In response to the California police raid on Gizmodo editor Jason Chen’s home, Gawker Media is arguing that the search and seizure was illegal because California law precludes a warrant being used to ascertain the name of a journalistic source.

Gizmodo’s interpretation of the law, however, entirely misses the point. The impetus for the warrant appears to be rooted in Gizmodo’s commission of a felony, namely the purchase of an iPhone they had reason to believe was stolen property.
Shield laws in the US were designed to protect sources, but by entering into a contract with said source (5 grand in exchange for the iPhone), Gizmodo was no longer just the recipient of information, but an active participant in the commission of a felony - hence the warrant.

Despite Giz’s arguments to the contrary, the warrant is 100% kosher.