NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0964-09T30964-09T3

TOO MUCH MEDIA, LLC,

JOHN ALBRIGHT and

CHARLES BERREBBI,

Plaintiffs-Respondents,

v.

SHELLEE HALE,

Defendant-Appellant.

Argued March 2, 2010 - Decided

Before Judges Carchman, Parrillo, and Lihotz.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-2736-08.

Jeffrey M. Pollock argued the cause for appellant

(Fox Rothschild, attorneys; Mr. Pollock, of counsel; Mr. Pollock, Barry J. Muller, and Joseph Schramm, III, on the brief).

Joel N. Kreizman argued the cause for respondents (Evans, Osborne and Kreizman, attorneys; Mr. Kreizman, of counsel and on the brief).

McCusker, Anselmi, Rosen & Carvelli, attorneys for amici curiae North Jersey Media Group, Inc., the New Jersey Press Association, NBC Universal, Inc. and The New York Times Company (Jennifer A. Borg and Thomas Cafferty, of counsel; Bruce S. Rosen, on the brief).

The opinion of the court was delivered by

PARRILLO, J.A.D.

We granted leave to appeal to decide whether the protections of New Jersey's Shield Law, N.J.S.A. 2A:84A-21, extend to an operator of a website so as to bar from disclosure sources from which she obtained information in her investigation of the online adult entertainment industry and later posted on internet bulletin boards.

Plaintiff Too Much Media, Inc. (TMM), owned by plaintiffs John Albright and Charles Berrebbi, is a software company in Freehold that manufactures, as its principal product, NATS, a prepackaged "affiliate" or tracking software. Different websites, affiliated with one another for common business purposes, place links and banners on each other's websites as a form of reciprocal advertising, and when a banner or link is "checked," the user is transferred to the affiliate site. NATS functioned as the financial intermediary between these affiliated websites, allowing website owners to track which other "affiliate" websites were sending customers to them and thereby determine what commissions were due to the referring website. NATS did not collect money from the users -- it simply provided a means of tracking sales and commissions due. TMM made its profit by selling the software and charging a licensing fee. Many of TMM's customers who are "affiliates" to each other are in the "adult entertainment" business.

In Fall 2007, TMM experienced a security breach in which hackers compromised non-unique user names and passwords maintained in the NATS database for TMM clients and accessed subscriber lists to various porn websites and customer e-mail addresses. Obviously, such a security breach is damaging to a website's business and, due to the supposedly private nature of online pornography viewing, especially embarrassing for the customers of the website. This breach created a substantial amount of conversation within the online porn industry and was reported by major news agencies as early as January 2008.

Defendant Shellee Hale, a Washington State resident who worked for Microsoft and then operated a computer consulting company until 1994, began a business in 2007 as a certified life coach. In connection with that business, defendant operated two websites. Via these websites, users, without leaving their computers, were able to utilize webcams to project real-time images of themselves to another viewing a computer screen and thus interact electronically face-to-face over long distances. At some point in this business venture, defendant became distraught over the number of instances in which she was subjected to "cyber-flashers" who exposed themselves naked to her through the camera, under the guise of seeking life-skills coaching. When defendant's server did not remedy her complaints, she was determined to investigate what she perceived to be criminal activity in the online adult entertainment industry.

In October 2007, defendant launched a website called "Pornafia," www.pornafia.com, purportedly "to inform the public on scams, fraud, [and] technological issues" in the adult entertainment industry. According to a press release posted on February 8, 2008:

[Pornafia] came about in reaction to the unprecedented levels of criminal activity now rampant within the global adult entertainment industry, which have until now gone largely unchecked, with the aim of providing a cost free information resource for victims, potential victims, legitimate industry players, and pertinent government agencies worldwide.

Defendant further specified the crimes as "credit card fraud, identity theft, affiliate fraud and PPC fraud." She identified the Pornafia website as an "information exchange," and later described it alternatively as a "bulletin board" or "message board."

Despite defendant's announcement, however, the website was never fully launched and therefore published no findings. Although defendant said that the "front end of [the website] was a news magazine," she did not identify any journalist hired, and admitted that "that portion of the site was still being worked on and was not live."

