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C.B.C. Distribution and Mktg., Inc. v. Major League Baseball Advanced Media, L.P.: 1ST AMENDMENT - state law publicity rights subordinate to 1st Amendment; dissent on contract question

United States Court of Appeals
Nos. 06-3357/3358
C.B.C. Distribution and *
Marketing, Inc., *
Plaintiff-Appellee, *
v. **
Appeals from the United States
Major League Baseball Advanced * District Court for the Eastern
Media, L.P., * District of Missouri.
Defendant-Appellant, *
The Major League Baseball Players *
Association, *
Intervenor-Appellant. *
___________________ ** National Football League Players *
Association, National Football *
League Players, Inc.; NBA *
Properties, Inc.; NHL Enterprises, *
L.P.: NFL Ventures, L.P.; National *
Association for Stock Car Auto *
Racing, Inc.; PGA TOUR, Inc.; *
WNBA Enterprises, LLC; *
International Licensing Industry *
Merchandisers' Association, Inc., *
Amici on behalf of *
Appellants, *
Fantasy Sports Trade Association; *
First American Real Estate *
Solutions, LLC; TransUnion, LLC; *
Reed Elsevier Inc., *
Amici on Behalf of *
Appellee. *
Submitted: June 14, 2007
Filed: October 16, 2007
Before LOKEN, Chief Judge, ARNOLD and COLLOTON, Circuit Judges.
ARNOLD, Circuit Judge.
C.B.C. Distribution and Marketing, Inc., brought this action for a declaratory
judgment against Major League Baseball Advanced Media, L.P., to establish its right
to use, without license, the names of and information about major league baseball
players in connection with its fantasy baseball products. Advanced Media counterclaimed,
maintaining that CBC's fantasy baseball products violated rights of publicity
belonging to major league baseball players and that the players, through their
association, had licensed those rights to Advanced Media, the interactive media and
Internet company of major league baseball. The Major League Baseball Players
Association intervened in the suit, joining in Advanced Media's claims and further
asserting a breach of contract claim against CBC. The district court granted summary
judgment to CBC, see C.B.C. Distrib. and Mktg., Inc. v. Major League Baseball
Advanced Media, L.P., 443 F. Supp. 2d 1077 (E.D. Mo. 2006), and Advanced Media
and the Players Association appealed. We affirm.
CBC sells fantasy sports products via its Internet website, e-mail, mail, and the
telephone. Its fantasy baseball products incorporate the names along with
performance and biographical data of actual major league baseball players. Before the
commencement of the major league baseball season each spring, participants form
their fantasy baseball teams by "drafting" players from various major league baseball
teams. Participants compete against other fantasy baseball "owners" who have also
drafted their own teams. A participant's success, and his or her team's success,
depends on the actual performance of the fantasy team's players on their respective
actual teams during the course of the major league baseball season. Participants in
CBC's fantasy baseball games pay fees to play and additional fees to trade players
during the course of the season.
From 1995 through the end of 2004, CBC licensed its use of the names of and
information about major league players from the Players Association pursuant to
license agreements that it entered into with the association in 1995 and 2002. The
2002 agreement, which superseded in its entirety the 1995 agreement, licensed to
CBC "the names, nicknames, likenesses, signatures, pictures, playing records, and/or
biographical data of each player" (the "Rights") to be used in association with CBC's
fantasy baseball products.
In 2005, after the 2002 agreement expired, the Players Association licensed to
Advanced Media, with some exceptions, the exclusive right to use baseball players'
names and performance information "for exploitation via all interactive media."
Advanced Media began providing fantasy baseball games on its website, MLB.com,
the official website of major league baseball. It offered CBC, in exchange for a
commission, a license to promote the MLB.com fantasy baseball games on CBC's
website but did not offer CBC a license to continue to offer its own fantasy baseball
products. This conduct by Advanced Media prompted CBC to file the present suit,
alleging that it had "a reasonable apprehension that it will be sued by Advanced Media
if it continues to operate its fantasy baseball games."
