Woulfe v. Universal City Studios LLC, No.
22-cv-00459-SVW-AGR (C.D. Cal. Dec. 20,
2022)
Plaintiffs rented Yesterday on Amazon, allegedly in
reliance on the trailer, which contained a scene/subplot that ultimately never
appeared in the final movie featuring famous actress Ana De Armas. They
allegedly watched the movie because they wanted to see De Armas and the scene
in the movie. Although expressing some skepticism, the court found that they
stated a valid false advertising claim.
Yesterday’s protagonist is a musician who, after a
head injury, discovers that no one else remembers the Beatles, and becomes
famous after performing their songs. The trailer depicts his rise in part by
showing him on a talk show with De Armas as the other guest; the host urges him
to compose a song about her in front of the audience; the song he plays, Something,
visibly affects De Armas, suggesting a potential romance between them, and they
embrace. The trailer immediately cuts to the musician’s long-term love interest
expressing dissatisfaction about the effects of fame on their relationship. De
Armas has no dialogue, and the end of the trailer says that the movie was
directed by “the Academy Award Winning Director of Slumdog Millionaire,”
written by “the writer of Love Actually,” and starred Ramesh Patel and Lily
James. (Apparently the scene was cut because test audiences didn’t like Patel’s
flirtation with a woman other than James.)
Plaintiffs brought the usual California claims, along with
claims for unjust enrichment, breach of implied and express warranty, and violation
of Maryland’s Consumer Protection Act. Defendants moved to dismiss and brought
an anti-SLAPP motion. In the Ninth Circuit, if the anti-SLAPP motion challenges
the legal sufficiency of a complaint, it’s evaluated under Rule 12 standards;
if it challenges the factual sufficiency, it’s evaluated under Rule 56
standards. This was the former type.
The trailer didn’t fall under the commercial speech
exception to the statute, because, although it was commercial speech, the
anti-SLAPP law provides that its commercial speech exception does not apply to “advertisement
or other similar promotion ... of a motion picture.” The court, following Ninth
Circuit precedent, applied anti-SLAPP law despite being a federal court, and
included the Maryland claims. The trailer qualified as conduct in furtherance
of the right of free speech regarding the movie, in connection with issues of
public interest (the impact of the Beatles on history; the process of making
movies and trailers; the fame of De Armas).
Universal’s key merits argument was that there was no
actionable misrepresentation. But the standard—whether it was probable that a
significant portion of relevant consumers, acting reasonably in the
circumstances, could be misled—was satisfied.
Universal argued that the trailer never explicitly claimed
that De Armas or her segment would be in the movie and that De Armas and the
song Something only appeared for 10-15 seconds, without De Armas ever speaking.
Thus, Universal argued that the alleged misrepresentation was too vague and
non-specific to definitely represent that viewers would see De Armas or her segment
in the movie. But explicit misstatements aren’t required. And the alleged
misrepresentation here wasn’t vague or puffery. Under these circumstances, De
Armas’s presence in the film was a specific, measurable claim.
Nor was this an unreasonable interpretation of the trailer,
despite judicially noticed facts that some trailers include scenes that
do not appear in the final movie. Plaintiffs plausibly allegedb that “[m]ovie trailers
are understood by movie viewers and consumers to convey what actors will appear
in the advertised film,” and that De Armas was famous, making it reasonable to
expect she’d appear in the film. Also, “[i]n the scene that De Armas appears
in, she is sung to by the main character, is the only person in view for
several seconds, and embraces the mam character, [and subsequently] the main love
interest in the movie sees this embrace and becomes/is visibly upset by it.”
Even Universal acknowledged that the scene “conveys a key part of the overall
story arc in the trailer: [the protagonist’s] meteoric rise to fame and how it
undoes the life he knew.” Thus, “De Armas could be viewed as more than a
fleeting background extra, and as a character that viewers would expect to see
in the movie.” Also, while unverified internet comments were weak evidence, the
inclusion of social media comments by consumers in the complaint stating that
they expected to see the segment and De Armas in the movie “assists the
plausibility of Plaintiffs’ claims.”
However, the court didn’t rely on an additional allegation
that Universal explicitly misrepresented that De Annas was in the trailer,
because the streaming service VUDU listed De Annas as a cast member, since plaintiffs
didn’t watch the movie on Vudu, nor did they watch the movie on the basis of Vudu’s
listing. Without further evidence, the court also didn’t rely on the Vudu
listing as evidence that Vudu was deceived into believing De Annas was in the
movie based on the trailer. “The Court is unaware of how Vudu determines cast
members, and to infer that Vudu made this determination based off of watching
the trailer would force the Court to engage in impermissible speculation.” [But
discovery might be interesting.]
Universal also made a slippery slope argument: If this
theory prevailed, plaintiffs could sue if a trailer didn’t represent the precise
role/speaking time/etc. for an actor. The relevant limiting principle was the
reasonable consumer test.
Now onto the latest trap that modern doctrine has laid for
federal plaintiffs: The UCL and FAL are equitable in nature, so plaintiffs had
to show that legal remedies were inadequate to qualify for monetary
restitution. Did they plead lack of an adequate remedy at law? “After all, how
can one plead a plausible claim seeking equitable restitution, when they have
pleaded a plausible claim seeking damages at the same time?” But here, plaintiffs
failed to plead a plausible claim for legal damages, so they did show lack of
an adequate legal remedy.
