United States: AD-ttorneys@Law – June 28, 2019

In This Issue

  • Prime Rib and Primer: Boxes Trigger Subscription Suits
  • NAD Resolves a ‘We’re Number One!’ Double-Header
  • Gigi Hadid “Obliterates” Copyrights With Fair-Use Bazooka
  • Fourth Circuit Throws Open TCPA Barn Doors
  • The Root Weeds Out Ebony’s Lanham Suit

Prime Rib and Primer: Boxes Trigger Subscription Suits

The latest auto-renewal cases surface in California

Self-Surprise

Subscription boxes provide consumers with special to-order deliveries – and sometimes surprise assortments – of products, straight to their doorstep. Shipping is so standardized and easy that consumers can forgo the unexpected pleasure of odd finds they may once have encountered in brick-and-mortar shops and instead have the experience without leaving home.

Of course, boxes come with price tags, and often with long-term subscription offers for regular deliveries of goodies. And as soon as you hear the phrase “subscription offer,” you know what may be coming next: a lawsuit.

We’ve covered them before: a suit involving boxes of products for expectant mothers and another featuring boxes of healthy snack products. These cases featured allegedly shady trial offers, hidden auto-renew agreements and, in one case, compensated endorsements on the Better Business Bureau website.

Here, Put This Over Your Eye

Our latest subscription cases, both filed in May, involve an incongruous pair of boxed product categories that sound like the name of an ’80s punk rock band: meat and cosmetics.

First up is a suit brought by consumer Kyle Johnson in the Eastern District of California against Butcherbox, a Boston-based beef-to-bacon box biz (sorry). Johnson alleges that the company sent him and other class members “email follow-ups to their purchases, but has failed, and continues to fail, to provide an acknowledgment that includes the automatic renewal or continuous service offer terms” – a big no-no under California business law.

The other case is brought by California consumer Inez Vasquez-Cossio against Boxy Charm, a cosmetics delivery company, in California’s Central District. It features the same basic accusations – in fact, the wording used in the meat suit above is repeated almost verbatim in Ms. Vasquez-Cossio’s complaint.

The Takeaway

Turns out both Johnson and Vasquez-Cossio are represented by Pacific Trial Attorneys. At first glance, the firm appears to be a somewhat-new entrant to the class-action bar. But Pacific Trial Attorneys used to be the Newport Trial Group, which works out of the same office address.

And they’re interesting because they’re the subject of a RICO suit.

That suit, brought by a Florida homeopathic product company in California’s Central District in 2015, is still rattling around after getting sent up to the Ninth Circuit and back down again, and, perhaps predictably, it’s got a staggeringly long list of defense counsel.

The charges are amazing: Newport/Pacific is accused of masterminding a conspiracy through which they operated “an unlawful enterprise by paying individuals to assume the role of plaintiffs, who in fact had no bona fide basis for suit, and to initiate and maintain fabricated class action suits in order to extort money from those defendants.” That’s in addition to allegedly paying for false affidavits and inducing perjury.

True charges or a hysterical stab at revenge? We’ll let you know how it pans out.

NAD Resolves a ‘We’re Number One!’ Double-Header

Sales more important than ducats, says Division

Cruel Setup

Reckitt Benckiser was loud and proud, letting its freak flag fly in front of the National Advertising Division, and competitor company Bissell couldn’t stand it.

But let’s start at the beginning.

In the carpet kings’ first clash back in April, Bissell, producer of Scotchgard Carpet Shampoo, was sent home, defeated. Reckitt Benckiser – manufacturer of Resolve-brand carpet cleaners – challenged Bissell’s “#1 Carpet Cleaning Brand” before NAD, which held that Bissell’s claim did not hold for the overall brand, although it might apply to specific Bissell products within a specific class of cleaners.

And it all seemed over and done with.

The Takeaway

And it was, until Reckitt Benckiser celebrated its victory by making the very same claim.

This time, it was Bissell’s turn – the company went straight back to the NAD to challenge Reckitt Benckiser’s “#1 Carpet Cleaning Brand.”

And again, NAD sided with Reckitt Benckiser.

Bissell’s mistake seemed to be challenging what was, to NAD, an objective claim: Reckitt Benckiser was relying on unit sales data, rather than dollar sales figures, to support its claim. “Generally speaking, unit sales are a better fit than dollar sales to support a ‘#1 Brand’ claim where the price of products can influence a company’s ranking,” the Division said.

Remember this the next time you or a client tries to make a similar claim. Sales beats bucks.

Aside from a minor quibble – Reckitt Benckiser’s claim failed to mention either the time period or the scope of the claim in its disclaimer, a problem the company promised to fix – it was a double victory for the Resolve kids.

