The restriction of a criminal defendant’s cross-examination of a reporter who invoked his privilege not to testify, but was compelled to do so anyway, violated the defendant’s constitutional right to confront witnesses against him, a federal appellate court ruled earlier this week. The decision may implicate reporters' abilities to settle subpoena battles by agreeing to provide limited information.
The U.S. Court of Appeals in New York (2nd Cir.) nonetheless upheld the fraud conviction against former Monster Worldwide Inc. executive James Treacy. The court found that the trial court’s error was harmless, meaning the other evidence the prosecution presented at trial demonstrated Treacy’s culpability, the court decided Wednesday in United States v. Treacy.
At issue was the testimony of Charles Forelle, a member of The Wall Street Journal’s investigative team that in 2006 published a Pulitzer Prize-winning series on corporate backdating of stock options at many companies, including Monster, one of the world’s largest online recruiting companies. During the investigation, Forelle interviewed Treacy, the former president and chief operating officer at Monster, and quoted him as denying any involvement in the backdating of employee stock options.
When the government called Forelle to testify in its conspiracy and securities fraud case against Treacy, Forelle refused to do so, arguing that his testimony was not essential to the case, as required by the Second Circuit’s prior rulings governing the reporter’s privilege.
The government disagreed, insisting that comments Treacy made to Forelle during the interview could prove that he had lied to government investigators about Treacy's role in backdating of employee stock options — the focus of the criminal charges against him.
The court reached a compromise in which Forelle was forced to testify despite his claimed privilege. But attorneys for each side were only allowed to question him about three statements attributed to Treacy in the Journal story.
Treacy maintained that he was speaking only about his own option grants in the Journal interview and was not denying involvement in the process of issuing options to all company employees, as the government was trying to prove. The defense argued that, because it was limited to questioning Forelle about only the statements in the Journal story and, thus, was prevented from discussing outside communication between Forelle and Treacy that purportedly could prove its case, it was obstructed from proving Treacy’s statements referred only to his own options. Moreover, defense counsel said it was prevented from challenging Forelle’s credibility by bringing up on cross-examination a follow-up e-mail he sent to Monster’s public relations representative.
The appellate court ruled that in instances like this one, where a reporter is not protecting a confidential source or confidential materials, the showing required to overcome the journalist’s privilege is the same in a criminal case as it is in a civil one: The materials at issue are of likely relevance to a significant issue in the case and are not reasonably obtainable from other available sources. In so holding, the court rejected the friend-of-the-court argument of the Journal’s publisher, Dow Jones & Co., that the showing required in all criminal cases should be the higher standard that applies in civil cases when confidentiality is at stake.
The trial court properly applied the lower standard when it denied Forelle’s motion to quash the subpoena, but limited the scope of the government’s direct examination of him, the Second Circuit held.
Where the trial court erred was in its limitation on the scope of cross-examination of Forelle, the court ruled. Specifically, the lower court mistakenly treated Forelle’s interest in refusing to disclose information obtained during newsgathering and dissemination as a competing constitutional interest to be balanced against Treacy’s Sixth Amendment Confrontation Clause right. The court noted that the reporter’s privilege in the Second Circuit is derived from the federal common law of privileges, not the First Amendment. Thus, the standard required to overcome the privilege on cross-examination is the same one applied to direct questioning, the court ruled.
“[B]ecause the purpose of Forelle’s testimony was to confirm the accuracy of the statements in the Wall Street Journal article, attempts to test Forelle’s memory with respect to the writing of the article were not a general attack on credibility but a challenge to the specific details of Forelle’s direct testimony. Such a challenge is of ‘likely relevance to a significant issue in the case,’ and no person but Forelle could provide the required answers,” the court stated.