Pinder v. 4716 Incorporated

• Court: District Court, D. Arizona
• Decided: October 15, 2020
• Docket: 2:18-cv-02503
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Lucy Pinder, et al., No. CV-18-02503-PHX-RCC

10 Plaintiffs, ORDER

11 v.

12 4716 Incorporated, et al.,

13 Defendants. 14 15 This is the Court’s second summary judgment order in a series of cases across the 16 country pertaining to the unlawful use of models’ photos in advertisements for strip clubs.1 17 Here Plaintiffs Lucy Pinder, Ana Cheri, and Irina Voronina (“Plaintiffs”)2 allege that 18 Defendant 4716 Incorporated, d/b/a Hi Liter (“Defendant” or “Hi Liter”), posted Facebook 19 advertisements using Plaintiffs’ image without permission. Because the issues are nearly 20 identical, much of the analysis in the instant order reflects the previous case with few 21 exceptions. Plaintiffs raise state law claims of right of publicity/misappropriation of 22 likeness, and false light/invasion of privacy. In addition, Plaintiffs raise a two-part claim 23 under the Lanham Act for false advertising and false association.3 Both parties have filed 24 25 1 The cases pending in the District of Arizona are listed in the Court’s summary judgment 26 order in Skinner v. Tuscan Inc., No. CV–18–00319–TUC–RCC, Doc. 61 (D. Ariz. Oct. 7, 27 2020). 2 Plaintiff Abagail Ratchford was dismissed on April 28, 2020. (Doc. 67.) 28 3 Plaintiffs’ Lanham Act claim is named in the Complaint under one cause of action, but as explained in Section V, the Complaint provides notice of two distinct claims. 1 motions for summary judgment.4 This matter has been extensively briefed, and oral 2 arguments were held on September 15, 2020. (Docs. 74–75, 81–82, 89–90. 94–95, 97–98, 3 100, 102, 105.) The Court now rules. 4 I. Summary Judgment Standard of Review 5 A court may grant summary judgment if the pleadings and supporting documents, 6 viewed in the light most favorable to the non-moving party “show that there is no genuine 7 issue as to any material fact and that the moving party is entitled to judgment as a matter 8 of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed. R. Civ. P. 56(c). An issue 9 is “genuine” when the disputed facts “could reasonably be resolved in favor of either 10 party.” Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). But a disputed fact is 11 only material if it “might affect the outcome of the suit under the governing law.” Anderson 12 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 13 If the moving party establishes there is no genuine issue of material fact, then the 14 non-movant must come forth with evidence that there is a genuine disputed factual issue 15 that may change the outcome of the lawsuit in the non-movant’s favor. Id. at 248, 250. This 16 showing does not have to be unquestionable; however, the non-movant “may not rest upon 17 the mere allegations or denials of [his] pleadings, but . . . must set forth specific facts 18 showing that there is a genuine issue for trial.” Id. at 248; Fed. R. Civ. P. 56(e). 19 In general, a court must consider the evidence while making all inferences in favor 20 of the non-moving party. Anderson, 477 U.S. at 255. However, with dueling summary 21 judgment motions, the court “review[s] each motion . . . separately, giving the non[- 22 ]moving party for each motion the benefit of all reasonable inferences.” Brunozzi v. Cable 23 Commc’ns, Inc., 851 F.3d 990, 995 (9th Cir. 2017). “Where the parties file cross-motions 24 for summary judgment, the court must consider each party’s evidence, regardless under 25 which motion the evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 26 532 (9th Cir. 2011). Meaning, evidence from one party is not limited to that party’s motion 27

28 4 Also pending before the Court are three motions to exclude expert witnesses. (Docs. 78– 80.) The Court addresses these motions in a separate order. 1 for summary judgment; a court may consider evidence from defendant’s motion to 2 determine plaintiff’s motion and vice versa. See Fair Hous. Council of Riverside Cty., Inc. 3 v. Riverside Two, 249 F.3d 1132, 1136–37 (9th Cir. 2001). 4 However, the necessary showing for each party to obtain summary judgment 5 depends upon that party’s burden of proof. And so, “a moving party with the burden of 6 persuasion must establish beyond controversy every essential element of [its claim].” Pub. 7 Storage v. Sprint Corp., No. CV 14–2594–GW PLAX, 2015 WL 1057923, at *4 (C.D. Cal. 8 Mar. 9, 2015) (quoting S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 888 (9th Cir. 9 2003)). The party without such burden need only (1) provide “evidence negating an 10 essential element” of a claim or (2) demonstrate that the non-moving party “does not have 11 enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” 12 Nissan Fire & Marine Ins. Cos., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 13 2000). 14 II. Admissibility of Facebook Advertisements 15 As a threshold matter, Defendant argues that the entire case should be dismissed 16 because Plaintiffs cannot establish the proper foundation for the offending Hi Liter 17 Facebook postings and therefore the ads are not admissible. Because Plaintiffs did not see 18 the images, Defendant states, there is no litigant who could testify to first-hand knowledge 19 of the postings, and so there is no way to prove that they were posted on Defendant’s 20 Facebook page. At the summary judgment stage, Defendant claims, this failure is fatal to 21 Plaintiffs’ case. 22 Plaintiffs counterargue that they are suing Defendant for using Plaintiffs’ images in 23 advertising, and how the advertisements ended up on Defendant’s Facebook page is 24 irrelevant. Plaintiffs state that they do not need to have personally viewed the publication 25 for the offending posts to be considered admissible and stated during oral argument that 26 they would have no problem laying the foundation for the ads. Furthermore, Defendant has 27 never directly denied the postings were on its Facebook page, and Defendant’s claim that 28 there were unauthorized posts at some point prior to litigation is a weak attempt to divert 1 its liability. 2 “A trial court can only consider admissible evidence in ruling on a motion for 3 summary judgment.” Orr v. Bank of Am., 285 F.3d 764, 773 (9th Cir. 2002). But, “it is the 4 admissibility of the contents of evidence—not its form—that determines whether evidence 5 is admissible for purposes of avoiding summary judgment.” Ericson v. City of Phoenix, 6 No. CV–14–01942–PHX–JAT, 2016 WL 6522805, at *8 (D. Ariz. Nov. 2, 2016) (citing 7 Fraser v. Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 2003), cert. denied, 541 U.S. 937 8 (2004)) (emphasis in original); Celotex Corp., 477 U.S. at 324 (“We do not mean that the 9 non[-]moving party must produce evidence in a form that would be admissible at trial in 10 order to avoid summary judgment.”); JL Beverage Co., LLC v. Jim Beam Brands Co., 828 11 F.3d 1098, 1110 (9th Cir. 2016) (permitting evidence that is inadmissible in form as long 12 as it is possibly admissible at trial); Block v. City of Los Angeles, 253 F.3d 410, 418–19 13 (9th Cir. 2001) (stating evidence need not be admissible in form if it meets requirements 14 of Fed. R. Civ. P. 56). Moreover, even “[w]hen a party opposing summary judgment fails 15 to comply with the formalities of Rule 56, a court may choose to be somewhat lenient in 16 the exercise of its discretion to deal with the deficiency.” Sch. Dist. No. 1J v. ACandS, Inc., 17 5 F.3d 1255, 1261 (9th Cir. 1993). 18 Depending on the circumstances, the content of the Facebook ads may be admissible 19 through several avenues. A Facebook post may meet the requirements of a business record 20 under Federal Rule of Evidence 803(6) that is self-authenticating under Rule 902(11). See, 21 e.g., Randazza v. Cox, No. 12–cv–2040–JAD–PAL, 2014 WL 1407378, at *4 (D. Nev. 22 Apr. 10, 2014) (YouTube video self-authenticating if certified by custodian of records in 23 accordance with hearsay exception for business record); United States v. Hassan, 742 F.3d 24 104, 134 (4th Cir. 2014) (Facebook pages and YouTube videos self-authenticating under 25 902(11)). Under this scenario, no extrinsic evidence of authenticity would be necessary for 26 admissibility. Fed. R. Evid. 902(11). While this may not be sufficient to demonstrate who 27 posted the offending ads, it could establish that the post existed on Hi Liter’s Facebook 28 page, and that the images have not been altered in any fashion. See Hassan, 742 F.3d at 1 134. 2 In addition, Plaintiffs may be able to lay the foundation for admission of the 3 screenshot of the Facebook page through an internet archive service. Archived websites 4 may sometimes be afforded judicial notice. See, e.g., Under a Foot Plant Co. v. Exterior 5 Design, Inc., No. 6:14–cv–01371–AA, 2015 WL 1401697, at *4 (D. Md. Mar. 25, 2015) 6 (“District courts have routinely taken judicial notice of content from The Internet 7 Archive.”); but see Open Text S.A. v. Box, Inc., No. 13–cv–04910–JD, 2015 WL 428365, 8 at *7 (N.D. Cal. Jan. 30, 2015) (archived website printouts not afforded judicial notice 9 without certification from representative). 