An Update To Our Prior Post: The Eleventh Circuit Rules That Georgia’s Anti-SLAPP Does Not Apply In Federal Court. Supreme Court, Here We Come?

Last year, we posted that a Georgia federal court held, in a lawsuit against CNN, that Georgia’s anti-SLAPP statute had no application in federal court.  CNN appealed that decision and, last Thursday, the Eleventh Circuit agreed with the trial court and held that Georgia’s anti-SLAPP law does not apply in federal court.  The case is Carbone v. Cable News Network, Inc., Case No. 17-10812 in the Eleventh Circuit Court of Appeals.

The Court’s Decision

The Eleventh Circuit held that, taken together, Federal Rules of Civil Procedure 8, 12, and 56 provide an answer to the question of whether a federal court plaintiff’s “complaint states a claim for relief supported by sufficient evidence to avoid pretrial dismissal.”  According to the Court, while those federal rules answer the question of sufficiency of a plaintiff’s claim by applying a plausibility standard and by requiring the plaintiff to demonstrate a triable issue of fact, the “Georgia anti-SLAPP statute answers the same question by requiring the plaintiff to allege and prove a probability of success on the merits” (emphasis added).  This conflict forms the basis of the Court’s opinion, which holds that the anti-SLAPP law is inapplicable in federal court.

According to the Court’s order:

  • Plausibility versus Probability: Rule 8 governs the general rules of pleading and Rule 12 addresses motions to dismiss, which collectively “define the criteria for assessing the sufficiency of a pleading before discovery.”  Whereas the Georgia anti-SLAPP statute requires a plaintiff to show a probability of success on his or her claims prior to discovery, the federal rules merely apply a plausibility standard.
  • Genuine Issue Of Material Fact versus Success On The Merits: Rule 56, meanwhile, governs summary judgment, which allows the defendant to test whether the plaintiff’s “claim is supported by sufficient evidence to avoid pretrial dismissal.”  Per the Court, the Georgia anti-SLAPP statute’s evidentiary burden is far more demanding and contemplates a substantive determination of the plaintiff’s probability of prevailing on his or her claims.  Rule 56, meanwhile, does not ask the trial court to weigh the evidence nor to determine the truth of the matter, but only to determine whether there is a genuine issue of material fact for trial.

At bottom, the Eleventh Circuit held that, taken together, Rules 8, 12, and 56 “provide a comprehensive framework governing pretrial dismissal and judgment.”  According to the Court, because the Georgia anti-SLAPP statute seeks to answer the same question as those federal rules, there is a conflict that renders the anti-SLAPP law inapplicable in federal court.

Will The Supreme Court Weigh In?

This decision places the Eleventh Circuit on the side of the D.C. Circuit and squarely at odds with the First, Fifth, and Ninth Circuits, all of which have applied state anti-SLAPP laws in federal court.  Given this split between the circuits, will CNN ask the Supreme Court to weigh in?  We will certainly know soon.

On a related note, only a few days ago we posted about the fact that Donald Trump successfully used Texas’s anti-SLAPP statute against Stormy Daniels in California federal court, netting him nearly $300,000 in attorney’s fees and costs.  Stormy is currently on appeal before the Ninth Circuit and, among other things, she asks the Court to address the question: “Does the Texas Citizens Participation Act (TCPA), the Texas version of the anti-SLAPP, apply in federal court?”  The Ninth Circuit has previously held that California’s anti-SLAPP statute does apply in federal court, as discussed in greater detail hereSee United States ex rel. Newsham v. Lockheed Missiles & Space Co., 190 F.3d 963 (9th Cir. 1999).

In any event, we will continue to provide updates on these types of federal cases applying state anti-SLAPP laws, including both CNN’s and Stormy’s respective appeals.  And of course, we will let you know if and when the Supreme Court decides to weigh in.

Trump Awarded Nearly $300,000 In Attorney’s Fees And Costs Following His Successful Anti-SLAPP Motion Against Stormy Daniels

We previously posted about President Donald Trump’s successful use of the First Amendment in bringing an anti-SLAPP against Stormy Daniels based on her claim of defamation.  On October 15, 2018, Stormy appealed that decision to the Ninth Circuit.  The lawsuit is Stephanie Clifford v. Donald J. Trump, et al., Case No. 18-cv-06893-SJO (FFMx) in the United States District Court for the Central District of California.  The appeal is Stephanie Clifford v. Donald J. Trump, Case No. 18-56351 in the Ninth Circuit Court of Appeals.

Trump Wins His Attorney’s Fees Motion

Yesterday, the trial court awarded the President the majority of his attorneys’ fees and costs based on his successful anti-SLAPP motion—an award totaling nearly $300,000.  As discussed below, such an award is not uncommon when a defendant successfully brings an anti-SLAPP motion.

