First Amendment Did Not Bar Publicity Rights Claims Against Video Game Maker

This posting was written by Thomas A. Long, Editor of Wolters Kluwer IP Law Daily.

The First Amendment did not bar claims by retired National Football League players alleging that video game developer Electronic Arts Inc. (“EA”) violated their rights of publicity under California law by using their likenesses in the EA video game, Madden NFL, without their authorization, the federal district court in San Francisco has ruled. The court also denied EA’s motion to strike the complaint pursuant to California’s Anti-SLAPP (“Anti-Strategic Lawsuit Against Public Participation”) law.

Background

The Madden NFL game featured highly realistic simulations of actual NFL stadiums, uniforms, and current team rosters, including active players’ likenesses and biographical information, which were covered by various licenses that did not cover the retired players.

Recent versions of the game allowed players to select “historical” NFL teams, with rosters that did not include the retired players’ names, but featured game “avatars” that closely resembled the retired players, in terms of height, weight, skin tone, position, years in the league, and athletic ability. For purposes of its motions to dismiss and strike, EA accepted the retired players’ allegations that it used protectable elements of their likenesses in Madden NFL.

Three retired players—Michael Davis, Vince Ferragamo, and Billy Joe Dupree—filed a putative class action lawsuit on behalf of themselves and approximately 6,000 other former NFL players whose likenesses allegedly appeared in certain editions of Madden NFL. They asserted violations of California’s statutory right of publicity under Civil Code Sec. 3344 and violations of California’s common law right of publicity.

First Amendment

EA contended that the game, as an expressive work, was protected by the First Amendment to the extent that it contained significant transformative elements, such that the value of the game did not derive primarily from the fame of the players.

However, according to the court, the “transformative use” test focuses on the reproduction of the celebrities’ likenesses, rather than on the larger work. In the Madden NFL game, the retired players’ likenesses appeared in their conventional role as football players. EA failed to articulate any expressive significance inherent in this depiction.

The game’s literal projection of the retired players’ likenesses into avatar figures was insufficient to confer constitutional protection, in the court’s view. The fact that the likenesses could be controlled or manipulated by game players did not change the analysis; the avatars were still realistic depictions of the retired players.

The court also rejected EA’s argument that its use of the players’ likenesses in Madden NFL was protected because it concerned a matter of public interest. Although the reporting and discussion of factual information about professional sports implicated the public interest, the alleged use of the retired players’ likenesses went well beyond simply reporting or publishing statements of historical fact.

There was very little in the game that resembled traditional reporting. The game play of Madden NFL did not report, or even re-create, recent or historical games. Each game was within the players’ control; the only historical aspect of the game was the retired players’ likenesses, the court said.

EA’s use of the retired players’ likenesses was not exempt from liability under the California publicity rights statute’s provision of immunity for the use of a name or likeness in connection with “public affairs.” Game play did not report on or relate “real life” occurrences, other than a minimal amount of statistical information about each player. The game was entirely fictional, the court said. Accordingly, the court denied the motion to dismiss the claims.

Anti-SLAPP Law

California’s Anti-SLAPP law provides for dismissal of any claims for relief that are primarily based on defendants’ activities in furtherance of their right to free speech relating to an issue of public concern. Once a defendant makes a prima facie showing that free speech protections are implicated, the burden shifts to the plaintiff to demonstrate a “reasonable probability” of prevailing on the underlying claims by stating and substantiating a legally sufficient claim.

Although video games were expressive works entitled to First Amendment protection, EA had conceded for purposes of its motions that Madden NFL used the retired players’ likenesses without authorization. EA had not otherwise attacked the adequacy of the allegations against it. Therefore, the court said, the retired players had satisfied their burden of stating and substantiating a legally sufficient claim. The motion to strike was denied.

The March 29 decision in Davis v. Electronic Arts, Inc. will be reported in CCH Advertising Law Guide.

