# Opposition Brief — Forro Precision, Inc. v. International Business Machines Corp.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1985
- **Citation:** 471 U.S. 1130

## Text

Office -Suprsme Court, US.
my FILED
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No. 84-1577. “~~ MAY @ 1985
ALEXANDER L. STEVAS,

CirRK

IN THE L
Supreme Court of the United States

OCTOBER TERM, 1984

FoRRO PRECISION, INC.,
Petitioner,
VS.

INTERNATIONAL BUSINESS MACHINES CORPORATION,
Respondent.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

HENRY C. THUMANN
(Counsel of Record)
JAMES V. SELNA
ROBERT E. WILLETT
400 So. Hope Street
Suite 1500
Los Angeles, Calif. 90071
Telephone: (213) 669-6000

Of Counsel: Attorneys for Respondent
O’MELVENY & MYERS International Business
Machines Corporation

May 6, 1985

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QUESTION PRESENTED

Did the court of appeals err in affirming summary
judgment dismissing a California common-law tort claim on
the basis of its determination that respondent’s solicitation
of a police investigation of criminal trafficking in its trade-
secret designs and its subsequent participation, at police
request, in the execution of a judicially-issued search

warrant were absolutely privileged as a matter of California
law?

RULE 28.1 STATEMENT

Respondent International Business Machines Corpora-
tion (IBM) has no subsidiaries which are not wholly owned,
except Discovision Associates. IBM is also a partner in
Satellite Business Systems. IBM is not a subsidiary of any
other company.

ii

TABLE OF CONTENTS

Title

| eee Te
RR ee ttn
TABLE OF AUTHORITIES CITED o....cssssssssssssssssssesssssessssees
ey So ee
I ini acecscncndsictcnssnantbcets
RFASONS FOR DENYING THE WRIT.......::::sssssssssssssse

I. THE CONTROLLING ISSUES OF STATE LAW
RAISED BY PETITIONER OFFER NEITHER
SPECIAL NOR IMPORTANT REASONS TO
INVOKE THE COURT’S DISCRETIONARY
POWER OF REVIEW, AND NO COLORABLE
FEDERAL ISSUES ARE PRESENTED.....................000

Il. THE COURT OF APPEALS CORRECTLY APPLIED
PPP Eee Parke SPR PIR EAW civcciccsssccrsscrsssresceccssonsecessees

A. IBM’S Communications With the Authorities Were
PRGUARGI PIEVIIIIOE cccscsssscecssscsscosssecssesseseness esadiiesah

B. In According Absolute Privilege to IBM’s
Participation in the Execution of the Search Warrant,
the Court of Appeals Correctly Implemented
California’s Declared Policy of Encouraging
Affirmative Citizen Response to Police Requests for
ES ik ks dein nid cecisminbencinictensrecbceseabesinivissshonsosnssinensies

SN ITD tovinsisbsitdess tunis vneravecsnxsrnainiecesiaddcshadandaawesapeaalades

ili

TABLE OF AUTHORITIES CITED

Cases Page
Albertson v. Raboff, 46 Cal. 2d 375, 295 P.2d 405 (1956)....... 7, 10
Ball v. Rawles, 93 Cal. 222, 28 P. 937 (1892) ues 7, 10
Brody v. Montalbano, 87 Cal. App. 3d 725, 151 Cal. Rptr.
206 (1978), cert. denied, 444 U.S. 844 (1979)... 10, 12
Buckaloo v. Johnson, 14 Cal. 3d 815, 122 Cal. Rptr. 745, 537
Fa I TO sikipincinstiticsaccivlicrransthcinlaidetlaididiidss lila Biaaidciinnliticntntasscitsthn 9
Delta Air Lines, Inc. v. August, «50 U.S. 346 (1981)... 8, 16

Ellis v. Dixon, 349 U.S. 458, reh. denied, 350 U.S. 855

Sa rccastnescicenpubic vbabasnicadodaadianaasdnacan cesebenatiad da ipensdeclelstn ss dnitaclsockcealanbant 8
Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) ..... ee eeeeeees 7
Ex Parte Peterson, 253 US. 300 (1920)... .ccsccsccsrscccscscseccccssssseses 8
Fidelity & Deposit Co. v. United States, 187 U.S. 315 (1902). 8
Forro Precision, Inc. v. Int. Bus. Machines Corp., 673 F.2d

Se ate REE BE Bi aicenstennniccinnsncmencedionmoennn passim
Forro Precision, Inc. v. Int. Bus. Machines Corp., 745 F.2d

Ce CUE See BIE TINE OEE seddccrreasivnrisrinnsinsnriennanrnstmssans passim
Frisk v. Merrihew, 42 Cal. App. 3d 319, 116 Cal. Rptr. 781

