Did The Ninth Circuit’s “Blurred Lines” Ruling Just Quietly Move To Kill Off The So-Called Inverse Ratio Rule?

This week, on July 11, 2018, the Ninth Circuit issued an order which both denied a petition to rehear its “Blurred Lines” decision en banc, which upheld the 2015 jury verdict that the hit song “Blurred Lines” by Pharrell Williams, Clifford Harris, Jr. (aka “T.I.”), and Robin Thicke infringed the copyright to Marvin Gaye’s “Got to Give it Up,” and amended its original opinion.  Opinion While the denial of the petition to rehear the case en banc is grabbing all the headlines, it is the amended opinion that stands to make the biggest impact on copyright law.  The amended opinion quietly deletes all references to the oft-criticized inverse ratio rule.  By taking out all references to the so-called inverse ratio rule in its amended opinion (and in the dissent), the Ninth Circuit may be signaling that the inverse ratio rule (considered and rejected by the Second Circuit more than 50 years ago) has finally danced its last dance in the Ninth Circuit.

As we pointed out in our 2011 article, as a practical matter, the so-called inverse ratio rule makes precisely no sense.  As stated from time to time, under the inverse ratio “rule,” if the plaintiff establishes a high degree of access to its work by the defendants, a finding of copyright infringement may supposedly be based upon a lesser degree of similarity.  Nonsense.  As a matter of basic copyright law, no degree of access can substitute for a finding that the works are in fact substantially similar within the meaning of the Copyright Act.  A court’s determination of whether there is substantial similarity of protectable expression is made by looking at the works and analyzing them.  That analysis is totally unrelated to whether the defendant had no access, some access, had a lot of access or even had the plaintiff’s work posted on the wall of the writers’ room.

District courts within the Ninth Circuit have struggled with the so-called inverse ratio rule for years. Some judges have correctly determined that it makes no sense, and refuse to apply it.  Other judges pay lip service to it, but then admit that they are not sure how it applies.  Other judges have applied it, but it is totally unclear from the decisions as to how it was applied.

The bottom line is that a plaintiff must still prove substantial similarity regardless of how strong its evidence is that the defendant had access to the plaintiff’s work. This is true even where the defendant in fact copied from the plaintiff’s work.  Even in that instance the plaintiff has to prove the full measure of substantial similarity of protectable expression within the meaning of the Copyright Act.  Simply put, not all copying is unlawful.

The Second Circuit considered and rejected the inverse ratio rule more than 50 years ago (in 1961). In light of the Ninth Circuit’s amended opinion of July 11, 2018, and its deletion of all discussion of the so-called inverse ratio rule, it appears that the Ninth Circuit is, at long last, starting to catch up.

California’s Revenge Porn Statutes

Several members of the University of Central Florida chapter of the Delta Sigma Phi fraternity were recently sued, along with the fraternity itself, by a woman claiming that the fraternity operated a secret Facebook group where members uploaded images and video of private sexual encounters for other fraternity members to see.  The case is Kathryn Novak v. Brandon Simpson, et al., Case No. 6:18-cv-00922-RBD-TBS (M.D. Fla. June 13, 2018).

The Plaintiff claims that she had a sexual relationship with defendant Brandon Simpson from October 2017 to February 2018 during which time Simpson recorded sexual encounters with her. Plaintiff claims that Simpson distributed video of the couple having sex to at least five Delta Sigma Phi fraternity members who then shared the video with the rest of the fraternity house.

The frat allegedly operated a secret Facebook group called the “Dog Pound” where fraternity brothers “routinely posted electronic video and images of their sexual ‘conquests’” and that the page was then used to disseminate nude images and videos of young women.  The women involved allegedly did not consent to the distribution of the material.  Plaintiff is asserting claims for invasion of privacy, intentional and negligent infliction of emotional distress, and a claim under Florida’s revenge porn statute.

Like Florida, California has a revenge porn statute.  In 2013, the California legislature added “revenge porn” as a crime under California Penal Code § 647(j)(4).  The statute makes it a misdemeanor offense to intentionally distribute images of another identifiable person depicted in a sexual act “under circumstances in which the persons agree or understand that the image shall remain private.”

