Agreement to One Is Not Consent to All

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[author: Darra Loganzo]

Addressing a myriad of issues involving unauthorized use of professional models’ photographs for gentlemen’s clubs’ promotional materials, the US Court of Appeals for the Second Circuit held that the district court erred in its interpretation of “consent,” and vacated and remanded to adjudicate the scope of the consent given. The Second Circuit simultaneously affirmed the district court’s dismissal of claims under the Lanham Act and New York corporate and libel law. Electra v. 59 Murray Enterprs., Case No. 19-235 (2d Cir. Feb. 9, 2021) (Pooler, J.)

Eleven famous female models, including celebrity Carmen Electra, brought claims against three gentlemen’s clubs for using photographs of the models without permission. Plaintiffs had posed for the photographs for modeling agencies and signed release agreements for those agencies to use the photos. The clubs were given these photographs through third-party contractors that used the images to promote social events, including advertisements on the clubs’ website and social media. Plaintiffs never provided the clubs with any authorization or written consent to use their photos, nor were they compensated. Plaintiffs maintained that they do not endorse the clubs and were harmed by the unauthorized use of their likeness in association with prurient activities that the clubs promote. The clubs argued that their contractors obtained the images from a catalogue source that they believed had all rights in the images.

The main issues on appeal were whether plaintiffs had provided their “written consent” to the clubs to use their photos when they signed releases with their own agencies (despite never authorizing the clubs to use the photos), and whether the releases barred their claims.

Of the 11 plaintiffs, only six were not time barred, and of those, only two had disputed terms of their agreements. The Court opined for those two plaintiffs.

Under New York Civil Rights Law §§ 50-51 (statutory right of privacy and publicity), it is a misdemeanor to “use for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person.” This protects both private individuals and those in the public eye, such as the plaintiffs, if they did not give written permission for that particular use. In deciding whether plaintiffs gave their consent for lawful use, the Second Circuit explained that there is no consent if the use exceeds the terms of the agreement, a factual inquiry into the text and terms of the releases.

The district court granted the clubs summary judgment under § 51 claims, finding that each plaintiff with a timely claim had entered into a “comprehensive” release that “grant[ed] the releasee unlimited rights to the use of the images at issue.” The plaintiffs argued that the district court erred in so finding because the record did not contain releases for the images at issue. The district court did not address whether the releases constituted written consent, but mused that it would be “inconsistent” with the statute for plaintiffs to sign unlimited releases and then claim lack of consent. The Second Circuit disagreed and found the district court’s characterization to be error because the clubs were not parties to, nor intended third-party beneficiaries in, the contracts. Thus, the plaintiffs did not give consent to the clubs under the agreements to use their photos. Written consent to one party is not a blanket agreement for all to use the images for any purpose. Rather, the Court explained that under § 51, plaintiffs are free to protect themselves from exploitation of their likeness against “all the world,” with the exception of those whom they agreed could use their likeness. Ruling that plaintiffs established that the clubs used their images without written consent, and that plaintiffs were entitled to summary judgment and a permanent injunction, the Court remanded the case for the district court to determine fair market value for purposes of calculating compensatory damages.

Plaintiffs had also appealed dismissal of their claims under the federal Lanham Act for trademark infringement, and under New York business law and libel law. The Second Circuit affirmed the dismissal of those claims. For the Lanham Act, plaintiffs failed to prove likelihood of consumer confusion based on whether plaintiffs were recognizable in the photos, as the Court found their survey of club goers’ perceptions of the ads defective. The Court also found that plaintiffs failed to prove bad faith because the clubs merely failed to investigate whether their third-party contractors had secured legal rights in the images. Plaintiffs’ general business law argument failed because they did not prove that the clubs’ business practices were deceptive, as the misconduct complained of was not consumer oriented in terms of damage; rather, it was seeking a remedy for a private injury to the plaintiffs. The Second Circuit did not find merit in the claim that the clubs committed libel based on false defamatory statements (i.e., viewers interpreting that plaintiffs were strippers at the clubs), finding that viewers could understand the ads to have multiple meanings (for example, that the plaintiffs were merely modeling for the clubs, not employed by them).

Finally, the Court addressed an issue regarding the sufficiency of a parties’ offer of judgment based on an offer and reply, finding that there had been no “meeting of the minds” on the offer because of ambiguity on the most crucial term, the compensation amount.

[View source.]

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