Jules Jordan Video, Inc. v. 144942 Canada Inc.

Ninth Circuit holds that adult filmmaker’s right of publicity claim under California state law is preempted by the federal Copyright Act and that the district court erred in entering judgment as a matter of law that plaintiff employee lacked standing to sue for infringement under the “work for hire” doctrine where plaintiff employer and plaintiff employee were one and the same.

Plaintiff adult movie actor Ashley Gasper (“Gasper”) performs under the stage name Jules Jordan and is the president and sole shareholder of plaintiff Jules Jordan Video (“JJV”). JJV is a “one-man shop,” that is, Gasper has complete control of the company. Gasper writes, produces, films, and appears in JJV’s adult videos. Defendants are adult video distributors, including 144942 Canada, Inc., d/b/a Kaytel Video Distribution, Leisure Time Video Canada, Inc., and Alain Elmaleh, the principal shareholder of the Kaytel and Leisure Time corporate defendants (collectively, the “Kaytel defendants”). In their complaint, plaintiffs alleged that defendants committed copyright infringement by making and distributing unauthorized copies of thirteen JJV DVDs and that these acts also violated Gasper’s right of publicity under California law. After additional state law claims for unfair competition and false advertising were dismissed, the infringement and right of publicity claims were tried in the district court and the jury returned a verdict for plaintiffs on both claims. The trial court entered judgment as a matter of law (“JMOL”) in part, in favor of defendants, finding that neither Gasper nor JJV had standing to assert copyright infringement claims, but rejected defendants’ argument that Gasper’s right of publicity claim was preempted by the federal Copyright Act. Both sides appealed.

On the Kaytel defendants’ appeal from the district court’s decision that Gasper’s right of publicity claim under California Civil Code § 3344 was not preempted by the Copyright Act, the Ninth Circuit held that the state claim was preempted and reversed the lower court’s decision on this point. In finding no preemption, the district court relied on KNB Enters. v. Matthews, 78 Cal.App.4th 362 (2000) (“KNB”), which held that the right of publicity claim is not preempted by the Copyright Act where “the defendant has no legal right to publish the copyrighted work.” Finding that the defendants had no legal right to distribute the JJV DVDs, the district court reasoned that the defendants did not have federal rights which could preempt plaintiffs’ state law rights and, therefore, preemption did not occur. The Ninth Circuit found that the KNB court had read both the Copyright Act, and the prior California decision Fleet v. CBS, Inc., which KNB sought to limit to its specific facts, too narrowly. “Whether a claim is preempted under Section 301 [of the Copyright Act] does not turn on what rights the alleged infringer possesses, but on whether the rights asserted by the plaintiff are equivalent to any of the exclusive rights within the general scope of the copyright. . . . If a plaintiff asserts a claim that is the equivalent of a claim for infringement of a copyrightable work, that claim is preempted, regardless of what legal rights the defendant might have acquired.” The court then reasoned that, because the essence of Gasper’s right of publicity claim is that “the Kaytel defendants reproduced and distributed the DVDs without authorization,” the claim falls within the scope of the Copyright Act and is preempted. The court accordingly reversed the district court and vacated the jury’s verdict against the Kaytel defendants on Gasper’s claim for violation of the right of publicity.

On plaintiffs’ appeal from the district court’s entry of JMOL that both Gasper and JJV lacked standing to sue defendants for copyright infringement, the Ninth Circuit again reversed the district court. The district court’s decision was based in part upon its reasoning that Gasper lacked standing to sue because the adult films at issue were “works for hire” made by Gasper as JJV’s employee and JJV was the author of the works. The district court implicitly held that JJV also lacked standing because copyright registrations for the works were in Gasper’s name, not JJV’s name, and were therefore invalid. The Ninth Circuit found that the district court’s decision was “legally erroneous, inequitable and illogical given that only Gasper or JJV could possibly own the copyrights and both were plaintiffs in the action.” In its analysis, the court rejected the district court’s conclusion that, because the films were “works for hire” created within the scope of Gasper’s employment, Gasper was not the author of the works and therefore could not have standing to sue for infringement. The appellate court reasoned that, because Gasper and JJV are alter egos for one another, no one could dispute Gasper’s testimony that both he and JJV always intended for Gasper to retain ownership of copyright in the works. The court also noted that, even if the films were works for hire, the “mistake” in listing Gasper, and not JJV, as the author of the works on the registrations was not sufficient to invalidate the copyrights and strip JJV of its standing. Concluding that “the district court erred in holding that the motion pictures were works for hire,” the Ninth Circuit reversed the district court’s grant of defendants’ motion for JMOL invalidating the jury’s verdict of infringement.

Having concluded that the district court erred in granting defendants’ motion for JMOL, the appellate court examined several of the lower court’s rulings which defendants challenged and determined that the trial was not so tainted with error that the jury’s verdict on infringement should not be reinstated. The Kaytel defendants challenged the district court’s decision to allow plaintiff’s counsel in a consolidated action brought by another adult film producer to read to the jury 716 requests for admissions (“RFAs”) as facts that had been admitted by Kaytel Distribution. Because Kaytel Distribution had not responded to the RFAs before defaulting in the action and were denied leave to respond to the RFAs after the default was vacate, the Kaytel defendants argued that it was prejudicial for the trial judge to treat the RFAs as admissions by Kaytel Distribution. Although the Ninth Circuit agreed that it was error for the trial court to treat the RFAs as admissions, the appellate court found that the harm done did not warrant a new trial in this matter. The court reached this conclusion because the jury was instructed to consider the RFAs only in the context of the consolidated sister-action (not the case brought by Gasper and JJV) and because exclusion of the 716 RFAs at issue would not have helped the Kaytel defendants in light of 99 additional RFAs for which defendants had no ground for appeal. The appellate court also rejected on procedural grounds defendants’ challenge to the jury’s verdict based upon a lengthy special verdict form used at the trial. “[A]bsent an objection and alternative form, defendants failed to properly object at trial under Fed.R.Civ.P. 51, and the issue is not preserved for review by this court.”

Concluding its analysis, the court reversed the decision of the district court, vacated the jury’s verdict in favor of Gasper on his right of publicity claim, reinstated the jury’s verdict in favor of Gasper and JJV on their copyright infringement claim, and remanded for proceedings consistent with its opinion.