Universal responded that plaintiffs’ inability to obtain
damages resulted from failure on the merits, not from any inherent limitation
on a legal remedy. The mere fact that a plaintiff may ultimately fail in
proving their plausible claims for legal damages does show a lack of an
adequate remedy at law. But, where CLRA or warranty claims fail as a matter of
law, because the conduct wasn’t covered by the relevant statutes, plaintiffs
lack an adequate remedy at law.
Universal also argued that plaintiffs received the benefit of
their bargain. But this was not established as a matter of law. Universal noted
that the price of the stream, $3.99, would not have changed regardless of
whether De Armas or the segment were in the movie or not. But plaintiffs
alleged that they weren’t provided with what they paid for, and that it had
less value than what they were promised, and that was enough at the pleading
stage.
UCL: Under the unlawful prong, an ad must violate another “borrowed”
law to be actionable. The fraudulent UCL and FAL claims qualified. Plaintiffs
also argued that there was a Lanham Act false advertising violation, but they
didn’t sufficiently plead that they were injured in the relevant way: “either
by direct diversion of sales from [themselves] to defendant or by a lessening
of the goodwill associated with their products.” This was not to say that the
Lanham Act couldn’t be used as a predicate violation for the UCL, just
that they hadn’t plausibly done so.
The CLRA covers “unfair methods of competition and unfair or
deceptive acts or practices undertaken by any person in a transaction intended
to result or which results in the sale or lease of goods or services to any
consumer.” Goods, by statute, must be tangible. But buying a limited-time
license to stream a digital copy of Yesterday was neither a tangible good nor a
service under the CLRA. The Court agrees. Although Yesterday itself was
fixed in a tangible medium, what plaintiffs purchased was an intangible good.
Likewise, though the limited-time license could be interpreted as a provision
of video streaming services, “the video streaming services provided by Amazon
are irrelevant to Plaintiffs’ claim,” which depended on the underlying content
of the movie.
Similarly, warranty claims failed, because plaintiffs failed
to allege a transaction of consumer goods that would invoke either express or
implied warranties. “A ‘warranty’ that the DVD is without scratches that render
the movie unplayable is different from a warranty that makes a representation
about the underlying contents of the movie.” For claims about the latter, plaintiffs
needed to allege some transaction involving the underlying intellectual
property, but the right to stream the movie for a limited time “in no way
implicated the rights to the underlying movie itself.”
Also, plaintiffs lacked standing to seek injunctive relief.
Neither a vague interest in watching a rerelease with De Armas added back, nor anticipation
of buying or renting other movies advertised by Universal, was sufficient,
since plaintiffs didn’t allege that Universal’s misrepresentations would cross
over film to film.
First Amendment: Plaintiffs sufficiently alleged that the
trailer was false, commercial speech, defeating a First Amendment defense. Universal
argued that the trailer “bears all the hallmarks of noncommercial speech: it is
an audiovisual work that uses images, music, and dialogue to express a story,
including the themes and story arc that are contained in the full-length motion
picture,” and that permitting liability based on the inclusion of the scene
would interfere with Universal’s editorial choice in violation of Miami Herald
Publ’g Co. v. Tornillo, 418 U.S. 241 (1974).
Factors supporting a commercial speech characterization
include “[l] the speech is an advertisement, [2] the speech refers to a particular
product, and [3] the speaker has an economic motivation.” Those were all
present. The fact that the ad told a story didn’t make it noncommercial speech,
since almost any ad for a product can tell a story. “At its core, a trailer is
an advertisement designed to sell a movie by providing consumers with a preview
of the movie.” Excercising editorial discretion with respect to the content of commercial
speech doesn’t make it noncommercial.
Universal argued that it wasn’t plausible that “the primary
reason the Segment was included in the Yesterday trailer was for economic, as
opposed to artistic, reasons.” This framing was too narrow. “The commercial
speech in question is not the specific segment in question, but the trailer as
a whole. Viewed in this light, it is a reasonable inference that the trailer as
a whole was made for the primary pmpose of selling tickets, copies, and rentals
of the movie.”
Was the commercial character of the speech “inextricably
intertwined” with fully protected speech? Universal argued that the De Armas segment
was inextricably intertwined with the movie itself and the rest of the trailer,
entitling it to full First Amendment protection. But again, that was wrong. “[T]he
fact that the Segment (commercial speech) is inextricably intertwined with the
rest of the trailer (commercial speech) does not result in the conclusion that
commercial and non-commercial speech are inextricably intertwined.” It’s true
that the scenes from the movie would be noncommercial when used as part of the movie,
“when these scenes are used in the context of the trailer, they become
commercial speech.” Of course, truthful ads for expressive works are inherently
noncommercial speech because they come from the underlying work, but that wasn’t
the case here.
Universal also invoked Rogers v. Grimaldi, which has
been applied to Lanham Act claims, unfair competition claims, and false
advertising claims, and argued that it should extend to consumer protection
claims, especially since plaintiffs were trying to borrow a Lanham Act violation.
But that had been kicked out, leaving no need to use Rogers, “a rule of
construction to avoid conflict between the Constitution and the Lanham Act.” Also,
the court was “skeptical” that the Rogers framework would apply outside
of the context of a trademark claim.”
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