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IP/Entertainment Case Law Updates

Woulfe v. Universal City Studios LLC

In case alleging misrepresentation stemming from appearance of actor in movie trailer who was not included in film, district court grants in part and denies in part defendant’s anti-SLAPP motion, finding that plaintiffs’ claims arose out of protected activity in connection with public issue, but that plaintiffs had plausibly pled false advertising, unfair competition and unjust enrichment claims under California law, because general consumers could plausibly have been misled by trailer. 

Plaintiffs Peter Michael Rosza and Connor Woulfe alleged that a trailer for the movie Yesterday that contained a scene featuring the actor Ana de Armas persuaded them to spend $3.99 to rent the full movie on Amazon’s streaming service, only to find that de Armas and the scene were not in the movie. Plaintiffs brought a putative class-action suit against Universal City Studios— which acquired rights to the movie and advertised, licensed and sold the movie nationally—asserting false advertising and other related claims, including violations of California’s Unfair Competition Law (UCL), California’s False Advertising Law (FAL), Maryland’s Unfair and Deceptive Trade Practices Act (UDTPA), and California’s Consumer Legal Remedies Act (CLRA), as well as common-law unjust enrichment and breach of express and implied warranties. Plaintiffs sought to certify separate California and Maryland classes of viewers who either saw the movie at the theater or streamed it. 

Defendant Universal filed an anti-SLAPP motion and a motion to dismiss, arguing that all of plaintiffs’ causes of action should be stricken and/or dismissed because they arose out of protected activity in connection with a public issue and could not survive a motion to dismiss. The court partially granted Universal’s motion, holding that plaintiffs’ causes of action arose out of protected activity in connection with a public issue but that plaintiffs plausibly alleged their claims under the FAL and UCL and for unjust enrichment. The court dismissed plaintiffs’ CLRA and breach of warranty claims as well as their claims for injunctive relief.

At the outset, the court rejected plaintiffs’ argument that the movie trailer constitutes commercial speech and therefore falls into the commercial speech exception to the anti-SLAPP statute, noting that the statute expressly provides that the exception does not apply to “advertisements or other similar promotions” related to motion pictures. The court likewise rejected plaintiffs’ assertions that the California anti-SLAPP statute could not be applied in federal court to claims based in Maryland law, finding no case law to support that argument, and finding California district court and Second Circuit decisions to the contrary. 

Considering the first prong of the two-prong analysis under California’s anti-SLAPP statute, the court looked at whether plaintiffs’ causes of action were based on Universal’s protected free speech activity and whether it was in connection with a public issue. The court found that all of plaintiffs’ claims arose out of Universal’s creation and dissemination of the Yesterday trailer, and that the creation and dissemination of the trailer were acts in furtherance of the right to free speech, because the trailer furthers Universal’s free speech rights in the creation and release of the movie. The court also concluded that the trailer was made in connection with a public issue, because (1) the trailer is a statement concerning a person or entity in the public eye, in that it previews a fictional story about the Beatles—one of the most popular bands in history—and advances public discourse regarding their notoriety; (2) there is widespread public interest in the process of making movies and trailers; and (3) the trailer features Ana de Armas—a figure in the public eye—and advances public discourse by representing what her next role might be. That the creation and dissemination of Yesterday are matters of public interest was also demonstrated by the user reviews, ratings and interviews regarding the omission of de Armas from the movie.

On the second prong, the court considered whether plaintiffs successfully pled claims under the FAL, UCL and CLRA; for breach of express and implied warranties; and for injunctive relief and restitution. To succeed on their misrepresentation claims (FAL, UCL and CLRA), the court explained, plaintiffs would need to show that a significant portion of the general consuming public or of targeted consumers, acting reasonably under the circumstances, would probably be misled based on the trailer. The court found that plaintiffs’ misrepresentation claims were made plausible by their allegations that viewers of movie trailers expected to see the featured actors in the movie; de Armas was a relatively famous actor; the way de Armas was portrayed in the trailer made it seem like she had a significant role in the film; and plaintiffs and others expected to see de Armas and the specific scene in the movie.

The court also considered whether plaintiffs would be permitted to seek monetary restitution under the UCL and FAL and for unjust enrichment. Because the court held that plaintiffs failed to plead a plausible claim for legal damages, it held plaintiffs necessarily did not have an adequate remedy at law, which would have defeated their restitution claims. The court also rejected Universal’s argument that plaintiffs had already received the full value of what they paid for, as plaintiffs alleged that they had not received the full value of what they paid for—i.e., a film in which de Armas appeared. 

With respect to the CLRA, the court noted that the statute prohibits certain unfair methods of competition or unfair or deceptive acts or practices undertaken by any person in a transaction that is intended to result in or that results in the sale or lease of goods or services to any consumer. Noting that prior courts have held that software and licenses to access software and other intangible goods fall outside the reach of the CLRA, the court concluded that plaintiffs’ limited-time license to stream a digital copy of Yesterday is not a tangible good covered by the CLRA. 

Similarly, the court noted that claims for breach of express and implied warranties are limited to “transactions of goods.” Courts distinguish between the expressive content of movies and the tangible medium that conveys that content, as only tangible products are subject to product liability regulations, such as warranties. Here, the court held that plaintiffs’ claims do not relate to a tangible medium that embodies the intellectual property, but rather to the underlying intellectual property itself (i.e., the content of the film). To assert warranty claims in connection with the contents of the movie, plaintiffs had to allege a transaction involving the underlying intellectual property, which they did not. 

The court dismissed plaintiffs’ claims for prospective injunctive relief because it found that they could not establish actual or imminent future harm—all of plaintiffs’ potential future injuries were too speculative to establish standing for injunctive relief. 

Lastly, the court rejected Universal’s argument that the First Amendment bars plaintiffs’ claims, as the trailer constituted commercial speech, which is protected only to the extent it is true. Plaintiffs’ claims that the trailer contained misrepresentations would therefore be allowed to proceed. 

Summary prepared by Tal Dickstein and Jennifer Kahn