US District Court Grants CFTC’s Request to Enforce Subpoena Against McGraw-Hill

The US District Court for the District of Columbia has granted the Commodity Futures Trading Commission’s request for enforcement of an administrative subpoena duces tecum served on McGraw-Hill in April of this year. McGraw-Hill had objected to surrendering the information requested, alleging that it was collected in the course of protected newsgathering by its subsidiary publication, Platt’s. “Primarily, it argues that Platts, as a news publication, is protected from revealing confidential information received from its sources….Even though, as McGraw-Hill concedes, the privilege is qualified, it argues that the CFTC has not made the showing needed to overcome the privilege…Specifically, McGraw-Hill argues, the CFTC has failed to demonstrate that the information is crucial to its investigation or that it has exhausted alternative sources…In the alternative, McGaw-Hill asserts that the Subpoena is overly broad and unduly burdensome….In reponse, the CFTC asserts that there is no privilege because Platts is not engaged in traditional news gathering and/or is not disseminating its reports to the public….It further argues that, even if a privilege does exist, it is clearly abrogated by the public interest in law enforcement, the CFTC’s need for the information and its exhaustion of other sources….”

After considering whether Platts might claim the reporter’s privilege and concluding that it might, the court discussed the qualified nature of the privilege in this matter. “Since in this instant case, the party seeking disclosure is the government pursuing an enforcement matter, the interests are more aking to those in a criminal case than a purely civil matter. Among other things, the concerns attendant upon a private party seeking disclosure are not significant here….The scope and authority of the CFTC are more similar to that of a grand jury….Therefore, this Court finds that, while the strong preference for abrogation used in criminal cases does not apply here, the posture of this matter calls for a more qualified view of the privilege than would be appropriate in a purely civil case. It is under this view of the privilege that the balancing test will be undertaken.”

The court then found that the CFTC had shown that the public’s need for the information and the exhaustion of alternative source had overcome the qualified nature of the privilege. It next considered McGraw-Hill’s claim that the subpoena was “unduly burdensome.” While this Court is unpersuaded that McGraw-Hill’s general complaints…meet the undue burden standard, this Court does agree that some of the Requests are excessively borad on their face and technically call for a larger volume of data than may have been intended by the CFTC. To the extent that these Requests are unduly burdensome, this Court will modify them as explained infra….”

Read the entire memorandum opinion here. Read an earlier post on this case here.