United States: Applause Can Come With A Big Price Tag

Michael Jordan v. Jewel Food Stores, Inc.

Paying tribute to celebrity can sometimes be an expensive proposition.  A Chicago grocery store chain found this out the hard way when the U.S. Court of Appeals for the Seventh Circuit handed down its decision in Michael Jordan v. Jewel Food Stores, Inc., Case No. 12-1992 (7th Cir., Feb. 19, 2014) (Sykes, J.).

The facts are straightforward.  In 2009, basketball superstar Michael Jordan was inducted into the Naismith Memorial Basketball Hall of Fame.  Sports Illustrated decided to produce a commemorative issue to mark Jordan's Hall of Fame induction.  Jewel agreed to provide floor space to promote the issue.  In exchange, Jewel was permitted to place a full-page congratulatory notice in the commemorative issue, which purported to pay tribute to Jordan, once a mega-celebrity in Chicago.  Jordan, an unquestionably fine basketball player, but an especially astute businessman and promoter, saw in the congratulatory notice something much more—a royalty-free advertisement linking the promotion of the Jewel brand with Jordan's celebrity.

The notice combined textual, photographic and graphic elements and prominently displayed the Jewel-Osco logo and Jewel marketing slogan "Good things are just around the corner," both of which are trademarked.  The Jewel logo and slogan were positioned in the center of the page, above a photograph of a pair of basketball shoes, each of which bore Jordan's player number "23."  The congratulatory text read:

A Shoe In!  After six NBA championships, scores of rewritten record books and numerous buzzer beaters, Michael Jordan's elevation in the Basketball Hall of Fame was never in doubt!  Jewel-Osco salutes #23 on his many accomplishments as we honor a fellow Chicagoan who was "just around the corner" for so many years.

Shortly after Sports Illustrated launched its commemorative issue, Jordan filed suit against Jewel, alleging violations of the federal Lanham Act, Illinois Right of Publicity Act, Illinois Deceptive Trade Practices Act and the common law of unfair competition.  Jordan sought $5 million in damages, enhanced damages under the Lanham Act and punitive damages under state law.

Following discovery, Jewel filed a motion for summary judgment seeking dismissal of all claims on the basis that its congratulatory notice was non-commercial speech and thus protected under the First Amendment to the U.S. Constitution.  Jordan sought partial summary judgment that Jewel's conduct was not constitutionally protected.  The district court agreed with Jewel, determining that its congratulatory notice was noncommercial, constitutionally protected speech, and dismissed all claims.  Jordan appealed.

The 7th Circuit panel first expressed some doubt as to the propriety of the parties' framing of the issue on appeal because it viewed the dispute as purely a clash over private rights and not a public-law constitutional challenge.  It noted, however, that Jewel and Jordan had agreed that if Jewel's congratulatory notice was "non-commercial speech" in the constitutional sense, then the First Amendment would provide a complete defense to all claims in the lawsuit.  Consequently, the panel agreed to play in the ball court that the parties set for themselves, despite its doubts.

In determining whether Jewel's conduct constituted commercial speech, the panel applied the Supreme Court's test from Bolger v. Youngs Drug Prods. (1983).  Under that test, relevant considerations include "whether (1) the speech is an advertisement; (2) the speech refers to a specific product; and (3) the speaker has an economic motivation for the speech."   It noted that no one factor of this test is dispositive and all factors are not necessary to determine the commercial or noncommercial nature of the speech.

Analyzing the first Bolger factor, the 7th Circuit concluded that amid the celebratory applause on the occasion of Jordan's elevation to the Hall of Fame, Jewel's notice had an unmistakable commercial function—enhancing the Jewel brand in the minds of consumers.  The court further determined that this commercial function, although implicit, was easily inferred and was the dominant message.  Although the ad did not invite consumers to engage in any specific commercial transaction, the court explained that image or brand advertising is ubiquitous in all media today, and the ad implicitly encourages consumers to patronize their local Jewel-Osco store.  "The ad is a form of image advertising aimed at promoting goodwill for the Jewel-Osco brand by exploiting public affection for Jordan at an auspicious moment in his career."

The panel made quick work of the remaining two Bolger factors.  Although the Jewel congratulatory notice did not promote a specific product or service, the Court found it nevertheless promoted patronizing Jewel supermarkets.  The panel also determined that the ad had an unmistakable economic motivation— "to burnish the Jewel-Osco brand name and enhance consumer goodwill."  In view of the Bolger factors, the 7th Circuit held that Jewel's tribute to Michael Jordan in Sports Illustrated's commemorative issue qualified as commercial speech, which defeated Jewel's constitutional defense.  It reversed the district court's summary judgment in Jewel's favor and remanded.

Practice Note:  When honoring a superstar, refrain from patting your own back and promoting your goodwill.  Otherwise, be prepared to pay tribute—of the monetary kind.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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