Judge bars Business Week from publishing article

September 16, 1995|By Lyle Denniston | Lyle Denniston,Washington Bureau of The Sun

WASHINGTON -- Fighting a new round in a constitutional tussle as old as the nation, Business Week magazine is trying to get out from under a federal judge's order banning an article less than two hours before the presses were to start.

Over the weekend, though, the magazine's editors and publisher will keep the article to themselves, choosing to obey the order issued Wednesday in Cincinnati by Judge John Feikens that squelched the magazine's exclusive report on a new twist in a business lawsuit.

Kenneth M. Vittor, general counsel for Business Week's parent company, McGraw-Hill Inc., said the magazine regards the order as "patently unconstitutional" but will obey it "until such time as it is vacated." The company and its magazine regard that as their obligation, he said, even while pursuing an immediate constitutional challenge.

The magazine's lawyers have been trying since they received the surprise order Wednesday evening to get it lifted, but have not been able to do so. The 6th U.S. Circuit Court of Appeals in Cincinnati, however, will hold a hearing on the magazine's challenge Monday.

Mr. Vittor will ask that the three-judge panel immediately abolish Judge Feikens' order. In a telephone interview, the lawyer noted that Business Week is in no way involved in the business case that led to the order, and that Business Week obtained the material for its article by entirely legal means.

The court papers its reporter saw, tipping the magazine to the story, contained no sign that they were confidential, he added.

Cameron DeVore, a Seattle lawyer who often handles court cases for the press, said the judge's order "is void on its face; it is the least tolerable order under the First Amendment" free-press clause.

The law in many states, however, is that the press must obey such an order even while challenging it in court, Mr. DeVore noted. But, he added, some courts will not hold the press in contempt for violating such an order if it seems clearly unconstitutional.

The kind of order issued in Cincinnati is called a "prior restraint" -- a ban on expression before it happens -- and the Supreme Court has never upheld such a limitation, nullifying every one it has considered under the First Amendment. Such orders have become rare, however. The Supreme Court's last full-scale ruling on the subject came in 1976.

In that decision, Chief Justice Warren E. Burger wrote: "A prior restraint . . . has an immediate and irreversible sanction." It

"freezes publication." He added: "The barriers to prior restraint remain high unless we are to abandon what the court has said for nearly a quarter of our national existence and implied throughout all of it."

Most Supreme Court rulings on the issue trace back to a 1931 ruling saying that prior restraints on the press were unconstitutional, unless the press reported something like the movement of troops during wartime.

In the Business Week case, Mr. Vittor was in his New York office Wednesday when he got calls from two corporate lawyers telling him that Judge Feikens had issued the ban.

At that time, less than two hours remained before the magazine's presses were to start running an issue containing a story about a legal claim filed by Procter & Gamble Co. against Bankers Trust New York Corp.

Procter & Gamble has been locked in a court fight over investments it bought from Bankers Trust -- so-called "derivatives." Procter & Gamble contends that those were sold without warning about the risks involved. The company claims it lost almost $200 million.

Recently, Procter & Gamble decided to add to its legal claims one based on the federal law against racketeering -- the "RICO" law. Although that law was first adopted by Congress in 1970 to deal with mob syndicates, it has been widely used as a weapon in ordinary commercial legal fights.

According to Mr. Vittor, a Business Week reporter saw a court document in a public file referring to a new complaint. There was no sign that any of the related documents were being kept under seal, the magazine's lawyer said. Further details were obtained from a magazine source who shared the information.

Procter & Gamble and Bankers Trust got word of Business Week's planned story, and asked Judge Feikens to ban the article.

In his one-paragraph order, the 77-year-old judge noted that the documents filed in the case were "under seal" and covered by a protective order to guard their secrecy.

Mr. Vittor, however, noted that the magazine and its publisher are not covered by the protective order and are not involved in the lawsuit between the two corporations. When the magazine's attorney got the order, however, the editorial staff decided to tear up the magazine and withdraw the story in order to obey.

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