Flores v. Cooper Tire and Rubber Co.

SNOW, Judge,

dissenting:

¶ 61 In my view, the issue presented by this appeal is whether the trial court violated Cooper’s right to due process when it accepted and considered the affidavit of Boudreau, filed ex parte and under seal, without revealing or describing any part of the affidavit’s contents to Cooper. Because I believe under the circumstances that it did, I dissent.

¶ 62 In our previous decision order we determined that when KNXV voluntarily agreed to be subject to the confidentiality order in this matter, and nevertheless published documents that were subject to it, KNXV had the burden of establishing that its source for the documents was outside this litigation before further disseminating them. Scripps Howard Broad. Co. v. Schneider, 1 CA-SA 06-0081 (Ariz.App. June 13, 2006) (mem. decision); see also Snepp v. United States, 444 U.S. 507, 510 n. 3, 100 S.Ct. 763, 62 L.Ed.2d 704 (1980) (observing that a confidentiality agreement entered voluntarily is generally not considered “unenforceable as a prior restraint on protected speech”); Charter Commc’ns, Inc. v. County of Santa Cruz, 304 F.3d 927, 935 n. 9 (9th Cir.2002).

¶ 63 We further noted that both Cooper and the trial court had an interest in the enforcement of the confidentiality order.

Cooper has a legitimate interest in maintaining the confidentiality of trade secrets and the enforcement of a voluntarily-entered confidentiality agreement. In addition, the trial court has a legitimate interest in maintaining and enforcing its px'eviously entered orders, including the instant one by which [KNXV-TV] voluntarily agreed to be bound.

Scripps Howard, 1 CA-SA 06-0081, slip op. at 7.

¶ 64 We recognized that A.R.S. § 12-2237 protected KNXV from revealing the source of its information. But, we noted that under the circumstances, § 12-2237 “can be accommodated by the trial court conducting an in camera review of the underlying facts as to how the subject documents were obtained.” Id. at 6.

¶65 On remand, over Cooper’s objection, the trial court agreed to employ a two-step procedure proposed by KNXV. In the first step of that px’ocedure the trial court agreed to accept an additional ex parte sealed declaration by Boudreau. KNXV apparently advised both Cooper and the trial court that this supplemental affidavit did not name Boudreau’s source for the documents but did further detail the facts behind Boudreau’s receipt of the documents. The trial court did not propose to independently question Boudreau concerning her assertions in the affidavit. Nor did the court propose to x-edact only those specific portions of the affidavit that might serve to identify the source of the documents, or otherwise provide Cooper with any of the non-identifying facts that the dee*64laration contains about how KNXV obtained the documents from a source outside this litigation. Nevertheless, the trial court invited Cooper to submit whatever information or checklists it thought the court could use in evaluating the supplemental Boudreau affidavit. After considering this information the trial court indicated it would determine if the second step, holding an evidentiary hearing, would be appropriate.

¶66 Cooper objected to submitting information to impeach the declaration without even having a general idea as to what it contained. It thus submitted no additional materials. Two days later, after reviewing the Boudreau affidavit, the court determined no evidentiary hearing was necessary and vacated its earlier order preventing KNXV from further dissemination of the documents at issue.

¶ 67 I part company with the majority because I think it not only sanctions a deprivation of due process but it fails to give full effect to our prior decision order. A careful reading of that order demonstrates that this court already took into account the requirements of A.R.S. § 12-2237 and mandated the required procedure. While A.R.S. § 12-2237 protects KNXV from identifying its source, it does not, in these circumstances, protect KNXV from otherwise describing with some particularity how it came to obtain the documents at issue. We narrowly construe statutory privileges because they are in “derogation of the search for the truth” and the public generally “has a right to every man’s evidence.” Ariz. Indep. Redistricting Comm’n v. Fields, 206 Ariz. 130, 136, ¶ 14, 75 P.3d 1088, 1095 (App.2003) (quoting United States v. Nixon, 418 U.S. 683, 709-10, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974)).

¶ 68 While due to the statutory privilege Cooper may not have the right to ascertain the exact identity of the source which provided KNXV with the documents, it does have the right under these circumstances to challenge KNXV’s assertion that the source of the documents was not this litigation. And, to the extent possible without ascertaining the identity of the source, Cooper may challenge the particulars of how KNXV asserts that took place. Thus, in our previous decision order we did not mandate that Boudreau reveal the source of her information, but we did mandate at a minimum that she disclose “underlying facts as to how the subject documents were obtained.” Scripps Howard, 1 CA-SA 06-0081, slip op. at 6.

¶ 69 While the trial court considered the declaration, it provided Cooper with no access to any of its contents. In such circumstances the trial court’s invitation to Cooper to submit any “checklists” or other information by which the veracity of the declaration might be evaluated was essentially meaningless. “[Fjairness can rarely be obtained by secret, one-sided determination of facts decisive of rights.” Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 170, 71 S.Ct. 624, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring).

