Opinion: Apple, reporters, and judicial cowardice

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The Court of Appeals for California’s sixth district recently ruled that Apple may not serve subpoenas to discover who leaked information of an upcoming product to Macintosh news and rumor sites. While hailed as a victory for online journalists and bloggers — one that extends California’s reporter’s shield to online writers of all stripes — MWJ’s careful review of the ruling reveals that it does no such thing. What’s more, in the process of reaching its decision, the court committed so many errors in logic that they’re hard to count.

First, a refresher on the basic facts. In late 2004, Jason O’Grady’s PowerPage and AppleInsider published details of an Apple product allegedly in development. The product, code-named “Asteroid,” was to be a FireWire breakout box — an audio interface between an electric guitar and GarageBand. In early 2005, Apple Computer filed suit against unnamed individuals for misappropriation of trade secrets; as part of that lawsuit, Apple discovered that O’Grady uses an ISP named Nfox for his e-mail. Since O’Grady might be considered a reporter under California law and therefore immune from punishment if he ignored a subpoena for his e-mail about “Asteroid,” Apple instead subpoenaed Nfox for all documents relating to “Asteroid” in its e-mail servers.

Nfox was moving to comply with that subpoena when O’Grady, AppleInsider operator “Kasper Jade” (a pseudonym), and MacNN publisher Monish Bhatia petitioned the court hearing the lawsuit — the Superior Court of Santa Clara County, California, where Apple’s headquarters is located — for a protective order that would bar Nfox from complying with the subpoenas. The court ruled in favor of Apple, finding that whether or not O’Grady and Jade were covered under California’s shield law, their near-verbatim publishing of a stolen document was not a protected act of journalism.

O’Grady and Jade appealed the court’s denial of their request for a protective order. The Court of Appeals for California’s Sixth Appellate District heard arguments on the case in April, and issued its ruling May 26 — for the petitioners and against Apple in every major respect. The appellate court’s ruling is bizarre and contradictory; here’s an opinionated in-depth look at what the court said and did, and what it all might mean.

The reporter’s privilege

Almost all of the attention in this case has gone to the argument that Jason O’Grady’s piece on “Asteroid” was news, and O’Grady was functioning as a reporter, so his notes and other communications are protected by California’s reporter’s “shield” — a section of the state’s constitution and statutes that prohibits finding a reporter in contempt of court for refusing to honor a subpoena.

You may recall that the trial court sidestepped the issue of whether O’Grady was a reporter or not, instead finding that since O’Grady had published Apple’s trade secrets, he wouldn’t be protected by the shield anyway. The trial court cited U.S. Supreme Court precedent that “affirmed the co-equal status of trade secrets with patents as methodologies for protecting proprietary information,” and said that accepting Apple’s claim that the information was a trade secret — a claim that O’Grady and EFF did not rebut, despite the court’s direct inquiry on the subject — meant that the information about Asteroid was “stolen property, just as any physical item.” The trial court said:

What underlies this decision is the publishing of information that at this early stage of the litigation fits squarely within the definition of trade secret. The right to keep and maintain proprietary information as such is a right which the California legislature and courts have long affirmed and which is essential to the future of technology and innovation generally. The Court sees no reason to abandon that right even if it were to assume, arguendo, movants are “journalists” as they claim they are.

Here’s where the appellate ruling starts to go off the rails. Normally, to reverse this finding, the appellate court would have to explain why it was in error. The Sixth District Appellate Court, however, found that “Since this controversy turns on questions of statutory interpretation, it is subject to review entirely independent of the trial court’s ruling. In addition, because it implicates interests in freedom of expression, we review all subsidiary issues, including factual ones, independently in light of the whole record.” (Emphasis in original; citations omitted.)

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