California also recognizes a civil revenge porn claim under Civil Code § 1708.85, which creates a private cause of action against persons who intentionally distribute private images depicting an intimate body part of another.

Both of these statutes apply to the distribution of consensually-taken images.  For example, the circumstance presented under § 647(j)(4)(A) oftentimes is when a victim consents to the picture taking during a consensual sexual relationship, and the victim and victim’s partner agree not to distribute the image, but the image is distributed after the relationship is ended.  For this reason, the statutes have never been used to impose liability against media publishers because it has been impossible to show that publishers had an agreement with the subject that the images were to remain private.

Furthermore, publishers who lawfully obtain information, even if they know or have reason to know that the information was unlawfully obtained by the source, cannot be held liable for publishing newsworthy stories about the material.  Bartnicki v. Vopper, 532 U.S. 514, 535 (2001).  Consistent therewith, California’s civil revenge porn statute expressly recognizes that “[t]here shall be no liability on the part of the person distributing [sexually explicit materials] [where] … [t]he distributed material constitutes a matter of public concern.”  Cal. Civ. Code § 1708.85(c)(4).

Overall, despite being at the forefront of codifying revenge porn laws, analysts have noted that California’s statutes could be improved.  In particular, both statutes require a showing that the parties involved agreed or expected that the images would remain private, which can be difficult to establish when the persons involved (usually former partners) consented to recording the images but did not explicitly agree to keep them private.  Accordingly, revenge porn claims are typically asserted as claims for invasion of privacy, misappropriation of likeness, infliction of emotional distress, and copyright infringement.

Minnesota Court of Appeals Extends Fair Report Privilege to Stories that Accurately Summarize Police Press Conferences and Press Releases

The Minnesota Court of Appeals recently ruled that the “fair-report privilege” protects the media against defamation claims for news reports that accurately summarize official press conferences held by law enforcement or law enforcement agencies’ official press releases.  The fair report privilege is a broad privilege afforded to the press to publish defamatory statements so long as the report relies on official public documents or statements by public officials and the report fairly and accurately uses those sources.

On November 29, 2012 the Cold Spring, Minnesota police department came to perform a welfare check on Mr. Ryan Larson at his family’s request.  On the way, Officer Tom Decker was shot and killed in the vicinity of Larson’s residence.  Police arrested Larson in connection with the murder.  On November 30, 2012, law enforcement officials held a joint press conference about the incident, during which officials made statements about the arrest and answered questions.  In addition, the Minnesota Department of Public Safety issued a news release the same day stating that Larson had been arrested and booked on murder charges.

The story was covered by local media, including Defendants KARE 11 News and the St. Cloud Times, which reported on the incident and the police press conference in various broadcasts and articles published in the days following the arrest.  Eventually, however, Larson was released after investigators determined that there was insufficient evidence against him and he was cleared as a suspect in August 2013.

Larson sued KARE 11 and the St. Cloud Times for defamation over 11 statements made in the reporting on the arrest that indicated that he was accused of murder and that police believed or stated that he had shot Officer Decker.  At trial the jury found in favor of defendants, holding that although each statement was defamatory, referred to Larson, and was published, none of the statements were false.  Larson successfully moved for a new trial and defendants appealed.

On appeal, Larson argued that the fair-report privilege did not apply to news reports about law enforcement statements at the police press conference and in the press release.  The Court of Appeals disagreed and ordered judgment in favor of defendants.  The Court relied principally on the Minnesota Supreme Court case of Moreno v. Crookston Times Printing Co., which held that the fair report privilege applies to “an accurate and complete report or a fair abridgement of events that are part of the regular business of a city council meeting.”

The Court relied on two public policy principles for the extension of Moreno to police press conferences and press releases.  It explained that, because the meeting was public, a fair and accurate report would simply relay information to the reader that she would have seen or heard were she at the meeting.  Further, it held that there was an “obvious public interest in having public affairs made known to all.”

Accordingly, the Court analogized the police press statements to the public statements made at a city council meeting and further held that there was an “obvious public interest” in information relayed to the public by law enforcement officials.  Applying Moreno, the Court held that the fair report privilege extended to fair and accurate reporting of statements made by law enforcement officials at official press conferences or in official press releases based on its conclusion that “[w]e can discern no meaningful distinction between citizen statements … made at a city council meeting and police statements about a recent crime at an official press conference.”

