The Tokyo District Court on Monday accepted in principle a Kyodo News reporter’s refusal to reveal a news source in connection with a 1997 report on the taxation of a Japanese subsidiary of a U.S. health food company.

The ruling follows a decision by the Tokyo High Court on March 17 that an NHK reporter’s refusal to disclose his news source was acceptable. The high court made the ruling three days after Tokyo District Court determined that a Yomiuri Shimbun reporter’s refusal was unacceptable.

Kyodo News reported in October 1997 that Japanese and U.S. tax authorities had found the subsidiary had hidden some 7.7 billion yen in income.

The U.S. firm filed a suit against the U.S. government, claiming its reputation was damaged and its share price fell in connection with taxation on its Japan unit in 1997.

Under a bilateral legal cooperation agreement, U.S. judicial authorities commissioned Japanese courts to question as witnesses reporters of news organizations that reported the alleged income concealment.

The Kyodo reporter refused to respond to 41 questions. The court approved 31 of the refusals. Based on the decision, the court ordered Kyodo to pay part of the legal costs. A Kyodo official said the news agency will appeal the ruling.

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