Defendant claims, nevertheless, to have pursued an investigation of the online adult entertainment industry. To this end, she formed a limited liability company, ES Enterprises, under which she created two webcam sites, "sexyteaser.com" and "sextyteaserguys.com," to interact on various adult industry websites and to "start to develop relationships, and get into this business under somewhat of a pretext." Defendant first discussed these websites with the Attorney General of Washington, "[b]ecause I wanted to make sure that they were aware of what I was . . . going to be doing."

Defendant also reviewed web pages of the porn industry and news media sites, interviewed persons in the industry and attended six industry trade shows. One of the primary means she utilized for collecting and communicating information was through porn industry weblogs (blogs) and message boards such as www.jbm.com, www.gfy.com and www.Oprano.com (Oprano), the self-described "Wall Street Journal for the online adult entertainment industry." These are forums where members, in order to facilitate discussion, read and post their thoughts and opinions on various subjects. The content is usually available to the public for viewing. In order to post on the board, however, one must become a registered user by submitting an online form, including a name, e-mail address and a chosen username. Once approved by a website administrator, a user is free to post on the board; such posts are unfiltered and, ordinarily, not subject to review by the site administrator prior to being posted.

Defendant's investigation ultimately focused on TMM. To that end, she reviewed numerous posts and online articles related to the 2007 security breach of TMM's NATS database. Defendant also examined pleadings from an open litigation in which TMM's prime competitor, NR Media, sued TMM for defamation and tortious interference, among other claims, over comments by TMM that NR Media had not properly paid its affiliates. Defendant supposedly also talked to a person who told her confidentially that Albright had "threatened their life."

On several occasions, defendant made numerous posts on Oprano about TMM. For example, on March 17, 2008, defendant posted:

Consumer's [sic] personal information is fair game to every thief online[.] Read the 2much media Nats depositions (not yet public but copies are out there - Charles and John may threaten your life if you report any of the specifics which makes me wonder)[.]

She then directed the reader by link to Pornafia, where the complaint in a class action lawsuit against TMM could be accessed. She concluded this post by intimating plaintiffs have engaged in fraudulent, unethical and illegal uses of technology, stating if one read the class action suit "you would understand the depths of the schemes and fraud and how the unethical and illegal use of technology has become common practice." Defendant also posted a "snipit" [sic] from the class action complaint, listing each of the allegations against TMM by NR Media, including a violation of New Jersey's Consumer Fraud Act, N.J.S.A. 56:8-1 to -106, and New Jersey's Identity Theft Protection Act, N.J.S.A. 56:8-161 to -167.

In another post on Oprano, defendant suggested plaintiffs engaged in threatening behavior against persons who released information about the NR Media/TMM lawsuit:

Let me just clarify that this is my personal opinion after reading and speaking with several people.

Mr. John Albright has personally contacted me to let me know he "has not threatened anyone[,]" but I was told something different from someone who claims differently and a reliable source.

In yet another posting on Oprano, defendant implied TMM purposely failed to inform its customers of the security breach and actually made a profit off of it:

I guess I should preface this with innocent until proven guilty but . . . .

This point really concerned me. I believe it is $10,000 per violation in New Jersey. Does anyone have any idea how many consumer's [sic] processed their information through NATS. If 2 Much Media actually was aware of a security leak between them and the Billing Company why didn't anyone put out a fraud security announcement to the consumers? If this is true - How long have they been sitting on this information and doing nothing?

On another Oprano posting, defendant alleged plaintiffs had used TMM's NATS software to cause an influx of spam to its customers and "re-directs" away from NAT's affiliate websites to websites owned by TMM or one of its employees:

Do you think there is traceable revenue on the stolen email addresses from the security leak?

Do you think that we will find that traffic, spam, re-directs are found on a[n] adult site owned or operated by a TMM owner/employee?

Is there a potential class action law suit by customers who's [sic] email addresses were compromised and were not informed of this theft as soon as TMM became aware of it?

