University of Massachusetts School of Law Scholarship Repository @ University of Massachusetts School of Law Faculty Publications 2014 In Tort Pursuit of Mass Media: Big Tobacco, Big Banks, and Their iB g Secrets Richard J. Peltz-Steele University of Massachusetts School of Law - Dartmouth, [email protected] Eric J. Booth Follow this and additional works at: http://scholarship.law.umassd.edu/fac_pubs Part of the Intellectual Property Commons, and the Torts Commons Recommended Citation Richard J. Peltz-Steele & Eric J. Booth, In Tort Pursuit of Mass Media: Big Tobacco, Big Banks, and Their Big Secrets, 44 U. Mem. L. Rev. 267 (2013). This Article is brought to you for free and open access by Scholarship Repository @ University of Massachusetts chooS l of Law. It has been accepted for inclusion in Faculty Publications by an authorized administrator of Scholarship Repository @ University of Massachusetts chooS l of Law. THE UNIVERSITY OF MEMPHIS LAW REVIEW VOLUME 44 WINTLR 2013 NUMBER 2 Copyright 0 2013 The University of Memphis Law Review CONTENTS ARTICLES IN TORT PURSUIT OF MASS MEDIA: BIG TOBACCO, BIG BANKS, AND THEIR BIG SECRETS RichardJ.Peltz-Steele Eric J. Booth 267 SHELBY COUNTY AND THE END OF HISTORY Joel Heller 357 EFFECTS LIABLE TO JUSTICE: THE BANKRUPTCY CLAUSE, ARTICLE III COURTS, AND WHY THE CONSTITUTIONAL ISSUES IN BELLINGHAM DWARF THOSE IN MARATHON AND STERN Adam M Langley 413 NOTES CORPORATE DIRECTORS [AND OFFICERS] MAKING BUSINESS JUDGMENTS IN TENNESSEE: THE BUSINESS JUDGMENT RULE Brandon. Stout 455 TITLE IX: PROPORTIONALITY AND WALK-ONS Abigail M. Mabry 497 In Tort Pursuit of Mass Media: Big Tobacco, Big Banks, and Their Big Secrets RICHARD J. PELTZ-STEELE* ERIC J. BOOTH** I. RE-PUBLISHING CORPORATE SECRETS...... ............. 269 A. Introduction ................................... 269 B. Problem..................................272 C. Method...................... ............ 279 II. ANALYSIS OF CORPORATE PLAINTIFF VS. MEDIA DEFENDANT........................................283 A. Tortious Interference .................. ....... 285 1. Intent and Impropriety................ ...... 286 2. Common-Law Defenses and Associative Liability ....291 3. Liability Theories in Baer Bank and Big Tobacco ..... 293 4. Theory of Associative Liability. ............... 304 5. Defense Theories, Including Free Speech and Anti- SLAPP.................. ............. 305 6. Interference Liability Exposure in Sum......................318 B. Unfair-CompetitionLaw ............................... 318 1. Unfair Business Practice, Associative Liability, and Causation...................... ........ 319 2. Affirmative Defenses of Business Justification, Free Speech, and Anti-SLAPP ..........................323 3. Liability Theories in Baer Bank and Big Tobacco......328 * Professor, University of Massachusetts Law School. This Article was made possible thanks to a grant from UMass Law School. The authors are in- debted to Peltz-Steele's lead and co-author on Tort and Injury Law (2006), Pro- fessor Marshall S. Shapo, for his mentorship in torts, recognizing that failings of understanding in this article are ours alone. The authors also thank Misty N. Peltz-Steele, J.D., for invaluable background research. She deservedly antici- pates her M.L.S. in 2015. ** Attorney, Law Offices of Kenneth V. Kurnos, P.C. 267 268 The University of Memphis Law Review Vol. 44 4. Unfair Competition and the First Amendment............332 5. Unfair-Competition Liability Exposure in Sum..........333 C. Actions Related to the Theft of Trade Secrets: Conversion, Trespass to Chattels, Breach of Confidence, FurtherAssociative Liability, and Trade Secret Appropriation. ............................. 334 1. Conversion and Trespass................ ..... 334 2. Appropriation of Trade Secrets and Breach of Confidence ...................................335 3. Appropriation and Free Speech ............... 340 4. Liability Exposure in Baer Bank and Big Tobacco on Civil Theft and Related Theories ................ 344 5. Free-Speech Defense to Civil Theft and Related Theories...............................349 6. Liability Exposure on Civil Theft and Related Theories in Sum, and the First Amendment in Sum.................352 III. CONCLUSION ....................................... 