|Supreme Court Denies Cert in Online Freedom
of Speech Case
5/30. The Supreme Court denied
certiorari in Yahoo v. La Ligue. See,
List [8 pages in PDF] at page 2. This is a case regarding whether Yahoo can
obtain from the U.S. District Court a declaratory judgment that a French court
order censoring internet speech on Yahoo's servers in the U.S. violates the First Amendment.
The en banc panel of the Court of Appeals issued a short, two paragraph, per
curiam opinion that, like the three judge panel, reversed the District Court's
judgment in favor of Yahoo. Judges also wrote several
opinions [99 pages in PDF]. This disposition was a defeat for internet service providers,
internet speakers, and freedom of speech online.
This petition for writ of certiorari was filed, not by Yahoo, but by La Ligue,
one of the French entities that originally sought censorship. Yahoo filed no
opposition. See, Supreme Court
For further TLJ coverage of this case, see:
- story titled "9th Circuit En Banc Panel Rules Against Yahoo in French
Internet Censorship Case" in
TLJ Daily E-Mail
Alert No. 1,289, January 13, 2006.
- story titled "9th Circuit Grants Rehearing En Banc in Yahoo v. LICRA" in
TLJ Daily E-Mail
Alert No. 1,075, January 11, 2005.
titled "9th Circuit Reverses in Yahoo v. LICRA" in
TLJ Daily E-Mail
Alert No. 965, August 24, 2004.
- story titled "NDCal: French Court Order Restricting Internet Speech is
Unenforceable in U.S." in
TLJ Daily E-Mail
Alert No. 305, November 9, 2001.
- story titled "U.S. Has Jurisdiction over French Defendants in Yahoo v.
LICRA" in TLJ
Daily E-Mail Alert No. 205, June 11, 2001.
This case is Yahoo, Inc. v. La Ligue Contre La Racisme et L'Antisemitisme
and L'Union Des Etudiants Juifs de France, Sup. Ct. No. 05-1302, a petition
for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit. The
Court of Appeals number is No. 01-17424. It heard an appeal from the U.S.
District Court for the Northern District of California, D.C. No. CV-00-21275-JF.
|California Court of Appeal Rules in Apple
5/26. The Court of Appeal of the State of California, Sixth Judicial District, issued
[69 pages in PDF] in O'Grady v. Superior Court, issuing a writ of mandate
directing the Superior Court to grant O'Grady's motion for a protective order in
Apple's suit to obtain the identities of his confidential sources.
Jason O'Grady published in his news web site about Apple information about a
forthcoming Apple product. Apple sought to use the discovery process in a civil
John Doe action to compel O'Grady to disclose his sources. The Superior Court
denied O'Grady's motion for a protective order. Apple and other tech companies
argued that the importance of protecting trade secrets, particularly at tech
companies, and especially in light of the threats to trade secrets posed by
e-mail and web sites, warrants allowing this sort of discovery. O'Grady and
others advanced arguments related to freedom of speech online.
The Court of Appeal held that the Stored Communications Act's (SCA)
ban on the disclosure by service providers of stored e-mail contains no implied
exception for disclosure pursuant to civil subpoenas. The Court of Appeal also
held that the California reporters' shield law, which protects any "publisher,
editor, reporter, or other person connected with or employed upon a newspaper,
magazine, or other periodical publication", applies to Jason O'Grady and his web site.
The Court of Appeal also held that the discovery sought by Apple is barred by
the conditional federal and state constitutional privilege against compulsory
disclosure of confidential sources.
That is, O'Grady and the freedom of speech proponents prevailed over the
trade secrets proponents. O'Grady gets his protective order. Apple does not get
the records that would reveal O'Grady's sources. However, the Court of Appeal is
an intermediate court of appeal. Apple may appeal to the Supreme Court of California.
Background. Jason O'Grady publishes a web site that contains news
about Apple products. On November 19, 2004, he published a story about a
forthcoming audio recording device to be sold by Apple. He published three further stories that
provided more detail, including a drawing, likely prices, and a likely release date.
