Cal. court says “controversial” claim is therefore not factual

Serova v. Sony Music Entertainment, 44 Cal.App.5th 103 (2020)
Hard to believe the reasoning
in this case
could get worse, but they may have achieved it. The California
Supreme Court told the court of appeals to reconsider its earlier decision in
light of FilmOn.com Inc. v. DoubleVerify Inc., 439 P.3d 1156 (Cal. 2019).  Same result, slightly different reasoning: Because
there is a dispute over the vocalist on certain recordings advertised as
“Michael Jackson” recordings, this is a “controversial” question that therefore
cannot be factual for purposes of commercial speech doctrine. In fairness to
the court of appeals, this is a known problem of using “controversial” as a
standard in a lawsuit over compelled commercial speech, where there is by
definition a controversy. I’m not even strongly committed to this decision
being wrong on the merits given the special context of an entertainment product.
But it is a bad sign of where First Amendment cases are going: disclosure cases are now contaminating ordinary falsity cases.
Serova alleged that the album cover and a promotional video
wrongly represented that Jackson was the lead singer on each of the 10 vocal
tracks on the album, when in fact he was not the lead singer on three of those
tracks. Previously, the court of appeals held that: (1) Serova’s claims arose from
conduct furthering Appellants’ right of free speech “in connection with a
public issue” under the anti-SLAPP law; and (2) Serova did not show a
probability that her claims under the UCL and the CLRA would succeed because
the claims concern noncommercial speech that is not actionable under those
statutes.   
Reaffirming its earlier reasoning, the court of appeals
concluded that FilmOn concerned only the first step of the anti-SLAPP analysis,
i.e., whether particular claims arise from conduct that the anti-SLAPP statute
protects. Specifically, FilmOn considered “whether the commercial nature of a
defendant’s speech is relevant in determining whether that speech merits
protection” under the anti-SLAPP law, and concluded that the context of a statement—including
“the identity of the speaker, the audience, and the purpose of the speech” —is
“relevant, though not dispositive, in analyzing whether the statement was made
‘in furtherance of’ free speech ‘in connection with’ a public issue.”
Here, the representations that Michael Jackson was the lead
singer on the three disputed tracks “did not simply promote sale of the album,
but also stated a position on a disputed issue of public interest.” Before the
album was released, “certain Jackson family members and others publicly claimed
that Jackson was not the lead singer,” while the Estate made a public statement
about the authenticity, making the identity of the artist “a controversial
issue of interest to Michael Jackson fans and others who care about his musical
legacy.”  Sony’s financial interest in authenticity
didn’t change that.
This case arguably falls within an exception to an exception:
the legislature amended the anti-SLAPP law to exclude commercial speech, but then
excluded ads for “any dramatic, literary, musical, political, or artistic work”
from that exclusion. Still, the court reasoned, that didn’t mean that all such
ads were necessarily within the scope of the anti-SLAPP law. There still needs
to be some connection to a “public issue” or an “issue of public interest”;
otherwise, an ad falsely claiming that a musical album contains a particular
song would be covered by the anti-SLAPP law.
In FilmOn, the state Supreme Court held that a court
must consider the context as well [as] the content of a statement in
determining whether that statement furthers the exercise of constitutional
speech rights in connection with a matter of public interest.” FilmOn alleged
disparaging statements about the Web-based entertainment programming
distributed by FilmOn.com by defendant’s confidential reports to paying clients
classifying FilmOn Web sites under categories of sites that engage in copyright
infringement and contain “adult content.” The court held that these reports
were not “ ‘in connection with’ ” an issue of public interest. It was “ ‘not
enough that the statement refer to a subject of widespread public interest; the
statement must in some manner itself contribute to the public debate.’ ”
Here, the issue of public interest was whether Michael Jackson
was in fact the singer on the three tracks. And the issue doesn’t simply
concern some trivial fact about his life, but relates to his artistic legacy;
the dispute was of widespread interest among Michael Jackson fans. This public
controversy distinguished this case from other cases about allegedly misleading
descriptions of a particular commercial product or service.
The connection between the issue and the speech is also
relevant. The speaker and the audience for the statements at issue suggested a
commercial purpose: appellants sell the album, and they made the statement to
an audience of potential purchasers. But the content still was not merely
commercial speech, and anyway FilmOn was clear that “[s]ome commercially
oriented speech will, in fact, merit anti-SLAPP protection.” The content of the
statements related directly to the issue of public interest, rather than being
tangentially connected through a generalization of the statements’ subject
matter (the  “‘synedoche theory’ of public interest”); cf.