The district court granted summary judgment to CBC. It held that CBC was not
infringing any state-law rights of publicity that belonged to major league baseball
players. C.B.C., 443 F. Supp.2d at 1106-07. The court reasoned that CBCs fantasy
baseball products did not use the names of major league baseball players as symbols
of their identities and with an intent to obtain a commercial advantage, as required to
establish an infringement of a publicity right under Missouri law (which all parties
concede applies here). Id. at 1085-89. The district court further held that even if CBC
were infringing the players' rights of publicity, the first amendment preempted those
rights. Id. at 1091-1100. The court rejected, however, CBC's argument that federal
copyright law preempted the rights of publicity claim. Id. at 1100-03. Finally, the
district court held that CBC was not in violation of the no-use and no-contest
provisions of its 2002 agreement with the Players Association because "the strong
federal policy favoring the full and free use of ideas in the public domain as
manifested in the laws of intellectual property prevails over [those] contractual
provisions" (internal quotations omitted). Id. at 1106-07.
Because this appeal is from the district court's grant of summary judgment, our
review is de novo, and we apply "the same standards as the district court and view[]
the evidence in the light most favorable to the nonmoving party." Travelers Prop.
Cas. Co. of Am. v. General Cas. Ins. Co., 465 F.3d 900, 903 (8th Cir. 2006).
Summary judgment is appropriate only if "there is no genuine issue as to any material
fact and ... the moving party is entitled to judgment as a matter of law." Fed. R. Civ.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). We also review de novo
the district court's interpretation of state law, including its interpretation of Missouri
law regarding the right of publicity. See Hammer v. City of Osage Beach, 318 F.3d
832, 841 (8th Cir. 2003). When state law is ambiguous, we must "predict how the
highest court of that state would resolve the issue." Clark v. Kellogg Co., 205 F.3d
1079, 1082 (8th Cir. 2000).
An action based on the right of publicity is a state-law claim. See Zacchini v.
Scripps-Howard Broad. Co., 433 U.S. 562, 566 (1977). In Missouri, "the elements
of a right of publicity action include: (1) That defendant used plaintiff's name as a
symbol of his identity (2) without consent (3) and with the intent to obtain a
commercial advantage." Doe v. TCI Cablevision, 110 S.W.3d 363, 369 (Mo. 2003),
cert. denied, 540 U.S. 1106 (2004). The parties all agree that CBC's continued use of
the players' names and playing information after the expiration of the 2002 agreement
was without consent. The district court concluded, however, that the evidence was
insufficient to make out the other two elements of the claim, and we address each of
these in turn.
With respect to the symbol-of-identity element, the Missouri Supreme Court
has observed that " 'the name used by the defendant must be understood by the
audience as referring to the plaintiff.' " The state court had further held that "[i]n
resolving this issue, the fact-finder may consider evidence including 'the nature and
extent of the identifying characteristics used by the defendant, the defendant's intent,
the fame of the plaintiff, evidence of actual identification made by third persons, and
surveys or other evidence indicating the perceptions of the audience.' " Doe, 110
S.W.3d at 370 (quoting Restatement (Third) of Unfair Competition 46 cmt. d).
Here, we entertain no doubt that the players' names that CBC used are
understood by it and its fantasy baseball subscribers as referring to actual major league
baseball players. CBC itself admits that: In responding to the appellants' argument
that "this element is met by the mere confirmation that the name used, in fact, refers
to the famous person asserting the violation," CBC stated in its brief that "if this is all
the element requires, CBC agrees that it is met." We think that by reasoning that
"identity," rather than "mere use of a name," "is a critical element of the right of
publicity," the district court did not understand that when a name alone is sufficient
to establish identity, the defendant's use of that name satisfies the plaintiff's burden to
show that a name was used as a symbol of identity.
It is true that with respect to the "commercial advantage" element of a cause of
action for violating publicity rights, CBC's use does not fit neatly into the more
traditional categories of commercial advantage, namely, using individuals' names for
advertising and merchandising purposes in a way that states or intimates that the
individuals are endorsing a product. Cf. Restatement (Third) of Unfair Competition
47 cmt. a, b. But the Restatement, which the Missouri Supreme Court has
recognized as authority in this kind of case, see Doe, 110 S.W.3d at 368, also says that
a name is used for commercial advantage when it is used "in connection with services
rendered by the user" and that the plaintiff need not show that "prospective purchasers
are likely to believe" that he or she endorsed the product or service. Restatement
(Third) of Unfair Competition 47 & cmt. a. We note, moreover, that in Missouri,
"the commercial advantage element of the right of publicity focuses on the defendant's
intent or purpose to obtain a commercial benefit from use of the plaintiff's identity."