¶70 Further, in our prior decision order, we noted that KNXV could not meet its burden of proof by “[sjimply relying on an unsubstantiated representation in an otherwise cryptic affidavit.” Scripps Howard, 1 CA-SA 06-0081, slip op. at 7. Although, KNXV has provided additional detail in its supplemental affidavit filed under seal, by depriving Cooper of any access to it, the trial court permitted the affidavit to remain essentially unverified by the party which has the principal interest in assuring KNXV’s compliance with the confidentiality order.

¶71 The majority relies on Selcraig, 705 F.2d 789, to support the trial court’s two-step procedure in this case. However, both the facts and the procedure proposed in Selcraig were significantly different. In Selcraig, neither the reporter at issue nor the publication for which he worked had ever published documents that were the subject of a confidentiality order to which the reporter was subject. Id. at 792. Thus the reporter, Selcraig, was not a party to the proceeding. Rather, he had published newspaper stories concerning the plaintiff — a discharged school district official — and the allegations that led to his discharge. Id. The plaintiff brought a civil rights action against the school district because the district had never held hearings by which the plaintiff might clear himself of the allegations that led to his discharge. The school district had *65further leaked the allegations to Selcraig. Id. at 792-93. In his civil rights action the plaintiff sought to discover Selcraig’s sources in an attempt to discern whether they were officials whose conduct could be attributed to the school district. Id. at 794.

¶ 72 To protect the confidentiality of Seleraig’s sources insofar as possible, the trial court proposed a procedure in which the court would ask Selcraig questions in an in camera proceeding directed to determining whether his sources were affiliated with the plaintiffs school district. Id. at 795. If they were, then the “second phase” of the in camera proceeding would occur in which the court would ask Selcraig to further, and more explicitly, identify his sources. Id. The court would decide how much of this information needed to be disclosed to the parties so that they could pursue their respective rights and such disclosures would be under a protective order. Id.

¶ 73 This procedure, however, was never implemented because Selcraig refused to take the stand and was held in contempt by the district court. Id. On appeal, the circuit court vacated the contempt because it found that the plaintiff already knew that the reporter’s source was from the school district, thus plaintiff had no need to establish the actual identity of the source to pursue his action. Id. at 792.

¶ 74 As has been stated, Selcraig was not a party to the underlying litigation in that case, nor had he agreed to be bound by a confidentiality order of the court. Id. Thus, apparently neither party was intended to be present at the trial court’s interrogation of Selcraig. While such a proceeding would have been in camera it would not have been ex parte, because both parties would have had the same access to the reporter’s testimony.6

¶75 Here, however, Boudreau was allowed, with the assistance of counsel, to prepare an affidavit to be filed under seal which carefully controlled the information that was disclosed and to whom it was disclosed. Further, the trial court did not independently question Boudreau or others, as the trial court proposed to do in Selcraig, to determine whether KNXV obtained the documents independent of this litigation. Thus, KNXV uniquely controlled the content of the affidavit, which was not otherwise questioned by the trial court and could not be effectively questioned by Cooper. This complete exclusion of Cooper, coupled with no independent inquiry by the trial court, implicates due process and fairness concerns that were not present in Selcraig.

¶ 76 Our system does not permit a court to accept and evaluate evidence offered by one party without allowing the other to test and challenge it. “[W]here important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses.” Goldberg v. Kelly, 397 U.S. 254, 269, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); see also Obersteiner v. Indus. Comm’n., 161 Ariz. 547, 549, 779 P.2d 1286, 1288 (App.1989) (holding that “right to cross-examination is fundamental and attaches” when documentary evidence is received); Joint Anti-Fascist Refugee Comm., 341 U.S. at 170, 71 S.Ct. 624 (Frankfurter, J., concurring) (“[Fjairness can rarely be obtained by secret, one-sided determination of facts decisive of rights.”). Finally, “[without any opportunity for confrontation, there is no adversarial check on the quality of information” that KNXV provided and upon which the trial court relied to determine Boudreau’s source came from outside of the Flores litigation. AADC, 70 F.3d at 1069.

¶ 77 Because, in my view, considering this one-sided evidence deprived Cooper of the process it was due, I respectfully dissent.

. I agree with the majority that an in camera review is not necessarily the same thing as an ex parte review. As the majority correctly notes, in camera and ex pane are wholly different terms. In camera means in chambers or in private. Black’s Law Dictionary 775 (8th ed.2004). Ex pane means one side only or by or for one party. Id. at 616. Our order to conduct an in camera review did not require, or authorize, the unique exclusion of Cooper, especially in the absence of independent questioning of Boudreau by the trial court.