Justices: Oral pact binding; call b’cast OK

ACLU backed Pa. b'caster

WASHINGTON — The U.S. Supreme Court ruled Monday that a Hong Kong teleco violated securities law when reneging on an oral promise to sell a cable franchise to an American venture.

And in a separate ruling, the court found that a radio host cannot be sued for airing a phone conversation taped illegally by a third party, a decision that supported media rights over privacy law.

Securities decision upholds a $153.7 million judgment against Wharf, a leading telecommunications conglom. The Denver-based UnitedGlobalCom, which invests in and operates cable systems around the globe, brought suit against Wharf for blocking United’s option to buy 10% of the Hong Kong cable franchise in question.

In Monday’s ruling, the high court said Wharf had secretly intended never to honor the promise it made to the Denver company.

Decision affirmed the ruling of a lower appeals court, saying securities law covers oral contracts.

Rings true for court

The phone-call broadcast ruling was the first time the court considered the protection accorded published or broadcast speech that disclosed illegally obtained wiretapped conversations.

The court majority, however, cautioned that the ruling was tailored to circumstances of the case — involving a private conversation between union officials during newsworthy bargaining talks. The decision upheld a lower court ruling in favor of a Pennsylvania radio host and others who aired a tape of an intercepted cellular phone call.

ACLU backed broadcaster

The American Civil Liberties Union, which entered the case on behalf of the broadcaster, welcomed the ruling. The organization said the best way to protect private communications is for the government to end restrictions on powerful encryption technology.

Justices Stephen Breyer and Sandra Day O’Connor filed a separate opinion agreeing with the majority outcome but underscoring that the decision should not be read as a blank check for the news media.

Several newspapers, broadcast networks and magazines, filed a friend-of-the-court brief arguing in favor of the broadcast.

(Reuters contributed to this report.)

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