The Story You Should Be Reading

We are not accustomed to writing about ourselves, but an urgent issue has arisen that warrants comment. On Sept. 13, The McGraw-Hill Companies, publisher of BUSINESS WEEK, received a fax from the U.S. District Court for the Southern District of Ohio barring us from publishing an article. This was the first time in our 66-year history that we have ever been forced by the government to pull a story. This action is a most egregious attempt to curtail the free flow of information essential not only for intelligent political discourse but also for rational economic decision-making.

The story involved Procter & Gamble Co.'s $195 million suit against Bankers Trust Co. over its sale of derivatives to P&G. The prior restraint order was imposed on BUSINESS WEEK without notice by a judge who appears to have received ex parte communication on the phone from attorneys involved in the litigation. No briefs were filed, and BUSINESS WEEK was given no opportunity to be heard by the court, which faxed the restraining order just three hours before the publication deadline.

The basic legal issue is prior restraint--a lawyer's way of saying government censorship. We believe the gag constitutes a serious violation of the magazine's rights under the First Amendment. It prevents us from fulfilling our mission of providing all pertinent information on national and global business and economic affairs necessary for readers to act as productive and free citizens of this nation. The ability to report is at the core of the protections afforded by the First Amendment. And for good reason. The efficient workings of America's political and economic systems depend on the unfettered ability of the press to report on the news in a timely fashion.


The power to censor is the power to regulate information. It is unacceptable in a market democracy. Fortunately, legal precedent overwhelmingly favors the right of free speech over virtually any other issue. No prior restraint on the publication of information has ever been upheld by the Supreme Court. The judicial system has long held that "prior restraints on speech and publication are the most serious and least tolerable infringements on First Amendment rights" (Nebraska Press Assn. v. Stuart, 1976). The courts have clearly established that only in the case of war and national security can the principle of free speech possibly be superseded. Even then, the hurdle of proof is extremely high. In the Pentagon Papers case in 1971, the High Court rejected efforts to impose prior restraint despite the government's arguments that national security was at stake and the documents had been stolen.

BUSINESS WEEK, of course, is not above the law, and we are obeying the injunction while appealing it. We have moved to stay the order before the Supreme Court. The process of appeal, unfortunately, takes a great deal of time and the article goes unpublished and unread by millions of readers.

The banned story contains information from documents presented during the discovery process that both parties and the court agreed were to be sealed and kept from the public eye. The district court argues that in imposing prior restraint on BUSINESS WEEK, it is preserving the sanctity of the court system by protecting the privacy of that discovery process.


The federal judiciary must have the right to set and enforce rules. Since a modicum of privacy is essential to the negotiating process and integral to the judicial system, we recognize that the interests of the judiciary and the media are sometimes in conflict. But blanket seals routinely given are not the answer. Moreover, BUSINESS WEEK broke no judicial rules. The magazine is not a party to the litigation, nor is it a party to the protective order sealing the documents. Indeed, the order specifically states it is only between P&G and Bankers Trust.

The fact is, BUSINESS WEEK lawfully obtained a copy of the Sept. 1, 1995, P&G motion to amend its original complaint against Bankers Trust. That motion included new, more serious racketeering charges. It was not filed under seal, nor did the motion itself indicate that documents attached to it were being filed under seal. When the magazine, following the most careful journalistic practice, contacted Bankers Trust and P&G for comment, the litigants refused to comment and persuaded the district court to gag BUSINESS WEEK.

The prior restraint placed on BUSINESS WEEK is the latest manifestation of a trend to seal documents in civil cases to hide information from public view. In this case, the litigants are two giant, publicly traded corporations. The information obtained by P&G about Bankers Trust's sale of derivatives that is now secret could have serious consequences for dozens of companies and millions of shareholders. Many institutions are still selling derivatives to pension funds, corporations, and institutional money managers. They have a right to know how Bankers Trust operated with its clients and why it is trying so hard to keep this information secret. If it were up to BUSINESS WEEK, the business and financial communities would already know.

It is not fashionable in these times to support the media. But the stakes in this constitutional case are extremely high. That's why so many members of the print and electronic media--including rivals--back BUSINESS WEEK. Dow Jones, The New York Times, Bloomberg, Time, Newsweek, ABC News, News America Publishing, Advance Magazine Communications, Gannett Satellite Information Network, the Magazine Publishers Assn., and the Association of American Publishers have filed in court as amici curiae in support of BUSINESS WEEK. In a statement, they say banning the article "would allow parties involved in highly publicized legal proceedings to dictate what the press can and cannot print and televise, and what the public can and cannot know."

This is intolerable in a free society. BUSINESS WEEK, of course, is legally responsible for all that it publishes. But censorship is a totalitarian act. That's why prior restraint is unconstitutional and a danger to us all.

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