Maloney v. T3Media, Inc.

• Decision Date: 06 March 2015
• Docket Number: No. CV 14–05048–AB VBKx.,CV 14–05048–AB VBKx.
• Citation: 114 U.S.P.Q.2d 1402,94 F.Supp.3d 1128
• Court: U.S. District Court — Central District of California
• Parties: Patrick MALONEY et al. v. T3MEDIA, INC.

94 F.Supp.3d 1128

114 U.S.P.Q.2d 1402

Patrick MALONEY et al.

v.T3MEDIA, INC.

No. CV 14–05048–AB VBKx.

United States District Court, C.D. California.

Signed March 6, 2015.

Elaine T. Byszewski, Hagens Berman Sobol Shapiro LLP, Pasadena, CA, Stuart McKinley Paynter, The Paynter Law Firm PLLC, Washington, DC, John M. DeStefano, Leonard W. Aragon, Robert B. Carey, Hagens Berman Sobol Shapiro LLP, William Sorrell Sowders, Renaud Cook Drury Mesaros PA, Phoenix, AZ, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Patrick Maloney et al.

Karen A. Henry, Kelli L. Sager, Diana Palacios, Davis Wright Tremaine LLP, Los Angeles, CA, for T3Media, Inc.

Proceedings: [In Chambers] Order Granting Defendant's Special Motion to Strike Plaintiff's First Amended Complaint (Dkt. No. 36)

ANDRÉ BIROTTE JR., Judge.

Carla Badirian, Deputy Clerk.

Pending before the Court is Defendant T3Media, Inc.'s Special Motion to Strike Plaintiffs' First Amended Complaint (“FAC”) under California's Anti–SLAPP Statute (Cal.Code Civ. Proc. § 425.16 ), filed on October 24, 2014. (Mot., Dkt. No. 36.) Plaintiffs Maloney and Judge, acting on behalf of the putative class, filed an Opposition on November 17, 2014 and Defendant filed a Reply on November 17, 2014. (Opp., Reply, Dkt. Nos. 68, 69.) This matter was taken under submission on November 25, 2014. (Dkt. No. 71.) For the reasons stated below, the Court hereby GRANTS the motion WITHOUT LEAVE TO AMEND and DISMISSES the action WITH PREJUDICE.

I. BACKGROUND

On August 25, 2014, Plaintiffs filed their First Amended Complaint (“FAC”) alleging the following claims: (1) deprivation of rights of publicity in violation of California Civil Code § 3344 ; (2) violation of rights of publicity under California Common Law; and (3) violation of the Unfair Competition Act, California Business & Professions Code § 17200 et seq. (See FAC, Dkt. No. 29.)

Plaintiffs were members of the Catholic University basketball team from 1997 until 2001. (FAC, ¶ 71.) The team won the 2001 Men's Division III National Collegiate Athletic Association (“NCAA”) championship game. (FAC, ¶ 72.) Defendant provides cloud-based storage, hosting and licensing services for digital content uploaded by third-parties. (Ernest Weiser Declaration, Dkt. No. 36–1, ¶ 3.)

In or about January 2012, Defendant entered into an agreement with the NCAA to store, host, and license photographs for which the copyrights are owned and/or controlled by the NCAA (the “NCAA Photo Library”). (Id. at ¶ 5.) The NCAA Photo Library consists of thousands of photographs over more than 70 years, including 89 NCAA championship games across 23 sports. (Id. ) The NCAA Photo Library includes photographs of Plaintiffs from the 2001 Men's Division III championship game. (Id. at ¶ 10.)

Defendant owned and operated the website Paya.com from approximately January 1, 2013 until August 1, 2014. (Id. at ¶ 6.) On Paya.com, members of the public could view digital samples and brief descriptions of the people and events depicted in the photographs of the NCAA Photo Library. (Id. ) Paya.com offered users the option to purchase a non-exclusive license to download a single copy of a photograph for their own personal use. (Id. ) Users wishing to download photographs were first required to agree to the terms and conditions of the Paya.com “Content License Agreement.” (Id. at ¶ 8; see Weiser Decl., Dkt. No. 36–1, Ex. D.) Users interested in uses other than personal could contact Defendant through a “Make an Offer” button available on the website. (Id. at ¶ 14 subsection c.)

On August 1, 2014, Defendant posted on its Paya.com website that the “Paya.com [ ] licensing marketplace is no longer available.” (See id. at ¶ 51.) Defendant indicated that it was “relocat[ing] the NCAA photo store” and directed interested users to fill out a form so that a T3Media representative could contact them. Id.

Plaintiffs propose to represent “a class action on behalf of all current and former NCAA student-athletes whose names, images, and likenesses have been used without their consent by Defendant for the purpose of advertising, selling, or soliciting purchases of the photographs” in the NCAA Photo Library. (FAC, ¶ 5.) Plaintiffs allege that Defendant's actions constitute a misappropriation of Plaintiffs' rights of publicity. (Id. at ¶¶ 75–78, 105, 108.) Plaintiffs further contend that any consent obtained by Defendant from student-athletes while they were still in school is void because NCAA rules prohibit the commercial exploitation of student-athlete images. (Id. at ¶¶ 22, 30, 44, 82.)

