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Court balances criminal, civil tests for reporter's privilege

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NEWS MEDIA UPDATE   ·   WASHINGTON, D.C.

NEWS MEDIA UPDATE   ·   WASHINGTON, D.C.   ·   Confidentiality/Privilege   ·   Oct. 7, 2005


Court balances criminal, civil tests for reporter’s privilege

  • The publisher of an energy newsletter can claim the reporter’s privilege, but the privilege can be overcome by a government agency when the agency is investigating matters in the public interest, a federal court ruled Tuesday.

Oct. 7, 2005  ·   The publisher of an energy market newsletter which a federal judge ruled “engages in journalistic analysis and judgment in addition to simply reporting data” can claim the protection of the reporter’s privilege to fight a subpoena, but the privilege was overcome in a case involving a subpoena from the Commodity Futures Trading Commission.

In siding with the commission, the U.S. District Court in Washington, D.C. , ruled Tuesday that subpoenas by government agencies which attempt to thwart the reporter’s privilege should be subject to a test that strikes a balance between the test for a subpoena in a criminal case and the test for a subpoena in a civil case.

Generally, it is easier to overcome the reporter’s privilege in criminal cases than it is in civil cases. Here, where the court was looking at a subpoena issued by an executive branch agency, it decided to stake out ground in between both tests.

In this gray area, the court found “while the strong preference [against reporter’s privilege] used in criminal cases does not apply here, the posture of this matter class for a more qualified view of the privilege than would be appropriated in a purely civil case” applies, wrote Judge Royce C. Lamberth. “It is under this view of the privilege that the balancing test will be undertaken.”

Using this standard, the court found that the reporter’s privilege was trumped by the needs of the administrative agency.

“The court reaffirmed that the reporter’s privilege applies, but it holds that it was overcome in this case,” said Jim Keener, spokesman for Platts, a division of McGraw-Hill which publishes daily and biweekly indices and prices ranges in the energy market.

Platts was subpoenaed by the Commodity Futures Trading Commission on April 15 for information regarding its investigation of an energy marketing company. The commission alleges the energy company attempted to affect natural gas prices by reporting false data to Platts. Platts appealed and claimed the reporter’s privilege protected it from being compelled to turn over the information.

In ruling that the commission overcame the privilege, the court found little difference between criminal subpoenas and the job of the commission.

“The Court sees no reason why the weight of public interest should turn solely on whether the infraction is punishable by criminal or civil sanctions,” Lamberth wrote. “Just as criminal laws aspire to protect the public, the false reporting the price manipulation provisions of the [Commodities Exchange Act] are also designed to protect the public.”

Using its test, the court then looked at the commission’s need for Platts’ information and whether it had exhausted alternative sources. It found that the commission needed to see what information the energy company provided to Platts in order to determine the effect of the false reporting. “Platts’ formulas are crucial for determining whether Energy Company’s false reporting did, or could have, had an effect on prices,” Lamberth wrote.

In addition, “CFTC must have exhausted only those alternative sources that are reasonably available, not every other conceivable source,” Lamberth wrote. “This Court finds that data that may or may not reside in the files of various other unrelated companies is not reasonably available to the CFTC.”

(Commodity Futures Trading Commission v. The McGraw-Hill Companies; Media counsel: Richard L. Cys, Davis, Wright & Tremaine, Washington, D.C.)CM


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