10 Moreover, even circumstantial evidence can authenticate the content of a Facebook 11 post “where a document’s contents, in conjunction with other circumstances, reflect 12 distinctive characteristics.” See People v. Curry, No. 2–18–0148, 2020 WL 5423045, at *9 13 (Ill. App. Ct. Sept. 10, 2020) (citing United States v. Browne, 834 F.3d 403, 411–12 (3d 14 Cir. 2016)); see also State v. Griffith, 449 P.3d 353, 357 (Ariz. Ct. App. 2019) (Facebook 15 post “may be admitted if reasonable extrinsic evidence tends to show the party made it.”); 16 United States v. Farrad, 895 F.3d 859, 878 (6th Cir. 2018) (Facebook photo of defendant 17 admissible when other evidence suggested photos were what they claimed to be). The 18 alleged Hi Liter advertisement’s web address indicates it originated from 19 “hilitershowclub,” the ads use the Hi Liter username, and the webpage includes distinctive 20 background imagery and fonts. These elements could plausibly make the advertisements 21 sufficiently distinctive and admissible. 22 In addition, Defendant has not submitted evidence that the offending advertisements 23 were not posted on its Facebook page. Defendant merely offers an inchoate argument that 24 perhaps someone else may have infiltrated Defendant’s Facebook and posted the Hi Liter 25 advertisements without Defendant’s knowledge. Defendant offers deposition testimony 26 from Bob Jung—the advertising creator for Hi Liter—stating the ads do not look like his 27 work. But Jung falls short of stating he did not create the ad. Defendant also vaguely asserts 28 that at some point prior to litigation an unknown person made unauthorized postings on Hi 1 Liter’s Facebook page. But Defendant does not state that the unauthorized advertisements 2 were those at issue in this case, nor does it submit evidence of the imposter’s work or 3 records showing it changed its Facebook password in response to the unauthorized use. 4 Finally, Defendant claims that there are various Facebook pages that utilize the Hi Liter 5 name, and potentially any of those websites could have posted the ads at issue here. 6 However, Defendant has presented no evidence of other Hi Liter Facebook pages. The 7 evidence offered does not demonstrate the posts at issue here were not on the Hi Liter 8 website, but Defendant’s vague assertions raise a credibility issue better addressed by a 9 fact finder. Regardless, none of Defendant’s suppositions demonstrate that Plaintiffs will 10 be unable to lay the foundation for the advertisements’ content. 11 Because the copy of Hi Liter’s Facebook page may be admissible at trial, and there 12 is no indication that Plaintiff will be unable to lay the requisite foundation, this Court can 13 consider the content for the purposes of this motion. See Fraser, 342 F.3d at 1037; see also 14 Perpall v. Pavetek Corp., No. 12–CV–0336 (PKC), 2017 WL 1155764, at *29 (E.D.N.Y. 15 Mar. 27, 2017). While the Court reviews the advertisements for summary judgment, it 16 makes no final determination about admissibility at trial. 17 III. Arizona False Light – Invasion of Privacy 18 a. Statute of Limitations 19 The parties agree that Plaintiffs’ false light claims are governed by a one-year statute 20 of limitations under Arizona Revised Statute § 12–541. See Watkins v. Arpaio, 367 P.3d 21 72, 77 (Ariz. Ct. App. 2016). However, the parties disagree when these claims accrued. 22 Defendant posits that the clock begins on the date of publishing. Plaintiffs counter that the 23 continuing wrong doctrine applies, and the clock does not start until the photos were 24 removed. 25 Plaintiffs lean heavily on Flowers v. Carville, 310 F.3d 1118, 1126 (9th Cir. 2002) 26 to show that the continuing wrong doctrine applies to their false light claims. The Court is 27 baffled as to Plaintiffs’ interpretation of this case. Flowers addressed the continuing tort 28 doctrine as it related to alleged defamation in a defendant’s memoirs. Id. The Ninth Circuit 1 explained that the continuing wrong doctrine applies when there is no way to determine a 2 singular moment that caused harm. Id. However, it noted that there is no such incertitude 3 surrounding the publication of a book; the defamation occurs at the moment of publication. 4 Id. Moreover, there were no further actions by defendant obscuring the accrual date. Id. In 5 fact, the Ninth Circuit commented, “The only thing ‘continuing’ about this tort was [the 6 plaintiff’s] protracted failure to bring a lawsuit when she had the chance.” Id. The court 7 affirmed the dismissal of all tort claims related to the book publication—including the false 8 light claim. Id. at 1133. Like Flowers, the dates Defendant published its advertisements on 9 social media are identifiable dates of harm that preclude the continuing wrong doctrine. 10 Even though the posting exists for viewing after the publication, this does not constitute a 11 continuing injury. 12 Plaintiffs also cite Cruz v. City of Tucson, 401 P.3d 1018 (Ariz. Ct. App. 2017). This 13 case is inapposite. Similar to Flowers, in Cruz the court explained that under the continuing 14 wrong doctrine, there must be a continuous series of wrongful actions for the accrual date 15 to begin at termination. Id. at 1023. In this case, just as in Cruz, there are no continuous 16 actions. Instead, there is one discrete posting of a Plaintiff’s image per claim against 17 Defendant. As such, the continuing wrong doctrine does not apply and cannot prolong 18 Plaintiffs’ time for filing. 19 Moreover, the Arizona appellate court has declined to utilize the continuing wrong 20 doctrine in the context of false light claims. Watkins, 367 P.3d at 77. Instead, Arizona 21 evaluates the statute of limitations for false light in the same manner as defamation, 22 recognizing that accrual occurs on the date of publication. See Kimm v. Brannan, No. CV– 23 14–1966 JWS, 2017 WL 3535015, at *7 (D. Ariz. Aug. 17, 2017), aff’d, 779 F. App’x 439 24 (9th Cir. 2019); Larue v. Brown, 333 P.3d 767, 772 (Ariz. Ct. App. 2014) (accrual occurs 25 in defamation when material is posted on the web, and “later circulation of the original 26 publication does not start the statute of limitations anew”); Lim v. Sup. Ct. in and for Pima 27 Cnty., 616 P.2d 941, 942 (Ariz. Ct. App. 1980) (defamation accrual is time of publication); 28 cf. Uniform Single Publication Act, Ariz. Rev. Stat. Ann. § 12–651(A) (cannot have 1 multiple actions in tort based on one publication). 2 On May 25, 2018, Plaintiffs filed the instant Complaint in state court. Therefore, 3 any photo forming the basis of a false light claim must have been posted within one year 4 of the filing of the Complaint. Plaintiffs allege four images were posted on Defendant’s Hi 5 Liter Facebook account. A photo of Plaintiff Voronina was allegedly posted on December 6 23, 2016 and republished on December 25, 2016 along with a second photo published on 7 December 25, 2016. A photo of Plaintiff Pinder was posted on November 23, 2017, and a 8 photo of Plaintiff Cheri was posted May 25, 2017. There is no factual dispute as to these 9 publication dates. Therefore, the Court grants summary judgment to Defendant as to the 10 false light claims for Plaintiff Voronina’s photos because they are outside of the one-year 11 statute of limitations. 12 b. False Light Invasion of Privacy 13 For the two remaining photos, genuine issues of material fact remain precluding 14 summary judgment. 15 To state a claim of false light, a plaintiff must demonstrate “(1) the defendant, with 16 knowledge of falsity or reckless disregard for the truth, gave publicity to information 17 placing the plaintiff in a false light, and (2) the false light in which the plaintiff was placed 18 would be highly offensive to a reasonable person in the plaintiff’s position.” Doe v. 19 Oesterblad, No. CV–13–01300–PHX–SRB, 2015 WL 12940181, at *5 (D. Ariz. June 9, 20 2015) (quoting Desert Palm Surgical Grp., P.L.C. v. Petta, 343 P.3d 438, 450 (Ariz. Ct. 21 App. 2015)); see Restatement (Second) of Torts (“Rstmt. 2d Torts”) § 652E (Am. Law 22 Inst. 1977). Actions shedding a false light on another need not be plainly stated; implication 23 can be sufficient. Godbehere v. Phx. Newspapers, Inc., 783 P.2d 781, 787 n.2 (Ariz. 1989). 24 i. Defendant’s Facebook Advertisement 25 Defendant’s summary judgment motion alleges Plaintiffs have not supported their 26 false light claim because they cannot show the advertisements originated from Defendant’s 27 Facebook page. It posits that Plaintiffs’ exhibits are merely inadmissible photocopies that 28 cannot support Plaintiffs’ claim. Moreover, Defendant’s advertising executive did not 1 recognize the offending ads as his work, and Defendant believes its Facebook account had 2 been hacked at some time prior to litigation. It appears Defendant is suggesting if the ads 3 were on its Facebook, someone else posted the offending photos without Defendant’s 4 knowledge. 5 Defendant has not met its burden of showing Plaintiff is unable to prove Defendant 6 posted the ads. As stated previously, there are several ways in which Plaintiffs may have 7 the advertisements admitted into evidence. (See Sec. II.) Moreover, none of Defendant’s 8 statements explicitly undermine Plaintiffs’ contention. Rather they are vague, accusatory 9 assertions that side-step a straightforward proclamation that either the advertising 10 executive did not create the ad, or that if an ad were on Defendant’s page, it was one of 11 those created by the unauthorized phantom Hi Liter promoter. 12 But neither has Plaintiff demonstrated that it is beyond controversy that Defendant 13 did post the offending photos. Again, as noted above, Plaintiffs have not yet shown the 14 advertisements originated from Defendant’s Facebook page and must lay the proper 15 foundation. Whether Defendant posted Plaintiffs’ photos on its Facebook page is a genuine 16 issue of material fact precluding summary judgment. 