Sony’s big bluff can’t beat First Amendment

Word broke this weekend that Sony Pictures Entertainment has hired celebrated lawyer David Boies of Boies Schiller & Flexner to warn news organizations away from publishing stories based on information hacked from the studio’s servers. Boies’ letter, sent to top in-house counsel at the New York Times, Bloomberg, Variety and the Hollywood Reporter, said the hacked documents contain trade secrets, Sony intellectual property and privileged legal advice. If news organizations use the stolen material, the letter said, Sony “will have no choice but to hold you responsible.”

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That’s a mostly – but not entirely – empty threat. Under long-held U.S. Supreme Court precedent, confirmed most recently in the 2001 decision in Bartnicki v. Vopper, the First Amendment shields news organizations from liability for using stolen materials, as long as publishers themselves obtained the information without breaking the law and their stories are considered to be in the public interest. “Privacy concerns give way,” the Supreme Court said in Bartnicki, “when balanced against the interest in publishing matters of public importance.”

The key issue, of course, is whether news is a matter of public importance. In the Bartnicki case, that was an easy call. A local radio station in Pennsylvania aired a tape recording of an intercepted telephone call in which a teachers’ union negotiator said that unless the school district agreed to 3 percent raises, the union would “blow off their front porches.” The Supreme Court said a threat to public safety is clearly “a significant concern.”

But the “public importance” shield covers much more than news involving physical threats, according to law professors Jane Kirtley of the University of Minnesota and Len Niehoff of the University of Michigan. Both professors told me Sony would have a very tough time arguing against the news value of, say, racially insensitive email joking by Sony executive Amy Pascal and producer Scott Rudin about President Obama’s film preferences. Leaked salary information is also of public interest, said former New York Times lawyer George Freeman, now executive director of the Media Law Resource Center. “Sony is doing a lot of huffing and puffing but there’s not much legal theory behind it,” Freeman said.

There are, however, limits to First Amendment protection, according to Kirtley and Niehoff. As reluctant as the Supreme Court has been to recognize liability for news organizations’ use of stolen material, the justices have also avoided a sweeping declaration “that there could never be such a claim,” Niehoff said. So if Sony could show, for instance, that a news story based on hacked documents disclosed a trade secret or violated medical privacy laws, it might be able to claim damages, though it would surely face a fight over the definition of trade secrets for a movie studio. Kirtley said Sony may also be able to sue for contract interference if news outlets are part of conglomerates that compete with Sony in the film industry. And if a news organization reproduces copyrighted materials hacked from Sony, such as the stolen script for the upcoming James Bond movie, it could face infringement claims. (That’s very unlikely, at least for the news companies to which Sony sent warning letters. Any sophisticated media business knows it should think hard about fair use before quoting copyrighted Sony documents.)

Sony’s letter also raises the intriguing prospect that Sony might sue news companies for storing stolen data, rather than for publishing news articles based on the hacked documents. The letter specifically says that Sony does not consent to the possession, uploading or downloading of the data. The First Amendment only addresses publication, not data storage, so Sony counsel Boies could be laying a foundation for future claims that news organizations violated electronic privacy laws. That would be quite a novel suit.

Sony isn’t really likely to bring a case against publishers, according to four of the five media lawyers I talked to. (The fifth, a private lawyer who spoke on background because of client concerns, said that he could envision the studio suing over trade secrets or copyright if it believes future news stories compromise its rights.) The real purpose of the Boies letter, they said, seems to be simply to put news organizations on notice that Sony is watching them.

“This has much more to do with  editorial judgment than legal principles,” said Michigan law professor Niehoff. (Screenwriter Aaron Sorkin said more or less the same thing in a Times op-ed Monday that accused journalists of basically abetting cyberterrorism.)

In particular, Sony’s letter is a warning to the lawyers it is addressed to. It asserts that some of the hacked documents are protected by attorney-client privilege. Sony is required to make that notification in order to protect the documents or else it could be considered to have waived the privilege. The letter also, however, implicitly raises the possibility of ethics complaints against in-house lawyers who do not return or destroy stolen material. “I would be concerned,” said Minnesota professor Kirtley, “that this triggered ethical obligations.”

If nothing else, said Niehoff, Sony and Boies – who first became famous in the 1980s for defending CBS against libel claims by U.S. Army Chief of Staff William Westmoreland – have given news companies and their lawyers something to think about. “I don’t think the (privilege) argument is crazy,” Niehoff said. “It’s creative, but not crazy.”

My company, Thomson Reuters, did not receive a warning letter from Sony. I emailed Boies questions about the letter but didn’t get a response from him.

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