Reporters Committee leads coalition objecting to bankruptcy court investigation of Bloomberg sources

Press Release | January 18, 2016

A Delaware bankruptcy judge’s order demanding that more than 100 individuals in a case before him disclose all their contacts with any Bloomberg reporters in the last 60 days is overly broad and interferes with reporters’ First Amendment freedoms, the Reporters Committee argued in a letter to the judge on behalf of a media coalition.

U.S. Bankruptcy Judge Christopher S. Sontchi issued the order last Thursday, demanding that a long list of individuals associated with the debtors and creditors in the bankruptcy of Molycorp, Inc., disclose within 5 days any contacts with Bloomberg reporters, or any knowledge of anyone else’s contact with those reporters.

“While the court has a legitimate interest in examining a possible violation of its confidentiality order,” the letter argues, “we ask the court to take steps to ensure that it does not unnecessarily intrude into the constitutionally protected newsgathering activities of reporters. An overly broad investigation into sources will necessarily chill other sources from talking to journalists and deprive the public of information.”

Bloomberg intervened in the case late Friday to ask the judge to suspend the implementation of the order and reconsider its scope. The Reporters Committee filed a letter in support of that motion soon thereafter, emphasizing the important interests behind a free press and the use of confidential sources. Bloomberg has asked that the judge hear its motion tomorrow.

“The order issued by the Delaware bankruptcy court last Thursday strikes at the heart of the First Amendment and the fundamental mission of a free press: to provide transparency into important public events, including the bankruptcy of the largest rare-earths producer in the U.S.,” Bloomberg Editor-in-Chief John Micklethwait said in a statement. “Bloomberg News's request to the court reflects its commitment to protect the confidential reporter-source relationships that are essential to that mission.”

Mickelthwait added, “By forcing more than 100 potential sources to reveal contacts they or anyone else may have had with any of Bloomberg's 2,400 journalists about the debtor, this order is overly broad and will have grave repercussions that will put a chill on other sources and deprive the public of information about matters of significant public concern."

Molycorp is a rare-earth mining company that sought bankruptcy protection last year after commodities prices fell worldwide. Creditors are fighting with the company over how to sell some of its assets. Bloomberg reporter Jodi Xu Klein’s stories on the bankruptcy negotiations allegedly contained, according to Sontchi’s order, “a number of leaks of sensitive, non-public information concerning the bidding process and mediation” in the case.

The other members of the media coalition joining the Reporters Committee letter were The Associated Press, First Look Media, Inc., Gannett Co., Inc., The McClatchy Company, National Public Radio, Inc., Tribune Publishing Company and The Washington Post.