Commonwealth Energy Corp. v. Investor Data Exchange, Inc. (2003) 110
Cal.App.4th 26, 34, 1 Cal.Rptr.3d 390 [“The part is not synonymous with the
whole. Selling an herbal breast enlargement product is not a disquisition on alternative
medicine”].)   Even though the challenged statements didn’t
refer to the controversy, they took a position on that controversy.  Unlike the statements in FilmOn, the
statements here were public and contributed to the public conversation.  
It was also relevant that Sony wasn’t selling “a typical
consumer product” but rather a product that is itself subject to First
Amendment protection. “[T]he challenged conduct in this case helped shape the
experience of the music that consumers purchased,” which was indeed the basis for
Serova’s complaint. Without anti-SLAPP protection, Sony might have decided not
to sell the disputed tracks at all; others might decide not to include songs or
other artistic works with disputed provenance in a collection “rather than
either (1) risk the expense of consumer litigation, or (2) dilute their marketing
by acknowledging doubts about the provenance of the work that they do not
share.” That would discourage protected speech.   
Then, Serova couldn’t show a probability of success because
the UCL and CLRA apply only to commercial speech. Again, the speaker and the
intended audience suggested a commercial purpose. But the content of the
challenged speech was “critically different” from purely commercial speech for
two reasons: (1) Sony’s statements “concerned a publicly disputed issue about
which they had no personal knowledge” and (2) “the statements were directly
connected to music that itself enjoyed full protection under the First
Amendment.”
Personal knowledge matters because one reason commercial
speech receives less constitutional protection than political speech is its
greater verifiability. In Nike v. Kasky, the California Supreme Court “ascribed
great significance to the fact that, ‘[i]n describing its own labor policies,
and the practices and working conditions in factories where its products are
made, Nike was making factual representations about its own business
operations.”” Thus, “Nike was in a position to readily verify the truth of any
factual assertions it made on these topics,” and that commercial regulation was
“unlikely to deter Nike from speaking truthfully or at all about the conditions
in its factories.” [Important note: not its factories. The factories were owned
by subcontractors.] Here, by contrast, Sony’s representations about the
identity of the lead singer didn’t concern its own business operations or a
fact of which it had personal knowledge. Other defendants, not the Sony defendants,
allegedly “jointly created, produced, and recorded the initial versions” of the
tracks, so the vital element of personal knowledge was missing. The court of
appeals commented that Kasky might well have come out differently “if
the statements at issue concerned the labor practices of an independent commercial
supplier who simply sold products to Nike for resale,” whereas the Kasky court
specifically noted that Nike had entered into a memorandum of understanding
assuming responsibility for its subcontractors’ compliance with local labor
laws. [Assuming responsibility is not the same thing as having personal
knowledge, by the way.]
Without personal knowledge, Sony’s statements didn’t fit
into the definition of speech that is “ ‘less likely to be chilled by proper
regulation,’ ” given the strict liability of consumer protection law.  Personal knowledge about the content of
speech is “an important feature” in determining whether speech is commercial. Without
direct involvement in the recording, from Sony’s perspective, its statements
about the identity of the lead singer “were therefore necessarily opinion.”
Appellants “could only draw a conclusion about that issue from their own
research and the available evidence.” Thus, Sony’s representations about the
identity of the singer were just statements of opinion. 
To avoid potential liability, it would have had to put a
disclaimer on the album or leave the songs off entirely. The second option
shows a chilling effect, and the first option is also constitutionally dubious
because compelled commercial speech is a First Amendment problem, as shown by National
Institute of Family & Life Advocates v. Becerra, ––– U.S. –––  (2018), which in response to Breyer’s dissent
stated that it accepted [only] “the legality of … purely factual and
uncontroversial disclosures about commercial products.” Here, any compelled
disclosure would not be “uncontroversial” by definition because “controversy
has surrounded” the disputed tracks, and it wouldn’t be “purely factual” from
Sony’s perspective because it lacked personal knowledge of the facts. Forcing
Sony to put a claim in its advertising materials with which it doesn’t agree would
be bad compelled commercial speech. Even a statement about uncertainty “implies
the existence of real controversy or doubt about the identity of the singer
even though Appellants might not believe that any reasonable doubt exists.” [Although
Sony doesn’t actually know, according to the court of appeals, so the basis of
its certainty is … an interesting question.]
Aaaaaaaaargh. The epistemological confusion here is so deep it’s
more like rot.  Sony doesn’t have “personal”
knowledge because it is a corporation and does not “know” anything. Imputing
knowledge to a corporation serves many functions, but it’s distracting rather
than helpful here.  If we took this
concept seriously for commercial speech purposes—which, to be clear, we
absolutely should not—then the companies selling quack autism cures are exempt
from regulation precisely to the extent that they are ignorantly or avariciously
parroting claims from bogus anti-scientific literature and didn’t do the
research themselves.
This whole thing is not even a correct description of Kasky!
