Does the First Amendment provide complete protection to a whistleblower like WikiLeaks that attempts to post trade secrets on the Internet? That may be the key question in any whistleblower trade secrets case.
Following up on my recent post on the Julius Baer v. WikiLeaks case, and my presentation at the AIPLA’s Spring Meeting later today, one of the issues — if not the issue — that presented the greatest concern to the district court in that case was that its order might qualify as a “prior restraint” in violation of the First Amendment.
Federal courts are very attuned to constitutional issues, and, I would respectfully submit, especially amenable to a claim that their order might present a prior restraint in violation of the First Amendment. See Procter & Gamble Co. v. Bankers Trust Co., 78 F.3d 219, 225 (6th Cir. 1996); Ford Motor Co. v. Lane, 67 F. Supp. 2d 745 (E.D. Mich. 1999). State courts, on the other hand, may be more sensitive to the policies underlying trade secret law, as decisions by the California Supreme Court and the Ohio Supreme Court have shown. In those cases, those courts have rejected broad prior restraint arguments and recognized that policies underlying the protection of trade secrets must be balanced as well. American Motors Corp. v. Huffstutler, 61 Ohio St. 3d 343, 575 N.E.2d 116 (Ohio 1991); DVD Copy Control Assoc., Inc. v. Bunner, 31 Cal. 4 864, 4 Cal. Rptr. 3d 69 (2003).
In the Julius Baer case (see my earlier post), the intervention of the media and the arguments that they presented in that case influenced the court’s decision to dissolve the injunction. While they properly noted that some First Amendment protections that would be implicated (i.e., the impact that a shutdown of WikiLeaks website would have on news-gathering efforts), their arguments of course overlooked the important governmental and private interests in protecting confidential information (in that case, the privacy rights of the bank’s clients).
It is important to remember that the First Amendment issues — and there were plenty — were briefed extensively over an incredibly short period of time and on issues that were the “bread and butter” of the intervening media and public interest parties. This ultimately provided them with what proved to be an overwhelming procedural advantage.
In Julius Baer, the California First Amendment Coalition (“CFAC”), a non-profit public interest organization composed of large daily newspapers in California, and the ACLU both sought to intervene on February 26, 2008. On that day, both submitted extensive briefs not only extolling the importance of WikiLeaks to its members’ news-gathering efforts, but vigorously arguing that the First Amendment protects the right to gather and receive information and that the injunction in question had prevented the public’s access to the information previously contained on that website. The CFAC then filed yet another brief, challenging the jurisdictional basis of the case and arguing that diversity of jurisdiction was lacking because Julius Baer and WikiLeaks were both foreign citizens. Three days after the appearance of the CFAC and the ACLU (February 29, 2008), the district court issued its order dissolving the injunction, based on those arguments.
The reality is that many trade secret and commercial litigators may not be conversant in the wide-ranging law concerning the First Amendment. Given the speed of an injunctive proceeding, and the fact that counsel for the plaintiff is expected to be prepared to respond to whatever obstacle is thrown in his/her path, the intervention by the media in this kind of case can be devastating.
Arguing that the requested injunction is “content neutral” is probably the best argument that can be made in these circumstances because it triggers lesser scrutiny from the court. It is worth noting that this argument appears to not have been made in Julius Baer, either because of the lightning speed of the briefing on this issue or because the substantive basis for the injunction was rooted in constitutional and statutory privacy interests (as opposed to trade secrets). The DVD Copy Control case, cited above, provides a superb template for understanding and ultimately making this argument; in that opinion, the California Supreme Court very methodically reasoned that a narrow trade secret injunction would qualify as a content neutral injunction. The California Supreme Court further held that such an injunction was supported by a number of equally important policy considerations — preserving incentives to innovate, protecting investment in research and development, and the promotion of commercial and business ethics, among others.
In short, if you are faced with a sophisticated whistleblower with access to the Internet, First Amendment issues will be front and center in any litigation that tries to restrain him. Allaying a court’s concerns that you are protecting an important private property right, and not seeking to muzzle an important issue of public safety or concern, will be critical.