Skip to content

Two financial publishers fight for status as journalists

Post categories

  1. Protecting Sources and Materials

    NMU         ROUNDUP         Confidentiality/Privilege    

Two financial publishers fight for status as journalists

  • In two separate cases, a federal appeals court denied a ratings company’s claim of protection from a subpoena under the reporter’s privilege, while an index publisher is heading to court to make a similar claim.

May 23, 2003 — A federal appeals court denied financial ratings company Fitch Inc. status as a journalist in a reporter’s privilege decision issued Wednesday, while another financial publisher, Platts, asked for similar protection from a federal court in Texas.

The U.S. Court of Appeals in New York (2nd Cir.) ruled that Fitch, which publishes credit ratings for companies and posts its reports on its publicly-available Web site, could not claim protection from a subpoena based on the New York reporter’s privilege.

The credit-rating service was served with a subpoena on Aug. 26, 2002, in a lawsuit between American Savings Bank, FSB, and UBS Paine Webber, Inc.

The bank sued Paine Webber to recover losses from a securities deal ruled illegal by bank regulators. According to court papers, the bank is seeking information from Fitch regarding information it provided to Paine Webber about the deal.

Relying on previous cases, which allowed Standard & Poor’s, another credit rating service, to assert the reporter’s privilege to avoid subpoenas, Fitch argued that New York’s shield law protected the company from compelled disclosure.

The shield law, applicable only to “professional journalists,” protects members of the news media, in certain circumstances, from having to provide information in court proceedings.

The court said Fitch did not fit the definition of a “professional journalist” because most of the reports it publishes are compiled only in response to requests from clients. Moreover, Fitch does more than collect and report information from companies; it also provides information to the companies it rates.

“We do not suggest that an ostensible newsgathering organization is required to cover all events in order to qualify as journalists — part of a journalist’s job is exercising judgment about which events are newsworthy and which are not,” the court wrote in its opinion. “We believe, however, that Fitch’s information-disseminating activity does not seem to be based on a judgment about newsworthiness, but rather on client needs. We believe this weighs against Fitch being able to assert the privilege for the information at issue.”

The court was careful to say that it was “not deciding the general status of a credit rating agency like Fitch under New York’s shield law” and would leave for another day the issue of whether a credit rating company could ever assert the newsgathering privilege.

In a related development in a separate case, Platts, a division of the financial publisher McGraw-Hill Cos., will appear June 2 in a federal district court in Houston to debate its own status as news media.

Platts, a publisher of the financial indexes used to price commodities, has refused to provide information for an investigation by the Commodity Futures Trading Commission into whether energy companies filed false information in efforts to manipulate the indexes.

The commission subpoenaed Platts in February, seeking documents relating to the filings.

Platts already has provided the commission with 900 pages of documents, according to news reports.

The publisher issued a statement saying it is withholding further data collected from energy companies on grounds that it is protected as a journalist under the First Amendment.

Platts’ attorney, Victor Kovner, told the International Herald-Tribune his client is not willing to provide “wholesale access” to all of the publisher’s files. He said information collected through confidential sources would not be voluntarily relinquished.

The commission argued in court papers that Platts does not qualify for First Amendment protection from a subpoena, because the publisher’s reports are circulated only to energy companies and not to the public in general.

(In re Fitch, Inc.; Counsel for Fitch: Evan A. Davis, Cleary Gottlieb, Steen & Hamilton, New York; CFTC v. McGraw-Hill; Counsel for McGraw-Hill: Victor A. Kovner, Davis Wright Tremaine, New York) WT


© 2003 The Reporters Committee for Freedom of the Press

Return to: RCFP Home; News Page