354 Abstract This article examines potential civil liability under the mul- tistate norms of tort and closely related areas in the common law of the United States for the mass media re-publisherof leaked cor- porate secrets. The examination employs two fact patterns derived from real cases: one, contemporary, an international bank's grievance, never resolved on the merits in court, against the online publisher WikiLeaks; and second, conventional, a tobacco manu- facturer's grievance,feared but never filed, against the television newsmagazine 60 Minutes. The study assumes jurisdiction ar- guendo and examines liability theories in tortious interference; unfair-competition law; and conversion, trade-secret appropria- tion, and related theories of theft. The Article concludes that di- rect liability under any of these theories is unlikely, but that claims for associativeliability might well succeed. In reaching these con- clusions, the study analyzes the strengths and weaknesses of the claims and the vulnerabilities of the defenses, including the free- dom of speech. Ultimately, the Article demonstrates how nuanced questions offact would prove dispositive of liability, such that the liability exposure of the media defendant increases in proportion 2013 In Tort Pursuitof Mass Media 269 to its entanglement with an unscrupulous source. The discernible risk of liability counsels against an absolutist stance on the free- dom of information when media contemplate the republication of leaked corporatesecrets. The beginning of strife is as when one letteth out water: therefore leave off contention, before it be meddled with. -Proverbs 17:14 (King James Bible, Cambridge ed.) 1. RE-PUBLISHING CORPORATE SECRETS A. Introduction Neither governments nor corporations care to see their se- crets published online. Both expend resources to keep files under wraps, whether the government in protecting its national security plans or the corporation in protecting its proprietary product for- mulae. And both secret-keepers have long enjoyed resort to do- mestic courts to enjoin or punish unwanted revelations.' The global reach of the Internet has thrown a wrench in the works for these information owners.2 The Internet brought global publication within reach of the ordinary person with a laptop, re- gardless of originating locale. Secrets can be leaked more easily and quickly than in conventional media, and genies out of the bot- tle are difficult to recapture.3 1. Cf Transcriptof Secret Meeting Between Julian Assange and Google CEO Eric Schmidt, WIKILEAKS (Apr. 19, 2013), http://www.wikileaks.org/Transcript-Meeting-Assange-Schmidt.html ("There is one difference about the deployment of coercive force but even there we see that well connected corporations are able to tap into the governmental system and the court system and are able to deploy ... effectively deploy coercive force, by sending police to do debt requisition or kicking employees out of the office." (alteration in original)). 2. E.g., Pamela Samuelson, Principlesfor Resolving Conflicts Between Trade Secrets and the First Amendment, 58 HASTINGS L.J. 777, 796-99 (2007) (discussing vulnerability of trade secrets to Internet innovations). 3. Cf Richard J. Peltz, Fifteen Minutes of Infamy: PrivilegedReporting and the Problem of Perpetual Reputational Harm, 34 OHIo N.U. L. REV. 717, 743-45 (2008) (describing Internet properties of accessibility, longevity, and dynamism). 270 The University of Memphis Law Review Vol. 44 The law has been slow to catch up. Today, worldwide pub- lishers manage to evade the jurisdiction of domestic courts,4 some- times by escaping the reach of personal jurisdiction to initiate a cause of action,s and sometimes by placing technology beyond the reach of interlocutory and remedial court orders. 6 Much of the difficulty in online enforcement has arisen from international polit- ical disagreement over appropriate jurisdictional and free- expression norms where online publishing is concerned. These disagreements do persist. Fretting over the phenomenon of "libel tourism," by which defamation plaintiffs forum-shop among na- tions for weak free-expression defenses,8 the United States recently adopted legislation at the national level to block the enforcement of foreign defamation judgments.9 Iceland unveiled an ambitious 4. See, e.g., Jonathan Stray, Iceland Aims to Become an Offshore Haven for Journalists and Leakers, NIEMAN JOURNALISM LAB (Feb. 11, 2010, 9:00 AM), http://www.niemanlab.org/2010/02/iceland-aims-to-become-an-offshore- haven-for-journalists-and-leakers/ (reporting proposals in Icelandic parliament to create haven for whistleblowing through combination of source protection, free speech, and libel-tourism prevention laws). 5. See, e.g., Developments in the Law - The Law of Media, 120 HARV. L. REV. 1031, 1032-33 (2007) (comparing case law from United States and Commonwealth countries concerning jurisdiction over online-media defend- ants). 6. See, e.g., Adam Liptak & Brad Stone, Judge Shuts Down Web Site Specializing in Leaks, N.Y. TIMES (Feb. 20, 2008), http://www.nytimes.com/2008/02/20/us/20wiki.html? r-0 ("The feebleness of the [injunction granted to plaintiff bank] suggests that the bank, and the judge, did not understand how the