California Supreme Court Issues Key Ruling in Misappropriation Case
In a unanimous decision, the California Supreme Court has held that the single publication rule applies to claims for misappropriation and right of publicity, just as it does for defamation and other content-based tort claims. The Court also rejected the argument that the “discovery rule” should apply to misappropriation claims arising from publications that are widely distributed, even when the claim involves the alleged use of the plaintiff’s image in an advertisement or on a product label. Christoff v. Nestlé, S155242 (Aug. 17, 2009).
Plaintiff Russell Christoff was a professional model who claimed that he was unaware that his image was being used by defendant Nestlé USA on millions of labels for Taster’s Choice instant coffee, with the use continuing for more than five years before Christoff purportedly “recognized” his photograph on a jar of coffee on a store shelf. Christoff sued Nestlé for statutory and common law misappropriation, among other claims. The trial court rejected Nestlé’s motion for summary judgment based on the statute of limitations, holding that California’s Uniform Single Publication Act (Cal. Civil Code § 3425.3) did not apply to claims for the alleged unauthorized use of the plaintiff’s likeness. Although a two-year statute of limitations applied to Christoff’s claims, the trial court further held that the “rule of delayed discovery” applied, such that Christoff could seek damages extending back to Nestlé’s first use of his image if he could prove that he had not previously known or suspected that his photograph was being used. After a jury trial, at which the proper means of evaluating damages was hotly contested, the jury ruled in favor of Christoff and awarded him more than $15 million in damages.
The Court of Appeal reversed, finding that the trial court should have applied the single publication rule, and remanded the case for further proceedings in the trial court on the issues of whether the plaintiff’s failure to “discover” the use was caused in any way by Nestlé, and whether there had been any “republication” of Christoff’s image within the two-year statute of limitations period for which he could recover damages. The Court of Appeal also held that the jury’s award of more than $15 million in profits attributable to the use of Christoff’s image was not supported by substantial evidence, and reversed the jury’s quantum meruit award. The California Supreme Court granted review.
California Supreme Court ruling
Although the Supreme Court granted Christoff’s petition for review, its unanimous decision largely rejected his legal arguments in favor of the positions presented by Nestlé and by its amici. First, the Court rejected Christoff’s argument that the Uniform Single Publication Act only applies to “defamation-like” claims, not to misappropriation claims. The Court pointed to the broad language of the statute, which it held covers claims for “any tort” arising from a “single publication or exhibition or utterance, such as any one issue of a newspaper or book or magazine … or any one broadcast over radio or television ….” Opinion at 8-9.
Second, the Supreme Court held that the discovery rule—which essentially tolls the statute of limitations for certain claims until the plaintiff “discovers” the facts that give rise to the claim—does not apply to misappropriation claims that arise from widespread publications, including advertisements in the mass media and labels on products that are widely distributed. This ruling also is important for publishers, because it prevents a plaintiff from avoiding the limitations period by claiming—years after a book was published or a movie was released—that he or she “didn’t know” about the publication. Instead, the limitations period for the claim will begin to run on the date of first publication.
The Court remanded the case on the issue of whether the various uses by Nestlé of Christoff's image over a period of six years were a "single" publication, within the meaning of the USPA, or whether some of the uses were "republications" that would restart the statute of limitations. Because the trial court erroneously held that the USPA did not apply at all, the record was not developed on whether the uses were a “single” publication or involved multiple publications; consequently, the Supreme Court remanded for further proceedings on this issue.
In a concurring opinion, Justice Werdegar suggested that at minimum, the trial court should consider whether Nestlé’s uses included labels with different content from the original label, that were “aimed at different audiences.” Her concurrence suggested that while a “reissue, rebroadcast or reexhibition” might be a new publication, that did not mean that any separate printing should constitute a new publication, or that any download of material from the Internet would be a new publication. Instead, she suggested that one factor should be whether there was a “conscious and independent” or “conscious and deliberate” decision to reissue or republish, such that the statute of limitations might be restarted for the reissued or republished material. No other member of the Court joined in her concurrence.
Kelli Sager is a partner in the Los Angeles office and Rochelle Wilcox is a partner based in Sacramento, Calif. They represented a group of media, entertainment, and publishing organizations that filed an amici brief in support of Nestlé. Ms. Sager also participated in the oral argument before the California Supreme Court on behalf of the media amici.