The state's highest court must decide under what circumstances New York's "long-arm" law can be invoked to give the state personal jurisdiction over someone who is not physically within the state.

The Court of Appeals heard arguments Thursday from Rachel Ehrenfeld, the author of a book about the funding of terrorism. The Manhattan author is seeking protection from British court judgments obtained by a Saudi billionaire who has successfully sued other authors in the United Kingdom.

Ehrenfeld, author of "Funding Evil: How Terrorism is Financed _ and How to Stop It," published in 2003, filed a U.S. federal suit against Saudi businessman Khalid Salim A. Bin Mahfouz, in response to a libel suit he filed against her in England.

"He single-handedly silenced the American media from writing about him and about other individual Saudis who are funding terrorism," Ehrenfeld said Thursday. "This is a deliberate thought ... and since my work is about exposing those who fund terrorism, I feel it is my duty to stop it."

Attorneys for Bin Mahfouz did not immediately respond to requests for comment.

Although Ehrenfeld's lawsuit was filed in federal courts, much of it deals directly with New York state law, so the state court is charged with interpreting that law before the issue is returned to U.S. Court of Appeals for the Second Circuit.

"The issue may implicate the First Amendment rights of many New Yorkers, and thus concerns important public policy of the state," the Second Circuit said.

Current law indicates that the state has jurisdiction over someone outside the state if he or she "in person or through an agent" transacts any business within the state _ as long as the legal action arose from those New York transactions.

The court must determine if existing laws provide the state jurisdiction over someone in another country who sues a New Yorker. The court will also have to determine if interactions with New York state stemming from a foreign lawsuit qualify as doing business in the state. Specifically, whether Mahfouz conducted business in New York in his legal interactions with Ehrenfeld.

According to court documents, Bin Mahfouz argues that his actions in New York are not equivalent to doing business there, so he is not subject to the long-arm statute.

Bin Mahfouz's suit accused Ehrenfeld of libel in the High Court of Justice in London. Ehrenfeld did not appear in the British court to defend herself, and in 2005 it issued a default judgment against her. That judgment would require her to declare her writings about Bin Mahfouz to be false, publish a correction and apology, and enjoined her from publishing or authorizing further publication of the disputed statements in Britain, among other things.

"My immediate response was that I'm not going to acknowledge the court in England," Ehrenfeld said. "I'm an American ... If he wants to sue me, he should come to sue me in America."

In the federal lawsuit, Ehrenfeld has asked the court to declare that Bin Mahfouz could not win a claim of libel against her under U.S. law, making the English decision unenforceable in this country. The suit claims that Bin Mahfouz chose to sue Ehrenfeld in England because its libel laws favor plaintiffs, and warns his actions could lead to "libel tourism."

Ehrenfeld has said that her book cited Bin Mahfouz after her research revealed substantial credible evidence of his role as a financial supporter of terrorist organizations.

He has sued or threatened to sue for defamation in the United Kingdom at least 29 times for statements concerning his role in the financing of terrorism, according to Ehrenfeld's lawsuit.

An undated statement issued on the Bin Mahfouz family Web site said: "The Bin Mahfouz family has suffered for over a year from unsubstantiated innuendo and inaccurate reporting (much of it corrected or withdrawn too late to be helpful). It is, naturally, distressed that it now faces many of the same untrue allegations in filed civil actions. The family repeats that it abhors and condemns all acts of terrorism and that there is not a shred of evidence to justify the actions and lengthy legal process involved. It will, of course, vigorously contest them."