The case is Larson v. Gannett Co., Inc., No. A17-1068, 2018 WL 2090538 (Minn. Ct. App. May 7, 2018).

Without Doubt, Anonymous Sources Do Not Equate to Actual Malice

On April 25, 2018, the Second Circuit affirmed the district court’s dismissal of Venezuela’s “Number Two” politician’s, Diosdado Cabello-Rondon (“Cabello”), libel suit against Dow Jones & Company, Inc. (“Dow Jones”).

The suit stems from a Wall Street Journal (“WSJ”) article titled “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub.” See José de Córdoba and Juan Forero, “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub,” THE WALL STREET JOURNAL, May 18, 2015. The WSJ reported that Cabello, the former head of Venezuela’s national assembly, was the target of a U.S. Drug Enforcement Administration investigation for drug trafficking and money laundering.  Following the publication, Cabello filed a libel suit against the WSJ’s Parent Company, Dow Jones.  The Second Amended Complaint (“Complaint”) alleged that the article contained “false and defamatory allegations” and that the WSJ contrived the allegations and falsely attributed them to fictitious, anonymous sources or, in the alternative, failed to properly investigate its sources. The Complaint also alleged that the WSJ should have questioned the reliability of its sources because “no legitimate DOJ source has, or could conceivably have leaked such sensitive information core to an ongoing international criminal investigation,” where the case presents “nothing inherently controversial,” and any leakage “can serve no noble cause[.]”

On August 17, 2017, the district court dismissed the Complaint with prejudice because Cabello failed to plead falsity adequately as to some of the statements in the article, and failed to plead malice adequately. The Second Circuit affirmed the decision finding that the Complaint did not plausibly allege actual malice as required for a public figure plaintiff.

To establish a prima facie case for libel under New York Law, a plaintiff must plead facts supporting a plausible inference that “the identified statements were false.” Mosdos Chofetz Chaim, Inc. v. RBS Citizens, N.A., 14 F. Supp. 3d 191, 216 (S.D.N.Y. 2014).  When the plaintiff is a public figure, he must also plead actual malice. See Biro v. Conde Nast, 963 F. Supp. 2d 255, 270 (S.D.N.Y. 2013), aff’d, 807 F.3d 541 (2d Cir. 2015), and aff’d, 622 F. App’x 67 (2d Cir. 2015). The Second Circuit has held that the actual malice standard is not measured by ill will or animosity, “but instead the speaker’s subjective doubts about the truth of the publication.” See Church of Scientology Int’l v. Behar, 238 F.3d 168, 174 (2d Cir. 2001). In other words, in order to survive a motion to dismiss in the absence of a showing of a knowingly false statement, the plaintiff must plead plausible grounds that the defendant “entertained serious doubts” as to the truth of the publication. Biro, 807 F.3d at 545. Absent the allegations of “enough facts to raise a reasonable expectation that discovery will reveal evidence of actual malice[,]” a complaint will not survive. Id. at 546.

Applying this standard to Cabello’s Complaint, the Second Circuit made clear that reliance on anonymous sources alone does not support an inference that the publisher acted with actual malice. The Court characterized Cabello’s theory that any investigation into his activities simply could not have been leaked by government authorities as “patently unbelievable.” In fact, Cabello’s theory completely worked against his allegations because as the “Number Two” politician in a country with vast oil wealth and a complex relationship with the United States, it is certainly a controversial matter where a leak would not be unlikely or impossible. As such, the allegations were not enough to buttress an inference of actual malice.  Accordingly, the Court affirmed the district court’s order dismissing the Complaint with prejudice, as this was the Cabello’s second time failing to adequately amend his complaint as to the libel claim.

