Rhoads v. Margolis CA2/7 ( 2015 )

Filed 1/26/15 Rhoads v. Margolis CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
DELORES RHOADS et al., B249800
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. EC059885)
v.
PETER MARGOLIS et al.,
Defendants and Appellants.
DELORES RHOADS et al.,
Plaintiffs and Appellants,
v.
STEVEN ROSEN,
Defendant and Respondent.
APPEALS from an order of the Superior Court of Los Angeles County, Donna
Fields Goldstein, Judge. Affirmed in part and reversed in part.
Alan G. Dowling for Plaintiffs and Respondents Delores Rhoads, Kathryn Rhoads
D’Argenzio and Kelle Rhoads.
Leopold, Petrich & Smith, Louis P. Petrich and Jamie Lynn Frieden, for
Defendants and Appellants Peter Margolis, Andrew Klein and Velocity Publishing
Group, Inc. and, for Defendant and Respondent Steven Rosen.
__________________________
In 2007 Delores Rhoads, Kathryn Rhoads D’Argenzio and Kelle Rhoads, the
mother, sister and brother of Randy Rhoads, a well-known rock guitarist who died in a
plane crash in 1982, entered into an agreement with Peter Margolis granting Margolis the
right to use their personal information and memorabilia to make a documentary film
about Randy.1 When the documentary project faltered three years later, Margolis,
Andrew Klein, Steven Rosen and Velocity Publishing Group, Inc. published a book about
Randy. The family sued, alleging the book was based on materials they had provided to
Margolis for the exclusive purpose of making the documentary film. Margolis, Klein,
Rosen and Velocity filed a special motion to strike the complaint pursuant to Code of
Civil Procedure section 425.16 (section 425.16). The trial court denied the motion as to
all defendants other than Rosen. We affirm in part and reverse in part.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Margolis-Rhoads Agreement
In 1979 Randy, who was then performing with a band called Quiet Riot, was hired
as lead guitarist for a new band formed by Ozzy Osbourne, who had previously been the
lead vocalist for Black Sabbath. Randy performed with Osbourne’s band until 1982
when he died while on tour in a Florida plane crash at the age of 25. He had recently
been named best new guitarist by Guitar Player magazine and was recognized in 2008 as
one of Rolling Stone magazine’s 100 greatest guitarists. Notwithstanding his short
professional life, he has had a strong influence on other rock musicians.
1
Because several members of the families share the same last name, we refer to
them by their first names for convenience and clarity. (See Jones v. ConocoPhillips Co.
(2011) 198 Cal. App. 4th 1187, 1191, fn. 1.)
2
The Rhoads family has kept Randy’s legacy alive by giving interviews about him
through the years and holding memorial gatherings on his birthday and the anniversary of
his death. Many of their recorded reminiscences are available online. According to
Delores, who once operated the music school where Randy learned to play electric guitar,
family members have tried to accommodate the interests of Randy’s fans by sharing their
memories of Randy but have never tried to profit from his name. While the family knew
others had written biographies or created video tributes to Randy, they had long hoped to
see a documentary film depicting Randy’s complete life using the family’s personal
memories and memorabilia.
In 2006 Margolis, a former guitar student of Randy’s, approached the family about
making such a documentary. Margolis was not a filmmaker but had long worked in
television production. In April 2007 Margolis entered into an agreement with Delores,
Kathryn and Kelle (collectively defined as “Owner”) for an exclusive grant of rights “to
produce a non-fiction documentary type program on the life and times of Randy
Rhoads . . . .” In a paragraph entitled “Documentary Rights” the agreement provided,
“In consideration of the payment to Owner of [$5,000] . . . , Owner hereby grants to
Producer the right to produce, distribute and otherwise exploit one non-fiction
documentary type program (‘Documentary Program’) in the form of a motion picture,
television production or other production of approximately 43-110 minutes based on the
life of Randy, and to distribute and otherwise exploit the Documentary Program,
worldwide, in perpetuity in all media, now . . . or hereafter devised (the ‘Documentary
Rights’).”
The agreement also granted Margolis an option “to acquire all ‘Life Story Rights’
to produce a full length motion picture, television or other production based on the Life
Story Rights (which is distinguished from the Program), as a dramatic production . . . for
a term which is the longer of three (3) years from the date of the completion of the
Documentary Program or four (4) years from the date hereof (the ‘Term’).” The option
was never exercised.
3
A paragraph entitled “Interviews” stated: “Upon Producer’s request, Owner
agrees, subject to her [sic] availability, to be interviewed by and/or consult with Producer
and/or its authorized representative(s) as to the Life Story, for reasonable amounts of
time, whenever reasonably required by Producer in and in connection with the
Productions. In no event shall Owner knowingly give an interview for the purpose of a
competing production to the Productions of Producer. Owner hereby grants to Producer
the right to use any information, material, ideas, incidents, events, experiences,
observations, and feelings disclosed or referred to in said interviews and/or consultations
(‘interview information’) in and in connection with the Productions. . . .”
