But in this particular violation of the order, he told the court, “it doesn't appear to have had the adverse effect on the jury that the Silverstein parties might have wished.” Moreover, the judge said, branding Mr. Silverstein with a contempt citation could in itself have “a highly prejudicial effect” in this case and in possible future trials if additional phases of litigation are required.

The judge observed that the jury in this case already has invested sufficient time and effort and is sufficiently aware of the rules “as to make it unlikely that it would be thrown off stride by a party's extra-judicial statements.”

Mr. Silverstein's “extra-judicial statements” at issue occurred during a Ground Zero news conference on March 15, when he criticized his insurers in the case for refusing to pay him the $7 billion that he says he deserves. “We're trying to get them to fulfill the responsibilities that we paid for when we paid the premiums on the policies,” he told reporters. But, he added, “instead of getting insurance, we've got ourselves a massive amount of litigation.”

Speaking at the new 7 World Trade Center building now under construction, Mr. Silverstein also said that rebuilding the WTC site would cost roughly $12 billion much higher than some earlier estimates. “We're fighting hard with the insurance companies to achieve the money that's going to be necessary” to rebuild, he said.

Called to the stand to explain his comments, Mr. Silverstein defended his action by testifying that his staff had told him in a conference call on or about March 10 that the previous gag order had been lifted.

But Judge Mukasey noted that in the same testimony, Mr. Silverstein said his remarks were inadvertent and were made because of his frustration with the legal system. Judge Mukasey said, however, that if Mr. Silverstein really thought the gag order was off, then his comments had to have been planned.

“His testimony is essentially that he blurted them out almost inadvertently due to his frustration. That is inconsistent with the belief he expressed elsewhere in his testimony that he thought all restrictions on his remarks had been lifted,” Judge Mukasey said. “People do not usually cite frustration and inadvertence to explain conduct they believe they have every right to engage in.”

The judge also remarked on the fact that Mr. Silverstein, who had previously bridled at the gag order, could not recall on the witness stand who exactly among his communication staff said the order had been lifted. “In sum, Mr. Silverstein's explanations for his actions are contradictory and not credible,” he said.

Had Mr. Silverstein been found guilty of contempt, he could have faced monetary penalties and a mistrial could have been declared. Although the judge stopped short of finding Mr. Silverstein in contempt this time, he warned that “the judicial balance” could change should similar incidents occur in the future.

Still, the judge is keeping in effect his earlier decision to bar Mr. Silverstein from sitting in the courtroom as “a precautionary measure,” adding that the WTC leaseholder would have to “rely on his representatives to keep him informed about the trial's progress.”

“I have to control people here in my courtroom,” said the judge. “Apparently there is so much money at stake here, people are willing to do anything.”

The lawyers for Mr. Silverstein had urged the judge not to go on with the contempt hearing because of the danger of influencing jurors through negative publicity.

The good news, however, is that Judge Mukasey's stern warning to Mr. Silverstein to watch his “extra-judicial comments” to the press appears to be sinking in. When National Underwriter asked Mr. Silverstein last week outside the courtroom how he was doing and what his thoughts were on the judge's ruling, he said: “I'm not going to comment on anything.”

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, March 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.