From those allegations, Plaintiffs assert causes of action under California Law for:

(1) Violation of the right of publicity (Cal. Civ.Code § 3344 );

(2) Violation of the right of publicity (Common Law);

(3) Violation of California Unfair Competition Law (“UCL,” Cal. Bus. & Prof.Code § 17200, et seq. )

Defendant now moves for a special motion to strike under California's statute designed to prevent “strategic lawsuits against public participation” (SLAPPs).

II. LEGAL STANDARDS

California law allows for pre-trial dismissal of SLAPPs. Cal.Code Civ. Proc. § 425.16. Although framed as a rule of state procedure, California's anti-SLAPP statute protects substantive rights and thus applies in federal court. Newsham v. Lockheed, 190 F.3d 963, 973 (9th Cir.1999). The statute is designed to discourage actions that “masquerade as ordinary lawsuits but are brought to deter common citizens from exercising their political or legal rights or to punish them for doing so.” Batzel v. Smith, 333 F.3d 1018, 1024 (9th Cir.2003) (internal quotation marks omitted). The Legislature declared “that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process.” Cal.Code Civ. Proc. § 425.16(a). The legislature amended the statute in 1997 to ensure that it “shall be construed broadly.” Id.

Under the statute, “[a] cause of action against a person arising from any act ... in furtherance of the person's right of petition or free speech ... in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” Cal.Civ.Proc.Code § 425.16(b)(1). The statute explicitly defines four categories of activities “in furtherance of ... free speech,” including “(3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of ... free speech in connection with a public issue or an issue of public interest.” Cal.Civ.Proc.Code § 425.16(e)(3)-(4).

In assessing motions to strike under the anti-SLAPP statute, the court takes a two-step approach. Navellier v. Sletten, 29 Cal.4th 82, 88, 124 Cal.Rptr.2d 530, 52 P.3d 703, 708 (Cal.2002). First, the court determines whether the defendant has met his burden of proof that the challenged cause of action arises from protected activity. Id. If the court is satisfied that the claim falls within the scope of the statute, then the burden shifts to the plaintiff to establish “a probability that [he or she] will prevail on the claim[s].” Civ. Proc.Code § 425.16(b)(1) ; id. at 88, 124 Cal.Rptr.2d 530, 52 P.3d 703. “Since an Anti–SLAPP motion is brought at an early stage of proceedings, the plaintiff's burden of establishing a probability of success is not high.” Browne v. McCain, 611 F.Supp.2d 1062, 1068 (C.D.Cal.2009) (citing Overstock.com, Inc. v. Gradient Analytics, Inc., 151 Cal.App.4th 688, 699–700, 61 Cal.Rptr.3d 29 (Cal.Ct.App.2007) ). If the plaintiff cannot meet this burden, then the anti-SLAPP motion is granted and the plaintiff's lawsuit is dismissed.

III. DISCUSSION

Defendant contends that Plaintiffs' claims fall within the scope of the anti-SLAPP statute because the claims arise from Defendant's “display, reproduction, and licensing of copyrighted photographs depicting NCAA student-athletes participating in championship games....” (Mot., p. 6 ¶ 2.) Defendant then argues that Plaintiffs cannot demonstrate a probability of prevailing on any of their claims because the claims are:

(1) preempted by Federal Copyright law;

(2) constitutionally barred under the First Amendment; and

(3) invalid because California law exempts from liability the “use of a ... likeness in connection with any news, public affairs, or sports broadcast or account.” (See Mot., pp. 9, 13, 23.)

Plaintiffs do not dispute that Defendant engaged in protected activity under the statute's first prong, but argue under the second prong that their claims meet the § 425.16 standard for probability of success on the merits. (See Opp., Dkt. No 68, p. 3 ¶ 1.)

A. Protected Activity Under Section 425.16

Although Plaintiff did not dispute the first prong, the Court must determine if Defendant met his burden of establishing that the challenged causes of action arise out of Defendant's protected activity. Cal.Code Civ. Proc. § 425.16(b)(1). This threshold showing requires Defendant to demonstrate that Plaintiffs' claims fit into one of the categories listed in Section 425.16, subdivision (e). See Navellier, 29 Cal.4th at 88, 124 Cal.Rptr.2d 530, 52 P.3d 703.

Defendant contends: (1) the “display of photographs and editorial captions on its websites falls under Section 425.16(e)(3)'s protection for publication made in a public forum in connection with a matter of public interest;” and (2) “Plaintiffs' claims fall under (e)(4), which applies to ‘conduct in furtherance of the exercise of the ... constitutional right of free speech in connection with a public issue or an issue of public interest.’ ” (Mot., pp. 6–7 (quoting Cal.Code Civ. Proc. § 425.16(e)(4) ).)

1. Public Forum

Plaintiffs' suit arises out of the “sale”¹ of NCAA student-athlete images on Defendant's Paya.com website. (See FAC,...