In re Estate of Tasunke Witko, a.k.a. Crazy Horse,

vs.

The G. Heileman Brewing Co.

(slip op.) (Rosebud Sioux Tr. Ct., Oct. 25, 1994)

Stanley Whiting, J.

PROCEDURAL HISTORY

Seth H. Big Crow, Sr. was appointed by this Court as Administrator of the Estate of Tasunke Witko. The estate and Administrator subsequently brought a cause of action against the Defendants seeking a declaratory judgment, monetary damages, culturally appropriate damages and an accounting and injunctive relief on behalf of the Administrator and a class of heirs residing on various Indian Reservations in the State of South Dakota.

The complaint alleged that the damages arose from the Defendant's manufacturer, sale and distribution of the “Original Crazy Horse Malt Liquor.” The claim of Plaintiffs were premised on an ownership right in the nickname “Crazy Horse” which Plaintiffs allege belongs to the estate of Tasunke Witko. The Plaintiffs also asserted that the use of the appellation “Crazy Horse” on Crazy Horse Malt Liquor constitutes defamation, violates plaintiffs' right of publicity, and constitutes negligent and intentional infliction of emotional distress. The complaint also alleges that the use of the brand name “Crazy Horse” malt and the products packaging falsely suggest that the beer product is of Indian origin and therefore, violates the Indian Arts and Crafts Act and also violates the Federal Lanham Act by being false and misleading so as to suggest an affiliation with the heirs of Tasunke Witko.

Defendants appeared by special appearance and moved to dismiss the complaint on the grounds of lack of personal and subject matter jurisdiction and improper service. Affidavits were filed with the motion challenging this Court’s jurisdiction. The parties have submitted extensive briefs and the Cheyenne River Sioux Tribe appeared by amicus.

FACTS

The undisputed facts disclosed that Hornell is a New York corporation with its principle place of business in the State of New York. Hornell is a marketer and distributor of beer and other products which are produced by other brewing companies for Hornell pursuant to contracts. Hornell is a separate company unrelated to Heileman Brewing Company. The officers and directors of Heileman and Hornell are separate.

Hornell developed the brand name and the package designed for the Original Crazy Horse Malt Liquor. Heileman brews the beer and the beer is bottled or canned in containers which are owned by Hornell and provided to Heileman. To comply with requirements of the Bureau of Alcohol, Tobacco & Firearms, certificates of label approval authorizing the name of the Original Crazy Horse Malt Liquor are issued to Heileman as bottlers of the product. Hornell, however, owns any intellectual property and all rights relating to the label and packaging. Basically Heileman’s involvement with the sale and distribution of Crazy Horse Malt Liquor is limited to selling the brewed beer to Hornell to be packaged in Hornell's containers. Hornell is not incorporated in the State of South Dakota nor is it licensed to do business in South Dakota. Hornell does not transact business in South Dakota, nor on the Rosebud Indian Reservation. Hornell does not maintain bank accounts or other assets in the State of South Dakota, or on the Rosebud Sioux Indian Reservation. Hornell has no offices or employees or agents in South Dakota or the Rosebud Sioux Indian Reservation, nor does it maintain any breweries or distribution facilities in South Dakota or on the Rosebud Sioux Indian Reservation. Crazy Horse Malt Liquor is not available for purchase in South Dakota or upon the Rosebud Sioux Indian Reservation and Heileman is responsible for distribution of the malt liquor. Hornell purchases the malt liquor from the Heileman Brewing Co. located in Baltimore, Maryland and the malt beverage is not advertised in South Dakota, nor available for purchase in South Dakota or the Rosebud Sioux Indian Reservation. The individual Defendants similarly do not have any relationship with the State of South Dakota or the Rosebud Sioux Tribe. At the oral arguments before the Court on the Defendant's motion to dismiss and in the respective brief, the parties basically concede that the name of “Crazy Horse” is property. However, the property right in “Crazy Horse “ has never been trademarked.

I. TRIBAL LONG ARM STATUTE

The Rosebud Sioux Tribe Law and Order Code at Section 4-2-6 provides the following for jurisdiction over persons:

“The Rosebud Sioux Tribal Court will exercise civil and criminal jurisdiction over all persons within its territorial jurisdiction to the extent allowed by Federal statutory law and Federal Court decisions ….”

The Tribal Code at Section 4-2-7 provides for personal service off of the Reservation and also sets out acts submitting a non-resident person to jurisdiction of the Tribal Court as follows:

“A)So the greatest extent consistent with due process of law, any person, whether or not a citizen, resident, or present on the reservation, who in person or through an agent does any of the acts enumerated in this section, thereby submits said person or his personal representative to the jurisdiction of the Tribal Court as to any cause of action arising from doing any of the following acts within the Rosebud Indian Reservation:

1)The transaction of any business;

2)The commission of a tortuous act;

3)The partnership, use or possession of any property, real or personal …”

Defendants did not transact any business on the Rosebud Indian Reservation, nor did they own or use or possess any property, real or personal, within the confines of the Reservation. If the Tribal Long Arm Jurisdiction Statute applies in this case, it would be through the commission of a tortuous act by the Defendants on the Rosebud Reservation. To determine this issue, the Court will apply the appropriate Federal case law and first examining the property right involved.

II. THE PROPERTY RIGHT INVOLVED.

Plaintiffs basically submit that Defendants misappropriated the good name of “Crazy Horse” and used the misappropriation for a profit. Crazy Horse was a revered, Sioux Indian leader and his name is recognized throughout the nation. While alive, Crazy Horse was opposed to his people using alcohol. Because of his stature, a monument to Crazy Horse is presently being carved on a granite mountain near Custer, South Dakota which will dwarf Mt. Rushmore in size. Obviously the heirs of Crazy Horse and perhaps all Indian people in general have reason to feel affronted and insulted over the marketing of the “Crazy Horse Malt Liquor.” In determining if the Tribal Long Arm Statute applies in this case to grant this Court jurisdiction, the Court must examine the type of property misappropriated as it relates to trademarks and the right of publicity and privacy.

The name of Crazy Horse has never been trademarked by his descendents. Although Defendants have made application to trademark the Crazy Horse Malt Liquor label, the Plaintiffs have never attempted to trademark the name of Crazy Horse. Although it is not always necessary to register a trademark to have one, there cannot be protection granted beyond the physical location where it is used unless it is registered. (The Rights of Publicity and Privacy by J. Thomas McCarthy, Section 5.2.)

The law dealing with the rights of publicity and privacy become more complicated when dealing with an individual who has been deceased over 100 years and who, during his lifetime, never exercised any of these rights. While it has been documented that the name of “Crazy Horse” has been used for many years on such establishments as bars and clothing outlets, none of the descendants of Crazy Horse have ever exercised a right of publicity or privacy in the name of Crazy Horse by trademarking that name. A forceful judicial argument articulated against a postmortem Right of Publicity was made by the Federal Sixth Circuit Court of Appeals in Memphis Development Foundation v. Factors, etc. Inc., 616 F.2nd. 956 (6th Cir. 1980), cert. den. 449 U.S. 953. The Court opined that the common law of Tennessee would not recognize a postmortem Right of Publicity. The suit was brought by the exclusive licensee of the Estate of Elvis Presley against the Memphis Development Foundation for giving small pewter replicas of a statute of Elvis Presley to those who donated more than $25.00 to a fund to be used to erect a large bronze statute of Presley in downtown Memphis. In reversing a preliminary injunction against distribution of the Presley replicas, the Court said:

“We hold that the right is not inheritable. After death the opportunity for gain shifts to the public domain, where it is equally open to all.”

One of the Court’s pronouncements in Memphis Development, was that the incremental motivation to creativity created by a person's knowledge that heirs will benefit is outweighed by the public right to free commercial and competitive use of the names and likeness of a famous deceased person. In Memphis Development, Judge Merit stated the following:

“Heretofore, the law has always thought that leaving a good name to one’s children is sufficient reward in itself for the individual, whether famous or not. Commercialization of this virtue after death in the hands of heirs is contrary to our legal tradition and somehow seems contrary to the moral prescriptions of our cultural . . . and equal distribution of the opportunities to use the name of the dead seems preferable. The memory, name and pictures of famous individuals shou1d be regarded as a common asset to be shared, an economic opportunity available in the free market system.” Memphis Development at 959-960.

When this type of claim has been asserted after an individual’s death, some Courts view it as a property interest, which must have been recognized and used by that individual prior to his death in order for this right to be inherited by his descendents. See, Factors, etc. v. Pro Arts, Inc., 579 F.2d. 215, Hicks v. Casablanca Records and Filmworks, 464 F.Supp. 426; Price v. Hal Roach Studios, 400 F. Supp. 836, (SD NY 1975).

Another ardent advocate of rejecting a postmortem right of publicity is Steven J. Hoffman, who argued that the “property v. personal” distinction is not determinative of the descendability issue; a postmortem right would not create a significant incentive for creative endeavor; and a postmortem right would exacerbate conflicts with both first amendment principals and the copyright laws. Hoffman concluded that:

“Thus, cutting off the right of publicity at death better accommodates the competing interest at stake, mitigating some of the adverse impact on the right without seriously detracting from its benefits. Recognizing that the right of publicity is a mixed blessing, it terminates the right at a logical point. The death of the celebrity whose name and likeness it protects.”

See SJ Hoffman Limitations on the Right of Publicity, 28 Bull Copyright Soc., 111 139 (1980).

The Eleventh Court of Appeals has recognized a post mortem right of publicity. Martin Luther King, Jr., Center For Social Change v. American Heritage Products, 250 GA 135, 296 SE 2d. 697, 2l6 USPQ 711 (1982), Rev'd and Remanded, 694 F.2d. 674 (11th Cir. 1983). In the King case, the Defendants were selling plastic busts of the late civil rights leader, Martin Luther King, Jr. With each sale, the Defendant included a booklet about the life of Dr. King. Defendant’s advertising offered the bust as “an opportunity to support the Martin Luther King, Jr. Center for Social Change” and promised that a contribution from each order went to the Center. In fact, only three percent (3%) of the price was set aside as a donation. The Defendant had initially asked the King Center for permission, and though permission was refused, Defendant still went forward with advertising and sales.

In the King Case, the Plaintiffs contended that the manufacturer and sale of the busts violated Dr. King's right of publicity which had passed to his heirs upon Dr. King's death. The Defendants contended that no such right existed. The District Court concluded that it was not necessary to determine whether the “right of publicity” was divisible because Dr. King did not commercially exploit this right during his lifetime. The matter was appealed and the Eleventh Circuit ultimately found that the right of publicity survives the death of its owner even if the owner did not commercially exploit the right before his death. The King Court recognized that Dr. King was not a public official but was a public figure and dealt in the opinion with public figures who are neither public officials nor entertainers. The King Court distinguished those cases that had previously held that the right of publicity does not survive after death unless it has been commercially exploited during the decedent's 1ifetime.

