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"Today we resolve an apparent conflict between California's trade
secret law (Civ. Code, § 3426 et seq.) and the free speech clauses of
the United States and California Constitutions. In this case, a Web
site operator posted trade secrets owned by another on his Internet
Web site despite knowing or having reason to know that the secrets
were acquired by improper means. The trial court found that the
operator misappropriated these trade secrets in violation of section
3426.1 and issued a preliminary injunction pursuant to section 3426.2,
subdivision (a), prohibiting the operator from disclosing these
secrets. Accepting as true the trial court's findings, we now consider
whether this preliminary injunction violates the First Amendment of
the United States Constitution and article I, section 2, subdivision (a)
of the California Constitution. We conclude it does not."
But later [cites to various cases cut-out for readability]
"Our decision today is quite limited. We merely hold that the
preliminary injunction does not violate the free speech clauses of the
United States and California Constitutions, assuming the trial court
properly issued the injunction under California's trade secret law. On
remand, the Court of Appeal should determine the validity of this
assumption. Because there appears to be some confusion over the proper
standard of review, we offer guidance below."
"In upholding the preliminary injunction against Bunner's First
Amendment challenges, we rely on the assumption that DVD CCA is likely
to prevail on the merits of its trade secret claim against Bunner. As such,
"any factual findings subsumed" in the trade secret misappropriation
determination "are subject to constitutional fact review." ...
"[W]here a Federal right has been denied as the result of a [factual]
finding . . . or where a conclusion of law as to a Federal right and
a finding of fact are so intermingled as to make it necessary, in
order to pass upon the Federal question, to analyze the facts," the
reviewing court must independently review these findings. ...
"[F]acts that are germane to" the First Amendment analysis "must
be
sorted out and reviewed de novo, independently of any previous
determinations by the trier of fact." ... And "the reviewing court
must ` "examine for [itself] the statements in issue and the
circumstances under which they were made to see . . . whether they are
of a character which the principles of the First Amendment
. . . protect." ' " ...
On remand, the Court of Appeal must therefore "make an independent
examination of the entire record" ... and determine whether the
evidence in the record supports the factual findings necessary to
establish that the preliminary injunction was warranted under
California's trade secret law ... [noting that appellate courts must
independently review factual findings relevant to the resolution of
any First Amendment issues]). If, after this examination, the court
finds the injunction improper under California's trade secret law,
then it should find that the trial court abused its discretion. (See
ibid. [holding that, in determining whether the "issuance of a
preliminary injunction constitutes an abuse of " discretion under the
First Amendment, the reviewing court must independently review the
factual findings subsumed in the constitutional determination]; ...
[holding that preliminary injunctions are reviewed "under an abuse of
discretion standard"].) Otherwise, it should uphold the injunction. "
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