Everything You Need To Know About the Gizmodo-iPhone Fracas

For those of you not living in a bubble, you may have heard about the Gizmodo editor Jason Chen, who happened upon the supposed iPhone 4.0 prototype after paying some dude who found it in a bar, presumably left by some drunken Apple employee. He wrote a long blog post about the iPhone’s new specs, and it features some serious improvements over the previous model.

Well, funny story.

Police have seized computers and servers belonging to an editor of Gizmodo in an investigation that appears to stem from the gadget blog’s purchase of a lost Apple iPhone prototype.

Deputies from the San Mateo County Sheriff’s office obtained a warrant on Friday and searched Jason Chen’s Fremont, Calif., home later that evening, Gizmodo acknowledged on Monday.

In an article on Friday, CNET was the first to report on the criminal investigation into the circumstances surrounding the iPhone prototype and Gizmodo’s acquisition of it, including that Apple had contacted local police. A San Mateo County judge signed the search warrant, which said a felony crime was being investigated, a few hours later.

So yeah. Gizmodo is the tech arm of Gawker Media, and on Monday Gawker released images of the search warrant provided by the California Rapid Enforcement Allied Computer Team (more on them later). The warrant alleges that the iPhone “was used as the means of committing a felony,” and gave them free reign to take his computers and other electronic devices.

The warrant lists the items in question that were confiscated by the police, among them three MacBooks, several external hard drives, an iPad, two digital cameras, and a box of Chen’s business cards.

Gawker then posts a letter sent by Gaby Darbyshire, the chief operations officer of the website, to Detective Matthew Broad claiming that the police were in violation of California law. Darbyshire points to a provision in the California Penal Code which states “No warrant shall issue for any item or items described in Section 1070 of the Evidence Code.” The section that provision is taken from can be viewed here.

And if we refer to Section 1070 of the Evidence Code, we see the following, as provided in the letter to Detective Broad.

A publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine, or other periodical publication, or by a press association or wire service, or any person who has been so connected or employed, cannot be adjudged in contempt by a judicial, legislative, administrative body, or any other body having the power to issue subpoenas, for refusing to disclose, in any proceeding as defined in Section 901, the source of any information procured while so connected or employed for publication in a newspaper, magazine or other periodical publication, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.

Now, this is where it gets a bit complicated. Chen is a blogger, technically speaking, and it’s unclear whether he’s protected under the preceding section of the Evidence Code or not. In her letter, Darbyshire points to a 2006 ruling by an appellate court in California that grants the same protections to online journalists. In 2006, the appellate court ruled on a case where Apple demanded to know the sources of a blog post on O’Grady’s PowerPage leaking an Apple project in the wings. The website, run by Jason O’Grady, deals mainly with Apple computers and related products.

The blog post in question centered around “Asteroid,” a possible expansion to the capabilities of the app GarageBand. The court’s decision (PDF) quotes from an article on PowerPage where they talked about Asteroid as “a device that permitted the user of an Apple computer to record analog audio sources, such as microphones or guitars” through GarageBand. Well, Apple was furious, and they brought the case to court.

The court ruled in favor of PowerPage, specifically citing Apple’s violations of the Stored Communications Act of 1986, the section of the Evidence Code mentioned above, and this selection from the state constitution of California:

A publisher, editor, reporter, or other person connected with or employed upon a newspaper, magazine, or other periodical publication, or by a press association or wire service, or any person who has been so connected or employed, shall not be adjudged in contempt by a judicial, legislative, or administrative body, or any other body having the power to issue subpoenas, for refusing to disclose the source of any information procured while so connected or employed for publication in a newspaper, magazine or other periodical publication, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.

The punchline of that whole case? Apple never released Asteroid. After the case was settled, blogger Anne Onymus, who runs the website The Rumor Mill, posed the following theory:

Apple used to have a decent relationship with rumor mongers, such as Mac the Knife, and use them to send up trial balloons. Then Steve Jobs came back, and the company developed a real disdain for rumors.

What if, rather than creating Asteroid as a real product, the aim of the Asteroid Project was to destroy the rumor sites? All Apple would have to do is assign a few people to developing a semi-viable product be sure to include a “mole” on the team, and have this individual deliberately leak project information to the sites Apple wanted to put out of business.

But let’s return to the curious case of the raid in the nighttime. In order for any court to rule in favor of Chen in the increasingly likely case this gets brought to court, it must be established that Chen is a journalist and not just a blogger. This is slightly marred by a quote from Gawker founder Nick Denton last year in The Washington Post. In the regular column Media Notes, Howard Kurtz wrote:

“We don’t seek to do good,” says Denton, wearing a purplish shirt, jeans and a beard that resembles a three-day growth. “We may inadvertently do good. We may inadvertently commit journalism. That is not the institutional intention.”

A particularly damning blog post on The Feldman File (no relation, as far as I know) points out what could possibly be a contradiction on Denton’s part.