In King, the Court concluded that the right of publicity survives the death of its owner and is inheritable and devisable. The Court went on to state that:

“Recognition of the right of publicity rewards and thereby encourages effort and creativity. If the right of publicity dies with the celebrity, the economic value of the right of publicity during life would be diminished because the celebrity’s untimely death would seriously impair, if not destroy, the value of the right of continued commercial use. Conversely, those who would profit from the fame of a celebrity after his or her death for their own benefit and without authorization, have failed to establish their claim that they should be the beneficiaries of the celebrity’s death. Finally, the trend since the early common law has been to recognize survivability, not withstanding the legal problems which may thereby arise. “

The Court in King went on to determine that the owner of the right of publicity need not have commercially exploited that right before it can survive. The Court recognized that Dr. King could have exploited his name and likeness during his lifetime. The Court went on to state that:

“That this opportunity was not appealing to him does not mean that others have the right to use his name and likeness in ways he himself chose not to do. Nor does it strip his family and estate of the right to control, preserve and extend his status and memory and to prevent unauthorized exploitation thereof by others. Here, they seek to prevent the exploitation of his likeness in a manner they consider unflattering and unfitting. We cannot deny them this right merely because Dr. King choice not to exploit or commercialize himself during his lifetime.” King at 705.

Although some Courts have rejected a postmortem right of publicity in the absence of any trademarks, this Court believes that the rational of the King case is more appropriate concerning the property right claimed by the Plaintiff in the present case. Consequently, this Court concludes that the Plaintiffs do have a postmortem right of publicity in the good name of “Crazy Horse” even though Crazy Horse did not commercialize his name during his lifetime.

Having determined that the Plaintiffs have a postmortem right of publicity in the good name of Crazy Horse, the next issue to determine whether the commission of a tortuous act by the Defendants was done with sufficient minimum contacts with this forum to grant the Tribal Court jurisdiction under the long arm statute of the Rosebud Sioux Tribe.

III. MINIMUM CONTACT

The United States Supreme Court has emphasized that the minimum contacts requirement of International Shoe Company v. Washington, 326 U.S. 310 66 S.Crt. 154 (1945), must be met as to each Defendant over whom a forum Court exercises jurisdiction. Under the Tribal Long Arm Statute (RSTLOC Section 4-2-7), minimum contact with the forum could only exist if Defendants committed a torturous act within the forum.

A Plaintiff who exerts the existence of personal jurisdiction over a non-resident Defendant bears the burden of proof. Compagnie des Bauxites de Guinee v. L'Union, 723 F.2d. 357 (3rd Cir. 1985); Brown v. Flowers Indus., Inc., 688 F.2d. 328 (5th Cir. 1982), cert. denied, 460 U.S. 1023 (1983); Southwest Offset. Inc. v. Hudco Publishing Co., 622 F.2d. 149 (5th Cir. 1980), Electronic Signals Products, Inc. v. Eastern Electronic Co., Ltd., 783 F.Supp. 1135, 1137 (N.D. Ill. 1992).

Plaintiffs rely on Burger King v. Rudzewicz, 471 U.S. 462 (1985) for the proposition that minimum contacts occurred in this case. Burger King stood for the proposition that when a forum seeks to assert specific jurisdiction over an out-of-state Defendant who has not consented to suit, due process is satisfied if the Defendant has “purposefully directed” his activities at residence of the forum and the litigation results from alleged injuries that “arise out of or relate to” those activities. In the present case, the Court concludes that Defendants did not “purposefully direct” their activities at residents of the Rosebud Sioux Tribe or at the Plaintiffs. Actually, the facts establish that Defendants made no contact with the heirs of Crazy Horse or with the Rosebud Sioux Tribal Reservation. There were no ongoing business relationships or contracts between Plaintiff and Defendants. The Original Crazy Horse Malt Liquor was never advertised for sale or marketed in South Dakota or on the Rosebud Sioux Indian Reservation. Therefore, Defendants had no reason to believe that they would be hailed into the Tribal Court forum.

The minimum contact requirement cannot be satisfied unless there is “some act by which the Defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of it's laws.” Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 107 S.Crt. 1026 1031 (1987). The rationale for the minimum contact requirement is that it would be unreasonable to force a non-resident Defendant to submit to personal jurisdiction unless, by virtue of his purposeful contacts with the forum state, he was able to foresee the possibility of being hailed into that state’s court. Burger King, 105 S.Crt. at 2182-2183.

Plaintiffs also rely upon Calder v. Jones, 465 U.S. 783 (1984) for proposition that this Court has jurisdiction over the Defendants. However, in Calder, a reporter for the National Inquirer wrote a liableous article about a California resident. The reporter was from the State of Florida and the interview of the California resident occurred in Florida. The reporter made no contact with the State of California but knew that the article would be circulated in California. In fact, California circulation of the National Inquirer was higher than in any other state. Consequently, the Court found that the liableous article was purposefully directed into the California forum. In the present case, Defendants did not advertise the malt liquor in the State of South Dakota or on the Rosebud Indian Reservation. Further, there were no contacts whatsoever by the Defendants with Plaintiffs in any manner. Consequently, the Court concludes that the factual situation in Calder was antipodal to the present situation and that the dictates of Calder do not apply to create minimum contacts.

Both parties have cited Montana v. United States to advocate their respective views concerning jurisdiction by this Court. In Montana v. United States, 450 U.S. 544 (1981), the United States Supreme Court specifically recognized that a Tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security or the health or welfare of the Tribe. Plaintiffs claim that the dictates of Montana do not prohibit jurisdiction of the Tribal Court in the present case. On the other hand, Defendants claim that Montana prohibits tribal civil jurisdiction over the Defendants herein.

In Montana, the Supreme Court also recognized that Indian Tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on the reservations, even on non-Indian fee lands. A tribe may regulate, through taxation, licensing or other means, the activities of non-members who enter consensual relationships with the tribe or its members, through commercial dealings, contracts, losses or other arrangements.

In the present case, there were no commercial dealings, contracts or leases or other arrangements between the Plaintiffs and the Defendants. For this Court to have jurisdiction under the requirements of Montana, this Court would have to find that the conduct in question threatened or had some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.

It is the conclusion of the Court that Montana presupposes minimum contacts before civil jurisdiction of the Tribal Court can be exercised. The Court is unable to conclude that the marketing of the Original Crazy Horse Malt Liquor has had some direct effect on the political integrity, the economic security or the health or welfare of the Tribe. The Montana Court also concluded that the exercise of Tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of Indian tribes, and so cannot survive without expressed congressional delegation. This Court concludes that Montana and its protege does not grant jurisdiction to the Tribal Court under the existing factual scenario.…

For the reasons set out above, the Court concludes that it does not have personal jurisdiction over the Defendants. Defendants may prepare an order consistent with this opinion.

Dated this 25th day of October, 1994.

Stanley E. Whiting

PRO-TEM TRIBAL JUDGE

P.O. Box 48

142 E. Third Str.

Winner, SD 57580-0048

In re Estate of Tasunke Witko, a.k.a. Crazy Horse

v.

The G. Heileman Brewing Co.

No. Civ. 93-204 (Rbd. Sx. Sup. Ct., May 1, 1996)

EN BANC before Chief Justice Greaves, Associate Justices Lee, Pommersheim, Roubideaux, Swallow[1] and Zephier.

I.Introduction

Tasunke Witko, popularly known as Crazy Horse, is a revered nineteenth century (1842? – 1877) Lakota political and spiritual leader who lived all of his life within the bounds of the Great Sioux Nation Reservation[2] which included the present day Rosebud Sioux Reservation.[3] Tasunke Witko was a person of great moral character who steadfastly opposed the use and abuse of alcohol products by his people.[4]

Mr. Seth H. Big Crow, Sr., a member of the Rosebud Sioux Tribe and a resident of the Rosebud Sioux Reservation, is a direct descendant of Tasunke Witko. On March 4, 1993, he filed a petition for Letters of Administration in the Rosebud Sioux Tribal Court and was subsequently named as the Administrator of Tasunke Witko’s estate on April 12, 1993.

The G. Heileman Brewing Company, Hornell Brewing Company, and John Ferolito and Don Vultaggio, the Defendants/Appellees herein, are the manufacturers, distributors, and marketers of various alcoholic (and non‑alcoholic) drinking products including, but not limited to, the ornately packaged “The Original Crazy Horse Malt Liquor.”[5] This particular product has been promoted, distributed, displayed for sale and sold from on or about March 17, 1992. Other alcoholic (and non‑alcoholic) products of the Defendants/Appellees have been manufactured, promoted, and offered for sale prior to 1992. “The Original Crazy Horse Malt Liquor” has not been manufactured, advertised or offered for sale in South Dakota or on the Rosebud Sioux Reservation. Other alcoholic beverages of the Defendants/Appellees such as “Old Style,” “Schmidt,” and “Special Export” are advertised offered for sale in South Dakota and on the Rosebud Sioux Reservation.[6] Non‑alcoholic beverages of the Defendants/Appellees such as “Arizona Iced Tea,” “Arizona Mucho Mango Cocktail” and “Arizona Strawberry Punch Cowboy Cocktail” are also advertised and offered for sale in South Dakota and on the Rosebud Sioux Reservation.[7]

During the period of March – June 1993, there was written and oral communication between the parties and other concerned (non-party) Lakota individuals and groups about the alleged “insult and injury” of Defendants’ actions and the likelihood of legal action if such activities of the Defendants/Appellees were not halted.[8]

No mutually agreed upon solution emerged from these various exchanges. As a result, the Estate of Tasunke Witko filed a lawsuit against the Defendants/Appellees in the Rosebud Sioux Tribal Court on August 25, 1993. An amended complaint was filed on September 22, 1993. The complaint and amended complaint asserted five separate causes of action, namely, the knowing and willful tortious interference with customary rights of privacy and respect owed to a decedent and his family, the tortious interference with Plaintiff’s property right commonly known as the “right of publicity,” the negligent and intentional infliction of emotional distress on the heirs of the Estate through acts of exploitation and defamation, violation of the Indian Arts and Crafts Act,[9] and violation of the Lanham Act.[10] These claims were asserted — where applicable — under both tribal and federal law.

The Estate seeks wideranging relief including declaratory and injunctive relief, money damages, a written public apology, and culturally appropriate compensation such as “presenting to the Estate one (1) braid of tobacco, one (1) four ‑ point Pendelton blanket and one (1) racing horse for each State, Territory or Nation in which said products have been distributed and offered for sale.” On October 26, 1994, the Defendants/Appellees filed a motion to dismiss pursuant to Rule 12(b) of the Rosebud Sioux Rules of Civil Procedure.[11] A hearing on Defendants’ motion was held on June 27, 1994 before the Honorable Stanley E. Whiting, Pro‑Tem Tribal Judge. No testimony was taken at this hearing. The motion was considered solely on the complaint(s), including affidavits and exhibits, and Defendants’ motion to dismiss.[12]

On October 25, 1994 the Honorable Stanley E. Whiting granted Defendants’ motion, issued a memorandum opinion, and dismissed the action for lack of jurisdiction. The trial court’s opinion did not appear to distinguish between personal and subject matter jurisdiction. The Estate subsequently filed a timely notice of appeal. The Defendants filed no cross appeal. Pursuant to Rule 20 of the Rules of Procedure of the Rosebud Sioux Tribal Court of Appeals, the Court, on its own motion, ordered the appeal to be heard en banc.[13] Two amicus briefs were properly filed with this Court.[14] On March 29, 1996, oral argument [15] was heard before the en banc Court sitting at the University of South Dakota School of Law in Vermillion, South Dakota.