CR ieniesen soeseaciraarce lata Nicaea aca cls opietebaddnidesk catisavtecoandaiainasdinonee 12
Gruenberg v. Aetna Insurance Company, 9 Cal. 3d 566, 108

oe me Uk GE 2, | Oreo none 12
Huddleston v. Dwyer, 322 U.S. 232 (1944)... eee eceeeeeteeeee 7
Imig v. Ferrar, 70 Cal. App. 3d 48, 138 Cal. Rptr. 540

SOI chi oesie Gai datchatvaih ra ecaccascenediactebaasbeeiceeshashinadsnnsesabiaiiiaarahaaduncnos 10, 12
Itel Capital Corp. v. Cups Coal Co., 707 F. 2d 1253 (11th

I ccceth haba ccicces Bach sasneds Mab hiashcadngpidadmaleeeepaa alana tapebenainacaiiicas 12
Kachig v. Boothe, 22 Cal. App. 3d 626, 99 Cal. Rptr. 393

1 2) ) ER RS ern reer one epee morte iicckigiuabieomnalaieiunieneroks 11
Martin v. Kearney, 51 Cal. App. 3d 309, 124 Cal. Rptr. 281

Ea Tie sksccichinicisnieenaioubssuaacibi sig icaiehadchacliedigilad is cactugli eels cece inddencaah 10

Peterson v. Robison, 43 Cal. 2d 690, 277 P.2d 19 (1954). 8, 15, 16
Pettitt v. Levy, 28 Cal. App. 3d 484, 104 Cal. Rptr. 650

arr TIE ices utah sa taeindiccadeateasiddin aioeehaantstibNiglianealsincbatns 10, 11
Propper v. Clark, 337 U.S. 472, reh. denied, 338 U.S. 841
(1949), reh. denied, 342 U.S. 907 (1952) ............cccccssccsccsesees 15

iv

Rader v. Thrasher, 22 Cal. App. 3d 883, 99 Cal. Rptr. 670

PIT ia cicasnisnnssnsconeesiieiiiensa.aabeisehinnasssnciei ass eacanus ahccatiuapababbaasscadsinionesed 11
Scott v. McDonnell Douglas Corp., 37 Cal. App. 3d 277, 112

Ce GE. le Pe aibceiaiimitienacsiniieanissainns 10
Smith v. Hatch, 271 Cal. App. 2d 39, 76 Cal. Rptr. 350

CRI sci ecissceitetncsinicnisheeeke chal dadeia cacadeeadahiapaia atdaicciuaiaapiini diag 11
Sokol v. PUC, 65 Cal. 2d 247, 418 P.2d 265, 53 Cal.

ROE EF CI oi cvistediictistntaescenaccms tatiana Nenladesanaianl 8, 14, 15
Span-Deck, Inc. v. Fabcon, Inc., 570 F. Supp. 81 (D. Minn.

SEED icsicsicsicsrinniesshceceueadcabacsiiben tsi baad Acna thie tpi Aialipabialahaadialiaicas i2
Spiegel’s Estate v. Commissioner of Internal Revenue, 335

US. 701, reh. denied, 336 U.S. 915 (1949) .....cccccrcrorrccrcsssossse 7
Tiedemann v. Superior Court, 83 Cal. App. 3d 918. 148 Cal.

BR me CUTE siasataiciainasesncciesisnvlaleaicinacusdadiaielaiasannieiiein 10
Twyford v. Twyford 63 Cal. App. 3d 916, 145 Cal. Rptr.

SP CRIED inssitcsksssctsdsiniesdevtsciantsniaticlmhiowelaninlantn ina aaa 10, 12

United States v. Durham Lumber Co., 363 U.S. 522 (1960)..... 15
UNITED STATES CONSTITUTION

OU AMIE ic isisuisidnatnicadaxtblineiiahinitibdinanties 8
STATUTES
California Civil Code
PA ad ahs acs glee A arialde amare hdl eerasomnseaiueneieta aaalaiebe maa 14
STR seitcncecuuns s edpaiaiaiiapnmntboneuaccielamccuadcnduatssaneasedmcnin aeacaeeA 2,9
California Penal Code
A iaiccivvnaciaussetchsbianGonuccianaes ncaseueontaamisedebanctapaneuasaiamtia 15
Feria aaovihuse is acceso clgeatecndib isa ioitcllds dlapictae ache daa ood ebgdaeatoad 15
FARK, BS SEI. 6B icisescniss ptt ieeritiscetctetennsiinlasas 2,03
RULES
United States Supreme Court, Rule 17.1 ...............cscccscsscsssesesssees
Federal Rules of Civil Procedure, Rule 50(b) ............... eee
TREATISES
Restatement (Second), Torts, § 766................cssccccccssssssscecsssrcceses 9
V