Like California, the Texas anti-SLAPP statute (applied in this case) includes a mandatory fee-shifting provision when a defendant succeeds on his or her motion.  See Tex. Civ. Prac. & Rem. Code (“TCPR”) § 27.009(a)(1); compare Cal. Code Civ. Proc. § 425.16(c)(1).  In fact, the Texas statute provides for mandatory court costs, reasonable attorney’s fees, and other expenses incurred in defending the legal action, plus sanctions against the plaintiff sufficient to deter her from bringing similar actions in the future.

Fees & Costs – $292,052.33

In calculating Trump’s reasonable attorney’s fees and costs, the Los Angeles federal court applied what is referred to as the “lodestar” (not Lone Star) method, essentially multiplying the reasonable hours expended with reasonable hourly rates, which are then be enhanced by another multiplier, if necessary, to arrive at a reasonable fee.

Trump’s lawyers sought to recover their fees and costs incurred as a result of (i) their initial strategy; (ii) their motion to transfer the case from New York to California; (iii) their successful anti-SLAPP motion; and (iv) their motion for fees.  The Texas statute provides for an award of fees “incurred in defending the legal action.”  TCPR § 27.009(a)(1).  Here, Stormy’s lawsuit included only a single cause of action—for defamation.  Because Trump successfully SLAPP’d that one claim, the Court concluded that he could recover on his entire defense of the action, including each of the four categories above.

Trump sought $389,403.11 in attorney’s fees and costs.  The Court concluded that Trump’s lawyers’ hourly rates – ranging from $307.60 per hour for an associate to $841.64 per hour for a partner – were reasonable, but took issue with the number of hours expended by his lawyers in defending the lawsuit and bringing the anti-SLAPP motion.  As a result, the Court reduced the total amount of claimed fees and costs by 25%, resulting in an award of $292,052.33 in fees and costs.

Sanctions – $1,000

In calculating sanctions under the Texas law, courts apply a direct relationship between the offensive conduct and the sanction imposed, with the caveat that the sanctions must be just and must not be excessive.  Here, the Court recognized that sanctions were mandatory under the Texas statute, but declined to impose significant additional sanctions given (i) the already-significant award totaling nearly $300,000; (ii) Stormy’s pending attempt to withdraw her other defamation lawsuit against Trump; and (iii) the fact that Stormy had not brought additional lawsuits despite all of the “rhetorically hyperbolic statements that [Trump] has made about [Stormy] in the recent past[.]”  This last part certainly feels like a wink and a nudge about Trump’s proclivity for Tweeting, if you ask us.

At the end of the day, the Court awarded Trump $1,000 in sanctions.

These Types Of Large Attorney’s Fees Awards Are Not Uncommon

In both California state and federal courts, it is not uncommon for trial courts to award significant attorney’s fees and costs following defendants’ successful anti-SLAPP motions.  It is also not uncommon for appellate courts to uphold those awards and to award additional fees incurred on appeal.

Some examples include:

  • Vargas v. City of Salinas, 200 Cal. App. 4th 1331 (2011) – affirming award of $226,928 in fees and $2,495.84 in costs
  • Church of Scientology v. Wollersheim, 42 Cal. App. 4th 628 (1996) – affirming award of $130,506.71
  • Lunada Biomedical v. Nunez, 230 Cal. App. 4th 459 (2014) – affirming award of $162,059.38
  • Premier Medical Mgmt. Sys., Inc. v. California Ins. Guarantee Ass’n, 163 Cal. App. 4th 550 (2008) – affirming awards exceeding total of $275,000
  • Bernardo v. Planned Parenthood Federation of America, 115 Cal. App. 4th 322 (2004) – affirming award of $77,835.25
  • Wynn v. Chanos, No. 14-cv-04329-WHO, 2015 WL 3832561 (N.D. Cal. June 19, 2015) – awarding $390,149.63 in fees and $32,231.23 in costs
  • Metabolife International, Inc. v. Wornick, 213 F. Supp. 2d 1220 (S.D. Cal. 2002) –awarding $318,687.99
  • Makaeff v. Trump Univ., LLC, 2015 WL 1579000 (S.D. Cal. Apr. 9, 2015) – awarding $790,083.40 in fees and $8,695.81 in costs

These cases are just some of the many in which defendants have successfully recovered hundreds of thousands of dollars in legal fees based on their successful anti-SLAPP motions.  Under California law, a defendant will be awarded his or her fees even where an anti-SLAPP motion is only partially successful.  See, e.g., Mann v. Quality Old Time Service, Inc., 139 Cal. App. 4th 328, 339 (2006) (“Given the express legislative preference for awarding fees to successful anti-SLAPP defendants, a party need not succeed in striking every challenged claim to be considered a prevailing party within the meaning of section 425.16.”).

Moreover, similar to Stormy’s lawsuit, under California law a defendant will not be limited to recovering just the fees and costs incurred in bringing the anti-SLAPP motion itself.  The award will include, for example, “the fees incurred in enforcing the right to mandatory fees under Code of Civil Procedure section 425.16.”  Ketchum v. Moses, 24 Cal. 4th 1122, 1141 (2001); see also Wanland v. Law Offices of Mastagni, Holstedt & Chiurazzi, 141 Cal. App. 4th 15, 21 (2006) (recoverable attorney’s fees under anti-SLAPP statute “include expenses incurred in litigating an award of attorney fees after the trial court has granted the motion to strike.”).

