We have been following the story of the stolen IPhone and the implausible arguments of Gizmodo that it was merely playing a “source” when it bought the phone and took it apart. Now, police have raided Gizmodo’s offices, whose editors may want to look for a handy App for lawyers in the area. I discussed the issue on this segment of Countdown.

Police have seized computers and servers belonging to an editor of Gizmodo. The San Mateo County Sheriff’s office obtained the warrant on Friday and also searched Jason Chen’s Fremont, Calif., home.

It is always alarming to see the home and offices of journalists raided. I do view these bloggers to be journalists despite their irresponsible conduct in this case. In 2006, a California appellate court in O’Grady v. Superior Court ruled “We can think of no reason to doubt that the operator of a public Web site is a ‘publisher’ for purposes of this language…News-oriented Web sites… are surely ‘like’ a newspaper or magazine for these purposes.” That case had some obvious similarities including the involvement of Apple:

—Apple Computer, Inc. (Apple), a manufacturer of computer hardware and software, brought this action alleging that persons unknown caused the wrongful publication on the World Wide Web of Apple’s secret plans to release a device that would facilitate the creation of digital live sound recordings on Apple computers. In an effort to identify the source of the disclosures, Apple sought and obtained authority to issue civil subpoenas to the publishers of the Web sites where the information appeared and to the e-mail service provider for one of the publishers. The publishers moved for a protective order to prevent any such discovery. The trial court denied the motion on the ground that the publishers had involved themselves in the unlawful misappropriation of a trade secret.

The court ultimately ordered the issuance of a protective order. However, this was a more traditional act of journalism with the publication of an account by a source as to the next generation work of a company. The publishers had received the information as opposed to a stolen product. This is precisely the issue referenced in footnote 8 of the decision:

8 Penal Code section 499c criminalizes the misappropriation or attempted misappropriation of trade secrets under specified circumstances. Although Apple alluded to this statute in its memorandum below, and does so again before us, it has never demonstrated that the facts here could establish a criminal theft of trade secrets. That offense requires proof of, among other things, “intent to deprive or withhold the control of [the] trade secret from its owner, or … to appropriate [the] trade secret to [the defendant’s] own use or to the use of another … .” (§ 499c, subd. (b).) Since Apple has never argued the point, no occasion is presented to consider whether the inferred circumstances of the disclosure here could be found to constitute a crime. For present purposes we are concerned only with an allegedly tortious disclosure of a trade secret presumably by an Apple employee.

California does have a “shield law” Article I, section 2, subdivision (b) of the California Constitution states:

(a) A publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine, or other periodical publication, or by a press association or wire service, or any person who has been so connected or employed, cannot be adjudged in contempt by a judicial, legislative, administrative body, or any other body having the power to issue subpoenas, for refusing to disclose, in any proceeding as defined in Section 901, the source of any information procured while so connected or employed for publication in a newspaper, magazine or other periodical publication, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.
(b) Nor can a radio or television news reporter or other person connected with or employed by a radio or television station, or any person who has been so connected or employed, be so adjudged in contempt for refusing to disclose the source of any information procured while so connected or employed for news or news commentary purposes on radio or television, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.
(c) As used in this section, “unpublished information” includes information not disseminated to the public by the person from whom disclosure is sought, whether or not related information has been disseminated and includes, but is not limited to, all notes, outtakes, photographs, tapes or other data of whatever sort not itself disseminated to the public through a medium of communication, whether or not published information based upon or related to such material has been disseminated.

The law is primarily meant to protect journalists from being forced to give evidence in a grand jury or trial — as in the Scooter Libby case (where the lack of a federal shield law led to a journalist going to jail). In Rosato v. Superior Court , the court ruled that the shield law does not protect “newspersons from testifying about criminal activity in which they have participated or which they have observed.” The court read the law consistently with the prior ruling of the Supreme Court in Branzburg v. Hayes on the limitations on first amendment privilege claims:

“It would be frivolous to assert — and no one does in these cases — that the First Amendment, in the interest of securing news or 219 otherwise, confers a license on either the reporter or his news sources to violate valid criminal laws. Although stealing documents or private wiretapping could provide newsworthy information, neither reporter nor source is immune from conviction for such conduct, whatever the impact on the flow of news. Neither is immune, on First Amendment grounds, from testifying against the other, before the grand jury or at a criminal trial. The Amendment does not reach so far as to override the interest of the public in ensuring that neither reporter nor source is invading the rights of other citizens through reprehensible conduct forbidden to all other persons….

There is also the federal Privacy Protect Act of 1980, 42 U.S.C §2000 et. seq., which makes it “unlawful” for law enforcement officials “to search for or seize” media “work product materials” or “documentary materials.” However, those terms are defined to exclude most anything that was used to commit a criminal act:

(a) “Documentary materials”, as used in this chapter, means materials upon which information is recorded, and includes, but is not limited to, written or printed materials, photographs, motion picture films, negatives, video tapes, audio tapes, and other mechanically, magentically [1] or electronically recorded cards, tapes, or discs, but does not include contraband or the fruits of a crime or things otherwise criminally possessed, or property designed or intended for use, or which is or has been used as, the means of committing a criminal offense.
(b) “Work product materials”, as used in this chapter, means materials, other than contraband or the fruits of a crime or things otherwise criminally possessed, or property designed or intended for use, or which is or has been used, as the means of committing a criminal offense, and—
(1) in anticipation of communicating such materials to the public, are prepared, produced, authored, or created, whether by the person in possession of the materials or by any other person;
(2) are possessed for the purposes of communicating such materials to the public; and
(3) include mental impressions, conclusions, opinions, or theories of the person who prepared, produced, authored, or created such material.

The problem is that, if the Gizmodo editors are defined as journalists, they could create bad precedent for the media. As I stated in an earlier posting, this was not a case of journalists publishing information from a whistleblower or releasing leaked documents showing corruption or public dangers. It was the knowing receipt of stolen property to be the reveal the trade secrets of a company. As such, the limited protections of reporters from searches may not apply if the court finds the editors were involved themselves in unlawful conduct.

The person who must deserves a criminal charge is the person who found the phone and sold it to Gizmodo. I do not see the viable defense that this is abandoned property. It was lost property with an obvious owner: Apple. Section 485 of the California Penal Code states:

One who finds lost property under circumstances which give him knowledge of or means of inquiry as to the true owner, and who appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.
And on the civil side, section 2080

This may end up as a bad case making bad law. Gawker and Gizmodo will have to argue that even paying for a stolen phone is a journalistic act. If that is the case, than an automotive magazine could arrange to steal the new Prius van from Toyota to run a full story on its secrets. What is the difference between arranging for the theft and simply paying the thief? As someone who has long argued for press freedom, I would hate to have a court decide such questions on these facts.

For the full story, click here.