Title
Lorenzo Shipping Corp. vs. Distribution Management Association of the Philippines
Case
G.R. No. 155849
Decision Date
Aug 31, 2011
DMAP's "Sea Transport Update" criticized SC's ruling on freight rate deregulation; SC dismissed contempt petition, finding no intent to undermine judicial authority.
indirect contempt of court
right to criticize courts
legitimate channels

Case Summary (G.R. No. 155849)

Factual Background

On June 4, 2001, MARINA issued a Letter-Resolution advising DMAP that it no longer needed to compute a required freight rate adjustment for freight rates that had been officially considered or declared deregulated under MC 153. MARINA issued MC 153 pursuant to EO 213, promulgated by President Fidel V. Ramos on November 24, 1994.

To challenge the constitutionality of EO 213, MC 153, and MARINA’s June 4, 2001 letter, DMAP commenced in the Court of Appeals a special civil action for certiorari and prohibition, with prayer for injunctive relief, docketed as CA-G.R. SP No. 65463, on July 2, 2001. On November 29, 2001, the CA dismissed the petition and upheld the constitutionality of the challenged issuances and the letter-resolution. DMAP’s motion for reconsideration was denied on April 10, 2002.

DMAP then appealed to the Court in G.R. No. 152914. On June 5, 2002, the Court denied the petition for review on certiorari for failure (a) to take the appeal within the reglementary period and (b) to comply with payment requirements for sheriff’s fee and clerk’s commission totaling P202.00, as anchored on Section 2, Rule 45, in relation to Sections 5(a), Rule 56, and on the applicable circular and rules. On August 12, 2002, the Court denied with finality the motion for reconsideration.

In October 2002, DMAP held a general membership meeting (GMM). During this meeting, DMAP publicly circulated its Sea Transport Update, prepared and presented through Lorenzo Cinco and Cora Curay, reproducing among others the following themes: that the Supreme Court denied DMAP’s motion for reconsideration based on “technicalities and not on the legal issue,” that “Supreme Court ruling issued in one month only, normal lead time is at least 3 to 6 months,” that the “next move” was to go back to MARINA, and that members should not pay the alleged “20% GRI rate increase” until resolved by MARINA. The publication also contained references to what the authors characterized as “small technical matter” versus “technical matters that could cause denial.”

Contempt Petition and Allegations

Petitioners brought the present special civil action for contempt, alleging that respondents’ publication constituted indirect contempt of court. Petitioners asserted that the Sea Transport Update contained insinuations that petitioners were privy to an illegal act, and that it unfairly debased the Supreme Court by portraying alleged “scurrilous, malicious, tasteless, and baseless innuendo.” Petitioners specifically took issue with the insinuation that the Supreme Court’s resolution was influenced by petitioners, as reflected in the claim that the Court ruled in “one month only” when “normal lead time is at least 3 to 6 months.”

Petitioners contended that respondents’ purpose, when taken in context, was to “defy the decision,” because the denial was allegedly based on technicalities and because the Supreme Court was supposedly influenced.

Respondents’ Comment and Explanation

In their comment dated January 20, 2003, respondents denied any intention to malign, discredit, or criticize the Court. They maintained that the statement on the time frame of the Supreme Court ruling was not contemptuous in itself. They argued that the time required for the Court to resolve a petition could be less than a month when a petition was denied on technicality, or around three to six months when a petition was given due course. They also argued that the petitioners’ characterization of the statement as contemptuous depended on alleged malicious interpretation by petitioners rather than on the author’s real intent.

Respondents explained that the phrase “time frame” used in the publication was lay usage to convey that the petition had been dismissed on technicalities, noting that the appellate process before the Court had taken only about a month. They also submitted that “lead time,” although allegedly not the proper legal term, was common business parlance in their sector. According to respondents, the term “lead time” was used to indicate that the time to return the matter to MARINA had been shortened because of denial, and that if the Court had given due course, it was expected that resolution on the merits would have been from three to six months.

Respondents further argued that the CA’s decision, later affirmed by the Court, centered on the constitutionality of the challenged issuances. They emphasized that it did not determine the reasonableness or propriety of the 20% increase. On that premise, they argued that discussing legal options to go back to MARINA was consistent with what the CA instructed. Lastly, respondents asserted that at the time of the GMM on October 17, 2002, there was no entry of judgment yet related to the denial of the petition, so no final order or writ was being defied and thus no indirect contempt was committed.

Issue

The principal issue was whether the statements in the Sea Transport Update constituted or amounted to indirect contempt of court.

Legal Basis and Reasoning on Indirect Contempt

The Court first reiterated that contempt of court could be understood broadly as a willful disregard of or disobedience to a public authority, including a disregard or insolent language that impaired respect due to a court. In its restricted sense, contempt comprehended a despising of the authority, justice, or dignity of a court.

The Court emphasized that courts possessed inherent power to punish contempt to preserve order in judicial proceedings and to enforce judgments, orders, and mandates. Contempt was classified into direct contempt and constructive or indirect contempt. Indirect contempt was defined and punished under Section 3, Rule 71 of the Rules of Court, which required a written charge after which the respondent could comment and be heard.

The Court stressed that “misbehavior” under Rule 71, Sec. 3 meant something more than adverse comment or disrespect, and that intent was material: there was no contempt without willfulness and an illegitimate or improper purpose. The Court also held that good faith mattered where the act complained of was ambiguous and within the rights of the person charged. It further noted that unfounded accusations or allegations that tended to embarrass the court or bring it into disrepute had no place and could amount to contempt, particularly when coupled with an improper purpose.

Assessment of the Sea Transport Update Statements

Applying these standards, the Court found that petitioners did not sufficiently show how respondents’ publication fell within the acts punishable under Section 3, Rule 71. The petitioners’ theory rested on the assertion that the publication contained malicious innuendo that the Supreme Court was influenced by petitioners. The Court held that petitioners’ allegations, standing alone, were insufficient to sustain the charge.

The Court also held that the phrases specifically challenged—namely, the statement that the motion for reconsideration was denied based on “technicalities and not on the legal issue,” and the phrase that the “Supreme Court ruling [was] issued in one month only” while “normal lead time is at least 3 to 6 months”—were not inherently critical of the Court in a manner that would incite members to defy the Court’s resolutions. The Court instead read the “unmistakable intent” of the phrases as informing DMAP’s members of developments in the case and

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