Federal judge allows state trial spectators to be gagged

Federal judge allows state trial spectators to be gagged

• Observers who hear testimony during commercial litigation can be forced to promise not to repeat information heard

A Dallas federal judge refused on Jan. 10 to stop a state trial judge in Dallas from forcing spectators to a civil trial between two corporations to choose between leaving the courtroom during certain portions of the trial or agreeing not to disclose information that they hear or see.

Following a hearing, Judge A. Joe Fish denied from the bench a request from Bloomberg news service to temporarily restrain the enforcement of the orders of state district Judge David Evans. Fish did not issue a written opinion.

During the week following Fish’s ruling, the underlying lawsuit settled out of court, thereby making the issue moot.

Evans’ Nov. 15 orders state that members of the public who want to stay in the courtroom when certain exhibits or the contents and subject matter of those exhibits are discussed must sign a “Courtroom Spectator Confidentiality Order and Undertaking.” According to Evans’ orders, the exhibits in question embody “the probable existence of a trade secret or other privileged information which has not been publically discussed.” Any spectator who signs and then violates the confidentiality order faces contempt of court charges and a possible civil suit for misappropriation of trade secrets.

Evans orders also allow litigants to retroactively seal portions of the trial transcript that include testimony made in open court and not initially subject to the confidentiality order.

Bloomberg had argued that Evans’ orders violate the First Amendment by placing unreasonable and unconstitutional restrictions on access to trial proceedings and content-based prior restraints on the media’s freedom to report. Bloomberg also argued that the orders created the possibility that the author of a news article may be subject to sanctions if testimony made in open court and discussed in an article is later placed under seal and declared subject to the confidentiality orders.

Bloomberg filed its federal court action after the Texas Supreme Court in Austin refused without comment to overturn Evans’ orders. Samsung, one of the litigants, had appealed to the state high court, whose decision came only a day after a panel of the state Court of Appeals in Dallas held that Evans had conducted adequate hearings concerning the trade secrets and the closing of the courtroom, and that his orders contained sufficient provisions for a review of any request for closure of the courtroom. “The policy of open court proceedings is not absolute and a courtroom may be closed to the public to protect trade secrets,” the Court of Appeals concluded.

Samsung and The Dallas Morning News had initially appealed Evans’ orders, and Bloomberg and The Reporters Committee for Freedom of the Press had filed friend-of-the-court briefs in the state courts.

DSC Communications brought the underlying lawsuit against Samsung Electronics in 1996 after Samsung allegedly hired nine DSC engineers. DSC alleged that Samsung was attempting to steal digital-switching technology. Since the initiation of the suit, DSC has been purchased by Alcatel, which has pressed forward with the action and is seeking $425 million in compensatory damages and an unspecified amount in punitive damages.

(Bloomberg v. Evans; Media Counsel: Richard L. Klein and Charles J. Glasser Jr., New York, and James A. Hemphill, Austin)

Related stories:

• High court lets order silencing courtroom observers stand (12/7/1999)
• Appellate court approves order silencing courtroom observers (12/3/1999)

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