II. Issues

This appeal raises three significant — and occasionally overlapping — issues namely:

A. Whether the trial court applied the correct legal standard in deciding the Defendants’ motion to dismiss;

B.Whether the trial court erred as a matter of law in its analysis of the issues of territorial, personal and/or subject matter jurisdiction as they pertain to Plaintiff’s causes of action sounding in tort, defamation, and the “right of publicity”; and

C. Whether the trial court erred as a matter of law in its jurisdictional analysis of the federal statutory causes of action asserted under the Indian Arts and Crafts Act and the Lanham Act.

III.Discussion

Each issue will be discussed in turn.

A. Legal Standard for Ruling on a Motion to Dismiss and the Appropriate Standard of Review.

The proper standard of review on questions of law concerning jurisdiction is de novo.[16] See e.g. Haisten v. Grass Valley Medical Reimbursement Fund, 784 F.2d 1392 (9th Cir. 1986). Most unfortunately, the trial court’s opinion does not articulate or indicate any legal standard it applied or used to guide its analysis on the motion to dismiss. This in and of itself likely constitutes reversible error. For purposes of analytical and conceptual clarity in the future, this Court provides and sets forth the necessary analysis. The proper standard and guidance in this regard are found in the case of Lake v. Lake, 817 F.2d 1416 (9th Cir. 1987).

In Lake, similar to the case at bar, the trial court decided the issue of jurisdiction based on affidavits and other written materials but without making adequate factual findings. In this case — complicated by the absence of any legal standard — the analytical groundwork set forth in Lake is therefore worth quoting in some detail:

The district court decided the issue of its personal jurisdiction over Taylor on the basis of affidavits and written discovery materials: thus, the Lakes needed to make only a prima facie showing of jurisdictional facts in order to avoid the motion to dismiss. Data Disc, Inc. v. Systems Technology Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). Because the court made no findings on the disputed facts, we review the materials presented de novo to determine if plaintiff has met the burden of showing a prima facie case of personal jurisdiction. Brand v Menlove Dodge, 796 F.2d 1070, 1072 (9th Cir. 1986). All factual disputes are resolved in the plaintiffs’ favor. Id.; Fields v. Sedgwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986). Presenting a prima facie case of jurisdiction, however, does not necessarily guarantee jurisdiction over the defendant at the time of trial. The district court has the discretion to take evidence at a preliminary hearing in order to resolve any questions of credibility or fact that arise subsequent to this appeal. If such an event arises, plaintiff, being put to full proof, “must establish the jurisdictional facts by a preponderance of the evidence, just as he would have to do at trial. “ Data Disc, 557 F.2d at 1258.[17]

Therefore, on remand, if there are any subsequent questions of credibility or fact, the trial court has the discretion to take evidence at a preliminary hearing in order to resolve same. If such an event arises, as noted in Lake, Plaintiff must establish the jurisdictional facts by a preponderance of the evidence, just as he would have to do at trial.

Within the limits of the record before this Court, we will proceed to analyze the remaining jurisdictional issues engendered by this appeal in accordance with the prima facie standard in which all factual disputes are resolved in the Plaintiff’s favor. This analysis will also identify and apply the appropriate substantive legal standard(s).

B. Jurisdiction.

1. Territorial Jurisdiction

The Defendants/Appellees contend that the tribal court’s jurisdiction is territorial[18] in nature and since they never entered the physical confines of the reservation, there can be no jurisdiction over them for their activities that took place outside the territory of the reservation. The argument is seriously misinformed. The law of the Rosebud Sioux Tribe is clearly to the contrary.

While the Constitution of the Rosebud Sioux Tribe asserts that its jurisdiction “shall extend to the territory within the original confines of the Rosebud Reservation boundaries,”[19] this declaration is meant to emphasis the internal territorial integrity of the tribe’s legal authority as a matter of tribal law. It is, for example, axiomatic in Indian law that federal courts have sometimes (perhaps even often) decided the reach of tribal jurisdiction, at least, in part, on whether the land where the contested events occurred within the reservation was tribal or individual Indian trust lands or non‑Indian land held in fee.[20] Clearly these land tenure distinctions within the reservation are not at issue in this case. The harm, if any, that the Plaintiff Estate suffered was on tribal or individual Indian trust land within the reservation.

The Rosebud Sioux Tribe does not limit its potential “territorial” jurisdiction to the crabbed reading suggested by the Defendants/Appellees. The fact that the tribe has a “long arm”statute set out at Rosebud Sioux Tribal Law and Order Code § 4-2-7[21] indicates the Tribe’s clear intent, consistent with notions of due process,[22] to assert jurisdiction over non-residents who, for example, commit tortious acts that have effects within the reservation.

2. Personal Jurisdiction.

It is this issue that appears to be at the heart of the trial court’s decision. The trial court’s memorandum decision focuses much of its attention on the “minimum contacts” analysis required under the due process guarantee. Yet its analysis is seriously flawed because it does not articulate any (much less the correct) legal standard applicable to a motion to dismiss, applies some facts but ignores others without explanation, and misapprehends and misapplies the appropriate due process standard. Each of these matters will be treated separately.

a) Motion to Dismiss Standard.

As noted above,[23] the proper standard to apply in the context of a motion to dismiss is that the Plaintiff needs to make only a prima facie showing of jurisdictional facts to avoid a dismissal and all factual questions are resolved in the Plaintiffs’ favor.[24] In light of the fact that all factual disputes are resolved in favor of the Plaintiff, it is both curious and fatal that some of what would appear to be the most relevant facts are not even mentioned in the trial court’s memorandum opinion.

b) Relevant Facts.

The Plaintiff made numerous factual assertions in its complaint(s), affidavits, and exhibits that were not controverted by Defendant and even if they were, they would have to be construed in favor of the Plaintiff. However, these assertions were, apparently, simply ignored by the trial judge. These include, but are not limited to, the following: assertions that the Defendants continuously advertised and sold other alcoholic beverages such as “Old Style,” “Schmidt’s,” and “Special Export”[25] in South Dakota and on the Rosebud Sioux Reservation; that the Defendants continuously advertised and sold other non‑alcoholic beverages such as “Arizona Iced Tea,” “Arizona Mucho Mango Cowboy Cocktail,” and “Arizona Strawberry Punch Cowboy Cocktail”[26] in South Dakota and on the Rosebud Sioux Reservation; that Defendants made at least one telephone call to, and sent at least one package of allegedly defamatory materials to Plaintiff/Administrator on the Rosebud Sioux Reservation,[27] and that the Defendants’ advertising label on each bottle of “Original Crazy Horse Malt Liquor”[28] specifically exalted and targeted the forum reservation which was the home of the decedent Crazy Horse and is the home of the Plaintiff/Administrator. There may be other relevant facts; this is merely a sampling. At this point, the issue, of course, is not whether these (or other) facts are ultimately true, but only assuming that they are true (as we must) do they make out a sufficient prima facie case to withstand a motion to dismiss? The answer lies in the application of these and other relevant facts to the applicable “minimum contacts” due process standard.

c) “Minimum Contacts” Due Process Analysis.

Due process exists as an individual guarantee against the federal government pursuant to the Fifth Amendment,[29] against state governments pursuant to the Fourteenth Amendment,[30] and against tribal governments pursuant to the Indian Civil Rights Act of 1968[31] and any tribal constitutional guarantee.[32] Normally, the strictures of the United States Constitution do not apply against tribes. Talton v. Mayes, 116 U.S. 376 (1896). Federal courts have also ruled that the substantive content of the due process clause and other guarantees of the Indian Civil Rights Act of 1968 need not exactly mirror that of the United States Constitution. See e.g. Tom v. Sutton, 533 F.2d 1101 (9th Cir. 1976) and Wounded Head v. Tribal Council of Oglala Sioux Tribe, 507 F.2d 1079 (8th Cir. 1975). And while this Court has no doubt at traditional Dakota notions of due process that provide everyone the opportunity to be heard before making a decision are met in this case,[33] it is, nevertheless, necessary to also apply the federal due process “minimum contacts” analysis. This is so because as the Supreme Court announced in National Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845 (1985) the proper extent of tribal court jurisdiction is ultimately a matter of federal (common) law and therefore as to matters of jurisdiction, federal standards — including “minimum contacts” due process analysis — are applicable.

There are essentially two issues involved in construing a long arm statute. These are whether the intent of the long arm statute is to maximize its possible jurisdiction and if so, whether such assertion meets the requirements of due process. The former issue is decided solely by the local law of the forum and the latter by federal due process analysis. Helecoptreos Nacionales de Columbia v. Hall, 466 U.S. 408 (1984).

As to the former issue, it is clear that the intent of the tribal long arm statute is that its reach be co-existent with the federal due process clause. This is in keeping with the modern trend and the tribal commitment to provide a forum for all wrongs that have impact on individuals residing on the reservation. The preamble to the tribal long arm statute which states, in relevant part, the intent of asserting jurisdiction “to the greatest extent consistent with due process of law” is unequivocal in this regard.[34] This interpretation of tribal law is not subject to federal review. As noted by the United States Supreme Court in Helicopteros Nacionales de Colombia v. Hall:

It is not within our province, of course, to determine whether the Texas Supreme Court correctly interpreted the state’s long arm statute. We therefore accept that court’s holding that the limits of the Texas statute are coextensive with those of the Due Process Clause.[35]

The most recent hallmark decisions of the United States Supreme Court in the long arm context are Calder v. Jones, 465 U.S. 783 (1984) and Burger King v. Rudzewicz, 471 U.S. 462 (1985). Both of these cases make it clear that it is possible for a forum to assert personal jurisdiction over a defendant even when he has not physically entered or carried on business within the forum jurisdiction.

As the Supreme Court noted in Burger King, “The Due Process Clause protects an individual’s likely interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’” 471 U.S. 462, 471‑72 (citing International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). The Burger King opinion goes on to emphasize that a potential defendant may receive the necessary “fair warning” on which to condition jurisdiction if it has “purposefully directed” its activities at the forum and as a result it could have or should have foreseen being “haled” into that particular forum. In addition, the Court emphasized, “Moreover, where individuals ‘purposefully derive benefits’ from their interstate activities, . . . it may well be unfair to allow them to escape having to account in other states for consequences that arise proximately from such activities.” Burger King at 473‑74. The Burger King Court found the necessary contacts of the Defendant who never physically entered or carried on business in the forum state of Florida.