The term “Life Story Rights” was defined as “a grant by the Owner of all rights
Owner possess[es],” including “[t]he exclusive and irrevocable right (but not the
obligation) to use events from the life of Randy Rhoads (the ‘Life Story’) and to use
Randy’s name or any variant thereof and Randy’s picture, photograph, portrait, or
representation, or any simulation thereof, in and in connection with the Productions . . . ;
[¶] [and] [t]he exclusive and irrevocable right to depict, portray, and represent Randy and
Randy’s life . . . in connection with the Productions . . . .” In addition, “[t]he rights
granted include access to all material owned or controlled by Owner related to the Life
Story, including all film, tape, records, documents, journals, Randy’s personal effect[s]
. . . and all other materials related thereto (the ‘Materials’). Owner hereby grants to
Producer the right to use and incorporate in[to] the Productions any or all of the material
(subject to Producer securing all applicable clearances) but the ownership of all such
materials shall remain with Owner and shall be returned to Owner in the same condition.”
2. The Documentary Production
While negotiating the agreement with the Rhoads family, Margolis approached
Dakota Entertainment North, Inc. (Dakota) to discuss financing the documentary. Dakota
agreed to back the project but only if it held the rights. As drafted, the Margolis-Rhoads
agreement permitted Margolis to assign his rights, “provided that no such assignments
shall relieve Producer of [his] obligations hereunder unless such an assignment is to a
U.S. television network or a major motion picture studio or other such similarly
4
financially capable entity which assumes Producer’s obligations hereunder in writing.”
The day after the Margolis-Rhoads agreement was signed, Margolis assigned (by writing)
all rights he received under that agreement to Dakota, which then hired Margolis to
produce the documentary.2
Margolis began work on the documentary. He was approached by Klein, another
fan of Randy’s, who volunteered to work on the production. Over the next two years
Margolis and Klein videotaped more than 100 interviews and obtained numerous
photographs and video clips. According to the Rhoads family, Margolis did not seem to
have a clear direction for the documentary; and they were displeased with the quality of
the first cut. They were also surprised to learn Margolis had failed to obtain necessary
releases from Osbourne to use the band’s music in the documentary. Although further
versions of the documentary were made under Dakota’s auspices, the Rhoads family
contends Margolis and Klein had already begun working on the book (a project they did
not disclose to the family) and essentially abandoned the documentary. Dakota hired
another person to re-edit the documentary but has never released it.
In reliance on the Margolis-Rhoads agreement, the Rhoads family contends it
contributed access to Randy’s musical equipment that had been in storage for 30 years;
personal, private photographs of Randy and other members of the family; personal
photographs and film footage of Randy obtained from Rhoads family friends and
neighbors; access to Delores’s home, access to Randy’s automobile, costumes, jewelry
and shoes; access to Delores’s music school (now operated by Kelle); access to Randy’s
gravesite (including opening of the bars to the tomb); access to Randy’s church and the
“meditation garden” dedicated to his memory; original music and a music school
performance; photographs of Randy’s deceased body; the autopsy report and
introductions to Randy’s family and friends, including Osbourne, his wife Sharon and
2
The Rhoads family claims Margolis concealed from it his intention to assign the
agreement to Dakota.
5
Alice Cooper. The Rhoads family believes the materials provided by them remain in
Margolis and Klein’s possession.
According to Margolis, the idea for the book was first raised in 2009 when Klein
suggested Margolis ask Dakota about writing a companion book to the documentary.
Dakota’s president, Troy Miller, liked the idea and authorized them to pursue the book
using the materials gathered by Margolis and Klein during production of the
documentary. However, Miller cautioned Margolis publication of the book would
require a license agreement with Dakota.3
When the book was finished, Miller refused to approve it until the documentary
had been completed and released. Miller also claimed Dakota would own the book.
After learning of Miller’s demand, Klein decided to revise the book to eliminate materials
as to which Dakota owned the rights. Photographs supplied by the Rhoads family were
omitted, and the cover describing the book as a companion to the documentary was
changed. Klein and Margolis enlisted Rosen, an accomplished journalist who had
already interviewed many of the musicians depicted in the documentary, to rewrite the
book. Rosen never contacted anyone from the Rhoads family.
In December 2011 Klein contacted Delores to obtain her endorsement of the book.
Klein claims he offered to share the proceeds with the Rhoads family, but Delores
refused. Kathryn also refused to meet with Klein and Margolis. As a result, Klein
deleted portions of the book he believed contained material obtained solely from the
family for the documentary.
The book was published in September 2012 by Velocity, a company formed by
Klein for this purpose. According to the Rhoads family, the book contains numerous
photographs taken from or of the materials they provided to Margolis. Moreover, they
3
Dakota employee Anthony DiAntonio submitted a declaration in opposition to the
special motion to strike confirming that Miller had initially approved the use of the
Dakota materials in preparation of a book anticipated as a “companion piece to the
documentary . . . .”
6
claim much of the text appears to contain excerpts from interview transcripts prepared for
the documentary, including those of Delores, Kathryn and Kelle.
