MEMORANDUM OPINION
Denying McGraw-Hill’s Motion for Leave to File a Sur-Reply; Granting in Part the Application for an Order Requiring Compliance with Administrative Subpoena; Granting in Part McGraw-Hill’s Cross-Motion for a Protective Order
I. INTRODUCTION
Submitted for the court’s resolution is the application of the United States Commodity Futures Trading Commission (“the Commission”) for an order requiring the respondent, The McGraw-Hill Companies, Inc. (“McGraw-Hill”), to comply with an administrative subpoena, against which the latter has filed an Opposition and Cross-Motion for a Protective Order. Inhabiting the respective roles of the agency charged with enforcing fair trading in the natural gas market and the primary news source for the energy market, the parties are no strangers to battle over the legal landscape of the reporter’s privilege. In the instant matter, however, they restrict the scope of their conflict to four subpoena requests. Because the court concludes that the Commission successfully demonstrates its need for all but one of the requested documents in its subpoena, the court grants in part and denies in part the Commission’s application. The court likewise grants in part and denies in part McGraw-Hill’s cross-motion for a protective order, concluding that the subpoenaed documents may not be disclosed to unauthorized third parties but may be disclosed in subsequent related litigation; additionally, as the upheld document requests do not offend the reporter’s privilege or impose an undue burden on McGraw-Hill, they will not be narrowed or otherwise modified by the court.
II. BACKGROUND
A. Factual History
This controversy emerges from the unfortunate but frequent collision of two institutions employing contrary means to achieve convergent interests. The Commission is an independent federal regulatory agency charged with administering and enforcing the Commodity Exchange Act, 7 U.S.C. §§ 1 et seq., the purview of which includes protecting the integrity of the energy markets. McGraw-Hill is a leading publisher and a primary source of price information for the energy industry. Resp.’s Opp’n to App.’s Mot. to Compel and Cross-Motion for a Protective Order (“Resp.’s Opp’n”), at 5. The parties share the goal of fostering competitive natural gas markets but employ methods that sometimes run perpendicular to each other: the Commission utilizing investigatory and enforcement mechanisms to sanction price manipulation, App.’s Mot. for an Order Requiring Compliance with Admin. Subpoena (“App.’s Mot.”), at 6, and McGraw-Hill utilizing newsgathering and reporting to facilitate price generation that transparently reflects market conditions of supply and demand, id. at 7.
The present subpoena enforcement request concerns the Commission’s non-public investigation 1 of an energy company 2 *49 for manipulation and attempted manipulation of the price of natural gas at certain delivery locations in Texas. App.’s Mot. at 6. The Commission suspects that the energy company, primarily from August through December of 2005 and possibly in 2003, 2004 and 2006, submitted trading data to the publication Inside FERC (McGraw-Hill’s natural gas price publication) designed to manipulate prices to profit the company by improving its financial positions tied to the very same index. Id. at 9-10.
B. Procedural History
On December 15, 2006, the Commission served a subpoena on McGraw-Hill for information related to the energy company’s trade data submissions. Id. at 11. McGraw-Hill objected to Document Request Nos. 1, 2, 4 and 6, claiming that the reporter’s privilege of the First Amendment protected against disclosure. Id. at 12. The parties attempted to craft a protective order to meet both sides’ concerns but stumbled over two provisions inserted by the Commission: (1) that the Commission may, without prior notice to McGraw-Hill, “disclose, grant access to, and transmit the [subpoenaed] [djocuments to any Federal or State department, agency, or other entity identified in Section 8(e) of the [Commodity Exchange Act] that is acting within the scope of its jurisdiction”; and (2) that the protective order shall, upon the filing of an administrative or injunctive complaint, become “null and void.” Id. at 21-23.
The Commission filed its motion for enforcement of the subpoena on April 30, 2007, and McGraw-Hill filed its opposition and cross-motion for a protective order on June 14, 2007. On July 6, 2007, McGraw-Hill sought leave to file a sur-reply. The Commission opposed this request. 3
*50 III. ANALYSIS
A. The Court Grants In Part And Denies In Part the Application To Enforce the Commission’s Subpoena
The Commission maintains that it needs the subpoenaed information to establish two elements of manipulation and attempted manipulation: ability and causation. App.’s Mot. at 17. McGraw-Hill primarily argues that the subpoenaed information will not help the Commission establish these elements because the requested documents do not show how a company could submit accurate trading data to Inside FERC but nevertheless be engaged in price manipulation. E.g., Resp.’s Opp’n. at 10. Finding itself at an impasse with the Commission, McGraw-Hill invokes 4 the reporter’s privilege to prevent the enforcement of the subpoena and protect the confidentiality of its sources and practices. Id. at 11-12.