The Court’s fee award is just the latest in a line of many such awards following a successful anti-SLAPP motion.  Stormy’s tale may rightly be considered a cautionary one.

2 Milly Sues Epic Games Over Fortnite Dance Moves – What In The Wide, Wide World Of Copyright Is Going On Here?

On Wednesday, rapper 2 Milly sued Epic Games, the creators of the wildly popular online game Fortnite Battle Royale, asserting two counts of copyright infringement, two counts of right of publicity, and unfair competition.  2 Milly claims that Epic stole his dance, the “Milly Rock,” by introducing it as part of downloadable content in Fortnite.  The lawsuit is Ferguson v. Epic Games, Inc., et al. in the United States District Court for the Central District of California, Case No. 2:18-cv-10110.  The complaint is available online here.

For those unfamiliar, Fortnite Battle Royale is an online third-person shooter and battle royale game where, in the midst of the fighting (or perhaps after knocking out another player), players can have their characters do a short “dance.”  These dances have gone viral on YouTube and in the gaming community.  Players can purchase additional dance moves as paid in-game content and, according to 2 Milly, one of those downloadable dance moves – the “Swipe It” (YouTube link here) – improperly infringes upon his Milly Rock moves.

Copyrighting… Dance?

Can dance moves be copyrighted?  The answer is complicated.  You can get copyright protection for choreographic works but, as noted in a Copyright Office circular, “choreographic works are a subset of dance and are not synonymous with dance.”  And even then, it seems like an uphill battle.  As noted below, 2 Milly has yet to get a registration from the Copyright Office.  Whoops.  No statutory damages or attorney’s fees.  See below.

Section 102 of the Copyright Act, 17 U.S.C. § 102, provides protection for “choreographic works.”  The above-linked Copyright Office circular defines choreography as “the composition and arrangement of a related series of dance movements and patterns organized into a coherent whole.”  That circular also makes clear, however, that choreography “consisting of ordinary motor activities, social dances, commonplace movements or gestures, or athletic movements may lack a sufficient amount of authorship to qualify for copyright protection.”  So while choreography may be subject to copyright protection, that only remains true if it is something more than, for example, ordinary motor activities or social dances.

The circular goes on to make clear that protection is not afforded to the following categories of conduct, even though they may be unique in some respects:

  • Commonplace movements or gestures – for example, individual movements or dance steps, or even “short dance routines consisting of only a few movements or steps with minor lineal or spatial variations, even if a routine is novel or distinctive.”  Not protected.
  • Social dances – social dance steps and simple routines are not included within the ambit of copyright protection, as “[r]egistrable choreographic works are typically intended to be executed by skilled performers before an audience.  By contrast, uncopyrightable social dances are generally intended to be performed by members of the public for the enjoyment of the dancers themselves.”  This remains true even where such social dances have a “substantial amount of creative expression.”  Not protected.

These limitations on protectable choreography extend beyond just a Copyright Office circular, of course.  As noted by the Ninth Circuit only a few years ago, the legislative history of Section 102 recognized the almost-obvious nature of these types of limitations.  See, e.g., Bikram’s Yoga Coll. of India, L.P. v. Evolation Yoga, LLC, 803 F.3d 1032, 1043 (9th Cir. 2015) (“Nor did Congress define the term ‘choreographic work[ ],’ apparently because its meaning was ‘fairly settled.’ . . . The legislative history does explain, however, that it is not ‘necessary to specify that “choreographic works” do not include social dance steps and simple routines.’”).

The question then becomes: Does 2 Milly’s dance go above and beyond those categories of unprotectable works?

Based on our review of 2 Milly’s 2014 music video, probably not.  2 Milly’s “dance” seems to fall squarely within the unprotected category of “short dance routines consisting of only a few movements or steps with minor lineal or spatial variations, even if a routine is novel or distinctive.”  Moreover, the fact that protected choreography is “typically intended to be executed by skilled performers before an audience” seriously calls into question the viability of 2 Milly’s copyright claims.  He and his friends appear to be having fun, sure, but that doesn’t equate to protectable choreography.  On top of all that, are 2 Milly and his friends’ movements just the type of movements that are “performed by members of the public for the enjoyment of the dancers themselves”?  This remains to be seen.

But wait, there’s more.  The Copyright Office circular also notes that, as with other copyrightable works, a choreographic work must be fixed in a tangible medium of expression before it can be subject to protection.  Specifically, it must “reveal[] the movements in sufficient detail to permit the work to be performed in a consistent and uniform manner.”  2 Milly seemingly asserts that his 2014 music video suffices.  While this remains an open question, based on our review, the music video falls short of the type of works contemplated by the Copyright Act’s “choreography” protections.  The video appears to depict 2 Milly and his friends swaying and moving (to varying degrees) to his song rather than truly depicting a choreographed dance.  The movement of 2 Milly and his friends – much less the video itself – is certainly not a model of consistency and uniformity.

