Lost and Found: California Law and the Next Generation iPhone

Unless you've been hiding under a rock for the past few days, you've heard that a newfangled iPhone mysteriously turned up in a fancy beer bar in Redwood City, California, and photos of it ended up on Endgadget and Gizmodo.  Since yesterday, new details have come to light, and the prodigal "iPhone HD" is headed back to the mothership, thanks in part to decidedly low-tech California law on lost property.

A legal fight seemed a possibility yesterday, as it became clear that Gizmodo's parent company, Gawker Media, had paid for access to the device. Then Gizmodo released details about the Apple employee who lost the phone (doh!), and the efforts of the person who found it to return it to Apple, albeit unsuccessfully: 

He reached for a phone and called a lot of Apple numbers and tried to find someone who was at least willing to transfer his call to the right person, but no luck. No one took him seriously and all he got for his troubles was a ticket number.

He thought that eventually the ticket would move up high enough and that he would receive a call back, but his phone never rang. What should he be expected to do then? Walk into an Apple store and give the shiny, new device to a 20-year-old who might just end up selling it on eBay? (source)

Later last night, Gizmodo broke word that Apple had formally requested return of the device. Brian Lam, Gizmodo's Editorial Director, was happy to comply with this request, noting in an email to Apple's General Counsel that the device "[w]as burning a hole in our pockets" and adding, "[n]ow that we definitely know it's not some knockoff, and it really is Apple's, I'm happy to see it returned to its rightful owner."  As Lam put it, the whole thing worked out rather well for Gizmodo, which got final confirmation of the authenticity of the device and "warm, fuzzy, huggy feelings of legal compliance."

What, you might ask, was the legal basis for Apple's request?  Yesterday word was circulating that Apple considered the phone stolen, not lost, perhaps in an effort to trigger criminal laws against receipt of stolen property.  This is a creative approach—kind of a Jedi mind trick—but not even Steve Jobs' say-so can change what transpired in the beer garden that March night. California trade secrets law, an area Apple is not unfamiliar with, would probably be of little help because the guy who found the phone didn't acquire it through "improper means," which includes "theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means." Cal. Civ. Code § 3426.1(a).  That said, there's a question about whether a site could be said to have "misappropriated" Apple's trade secret simply by publishing photos of the device with knowledge "that it was a trade secret and that knowledge of it had been acquired by accident or mistake." Id. § 3426.1(b)(2)(C).

The answer is more mundane.  As Nilay Patel originally pointed out on Twitter, California law regulates what you can do when you find lost property in the state. Section 2080 of the Civil Code provides that any person who finds and takes charge of a lost item acts as "a depositary for the owner." If the true owner is known, the finder must notify him/her/it within a reasonable time and "make restitution without compensation, except a reasonable charge for saving and taking care of the property." Id. § 2080.  If the true owner is not known and the item is worth more than $100, then the finder has a duty to turn it over to the local police department within a reasonable time. Id. § 2080.1.  The owner then has 90 days to claim the property.  Id. § 2080.2. If the true owner fails to do so and the property is worth more than $250, then the police publish a notice, and 7 days after that ownership of the property vests in the person who found it, with certain exceptions. Id. § 2080.3.

With this framework in mind, and § 2080 in particular, Gizmodo had little choice but to return the device once Apple admitted that this thing was the real deal. Worked out rather nice for everyone, I would say.


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I missed that!

Wow... I'd be very happy if someone walks in the store and hands me one of these =)))