Christoff v. Nestlé USA, Inc.

• Citation: 62 Cal.Rptr.3d 122,152 Cal.App.4th 1439
• Decision Date: 29 June 2007
• Docket Number: No. B182880.,B182880.
• Court: California Court of Appeals Court of Appeals
• Parties: Russell CHRISTOFF, Plaintiff and Respondent, v. NESTLÉ USA, INC., Defendant and Appellant.

62 Cal.Rptr.3d 122

152 Cal.App.4th 1439

Russell CHRISTOFF, Plaintiff and Respondent, v. NESTLÉ USA, INC., Defendant and Appellant.

No. B182880.

Court of Appeal, Second District, Division 8.

June 29, 2007.

Horvitz & Levy, David M. Axelrad, Jeremy B. Rosen, John A. Taylor, Jr., Encino; Heller & Edwards, Lawrence E. Heller, Beverly Hills, and Shula R. Barash, for Defendant and Appellant.

Law Offices of Colin C. Claxon, Colin C. Claxon, San Rafael; Mayer & Glassman Law Corp., Robert David Mayer, Los Angeles; Kibre & Horwitz, Eric G. Stockel, Beverly Hills; David J. Franklyn, for Plaintiff and Respondent.

COOPER, P.J.

"No social purpose is served by having the defendant get free some aspect of the plaintiff that would have market value and for which he would normally pay." (Zacchini v. Scripps-Howard Broadcasting Co. (1977) 433 U.S. 562, 576, 97 S.Ct. 2849, 53 L.Ed.2d 965.) That is what happened in this case. Nestlé USA, Inc. (Nestlé or appellant) used Russell Christoff's image on its Taster's Choice instant coffee label without Christoff's consent and without remuneration. A jury awarded Christoff $330,000 in damages and over 15 million dollars in profits.

Nestlé argues that the jury verdict must be reversed because the cause of action was time barred. According to Nestlé, if the trial court correctly had applied the single-publication rule and a one-year statute of limitations, it would have concluded that the lawsuit filed six years after Nestlé first used Christoff's image was barred. "Under the single-publication rule, with respect to the statute of limitations, publication generally is said to occur on the `first general distribution of the publication to the public'" (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1245, 7 Cal.Rptr.3d 576, 80 P.3d 676 (Shively).) Nestlé also argues that the profits award, which was based on Civil Code section 3344, must be reversed because (1) it did not knowingly use Christoff's image without his consent; (2) Christoff was not a celebrity, and (3) Christoff did not show the profits were attributable to the use of his likeness.¹

We hold that the single-publication rule applies to a cause of action under section 3344, and that a two year statute of limitations applies to a section 3344 cause of action. As a result, unless a reasonable person in Christoff's position had no meaningful ability to discover the publication, Christoff must have filed a lawsuit within two years of when Nestlé first published his image or republished his image. We also hold Nestlé knowingly used Christoff's image without his consent; section 3344 applies to Christoff even though he is not a celebrity; and Christoff failed to provide substantial evidence showing that the 15 million dollar profit award was attributable to the use of his image.

We reverse the judgment based on the jury verdict and remand the case to the trial court for further proceedings.

FACTUAL BACKGROUND

In 1986, Russell Christoff, who was then a professional model, posed gazing at a cup of coffee, as if he enjoyed the aroma. The photo shoot was arranged by Nestlé Canada.² Christoff was paid $250 for his time and received a contract governing the use of his image, which was signed by his agent and by Nestlé Canada (Contract). The Contract provided that, if Nestl&233; Canada used the picture on a label it was designing for a brick of coffee, Christoff would be paid $2,000 plus an agency commission. The Contract also provided that the price for any other use of Christoff's image would require further negotiations. Without informing Christoff, or paying him according to the terms of the Contract, Nestlé Canada used Christoff's image on the coffee brick.

Eleven years later, in 1997, Nestlé decided to redesign its label for Taster's Choice instant coffee. For three decades, the Taster's Choice label prominently featured a "taster," that is a person peering into a cup of coffee. Amanda Steele, a Nestlé employee, explained that one goal of the redesign was to maintain the "taster" in order to retain continuity. Steele searched for high resolution artwork portraying the image of the original "taster," but was unable to locate any artwork that met the necessary specifications. Steele, however, found artwork portraying Christoff and it satisfied the requirements.