In that quote, Denton is essentially saying “We’re not journalists, so don’t hold us to journalistic standards.” However, when one of his editors got caught purchasing stolen property and committing extortion (refusing to return the phone to Apple unless the company sent him a written document that Gizmodo could publish to prove the authenticity of the phone), Denton’s managers and attorneys claimed journalistic protection. You can’t have it both ways.

Now, this is what Denton posted on Twitter on April 26.

So he’s now taking the path of ambivalence. Smart move.

Some people are saying that Chen is not protected by shield laws, and there is precedent for them to make these claims. Earlier this week, an appellate court in New Jersey ruled that blogger Shellee Hale was not protected by shield laws after being sued by software company Too Much Media for accusing them of fraud. TMM demanded to know her sources, and she wouldn’t budge, but the NJ court ruled she was not a journalist, because she was not “actively affiliated with and engaged in any of the ‘aspects of the news process.'”

Jonathan Turley, law professor at George Washington University, made this interesting observation about Chen’s case Tuesday on MSNBC’s Countdown.

The concern with the courts, and also some journalists, is that if you define [a] journalist so broadly to cover anybody with a blog, then it becomes a distinction without meaning and that, eventually, you’re going to lose protections of the media if everyone can be classified as a journalist.

In my view, he is a journalist, but not a very good one if this is the way he practices that profession. Most mainstream organizations, most professional journalists do not engage in checkbook journalism. That’s what this does appear to be. He paid $5000, according to reports, for something that was arguably stolen property.

One interesting precedent brought up by Tim Wu of Slate Magazine is the case of Bartnicki v. Vopper taken up by the U.S. Supreme Court in 2001. The case centered around a radio show that was sued for broadcasting a private cell phone conversation between a union negiotiator and the union’s president. Writing the majority opinion, Justice John Paul Stevens said, “[S]tate action to punish the publication of truthful information seldom can satisfy constitutional standards.” Wu makes the case that this is exactly what Apple is doing, trying to punish the publication of truthful information, and that can be used to Gizmodo’s advantage should this case go to court.

Of course, the people who raided Chen’s house have got some splainin’ to do. The chief deputy district attorney told CNET that they had no choice but to act quickly.

“I think the people who are saying, ‘No, we should have waited’ and did it the other way first don’t understand that in the world when you’re investigating crimes, evidence sometimes gets deleted and destroyed,” he said. “If you sit there and work by the Marquess of Queensberry rules, then bad guys win.”

The Electronic Frontier Foundation (EFF) also weighed in. Civil liberties director Jennifer Granick told Wired that Chen is protected under the Privacy Protection Act of 1980. The Act states the following:

It shall be unlawful for a government officer or employee, in connection with the investigation or prosecution of a criminal offense, to search for or seize any work product materials possessed by a person reasonably believed to have a purpose to disseminate to the public a newspaper, book, broadcast, or other similar form of public communication, in or affecting interstate or foreign commerce.

Good news for Chen, but unfortunately, the Act contains a caveat. An exception to the rule can be made if:

there is probable cause to believe that the person possessing such materials has committed or is committing the criminal offense to which the materials relate.

So we have two problems here for Gizmodo: first, they have to prove that Chen is a journalist; second, they have to prove they didn’t commit a crime by paying $5000 for a lost iPhone that was technically Apple’s property.

Let’s briefly review the circumstances of the iPhone loss and how Gizmodo reacted to it. All of this is detailed in a post on Gizmodo. Apple employee Gray Powell was out celebrating his 27th birthday at Gourmet Haus Staudt, a beer garden in Redwood City. He had the iPhone 4.0 with him, disguised as a previous version of the iPhone.

Somehow, after a night of drinking, someone else ended up with the iPhone, and police now say they’ve identified that someone else. The details of how it ended up in Gizmodo’s hands aren’t quite clear, but regardless they ended up paying $5000 for the phone. They claim they did not know if it was the real thing at first, but after testing it, they were able to confirm its authenticity. Gizmodo editor John Herrman contacted Powell about the missing phone, and a few days later, Apple VP Bruce Sewell sent a letter to editorial director Brian Lam asking for the iPhone back.

Lam posts the reply he sent:

Bruce, thanks.
Here’s Jason Chen, who has the iPhone. And here’s his address. You two should coordinate a time.

[Blah Blah Blah Address]

Happy to have you pick this thing up. Was burning a hole in our pockets. Just so you know, we didn’t know this was stolen [as they might have claimed. meaning, real and truly from Apple. It was found, and to be of unproven origin] when we bought it. Now that we definitely know it’s not some knockoff, and it really is Apple’s, I’m happy to see it returned to its rightful owner.

P.S. I hope you take it easy on the kid who lost it. I don’t think he loves anything more than Apple.

See the part I put in bold? I think that may have been a bad idea. You know, considering the subsequent raid and all.

I think the mess may have been summed up best by this Dilbert cartoon.