3. The Lawsuit
The Rhoads family filed this lawsuit on December 6, 2012. The first amended
complaint alleges causes of action against Margolis for breach of contract, against
Margolis and Klein for fraud and against all defendants (Margolis, Klein, Rosen and
Velocity) for invasion of privacy, violation of common law rights of publicity,
misappropriation of the plaintiffs’ names, voice and likenesses under Civil Code
section 3344, and common law and statutory (Bus. & Prof. Code, § 17200) unfair
competition.4 The pleading demands compensatory and punitive damages, an
accounting, disgorgement of profits, injunctive relief and an award of attorney fees and
costs.
After answering the first amended complaint, the four defendants filed a special
motion to strike pursuant to section 425.16. They supported the motion with declarations
from Margolis, Klein and Rosen, as well as friends of Randy who stated their positive
views of the book. The Rhoads family responded with declarations from DiAntonio,
Kathryn and her husband, Kelle and Delores.
On May 30, 2013 the trial court granted the motion as to Rosen but denied it as to
Margolis, Klein and Velocity. As to Rosen the court ruled the claims against him as a co-
author of the book arose from protected speech activity and were without merit. As to
the remaining defendants, however, the court concluded the gravamen or principal thrust
of the first amended complaint, including the tort and statutory causes of action,
concerned their breach of the written agreement with the Rhoads family rather than
protected expression and was outside the ambit of section 425.16. As an alternative
ground for its ruling denying the motion as to Margolis, Klein and Velocity, the court
also ruled the Rhoads family had established a probability of prevailing on their
undismissed claims.
4
The plaintiffs voluntarily dismissed a cause of action for misappropriation of
Randy’s name and likeness under Civil Code section 3344.1.
7
Margolis, Klein and Velocity have appealed from the order denying their section
425.16 motion. The individual members of the Rhoads family have cross-appealed from
the portion of the May 30, 2013 order granting the motion as to Rosen.
DISCUSSION
1. Section 425.16: The Anti-SLAPP Statute
Section 425.16, subdivision (b)(1), provides, “A cause of action against a person
arising from any act of that person in furtherance of the person’s right of petition or free
speech under the United States Constitution or the California Constitution in connection
with a public issue shall be subject to a special motion to strike, unless the court
determines that the plaintiff has established that there is a probability that the plaintiff
will prevail on the claim.” Pursuant to subdivision (e), an “‘act in furtherance of a
person’s right of petition or free speech under the United States or California Constitution
in connection with a public issue’ includes: (1) any written or oral statement or writing
made before a legislative, executive, or judicial proceeding, or any other official
proceeding authorized by law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a legislative, executive, or
judicial body, or any other official proceeding authorized by law, (3) any written or oral
statement or writing made in a place open to the public or a public forum in connection
with an issue of public interest, or (4) any other conduct in furtherance of the exercise of
the constitutional right of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.”
In ruling on a motion under section 425.16, the trial court engages in what is now
a familiar, two-step process. “First, the court decides whether the defendant has made a
threshold showing that the challenged cause of action is one arising from protected
activity. The moving defendant’s burden is to demonstrate that the act or acts of which
the plaintiff complains were taken ‘in furtherance of the [defendant]’s right of petition or
free speech under the United States or California Constitution in connection with a public
issue,’ as defined in the statute. (§ 425.16, subd. (b)(1).) If the court finds such a
showing has been made, it then determines whether the plaintiff has demonstrated a
8
probability of prevailing on the claim. Under section 425.16, subdivision (b)(2), the trial
court in making these determinations considers ‘the pleadings, and supporting and
opposing affidavits stating the facts upon which the liability or defense is based.’”
(Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal. 4th 53, 67; accord, Jarrow
Formulas, Inc. v. LaMarche (2003) 31 Cal. 4th 728, 733.)
a. Step one and mixed causes of action
The moving party’s burden on the threshold issue is to show “the challenged cause
of action arises from protected activity.” (Rusheen v. Cohen (2006) 37 Cal. 4th 1048,
1056; see Scalzo v. Baker (2010) 185 Cal. App. 4th 91, 98.) “[T]he statutory phrase ‘cause
of action . . . arising from’ means simply that the defendant’s act underlying the
plaintiff’s cause of action must itself have been an act in furtherance of the right of
petition or free speech. [Citation.] In the anti-SLAPP context, the critical point is
whether the plaintiff’s cause of action itself was based on an act in furtherance of the
defendant’s right of petition or free speech. [Citation.] ‘A defendant meets this burden
by demonstrating that the act underlying the plaintiff’s cause [of action] fits one of the
categories spelled out in section 425.16, subdivision (e). . . .’” (City of Cotati v.
Cashman (2002) 29 Cal. 4th 69, 78.) “If the defendant does not demonstrate this initial
prong, the court should deny the anti-SLAPP motion and need not address the second
step.” (Hylton v. Frank E. Rogozienski, Inc. (2009) 177 Cal. App. 4th 1264, 1271.)
