Can Sony Get Around the First Amendment to Sue the Media Over the Hack? (Analysis)

Sony Hack Comp - H 2014
Courtesy of Sony Pictures Entertainment

Sony Hack Comp - H 2014

On Sunday night, famed attorney David Boies sent a threatening letter on behalf of Sony Pictures to The Hollywood Reporter, The New York Times and other news organizations demanding destruction of stolen information and warning of consequences for publishing the company's secrets.

If Sony does decide to go to court against the media over revelations that keep coming — Channing Tatum and Chris Pratt wish to reboot Ghostbusters, George Clooney lost faith in The Monuments Men, Sony executives weren't thrilled by Leonardo DiCaprio dropping out of a Steve Jobs biopic — the First Amendment stands as a roadblock. But maybe not an impenetrable one.

Many attorneys are now carefully reading every word from a 2001 Supreme Court decision, Bartnicki v. Vopper.

The case concerned union officials whose intercepted cell phone conversations landed in the hands of a radio commentator who broadcast the contents. At the high court, the media defendants were given a pass from violating a federal wiretap law as they "played no part in the illegal interception," "their access to the information on the tapes was obtained lawfully, even though the information itself was intercepted unlawfully by someone else" and finally, "the subject matter of the conversation was a matter of public concern."

That decision offers tremendous hope for news organizations that Sony's threats against the news media are empty. "Unless the media is involved in the hacks themselves, the Bartnicki case puts the law on the side of the media," says Andy Sellars at Harvard University's Berkman Center for Internet & Society.

However, some caution might be in order for two reasons.

The first comes in the concurring opinion in Bartnicki authored by Justice Stephen Breyer, who emphasizes the unusual public concern of what was broadcast, that the "subject matter of the conversation at issue here is far removed from that in situations where the media publicizes truly private matters."

The second caution flag derives from the main opinion authored by Justice John Paul Stevens, who possibly signaled a narrow application by writing, "We need not decide whether that interest [privacy of communications] is strong enough to justify the application of § 2511(c) to disclosures of trade secrets or domestic gossip or other information of purely private concern."

In the Sony letter that Boies sent to the media Sunday, the attorney doesn't specifically mention his potential causes of action against news outlets that publish secrets. But he does offer a hint. He wrote:

"If you do not comply with this request, and the Stolen Information is used or disseminated by you in any manner, SPE will have no choice but to hold you responsible for any damage or loss arising from such use or dissemination by you, including any damages or loss to SPE or others, and including, but not limited to, any loss of value of intellectual property and trade secrets resulting from your actions."

"Intellectual property and trade secrets" is the key phrase above.

There are a number of cases, particularly on the copyright front, that demonstrate the limitations of "fair use" allowed by the First Amendment. For example, in 1985, the Supreme Court wouldn't protect The Nation magazine’s excerpting of former President Gerald Ford’s unpublished manuscript. For the same reason, any news organization that is brave enough to print the screenplay of the next James Bond film would likely find itself in trouble.

Trade secrets, or confidential business information not generally known, raises what's perhaps the most sticky issue for media because it's not always readily apparent what constitutes a trade secret. It's not like Sony is providing advance notice of what it sees as information in the must-not-tell column.

David Quinto at Kupferstein Manuel & Quinto believes that Sony would have viable trade secret claims against news organizations. He doesn't believe that the First Amendment would be a solid defense against such claims, analogizing the situation to a news outlet that trespasses in order to develop a story of public interest. And Bartnicki won't apply, he adds.

"In Bartnicki, the harm that the law was intended to protect against — the interception of the wire transmission — had occurred before the radio station played the recording," says Quinto. "Punishing the radio station would not make the harm any less likely to occur. In contrast, the trade secret laws seek to protect a party that has developed valuable information from having that information revealed to competitors or others who could benefit from its use.  Thus, the real harm does not occur when trade secret information is taken; the real harm occurs when it is used or disclosed."

And with trade secrets, disclosure really is the key. If an employee at Coca-Cola discloses the secret sauce to a reporter, he or she is doing the disclosing. But a media outlet that is publishing an exclusive about what's in the hacked files is much more likely to be pinned as the discloser.

And it gets worse because, as Quinto points out, misappropriation of trade secrets also can be punished criminally. At this point, it's only theoretical that a reporter could go to jail for publishing something in the Sony files, but nevertheless, beware Daily Beast!

All that said, while there haven't been many cases discussing the intersection between trade secrets and the First Amendment, there are at least a few highlights from case law that are tasty to the media.

For example, in one case involving Apple Computer's efforts to subpoena those who published the company's secret plans to release a device that would facilitate the creation of digital live sound recordings, a California appeals court wrote that "whatever is given to trade secrets law is taken away from the freedom of speech. In the abstract, at least, it seems plain that where both cannot be accommodated, it is the statutory quasi-property right that must give way, not the deeply rooted constitutional right to share and acquire information."

Then, in the entertainment industry's own backyard, there was the lawsuit brought by the DVD Copy Control Association against those websites that published the software code that decrypts the data on commercial DVDs. This battle went many rounds, with a preliminary injunction being issued, an appellate court overturning the injunction on the basis of the First Amendment, a higher appeals court then rejecting that ruling on the basis that the First Amendment has no application in trade secret cases and then finally, the lower appeals court deciding that the software code at issue wasn't really secret because it was already available on hundreds of websites by the time the lawsuit was filed.

As such, even Quinto acknowledges that it would be nearly impossible to litigate such a lawsuit against any news organization that merely repeats information that has been disclosed by another media outlet. In an odd twist of law, the media aggregators might be on safer ground than those who are breaking news.

Of course, telling the world that Sony co-chairman Amy Pascal once called DiCaprio "despicable" in a private conversation might not arise to a trade secret in the first place. And although the law might be a bit vague on whether news organizations can disclose more sensitive secrets, there's still a litany of cases — like this one or that one — standing for the proposition that judges care about matters of public interest and are generally deferential to the First Amendment.

In sending legal threats as he did, Boies certainly put the media on notice — maybe not only to preserve the ability of scoring great damages in the event of a lawsuit, but also to give news organizations some pause and remind them of ethical responsibilities. (See also Aaron Sorkin's op-ed, "The Sony Hack and the Yellow Press.")

But this all could backfire for Sony.

If the company does bring a lawsuit, it would probably have to show that it made reasonable efforts to protect the information. Does Sony really want to open up that examination?

And even if the company's threats are just smoke, it could compel reporters to try to figure out what exactly the studio is ready to go to war over and what are the secrets that fall under the category of being in the public concern.

"The media could move away Angelina Jolie to Operation Goliath," says Sellars, referring to a batch of documents about the MPAA's strategy to get tough on Google. "Sending a hostile letter could be seen as invitation to keep digging."

Twitter: @eriqgardner