Apple wrote to O'Grady on December 8. The Court of Appeal opinion
provides this quote: "The information in these posts and accompanying comments
constitutes trade secrets that you have published without Apple[’]s
authorization. ... It appears that you may be engaged in a practice of
soliciting and disseminating such trade secrets. Apple also demands that you
provide all information available to you regarding the sources for the posting
and comments identified above. ..."
Trial Court. On December 13, 2004, Apple filed a complaint in
Superior Court in Santa Clara County, California, against numerous unnamed
defendants identified only as "John Doe" alleging misappropriation of trade
secrets under California state law. O'Grady is not a defendant.
Apple applied to the Superior Court for the issuance of subpoenas for document. It
sought from O'Grady, other publishers, and e-mail service providers, records regarding
the sources of information for the news stories about Apple.
O'Grady and others filed a motion for a protective order. The Superior Court denied the
motion for a protective order, on the ground that the
publishers had involved themselves in the unlawful misappropriation of a trade secret.
Court of Appeal. O'Grady and others then filed with the Court of Appeal a petition
for writ of mandate or prohibition to compel the trial court to set aside its denial of the
motion for protective order. The Court of Appeal granted the petition, and directed the
Superior Court to grant the motion for a protective order.
The Court of Appeal held that "(1) the subpoena to the email
service provider cannot be enforced consistent with the plain terms of the
federal Stored Communications Act (18 U.S.C. §§ 2701-2712); (2) any subpoenas
seeking unpublished information from petitioners would be unenforceable through
contempt proceedings in light of the California reporter’s shield (Cal. Const.,
art. I, § 2, subd (b); Evid. Code, § 1070); and (3) discovery of petitioners’
sources is also barred on this record by the conditional constitutional
privilege against compulsory disclosure of confidential sources ..."
Stored Communications Act. The Court of Appeal first addressed the issues raised by
the SCA. Since this is a state court construction of a federal statute, this part of the
opinion is not binding precedent outside of California. However, the SCA is national in
scope, and other courts might find the analysis of the California court persuasive.
18 U.S.C. § 2702 provides that "a person or entity providing an electronic
communication service to the public shall not knowingly divulge to any person or
entity the contents of a communication while in electronic storage by that
The Court of Appeal wrote that Apple cannot obtain stored e-mail
from O'Grady's e-mail service provider pursuant to a civil subpoena because
Section 2702(a) prohibits this, and Section 2702(b), which enumerates
exceptions, contains no applicable exception.
Apple argued that Section 2702(b), which exempts the contents of
communications disclosed "as may be necessarily incident
to the rendition of the service or to the protection of the rights or property
of the provider of that service", is applicable. Apple feebly argued that since
noncompliance with a subpoena would expose the service provider to contempt or
other sanctions, its property was at risk. The Court of Appeals was not impressed.
Apple also argued that
18 U.S.C. § 2707's language, which provides, in part, that "good faith
reliance on ... a court warrant or order ... is a complete defense to any civil
or criminal action brought under" the SCA, entitles it to obtain the records.
However, the Court of Appeal held that this language merely provides the service
provider an exemption from liability for good faith, but illegal
disclosure. It does not make the disclosure legal.
The Court of Appeal also rejected, following a lengthy analysis,
the argument that there is an implied exemption to the SCA for civil discovery.
California Reporter's Shield Law. The California constitution provides
that "A publisher, editor, reporter, or other person connected with or employed
upon a newspaper, magazine, or other periodical publication . . . shall not be
adjudged in contempt . . . for refusing to disclose 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." There is a related
provision in the California Evidence Code.
These are provisions of California law, applicable only in cases to which
California law is applied.
First, Apple argued that O'Grady and the others could not assert the shield
because they were not engaged in "legitimate journalism or news", because they
were misappropriating trade secrets.