No. 84-1577

IN THE
Supreme Court of the United States

OCTOBER TERM, 1984

FORRO PRECISION, INC.,
Petitioner,
VS.
INTERNATIONAL BUSINESS MACHINES CORPORATION,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNFTED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

STATEMENT OF THE CASE

The California common-law intentional interference
claim as to which review is sought had its genesis in a 1974
complaint filed in the district court for the Northern District
of California. That complaint presented only a federai
antitrust claim. Petitioner was subsequently granted leave
to amend its complaint to add a pendent state-law claim for

2

intentional interference with prospective business ad-
vantage.'(CR 95.) The amended complaint asserted that
IBM had intentionally interfered with petitioner’s prospec-
tive business advantage by providing misleading informa-
tion to the Santa Clara County, California authorities, and
thereby causing a police investigation of petitioner and a
subsequent search of its business premises. (CR 87, {fl 22,
57.) The added claim likewise challenged IBM’s subsequent
assistance of the police in the execution of a search warrant.
IBM counterclaimed alleging petitioner’s misappropriation
of trade secret designs for various IBM products. (CR 7,CR
115.)

The case was tried to a jury in 1977. It failed to reach a
verdict on the antitrust claim, and the trial court subse-
quently granted IBM’s Motion for Judgment pursuant to
F.R.C.P. 50(b), finding that petitioner had failed to
establish a prima facie claim under Section 2 of the
Sherman Act.’ (CR 266.)That ruling was later affirmed by
the court of appeals,‘and is not a subject of the present
petition.

With respect to the interference claim, petitioner
presented evidence that petitioner’s business had been
adversely affected by news and trade media reports through
which its customers learned that its facilities had been
among a number of locations searched as part of a police
investigation of illicit trafficking in stolen IBM drawings. In
charging the jury on that common-law claim, the trial court

' Petitioner’s amended pleading asserted five other common-law claims
which were disposed of on summary judgment prior to trial. (CR 179;
CR 291, pp. 120-22.) None is a subject of the present petition.

* “CR” refers to the Clerk’s Record, and the filings therein are referred
to in accordance with the Clerk’s numbering system. “R” refers to the
trial transcript.

? 15 US.C. § 2.

* Forro Precision, Inc. v. International Business Machines Corp., 673
F.2d 1045, 1062 (9th Cir. 1982).

3

declined to instruct on the statutory privilege contained in
Section 47(2) of the California Civil Code which accords
absolute immunity to certain communications made to
government officials. It likewise declined to instruct on the
California common-law privilege related to IBM’s police-
requested participation in the execution of the search
warrant. (R 2948-49.) In the absence of such instruction,
the jury returned a verdict in favor of petitioner on the
common-law interference claim. (CR 237, 238.) The jury
also returned a verdict in favor of IBM on its trade secret
counterclaim. (CR 239.) Neither verdict was disturbed on
post-trial motions. (CR 266.)

On cross-appeals from the 1977 trial court judgment, the
court of appeals affirmed IBM’s trade secret misappropria-
tion award, noting abundant evidence of petitioner’s traf-
ficking in stolen IBM drawings. Forro Precision, Inc. v.
International Business Machines Corp., 673 F.2d 1045,
1057 (9th Cir. 1982) [hereinafter “Forro I’’| reproduced in
Petitioner’s Appendix A, at 17-18. However, the court of
appeals reversed and remanded the judgment on the
intentional interference claim, holding that the trial court
had erred in failing to accord IBM the benefit of
California’s statutory and common-law privileges. (Forro I,
App. A, at 16.)

On remand, IBM moved the district court-for summary
judgment on the ground that the sole proximate link
between petitioner’s claimed injury and the IBM conduct
evidenced in the record consisted of communications and
search participatory activity held absolutely privileged in
Forro I. (CR 332, pp. 17-21.) In its opposition, petitioner
made no further factual showing, but argued instead that
the California statutory privilege was not absolute and did
not extend to half-truths or statements amounting to
“fraudulent silence.” (CR 334, pp. 4-6, 11-12; CR 344, pp.
14-15, 17.) The district court entered summary judgment,

4

finding that the damage claimed by petitioner resulted
entirely from absolutely privileged conduct. (CR 340, Order
Granting Summary Judgment, reproduced in Petitioner’s
Appendix B, at 28-29.)

The court of appeals affirmed. Forro Precision, Inc. v.
International Business Machines Corp., 745 F.2d 1283 (9th
Cir. 1984) [hereinafter “Forro IJ’’], reproduced in Petition-
er’s Appendix C, at 31. In so doing, it reaffirmed its earlier
holding that the California statutory privilege was absolute
in nature, and rejected petitioner’s “fraudulent silence”
theory as incompatible with California’s statutory policy of
encouraging fullest citizen communication with govern-
mental authorities. (Forro II, App. C, at 33-34.)

