Arizona Court of Appeals Division One Holds That a News Organization Does Not Waive the Reporter-Informant Privilege by Seeking a Declaratory Judgment or Disclosing Some Information About an Informant and That a Trial Court Does Not Violate a Party’s Due Process Rights By Conducting an In Camera Review of a News Reporter’s Declaration Regarding the Identity of a Source.

Juan Flores sued Cooper Tire after his parents passed away as the result of an automobile accident.  Abbie Boudreau (“Boudreau”), a news reporter for KNXV-TV (“KNXV”), attended portions of the trial and agreed in writing to be bound by a confidentiality order.  Weeks after the case settled, a confidential source provided Boudreau with documents pertaining to the safety of Cooper’s tires.  on November 3, 2005, using two of the documents, KNXV aired a story discussing the safety of Cooper’s tires.  Shortly thereafter, Cooper’s counsel informed KNXV’s counsel that the confidentiality order applied to two of the documents shown in the broadcast.  Upon request, however, KNXV refused to reveal its source.  Five days later, KNXV sought to intervene in the lawsuit, seeking a declaration that it had complied with the confidentiality order and could continue to broadcast the story.  The trial court permitted KNXV to intervene but issued an order granting Cooper’s request to preclude further broadcasts.  KNXV filed a petition for special action.

The Arizona Court of Appeals accepted jurisdiction and issued a decision order, explaining that the constitutionality of the trial court’s order depended upon whether KNXV’s information came from a source outside the litigation and remanding the case so that the trial court could conduct an in camera review of the underlying facts.  The Court also required that KNXV provide additional information regarding its source.  On remand, KNXV contended that in-camera review meant review in chambers with no counsel present.  The trial court, however, adopted a two-step process whereby it first would review, ex parte, a declaration submitted by Boudreau and then, if additional information were necessary, it would conduct an in-camera evidentiary hearing.  After reviewing Boudreau’s declaration, the trial court concluded that it needed no additional information to conclude that KNXV’s information came from outside the litigation.  It, therefore, vacated its prior order restraining further broadcast. This appeal followed.

The parties presented the Arizona Appeals Court with two primary issues:  (1) whether KNXV had waived the reporter-informant privilege by seeking affirmative relief from the trial court, and (2) whether the trial court abridged Cooper’s procedural due process rights by conducting an ex parte review of Boudreau’s declaration.  The Court answered both questions in the negative.

The Court first assumed that the reporter-informant privilege is waivable and then explained that waiver occurs where the claimant’s conduct places it in such a position that it would be unfair to allow the privilege.  The Court noted that KNXV did not seek affirmative relief in the form of damages or an injunction and that its actions were primarily aimed at rebutting the presumption that it had violated the confidentiality agreement.  Finally, given the importance of the reporter-informant privilege to the free flow of information in our society, the Court rebuffed Cooper’s argument that the disclosure of partial information regarding a source waives the privilege as to all information regarding the source.  Thus, KNXV’s request for a declaratory judgment and its disclosure that the informant was a whistle-blower did not waive the reporter-informant privilege.

Moving on to the alleged violation of Cooper’s due process rights engendered by the trial court’s ex parte review of Boudreau’s declaration, the Arizona Appeals Court explained that a procedural due process challenge in the civil context requires the Court to balance the nature of the interest involved, the burdens of alternative processes, and the risk of erroneous deprivation.  Here, Copper’s interest in reviewing Boudreau’s declaration, questioning her about it, and preventing further disclosure of trade secrets, while strong, did not outweigh the interest in protecting the informant’s confidentiality.  Thus, relying on a number of cases from outside Arizona approving a two-step process similar to that the trial court employed, the Court concluded that the trial court did not violate Cooper’s due process rights when it conducted an ex parte review of Boudreau’s declaration prior to deciding whether to hold an in-camera evidentiary hearing.    

Judge Snow dissented, arguing that the trial court violated Cooper’s procedural due process rights when it deprived Cooper of any access to Boudreau’s declaration and the opportunity to challenge KNXV’s claim that the source of the documents was not the litigation.

Judge Portley authored the opinion, joined by Judge Hall; Judge Snow dissented.