Supreme Court Strikes Down Vermont Prescriber Data Privacy Law . . .

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

A Vermont statute regulating the collection and use of data identifying health care providers’ prescribing patterns impermissibly restricted data mining companies’ free speech rights in violation of the First Amendment, the U.S. Supreme Court has determined.

The challenged statute banned the sale, transmission, or use of prescriber-identifiable data (“PI data”) for marketing or promoting a prescription drug unless the prescriber gave consent.

Freedom of Speech

The statute imposed content- and speaker-based burdens on protected expression, so it was subject to heightened judicial scrutiny, the Court said. The creation and dissemination of information were speech for First Amendment purposes.

The law forbade the sale of PI data subject to exceptions based in large part on the content of a purchaser’s speech. It then barred pharmacies from disclosing the information when recipient speakers would use that information for marketing. Finally, it prohibited pharmaceutical manufacturers from using the information for marketing.

The statute disfavored marketing—speech with a particular content. It also disfavored speech by particular speakers, according to the Court.

Specifically, it restricted the practice of “detailing” by data mining companies, which prepared reports helping pharmaceutical manufacturers to refine their marketing tactics. The law allowed PI data to be purchased, acquired, and used for other types of speech and by other speakers. Therefore, the statute went beyond mere content discrimination, to actual viewpoint discrimination.

Whether a special commercial speech inquiry or a stricter form of judicial scrutiny were applied, the statute did not advance a substantial government interest and was not narrowly tailored to serve that interest, in the Court’s view.

Vermont contended that the statute was intended to:

(1) Protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship, and

(2) Achieve the policy objectives of improving public health and reducing healthcare costs.

Assuming that physicians had an interest in keeping their prescription decisions confidential, the statute was not drawn to serve that interest, the Court said. Pharmacies were permitted to share prescriber-identifying information with anyone for any reason except for marketing. Vermont might have addressed physician confidentiality through “a more coherent policy,” but it did not.

Vermont’s goals of lowering the costs of medical services and promoting public health may have been proper, but the statute did not advance them in a permissible way, the Court stated. Vermont sought to achieve those objectives through the indirect means of restraining certain speech by certain speakers. Vermont did not contend that the statute would prevent false or misleading speech. The fear that people would make bad decisions if given truthful information cannot justify content-based burdens on speech, the Court concluded.

The opinion was delivered by Justice Kennedy and was joined by Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Sotomayor.

The Court affirmed a decision of the U.S. Court of Appeals in New York City (CCH Privacy Law in Marketing ¶60,646). The U.S. Court of Appeals in Boston had upheld the validity of similar laws in Maine (IMS Health Inc. v. Mills, CCH Privacy Law in Marketing ¶60,527) and New Hampshire (IMS Health Inc. v. Ayotte, CCH Privacy Law in Marketing ¶60,270), rejecting constitutional challenges in both cases.

Dissenting Opinion

In a dissenting opinion joined by Justices Ginsburg and Kagan, Justice Breyer argued that the statute’s effect on expression was inextricably related to a lawful governmental effort to regulate a commercial enterprise. In Breyer’s view, heightened First Amendment scrutiny of such an effort was not required. In any event, Breyer said, the statute met the First Amendment standard previously applied by the Court when the government sought to regulate commercial speech.

The decision is Sorrell v. IMS Health Inc, CCH Privacy Law in Marketing ¶60,646.


. . . Agrees to Review Telephone Consumer Protection Act Jurisdictional Question

The U.S. Supreme Court has granted an individual’s petition for certiorari requesting review of whether Congress divested the federal district courts of their federal-question jurisdiction under 28 U.S.C. Sec. 1331 over private actions brought under the Telephone Consumer Protection Act.

At issue is a decision of the U.S. Court of Appeals in Atlanta (CCH Privacy Law in Marketing ¶60,637) holding that the individual’s TCPA claims against a debt collection agency could be pursued only in state court.