When a special motion to strike pursuant to section 425.16 challenges a cause of
action that involves both protected and nonprotected activity (sometimes referred to as a
“mixed” cause of action), “if the allegations of protected activity are only incidental to a
cause of action based essentially on nonprotected activity, the mere mention of the
protected activity does not subject the cause of action to an anti-SLAPP motion.” (Scott
v. Metabolife Internat., Inc. (2004) 115 Cal. App. 4th 404, 414; accord, Kenne v. Stennis
(2014) 230 Cal. App. 4th 953, 967-968; World Financial Group, Inc. v. HBW Ins. &
Financial Services, Inc. (2009) 172 Cal. App. 4th 1561, 1574.) On the other hand, if the
allegations of nonprotected conduct are collateral to the substance of the cause of action,
their presence does not prevent the court from applying the statute. As we explained in
9
Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal. App. 4th 294, 308, “[A] plaintiff
cannot frustrate the purposes of the SLAPP statute through a pleading tactic of combining
allegations of protected and nonprotected activity under the label of one ‘cause of
action.’” (Accord, Mann v. Quality Old Time Service, Inc. (2004) 120 Cal. App. 4th
90, 103.)
In applying section 425.16 to mixed causes of action, “it is the principal thrust or
gravamen of the plaintiff’s cause of action that determines whether the anti-SLAPP
statute applies [citation], and when the allegations referring to arguably protected activity
are only incidental to a cause of action based essentially on nonprotected activity,
collateral allusions to protected activity should not subject the cause of action to the anti-
SLAPP statute.” (Martinez v. Metabolife Internat., Inc. (2003) 113 Cal. App. 4th 181,
188; see Episcopal Church Cases (2009) 45 Cal. 4th 467, 477-478 [“This dispute
[involving ownership of property] and not any protected activity, is ‘the gravamen or
principal thrust’ of the action. [Citation.] The additional fact that protected activity may
lurk in the background—and may explain why the rift between the parties arose in the
first place—does not transform a property dispute into a SLAPP suit.”]; see also Club
Members for an Honest Election v. Sierra Club (2008) 45 Cal. 4th 309, 319 [“[t]he
‘principal thrust or gravamen’ test has been used to determine whether an action fits
within the scope of the anti-SLAPP protection provided by section 425.16 when a
pleading contains allegations referring to both protected and unprotected activity”].) That
is, “the cause of action is vulnerable to a special motion to strike under the anti-SLAPP
statute only if the protected conduct forms a substantial part of the factual basis for the
claim.” (A.F. Brown Electrical Contractor, Inc. v. Rhino Electric Supply, Inc. (2006)
137 Cal. App. 4th 1118, 1125.)
This analysis does not require an either-or determination or mean the gravamen of
a cause of action must be based only on protected activity or on nonprotected activity.
Rather, the proper statement of the rule, as articulated in Haight Ashbury Free Clinics,
Inc. v. Happening House Ventures (2010) 184 Cal. App. 4th 1539, 1551, footnote 7 is:
“[W]here the defendant shows that the gravamen of a cause of action is based on
10
nonincidental protected activity as well as nonprotected activity, it has satisfied the first
prong of the SLAPP analysis.” (Accord, Kenne v. Stennis, supra, 230 Cal.App.4th at
pp. 967-968; World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc., supra,
172 Cal.App.4th at p. 1574.)
b. Step two
If the defendant establishes the statute applies, the burden shifts to the plaintiff to
demonstrate a “probability” of prevailing on the claim. (Equilon Enterprises v.
Consumer Cause, Inc., supra, 29 Cal.4th at p. 67.) In deciding the question of potential
merit, the trial court properly considers the pleadings and evidentiary submissions of both
the plaintiff and the defendant, but may not weigh the credibility or comparative strength
of any competing evidence. (Taus v. Loftus (2007) 40 Cal. 4th 683, 713-714; Wilson v.
Parker, Covert & Chidester (2002) 28 Cal. 4th 811, 821.) The question is whether the
plaintiff presented evidence in opposition to the defendant’s motion that, if believed by
the trier of fact, is sufficient to support a judgment in the plaintiff’s favor. (Zamos v.
Stroud (2004) 32 Cal. 4th 958, 965.) Nonetheless, the court should grant the motion “‘if,
as a matter of law, the defendant’s evidence supporting the motion defeats the plaintiff’s
attempt to establish evidentiary support for the claim.’” (Taus, at p. 714; Wilson, at
p. 821; Zamos, at p. 965.)
c. Standard of review
The trial court’s rulings on a special motion to strike are subject to our
independent or de novo review. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th
811, 820; accord, Flatley v. Mauro (2006) 39 Cal. 4th 299, 325.)
2. Each of the Causes of Action Arises from Protected Expressive Activity
That the acts of researching, writing, editing and publishing an unlicensed
biography are protected activities within the meaning of section 425.16, subdivision (e),
is not questioned by any of the parties.5 The Rhoads family also does not dispute that
Randy’s life is a matter of public interest. The family contends, however, its claims do
5
There have been numerous biographical works written about Randy that were
neither endorsed nor challenged by the Rhoads family.
11
not target protected conduct but rather the misuse of materials family members provided
solely for the production of the documentary pursuant to the Margolis-Rhoads agreement.
The licensing of this material for a specified use, the Rhoads family urges, removes its
use for other purposes from the sphere of protected activity. They argue that because the
gravamen of the various causes of action in the first amended complaint is the violation
of the limited licensing agreement, they argue, section 425.16 does not apply.