How many customers had [an] increase of spam or malware after signing up under a site managed by TMM and is there some relevancy connecting the two?

Defendant explained that in this post, she was questioning whether TMM sold the email addresses, "and then they spammed those e-mail addresses, or used those e-mail addresses to send material to promote a product, or services . . . the[n] people

. . . bought something that would be revenue from the stolen e-mail addresses." Defendant acknowledged that throughout her "investigation," she never inquired of TMM's principals concerning their version of the facts.

According to defendant, she posted information on TMM's security breach for two reasons: (1) to inform the public about alleged misuse of technology, affiliate fraud and scams taking place in the online porn industry; and (2) to facilitate debate on these issues. She believed the information was of interest to the public because "whenever there is a security breach . . . people may need to change their passwords, . . . change their banks, [or] close accounts [because] . . . their personal information can be compromised."

These various internet postings form the basis of plaintiffs' complaint against defendant, alleging defamation, false light and trade libel. After defendant answered, discovery ensued in which plaintiffs sought to depose defendant about, among other things, the sources of information for the allegedly defamatory statements she posted about them. Claiming to be a journalist and invoking the newsperson's privilege, N.J.S.A. 2A:84A-21, defendant sought a protective order preventing disclosure of the identity of her "confidential" sources. Following a plenary hearing pursuant to N.J.S.A. 2A:84A-21.3, the motion judge denied the application for a protective order, determining that defendant was not entitled to the protections of the Shield Law. Defendant's subsequent motion for reconsideration was also rejected. On leave granted, defendant appeals, arguing that both the statutory newsperson's privilege and First Amendment of the United States Constitution protect the anonymity of her sources, and that the motion judge erred in finding she was not a member of the news media and her information was not "newsworthy."

I

(i)

N.J.S.A. 2A:84A-21, entitled "Newsperson's privilege" and commonly called the "Shield Law," states:

Subject to [N.J.R.E. 530], a person engaged on, engaged in, connected with, or employed by news media for the purpose of gathering, procuring, transmitting, compiling, editing or disseminating news for the general public or on whose behalf news is so gathered, procured, transmitted, compiled, edited or disseminated has a privilege to refuse to disclose, in any legal or quasi-legal proceeding . . . .

a. The source, author, means, agency or person from or through whom any information was procured, obtained, supplied, furnished, gathered, transmitted, compiled, edited, disseminated, or delivered; and

b. Any news or information obtained in the course of pursuing his professional activities whether or not it is disseminated. . . .

"News media" is defined as "newspapers, magazines, press associations, news agencies, wire services, radio, television or other similar printed, photographic, mechanical or electronic means of disseminating news to the general public." N.J.S.A. 2A:84A-21a(a). "News" is defined as "any written, oral or pictorial information gathered, procured, transmitted, compiled, edited or disseminated by, or on behalf of any person engaged in, engaged on, connected with or employed by a news media and so procured or obtained while such required relationship is in effect." N.J.S.A. 2A:84A-21a(b).

The Supreme Court has recognized the Legislature's "intent to preserve a far-reaching newsperson's privilege in this State[,]" Maressa v. New Jersey Monthly, 89 N.J. 176, 187, cert. denied, 459 U.S. 907, 103 S. Ct. 211, 74 L. Ed.2d 169 (1982), and that the privilege was intended "to be as broad as possible." State v. Boiardo, 82 N.J. 446, 457 (1980). The Shield Law "affords newspersons an absolute privilege not to disclose confidential sources and editorial processes, absent any conflicting constitutional right." Maressa, supra, 89 N.J. at 189. It was enacted "to protect the confidential sources of the press as well as information so obtained by reporters and other news media representatives to the greatest extent permitted by the Constitution of the United States and that of the State of New Jersey." In re Farber, 78 N.J. 259, 270, cert. denied sub nom., New York Times Co. v. New Jersey, 439 U.S. 997, 99 S. Ct. 598, 58 L. Ed.2d 670 (1978).

