Why it matters: On April 7, 2017, the Ninth Circuit revived a copyright infringement case filed by a paparazzi group against social media platform LiveJournal that the district court had dismissed on summary judgment. The paparazzi group Mavrix Photographs LLC alleged that a celebrity-fan community run by LiveJournal posted Mavrix’s photographs without authorization. In a decision with far-reaching implications regarding internet service providers’ (ISPs’) ability to use the Digital Millennium Copyright Act’s (DMCA’s) “safe harbor” defense under 17 U.S.C. § 512(c), the Ninth Circuit applied the common law of agency and held that there was a genuine issue of material fact as to whether the volunteer moderators of the celebrity-fan community were acting as LiveJournal’s agents when they posted Mavrix’s photographs. If so, then the moderators’ actions were attributable to LiveJournal and were not taken at the “direction of a user,” which the court ruled is a threshold requirement for reliance on the § 512(c) safe harbor defense.

Detailed discussion: On April 7, 2017, in Mavrix Photographs LLC v. LiveJournal Inc., the Ninth Circuit reversed the summary judgment dismissal by a Central District of California court of the copyright infringement suit brought by paparazzi group Mavrix Photographs against social media platform LiveJournal. Mavrix had sued LiveJournal for copyright infringement because a moderated celebrity-fan community run by LiveJournal, called “Oh No They Didn’t!” (ONTD), posted 20 of Mavrix’s photographs without a license. In dismissing the case, the district court found that LiveJournal was protected from liability under the DMCA’s safe harbor defense set forth in 17 U.S.C. § 512(c). The district court concluded that the photographs were posted at the “direction of a user,” not by LiveJournal—a threshold requirement under § 512(c).1 The district court further ruled that LiveJournal, in its capacity as an ISP, had met all the other requirements to satisfy § 512(c)’s safe harbor.

On appeal, the Ninth Circuit panel reversed the district court’s ruling. Applying the common law of agency, the Ninth Circuit found that there was a genuine issue of material fact as to whether ONTD’s moderators were acting as LiveJournal’s agents when they posted Mavrix’s photographs. The court explained that if the moderators were acting as LiveJournal’s agents, then the photographs were not posted “at the direction of a user” and LiveJournal thus could not meet this threshold requirement of § 512(c)’s safe harbor defense. LiveJournal is seeking a rehearing en banc.

LiveJournal and ONTD (Oh No They Didn’t!)

The Ninth Circuit identified LiveJournal as a “social media platform” that “allows users to create and run thematic ‘communities’ in which they post and comment on content related to the theme.” While the online communities are permitted to make their own rules regarding the submission of user posts, LiveJournal requires three types of unpaid administrator roles to run its online communities. One type of administrator is a “moderator” whose job is to “review posts submitted by users to ensure compliance with the rules.” As an ISP, LiveJournal protects against copyright infringement in its communities by, among other things, following the notice and takedown procedures outlined in the DMCA.

The court identified ONTD as a “popular LiveJournal community which features up-to-date celebrity news.” ONTD moderators review and post user submissions, which can include “photographs, videos, links and gossip about celebrities’ lives.” The court gave as one example of such submissions a post that contained a photograph of Beyoncé taken by Mavrix where users speculated in the comments section about whether she was pregnant. ONTD has created its own rules for submitting and commenting on posts that include guidance for users on avoiding potential copyright infringement and not copying content from any specifically listed sources that have put ONTD on notice in the past.

During the relevant time period, ONTD had nine moderators who performed the following functions for ONTD once users submitted proposed posts to an internal queue: “Moderators review the submissions and publicly post approximately one-third of them. Moderators review for substance, approving only those submissions relevant to new and exciting celebrity news. Moderators also review for copyright infringement, pornography and harassment.” As ONTD grew in popularity and into a “household name,” the court stated that LiveJournal sought to “take over” the site by hiring in 2010 one of ONTD’s active moderators as the “primary leader” (the community elected this new LiveJournal employee as “owner,” another of LiveJournal’s administrator roles, in 2011).

ONTD Moderators Acting as Agents for LiveJournal

The court began its analysis by stating that, to rely on the Section 512(c) safe harbor, “LiveJournal must make a threshold showing that Mavrix’s photographs were posted on ONTD at the direction of the user …. In the context of this case, that inquiry turns on the role of the moderators in screening and posting users’ submissions and whether their acts may be attributed to LiveJournal.” After reviewing the common law principles of agency and applicable case precedent, the court said that, unlike the district court, “[w]e … have little difficulty holding that common law agency principles apply to the analysis of whether a service provider like LiveJournal is liable for the acts of the ONTD moderators.”

Applying those common law principles to the evidentiary record on which the district court based its grant of summary judgment, the Ninth Circuit concluded that “there are genuine issues of material fact as to whether the moderators are LiveJournal’s agents.” These genuine issues of material fact included questions of whether ONTD’s moderators were acting (1) on the actual authority of LiveJournal (“[a]lthough LiveJournal calls the moderators ‘volunteers’… [t]here is evidence in the record that LiveJournal gave moderators express directions about their screening functions, including criteria for accepting or rejecting posts”); (2) on the apparent authority of LiveJournal (“Mavrix presented evidence that LiveJournal users may have reasonably believed that the moderators had authority to act for LiveJournal”); and (3) under the control of LiveJournal (“[e]vidence presented by Mavrix shows that LiveJournal maintains significant control over ONTD and its moderators”). All these considerations caused the court to conclude that “[f]rom the evidence currently in the record, reasonable jurors could conclude that an agency relationship existed” and to reverse the district court’s grant of summary judgment.

The Ninth Circuit also pointed out that if there is a finding of agency on remand, “the factfinder must [then] assess whether Mavrix’s photographs were indeed posted at the direction of the users in light of the moderators’ role in screening and posting the photographs” or whether ONTD’s moderators only performed “accessibility enhancing” functions for users. If there is no finding of agency on remand and LiveJournal successfully proves Section 512(c)’s threshold requirement that the ONTD posts were “at the direction of the user,” the other requirements that LiveJournal would have to prove to establish the Section 512(c) defense would be “lack of knowledge of infringements and lack of any financial benefit from infringement that it had the right and ability to control.”

Motion for Rehearing En Banc

On May 5, 2017, LiveJournal filed a motion for rehearing en banc with the Ninth Circuit, arguing that the panel decision “dramatically reshapes” the Section 512(c) safe harbor because it “creates an enormous cloud of uncertainty for service providers, who necessarily (and laudably) want to screen what is posted, in order to protect against unsavory or illegal material such as spam, pornographic content and copyright-infringing materials …. Ironically, the panel’s decision punishes those who seek to root out copyright infringement.” LiveJournal also argued that the panel misread the wording and meaning of Section 512(c), improperly substituting the word “posted” for “storage” in connection with what must be “at the direction of the user,” thereby changing the statute’s meaning to contradict controlling case law. A decision on the rehearing motion is expected in the near future.