The Rhoads family’s argument—essentially adopted by the trial court—is
fundamentally flawed. The claims the family asserts relating to publication of the book
involve only a miniscule amount of the material gathered by Margolis and Klein. As
discussed, much of the information regarding Randy was already available in the public
domain; the Rhoads family had frequently and fully shared their memories of Randy
prior to entering into the agreement with Margolis. Moreover, Dakota (acting principally
through Margolis and Klein) interviewed dozens of people outside the Rhoads family and
collected photographs and video recordings from hundreds of sources. Any rights to this
additional material Dakota may have are not at issue in this litigation: The Rhoads
family has not sued Dakota—the family asserts it has no quarrel with Dakota—and
Dakota is not asserting claims against Margolis, Klein or Velocity either directly or by
the Rhoads family as Dakota’s assignee. Thus, any allegedly private Rhoads material
included in the book is interwoven with, and dwarfed by, material as to which the Rhoads
family has no arguable rights and the use of which was plainly protected expression. (Cf.
Haight Ashbury Free Clinics, Inc. v. Happening House Ventures, supra, 184 Cal.App.4th
at p. 1551, fn. 7; World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc.,
supra, 172 Cal.App.4th at p. 1574.)
But even if a larger amount of the book’s material were at issue, or even most of
it, the claim that publication of a book on the subject of a matter of public interest
breaches a contract or violates common law or statutory rights unquestionably arises from
protected speech activity and easily satisfies the first prong of section 425.16: The
defendants’ act underlying the plaintiffs’ causes of action itself was “an act in furtherance
of the right to petition or free speech.” (City of Cotati v. Cashman, supra, 29 Cal.4th at
12
p. 78; see No Doubt v. Activision Publishing, Inc. (2011) 192 Cal. App. 4th 1018, 1027
(No Doubt).)
In No Doubt the members of a band entered into a contract allowing a video game
producer to use images of the band in certain specified contexts. After the video game
was released, the band sued alleging that the producer had used its image in contexts
other than those described in the contract. The producer moved to strike the complaint
under section 425.16, asserting the band’s claim was predicated on a protected activity—
the production of a video game. No Doubt opposed the motion, arguing that the producer
had not “satisf[ied] the threshold showing under section 425.16 because a contract issue,
not [the producer’s] right to free speech, is at the heart of the parties’ dispute.”
(No Doubt, supra, 192 Cal.App.4th at p. 1027.) Our colleagues in Division Four of this
court concluded that, although the conduct at issue—production of a video game—might
qualify as a breach of the parties’ contract, it also involved a form of protected activity.
(Ibid. [“‘conduct alleged to constitute breach of contract may also come within
constitutionally protected speech or petitioning’”], quoting Navellier v. Sletten (2002) 29
Cal. 4th 82, 92; see Taus v. Loftus, supra, 40 Cal.4th at pp. 706-707 [defendants’
investigation and ensuing article, based in part on allegedly fraudulently obtained
interview, constituted protected activity]; Lieberman v. KCOP Television, Inc. (2003) 110
Cal. App. 4th 156, 164-166 [defendants’ newsgathering, including surreptitiously obtained
video recordings, constituted protected activity]; see also Doe v. Gangland Productions,
Inc. (9th Cir. 2013) 730 F.3d 946, 955-956 [lawsuit alleging producer of gang
documentary breached agreement to conceal gang member’s identity arose from
protected activity].)
The same analysis applies here. The “principal thrust” (Martinez v. Metabolife
Internat., Inc., supra, 113 Cal.App.4th at p. 188) of every claim in the Rhoads family’s
first amended complaint is premised on the allegation the defendants, in researching,
writing and publishing the book, used the Rhoads family’s proprietary material provided
solely for the purpose of the documentary. Whether or not defendants violated the terms
of the Margolis-Rhoads agreement, their conduct in writing and publishing the book also
13
qualifies as a form of protected activity. (See Doe v. Gangland Productions, Inc., supra,
730 F.3d at p. 955 [“[b]ut for the broadcast . . . , Plaintiff would have no reason to sue
Defendants”].)
3. With the Exception of the Breach of Contract Cause of Action, the Rhoads
Family Has Failed To Establish a Probability of Prevailing on Its Claims
a. The breach of contract cause of action
Margolis is the only defendant named in the breach of contract cause of action.
Two factual inquiries are necessary to determine his liability on that claim: 1) whether he
remained bound by the agreement under the specific terms of the assignment provision, a
question that turns, at least in part, on whether Dakota was a “financially capable entity”
within the meaning of that provision; and 2) whether the Rhoads family can successfully
establish the use of materials provided pursuant to the agreement that were otherwise
unavailable to Margolis.6 Those are inquiries for the finder of fact, and the Rhoads
family has established a prima facie case that such misuse occurred.7 (See Soukup v. Law
Offices of Herbert Hafif (2006) 39 Cal. 4th 260, 291 [to satisfy its burden under the
second step of § 425.16, plaintiff must demonstrate his claims have “‘“only a minimum
level of legal sufficiency and triability”’”]; accord, Jarrow Formulas, Inc. v. LaMarche,
supra, 31 Cal.4th at p. 738.)