Doe, 110 S.W.3d at 370-71. Because we think that it is clear that CBC uses baseball
players' identities in its fantasy baseball products for purposes of profit, we believe
that their identities are being used for commercial advantage and that the players
therefore offered sufficient evidence to make out a cause of action for violation of
their rights of publicity under Missouri law.
CBC argues that the first amendment nonetheless trumps the right-of-publicity
action that Missouri law provides. Though this dispute is between private parties, the
state action necessary for first amendment protections exists because the right-of-
publicity claim exists only insofar as the courts enforce state-created obligations that
were "never explicitly assumed" by CBC. See Cohen v. Cowles Media Co., 501 U.S.
663, 668 (1991).
The Supreme Court has directed that state law rights of publicity must be
balanced against first amendment considerations, see Zacchini v. Scripps-Howard
Broad., 433 U.S. 562 (1977), and here we conclude that the former must give way to
the latter. First, the information used in CBC's fantasy baseball games is all readily
available in the public domain, and it would be strange law that a person would not
have a first amendment right to use information that is available to everyone. It is true
that CBC's use of the information is meant to provide entertainment, but "[s]peech that
entertains, like speech that informs, is protected by the First Amendment because
'[t]he line between the informing and the entertaining is too elusive for the protection
of that basic right.' " Cardtoons, L.C. v. Major League Baseball Players Ass'n, 95
F.3d 959, 969 (10th Cir. 1996) (quoting Winters v. New York, 333 U.S. 507, 510
(1948)); see also Zacchini, 433 U.S. at 578. We also find no merit in the argument
that CBC's use of players' names and information in its fantasy baseball games is not
speech at all. We have held that "the pictures, graphic design, concept art, sounds,
music, stories, and narrative present in video games" is speech entitled to first
amendment protection. See Interactive Digital Software Ass'n v. St. Louis County,
Mo., 329 F.3d 954, 957 (8th Cir. 2003). Similarly, here CBC uses the "names,
nicknames, likenesses, signatures, pictures, playing records, and/or biographical data
of each player" in an interactive form in connection with its fantasy baseball products.
This use is no less expressive than the use that was at issue in Interactive Digital.
Courts have also recognized the public value of information about the game of
baseball and its players, referring to baseball as "the national pastime." Cardtoons,
95 F.3d at 972. A California court, in a case where Major League Baseball was itself
defending its use of players' names, likenesses, and information against the players'
asserted rights of publicity, observed, "Major league baseball is followed by millions
of people across this country on a daily basis ... The public has an enduring fascination
in the records set by former players and in memorable moments from previous games
... The records and statistics remain of interest to the public because they provide
context that allows fans to better appreciate (or deprecate) today's performances."
Gionfriddo v. Major League Baseball, 94 Cal. App. 4th 400, 411 (2001). The Court
in Gionfriddo concluded that the "recitation and discussion of factual data concerning
the athletic performance of [players on Major League Baseball's website] command
a substantial public interest, and, therefore, is a form of expression due substantial
constitutional protection." Id. We find these views persuasive.
In addition, the facts in this case barely, if at all, implicate the interests that
states typically intend to vindicate by providing rights of publicity to individuals.
Economic interests that states seek to promote include the right of an individual to
reap the rewards of his or her endeavors and an individual's right to earn a living.
Other motives for creating a publicity right are the desire to provide incentives to
encourage a person's productive activities and to protect consumers from misleading
advertising. See Zacchini, 433 U.S. at 573, 576; Cardtoons, 95 F.3d at 973. But
major league baseball players are rewarded, and handsomely, too, for their
participation in games and can earn additional large sums from endorsements and
sponsorship arrangements. Nor is there any danger here that consumers will be
misled, because the fantasy baseball games depend on the inclusion of all players and
thus cannot create a false impression that some particular player with "star power" is
endorsing CBC's products.
