Source: https://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695
Timestamp: 2018-01-19 02:51:59
Document Index: 227365472

Matched Legal Cases: ['§ 2701', '§ 2702', '§ 2707', '§ 3426', '§ 3426', '§ 3426', '§ 1070', '§ 499', '§ 2', '§ 2701', '§ 499', '§ 499', '§ 3426', '§ 3426', '§ 3426', '§ 3426', 'art 1', '§ 3426', '§ 1070', '§ 3426', '§ 2701', '§ 2702', '§ 2707']

Opposition of Real Party in Interest Apple Computer, Inc. to Petition for A Writ of Mandate and/or Prohibition | Jason O'Grady, Monish Bhatia & Kasper Jade v Superior Court of the State of California, County of Santa Clara & Apple Computer (Real party in interest) | Electronic Frontier Foundation - JDSupra
This is the opposition of real party in interest, Apple Computer, Inc., to the Petition for a writ of mandate and/or prohibition.
CiVil No. H028579 SIXTH APPELLATE DISTRICT .JASON O'GRADY, MONISH BHATIA, AKNADs PER JADE, Petitioners, COURT Respondent, and APPLE COMPUTER, Real Party in Interest. for the Case No. 1-04-CV -032178 The Honorable James Kleinberg OPPOSITION IN INTEREST APPLE COMPUTER, INTCO. GEORGE DvARrnA. R.ILEY (S.B. EBERHART (S.B. *195414) DHAIV A T H. SHAH (S.B. #196382) JAMESA . BOWMAN( S.B#. 212227) 275 Battery Street San Francisco, California 94111 Phone: (415) 984-8700 Fax: (415) 984-8701 Attorneys for Real Party in Interest Apple Computer, Inc. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695-, II il I l 1. The Nature Of Apple's Claims Weighs In Favor Of Disclosure. 17 1 2. The Discovery From Nfox Goes To The Heart Of Apple's Trade Secret 3. Apple Has Pursued All Reasonable I Alternative Sources Of The Information , Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951j 11 (continued) Page l Misappropriation. 26 l I TO APPLE'S REQUEST FOR DISCOVERY FROM 1 l Discovery. 30 iI l Legitimate Newsgathering Activity. 31 l Apple's Unserved Subpoenas In This Case 36 -.II I I I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695TABLE OF CONTENTS (continued) Page Regarding The Federal Privilege. 41 Claim 44 -,-... III I ~'I~_i\i~; Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695II ) ' 1 TABLE OF AUTHORITIES d11 "\I Page American Express Fin. Advisors, Inc. v. Yantis, WL 469362 (N.D. Iowa Feb. 28, 2005) 25 I! 67 Cat. App. 4th 1072 (1998) 26 1 Branzburg v. Hayes, ! 408 U.S. 665 (1972) 3,44 \ Carushka, Inc. v. Premiere Products, Inc., l I Dalitz v. Penthouse Int 'I, Ltd., " -, 168 Cat. App. 3d 468 (1985) 19 Data Gen. Corp. v. Grumman Sys. Support Corp., , ; 50 Cat. 3d 785 (1990) 29,32 j Dietemann v. Time, Inc., Iii li 31 Cat. 4th 864 (2003) 14, 15 !i\ Gable-Leigh, Inc. v. North American Miss, l In re Joel H., Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695,i, AUTHORITIES "\ (continued) I Page 1 In re Petroleum Products Antitrust Litigation, 680 F.2d 5 (2d Cir. 1982) 22,23 l In re StratosphereC orp. Sec.L itig., : lIT Telecom Prods. v. Dooley, I 214 Cal. App. 3d 307 (1989) 12 l Mitchell v. Superior Court, l Morgan v. Roberts, . 702 F.2d 945 (11th Clr. 1983) 40 ] 24, 2005) 38,39 I 51 Cal. 3d 453 (1990) 29,30 l39 I 33 Cal. 3d 158 (1982) 36 I Rancho Publ'ns v. Superior Court, ! 68 Cal. App. 4th 1538 (1999) 23, 29, 30, 31 I I,I --, v I 4" """Jj Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695., TABLE OF AUTHORITIES ., (continued) Page -, Ruckelshaus v. Monsanto Co., -467 U.S. 986 (1984) 12, 13 -, -, Shoen v. Shoen, l 5 F.3d 1289 (9th Cir. 1983) 23 326 F. Supp. 2d 556 (S.D.N.Y. 2004) 19 359 F .3d 1066 (9th Cir. 2004) 34 l I 221 Cat. App. 3d 181 (1990) 38 i United Liquor Co. v. Gard, i -,l Wright v. Fred Hutchinson Cancer Research Ctr., I Zacchini v. Scripps-Howard Broad. Co., 433 U.S. 562 (1977) 31 l -,: STATUTES i 18 U.S.C. § 2701 et seq. 3 I 18 U.S.C. § 2702 35 l 18 U.S.C. § 2707 35 -; Cat. Civ. Code § 3426.1 passim iI Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e22769511) T ABLE OF AUTHORITIES i (continued) i Page ., Cal. Civ. Code § 3426.3 13 Cal. Civ. Code § 3426.5 25 1 Cal. Evid. Code § 1070 3,29,30,32 l Cal. Penal Code § 499 13 I OTHER AUTHORITIES -,II ""1 I The US. Internet Service Provider Association, Electronic I Providers, 18 Berkeley Tech. L.J. 945 (2003) 34 I CONSTITUTIONAL PROVISIONS Cal. Const. art. I, § 2 3 1" U.S. Const. amend. I '."".' 2,3, 14, 15 -., i !: -., i I lI iII .~-" ~c"""~;Jcc. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951"\I Petitioners seek to stop a third party from providing the identities of j '1 ! Computer and were illegally disseminated through Petitioners' websites. "' After conducting a thorough but unsuccessful investigation into this unauthorized disclosure, Apple served a narrowly tailored subpoena on an ""\ email service provider to recover the stolen materials and discover who had 'I misappropriated Apple's trade secrets. Asserting special protections they I protective order to block this essential discovery. The trial court denied the motion and this petition followed. 1 Unknown individuals stole trade secrets about an unreleased Apple product, code-named "Asteroid," from secure Apple facilities. Petitioners ""1i deliberately posted these misappropriated trade secrets on their websites l "PowerPage" and "Applelnsider." These posts contained little more than outright copies of Apple's unreleased, copyrighted design, verbatim -, excerpts from Apple technical specifications, Apple's pricing projections for Asteroid, and Apple's comparison of the product to its anticipated 1 .. i competItIon. II for trade secret misappropriation. Apple's complaint seeks redress not only l I l: necessary to determine who was responsible for stealing and disseminating -, service provider to the PowerPage website. Nfox has confirmed that emails ..., I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951! 1 about the confidential Asteroid product were sent to PowerPage. The , and copyrighted design taken from Apple. Thus, the emails in Nfox's l possession likely contain the actual materials stolen from Apple and electronically transmitted to Petitioners. ")I Apple's subpoena seeks the return of the stolen trade secret materials i and the identities of the persons who supplied that information. Before the Il subpoena issued, the trial court approved the specific language of the I Petitioners, and no discovery other than the subpoena to Nfox is at issue in 1 this petition. ., . . In theIr motIon for a protectIve order agaInst the Nfox subpoena, 1 Petitioners argued that they are entitled to stop discovery into the theft and dissemination of Apple's trade secrets because they acted as 'journalists" I when they posted the stolen materials on their websites. Petitioners maintained that the First Amendment reporter's privilege and California ..,I Reporter's Shield prevent Nfox's compliance with the subpoena's requests l to return the stolenm aterialsa nd identify the responsiblein dividuals. ! Petitioners' arguments contradict clearly established principles of II The trade secrets that Petitioners acquired and disseminated do not involve i public arguably has a right to know. Instead, these trade secrets were l valuable assets for Apple precisely because they were confidential and protected against unauthorized disclosure by criminal and civil laws. l Nor is there any First Amendment privilege for a journalist or his ! I: First 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 I II l 2 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695'\ i I,! other citizens through reprehensible conduct forbidden to all other ; persons." Branzburg v. Hayes, 408 