Putting It In Writing: The Return of The Morality Clause In The Age of #MeToo and Time’s Up (Part II)

Part I: The Birth of Morals Clauses in Entertainment Services Contracts

Part II: Twenty-First Century Morality Clauses in Entertainment Services Contracts

Morality clauses, or morals clauses, are making a comeback in the age of the #MeToo and Time’s Up movements.  A sample morality clause in an actor talent agreement may read as follows:

Artist shall act at all times with due regard to public morals, conventions and Studio policies. If Artist shall have committed or does commit any act, or if Artist shall have conducted or does conduct himself in a manner, which shall be an offense involving moral turpitude under federal, state or local laws, or which might tend to bring Artist to public disrepute, contempt, scandal or ridicule, or which may embarrass, offend, insult or denigrate individuals or groups, or that may shock, insult or offend the community or Studio workforce or public morals or decency or prejudice Studio, or which results in or is likely to result in actual or threatened claims against Studio, or which otherwise may might tend to reflect unfavorably upon Studio, Studio shall have the right to terminate this Agreement upon notice to Artist given at any time following the date on which the commission of such act, or such conduct, shall have become known to Studio.

Studios, networks, producers, distributors, financiers, advertisers and many others make a significant investment in television and motion picture projects. That investment is put at risk if public opinion turns against a key personality or executive connected with a project.  Recent events involving actor Kevin Spacey are a case in point.  After multiple reports surfaced that Kevin Spacey engaged in sexual misconduct, studios cancelled a number of his pending film and television projects.  Imperative Entertainment, the financier of Ridley Scott’s All the Money in the World, spent $10 million to reshoot Spacey’s scenes with Christopher Plummer and save the film in time for its holiday release. Separately, Netflix immediately severed its relationship with Spacey, reportedly losing tens of millions of dollars by shutting down production on House of Cards and scrapping its Spacey-driven Gore Vidal biopic, which was already in post-production.  Because Spacey did not have a morality clause in his contracts, he was reportedly paid for the entire final season of House of Cards and for All the Money in the World.  In January 2018, Netflix announced that it took a “$39m non-cash charge in Q4 for unreleased content [it] decided not to move forward with.”  Netflix CFO, David B. Wells, confirmed in the Q4 earnings call that the “write-downs” were “related to the societal reset around sexual harassment.”

Indeed, this is the very scenario Universal sought to avoid when it first announced the use of morality clauses in September 1921:

“As contracts are drawn today, a company seems to be liable not only to continue to pay the salary of an actor or actress who forfeits the respect of the public, but has to bear the obloquy of still having them in its employ. Pictures on the market or unreleased and unreleasable are sufficient penalty to pay for an infraction of the moral law by an employee in whose good name millions may be tied up and over whose moral conduct the company has no control whatever.”  (Morality Clause For Films, N.Y. Times, Sept. 22, 1921, at 8) (PDF).

Those who oppose the use of morality clauses worry that they can be drafted too broadly and are subject to abuse.  This criticism is supported, in part, by the politicized history of morality clauses.  In the 1940’s and 1950’s, several studios used morality clauses to terminate the agreements of the so-called Hollywood Ten, a group of ten actors and screenwriters who were jailed, and blacklisted by movie studios, for publicly denouncing the activities of the House Committee on Un-American Activities during its investigation of Communist influence in Hollywood.  Even today, some representing talent fear that morality clauses, particularly those that are broad or ambiguous, may create pretext for termination of contracts based on other factors.  There is also concern that morality clauses can be unfair to talent since anyone can invent an accusation, or make a public statement that is not necessarily true.  Both the Director’s Guild of America (DGA) and the Writer’s Guild of America (WGA) have banned morals clauses in guild member agreements for decades.  The DGA Basic Agreement states that: “Employer agrees that it shall not include or enforce any so-called ‘morals clause,’ as the term is commonly understood in the motion picture and television industries, in any contract of employment or deal memo for the services of an employee.”  Similarly, the WGA Basic Agreement states that: “Company agrees that it will not include the so-called ‘morals clause’ in any writer’s employment agreement covered by this Basic Agreement.”  Though the Screen Actors Guild-American Federation of Radio and Television Artists (SAG-AFTRA) does not contain a similar prohibition, talent agents and attorneys often negotiate for the removal of a morality clause from a talent agreement, or to narrow and clarify the terms.

