|Photo by Julian Walker, licensed as CC-BY-ND
Robinson v HSBC Bank USA is a case I characterize as a harm in search of a legal theory. You have some sympathy for the plaintiffs, but not every wrong suffered gets you legal relief.
Plaintiff Douglass Robinson owns a much-photographed house in the Haight neighborhood of San Francisco. It was photographed one time too many for plaintiffs’ taste; they filed a lawsuit because a photo of the house was used in a flyer distributed with the San Francisco Chronicle advertising defendant HSBC Bank’s “Premier Mortgage.” This was no incidental use; the house is the central focus of the front and back of the flyer.
After the ad was published, neighbors, local business owners, unknown realtors, and even the tenants in the house asked the plaintiffs about their financial condition and whether they wanted to sell the house. The plaintiffs were offended by HSBC’s use, particularly in the “current economic climate where thousands of individuals nationwide are losing value in their homes, in part due to precisely the type of loan advertised in the HSBC flyer (Adjustable Rate Mortgage loans), when in fact Plaintiff Robinson owns the Property free of encumbrances.”
But what right do the plaintiffs have to prevent this kind of use? None, according to the court. Seven legal theories, none left standing.
Misappropriation under California Civil Code § 3344
Section 3344 authorizes a cause of action for misappropriation where anyone “uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent.” This is pretty easy: “The Court finds that as the Ad did not use plaintiffs’ names, voices, signatures, photographs or likenesses–only the likeness of plaintiffs’ Property–their claim falls outside the protection of section 3344.”
Misappropriation under California Common Law
In order to sustain a common law cause of action for commercial misappropriation, a plaintiff must prove: (1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury. The plaintiffs relied on Motschenbacher v. R.J. Reynolds Tobacco Co., 498 F.2d 821 (9th Cir.Cal.1974), where the plaintiff was successful in claiming that his race car was an attribute of his identity, so even though his face was not visible he had a claim for misappropriation. This didn’t wash here, though:
|Plaintiffs’ allegation that their house is so recognizable that after the Ad ran they received inquiries from friends and strangers regarding their financial solvency and intentions with respect to the house because they were known as the owners of the home by neighbors and realtors, does not mean that plaintiffs’ identities were appropriated by HSBC. Plaintiffs do not cite any cases that support their argument that the Property–which was not constructed or designed by plaintiffs–is part of their identity. [FN2] They are, instead, simply the owner and occupants of a very distinctive building.
FN2. As defendant noted at oral argument, if plaintiffs sold and moved out of the Property, the Property would still retain its notoriety but the Property would no longer be identified with plaintiffs. In Motschenbacher, by contrast, even if plaintiff race car driver sold his unique racing car, it would still be part of his identity. [ed: huh? I guess I don’t see why the car would still be associated with Motschenbacher after he sold it.]
Trade libel is an intentional disparagement of the quality of property which results in pecuniary damage to plaintiff. The plaintiffs had to successfully allege: (1) publication, (2) absence of justification, (3) falsity and (4) direct pecuniary loss, but failed on both falsity and pecuniary loss. The court entertained “falsity” by considering more generously whether there was a “false and disparaging ‘implication’ of fact,” but no luck for plaintiffs.
|There is nothing in the Ad, or its context, that states or implies a defamatory or disparaging fact about plaintiffs or their Property. Plaintiffs have cited no case that holds or even suggests that an allegation that someone has a mortgage, even an adjustable rate mortgage, is defamatory or disparaging. Moreover, the Ad was not a “for sale” ad, an ad for “foreclosure bargains,” or an ad which could have conveyed negative information about plaintiffs. The Ad is not susceptible to the meaning suggested by plaintiffs, i.e., that they are financially insolvent or their ambitions are disproportionate to their assets. Instead, the Ad simply advertises “premier,” albeit adjustable rate, mortgages.
No pecuniary harm either; the plaintiffs alleged only contempt, ridicule and pity. Attorneys’ fees and costs of suit don’t count, if they did “then each and every false statement would be actionable without a showing that the false statement caused damage to an individual’s trade or property.”
This one’s easy – California does not recognize a stand-alone cause of action for unjust enrichment.
California Consumer Legal Remedies Act, Civil Code § 1761(d)
This provides protection to consumers from damages suffered in connection with a consumer transaction. The problem here? No transaction between plaintiffs and HSBC Bank.
California False Advertising Law, Cal. Bus. & Prof. Code § 17500
This requires showing that the defendant knowingly made an untrue or misleading statement. No luck again; even if the Ad was disparaging to the plaintiffs, there was nothing false or misleading about it that would induce the public to buy goods and services.
California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200
Here the plaintiffs had a standing problem–they had to have lost money or property to have standing. There were no factual allegations that the plaintiffs had, only suffering ridicule (really?) and questions about their solvency. Not good enough.
HSBC Bank also made a run at a copyright preemption argument, but at least lost that one. Under § 301, a state common law or statutory claim is preempted if: (1) the work is within the scope of the “subject matter of copyright” and (2) the rights granted under state law are equivalent to any exclusive rights within the scope of federal copyright. The court found that since it is not an infringement of copyright to take a photograph of the house from a public place, the claims were not within the scope of the subject matter of copyright. That’s a bit too literal and not consistent with the general understanding of preemption – “Although the Ninth Circuit has not addressed this issue, most circuits have held that for preemption, the ‘scope of the Copyright Act’s subject matter is broader than the scope of the Act’s protections.’” Blue Nile, Inc. v. Ice.com, Inc., 478 F. Supp.2d 1240, 1246 (W.D. Wash. 2007), citing Wrench LLC v. Taco Bell Corp., 256 F.3d 446, 455 (6th Cir. 2001). Clearly the Copyright Act meant to cover the act of photographing buildings from a public place. Nevertheless the court got the second half right, that none of these claims are equivalent to a claim for copyright infringement.
Seven theories, no winners. As noted though, “the Court doubts HSBC is going to use another picture of plaintiffs’ Property in a future ad.”
Robinson v. HSBC Bank USA, No. C 10-01494 SI (N.D. Cal. Aug. 9, 2010).
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