Reporter not liable for allegedly revealing source

From the Fall 2000 issue of The News Media & The Law, page 25.

A federal judge in Washington, D.C., dismissed a case brought against a Newsweek reporter for allegedly failing to honor an agreement not to reveal a source. U.S. District Court Judge Colleen Kollar-Kotelly ruled in early September that a reporter’s oral promise of confidentiality to a source does not constitute an enforceable contract.

Julie Hiatt Steele sued reporter Michael Isikoff and Newsweek’s parent company, The Washington Post Co., after publication of stories naming Steele as the source of information for reports of President Clinton’s alleged groping of Kathleen Willey. Steele claimed the defendants broke an agreement not to name her. However, Steele admitted she lied about having first-hand knowledge of the alleged incident; in fact, she said Willey put her up to telling Isikoff about the event.

Isikoff claimed he never agreed to speak with Steele off the record and called her suggestion that he had, a “fantasy.” Although Isikoff knew Steele recanted her story, he elected to publish the story with both her original statement and her later recantations.

The district judge ruled the First Amendment barred Steele’s recovery for her “reputational” claims. The defendants urged the court to find all of the plaintiff’s claims were “a thinly disguised effort to collect damages for defamation without meeting the constitutional requirements of a defamation claim.”

The U.S. Supreme Court precedent for suing the media for defamation requires plaintiffs to prove harm to reputation before recovering damages, regardless of the legal theory. Thus, the court here agreed the reputational aspects of Steele’s suit were unsustainable, but left open the possibility other parts of the claims were “non-reputational.” Non-reputational claims would include, for example, lost employment and diminished employment prospects.

Steele claimed Isikoff breached an oral contract by revealing her name in a story after he had promised not to do so. Declaring the area one of first impression, the federal district court held contract law was not an appropriate theory to enforce a reporter’s promise of confidentiality.

The judge followed the Minnesota Supreme Court’s reasoning from Cohen v. Cowles Media Co., a case reversed on other grounds by the U.S. Supreme Court, in which the Minnesota court ruled reporters have a moral commitment, not a contractual obligation, to keep their sources confidential when promised.

Steele could not enforce a contractual obligation, the judge alternatively reasoned, because she violated her duty of good faith and fair dealing by lying to the reporter. Applying Virginia law, the judge rejected Steele’s promissory estoppel claim because the state does not recognize the doctrine in a breach-of-contract context.

Kollar-Kotelly ruled Virginia law applied because the only face-to-face meeting between Steele, a Virginia resident, and Isikoff, of the District of Columbia, took place in Virginia. Also, Steele was in Virginia when Isikoff allegedly promised he would keep her name confidential. The impact of the publication of her name also “befell her where she lived,” the judge ruled.

Steele also claimed Newsweek and Isikoff were unjustly enriched from Isikoff’s broken promise. To prove a claim of unjust enrichment, a plaintiff must demonstrate that the defendant received a financial benefit, and that if the benefit were retained, the outcome of the case would be unfair.

Steele had “unclean hands” because she lied, the court held, and therefore her claim for unjust enrichment also failed. Under the unclean hands doctrine, a plaintiff who seeks an equitable remedy, such as unjust enrichment, must be free from fraud or deceit in the transaction.

The judge also denied Steele’s claims of fraud and misrepresentation because the harm she alleged was “rooted in her own lie, a deception by which she alone tied herself to a sordid news story that dominated all types of media.”

Steele alleged Isikoff intentionally inflicted emotional distress on her by engaging in extreme conduct.

Under District of Columbia law, the defendant’s conduct must “go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.”

The court ruled this claim failed because Steele herself was the catalyst of the harm. The court also said that, if true, Isikoff’s behavior may have been contrary to journalistic standards, but it was not outrageous enough to warrant a claim.

Isikoff’s attorney said the case would have been much different if Steele had not lied.” We might still be in discovery on some claims,” said Isikoff’s attorney Stuart Gold, referring to the unjust enrichment and fraud allegations.

Finally, Steele asserted Isikoff had a “fiduciary duty” not to reveal her identity. A fiduciary relationship exists when one party is under a duty to act for or give advice for the benefit of another upon matters within the scope of the relationship. A fiduciary relationship is one founded upon trust or a confidence kept by one person in the integrity and fidelity of another. Examples of fiduciary relationships include the duty owed by a trustee to trust beneficiaries and among partners to a business.

The judge found no fiduciary duty existed between Steele and Isikoff, calling their relationship “too fleeting and too superficial.”

A representative from Steele’s attorney said it was unlikely that the ruling would be appealed. –DB