Confidentiality rule was misapplied, Al Jazeera tells Delaware Supreme Court

From Westlaw Journal Delaware Corporate: A ruling of first impression requiring Al Jazeera America to bare the details of its breach-of-contract suit against AT&T’s cable unit dangerously misapplies Delaware’s new confidential-filings rule, the news network warned the state Supreme Court during oral argument April 23.

The question the en banc high court must decide is whether a revised Delaware rule concerning sealed court documents — which are common in business disputes — required Al Jazeera to reveal what it calls “substantially damaging” details of a disputed contract.

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Journalists work in the Al Jazeera America  newsroom in New York.

Journalists work in the Al Jazeera America newsroom in New York.

Al Jazeera’s Chancery Court complaint accuses AT&T Services of inexplicably dropping the channel once owned by former Vice President Al Gore’s Current TV network after the Qatar-backed cable news organization acquired the channel for the purpose of broadcasting news programs in the United States.

But that legal battle was soon sidetracked by objections from various news organizations that intervened in the case to argue that even the public version of the complaint was so heavily redacted that it was virtually impossible for them to report on what the suit was actually about.

Those media organizations, led by Bloomberg LP, intervened in the case to force Al Jazeera to unseal the complaint, and the litigation over the merits of the breach-of-contract suit has seen little activity.

Vice Chancellor Sam Glasscock III ruled in favor of the news organizations last Oct. 14, holding that the public has the right to know the circumstances under which a cable provider with 48 million subscribers can deny a Middle East-based journalistic organization entry into the American broadcast market.  Al Jazeera Am. LLC v. AT&T Servs., No. 8823, 2013 WL 5614284 (Del. Ch. Oct. 14, 2013).

Unredact immediately

He ordered Al Jazeera to produce a largely unredacted version of its complaint immediately.  But the judge suspended that order pending outcome of Al Jazeera’s appeal.  AT&T took no position in the appellate battle between Al Jazeera and the various media outlets.

In order to preserve the details of the disputed contract until it reaches a decision on the network’s confidentiality appeal, the high court closed the first half of oral argument to the public.

The public portion of the arguments focused on whether Vice Chancellor Glasscock had misinterpreted a 2013 revision to Chancery Court Rule 5 and had, as a result, imposed too harsh a remedy against Al Jazeera.

The new Chancery Court rule imposes stricter requirements on parties seeking to submit confidential filings, reduces the categories of information that are entitled to protection from disclosure, and streamlines the process for challenging confidentially filed documents.  The text of the rule is available at http://www.courts.delaware.gov/Rules/ChanceryAmendmentRules5-1.pdf.

Four lines is enough

Andrew Deutsch of DLA Piper in New York, a lawyer for Al Jazeera, argued that to comply with the new rule, Al Jazeera only has to add a cover sheet with a four-line description of the charges in its complaint.  Such a description satisfies the network’s statutory duty to keep the public informed, Deutsch argued.

“The new (confidentiality) rule does not say that it doesn’t matter how much harm a business suffers if enough of the public wants to know” what’s in their confidential business affairs, he said.

Justice Randy Holland asked Deutsch whether Al Jazeera could agree to a middle-ground compromise under which it would disclose more than just a four-line cover sheet but could still keep many details of the contract confidential.  Such a compromise might let the network avoid the all-or-nothing gamble that the justices would reverse the Chancery Court ruling, Justice Holland pointed out.

Al Jazeera’s position is that it should not have to make any part of the contract public, Deutsch said.

Arguing for the media interveners, Joel Friedlander of Bouchard Margules & Friedlander in Wilmington, Del., said that if Al Jazeera and AT&T wanted to keep their contract private, they should have stipulated that any disputes arising from it would go to private arbitration.

Justice Carolyn Berger asked Friedlander if he thought the quest for the disputed information had taken on a life of its own: Would the interveners continue to push for disclosure of the pleadings even if the breach-of-contract case were dismissed or settled?

“It (the information) would still be ‘out there,’” she said.  “Would it still be that important?”

“Absolutely,” Friedlander replied.  “They are still judicial records, and that doesn’t change … or the public’s interest in why Al Jazeera was denied broadcast access.”

The justices are expected to rule within three months.

Al Jazeera America LLC v. AT&T Services Inc., No. 600, 2013, oral argument heard (Del. Apr. 23, 2014).