The mere claim that one is a reporter or journalist, however, is not enough to gain the protection of the Shield Law. As with any assertion of privilege, the proponent bears the burden to prove its application to any given situation. Horon Holding Corp. v. McKenzie, 341 N.J. Super. 117, 125 (App. Div. 2001). In the context of resolving conflicts between a criminal defendant and a newsperson he wants to subpoena in his defense, the Legislature, in 1979, enacted a comprehensive scheme requiring the proponent to first make a prima facie showing of his or her entitlement to the privilege before the State is required to establish countervailing considerations. N.J.S.A. 2A:84A-21.3. Thus, N.J.S.A. 2A:84A-21.3 provides:

a. To sustain a claim of the newsperson's privilege under [N.J.R.E. 508] the claimant shall make a prima facie showing that he is engaged in, connected with, or employed by a news media for the purpose of gathering, procuring, transmitting, compiling, editing or disseminating news for the general public or on whose behalf news is so gathered

. . . and that the subpoenaed materials were obtained in the course of pursuing his professional activities.

b. To overcome a finding by the court that the claimant has made a prima facie showing under a. above, the party seeking enforcement of the subpoena shall show by clear and convincing evidence that the privilege has been waived under [N.J.R.E. 530] or by a preponderance of the evidence that there is a reasonable probability that the subpoenaed materials are relevant, material and necessary to the defense, that they could not be secured from any less intrusive source, that the value of the material sought as it bears upon the issue of guilt or innocence outweighs the privilege against disclosure, and that the request is not overbroad, oppressive, or unreasonably burdensome which may be overcome by evidence that all or part of the information sought is irrelevant, immaterial, unnecessary to the defense, or that it can be secured from another source.

Publication shall constitute a waiver only as to the specific materials published.

c. The determinations to be made by the court pursuant to this section shall be made only after a hearing in which the party claiming the privilege and the party seeking enforcement of the subpoena shall have a full opportunity to present evidence and argument with respect to each of the materials or items sought to be subpoenaed.

Although the statutory procedure detailed in paragraph (b) is specific to requests by criminal defendants, In re Schuman, 114 N.J. 14, 27 (1989), we discern no reason not to apply the more traditional rules embodied in paragraphs (a) and (c) to determine the applicability of the evidentiary privilege in a civil context. Where the existence of a privilege is subject to a condition, the issue is to be determined by the judge, N.J.R.E. 104(a); In re Madden, 151 F.3d 125, 127-28 (3d Cir. 1998), and where there are contested issues of material fact as to the existence of the conditions precedent to assertion of the privilege, there should be a full preliminary hearing to decide whether all the requirements of the Shield Law have been met. N.J.R.E. 104(a); Jerolamon v. Fairleigh Dickinson Univ., 199 N.J. Super. 179, 185 (App. Div. 1985); Devlin v. Greiner, 147 N.J. Super. 446, 460 (Law Div. 1977). Cf. R. 1:6-6; Conforti v. Guliadis, 245 N.J. Super. 561, 565 (App. Div. 1991), modified, 128 N.J. 318 (1992). Here, a finding that defendant was connected with the "news media" and, in the course of her professional duties, was involved in some aspect of the news process for the general public is essential to the successful invocation of the newsperson's privilege under N.J.S.A. 2A:84A-21.

(ii)

Even in the context of traditional forms of news media, determining who qualifies for the privilege is difficult. The United States Supreme Court has warned of the complexities in such an undertaking:

Sooner or later, it [will become] necessary to define those categories of newsmen who qualif[y] for the privilege, a questionable procedure in light of the traditional doctrine that liberty of the press is the right of the lonely pamphleteer . . . just as much as of the large, metropolitan publisher . . . .

[Branzburg v. Hayes, 408 U.S. 665, 704, 92 S. Ct. 2646, 2668, 33 L. Ed.2d 626, 653 (1972).]

