A criminal defendant, charged with participating in a prescription drug counterfeiting ring, has lost his bid to force the writer of a book on the scheme to turn over information related to her investigation, an appellate court has ruled.

The Appellate Division, Second Department, held that the qualified privilege granted to journalists under New York’s so-called “Shield Law” precluded Paul Perito from obtaining non-confidential information from Katherine Eban, the author of “Dangerous Doses: A True Story of Cops, Counterfeiters, and the Contamination of America’s Drug Supply.”

In a unanimous, unsigned opinion, Perito v. Eban Finklestein, 6155/06, the court rejected Mr. Perito’s claims that the information was “critical or necessary” to his criminal defense and could not be obtained from other sources.

The decision appears on page 29 of the print edition of today’s Law Journal.

According to the Miami Herald, in May 2004, Mr. Perito, a South Florida urologist, was arrested, along with his business partner, Nicholas Just, in connection with a $60 million counterfeit drug scheme.

The Herald reported that Mr. Perito, then 42, was accused of selling diluted cancer medications from his strip club and other locations. He was charged with racketeering, conspiracy to commit racketeering, organized scheme to defraud, product tampering, vending of counterfeit drugs, and the purchase of prescription drugs from an unlicensed person.

Mr. Perito used profits from the sale of diluted medication to support “an extravagant lifestyle, including the purchase of the strip club and expensive cars, boats, and exotic motorcycles,” according to a 2004 press release from the Florida attorney general’s office.

In 2005, “Dangerous Doses” was published. In the book, Ms. Eban chronicled the Florida law enforcement investigation that led to the arrest of Mr. Perito and other individuals implicated in the counterfeit drug ring.

Ms. Eban, a former Rhodes Scholar, is a freelance reporter and a contributing editor to Portfolio magazine, whose work has been featured in such publications as the New Republic, the New Yorker, and Vanity Fair, according to a biography on the “Dangerous Doses” Web site.

Mr. Perito subsequently served a subpoena to compel Ms. Eban’s testimony about “information she received from disclosed sources” and related to her role as an eyewitness of events recounted in “Dangerous Doses.” He also demanded documents from Florida law enforcement officers that Ms. Eban used “in connection with the preparation of her book.”

Mr. Perito contended that this information was “critical and necessary” to mount a defense in his pending criminal trial.

Ms. Eban moved to quash.

In an affidavit, the author testified that some of the more than 160 sources she interviewed during the 2 1/2 year-long preparation of her book “explicitly demanded anonymity and/or offered me information on the express condition that I not reveal the identity of such sources.”

On Jan. 30, 2007, Kings County Supreme Court Justice Wayne Saitta ( See Profile) held that non-confidential information requested by Mr. Perito was subject to the qualified privilege granted to journalists under the state civil rights statute. The judge ruled that Ms. Eban only had to respond to Mr. Perito’s interrogatories “for the limited purpose” of confirming previously published information.

‘Vague Assertions’

The appellate court agreed.

New York Civil Rights Law gives journalists in §79-h(b) an absolute privilege against disclosure of confidential sources; §79-h(c) provides a qualified privilege where non-confidential information is involved.

To breach the qualified privilege, Mr. Perito had to establish that the information he sought was “critical or necessary” to his criminal defense, the panel noted.

To meet this standard, Mr. Perito could not simply contend that the information would be “useful, but rather that the defense could not be presented without it,” the court held.

In that regard, the panel rejected Mr. Perito’s “vague assertions” that documents and testimony related to Ms. Eban’s book “might impact on the credibility of witnesses in the impending trial.”
The court also held that Mr. Perito did not make a sufficient showing that the information could not be obtained from an alternative source.

Joining in the decision were Reinaldo E. Rivera ( See Profile), Peter B. Skelos ( See Profile), Fred T. Santucci ( See Profile), and Ariel Belen ( See Profile).

Cyrus R. Vance Jr. and Ellen Murphy from Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer represented Mr. Perito. Ms. Murphy said that she was “disappointed” with the decision, and that all of the information demanded by Mr. Perito was not confidential. She added that she is “considering” requesting leave to seek an appeal.

Steven J. Hyman, of McLaughlin & Stern, who served as counsel to Ms. Eban, said that “it was critical” that the court held that this “broad sweep to try to get at a reporter’s sources is not permitted,” even under the qualified privilege of the state’s shield law.

Mr. Perito’s criminal trial is pending in Florida, according to Ms. Murphy.

Noeleen G. Walder can be reached at nwalder@alm.com.