In Calder, the actress Shirley Jones sued the writer of an allegedly defamatory article about her in California where Ms. Jones resided. The writer — defendant had never been in California. The Court found the necessary contacts to justify “in personam” jurisdiction over the defendant. It emphasized that defendant “knew” that Ms. Jones would suffer the “effect” of the defamatory statements in the forum state. The Court also noted that the vehicle for the defamatory article — The National Enquirer (not a defendant in the case) — had a substantial circulation in the forum state of California.

If the requirements of Calder and Burger King are integrated and harmonized, the key questions become did the defendant engage in activities “purposefully directed” to the forum, did the defendant know the plaintiff would suffer the “effects” of defendant’s activities in the forum, and was all of this reasonably foreseeable to justify “haling” the defendant into the forum’s jurisdiction?

The trial court did not discuss this legal standard, but rather found no facts to support jurisdiction. The trial court stated, “[a]ctually, the facts established that Defendant made no contacts with the heirs of Crazy Horse or with the Rosebud Sioux Tribe Reservation.” Slip Op. at 13. And again, “[f]urther, there are no contacts whatsoever by the Defendants with Plaintiff’s [sic] in any manner.” Slip Op. at 14. These factual conclusions are quite simply erroneous and unwarranted. The Plaintiff Estate made numerous factual assertions to the contrary (none of which were even contradicted by the Defendants) which must be assumed to be true for purposes of a motion to dismiss. Lake at 1420.

A reasonable cross‑section of these facts has already been enumerated.[36] These facts include, but are not limited to, the advertisement and sale of other alcoholic and non-­alcoholic beverages by the Defendants in South Dakota and on the Rosebud Sioux Reservation, the making of one telephone call and the mailing of one package of allegedly defamatory materials by a representative of Defendants to the Plaintiff/Administrator or his attorney on the Rosebud Sioux Reservation and that the advertising label on “Original Crazy Horse Malt Liquor” bottles is specifically directed to the forum.

The trial court provided no explanation for ignoring these facts and it has therefore committed reversible error. Because the trial court made no findings on the facts — disputed or otherwise — we review the materials de novo to determine if Plaintiff has met the burden of showing a prima facie case of personal jurisdiction. Lake v. Lake, 817 F.2d 1416, 1420 (9th Cir. 1987).

We find that Plaintiff/Administrator has made a prima facie showing. Defendants are conducting business — albeit only with related non-offending alcoholic and non‑alcoholic beverages — in the forum, and have made physical — admittedly limited — contact with the forum through the single telephone call and mailing of package of allegedly defamatory materials to the Plaintiff/Administrator or his attorney on the Rosebud Sioux Reservation. These physical and business activities satisfy traditional “minimum contacts” requirements.

In addition and in support of our conclusion, it is noteworthy to demonstrate how the Defendants want it both ways. In the advertising label affixed to each bottle of the “Original Crazy Horse Malt Liquor,” Defendants clearly exalt and direct their activities to the forum. The label ornately proclaims:

“The Black Hills of Dakota, steeped in the history of

the American West, home of Proud Indian Nations.

A land where imagination conjures up images of blue clad

Pony Soldiers and magnificent Native American Warriors,

A land still rutted with wagon tracks of intrepid pioneers.

A land where wailful winds whisper of Sitting Bull.

Crazy Horse and Custer.

A Land of character, of bravery, of tradition.

A land that truly speaks of the spirit that is America.”

Defendants demur to this reading claiming that they did not know there were any living descendants of Crazy Horse, much less living on the Rosebud Sioux Reservation at the time they began to market and sell the “Original Crazy Horse Malt Liquor.” While it is true that the Rosebud Sioux Reservation is not specifically mentioned on the label, it is clearly subsumed within the phrase “The Black Hills of Dakota . . . home of proud Indian Nations.” The professed east coast ignorance may well have been true at the time the product first entered the market, but certainly it ended when Defendants were informed by the Plaintiff/Administrator (prior to instigating this lawsuit), other members of the Lakota Nation, and members of South Dakota’s congressional delegation and others of their ongoing offensive conduct within the forum.[37] Conduct, it may be noted incidentally, that has not been discontinued. For the jurisdictional importance of ongoing activity by a defendant with notice of the alleged wrongfulness of the conduct at issue, see Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994).

Despite this purposeful activity, Defendants have studiously avoided the actual marketing and sale of “Original Crazy Horse Malt Liquor” in Indian county in and around South Dakota including the Rosebud Sioux Reservation. Given the marketing and sale of similar — but non‑offending — products in the forum, this avoidance appears to be the most cynical ploy. Defendants exalt and target the forum where it taps a likely vein of customers, but studiously avoid marketing and sale in the forum itself because their conduct is potentially offensive and tortious there. It seems wholly unlikely that the due process clause can be made to countenance such distortion and manipulation and this Court holds that it does not.

These marketing activities of the Defendants are “purposefully directed” to the forum, with notice and knowledge of the potential adverse “effects” on the Plaintiff/Administrator within the forum. Potential harm is clearly foreseeable. The actions of the Defendants do not constitute “mere untargeted negligence.” (Calder at 789.) These facts taken together clearly meet the requirements of Calder and Burger King. See also Brainard v. Governors of University of Alberta, 873 F.2d 1257 (9th Cir. 1989) in which the defendant was held subject to personal jurisdiction in a forum where his only contact was to receive two phone calls and respond to a letter. The defendant never physically entered the forum.

Similarily, in VDI Technologies v. Price, 781 F. Supp. 85 (D.N.H. 1991), the court held for jurisdictional purposes that a party commits a tortious act within the state when injury occurs in the forum even if the injury is the result of acts outside the state. This is also the case at bar.[38] In VDI Technologies, the court found personal jurisdiction over the defendant based solely on letters defendant sent to plaintiff’s customers outside the forum because of defendants knowledge of the likely harm to the plaintiff within the forum. Again, this closely parallels the case at bar. The Defendants were on notice that their ongoing tortious conduct was causing harm to the Plaintiff Estate within the forum. This case, like VDI Technologies, is one of purposeful effects, not unintended consequences. See also Dakota Industries, Inc. v. Dakota Sportswear, Inc., 946 F.2d 1385 (8th cir. 1991). Defendants may not escape accountability in the very forum they assiduously cultivate when it fits their purposes, but simultaneously seek to avoid because of the likely harm to accrue there.

The analytical horizon drawn from this line of cases is eminently reasonable and fully comports with the requirements of due process. We therefore find that the “minimum contacts” due process requirement — in the context of a motion to dismiss — are fully met in this case. More broadly, such a result comports with notions of reasonableness and fair play that are also embedded in the concept of due process, Sinatra v. National Inquirer Inc., 854 F.2d 1191 (9th Cir. 1978).

In sum, in assessing personal jurisdiction, the focus is on “the relationship among the defendant, the forum and the litigation.” Shaffer v. Heitner., 433 U.S. 186, 204 (1977). This analysis most often examines three elements, namely (1) that the nonresident defendant purposefully directs its activities toward the forum or its residents; (2) the claim must be one which arises out of or relates to the defendant’s forum related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. Haisten, 784 F.2d at 1397. See also Burger King 471 U.S. at 472‑76.

As we have seen, the Defendants have purposefully availed themselves of the forum by advertising and selling other of their alcoholic and non‑alcoholic beverages in South Dakota and on the Rosebud Sioux Reservation, by placing at least one telephone call to and sending one packet of allegedly defamatory material to the Plaintiff or his attorney on the Rosebud Sioux Reservation, and continually targeting the forum through each label affixed to a bottle of “Original Crazy Horse Malt Liquor” even after being informed by more than one non‑party source of its offensiveness within the forum and elsewhere on Reservations in South Dakota.[39]

Jurisdiction, of course, may not be avoided by a lack of physical contact with the forum state or reservation. This is the central holding of both the Burger King and Calder cases. Nevertheless, a defendant may not be haled into a jurisdiction as the result of random, fortuitous, or attenuated contacts. Burger King, 471 U.S. at 479. In the instant case, none of the Defendants’ conduct has been random or fortuitous or accidental. The contact is systematic and ongoing. It was clearly both proximate and foreseeable that Defendants would be haled into court on the Rosebud Sioux Reservation. Plaintiff’s claim grows directly out of defendants’ activities involved in the advertisement, marketing, and sale of both its offending and non‑offending products.[40] It is significant to emphasize here that the alleged actions of the Defendants do not involve seeking to market a physically defective product — the classic products liability situation, — within the forum, but rather a situation where Defendants are alleged to be intentionally causing harm to the personal or property (e.g. ‘right of publicity’) interests at the Plaintiff’s place of residence and domicile as the result of the manufacturing, sale, and/or marketing of the “Original Crazy Horse Malt Liquor.”

Finally, the exercise of a forum’s jurisdiction must be reasonable and comport with fair play and justice. The burden on the Defendants to litigate in the tribal forum is minimal. They are all national corporations engaged in extensive interstate commerce. The scope of Defendants’ resources and the nature of modern transportation and communication make any ensuing burdens in defending this lawsuit slight. The reservation forum is likely to be most convenient for all parties, while it would be correspondingly difficult both economically and geographically for the Plaintiff to file his lawsuit in another forum far away from the reservation.

The local forum is also best situated to provide convenient and effective relief for the Plaintiff Estate should it prevail at a trial on the merits. This is particularly significant in light of the fact that some of the causes of action asserted by the Plaintiff involve questions of tribal custom and tribal common law that, as questions of first impression, will not be readily discerned or easily answered in a state or federal forum at a substantial cultural and geographical remove from the reservation forum. The reservation forum is also the most efficient forum for this lawsuit because it has already dealt with the issue of jurisdiction (which is likely to arise in any forum) and because of its expertise in evaluating claims grounded in whole or in part in tradition, custom and/or tribal common law. This is especially true in light of Justice Marshal’s statement that, “[t]ribal courts play a vital role in tribal self‑government. . . and the Federal government has consistently encouraged their development.”[41] Such support is particularly appropriate in this instance where the tribal court is uniquely capable to “provide other courts with the benefit of their expertise in such matters in the event of further judicial review.” National Farmers Union, 471 U.S. at 856 (1985). Finally, the tribal forum has a well justified interest in the lawsuit as it alleges extensive and pervasive (tortious) harm that has accrued on the reservation against one of its residents.

3. Subject Matter Jurisdiction.

The trial court also rested part of its decision to dismiss on its analysis of Montana v. United States, 450 U.S. 544 (1981). Slip Op. at 14‑16. The trial court made no distinction in its opinion between personal and subject matter jurisdiction and the fact that Montana is a case about subject matter — not personal — jurisdiction. The trial court, despite observing that Montana was a case involving tribal jurisdiction over activities taking place on fee lands within the reservation applied it to events that did not take place on fee lands and also, made a rather cursory and quite flawed analysis about the applicability of the two prongs of the Montana proviso.[42] It concluded “that Montana and its protege [sic] does [sic] not grant jurisdiction to the Tribal court under the existing factual scenario.” Slip op. at 16. This conclusion is flat wrong.