17 ii. Falsity of Social Media Posts 18 Defendant then argues that the claim fails because the advertisements made no false 19 statements about Plaintiffs and the photos were not manipulated in any manner. Moreover, 20 Plaintiffs’ pictures were risqué, so using the unadulterated photo did not misrepresent the 21 nature of the photos. However, “[a] false light cause of action may arise when . . . the 22 publication of true information creates a false implication about the individual.” Reynolds 23 v. Reynolds (“Reynolds”), 294 P.3d 151, 156 (Ariz. Ct. App. 2013) (quoting Godbehere, 24 783 P.2d at 787). 25 Defendant’s reasoning ignores the visual and written innuendo within its 26 advertising. The misrepresentation is not necessarily the reproduction of the photos, but 27 the connection between Plaintiffs and Defendant’s strip club. In the first advertisement, 28 Plaintiff Pinder is shown dressed in her undergarments placing a turkey in the oven. The 1 advertisement reads, “Happy Thanksgiving from The HiLiter! Here’s hoping you all get 2 enough ‘stuffing!’” (Doc. 75–2 at 12.) By placing the image with the words, Defendant has 3 created a visual connection between Pinder’s photo and Hi Liter. But even without the 4 direct link between the photo and the text, the advertisements could conceivably cast 5 Plaintiffs in a false light. The second advertisement includes a photo of Ana Cheri in a 6 sports bra and shorts. The post proclaims, “Happy Thursday from the HiLiter!” (Doc. 75– 7 2 at 8.). A fact finder could decide that Plaintiffs’ images and the corresponding text in the 8 advertisements falsely suggest the Plaintiffs were somehow affiliated with, promoted, or 9 employees at Defendant’s strip club. 10 Moreover, Plaintiffs have presented survey evidence suggesting the reproduction of 11 Plaintiffs’ photos and Defendant’s corresponding advertisement could confuse customers 12 as to Plaintiffs involvement with Hi Liter. Therefore, whether Defendant’s use of Plaintiffs’ 13 photos in its advertisements placed Plaintiffs in a false light is a genuine issue of material 14 fact precluding summary judgment. 15 iii. Highly Offensive 16 Next, Defendant claims that since Plaintiffs are models who have been 17 photographed in various degrees of undress, the placement of Plaintiffs’ photos in 18 connection to its strip club could not possibly be highly offensive. The Court finds that 19 assertion debatable. The Court agrees with the district judge in Geiger v. Creative Impact, 20 Inc., No. CV–18–01443–PHX–JAT, 2020 WL 3545560, at *3 (D. Ariz. June 30, 2020), 21 that simply because a woman has modeled in risqué clothing (or even previously worked 22 at a strip club) does not mean a reasonable person in a similar position could not be 23 offended by the suggestion that the person is an exotic dancer at the defendant’s strip club. 24 See also Douglass v. Hustler Magazine, Inc., 769 F.2d 1128, 1136–38 (7th Cir. 1985) 25 (publishing plaintiff’s Playboy photos in Hustler without permission could cast plaintiff in 26 highly offensive and false light). Whether the use of Plaintiffs’ images in association with 27 Hi Liter is highly offensive is a genuine issue precluding summary judgment. 28 iv. Major Misrepresentation 1 Defendant next argues that any misrepresentation must be major, and its advertising 2 was not. “[T]o qualify as a false light invasion of privacy, the publication must involve ‘a 3 major misrepresentation of [the plaintiff’s] character, history, activities or beliefs,’ not 4 merely minor or unimportant inaccuracies.” Godbehere, 783 P.2d at 787 (quoting Rstmt. 5 2d Torts § 652E cmt. C) (alteration in original). Like the “highly offensive” inquiry, a fact 6 finder may find that linking a model to entertainment at a strip club presents a major 7 misrepresentation; even when—as here—the model has previously modeled in the nude, 8 posed with a stripper pole, or played an exotic dancer in film. However, a fact finder could 9 also determine that any alleged misrepresentation is minor considering the nature of the 10 photographs and the history of the Plaintiffs. The Court cannot decide this issue as a matter 11 of law. 12 v. No Mental or Emotional Injury 13 Defendant next asserts that Plaintiffs’ false light claims only permit relief for mental 14 and emotional injury; therefore, since Plaintiffs have not pleaded such harm their claims 15 must fail. 16 “Unlike defamation, false light does not protect reputation or good name, but rather 17 protects mental and emotional interests.” Reynolds, 294 P.3d at 156 (quoting Godbehere, 18 783 P.2d at 787). Nonetheless, for a false light claim “a plaintiff may recover even in the 19 absence of reputational damage, as long as the publicity is unreasonably offensive and 20 attributes false characteristics.” Godbehere, 783 P.2d at 787. “In [this] type of case, the 21 false innuendo created by the highly offensive presentation of a true fact constitutes the 22 injury.” Reynolds, 294 P.3d at 156 (alteration in original). A judge does not determine as 23 a matter of law “any actual damage to [the plaintiff’s] reputation” nor does he decide “any 24 emotional damage or damage to sensibility.” Desert Palm Surgical Group, 343 P.3d at 450. 25 These determinations are left to the fact finder after deciding whether a plaintiff has proven 26 the false light claim. See id. 27 Here, Plaintiffs allege Defendant’s social media posts falsely implied Plaintiffs 28 endorsed or worked at Hi Liter. Furthermore, as noted previously, there is a genuine issue 1 whether this inference was highly offensive. Because Plaintiffs raise a triable case that 2 Defendant’s advertisement with Plaintiffs’ photos led to false innuendo about Plaintiffs’ 3 association with Hi Liter strip club, and that this insinuation was highly offensive, the 4 extent and nature of the damage is for the fact finder to decide. 5 vi. Actual Malice – Knowledge of Falsity or Reckless Disregard 6 When a plaintiff is a public figure, a false light claim must also demonstrate actual 7 malice. Godbehere, 783 P.2d at 788. Actual malice occurs when a defendant makes a 8 statement knowing the statement was false or with reckless disregard of the truth. See 9 Miller v. Servicemaster by Rees, 851 P.2d 143, 145 (Ariz. Ct. App. 1992). In general, actual 10 malice is a factual issue. Id. 11 Plaintiffs argue that Defendant acted with actual malice because it knew that 12 Plaintiffs were not associated with, had not endorsed, and did not work for Hi Liter, but, 13 nevertheless, posted the advertisements suggesting Plaintiffs did so. Defendant asserts that 14 the advertisements were not false because the ads make no statements that Plaintiffs were 15 associated with Hi Liter. In addition, Defendant claims the photos were not published 16 “knowingly” because Defendant outsourced the creation of its advertisements to Bob Jung 17 and told him he could only use photos for which he had permission. Because Jung exceeded 18 the scope of this permission, Defendant believes actual malice cannot be presumed. 19 First, Defendant ignores the connotations that could be made by linking its 20 advertisement for Hi Liter with Plaintiffs’ images, despite the knowledge that Plaintiffs 21 were in no way associated with the strip club. Whether this link was in reckless disregard 22 to the truth depends upon a fact finder’s determination of the postings’ degree of innuendo 23 (whether they placed Plaintiffs in a false light) and offensiveness (whether the false light 24 was highly offensive to a similarly situated person). These are material factual issues. 25 Second, simply having Jung as an agent does not necessarily absolve Defendant of 26 liability. When Defendant gave Jung the ability to create the advertisements, Defendant 27 knew it did not photograph its own dancers for advertising. So, Defendant was aware that 28 the images in its advertising were not associated with Hi Liter and could be construed as 1 falsely implying whomever was in the image was associated with Hi Liter. Informing Jung 2 he needed to use publicly available photos does not undermine Defendant’s knowledge. 3 Furthermore, as stated in Geiger v. Creative Impact Inc., Defendant has not shown 4 it probed into whether the images actually used were permissible, and so Defendant’s 5 argument that actual malice is lacking is unpersuasive. See Geiger, 2020 WL 3545560, at 6 *5 (failing to investigate the origin and permission of models’ photos used in advertising 7 raised a genuine issue of fact as to actual malice). 8 Finally, Defendant claims that actual malice cannot be proven because Jung did not 9 recognize the advertisements as his work, and someone made unauthorized posts on 10 Defendant’s Facebook. These are vague statements. They neither deny nor admit that the 11 work was Jung’s. Nor do they explain how Jung’s work differs from the offending 12 advertisements. Whether his testimony undermines the element of actual malice is a 13 credibility determination that requires the fact finder to make certain inferences that are not 14 appropriate to settle as a matter of law. Anderson, 477 U.S. at 255 (“Credibility 15 determinations, the weighing of evidence, and the drawing of inferences from the facts are 16 jury functions, not those of a judge . . . .”); Harris v. Itzhaki, 183 F.3d 1043, 1051 (9th Cir. 17 1999) (“Issues of credibility . . . should be left to a jury.”). 18 The Court finds there are too many factual issues to settle this claim as a matter of 19 law. 20 IV. Arizona Right of Publicity – Misappropriation of Likeness 21 a. Common Law Right of Publicity v. Statutory Right 22 i. Statutory Intent to Limit Right of Publicity to Soldiers 23 Defendant argues that Plaintiffs’ right of publicity claim fails because Arizona has 24 recognized a right of publicity for soldiers alone under Arizona Revised Statute § 12– 25 761(B). If the state legislature had desired a broader scope for the right of publicity, 26 Defendant asserts, it would have extended that right by statute. 