Six U.S. Courts of Appeals (the Second, Third, Fourth, Fifth, Ninth, and Eleventh Circuits) have held that federal courts lack federal-question jurisdiction over private TCPA actions. The Sixth and Seventh Circuits have taken the contrary position, with the Seventh Circuit reasoning in Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (2005) that federal courts retained jurisdiction because the TCPA's provision authorizing private actions in state court did not declare state jurisdiction to be exclusive.

The petition for review is Mims v. Arrow Financial Services, LLC, Dkt. 10-1195, filed March 30, 2011, granted June 27, 2011.

Further information regarding CCH Privacy Law in Marketing appears here.

Political Robocalls Held Subject to Identification Requirements of Federal Law

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

The State of Maryland could proceed with a Telephone Consumer Protection Act (TCPA) suit against a corporation that provided various services to candidates for political office, for broadcasting prerecorded voice messages to more than 112,000 telephone numbers belonging to Maryland residents, the federal district court in Baltimore has determined.

The messages allegedly did not identify the caller or disclose on whose behalf the call was being made, as required by the TCPA.

The corporation had been hired to serve as a political consultant by a candidate in the 2010 Maryland gubernatorial election. The message—which was broadcast via an automated dialing system on election day, primarily to registered Democrats residing in Baltimore City and Prince George’s County—stated that the incumbent governor had been “successful” in the election and did not need the recipients’ votes. The message did not indicate that the calls were made on behalf of the opposing candidate.

Political robocalls are not exempt from the TCPA’s identification and disclosure requirements, the court said. Those requirements were not limited to calls made for a commercial purpose; they apply to any calls made with an autodialer.

Liability of Corporation, Owner, Employee

Even though the calls were placed by a third-party telemarketing company, the corporation could be liable under the TCPA as an entity responsible for initiating the calls.

The corporation allegedly went to the telemarketer’s website, uploaded a prerecorded message and a list of phone numbers, and directed the telemarketer to broadcast the message to those numbers. The corporation was in a position to ensure that the content of the message complied with the TCPA, according to the court.

The corporation’s owner and its employee could be individually liable under the TCPA. The statute authorized state attorneys general to bring actions against “any person” who violated the disclosure requirements, the court said. The State contended that the owner and employee personally participated in the violations.

First Amendment

The TCPA did not violate the First Amendment, in the court’s view. The TCPA section at issue imposed technical requirements that applied to all prerecorded phone messages. The requirements were content-neutral and subject to intermediate scrutiny.

The government had a substantial interest in protecting residential privacy. The disclosure requirements allowed call recipients to terminate the call and to contact the caller to prevent future unwanted calls.

The TCPA was narrowly tailored; the statute allowed the continued use of autodialers while protecting the right of the recipient to choose whether or not to receive a message. The corporation had ample alternative channels for communication. The TCPA also promoted the government’s interest in preventing citizens from being misled as to the originators of recorded phone messages, the court said.

The May 25 decision is State of Maryland v. Universal Elections, Inc., CCH Privacy Law in Marketing ¶60,634.

High Court Agrees to Review Vermont Prescriber Privacy Law

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

The U.S. Supreme Court has agreed to decide whether the First Amendment prohibits the enforcement of a Vermont law that restricts access to information in prescription drug records.

At issue is a decision of the U.S. Court of Appeals in New York City (CCH Privacy Law in Marketing ¶60,558) holding that a Vermont statute regulating the collection and use of data identifying health care providers’ prescribing patterns impermissibly restricted commercial speech.

The statute banned the sale, transmission or use of prescriber-identifiable data for marketing or promoting a prescription drug unless the prescriber gave consent.

The appellate court determined that Vermont had failed to show that the statute directly and materially advanced the substantial state interests of lowering health care costs and protecting public health. The law had been challenged by three data-mining companies.

