US v. Simon

• Decision Date: 10 July 1987
• Docket Number: No. S 87 Cr. 265 (JMC).,S 87 Cr. 265 (JMC).
• Citation: 664 F. Supp. 780
• Parties: UNITED STATES of America, v. Stanley SIMON, Mario Biaggi, Peter Neglia, John Mariotta, Bernard Ehrlich, Richard Biaggi and Ronald Betso, Defendants.
• Court: U.S. District Court — Southern District of New York

664 F. Supp. 780

UNITED STATES of America, v. Stanley SIMON, Mario Biaggi, Peter Neglia, John Mariotta, Bernard Ehrlich, Richard Biaggi and Ronald Betso, Defendants.

No. S 87 Cr. 265 (JMC).

United States District Court, S.D. New York.

July 10, 1987.

COPYRIGHT MATERIAL OMITTED

Robert D. Sack, Mitchell A. Karlan and Richard J. Tofel, Gibson, Dunn & Crutcher, New York City, for Dow Jones & Co., Inc.

Robert L. Raskopf, Townley & Updike, New York City, for Newsday, Inc.

Deborah R. Linfield, New York City, for New York Times Co.

Douglas P. Jacobs, New York City, for CBS, Inc.

Roberta Brackman, New York City, for Nat. Broadcasting Co., Inc.

Marjorie T. Coleman and Theodore Hadjiparaskevas, New York City, for New York News, Inc.

Nancy Brown and David Schultz, Rogers & Wells, New York City, for Associated Press.

Rudolph W. Giuliani, U.S. Atty., and Mary T. Shannon, Asst. U.S. Atty., for the U.S.

Maurice N. Nessen and David Z. Seide, Kramer, Levin, Nessen, Kamin & Frankel, New York City, for Stanley Simon.

Barry I. Slotnick, Slotnick & Baker, New York City, for Mario Biaggi.

Kevin P. McGovern, Brooklyn, N.Y., for Peter Neglia.

Jeffrey Glekel, Skadden, Arps, Slate, Meagher & Flom, New York City, for John Mariotta.

Peter Driscoll, Kostelanetz & Ritholz, New York City, for Bernard Ehrlich.

Dominic Amorosa, New York City, for Richard Biaggi.

Alan Kaufman, Buchwald & Kaufman, New York City, for Ronald Betso.

New York Civil Liberties Union, Arthur Eisenberg, New York City, for amicus curiae.

MEMORANDUM & ORDER

CANNELLA, Senior District Judge:

Before the Court is an application by Dow Jones & Company, Inc., The New York Times Company, CBS, Inc., National Broadcasting Company, Inc., New York News Inc., The Associated Press and Newsday, Inc. "applicants" to vacate this Court's Order of April 23, 1987 "April 23 Order" or "Order". As it now stands, the Order directs defendants, their counsel, the United States Attorney and his representatives to respond to inquiries from the public communications media with the statement "No comment," or "Whatever we have to say will be said or has been said in court."¹

A brief history of the events leading up to the April 23 order will assist the reader in placing the instant application in proper context. On April 1, 1987, former Bronx Borough President Stanley Simon was indicted on six counts of extortion, obstruction of justice, perjury and tax evasion. The charges stemmed from the ever-burgeoning investigation of the Wedtech Corporation "Wedtech". At a pretrial conference held on April 10, the Court established tentative discovery and trial dates. Maurice Nessen, Esq., counsel for Stanley Simon, then read into the record the contents of a letter he had sent to the United States Attorney.² The letter spelled out the terms of a proposed stipulation regarding extrajudicial statements. After the letter had been read, the Court asked whether the Government would have any difficulty with the terms of the stipulation. The United States Attorney responded in the negative.³ Following these discussions, the Government informed the Court and Mr. Nessen that it would be seeking a superseding indictment naming an unspecified number of additional defendants.

Several days later, upon the Government's refusal to execute the stipulation, Mr. Nessen submitted to the Court a proposed order embodying its terms. By letters dated April 16 and April 23, the Government opposed entry of the order. The Government argued that it had never consented to the specific terms of the proposed order and that such terms were inappropriate insofar as they exceeded the scope of Local Criminal Rule 7, to which the Government already considered itself bound.⁴

The Court entered the proposed order on April 23 after considering the extent of both pre-indictment and post-indictment publicity regarding Mr. Simon, the numerous media accounts of an anticipated superseding indictment and the charges likely to be contained therein,⁵ the Government's April 10 in-court consent to the terms of the proposed order and the lack of any cognizable prejudice to the Government.