6
With respect to materials obtained from the Rhoads family pursuant to the
Margolis-Rhoads agreement, the DiAntonio declaration identifies several “personal
family photographs” provided by Kathryn, two featured quotes from an interview with
Delores on June 25, 2007, photographs of the family visiting Randy’s grave on July 30,
2007, and photographs resulting from access to some of Randy’s equipment that may
never have been publicly shown. Kathryn and Kelle assert they recognize some
statements in the book as ones they made during their interviews for the documentary.
The Rhoads family may not recover, however, for the use of materials gathered by
Dakota in the course of preparing the documentary that did not come from Delores,
Kathryn or Kelle. For instance, the rights to photographs or statements made by people
who knew Randy may belong to Dakota, but those materials fall outside the scope of the
Margolis-Rhoads agreement itself.
7
Margolis contends he acted solely as an editor on the book and thus cannot be
liable for any decision as to which materials were used or how they were obtained. This
distinction also requires a factual inquiry more appropriate for the finder of fact.
14
b. The fraud cause of action
The gist of the fraud claim is that, “in or about March and April 2007, as well as
thereafter,” Margolis and Klein (but not Rosen) represented orally and in writing they
would use the Rhoads family material only for the production of the documentary.
However, no evidence was proffered that Margolis contemplated writing a book based on
the Rhoads material before he executed the agreement. (See Tenzer v. Superscope, Inc.
(1985) 39 Cal. 3d 18, 30-31 [“‘something more than nonperformance is required to prove
the defendant’s intent not to perform his promise’”].) Moreover, neither Klein (a
longtime fan who only became involved in the production of the documentary well after
execution of the Margolis-Rhoads agreement) nor Velocity (formed by Klein in April
2012) was involved with Margolis at the time the agreement was executed. Any
subsequent representations by Klein were made pursuant to his authority from Dakota
well after production of the documentary had begun. Although the Rhoads family
alternatively alleges Margolis and Klein wrongfully concealed their intent to write a
book, the family failed to produce any evidence that materials contained in the book were
provided after 2009 when Klein first began to explore the possibility of writing one.
c. The misappropriation causes of action
The Rhoads family’s third cause of action alleges the use of its materials invaded
their individual rights of privacy, a term that can encompass any injury from public
disclosure of private facts to intrusion into private places, conversations or other matters.
(See Hill v. National Collegiate Athletic Assn. (1994) 7 Cal. 4th 1, 24 [acknowledging
four different privacy torts: “(1) intrusion into private matters; (2) public disclosure of
private facts; (3) publicity placing a person in a false light; and (4) misappropriation of a
person’s name or likeness . . . .”]; see also Shulman v. Group W Productions, Inc. (1998)
18 Cal. 4th 200, 214-282 [discussing variants of right of privacy]; Taus v. Loftus, supra,
40 Cal.4th at pp. 705-708 [same].) The family members characterize their invasion of
privacy claim as one of misappropriation of name and likeness.
To sustain a common law cause of action for commercial misappropriation based
on the right of privacy, a plaintiff must prove: “(1) the defendant’s use of the plaintiff’s
15
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.” (Eastwood v.
Superior Court (1983) 149 Cal. App. 3d 409, 417; accord, Stewart v. Rolling Stone LLC
(2010) 181 Cal. App. 4th 664, 679.) This cause of action is essentially identical to the
fourth cause of action, which the Rhoads family has labeled violation of the common law
right of publicity. The fifth cause of action alleges a violation of Civil Code
section 3344, which creates a statutory remedy for commercial misappropriation and
provides in part, “[a]ny person who knowingly uses another’s name, voice, signature,
photograph, or likeness, in any manner . . . for purposes of advertising . . . without such
person’s prior consent . . . shall be liable for any damages sustained by the person . . . .”
(Civ. Code, § 3344, subd. (a).) Under this section a plaintiff must prove not only the
elements of the common law cause of action but also the knowing use by the defendant of
the likeness as well as a direct connection between the alleged use and the commercial
purpose. (Stewart, at p. 680.)
Crucially, under the common law, “no cause of action will lie for the
‘[p]ublication of matters in the public interest, which rests on the right of the public to
know and the freedom of the press to tell it . . . .’” (Montana v. San Jose Mercury News,
Inc. (1995) 34 Cal. App. 4th 790, 793.) This First Amendment defense extends “to almost
all reporting of recent events,” as well as to publications about “‘people who, by their
accomplishments, mode of living, professional standing or calling, create a legitimate and
widespread attention to their activities . . . .’” (Eastwood v. Superior Court, supra,
149 Cal.App.3d at p. 422.) However, the defense is not absolute; a court must find “a
proper accommodation between [the] competing concerns” of freedom of speech and the
right of publicity. (Ibid.) An even broader exception applies to actions under Civil Code
section 3344: “For purposes of this section, a use of a name, voice, signature,
photograph, or likeness in connection with any news, public affairs, or sports broadcast or
account, or any political campaign, shall not constitute a use for which consent is
required under subdivision (a).” (Civ. Code, § 3344, subd. (d).)