It is the opinion of this Court that Montana is inapplicable to the case at bar and even if it was, subject matter jurisdiction may properly be found under both of the Montana exceptions. Since Montana is often a key case employed both by tribal courts and reviewing federal courts when assessing the legitimate ambit of tribal court jurisdiction,[43] some review of that case — what it is and is not about — is in order.

a) Montana v. United States.

Montana v. United States is not a case — despite apparent conceptions to the contrary in some quarters — in which the Supreme Court assessed tribal court subject matter jurisdiction as a matter of either constitutional principles or federal common law. It is rather a case about statutory construction. In Montana, the Court assessed the jurisdictional implications of the creation of fee land within the Crow Reservation as a result of the General Allotment Act and the Crow Allotment Act. The Court found that Congressional authorization to alienate tribal lands had the necessary effect of limiting tribal sovereignty with regard to non-Indian activity on those fee lands. Montana at 1255-56.[44]

Therefore in the absence of a specific Congressional enactment, judicial decisions interpreting the reach of tribal court jurisdiction are properly constrained. See e.g. United States ex rel. Morongo Band of Mission Indians v. Rose, 24 F.3d 901, 906 (9th Cir. 1994) (Montana exceptions are “relevant only after the court concludes there has been a general divestiture of tribal authority over non-Indians by alienation of the land.”)[45] More broadly, the Supreme Court has noted, “[c]ivil jurisdiction over such activities presumptuously lies in the tribal courts unless affirmatively limited by specific treaty provision or federal statute.” Iowa Mutual Insurance Co. v. LaPlante, 480 U.S. 9, 18 (1987).[46]

Therefore the Montana decision is specifically limited to fee lands. To extend Montana to non‑fee land and beyond the federal statutes involved in that case is to engage in judicial law making plain and simple. Federal authority in Indian law is primarily congressional and not judicial in nature. Courts — including federal reviewing courts — therefore need to hue to the proper limits of their authority.

In fact, this is exactly what the Montana Court itself did. When the Court turned its attention from tribal regulation of non‑Indian activity on fee land to regulating the same conduct on tribal (and individual Indian) land, it did not examine that conduct through the Montana proviso, but rather summarily observed “The Court of Appeals held that the Tribe may prohibit nonmembers from hunting or fishing on land belonging to the tribe or held by the United States in must for the tribe and with this holding we can readily agree.” Montana at 1254. If the Montana court itself did not apply the Montana proviso analysis to non‑fee land, tribal and lower federal courts ought not.[47]

In the case at bar, the harm clearly occurs on individual and tribal trust land within the Rosebud Sioux Reservation and therefore Montana analysis is inappropriate. Neither of the parties contends that there is any other relevant federal statute that potentially bars the tribal court from asserting subject matter jurisdiction.

It is also pertinent to note that Montana-like analysis is properly limited to questions of tribal regulatory and legislative authority and not tribal court adjudicatory authority. The underlying question in Montana was whether the Crow Tribe could regulate (or legislate) concealing the right of non‑Indians to hunt and fish on non-Indian fee land within the reservation. The Court answered that the Crow tribe could not. The Court did not in any way indicate that the tribal court would not be an appropriate forum to adjudicate a hunting issue that came up on the Reservation.

The Montana Court did not make the legislative‑adjudicatory distinction. Yet it is this implicit distinction that best explains the Supreme Court’s subsequent decision in National Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845 (1985). In that case, the Supreme Court held that the tribal court did have adjudicatory jurisdiction in the first instance to hear a civil dispute, namely a tortious claim asserted by an Indian student against a non‑Indian school district resulting from a motorcycle accident that occurred on fee land owned and occupied by a state public school. The Court applied no Montana analysis. This would seem difficult to fathom but for the fact the case involved tribal judicial rather than legislative authority.[48] Since the case at bar involves the question of whether a tribal judicial forum is available to hear a tort case just like the issue in National Farmers Union and not whether the tribe can regulate or legislate non‑Indian conduct on fee land which was the issue in Montana, National Farmers Union’s reasoning is more persuasive and provides yet another reason why Montana is inapplicable here.[49]

b) The Montana “Proviso”.

Even if Montana were to apply in this case, both prongs of the famous ‘proviso’ are satisfied. In Montana, the Court stated that despite the presumption against tribal (regulatory) authority over non‑Indians on fee land, there might nevertheless be tribal authority:

To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non‑Indian fee lands. A tribe may regulate, through taxation, licensing, or other means, the activities of non-members who enter consensual relationships with the tribe or its members, though commercial dealing, contracts, leases or other arrangements. [E.g.,] William v. Lee, 358 U.S. 217, 223. A tribe may also retain inherent power to exercise civil authority over the conduct of non‑Indians on fee land within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe. Montana at 1258.

Again, for purposes of emphasis, as discussed above, note the Court’s use of the word ‘regulate’ rather than the word ‘adjudicate’.

The Plaintiff/Administrator in this case alleges, among other things, that Defendants misappropriated the likeness of ‘Crazy Horse’ for their own commercial gain. It is significant to note in this regard that the trial court specifically recognized a “right of publicity” in the Plaintiff Estate. Slip. Op. at 11. In other words, the Defendants failed to enter into a ‘consensual relationship’ with the Plaintiff for the use of the name and reputation of ‘Crazy Horse.’ This case is thus about, at least in part, the failure (caused by the Defendants) to have a consensual agreement. It therefore would seem an odd twist to say that Defendants’ failure to enter into a consensual agreement which gives rise to the cause of action in the first instance could be used to defeat the Court’s subject matter jurisdiction. Such reasoning would constitute the most arid and formalism and insofar as the trial court so reasoned, it is hereby rejected.

Similarly, the trial court — without any analysis that this Court can discern — concluded that the second prong of the proviso was not satisfied. Slip Op. at 16. This unsupported conclusion is incorrect. The ability of the Rosebud Sioux Tribe to protect the ‘health and welfare of the tribe’ is directly implicated in this case. It is a touchstone of tribal ‘health and welfare’ to be able to provide a forum for the resolution of alleged harms suffered by tribal members (or any person) on the reservation. This is particularly, even glaringly, true in the context of allegations of the tortious interference with, and the misappropriation of, the image and reputation of a venerated cultural hero and political and spiritual leader. If the tribe cannot successfully provide a forum in this dispute of wideranging individual and collective tribal import, Montana will have indeed run over its fee‑lined banks and inundated the tribal jurisdictional landscape far beyond that which is justifiable. Confident that Montana was not so intended, we find the second prong of the process fully satisfied. And we repeat a cautionary refrain noted at the outset: this appeal and the current posture of this case are about jurisdiction — personal and subject matter — and the availability of a tribal forum. We are not concerned at this juncture about the substantive merit of Plaintiff’s claims or his likelihood to prevail at trial.

c) A-I Contractors v. Strate.[50]

The Court also feels that it is necessary to make some observations about the en banc decision of the Eighth Circuit in A-I Contractors. A-I Contractors involved a non‑Indian versus a non-Indian lawsuit resulting from a car/truck accident that took place on non‑fee land on the Fort Berthold Reservation in North Dakota. In the original panel decision,[51] the court held (2 to 1) that there was tribal court jurisdiction. The recent en banc decision vacated the prior decision and reversed holding Montana analysis applicable even to disputes arising on non‑fee land within the reservation and further found that neither prong of the Montana proviso was satisfied.[52]

As much of this Court’s discussion suggests, Montana analysis is inappropriate in this case. And even if it is, both prongs of the proviso are satisfied. However, very little, if any, of this Court’s reasoning and analysis appears in the en banc opinion of the Eighth Circuit and we are confident that if it did, that Court’s decision would have been otherwise. Regardless of this speculation, this case is clearly distinguishable from A-I Contractors. This case does not involve only non‑Indian parties, but instead involves an Indian party seeking to vindicate personal and cultural injuries that clearly transcend the mere physical harm any `garden variety’ car accident might occasion. The Eighth circuit’s wide solicitude when only non‑Indian parties are involved and its correspondingly quite attenuated understanding of apposite tribal interests in such circumstances are simply not applicable in the case at bar.

C. Jurisdiction Pursuant to Federal Statutes.

The Plaintiff Estate has also asserted federal causes of action under the Indian Arts and Crafts Act, 25 U.S.C. § 305 et seq. (1994) and the Lanham Act, 15 U.S.C. § 1125(a) (1994). Neither of these statutes limit their jurisdiction to the federal courts. Nor is there any limitation in tribal law to preclude tribal court jurisdiction as a matter of local law. The parties do not contend otherwise. In other words, there are no jurisdictional bars to the assertion of these federal statutory causes of action in tribal court.

The defenses raised by the Defendants to these two federal claims are matters of statutory interpretation as to the necessary elements that make up each cause of action. Each federal statutory claim will be treated in turn.

1. Indian Arts and Craft Act.

The Indian Arts and Crafts Act was enacted to “protect Indian artists from unfair competition from counterfeiters.”[53] The purpose of the Indian Arts and Crafts Act is not at issue in this case. What is at issue is whether an individual Indian has standing to initiate a lawsuit under the statute. The Defendants claim that the Plaintiff Estate lacks standing to bring a claim under the Indian Arts and Crafts Act. This argument is drawn from a plain meaning of the relevant statutory language and the supporting legislative history. Specifically, Defendants point to 25 U.S.C. § 305(e)(c)(1)[54] as a bar. Defendants allege that the structure of this section provides standing as follows: “A) by the Attorney General of the United States . . . on behalf of an Indian who is a member of an Indian Tribe or on behalf of an Indian tribe or Indian arts and crafts organization;” or “B) by an Indian tribe on behalf of itself, an Indian who is a member of the tribe, or on behalf of an Indian arts and crafts organization.”

Each of these sections permits lawsuits to be filed by representative parties. In A, the Attorney General is the representative party and in B, an Indian tribe is the representative party. In both A and B, the representative body may bring a lawsuit “on a behalf of an Indian” (A) or “on behalf of itself, an Indian who is a member of the tribe.” There is no additional section that allows an Indian to bring a lawsuit in his or her own behalf. This reading is particularly reasonable in that B speaks of “an Indian who is a member of the tribe” (emphasis added) which clearly refers back to “an Indian tribe” as the representative party. Without this reading, the word the actually would be inappropriate and incorrectly used. We are not persuaded that it has been improperly used, but rather that it harmonizes with the structure of the standing provisions. There is no ambiguity to be resolved in Plaintiff’s favor. In addition, as noted in the court’s opinion, a contrary reading would not be consistent with the legislative history of the Act. Slip. Op. at 19. Finally, the Plaintiff has indicated no case law suggesting a different result.

2. Lanham Act.

The Plaintiff also alleges a cause of action against the Defendants based on the Lanham Act. Specifically, Plaintiff claims that the label affixed to each bottle of “The Original Crazy Horse Malt Liquor” constitutes false advertising and false association in violation of § 43(a) of the Act as set forth at 15 U.S.C. § 1125(a). The definitions in the Lanham Act are to be construed broadly. Smith v. Montoro, 648 F.2d 602, 607 (9th Cir. 1981).

