Gulliver's Periodicals, Ltd. v. Chas. Levy Cir. Co.

• Decision Date: 07 September 1978
• Docket Number: No. 77 C 547.,77 C 547.
• Parties: GULLIVER'S PERIODICALS, LTD., et al., Plaintiffs, v. CHAS. LEVY CIRCULATING COMPANY, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

455 F. Supp. 1197

GULLIVER'S PERIODICALS, LTD., et al., Plaintiffs, v. CHAS. LEVY CIRCULATING COMPANY, INC., et al., Defendants.

No. 77 C 547.

United States District Court, N. D. Illinois, E. D.

September 7, 1978.

George W. Hamman, Jill Nickerson, Chicago, Ill., Marvin N. Benn, Chicago, Ill., for plaintiffs.

Keith C. McDole, Don H. Reuben, Thomas F. Ging, Kirkland & Ellis, Chicago, Ill., for Newsweek, Inc. and Time, Inc. Roger B. Harris, Susan Henderson, Altheimer & Gray, Chicago, Ill., for Kable News and Curtis Circulating Co.

John M. Hadlock, Whitman & Ransom, New York City, Wilbur H. Boies, McDermott, Will & Emery, Chicago, Ill., for Select Magazines and Ziff-Davis Pub. Co.

Frederic J. Artwick, Sidley & Austin, Chicago, Ill., for Fawcett Pub. Co.

Earl E. Pollock, Sonnenschein, Carlin, Nath & Rosenthal, Duane C. Quaini, Chicago, Ill., for Chas. Levy Circulating Co.

Bergstrom, Davis & Teeple, Chicago, Ill., for Independent News.

Isham, Lincoln & Beale, David M. Spector, Chicago, Ill., for The New York Times Co.

David W. Andich, Roan & Grossman, Chicago, Ill., for The Chicago Reader, Inc.

MEMORANDUM

LEIGHTON, District Judge.

This private antitrust suit has generated a discovery controversy between the lead defendant, the Chas. Levy Circulating Company, Inc., and the Chicago Reader, a newspaper publisher, along with two of its contributing reporters concerning a deposition at which the reporters will be questioned about their sources for an article they wrote for the publisher. The publisher and the reporters have moved to quash the deposition subpoenas on the ground that the information sought is irrelevant and immaterial; but more importantly, that the publisher and the reporters are protected by the first amendment to the United States Constitution from revealing the sources and source material on which they relied in writing and publishing the article. This court concludes that even if the information sought is relevant and material to this case, the publisher and its reporters are constitutionally protected from being subjected to a deposition at which they will be required to answer questions concerning sources on which they relied in writing and publishing the article in question. Accordingly, the deposition subpoenas as served are quashed; and the depositions as sought to be taken are barred.

I.

Gulliver's Periodicals, Ltd. is an Illinois corporation engaged in the business of distributing magazines and newspapers. Bob's New Emporium, Inc. is a retailer of magazines and newspapers. Both corporations are wholly owned and controlled by Robert Katzman who is a distributor of periodicals. The corporations are plaintiffs in this suit in which it is alleged that defendants, all of them national distributors and publishers, are violating Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, by engaging in a conspiracy and combination in which they have agreed to deal only with Chas. Levy Circulating Co., a principal distributor of magazines and newspapers in the greater metropolitan area of Chicago. Thus, it is charged that defendants have conspired to eliminate Gulliver's as a competitor of Levy. As a consequence of this conspiracy, plaintiffs allege that Bob's Emporium is compelled to pay a substantially higher price for the magazines and newspaper it retails.

On June 3, 1977, the Reader, a Chicago weekly newspaper, published an article entitled "A Newsboy's Improbable Dream" written by two contributing reporters, David Martin and Michael VerMeulen, describing Robert Katzman's difficulties in the operation of his distributorship. The article was liberally laced with quotes and comments concerning the history of the Chas. Levy operation, its alleged domination of the periodical distribution business in the Chicago area, Katzman's claimed difficulties with Levy, and this pending suit. Chas. Levy took a deposition of Katzman who, when questioned about the article, stated that portions of it were erroneous.

Shortly after discovering this information from Katzman, Chas. Levy, pursuant to Rules 30 and 45, Fed.R.Civ.P., served third party deposition notices on the company that published the Reader and on the authors of the article. The subpoena served on the publisher required production of

all documents in your . . . possession, custody or control which constitute, relate or refer to any interview, conversation, communication or other contact with Robert Katzman in the preparation of or otherwise concerning an article headlined "A Newsboy's Improbable Dream", bearing the by-line "By David Martin and Michael VerMeulen", and appearing on pages 1, and 18-23 of the Reader of Friday, June 3, 1977, Volume 6, No. 35, published by Chicago Reader, Inc., 12 East Grand Avenue, Chicago, Illinois, 60611, including, but not limited to notes, memoranda and mechanical or electronic recordings.