The Court of Appeal rejected this argument. It wrote that "The shield law is
intended to protect the gathering and dissemination of news, and that is
what petitioners did here. We can think of no workable test or principle that
would distinguish ``legitimate´´ from ``illegitimate´´ news. Any attempt by
courts to draw such a distinction would imperil a fundamental purpose of the
First Amendment, which is to identify the best, most important, and most
valuable ideas not by any sociological or economic formula, rule of law, or
process of government, but through the rough and tumble competition of the
Second, Apple argued that O'Grady and the others could not assert the shield
because they published verbatim information provided to them. The Court of
Appeal rejected this argument. It wrote that "A reporter who uncovers newsworthy
documents cannot rationally be denied the protection of the law because the
publication for which he works chooses to publish facsimiles of the documents
rather than editorial summaries. The shield exists not only to protect editors
but equally if not more to protect newsgatherers."
The Court also elaborated on this principle in the context of online writing.
"Digital communication and storage, especially when coupled with hypertext
linking, make it possible to present readers with an unlimited amount of
information in connection with a given subject, story, or report. The only real
constraint now is time -- the publisher's and the reader's. From the reader’s
perspective, the ideal presentation probably consists of a top-level summary
with the ability to ``drill down´´ to source materials through hypertext links.
The decision whether to take this approach, or to present original information
at the top level of an article, is itself an occasion for editorial judgment.
Courts ought not to cling too fiercely to traditional preconceptions, especially
when they may operate to discourage the seemingly salutary practice of providing
readers with source materials rather than subjecting them to the editors' own
``spin´´ on a story."
Apple next argued that O'Grady and the others could not assert the shield because they
are merely individuals operating web sites. It argued that they are not covered because they
are "not members of any professional community governed by ethical and professional
standards". The Court of Appeal rejected this argument. It reasoned, based upon
dictionary statements of the meanings of words, that the
shield applies to "publishers", and O'Grady and the other were publishers.
Apple next argued that O'Grady and the others could not assert the shield because their
publications did not fall within the meaning of "newspaper, magazine or other periodical
publication". The Court of Appeal rejected this argument. It concluded that the web
sites at issue could not be considered a "newspaper", but are a "magazine"
or "other periodical publication".
Hence, the Court of Appeal concluded that O'Grady and the others "are
entitled to the protection of the shield law, which precludes punishing as
contempt a refusal by them to disclose unpublished information."
Constitutional Privilege. Finally, the Court of Appeal held that the
discovery sought by Apple is barred by the conditional federal and state
constitutional privilege against compulsory disclosure of confidential sources.
The Court followed the test established in 1984 by the California Supreme Court
in Mitchell v. Superior Court, which is reported at 37 Cal.3d 268.
Amicus Briefs. Several companies and groups filed amicus curiae briefs in support
of Apple, including Genentech, Intel and the
Business Software Alliance (BSA), and the
Information Technology Industry Counsel (ITIC).
Intel and the BSA wrote that "all technology-oriented companies -- and ultimately
consumers -- share a strong interest in vigorous enforcement of the trade secret laws,
including discovery to determine who may have violated those laws."
They continued that "strong trade secret laws are vital to the health of
California's high-technology businesses and to the economy of the nation as a
whole. The types of trade secrets at issue here (information about unannounced
future products) are among the most valuable and closely guarded of all. There
is no public interest in having such trade secrets stolen and plastered on the
Internet for competitors and others to see. If that occurs, victims must be
entitled to use the courts for redress -- starting with discovery to determine
who committed the theft. The protections of the Civil and Penal Codes must be
available in practice as well as in name."
This case is Jason O'Grady v. Superior Court of Santa Clara County,
Court of Appeal of the State of California, Sixth Judicial District, App. Ct.
No. H028579, a petition for writ of mandate to the Santa Clara County Superior
Court, Superior. Ct. No. CV032178.
|1st Circuit Rules Federal Aviation
Statute Preempts Part of Maine's Internet Tobacco Sales Statute
5/22. The U.S. Court of Appeals (1stCir) issued
in New Hampshire Motor Transport Association v. Stephen Rowe, a case
involving whether a statute of the state of Maine that regulates the sale and delivery of
tobacco products purchased via the internet or other electronic means is preempted by the
Federal Aviation Administration Authorization Act of 1994 (FAAAA).