1. The Legal Standard for the Reporter’s Privilege
As a general rule, the law favors broad disclosure.
See, e.g.,
Fed.R.Civ.P. 26(b)(1) (describing the permissible scope of discovery in extremely broad terms);
cf. United States v. Bryan,
The party asserting the reporter’s privilege (“the privilege”) bears the burden of showing that it applies in a particular case.
Hutira v. Republic of Iran,
In this Circuit, the privilege applies to civil as well as criminal actions, but may be overcome by a compelling interest in disclosure.
Zerilli,
This case lies somewhere between a criminal action and civil matter.
See U.S. Commodity Futures Trading Comm’n v. McGraw-Hill Cos., Inc.,
2. The Commission Demonstrates Need for Document Request Nos. 1, 2 and 4 But Not 6
The Commission claims that it needs the requested documents to establish two elements of manipulation and attempted manipulation, viz., the ability to influence prices and the causation of manipulated prices. App.’s Mot. at 17. Manipulation is demonstrated by intentional conduct resulting in a price that does not reflect basic forces of supply and demand. 7 U.S.C. §§ 13(a)(2) and 13(b);
Cargill,
McGraw-Hill counters that the Commission’s requests exceed its proven investigatory needs. Specifically, McGraw-Hill challenges four requests: Document Request Nos. 1, 2, 4 and 6. 6 Resp.’s Opp’n at 6.
a. Document Request No. 1 Is Not Privileged
Request No. 1 seeks the trade data submitted to McGraw-Hill for use in
Inside FERC.
App.’s Mot., Ex. 6, at 8. McGraw-Hill objects that this data will have no bearing on whether the reported trades were the legitimate forces of supply and demand. Resp.’s Opp’n at 10. But this argument is either inapposite, confused, or both. Information that is a necessary element of proof in a party’s claim constitutes critical evidence for which a court will abrogate the reporter’s privilege.
Carey,
McGraw-Hill’s objection that the documents will not establish how (absent the submission of false prices) the energy company manipulated — that is, corrupted rather than just affected — the price index, is also inapposite. It does not rebut the Commission’s argument that the Commission must, to carry its case against the energy company, demonstrate the latter’s ability to influence the natural gas prices through submission to Inside FERC. McGraw-Hill’s argument is, furthermore, confused because it appears to assert that the Commission must first establish how *53 the trades, manipulated (corrupted) prices before demonstrating how the trades affected prices at all through their publication in Inside FERC. Sequential submission of proof of the elements of a violation is not, however, a condition of establishing the need for information. See id. (recognizing a libel plaintiffs need for documents to prove both falseness of statements and malice).
The court notes that this conclusion accords with that of Judge Lamberth who, in a case decided just last year involving the same parties, granted (pursuant to an administrative subpoena) document requests identical with the first three requests at issue here.
8
U.S. Commodity Futures Trading Comm’n v. Whitney,
b. Document Request No. 2 Is Not Privileged
Request No. 2 demands any instructions and related documents for reporting trade data provided by McGraw-Hill to the energy company during the investigated period. App.’s Mot., Ex. 6, at 8. McGraw-Hill phrases its objection cryptically — refusing to produce anything more than
Inside FERCs,
published methodologies and complaining that the Commission could obtain these by subscription to the publication. Resp.’s Opp’n at 9 n. 12. The Commission notes that McGraw-Hill has objected to Request No.
2,
but the Commission does not clarify the scope of its request.
9
App.’s Mot. at 11. Putting that omission aside, Request No. 2 is probative of manipulation because it seeks information about McGraw-Hill’s promulgated methodology for submitting trade reports. It is probative of both intent, revealing that the energy company knew how to submit data on manipulated trades, and of causation, providing a link in the chain in the production of the price index.
See Whitney,
c. Document Request No. 4 Is Not Privileged
Request No. 4 demands the formulas used by McGraw-Hill to calculate the price index. App.’s Mot., Ex. 6, at 8. Again,- McGraw-Hill justifies its recalcitrance with the argument that “the CFTC has refused to explain why the documents
*54
reflecting the process by which
Inside FERC
indices were created would have any bearing on whether the trades Energy Company had reported were artificial.” Resp.’s Opp’n. at 10 (internal quotations omitted). This sidesteps the pertinent questions: First, are the formulas probative of the energy company’s ability to influence market price? They are.