STATEMENT OF FACTS

Petitioner Forro Precision, Inc. is a precision machine
shop which, since 1968, has specialized in producing metal
parts for electronic data processing devices. (R 1354-56.)
Respondent IBM is a developer and manufacturer of a
complete line of electronic data processing equipment.
Among the equipment offered by IBM are randomly
accessible auxiliary data storage devices known as disk
drives.

In late 1970, IBM became aware for the first time that
future disk product designs then in development at its San
Jose, California laboratory had become the subject of an
illicit market. (R 278; PX 437, p. 3.) Reports circulated at
an October 1970 trade show that blueprints for IBM’s 3330
“Merlin” product, then nearly a year away from initial
customer shipment, could be purchased in an emerging
underground market. Discovery in a state-court trade secret
action, IBM v. Memorex, indicated that petitioner was
supplying Memorex with certain machine parts which were
identical to critical ““Merlin” parts well before IBM’s initial
shipment of its “Merlin” product.

5

Having suffered compromise of its ‘““Merlin” design, IBM
in early 1973 was confronted with additional rumors that
the design of its yet-to-be-shipped “Winchester” device was
likewise “out.” Using a suspected former “‘Merlin”’ traffick-
er as a go-between, IBM commenced an internal investiga-
tion which revealed that a “source” still existed within its -
laboratory, and that IBM’s new technology was indeed
available for a price. (R 1860, 1863-65.) In April 1973,
IBM approached local prosecutorial and-law enforcement
authorities with its information, and based thereon, the San
Jose Police Department and the Santa Clara County
District Attorney’s Office initiated a criminal investigation
under their exclusive control. (R 689-90, 2067-68.) A series
of police-monitored meetings of the go-between and his
inside contact, together with information supplied by IBM,
indicated that Forro, among others, was linked to the
trafficking in confidential IBM designs. (PX 425, pp. 28,
29.)

In going to the authorities, IBM hoped to obtain both the
identification of its inside source and the prosecution of
those who had been criminally trafficking in its proprietary
designs. (R 1274, 1959, 1969-70.) In addition, some IBM
security officials had hoped that the “thunderclap” of
publicity which would accompany any such prosecution
would serve to put the industry on notice that the willful
misappropriation of IBM trade secrets involved criminal
misconduct. (R 1001-03.)

On the basis of an affidavit drafted by Santa Clara
County Deputy District Attorneys and executed by a San
Jose Police Department Officer, the authorities sought a
search warrant of petitioner’s facility. (PX 425.) Although
the affidavit largely reflected information provided by IBM,
the record is uncontradicted that IBM had no part in
preparing the affidavit or in the prosecutorial decision to
seek a warrant. (R 727, 966, 978.) On June 27, 1973, a

6

municipal court judge issued a warrant for the search of
Forro’s facility, and the warrant was executed two days later
at Forro’s Los Angeles plant. (PX 424, PX 425.) The search
was conducted under the supervision of the San Jose Police
Department. (R 2027, 2033.) At the written request of the
San Jose Police Chief, IBM employees were present to aid in
the identification of technical data falling within the call of
the warrant. (DX 6559, R 665.)

It is uncontested that each IBM employee was accom-
panied by a police officer at all times. (R 1406, 2023-26.)
Although IBM employees provided technical assistance, it
was the police who established the search guidelines and
made the final determination as to what to seize. (R 1652-
53, 2027, 2033.) The search produced numerous “Merlin”
drawings. (R 1651-52; PX 423.) Although there had been
some leads suggesting that Forro was producirig replicas of
components for IBM’s yet-to-be-shipped “Winchester” disk
drive (PX 437), no such drawings were uncovered during
the search. However, the undisturbed jury verdict on IBM’s
counterclaim established that petitioner had in fact previ-
ously solicited and obtained “Winchester” drawings from a
European contractor who was producing parts for IBM
Germany pursuant to a confidentiality agreement. Petition-
er’s president, who admitted hiding drawings during the
search, later assured his concerned European source that no
“Winchester” drawings had been found by the police.
(R 2345.) While several of the other subjects of the police
investigation were indicted and convicted, no charges were
filed against. Forro.

> Forro made no effort to challenge the validity of the search warrant
which had been issued by the Los Angeles municipal court, nor did it
seek return of the seized drawings. (R 1400-02, 1414-15.)

7

REASONS FOR DENYING THE WRIT

I. THE CONTROLLING ISSUES OF STATE LAW
RAISED BY PETITIONER OFFER NEITHER
SPECIAL NOR IMPORTANT REASONS TO INVOKE
THE COURT’S DISCRETIONARY POWER OF
REVIEW, AND NO COLORABLE FEDERAL ISSUES
ARE PRESENTED.