Then there are so-called non-monetary interests that publicity rights are
sometimes thought to advance. These include protecting natural rights, rewarding
celebrity labors, and avoiding emotional harm. See Cardtoons, 95 F.3d at 973. We
do not see that any of these interests are especially relevant here, where baseball
players are rewarded separately for their labors, and where any emotional harm would
most likely be caused by a player's actual performance, in which case media coverage
would cause the same harm. We also note that some courts have indicated that the
right of publicity is intended to promote only economic interests and that noneconomic
interests are more directly served by so-called rights of privacy. See, e.g.,
id. at 967; Gionfriddo, 94 Cal. App. 4th at 409 (2001); see also Haelan Laboratories
v. Topps Chewing Gum, 202 F.2d 866, 868 (2d Cir. 1953). For instance, although the
court in Cardtoons, 95 F.3d at 975-76, conducted a separate discussion of noneconomic
interests when weighing the countervailing rights, it ultimately concluded
that the non-economic justifications for the right of publicity were unpersuasive as
compared with the interest in freedom of expression. "Publicity rights ... are meant
to protect against the loss of financial gain, not mental anguish." Id. at 976. We see
merit in this approach.
Because we hold that CBC's first amendment rights in offering its fantasy
baseball products supersede the players' rights of publicity, we need not reach CBC's
alternative argument that federal copyright law preempts the players' state law rights
of publicity.
We come finally to the breach of contract issue. The 2002 contract between the
Players Association and CBC specifically provided: "It is understood and agreed that
[the Players Association] is the sole and exclusive holder of all right, title and interest
in and to the Rights." CBC undertook not to "dispute or attack the title or any rights
of Players' Association in and to the Rights and/or the Trademarks or the validity of
the license granted," either during or after the expiration of the agreement (the nochallenge
provision). CBC also agreed that, upon expiration or termination of the
contract, it would "refrain from further use of the Rights and/or the Trademarks or any
further reference to them, either directly or indirectly" (the no-use provision). The
Players Association maintains that the no-challenge and no-use provisions of the 2002
agreement are fatal to CBC's claim. We disagree.
In holding the no-use and no-challenge provisions unenforceable as against
public policy, the district court applied a Supreme Court decision dealing with patents.
In that case, the Supreme Court held that the doctrine of licensee estoppel (under
which a licensee is estopped from contesting the validity of its license, see Idaho
Potato Comm'n v. M&M Produce Farm & Sales, 335 F.3d 130, 135 (2d Cir. 2003),
cert. denied, 541 U.S. 1027 (2004)), must give way when the "strong federal policy
favoring the full and free use of ideas in the public domain" contained in federal
patent law outweighs the "competing demands ... of contract law." Lear, Inc. v.
Adkins, 395 U.S. 653, 674, 675 (1969). The Lear balancing approach has been
applied to other areas of federal intellectual property law, see Idaho Potato, 335 F.3d
at 137-39 (certification marks); Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328-29
(6th Cir. 1973), cert. denied, 414 U.S. 858 (1973) (trademarks); see also Saturday
Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1200-01 (7th Cir. 1987)
(copyright). The district court's application of the Lear principles to a state law rightof-
publicity action, however, was unique so far as we can determine.
We do not reach the issue of whether Lear is applicable here, though, because
we believe that the contested contract terms are unenforceable for a different reason.
We first note that in its brief, CBC argued that it should be relieved of its no-use and
no-challenge obligations because the Players Association breached a warranty
contained in 1(b) of the 2002 agreement. Section 1(b) of the agreement provides
that "[the Players Association] represents and warrants that it has the authority to grant
the rights licensed herein." CBC argued that this was a warranty of title in the players'
publicity rights and that the Players Association breached this warranty, either because
the players did not have publicity rights or because CBC's first amendment rights
superseded any such publicity rights. We find this argument meritless: Section 1(b)
is not a warranty of title, it is merely a warranty that the Players Association is the
agent of the players. That warranty was not breached.