Similar laws in New Hampshire and Maine have been upheld by the U.S. Court of Appeals in Boston (CCH Privacy Law in Marketing ¶60,270 and CCH Privacy Law in Marketing ¶60,527, respectively).

The petition is Sorrell v. IMS Health Inc., Docket 10-779, cert granted January 7, 2011.

Vermont Prescriber Privacy Law Violates First Amendment

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

A Vermont statute regulating the collection and use of data identifying health care providers’ prescribing patterns impermissibly restricted commercial speech in violation of the First Amendment, the U.S. Court of Appeals in New York City has held.

A district court decision (CCH Privacy Law in Marketing¶60,330) denying declaratory and injunctive relief from enforcement of the statute, sought by three data-mining companies, was reversed and remanded.

The statute banned the sale, transmission, or use of prescriber-identifiable data (“PI data”) for marketing or promoting a prescription drug unless the prescriber gave consent. The law restricted speech and did not regulate merely non-expressive conduct, the court said. Restricting the sale of prescription information was a restriction on disclosure of information, which was a regulation of speech.

Substantial State Interests

Vermont alleged that the law advanced three substantial state interests: (1) protecting the public health, (2) protecting the privacy of prescribers and prescribing information, and (3) containing health care costs.

Vermont purportedly sought to discourage marketing practices regarding new brand-name prescription drugs that may not be efficacious or which may not be more effective than generic alternatives.

The state’s asserted interest in medical privacy was too speculative to qualify as a substantial state interest, in the court’s view. Vermont had not shown any effect on the integrity of the prescribing process or the trust patients have in their doctors from the use of PI data in marketing.

Lowering Costs, Protecting Public Health

Vermont did have a substantial interest in both lowering health care costs and protecting public health, but the court held that Vermont failed to show that the statute directly and materially advanced those interests.
The statute did not directly restrict the prescribing practices of doctors or the marketing practices of pharmaceutical companies. Rather, it restricted the information available to marketers so that their practices will be less effective and less likely to influence the prescribing practices of physicians.

This indirect approach was antithetical to a long line of Supreme Court cases stressing that courts must be very skeptical of government efforts to prevent the dissemination of information in order to affect conduct.

More Limited Restriction

In addition, Vermont's interests could be served as well by a more limited restriction on commercial speech, according to the court. The statute targeted the use of PI data to market all brand-name prescription drugs, not merely new brand-name drugs or those brand-name medications for which there were no generic alternatives. Thus, the statute banned speech beyond what the state’s evidence purportedly addressed.

There were alternative means to promote its interests, such as mandating the use of generic drugs as a first course of treatment, absent a physician’s determination otherwise, for all those patients receiving Medicare Part D funds.

The decision is IMS Health Inc. v. Sorrell, CCH Privacy Law in Marketing ¶60,558.

Former Players Can Pursue Publicity Rights Claims Against NFL

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

Former professional football players’ right of publicity claims against the National Football League could not be dismissed on the theory that NFL promotional videos did not constitute commercial speech and were entitled to First Amendment protection as expressive works, the federal district court in St. Paul has ruled.

The NFL allegedly violated the right of publicity statutes and common law of the 50 states by using the players’ names and images in promotional videos such as the “History” series, which included videos called the “Fabulous Fifties” and “Sensational 60s.”

Commercial Speech v. Expressive Works

While the films were not pure infomercials, their overwhelmingly positive tone belied the NFL’s contention that they were documentaries and supported the player’s contention that they were advertisements, according to the court.

Giving the players the benefit of all reasonable inferences at the stage of a motion to dismiss, they made out a plausible claim that the films referenced a specific product, NFL football, and that the constitutional protection to be afforded the films did not outweigh the players’ interests in their own identities.

Copyright Preemption

The Copyright Act did not preempt the right of publicity claims. The subject of a right of publicity—the name and likeness of a celebrity or other individual—was not a “work” within the subject matter of copyright law, the court reasoned.