27 Defendant ignores the circumstances leading up to the promulgation of the statute. 28 Limiting the right of publicity was not the state legislature’s primary consideration; it was 1 the immediate desire to allow families of deceased soldiers a means of recovery. During 2 the Iraq War, anti-war advocates used the names of dead soldiers to sell merchandise in 3 protest. Frazier v. Boomsma, CV–07–08040–PHX–NVW, 2007 WL 2808559, at *1 (D. 4 Ariz. Sept. 27, 2007). Families of the deceased soldiers sought to end the use of their loved 5 one’s names for political purposes and addressed their complaints to the Arizona State 6 Legislature. Id. at *2. Arizona Revised Statute § 12–761(B) and its preceding Senate Bill 7 1014 were “a direct result of these complaints.” Id. 8 At the time, the Arizona law did not recognize that a right of publicity was 9 descendible, and so the legislators’ intent was likely to extend that right beyond the grave. 10 Originally, the right of publicity was considered a subset of the right of privacy under 11 Restatement (Second) of Torts § 652C. See Restatement (Third) of Unfair Competition § 12 46, cmt. b (1995) (“Rstmt. 3d Unfair Competition”) (“The principal historical antecedent 13 of the right of publicity is the right of privacy.”); Geiger, 2020 WL 3545560, at *7 n.7 14 (acknowledging that the Arizona District Courts previously found the state right of 15 publicity to be a right of privacy under Rstmt. 2d Torts). But, under the right of privacy 16 umbrella, the right of publicity would not survive the death of a plaintiff. See Ariz. Rev. 17 Stat. Ann. § 14–3110 (2007) (“Every cause of action, except . . . invasion of the right of 18 privacy, shall survive the death of the person entitled thereto . . . .”); see Rstmt. 3d Unfair 19 Competition §49 cmt. b (“In most jurisdictions the interest in personal privacy cannot be 20 assigned and does not survive death.”). However, the Arizona appellate court in In re Estate 21 of Reynolds v. Reynolds (“In re Reynolds”) clarified that the right of publicity is in essence 22 a property right under Restatement (Third) of Unfair Competition §§ 46–49 that survives 23 death, and that the statute precluding right to privacy claims by descendants did not apply 24 to the right of publicity. 327 P.3d 213, 214–15, 217 (Ariz. Ct. App. 2014). But In re 25 Reynolds, a 2014 case, would not have been available at the time the Senate Bill was written 26 in 2007—only the statutory language and district court cases interpreting the right of 27 publicity as a privacy right for which descendants could not recover. 28 The proposed Senate Bill reflects an intent to expand the right of publicity to 1 decedents’ families. The original proposed bill was limited to deceased soldiers; it specified 2 that the right of publicity survived death and could be exercised by a soldier’s family 3 member or designated representative. Unauthorized Use of the Name, Portrait or Picture 4 of a Deceased Soldier, S.B. 1014, 48th Leg., 1st Sess. (Ariz. 2007), available at 5 https://www.azleg.gov/legtext/48leg/1R/bills/sb1014p.pdf (last visited August 30, 2020); 6 see also Ariz. Rev. Stat. Ann. §§ 12–761(B) & (E) (utilizing similar language to proposed 7 bill, but specifying the soldier is the holder of the right of publicity for which certain family 8 members can recover upon the soldier’s death). 9 Furthermore, the statutory language acknowledges that it was not meant to override 10 the right of privacy, which encompassed the right of publicity. See Ariz. Rev. Stat. Ann. § 11 12–761(E) (“The rights and remedies provided in [A.R.S. § 12–761] supplement any other 12 rights and remedies provided by law, including the common law right of privacy.”). This 13 is further evidence that the concern when enacting the statute was to expand the right of 14 publicity, not limit it. 15 Defendant excerpts Arizona State Senator Robert Blendau’s statements from the 16 hearing of the Senate Committee on Commerce and Economic Development in an attempt 17 to show that the Arizona State Legislature “deliberately chose to limit this right to the 18 American military, and not to extend it to civilians.” (Doc. 39 at 9.) Again, this ignores the 19 context. The broader focus of the hearing was on inclusivity of the families’ descendible 20 interests, not exclusivity. Blendau was concerned that a deceased movie star’s estate could 21 recover from injury (through copyright) but not a soldier’s family (through a right of 22 publicity). He commented, “You know when a movie star or something dies, like John 23 Wayne, you’re not allowed to use his image without his permission but yet the newspaper 24 is able to publish . . . an obituary and an article and maybe we can look under those laws 25 to figure out what kind of language we can use that would . . . let the paper . . . publish 26 news or whatever they wanted, but keep people from using [the soldier’s likeness] in a 27 manner that . . . the relatives would not support.” Hearing on S.B. 1014 before the S. Com. 28 & Econ. Dev. Comm., 48th Leg., 1st Sess. (Ariz. 2007) (statement of R. Blendau, Member, 1 S. Com. & Econ. Dev. Comm.), available at http://azleg.granicus.com/MediaPlayer.php? 2 view_id=13&clip_id=54 (last visited August 30, 2020). The Senate Committee did not 3 consider whether private citizens should also enjoy a right of publicity; the focus was on 4 establishing a right for the families of fallen soldiers while balancing freedom of speech. 5 Defendant’s contention that the legislature could have extended that right to private citizens 6 if it wanted disregards that the statute was in response to a specific situation, and the 7 extension of the right of publicity to other persons was not part of the discussion. Therefore, 8 the Court cannot find that this statute was meant to limit the right of publicity to soldiers 9 alone. See Orca Commc’ns Unlimited, LLC v. Noder, 337 P.3d 545, 547 (Ariz. 2014) (“If 10 the legislature seeks to preempt a cause of action [,] . . . the law’s text or at least the 11 legislative record should say so explicitly.”) (citation omitted) (alteration in original). 12 ii. Arizona Recognizes Right of Publicity 13 In addition, Arizona has recognized a right of publicity at the appellate level, and 14 there is no indication that it would not recognize this right at the Arizona Supreme Court. 15 See, e.g., In re Reynolds, 327 P.3d at 216 (“We hold that Arizona recognizes a right of 16 publicity.”); see also Geiger, 2020 WL 3545560, at *7 n.6 (following the state appellate 17 court’s lead, right of publicity is an Arizona cause of action under Rstmt. 3d Unfair 18 Competition); ACT Grp., Inc. v. Hamlin, No. CV–12–567–PHX–SMM, 2014 WL 19 4662234, at *8 (D. Ariz. Sept. 18, 2014), reconsideration denied, 2015 WL 11117191, at 20 *2 (D. Ariz. Apr. 27, 2015) (acknowledging that in accordance with In re Reynolds, a right 21 of publicity exists under Arizona law); Pooley v. Nat’l Hole-In-One Ass’n, 89 F. Supp. 2d 22 1108, 1112 (D. Ariz. 2000) (“The Court sees no reason why a claim for invasion of the 23 right of publicity should not be recognized in Arizona.”). 24 Defendant’s argument that the recognition of the right of publicity in In Re Reynolds 25 is merely obiter dictum is unpersuasive. Obiter dictum is “a statement ‘made during the 26 course of delivering a judicial opinion, but one that is unnecessary to the decision in the 27 case and therefore not precedential (though it may be considered persuasive).’” See Best 28 Life Assur. Co. of Calif. v. C.I.R., 281 F.3d 828, 834 (9th Cir. 2002) (quoting Black’s Law 1 Dictionary 1100 (7th ed. 1999)). The court’s holding was crucial to its analysis of 2 plaintiff’s claim; the Arizona Court of Appeals specifically held that there was a right of 3 publicity, but the plaintiff had not established the elements necessary to state a claim. 4 Geiger, 2020 WL 3545560, at *7 n.6. 5 iii. Restatement Not in Conflict 6 Defendant next asserts that the statutory right of publicity under Arizona Revised 7 Statute § 12–761(B) preempts the Restatement’s right of publicity because they are in 8 conflict. The Court disagrees. Even where the state court has not acknowledged a common 9 law right, Arizona applies the Restatement in the absence of conflicting law. Pooley, 89 F. 10 Supp. 2d at 1111; Ft. Lowell-NSS Ltd. P’ship v. Kelly, 800 P.2d 962, 968 (Ariz. 1990). 11 Restatement (Third) of Unfair Competition recognizes the right of publicity. Rstmt. 3d 12 Unfair Competition § 46; see In re Reynolds, 327 P.3d at 215; see also Geiger, 2020 WL 13 3545560, at *7 nn.6–7 (finding a right of publicity through both the common law and the 14 application of the Rstmt. 3d Unfair Competition §§ 46–49). Moreover, Defendant has not 15 presented a persuasive argument that the Restatement is preempted because of the statutory 16 extension of the right of publicity to soldiers. See Orca Commc’ns Unlimited, 337 P.3d at 17 547 (“If the legislature seeks to preempt a cause of action [,] . . . the law’s text or at least 18 the legislative record should say so explicitly.”) (citation omitted) (alteration in original). 19 The soldiers’ right of publicity statute clearly states that any rights granted therein 20 supplement those available at common law and as demonstrated supra, the legislative 21 intent was not meant to limit the cause of action. See Ariz. Rev. Stat. Ann. § 12–761(E) 22 (soldiers’ statute meant to supplement any other legal right). So, even if there were no 23 common law right of publicity, there is a right of publicity under the Restatement. 