Whitney,
d. Document Request No. 6 Is Privileged
Request No. 6 demands any unsolicited complaints received by McGraw-Hill about the energy company’s alleged price manipulation. App.’s Mot., Ex. 6, at 8. McGraw-Hill argues that the Commission has not explained why it believes McGraw-Hill would possess any complaints. Resp.’s Opp’n at 10. The Commission’s response is evasive and concluso-ry, stating only that “[t]hose complaints are directly relevant to the Commission’s investigation and are unavailable from any other source,” App.’s Reply at 24, and citing Judge Lamberth’s decision enforcing a prior subpoena with an identical request,
McGraw-Hill,
The Commission’s unqualified demand for all complaints is an unlicensed fishing expedition into McGraw-Hill’s records— precisely the sort of abuse from which the privilege shields reporters.
See In re Grand Jury Subpoena: Subpoena Duces Tecum,
*55 B. The Commission Made Reasonable Efforts to Exhaust Alternative Sources
Even when a party demonstrates need, the privilege will not be abridged absent an attempt to obtain the information from other reasonable sources.
Zerilli,
McGraw-Hill disputes the Commission’s need for trade data submitted by the energy company and in McGraw-Hill’s possession, arguing that the energy company can supply documents verifying its submissions of. trade data to
Inside FERC.
Resp.’s Opp’n at 24. Indeed, the Commission first directed its request to the energy company, but has since discovered that the energy company does not have “the universe of documents that were exchanged between it and [McGraw-Hill].” App.’s Mot. at 19. One office of the energy company is missing the trade report from September 2005; some reports omit the year the trades were executed; and McGraw-Hill’s receipt of the trade reports exactly as submitted by the energy company can only be confirmed by the reports in McGraw-Hill’s possession.
Id.
at 20; App.’s Reply at 18;
see Whitney,
C. The Court Grants In Part And Denies In Part McGraw-Hill’s Cross-Motion for a Protective Order
McGraw-Hill urges the court to at least grant a protective order restricting the Commission’s discretion to disclose the subpoenaed documents. Specifically, it asks the court to strike the Commission-inserted provisions in the parties’ negotiated protective order allowing the Commission to, without prior notice to McGraw-Hill: (1) “disclose, grant access to, and transmit the [subpoenaed] [documents to any Federal or State department, agency, or other entity identified in Section 8(e) of the [CEA] that is acting within the scope of its. jurisdiction”; and (2) declare the protective order, upon the filing of an administrative or injunctive complaint, “null and void as to those documents relevant to the charges or conduct forming the basis of or described in [the complaint].” App.’s Mot. at 21-23; Bañar Decl. Ex. 8, at ¶ 12.
As to the first provision, the Commission claims that it has a “statutory right to share the information with other State or Federal law enforcement agencies.” Id. at 22. This includes sharing relevant information with FERC in recognition of the *56 latter’s ongoing investigation of the energy-company. App.’s Reply at 20-21. The Commission assures the court that it would be a “waste of judicial resources to require the FERC to issue its own subpoena to McGraw-Hill, to compel production of the same documents, based upon the [sic] essentially the same set of facts.” Id. at 21. As a compromise, the Commission proposes that if another agency should request the documents from the Commission, the court could conduct an ex parte, in camera review of that agency’s need for the information and its exhaustion of alternative sources. App.’s Mot. at 23. McGraw-Hill retorts that if any other agency wants the requested documents, it can request them itself, rather than obtaining them extra-judicially through the Commission. Resp.’s Reply at 6.
The Commission’s position is without precedent in this jurisdiction.
See, e.g., Carey,
As regards the second provision, the Commission argues that it is necessary that the protective order become void upon the filing of a complaint because the Government is not permitted to file secrete complaints, or to conduct secret trials. App.’s Mot. at 23. Moreover, the prejudice to First Amendment rights is minimal, the Commission advises the court, as McGraw-Hill will have ample time to file a motion for a new protective order with the relevant court or agency if the original is voided. Id. McGraw-Hill takes exception, observing that in two prior cases involving the same parties, the Commission “managed to file non-secret complaints and conduct non-secret litigation while keeping— per the orders of each court — McGraw-Hill’s documents confidential.” Resp.’s Reply at 10.
