Thursday, October 07, 2021

Ice Cube's case against Robinhood melts again

Jackson v. Robinhood Markets, Inc., No. 21-cv-02304-LB (N.D. Cal. Sept. 20, 2021)

Previously, the court dismissed Ice Cube’s ROP and false endorsement claims for lack of standing because pleading an appearance in a financial newsletter does not suffice to plead endorsement. (Is that lack of Article III standing? Before TransUnion I would probably have said no, but after TransUnion I’m no longer so sure.

Still used in Robinhood's newsletter, captioned Correct yourself before you wreck yourself

Jackson repled Lanham Act claims only, and the court found that he hadn’t fixed the deficiencies in the complaint. Robinhood’s article described a market correction for tech stocks and paraphrased a line from one of his songs, “Check yo self before you wreck yo self,” as “Correct yourself before you wreck yourself,” illustrated with a picture from a movie in which Ice Cube appeared.

The amended complaint cites congressional testimony and SEC filings to illustrate that [the newsletter] Robinhood Snacks is a commercial product that entices new users to sign up for the app and offers digestible educational content that also satisfies certain financial regulatory requirements. It adds allegations about its demographics and the appeal of celebrities like Ice Cube (and its celebrity endorsers Jay-Z, Nas, and Snoop Dog) to support the point that using Ice Cube’s picture and phrase created consumer confusion and suggested Ice Cube’s endorsement of its products.

However, this still failed to plead injury in fact “Robinhood’s use of Ice Cube’s image and phrase does not suggest Ice Cube’s endorsement of Robinhood’s product.” (The court doesn’t say it this way, but: there are many “commercial products” that consist of “noncommercial speech,” such as Naomi Novik’s new novel The Last Graduate which I am very excited to buy! Implicit in the reasoning is that a celebrity appearance in noncommercial speech is not itself enough to suggest endorsement.)

If unauthorized use of Ice Cube’s image suggested endorsement, that would constitute injury in fact. “But the image and phrase are not an endorsement: they illustrate a point in the newsletter about a market correction in tech stocks.” The case law requires more “more than alleged unauthorized use” to

plead implied endorsement. Again, the court doesn’t say as much, but the cited cases involved conventional ads for a separate product (White v. Samsung, the Waits case, etc.), or appearance on product labels (Monk v. N. Coast Brewing Co. Inc., No. 17-cv-05015-HSG, 2018 WL 646679) (N.D. Cal. Jan. 31, 2018).

I still think this is about substantive failure, not Article III standing, but clearly we’re in a period of standing transition.

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