IP Rights and the “Public Good” Exemption to California’s Anti-SLAPP Law: An Update

In the case of Martinez v. Zoom Info Technologies, the Ninth Circuit addressed the “Public Interest” exemption to California’s anti-SLAPP law. Scott Hervey and James Kachmar talk about this case on this episode of The Briefing.

Watch this episode on the Weintraub YouTube channel here.

Show Notes:

Scott:
The 9th Circuit was recently asked to address the public interest exemption to California’s anti-SLAPP law in a proposed class-action lawsuit brought by a plaintiff whose photo and personal information were used without her consent to advertise subscriptions to the website Zoom info. The case is Martinez v. Zoom Info Technologies. My colleague James Kachmar recently wrote an article exploring the interesting substantive and procedural issues concerning the interplay between one’s intellectual property rights and California’s anti-SLAPP law that arose in this case. James is joining me today to talk about this case on this installment of The Briefing by Weintraub Tobin.

James, welcome back to The Briefing.

James:
Thanks for having me. Scott.

Scott:
James, you wrote an extremely insightful article about the holding in Martinez versus Zoom Info Technologies, Inc. Can you give us some background on the case?

James:
Sure, Scott. Zoom Info is a website. It boasts a database of approximately 125,000,000 business professionals and contains their relevant information. When someone searches for a person or a business person, either through a web search or through Zoom Info’s website, they can view a teaser profile of Zoom Info with some information about that person, such as their photo, maybe some limited business information, but most of the information is redacted. This teaser profile then contains the subscription buttons that invite the viewers to subscribe to Zoom info for a fee to access more information about that person and do other searches. The plaintiff in the case, Kim Martinez, is a political and legislative director of a labor union representing California public sector employees. Zoom Info has a profile dedicated to her that includes information regarding her job title, her employment at the union, contact information, and names of several of her business colleagues. Her teaser profile included options for a viewer to subscribe to Zoom Info, including, apparently, an option for a $10,000 annual subscription. Ms. Martinez alleged she never used Zoom Info and had not consented to the use of her profile by Zoom Info for marketing purposes.

In September 2021, Ms. Martinez filed a lawsuit against Zoom Info in federal court on behalf of herself and a proposed class of California citizens whose profiles might have been used without their consent, like hers. She claimed that Zoom info violated California law, particularly the right of privacy statute, by unlawfully profiting from her intellectual property of herself and the class. Members, such as the use of her name, photo and employment information and Zoom.

Scott:
Info responded to this filing by filing a motion to dismiss under California’s anti-SLAPP laws, correct?

James:
Yes. It filed two motions, a motion to dismiss saying that the lawsuit had no merit, and a motion to strike under the anti-SLAPP law in California. California’s anti-SLAPP laws, designed to protect against lawsuits brought primarily to suppress free speech and petition rights while encouraging participation in matters of public significance. The district court denied Zoom Info’s motions, including the motion to strike under the anti-SLAPP, which led Zoom Info to file an immediate appeal to the 9th Circuit.

Scott:
Now, California’s anti-SLAPP law includes several exemptions or exceptions where the anti-SLAPP statute may not apply. These exemptions are designed to ensure that the law is appropriately applied in cases where there are legitimate concerns or disputes that go beyond free speech and public participation. If the alleged conduct falls under one of these exemptions, it may not be protected by the anti-SLAPP statute. For example, one exemption is commercial speech. If the lawsuit is related to advertising, marketing, or other purely commercial activities, the anti-SLAPP protection may not apply. So, the 9th Circuit initially considered whether it even had jurisdiction to review the district court’s denial of Zoom Info’s anti-SLAPP motion to strike. So what happened there?

James:
This is the interesting procedural issue you mentioned in the introduction. So, under California’s anti-SLAPP law, if a court denies an anti-SLAPP motion on one of the statutory exemptions, such as the public interest exemption or commercial speech exemption, that denial may not be immediately appealed. However, here, the district court denied the motion based on its determination that Zoom Info had failed to establish the elements for anti-SLAPP relief and was not based on any of the exemptions. As such, the 9th Circuit concluded that it had jurisdiction to consider the appeal because the district court hadn’t found any applicable exemptions.

Scott:
There was a concurring opinion by two justices on that 9th Circuit ruling, right? James?

James:
Yes, Scott, there were actually two concurring opinions, but for basically the same reason. Both justices agreed with the result of the outcome that the anti-SLAPP had properly been denied. What they questioned was whether it was proper for the appellate court to consider an immediate appeal of the denial of the motion under California law. We discussed that there is, in certain cases, an immediate right to appeal. These justices decided that’s more of a procedural issue, and the federal courts aren’t necessarily bound by California procedural law.

Scott:
Interesting. But having established jurisdiction, the 9th Circuit then went on to determine whether the district court had appropriately denied Zoom Info’s anti-SLAPP motion to strike. So what happened there?

