Memphis Development Foundation v. FACTORS, ETC.

• Decision Date: 05 December 1977
• Docket Number: No. 77-2545.,77-2545.
• Citation: 441 F. Supp. 1323
• Parties: MEMPHIS DEVELOPMENT FOUNDATION, Plaintiff, v. FACTORS, ETC., INC., Defendant.
• Court: U.S. District Court — Western District of Tennessee

441 F. Supp. 1323

MEMPHIS DEVELOPMENT FOUNDATION, Plaintiff, v. FACTORS, ETC., INC., Defendant.

No. 77-2545.

United States District Court, W. D. Tennessee, W. D.

December 5, 1977.

Ronald S. Borod, David J. Cocke, G. Breen Bland, Jr., Memphis, Tenn., for plaintiff.

Thomason, Crawford & Hendrix, John J. Thomason, Memphis, Tenn., for defendant; Ervin, Cohen & Jessup, Beverly Hills, Cal., of counsel.

MEMORANDUM OPINION

WELLFORD, District Judge.

Plaintiff is a Tennessee "not for profit" corporation, and has sued defendant in this diversity action, a Delaware corporation, relative to the right to advertise and promote a statue of the late Elvis Presley. Elvis Presley, a resident of Memphis, died on August 16, 1977, and shortly thereafter plaintiff, in an effort to memoralize him, commissioned one Erick Parks to design and cast a bronze statue of Presley, which would be erected in his home city, Memphis. To finance the projected $200,000 cost of the project, plaintiff announced its intention to give eight-inch pewter replicas of the bronze statue to persons who contribute $25.00 or more to plaintiff. Plaintiff projects that advertisement expenses will exceed $10,000 for the project.¹

Early in his career that brought him fame and fortune, Presley granted to Col. Tom Parker the exclusive right to market his name, picture, image, likeness and personality. These rights were in fact developed and marketed through various licensing arrangements. In 1974, Parker and Presley transferred all of these "commercial Elvis Presley rights" to Boxcar, Inc., a Tennessee corporation, which thereafter was the exclusive entity through which said rights were marketed.

On August 18, 1977, following his death, Boxcar granted, by written agreement, to defendant, the exclusive right to market the commercial Elvis Presley rights throughout the world upon payment to Boxcar of $100,000 against a guarantee of $150,000. Vernon Presley signed the agreement as executor of the Elvis Presley estate and as the representative of Presley's share of Boxcar. Defendant has begun marketing under this agreement, through licensing arrangements, Elvis Presley novelty items, among which are pewter statuettes of Elvis in three castings, expressly approved by Parker and Vernon Presley.

Plaintiff alleges that defendant has taken steps to interfere with plaintiff's attempts to solicit contributions in return for the statuettes it intended to distribute and seeks to restrain such interference. Both parties agree that the fleeting nature of the market for novelties following Elvis' death requires a swift determination of defendant's claim to the exclusive marketing rights of Presley's name and likeness.

Although there are assertions of antitrust violation and claims and cross-claims for damages involved, there is a central and crucial issue of law to be decided which will determine the rights of the parties in this litigation. Basically the plaintiff contends that the right to capitalize, to exploit and to publicize the name and reputation of Elvis Presley (and particularly by statue or replica) terminated at his death. Plaintiff therefore takes the position that it had a right after his death, free from interference, to use a commissioned statue of Presley to raise money for a public, non-profit purpose. Plaintiff contends it had to seek no approval or permission from anyone connected with Presley or his estate because the right to exploit the name and image or any publicity in connection with Elvis Presley was personal to him only and expired with him.

Defendant, on the other hand, takes the opposite position that the right of publicity and use of Elvis Presley's name and reputation and incidents thereof survives, particularly under the circumstances here which are not substantially in dispute. There is no question but that Elvis Presley enjoyed national and even worldwide fame as a singer, performer, actor and entertainer. He enjoyed the full benefits of the commercial use and exploitation of his name and fame during his lifetime, aided by and through an experienced business manager. Extensive efforts for his benefit were made during his lifetime under an exclusive right given by him to use and exploit commercially the Presley attributes which were well-known and valuable. The rights were restricted during his lifetime to authorized persons subject to royalties. The question now is: can an exclusive assignment to this same effect be valid and enforceable after Presley's death? If it can be, then defendant will prevail as a matter of law.

