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IP/Entertainment Case Law Updates

Jenni Rivera Enterprises LLC v. Univision Communications Inc.

In appeal over production and broadcast of TV series based on life of Mexican-American celebrity Jenni Rivera, California appellate court found that Univision’s use and broadcast were protected by First Amendment, but found that plaintiff made prima facie case against producer defendants.

Plaintiff, the entity that controls most of Rivera’s assets, Jenni Rivera Enterprises LLC, entered into a nondisclosure agreement with Rivera’s former manager, Pete Salgado, restricting his disclosure and use of personal information about Rivera and her family. In March 2016, a company owned by Salgado entered into a coproduction agreement with the defendant producers to develop, produce and deliver a TV series based on an unpublished manuscript by Salgado titled Her Real Name was Dolores. And the producers signed a term sheet with Univision to broadcast the series. 

Subsequently, JRE sued the producers, Salgado and Univision, alleging that Salgado breached a nondisclosure agreement with JRE and alleging that the producers and Univision interfered with that agreement and induced Salgado’s breach. 

Both Univision and the producers filed special motions to strike under California’s anti-SLAPP statute (Code of Civil Procedure section 425.16). The trial court denied both motions. The court of appeal reversed the denial of Univision’s anti-SLAPP motion but affirmed the denial of the producers’ motion, finding that JRE satisfied its burden under Section 425.16 of demonstrating a prima facie case of inducing breach of contract. 

Univision argued — and the court agreed — that the First Amendment barred JRE’s causes of action against the broadcaster because Univision’s actions arose out of the broadcast of matters of public interest, specifically “a truthful account of a newsworthy event about a public figure” and because its actions were not so “wrongful” or “unlawful” to overcome the First Amendment newsgathering and broadcast privilege.

The court of appeal explained that the First Amendment provides a complete defense to causes of action for interference with contract and inducing breach of contract when they arise out of the publication of “a truthful account of a newsworthy event about a public figure.” Nevertheless, “[t]he First Amendment does not ‘shield the press from torts and crimes committed in the pursuit of a story.’” 

JRE argued that Univision’s “[p]aying money to intentionally encourage tortious interference with and to induc[e] the breach of a valid contract” brought it outside the scope of First Amendment privilege because Univision committed “an independent tort” in its acquisition and use of confidential information from Salgado. Noting that California courts have not determined where intentionally interfering with a nondisclosure agreement falls on the continuum of routine reporting techniques, that court declined to make that determination in this case, instead focusing on the fact that Univision had no knowledge of the nondisclosure agreement at the time it entered into its license agreement, and after learning of the nondisclosure agreement, Univision’s actions consisted only of continuing to pay the license fees and promoting Salgado’s involvement in the series. The court determined that “even if these actions were sufficient to serve as a basis of liability for tortious interference, they are not sufficiently ‘wrongful’ or ‘unlawful’ to overcome the First Amendment newsgathering and broadcast privileges. As such, the court concluded that Univision’s use and broadcast of the series were protected by the First Amendment. 

The court, however, affirmed the trial court’s denial of the producers’ special motion to strike. To resolve a special motion to strike, a defendant must first establish that the challenged claim arises from activity protected by section 425.16 — “any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue.” If the defendant makes this showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing the probability of success. The court of appeal held that JRE did so show, “with reasonable inferences from admissible evidence, that the producers had knowledge of the nondisclosure agreement before taking actions substantially certain to induce Salgado to breach the agreement.” Specifically, the court rejected the producers’ argument that they could not have intended to interfere with the nondisclosure agreement because they were not aware of its existence when they signed their production agreement with Salgado. The court found that JRE had sufficiently alleged that the producers continued to induce and separately induced Salgado to breach the nondisclosure agreement even after they had knowledge of the nondisclosure agreement.