Since then, few cases around the country have discussed who, beyond the traditional news media, has status to raise the newsperson's privilege. Our research discloses only limited occasions in New Jersey where the privilege had been successfully invoked by an individual who was not a "journalist" in the traditional sense. This court in In re Avila, found that, although a twenty-page tabloid paper printed in Spanish was not a "newspaper" within the meaning of New Jersey's Shield Law because, among other reasons, it did not have a paid circulation, it nonetheless satisfied the statute's requirement of being sufficiently "'similar' to a 'newspaper.'" 206 N.J. Super. 61, 63-66 (App. Div. 1985). In In re Woodhaven Lumber v. Mill Work, the Court extended Shield Law coverage to unpublished photographs of a fire taken by a news photographer. 123 N.J. 481, 497-98 (1991). In In re Burnett, the Law Division applied the Shield Law to information used in preparation of an annual insurance rating report issued by an industry trade publication. 269 N.J. Super. 493, 500-02 (Law Div. 1993). In Kinsella v. Welch, in connection with a patient's invasion of privacy action, we applied the newsperson's privilege to a media company videotaping events in a hospital emergency room for a reality television program. 362 N.J. Super. 143, 154-55 (App. Div. 2003). More recently, in Trump v. O'Brien, we found the author and publisher of a biographical book about an entrepreneur was protected under both New York's and New Jersey's Shield Law. 403 N.J. Super. 281, 292-98, 303-04 (App. Div. 2008).

The Court of Appeals for the Second Circuit was the first to fashion a test for invoking a journalistic privilege under the qualified First Amendment right recognized in Branzberg, emphasizing the intent behind the news-gathering process rather than the mode of dissemination. von Bulow v. von Bulow, 811 F.2d 136, 144 (2d Cir.), cert. denied sub nom., Reynolds v. von Bulow, 481 U.S. 1015, 107 S. Ct. 1891, 95 L. Ed.2d 498 (1987). In von Bulow, the court held that the individual claiming the privilege must demonstrate, through competent evidence, the intent to use the material in order to disseminate information for the public, and such intent must have existed at the inception of the newsgathering process. Ibid. In holding the privilege not limited to reporters employed in the traditional print or broadcast media, the court stated that an individual may successfully claim the journalist's privilege if she is involved in activities traditionally associated with the gathering and dissemination of news, even though she may not ordinarily be a member of the institutionalized press. Id. at 144-45. Thus, it makes no difference whether the "intended manner of dissemination [was] by newspaper, magazine, book, public or private broadcast medium, handbill or the like [because] 'the press in its historic connotation comprehends every sort of publication which affords a vehicle of information and opinion.'" Id. at 144 (quoting Lowell v. Griffin, 303 U.S. 444, 452, 58 S. Ct. 666, 669, 82 L. Ed.2d 949, 954 (1938)). In focusing on the claimant's intent at the inception of the investigatory process, the Second Circuit contrasted a person who "gathers information for personal reasons, unrelated to dissemination of information to the public, [who] will not be deterred from undertaking his search simply by rules which permit discovery of that information in a later civil proceeding." von Bulow, supra, 811 F. 3d at 143. In other words, von Bulow holds that the purpose of the journalist's privilege is not solely to protect newspaper or television reporters, but to protect the activity of investigative reporting. Id. at 142-43.

The test fashioned in the von Bulow decision was adopted by the Court of Appeals from the Ninth Circuit. Shoen v. Shoen, 5 F.3d 1289, 1293 (9th Cir. 1993). In extending the journalist's privilege to investigative book authors, the court reiterated von Bulow's reasoning that the journalist's privilege "is designed to protect investigative reporting, regardless of the medium used to report the news to the public." Ibid. "What makes journalism journalism is not its format but its content." Ibid. Thus, "the critical question for deciding whether a person may invoke the journalist's privilege is whether she is gathering news for dissemination to the public." Ibid.

The von Bulow test was also followed by the Third Circuit in In re Madden, supra, 151 F. 3d at 129-30, which found the test consistent with the Supreme Court's concerns (see Lovell, supra, 303 U.S. at 452-53, 58 S. Ct. at 669, 82 L. Ed. 2d at 953-54) "that the privilege apply only to legitimate members of the press." 151 F. 3d at 129-30. In Madden, a non-party witness in a civil matter sought the protections of the Pennsylvania Journalist's Shield Law, 42 Pa. Cons. Stat. Ann.