The trial court specifically recognized the Plaintiff’s “right of publicity” in the name ‘Crazy Horse’. Slip. Op. at 11. Recognition of this right, with which we agree, clearly entails the potentiality of that right being infringed by the ‘false advertising’ or ‘false association’ of the Defendants. At this stage, the Plaintiff Estate has asserted that the actions of the Defendants involve both ‘false advertising’ and ‘false association’ relative not only to “Crazy Horse” himself but also personal and tribal beadwork patterns or designs and sacred symbols. Amended complaint at 15‑16. All of these items are potentially subject to commercial and non‑commercial exploitation and loss. That is something to be developed at the trial on the merits. Neither side has cited to, or discussed, case law in the context of a motion to dismiss based on lack of standing under the Lanham Act. The Plaintiff has asserted, without contradiction, enough to survive a motion to dismiss. The standing issue may, of course, be revisited at trial.

IV. Conclusion.

For all of the above stated reasons, the decision of the trial court is hereby reversed in part, affirmed in part, and remanded for prompt trial on the merits. Specifically, the trial court’s findings as to personal and subject matter jurisdiction are reversed, as is its dismissal of the Lanham Act claim. The trial courts dismissal of the Indian Arts Crafts Act claim is affirmed.

HO HE’CETU YE LO.

IT IS SO ORDERED

Dated May 1, 1996

/s Leroy Greaves (Chief Justice), Patrick Lee, Frank Pommersheim, Ramon Roubideaux, Michael Swallow, Diane Zephier (Associate Justices)

[1088] Stuart P. Kaler, San Francisco, CA, argued, for appellant/cross-appellee Seth H. Big Crow.

Eric J. Antoine, Rosebud, SD, argued (Robert P. Gough, on the brief), for appellants/cross-appellees Hon. Stanley Whiting and Rosebud Sioux Tribal Court.

Cherie L. Krigsman and Lawrence I. Fox, New York City, argued (Charles M. Thompson, on the brief), for appellees/cross-appellants.

Before BOWMAN, LAY, and MURPHY, Circuit Judges.

LAY, Circuit Judge.

Tasunke Witko, also known as Crazy Horse, was a renown and beloved leader of the Oglala Sioux. He died in 1877. The Lakota people revere Crazy Horse as a spiritual and political leader. We take judicial notice of the fact that on January 15, 1982, [1089] the United States Postal Service issued a stamp honoring Crazy Horse, and there is a national Crazy Horse Monument under construction in South Dakota.

Crazy Horse opposed the use of alcohol by his people. Seth H. Big Crow, Sr., a descendant of Crazy Horse, acting as administrator of Crazy Horse's Estate ("Estate"), brought suit in the Rosebud Sioux Tribal Court^[1] contesting the use of the Crazy Horse name by Hornell Brewing Co., doing business as Ferolito, Vultaggio and Sons, Inc., Heileman Brewing Co., Inc., and John Ferolito and Don Vultaggio ("Breweries"). The Estate challenged the Breweries' use of the Crazy Horse name in the manufacture, sale, and distribution of an alcoholic beverage called "The Original Crazy Horse Malt Liquor" ("Crazy Horse Malt Liquor").^[2] The complaint asserted defamation, violation of the Estate's right of publicity, and negligent and intentional infliction of emotional distress. The complaint also alleged violations of the Lanham Act, see 15 U.S.C. §§ 1051-1128 (1994), and the Indian Arts and Crafts Act, see 25 U.S.C. §§ 305-305e (1994). The Estate sought injunctive and declaratory relief, as well as damages.

On October 25, 1994, the tribal judge, Honorable Stanley E. Whiting, Pro-Tem Tribunal Judge of the Rosebud Sioux Tribal Court, dismissed the Estate's action on the grounds that the tribal court lacked personal jurisdiction over the Breweries, and it lacked subject matter jurisdiction over the Estate's claims. J.A. at 13-34. The Estate appealed the dismissal of its complaint to the Rosebud Sioux Supreme Court.

On May 1, 1996, the Rosebud Sioux Supreme Court held the Breweries had sufficient contacts with the Rosebud Sioux Reservation to uphold service of process,^[3] and the Estate had established "prima facie" subject-matter jurisdiction. Id. at 187-214. The tribal supreme court also held that the tribal court improperly dismissed the Estate's Lanham Act claim.^[4] Id. at 216-17. The tribal supreme court held, however, that the Estate did not have standing to sue under the Indian Arts and Crafts Act. Id. at 214-16.^[5] The [1090] Rosebud Sioux Supreme Court then remanded the case to the tribal court for a "prompt trial on the merits."^[6] Id. at 217.

In July 1996, the Breweries filed suit in the United States District Court for the District of South Dakota against the Estate, the Rosebud Sioux Tribal Court,^[7] and the tribal court judge, seeking declaratory and injunctive relief. The Breweries asserted the tribal court had neither personal jurisdiction over the Breweries, nor subject-matter jurisdiction over the Estate's claims. The district court^[8] enjoined the Rosebud Sioux Tribal Court from conducting any further proceedings on the merits of the case. J.A. at 391 (Hornell Brewing Co. v. Rosebud Sioux Tribal Court, Civ. No. 96-3028 (D.S.D. Dec. 3, 1996)). The district court disagreed with the rationale the Rosebud Sioux Supreme Court had used to find subject matter jurisdiction over the Estate's claims.

In its discussion of subject matter jurisdiction, the Rosebud Sioux Supreme Court first held Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981), inapplicable to this case.^[9] J.A. at 209. The tribal supreme court said Montana dealt only with questions of statutory construction, is specifically limited to fee lands, and is properly limited to questions of tribal regulatory and legislative authority and not to questions of tribal adjudicatory authority. Id. at 207-10. The tribal supreme court also held that even if Montana were applicable to this case, the Breweries' conduct satisfied both of the Montana exceptions. Id. at 210. The tribal supreme court stated the Breweries' failure to enter into a consensual relationship with the Estate for the use of the name and reputation of Crazy Horse satisfies the first exception. Id. at 211. The tribal supreme court further stated that the Breweries' conduct satisfies the second exception, because the Tribe's health and welfare depend upon the Tribe's ability to provide a forum for resolution of the Breweries' allegedly harmful conduct. Id. at 212.

The United States District Court for the District of South Dakota disagreed, finding Montana directly applicable to this case, and stated that because neither Montana exception was met in this case, the tribal courts lacked subject matter jurisdiction over the Estate's claims. J.A. at 387-88. The district court concluded, however, the Breweries had not exhausted their remedies, "because the tribal court should be given the first full opportunity to determine whether [the Estate] [1091] has established the jurisdictional facts by a preponderance of the evidence, as distinguished from merely establishing a prima facie case of jurisdiction." Id. at 386.^[10] The district court entered an order enjoining the tribal court from proceeding on the merits. Id. at 391. It remanded the case to the tribal court for the limited purpose of conducting an evidentiary hearing on the issues of personal and subject matter jurisdiction. Thus, under the district court's order, this case has been remanded to tribal court for further proceedings as to both personal and subject matter jurisdiction, and the tribal court is enjoined from proceeding on the merits of this case. Id. at 391-92.

The tribal court, tribal judge, and the Estate have now appealed the issuance of the preliminary injunction, pursuant to 28 U.S.C. § 1292(a)(1). They argue the Rosebud Sioux Tribal Court has inherent and exclusive jurisdiction over the personal property rights vested in the Estate. The Breweries have cross-appealed, asserting the order remanding the case for evidentiary hearings on jurisdiction should be vacated, and this court should hold that the tribal court lacks subject matter jurisdiction. Although the parties assert differing viewpoints as to whether the district court properly issued a preliminary injunction, we need not review this holding since, as we discuss infra, we find the tribal court lacks subject matter jurisdiction over the Estate's claims against the non-Indian Breweries.^[11]

We begin our discussion of subject matter jurisdiction by noting that, "absent express authorization by federal statute or treaty, tribal jurisdiction over the conduct of nonmembers exists only in limited circumstances." Strate v. A-1 Contractors, ___ U.S. ___, ___, 117 S.Ct. 1404, 1409, 137 L.Ed.2d 661 (1997) (citing Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 98 S.Ct. 1011, 55 L.Ed.2d 209 (1978) and Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981)).^[12] Indian tribes do, however, "retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations." Montana, 450 U.S. at 565, 101 S.Ct. at 1258 (emphasis added). The operative phrase is "on their reservations." Neither Montana nor its progeny purports to allow Indian tribes to exercise civil jurisdiction over the activities or conduct of non-Indians occurring outside their reservations.

The activities at issue in this case are the Breweries' manufacture, sale, and distribution of Crazy Horse Malt Liquor. It is undisputed that the Breweries do not conduct those activities on the Rosebud Sioux Reservation or within South Dakota. Thus, because the conduct and activities at issue here did not occur on the Rosebud Sioux Reservation, we do not believe Montana's discussion of activities of non-Indians on fee land within a reservation is relevant to the facts of this case. More importantly, the parties fail to cite a case in which the adjudicatory power of the tribal court vested over activity occurring outside the confines of a reservation. The mere fact that a member of a tribe or a tribe itself has a cultural interest in conduct occurring outside a reservation does not create jurisdiction of a tribal court under its powers of limited inherent sovereignty. The analysis of Montana, and the cases the Montana Court discussed, expressly or implicitly recognize tribes' limited authority over activity occurring within the reservation and tribes' lack of authority "to [1092] determine their external relations." Montana, 450 U.S. at 564, 101 S.Ct. at 1258 (quoting United States v. Wheeler, 435 U.S. 313, 326, 98 S.Ct. 1079, 1087, 55 L.Ed.2d 303 (1978)). As Montana emphasizes, "exercise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of the tribes, and so cannot survive without express Congressional delegation." Id.

At the time of the tribal court proceedings, as well as at the time of the issuance of the district court's injunction, neither the parties nor the various tribunals directly involved in this case had the benefit of the United States Supreme Court's recent decision in Strate v. A-1 Contractors. Once again, however, the facts of Strate, like Montana, relate to use by non-Indians of fee lands within a reservation. Strate does, however, harmonize Montana with other cases addressing tribal civil authority over nonmembers. See Strate, ___ U.S. at ___ - ___, 117 S.Ct. at 1409-14.

In Strate, Lyle Stockert, a non-Indian driver of a truck owned by A-1 Contractors, a non-Indian company, collided with the automobile of Gisela Fredericks, a non-Indian widow of a deceased member of the Three Affiliated Tribes of the Fort Berthold Indian Reservation. Id. at ___, 117 S.Ct. at 1408. The collision occurred on a state highway that crossed through reservation land. Fredericks filed a personal injury suit in tribal court, and the tribal court concluded it had jurisdiction to adjudicate Fredericks' claims. Id.

