When the celebrity gossip blog Gawker decided to post highlights from a sex tape starring Hulk Hogan, it never thought that decision would lead to suing the FBI. But that’s what happened—and just recently, Gawker prevailed. A federal judge in Florida ordered that the FBI and the Executive Office of United States Attorneys (EOUSA) must respond to Gawker’s FOIA request—even though the agencies argued that the requested evidence related to an ongoing investigation. The case between Gawker and the FBI had nothing to do with alleged trade secret theft or federal hacking violations. But the judge’s decision underscores an important risk that companies should consider before contacting law enforcement about potential trade secret theft or computer security breaches: What is exchanged with law enforcement may become public record—which could have the unintended consequence of stripping an otherwise protectable trade secret of its “secrecy.”
From Hulk Hogan v. Gawker To Gawker v. FBI. The case between Gawker and the FBI arose from Hulk Hogan’s suit against Gawker. Hogan sued Gawker in Florida state court over an October 2012 post that published a highlight reel from an anonymously received sex tape. Hogan claims that Gawker invaded his privacy by posting the video footage and seeks $100 million in damages.
Hogan’s counsel also contacted the FBI and requested a criminal investigation regarding the creation and attempted sale of the sex tape. The FBI uncovered a large volume of evidence about the sex tape, and in November 2013, Gawker filed a FOIA request with the FBI, seeking “[a]ll documents relating to an investigation, or a request for an investigation, in October 2012 regarding allegations of illegal recording(s) of Terry Bollea a/k/a Hulk Hogan engaged in sexual relations.”
Initially, the FBI denied the request due to privacy concerns, but in the meantime, Gawker convinced the Florida state court judge to compel Hogan and the female in the video to sign privacy waivers because Gawker needed the FBI’s evidence for its defense. Gawker then updated the FBI in November 2014 about the signed privacy waivers and that Hogan had agreed on a specific method that the FBI should use when producing responsive evidence. Hogan agreed that the FBI should produce all responsive documents directly to Gawker and that any responsive video footage must first be produced to the Special Discovery Magistrate in the Florida state court case.
But in January 2015, the FBI refused to produce 1,168 responsive documents and two CDs of video material because they related to an “ongoing investigation.” Gawker ultimately sued both the FBI and the EOUSA in a Florida federal court, seeking an order to compel the production of documents and video footage. Gawker argued that the documents and video were essential to its defense and that the FBI and EOUSA had not provided a sufficient reason to withhold them. Gawker noted that their investigation had concluded several months earlier.
The Federal Court Decision. The federal judge agreed with Gawker. The judge ordered the FBI and EOUSA to produce all documents that did not fall within FOIA’s “law enforcement exception” (5 U.S.C. § 552(b)(7)(A)) and to produce the video footage to the state court’s Special Discovery Magistrate. She also seemed wary of the government’s exemption claims. She ordered that the FBI and EOUSA must file a “categorical index” of all responsive documents that includes “general categories of documents, the number of pages pertaining to each category, the claimed exemption, and the reason why disclosure of the documents could reasonably be expected to interfere with law enforcement proceedings.” She also ordered that the FBI and EOUSA must “submit a declaration in support of the categorical index” that “shall provide a more particularized explanation as to why the law enforcement exemption applies to each category of documents and why disclosure of each category could reasonably be expected to interfere with law enforcement proceedings.” And it seems that the FBI and EOUSA will fight an uphill battle in trying to persuade her that the “law enforcement proceeding” exemption actually applies. That is, Gawker will likely receive all the requested evidence.
Lesson Learned. The cases between Hulk Hogan and Gawker and Gawker and the FBI do not involve trade secret theft or computer security breaches. But the judge’s ruling against the FBI should give companies pause before contacting law enforcement about potential trade secret theft or federal hacking violations. It’s not uncommon for law enforcement to investigate and gather evidence but, in the end, decline to pursue formal charges. Law enforcement may thus not be able to rely on the “law enforcement proceeding” exemption to withhold information that a competitor seeks through a FOIA request. Companies should keep this in mind when deciding what to provide to law enforcement and how to provide it. We have previously written about precautionary steps to take when disclosing information to a public entity—and this a good opportunity to revisit those suggestions.
Clearly Mark Trade Secrets. Conspicuously identify what documents or information are trade secrets by marking them accordingly. Though a “law enforcement proceeding” may no longer be available, law enforcement agencies can rely, for instance, on FOIA exemptions that protect trade secrets from public disclosure.
Limit What Is Provided. Consider how much information law enforcement needs to start its investigation—and gauge how receptive law enforcement is to pursuing the investigation—before disclosing the actual trade secrets that may have been misappropriated.
Request FOIA Notification. Ask the law enforcement agency for formal written notice of any FOIA-type request for documents or information concerning the investigation.
Consider The Impact. Weigh the potential harm that public disclosure could cause against the benefit of having law enforcement involved. The risk of disclosure may be small—but companies must consider the nightmare scenario of losing potential trade secret protections by involving law enforcement to help protect those same trade secrets. Companies should rely on counsel to guide them on whether and how to involve law enforcement so that their information is best protected.