A decision was made to use Christoff's image because of his "distinguished" look and because he could create continuity with the original "taster" to whom the parties refer as Taster No. 1. Steele believed that she had authority to use Christoff's image because she knew it had been widely used in Canada. Steele never investigated the scope of the consent and never asked Christoff if he consented to the use of his image. Steele explained that "in talking to my colleague at Nestlé Canada, I believed that we had usage rights for the photo. So, I didn't think there was any need to [contact Christoff]." Christoff's image was used in the redesigned Taster's Choice label beginning in 1998. Only a portion of Christoff's face is visible and the picture is cropped just above the eyebrows. The redesigned label was used on several different Taster's Choice jars, including regular coffee, decaffeinated, and various flavors. Labels bearing Christoff's image also were produced in different languages to be sold internationally. For the label to be placed on jars sold in Mexico, Christoff's image was altered to add sideburns and darken his complexion. Jars of coffee bearing Christoff's image were included in Nestlé's multiple advertising campaigns for Taster's choice, including transit ads, coupons in newspapers, magazine advertisements, and Internet advertisements.

On June 4, 2002, Christoff discovered the use of his picture when he was shopping at a Rite Aid store and happened to see a can of Taster's Choice instant coffee.³

In 2003, Nestlé again redesigned its label using another model, James Vaccaro, as the "taster." Vaccaro was paid $150,000 for the use of his image for 10 years. The new label started circulating in May 2003, but jars of Taster's Choice with Christoff's image were still in Nestlé's inventory and could have been shipped to retailers.

PROCEDURAL BACKGROUND

In 2003, Christoff sued Nestlé, alleging causes of action for violation of section 3344, common law appropriation of likeness, quantum meruit (initially labeled "quasi-contract"), and unjust enrichment. The trial court denied Nestlé's motion for summary judgment based on the statute of limitations. The court applied a two-year statute of limitations under Code of Civil Procedure section 339. The court further concluded that the jury must determine whether Christoff knew or should have known Nestlé used his image prior to his discovery in June 2002. The trial court also denied Nestlé's motion for summary adjudication, in which it asserted that there was no evidence it knowingly used Christoff's photograph without his consent.

At trial, Nestlé vigorously objected to the testimony of Christoff's damage expert, Peter Sealy. Sealy's testimony detailed his opinion that the icon on the Taster's Choice label was responsible for five to 15 percent of Nestlé's profits from selling Taster's Choice instant coffee. This testimony was the basis for Christoff's argument that he was entitled to 10 percent of Nestlé's profits from the sale of Taster's Choice instant coffee. Christoff's accounting expert testified that, during the six-year period Nestlé used Christoff's likeness, Nestlé's total profits from Taster's Choice were $531,018,000 and, based on Sealy's testimony, Christoff was entitled to $53,101,800.

Joseph Hunter, a former partner at Ford Models, a prominent modeling agency, also testified as an expert for Christoff. According to Hunter, a model generally charges a day rate for a photo shoot and a usage fee for different uses such as packaging, billboards and transit. He valued the use of Christoff's photograph for a six-year period at $1,475,000. In addition to the six-year time period, Hunter assumed that the photo was used "in virtually all kinds of media that existed."⁴ He acknowledged that Vaccaro received $150,000 for the use of his image for a 10-year period but explained that $150,000 is a very low fee.

At the close of Christoff's case, the court granted Nestlé's nonsuit motion on the issue of punitive damages. The court found no evidence of malice.

The jury concluded as follows: (1) Nestlé knowingly used Christoff's photograph or likeness on the Taster's Choice labels for commercial purposes without Christoff's consent; (2) Prior to 2002, Christoff did not know and should not have known or reasonably suspected that his photograph was being used for commercial purposes; (3) Christoff suffered $330,000 in actual damages; (4) The profits attributable to the use of Christoff's photograph or likeness were $15,305,850; (5) The damages for the common law appropriation claim were $330,000 and for the quantum meruit claim were $15,635,850. The trial court subsequently granted Christoff's motion for attorney fees. Nestlé appealed from the judgment and the order awarding costs and attorney fees.⁵

DISCUSSION

This appeal raises four primary questions: (1) Does the single-publication rule (SPR) apply to a cause of action for appropriation; (2) What are the implications of applying the SPR to an appropriation cause of action; (3) Did Christoff prove his cause of action under section 3344; and (4) Did Christoff establish he was entitled to profits under section 3344?

We begin, in part I, with a discussion of the development of the right of publicity. Its historical roots are significant in the analysis of whether the right of publicity falls within the SPR and which statute of limitations applies to a cause of action asserting a violation of the right of publicity.

In part II, we consider the SPR in the context of Nestlé's argument that Christoff's claims are barred by the statute of limitations. According to Nestlé,...