Despite these concerns, the ambiguities highlighted by opponents of morality clauses can be negotiated to tailor these clauses more precisely and address each parties’ position.  Moreover, the incentive to avoid deliberately destroying a project would also ensure that a talent agreement is only terminated pursuant to a morality clause when it is warranted.

The #MeToo and Time’s Up Movements are playing an important role in forcing a number of industries, including Hollywood, to recognize and be accountable for conduct.  In the meantime, film studios, networks, and producers have begun reconsidering the use of morality clauses both as a way to deter misconduct and to provide them with some means to protect their investments.

New York Defamation Suit Against Trump To Proceed: The public response to an accusation of sexual misconduct may give rise to a defamation claim

On March 20, 2018, a New York state judge held that Summer Zervos, a former contestant on the reality television show The Apprentice, can move forward with her defamation suit against President Trump in Zervos v. Trump, No. 150522/17 (N.Y. Sup. Ct. Mar. 20, 2018).  The ruling illustrates both that a sitting President is not immune to civil liability even in state court, and that a defendant’s public response to an accusation of sexual misconduct may give rise to a defamation claim.

During the 2016 presidential campaign, Zervos was one of roughly twenty women who accused Trump of sexual misconduct after the footage from the television show Access Hollywood was made public.  On October 14, 2016, Zervos and her attorney held a press conference where she alleged that Trump sexually assaulted her on several occasions in 2007.  The following day, Trump denied the allegations as “100% fabricated and made up charges” in a statement on his campaign website.  Trump continued to deny the allegations at campaign rallies and in a series of tweets.  During the October 19, 2016 presidential debate, Trump again called the allegations “lies” and “fiction.”  Finally, during a October 22, 2016 Pennsylvania campaign rally, Trump made the following public statements:

“Every Woman lied when they came forward to hurt my campaign, total fabrication.  The events never happened. Never. All of these liars will be sued after the election is over.”  (Zervos Complaint, ¶ 74).

On January 17, 2017, Zervos filed a complaint in New York state court, alleging that the President Elect made defamatory statements about her. Zervos alleges she suffered at least $2,914 in financial losses, and seeks an unspecified amount of compensatory and punitive damages.  Three days after the complaint was filed, Trump became the 45th President of the United States.  Trump moved to dismiss the complaint or continue the lawsuit until after he leaves office.  On March 20, the New York court denied his motion, finding that the President has no immunity for purely private acts, even in state court, and that Zervos stated a cause of action for defamation.  The court cited the U.S. Supreme Court’s unanimous opinion in Clinton v. Jones, 520 U.S. 681 (1997), which held that a sitting President does not have absolute immunity from civil lawsuits related to conduct prior to the presidency.

After finding that “[n]o one is above the law,” the court also held that Zervos’s complaint met the minimal standard necessary to plead a cause of action for defamation and therefore withstood a motion to dismiss.  In support, the court cited a 2014 decision by New York’s highest court in Davis v. Boeheim, 24 N.Y.3d 262 (2014), which held that an action for defamation could be maintained against a defendant who called his accusers liars.  In reviewing the alleged public statements Trump made about Zervos, the court found that Trump used “specific, easily understood language to communicate” that Zervos lied to further her interests.

The court’s decision to allow the Zervos defamation claim to proceed hinged on its determination that, as alleged by Zervos, Trump’s statements constituted actionable statements of fact, rather than nonactionable statements of opinion.  The court determined that Trump’s “repeated statements … cannot be characterized simply as opinion, heated rhetoric or hyperbole.”  Trump’s attorney filed a notice of appeal on April 1, 2018.

Following the court’s order denying Trump’s motion to dismiss the Zervos complaint, on March 26, 2018, Stephanie Clifford (a.k.a. Stormy Daniels), the woman who went public about her alleged sexual relationship with President Trump, amended her complaint against Trump, pending in the United States District Court for the Central District of California, captioned Stephanie Clifford v. Donald J. Trump et al, No. 2:18-cv-02217 (C.D. Cal. Apr 2, 2018).  Clifford added a defamation claim again the President’s longtime personal lawyer, Michael Cohen, who allegedly paid her $130,000 to keep the details of the alleged affair secret.  Clifford alleges that the public statement Cohen issued on February 13, 2018, stating that “Just because something isn’t true, doesn’t mean that it can’t cause you harm or damage,” was reasonably understood by those who read or heard it to concern Clifford and was “meant to convey that Clifford is a liar, someone who should not be trusted, and that her claims about her relationship with Mr. Trump” are not true.  Clifford Complaint, ¶¶ 66-67.  Defendants have filed a motion to compel Clifford’s lawsuit to arbitration.

