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IP/Entertainment Case Law Updates

Serova v. Sony Music Entertainment

California Supreme Court holds that statements during marketing of Michael Jackson’s posthumous album Michael about authenticity of tracks allegedly recorded by Jackson imitator were commercial in nature, and that claims under state consumer protection and false advertising laws alleging statements were false or inaccurate were not subject to dismissal under California’s anti-SLAPP statute.

Plaintiff Vera Serova purchased the 2010 album Michael, billed as Michael Jackson’s first posthumous release, and subsequently sued Sony Music Entertainment, Jackson’s estate and MJJ Productions, Inc., each of which was involved in the release and promotion of the album, for violation of California’s consumer protection and false advertising laws. Serova alleged that Michael’s packaging and marketing misrepresented that Jackson was the vocalist on the album, when in fact certain tracks that apparently originated in a basement recording studio in the New Jersey house of a friend of Jackson’s actually featured a Jackson imitator. 

A month before the album was released, Sony offered the public “complete confidence in the results of our extensive research as well as the accounts of those who were in the studio with Michael that the vocals on the new album are his own.” Similarly, Jackson’s estate released an open letter to fans stating that several producers, engineers and other industry professionals affiliated with Jackson supported the authenticity of the new tracks. As the album’s release approached, defendants produced a video commercial juxtaposing images of Jackson with a voiceover announcing, “Michael, the brand-new album from the greatest artist of all time.” When the album was released, its front cover contained images of Jackson, while its back cover included a track listing and stated, “This album contains 9 previously unreleased vocal tracks performed by Michael Jackson.” Serova, however, was not convinced and hired her own audio expert, who concluded that Jackson was “very likely” not the source of the vocals on three of the tracks at issue. Serova filed her suit purportedly on behalf of a class of all California purchasers of the three tracks and targeted the video commercial, the estate’s letter and the album packaging as containing allegedly false statements.

Defendants filed a special motion to strike Serova’s claims under California’s anti-SLAPP law, which provides a mechanism for early dismissal of suits that arise from a defendant’s exercise of free speech rights in connection with a public issue. The Superior Court partially granted defendants’ motion, holding that the estate letter constituted noncommercial speech, but concluded that the album packaging and video were commercial speech that could be sufficiently false or misleading to permit the lawsuit to proceed. Defendants appealed, but Serova did not—removing the estate letter from the dispute on appeal. The Court of Appeal reversed, holding that the remaining statements were more than mere commercial speech for purposes of the First Amendment and therefore immune from California’s consumer protection and false advertising statutes. Serova appealed, and the California Supreme Court reversed the Court of Appeal’s decision. 

At issue on appeal were Serova’s allegations that the video and album packaging violated the Consumers Legal Remedies Act, which prohibits sellers of consumer goods from representing that goods have characteristics they lack; and the California unfair competition law, which prohibits any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising. In the Court of Appeal’s view, these statements were noncommercial because they “were directly connected to music that itself enjoyed full protection under the First Amendment” and “concerned a publicly disputed issue” (the authenticity of the vocals) about which the defendants had no personal knowledge.

The California Supreme Court disagreed and held that the album-back statement and video were unquestionably commercial speech. The court explained that commercial speech is subject to less First Amendment protection than noncommercial speech because, among other things, it is typically more easily verifiable by its disseminator and it is less likely to suffer the chilling effect of regulation due to its underlying profit motives. Because of this, commercial speech may be prohibited entirely where it is false or misleading, the court explained. Noting that commercial speech consists at its core of “speech proposing a commercial transaction,” the court analyzed three elements to determine whether defendants’ statements should be classified as commercial or noncommercial: the speaker, the intended audience and the content of the message. 

On the first element, the court noted that defendants were the “speaker” and were directly promoting Michael for sale. On the second element, the court reasoned that the audience for the messages constituted potential purchasers of the album, such as Serova, and the statements therefore could induce purchases by that audience. Turning to the third element, the court explained that the content of speech is typically commercial when it includes representations of fact about the speaker, the speaker’s business, or the individual or company that the speaker represents for promotional purposes. Importantly, the court held that commercial speech that includes representations is not shielded under the First Amendment merely because it relates to a matter of public interest or controversy. The court concluded that the statements on the back of the album indicating it “contains 9 previously unreleased vocal tracks performed by” Jackson and in the video that it was “from” Jackson constituted the kind of representations of fact that classify the content of speech as commercial.

The court also rejected defendants’ argument that Michael’s promotion was noncommercial because it pertained to art and an artist. The court explained that art can be sold and promoted like any other product in the marketplace, making misrepresentations equally harmful to consumers and subject to state consumer protection laws. The court noted that the underlying policy justifications for why commercial speech is subjected to greater regulation—the speaker’s close relationship to the product, profit motive and the government’s traditional role in preventing commercial harm—applied equally when the product marketed is artistic. So too did the court hold that defendants’ statements were not so “inextricably intertwined” with an expressive work to receive the heightened protection accorded to noncommercial speech. 

Defendants separately argued that because commercial speech requires a representation of fact, the statements at issue were not commercial because their truth was not readily verifiable and thus defendants lacked knowledge of their falsity. The Court of Appeal had agreed with this argument, reasoning that defendants’ statements were not commercial because they lacked the critical element of personal knowledge. But the California Supreme Court rejected this contention, holding that knowledge and verifiability are not requirements under the analysis of the commercial or noncommercial content of speech. The court noted that these requirements would lead to inconsistent results, where two identical promotional statements might face differing regulations because of the speakers’ mental states and could have the unintended result of incentivizing speakers to intentionally avoid knowledge of the accuracy or falsity of their statements. The court concluded that speech that is otherwise commercial does not lose its commercial nature simply because a seller makes a statement without knowledge or that is difficult to verify. 

Although the court determined that statements on the album packaging constituted commercial speech, it declined to consider whether the album’s title (Michael) and the album’s artwork featuring images of Jackson constituted commercial speech, given its expressed preference for “narrower resolutions of constitutional questions.” 

Summary prepared by Frank D’Angelo and Jordan Meddy

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