V.S. 665, 691-92 (1972). Thus, courts i in both civil and criminal cases have consistently held the First Amendment 1 does not shield from discovery or liability the illegal or tortious misconduct I by a journalist or his source. Accordingly, the trial court properly denied 1 (\ the trial court to set aside its order. Petitioners offer four arguments why -, the trial court's reasoned decision should be set aside. None of these ,: arguments has merit. -: First Amendment reporter's privilege (the "Federal Privilege") limiting I disclosure of a reporter's sources. But this qualified privilege does not shield a reporter or his sources from discovery into criminal or tortious l misconduct or from the obligation to return stolen property. Moreover, \ I Asteroid trade secret is sufficient to overcome this qualified privilege. Second, Petitioners argue that Apple's subpoena to Nfox is barred l by the California reporter's shield (the "California Shield"). Cal. Const. ! : California Shield is strictly limited to protecting reporters from contempt I judgments and does not apply to discovery sought from a non-reporter third party. Nfox is not a reporter, nor has an order of contempt been issued I the discovery to Nfox. -; Third, Petitioners assert that the Stored Communications Act, 1 18 V.S.C. § 2701 et seq. ("SCA"), prevents Nfox from disclosing I! PowerPage's email communications and returning Apple's stolen property. 1 This argument rests on a fundamentally erroneous interpretation of the l 3 I """""'"' "","i~,~ Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e22769511\ SCA, contains broad exemptions that permit the discovery requested from Nfox. -:I Finally, Petitioners argue that the trial court misstated and "1II analysis and legal reasoning. The trial court's written opinion correctly -, applied the law and reached the right decision. I\ What is at stake in these proceedings is Apple's right to recover its 1 stolen property and discover the identities of the individuals who misappropriated valuable trade secrets. If the Doe Defendants had l the unquestionable right to discovery regarding the transmission and the l identity of the offenders. The outcome should be no different where the offenders use the services of Petitioners' websites to accomplish the same ..,\ injury. The writ should not be granted. -"'1I FACTS , The Asteroid Trade Secrets. i Asteroid is an unreleased Apple product. Confidential information i about this future product constitutes a highly valuable trade secret for I -, ! i -, 4 I ~~'",. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695"':i I public greatly hanns Apple because it enables those competitors to direct 1 their marketing and development efforts at frus~ating Apple's plans. (Zonic Decl. 'iI'iI 26-28 (Ex. 28 at 404:28-406:5); OrtIZ Decl. 'iI 12 (Ex. 27 at .., 392:17-23).) Apple enforces stringent security measures to protect this .., ..,l Ii confidentiality agreements that prohibited them from disclosing, i 406:9-12); Ortiz Decl. 'iI 13 (Ex. 27 at 392:27-393:2).) -, Petitioner Jason O'Grady is the owner and operator of the website -,i posted trade secrets related to the Asteroid product on PowerPage. (Zonic -,Ii Decl. 'iI'iI 5-8 (Ex. 28 at 397:2-398:28); Ortiz Decl. 'iI'iI 2-3 (Ex. 27 at l 390:9-22).) , i confidential, copyrighted Apple rendering of the Asteroid product design. I, -: O'Grady's site had been stolen from a confidential set of internal Apple ! highly secure server at Apple. (Id. 'iI'iI 4, 6, 19 (Ex. 28 at 396:24-397:1, -, 397:16-28, 403:17-19).) O'Grady's post also included specific technical ,-, 5 ,! Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695"11 .,I i Asteroid that had, yet again, been copied verbatim from Apple's ""\ I The next day, on November 23, O'Grady disseminated more I I -, blatantly copied from information contained in the confidential Apple slide i,1 set. (Id.~~11-12(Ex.28at400:1-28).) l Other than brief announcements, all three of O'Grady's posts were I devoid of any information other than the copyrighted rendering of the 1 ! specifications for the device. ! --, l drawn by artist "Paul Scates" -that was copied with only insubstantial I\ changes from the copyrighted Asteroid rendering stolen from Apple's i revealed confidential details about Apple's plans to manufacture the l i -, "Dr. Teeth and The Electric Mayhem" posted information on PowerPage I Ii l for protective order includes a direct comparison of the information posted I !1 , 6 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e22769511 that purportedt o evaluatec onflicting claims about the unreleasedA steroid l product. The accuracy of the details about the Asteroid product strongly ;! suggestedth at "Dr. Teeth" usedA pple's confidential slides as the basis for I his post. (Id.1 16 (Ex. 28 at 402:20-27).) Given the strict security measures at Apple to protect the Asteroid i I trade secrets, the information disclosed by Petitioners on their websites -;; -, (Ex. 28 at 406:6-15); Ortiz Decl. 1 13 (Ex. 27 at 393:3-5).) i i Apple promptly and diligently investigated these unauthorized \! 1 who had misappropriated and transferred the trade secrets to Petitioners. II I reviewed the materials posted on the PowerPage and AppleInsider websites -,I! and determined that these materials had been copied directly from -, ii at 396:20-397:1); Ortiz Decl. 112-3 (Ex. 27 at 390:9-22).) Access to this i (Zonic Decl. 11 17, 29 (Ex. 28 at 403:3-5,406:9-12); Ortiz Decl. 1 13 (Ex. '1 27 at 392:27-393:2).) ! Apple's investigators followed every available lead to determine 1 which Apple employees had accessed the confidential Asteroid slides. , i misled the investigators. Nevertheless, the investigators were unable to ! identify through these interviews the persons responsible for stealing the 1 7 I *"~C Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695i1 1 iI Apple security also directed and assessed the results of broad 1 forensic searches of Apple's email servers for any communications I regarding the confidential information disclosed on the websites. (Ortiz l the source of the disclosure. (Id.) \ Having no other recourse to remedy the damage it had suffered, -, Apple commenced this action on December 13, naming only Does as defendants. l I I take expedited document discovery from PowerPage, AppleInsider, and a ! third website, www.thinksecret.com ("ThinkSecret"),that would lead to the -,, authorized by that order is currently pending or at issue. l I Apple later learned that Nfox, a Nevada company that provides I -, rendering posted on PowerPage were taken directly from Apple's confidential slides, it is highly likely that these emails contain the materials l I stolen from Apple's secure facilities. application for an order permitting document discovery to Nfox -discovery 1 that is narrowly focused on recovering the property stolen from Apple and I l 8 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e22769511 identifying the person responsible for the theft. Feb. 4, 2005 Order (Ex. 1 13). In ordering this discovery, the court reviewed and approved the l served subpoenas on Nfox in California and in Nevada. Those subpoenas contain only the following court-approved request: l-, who supplied information regarding an unreleased Apple ! product code-named "Asteroid" or "Q97,,2 (the "Product"), ! including postings that appeared on PowerPage.com (the i and November 26, 2004. These documents include: l (a) all documents identifying any individual or ! individuals who provided information relating to the Product ("Disclosing Person(s)"), including true name(s), address(es), l internet protocol ("IP") address(es), and e-mail address(es); I (b) all communications from or to any Disclosing l Persons( ) relating to the Product; l Disclosing Person( s) relating to the Product; and I! (d) all images, including photographs, sketches, l schematics and renderings of the Product received from or I sent to any Disclosing Person(s). Order ("Eberhart Decl.")' 9 (Ex. 25 at 378:23-25).) l Nfox has not objected to the subpoenas on any grounds. (fd.' 10 (Ex. 25 at 379:9-11).) Other than the Nfox subpoenas, no discovery is l currently pending. (fd.' 11 (Ex. 25 at 379:12-13).) ll Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695,-, I!! ,-,I .