Uh Oh – No Copyright Registration!

2 Milly’s complaint makes note of the fact that, though his music video was released around August 2014, he is only now “in the process of registering the Milly Rock dance with the United States Copyright Office”—to be clear, he submitted his application with the Copyright Office on December 4, 2018, only one day before he filed suit against Epic.

Section 411 of the Copyright Act prohibits the filing of a civil action for infringement absent preregistration or registration of the copyright.  Then the question becomes: If 2 Milly’s application is rejected by the Copyright Office, does he even have a leg to stand on?

Putting that aside, however, Section 412 of the Copyright Act generally prohibits a plaintiff from recovering statutory damages or attorney’s fees for any infringement of a published work that occurs (i) after the first publication of the work and (ii) before the effective date of its registration.  2 Milly’s allegations appear to fall squarely in that category.  He published his music video more than four years ago but waited until earlier this week to seek registration.  Based on that alone, 2 Milly will likely be barred from recovering any statutory damages or attorney’s fees.  In other words, he’ll need to seek actual damages and, really, what are those in this case?

2 Many Problems For 2 Milly?

On top of all of the foregoing, 2 Milly will need to contend with many possible First Amendment defenses.  The U.S. Supreme Court has clearly held that video games are fully protected speech under the First Amendment, just like books, TV shows, and movies.  See Brown v. Entertainment Merchants Association, 564 U.S. 786 (2011).  Will 2 Milly have to face an anti-SLAPP motion from Epic Games under the assertion that his state law claims are a “SLAPP”—a strategic lawsuit against public participation?  It remains to be seen.

2 Milly may also face problems for his ancillary, non-copyright claims under the doctrine of copyright preemption.  Section 301 of the Copyright Act, 17 U.S.C. § 301, expressly states that rights equivalent to those protected by the Copyright Act are “governed exclusively by this title”—in other words, they are preempted.  Will Epic take the position that 2 Milly’s right of publicity and (perhaps more likely) unfair competition claims are really just dressed up claims for copyright infringement?  This, too, is well worth consideration.

Finally, 2 Milly seeks punitive damages on his copyright claims: Problematic for Milly, punitive damages are not available for copyright infringement claims.

Regardless, at the end of the day, this will be a fascinating one to follow.  Stay tuned, everyone.

Let’s Be Clear: The TRO In Jay-Z’s “Roc Nation” Dispute Did Little More Than Delay Things By A Couple Of Weeks

News outlets recently rushed to share the story that lawyers for Jay-Z had successfully halted an arbitration in his “Roc Nation” trademark dispute with Iconix based on findings of racial bias and discrimination.  Headlines included:

  • “Judge Halts Arbitration In Jay-Z Suit Because Of Racial Bias”
  • “Jay-Z wins arbitration delay after arguing panel was ‘too white’”
  • “Jay-Z arbitration dispute temporarily halted after rapper wins injunction over discrimination”
  • “Jay-Z Halting His $204M Lawsuit Over a Lack of Black Arbitrators Could Be Historic”
  • “Jay-Z Wins Bid To Halt Arbitration In Iconix Dispute on Racial Grounds”

So what really happened?

It is true that Justice Saliann Scarpulla of the Supreme Court of the State of New York recently granted an order to show cause temporarily halting an arbitration in the matter Shawn C. Carter, et al. v. Iconix Brand Group, Inc. et al., Index No. 655894/2018.  It is also true that lawyers for Jay-Z brought a petition to stay the parties’ American Arbitration Association (AAA) arbitration because they alleged a lack of diversity within AAA.  And it is also true that Justice Scarpulla agreed that the AAA should be diverse: “that’s a given.”

But let’s be clear.  Justice Scarpulla is not the judge assigned to the case.  That is Justice Barry Ostrager.  He was out last week and Justice Scarpulla heard the petition in his absence.  And as the publicly-available transcript demonstrates, her decision to grant the temporary restraining order was not based on the merits but was simply an opportunity to let Justice Ostrager hear things after he got back:

“I’m going to sign this TRO.  You can argue it in front of Judge Ostrager. . . . If this was my case, I would rule on it, but it’s not.  I have no problem issuing a TRO for twelve days. . . . [Justice Ostrager] has the absolute right to do whatever he wants, and I just want to keep the status quo between now and when you argue in front of Judge Ostrager.”

Justice Scrapulla even changed the phrasing of the order to reflect her reasoning:

Thus, she nixed the language agreeing with the substance of Jay-Z’s request as well as the portion halting the arbitration for 90 days.  During the hearing, Justice Scarpulla even expressed concerns about the Court’s role in the dispute in the first place: “This is a private agreement between two individuals.  You could have said in your contract, I want the Dalai Lama to decide my case, and that’s your private right and your private decision[.] . . . What I am saying to you is, it doesn’t involve the government.”