The Court of Appeals affirmed in part the judgment of the District Court
granting summary judgment the plaintiffs. This case is a small victory for
The state of Maine enacted a statute regulating the sale of tobacco products
over the internet. However, it also had the effect of requiring air and motor
carriers, such as United Parcel Service (UPS),
to enforce the ban, thereby imposing considerable burdens upon them. For
example, it had the effect of requiring the carriers to ascertain the content of
packages, the age of the addressee of packages, and whether the addressee is of
legal age to receive the package (27 years old in the case of tobacco products).
It further required carriers to ascertain whether the retailer was licensed by
the state of Maine to sell tobacco products.
The New Hampshire Motor Transport Association
and other trade groups that deliver packages challenged the Maine statute. They
filed a complaint in U.S. District Court (DMaine) against the Attorney General
of Maine seeking declaratory and injunctive relief that the Maine statute is
preempted by the FAAAA.
The District Court granted summary judgment for the the trade groups. Maine
brought this appeal.
The FAAAA provides both that a "State ... may not enact or enforce a law ...
related to a price, route, or service of any motor carrier . .. with respect to
the transportation of property", and that a "State may not enact or enforce a
law ... related to a price, route, or service of an air carrier or carrier
affiliated with a direct air carrier through common controlling ownership when
such carrier is transporting property by aircraft or by motor vehicle. ..."
The Court of Appeals affirmed in part, and reversed in part. It held that
"the FAAAA focuses on the effect that a state's law has on carriers, and not on
the state's objective in passing the law. To the extent that Maine's Tobacco
Delivery Law requires (or has the effect of requiring) carriers to implement
state-mandated procedures in the processing and delivery of packages, it is
preempted by the FAAAA. But to the extent that the Tobacco Delivery Law merely
bars all persons (including carriers) from knowingly transporting contraband
tobacco into Maine, the FAAAA is not implicated."
This case is New Hampshire Motor Transport Association, et al. v. Stephen Rowe,
U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 05-2136, an appeal from
the U.S. District Court for the District of Maine, Judge Brock Hornby presiding.
Judge Howard wrote the opinion of the Court of Appeals, in which Judges Boudin
and Stahl joined.
|There was no issue of the TLJ Daily E-Mail Alert on Tuesday, May 30,
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, May 31
The House will not meet on Monday, May 29, through Monday, June 5. The
House will next meet on Tuesday, June 6, at 2:00 PM. See,
Republican Whip Notice.
The Senate will not meet on Monday, May 29, through Friday, June 2. See,
2006 Senate calendar.
8:30 AM - 5:00 PM. Day two of a two day workshop on public participation in
nanotechnology hosted by the National Nanotechnology Coordination Office (NNCO). See,
notice in the Federal Register, May 3, 2006, Vol. 71, No. 85, at Page 26117. Location:
Westin Arlington Gateway Hotel, 801 North Glebe Road, Arlington, VA.
|Thursday, June 1
2:00 - 4:00 PM. The Brookings Institute will host
an event titled "The State of Homeland Security". Secretary of Homeland
Security Michael Chertoff will speak at 3:00 PM. See,
Brookings, 1775 Pennsylvania Ave., NW.
Deadline to submit comments to the
Federal Trade Commission (FTC) in response to its
Notice of Proposed Rulemaking (NPRM) to amend the Telemarketing Sales Rule (TSR) to
revise the fees charged to entities accessing the National Do Not Call Registry. See,
notice in the Federal Register, May 1, 2006, Vol. 71, No. 83, at Pages 25512-25516.
|Friday, June 2
12:00 NOON - 2:00 PM. The
Progress and Freedom Foundation (PFF) will
host a panel discussion titled "The Role of Music Licensing in the Digital
Age". The speakers will be Michael Petricone (Consumer Electronics
Association), Mitch Glazier (Recording Industry Association of America), and
others. Patrick Ross (PFF) will moderate. See,
Lunch will be served. Location: Room B-354, Rayburn Building.
|Monday, June 5
The House will return from its Memorial Day recess. See, Majority Whip's
The Senate will return from its Memorial Day recess. See,
2006 Senate calendar.
9:00 - 11:00 AM. The Office of the Deputy Director
of National Intelligence for Collection will hold a meeting. See,
notice in the Federal Register, May 12, 2006, Vol. 71, No. 92, at Page
27745. Location: Heritage Conference Center, TASC Northrop Grumman, 4803
Stonecroft Boulevard, Chantilly, VA.