Gigi Hadid “Obliterates” Copyrights With Fair-Use Bazooka

Argument over Instagram post ramps up with bitter cross-filings

Grab the Popcorn

The story so far: Supermodel extraordinaire Gigi Hadid was sued in February by a company called Xclusive-Lee Inc. for allegedly copying a photo of herself that Xclusive-Lee owned and posting it to her Instagram account. Got it?

But this suit came on the heels of a previous suit, a since-settled case in which she was sued for copyright infringement in Virginia’s Eastern District by paparazzo Peter Cepeda. The accusations? Exactly the same behavior. Xclusive-Lee even cited Cepeda’s suit in its complaint as proof that Hadid knew exactly what she was doing, and why it was wrong.

Drama.

Quick Snaps

So, as promised, we bring you news of some more movement in the more recent case, including two new filings.

First is Ms. Hadid’s motion to dismiss, and it’s fun stuff: Hadid attempts to dodge the suit altogether by claiming that her posting of the photo was fair use.

In the motion, Hadid argued that “[a]ccording to [Xclusive-Lee’s] complaint, Ms. Hadid merely reposted the photograph to her Instagram page and made no effort to commercially exploit it. Her reposting thus reflected a personal purpose different than the photographer’s purpose in taking the photograph, which was to commercially exploit Ms. Hadid’s popularity.”

Moreover, the motion read, the shot was nothing but a friendly photo taken on a city sidewalk – “a factual work, not a creative one, thus favoring a determination of fair use.” Hadid also argued that she stopped and posed for the shot, and therefore had some stake in the final product’s ownership since she collaborated with the photographer.

The Takeaway

Xclusive-Lee’s opposition memo is a masterwork of outrage. Here’s a representative passage: “Concerning Hadid’s assertion that she somehow maintains joint copyright in the Photograph because she noticed the photographer and smiled at the moment the photographer chose to snap the shutter is preposterous,” Xclusive-Lee responds. “Ms. Hadid is as much a joint copyright holder in the Photograph as the subject of a biography is joint copyright holder to the words used by the author to describe her life.”

The counterargument breaks down Hadid’s motion, maintaining that her use of the work was not transformative – “Hadid has not claimed she copied and posted the Photograph for any of the established albeit narrowly defined statutory allowances, including commentary, criticism, reporting, or research.” Her argument regarding commercial use of the photograph, the complaint claims, is similarly misguided; since Hadid is a successful model, the use of the photo granted her an indirect commercial advantage.

Hadid had also argued that her posing for the camera created an implied license between the photographer and herself, and this assertion comes under withering fire:

“If a model poses for a sculptor, does she possess an implied license to appropriate the work? If an individual provides a quote to [a] reporter for a story, does she possess an implied license to appropriate the work? If an individual cooperates with an author on a biography, does she possess an implied license to appropriate the work. Of course not. If Hadid’s approach to the issue of an implied license were adopted, the copyrights of the majority of the world’s authors would be obliterated because the only requirement for an implied license would be for the subject of a work of original art would be to claim (not very convincingly) that she winked, smiled, nodded, or otherwise communicated her acceptance to the author.”

Tons of drama. More to come, we’re sure, and we’ll be following it all.

Fourth Circuit Throws Open TCPA Barn Doors

Dish Network can’t scrape Do Not Call registry claims off its plate

Kickoff

In the closing days of May, the Fourth Circuit issued an opinion on Thomas Krakauer v. Dish Network, a class action filed in 2014 in the Middle District of North Carolina. It’s an important opinion in a Telephone Consumer Protection Act landscape that’s still in upheaval over the consequences of the Supreme Court’s 2016 Spokeo decision.

It’s also quite clear-cut and emphatic.

Here are the facts of the original case. Dr. Krakauer alleges he began receiving calls in 2009 urging him to buy Dish Network’s services. The calls were placed by Satellite Systems Network (SSN), a company that made sales calls on behalf of TV service providers. Dr. Krakauer claims – wait for it – that he placed his number on the national Do Not Call (DNC) registry six years prior. Hence, the lawsuit.

The case went to trial in early January 2017, with the jury deciding that SSN was acting as Dish’s agent, that Dr. Krakauer and other class members received two calls within a 12-month period despite being on the DNC registry, and that each call merited a $400 fine under the TCPA. The court trebled the fine for knowing violations. After a year of contentious claims process, the court entered a final judgment of $61 million.

The Appeal

Dish appealed on three points, and the Fourth Circuit answered each forcefully.

First, on standing, Dish argued that Krakauer and company had not suffered concrete and particular harm as demanded by Spokeo, a suggestion the Fourth Circuit rejected handily. “Rather than paying heed to Congress’s judgment of what sort of particular and concrete harms ought to count,” the court wrote, “the appellants ask that we import the elements of common law torts, piece by piece, into any scheme Congress may devise. … Since [the harm caused by disregarding the DNC] is both particular to each person and imposes a concrete burden on his privacy, it is sufficient to confer standing. The appellant’s suggestion otherwise is nothing more than an attempt to dismember the TCPA.”