At the end of the day, the Court’s decision appears to be less historic and substantial than advertised.  Rather, it put things on hold for a couple of weeks to accommodate another judge’s schedule.  Of course, the headline “Judge Halts Proceedings Until Another Judge Can Hear Petition” would be far less exciting.

So stay tuned.  Justice Ostrager could hear these arguments as early as next week.

The Results Are In: First Amendment Soundly Defeats Claims Regarding Allegedly Defamatory Campaign Advertisements

On November 6, 2018, Arkansas Supreme Court Associate Justice Courtney Goodson was elected to remain in her position with the Arkansas Supreme Court.  Her victory undoubtedly softened the blow of being denied a preliminary injunction seeking to stop an attack advertising campaign levied against her by the Republican State Leadership Committee – Judicial Fairness Initiative, a Washington-based special interest group (the “Special Interest Group”), in support of her opponent, David Sterling.  Goodson complained that television advertisements and a campaign mailer created by the Special Interest Group defamed her.

Broadly speaking, the campaign advertisements at issue contained two types of allegedly defamatory statements.  First, the Special Interest Group asserted that Goodson accepted various gifts, including a $50,000 trip to Italy and large campaign contributions from plaintiffs’ law firms.  It was undisputed that Goodson accepted a trip to Italy from a personal friend and lawyer and complied with judicial ethics rules both by timely disclosing the gift and recusing herself from cases involving the lawyer who gave the gift.  The testimony from the preliminary injunction hearing confirmed that Goodson’s campaign accepted contributions from plaintiffs’ law firms, but that Goodson did not personally solicit campaign contributions or even know who contributed to her campaign.  Goodson argued that the statements regarding the gift and campaign contributions were false by implication or omission because she had recused herself from the cases as required.

Second, the Special Interest Group asserted that Goodson asked for an $18,000 per year pay raise.  Goodson alleged, however, that she did not personally request a raise; rather, the Chief Justice raised the issue on behalf of every member of the Arkansas Supreme Court.  Moreover, after initially refusing to answer questions on the topic at the hearing, Goodson eventually testified that she voted against the raise.  Notably, this was the first time Goodson had publicly disclosed her vote.

On November 1, 2018, the United States District Court for the Eastern District of Arkansas denied Goodson’s motion for a preliminary injunction on two separate grounds.

A Preliminary Injunction Would Violate the First Amendment

The court held that granting a preliminary injunction would be an impermissible prior restraint on speech because it would stop the Special Interest Group from publishing its campaign materials, which would be tantamount to restricting it from speaking.  The term “prior restraint” refers to an administrative or judicial orders prohibiting certain communications before they occur.  Alexander v. United States, 509 U.S. 544, 550 (1993) (quotations omitted).  Temporary restraining orders and injunctions “are classic examples of prior restraints.”  Id.

As the court correctly noted, restraining future speech is almost always prohibited by the First Amendment, such that any prior restraint bears a heavy presumption against its constitutional validity.  The court also observed that while some federal and state courts have found that a narrowly-tailored prior restraint is permissible following a full trial at which it is determined that the defendant defamed the plaintiff, it is “wholly unprecedented” for a federal court to enter a preliminary injunction in a defamation case.  Indeed, the U.S. Supreme Court, for its part, has never approved a prior restraint in a defamation case.

The court also reasoned that the context of the case militated against a preliminary injunction—imposing any prior restraint on election-related speech should be viewed with extreme caution.  Indeed, “debate on the qualifications of candidates [is] integral to the operation of the system of government established by our Constitution.”  Buckley v. Valeo, 424 U.S. 1, 14 (1976).  Accordingly, the court denied the preliminary injunction as a prior restraint on speech, particularly given that the speech at issue had not yet been determined to be defamatory.

Goodson Was Unlikely to Succeed on the Merits

The court also held that Goodson could now show a reasonable probability of succeeding on the merits of her defamation claim, as she must in order to obtain a preliminary injunction.  The court explained that, because she is a public official, Goodson must show that the Special Interest Group made the statements at issue with actual malice.

The court stated that Goodson likely could not prove actual malice concerning the statements about her trip to Italy and campaign contributions.

The court also concluded that Goodson was unlikely to show that the Special Interest Group acted with actual malice regarding the advertisements stating that Goodson requested a pay raise.  Although it did not confirm whether Goodson voted for the pay raise before running the advertisement, there was no indication that the Special Interest Group made the statement knowing it was false or that it was very likely false.  The court cautioned, however, that Goodson’s testimony at the hearing provided notice that she voted against the raise.

While a bitter pill for Goodson to swallow as a candidate facing political advertisements making allegedly false claims against her, the court reached the correct result.  A prior restraint on free speech may be upheld, if at all, only in extraordinary circumstances.  The U.S. Supreme Court has suggested that such extraordinary circumstances may be found for matters of national security or to control obscenity.  Near v. Minnesota, 283 U.S. 697, 716 (1931); see N.Y. Times v. United States, 403 U.S. 713, 718-720 (1971) (Black, J., concurring).  Furthermore, a prior restraint restricting political speech is particularly problematic given that political speech “is at the heart of our democratic process and ‘operates at the core of the First Amendment.’”  Ariz. Right to Life PAC v. Bayless, 320 F.3d 1002, 1008 (9th Cir. 2003) (quoting Boos v. Barry, 485 U.S. 312, 318 (1988)).

