Will the iPhone Saga Bankrupt Gawker Media?

By Damien Hoffman

The iPhone controversy with Gizmodo is starting to sound like a passage from Orwell's 1984. Police have searched Gizmodo Editor Jason Chen's home for evidence regarding how the blog acquired a prototype of the new iPhone.

What's the secret? Gizmodo told the world they paid $5,000 to someone who found the phone after Apple (AAPL) engineer Gary Powell got so blitzed he left the priceless device at bar Gourmet Haus Staudt — just 20 miles from Apple's Infinite Loop headquarters. Of course, Powell is probably weaving a different story to keep his job. But does that necessitate the police acting as private security for Apple?

The Journalist's Shield

Worse, the police probably violated the California Journalist Shield Law — California Penal Code 1524(g) — which protects journalists from these exact types of seizures. Our friends at Business Insider obtained the letter Gawker COO Gaby Darbyshire wrote to Detective Broad describing the law and requesting that the San Mateo police return the confiscated property:

So, is Chen covered? Although we can't be 100% sure, it seems so. A consortium of lawyers called The Citizen Media Law project asserts:

[I]n California there is relatively clear precedent that online journalists like Chen are covered by the shield law. In O'Grady v. Superior Court, 139 Cal. App.4th 1423 (Cal. Ct. App. 2006), a California appeals court held that Apple could not get the identities of confidential sources from the publishers of "O'Grady's Power Page" and "Apple Insider," two sites devoted to covering stories about Apple products. While the court acknowledged that not all bloggers would qualify under the shield law, it explained that characteristics like frequency of publication, permanency of web address, and number of visitors per month made the two sites in question akin to a newspaper or "other periodical publication." Certainly, Gizmodo outstrips the two sites in O'Grady when it comes to these same characteristics.

On its face, it appears Chen should be protected under the Journalist Shield Law. But all that means is Chen will get all his confiscated crap back.

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