This Court has long recognized that the ultimate respon-
sibility for determining state law resides not with it but with
the highest court of the State. Erie R. Co. v. Tompkins, 304
U.S. 64, 78 (1938). Accordingly, where reasonable argu-
ments have been advanced to support a determination of
state law made by a federal circuit court, this Court has
found it “wholly unprofitable for us to analyze [the state]
cases on the point.” Spiegel’s Estate v. Commissioner of
Internal Revenue, 335 U.S. 701, 708, reh. denied, 336
US. 15 (1949). It has for that reason become the policy of
the Court to “accept and therefore ... not review, save in
exceptional cases, the considered determination of questions
of state law by the intermediate federal appellate courts.”
Huddleston v. Dwyer, 322 U.S. 232, 237 (1944). Indeed, as
Rule 17.1 of the Rules of this Court admonishes, discretion-
ary review should be granted only for “special and
important reasons,” and that is doubly so where the
controlling questions are of local law.

Here the court of appeals’ disposition of petitioner’s
common-law interference claim turned exclusively — and
correctly‘ — upon (1) a California statutory privilege which
has been definitively interpreted in scope and force by the
California Supreme Court;’and (2) upon a California
common-law policy of encouraging citizen assistance of law

° See Section II, infra.

" Albertson v. Raboff, 46 Cal.2d 375, 379, 295 P.2d 405, 408 (1956);
Ball v. Rawiles, 93 Cal. 222, 236, 28 P. 937, 941 (1892).

8

enforcement agencies which has likewise been accorded
clear recognition by the California Supreme Court. Little
purpose would be served by a review of California’s
statutory and common law, entirely local in its operation,
and in any case subject to ultimate state-court control
regardless of this Court’s intervention.

Petitioner’s effort to conjure an issue of federal concern is
both substantively’ mistaken and unsupported by its
procedural positions below. In a desperate search for a
constitutional issue, petitioner accuses the Forro I court of
“begging” the appellate court’s purported duty to make a de
novo review of the constitutional breadth of the Los Angeles
municipal court’s heretofore unchallenged search warrant.
(Petition, at 22.) While the court of appeals would have
such a duty in considering an appeal from a criminal
proceeding in which a warrant was challenged, this was a
civil case in which the warrant was not challenged and in
which its constitutionality bore on none of the elements of
the claim. Moreover, petitioner’s failure to raise the
purported constitutional issue in the trial court or in the
circuit court on either appeal bars any review here.’ Ellis v.
Dixon, 349 U.S. 458, 460, reh. denied, 350 U.S. 855 (1955);
see Delta Air Lines, Inc. v. August, 450 U.S. 346, 362
(1981).

® Sokol v. PUC, 65 Cal.2d 247, 257-58, 418 P.2d 265, 272, 53 Cal.
Rptr. 673, 680 (1966); Peterson v. Robison, 43 Cal.2d 690, 697, 277
P.2d 19, 24 (1954).

* Similarly misplaced, both procedurally and substantively, is the
assertion that application of an absolute privilege which takes the
liability determination from the jury amounts to a denial of Seventh
Amendment rights. (Petition, at 1.) Petitioner ignores a court’s
constitutionally permissible power to terminate an action short of a
jury verdict where as a matter of law there is no basis for imposing
liability. Ex Parte Peterson, 253 U.S. 300, 309-10 (1920); see Fidelity
& Deposit Co. v. United States, 187 U.S. 315, 320 (1902). Moreover,
in neither of its appeals below did petitioner raise any Seventh
Amendment issue.

9

II. THE COURT OF APPEALS CORRECTLY
APPLIED APPLICABLE CALIFORNIA LAW.

The court of appeals twice considered IBM’s communica-
tions with police authorities and its participation in the
search at police request. In the first instance it held that the
trial court had erred in failing to accord IBM the benefit of
California’s absolute privileges and in the second instance it
held that the trial court had on the record before it properly
entered summary judgment on the basis of those privileges.
In reaching both determinations the court of appeals applied
settled state law directed at the promotion of clearly
enunciated statutory and common-law policies.”

A. IBM’s Communications With the Authorities Were
Absolutely Privileged.

As a matter of long-standing statutory mandate,
California encourages the fullest degree of communication
between citizen and government. Section 47(2) of the
California Civil Code, adopted in 1872, declares statements
made “‘[i]n any (1) legislative or (2) judicial proceeding, or
(3) in any other official proceeding authorized by law” to be
privileged. (Enacted 1872; amended Code Am. 1873-74, c.