Dish also took aim at class certification. “Dish argues that the class necessarily includes a large number of people who have no statutory claim at all,” the court wrote, explaining that Dish wanted to narrow the class to subscribers alone, rather than anyone who received an improper call. Again, the appeals court was firm: “A non-subscriber who receives a call can suffer a privacy intrusion just as easily as a subscriber can. The extensive legislative history accompanying the TCPA confirms its broad reach.”

Finally, Dish challenged the jury’s ruling that it was liable for the calls placed by SSN, arguing that it had occasionally admonished the company to obey the TCPA, and in any case its contract kept SSN at arm’s length as an independent contractor rather than as an agent.

But that simply wasn’t enough for the court: “It may be that Dish believes that its warnings and admonitions should have been given greater weight by the jury,” the opinion states. “Because the jury resolved this question and had extensive evidentiary support for its conclusion, it does not matter whether Dish now believes its argument to be convincing. Dish had its chance to persuade the jury, and it lost.”

In addition, the contract between Dish and SSN shouldn’t have been the sole focus of a jury: “parties cannot avoid the legal obligations of agency by simply contracting out of them.”

The Takeaway

The Fourth Circuit’s opinion will have several effects.

First, the opinion tightly binds class certification to the TCPA statute; two calls in 12 months is enough to establish a class. This case is going to be a favorite cite for plaintiffs’ counsel. The opinion also keeps the affected class open to anyone who receives offending calls, regardless of their responsibility for the phone line, again hewing close to the TCPA text which mentions “consumers” rather than the more specific “subscribers.”

Next, companies should be on notice that it is not enough to merely ask an agent to follow the TCPA’s DNC requirements. Companies need to ensure that their agents are following the rules, or they risk a day in court.

Finally, the Fourth Circuit may become a popular battleground for TCPA plaintiffs. It’s not just a matter of legal opinion, it’s also a matter of attitude:

“[The TCPA] private cause of action is a straightforward provision designed to achieve a straightforward result,” the opinion states in one of many pointed passages. “Congress enacted the law to protect against invasions of privacy that were harming people. The law empowers each person to protect his own personal rights. Violations of the law are clear, as is the remedy. Put simply, the TCPA affords relief to those persons who, despite efforts to avoid it, have suffered an intrusion upon their domestic peace.”

The Root Weeds Out Ebony’s Lanham Suit

Storied African American magazine can’t get relief for infringing parody

Icon

The bold red “EBONY” cover logo is as recognizable as any in journalism: White letters in a bold, red, rectangular box. It’s been the signature look of one of the country’s most important African American-focused magazines since it was founded in 1945, the same year the owners also took the time to trademark the magazine’s name and logo art.

But a 75-year-long run as one of the most recognizable publications in the country means you’re bound to receive some negative attention. And a recent article published by The Root, an online journal of African American culture and politics, was rather vicious.

Fake News! (No, Really, Fake News …)

We won’t get into all the details – there are a lot of them – but the basic gist is that the Root article made a variety of accusations against the owners of Ebony, claiming that they, among other things, failed to pay their writing staff for work that had been delivered and then turned around and threw a lavish gala. (The unpaid writers sued, and then settled – The Root covered it here.)

Anchoring the article was a fake Ebony cover image that accompanied the article. It’s a reasonable mock-up of Ebony’s iconic cover until you start reading the headlines, which repeat several of the article’s assertions over a picture of Ebony owners Michael Gibson and Willard Jackson (who are called out by name).

Last December, Ebony lawyered up and sued The Root’s owner, Gizmodo Media Group, and its owner, Univision Communications, in the Southern District of New York. A slew of violations was alleged: trademark infringement, trademark dilution, unfair competition and false advertising under the Lanham Act, among others.

The Takeaway

In early June, the district court threw the whole thing out.

The first sentence of discussion in the court’s order granting Gizmodo’s motion to dismiss sets the tone: “The Lanham Act must be construed narrowly to avoid conflict with First Amendment values.”

On the infringement claims, the court ruled that the competitive relationship between the outlets did not override the free speech protections granted to a parody like the offending fake magazine cover.

The dilution claims were likewise waved off: News reporting, the court maintained, is “not actionable as dilution by blurring or dilution by tarnishment.”

As for the false advertising claims, the court held that the cover was simply not commercial speech. The Root did not gain a competitive advantage over Ebony through its parody. “Although it may implicitly invite comparison between how Plaintiff and Defendants treat their writers,” the court held, “the central message of the Accused Image, and the article in which it appears, is simply that Plaintiff should pay its writers in a timely fashion.”

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions