Baker v. F & F INVESTMENT

• Decision Date: 07 December 1972
• Docket Number: No. 173,Docket 72-1413.,173
• Parties: Charles BAKER et al., Appellants, v. F & F INVESTMENT et al., Appellees.
• Court: U.S. Court of Appeals — Second Circuit

470 F.2d 778 (1972)

Charles BAKER et al., Appellants, v. F & F INVESTMENT et al., Appellees.

No. 173, Docket 72-1413.

United States Court of Appeals, Second Circuit.

Argued November 16, 1972.

Decided December 7, 1972.

Douglas C. Nohlgren, Thomas P. Sullivan, John C. Tucker, John G. Stifler, Richard T. Franch, Chicago, Ill. (Jenner & Block, Thomas J. Boodell, Jr., Boodell, Sears, Sugrue, Giambalvo & Crowley, Chicago, Ill., Herbert Teitelbaum, Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel), for appellants.

Martin I. Kaminsky, Pollack & Singer, New York City, for appellees.

Before SMITH, KAUFMAN and MULLIGAN, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge:

This unusual interlocutory appeal involves the validity of a district judge's decision refusing to compel a journalist to disclose confidential news sources. Appellants here are plaintiffs in a federal class action pending in the Northern District of Illinois,¹ a case which involves alleged racial discrimination in the sale of houses to Negroes in Chicago. Appellants moved in the Southern District of New York for an order under Rule 37, F.R.Civ.P.,² to compel Alfred Balk, a journalist, to answer questions posed to him during the taking of his oral deposition in New York City. Judge Bonsal denied the motion. Appellants urge us to extend to this civil case the limited principle of Branzburg v. Hayes (United States v. Caldwell), 408 U.S. 665, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972), which held only that newsmen could be required to disclose confidential sources to a grand jury conducting a criminal investigation. We decline that invitation and affirm the order below.³

I.

The underlying case is a civil rights class action brought in behalf of all Negroes in the City of Chicago who purchased homes from approximately 60 named defendants between 1952 and 1969. The complaint alleges that defendants sold homes at excessive prices by engaging in racially discriminatory practices such as "blockbusting." Appellants' complaint survived a motion to dismiss, see, Contract Buyers League, et al. v. F&F Investment, 300 F.Supp. 210 (N.D. 111, 1969)⁴ and, with the issue joined they embarked upon pretrial discovery.

In connection with its discovery, appellants deposed Alfred Balk who is, at present, editor of the Columbia Journalism Review and a lecturer at the Graduate School of Journalism of Columbia University. Approximately ten years ago, while living in Chicago, Mr. Balk wrote an article on "blockbusting" which was published in the Saturday Evening Post on July 14, 1962. The story, entitled "Confessions of a Block-Buster," was based upon information supplied to Mr. Balk by an anonymous real estate agent in Chicago, given the pseudonym "Norris Vitchek" for purposes of publication. The record discloses that "Vitchek" was unwilling to make his information available unless Balk and his publishers agreed not to reveal the true identity of their source. The article exposed details of real estate practices in the Chicago area including racially discriminatory activities on the part of unscrupulous landlords and real estate speculators.

At his deposition taken on June 7, 1971, it was apparent that Balk was highly sympathetic to appellants' cause and was anxious to cooperate. He indicated that he would "be happy to verify such information as you find in the article and describe such as I understand as sic the general mechanics of the real estate speculators' operations." He went on to state that he wrote the article on blockbusting, and that it accurately reflected information provided to him by "Norris Vitchek." Balk testified that "Vitchek" was a real person but Balk was unwilling to identify him on the ground that information given by "Vitchek" was made available on a confidential basis. Balk made it clear that his refusal to disclose confidential sources was based on "the First Amendment . . . which protects not only the right to disseminate, but the right to gather information."

Accordingly, appellants moved under Rule 37, F.R.Civ.P., for an order compelling Balk to disclose the identity of his confidential source. Judge Bonsal, in a well-considered opinion filed prior to the Supreme Court's decision in Branzburg v. Hayes (United States v. Caldwell), supra, balanced the competing public and private interests involved in the case and concluded that Balk should not be required to reveal "Vitchek's" identity.