-, Court's March 11,2005 Decision. ! I! Petitioners filed a motion for a protective order seeking to block the l subpoenasto Nfox. Petitionersa lso sought advisory relief far beyond the ,I limited discovery to Nfox, asking the trial court to order that: 1I I a. Petitioners O'Grady, Bhatia, and Jade are journalists; n '1 discovery to O'Grady, Bhatia, or Jade to learn their sources; n! c. Apple cannot seek to discover Jade's identity; ,l d. Apple cannot serve or enforce discovery to any third i party service provider to learn the identities of Jade, Bhatia, or O'Grady's sources. , 126:21-127:6).) l protective order. Mar. 11, 2005 Order at 13 (Ex. 34 at 467:18-20). In its i decision, the court carefully reviewed and rejected Petitioners' claim that l I barred. 'l ! First, the trial court declined to address Petitioners' request for an ! advisory opinion regardingh ypotheticals ubpoenasto Petitioners. Instead, ! i Second, the trial court found that O'Grady's posts on the PowerPage i Apple's confidential slide set. [d. at 6 (Ex. 34 at 460:17-25). The trial court also found that the technical specifications listed in these posts "were Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695IrI court noted that Apple has the fundamental right to preserve the n confidentiality of that information, regardless of whether or not Petitioners are journalists. Id. at 13 (Ex. 34 at 467: 10-17). i Fourth, the trial court carefully evaluated Petitioners' claim that the , Federal Privilege barred this discovery. In deciding whether Apple's need I; to discover the source of the trade secret disclosure outweighed this --, qualified privilege, the court applied the five-factor test articulated in I that all five of these factors weigh in favor of disclosure. Mar. 11, 2005 iI Order at 9-10 (Ex. 34 at 463:8-464:8). I Finally, the trial court found that regardless of whether O'Grady fit the definition of a journalist or reporter, his dissemination of Apple's 1 Shield because "there is no license conferred on anyone to violate valid -: criminal laws." Id. at 11 (Ex. 34 at 465:1-6). l ARGUMENT ACQUISITION I, l This is a trade secret case. Through its subpoena to Nfox, Apple is I only trying to recover its stolen property and identify those responsible for 1 misappropriating its trade secrets. , I Valuable Apple Trade Secret. l Confidential information about unreleased products, such as the .., Asteroid device, are trade secrets "that have been recognized as a ,1 }. 11 """'"~ .co," ~~C,,".c I.c,"C"C~ Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695I Il constitutionally protected intangible property interest." lIT Telecom Prods. l Monsanto Co., 467 U.S. 986, 1001-04 (1984». n Apple has established,a nd the trial court found for the purposeso f -trade secret. Mar. II, 2005 Order at II, 13 (Ex. 34 at 465:18-20, 467:12-iI 13) (finding that the information disseminated by Petitioners "falls squarely I under the UTSA and Penal Code § 499c definitions"); see also Zonic Decl. ! Apple and disseminated through their websites is a trade secret. l Apple did not bring this case lightly. Apple makes enormous , I makes these investments with the expectation that criminal and civil laws l 11 unauthorized and unexpected disclosure of information about a product still I I information also enables competitors to anticipate and copy that new I I product, giving them a "head start" in competing against Apple's l Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695I IiIII Penal Code § 499(c); see also Ruckelshaus, 467 U.S. at 1003-04. .-, I Misappropriation of a trade secret includes the acquisition of a trade secret n by improper means. Cal. Civ. Code § 3426.I(b)(I). Trade secret .-, misappropriation also includes the unauthorized disclosure or use of a IIII the trade secret; or l was: i I utilized improper means to acquire it; -, (ii) Acquired under circumstances giving rise to a Ii duty to maintain its secrecy or limit its use; or 1 (iii) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or -, limit its use; or i that knowledge of it had been acquired by accident or ""1 mistake. Cal. Civ. Code § 3426.I(b)(2). -,: l facility and transmitted them to Petitioners certainly had reason to know 1 13 i II Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695:lII 'l The disseminated information about the unreleased Asteroid product had marked as "Apple Need-To-Know Confidential" and were kept on a secure I server at Apple. , Liability for trade secret misappropriation also extends to any II l them secret, or acquired by mistake. Cat. Civ. Code § 3426.1(b)(2); see Ii I time of the use of the confidential information [the defendant] knew or had I I I secrets were obtained by a person who owed a duty to plaintiffs to maintain I Ii the secrecy."). -, The constitutional guarantees of free speech are no defense to j I Bunner, 31 Cal. 4th 864,874-88 (2003). Petitioners concede, as they must, III that the First Amendment does not give anyone, including journalists, the 1 right to break the law. (Tr. of Mar. 4, 2005 Hearing at 8 (Ex. 33 at 439:4-I l immunity for torts or crimes committed during the course of newsgathering. The First Amendment is not a license to trespass, to steal, -,I or to intrude by electronic means into the precincts of another's home or -, office." Dietemann v. Time, Inc., 449 F.2d 245, 249 (9th Cir. 1971); see I also Food Lion, Inc. v. Capital Cities/ABC, Inc., 951 F. Supp. 1211, 1216 1 iI ""1 14 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695l! I l ,l society."). I FEDERAL I SUBPOENA TO NFOX. II Trade Secret Misappropriation. l Petitioners contend that although the Federal Privilege may not i immunize liability for trade secret theft, it nevertheless blocks Apple's 1 discovery into the identities of the persons who violated the law as well as Apple's efforts to secure the return of the stolen materials. (Pet. at 42.) i This argument is without merit. Petitioners posted verbatim excerpts of Apple's secret technical 1 specifications and an exact reproduction of a copyrighted rendering of the , iI I consistently held that the Federal Privilege cannot be used to shield from I discovery the illegal or tortious misconduct by a journalist or his source. See, e.g., Food Lion, 951 F. Supp. at 1216 (Federal Privilege does not 1 shield tortious conduct by reporter from discovery); United Liquor Co. v. I Gard, 88 -, I tortious conduct by source from discovery). l i reporters engaged in fraud or trespass in conducting undercover -, investigations of the plaintiffs stores. The court reasoned that "[t]o allow II ..., camouflage tortious behavior on the part of its agents and employees is Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695: ..) 