Whether the reporter’s privilege precludes the Commission from disclosing the requested information in a related civil prosecution is a question subsumed under the preliminary balancing test, which requires the court to examine whether the information goes to the heart of the matter in question — namely, the ongoing investigation and the civil prosecution.
See Whitney,
D. The Court Declines to Modify the Subpoena
As alternative relief, McGraw-Hill urges the court to narrow the subpoena in three relevant respects. 11 First, McGraw-Hill argues, the court should limit the relevant time period for the document requests to 2005, Resp.’s Mot. at 28, even though the Commission is requesting documents from the months of August through December for the years 2003, 2004, 2005 and 2006, Bañar Decl. ¶ 7. Second, the court should modify Document Request No. 1 to permit compliance by means of declaration rather than document production to indicate which reports McGraw-Hill has received from the energy company. Id. at 29. And third, the court should narrow Document Request No. 4 to data submissions concerning trades exclusive to the Houston Ship Channel.- Id. at 29-30.
1. The Court Will Not Limit the Relevant Time Period
Restricting the subpoena to documents from 2005 is appropriate, McGraw-Hill maintains, because that is “the only year for which [the Commission] purports to possess evidence,” App.’s Mot. at' 28. The Commission counters by adverting to evidence that the energy company made manipulative trades in the fall of 2003- and 2004, Bruno Decl. ¶ 28 (citing the Commission’s “information and belief’), as well as early 2006, id. ¶ 26 (citing the testimony of a risk analyst with the energy company). App.’s Reply at 23. McGraw-Hill replies that the. Commission’s “information and belief’ does not suffice as a “clear and specific showing that the [privileged material] is highly material and relevant.” Resp.’s Reply at 16 (internal quotations omitted).
To establish that illicit activity may have occurred in the year '2006, the Commission’s proffered evidence — the statement of an employee with relevant knowledge — clearly will suffice. Whether a mere averment of “information and belief’ of manipulative trading likewise stands safely outside' the perimeters of the reporter’s privilege or makes an unsupportable incursion, however, poses a closer question. The court will enforce a request for trade data from years outside those during which a violation allegedly occurred if the data has a “more than reasonable” chance of satisfying the intent
*58
element of manipulative trading.
Whitney,
2. The Court Will Not Excuse Compliance By Production of Documents
In response to McGraw-Hill’s proposal that it comply with Document Request No. 2 by affidavit, the Commission declares that “McGraw-Hill should not be permitted to dictate to the Commission (or this Court) what documents it is required to produce, nor the manner of them production.” App.’s Reply at 25. McGraw-Hill maintains that its “proposal to authenticate documents already in the CFTC’s possession constitutes a reasonable way of reducing the intrusion upon the reporter’s privilege and is hardly startling.” Resp.’s Reply at 19. Neither party cites any legal support its arguments.
The court can only construe McGraw-Hill’s cavil as a plea of undue burden. A party may be excused from compliance with a subpoena that imposes an undue burden when the subpoena is so broad that compliance will severely disrupt its normal business operations.
FTC v. Texaco, Inc.,
3. The Court Will Not Narrow Document Request No. 4 to Papers from the Houston Ship Channel Hub
Addressing McGraw-Hill’s proposal to limit Document Request No. 4 to editorial papers associated with trades occurring at the Houston Ship Channel Hub, the Commission avers that the energy company’s trades may have impacted prices at the hubs for the Texan cities of Katy and Waha as well as Houston. App.’s Reply at 24. As support, the Commission cites a Department of Energy web publication identifying Waha and Katy as important natural gas centers. Bruno Deck ¶ 27. The Commission further explains that natural gas trades are based on price differentials between major trading ports, such as Houston, Waha and Katy. Bañar Decl. ¶ 8. Accordingly, the Commission agrees to limit its Document Request No. 4 to papers related to the ports of Houston, Waha and Katy. App.’s Reply at 24.
McGraw-Hill accuses the Commission of proffering nothing more than conclusory statements to support a link between trades in Houston and prices in Waha and Katy, but this only follows from McGraw-Hill’s own misapprehension of the differ
*59
ence between a statement that is concluso-ry and one that is based on circumstantial evidence — the one being supported by no evidence, the other by indirect evidence.
See
Black’s Law Dictionary 284, 576 (7th ed. 1999) The Commission’s circumstantial evidence shows that natural gas trades are based on price differentials between major ports and that Waha, Katy and Houston are major ports. It syllogistically follows, then, that trading at Houston may affect prices at Waha and Katy.