'° Petitioner’s assertion that the court in Forro II failed to follow the law
of the case betrays a fundamental misunderstanding of tort law.
(Petition, at 27.) Petitioner does correctly observe that Forro I
rejected a challenge to the sufficiency of Forro’s damage evidence, and
held that there need be no trial of the damage issue on remand. /Forro
I, App. A, at 7.) However, it is axiomatic that regardless of injury in
fact, a plaintiff sustains no recoverable damage unless that damage
flows from conduct giving rise to liability. Buckaloo v. Johnson, 14
Cal. 3d 815, 827-28, 122 Cal. Rptr. 745, 752, 537 P.2d 865, 872
(1975); Restatement (Second), Torts, § 766. On remand, the trial
court held on summary judgment, and the court of appeals affirmed,
that there was no non-privileged IBM conduct on which to causally
predicate liability for the exclusively search-related damage claimed
by petitioner. (Memorandum, App. B, at 29; Forro II, App. C., at 35.)
No violence is done to the doctrine of law of the case in hewing to the
proposition that without conduct giving rise to liability there can be no
recoverable damage.

10

612, p. 184, § 11.) Judicial interpretation has confirmed
that the privilege is absolute and that the policy it seeks to
adv’ nce would be frustrated if it were reduced to a qualified
pr ilege subject to a jury’s determination. Albertson v.
Raboff, 46 Cal. 2d 375, 379, 295 P.2d 405, 408 (1956); Imig
v. Ferrar, 70 Cal. App. 3d 48, 55-56, 138 Cal. Rptr. 540,
543 (1977).

The privilege attaches without regard to the presence of
malice or ulterior motive on the part of the declarer.
Albertson v. Raboff, 46 Cal. 2d at 379, 295 P.2d at 408-09;
Tiedemann v. Superior Court, 83 Cal. App. 3d 918, 926,
148 Cal. Rptr. 242, 248 (1978); Pettitt v. Levy, 28 Cal. App.
3d 484, 488, 104 Cal. Rptr. 650, 652 (1972). It extends to
communications designed to initiate a proceeding, including
specifically criminal proceedings, as well as those made in
the course of an existing proceeding. Ball v. Rawles, 93 Cal.
222, 236, 28 P. 937, 941 (1892); Martin v. Kearney, 51 Cal.
App. 3d 309, 311, 124 Cal. Rptr. 281, 282 (1975).
Moreover, the underlying state policy of encouraging citizen
communication is viewed as of such paramount importance
that any reasonable doubt concerning the applicability of
the privilege must be resolved in favor of according the
privilege. Brody v. Montalbano, 87 Cal. App. 3d 725, 733,
151 Cal. Rptr. 206, 212 (1978), cert. denied, 444 U.S. 844
(1979); Twyford v. Twyford, 63 Cal. App. 3d 916, 926, 134
Cal. Rptr. 145, 150 (1976)."

'' Petitioner trivializes the Section 47(2) privilege by suggesting that
resolution of doubts in favor of the privilege somehow obtains only in
proceedings involving domestic disputes. (Petition, at 27 citing
Twyford v. Twyford.) The statutory policy favors the privilege
whether a statement is uttered in a domestic relations proceeding, is
discussed at a public meeting, or is communicated in the course of any
other official proceeding recognized by law. Imig v. Ferrar, 70 Cal.
App. 3d 53, 55, 138 Cal. Rptr. 540, 543 (1977); Scott v. McDonnell
“ste. Corp., 37 Cal. App. 3d 277, 293, 112 Cal. Rptr. 609, 620
(1974).

il

That is the settled California law which confronted the
court of appeals in assessing petitioner's common-law
interference claim and its argument that no privilege was
applicable. In Forro I, the court of appeals fully adverted to
petitioner’s contention that IBM had in part an impermis-
sible ulterior motive in contacting the authorities — to
create a detrimental “thunderclap” of publicity — but
correctly noted that under California law malice is irrele-
vant so long as the communication has some legitimate
connection to the proceeding. (Forro I, App. A, at 13.) The
court pointed out that the record was uncontradicted that
“the company’s communications to the authorities were
made for law enforcement purposes as well as for the
purpose of creating publicity.” ( Forro I, App. A, at 16;
emphasis supplied.) That legitimate purpose supplied the
necessary “connection” between the communication and the
proceeding so as to make the privilege applicable as a matter
of law. Rader v. Thrasher, 22 Cal. App. 3d 883, 888-89, 99
Cal. Rptr. 670,673-74 (1972); Smith v. Hatch, 271 Cal.
App. 2d 39, 46, 76 Cal. Rptr. 350, 354 (1969).