The First Amendment is of vital importance, particularly in the arena of political speech, as “[o]nly a free and unrestrained press can effectively expose deception in the government.”  N.Y. Times, 403 U.S. at 717 (Black, J., concurring).  In Goodson, the Eastern District of Arkansas, correctly recognizing this, avoided taking a step down the proverbial slippery slope.

Indiana Supreme Court Finds Fantasy Sports Statistics Newsworthy In Right of Publicity Claim

Plaintiff-Appellants Akeem Daniels, Cameron Stingily, and Nicholas Stoner were collegiate student–athletes between 2014-2016.  Their on-field performances were collected as numerical statistics and published by various fantasy sports website operators including Defendants-Appellees DraftKings, Inc. and FanDuel, Inc.  For a fee, consumers could access detailed information such as Plaintiffs’ names, images, and statistics, assess the athletes’ weekly performances, and assemble a virtual team of real-life athletes to compete against other users’ teams on Defendants’ websites.

Plaintiffs filed a class action in Indiana alleging that Defendants “used their names and likenesses in operating and promoting online fantasy sports contests without Plaintiffs’ consent, in violation of their right of publicity.”  Defendants removed the case to the U.S. District Court for the Southern District of Indiana and moved to dismiss, arguing that Plaintiffs failed to state a claim because the use of Plaintiffs’ names and statistics fell under certain statutory exceptions to the right of publicity.  The District Court dismissed the suit, finding no violation of Plaintiffs’ right of publicity because the use of their likenesses was in material that had newsworthy value and was a matter of public interest under the exceptions to the Indiana right of publicity statute.  Plaintiffs appealed to the Seventh Circuit Court of Appeals, which certified the question of Indiana law to the Court in Daniels v. FanDuel, Inc., 884 F.3d 672, 674 (7th Cir. 2018).

On October 24, 2018, the Indiana Supreme Court answered the certified question from the U.S. Court of Appeals for the Seventh Circuit asking, “[w]hether online fantasy-sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both.”

The Indiana Supreme Court answered that “online fantasy sports operators that condition entry to contests on payment and distribute cash prizes do not violate the Indiana right of publicity statute when those organizations use the names, pictures, and statistics of players without their consent because the use falls within the meaning of “material that has newsworthy value,” an exception under the statute.”

Indiana’s right of publicity statute provides that “a person may not use an aspect of a personality’s right of publicity for a commercial purpose without having obtained previous written consent.”  Ind. Code § 32-36-1- 8(a).  Indiana law defines the scope of a person’s right of publicity as a personality’s property interest in his/her (1) name; (2) voice; (3) signature; (4) photograph; (5) image; (6) likeness; (7) distinctive appearance; (8) gestures; or (9) mannerisms.  Ind. Code § 32-36-1-7.  The law exempts such claims when the material has “political or newsworthy” value.  The Court focused on the scope of this exception.

In its decision, the Indiana Supreme Court maintained a narrow focus on the certified question by limiting its opinion to the “newsworthy value” exception.  Specifically, the Court analyzed the spectrum of “material that has newsworthy value” and concluded that the use of players’ names, pictures, and statistics in fantasy sports contests does not violate the right of publicity in Indiana.

On the question of newsworthiness, the Court rejected Plaintiffs’ arguments that the statutory exception for newsworthiness does not apply in the context of commercial use.  First, the Court found that the statute itself does prohibit the use of a person’s right of publicity “for a commercial purpose” and therefore, the Court declined to read such a requirement into the otherwise clear language of the statute.  Second, the Court held that whether Defendants are media companies or news broadcasters is immaterial in the context of the newsworthiness exception.  The plain language of the statute only speaks to the use of a personality’s right of publicity in “[m]aterial that has political or newsworthy value.”  Ind. Code § 32-36-1-1(c)(1)(B).  Finally, the Court noted that Plaintiffs’ information is not stripped of its newsworthy value simply because it is placed behind a paywall or used in the context of a fantasy sports game.  “On the contrary, fantasy sports operators use factual data combined with a significant, creative component that allows consumers to interact with the data in a unique way” and “Defendants’ use of the players’ names, images, and statistics in conducting fantasy sports competitions bears resemblance to the publication of the same information in newspapers and websites across the nation.”  The Court agreed with Defendants that, “it would be strange law that a person would not have a first amendment right to use information that is available to everyone.”  Thus, the Court held that Indiana’s right of publicity statute contains an exception for material with newsworthy value that includes online fantasy sports.  The case is Akeem Daniels, Cameron Stingily, and Nicholas Stoner v. FanDuel, Inc. and DraftKings, Inc., 18S-CQ-134.