Shortly thereafter, Stockert and A-1 Contractors filed suit in federal district court, seeking a declaratory judgment that, as a matter of federal law, the tribal court lacked jurisdiction to adjudicate the claims. Id. The district court concluded the tribal court had civil jurisdiction over Fredericks' claims against Stockert and A-1 Contractors, and on cross-motions for summary judgment, it dismissed the suit. Id. at ___, 117 S.Ct. at 1409. A divided panel of the Court of Appeals for the Eighth Circuit affirmed. Id. Following a rehearing en banc, and in an eight-to-four decision, the Eighth Circuit Court of Appeals reversed the district court's judgment, concluding that under Montana, the tribal court lacked subject matter jurisdiction over the dispute. Id.

The United States Supreme Court affirmed the en banc decision. The Court equated the state-held highway to non-Indian fee land and concluded the Montana rule and its two exceptions governed the issue of jurisdiction. Id. at ___, 117 S.Ct. at 1414. With respect to Montana, the Court stated:

Montana thus described a general rule that, absent a different congressional direction, Indian tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation, subject to two exceptions: The first exception relates to nonmembers who enter consensual relationships with the tribe or its members; the second concerns activity that directly affects the tribe's political integrity, economic security, health, or welfare.

Strate, at ___ - ___, 117 S.Ct. at 1409-10. The Court concluded neither Montana exception conferred tribal court jurisdiction over Fredericks' claims. Id. at ___ - ___, 117 S.Ct. at 1415-16.

In finding that the claims arising from this particular automobile accident did not fall within the reach of the tribal court's adjudicatory power, the Court also discussed the exhaustion requirement now well-established in the cases of National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985), and Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987). Id. at ___ - ___, 117 S.Ct. at 1410-13. In doing so, the Court made clear that the exhaustion rule is based upon "prudential" policies and is not jurisdictional. Id. at ___, 117 S.Ct. at 1413. We need not further elaborate on the detailed analysis of the Strate case other than to emphasize the Court's admonition set forth in footnote 14 at page 1416, wherein the Court observed:

When, as in this case, it is plain that no federal grant provides for tribal governance of nonmembers' conduct on land covered by Montana's main rule, it will be equally evident that tribal courts lack adjudicatory authority over disputes arising from such conduct. As in criminal proceedings, [1093] state or federal courts will be the only forums competent to adjudicate those disputes. Therefore, when tribal-court jurisdiction over an action such as this one is challenged in federal court, the otherwise applicable exhaustion requirement, must give way, for it would serve no purpose other than delay.

Strate, at ___ n. 14, 117 S.Ct. at 1416 n. 14 (citations omitted).

Suffice it to say neither the tribal court nor the Estate claim that the first exception of Montana, regarding nonmembers entering consensual relationships with a tribe or its members, applies in this case. Thus, the primary issue the parties raise on appeal relates to Montana's second exception, namely that the activity engaged in by the nonmember Breweries "directly affects the tribe's political integrity, economic security, health, or welfare." Strate, at ___, 117 S.Ct. at 1410. As we have noted, however, we deem this issue misleading.

It is a fundamental fact in the present case that the Breweries do not manufacture, sell, or distribute Crazy Horse Malt Liquor on the Reservation. The tribal court asserts that the Breweries do engage in the sale of other beverages, including some alcoholic beverages, on the Reservation. We find, as did the district court, that this argument is irrelevant. This is not the activity for which complaint is made. The only grounds upon which the Rosebud Sioux Supreme Court asserted subject matter jurisdiction was that the Breweries' conduct affects the health and welfare of the Tribe in that the Tribe should be able to provide a forum for resolution of harm suffered by its members on the Reservation. The district court rejected this reasoning and stated:

If providing a forum for its members would be a sufficient reason to confer subject matter jurisdiction upon the tribal courts when a tribal member is a party to a lawsuit, it follows that the tribal courts would always have civil subject matter jurisdiction over non-Indians. There would have been no reason for the discussion in Montana regarding the broad general rule of no civil jurisdiction over non-Indians and the two narrow exceptions to that general rule. Therefore, this Court does not agree that the second Montana exception provides tribal civil subject matter jurisdiction over the brewing companies in this case, under the present record.

J.A. at 388. We agree with this conclusion.

On appeal, the tribal court also asserts that although Crazy Horse Malt Liquor was not sold on the Rosebud Sioux Reservation, it was advertised outside the Reservation and on the Internet (available to tribal members on the Reservation), and therefore, it had a direct effect upon tribal members. We find this contention specious. Advertising outside the Reservation and on the Internet does not fall within the rubric of directly affecting the health and welfare of the Tribe. The Internet is analogous to the use of the airwaves for national broadcasts over which the Tribe can claim no proprietary interest, and it cannot be said to constitute non-Indian use of Indian land.

Following the admonition of the Supreme Court in Strate, we think it plain that the Breweries' conduct outside the Rosebud Sioux Reservation does not fall within the Tribe's inherent sovereign authority. We deem it clear the tribal court lacks adjudicatory authority over disputes arising from such conduct. We emphasize that our decision in this case does not turn upon the merits of the claims asserted by the Estate. The Estate and other interested parties may assert these claims in federal district court. Our holding relates solely to the adjudicatory authority of the tribal court.

Under the circumstances, we see no need for further exhaustion. We therefore vacate the order of remand for further exhaustion. In view of our holding that the tribal court lacks adjudicatory authority, we also see no further need for the preliminary injunction the district court issued. We are confident that all the parties will be governed by the law of the case. We therefore order the preliminary injunction dissolved.

For the foregoing reasons, the judgment of the district court is hereby vacated, and the case is remanded to the district court with instructions that the district court amend its judgment to hold that the Rosebud Sioux [1094] Tribal Court lacks adjudicatory authority over the dispute arising from the Breweries' use of the Crazy Horse name in the manufacturing, sale and distribution of Crazy Horse Malt Liquor outside the Rosebud Sioux Reservation.

IT IS SO ORDERED.

[1] The Rosebud Sioux Reservation is located in South Dakota.

[2] In 1992, Congress enacted a statute banning the use of the name Crazy Horse on the label of any distilled spirit, wine, or malt beverage product. See Pub.L. No. 102-393 § 633, 106 Stat. 1729. In 1993, the United States District Court for the Eastern District of New York concluded the statute violates the First Amendment of the Constitution. See Hornell Brewing Co. v. Brady, 819 F.Supp. 1227, 1245-46 (E.D.N.Y.1993).

[3]The Rosebud Sioux Supreme Court observed:

In the advertising label affixed to each bottle of the "Original Crazy Horse Malt Liquor," Defendants clearly exalt and direct their activities to the forum. The label ornately proclaims:

The Black Hills of Dakota, steeped in the history of the American West, home of Proud Indian Nations. A land where imagination conjures up images of blue clad Pony Soldiers and magnificent Native American Warriors, A land still rutted with wagon tracks of intrepid pioneers. A land where wailful winds whisper of Sitting Bull, Crazy Horse and Custer. A land of character, of bravery, of tradition. A land that truly speaks of the spirit that is America.

J.A. at 198.

[4]The Estate alleged a cause of action under section 1125(a) of the Lanham Act, which provides:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which —

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities,

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

15 U.S.C. § 1125(a).

[5]Section 305e(c)(1) of the Indian Arts and Crafts Act of 1990 expressly provides:

(c) Persons who may initiate civil actions

(1) A civil action under subsection (a) of this section may be commenced —

(A) by the Attorney General of the United States upon request of the Secretary of the Interior on behalf of an Indian who is a member of an Indian tribe or on behalf of an Indian tribe or Indian arts and crafts organization; or

(B) by an Indian tribe on behalf of itself, an Indian who is a member of the tribe, or on behalf of an Indian arts and crafts organization.

25 U.S.C. § 305e(c)(1).

[6] Thereafter, the Rosebud Sioux Tribe filed a motion in the tribal court for permissive joinder as a co-plaintiff under the Rosebud Sioux Tribe Law and Order Code, Rules of Civil Procedure, Rule 20(a). The Tribe asserted an independent right of action under the Indian Arts and Crafts Act. The tribal court granted the Tribe's motion to join as a co-plaintiff. See J.A. at 241.

[7] The Rosebud Sioux Tribe was not joined as a party. It appears in the present appeal as Amicus Curiae.

[8] Honorable Charles B. Kornmann, United States District Judge for the District of South Dakota.

[9] Montana is the initial Supreme Court case addressing the civil authority tribes may exercise over nonmembers carrying on activities within a reservation. See Montana, 450 U.S. at 544, 101 S.Ct. at 1247-48. The MontanaCourt determined the authority of the Crow Tribe to regulate hunting and fishing by non-Indians on lands within the Tribe's reservation owned in fee simple by non-Indians. The Court concluded the Tribe did not have the authority to regulate nonmembers in these particular circumstances but did state:

To be sure, Indian tribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. A tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements. A tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.

Id. at 565-66, 101 S.Ct. at 1258 (citations omitted). This passage thus describes two exceptions to the general rule that Indian tribes may not exercise civil authority over the conduct of nonmembers on alienated, non-Indian land within a reservation.

[10] In the original tribal court decision, the tribal court did not conduct an evidentiary hearing but found The Estate had established a prima facie case of jurisdiction. The Rosebud Sioux Supreme Court faulted the tribal court for not separating the discussions of personal and subject matter jurisdiction. The supreme court, although remanding the case for "prompt trial on the merits," did state that upon remand, "if there [were] any subsequent questions of credibility or fact," the plaintiff must establish the "jurisdictional facts" by a preponderance of evidence. J.A. at 187.

[11] Although the Tribe has now made a claim over the same subject matter in the tribal court, it is not a party to this appeal. Nonetheless, the preliminary injunction issued by the district court enjoined the tribal court from exercising subject matter jurisdiction as to the claim made by the Tribe against all of the non-Indian defendants.

[12] There is no federal statute or treaty conferring subject matter jurisdiction over the Estate's claims to the tribal court.

Harmon, Smith & Bridges, Archer D. Smith III, John M. Leiter, for appellants.

Ruppert, Bronson & Chicarelli, James D. Ruppert, for appellees.

HILL, Presiding Justice.

These are certified questions regarding the "right of publicity." The certification comes from the United States Court of Appeals for the Eleventh Circuit. Code Ann. § 24-3902; see Miree v. United States of America, 242 Ga. 126, 131-133 (249 SE2d 573) (1978). The facts upon which the questions arise are as follows:^[1]

The plaintiffs are the Martin Luther King, Jr. Center for Social Change (the Center),^[2] Coretta Scott King, as administratrix of Dr. King's estate, and Motown Record Corporation, the assignee of the rights to several of Dr. King's copyrighted speeches. Defendant James F. Bolen is the sole proprietor of a business known as B & S Sales, which manufactures and sells various plastic products as funeral accessories. Defendant James E. Bolen, the son of James F. Bolen, developed the concept of marketing a plastic bust of Dr. Martin Luther King, Jr., and formed a company, B & S Enterprises, to sell the busts, which would be manufactured by B & S Sales. B & S Enterprises was later incorporated under the name of American Heritage Products, Inc.

