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Maloney v. T3Media, Inc.

United States Court of Appeals, Ninth Circuit

April 5, 2017

Patrick Maloney, on behalf of himself and all others similarly situated; Tim Judge, on behalf of himself and all others similarly situated, Plaintiffs-Appellants,
v.
T3Media, Inc., DBA Paya.com, a Colorado corporation, Defendant-Appellee.

          Argued and Submitted February 17, 2017 Pasadena, California

         Appeal from the United States District Court for the Central District of California No. 2:14-cv-05048-AB-VBK Andre Birotte, Jr., District Judge, Presiding

          John M. DeStefano (argued), Robert B. Carey, and Leonard W. Aragon, Hagens Berman Sobol Shapiro LLP, Phoenix, Arizona, for Plaintiffs-Appellants.

          Kelli L. Sager (argued), Karen A. Henry, Eric M. Stahl, and Diana Palacios, Davis Wright Tremaine LLP, Los Angeles, California, for Defendant-Appellee.

          Michael Rubin and P. Casey Pitts, Altshuler Berzon LLP, San Francisco, California, for Amici Curiae the National Football League Players Association, the Major League Baseball Players Association, the National Hockey League Players' Association, the National Basketball Players Association, and the Major League Soccer Players Union.

          Sean Sansiveri, Washington, D.C., as and for Amicus Curiae National Football League Players Association.

          David Prouty, New York, New York, as and for Amicus Curiae Major League Baseball Players Association.

          Don Zavelo, Toronto, Ontario, as and for Amicus Curiae Counsel National Hockey League Players' Association.

          Gary Kohlman, New York, New York, as and for Amicus Curiae National Basketball Players Association.

          Jon Newman, Sherman Dunn Cohen Leifer & Yellig P.C., Washington, D.C., for Amicus Curiae Major League Soccer Players Union.

          Nancy E. Wolff, Cowan DeBaets Abrahams & Sheppard LLP, New York, New York, for Amici Curiae Associated Press, Digital Media Licensing Association, Getty Images (US), Inc., Graphic Artists Guild, National Press Photographers Association, Inc., PhotoShelter, Inc., Professional Photographers of America, Shutterstock, Inc. and Zuma Press, Inc.

          Bruce D. Brown and Gregg P. Leslie, Reporters Committee for Freedom of the Press, Washington, D.C., for Amici Curiae the Reporters Committee for Freedom of the Press and 22 Media Organizations.

          Before: MILAN D. SMITH, JR. and JOHN B. OWENS, Circuit Judges, and EDWARD R. KORMAN, [*] District Judge.

         SUMMARY [**]

         California Anti-SLAPP Statute / Copyright Act

         The panel affirmed the district court's order granting T3Media's special motion to strike, pursuant to California's anti-SLAPP statute, the action brought by plaintiffs/former student-athletes Patrick Maloney and Tim Judge, alleging that T3Media exploited their likenesses commercially.

         Plaintiffs alleged that T3Media exploited their likenesses by selling non-exclusive licenses permitting consumers to download photographs from the National Collegiate Athletic Association's Photo Library for non-commercial use. Plaintiffs asserted statutory and common law publicity-right claims and an unfair competition claim under California law.

         The California anti-SLAPP statute, Cal. Civ. Proc. Code § 425.16, was enacted to allow for early dismissal of meritless first amendment cases aimed at chilling expression though litigation.

         Section 301 of the federal Copyright Act adopted a two-part test to determine whether a state law claim was preempted by the Act; first, whether the subject matter of the state claim fell within the subject matter of copyright, as described in 17 U.S.C. §§ 102 and 103; and second, if so, whether the rights asserted under state law were equivalent to the rights contained in 17 U.S.C. § 106.

         At step one of the Copyright Act test, the panel held that the subject matter of the state law claims fell within the subject matter of copyright. Specifically, the panel held that a publicity-right claim may proceed when a likeness is used non-consensually on merchandise or in advertising; but where a likeness has been captured in a copyrighted artistic visual work and the work itself is being distributed for personal use, a publicity-right claim is little more than a thinly-disguised copyright claim because it seeks to hold a copyright holder liable for exercising his exclusive rights under the Copyright Act. The panel concluded that plaintiffs' publicity-right claims and the derivative Unfair Competition Law claim challenged control of the artistic work itself, and accordingly, the subject matter of the state law claims fell exclusively within the subject matter of copyright.

         At step two, the panel held that the rights plaintiffs asserted were equivalent to rights within the general scope of copyright.