Lanham Act False Endorsement

On Lanham Act false endorsement claims, a determination could not be made on the pleadings alone that the NFL’s use in promotional videos of former professional football players’ names and images was not “explicitly misleading” or likely to cause confusion, the court held.

The opinion in Dryer v. National Football League will be reported at CCH Advertising Law Guide ¶63,807.

Website Commenter Did Not Waive First Amendment Right to Anonymity

This posting was written by Thomas A. Long, Editor of CCH Privacy Law in Marketing.

An anonymous poster of a comment on a newspaper website did not waive his or her First Amendment right to remain anonymous by registering for an account with the website, the federal district court in Kansas City has ruled.

A plaintiff bringing a lawsuit against a Springfield, Missouri police officer, who allegedly injured him, was not entitled to an order compelling disclosure of the poster’s identity.

The poster—who was not a party to the lawsuit—had written a comment to a story on The Springfield News-Leader website about prosecutors’ decision to drop charges against the officer in connection with the facts underlying the suit. In the comment, the poster suggested that the City of Springfield had knowledge of the officer’s alleged violent tendencies.

The News-Leader required website users to register for an account in order to post comments. When registering for this account, users were not required to provide their first or last names or any other personal information.

Privacy Policy

The website’s privacy policy disclosed what information the News-Leader would gather from its online users and how that information would be used, generally in a commercial manner. The privacy policy stated that, in some cases, the News-Leader may use and share personally-identifiable information.

Nothing on the face of the privacy policy hinted that users might be waiving their constitutional right to anonymous free speech by posting comments or materials on the website, according to the court.

Given the presumption against waiver and the boilerplate language of the privacy policy, it could not be said that the poser was aware that he or she could be waiving the right to speak anonymously, let alone the significance of such waiver.

The decision in Sedersten v. Taylor appears at CCH Privacy Law in Marketing ¶60,414.

Rule Requiring Chain Restaurants to Post Calorie Content Upheld

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

A New York City regulation requiring chain restaurants to post calorie content for menu items was not federally preempted or unconstitutional under the First Amendment, the U.S. Court of Appeals in New York City has ruled. A federal district court decision upholding the regulation (CCH Advertising Law Guide ¶62,913) was affirmed.

The regulation, adopted in January 2008, requires all chain restaurants with fifteen or more establishments nationally to make statements showing calorie content precisely in the manner prescribed. The calorie information must be presented clearly and conspicuously, adjacent or in close proximity to the menu item, and the font and format of calorie information must be as prominent in size and appearance as the name or price of the menu item.

The mandatory disclosure requirement differs from a 2006 version of the regulation—applicable only to restaurants that voluntarily disclosed nutrition information—which had been held to be preempted by the federal Nutrition Labeling and Education Act (NLEA). Under the NLEA, restaurants generally are exempt from federal mandatory food nutrition labeling rules, but restaurants that choose to make nutrition content “claims” are subject to Food and Drug Administration regulation.

Federal Preemption

The court rejected the contention of the New York State Restaurant Association that New York City’s 2008 regulation, like the 2006 version, was federally preempted

The federal statutory scheme regulating labeling and branding of food is a “labyrinth,” the court said. A series of agency regulations interpreting the NLEA sometimes appeared to conflict and were difficult to harmonize.

The court determined that Congress intended to exempt restaurant food from the preemption provisions that were necessary to allow food to be sold interstate. In requiring chain restaurants to post calorie information on their menus, New York City merely stepped into a sphere that Congress intentionally left open to state and local governments.

First Amendment

In addressing the restaurant association’s First Amendment challenge, the court acknowledged that restaurants are protected by the Constitution when they engage in commercial speech. However, the First Amendment is not violated when the regulation at issue mandates a simple factual disclosure of caloric information and is reasonably related to New York City’s goal of combating obesity, the court held.

The opinion,New York Restaurant Association v. New York City Board of Health, will be reported in CCH Advertising Law Guide.