The parties have briefed and argued their respective positions thoroughly and have been of assistance to the Court in an area embodying a relative paucity of reported decisions.²

PLAINTIFF'S CONTENTIONS:

A. The right to exploit the name and likeness is a branch of the common law right of privacy.

Prosser in his Handbook of the Law of Torts (3d ed. 1964) discusses four distinct kinds of invasion of four separate rights "encompassed with the law of privacy." The last one discussed by Dean Prosser is appropriating for another's benefit the name or likeness of a person. This is also the separate subject of reference in Restatement of Torts (2d), § 652C (Tentative draft 1967). Plaintiff, however, acknowledges that this fourth area, distinct from other invasions of privacy, is also termed a "right of publicity." See Zacchini v. Scripps-Howard, 47 Ohio St.2d 224, 351 N.E.2d 454 (1976), rev'd. on other grounds, ___ U.S. ___, 97 S.Ct. 2849, 53 L.Ed.2d 965 (1977) and Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc., 202 F.2d 866 (2d Cir. 1953). The former sets out that "the `privacy' which the performer seeks is personal control over commercial display and exploitation of his personality." 351 N.E.2d at 459. Plaintiff concedes that this has also been characterized a "property right," citing Cepeda v. Swift & Co., 415 F.2d 1205 (8th Cir. 1969) and Uhlaender v. Henricksen, 316 F.Supp. 1277 (D.Minn. 1970), but plaintiff contends its proper description is that of a "proprietary right." See Motschenbacher v. R. J. Reynolds Tobacco Co., 498 F.2d 821 (9th Cir. 1974). This case, however, also notes that other courts have recognized and protected a so-called "right of publicity" under the "rubric of `property'." 498 F.2d at 825. But, maintains plaintiff, such right of Elvis Presley, however it may be characterized by these (or other) cases, to the commercial use of his name and likeness is not an inheritable right.

B. The right of publicity is not a "property right" and is not inheritable.

Several cases are relied upon by plaintiff that deal with the tax treatment of the right of publicity. Miller v. Commissioner, Internal Revenue, 299 F.2d 706 (2d Cir. 1962) involved a proceeding by Glenn Miller's widow contesting the treatment of income received by her many years after his death under an exclusive contract with a motion picture producer to produce "The Glenn Miller Story". The "specific question dividing the parties related to the meaning of the term `capital asset'" in that case. 299 F.2d at 708. The court found that Mrs. Miller did not establish the payment to her to be for a capital asset³, that it was not such "property" under the Internal Revenue Code as would qualify for capital gains treatment, because "not everything that can be called property in the ordinary sense and which is outside the statutory exclusions qualifies as a capital asset." 299 F. 2d at 710-11. Plaintiff apparently relies upon the discussion in that case questioning whether "such a property right, if it existed, could pass to the sole beneficiary under his will" (299 F.2d at 709) and the conclusion that no such "capital asset property" came into existence after Miller's death. The second case, Damon Runyon, Jr. v. United States, 281 F.2d 590 (5th Cir. 1960) reached a similar result on a New York contract made after Damon Runyon's death for a motion picture of his life and for the portrayal of the taxpayer himself therein. The court noted in the latter case a failure of the taxpayer to prove any legal right in himself to his father's life story; the taxpayer was not entitled to capital gains treatment on the payment received because New York statutory law on the "right of privacy" applied "only to a living person." 281 F.2d at 592. The court added, however, that "even though the taxpayer had a property right in the name and story of his father's life, there was nevertheless no sale of it."

Other cases relied upon by plaintiff, Maritote v. Desilu Productions, 345 F.2d 418 (7th Cir. 1965); James v. Screen Gems, Inc., 174 Cal.App.2d 650, 344 P.2d 799 (1959); and Schumann v. Lowe's, Inc., 135 N.Y.S.2d 361 (Supp. 1954) involved actions brought many years after the death of notorious or famous persons by a personal representative or kin asserting invasion of privacy on one hand causing mental suffering, and in others, misappropriation of a name. These cases held that such a right of privacy, as asserted, in the name or reputation of Al Capone or Jesse James was personal to them, and in the Schumann case that there was not demonstrated a right of inheritance or assignment shown.⁴ These latter cases do not really address the issue here in controversy; the relatives were contending about a filmed presentation of the life or activities of a person long deceased. There was no claim that a recent effort or action was asserted after death to pursue any right of publicity for commercial ends which was initiated, recognized and utilized during lifetime of the personages involved by any plaintiff. "Comment, fictionalization, and even distortion of a dead man's career do not invade the privacy of his offspring, relatives, or friends." Maritote, supra, 345 F.2d at 420. The basic complaint in these cases (except Schumann) was humiliation from false and distorted stories about the deceased. That is an entirely different area of the law of privacy and would likely...