Fraley v. Facebook, Inc.
40 Media L. Rep. (BNA) 1222, 101 U.S.P.Q. 2d (BNA) 1348, 830 F.Supp.2d 785 (2011)
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Rule of Law:
An interactive computer service provider may be held liable for violating a user's right of publicity when it uses the user's name and likeness to create new commercial content, such as a paid endorsement, because in doing so it acts as a content creator rather than a mere publisher protected by the Communications Decency Act.
Facts:
- Plaintiffs Angel Fraley and others were registered members of Facebook.com, a free social networking site that generates revenue from advertising.
- On January 25, 2011, Facebook launched a new advertising feature called 'Sponsored Stories,' which was enabled for all members by default.
- The named plaintiffs registered for Facebook before the 'Sponsored Stories' feature was introduced.
- Plaintiffs clicked the 'Like' button on various companies' Facebook pages for reasons such as accessing a free software demonstration or receiving a promotional offer.
- Subsequently, Facebook used the plaintiffs' names, profile pictures, and their 'Like' activity to create 'Sponsored Story' advertisements that were displayed on their friends' Facebook pages.
- An example of a Sponsored Story was an advertisement for Rosetta Stone featuring plaintiff Angel Fraley's name and profile picture with the text, 'Angel Frolicker likes Rosetta Stone.'
- Plaintiffs were not aware that clicking the 'Like' button would be interpreted and publicized by Facebook as a commercial endorsement for which they would not be compensated.
- Facebook's CEO and COO publicly stated that a 'trusted referral' from a friend is the 'Holy Grail of advertising' and is two to three times more valuable than a standard advertisement.
Procedural Posture:
- Angel Fraley and other plaintiffs filed a putative class action lawsuit against Facebook, Inc. in a California state court.
- Plaintiffs filed an amended complaint in state court.
- Facebook removed the case to the U.S. District Court for the Northern District of California.
- After Facebook filed an initial motion to dismiss in federal court, Plaintiffs filed a Second Amended Complaint.
- Facebook filed the present motion to dismiss the Second Amended Complaint for lack of subject matter jurisdiction and for failure to state a claim.
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Issue:
Does using a Facebook member's name, profile picture, and their 'Like' of a brand to create a paid 'Sponsored Story' advertisement, without the member's specific consent or compensation, state a plausible claim for violation of California's statutory right of publicity, California Civil Code § 3344?
Opinions:
Majority - Judge Lucy H. Koh
Yes. Using a Facebook member's name and likeness in a 'Sponsored Story' advertisement states a plausible claim for a violation of California's right of publicity because even a non-celebrity's personal endorsement to their social network can have a quantifiable commercial value that the law protects from unconsented commercial appropriation. The court rejected Facebook's primary defenses, finding first that Plaintiffs had Article III standing because they alleged a concrete economic injury—the loss of compensation for the commercial value of their endorsements. Second, the court held that immunity under § 230 of the Communications Decency Act (CDA) does not apply. By taking user actions, combining them with user names, photos, and advertiser logos, and labeling them 'Sponsored,' Facebook becomes an 'information content provider' responsible, at least in part, for creating the challenged advertisement, rather than being a mere publisher of third-party content. Finally, addressing the merits of the California Civil Code § 3344 claim, the court found that the 'newsworthy' exception did not apply because the use was purely commercial advertising. The issue of consent was a disputed question of fact not suitable for dismissal. Critically, the court affirmed that the right of publicity protects non-celebrities and that the appropriation of a likeness can itself create economic value, which Plaintiffs plausibly alleged by citing Facebook's own executives on the enhanced value of friend endorsements.
Analysis:
This decision was significant for establishing that online platforms cannot automatically claim immunity under the Communications Decency Act when they actively create commercial advertising content using their users' identities. It affirmed that the right of publicity extends to the digital realm for ordinary individuals, recognizing that a personal endorsement within a social network has tangible economic value. The ruling set an important precedent that forced social media companies to be more transparent about how user actions are monetized and paved the way for future litigation and settlements concerning the commercial use of user data and likenesses in online advertising.