The Forro I court likewise noted the substance of Forro’s
“fraudulent silence” contention: “IBM failed to inform the
police that a protective order shielded the depositions on
which the affidavit in support of the search warrant was
based, failed to disclose that IBM's counsei had returned
without restriction the Merlin drawings produced at deposi-
tions, and misled the authorities into thinking that the
designs were trade secrets.” (Forro I, App. A, at 13.)
Nevertheless, the court followed California law which
requires the full benefit of the privilege to be accorded even
misleading statements. Pettitt v. Levy, 28 Cal. App. 3d at
489, 104 Cal. Rptr. at 653; Kachig v. Boothe, 22 Cal. App.
3d 626, 641-42, 99 Cal. Rptr. 393, 403 (1971). And Forro I
made express the court’s recognition of the illogic of
petitioner’s theory that one could claim privilege for what he

12

said, but not for what he failed to say. (Forro II, App. C, at
33-34.)

Petitioner’s claim that the court of appeals overlooked an
intermediate California appellate authority, Frisk v.
Merrihew, 42 Cal. App. 3d 319, 326, 116 Cal. Rptr. 781,
785 (1974), is flat wrong. (Forro I, App. A, at 9.) Moreover,
even if good law," petitioner obtains no benefit from Frisk’s
observation that, in the absence of facts permitting but one
conclusion, it is for the jury to decide whether a privileged |
occasion was abused by reason of the communication’s
failure to bear a reasonable relationship to the official
proceeding. Given the concli sive effect of the jury’s counter-
claim finding of trade secret thievery, “there is but one
conclusion as to whether IBM, at least in part, had
legitimate cause for invoking police assistance. As the Forro
I court noted, “The jury’s verdict . . . indicates that IBM
had cause to seek help from the police, and our review of the
record supports that finding.” (Forro I, App. A, at 24-25.)

Nor did the court of appeals misinterpret California case
law in rejecting the argument in Forro II that IBM’s
communication should have been denied protection because
they were part of a broader, transcendent scheme. (Petition
at 28, citing, Gruenberg v. Aetna Insurance Company, 9
Cal. 3d 566, 108 Cal. Rptr. 480, 510 P.2d 1032 (1973).) As
the court of appeal noted, the insurance company in
Gruenberg had engaged in actionable conduct which

'* But see, e.g., Brody v. Montalbano, 87 Cal. App. 3d 725, 733, 151 Cal.
Rptr. 206, 212 (1978), cert. demied, 444 Us. 844 (1979); Imig v.
Ferrar, 70 Cal. App. 3d 48, 55-56, 138 Cal. Rptr. 540, 543 (1977);
seg) 5 Twyford, 63 Cal. App. 2d 916, 926, 134 Cal. Rptr. 145,
l l )

'* Itel Capital Corp. v. Cups Coal Co., 707 F.2d 1253, 1260-61 & n.14
(11th Cir. 1983); Span-Deck, Inc. v. Fabcon, Inc., 570 F. Supp. 81, 88-
89 (D. Minn. 1983) (“The law of the case doctrine is no less applicable
here because the question involves the continued viability of jury
special verdict findings’’).

|

13

damaged plaintiff wholly apart from its privileged com-
munications. The Forro II court correctly determined that
the case had no applicability to the present situation
inasmuch as all of petitioner’s injury resulted directly from
the occurrence of the police search as to which the entirety
of IBM’s causally relevant conduct was privileged. (Forro
II, App. C, at 33n.2.)

Finally, petitioner asserts that a “conspiracy” claim
whereby the police are asserted to have been mere pawns
“bought and paid” for by IBM somehow “disappeared”
from the court of appeals’ analysis of its interference claim.
(Petition at 25.) But the fact is that the court expressly
noted petitioner’s argument, but found no evidence to
support it: “Although Forro would have us view IBM as a
puppeteer directing the actions of the police, our review of
the record convinces us that the evidence provides no basis
for inferring that the police were not in charge of obtaining
the search warrant and the conduct of the search itself.”
(Forro I, App. A, at 11.)"

“ Petitioner’s present assertion that the police were “bought and paid”
for is at odds with its own prior characterization of the evidence.
(Petition at 25.) Arguing in opposition to IBM’s Motion for Directed
Verdict, counsel for petitioner conceded that “[IBM’s payment of
investigation expenses] wasn’t a bribe in the sense that we would know
it where the recipient of the money willfully and knowingly accepts the
money to disregard his duty.” (R 1813.) Given that all the expense
money was properly spent and accounted for (R 2075), the best
argument that petitioner could offer was that IBM had psychological-
ly predis the authorities to credit IBM’s claim of trade secret
losses. (R 1813-14.)

Moreover, when asked by the trial court at the close of its rebuttal
case to identify evidence of conspiracy sufficient to warrant a
conspiracy jury charge under Section 2 of the Sherman Act, petitioner
abandoned the claim. (R 2686.) With respect to the interference
Ti} petitioner never even requested a conspiracy instruction. (CR
282.