24 iv. Revised Arizona Jury Instructions Not Mandatory Authority 25 As to Defendant’s claim that this Court should not find a right of publicity because 26 the Revised Arizona Jury Instructions (“RAJIs”) do not recognize any appellate case law 27 in support, the Court notes that the RAJIs “are standard jury instructions created by the 28 State Bar of Arizona. They are not approved by the Arizona Supreme Court, and their use 1 is not mandatory.” Thues v. Ryan, No. CV–13–00644–PHX–NVW, 2014 WL 3571687, at 2 *21 n.7 (D. Ariz. July 21, 2014). This argument, therefore, does not convince the Court it 3 must deny Plaintiffs’ cause of action. 4 In conclusion, the Court finds Arizona recognizes a right of publicity and Plaintiffs 5 may raise this claim. 6 b. Statute of Limitations – Right of Publicity 7 Having established the right of publicity, the Court now considers whether 8 Plaintiffs’ claims are barred by the statute of limitations. Plaintiff raised the statute of 9 limitations issue during oral arguments, and Defendant opined that the limitations period 10 likely mirrored the time for false light claims, but conceded it did not believe the issue was 11 before the Court. 12 “[A]n affirmative defense is not waived to the extent that . . . the opposing party’s 13 own evidence discloses the defense.” Jones v. Miles, 656 F.2d 103, 107 n.7 (5th Cir. 1981). 14 Moreover, if the limitations period is addressed “by express or implied consent of the 15 parties[]” the issue may be raised at later points in litigation. Bush v. Woods, No. AZ-05- 16 1124-MoSK, 2005 WL 6960185, at *6 (B.A.P. 9th Cir. Dec. 15, 2005) (citing Haskins v. 17 Roseberry, 119 F.2d 803, 805 (9th Cir. 1941)); Wyshak v. City Nat’l Bank, 607 F.2d 824, 18 826 (9th Cir. 1984) (untimely statute of limitations defense permissible where there was 19 no prejudice to opposing party and notice was provided in pleadings). Here, the Court may 20 consider the statute of limitations because: (1) Plaintiffs raised the issue, (2) Plaintiffs are 21 not prejudiced by the defense since the limitations period was applicable to their claim 22 from the outset, and (3) Defendant provided notice of the affirmative defense in its Answer. 23 (See Doc. 8 at 14, ¶ 88.) 24 However, when asked its position about the limitations period, Defendant briefly 25 suggested the period was one year but missed its opportunity to further elaborate. 26 Defendant has failed to meet its burden of showing the one-year limit is applicable. See 27 Electra v. Id. Bus. Holdings LLC, No. CV-18-01604-SRB, Doc. 179 at 6 (D. Ariz. Sept. 28 24, 2020) (quoting Troutman v. Valley Nat. Bank of Ariz., 826 P.2d 810, 814 (Ariz. Ct. 1 App. 1992)) (“[W]hen a defendant asserts the statute of limitations as a defense, the 2 defendant has the burden of proving the complaint falls within the statute.”). 3 c. Prima Facie Case of Right of Publicity – Misappropriation 4 Next, the Court finds there are factual issues that preclude summary judgment for 5 either party as to the right of publicity claims. “To prevail on a right of publicity claim, a 6 plaintiff must show (1) the defendant’s use of the plaintiff’s name or likeness, (2) the 7 appropriation of the plaintiff’s name or likeness to the defendant’s advantage, (3) lack of 8 consent, and (4) resulting injury.” Lemon v. Harlem Globetrotters Int’l, Inc., 437 F. Supp. 9 2d 1089, 1100 (D. Ariz. 2006) (citing Pooley, 89 F. Supp. 2d at 1111). Appropriation of 10 likeness is not limited to celebrities. “[T]he identity of even an unknown person may 11 possess commercial value.” In re Reynolds, 327 P.3d at 215 (quoting Rstmt. 3d Unfair 12 Competition § 46 cmt. d). 13 i. Use of Likeness 14 Overshadowing all of Plaintiffs’ claims is Defendant’s argument that the Plaintiffs 15 cannot demonstrate Defendant posted Plaintiffs’ images on its Facebook page. For the 16 reasons stated in Section III(a)(i), this is a genuine issue of material fact precluding 17 summary judgment. 18 ii. Consent 19 In addition, Defendant seems to suggest that because Plaintiffs were paid for the 20 photos at issue, and some had released the rights to the photos to other entities, Plaintiffs 21 do not own their images and they could be distributed without Plaintiffs’ permission. This 22 misses the mark, however, because Defendant never claims it obtained the permission from 23 the other entities for usage. The right of publicity protects a person’s ability to control how 24 their likeness is used. Even if Plaintiffs released their image to certain businesses for use, 25 Defendant’s business was not one of them. Therefore, there is no dispute that Defendant 26 did not have consent to use Plaintiffs’ likeness. 27 iii. Agency 28 Defendant also argues Plaintiffs cannot show that Defendant is liable for posting 1 Plaintiffs’ images on its Facebook page because under the agent-principal theory, the 2 principal is not responsible for the torts of the agent when the agent acts outside of the 3 scope of authority granted by the principal. Defendant informed its agent, Bob Jung, that 4 he could not use images without proper licensing. Therefore, it claims, the Court should 5 grant summary judgment in its favor “because Plaintiffs cannot prove Defendant 6 authorized Jung to engage in unauthorized use of the Images and authorized Jung to exceed 7 the scope of his given authority.” (Docs. 81 at 7; 89 at 7.) 8 Plaintiffs respond that the right of publicity is a strict liability tort, and it is 9 inconsequential who posted the advertisement. What matters is who benefitted from it. 10 Plaintiffs are correct that Defendant’s intent is not pertinent to establishing the elements of 11 a right of publicity claim. See Pooley, 89 F. Supp. 2d at 1115 (“[A]n intent to infringe 12 another’s right of publicity is not an element of liability.”); cf. Gray v. LG&M Holdings, 13 LLC, No. CV–18–02543–PHX–SRB, at 6 n.4 (D. Ariz. Sept. 23, 2020) (declining to 14 require “actual malice” in right of publicity claim). 15 iv. Defendant’s Advantage and Plaintiffs’ Injury 16 Plaintiffs assert that the use of their images created an advantage for Defendant by 17 “getting Plaintiffs to appear for free in the[] advertisements.” (Doc. 74 at 5.) In addition, 18 Plaintiffs were injured by “being denied the fair market revenue [they] would have received 19 but for Defendant’s misappropriations.” (Id.) Defendant claims that Plaintiffs cannot prove 20 Defendant obtained an advantage by using Plaintiffs’ photos. Furthermore, because 21 Plaintiffs were not denied work, and in certain instances Plaintiffs had released the rights 22 to the images, they cannot prove injury. 23 On a basic level, Defendant was advantaged by its use of Plaintiffs’ images. It is 24 evident that strip club customers are more likely to frequent establishments with attractive 25 women, as performer attractiveness is the cornerstone of strip club entertainment. 26 Defendant utilized photos of beautiful women to promote its strip club, therefore, 27 Defendant’s inclusion of Plaintiffs’ photos in its advertising “enhanced the marketability” 28 of Hi Liter and was “integral” to the advertisement. See Pooley, 89 F. Supp. 2d at 1112– 1 13. In sum, Defendant’s use was for the purposes of increasing trade and functioned to its 2 commercial advantage. See id. 3 Moreover, “[i]t is beyond controversy that the failure to pay any Plaintiff for the use 4 of her Image harmed each Plaintiff.” Gray, CV–18–02543-PHX-SRB, Doc. 122 at 7. 5 Plaintiffs have met their burden of showing Defendant enjoyed a benefit and Plaintiffs 6 suffered an injury. 7 v. Identifiability 8 Defendant next asserts that Plaintiffs’ claim fails because Plaintiffs cannot show 9 they are identifiable. It claims that Plaintiffs’ survey and report by Martin Buncher does 10 not adequately establish that Plaintiffs are recognizable to Hi Liter patrons. 11 Where a defendant has used the photographic image of a plaintiff’s likeness, “the 12 plaintiff must be reasonably identifiable.” Rstmt. 3d Unfair Competition § 46 cmt. d. But, 13 because an unknown person may bring a right of publicity claim, the identifiability of a 14 plaintiff measures the monetary relief available; it does not measure a plaintiff’s ability to 15 establish beyond controversy the essential elements of her claim. See Rstmt. 3d Unfair 16 Competition §46 cmt. d (“[T]he identity of even an unknown person may possess 17 commercial value . . . . Thus, an evaluation of the relative fame of the plaintiff is more 18 properly relevant to the determination of appropriate relief.”). 19 Despite Plaintiffs’ ability to meet several of the elements, the issue of whether 20 Defendant posted Plaintiffs’ images could be decided in favor of either party, and so the 21 Court may not grant summary judgment. 22 V. Lanham Act 23 a. Pleading of False Advertising and False Association Claim 24 Count II of Plaintiffs’ Complaint raises Lanham Act violations under 15 U.S.C. § 25 1125(a). This section provides: 26 (a) Civil action 27 (1) Any person who, on or in connection with any goods or services, or any 28 container for goods, uses in commerce any word, term, name, symbol, 1 or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading 2 representation of fact, which-- 3 (A) is likely to cause confusion, or to cause mistake, or to deceive as to the 4 affiliation, connection, or association of such person with another 5 person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or 6 (B) in commercial advertising or promotion, misrepresents the nature, 7 characteristics, qualities, or geographic origin of his or her or another 8 person’s goods, services, or commercial activities,

9 shall be liable in a civil action by any person who believes that he or she is 10 or is likely to be damaged by such act.