1 I concealment of relevant evidence of wrongdoing solely because the r '-, ! , trespass. Id. i 1 confidential information and the public has no right to have it printed. ,-, f United Liquor, 88 F.R.D. ,-, i respected." Id. Because an individual's tax returns are confidential and protected by civil and criminal laws, the court held that the Federal l Privilege did not bar discovery directed to learning the source of the -, information. Id. at 131-32. , the applicationo f the FederaPl rivileget hand id the situationsin FoodL ion ii and United Liquor. Like the plaintiffs in Food Lion and United Liquor, l tortious misconduct. And like the tax return information at issue in United l Liquor, Petitioners in this case had no right to publish Apple's trade secrets and the public had no right to have that information disclosed. Instead, like 1 personal tax return information, Apple has the right to expect that highly i sensitive information about future products like Asteroid will be protected -I l misappropriation. Because the individuals who stole this information from I ""1 16 i , Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695n! .--, Apple and disseminated it through Petitioners' websites violated these laws, 'l the Federal Privilege has no application in this case and does not prevent I the return of the stolen property or the discovery of those persons' Il identities. Nfox Overcomes The Federal Privilege. il Where the Federal Privilege applies at all, it must be weighed !I against the strong public policy favoring full disclosure of relevant 'I i (1984). Even if Petitioners are entitled to invoke the Federal Privilege for !l II need to recover the stolen information and identify the persons responsible I for the misappropriation. I In Mitchell, the California Supreme Court articulated five factors for I! determining whether a party's need for discovery overcomes an assertion of 1 the Federal Privilege: (1) the "nature of the litigation and whether the reporter is a party"; (2) whether the information sought goes "to the heart" i reasonable alternative source of information; (4) the importance of I I protecting confidentiality in the case; and, optionally (5) whether the l Mitchell factors weigh in favor of disclosure. Mar. 11, 2005 Order at 9-10 l Disclosure. lI The first Mitchell factor -the nature of the claims -favors l l 17 Ii CC"~""k,~;;'" Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695n" 1 n 3d at 279. This factor prevents the Federal Privilege from being misused to I obstruct discovery into a reporter's misconduct that may have injured the i plaintiff. Thus, where the reporter is a party, this factor strongly weighs in 0 n I dispute, this factor weighs against disclosure. ! Petitioners argue that this factor weighs against disclosure because i I they have not yet been named as defendants. may, in fact, n (See ! r-, It is undisputed the Petitioners disseminated Apple trade secrets i, through their websites. This dissemination was a tort under California law l mistake. Civ. Code § 3426.1. person who acted with such knowledge matches the description of Does 2-25 in the Complaint. (See l l recognized that although Petitioners had not yet been named as defendants, possible that they would later be named l defendants. Mar. 11, 2005 Order at 9 (Ex. 34 at 463: 13-15). II Petitioners houldn ot be permitted to shield their knowledge of and l involvement in the dissemination of Apple's trade secrets when that very 1 named as defendants in this case, Petitioners' conduct is squarely at issue, and the first Mitchell factor weighs strongly in Apple's favor. I ! -,I 1 I "1 18 I -Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695r"""\Ii --:! 2. r"""\ Apple's Trade Secret Misappropriation Claim. I; The second factor -whether the discovery sought goes to the heart 1 of the plaintiff's claim -is considered the "most crucial" of the Mitchell I factors. Dalitz v. PenthouseIn t'l, Ltd., 168 Cal. App. 3d 468,478 (1985). Fl The facts of this case mandate disclosure under this factor. i ..., I recovering the stolen materials and identifying the individuals responsible n for stealing and disclosing the trade secrets. Only after learning their ! identities can Apple name them as defendants, develop an affinnative case this factor weighs in favor of disclosure. Mar. 11, 2005 Order at 9 (Ex. 34 .-., "J at 463:16-18). The law is clear that where a source acted unlawfully in disclosing I infonnation to a journalist, the identity of that source "goes to the heart" of the plaintiff's claim. United Liquor, 88 F.R.D. at 126. "Ascertaining the i I identities and residences of the Doe Defendants is critical to plaintiffs' !I I infonnation Apple seeks from Nfox could hardly be more specific and l relevant. Petitioners contend that this discovery is peripheral to Apple's trade -, secret claims. In support of this argument, Petitioners mischaracterize -, I responsible for stealing the trade secrets at issue. (Pet. at 33.) l""' 19 I ,,",~"""" Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695nr I --; I Apple's casei s not constrainedt o identifying the employees,if any, n responsible for stealing its trade secrets. Rather, Apple seeks full legal redress against not only those persons who originally stole the trade 1 secrets -I n i n (Pet. at 34.) In support of this argument, Petitioners argue that discovery I, I Scates is not necessary to identify the person that originally stole Apple's !I trade secrets. (Id. at 34.) 1 that Apple has not served in this case and then insisting that this discovery I J is too broad. There is no pending discovery that specifically targets Mr. Borries, Mr. Scates, or "Dr. Teeth.,,3 The only pending discovery, and .., II the only issue before this Court, is the subpoena to Nfox. This subpoena is extremely limited and asks only for the return of the stolen materials and l information related to the identities of those who disclosed the Asteroid ! trade secrets. (Eberhart Decl. ~ 9 (Ex. 25 at 378:23-379:7).) ,I Petitioners also contend that Apple's subpoenat o Nfox is overbroad l because it seeks all communications related to the Asteroid device. (Pet. at 34.) Petitioners argue that Apple's subpoena thus improperly includes l within its scope non-confidential information related to the Asteroid product. (Id.) I ;! , involved in the misappropriation that is the narrow focus of Apple's discovery to Nfox, then their conduct and identities goes directly to Apple's 1 "core trade secret claim." .., 20 ,.c, -"', ,ii1 jI Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695nIl This argument fails because there is no non-trade secret information n about the unreleased Asteroid product. The Asteroid device is still in development and all details (including its code name) had been kept at I Apple in the strictest confidence and subject to security measures. (Zonic i ,-, I provided about Asteroid -a secret project -was, by its very nature, a trade secret. ,--,II The third Mitchell factor favors disclosure where the plaintiff has : "no other practical means of obtaining the information." Mitchell, 37 Cal. I i has pursued every reasonable alternative source of the information it now -, seeks from Nfox. ,iJ Apple's highly experienced investigators followed every available -, investigators then personally interviewed these employees -all of whom faced losing their jobs if they lied to or misled the investigators. (Zonic 1 -, reviewed the results of forensic searches of Apple's email servers for any -, communications