. 273):

           

"From time to time there were offers. I received notice about them from Ben-Ami. There were three offers that I remember: 22,000, 24,000 and, lastly, 25,000-26,000. I do not remember if the last offer (my emphasis) was before or after the article. I remember that I reported it to Mr. Peled in April 1967. I do not remember when the second article appeared."

 

            Since it is known that the article was published on 14.3.1967, it follows that Mr. Shagal received two offers before then, the higher of which was 24,000 pounds. It was therefore not correct to write in the article that there was an offer from a buyer of 24,000-25,000 poounds.

           

            The correct facts alongside those detailed in the article are, therefore, as follows:

           

a.     The car was at the Goldberg agency for three and a half months and not for more than four months, as written;

           

b.    By then, the end of the first quarter of the 1967 model year was approaching and not the end of the model year itself.

           

c.     The offer that was rejected by the Respondent was for 24,000 pounds and not 24,000-25,000 pounds, as was published.

           

            In my opinion these are not inaccuracies whose cumulative weight amounts to "an incidental detail which is not actually injurious" within the meaning of section 14 of the Law which deals with the defense of truth, especially since they do not stand alone, but are in addition to the other considerations because of which the defense of "expression of opinion in good faith" is not available to the Appellants.

           

            For this reason, too, my conclusion is that this plea should be dismissed.

           

            6. But I am prepared to proceed on the assumption (contrary to my opinion) that there is no need to include within the body of the article even a minimal factual foundation so as to enable the reader to decide, for himself, if the opinion expressed has grounds, and that it is possible to content oneself with the facts published, so long the defendant (in our case the Appellants) produces in the course of the proceedings supplementary facts which together provide a proper factual basis. likewise I proceed on the assumption (again contrary to my opinion) that the imputation of an intention to deceive was an expression of opinion and not the establishment of a fact.

 

            On the basis of these assumptions, I will examine what facts, of which Kotler was aware when he published his article, were proved in the course of the action. I have limited myself as emphasized, since the facts of which he had no knowledge could in any case have had no part in the formation of his opinion. See Gatley on Libel and Slander, 7th ed., p. 293, near line 6.

           

            As already noted, Mr. Kotler testified that his information was based on one source only: Mr. Ben-Ami Amir, the Goldberg Company's sales manager (p. 209). According to him, Mr. Amir concluded that the Electric Corporation only wished to gain time based on the consideration "that otherwise it was not possible that they would place a car intended for sale in a warehouse, where it would become covered with dust for four months" (p. 214). During the course of his testimony he returned to the concealment of the car as the central consideration for his conclusion. For example, the following statements made by him appear in the protocol (at the end of p. 210 and the beginning of p. 21l):

           

"He [Ben-Ami Amir] explained to me that the car was brought to the company's warehouse but they hid it from the eyes of the public, that is, they did not want to sell it, because if you want to sell you display it. Ben-Ami Amir told me that in fact they did not wish to sell the car and that is what I wrote.

 

The car was hidden by Goldberg, apparently upon the instructions of the Electric Corporation and that is why I wrote that the car was supposedly put up for sale".

 

            It follows that even in the first paragraph of the part of the article upon which the action was based, Mr. Kotler was not other than Mr. Amir's mouthpiece, but this was not made clear to the readers.

           

            With regard to the importance that Mr. Amir attaches to the concealment of the car, as appears clearly from the above quotation, it is worth noting that this fact is not at all mentioned in the article, and what is still more important - it is not consistent with Mr. Amir's own testimony, in which he said:

           

"It is two that when they brought the car for sale to the Goldberg garage they told me to try and sell it and I really tried to sell it.... I did everything to find a buyer. I don't know why I didn't move the car and place it amongst the used cars that were for sale. I am mostly interested in selling new cars, not old ones.... I don't think that I said that the fact that it stood there was an obstacle. I did not emphasize this. True, it was not visible to people. But this was not an obstacle. The location of the car did not impede its sale".