The law in this area is clearly stated. A motion seeking a discovery ruling is addressed to the discretion of the district court, and our function on appeal is to determine whether the trial judge abused his discretion in entering the challenged order, see, e. g., Montecatini Edison S.P.A. v. E. I. du Pont de Nemours & Co., 434 F.2d 70 (3 Cir. 1970); Borden Co. v. Sylk, 410 F.2d 843 (3 Cir. 1969); Tiedman v. American Pigment Corp., 253 F.2d 803 (4 Cir. 1958). We conclude that Judge Bonsal was well within the ambit of his discretionary authority in denying appellants' motion for discovery.

Rather than rely on the Ninth Circuit Court of Appeals's decision in Caldwell v. United States, 434 F.2d 1081 (9 Cir. 1970), which established a journalist's testimonial privilege in criminal investigations conducted by the grand jury — a ruling subsequently reversed by the Supreme Court in Branzburg v. Hayes, supra⁵ — Judge Bonsal instead sought independently to ascertain the applicable federal law governing resolution of the discovery motion before him. It suffices to state that federal law on the question of compelled disclosure by journalists of their confidential sources is at best ambiguous. Although it is safe to conclude, particularly after the Supreme Court's decision in Branzburg, a case about which we will have more to say in Part II of this opinion, that federal law does not recognize an absolute or conditional journalist's testimonial "privilege", neither does federal law require disclosure of confidential sources in each and every case, both civil and criminal, in which the issue is raised. Absent a federal statute to provide specific instructions, courts which must attempt to divine the contours of non-statutory federal law governing the compelled disclosure of confidential journalistic sources must rely on both judicial precedent and a well-informed judgment as to the proper federal public policy to be followed in each case.

To inform his judgment concerning appropriate federal public policy in the area of a newsman's privilege, Judge Bonsal looked to both New York and Illinois statutes governing newsmen's rights. These two states — and there are others — have enacted legislation protecting a journalist from forced disclosure of his confidential sources. Both statutes⁶ were enacted after the publication of Mr. Balk's article, but prior to the filing of appellant's motion in the district court. In a memorandum to the Legislature approving New York's "newsman's privilege" statute, Governor Rockefeller stated:

Freedom of the press is one of the foundations upon which our form of government is based. A representative democracy, such as ours, cannot exist unless there is a free press both willing and able to keep the public informed of all the news.

The threat to a newsman of being charged with contempt and of being imprisoned for failing to disclose his information or its sources can significantly reduce his ability to gather vital information. . . .

. . . . . .

. . . This legislation affords a stronger safeguard of the free channels of news communication . . . by protecting newsmen from being compelled to disclose the information they gather, as well as the identity of their informants . . . .⁷

New York and Illinois State law, while not conclusive in an action of this kind, reflect a paramount public interest in the maintenance of a vigorous, aggressive and independent press capable of participating in robust, unfettered debate over controversial matters, an interest which has always been a principal concern of the First Amendment, see e. g., New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). Compelled disclosure of confidential sources unquestionably threatens a journalist's ability to secure information that is made available to him only on a confidential basis — and the district court so found. The deterrent effect such disclosure is likely to have upon future "undercover" investigative reporting, the dividends of which are revealed in articles such as Balk's, threatens freedom of the press and the public's need to be informed. It thereby undermines values which traditionally have been protected by federal courts applying federal public policy.

As against these significant public and private interests, appellants urge us to consider the overriding importance of compelling testimony in judicial proceedings, see, e. g., Blackmer v. United States, 284 U.S. 421, 52 S.Ct. 252, 76 L.Ed. 375 (1932) (criminal proceeding); Garland v. Torre, 259 F.2d 545 (2 Cir.), cert. denied 358 U.S. 910, 79 S.Ct. 237, 3 L.Ed.2d 231 (1958) (libel action). This federal public policy is particularly strong, we are told, when the issue involves enforcement of federal laws in federal courts, and is even more trenchant when the case involves claims under various provisions of the civil rights acts.

This argument, we believe, goes too far, for it would require disclosure of confidential sources in every case based upon federal question jurisdiction or, at least, in every case raising a claim under the civil rights acts. We can see no justification for either a blanket rule covering all federal question cases, or for a partial rule of disclosure for all civil rights actions. It would be inappropriate for a court to pick and choose in such gross fashion between different acts of Congressional legislation, labelling one "exceedingly important" and another less so, without specific directions from the Legislature. While we recognize that there...