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Apple pays $700,000 for bloggers' legal fees

updated 01:30 pm EST, Mon January 29, 2007

Apple pays legal fees

Bloggers and online journalists have completed their final victory lap in a protracted fight against Apple. Earlier this month, a Santa Clara County Court ordered Apple to pay the legal fees associated with the defense of subpoenas issued to online journalists (and other related entities) in response to online reports about a confidential audio/video product -- code-named "Asteroid" -- under development at the Cupertino-based company. The "Asteroid" product was never released, but Apple claimed the news reports violated California state trade secret law and that the journalists were not entitled to First Amendment protections. However, following an appeals decision last year that strongly sided with the journalists, the Court ordered Apple to pay all legal costs associated with the defense, including a 2.2 times multiplier of the actual fees. [updated]

"The court's ruling is a victory for journalists of all mediums and a tremendous blow to those firms that believe their stature affords them the right to silence the media," said Kasper Jade, the publisher of AppleInsider.com, one of the sites that broke the original "Asteroid" report (the other was PowerPage.org). "Hopefully, Apple will think twice the next time it considers a campaign to bully the little guy into submission."

In total, Apple was ordered to pay nearly $700,000 -- a small amount for a company that reported nearly $1 billion in profit in the December quarter, but a large moral victory for bloggers, journalists and the Electronic Frontier Foundation (EFF) which helped defend against Apple's subpoenas.

"We are very pleased, as this will go a long way towards keeping EFF on the forefront of impact litigation defending the rights of online journalists and others," EFF Staff Attorney Kurt Opsahl wrote in an email. "Bloggers break the news, just like journalists do. They must be able to promise confidentiality in order to maintain the free flow of information. Without legal protection, informants will refuse to talk to reporters, diminishing the power of the open press that is the cornerstone of a free society."

Apple last week declined the opportunity to appeal the award ruling and paid in full. In addition, Apple dismissed the underlying case, but did so "without prejudice" (i.e., allowing them the to retain the right to re-file it at a later date).

In May of last year, a California state appeals court overturned a lower court decision from a few months prior, ruling in favor of the EFF's appeal on behalf of three bloggers: the Court upheld the rights of online journalists to protect their confidential sources and putting them on par with traditional print journalists. In its ruling, the appeals court said that bloggers and webmasters are no different in their protections than a reporter and editor for print publications.

"We can think of no workable test or principle that would distinguish 'legitimate' from 'illegitimate' news," wrote a three judge panel. "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 memetic marketplace," the judges added.

The EFF, a legal organization dedicated to bringing traditional rights to the digital and internet worlds, received $425,000, while the remaining monies went to co-counsel Richard Wiebe and Tom Moore who also helped prepare and defend the case.

Behind the multiplier

The EFF asked the court for a multiplier (a.k.a, "loadstar") of the actual legal fees to compensate for the double contingent risk presented, i.e., both the risk of not prevailing in the defense of the subpoenas and the risk of succeeding, but without the circumstances necessary to obtain legal fees. At the low-end of traditional multipliers, which can range from 2-4 under California law, the EFF also said that California laws provides for a multiplier based on the novelty and complexity of the legal issues involved.

"We litigated this case in the public interest and successfully obtained substantial public benefits by vindicating constitutional rights protecting all journalists, and the public that benefits from the work of journalists, and vindicating federal statutory rights that protect all the millions of users of email communications," Opsahl wrote.

"Also supporting a multiplier was the fact that the issues litigated were novel and complex, our work was of high quality, and the result achieved was extraordinary."

Separately, Apple has sued another Mac enthusiast site Think Secret, alleging that postings on the site contain Apple trade secrets.




by MacNN Staff

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Comments

  1. Jonathan-Tanya

    Joined: Dec 1969

    0

    Good news

    I remember a lot of the n***'s commenting in this very forum.

    Now that its obvious that Apple's behavior was the one out of line, and not those of the journalists...I expect some people need to apologize now.

  1. Stone Soldier

    Joined: Dec 1969

    0

    Dangerous Ruling

    If an employee can freely disclose information covered by a NDA to a blogger without repercussions then how is any tech company supposed to protect trade secrets. I'm fully support free speech but I that if contractual obligations have been violated you cant argue free speech. If a Lawer discloses information about his client for the greater good and argues free speach then he still gets disbarred.

  1. gskibum3

    Joined: Dec 1969

    0

    :)

    I'm sorry! gskibum3 gives big hug to jonathan-tanya, wipes tear from eye. Let me kiss your little boo-boo too.

    Do you feewl better now?

  1. galley

    Joined: Dec 1969

    0

    Without merit?

    If the issue was previously unsettled law (about whether or not bloggers were entitled to the same rights as journalists), and Apple actually won the initial court contest, how is it that the case was considered by the appeals court to be "without merit", thus justifying the 2.5 multiplier on the fees? That seems a little odd.

  1. galley

    Joined: Dec 1969

    0

    Re; without merit

    On re-reading the article, it is unclear about whether Apple won the initial proceeding (i.e., which side filed the appeal), so my previous comment may be off base.

  1. goatman

    Joined: Dec 1969

    0

    a boy named sue

    I'm so happy for them. That's great. Let's sue sue sue. I'm so happy that... yes, I think I'll sue Apple for being an accomplice to happiness.

  1. gudin

    Joined: Dec 1969

    0

    fees

    I think it's great that there is a law to force a person bringing a suit to pay the defender's legal fees, and more when the situation warrants it. However, two issues here:

    1. If this was unsettled law, why is there a multiplier? It clearly wasn't completely obvious that the suit was baseless.

    2. If there is a multiplier, why does the extra money go to the legal defense funds and not the defendants, or some other fund?

    Weird.

    The idea is good though.

  1. coldfusion1970

    Joined: Dec 1969

    0

    Case

    I dont know the ins and out of the appeal, but this sounds like a bad decision. Companies need to be able to protect their secrets.

  1. Zeeb

    Joined: Dec 1969

    0

    Not

    I'm very glad Apple lost this case. Sure, companies need to protect their secrets and if they discover the employee that leaked the info then they have the right to fire/sue that employee.

    However, its not the journalist's job to help Apple find their leaks. Trying to bully them is reprehensible.

    No one but Apple fanboys and those who oppose free speech would support Apple in this case.

  1. kerryb

    Joined: Dec 1969

    0

    One for the 1st.

    NDA are not the same as blogging information you attain while not under a non disclosure agreement. Apple was wrong in this case and I'm glad they lost. As much as I like that company it is still a big corporation and it has to follow the same laws as the rest of us.

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