 

Incidentally, Mr. Shagal testified as follows (pp. 273- 274):

 

"I gave the car to an agent and it was placed in a garage which was in fact a yard. Afterwards, Mr. Peled's driver, who happened to be there in the course of attending to another car and who saw that the car was very neglected, got in touch with me. I then phoned Mr. Ben-Ami and as a result the car was stored in a place where new cars were stored. I was there. Ben-Ami complied with my request unreservedly. The car was in a closed warehouse which served as a place for storing Chevrolets. It is not a basement. It was not deep down. I saw new cars there. The choice was between an open area and this place, because I did not presume to ask him to put the car in the display window since there was room there for only two cars and I saw two new cars there."

 

            In any event, Mr. Amir's testimony is sufficient to refute the main consideration which moved Mr. Kotler to write "supposedly", that is to impute to the Respondent the intention described above. Furthermore, according to him, this was the explanation which he received from Mr. Amir, and if that is the case then they contradict each other.

           

            It should be noted that even the significance of the fact that the Respondent conditioned the sale of the car on its prior approval is lessened, to a not inconsiderable extent, by Mr. Amir's testimony, since he said (p. 37):

           

"Although this is not usual, in any event there is nothing wrong in someone saying that I should receive his approval before I sell a car. The purchase of a used car is sometimes concluded in a minute. There should be a ceiling price. If there is not - then one must call for approval. There is nothing improper in this."

 

            I am aware of the fact that in another part of his testimony he converted this into almost the main consideration for the conclusion concerning the absence of any real intention to sell the car, but, after all, the burden of proof rests on the Defendants.

           

            On this point, too, it is worth turning to Mr. Shagal's testimony, who told Mr. Amir more than once that he was not prepared to lose more than 5,000 pounds. This testimony accords with the figure of 28,000 pounds that appears in the article. And in fact Mr. Shagal added in his testimony that he advised Mr. Peled to accept an offer of this sum if tendered.

           

            The fact that the Corporation did not ask for an assessment of the car by an assessor is not particularly surprising. After all the Respondent had paid 33,500 pounds for the car a short time earlier, after receiving a rebate of 500 pounds. The car had been driven 5,000 kilometers, according to the learned judge (and not 6,000 as written in the article - an inaccuracy with which I do not deal). It was suggested that Mr. Goldberg take it back for 30,000 pounds, but he refused to do so and recommended that the car be left with him to be sold. We speak about a transport manager of a large company with a lot of experience, both in sales and in general, as well as the owner of an agency for selling cars of the same kind. Is it possible that in such circumstances it was not clear what the approximate value of the car was and what price the seller could expect to get for it? So when the offers failed to come in, Mr. Shagal "descended" from 30,000 to a minimum of 28,000 pounds, and according to his testimony (it will be recalled) he informed Mr. Amir that he was not prepared to lose more than 5,000 pounds, and hence, apparently, came the need to receive the Corporation's approval if an offer of 28,000 pounds was made, that is if the loss should amount to a little more than the ceiling he laid down.

 

          The fact that a practically new car was not sold by means of a public tender could, as stated above, perhaps be a subject for public debate and criticism, although this could be seen as an exceptional case requiring unusual treatment. The Respondent's version of events in his testimony, to the effect that in this special case in particular he wished to insist on as small a loss as possible, seems reasonable and I do not intend taking a stand on whether calling for tenders - as the witness Kantor thought should have been done - would have been a more effective way to achieve the desired end.

         

          In any event the judge was correct, in my opinion, in holding that there was no connection between these matters and the subject at issue. Furthermore, I did not find in the testimonies of Messrs. Kotler and Amir any hint that they knew of, or even considered, the standard practices of the corporation, in general, and with regard to sales by tender in particular. There is no need to state once again that a fact which was not considered by the publisher is not available to him on which to base the opinion he expressed.

         

          7. Notwithstanding several doubts arising from the detailed factual inaccuracies, I am prepared to conclude that Mr. Kotler published his article in good faith based on the fact that before doing so he contacted the Respondent in order to get his reactions, but was informed that the latter would have nothing to do with him.

