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Newsletter publisher must turn over subpoenaed materials

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NEWS MEDIA UPDATE   ·   WASHINGTON, D.C.   ·   Confidentiality/Privilege   ·   Aug. 1, 2006

Newsletter publisher must turn over subpoenaed materials

  • A McGraw-Hill division that publishes a newsletter can claim reporter’s privilege but must turn over documents to a federal agency which overcame the privilege, a federal judge ruled.

Aug. 1, 2006  ·   The U.S. District Court in Washington D.C., ruled last week that a federal agency overcame the reporter’s privilege claimed by a newsletter publisher who must now turn over subpoenaed materials as part of a civil prosecution of an energy trading company.

The Commodity Futures Trading Commission (CFTC) sought documents created by the company pertaining to natural gas prices received by Platts, a division of McGraw-Hill and a publisher of an energy trading newsletter. The subpoenas also sought information on how Platts used the data from gas traders as well as the instructions given to companies by Platts regarding those submissions.

The prosecutions revolve around gas traders allegedly manipulating markets in violation of the Commodity Exchange Act. The court, in a previous case involving both parties, ruled that in connection with criminal prosecutions of an energy marketing company, the reporter’s privilege also was overcome.

In Tuesday’s ruling, the court noted that the privilege “is more likely to be overcome in criminal rather than civil cases,” according to Judge Royce C. Lamberth, because of the “lesser public interest” the public has in cases of private redress weighed against the heightened public interest in press freedoms.

Since this case involves a federal agency mandated with enforcing laws that protect the public, not a strictly civil or criminal matter, the court applied a middle ground to the balancing test required under the privilege.

This balancing test asked whether the information sought went to the heart of the matter of the investigation and whether CFTC exhausted other sources. “The balancing test, then, must be undertaken with a ‘more qualified view of the privilege than would be appropriate in a purely civil case,'” Lamberth wrote.

In ruling the CFTC had overcome the privilege, the court found that the subpoena for information submitted to two Platts publications “carefully described how the documents are crucial, not merely relevant, to the Civil Actions and as such meets the requirement that the Subpoenas seek documents or information that go to the heart of the matters,” Judge Lamberth wrote.

Judge Lamberth also ruled that “CFTC has met its burden of demonstrating need for the documents and that it has exhausted other sources.”

McGraw-Hill also sought a protective order to restrict CFTC’s subsequent disclosure of subpoenaed data and documents. CFTC argued that based on public interest the agency should be allowed to share the information with other third-parties including “federal agencies and Congress who would use the information for the similar purpose of protecting the integrity of the natural gas markets.”

The court agreed with McGraw-Hill. “Since documents protected by the reporter’s privilege are ordered to be disclosed only when the balancing test is satisfied, any subsequent disclosure of the documents must necessarily be on condition that the balancing test is also met in that particular case,” Lamberth wrote. “Whether the documents go to the heart of the matter is an inquiry that necessarily must be undertaken for each disclosure of the documents.”

Therefore, the subpoenaed information will not be disclosed unless “a case-specific determination” is made, Lamberth said.

Although the court recognized the requirement may affect future investigations, Lamberth wrote, “the alternative of permitting indiscriminate disclosure effectively eviscerates the protection provided by the reporter’s privilege in the first place, and would vastly expand the narrow purpose of the public interest exception.”Jason Feuchtwanger, a spokesman for McGraw-Hill, said the company “will continue to seek to protect our privileged confidential and proprietary documents and information consistent with the law,” said.

(Commodity Futures Trading Commission v. Whitney, Media Counsel: Richard L. Cys, Davis, Wright & Tremaine, Washington, D.C.)BW

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© 2006 The Reporters Committee for Freedom of the Press   ·   Return to: RCFP Home; News Page

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