Thursday, July 27, 2006, 7/27/2006 12:58:00 PM

More Trade Secret Defenses to Subpoenaed Production

By Todd
McGraw-Hill used to publish a good number of our textbooks when we were little kids. McGraw-Hill also owns, apparently, a natural gas price publishing operation called Platts. Platts gets its published natural gas prices from various traders who report those market prices on a daily basis to Platts.

The United States Commodities Futures Trading Commission is currently prosecuting four natural gas traders for market manipulation - including one named Whitney. Allegedly, these traders were manipulating natural gas markets by mis-reporting natural gas price information to Platts which then would influence futures trading prices for that commodity. As part of their case, the USCFTC has served non-party subpoenas on Platts to produce the pricing reports they received from a few years back via Mr. Whitney and his co-defendants. McGraw-Hill has objected, saying their reports are subject to a "reporter's privilege" and that the same constitute trade secrets of McGraw-Hill.

Judge Royce Lamberth of the United States District Court for the District of Columbia has rejected McGraw-Hill's basic trade secret claims. Judge Lamberth apparently felt the fact that the data was a couple years old and did not create a current competitive advantage in McGraw-Hill such that a trade secret argument could withstand scrutiny. Many of the documents and things sought need to be produced says the Court.

The decision can be cited as U.S. Commodities Futures Trading Comm'n. v. Whitney, 2006 WL 2055722 (July 25, 2006 D.D.C.).

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