         The panel concluded that plaintiffs' state law claims were preempted by section 301 of the federal Copyright Act because plaintiffs sought to hold T3Media liable for exercising rights governed exclusively by copyright law. The panel further held that plaintiffs could not demonstrate a reasonable probability of prevailing on their challenged claims; and the district court did not err in granting the special motion to strike, and dismissing without leave to amend.

          OPINION

          Milan D. Smith, Jr., Circuit Judge

         Former student-athletes Patrick Maloney and Tim Judge allege that defendant T3Media, Inc. (T3Media) exploited their likenesses commercially by selling non-exclusive licenses permitting consumers to download photographs from the National Collegiate Athletic Association's (NCAA) Photo Library for non-commercial art use. Maloney and Judge assert statutory and common law publicity-right claims and an unfair competition claim under California law. The district court held that the federal Copyright Act preempts plaintiffs' claims and granted T3Media's special motion to strike pursuant to California's anti-SLAPP statute. We affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         A. The Parties

         Plaintiffs Patrick Maloney and Tim Judge are former NCAA student-athletes who played for the Catholic University (CU) men's basketball team between 1997 and 2001. In their final year at CU, they made it all the way to the Division III national championship game, and helped lead the underdog Cardinals to an upset 76-62 victory over the William Paterson University Pioneers. The game's drama was captured in a series of photographs depicting the plaintiffs in play, and later posing as members of the team with CU's first-ever national championship trophy. The NCAA owns or controls the copyright to these photographs. It accordingly placed them into its collection, the NCAA Photo Library.

         T3Media provides storage, hosting, and licensing services for a wide variety of digital content. In 2012, it contracted with the NCAA to store, host, and license the images in the NCAA Photo Library. The NCAA Photo Library itself contains thousands of photographs chronicling seventy years of NCAA sports history. Until 2014, T3Media made the photographs available to the public through its website, Paya.com.

         Consumers could view digital thumbnails of the images contained in the NCAA Photo Library on Paya.com, and obtain for $20 to $30 a non-exclusive license permitting them to download a copy of a chosen photograph. Brief descriptions of the events depicted in the images accompanied the digital thumbnails.[1] Users were also required to assent to a "Content License Agreement" in order to download one of the photographs. Pursuant to that agreement, consumers could "use a single copy of the image for non-commercial art use." Consumers did not obtain "any right or license to use the name or likeness of any individual (including any athlete, announcer, or coach) appearing in the Content in connection with or as an express or implied endorsement of any product or service."

         B. Procedural History

         Plaintiffs commenced this action in the Central District of California in June 2014. They allege that T3Media exploited their names and likenesses commercially by selling photographs on Paya.com depicting their 2001 triumph. They purport to represent a putative class "of all current and former NCAA student-athletes whose names, images, and likenesses have been used without their consent by [T3Media] for the purpose of advertising, selling, or soliciting purchases of the photographs themselves." The complaint asserts claims for violation of California's statutory right of publicity, Cal. Civ. Code § 3344, common law right of publicity, and Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq.[2]

         In October 2014, T3Media moved to strike the complaint pursuant to California's anti-SLAPP statute. Cal. Civ. Proc. Code § 425.16. T3Media argued that the federal Copyright Act preempts plaintiffs' claims, that they are barred by the First Amendment, and that California's statutory exemption for news, public affairs, or sports broadcasts or accounts precludes liability for any publicity-right violations. The district court granted T3Media's motion to strike on March 6, 2015, holding that the Copyright Act preempts plaintiffs' claims, and declining to reach the other defenses.

         According to the district court, the plaintiffs asserted rights that fell within the subject matter of copyright because their claims derived from the licensing of copyrighted photographs, which were original works of authorship fixed in a tangible medium of expression under the circumstances. The court rejected plaintiffs' argument that a publicity-right claim involving a photograph is not subject to preemption. It distinguished between claims derived from "selling a copyrighted photograph containing an athlete's likeness, " which it said require preemption, and claims based on "using the athlete's likeness contained in the photograph for some other purpose, " which it said do not. The district court also concluded that plaintiffs were asserting rights equivalent to the exclusive rights contained in the Copyright Act because they did not identify a use of their names or likenesses "independent of the display, reproduction, and distribution of the copyrighted images in which they are depicted." Lastly, the district court found that the plaintiffs' UCL claim was derivative of the publicity-right claims, and thus concluded that it failed because the publicity-right claims were preempted by the Copyright Act. The court denied plaintiffs' request for additional discovery because the identified topics did not bear on the issue of preemption. The court also acknowledged that plaintiffs had been afforded ...


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