These cases make clear that a public response to an allegation of sexual misconduct may potentially give rise to a claim of defamation.

Strong Shield Law Protections for Journalists in California and Across the Country

There has been a series of cases in recent months involving attempts by the government to expose journalists’ confidential sources of information.  These cases tend to follow a familiar pattern: the government seeks the identity of a reporter’s source of information and the reporter (or media company) asserts a journalist’s First Amendment protection from being compelled to testify about confidential information or sources (commonly known as the “reporter’s privilege”).

In fact, a succession of reporter’s privilege cases have appeared across the country over the past two months.

In San Diego California, County lawyers sought to compel freelance journalist Kelley Davis’s notes, research, and sources along with a deposition after she published a series of articles detailing jail deaths and the high inmate suicide rate in San Diego jails.  Davis successfully argued that the reporter’s privilege applied and secured a ruling protecting her from disclosing any confidential information to the County.

San Diego County also recently lost another attempt to compel a journalist to testify in the case of Israel Morales, who was charged with three misdemeanor counts of drunk driving.  A journalist, Paul Anderegg, witnessed Morales pushing his car on the freeway, called 911, and then witnessed an accident as another car struck Morales’ vehicle.  Prosecutors argued that Anderegg could be called as a witness to testify in the County’s case against Morales because he was not acting as a journalist when he witnessed the accident.  However, the judge disagreed and ruled that because Anderegg traveled to the scene to record the events for a news story, he was protected by the reporter’s privilege and prosecutors could not subpoena him to testify.

In Des Plains Illinois, the city, police chief, and a police sergeant recently sued the Journal & Topics Media Group seeking the identity of the source of a photograph published by the Journal depicting police officers viewing pornography in the police station.  The Journal successfully asserted the reporter’s privilege and was not ordered to disclose the name of its source.

Finally, in New York, the Associated Press recently objected to an attempt by Honduran police officers to obtain the AP’s phone records in order to identify the source of a story detailing how top Honduran police officials intervened to safely deliver 1,700 pounds of cocaine to a cartel kingpin.  The AP has refused to provide the records, claiming that they are protected under the analogous reporter’s privilege embodied in the Honduran constitution.

In California there is a robust reporter’s privilege that shields journalists from having to disclose confidential (or non-confidential) sources and unpublished information in civil proceedings.  California’s reporter’s privilege is set forth in Article I, Section 2(b) of the California Constitution (known as the “Shield Law”) which states that reporters are protected from “disclos[ing] the source of any information procured while so connected or employed for news or news commentary purposes on radio or television, or for refusing to disclose any unpublished information obtained or prepared in gathering, receiving or processing of information for communication to the public.”  The same is established by statute in California Evidence Code Section 1070.  Accordingly, California courts have interpreted the Shield Law as providing absolute immunity from disclosing sources or unpublished information in civil proceedings.

No SpielBurgers for you! Steven Spielberg Shuts Down Unauthorized Use of His Name

Last week, Carl’s Jr. announced that in honor of Steven Spielberg’s new movie, Ready Player One, they would change the name of their Charbroiled Sliders to “SpielBurgers.” They tweeted: “@StevenSpielberg hasn’t signed off yet, but we’re pretty sure he’ll be down with it.”

In fact, Spielberg was not down with it. He posted a video on Twitter politely declining the honor: “It’s recently come to my attention that Carl’s Jr. wants to rename their Charbroiled Sliders ‘SpielBurgers.’ And they’re pretty good, but I’m passing. Cease and desist. You can’t do it. Sorry, guys.”