that might reveal the source of the stolen information I """1 These efforts did not uncover the person responsible for the theft. (Zonic i .., simply wrong. -: 21 ,i Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695nn Decl. , 23 (Ex. 28 at 404:9-13); Ortiz Decl. , 10 (Ex. 27 at 392:6-9).) The n trial court concluded that Apple's "thorough investigation" before seeking discovery from Nfox weighed in favor of disclosure. Mar. 11, 2005 Order ~I at 9 (Ex. 34 at 463:21-23). Petitioners' assertion that Apple had not sufficiently "worked up a 1 sweat" before seeking information from Nfox does not withstand scrutiny. ,--, (Pet. at 38.) Apple pursued every reasonable means of learning who iI disclosed the Asteroid trade secrets before seeking to subpoena Nfox. n Nevertheless, Petitioners argue that Apple should have deposed the I employees that it interviewed about the theft of its trade secrets. (Id. at 35.) case law and is nonsensical in the situation presented here. --, I 1981), in which the plaintiffs alleged that unknown government employees I leaked confidential phone transcripts to reporters. Although the plaintiffs Ii depose or interview any of these employees. Zerilli, 656 F.2d at 714-15. 1 The court held that the plaintiffs had not pursued every reasonable i alternative source of the information because they failed to ask these the reporter. The court never held that depositions, as opposed to "interview" interchangeably with "deposition" discussing the plaintiffs' 1 I. failure to seek information from the listed employees. Id. at 715 ("it is quite possible that interviewing these four individuals could have shed -; -; responsible for the leaks"). Ii -, 22 ".~;1j;:;,i,.=" Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695nn price-fixing claims against several defendants. The plaintiffs sought discovery from a third party magazine to see whether the defendants had I surreptitiously exchanged pricing information through that magazine's ,.-, plaintiffs had not once asked, during hundreds of depositions, whether any ,--., of the deponents had given information to the media. The plaintiffs' discovery was a true fishing expedition. Petroleum Products, 680 F .2d at In Carushka, the defendant asked the plaintiff for information that .--, the defendant's request. Rather than follow up on the plaintiff's failure to l produce this information, the defendant instead sought the information from the magazine. Because the defendant had failed to follow up on its request I i I pursuit of every reasonable alternative source. Carushka, 1989 U.S. Dist. ! LEXIS 17487, at *8.5 i I ,I I 5 The other cases cited by Petitioners are similarly distinguishable. See l Rancho Publ'ns v. Superior Court, 68 Cal. App. 4th 1538, 1551 (1999) ! (plaintiffs could not subpoena newspaper's sources because the discovery Fred Hutchinson Cancer Research Ctr., 206 2002) (defendant could not subpoena a reporter's communications with the ; plaintiffs because the defendant had not first asked the plaintiffs for this I (plaintiffs sought discovery from a reporter before seeking clarification I 1 23 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695'""""1 I, I I The cases cited by Petitioners are easily distinguishable from the n facts presentedh ere. In Petitioners'c ases,t he parties failed to ask the right has done everything possible to identify the employees who had access to n the trade secrets and then thoroughly interviewed each of them. The interviewed employees were all obligated to tell the truth to the n investigators or risk losing their jobs. Apple is aware of no authority -and , Petitioners cite none -holding that a deposition is required under such II circumstances.6 Thus, the third Mitchell factor clearly weighs in Apple's 1 favor. i l Petitioners' Source From Disclosure. I The fourth Mitchell factor considers the importance of protecting the l confidentiality of the reporter's source. Mitchell, 37 Cal. 3d at 282. Under certain circumstances, the public interest is served by maintaining the -,I anonymity of a reporter's source. Press investigations into criminal or the vengeful subjects of such legitimate investigations. [d. at 283. l The persons who acquired and disseminated Apple's trade secrets served no public interest. Preserving the anonymity of these individuals l would turn this factor on its head by shielding -rather than exposing --., from the defendant of the defendant's uninformative interrogatory responses regarding communications with that reporter). l 6 Petitioners also assert that Apple should have pursued discovery from l -before subpoenaing Nfox. This directly contradicts Petitioners' separate insufficiently related to Apple's trade secret claims. (Compare Pet. at 37 l with Pet. at 34.) -; 24 [I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695unethical and criminal misconduct. Preventing their disclosure serves no public good but instead would only encourage illegal conduct. presumption of public interest in disclosure is generally paramount -the view. Cal. Civ. Code § 3426.5. interest demands the protection of trade secrets. American Express Fin. the unauthorized disclosure of trade secrets."); Merrill Lynch, Pierce, ("[T]he Court believes the public interest is served by protecting confidential business information and trade secrets, and enforcing valid contractual provisions, to which parties have voluntarily entered."); Gable-Leigh, Inc. v. North American Miss, No. 01-01019 (SHx), 2001 U.S. interest that trade secret customer lists be protected."). fatally conflates public curiosity with the public interest Mar. 11, 2005 Order at 12 (Ex. 34 at 466:15-16) ("[A]n interested public is not the same factor -greatp ublic importancea nd a substantiarl isk of harm to the source .-, 25 I " ',,; Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695curiosity about an individual's wealth, but that would never justify the theft and publication of the individual's tax returns. Similarly, no legitimate secrets. This factor weighs strongly in favor of disclosure. Secret Misappropriation. Mitchell, 37 Cal. 3d at 283. In the trial court, Petitioners asserted that this now change course and assert without argument that Apple has failed to this absence "compels protection against discovery." (Pet. at 39.) These assertions are both legally misplaced and flatly contradicted by the undisputed facts. Mitchell, 37 Cal. 3d at 283 (a prima facie showing of falsity in a to tip the balance in favor of discovery"); see also Anti-Defamation League -neither favors disclosure nor discourages it." (Mot. at 12 (Ex. 16 at Mitchell considered a source that had served a public interest, nothing in the public interest can weigh in favor of disclosure. Mitchell, 37 Cal. 3d at 282-83. ---26 I "",,"'.i\!~~i'"f2";;;t, Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695facie showing as a discretionary requirement."). This optional showing privilege. See Mitchell, 37 Cal. 3d at 283. Even if such a showing were originally stole the trade secrets and as to Petitioners. were all conspicuously marked "Apple Need-to-Know Confidential." that prohibited them from disclosing, publishing, or disseminating this information. Finally, the posts themselves referred to the unreleased correctly found, Apple made a prima facie showing that its trade secrets were misappropriated. Mar. 11,2005 Order at 10 (Ex. 34 at 464:6-8). Apple's unrebutted evidence also establishes a prima facie case against Petitioners. First, it is uncontested that Petitioners repeatedly disseminated Apple's trade secrets on their websites. Second, it is information through a violation of Apple's confidentiality agreements or, at proclaimed experts on Apple and the computer industry, Petitioners can i hardly claim that they were not aware of Apple's rigorous security I measures and confidentiality agreements. See Data Gen. Corp. v. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695(defendant cannot shield self from liability by claiming ignorance of that such agreements were widely used in the industry). particularly telling. In the trial court, O'Grady submitted two declarations in support of the motion for protective order. Following O'Grady's first declaration, Apple's opposition papers noted that O'Grady had not secret obtained in violation of a duty of confidentiality. (Apple Opp. at 5-6 (Ex. 24 at 367:25-368:3).) Thereafter, O'Grady filed a second declaration and again failed to deny that he knew the information was a trade secret obtained in violation of a duty of confidentiality. His silence on this key violation of the law. (See Declaration of Jason O'Grady in Support of Motion for Protective Order (Ex. 18); Declaration of Jason O'Grady in Support of Reply Brief (Ex. 31).) In summary, as the trial court properly found, all five of the Mitchell factors weigh in favor of the return of Apple's property and of the trade secrets to Petitioners. SHIELD DOES NOT APPLY TO limited immunity to reporters facing contempt judgments for refusing to for email communications and stolen materials to Nfox, a party that is not a : Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695Recognizing that the California Shield does not prevent the discovery Apple seeks, Petitioners offer a chain of hypotheticals. and if they had refused to provide this information and if the Court had legitimate news gathering activity. (Pet. at 24.) Such speculation provides no basis to reverse the trial court's decision. Judgment. The California Shield provides only one protection: a newsperson's (1990). This narrow immunity offered by the Shield does not, however, The California shield law, however, is unique in that it affords only limited protection. It does not create a privilege for newspeople, rather, it provides 136 Cal. App. 3d 375,379-80 (1982). The California Shield's protection is contempt, such as issue preclusion and monetary sanctions. Rancho l ., because Nfox has neither refused to comply with the subpoenas nor been --,I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695its protection only applies once a contempt judgment has been entered against the reporter. Cal. Evid. Code § 1070; see Delaney v. Superior Court, 50 Cal. 3d 785, 797 n.6 (1990) ("the shield law prohibits only a a contempt judgment has been entered). The California Shield also has no application to Apple's subpoena California Shield does not block discovery directed at parties that are not news person shall not be adjudged in contempt") (emphasis added). Nfox. Even if Petitioners were able to assert the California Shield on Nfox's behalf, they nevertheless are not entitled to that law's protections. activities. Petitioners certainly cannot establish that acquiring and disseminating Apple's trade secrets were legitimate newsgathering fall within the limited class of people who qualify for the Shield's protection. Il n 30 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695Legitimate Newsgathering Activity. Not all infonnation gathered for communicating to the public is sufficient to invoke the California Shield. See Rancho Publ 'ns, 68 Cal. App. 4th at 1544 (rejecting argument that advertorials in newspapers, though communicating to the public, satisfied the requirements for invoking the California Shield). Instead, the party seeking to invoke the or she was "engaged in legitimate journalistic purposes, or [exercised] judgmental discretion in such activities." [d. Petitioners cannot demonstrate that acquiring and disseminating Apple's trade secrets were done for "legitimate journalistic purposes" or that they "exercise[ d] judgmental discretion" in doing so. verbatim copies of Apple's confidential, proprietary infonnation is not See Cal. Civ. Code § 3426.1(b); United Liquor, 88 F.R.D. at 131 (journalists have no right to publish confidential infonnation and the public has no right to have it printed). Similarly, Petitioners' blatant copying and dissemination copyright violation. See Zacchini 562, 576-79 (1977). That Petitioners may also post other articles on the change the fact that this specific conduct was not done for legitimate journalistic purposes. See Rancho Publ'ns, 68 Cal. App. 4th at 1544 activities"). l 31 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695Second, in disclosing the Asteroid trade secrets on their websites, Petitioners exercised no editorial oversight at all. Instead, as the detailed reprinted verbatim details from Apple's confidential slide set and copied Shield. newspersons specifically listed in the statute. [d. at 805 n.17. The contempt immunity may only be claimed by a "publisher, editor, reporter, or other periodical publication, or by a press association or wire service." There is no protection for many other classes of persons purportedly engaged in information collection and dissemination such as, for example, lecturers, novelists, researchers, or pamphleteers. The choice of certain enumerated newspersons reflects the professional standards that define those classes. For example, the Code of Ethics of the Society of , ProfessionaJl ournalistsp rovidest hat "[j)ournalists shouldt est the accuracy I of information from all sources," "identify sources whenever feasible" and -"-1iI 1 32 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695categories. Although the California Shield has been repeatedly amended to information on a website. Persons who post such information, moreover, professional standards. Indeed, if Petitioners' arguments were accepted, language of the statute forecloses such a broad application. Petitioners thus have not and cannot demonstrate that they fall within the limited categories of newspersons deserving protection under the California Shield. Communications Act, 18 U.S.C. § 2701 et seq., bars all civil discovery to Nfox, including Apple's court-approved subpoena. (Pet. at 21.) Nothing in the sweeping interpretation pressed on this Court by Petitioners. enacted to regulate governmental searches of email communications. i -,l 33 ",."c '...,c~ C!~~J"?