But cf. In re Natural Gas Commodity Litigation,
IV. CONCLUSION
For the reasons stated herein, the court denies McGraw-Hill’s motion for leave to file a sur-reply, grants in part the Commission’s motion for an order requiring compliance with an administrative subpoena and grants in part McGraw-Hill’s cross-motion for a protective order. An order consistent with this memorandum opinion is separately and contemporaneously issued this 27th day of August 2007.
Notes
. On July 26, 2007, the Commission initiated a civil prosecution in this matter by filing a two-count complaint in the U.S. District Court for the Northern District of Texas alleging that four corporate defendants attempted to manipulate the price of natural gas at the Houston Ship Channel delivery hub during September 2005 and November 2005 in violation of § 9(a)(2) of the Commodity Exchange *49 Act, 7 U.S.C. § 13(a)(2). Supplemental Filing in Support of App.’s Mot., at 1.
. The identity of the energy company is not revealed, pursuant to the court's order granting the Commission’s motion to seal due to an ongoing nonpublic investigation. May 30, 2007 Order Granting Motion to Seal Declaration and Exhibits.
. McGraw-Hill argues that the attachment to the Commission’s reply contains new facts. Resp.'s Mot. to File Sur-reply ("Resp.’s Sur-reply Mot.”), at 2. The Commission responds that the attachment merely "correct[ed] erroneous facts supplied by [McGraw-Hill] in its Opposition ... and supplied certain additional details ... [which] did not contain new argument but rather elaborated on facts previously provided in the [attachment to the Commission's Motion].” App.'s Opp’n to Resp.'s Proposed Sur-reply ("App.’s Opp'n to Sur-reply”), at 2. To demonstrate good cause for considering a sur-reply, one must show that the reply filed by the opposing party raised new arguments that were not included in the original motion.
Stanford v. Potomac Elec. Power Co.,
. The Commission does not dispute that McGraw-Hill may claim protection under the privilege as a reporter. Clearly, it may.
See U.S. Commodity Futures Trading Comm’n v. McGraw-Hill Cos., Inc.,
. McGraw-Hill’s First Amendment interest overlaps with the interest of consumers and law enforcement in ensuring competitive energy markets through transparent, market-determined prices.
See Zerilli v. Smith,
. Request No. 1 demands: "All documents received by Inside FERC's Gas Market Report during the Relevant Time Period from any employee or agent of [the energy company] that contains price, volume or delivery location of any natural gas baseload transaction for the Houston Ship Channel.” App.’s Mot., Ex. 6, at 8. Request No. 2 demands: "All documents concerning reporting of information about natural gas transactions ... including ... instructions about the types of natural gas transactions for which [the energy company] should submit information.” Id. Request No. 4 demands: "All documents reflecting, referencing or implementing formulas used to calculate index prices for each day of the Relevant Time Period for each natural gas delivery point at which any employee or agent of [the energy company] submitted price and volume information on each day of the relevant period.” Id. And Request No. 6 demands: "All documents reflecting any complaints received from any person, or any conversation that relates to the communication of false, inaccurate or otherwise incorrect price and volume information or attempted price manipulation by any employee or agent of [the energy company] during the Subpoena Period.” Id.
. Inside FERC inputs reported data into a commodity index price calculator that creates a weighted average monthly price that takes into account the price and volume of natural gas transactions. App.'s Mot., Bañar Deck, ¶ 10, Ex. 2. Energy companies routinely price natural gas contracts off of this index. App.'s Reply, Bruno Deck, ¶ 21.
. In fact, this case was itself a sequel to a prior case before Judge Lamberth.
U.S. Commodity Futures Trading Comm’n v. McGraw-Hill Cos., Inc.,
. The court reminds the parties that "[a] litigant does not properly raise an issue by ad-' dressing it in a ‘cursory fashion' with only 'bare-bones arguments.' ”
Cement Kiln Recycling Coalition v. EPA,
. As the court has already found the Commission without need for hypothesized complaints about the energy company, it may forego opining on whether the Commission could discover these through reasonable investigation elsewhere.
. A fourth request, that Document Request No. 6 be stricken, is moot in light of the court's ruling today. See. supra III.A.2.d. Also, McGraw-Hill appears to have withdrawn its request that "the identities and the data related to sources other than [the energy company] should be redacted.” Resp.’s Opp'n at 30; Resp.’s Reply at 17 n. 16. Because the Commission had already consented to redact such information, the request never resounded with any 'clarity.