16
Thus, relatives and associates of public persons generally have no claim for
invasion of their right of privacy or publicity “so long as the disclosure bears a reasonable
relationship to the ties that the relative or associate had to the public person.”
(2 J.T. McCarthy, The Rights of Publicity and Privacy (2014 ed.) Telling the story—
Liability to relatives and associates of the subject of the story, § 8:66, pp. 230-232;
see Maheu v. CBS, Inc. (1988) 201 Cal. App. 3d 662, 675 [“[n]ot only public figures, but
individuals closely associated with public figures, have been precluded from maintaining
actions for invasion of privacy under circumstances where there is a societal interest in
disclosure”]; Carlisle v. Fawcett Publications, Inc. (1962) 201 Cal. App. 2d 733, 747
[person married to celebrity when they were both teenagers had no claim for invasion of
privacy after details disclosed by fan magazine].) As our colleagues in Division Two of
this court have explained,“Whether appellant is considered a celebrity or not, whether he
is seeking damages for injury to his feelings or for the commercial value of his name and
likeness, . . . the public interest in the subject matter of the program gives rise to a
constitutional protection against liability. [Citation.] [¶] Though both celebrities and
non-celebrities have the right to be free from the unauthorized exploitation of their names
and likenesses, every publication of someone’s name or likeness does not give rise to an
appropriation action. Publication of matters in the public interest, which rests on the right
of the public to know and the freedom of the press to tell it, is not ordinarily actionable.
[Citations.] Public interest attaches to people who by their accomplishments or mode of
living create a bona fide attention to their activities.” (Dora v. Frontline Video, Inc.
(1993) 15 Cal. App. 4th 536, 542.)
Here, rather than protest the attention occasioned by Randy’s celebrity, Delores,
Kathryn and Kelle Rhoads have long fostered the interest and access of the public to
information about him and his musical talent. Other than the $5,000 paid under the
Margolis-Rhoads agreement, Delores, Kathryn and Kelle disavow ever seeking
compensation for their participation in interviews over the years or for disclosures in the
various articles and biographies about Randy that contained photographs and information
about them individually. They contend, however, they kept their most personal feelings,
17
reminiscences and property to themselves, with the intent of eventually publishing their
own book. And, although they acknowledge Margolis and Klein had no obligation to
seek their permission to write a book about Randy, they believe they should be
compensated for the use of material licensed pursuant to the terms of the Margolis-
Rhoads agreement.
This proposition, while perhaps superficially appealing, lacks merit. The subject
of the book that allegedly violated the family members’ rights was Randy. Most of the
material shared by the Rhoads family concerned Randy and only incidentally depicted
family members; as Margolis and Klein point out, photographs of Randy, his guitars or
his tomb, even if never previously disclosed to the public, do not implicate the personal
privacy or publicity rights of his family members. Moreover, any contention family
members should be compensated for material falling within the scope of the Margolis-
Rhodes agreement is properly addressed by the breach of contract cause of action; a tort
cause of action does not lie unless the defendant’s conduct also violates an independent
duty to the plaintiff. (See Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994)
7 Cal. 4th 503, 514-516.)
Finally, the family members admit Randy’s life (and death) are matters of public
interest, as are their own lives as Randy’s relatives. (See Maheu v. CBS, Inc., supra,
201 Cal.App.3d at p. 675 [“[t]he general rule is that ‘“once a man has become a public
figure, or news, he remains a matter of legitimate recall to the public mind to the end of
his days”’”].) They also admit nothing in the book was objectionable or untrue. (See
Eastwood v. Superior Court, supra, 149 Cal.App.3d at p. 426 [plaintiff failed to state
cause of action under either the common law or Civ. Code, § 3344 because he failed to
allege the article, which was otherwise a matter of public interest, was published with
knowledge of or in reckless disregard of its falsity]; Maheu, at p. 677 [failure to dispute
truthfulness of matters published fatal to plaintiff’s cause of action when material was
newsworthy].) Under these circumstances the Rhoads family has failed to establish a
probability of recovery under their common law and statutory causes of action for
misappropriation. (See Forsher v. Bugliosi (1980) 26 Cal. 3d 792, 811 [“‘[i]f the
18
information reported has previously become part of the “public domain” or the intrusion
into an individual’s private life is only slight, publication will be privileged even though
the social utility of the publication may be minimal’”].)
d. The unfair competition cause of action
Unfair competition under Business and Professions Code section 17200 (UCL)
means “any unlawful, unfair or fraudulent business act or practice and unfair,
deceptive, untrue or misleading advertising . . . .” Written in the disjunctive,
section 17200 establishes “three varieties of unfair competition—acts or practices which
are unlawful, unfair, or fraudulent.” (Cel-Tech Communications, Inc. v. Los Angeles
Cellular Telephone Co. (1999) 20 Cal. 4th 163, 180 (Cel-Tech); accord, Kasky v. Nike,
Inc. (2002) 27 Cal. 4th 939, 949.) The “unlawful” prong of the UCL “‘borrows’
violations from other laws by making them independently actionable as unfair
competitive practices.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal. 4th
1134, 1143; accord, Kasky, at p. 949.)
