Justice Stevens, trial judge allow Business Week restraint to continue

Justice Stevens, trial judge allow Business Week restraint to continue

10/09/95

WASHINGTON, D.C.–U.S. Supreme Court Justice John Paul Stevens in late September refused to stay a Cincinnati federal court’s restraining order barring publication of a Business Week magazine article on a Proctor & Gamble bond dispute that was originally written based on sealed documents. The lower court then refused to overturn its restraining order against publishing information from sealed court records in early October. However, the court did unseal the documents in the case, thus effectively allowing the magazine to publish its article.

The order kept the magazine from publishing information it obtained from court records for three weeks.

Justice Stevens ruled that it was more appropriate to have a hearing on the merits of the restraining order in the federal District Court in Cincinnati, which issued the original restraining order on September 13, in order to resolve disputed issues of fact before coming before a higher court. Justice Stevens said he would then allow any appeal on the merits to be reviewed by the U.S. Court of Appeals in Cincinnati (6th Cir.) before coming back to the U.S. Supreme Court.

Business Week publisher McGraw-Hill had filed the expedited appeal with the Supreme Court to overturn a restraining order which bars the magazine from publishing an article relating to a lawsuit between Bankers Trust New York Corporation and Proctor & Gamble, concerning alleged fraudulent derivatives sales practices by Bankers Trust. Justice Stevens reviewed the application in his capacity as Circuit Justice for the Sixth Circuit.

Stevens denied the publisher’s request to stay the restraining order on a combination of jurisdictional and procedural grounds. After calling the appeal “hastily prepared,” Stevens criticized McGraw-Hill for not filing a prompt motion to dissolve the prior restraint with the District Court in Cincinnati at the time of the original order. Justice Stevens stated that, had the publisher made such a motion, the trial court would have likely overturned its own order, or at least the Court of Appeals would have had jurisdiction over the merits of the order.

The magazine publisher had filed an expedited appeal with the court of appeals. The court, however, dismissed this action on the grounds that it did not have the jurisdiction to review the merits of the restraining order.

During the rehearing before the lower court, a partner at Sullivan & Cromwell, the law firm representing Bankers Trust, admitted to leaking the sealed documents. Steven Holley testified that he did not know the documents were sealed, and that he believed he was filling a request for public information when he handed the documents over to Linda Himelstein, a reporter for Business Week.

McGraw-Hill said it plans to appeal the restraint on the original article. The publisher said even though they are able to report on the unsealed documents, the order established a precedent that would allow courts to restrain articles based on sealed documents in the future. (McGraw-Hill Companies Inc. v. Proctor & Gamble Company, Bankers Trust New York Corporation, et al; Media Counsel: Kenneth M. Vittor, New York)