The subpoenas served on the authors of the article required production of

all documents in your . . . possession, custody or control which constitute, relate or refer to any interview, conversation, communication or other contact with Robert Katzman in the preparation of or otherwise concerning an article headlined "A Newsboy's Improbable Dream", bearing the by-line "By David Martin and Michael VerMeulen", and appearing on pages 1 and 18-23 of the Reader of Friday, June 3, 1977, Volume 6, No. 35, published by Chicago Reader, Inc., 12 East Grand Avenue, Chicago, Illinois 60611, including, but not limited to notes, memoranda and mechanical or electronic recordings.

II.

These are the notices of depositions against which the publisher and the two reporters seek a protective order; and these are the subpoenas which they have moved to quash. They argue that the information and documents sought by Chas. Levy are not relevant to its defenses, nor are they relevant to its counterclaim which is based on an article that was published in the Maroon, not in the Reader; that the subpoenas infringe their confidential relation with their news source, Robert Katzman; that they have a First Amendment privilege of non-disclosure of news sources which would be violated if they were to comply with the notices and subpoenas; and that the Illinois Reporter's Privilege Statute, Ill.Rev.Stat., ch. 51, §§ 111, et seq. (1975), protects them from compelled disclosure of the information sought.

Chas. Levy counters these arguments with the contentions that the materials it seeks to obtain, and the information about them, are relevant to the allegations of its counterclaim against the plaintiffs in this suit; that there is no First Amendment reporter's privilege against disclosure of confidential relations with news sources; and that the state statute on which the publisher and the reporters rely does not govern disposition of these motions because this suit is pending in a federal court where issues of this kind are controlled by the Federal Rules of Evidence.

III.

From the outset, this court rejects the notion that Illinois law governs the disposition of these motions. In federal question cases and cases where federal law governs, the clear weight of authority supports reference to federal law on the existence and scope of a privilege. Rule 501, Federal Rules of Evidence; Lewis v. United States, 517 F.2d 236, 237 (9th Cir. 1975). However, where, as in this case, there is no controlling federal statute on the asserted privilege, the district court for its guidance may consider existing state law concerning the privilege. Baker v. F & F Investment, 470 F.2d 778, 781-82 (2d Cir. 1972), cert. denied, 411 U.S. 966, 93 S.Ct. 2147, 36 L.Ed.2d 686 (1973).

By its Illinois Reporter's Privilege Act, Illinois law provides:

No court may compel any person to disclose the source of any information obtained by a reporter during the course of his employment except as provided in this Act. The privilege conferred by this Act is not available in any libel or slander action in which a reporter or news medium is a party defendant. Ill.Rev.Stat. ch. 51, § 111 (1975).¹

A "source" is defined to include and encompass "the person or means from or through which the news or information was obtained." Ill.Rev.Stat. ch. 51, § 112(c) (1975). Illinois law provides that the party seeking to divest a reporter of his privilege of non-disclosure must apply to the circuit court where the action is proceeding for an order of divestiture. Ill.Rev.Stat. ch. 51, § 113 (1975). In proceeding on such an application the circuit court should consider,

the nature of the proceedings, the merits of the claim or defense, the adequacy of the remedy otherwise available, if any, the relevancy of the source, and the possibility of establishing by other means that which it is alleged the source requested will tend to prove. Ill.Rev.Stat. ch. 51, § 116 (1975).

This court has examined the statute, but concludes that it does not control disposition of the motions in this case. This conclusion requires the court to determine the law which does govern them.

The controversy presented by these motions is a clash between public and private interest in compelled testimony; it involves the duty to give testimony,² and the public interest in the non-disclosure of a journalist's confidential sources. See Baker v. F & F Investment, 470 F.2d at 782-83; Note, Reporters and Their Sources: The Constitutional Right to a Confidential Relationship, 80 Yale L.J. 317 (1970). Courts have recognized that in the process of gathering information, a reporter sometimes makes assurances that either the source of his information will not be disclosed or that only some of the information acquired will be published. If these assurances are broken, potential sources of information will be reluctant to come forward and "information lost to the press is information lost to the public; unnecessary impediments to a newsman's ability to gather facts, follow leads, and assimilate sources can restrict the quality of our news...