The “unfair” prong authorizes a cause of action under the UCL if the plaintiff can
demonstrate the objectionable act, while not unlawful, is “unfair” within the meaning of
the UCL. (Cel-Tech, supra, 20 Cal.4th at p. 182.) Outside the commercial context of a
plaintiff who claims to have suffered injury from a direct competitor, “a business practice
is ‘unfair’ if (1) the consumer injury is substantial; (2) the injury is not outweighed by
any countervailing benefits to consumers or competition; and (3) the injury could not
reasonably have been avoided by consumers themselves.” (Klein v. Chevron U.S.A., Inc.
(2012) 202 Cal. App. 4th 1342, 1376;8 compare Cel-Tech, at p. 187 [“[w]hen a plaintiff
who claims to have suffered injury from a direct competitor’s ‘unfair’ act or practice
invokes section 17200, the word ‘unfair’ in that section means conduct that threatens an
8
As we explained in Klein v. Chevron U.S.A., Inc., supra, 202 Cal.App.4th at
page 1376 and footnote 14, although there is currently a split of authority with respect to
the proper definition of the term “unfair” in the context of consumer cases arising under
the UCL, the Second District has consistently followed the definition enunciated by
Division Eight of this court in Camacho v. Automobile Club of Southern California
(2006) 142 Cal. App. 4th 1394, 1403.
19
incipient violation of an antitrust law, or violates the policy or spirit of one of those laws
because its effects are comparable to or the same as a violation of the law, or otherwise
significantly threatens or harms competition”].)
Under the “fraudulent” prong, a business practice violates the UCL if it is “likely
to deceive the public. [Citations.] It may be based on representations to the public which
are untrue, and ‘“also those which may be accurate on some level, but will nonetheless
tend to mislead or deceive. . . . A perfectly true statement couched in such a manner that
it is likely to mislead or deceive the consumer, such as by failure to disclose other
relevant information, is actionable under”’ the UCL. [Citations.] The determination as to
whether a business practice is deceptive is based on the likely effect such practice would
have on a reasonable consumer.” (McKell v. Washington Mutual, Inc. (2006)
142 Cal. App. 4th 1457, 1471; see Paduano v. American Honda Motor Co., Inc. (2009)
169 Cal. App. 4th 1453, 1469.) Actual deception is not necessary. All that is required is
proof that reasonable “‘members of the public are likely to be deceived.’” (Bank of the
West v. Superior Court (1992) 2 Cal. 4th 1254, 1267.)
Despite this low threshold for proving an unlawful business practice under the
UCL, the Rhoads family has not articulated an actionable manner in which the public was
likely to be deceived by the book or that consumers suffered substantial injury.9 The
family contends the book’s relation to the documentary, the participation of Margolis and
Klein and the book’s use of a photograph of Delores constituted unfair, deceptive acts,
but they have failed to produce any evidence that a reasonable consumer would have
been misled by these facts, whether to believe this book, (as opposed to the other books
about Randy) had been endorsed by members of the Rhoads family or in any other
respect.10 (See South Bay Chevrolet v. General Motors Acceptance Corp. (1999)
9
Because the Rhoads family’s claims for misappropriation under Civil Code
section 3344 and the common law fail as a matter of law, its effort to plead a UCL claim
under the “unlawful” prong based on misappropriation also fails.
10
DiAntonio offers his opinion that many of those interviewed for the documentary
did so because they believed the project had the approval of the Rhoads family, but
20
72 Cal. App. 4th 861, 889 [plaintiff must provide “substantial evidentiary support that
anyone was actually misled or likely to be misled”].) The Rhoads family has failed to
present an evidentiary basis for finding a reasonable probability of prevailing on the
unfair competition cause of action. Accordingly, as to this claim too, the special motion
to strike should have been granted.
e. Injunctive relief
The remaining cause of action for injunctive relief is premised on Margolis’s
alleged breach of the Margolis-Rhoads agreement. Even if the Rhoads family could
prove its contractual claim, however, injunctive relief would be improper. (See Civ.
Code, § 3423, subd. (e) [court may not grant injunction “[t]o prevent the breach of a
contract the performance of which would not be specifically enforced”].) Indeed, the
agreement itself contains a waiver of injunctive relief: “Subject to Producer’s payment of
all compensation . . . , Owner’s sole and exclusive remedy for any breach, termination or
cancellation by Producer hereof or any term hereof . . . shall be an action for damages and
Owner irrevocably waives any right to rescission or equitable or injunctive relief.”
provides no evidence that any of those individuals have objected to their depiction in the
book. The Rhoads family has presented no evidence the book has misled anyone,
particularly within the avid, but relatively small, community of Randy’s fans. According
to Klein, he has on occasion been asked whether the family has endorsed the book and
has denied such endorsement.
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DISPOSITION
The order denying Margolis’s special motion to strike is affirmed as to the
contract cause of action and reversed as to all other causes of action. The order denying
the special motion to strike as to Klein and Velocity is reversed. The order as to Rosen is
affirmed. The parties are to bear their own costs on appeal.
PERLUSS, P. J.
We concur:
WOODS, J.
FEUER, J.*
*
Judge of the Los Angeles County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
22