Nike didn’t have “personal knowledge” of conditions in the factories of its
subcontractors because it had made the business decision to set itself up in a
way that offloaded risk and control to its subcontractors. Subcontractors are
independent third parties. That was the point.  Nike had hired other third parties to
monitor, but even if those third parties had “personal knowledge” of the conditions,
Nike still didn’t, by the exact same logic that is in play in this decision.
The imposition of strict liability for factual claims made
to sell products should not depend on—and never has before depended upon—the
corporate form a company has chosen to adopt, which by the way is usually unknown to
consumers.  Nike and Sony both decided to
have certain tasks performed outside the boundaries of the corporation; they
did so for reasons that are doubtless well-founded in economics, but should not
be encouraged by the structure of false advertising law—especially since, if
corporations do take advantage of this new rule, there will often be no one to hold
liable for resulting falsity. For example, ingredient suppliers don’t engage in
“advertising” to the public, and the sellers of the final product won’t have
personal knowledge of whether the ingredients are truly the ingredients. The
ingredients list on the product will therefore, according to the reasoning of the
court of appeals here, merely be the seller’s “opinion” about the ingredients.  Contrary to what the court of appeals says,
what is “purely factual” should not be and never before has been measured by
the “perspective” of the advertiser.
That’s not even getting into the invited error around
controversiality/disclosure precedents. Under this interpretation, an
advertiser seems to get to create controversy by disagreeing with the
regulator, at least if the advertiser has enough market power to get its voice
heard.
But even if you think that “controversial” serves an
important purpose in mandatory disclosure situations, the court of appeals’
reasoning here has turned every deception case into a mandatory disclosure case,
which makes no sense.  Consider: the
shark cartilage seller wants to advertise that shark cartilage cures cancer.
The regulator says: no, that’s false.  The
seller says: now my choices are to not sell shark cartilage or to put a disclaimer
on my shark cartilage saying it doesn’t cure cancer, and that’s bad compelled
speech about a controversial subject!  Those
are the exact choices Sony has. But if a commercial speaker is saying something
false, those are legitimate choices to put it to—shut up and stop fooling
people, or say something true instead—even if it believes its own claims.  
All the real work in this case is being done by the idea
that the factuality of “Michael Jackson sang this” is of a different order/regulability
than the factuality of “shark cartilage cures cancer” because of the former’s
connection to an expressive work. Making other arguments than that just screws
up First Amendment doctrine for everyone.
The court of appeals does go on to say that there’s a deep
connection between the challenged statements and the First Amendment-protected
art they promote.  Unlike the foregoing,
this is actually a legitimate argument. As long as there is a distinction
between speech that is sold and other things that are sold that happen to have
speech on them (e.g., cans of corn), this rationale will not destroy false
advertising law generally.
The court of appeals notes that “[t]he identity of a singer,
composer, or artist can be an important component of understanding the art
itself. No one could reasonably dispute that knowing whether a piece of music
was composed by Johann Sebastian Bach or a picture was painted by Leonardo Da
Vinci informs the historical understanding of the work.” I think that’s true,
but it’s interesting to consider the ideological work being done here: “Thus,
the marketing statements at issue here are unlike the purely factual product or
service descriptions constituting commercial speech in cases that Serova cites.”
There’s nothing “thus” about it!  There
is a ground truth about who was the lead vocalist on these songs, at least as
much as there is about a “representation that products were manufactured in the
United States” and about an “attorney’s certification as an expert,” two of the
cited cases.  Indeed, what counts as “made
in the USA” once you know the historical facts is often substantially more
subject to debate than how to decide who’s the lead singer on a song once you
know the historical facts, as far as I can tell.  The implications to the consumer of the
“purely factual” question of who sang a song may be complex—but then again, so are
the effects on the consumer of “made in the USA,” and of knowing how much alcohol
is in a can of beer. And there are a lot of factual statements that are, because
of how science works, provisional: right now, we think some things about aspirin
are true because that’s what the scientific consensus is; false
advertising law should rely on scientific consensus even though the ground
truths it seeks are subject to revision.
Anyway, the court continued, some statements about art could
be commercial speech—like film ads featuring fictional endorsements from a
nonexistent critic, or a statement falsely stating that a particular song is
included in an album. But not these statements, where (1) the identity of the
artist was itself an issue of public discussion and interest; and (2) Sony had
no personal knowledge of the issue.
Final note: this standard is out of whack with the usual
First Amendment rules for defamation, which are usually thought of as pretty
strong. Defamation of a public figure requires malice—knowledge or reckless
disregard for a high probability of falsity. Even if the court of appeals was
right that Sony’s scienter should matter, why shouldn’t it be enough to allege
that Sony was reckless about the truth?  Suppose, for example, that a non-Sony defendant had privately acknowledged to Sony that MJ probably wasn’t the singer. 

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