         

          But good faith is not sufficient. The conditions which I enumerated above must be met before the defense of "expression of opinion" becomes available to the publisher: compare the London Artists case above [191. There, too, the defendant's good faith was not in doubt.

         

          8. Mr. Lieblich argued that the judge should not have relied on the letter from Mr. Leo Goldberg, as it was admitted at the time on condition that it would not serve as proof of the truth of its content.

         

          I do not think that this error - if indeed it is an error - is sufficient to change in any way the considerations from which I drew my conclusions. I said "if indeed it is an error" because Mr. Shagal in his testimony said that "what Leo Goldberg says in his letter is right" - an answer which prima facie makes the content of his letter acceptable as evidence.

 

            9. At this stage I had the opportunity to examine Justice Shamgar's opinion and I would like to comment that the judgment in the Campbell case [25], (at the end of paragraph 4 in his judgment) is, to the best of my knowledge, still recognized in England, and is referred to without any reservations in the House of Lords' judgment in Kemsley [32]. With all due respect, I do not think that the judgment in Walker, [26], changes anything, but only adds a further dimension to the existing situation. It is referred to, inter alia, in the London Artists case, [19] on which I in any event relied, and the conditions enumerated there are not present, in my opinion, in our case.

           

            Similarly, I regret to have to dissent from my distinguished colleague Justice Shamgar's description of the facts, which is based on a completely different evaluation of the testimony from that of the District Court judge. I examined very carefully both the evidence and the judgment of the District Court, which is the subject of this appeal, and I could not find any cause for interfering with the judge's factual findings based on his personal impressions of the witnesses who appeared before him.

           

            10. The plea of "truth" was also unfounded - a conclusion which derives directly from an analysis of the evidence and of the facts proved during the course of the action.

           

            There remains for me to consider, in this context, the argument of the Appellants' counsel that the judge should have permitted him to prove the Electric Corporation's practice that a retiring director general receives the car which had been in his use, as part of his retirement conditions.

           

            If they sought to prove an improper practice, then the answer depends on the interpretation of section 22 of the Law, which is intended, in general, to prevent the presentation of evidence, and the examination of witnesses, concerning past objectionable acts on the part of the injured party, save in so far as these particulars are directly relevant to the defamation which is the subject of the action. It is clear that "... one cannot prove intent - which is a matter of the heart - save by drawing conclusions from a complex of facts" (Cr.A. 215/58, [16], at p. 394). The "intent" therefore touches directly on the subject of the action. But what intent? That is to say - the intent to abide by the promise that was announced in the press to sell the particular car, in light of the public criticism of its acquisition. It appears to me that we would breach the dam which the legislator sought to impose in the said section 22 if we were to permit the alleged objectionable promise to be proved as evidence of an intent to break a promise to the public.

           

            In any event, even if we assume - in complete contradiction of the witnesses' answers to the questions of the Appellants' counsel, as noted in the court protocols - that there was such a practice and that evidence of it was admissible, there still would not be a factual basis for the intention imputed to the Respondents. I already pointed out above that the fact that a solemn promise is made publicly constitutes strong prima facie evidence of its sincerity, and this evidence is not rebutted by proof of past sins of the Corporation which employs the maker of the promise, if in fact there were such sins. It is also not conceivable that the Respondents would have dared to use that same car again, as long as the eyes of the media were focussed on their actions.

           

            In so far as the defense of "expression of opinion in good faith" is concerned, this promise has no importance ab initio, as there is no evidence (it will be recalled) that Messrs. Kotler and Amir knew about it and took it into account amongst their other considerations.

           

            11. In light of the above considerations I would dismiss the appeal.

           

            The appeal is allowed, by majority decision, and the judgment of the District Court is dismissed.

           

            The Respondents will bear the Appellants' costs in this Court and in the District Court, including advocates' fees, in the amount of 5,000 Israeli pounds.

           

            Judgment given today, 6 Adar 5737 (24.2.1977).