Latest Scaife court dispute centers on disclosure of Trib's financial information
February 17, 2016 12:23 AM
Last week, Trib Total Media Inc., parent company of the Pittsburgh Tribune-Review, asked Judge Kathleen A. Durkin, of the Allegheny County Court of Common Pleas, to enter an order protecting its financial information from disclosure.
By Rich Lord/Pittsburgh Post-Gazette
In the court fight over late publisher Richard Mellon Scaife’s spending, attorneys for Pennsylvania newspapers are taking differing positions over the disclosure of financial documents.
Last week, Trib Total Media Inc. asked Allegheny County Common Pleas Judge Kathleen A. Durkin to enter an order protecting its financial information from disclosure. The Trib motion follows decisions in which Judge Durkin found that the newspaper chain’s financial records of the last 24 years are legitimate subjects of discovery in a case that pits the Mr. Scaife’s daughter and son against three trustees who allowed him to drain about $450 million from a trust fund.
The Trib’s proposed protective order would make possible the filing of sealed documents without notice to the media.
“Now when its documents are subject to the common law, First Amendment and Pennsylvania constitutional rights of access, the Trib effectively wishes to seal the proceedings and abrogate the press’ acknowledged, sacrosanct rights of access,” wrote Frederick N. Frank, attorney for the Pittsburgh Post-Gazette and the Philadelphia Inquirer, in a response filed Tuesday.
That response, supported by Mr. Scaife’s children in their own filing, was followed later in the day by a notice of appeal filed by the Trib to the state Superior Court.
“There are times and circumstances when matters of privacy, confidentiality and privilege supersede what I believe is the public’s right to know,” said attorney William Pietragallo, representing Jennie Scaife, “But those are rare circumstances and certainly not, in my opinion, what is present in this lawsuit.”
The dispute over court openness comes in the 16th month of a case in which Ms. Scaife, 52, of Florida, and David Scaife, 50, of Shadyside, contend they were denied a share of a family trust fund created in 1935.
The fund was drained over 20 years, largely to subsidize the Tribune-Review newspapers and Trib Total Media, at the request of Richard Mellon Scaife and with the approval of trustees H. Yale Gutnick, James Walton and PNC Bank. Had there been a balance upon the father’s July 2014 death, it would have gone to the daughter and son — but there was none.
The case revolves around whether spending on the Trib was a “waste,” as the daughter and son argue, or legitimately contributed to the father’s “welfare” as the trustees maintain. Mr. Gutnick recently retired as chairman of Trib Total Media.
Ten days after the case was filed, the Post-Gazette and Philadelphia Inquirer intervened, noting that, “Judicial records are presumptively open to public access.” The next day, the Trib joined in a dozen paragraphs of that motion, including those affirming the presumption of openness.
A September protective order — negotiated between the case’s parties, the Post-Gazette and the Inquirer — presumes that filings are open but allows parties to petition to seal elements. The intervening newspapers get notice and the opportunity to argue against sealing, with Judge Durkin as the decision maker.
The daughter and son have demanded Trib financial records, and Judge Durkin agreed a month ago that they were relevant and should be turned over in discovery. Discovery documents aren’t automatically public, but can be cited in court hearings and filings.
Trib attorney Robert L. Byer wrote last week that Judge Durkin’s discovery decision demands that the newspaper chain turn over “highly sensitive, proprietary, and trade secret information” which could then reach the public domain. He reminded the judge that during a hearing Jan. 14, Mr. Pietragallo said the newspaper chain “was probably losing in the order of magnitude of $10 million in the early years. But as those [trust fund] distributions were made to Dick Scaife, that went from ten to about $70 million a year.”
The Trib wants to protect answers to interrogatories, documents, deposition transcripts and exhibits that it designates as “confidential information” or for “attorneys’ eyes only.” Then the receiving party would have 90 days to challenge the designation, with the judge as referee. In the meantime, the information couldn’t be made public, even in arguments in open court. If the Trib’s secrets were discussed in deposition, it would have the right to designate portions of the transcript as confidential.
Under the Trib’s proposal, if a court filing contained confidential information, it would be sealed with “[n]o further notice to the Pittsburgh Post-Gazette or the Philadelphia Inquirer ...” Two months after the conclusion of litigation, the Trib’s confidential information would be returned or destroyed.
In his filing on Tuesday, Mr. Pietragallo wrote that the Trib has failed to show good cause as to why the protective order is necessary and therefore is not entitled to relief.
Mr. Byer wrote that he thought he had an agreement with James Mannion, attorney for David Scaife, that would have protected Trib secrets, but that the son and daughter then submitted a version that “essentially gutted” the pact.
Mr. Frank, representing the Post-Gazette and Inquirer, replied that the Trib’s attempts to negotiate a pact with Mr. Mannion were “an unsuccessful effort to do an end-run around” the intervenors. It also flies in the face of the Trib’s 2014 joinder which “serves as a judicial admission of the presumption of openness in this proceeding and that a heavy burden firmly rests on any party seeking to seal this proceeding,” Mr. Frank wrote.
He added that the September order provides enough protection “while not limiting the press’ rights of access to judicial proceedings and records.”
If the Trib doesn’t get protection, Mr. Byer wrote, it “will be forced to engage in costly litigation throughout this case simply to preserve the confidentiality of any records it produces throughout the life of this case.” It would then also appeal Judge Durkin’s order to turn over its financials, Mr. Byer wrote.
Rich Lord: firstname.lastname@example.org or 412-263-1542. Paula Reed Ward contributed.
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