Trump Uses First Amendment To Avoid Liability In Defamation Action

October 15, 2018 – Blanketing Himself In First Amendment Protections, Trump Wins Dismissal of Stormy Daniels’ Defamation Suit

October 16, 2018 – Prominent Nonprofit Sues Trump For Using His Presidential Powers To Violate The First Amendment

 On October 15, 2018, U.S. District Judge James S. Otero of the Central District of California issued an order dismissing the defamation case brought by adult film star Stephanie Clifford, a.k.a. Stormy Daniels (“Daniels”).  The case concerns President Trump’s tweet about the allegedly anonymous man who threatened Ms. Daniels to keep quiet about her affair with Mr. Trump.  The Court found that Mr. Trump’s tweet was an exercise of his right of free speech under the First Amendment, dismissed the case and awarded Trump his legal fees.  The case is Stephanie Clifford v. Donald J. Trump, Case 2:18-cv-06893 SJO (FFMx) (C.D. Cal.).

The Tweet

Daniels alleges that in May of 2011, she agreed to cooperate with In Touch Magazine in connection with an article about her past relationship with Trump.  Daniels agreed to speak to the magazine after her ex-husband approached In Touch without her approval.  As alleged in her complaint, a few weeks after agreeing to speak to the publication, a man approached her in Las Vegas, Nevada, threatening her and her daughter to “Leave Trump alone.  Forget the story.”  After Trump was elected President on November 8, 2016, Daniels worked with a sketch artist to render a sketch of the person who had threatened her in 2011.  She released the sketch publicly on April 17, 2018.  The next day, on April 18, 2018, Trump, using his personal Twitter account (@RealDonaldTrump), posted the following tweet:

“A sketch years later about a nonexistent man. A total con job, playing the Fake News Media for fools (but they know it)!”

Daniels Sues Trump For Defamation Based On Trump’s “Con Job” Tweet

In response to his tweet, Daniels filed a complaint for defamation against Trump on April 30, 2018 in the Southern District of New York. Daniels alleged that Trump’s “tweet attacks the veracity of her account of the threatening incident that took place in 2011” and “suggests that she is falsely accusing an individual of committing a crime against her.”  She contended that Trump meant to convey that she “is a liar, someone who should not be trusted, that her claims about the threatening encounter are false, and that she was falsely accusing the individual depicted in the sketch of committing a crime, where no crime had been committed.”  On this basis, Daniels alleged that Trump’s tweet was false and defamatory, and constituted defamation per se because it charged her with committing a serious crime.  

On August 8, 2018, the parties agreed to transfer the case from the Southern District of New York to the Central District of California. On August 27, 2018 Trump filed a motion to dismiss the complaint pursuant to the applicable anti-SLAPP statute. Welcoming the First Amendment protections that both the anti-SLAPP statute itself and judicial precedent provide, Trump argued, among other things, that his tweet was a non-actionable opinion.

Luckily for Trump, the district court recognized that the anti-SLAPP statute seeks to “encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.”

The Court Determines The Tweet Constitutes Non-Actionable Rhetorical Hyperbole, Dismisses The Complaint And Awards Trump His Legal Fees As Required By The Anti-SLAPP Statute

The Court easily determined that the complaint related to Trump’s exercise of his right of free speech and agreed with Trump that his tweet constituted “rhetorical hyperbole” which is protected by the First Amendment.  The Court also held that Trump sought to use language to challenge Ms. Daniels’ account of her affair and the threat that she purportedly received in 2011, and that the U.S. Supreme Court has held that a published statement that is “pointed, exaggerated, and heavily laden with emotional rhetoric and moral outrage” cannot constitute a defamatory statement.” See Milkovich v. Lorain Journal Co., 497 U.S. 1, 32 (1990).  Relying on judicial precedent regarding the First Amendment, the Court explained that even statements such as “ripping off” and “sleazy” constitute non-actionable opinion.

The Day After Trump Wins Under The First Amendment, Nonprofit Sues Trump For Allegedly Using His Presidential Powers To Violate The First Amendment

Trump’s victory on First Amendment grounds stands in stark contrast to his public criticisms of an expansive right to free speech. Trump has issued numerous tweets condemning the actions of journalists, which many argue constitutes an effort to impinge the rights of the media and freedom of speech.  With repeated “Fake News” soundbites and tweeting about changing libel laws, Trump sure seemed to enjoy the protections of the First Amendment when he was the defendant in a defamation action.

Nevertheless, the day after the Court dismissed Daniels’ defamation case on First Amendment grounds, on October 16, 2018, Pen American Center, Inc.—a prominent nonprofit organization that works to defend free expression—filed a complaint against President Trump in the Southern District of New York.  Plaintiffs allege that, acting in his official capacity as the President of the United States, Trump intended to stifle exercise of the constitutional protections of free speech and a free press, and therefore violated the First Amendment and his oath to uphold the Constitution.  The complaint alleges that Trump has issued retaliatory directives to officials in Trump’s Administration and public threats to use his government powers against news organizations and journalists who have reported on his statements, actions, and policies in unfavorable ways, including the following:

  • Trump allegedly demanded that Jeff Bezos, Amazon, and The Washington Post, which Bezos owns personally, be punished because of The Post’s coverage of him. This includes reports that Trump allegedly issued an executive order directing the U.S. Postal Service to double Amazon’s delivery rates.
  • Trump allegedly has threatened CNN and its parent company, Time Warner.
  • Trump allegedly regularly threatens to withdraw the White House press credentials of individual reporters.
  • Trump allegedly has threatened to challenge broadcast licenses for television stations owned by or carrying NBC and other networks.