10:00 AM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Wireless Agents v. Sony Ericsson.
This case is App. Ct. No. 2006-1054. Location: Courtroom 203, 717 Madison Place, NW.
2:00 PM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Integra LifeSciences v. Merck. This case
is App. Ct. No. 2002-1052. Location: Courtroom 203, 717 Madison Place, NW.
Deadline to submit reply comments to the Federal Communications
Commission (FCC) regarding the petition of the
Georgia Public Service Commission (GPSC) for a declaratory ruling that the GPSC is
not preempted by federal law from regulating rates under
47 U.S.C. § 271 for local switching, high capacity loops and transport,
and line sharing. See, FCC
[PDF]. This is WC Docket No. 06-90.
Deadline to submit initial comments to theFederal
Communications Commission (FCC) regarding the transfer of licenses associated with the
AT&T, BellSouth, and Cingular transaction. This is nominally a license transfer
proceeding, but is also in the nature of an antitrust merger review. This proceeding will
be governed by "permit but disclose" ex parte communications procedures under
Section 1.1206 of the FCC's rules. See, FCC
[10 pages in PDF] and FCC
web page for its
AT&T/SBC/Cingular merger review. This proceeding is WC Docket No. 06-74.
Deadline to submit comments to the National
Institute of Standards and Technology (NIST) regarding
Draft Special Publication 800-38D [23 pages in PDF], titled "Recommendation
for Block Cipher Modes of Operation: Galois/Counter Mode (GCM) for
Confidentiality and Authentication".
|Tuesday, June 6
The House will return from its Memorial Day District Work Period. It will
meet at 2:00 PM. See,
Republican Whip Notice.
10:00 AM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Motionless Keyboard v. Microsoft.
This case is App. Ct. No. 2005-1574. Location: Courtroom 201, 717 Madison Place, NW.
12:00 NOON - 2:00 PM. The Progress and
Freedom Foundation (PFF) will host a lunch. The featured speaker will be
Brian Roberts, Ch/CEO of Comcast Corporation. The other speakers will be Aryeh
Bourkoff (UBS Investment Research), Blair Levin (Legg Mason), and Craig
Moffett (Sanford Bernstein & Co.) See,
South American Room, Capitol Hilton, 1001 16th Street, NW.
1:00 - 3:00 PM. The Department of State's (DOS)
International Telecommunication Advisory Committee will meet to prepare for
ITU Radiocommunication Sector's Special Committee on Regulatory/Procedural
Matters that will take place on December 4-8, 2006, in Geneva, Switzerland. See,
notice in the Federal Register, May 4, 2006, Vol. 71, No. 86, at Pages
26397-26398. Location: Boeing Company, 1200 Wilson Blvd., Arlington, VA.
6:00 - 9:15 PM. The DC
Bar Association will host a continuing legal education (CLE) seminar titled
"How to Conduct Business in the Current Chinese Legal Environment: Myths and
Facts". The seminar will address, among other topics, "technology transfer
issues, including the Chinese government policy on intellectual property, licensing of
intellectual property, structuring of technology transfers and some of the legal and
practical measures to help protect licensed intellectual property". The speakers
will include Paul Manca (Hogan & Hartson),
Grace Fremlin (Foley & Lardner), and
Steve Robinson (Hogan & Hartson). The
price to attend ranges from $70-$125. For more information, call 202 626-3488. See,
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
Deadline to submit initial comments to the
Federal Communications Commission (FCC) in response to
its notice of proposed rulemaking (NPRM) regarding creation of broadband channels in
the 700 MHz public safety band. The FCC adopted this NPRM on March 17, 2006. See, story
titled "FCC Adopts NPRM Re Public Safety Communications in the 700 MHz Band"
in TLJ Daily E-Mail Alert No. 1,332, March 20, 2006. The FCC released the
text [30 pages
in PDF] of this NPRM on March 21, 2006. This NPRM is FCC 06-34 in WT Docket No. 96-86. See,
notice in the Federal Register, April 7, 2006, Vol. 71, No. 67, at Pages
|Wednesday, June 7
8:30 AM - 3:00 PM. The
National Institute of Standards and Technology
(NIST) Malcolm Baldrige National Quality Award Board of Overseers will meet. See,
notice in the Federal Register, May 3, 2006, Vol. 71, No. 85, at Page 26052.