11 15 U.S.C. § 1125(a). Section (a)(1)(A) is considered an action for “false association.” 12 Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 122 (2014). False 13 endorsement “is a type of false association claim.” Lemon, 437 F. Supp. 2d at 1095. 14 Moreover, an action under § (a)(1)(B) raises a “false advertisement” claim. Lexmark Int’l, 15 572 U.S. at 122. Given the factual allegations corresponding to both subsections and 16 recognizing that Plaintiffs’ cause of action under the Lanham Act, 15 U.S.C. § 1125, 17 encompassed both § (a)(1)(A) and § (a)(1)(B), Defendant was properly notified of 18 Plaintiffs’ false association and false advertisement claims. 19 b. False Advertising – 15 U.S.C. § 1125(a)(1) 20 Both parties assert that they should be afforded summary judgment on the false 21 advertising claim. However, only Defendant is correct. Plaintiffs must show the following 22 to avoid dismissal of their false advertising claim: (1) that their injury falls within the “zone 23 of interests” that are safeguarded by the Lanham Act, and (2) that the resulting injury was 24 proximately caused by a violation of the Act. Lexmark Int’l., 572 U.S. at 130, 133. 25 i. Zone of Interests 26 For false advertising claims, the Lanham Act’s primary interest is in “protect[ing] 27 persons engaged in commerce against unfair competition” by “making actionable the 28 deceptive and misleading use of marks.” 15 U.S.C. § 1127; Lexmark Int’l, 572 U.S. at 131. 1 So, “[t]o come within the zone of interests [in a Lanham Act false advertising claim], a 2 plaintiff [must] allege an injury to a commercial interest in reputation or sales.” Lexmark 3 Int’l, 572 U.S. at 131–32. If the parties are not directly in competition, a plaintiff must 4 show that the injury plaintiff suffered is “harmful to the plaintiff’s ability to compete with 5 the defendant.” Jack Russell Terrier Network of N. Ca. v. Am. Kennel Club, Inc., 407 F.3d 6 1027, 1037 (9th Cir. 2005). 7 Plaintiffs allege that they suffered an injury to their commercial interests because 8 Defendant pilfered their photos instead of paying for a photo shoot. Lost income from a 9 missed photo shoot could be construed as a financial injury to Plaintiffs, in that the sale of 10 their goods—i.e. their photos—has been impeded. However, any alleged false advertising 11 must also “be harmful to plaintiff’s ability to compete with defendant.” Id. Not being hired 12 by Defendant is not equivalent to not being able to compete with Defendant. Plaintiffs have 13 not shown their competitive edge was affected from Defendant’s advertising. 14 In addition, Plaintiffs’ contention that they suffered a competitive commercial injury 15 is undermined because the parties’ commercial interests do not overlap. Clearly, the parties 16 are not direct competitors, as Plaintiffs are models and Defendant runs a strip club. But 17 commercial competitive interests need not be direct to successfully allege that a false 18 advertisement led to a commercial injury. Lexmark Int’l., 572 U.S. at 136. Nonetheless, 19 Plaintiffs’ bare assertion that their commercial interests overlap with Defendant’s is simply 20 not supported by any evidence. Nelson v. Pima Cmty. Coll., 83 F.3d 1075, 1081–82 (9th 21 Cir. 1996) (“[M]ere allegation and speculation do not create a factual dispute for purposes 22 of summary judgment”). There is no indication that the consumer money would otherwise 23 go to hiring Plaintiffs for modeling if not for Defendant’s false advertisement. Moreover, 24 Plaintiffs make no allegations that their ability to obtain modeling jobs has been affected 25 from the false advertisement. See cf. Geiger v. C&G of Groton, Inc., 424 F. Supp. 3d 276, 26 291–92 (D. Conn. 2019) (denying motion to dismiss false advertisement claim where 27 models’ alleged injury to commercial interest was reputational injury affecting plaintiffs’ 28 ability to be hired by commercial clients, and injury was proximately caused by defendant’s 1 false advertising). Plaintiffs’ speculation is insufficient to show “their position in the 2 marketplace has been damaged.” See Lexmark Int’l, 572 U.S. at 137. 3 Moreover, Plaintiffs have produced no evidence that the alleged association with Hi 4 Liter has damaged their reputation or their ability to compete in any fashion. Without direct 5 competition or comparative advertising, Plaintiffs must show actual injury from 6 Defendant’s deception and have failed to do so. See TrafficSchool.com, Inc. v. Edriver Inc., 7 653 F.3d 820, 826 (9th Cir. 2011); see also B. Sanfield Inc. v. Finlay Fine Jewelry Corp., 8 258 F.3d 578, 580–81 (7th Cir. 2001) (indirect competition requires showing of “past or 9 potential” injury); Dependable Sales & Serv., Inc. v. TrueCar, Inc., 377 F. Supp. 3d 337, 10 347 (S.D.N.Y. 2019) (“The Second Circuit has expressly disfavored presumptions of harm 11 in cases where the products are not obviously in competition or where the defendant’s 12 advertisements make no direct reference to any competitor’s products . . . .”) (citation and 13 quotation marks omitted). 14 ii. Proximate Cause of Harm 15 Even if the Court found Plaintiffs’ injury implicated the zone of interests, Plaintiffs 16 have not established causation. To state a claim of false advertising, a plaintiff must show 17 that “the plaintiff has been or is likely to be injured as a result of the false statement.” 18 Gaby’s Bags, LLC v. Mercari, Inc., CR 20–00734 WHA, 2020 WL 1531341, at *2 (N.D. 19 Cal. Mar. 31, 2020) (citing Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 20 (9th Cir. 1997)) (emphasis added). In other words, “[c]ourts have found that causation just 21 requires that the false advertising proximately cause the claimed injury.” Wyndham 22 Vacation Ownership v. Reed Hein & Assocs., LLC, No. 6:18–cv–02171–GAP–DCI, 2019 23 WL 3934468, at *4 (M.D. Fla. Aug. 20, 2019). In general, proximate cause requires that a 24 plaintiff’s “economic or reputational injury flow[s] directly from the deception wrought by 25 the defendant’s advertising; and that occurs when deception of consumers causes 26 [consumers] to withhold trade from the plaintiff.” Lexmark Int’l, 572 U.S. at 133. However, 27 a plaintiff “cannot obtain relief without evidence of injury proximately caused by 28 [defendant’s] alleged misrepresentations.” Id. at 140 (emphasis in original). 1 In sum, Plaintiffs cannot show that their injury was caused by false advertising. 2 Plaintiffs’ only alleged injury (the loss of photo shoot income) was neither caused by 3 consumers withholding money, nor was it a result of consumer deception; the injury 4 resulted from Defendant’s failure to pay for the photos. Defendant was not deceived by its 5 own misleading advertising, and no consumer was hoodwinked into not paying Plaintiffs 6 but instead giving Defendant his or her money. The lost modeling income may be pertinent 7 to other claims—such as the right of publicity—but does not establish the proximate cause 8 necessary for false advertising. See Gibson v. BTS N., Inc., No. 16–24548–Civ– 9 COOKE/TORRES, 2018 WL 888872, at *5 (S.D. Fla. Feb. 14, 2018) (granting summary 10 judgment on plaintiffs’ false advertising claim because “compensation for the fair market 11 value of the use of their image” was irrelevant to whether defendant’s advertising was false 12 and did not necessarily show proximate cause). 13 Plaintiffs have failed to support their false advertising claim and, therefore, it must 14 be dismissed. c. False Association – 15 U.S.C. § 1125(a)(1) 15 In essence, the crux of a false association claim depends upon the answer to the 16 question: Would a reasonably prudent consumer in the marketplace be confused? See 15 17 U.S.C. §1125(a); Lemon, 437 F. Supp. 2d at 1095. Here, neither Plaintiffs nor Defendant 18 has proven that the undisputed facts conclusively answer this question. 19 To establish this claim, a plaintiff must demonstrate that a defendant’s 20 advertisement was placed in commerce and made a confusing or misrepresentative “false 21 designation of origin, false or misleading description, or representation of fact” that 22 obscured the true characteristics of a defendant’s services or goods. Freecycle Network, 23 Inc. v Oey, 505 F.3d 898, 902 (9th Cir. 2007). A false representation may cause confusion 24 as to either the source and sponsorship of, affiliation with, or connection to a defendant’s 25 goods or services. See 15 U.S.C. § 1125(a)(1)(A). In general, “‘[l]ikelihood of confusion 26 is a factual determination,’ and ‘district courts should grant summary judgment motions 27 regarding the likelihood of confusion sparingly.’” Fortune Dynamic, Inc. v. Victoria’s 28 Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1039 (9th Cir. 2010) (quoting Thane Int’l, 1 Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901–02 (9th Cir. 2002)) (alteration in original). 2 i. Sleekraft Factors 3 As noted in the Court’s assessment of Plaintiffs’ false advertising claim, the parties’ 4 markets are not competitive; however, the “goods are related” in that they both use photos 5 of beautiful women to generate income. Plaintiffs are beautiful women who pose for photos 6 for money. Defendant uses photos of beautiful women to entice customers to frequent its 7 establishment. 8 When the parties’ “goods are related, but not competitive,” the district court 9 considers eight factors to evaluate confusion. See AMF, Inc. v. Sleekcraft Boats, 599 F.2d 10 341, 348 (9th Cir. 1979). These include: “(1) the similarity of the marks; (2) the relatedness 11 of the two [parties’] services; (3) the marketing channel used; (4) the strength of 12 [plaintiff’s] mark; (5) [defendant’s] intent in selecting its mark; (6) evidence of actual 13 confusion; (7) the likelihood of expansion into other markets; and (8) the degree of care 14 likely to be exercised by purchasers.” GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000). When, as here, the advertisement has been posted online, the most 15 important factors are the first three, named the “Internet Troika.” Internet Specialties W., 16 Inc. v. Milon-DiGiorgio Enters., 559 F.3d 985, 989 (9th Cir. 2009). Still, “[t]he factors 17 should not be rigidly weighed; [courts] do not count beans.” Dreamwerks Prod. Grp. v. 18 SKG Studio, 142 F.3d 1127, 1129 (9th Cir. 1998). 