On June 3, the grand jury investigating Wedtech returned a superseding indictment containing 58 counts and naming six additional defendants: New York Congressman Mario Biaggi, John Mariotta, Peter Neglia, Bernard Ehrlich, Richard Biaggi and Ronald Betso. On June 5, all defendants named in the superseding indictment were arraigned, with the exception of Bernard Ehrlich. On that date, the Court stated from the bench that the terms of the April 23 Order were being extended to all participants for the duration of the case.⁶ During these proceedings, an attorney representing applicant Newsday, Inc. asked to be heard regarding the Order. Newsday was invited by the Court to make a written submission regarding its concerns.

On June 12, a hearing was held concerning the April 23 Order. All parties expressing an interest were provided an opportunity to present their views. First and foremost, the Court polled the individual defendants regarding their positions. Five defendants, Stanley Simon, John Mariotta, Peter Neglia, Bernard Ehrlich and Richard Biaggi expressed support for continuation of the Order; defendants Mario Biaggi and Ronald Betso took no position.⁷ Representatives of the applicants, along with a representative of the New York Civil Liberties Union "NYCLU" were heard, as was counsel for Mr. Simon. At the conclusion of the hearing, the Court invited further written submissions,⁸ granted the request of the representatives of the media to have their submissions considered an application to vacate the April 23 Order and reserved decision.

DISCUSSION

I. STANDING OF APPLICANTS

Applicants are members of the print and broadcast public communications media. At the June 12 hearing, there was some discussion concerning what standing, if any, applicants might possess to challenge an order restraining defendants, their counsel and the United States Attorney "trial participants" from making extrajudicial statements when, except for the Government, none had objected to the terms of the Order and no direct restraint had been imposed on applicants or any other news-gathering organization. Applicants have more thoroughly addressed this issue in their written submissions.

Applicants argue that they have standing to challenge the Order because of "(1) the free speech right with respect to the persons `gagged' and (2) the free press right of the applicants to gather news for dissemination to the public." Applicants argue that they possess standing "separately to assert both rights." Memorandum In Support of Application To Vacate April 23 Order at 5, 87 Cr. 265 (JMC) (filed S.D.N.Y. June 22, 1987) "Memorandum of Applicants" (emphasis in original).

A. The First Amendment and the Individuals Restrained

Applicants first claim standing to challenge the April 23 Order on account of the "free speech" rights of the individuals restrained by it. As nonparties, which are not subject to the Order, however, applicants do not possess standing to assert the First Amendment rights of the individuals who are subject to the Order. See Radio & Television News Assn. v. U.S. District Court, 781 F.2d 1443, 1448 (9th Cir.1986); Levine v. U.S. District Court, 764 F.2d 590, 594 (9th Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 2276, 90 L.Ed.2d 719 (1986); see also Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 80, 98 S.Ct. 2620, 2634, 57 L.Ed.2d 595 (1978). This is especially true where, as here, the individuals restrained have not themselves challenged the Order, or otherwise asserted any infringement of their First Amendment rights.⁹

Applicants' challenge is more precisely premised upon an alleged infringement of their First Amendment "right to receive" or "right to listen to" the speech of those individuals restrained by the Order. In support of this first prong of their standing argument, applicants cite the case of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976); see also Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 559 n. 2, 100 S.Ct. 2814, 2818 n. 2, 65 L.Ed.2d 973 (1980) (Stewart, J., concurring in judgment) (the "right to speak implies a freedom to listen").

In Virginia State Board, the Supreme Court struck down a statute declaring it unprofessional conduct for a pharmacist to advertise the prices of prescription drugs. On the issue of standing, the Court found that a consumer group not directly affected by the statute had standing to challenge it on First Amendment grounds because "a right to advertise ... creates a reciprocal right to receive the advertising," which may then be asserted by such potential recipients. Id. 425 U.S. at 757, 96 S.Ct. at 1823.¹⁰

Under Virginia State Board, it is clear that when an individual desires to speak but is restrained, the potential recipients of that message have standing to challenge the restraint. See id. at 756-57, 96 S.Ct. at 1822-23; see also Kleindienst v. Mandel, 408 U.S. 753, 762-63, 92 S.Ct. 2576, 2581, 33 L.Ed.2d 683 (1972) (citing cases). However, it seems equally clear that "freedom of speech and the reciprocal right to receive that speech presupposes a willing speaker." Virginia State Board, 425 U.S. at 756, 96 S.Ct. at 1823 (emphasis added). Of the seven defendants and their counsel in this case, none have objected to or otherwise challenged the April 23 Order in any respect. Indeed, five of the seven defendants openly support the restraints and the remaining two have taken no position. Only the Government has opposed the Order, primarily on the ground that it is not warranted by the circumstances.¹¹

In the Court's view, a potential recipient of speech faces a two-step hurdle before he may successfully challenge, on First Amendment grounds, a restraint on the right of others to speak. First, his...