Carl’s Jr. took the rejection well, focusing on the positive: “OMG Spielberg likes our Charbroiled Sliders!” Although this was probably a successful campaign for the company, it could have easily turned out worse. As we’ve noted before, some celebrities respond to the unauthorized use of their names less politely. For example, when a clothing company played on Don Henley’s name and encouraged people to “Don a Henley,” the famous musician filed a lawsuit against them.

Some celebrities are willing to play along with these stunts. For example, Mark Hamill tweeted that he was “completely open to the idea of “HAMILLBURGERS” #NoShameNoGain.” But, if you guess wrong, gambling on whether a celebrity is going to be OK with your use of their name can be very costly.

For a more in-depth analysis of these issues, check out Part IPart II, and Part III of a series on Right of Publicity claims on Drye Wit.

Storytellers and Artists May Continue To Rejoice – Feud: Bette and Joan Is Fully Protected By The First Amendment

On March 26, 2018, the California Court of Appeal filed its opinion in De Havilland v. FX Networks, LLC concerning FX’s docudrama Feud: Bette and Joan.  The De Havilland opinion is yet another good one for filmmakers and television producers.  The California Court of Appeal reiterated that the First Amendment provides a powerful defense for entertainment works, just as the Ninth Circuit did in the right of publicity case involving The Hurt Locker.  See Storytellers and Artists Rejoice: The Hurt Locker Is Fully Protected By The First Amendment.

For those of you who have not had time to read the Court’s opinion, here is what we consider to be the 9 major takeaways:

  1. The Court confirmed that a person does not own the facts that make up his or her own story or a portion thereof.
  2. Docudramas, which are a mixture of fact and fiction, are protected by the First Amendment. As the Court noted, the First Amendment “safeguards the storytellers and artists who take the raw materials of life – including the stories of real individuals, ordinary or extraordinary – and transform them into art, be it articles, books movies, or plays.”  Order at 19.  And authors of docudramas have literary license under the First Amendment to alter true events and give dramatic interpretations thereof.
  3. So-called “life rights” agreements are not legally necessary. While there may be a practical reason for wanting to enter into a “life rights” agreement with a person, it is not legally required. The creators of film and television programs simply are not required to purchase a person’s rights to feature that person’s name or likeness.
  4. Advertising and promotions are protected too: The Court also confirmed that the creators of television programs may use a person’s name and identity in their promotions for the program without running afoul of right of publicity laws.
  5. The Court also followed the case of Guglielmi v. Spelling-Goldberg Prods., 25 Cal. 3d 860 (1979). In that case, Chief Justice Bird noted (in a widely-followed concurring opinion) that that creators should be allowed to express themselves using figures from history as a starting point for their stories.
  6. The Court made the transformative use test easier to follow (and satisfy), at least within the context of films, plays and television programs. See Opinion at 23-27.
  7. On a false light claim, the Court decides as a matter of law whether the program conveyed (a) statements of fact that are (b) defamatory or highly offensive to a reasonable person and (c) actually false or convey a false impression of the plaintiff. And the statement must be analyzed in its broad context to determine whether it implies an assertion of actual fact. Here, Ms. De Havilland’s claims failed, and the Court noted that viewers are familiar that docudramas (even those which are “based” on fact) contain fictionalized scenes, conversations and characters, as well as dramatic interpretations of events and dialogue.
  8. A public figure bringing a false light claim must prove actual malice by clear and convincing evidence. And “[p]ublishing a fictitious work about a real person cannot mean the author, by virtue of writing fiction, has acted with actual malice.” Opinion at 35.
  9. The Court re-confirmed that unjust enrichment simply is not a cause of action.

Putting It In Writing: The Return Of The Morality Clause In The Age Of #MeToo And Time’s Up (Part I)

Part I: The Birth of Morals Clauses in Entertainment Services Contracts

The issues highlighted by the #MeToo and Time’s Up movements have refocused the spotlight on morals clauses in talent agreements.  Morals clauses (or morality clauses) are contractual provisions which give entertainment and media employers – e.g. motion picture studios, television networks, producers, news media providers, advertisers, sports leagues etc. – the right to terminate contracts if the talent behaves in a way that negatively impacts his or her public image and devalues the services to be provided under the contract.  Originally introduced by Universal Pictures in 1921, the prevalence of morality clauses in talent agreements appeared to have declined in recent years.  Today, in 2018, following a slew of cancelled film releases, film projects, television series, and comedy specials, some companies have revisited the use of morals clauses to protect their investments.