Plaintiffs argue that Trump has First Amendment rights and is free to criticize the press, but he is not free to use the power and authority of the United States government to punish and stifle free speech.  Plaintiffs contend that Trump has directed his threats and retaliatory actions at specific outlets whose content and viewpoints he views as hostile.  As a result, journalists who report on the President seek a  remedy for what they allege is the President’s unconstitutional actions aimed at suppressing speech.  Specifically, plaintiffs seek an order (a) declaring that Trump ’s retaliatory acts violate the First Amendment, and (b) enjoining “Trump from directing any officer, employee, agency, or other agent or instrumentality of the United States government to take any action against any person or entity with intent to retaliate against, intimidate, or otherwise constrain speech critical of him or his Administration.”  The case is Pen American Center, Inc. v. Donald J. Trump, in his official capacity as President of the United States, Case: 1:18-cv-09433 (S.D.N.Y).

Given his arguments in Stephanie Clifford v. Donald J. Trump, it appears that President Trump is a big fan of the First Amendment.  His arguments in response to the Pen American Center, Inc. v. Trump case, wherein he is flatly accused of stifling First Amendment protections, will be interesting to follow.  Stay tuned.

Los Angeles Superior Court Quashes Subpoena to CBS under California’s Press Shield Law

Austin Harrouff faces two counts of first degree murder in Florida for the fatal stabbings of John Stevens and Michelle Mishcon on August 15, 2016.  The case was widely publicized after police investigators said that when they apprehended Harrouff, he was on top of Stevens, biting his face.

Ever since, Harrouff’s attorneys have been involved in a two year legal battle with CBS over unpublished excerpts of an interview CBS obtained between talk-show host Dr. Phil McGraw and Harrouff, conducted at the St. Mary’s Medical Center just days after his arrest.  CBS aired clips from the interview on Dr. Phil’s show in which Harrouff claimed that he did not remember much from the night of the incident, but said it was “like a nightmare” and that he “never wanted it to happen.”  CBS later released an edited 22-minute version of the interview.

Harrouff’s lawyers argued that the full recording, including the outstanding 8 minutes of unpublished material, should be released so that their expert could make sure that Harrouff was not coached by McGraw or his staff during the interview in order to evaluate the defendant’s anticipated insanity defense.  CBS argued that there was no dialogue between Harrouff and McGraw during the 8 minutes of unpublished material.  In September 2017, the trial judge in Florida ruled that the recording was essential to Harrouff’s defense and ordered that the full recording be released.  Harrouff subsequently issued a subpoena to CBS in California for the full recording.

California has a robust “shield law” for the press which provides an immunity from being held in contempt to reporters, editors, publishers, and other press-related individuals and organizations as embodied in the California Constitution, Article I, Section 2(b) and California Evidence Code § 1070.  The shield law protects both confidential sources of information and “unpublished information” including notes, outtakes, photographs, audio recordings, or videos that have not been transmitted to the public.

California courts have applied the shield law differently in various contexts.  For example, in civil suits where the press is a non-party, the immunity from contempt is absolute.  New York Times v. Superior Court, 51 Cal. 3d 453 (1990).  Similarly, in a criminal case, the shield law is also absolute where the prosecution seeks confidential or unpublished information from the press.  Miller v. Superior Court, 21 Cal. 4th 883 (1999).

Where, as here, however, when a criminal defendant seeks information from the press protected by the shield law, the criminal defendant must first establish “a reasonable possibility that the information will materially assist his defense.”  If that threshold is met, then the California Supreme Court has set forth a balancing test to determine whether the defendant’s federal constitutional right to a fair trial preempts California’s shield law immunity.  Delaney v. Superior Court, 50 Cal. 3d 785 (1990).  The factors considered are (1) whether the unpublished information is confidential or sensitive; (2) the interests sought to be protected by the shield law; (3) the importance of the information to the criminal defendant; and (4) whether there is an alternative source for the unpublished information.

In the Harrouff case, the California court concluded that the subpoena to CBS was subject to California’s Press Shield Law and held that Harrouff was unable to make the requisite threshold showing of “a reasonable possibility” that the information would assist his defense.  The court determined that Harrouff had failed to prove that the 8 minutes of outstanding video, “which does not contain any interactions or questions towards Harrouff or otherwise capture his behavior or demeanor,” was sufficiently relevant to Harouff’s defense to overcome shield law immunity.

The case is State of Florida v. Harrouff, Los Angeles Superior Court, Case No. BS172573.

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.

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