At issue, of course, is the big scoop of last week, the next-generation iPhone prototype found in a Redwood City bar which eventually ended up in the hands of Gizmodo (via $5,000). While the device was returned to Apple, there was some discussion around the legality of the matter.
Interestingly, the raid on Chen's house was performed on Friday night. It was during the weekend that reports surfaced indicating that the D.A. was looking into charges in the matter.
California's Shield Law protects a "publisher, editor, reporter, or other person connected with or employed unpon a newspaper, magazine, or other periodical publication, or by a press association or wire service" and a "radio or television news reporter or other person connected with or employed by a radio or television station." In 2006, in the case of O'Grady v. Superior Court, a California appellate court held that the law applies to bloggers as well. Thus, it would seem Gizmodo is covered.
However, the California Shield Law covers contempt charges that might be levied against a journalist attempting to protect a source. If instead, the police are looking to charge Gizmodo with buying stolen property, that would not be protected by the law.
Therein lies the rub: how much did Gizmodo know, or not know?