Georgian v. Zodiac Group, Inc., 2011 WL 3349573 (S.D. Fla.)
It's been a while since I saw a RICO claim survive summary judgment in an IP case.
Georgian purports to be a psychic who had a contract with defendant Zodiac allowing it to use her name, likeness, etc. in connection with Zodiac’s telephone psychic entertainment services. After the contract ended, though, Zodiac continued to use her name and likeness, including by using her name and likeness on websites, listing phone numbers in directories purporting to be affiliated with her, and employing telephone operators who represented to callers that they were associated with Georgian.
Of possible interest, Georgian contracted with an entity created for purposes of this litigation to which she purported to assign rights to exploit her name etc., but the court found that there was no evidence that this entity actually was in operation in competition with Zodiac and thus lacked standing.
The court rejected Zodiac’s motion for summary judgment on the §43(a)(1)(A) claims for the obvious reason. Georgian submitted evidence that she was an internationally renowned psychic who’d appeared on numerous TV and radio shows; though this was a self-serving affidavit, it could not for that reason simply be ignored. There was at least a material issue of fact on likely confusion, and indeed many of the factors clearly favored Georgian. Zodiac argued that any continuing representations about Georgian’s affiliation after the contract expired were from independent contractor-psychics for whom Zodiac was not responsible, but that was disputed.
Even without that evidence, there was evidence that Zodiac made outbound calls and left messages for potential clients representing that Georgian was still affiliated after the contract ended—in at least one case, apparently about three years after. “[A] reasonable fact finder could infer Defendants' intent from the fact that Georgian's name and likeness appeared on Defendants' website for so long after the parties' agreement expired.”
There was evidence of actual confusion from consumer affidavits based on online directory listings linking Georgian’s name with Zodiac’s phone number. Georgian had no evidence that Zodiac posted the listings or caused them to be posted. Defendants submitted evidence that the listings didn’t come from them, but resulted from primary data sources trading information without verifying it. One defendant asked some directories to remove the relevant listing, which Georgian tried to characterize as spoliation, but the court was unpersuaded: “she faults him for taking action to correct the situation that she complains of in her lawsuit.” Just because he didn’t try to demand that the directories preserve all relevant records didn’t make him complicit in the destruction of evidence; Georgian had an adequate opportunity to subpoena those directories before the defendant ever contacted the relevant website.
Still, Georgian argued that defendants were responsible for the third-party listings because they had a motive to create the listings. The court found that “[t]he mere existence of the listings, with Georgian's name and Zodiac's phone number, placed after the parties' agreement expired, is suspicious. Because Zodiac had more motive than any other party to place the subject listings, a reasonable fact-finder could infer that Zodiac indeed placed the listings. Georgian has therefore pointed to a disputed issue of material fact regarding the origin of the listings.”
On the Lanham Act false advertising claim, the court addresses the most interesting false advertising issue—materiality—by pure fiat. Defendants’ statements of affiliation/endorsement were false as of early 2007. And “[i]t is self-evident that an unauthorized endorsement has the capacity to deceive a consumer that sees or hears the representation.” As for materiality, the court stated that the question was whether statements about Georgian’s affiliation with Zodiac misrepresented an inherent quality or characteristic of the product, and the court simply said that it was, citing a case holding that confusion was likely when a terminated franchisee continues to use the former franchisor’s trademarks—even though that case was about confusion, not materiality of the confusion!
Florida right of publicity claim: Defendants argued that the internal pages on Zodiac’s website where Georgian’s name were used were not commercial and didn’t directly promote any goods or services, including telephone numbers. Georgian didn’t rebut this characterization, but the court found a disputed issue of material fact about whether this use counted as directly promoting services. “Even though the website page did not have Georgian's likeness and a psychic phone line number on the same page, a consumer searching for Georgian on the internet could find the page, see the purported affiliation for Zodiac, and then seek out Zodiac's number. Besides, even if the Court accepts Defendants position that the website was designed to attract psychic readers to the Zodiac brand (i.e., employees and affiliates), rather than consumers of Zodiac's services (i.e., clients), a fact finder could conclude that Defendants used Georgian's name to make their own business more successful by attracting more psychic readers.” Plus there was the alleged use of Georgian’s name in outbound phone calls, which would also violate her right of publicity.
Georgian’s Florida statutory deceptive & unfair trade practices claim survived for the same reasons that her Lanham Act claim did, as did her unjust enrichment claim.
Georgian’s civil RICO claim also started off well, because it’s a federal offense to knowingly use a "means of identification of another person" without lawful authority and "in connection with, any unlawful activity that constitutes ... a felony under any applicable State or local law." An individual's name is a "means of identification" under the relevant law. Thus, "racketeering activity" “includes the use of another person's name without lawful authority in a way that affects interstate commerce and in connection with any unlawful activity that constitutes a felony under Florida state law.” Meanwhile, Florida makes it a felony “to willfully and without authorization fraudulently use an individual's ‘personal identification information’ without first obtaining the person's consent,” and this also includes a name. Thus, willful, unauthorized, fraudulent use of a person’s name is a RICO predicate act. Likewise, placing an unauthorized listing on a third party website is arguably wire fraud.
What about a pattern of racketeering activity? This requires two or more predicate acts within a 10-year period that are related to one another and that demonstrate criminal conduct of a continuing nature. Circuit law requires continuity—the threat of continuing racketeering activity. A single scheme with a discrete goal doesn’t count. She didn’t allege a closed-ended pattern of racketeering, because there was just one scheme: the use of Georgian’s name etc. through various means for defendants’ own financial benefit.
However, she could also show “open-ended continuity,” if the conduct was part of defendants’ regular way of doing business or if the illegal acts threatened repetition in the future. The court found disputed issues of fact over whether the unauthorized use of her name was defendants’ regular way of doing business. The evidence was: use of her name etc. on an interior web page, now removed; at least one outbound automated phone call allegedly using her name; incidents of Zodiac psychics representing to callers that they were Georgian or that Georgian was otherwise affiliated with Zodiac when she was not; and unauthorized listings on third party websites, placed after the parties' agreement expired, that indicated Georgian was affiliated with Zodiac. Taken together, a factfinder “could determine that Zodiac's misuse of Georgian's name and likeness was their regular way of doing business.” Her RICO conspiracy claim also survived.