Legal Commentary

CA trial court rules there is no First Amendment / Media Shield privilege to violate criminal law.

Last Friday, Judge James P. Kleinberg of the Santa Clara County Superior Court issued a ruling in Apple Computer, Inc. v. Doe, et al, which forces a weblogger to comply with the subpoena to produce documents identifying the source(s) of its posting regarding new Apple products.  Although the opinion has no precedential value and sort of ducks key free speech issues, it is interesting as to the level of protection afforded to journalists, particularly in its blog form.

For those unfamiliar with the case, it is a lawsuit by Apple against several unnamed people, who allegedly leaked trade secrets about new Apple products to several weblog sites.  The aim of Apple's subpoena was to identify the individuals who provided that confidential trade information to the webloggers.

The decision generated quite a news buzz (at least locally), and one of our NPR-affiliates did a one-hour panel discussion with lawyers and journalism professors regarding possible implications of this decision for webloggers.  Frankly, I think they are overreacting because this ruling barely implicates those concerns.  The judge ducked a dicey issue of whether a weblogger is considered a "journalist" by concluding that even if he is, journalists do not have either a constitutional or a state media shield law privilege to violate penal laws prohibiting publishing of confidential trade secrets. 

If anything, the ruling is more interesting on the issue of whether any journalist has more First Amendment rights (or rights under media shield law) that an ordinary citizen.

Update:  On further reflection, Judge Kleinberg's decision may not be as straightforward as it initially seemed.  True enough, on the First Amendment issue, he towed the line pretty close to Branzburg v. Hayes, though he did not mention a recent D.C. Circuit opinion that supports the ruling. 

But the ruling on the shield law warrants more discussion.  I am no expert in this area, but it seems that our Legislature could have, if it wanted to, give the journalists (including, presumably, webloggers) at least a qualified discovery privilege against a civil discovery request (as opposed to a terrorism investigation).  The decision does not coherently explain why the media shield law does not apply here (i.e., statutory language, leg. history, case citaiton, etc).  Also, in balancing the competing interests, the court treated the plaintiffs' alleged trade secret misappropriation as if it were a crime against national security, which automatically trumps any free speech interests.  This approach might have worked in In re Grand Jury Subpoenas, where there was a criminal investigation in a matter of national security, but not in a routine civil discovery dispute. 

CA Supreme Court holds appeal from a denial of a SLAPP motion stays the trial court proceedings.

Yesterday, the California Supreme Court issued an opinion in Varian Medical Systems v. Delfino, in which it held that appeal from a denial of a pre-trial SLAPP motion automatically stays the trial court proceedings until resolution of that appeal.  For those of you unfamiliar with SLAPP law, it is a provision of the California Code of Civil Procedure under which the defendant may move to strike complaint on the ground that it interferes with the defendant's First Amendment right to participate in an issue of public importance.  If the plaintiff cannot demonstratve a probability of prevailing on that complaint, the trial court must strike it and award the defendant attorneys' fees.

The facts of this one are interesting.  The defendants are former research scientists and employees of the plaintiff company (the plaintiff fired one of them and the other one resigned in sympathy).  The defendants then organized their independent research company in Silicon Valley.  However, in their spare time, they also began to post what the Supreme Court called "derogatory messages about the plaintiffs on the Internet."  I actually read one of the amicus brief in support of the defendants and their messages may have been about some bona fide dispute between them and the plaintiff.  In any event, the plaintiffs became unhappy with those posts and sued the defendants for various causes of action, including libel, invasion of privacy, and engaging in unfair competition.

This case attracted my attention because it addresses the same issue as in one of my current pending appeals - termination of the trial court's jurisdiction once the appeal is perfected.

Does the recent change in CA Unfair Competition Law apply retroactively?

Last November, California voters approved Proposition 64, which significantly limited the reach of the California Unfair Competition Law in the name of tort reform.  Under the old version of the law, any member of the general public had standing to enforce it.  After the passage of the proposition, only plaintiffs who suffered injury-in-fact have standing.  The $64,000,000 question is whether the change should be applied retroactively?

The lower courts of appeal split on the issue.  In Californians for Disability Rights v. Mervyns, the First District Court of Appeal in San Francisco said no.  Based on what I personally perceive to be the correct interpretation of the statutory construction law, the court reasoned that statutes operate prospectively unless the Legislature or the voters declare otherwise.  Since Proposition 64 is silent on the issue, the statutory change to UCL operates only prospectively.

But the appellate courts in Los Angeles and San Diego held, most recently in Bivens v. Correl Corporation, that the new version of the UCL applies to cases pending at the time the change in UCL went into effect.  These courts draw a distinction with the rule against inferring retroactive statutory application by limiting the rule to cases arising under the common law.  Based on a series of older Supreme Court decisions, these courts conclude that since UCL is a purely statutory cause of action, the court must apply the version of UCL in effect at the time the decision is rendered, so long as no rights under UCL have vested under the prior version of the law.