'S Petitioner's accusation of non-feasance on the part of the court of
— is —— an effort to camouflage its belated introduction
the new but mistaken argument that the court applied the wrong
(footnote continued on next page)

14

In sum, the court of appeals fairly addressed and correctly
disposed of petitioner's attacks on the dispositive nature of
the California statutory privilege.

B. In According Absolute Privilege to IBM's Participa-
tion in the Execution of the Search Warrant, the Court
of Appeals Correctly Implemented California's
Declared Policy of Encouraging Affirmative Citizen
Response to Police Requests for Assistance.

While IBM's communications to the authorities are
absolutely privileged by operation of an express California
statute, no such legislative mandate protects IBM's police-
requested assistance in the execution of the search warrant.
However, the California Supreme Court has recognized
that affirmative citizen response to a police request for
assistance is a desirable social objective and has accordingly
formulated a principle of common law intended to promote
such citizen cooperation. In Sokol v. PUC, 65 Cal. 2d 247,
418 P.2d 265, 53 Cal. Rptr. 673 (1966), a telephone
company had terminated Sokol’s service upon police request
and advice that Sokol was using his telephone for illegal
purposes. In reviewing Sokol’s challenge of that termina-
tion, the California Supreme Court held that the telephone
company was protected from civil liability since “a contrary
rule . . . would discourage cooperation with law enforcement
agencies.” 65 Cal. 2d at 257-58, 418 P.2d at 272, 53 Cal.
Rptr. at 680. In so holding, the California Supreme Court
relied and expanded upon an earlier decision according
immunity to a citizen who, at police request, effected an

(footnote continued from previous page) )
statute in assessing IBM's communications. Pointing for the first time
to California Civil police § 43.S(a) and the qual nature of the
privilege it accords police officers executing arrest warrants, petition-
er asserts without explanation that a anche privilege accorded
1BM’s communications by independent statute somehow dissolves. |
Moreover, petitioner was never arrested by either IBM or the police. |

a

15

arrest. Peterson v. Robison, 43 Cal. 2d 690, 697, 277 P.2d
19, 24 (1954).

With that state-law policy squarely in place, the Forro /
court undertook an analysis of its applicability to IBM's
police-requested search participation. In dealing with this
previously unconsidered factual setting,“ the court cata-
logued both practical and legal consiCerations dictating the
principle’s full applicability. First, a layman would not have
been able to identify the technical materials specified in the
warrant. (Forro I, App. A, at 11.) Although the police
authorities made the final determination of what materials
would be seized (Forro I, App. A, at 11), expert technical
advice as to the nature of the information depicted on
particular blueprints was essential. (R 665, 2025-27.)
Second, California statutory provisions expressly authorize
police officers to make requests for citizen assistance. (Forro
I, A-11, citing California Penal Code, § 1530.) Finally, a
police officer executing a search warrant valid on its face
enjoys absolute immunity by provision of California statute.
(Forro I, App. A, at 12, citing California Penal Code,
§ 830.6(b)}.) In view of these circumstances, the court of
appeals concluded that a California court would apply the
rationale of Sokol and Peterson to accord immunity to
IBM’s search participation.

In this Court, petitioner makes no challenge — indeed no
mention — of California’s clearly articulated policy of
encouraging citizen cooperation with police requests for
assistance. Rather, petitioner makes a belated and irrele-
vant attack on the sufficiency of the underlying warrant,
contending that expert assistance cannot be used to cure an

16

unreasonably vague instrument. (Petition, at 22-24.) But
that argument has no relevance to the immunity due a third-
party citizen who did not have any role in the preparation of
the warrant. Indeed, in the Peterson case, the citizen
providing police-requested arrest assistance was determined
immune from a claim of false imprisonment “even if it be
assumed that the imprisonment which followed ... was
unlawful.” Peterson v. Robison, 43 Cal.2d at 698, 277 P.2d
at 24.

In sum, the Forro I court correctly held IBM’s search
participation immune. Moreover, petitioner's failure to
challenge the validity of the warrant at any previous stage of
the proceeding precludes its doing so here. Delta Air Lines,
Inc. v August, 450 U.S. at 362.

17

Ill. CONCLUSION.

For the foregoing reasons, International Business Ma-
chines Corporation respectfully requests the Court to deny
the instant petition for grant of a writ of certiorari.

Henry C. THUMANN
(Counsel of Record)
James V. SELNA

Ropert E. WILLETT

Attorneys for Respondent
International Business
Machines Corporation

Of Counsel:

O'MELVENY & MYERS

May 6, 1985

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_0059%3A2. Public record. Not legal advice.