Although the parties did not cite to it in their briefs, the agreement does contain
what we believe is a warranty of title not in 1(b), but in 8(a). The agreement
provides that its interpretation will be governed by New York law. In New York, a
contractual warranty is defined as " 'an assurance by one party to a contract of the
existence of a fact upon which the other party may rely.' " CBS Inc. v. Ziff-Davis
Publ'g Co., 75 N.Y.2d 496, 503, 553 N.E.2d 997, 1000 (1990) (quoting Metropolitan
Coal Co. v. Howard, 155 F.2d 780, 784 (2d Cir. 1946) (Hand, J.)). Section 8(a) of the
agreement provides that the Players Association "is the sole and exclusive holder of
all right, title and interest" in and to the names and playing statistics of virtually all
major league baseball players. This is quite obviously a representation or warranty
that the Players Association did in fact own the state law publicity rights at issue here.
For the reasons given above, the Players Association did not have exclusive "right,
title and interest" in the use of such information, and it therefore breached a material
obligation that it undertook in the contract. CBC is thus relieved of the obligations
that it undertook, and the Players Association cannot enforce the contract's no-use and
no-challenge provisions against CBC.
For the foregoing reasons, the district court's grant of summary judgment to
CBC is affirmed.
COLLOTON, Circuit Judge, dissenting.
I agree with the courts discussion of the right of publicity in Missouri and the
application of the First Amendment in this context. I would resolve the contractual
issues differently, however, and I therefore respectfully dissent.
Advanced Media and the Major League Baseball Players Association
(MLBPA) contend that CBC has violated two provisions of the applicable License
Agreement as set forth in the majority opinion the no-challenge provision and the
no-use provision. CBC does not really dispute that it violated the restrictions, but
it contends that the contractual provisions are unenforceable. I disagree with the
courts conclusion, sua sponte, that the provisions are unenforceable because MLBPA
breached a warranty set forth in section 8(a) of the agreement.
Section 8(a) appears under a heading Ownership of Rights. It provides as
follows: It is understood and agreed that MLBPA is the sole and exclusive holder
of all right, title and interest in and to the Rights and/or Trademarks for the duration
of this Agreement. Given the courts resolution of issues concerning the right of
publicity and the First Amendment, section 8(a) wins the day for CBC only if it is a
warranty by MLBPA that CBC does not have rights under the First Amendment to use
the players names and statistics in its fantasy baseball games.
Assuming that section 8(a) does address CBCs constitutional rights (as
opposed merely to the players state-law rights of publicity, which are accurately
represented), and assuming that one partys prediction about the constitutional rights
of another party is the sort of fact that can be warranted under New York law,
section 8(a) does not purport to make such a warranty. The provision states that the
parties agree that MLPBA is the sole and exclusive holder of all right, title and
interest in and to the Rights. CBC surely can agree, as a matter of good business
judgment, to bargain away any uncertain First Amendment rights that it may have in
exchange for the certainty of what it considers to be an advantageous contractual
arrangement. See Paragould Cablevision v. City of Paragould, 930 F.2d 1310, 1315
(8th Cir. 1991). That CBC later decided it did not need a license, and that it preferred
instead to litigate the point, does not relieve the company of its contractual obligation.
See Heath v. Dick Co., 253 F.2d 30, 34-35 (7th Cir. 1958).
I also do not believe the district courts grant of summary judgment invalidating
the no-use and no-contest provisions can be sustained on the grounds actually raised
by CBC. I agree with the court that MLBPA has not breached the warranty set forth
in section 1(b) of the agreement. And I would not adopt the district courts conclusion
that the Supreme Courts decision in Lear, Inc. v. Adkins, 395 U.S. 653 (1969), should
be applied to declare the no-use and no-contest provisions unenforceable as against
public policy. Lear held that state contract law establishing the doctrine of licensee
estoppel in a patent case was preempted where its enforcement would significantly
frustrate overriding federal policies embodied in the federal patent laws. The Lear
approach to preemption has been extended only to areas where there are comparable
federal policies derived from federal statutes that justify the preemption of state law.
In this case, there is no federal statute that addresses state-law contract obligations
with respect to the right of publicity, and no indication that Congress sought to
abrogate contracts in this area that are otherwise enforceable under state law. I would
not fashion a rule of federal common law that abrogates these freely negotiated
contractual provisions. See Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816
F.2d 1191, 1200 (7th Cir. 1987).
For these reasons, I would reverse the district courts grant of summary
judgment in favor of CBC.


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