Mavrix Photographs, LLC v. Livejournal, Inc.
873 F.3d 1045 (2017)
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Rule of Law:
The common law of agency applies when determining whether infringing material was 'stored at the direction of a user' for purposes of the Digital Millennium Copyright Act’s (DMCA) § 512(c) safe harbor defense. A service provider may be liable for copyright infringement if its agents, including volunteer moderators, actively screen and post infringing content beyond merely 'accessibility-enhancing' activities.
Facts:
- LiveJournal operates an online social media platform where users can create and run thematic communities.
- LiveJournal established roles for unpaid administrators, including 'Moderators' who review user-submitted posts for compliance with community rules.
- Oh No They Didn’t! (ONTD) is a popular LiveJournal community focused on celebrity news, where users submit posts containing photographs, videos, and gossip.
- ONTD moderators review user submissions for substance, copyright infringement, pornography, and harassment, publicly posting only about one-third of them.
- Due to ONTD's significant popularity, LiveJournal hired Brendan Delzer, an active ONTD moderator, as a full-time 'primary leader' for ONTD in 2010, aiming to exercise more control and generate advertising revenue.
- As the 'primary leader,' Delzer instructs ONTD moderators, selects and removes them based on performance, and participates in reviewing and approving posts.
- Mavrix Photographs is a celebrity photography company that specializes in candid celebrity photographs and sells them to magazines.
- Between 2010 and 2014, ONTD posted twenty of Mavrix’s copyrighted photographs on the LiveJournal platform, some of which contained watermarks including 'Mavrixonline.com.'
Procedural Posture:
- Mavrix filed a lawsuit against LiveJournal for copyright infringement, seeking damages and injunctive relief, based on twenty photographs posted on ONTD.
- LiveJournal subsequently removed the allegedly infringing posts.
- During discovery, Mavrix filed two motions to compel LiveJournal to disclose the identities of the ONTD moderators, which a magistrate judge denied.
- Mavrix sought review of the magistrate judge's order by the district court, but the district court upheld the denial, citing the moderators' First Amendment right to anonymous internet speech.
- LiveJournal moved for summary judgment, arguing it was protected by the Digital Millennium Copyright Act’s (DMCA) § 512(c) safe harbor.
- The district court granted LiveJournal’s motion for summary judgment, finding the § 512(c) safe harbor shielded LiveJournal from liability, and denied Mavrix’s cross-motion for partial summary judgment.
- Mavrix appealed the district court's summary judgment ruling and the denial of its discovery motions to the Ninth Circuit Court of Appeals.
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Issue:
Does the common law of agency apply to determine whether material posted by volunteer moderators on an online platform was 'stored at the direction of a user' under the DMCA § 512(c) safe harbor, and if so, are there genuine issues of material fact concerning an agency relationship between LiveJournal and its ONTD community moderators?
Opinions:
Majority - PAEZ, Circuit Judge
Yes, the common law of agency applies when determining whether material was 'stored at the direction of a user' under the DMCA § 512(c) safe harbor, and there are genuine issues of material fact regarding whether the ONTD moderators are LiveJournal's agents, necessitating a trial. The court reasoned that statutes are presumed not to disturb the common law, and federal copyright law, including the DMCA, has consistently incorporated common law principles like agency and vicarious liability. The district court erred by rejecting the application of agency law to the safe harbor analysis. The court identified genuine issues of material fact concerning the agency relationship, applying Restatement (Third) of Agency principles. Evidence suggested LiveJournal manifested assent to moderators acting on its behalf by giving them explicit authority and making them integral to ONTD's business model (actual authority). User complaints relying on moderator approval also indicated apparent authority, traceable to LiveJournal’s explicit roles. LiveJournal also exerted significant control through Brendan Delzer, who instructs, selects, and removes moderators, and whose screening criteria derive from LiveJournal-ratified rules. The court clarified that if an agency relationship is found, the fact finder must then determine if the moderators' manual, substantive review and posting activities exceeded mere 'accessibility-enhancing activities.' The court also provided guidance for remand on the other § 512(c) elements, including assessing actual and red flag knowledge (considering watermarks) and the 'financial benefit directly attributable to the infringing activity' and 'right and ability to control' criteria, which require 'something more' than just the ability to remove content. Finally, the court vacated the denial of discovery regarding moderator identities, stating the agency determination should inform the balancing test for anonymous internet speech rights.
Analysis:
This case significantly clarifies the applicability of common law agency principles to DMCA § 512(c) safe harbor defenses, particularly concerning the actions of volunteer moderators on large online platforms. By rejecting a bright-line rule against agency for volunteers, the Ninth Circuit emphasizes that a service provider's level of control and the integration of 'volunteer' actions into its business model are crucial. This ruling prevents online platforms from easily disclaiming responsibility for content curated by non-employee administrators, potentially leading to more rigorous oversight of user-generated content and broader liability for platforms that actively manage, rather than passively host, such content. It also highlights the importance of discovery in establishing such agency relationships.
