On March 23, 2010, the US Court of Appeals for the 9th Circuit amended its opinion in Hilton v Hallmark Cards.1 Although the court denied Hallmark’s petition for rehearing, it significantly revised its discussion of the “transformative-use” test, which the California Supreme Court has used to balance First Amendment rights against the right of publicity.2 Of particular importance, the amended opinion removed language that might have made it more difficult for defendants to defeat right-of-publicity claims at the pleading stage, and clarified that a use need not be “phantasmagoric” or “fanciful” to be constitutionally protected.3

The case arose from a Hallmark greeting card that featured a cartoon of Paris Hilton dressed as a waitress serving a plate of food to a patron while saying, “Don’t touch that, it’s hot.”4 The patron then inquires, “What’s hot?”5 The waitress responds, “That’s hot.”6 The greeting inside the card read, “Have a smokin’ hot birthday.”7

Hilton sued for common-law misappropriation and Lanham Act violations in the U.S. District Court for the Central District of California.8 In its special motion to strike the state-law misappropriation claim, Hallmark argued that its use of Hilton’s image in its greeting card was protected by the First Amendment.9 The district court disagreed, and Hallmark appealed.10

The 9th Circuit’s original opinion

In its original opinion affirming the district court’s order, the 9th Circuit discussed at length the transformative-use test announced by the California Supreme Court in Comedy III Prods., Inc. v. Gary Saderup, Inc.11 To evaluate whether the First Amendment defeats a right-of-publicity claim arising from a defendant’s use of a celebrity’s name or likeness in an expressive work, the Comedy III Court directed trial courts to consider “whether the celebrity likeness is one of the raw materials from which an original work is synthesized, or whether the depiction … of the celebrity is the very sum and substance of the work in question.”12 “[I]n other words,” the court must determine whether the work “containing the celebrity’s image is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness.” 13

Applying this test to Hallmark’s use of Hilton’s image, the 9th Circuit found “useful data points” in the California Supreme Court’s discussion of the expressive works at issue in Comedy III and Winter v. DC Comics.14 For example, the 9th Circuit noted that in Comedy III the plaintiff’s right-of-publicity claim was based on the defendant’s use of “literal, conventional depictions of the Three Stooges drawn in charcoal and sold on t-shirts.”15 The Court found that the First Amendment did not protect the use of the three comics’ images because it was not significantly transformative; the defendant simply was merchandising the celebrities’ images without their consent.16 The 9th Circuit contrasted the t-shirts in Comedy III with the comic books at issue in Winter, which included half-human, half-worm depictions of musicians Johnny and Edgar Winter.17 Unlike in Comedy III, the Court found that these distorted caricatures of the Winter brothers were sufficiently transformative to defeat the musicians’ right-of-publicity claim.18

The 9th Circuit went on to explain that Comedy III and Winter “bookend the spectrum on which Hallmark’s birthday card is located.”19 The court observed that “Winter provides an example of a use that is transformative as a matter of law[,]” and that “Comedy III illustrates [a use] that is not [transformative as a matter of law].”20 “As long as Hallmark’s card is not in the same category as the comic book in Winter,” the 9th Circuit reasoned, “then the anti-SLAPP motion to strike must be denied.”21 Concluding that Hallmark’s use of Hilton’s image was “far afield from the total, phantasmagoric conversion of the musicians into the comic book characters at issue in Winter[,]” the Court held that her common-law misappropriation claim survived.22

Hallmark’s petition for rehearing

Hallmark subsequently petitioned for rehearing or rehearing en banc. Concerned that the 9th Circuit’s discussion of the transformative-use test could be misinterpreted as suggesting that only claims involving the “total, phantasmagoric conversion” of a plaintiff’s image could be dismissed as a matter of law, several video-game publishers filed an amici brief in support of Hallmark’s petition. 23

Amici emphasized that misappropriation claims pose an acute threat to publishers of expressive works, and that the California Supreme Court had declared that “speedy disposition of [such] cases is desirable.”24 Amici also pointed to the California Supreme Court’s instruction that such claims “can often [be] resolve[d] … as a matter of law simply by viewing the work in question” and applying the transformative-use test.25 Indeed, in such cases, the California Supreme Court has declared that right-of-publicity claims are “often properly resolved on summary judgment or … even on demurrer.”26

Because the 9th Circuit’s original opinion risked the unintended consequence of unnecessarily increasing the cost and burden of defending right-of-publicity lawsuits that target expressive works, amici suggested that rehearing was proper. Alternatively, amici proposed that the 9th Circuit amend its opinion to remove three problematic passages from the original opinion that might have been construed to suggest that a right-of-publicity claim could not be dismissed on an initial motion if the defendant’s transformation of the plaintiff’s image were less fanciful or phantasmagoric as in Winter, if the defendant’s work were a parody, or if the defendant’s work involved a realistic depiction of the plaintiff.27

The 9th Circuit’s amended opinion

Several weeks ago, the 9th Circuit denied Hallmark’s petition for rehearing, but issued an amended opinion that revised its prior discussion of the transformative-use test in three significant respects.28

First, the court deleted the three passages identified by amici.

Second, the court omitted its description of Comedy III and Winter as “bookends” on the spectrum of right-of-publicity claims. In place of that language, the court added a discussion of Kirby v. Sega of America, Inc.,29 a California appellate decision holding that a video game’s alleged use of a singer’s likeness was sufficiently transformative to qualify for First Amendment protection.30

Third, the court squarely recognized that “a work need not be phantasmagoric as in Winter or fanciful as in Kirby in order to be transformative.”31

As amended, the 9th Circuit’s opinion in Hilton makes clear what the California Supreme Court has declared all along—right-of-publicity claims that target expressive works “can often [be] resolve[d] … as a matter of law simply by viewing the work in question” and applying the transformative-use test. 32

The amended opinion leaves open important questions about the intersection of the right of publicity and the First Amendment. In a footnote, the 9th Circuit expressly “t[ook] no position on whether there is a First Amendment defense to misappropriation of the right of publicity that is distinct from the [transformative-use] test the California Supreme Court has articulated[,]” “leav[ing] for another day the question of whether the First Amendment furnishes a defense to misappropriation of publicity that is broader than the transformative use or public interest defenses.”33

The court’s answer to that question will be important for the creators and publishers of a variety of expressive works; in California alone, these claims have been used to target newspaper and magazine publishers,34 motion-picture studios,35 television networks,36 comic-book publishers,37 documentary filmmakers38 and video-game publishers.39 Two pending appeals in cases arising from the alleged use of athletes’ images in video games, Brown v. Electronic Arts40 and Keller v. Electronic Arts,41 may provide an opportunity for the 9th Circuit to answer these questions.