The irony here is that Gizmodo was not the first website that had the chance to get their hands on this iPhone. Daily Finance writer Jeff Bercovici posted an article about how Daily Finance’s sister site (both owned by AOL Time Warner) Engadget, Gizmodo’s chief online rival, was offered the iPhone first, but they turned it down.

Engadget, Gizmodo’s chief rival (and a sister site of DailyFinance) also had a chance to bid after earlier publishing photos of the phone, but ultimately demurred, says editor in chief Joshua Topolsky. “We aren’t in the habit of paying for scoops,” he says. “We don’t think checkbook journalism is a way to get good information, and it encourages awful behavior in tipsters.”

Steve Jobs has not commented publicly on the leak, but Steve Wozniak has offered his two cents. Wozniak told CNET, “It seems clear that (Powell) kept the iPhone prototype secret enough to satisfy Apple. It’s a bad accident that could happen to any of us.” Apple did eventually get its iPhone back.

A popular rumor that circulated when Gizmodo first published their findings was that the whole thing was a huge publicity stunt by Apple. Logically, there is no way that could make any sense. Radio host Rush Limbaugh, a big fan of Apple products, summed up Apple’s marketing strategy thusly.

Well, now, Snerdley, the cynic, is piping up here by saying: great publicity.  I don’t think, if you have any understanding of Apple’s relationship with the media, this runs counter to everything.  Planting a phone, hoping to get publicity out of it, as in, i.e., a publicity stunt, this is not how Apple does things.  Apple has working relationships with journalists already.  Access journalism.  It’s very smart on Apple’s part.  They allow certain journalists to have their items weeks in advance and test them, and if they get a good review, then they get the next product.  If they don’t get a good review then they pull the next product.  So it’s a way for Apple to control what’s reported, and they’ve got plenty of people they do this with.  So they don’t need to plant a phone.  Especially with the iPad out there and everybody now anticipating what the next iPhone going to be, they have built-in anticipation for this.

But make no mistake, they are very sensitive about issues like this. And this is why, apparently, a few guys came to Chen’s house several days before the raid took place and tried to enter the house themselves, but his roommate wouldn’t let them in.

The Rapid Enforcement Allied Computer Team (REACT) was responsible for raiding Chen’s house. According to the group’s website, REACT “was established in 1997 by the California State Department of Justice, in response to both public and industry concerns over the spread of new types of crime directly tied to our increasingly computer-oriented economy and widespread use of the Internet.”

The task force was being overseen by a steering committee that, according to MarketWatch, includes Google, Adobe, and Apple itself.

The REACT website features a guest book where anyone can leave a comment. Here are a few recent highlights.

The American public, ladies and gentlemen.

But lest we forget, these are human beings at REACT. Not just faceless, heartless bastards. Business Insider has a story on Detective Matthew Broad, whom you will remember from earlier in this post as the subject of a letter from Gawker. Broad led the raid on Chen’s house.

On his LinkedIn page, he associates himself with the group Bloodhound Forensics. That group lists its mission statement as follows.

Bloodhound Forensics endeavors to provide quality forensic examinations to private industry, private attorneys, and local law enforcement agencies for a reasonable price.  We know what it takes to make a case and we know that the mishandling of forensic evidence can put a case in jeopardy.  We will work with you every step of the way to ensure that your evidence is properly preserved and examined to make the best possible case in court.

So I guess it’s not a surprise he’s on this task force.

Unfortunately for REACT, they could get hit with a lawsuit of their own from Gizmodo. Media lawyer Thomas Burke told CNET the possibility of a lawsuit “is available because search is not the appropriate method in this situation.”

The problem here is that a court of law has to establish that Chen is a journalist and that the police raid violated shield laws in order for Gizmodo to file a lawsuit. Their entire case rests upon the First Amendment.

The timing of this mess is unfortunate for Apple, as they just announced they’re holding their annual developers conference from June 7 to June 11. PC World writer Ian Paul asks the most important question going forward:

[H]ow will Apple CEO Steve Jobs handle this one? Will he acknowledge Gizmodo’s scoop with a passing reference or a joke, or just pretend that the biggest tech leak of 2010 didn’t happen?

I find it hard to believe that a tech guru, in this age of new media, could possibly ignore the one thing everyone is talking about. That would be like Sandra Bullock denying she has marital trouble or Robert Pattinson denying he has stalkers. You can’t be one of the most plugged-in people in the world and ignore the elephant in the room.

Well, I feel like I’ve exhausted this topic enough for one post. Stay tuned for any further updates. And by that I mean, wait until this thing goes to court.


2 thoughts on “Everything You Need To Know About the Gizmodo-iPhone Fracas

  1. Pingback: This Phone Is Perfect. Trust Us. Would We Lie to You? | Tech tAUk

  2. Pingback: What to Expect When You’re Expecting: Apple Edition | Tech tAUk

Comments are closed.