Movie studios first introduced morality clauses after the public outcry following the arrest and widely publicized trials of silent film actor Roscoe ‘Fatty’ Arbuckle in 1921. Arbuckle was among the most popular, and most highly compensated, silent film stars of the 1910s.  In the summer of 1921, Arbuckle signed a three-year contract with Paramount Pictures for $1 million (estimated by some to be approximately $14 million today).  Arbuckle had just completed his starring role in a comedy called Leap Year, which was set to be released.  Over Labor Day weekend, Arbuckle traveled to San Francisco, checking into a suite at the St. Francis Hotel.  During the gin party that ensued (this was during Prohibition), an actress named Virginia Rappé was found severely injured in Arbuckle’s suite.  After Rappé died from a ruptured bladder, Arbuckle was arrested on rape and murder charges.  His arrest caused a media frenzy.  Even though Arbuckle was acquitted after three trials and was even issued an unprecedented statement of apology from the jury, the scandal marked the end of Arbuckle’s career.  Public opinion had turned against the once beloved actor.  The newly formed Motion Picture Producers and Distributors of America–the organization that later became the Motion Picture Association of America–banned Arbuckle from appearing in films.  Though the Association lifted the ban eight months later, Arbuckle’s career was over. Leap Year was never released, and Paramount presumably lost a substantial investment.

In response to the public disenchantment with Arbuckle and a growing concern about Hollywood scandals, the Universal Film Company announced that it would include clauses in all its talent agreements “permitting the company to discontinue their salaries if they forfeit the respect of the public.”  (Morality Clause For Films, N.Y. Times, Sept. 22, 1921, at 8) (PDF).  The announcement noted that though “[i]t may have a restraining influence on some thoughtless or willful actors; it will reassure the public, who for the moment may be inclined to fear that all their screen idols have feet of clay, and it will protect the company in an investment, often of hundreds of thousands of dollars.” Id.  Other studios followed suit, and morality clauses became a standard term in talent agreements.

During the 1940’s and 1950’s, several studios used morality clauses to terminate talent contracts based on politics.  Morality clauses were used to dismiss the so-called Hollywood Ten, a group of ten actors and screenwriters who were jailed and blacklisted by movie studios for publicly denouncing the activities of the House Committee on Un-American Activities (HUAC) during its investigation of Communist influence in Hollywood.  In a series of high profile cases, the Ninth Circuit Court of Appeals upheld the dismissals under the morality clauses.  In one case, the Court held that “because, even in 1947, a large segment of the public did look upon Communism and Communists as things of evil,” by failing to assist the HUAC, the screenwriter breached his agreement “not do or commit any act or thing that will tend to degrade him in society or bring him into public hatred, contempt, scorn or ridicule, or that will tend to shock, insult or offend the community or ridicule public morals or decency, or prejudice the producer or the motion picture, theatrical or radio industry in general.” Loew’s, Inc. v. Cole, 185 F.2d 641, 644-645 (9th Cir. 1950).  The court reached similar conclusions in Twentieth Century-Fox Film Corp. v. Lardner, 216 F.2d 844 (9th Cir. 1954) and Scott v. RKO Radio Pictures, Inc., 240 F.2d 87, 88 (9th Cir. 1957).

In the decades that followed, the prevalence of morality clauses in film and television contracts started to decline. While such clauses remained prominent in celebrity endorsement agreements, morals clauses were criticized by some for their vagueness and fell out of favor.

Both the Director’s Guild of America (DGA) and the Writer’s Guild of America (WGA) have banned morals clauses in guild member agreements for decades.  The DGA Basic Agreement states that,  “Employer agrees that it shall not include or enforce any so-called ‘morals clause,’ as the term is commonly understood in the motion picture and television industries, in any contract of employment or deal memo for the services of an employee.”  Similarly, the WGA Basic Agreement states that, “Company agrees that it will not include the so-called ‘morals clause’ in any writer’s employment agreement covered by this Basic Agreement.”  The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) does not impose a similar prohibition.

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