IP Rights and the “Public Good” Exemption to California’s Anti-SLAPP Law
Published: October 26, 2023
The Ninth Circuit was recently asked to address the “public interest” exemption to California’s anti-SLAPP law in a class action lawsuit brought by a Plaintiff whose photo and personal information were used without her consent to advertise subscriptions to a website. The case, Martinez v. ZoomInfo Technologies, Inc. (decided Sep. 21, 2023), posed interesting substantive and procedural issues concerning the interplay between one’s intellectual property rights and California’s anti-SLAPP law.
ZoomInfo is a website that utilizes a database of approximately 125 million business professionals and their pertinent information. When someone searches for a business person, either through a web search or through ZoomInfo’s website, ZoomInfo will display a “teaser profile” that shows some business information regarding a person in its database with redacted information. The “teaser profile” includes several options allowing the viewer to subscribe to ZoomInfo to gain access to additional details regarding that person’s profile.
The plaintiff, Kim Martinez, is a political and legislative director of a labor union representing public sector employees in California. ZoomInfo has a profile dedicated to her that includes information regarding her job title, her employment at the union, contact information, and the names of several of her colleagues. Her “teaser” profile includes options for a viewer to subscribe to ZoomInfo, including an option for a $10,000 annual subscription. Ms. Martinez alleged that she never used ZoomInfo and did not consent to the use of her profile for ZoomInfo to solicit subscriptions.
In September 2021, Ms. Martinez filed a lawsuit on behalf of herself and a proposed class of California citizens whose profiles may have appeared in ZoomInfo’s “teaser profiles” without their consent. Her complaint alleged that ZoomInfo violated California law with regard to its right of privacy statute in that ZoomInfo was unlawfully profiting from the class’s intellectual property, including their names and employment information.
ZoomInfo, in response to Ms. Martinez’s complaint, filed a motion to dismiss and a motion to strike under California’s anti-SLAPP statute. California’s anti-SLAPP law was enacted “to protect against `lawsuits brought primarily to chill’ the exercise of speech and petition rights” and to “encourage continued participation in matters of public significance.” The district court denied ZoomInfo’s motion to dismiss and anti-SLAPP motion to strike. ZoomInfo filed an immediate appeal to the Ninth Circuit seeking review of these rulings. (This article will not address the motion to dismiss.)
The Ninth Circuit began by addressing the issue of whether it even had jurisdiction to consider the district court’s denial of ZoomInfo’s motion to strike. The lower court denied the motion on the ground that the alleged speech at issue was “commercial speech” and therefore not protected under the statute. The Ninth Circuit concluded that because the district court did not find that one of the exemptions to the anti-SLAPP law was applicable, the Ninth Circuit was not deprived of jurisdiction to consider the appeal.
The Ninth Circuit then turned to the issue of whether the district court properly denied the anti-SLAPP motion to strike. The Ninth Circuit recognized that under California law, “before engaging in the merit analysis, [the] Court must consider any claims by the plaintiff that a statutory exemption contained in [the anti-SLAPP statute] applied.” The Ninth Circuit concluded that the district court apparently “put the cart before the horse” by failing to address the exemptions in is ruling denying the motion to strike. The Ninth Circuit noted that if the complaint satisfied an exemption to the anti-SLAPP law, it could not be subject to being stricken under the anti-SLAPP statute.
The Ninth Circuit then turned to the “public interest” exemption. It recognized that under California law, a lawsuit is not subject to the anti-SLAPP statute if it is “brought solely in the public interest or on behalf of the general public.” This requires a showing of the following three elements: (1) the plaintiff does not seek relief that is more or different than the relief sought for the general public or class; (2) an important right affecting the public interest would be furthered if the lawsuit were successful; and (3) private enforcement is necessary and would otherwise place a disproportionate financial burden on the plaintiff in relation to his or her stake in the lawsuit. The Ninth Circuit noted that ‘the public interest exemption is to be narrowly construed and applies ‘only when the entire action is brought in the public interest.’”
The primary argument raised by ZoomInfo was that Ms. Martinez could not avail herself of the public interest exemption because she sought personal relief in the lawsuit. In essence, because she was seeking damages on behalf of herself also, this would require an individualized determination that took it outside the public interest exemption. The Ninth Circuit rejected ZoomInfo’s argument in this regard.
After reviewing various California cases, the Ninth Circuit concluded: “The bottom line is that seeking individualized relief is permissible and not a death knell to the public interest exemption” when “a claim brought on behalf of the general public might include some kind of individual relief, in which case, it would have to be determined … whether that relief is greater than or different from the relief sought from the general public.”
The Ninth Circuit continued by analyzing the relief sought by Ms. Martinez in the complaint on behalf of herself and the other class members. It noted that she was not seeking any additional relief that would not apply to some or all of the other class members. Because of this fact and its analysis of other California cases, the Ninth Circuit concluded: “We cannot reasonably construe these authorities to prohibit all requested class-wide relief that might require individualized calculations to award damages.” In essence, Ms. Martinez was not seeking any relief that would not be granted to other class members if the action was successful.
The Ninth Circuit then examined the two remaining elements of the public interest exemption. First, it found that if Ms. Martinez’s lawsuit was successful, it would “enforce an important right affecting the public interest” and that it would also “confer a significant benefit” to the general public. It noted that California “has long declared a policy of protecting artists’ and other individuals’ right to control the use of their persona.” For decades, California has allowed legal action with regard to the “unauthorized use of a person’s name for commercial exploitation.” The Ninth Circuit concluded, “This longstanding protection demonstrates that California considers the right to control one’s name and likeness to be an important right affecting the public interest.”
Finally, as to the third element, the Ninth Circuit concluded that the public interest exemption should apply “because private enforcement is both necessary and disproportionately burdensome.” The Ninth Circuit reasoned that “[a]s a non-celebrity who may struggle to demonstrate the economic value of her name or likeness, Martinez may well recover only the minimum statutory damages,” which unfortunately “would not even cover the cost of litigating this action.” On the other hand, by allowing the class action lawsuit to proceed, her “personal recovery would be dwarfed by the total recovery for the putative class, which she alleges may number in the millions.” Thus, the Ninth Circuit concluded that the public interest exemption should apply, which provided an adequate basis for the denial of ZoomInfo’s anti-SLAPP motion to strike even though the district court did not analyze it under this prong.
Two of the three Justices in Martinez‘s opinion filed concurring opinions but questioned “the propriety of [the] court reviewing on interlocutory appeal denials of anti-SLAPP motions to strike.” In essence, there is a general principle in certain lawsuits in federal court that the court will apply a state’s substantive laws but not its procedural ones. The two Justices were questioning whether the California statute that allowed an immediate appeal of the denial of an anti-SLAPP motion was more procedural in nature and, therefore, could be disregarded in the federal court system. The two Justices noted that the Ninth Circuit’s position on this issue put them in the minority of other circuits that had considered similar issues. In essence, the Justices were saying that while they agreed with the denial of ZoomInfo’s anti-SLAPP motion to strike, they thought it was premature for the Ninth Circuit to consider the appeal before the lawsuit had run its course.
The Martinez case is a warning to businesses that use sample or teaser photos or profiles of people without their consent to market their services that they risk legal exposure. If sued, these businesses will be unlikely to take advantage of California’s (and presumably other states) anti-SLAPP laws to seek early dismissal of such lawsuits.