Fantasy gambling is newsworthy, doesn’t violate players’ rights of publicity

Daniels v. FanDuel, Inc., No. 16-cv-01230 (S.D. Ind. Sept.
29, 2017)
Akeem Daniels, Cameron Stingily, and Nicholas Stoner played college
football and sued FanDuel and DraftKings for violating their Indiana right of
publicity. Defendants run fantasy sports websites and mobile apps; they
assemble a group of select collegiate players—including plaintiffs—to appear on
a list of available athletes, and they assign each player a fictitious
“salary.” A customer can then buy the services of individual athletes, and each
athlete on the fantasy team scores a certain number of points in each contest
based on real-life performance.  Defendants allegedly generated roughly $3.0
billion in customer entry fees in 2015, and used athletes’ names and likenesses
in marketing.
Indiana Code Section 32-36-1-8(a) provides that a “person
may not use an aspect of a personality’s right of publicity for a commercial
purpose during the personality’s lifetime or for one hundred (100) years after
the date of the personality’s death without having obtained previous written
consent ….” The statute defines a person’s right of publicity as “a
personality’s property interest in the personality’s: (1) name; (2) voice; (3)
signature; (4) photograph; (5) image; (6) likeness; (7) distinctive appearance;
(8) gestures; or (9) mannerisms.”
The law does not apply to:
1. The use of a personality’s name,
voice, signature, photograph, image, likeness, distinctive appearance,
gestures, or mannerisms in material that has political or newsworthy value.
2. The use of a personality’s name,
voice, signature, photograph, image, likeness, distinctive appearance,
gestures, or mannerisms in connection with the broadcast or reporting of an
event or a topic of general or public interest.
3. The use of a personality’s name,
voice, signature, photograph, image, likeness, distinctive appearance,
gestures, or mannerisms in literary works.
4. The use of a personality’s name
to truthfully identify the personality as the performer of a recorded
performance.
Newsworthiness: plaintiffs argued that this exception didn’t
apply to noncommercial speech.  But the
statute only covers uses with a commercial purpose. Thus, “the exceptions must
apply to uses that are commercial in nature.” [Not all uses that have a
commercial purpose are commercial speech; the analysis here doesn’t require
understanding that, but below the conflation will cause some trouble.] 
Newsworthiness is broad under Indiana law. As a 1993 federal
court applying Indiana law wrote, “The privilege of enlightening the public is
by no means limited to dissemination of news in the sense of current events but
extends far beyond to include all types of factual, educational and historical
data, or even entertainment and amusement, concerning interesting phases of
human activity in general.” Plaintiffs argued that this 1993 case was
inapplicable because it was decided prior to the enactment of the ROP
statute.  But, of course, that’s exactly
why it applies—“[t]he legislature is presumed to know the common law and to
incorporate it into the statute except where it expressly indicates otherwise.”  Plus, a contrary holding would raise
significant constitutional issues, so avoidance supported a broad
interpretation as well. Given the breadth of the exception, plaintiffs’
athletic achievements and activities were newsworthy.
Plaintiffs argued that defendants weren’t “news
organizations” engaged in “reporting,” so they couldn’t qualify for the
exception, but neither of those were predicates for qualifying for the
exception, and the court wouldn’t read in any such requirements.  Plaintiffs then argued that the assignment of
fictitious salaries to plaintiffs and commentary posted in comment fields or in
commentary/blog portions of the sites weren’t newsworthy.  However, the statute doesn’t prohibit the use
of materials “associated with” the name, likeness, etc. of an individual—it
prohibits the use of the names and likenesses themselves. “Adopting Plaintiffs’
reading of the statute would bring an almost limitless universe of materials
within its reach, with obvious First Amendment implications.” Thus, fictitious
salaries and commentary [about those salaries?] didn’t constitute a person’s
name or likeness, and weren’t encompassed within the definition of a person’s
right of publicity. [For an example of what would be at risk with a contrary
holding, consider Joyce Carol Oates’ Blonde
or the more low-brow Alternate Presidents,
a collection of fictional stories (also, not coincidentally, including some
alternate Marilyn Monroe stories).] 
Thus, defendants’ motion to dismiss was granted on this ground.  (Defendants’ ads were also covered because