Location: NIST, Administration Building, Lecture Room A, Gaithersburg, MD.
9:30 AM - 5:30 PM. The Antitrust
Modernization Commission will meet to deliberate regarding its
report and/or recommendations to the Congress. See,
notice in the Federal Register, 24, 2006, Vol. 71, No. 100, Page 29915. Location:
Federal Trade Commission, Conference Center, 601 New Jersey Ave., NW.
10:00 AM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Intel v. Commonwealth Scientific,
App. Ct. No. 2006-1032, and Microsoft v. Commonwealth Scientific, App. Ct. No. 2006-1040.
Location: Courtroom 201, 717 Madison Place, NW.
10:00 AM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Microsoft v. Amado. This case is
App. Ct. No. 2005-1531. Location: Courtroom 203, 717 Madison Place, NW.
12:00 NOON - 1:30 PM. The DC
Bar Association's Intellectual Property Law Section will host a panel discussion
titled "Structuring Your License Agreements So You Get Paid And What To Do If
You Think You Are Not Receiving The Royalties You Bargained For". The speakers
will include Michael Dansky and Barry Sussman (both of the Huron Consulting Group). The
price to attend ranges from $15-$25. For more information, call 202-626-3463. See,
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
RESCHEDULED FROM MAY 25. 2:00 PM. The
House Science Committee HSC) will meet to mark
up several bills, including
HR 5356, the
"Early Career Research Act of 2006",
HR 5357, the
"Research for Competitiveness Act of 2006", and
HR 5358, the
"Science and Mathematics Education for Competitiveness Act of 2006". The
hearing will be webcast by the HSC. Location: Room 2318, Rayburn Building.
TIME? The Federal
Communications Bar Association's (FCBA) Transactional Practice Committee
will host a continuing legal education (CLE) seminar. Location?
|People and Appointments
5/30. John Snow
announced his resignation as Secretary of the Treasury. President Bush nominated
Henry Paulson (at left), the Chairman and CEO of
Goldman Sachs Group, to replace him. See, White House
President Bush stated that "He will help ensure that our trading partners play by the
rules, respect intellectual property rights, and maintain flexible, market-based exchange
rates for their currencies." See,
5/26. Federal Communications Commission
(FCC) Commissioner Deborah Tate gave a
speech [6 pages in PDF] via videotape to the
American Public Communications Council (APCC). She said that "payphones are
still an important part of many people’s lives", noting both that millions of
people have no phone service, and that others rely upon pay phones in
emergencies. She also said that "the FCC needs to be prepared for the
possibility of a flu pandemic", because many people would then work from home.
"The ability to work from home is going to depend on the ability to of our
communications networks to handle the increased load."
5/26. The Federal Communications Commission's
(FCC) Consumer & Governmental Affairs Bureau (CGB) issued a
revised version [18 pages in PDF] of its quarterly report on consumer
inquiries and complaints.
5/26. The Federal Communications Commission's (FCC)
denied the Electronic Privacy Information Center's (EPIC)
application for review of the Wireline Competition
Bureau's (WCB) denial of the EPIC's requests for records, pursuant
to the Freedom of Information Act (FOIA), regarding the FCC proceeding in which the FCC
mandated that interconnected voice over internet protocol (VOIP) services comply with E911
rules. While the FCC decided to give 10 pages of records to the EPIC, it stated that the
rest fall within the FOIA's deliberative process exemption. See, FCC's
Opinion and Order [4 pages in PDF]. This item is FCC 06-72. The FCC's VOIP
E911 proceeding is WC Docket Nos. 04-36 and 05-196. The FOIA is codified at
5 U.S.C. § 552.
|About Tech Law Journal
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Copyright 1998 - 2006 David Carney, dba Tech Law Journal. All