The Lexington Herald-Leader Co. v. Beard, HERALD-LEADER

• Decision Date: 20 December 1984
• Docket Number: HERALD-LEADER,No. 84-SC-244-DG,84-SC-244-DG
• Citation: 690 S.W.2d 374
• Parties: 11 Media L. Rep. 1376 THE LEXINGTONCOMPANY, Movant, v. Flossie C. BEARD, Bob Boone, Grace M. Donnelly, Kathy D. Greer, Connie S. Heird, Peter H. Laws, Karen M. Meekins, Lori G. Miller, Vicky Rankin, Martha Robertson, Kay Shannon, William A. Stallings, and Danielle G. Twining, Respondents.
• Court: United States State Supreme Court — District of Kentucky

Page 374

690 S.W.2d 374

11 Media L. Rep. 1376

THE LEXINGTON HERALD-LEADER COMPANY, Movant, v. Flossie C. BEARD, Bob Boone, Grace M. Donnelly, Kathy D.

Greer, Connie S. Heird, Peter H. Laws, Karen M. Meekins,

Lori G. Miller, Vicky Rankin, Martha Robertson, Kay Shannon,

William A. Stallings, and Danielle G. Twining, Respondents.

No. 84-SC-244-DG

Supreme Court of Kentucky.

Dec. 20, 1984.

Rehearing Denied June 13, 1985.

Carl Timothy Cone, Elsa Goss Black, Stoll, Keenon & Park, Lexington, for movant.

Thomas H. Burnett, David M. Andrews, Lexington, for respondents.

LEIBSON, Justice.

This case involves the scope of discovery in a libel case.

Respondents are thirteen former employees of the University of Kentucky's Tobacco and Health Institute who sued the movant, a Lexington newspaper, claiming that the newspaper had published a series of articles about the Institute containing false and defamatory statements that the respondents were "fired," that they were "incompetent, crooked, or useless," and that the Institute was a "cesspool."

In June, 1981, shortly after suit was filed, the respondents served a subpoena duces tecum on three reporters involved in the publication of the allegedly defamatory articles directing them to produce at deposition "all documents of whatever nature relating to the matters in controversy herein, including but not limited to any memoranda of interviews, records of people interviewed, notes of whatever nature, memoranda of phone calls, reports of independent agencies, and any and all other materials acquired during the course of investigation or preparation of the newspaper stories referred to in the complaint ...."

The movant responded with a motion to quash, alleging the material was "nondiscoverable, at this time, by virtue of the First Amendment to the United States Constitution and KRS 421.100."

The matter was argued but was not ruled upon until February 16, 1983. In the interim the court had required the movants, as plaintiffs, to pursue other methods of discovery which included deposing the former director of the Institute at the time, to whom much of the information reported was attributed, and serving and answering extensive interrogatories.

It was only after this discovery had failed to produce answers to basic questions as to what information was in the possession of the reporters at the time of publication that the trial court overruled the motion to quash while imposing certain "conditions." These conditions included that the newspaper would be "permitted to furnish copies of the reporters' notes in lieu of the original thereof," would be permitted "to delete from the copies ... such portions of the notes as refer solely to matters other than the issues raised by the allegations of the complaint," and would be entitled to a further hearing whenever there was "any doubt as to whether material should or should not be deleted."

Simply stated, the key question in this case is whether or not the articles published were based on information in the possession of the reporters at the time, and the respondents claimed that as a practical matter there was no reasonable or practical alternative to the subpoenas duces tecum for obtaining such discovery at the point where the trial court acted to overrule the newspaper's motion to quash, which was further qualified by its protective order. Further, the respondents concede as a fact for purposes of this case that the order as restricted to furnishing "copies of the reporters' notes in lieu of the original," means that the names of the informants shall be deleted, thus recognizing the statutory privilege conferred by KRS 421.100 protecting news media from disclosure of "the source of any information procured or obtained by [a reporter], and published in a newspaper...." ¹

The trial court specified that its discovery order should be a final order subject to appeal. CR 54.02. In March 1983 the newspaper perfected an appeal to the Court of Appeals, seeking to raise statutory and constitutional questions as to the discovery required by the trial court's order. In March 1984 by "Opinion and Order," the Court of Appeals dismissed the newspaper's appeal on grounds that "[d]espite the recitation of finality in the order ... the order is interlocutory in nature and does not finally adjudicate the rights of the parties below." The Court of Appeals cited Hook v. Hook, Ky., 563 S.W.2d 716, 717 (1978):

"Where an order is by its very nature interlocutory, even the inclusion of the recitals provided for in CR 54.02 will not make it appealable."