19 1. Similarity of Marks 20 Obviously, Defendant’s ads are similar to Plaintiffs’ images; there is no dispute that 21 the photos in the advertisements are carbon copies of Plaintiffs. “When the alleged 22 infringer knowingly adopts a mark similar to another’s, reviewing courts presume that the 23 defendant can accomplish his purpose: that is, that the public will be deceived.” Wendt v. 24 Host Int’l, Inc., 125 F.3d 806, 813 (9th Cir. 1997) (quoting Sleekcraft Boats, 599 F.2d at 25 354). This element weighs in Plaintiffs’ favor. 26 2. Relatedness of the Parties’ Services or Goods 27 Here again, Plaintiffs argue that their services are similar because both try to attract 28 clients through the use of images of beautiful women. Further, they argue, both parties are 1 targeting a similar market through social media. Defendant argues that since Plaintiffs have 2 admitted their celebrity is completely unrelated to Defendant’s strip club, Defendant 3 believes this factor should weigh in its favor. 4 When a plaintiff’s commercial value is linked to celebrity status, the goods or 5 services provided are related to the plaintiff’s “reasons for or source of . . . fame.” Downing 6 v. Abercrombie & Fitch, 265 F.3d 994, 1007 (9th Cir. 2001). “To determine whether goods 7 are related, courts may consider whether the goods are complementary, whether the 8 products are sold to the same class of purchasers, and whether the goods are similar in use 9 and function.” Kiva Health Brands LLC v. Kiva Brands Inc., 402 F. Supp. 3d 877, 893 10 (N.D. Cal. 2019). Here, Plaintiffs’ source of fame is their successful—and, in part, risqué— 11 photoshoots and their social media presence. Their fame is also due to each woman’s 12 beauty. Defendant used Plaintiffs’ photos on social media to promote its club that spotlights 13 beautiful women. On a broad scale, the goods are similar and complementary in that both 14 use photos of beautiful women on their social media sites to pique viewers’ interest in their goods. However, the parties do not sell their goods to the same purchasers. Plaintiffs derive 15 income from being hired for photo shoots; Defendant derives income from customers’ 16 entrance fees, entertainment, and drinks at the strip club. This factor tips slightly in 17 Defendant’s favor. 18 3. Contemporaneous Use of Social Media for Marketing 19 Both parties use identical social media platforms to market, but social media is often 20 used in this manner today. “[T]he shared used of the internet as a marketing channel is 21 ubiquitous and, thus, does not shed much light on the likelihood of consumer confusion.” 22 Groupion, LLC v. Groupon, Inc., 859 F. Supp. 2d 1067, 1077 (N.D. Cal. 2012) (citing 23 Network Automation v. Advanced System Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 24 2011)). This factor is equivocal. 25 4. Strength of Plaintiffs’ Mark 26 There is a genuine issue of fact as to whether Plaintiffs are recognizable to members 27 of the community for which Defendant’s advertising is focused. For cases involving 28 alleged celebrities, a strong mark is demonstrated by how recognizable the celebrity is 1 amongst relevant consumers. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1400 (9th 2 Cir. 1992). Plaintiffs have presented a survey indicating a small percentage of those 3 surveyed felt they recognized Plaintiffs. They have also provided evidence that they have 4 a strong social media following. Defendant has submitted no counter-survey. 5 However, Defendant has pointed to evidence that suggests Plaintiffs’ celebrity success 6 appears to be in the past and their current recognizability is questionable. Moreover, 7 Defendant notes that Plaintiff Pinder resides in the United Kingdom and Plaintiffs 8 Voronina and Cheri live in California, making them less recognizable to Hi Liter patrons 9 living in Arizona. It also states that because Plaintiffs are not strippers, they are less 10 recognizable to strip club patrons. Finally, it claims the survey Plaintiffs rely upon to show 11 a likelihood of confusion is flawed because the methods were faulty. The scale for this 12 factor could tip to either side. 13 5. Defendant’s Intent 14 Defendant suggests it had no intent to confuse the viewer into believing Plaintiffs were affiliated with Hi Liter because it told its advertising creator he could not use any images 15 without the proper permissions. However, Defendant knew that any images used in 16 advertising were not of its own dancers, but never investigated whether the proper 17 permissions were obtained. Defendant’s intent and the credibility of Defendant’s witnesses 18 are issues of fact that the Court cannot decide here. Harris, 183 F.3d at 1051 (“Issues of 19 credibility, including questions of intent, should be left to a jury.”); Anderson, 477 U.S. at 20 255 (“Credibility determinations, the weighing of evidence, and the drawing of inferences 21 from the facts are jury functions, not those of a judge . . . .”) 22 6. Evidence of Actual Confusion 23 A genuine issue as to actual confusion also exists. “[S]urvey evidence may establish 24 actual confusion.” Fortune Dynamic, Inc., 618 F.3d at 1035 (quoting Thane Intern., 305 25 F.3d at 902). Plaintiffs have presented survey evidence indicating that approximately 66 26 percent of interviewees believed that Plaintiffs would likely participate in the strip club 27 activities at Hi Liter, 80 percent thought Plaintiffs “agreed to sponsor, endorse or promote” 28 Hi Liter, and 89 percent felt that it was very or somewhat likely that the Plaintiffs were 1 representative of those employees that performed at Hi Liter. (Doc. 78-2 at 22–23); see 2 Warner Bros. Entm’t v. Glob. Asylum, Inc., No. CV 12–9547 PSG (CWx), 2012 WL 3 6951315, at *10 (C.D. Cal. Dec. 10, 2012) (“Generally, confusion levels of 25 to 50 percent 4 provide ‘solid support’ for a finding of likelihood of confusion.”). Furthermore, the use of 5 identical pictures in Defendant’s advertising increases the likelihood that confusion has 6 occurred. See BPI Lux S.a.r.l. v. Bd. of Managers of Setai Condo. Residence at 40 Broad 7 St., No. 18 CIV. 1621 (NRB), 2019 WL 3202923, at *5 (S.D.N.Y. July 16, 2019) (“[T]he 8 likelihood of confusion is obvious” when defendant’s mark imitates plaintiff’s). 9 However, Defendant may undermine the weight a fact finder gives to the survey 10 evidence through questioning the survey methods and the clarity of the questions presented. 11 There is a triable issue here whether these percentages and the identical use constituted 12 actual confusion. 13 7. Likelihood of Expansion into Other Markets 14 This factor is inapplicable since Plaintiffs have no intent to enter into the strip club business and have not alleged Defendant’s advertising hindered the expansion of their 15 goods in any way. 16 8. Purchasers’ Degree of Care 17 Plaintiffs argue that little care is exercised by strip club participants because strip 18 clubs are relatively cheap. Defendant does not believe this factor is relevant but offers no 19 explanation why. “[W]hen the goods are expensive, the buyer can be expected to exercise 20 greater care in his purchases; again, though, confusion may still be likely.” Kiva Health 21 Brands LLC, 402 F. Supp. 3d at 894. Neither party provided evidence of either the cost of 22 strip clubs in general or the sophistication of strip club clientele. These arguments are 23 therefore up for debate. 24 Because a majority of the Sleekraft factors could “tip in either direction” summary 25 judgment as to Plaintiffs’ false association claim is inappropriate. See Fortune Dynamic, 26 Inc., 618 F.3d at 1039. 27 /// 28 VI. John Doe Defendants 1 Finally, Plaintiffs have listed twenty unnamed John Doe Defendants in their 2 Complaint. Generally, the use of anonymous appellations to identify defendants is not 3 favored. Rule 10(a) of the Federal Rules of Civil Procedure requires the plaintiff to include 4 the names of the parties in the action. Because these Defendants are unnamed and there are 5 no factual allegations against them, the Court will dismiss the John Doe Defendants. 6 Accordingly, IT IS ORDERED: 7 1) Plaintiffs’ Motion for Summary Judgment is DENIED. (Doc. 74.) 8 2) Defendant’s Motion for Summary Judgment is GRANTED IN PART and 9 DENIED IN PART as directed in this Order. (Docs. 81, 89.) 10 a. The Motion for Summary Judgment is GRANTED in favor of Defendant 11 for Plaintiff Irina Voronina’s false light–invasion of privacy claims. All 12 other false light claims shall proceed to trial. 13 b. The Motion for Summary Judgment is GRANTED in favor of Defendant 14 for Plaintiffs’ false advertising claims under the Lanham Act. c. The Motion for Summary Judgment is DENIED as to Plaintiffs’ false 15 association claims under the Lanham Act. These claims shall proceed to 16 trial. 17 d. The Motion for Summary Judgment is DENIED as to Plaintiffs’ right of 18 publicity claims. These claims shall proceed to trial. 19 3) John Doe Defendants 1–20 are DISMISSED. 20 4) A joint proposed pretrial order shall be lodged within thirty (30) days from the 21 date of this Order. The Court shall set a pretrial conference upon receipt of the 22 joint proposed pretrial order. The attorney responsible for trial shall appear and 23 participate in the pretrial conference. At the conference, the Court will set 24 deadlines for filing and disposing of the following matters: proposed voir dire, 25 jury instructions, trial memoranda, deposition testimony to be used at trial, and 26 motions in limine. No trial date is set at this time. 27 /// 28 /// 1 5) Should the parties wish to engage in setthement negotiations in front of a 2 Magistrate Judge, the parties shall file a Joint Notice to the Court indicating the 3 desire to have this case referred for settlement. 4 Dated this 14th day of October, 2020. 5 6 7 (J Dp 8 & i} \> □□□ Honorable Raner ©. Collins 9 sernior United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-31-

1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 , No. CV-XXX-XXXXX-TUC-RCC

10 Plaintiff, [Proposed Joint Pretrial Order]

12 ,