~f"'(: Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695'f! "i Ps was intended to extend the same Fourth Amendment-style protections to email communications that had previously been extended to other forms of communication. See 132 Congo Rec. H4039-01 (Oct. 2, 1986) (explaining I1 telephones, and data transmission by providing such communications with 1 Guide to the Stored Communications Act, and a Legislator's Guide to catch-all statute designed to protect the privacy of stored Internet 1 communications;in stead it is narrowly tailored to provide a set of Fourth Amendment-like protections for computer networks."). -, Given the SCA's focus on governmental searches and seizures, it is -, I valid civil subpoena. In Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir. \ i 1 rules of civil procedure that it became "a piece of paper masquerading as I ii .., misleading: the ellipses in Petitioners' citation excise the portion of the I interpretation. "Section 2702(b) offers several exceptions to the 1 prohibition, but none of them expressly permits disclosure pursuant to a ! civil discovery order unless the order is obtained by a government entity. --, This issue has not been litigated to our knowledge. . . ." Compare The U.S. i Guide for Internet Service Providers, 18 Berkeley Tech. L.J. 945, 965 -, (2003) (emphasis added), with Pet. at 23. I l 34 ;;, Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951I 0 "transformed the access from a bona fide state-sanctioned inspection into I communications pursuant to that invalid subpoena, ultimately concluding that it did. [d. at 1072-77. But if Petitioners' position were correct, the i Ninth Circuit's detailed analysis could have been replaced by a single I ! valid civil discovery. , -., substantial categories of disclosures -categories that are far broader than I.. -., narrower exemption for civil discovery is not an indication that civil discovery is barred; instead, it is a reflection of the fact that the enumerated ""'1i exemptions are far broader than the bounds of civil discovery. I I necessarily incident. . . to the protection of the rights or property of the 1 provider of that service" -a category far wider than mere civil discovery. , 18 U.S.C. § 2702(b)(5). Here, Nfox faces valid civil subpoenas -reviewed I anda pprovedin an orderi ssuedb y the trial court-and faces civil contempt I if it does not comply. Thus, the statute permits Nfox to comply with the l the SCA provides that compliance with valid court process is a complete : defense. See 18 U.S.C. § 2707 ("[G]ood faith reliance on ... a court i warrant or order. . . is a complete defense to any civil or criminal action t brought under" the act). i\ by Petitioners. Nor should it. Petitioners' proposed interpretation would "-1 preclude discovery even where the communications cannot be obtained 1 35 I , I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695ll from another source -thereby creating a safe harbor for a vast array of l illegal activity where the perpetrator cannot be found or has destroyed his copies of the communications. Nothing in the history or interpretation of -., Ii I I i l I The Nfox subpoenasa re the only pending discovery in this action. l NeverthelessP, etitionersa lso soughto rderst hat: II a. Petitioners O'Grady, Bhatia, and Jade are journalists; l b. Apple is prohibited from serving or enforcing discovery to O'Grady, Bhatia, or Jade to learn their 1 sources; I -, II d. Apple cannot serve or enforce discovery to any third party service provider to learn the identities of Jade, l Bhatia, or O'Grady's sources. I -, (Proposed Order Granting Motion for Protective Order at 2-3 (Ex. 17 at ii i 126:21-127:6).) The trial court denied Petitioners' request for orders on the i above matters, holding that Petitioners were improperly requesting an iI advisory opinion. Mar. 11, 2005 Order at 3 n.3 (Ex. 34 at 457:25). Their l petition provides no reason to reverse this decision. I Unserved Subpoenas In This Case. l justiciable controversy in order for a court to exercise its discretion to l (1993); Van Dyke v. S. K. I. Ltd., 67 Cal. App. 4th 1310, 1319 (1998). This : rule "is rooted in the fundamentacl onceptt hat the proper role of the ""1 36 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695ni ! 1I judiciary does not extend to the resolution of abstract differences in legal l i 158, 169 (1982). -, ! In deciding whether a controversy is ripe for adjudication, the court -, I --, withheld. [d. at 171-73. The abstract questions Petitioners raise regarding II -, ! I Controversy. I Apple has not served any discovery beyond the subpoenas to Nfox. The ! i fact that the trial court earlier authorized Apple to serve limited discovery I on Petitioners does not alter this conclusion. See Dec. 14, 2004 Order I (Ex. 8). Apple has not served the subpoenas authorized by that order and \ II I may never come to pass. \ I amend the complaint to name the proper defendants and open discovery. I Apple may have no need to send discovery directly to Petitioners at all. -, Ii Even if Apple later decides that it needs to propound discovery to -, I 1 The opening of discovery following the identification and service of iI a defendant, moreover, would permit the parties in this case to develop a 1 factual record on which the court can properly assess the issues that i I 37 III -""" Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695,II -"1 I prevents courts from issuing purely advisory opinions," such as those i sought by Petitioners, because 'judicial decision making is best conducted -:." sufficient definiteness to enable the court to make a decree finally disposing , i -, App. 4th 134, 157-58 (1994) (citation and internal quotation marks I I that his treatment had been unrelated to the subject matter of the doctor's I . testImony. ) 1 Petitioners nevertheless argue that there is an actual and concrete I controversy regarding Apple's unissued, unserved subpoenas, relying on -, -, 427911, at *15 (S.D.N.Y. Feb. 24, 2005). But the narrow holding in i , those presented here. I that the government could not subpoena telephone records from two I already subpoenaed these records, because the government refused to l newspaper regarding future subpoenas of those reporters' records. The I telephone service providers also refused to give the newspaper any l; information about government subpoenas for the reporters' records. The ""1 court found that the newspaper had presented a ripe controversy regarding the government's subpoenas. [d. at *15. The decision relied on the fact 1 l 38 I! ~"-~ .."C" Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695--,\I I ! ii the investigation but refused to provide details concerning when or if the I subpoenasw ould issue. Id. I Here, the facts are entirely different from Gonzales. There is no I uncertainty regarding the currently-outstanding discovery. It is undisputed that the only outstanding subpoenas are those served on Nfox and that i I -, Petitioners will necessarily receive notice if Apple propounds any of the Ii other discovery authorized by the trial court, given that Petitioners are the -., principals of PowerPage and AppleInsider. Thus, unlike the newspaper in ( discovery. 9 iI Outside of the unique circumstances presented in Gonzales (which l are not present here), courts have routinely held that disputes regarding i -, i 22862662, -, ii defendantsh ad no currently enforceables ubpoenaa gainstt he plaintiff there i warranting declaratory relief); Morgan v. Roberts, 702 F.2d 945,947 (11th ii -,ii I -.., 9 The i Cir. 1982), is distinguishable for the same reasons. Like Gonzales, the outcome in Harris was caused by the plaintiffs lack of opportunity to -, jo oppose any future subpoena for his records. Harris, 696 F.2d 109, ! 112-14 Cir. 1982) (government's offer to return the plaintiffs -, medical records did not moot controversy over subpoena because the I! plaintiff would not have an opportunity to oppose a future subpoena for '""\ disclosure). l 39 iI Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695...,Ii -,II needed to be produced and the plaintiffs failed to show a reasonable l likelihood of future subpoenas, no actual controversy existed). II -: i Case. -,i Petitioners argue that they face substantial hardship as a result of -, hypothetical subpoenas because they have lost confidential sources of 1: potential information. (Pet. at 47.) But they have not provided any unserved subpoenas. The reduction in anonymous information about 1 Apple's products could just as easily be the result of Apple's internal investigation into the theft of its trade secrets, increased publicity regarding -, ! Apple's efforts to protect its trade secrets, a decline in the flow of illegal 1 information to Petitioners from their sources, or the departure of such l 1 sources from Apple's employment. I Petitioners also claim that they face significant hardship from the I! hypothetical subpoenas because they believe it would be burdensome to I 47.) But nothing supports the notion that new subpoenas will be required l issue. There is no reason to litigate subpoenas that Apple has not II issued and may never issue. I Finally, Petitioners repeatedly complain about Apple's "threats," "harassment," and "intimidation." (Id. at 46-47.) These inflammatory 1 i allegations are inconsistent with the facts in this case. Petitioners point to i no activity by Apple that merits those labels, and the facts show that Apple i is only trying to recover the stolen materials and identify the responsible -, individuals. IiIi The trial court properly rejected Petitioners' request for an advisory l opinion on these contingent and abstract issues. If and when Apple chooses i! --40 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695l, I I, to propound discovery directly to Petitioners, the issues raised by that I discovery will be concrete. Petitioners should be required to reserve any I challengesto that hypotheticald iscoveryu ntil the future. n l PROTECTIVE I , The trial court's written decision reflects that it carefully considered I the arguments raised by both sides in ruling on Petitioners' motion for a 1 protective order. Petitioners' attack on that decision distorts the trial i court's factual analysis and legal reasoning. , I The Federal Privilege. l i Petitionersa rguet hat the trial court failed to properlya pplye acho f l the five Mitchell factors. (Pet. at 40-42.) The court's written decision, however, shows that it properly applied the Mitchell factors in ruling that l the Federal Privilege did not bar Apple's discovery to Nfox. Petitioners assert that the trial court misapplied the first Mitchell l factor because it "treated Petitioners as though they were parties." (Id. at -, were not parties in this case. Mar. 11, 2005 Order at 9 (Ex. 34 at 463:13--., 15). Neverthelesst,h e court recognizedt hat Petitionersh ad clearly been involved in the theft and publication of Apple's trade secrets. Thus, I because Petitioners' conduct is squarely at issue in this case, the court II correctly found that this factor weighs in favor of disclosure. Id. 1 Second, Petitioners argue that the trial court did not consider the II breadth of Apple's discovery in analyzing the second Mitchell factor. (Pet. l mischaracterization of Apple's claims and the narrow discovery at issue. lI l 41 iI I. ~~"",~.1' Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695ll The trial court's decision reflects that it recognized the true scope of both I Apple's claims and discovery. I l evaluating the third Mitchell factor. (Id.) Petitioners also assert that the , I explain what they believe is erroneous about the court's analysis of this I 1 every reasonable alternative source of information before seeking discovery I "unusual step" of deposing its employees is entirely consistent with i relevant case law. See Section II(B)(3), supra. I Similarly, Petitioners have not demonstrated that the trial court erred 1 in applying the fourth Mitchell factor. Petitioners served no legitimate public interest by posting Apple's trade secrets on their websites. The I public interest, moreover, would not be served by shielding from discovery the source that illegally provided this information. l i 41.) But this is, at most, an optional showing, and Mitchell certainly does j not require a prima facie showing against the party claiming the privilege. 1 See Mitchell, 37 Cal. 3d at 283 (noting that court may, at its option, require a showing of falsity in defamation action). Regardless, as discussed above l I wrongfully disseminated Apple's trade secrets. -,II lll 42 it ".'"'~~"~ , Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951i I l Liability In Rejecting Petitioners' Federal Privilege Claim. Privilege should not be used to shield misconduct by a reporter or his I i I 463:7,465:1-16,465:21-466:5, 467:10-17). Petitioners argue from these Ii referencesth at the court incorrectly believedt hat denying their motion for a l protective order would have immunized the trade secret thief from liability, ,, rather than preventing discovery into that theft. (Pet. at 42-44.) Thus, I Petitioners contend that the trial court must have been confused about the ! difference between an immunity and an evidentiary privilege. (Id. at 42.) Il i regarding liability or the ultimate merits of Apple's claims. Instead, the -: court emphasized that it was only ruling on the merits of Petitioners' ! motion for a protective order against Apple's discovery to Nfox. Mar. 11, l 2005 Order at 2 (Ex. 34 at 456:9-13). : Nor do Petitioners' citations to the court's opinion demonstrate that l the court wrongly decided their Federal Privilege claim. The court II making this ruling, the court correctly recognized that other privileges I I! similarly could not be used to shield illegal activity from discovery. See id. l at 11 (Ex. 34 at 465:7-16) (noting that privileges such as the attorney-client , privilege, marital communications privilege, and physician-therapist I Supp. at 1216 (noting that "[e]ven the attorney-client privilege, which is I, I 43 I Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e2276951 i l more deeply rooted and absolute than the journalist's privilege, gives way l I fraud"); United Liquor, 88 F.R.D. at 131. IIi Rejecting Petitioners' Federal Privilege Claim. II . Petitioners argue that the trial court improperly relied on authority l ! Because the Federal Privilege is more limited in a criminal case than a civil -, I case, Petitioners argue that the trial court's citation to criminal cases -such I as Branzburg v. Hayes, 408 U.S. 665 (1972) -demonstrates that it l mistakenly applied the more stringent criminal standard to their privilege i I claims rather than a criminal investigation. (Tr. of Mar. 4, 2005 Hearing at I 19 (Ex. 33 at 450:18-19) ("I recognize that this is not a criminal l proceeding.").) Moreover, Petitioners' argument fails because the court did I not apply the more stringent criminal standard. Instead, as Petitioners I acknowledge, the trial court applied the Mitchell five-part test that is appropriate to a privilege claim in a civil case. Mar. 11, 2005 Order at 9-10 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695--,Ii l-,I For all of the foregoing reasonsA, pple respectfullyr equestst hat this Court deny the petition for writ of mandate and/or prohibition. ...,i! I i GEORGE A. RILEY , EBERHART I JAMES LLP -; r;{(;~~~~?=---Interest Apple Computer, Inc. ll-,Ii , II l, I ii) -"'\iII I I ,II l 45 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695~! l -, I (Cal. Rules of I The text of this brief consists of 12,600 words (including footnotes) !i 1 used to generate this brief. Respectfully submitted, -:,i; I 1 DHAIV SHAH I JAMES A. BOWMAN LLP ; I Bs:~!~i~~~2=----: I! Interest Apple Computer, Inc. 1I SFI :582549.3 I III Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=4f955100-f90e-429a-9581-53061e227695
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