Because of the importance of underlying considerations in this case involving the scope of freedom of the press, we granted discretionary review. After considering both the procedural question as to the right to appeal a discovery issue of this nature, and the larger question of the competing interests involved, we affirm.

First, as to the procedural question. The test for determining the appealable character of an order of the trial court is whether "... the order grants or denies the ultimate relief sought in the action or requires further steps to be taken in order that parties' rights may be finally determined." Evans Elkhorn Coal Co. v. Ousley, Ky., 388 S.W.2d 130, 130-131 (1965).

In Claussner Hosiery Co. v. City of Paducah, 275 Ky. 149, 120 S.W.2d 1039 (1938), we held that the trial court's order granting a subpoena duces tecum requiring the witness to produce the books and records of a corporation was "purely interlocutory" and therefore, not appealable. 120 S.W.2d at 1040. In Crook v. Schumann, 292 Ky. 750, 167 S.W.2d 836 (1942), a stockholder's action for mismanagement, we reaffirmed that such an order is "clearly interlocutory and not appealable." 167 S.W.2d at 839.

Movant takes the position that it is not necessary for all issues between the parties to be finally resolved before an order may be designated as final for purposes of appeal, relying primarily on Ratliff v. Fiscal Court of Caldwell County, Kentucky, Ky., 617 S.W.2d 36 (1981). Ratliff was a condemnation case where the condemnee challenged the exercise of the power of eminent domain. We recognize the condemnee's right to appeal an interlocutory judgment granting the condemnor the immediate right of possession even though the issue of damages remained undecided.

The qualitative distinction between a discovery order and an order divesting a property owner of his property should be readily apparent. An order of immediate possession which irreversibly disposes of the use and possession of property is final in character even though there is another issue in the case, compensation for the taking, which remains to be decided. A discovery order is totally dissimilar. As a general proposition to permit appeals from discovery orders would create intolerable delay and unmitigated chaos in the progress of the litigation.

But, of course, it is not enough to dispose of the present case on the basis of the rule foreclosing appeal of a discovery order in ordinary circumstances. Discovery is challenged here on the basis that there is a competing public interest of constitutional magnitude, freedom of the press. Although movant has elected to proceed by appeal, the right to seek a writ of prohibition is not abandoned. Assuming the movant could establish that the lower court, although proceeding within its jurisdiction, was acting incorrectly in circumstances where there is no adequate remedy by appeal and great injustice or irreparable injury will result, such a writ would be available. Shumaker v. Paxton, Ky., 613 S.W.2d 130 (1981); Warecke v. Richardson, Ky., 468 S.W.2d 795 (1971). This case has already been delayed a year and a half by the newspaper's effort to effect a direct appeal of the trial court's discovery order, followed by its petition for discretionary review. In the interest of justice and judicial economy, this case cannot stand a further, similar delay while a writ of prohibition works its way through the appellate process. It is incumbent upon us to go beyond the Court of Appeals' dismissal on procedural grounds and deal with the substantive issues.

There is a striking similarity between this case and Nazareth Lit. & Ben. Inst., d/b/a SS. Mary & Elizabeth Hospital v. Stephenson, Ky., 503 S.W.2d 177 (1973). In the SS. Mary & Elizabeth Hospital case the issue was whether the hospital was required to respond to a discovery order directed to statements and reports of physician members of its staff rendered in internal peer review procedures, where the issue was the hospital's alleged negligence in permitting an incompetent physician to practice in the hospital. The hospital argued an overriding public interest "that such reports ... must remain confidential because their revelation would impede the freedom of communication between physicians and hospital authorities concerning proper methods of treatment and the corrections of mistakes." 503 S.W.2d at 178. At the outset of the opinion this court addressed the question whether the hospital should have proceeded by appeal or writ of prohibition. We elected to decide the case on the merits, rather than to dispose of it on procedural grounds, primarily because "the issue is one of positive public interest." The same consideration applies here.

Arguably, the confidentiality of the information in a reporter's notes may be of more, or less, public importance than the confidentiality of a hospital's peer view procedures. But there are a number of cardinal principles set out in the SS. Mary & Elizabeth Hospital case which are applicable here without regard to the relative public importance of the two interests. These are:

1) "Claims of privilege are carefully scrutinized, and impediments to the discovery of truth are afforded validity in relatively few instances in the common law." 503 S.W.2d at 179. Since there was "no applicable privilege expressed in either the general law of...