13 Defendant.

14 Pursuant to the Scheduling Order previously entered, the following Proposed 15 Joint Pretrial Order reflects the agreement of the parties and shall, upon approval of the 16 Court, be incorporated into the Final Pretrial Order: 17 I. IDENTIFICATION OF PARTIES AND COUNSEL 18 II. NATURE OF ACTION 19 Provide a concise statement of the type of case, including the cause of action 20 and the relief sought. 21 III. STATEMENT OF JURISDICTION 22 State the claims and cite the statutes which give this Court jurisdiction over each 23 claim. 24 IV. CONTENTIONS OF THE PARTIES 25 With respect to each count of the complaint, counterclaim or cross-claim, and to 26 any defense, affirmative defense, or the rebuttal or a presumption where the 27 burden of proof has shifted, the party having the burden of proof shall list the 28 elements or standards that must be proven in order for the party to prevail on that 1 claim or defense. 2 V. STIPULATIONS AND UNCONTESTED FACTS 3 Identify any stipulations reached between the parties and any facts that are 4 uncontested. 5 VI. CONTESTED ISSUES OF FACT 6 List issues of fact to be tried and determined upon trial. Each issue of fact must be 7 stated separately and in specific terms, followed by the parties’ contentions as to 8 each issue. E.g.: 9 Issue: 10 Plaintiff(s) contends: 11 Defendant(s) contends: 12 VII. CONTESTED ISSUES OF LAW 13 The following are issues of law to be tried and determined upon trial. Each issue 14 of law must be stated concisely, separately and in specific terms, followed by the 15 parties’ contentions as to each issue. E.g.: 16 Issue: 17 Plaintiff(s) contends: 18 Defendant(s) contends: 19 VIII. LIST OF WITNESSES 20 Each party shall provide a list of witnesses intended to be called at trial. As to each 21 witness, identify whether he or she is a fact or expert witness and include a brief 22 statement of the expected testimony of any expert witness. 23 24 The parties shall include the following text in this section of the Proposed Final 25 Pretrial Order: “Each party understands that it is responsible for ensuring that the 26 witnesses it wishes to call to testify are subpoenaed. Each party further understands 27 that any witness a party wishes to call shall be listed on that party’s list of witnesses; 28 the party cannot rely on the witness having been listed or subpoenaed by another 1 party.” 2 IX. LIST OF EXHIBITS 3 Each party shall provide a list of numbered exhibits. As to each exhibit, the party 4 shall include a description containing sufficient information to identify and 5 distinguish the exhibit. Further, a statement of either UNCONTESTED or 6 CONTESTED shall follow each listed exhibit. If contested, a brief statement of 7 the objection by the opposing party shall also follow the listed exhibit. Exhibits 8 shall be marked according to the instructions received from the Court (which 9 shall be provided approximately two weeks prior to trial). 10 (e.g. – 1. Laboratory Report from the Clinical Immunology Diagnostic Laboratory 11 dated 6/15/14. CONTESTED by *** for relevance, foundation, hearsay, etc.) 12 13 The parties shall include the following text in this section of the Proposed Final 14 Pretrial Order: “Each party hereby acknowledges by signing this joint Proposed 15 Final Pretrial Order that any objections not specifically raised herein are waived.” 16 X. LIST OF DEPOSITIONS 17 Portions of depositions that will be read at trial must be listed by the party 18 intending to introduce the same and must include the page and line number(s). A 19 statement of either UNCONTESTED or CONTESTED shall follow every 20 identified portion of each listed deposition. If contested, a brief statement of the 21 objection by the opposing party shall follow the listed portion of the deposition to 22 be offered. 23 24 The parties shall include the following text in this section of the joint Proposed 25 Final Pretrial Order: “Each party hereby acknowledges by signing this joint 26 Proposed Final Pretrial Order that any deposition not listed as provided herein will 27 not be permitted at trial absent good cause.” 28 /// 1 XI. JURY TRIAL or BENCH TRIAL 2 A. For a Jury Trial 3 Trial briefs (only upon request of the Court), proposed voir dire, deposition 4 testimony, objections to exhibits and depositions, stipulations, interrogatories to 5 the jury, and stipulated jury instructions shall be filed thirty (30) days prior to trial 6 unless otherwise directed by the Court. Jury instructions which are not agreed 7 upon, together with a concise argument in support of the instruction, shall be filed 8 with the Court and served upon each party at least thirty (30) days before trial. 9 Objections to the non-agreed upon jury instructions shall be filed with the Court 10 and served upon each party fourteen (14) days thereafter. No replies shall be 11 permitted without prior approval from the Court. All proposed jury instructions 12 shall conform with Local Rule 51. Motions in limine shall be filed no later than 13 thirty (30) days before trial. Any opposition shall be filed and served fourteen 14 (14) days thereafter. No replies shall be permitted without prior approval from the 15 Court. 16 B. For a Bench Trial 17 Trial briefs (only upon request of the Court), objections to exhibits, objections to 18 deposition testimony, motions in limine, and stipulations shall be filed and served 19 at least thirty (30) days prior to trial. Proposed findings of facts and conclusions 20 of law (only upon request of the Court) shall be filed fourteen (14) days prior to 21 trial, or as otherwise directed by the Court. 22 XII. PROBABLE LENGTH OF TRIAL 23 Each party shall identify the estimated length of time it will take to present its 24 case. 25 XIII. ADDITIONAL INFORMATION THAT MAY BE HELPFUL TO THE 26 COURT 27 A. Pending Motions: Identify all motions that remain pending on the docket as 28 of the date of this Joint Proposed Pretrial Order. 1 B. Any other information that may be helpful to the Court. 2 XIV. INFORMATION FOR COURT REPORTER 3 In order to facilitate the creation of an accurate record, please file a "Notice to Court 4 Reporter" one week before trial containing the following information that may be 5 used at trial: 6 1. Proper names, including those of witnesses; 7 2. Acronyms; 8 3. Geographic locations; 9 4. Technical (including medical) terms, names or jargon; 10 5. Case names and citations; and 11 6. Pronunciation of unusual or difficult words or names. 12 In addition, please send (or transmit electronically) to the court reporter a copy of 13 the concordance from key depositions. 14 XV. CERTIFICATION 15 Undersigned counsel for each of the parties in this action do hereby approve and 16 certify: 17 1. All discovery has been completed. 18 2. The identity of each witness has been disclosed to opposing counsel. 19 3. Each exhibit listed herein: (a) is in existence; (b) is numbered; and (c) has 20 been disclosed and shown to opposing counsel. 21 4. All other form and content of this proposed Joint Pretrial Order. 22 XVI. ADOPTION 23 The Court may adopt this proposed Joint Pretrial Order at the Pretrial Conference 24 or at a subsequent hearing. 25 26 ______________________ _______________________ 27 Attorney for Plaintiff Attorney for Defendant 28