NEWS MEDIA UPDATE · NINTH CIRCUIT · Prior Restraints · March 23, 2007
Judge rescinds order barring reporters from trial
March 23, 2007 · A California judge ruled Thursday that reporters do not have to sign a nondisclosure agreement to attend a San Jose trial, one day after he ordered journalists out of a federal bankruptcy courtroom during testimony.
On Wednesday, reporters for the San Jose Mercury News, The (San Francisco) Recorder, and the San Francisco Daily Journal refused to sign the confidentiality agreement, which the judge mandated orally on March 13. The reporters were allowed to listen to opening arguments but could not remain in the courtroom for portions of testimony that included references to sealed confidential documents.
The Mercury News filed a motion Wednesday night to intervene in the trial to challenge the secrecy. During a hearing Thursday morning, James Chadwick, attorney for the Mercury News, argued that a 2003 order was not an actual justification for sealing documents and preventing reporters from covering the trial in its entirety.
“We convinced the court that this was a case of prior restraint,” Chadwick said. “Now, the parties will need to make particularized arguments each time” to keep documents sealed, he said.
The proceedings involve the creditors of 3dfx, a now-bankrupt graphics developer, and Nvidia, a computer graphics chip company. The two companies merged in 2001, and the 3dfx creditors are suing for 1 million shares of Nvidia’s stock because they claim Nvidia undercompensated them while overvaluing assets.
On Tuesday, the trustee for the creditors, William Brandt, had asked the judge to set aside the order requiring members of the public to sign nondisclosure agreements to attend the trial.
Brandt had also moved in February to unseal documents concealed under a blanket order that allowed the parties to mark documents as “confidential” without ever offering justification as to why they should be sealed.
Nvidia, Brandt and several third parties agreed to the order in 2003 to prevent “competitive harm.”
During the pretrial discovery phase, Nvidia labeled thousands of documents as confidential, including online news articles and publicly available Securities and Exchange Commission filings, according to Brandt’s court filings. Nvidia planned to use many of those documents at trial without meeting the high standard needed to seal trial exhibits, court papers state.
Judge Roger Efremsky said Thursday he would review the “confidential” documents each day to determine if they should be kept secret and that he would bar reporters from the courtroom when those documents were presented, according to Chadwick.
Chadwick said the Mercury News does not expect to have to file further papers with the court, “although if the sealed documents seem excessive, we may need to address that.” He hopes that instead of forcing reporters out of the courtroom when the trial involves confidential documents, the documents will instead be redacted.
The Mercury News requested the unsealing of the transcript from Wednesday’s trial proceedings while the reporters were barred from the courtroom. The transcript is expected to be released Monday morning.
(Brandt v. Nvidia Corp., Media Counsel: James M. Chadwick, Shepard Mullin Richter & Hampton LLP, San Francisco) — LM