advertising related to exempt material is also exempt, which only makes sense.)
For the same reasons that the defendants’ materials were
newsworthy, they were also matters of public interest.  But the public interest exemption requires use
“in connection with the broadcast or reporting of an event or a topic.”
Defendants argued that their websites “report” information about college
sports, because they profile players on their websites; “corral [the] week’s
news, notes and injury updates;” and disseminate performance information. But
they also allow customers to create fantasy football teams.  The Ninth Circuit, in In re NCAA
Student-Athlete Name & Likeness Licensing Litig., 724 F.3d 1268, 1271 (9th
Cir. 2013), considered a similar challenge raised by former student athletes to
a video game, which allowed individuals to “control avatars representing
college football players as those avatars participate in simulated games,” and
ruled that the material at issue did not constitute “publishing or reporting.”  However, it also distinguished the video games
from the C.B.C. fantasy baseball case
because video games use “virtual likenesses” rather than just performance and
biographical data.  Here, defendants’ websites
could be used as “reference sources,” “either for purposes of playing the associated
game, or for information about the collegiate sports and athletes represented
on the websites.” This was a close call, but given the policy of defining
reporting broadly/constitutional avoidance, the court found that the materials
were “reporting” and defendants also won their motion to dismiss on that ground.
That was good, because they fared less well on their other
objections, which the court presumably addressed to save time after the
inevitable appeal.
DraftKings argued that its contests fell within the “literary
works” exception.  Other courts have
determined that video games are literary works for similar purposes, and
websites are literary works under the copyright law.  However, for the publication/reporting
exception, DraftKings tried to distinguish itself from video games, and it also
didn’t explain why “the particular features of fantasy sports competitions are
similar to the video games that courts have determined constitute literary
works.” This created factual issues not suitable for resolution at the motion
to dismiss stage.
Plaintiffs also argued that they were entitled to the
exemption for naming performers of recorded performances. The statute doesn’t
explicitly require that a protected entity be the entity that “otherwise
rightfully reproduce[s], exhibit[s], or broadcast[s] the recorded performance.”
However, defendants also used plaintiffs’ names and likenesses for purposes
other than to identify them as performers of a recorded performance. “At a
minimum, Defendants also listed selections of Plaintiffs’ athletic and statistical
achievements.” “The statute itself only lists a personality’s ‘name’ as subject
to coverage by this exception, and Defendants have offered no justification as
to why it should expanded to cover the other uses—including Plaintiffs’
likenesses—that are at issue in this case.”  [Does that mean that a greatest hits DVD would
violate the law if it talked about the players on the promo text on the back?]
The court also declined to recognize a First Amendment
defense at this stage, because it wasn’t clear (among other things) whether
defendants’ speech was noncommercial. In classifying whether “mixed” speech should
be classified as commercial or non- commercial, the Seventh Circuit has
highlighted the following relevant considerations: “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.”  [But not all speech offered for profit is “mixed”
speech—I doubt the court would think that a (non-sponsored, I have to add) NYT
article or editorial was “mixed” speech even though the NYT seeks to make a
profit. The court thought it couldn’t figure this out at the motion to dismiss
stage, even though the pleading itself apparently distinguished between
defendants’ ads and the service defendants sold, so I’d say this could be done
on a motion to dismiss.

The court also rejected defendants’ copyright preemption
argument, because the Seventh Circuit’s holding in Toney indicates that persona (etc.) isn’t copyrightable subject
matter because it can’t be fixed.  It may be that a person’s likeness can’t be fixed
in a specific photo, but if she uses the same name through time I can’t see
what’s so unfixable about the name; I guess the argument must be that the name
is just the manifestation of the unfixed persona which is really what the ROP
protects.  Still, that name is fixed in a tangible medium, like other uncopyrightable stuff as to which state-law protection is preempted.  Sigh.

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