Since the issue of retroactivity of the change in the UCL raises a seeming conflict between two rules of statutory interpretation, it is heading for Supreme Court review.  The chances of the Court granting review become even greater because the change in UCL standing provisions was a hot-button political issue in the last year's elections.

Today, the California Supreme Court issued a 7-0 decision, in a lawsuit involving a company managing Bing Crosby's remaining business interests, that an attorney-client privilege ceases to exist after the privilege holder dies, his estate is probated, and the executor of the estate is discharged.  Citing section 953 (c) of the California Evidence Code, which names the client's personal representative (executor of the estate) a privilege holder after client's death, the Court held that it was disinclined to issue a ruling allowing the privilege to survive distribution of the client's estate.

I wonder what is the law on this topic in the state of New York.  I always got a kick out of these Law and Order episodes, in which DA Jack McCoy (Mike Moriarty's character never pulled this stuff) exclaims that an attorney-client privilege does not apply because the client is dead.  Could it be that the old blowhard is right?:) 

No gun control through the courts.

On February 10, 2005, 1st District Court of Appeal in San Francisco published an opinion, In re Firearm Cases, in which it affirmed the trial court's grant of summary judgment in favor of several gun manufacturers in a group of lawsuits filed by local government entities.  In a display of unity rarely found on other issues, several Northern and Southern California cities and counties filed a series of identical state court lawsuits against a group of gun manufacturers (including Gloch, Beretta, and Smith & Wesson) pursuant to the California's Unfair Competition Law (B&P, sec. 17200) and a nuisance statute (Civ. Code, sec. 3479).  In each of these lawsuits, the plaintiffs essentially argued that the defendants were liable for their failure to police high-risk sales and advertising practices by gun dealers and retailers.  Plaintiffs also alleged that the defendants failed to incorporate safety features into their guns and engaged in false advertising campaigns re: gun ownership increasing home safety (these latter issues were not raised on appeal).

On appeal, the First District affirmed the trial court's grant of a summary judgment motion in favor of the defendant manufacturers.  The Court held that both UCL and nuisance claims require a showing of a causal connection between the alleged unlawful acts and the alleged harm.  The court pointed out that summary judgment in favor of the defendants was proper because the plaintiffs failed to present any evidence that the defendants themselves engaged in any high-risk sales or manufacturing practices or that the defendants had any actual knowledge that the retailers engaged in such conduct. 

In terms of public policy, the Court noted that while it was mindful of the harm created by gun violence, it would be equally dangerous to create vicarious liability under the Unfair Competition Law for gun manufacturers' otherwise lawful conduct without a showing the manufactuers' actual knowledge that the dealers / retailers engaged in illegal sales or marketing conduct .  To illustrate this danger, the Court cited a 9th Circuit decision on a similar issue, in which a dissenting judge noted that holding a gun manufacturer liable for marketing a firearm that was later used to commit murder would be like holding GM liable for marketing the speed of its Corvette, which was later used by joy-riding juveniles to kill someone in a traffic accident.  The Court also noted that requiring additional regulatory practices by the gun manufacturers to reduce the overall level of gun violence is a task better left to Legislature. 

The really interesting thing about this case is that it does not mention the California Supreme Court's decision in Merrill v. Navegar, in which the California Supreme Court rejected a lawsuit by shooting victims against gun manufacturers, which raised similar issues.  Apparently taking a hint from that decision, the plaintiffs here tried to avoid thorny causation issues by trying to present similar claims as "unfair business practices."  In light of the trend to limit the expansive reach of the UCL (California voters passed an ill-advised UCL initiative last November), it is not surprising the Court here declined to adopt a broad interpretation of the law advocated by the plaintiffs.  Plus, the Court is right - limiting and /or banning sales of some or all guns may be a great idea, but it should be done by Legislature.

Your attorney-client privilege may outlive you.

In the last six + years, I have argued my fair share of discovery motions, including those involving applications of the attorney-client privilege.  I was always under the impression that since the privilege is uniquely personal to the client, as only the client could waive it, it would be terminate upon one's death.  Not necessarily so, says the California Supreme Court (as reported on the law.com website) in a case involving the estate of Bing Crosby.  This seem counterintuitive because such a ruling (if it is issued) would run contrary to the policy of preserving confidentiality of the attorney-client relationship.  Now, disclosure of a confidential attorney-client communication to a third party does not necessarily destroy the privilege if that disclosure is for the client's benefit (ex. joint defense agreements, etc).  However, allowing a third-party not to destroy the privilege is a far cry from allowing a third-party to invoke it.