James:
So, ironically, the 9th Circuit, to get jurisdiction, found that the district court hadn’t considered an exemption. And what they really focused their opinion on then is determining that an exemption did apply. To find that the trial court had properly denied the anti-SLAPP motion, the 9th Circuit recognized that under California law, before you engage in an analysis of the merits of an anti-SLAPP motion, you should consider whether any of the claims brought by the plaintiff are subject to a statutory exemption, the public interest exemption, or the commercial speech exemption. Essentially, what the 9th Circuit found was that the district court had put the cart before the horse by failing to address the exemptions. In its ruling denying the motion to strike, the 9th Circuit noted that if a complaint satisfies an exemption to the anti-SLAPP law, it cannot be subject to being stricken under that statute, and the.

Scott:
9th Circuit looks specifically at the public interest exemption. Correct?

James:
Right. Under California law, if a lawsuit is not subject to the under California law, a lawsuit is not subject to anti-SLAPP statute if it is brought solely in the public interest or on behalf of the general public. The exemption requires a plaintiff to plead three criteria that the plaintiff’s relief sought should not differ from that which is sought for the general public. The lawsuit should further an important right affecting the public interest, and private enforcement should be necessary and not disproportionately burdensome. Zoom info in arguing that the exemption should not apply focused primarily on the plaintiff’s claim that she was seeking personal relief, I. E. Damages, for herself as part of the lawsuit, they argued this would require an individualized determination and therefore was not in the public’s interest. The 9th Circuit rejected this argument. Citing California cases that allowed individualized relief within class action lawsuits. The 9th Circuit concluded that she was not seeking any relief in addition to what she was also seeking on behalf of the class members, and therefore, the public interest exemption should apply.

Scott:
The 9th Circuit then examined the other two elements of the public interest exemption. What did the court find for those last two elements?

James:
Sure. First, it determined that Ms. Martinez’s lawsuit would enforce an important right affecting the public interest, namely the right to control the use of one’s name and likeness and that it would also confer a significant benefit to the general public in doing so. As you know, Scott, under or California has long declared a policy of protecting artists and other individuals’ rights, to control the use of their Persona.

Scott:
Yeah, California certainly does, as does New York, by the way, and some other states as well. What about the final element of the public interest exemption?

James:
As to the third element, the 9th Circuit concluded that the public interest exemption should apply because private enforcement is both necessary and disproportionately burdensome. The court reasoned that as a non-celebrity, Miss Martinez may struggle to demonstrate economic value of the use of her name or likeness and may only recover the minimum statutory damages which would not cover the cost of the litigation itself. On the other hand, by allowing the case to proceed as a class action lawsuit, her personal recovery would be dwarfed by the total recovery for the putative class, which she had alleged could number in the millions of potential class members. Thus, the 9th Circuit concluded that the public interest exemption should apply and provided an adequate basis for the trial court’s denial of the anti-SLAPP motion by Zoom Info, even though the trial court had never reached this issue.

Scott:
Interesting. So to me, when I read this case, there’s a couple of interesting things that came out to me. The first is that the 9th Circuit basically reached the same result as the district court, but the district court went about it in the wrong way. And I guess the 9th Circuit’s opinion is important because it’s important both for district courts and practitioners to first look at the exemptions and make sure that they are either applicable or not applicable before you go on to examining the elements of the SLAPP statute itself, or whether or not the party seeking the motion to strike under the anti-SLAPP laws has satisfied the elements of the anti-SLAPP law. The second thing that stood out to me was we talked a little bit about the commercial speech exemption, which to me seemed to be a layup. But the court’s analysis of the public interest exemption really seems to be like a three-point from the top of the keys. Do you have any understanding as to maybe why the court addressed what to me seemed to be the more analytical and probably maybe more challenging exemption to apply?

James:
I don’t. Scott, the court notes in its opinion that having decided the public interest exemption applied, it needed to turn to the commercial speech. All I can suggest is possibly the public interest exemption subsection comes right before the commercial speech. So having decided the first subsection, it didn’t need to turn to the second one.

Scott:
I mean, that’s probably the reason why the court did it that way. So interesting. And maybe it felt that it needed some clarification on what is or is not a public interest exemption and that class-action lawsuits may, in fact, fall under that in the, there’s, there’s a great takeaway from this case. What should businesses take from this?

James:
Well, I think the Martinez case serves as a cautionary tale for businesses that use individual photos or personal information for marketing purposes, especially without the person’s consent. The case demonstrates both their potential legal exposure if they do so, as well as the likely obstacles they face in trying to take advantage of California’s anti-SLAPP law to seek early dismissal of these types of lawsuits.

Scott:
Really interesting. James, keep writing those really great articles, and we’ll have you back again.

James:
Thanks, Scott.

Scott:
Thank you for listening to this episode of The Briefing. We hope you enjoyed this episode. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we covered today, please leave us a comment.