Although Bolen sought the endorsement and participation of the Martin Luther King, Jr. Center for Social Change, Inc., in the marketing of the bust, the Center refused Bolen's offer. Bolen pursued the idea, nevertheless, hiring an artist to prepare a mold and an agent to handle the promotion of the product. Defendant took out two half-page advertisements in the November and December 1980 issues of Ebony magazine, which purported to offer the bust as "an exclusive memorial" and "an opportunity to support the Martin Luther King, Jr., Center for Social Change." The advertisement stated that "a contribution from your order goes to the King Center for Social Change." Out of the $29.95 purchase price, defendant Bolen testified he set aside 3% or $.90, as a contribution to the Center. The advertisement also offered "free" with the purchase of the bust a booklet about the life of Dr. King entitled "A Tribute to Dr. Martin Luther King, Jr."

In addition to the two advertisements in Ebony, defendant [136] published a brochure or pamphlet which was inserted in 80,000 copies of newspapers across the country. The brochure reiterated what was stated in the magazine advertisements, and also contained photographs of Dr. King and excerpts from his copyrighted speeches. The brochure promised that each "memorial" (bust) is accompanied by a Certificate of Appreciation "testifying that a contribution has been made to the Martin Luther King, Jr., Center for Social Change."

Defendant James E. Bolen testified that he created a trust fund for that portion of the earnings which was to be contributed to the Center. The trust fund agreement, however, was never executed, and James E. Bolen testified that this was due to the plaintiffs' attorneys' request to cease and desist from all activities in issue. Testimony in the district court disclosed that money had been tendered to the Center, but was not accepted by its governing board. Also, the district court found that, as of the date of the preliminary injunction, the defendants had sold approximately 200 busts and had outstanding orders for 23 more.

On November 21, 1980, and December 19, 1980, the plaintiffs demanded that the Bolens cease and desist from further advertisements and sales of the bust, and on December 31, 1980, the plaintiffs filed a complaint in the United States District Court for the Northern District of Georgia. The district court held a hearing on the plaintiffs' motion for a preliminary injunction and the defendants' motion to dismiss the complaint. The motion to dismiss was denied and the motion for a preliminary injunction was granted in part and denied in part. The motion for an injunction sought (1) an end to the use of the Center's name in advertising and marketing the busts, (2) restraint of any further copyright infringement and (3) an end to the manufacture and sale of the plastic busts. The defendants agreed to discontinue the use of the Center's name in further promotion. Therefore, the court granted this part of the injunction. The district court found that the defendants had infringed the King copyrights and enjoined all further use of the copyrighted material.

In ruling on the third request for injunction, the court confronted the plaintiffs' claim that the manufacture and sale of the busts violated Dr. King's right of publicity which had passed to his heirs upon Dr. King's death. The defendants contended that no such right existed, and hence, an injunction should not issue. The district court concluded that it was not necessary to determine whether the "right of publicity" was devisable in Georgia because Dr. King did not commercially exploit this right during his lifetime. As found by the district court, the evidence of exploitation by Dr. King came from his sister's affidavit which stated that he had received "thousands of [137] dollars in the form of honorariums from the use of his name, likeness, literary compositions, and speeches." The district court further found that "Dr. King apparently sold his copyrights in several speeches to Motown Records Corporation." Martin Luther King, Jr. Center for Social Change v. American Heritage Products, 508 FSupp. 854 (N.D. Ga. 1981).

On plaintiffs' appeal of the partial denial of the preliminary injunction, the Eleventh Circuit Court of Appeals has certified the following questions:

(1) Is the "right of publicity" recognized in Georgia as a right distinct from the right of privacy?

(2) If the answer to question (1) is affirmative, does the "right to publicity" survive the death of its owner? Specifically, is the right inheritable and devisable?

(3) If the answer to question (2) is also affirmative, must the owner have commercially exploited the right before it can survive his death?

(4) Assuming the affirmative answers to questions (1), (2) and (3), what is the guideline to be followed in defining commercial exploitation and what are the evidentiary prerequisites to a showing of commercial exploitation?

As noted by the Eleventh Circuit, this case raises questions concerning the laws of Georgia as to which there are no controlling precedents directly on point. In addition to being novel in this jurisdiction, the questions are legally alluring. Under these twin circumstances, it is necessary in the first instance to consider how the answers to the questions apply to other fact situations, and tempting in the second instance to include those considerations in writing. Hopefully having considered the various ramifications, we will resist to the extent possible the temptation to answer more than has been asked.

The right of publicity may be defined as a celebrity's right to the exclusive use of his or her name and likeness. Price v. Hal Roach Studios, 400 FSupp. 836, 843 (S. D. N. Y. 1975); Estate of Presley v. Russen, 513 FSupp. 1339, 1353 (D. N. J. 1981), and cases cited. The right is most often asserted by or on behalf of professional athletes, comedians, actors and actresses, and other entertainers. This case involves none of those occupations. As is known to all, from 1955 until he was assassinated on April 4, 1968, Dr. King, a Baptist minister by profession, was the foremost leader of the civil rights movement in the United States. He was awarded the Nobel Prize for Peace in 1964. Although not a public official, Dr. King was a public figure, and we deal in this opinion with public figures who are neither public officials nor entertainers. Within this framework, we turn to the questions [138] posed.

1. Is the "right of publicity" recognized in Georgia as a right distinct from the right of privacy?

Georgia has long recognized the right of privacy. Following denial of the existence of the right of privacy in a controversial decision by the New York Court of Appeals in Roberson v. Rochester Folding Box Co., 171 N. Y. 538 (64 NE 442) (1902), the Georgia Supreme Court became the first such court to recognize the right of privacy in Pavesich v. New England Life Ins. Co., 122 Ga. 190 (50 SE 68) (1905). See Prosser, Law of Torts, pp. 802-804 (1971).

In Pavesich v. New England Life Ins. Co., supra, the picture of an artist was used without his consent in a newspaper advertisement of the insurance company. Analyzing the right of privacy, this court held: "The publication of a picture of a person, without his consent, as a part of an advertisement, for the purpose of exploiting the publisher's business, is a violation of the right of privacy of the person whose picture is reproduced, and entitles him to recover without proof of special damage." 122 Ga. at 191 (11) (50 SE at 68 [11]). If the right to privacy had not been recognized, advertisers could use photographs of private citizens to promote sales and the professional modeling business would not be what it is today.

In the course of its opinion the Pavesich court said several things pertinent here. It noted that the commentators on ancient law recognized the right of personal liberty, including the right to exhibit oneself before the public at proper times and places and in a proper manner. As a corollary, the court recognized that the right of personal liberty included the right of a person not to be exhibited before the public, saying: "The right to withdraw from the public gaze at such times as a person may see fit, when his presence in public is not demanded by any rule of law is also embraced within the right of personal liberty. Publicity in one instance and privacy in the other is each guaranteed. If personal liberty embraces the right of publicity, it no less embraces the correlative right of privacy; and this is no new idea in Georgia law." (Emphasis supplied.) 122 Ga. at 196 (50 SE at 70).

Recognizing the possibility of a conflict between the right of privacy and the freedoms of speech and press, this court said: "There is in the publication of one's picture for advertising purposes not the slightest semblance of an expression of an idea, a thought, or an opinion, within the meaning of the constitutional provision which guarantees to a person the right to publish his sentiments on any subject." 122 Ga. at 219 (50 SE at 80). The defendants in the case now before us make no claim under these freedoms and we find no violation thereof.

[139] Observing in dicta that the right of privacy in general does not survive the death of the person whose privacy is invaded, the Pavesich court said: "While the right of privacy is personal, and may die with the person, we do not desire to be understood as assenting to the proposition that the relatives of the deceased can not, in a proper case, protect the memory of their kinsman, not only from defamation, but also from an invasion into the affairs of his private life after his death. This question is not now involved, but we do not wish anything said to be understood as committing us in any way to the doctrine that against the consent of relatives the private affairs of a deceased person may be published and his picture or statue exhibited." 122 Ga. at 210 (50 SE at 76).

Finding that Pavesich, although an artist, was not recognized as a public figure, the court said: "It is not necessary in this case to hold, nor are we prepared to do so, that the mere fact that a man has become what is called a public character, either by aspiring to public office, or by holding public office, or by exercising a profession which places him before the public, or by engaging in a business which has necessarily a public nature, gives to everyone the right to print and circulate his picture." 122 Ga. at 217-218 (50 SE at 79-80). Thus, although recognizing the right of privacy, the Pavesich court left open the question facing us involving the likeness of a public figure.^[3]

The "right of publicity" was first recognized in Haelan Laboratories v. Topps Chewing Gum, 202 F2d 866 (2d Cir. 1953). There plaintiff had acquired by contract the exclusive right to use certain ball players' photographs in connection with the sales of plaintiff's chewing gum. An independent publishing company acquired similar rights from some of the same ball players. [140] Defendant, a chewing gum manufacturer competing with plaintiff and knowing of plaintiff's contracts, acquired the contracts from the publishing company. As to these contracts the court found that the defendant had violated the ball players' "right of publicity" acquired by the plaintiff, saying (at 868): "We think that, in addition to and independent of that right of privacy (which in New York derives from statute), a man has a right in the publicity value of his photograph, i.e., the right to grant the exclusive privilege of publishing his picture, and that such a grant may validly be made `in gross,' i.e., without an accompanying transfer of a business or of anything else. Whether it be labelled a `property' right is immaterial; for here, as often elsewhere, the tag `property' simply symbolizes the fact that courts enforce a claim which has pecuniary worth.

"This right might be called a `right of publicity.' For it is common knowledge that many prominent persons (especially actors and ball-players), far from having their feelings bruised through public exposure of their likenesses, would feel sorely deprived if they no longer received money for authorizing advertisements, popularizing their countenances, displayed in newspapers, magazines, busses, trains and subways. This right of publicity would usually yield them no money unless it could be made the subject of an exclusive grant which barred any other advertiser from using their pictures."

In Palmer v. Schonhorn Enterprises, 232 A2d 458 (N.J. Superior Court 1967), Arnold Palmer, Gary Player, Doug Sanders and Jack Nicklaus obtained summary judgment against the manufacturer of a golf game which used the golfers' names and short biographies without their consent. Although written as a right of privacy case, much of what was said is applicable to the right of publicity. In its opinion the court said (232 A2d at 462): "It would therefore seem, from a review of the authorities, that although the publication of biographical data of a well-known figure does not per se constitute an invasion of privacy, the use of that same data for the purpose of capitalizing upon the name by using it in connection with a commercial project other than the dissemination of news or articles or biographies does.

"The names of plaintiffs have become internationally famous, undoubtedly by reason of talent as well as hard work in perfecting it. This is probably true in the cases of most so-called celebrities, who have attained national or international recognition in a particular field of art, science, business or other extraordinary ability. They may not all desire to capitalize upon their names in the commercial field, beyond or apart from that in which they have reached their known excellence. However, because they presently do not should not be [141] justification for others to do so because of the void. They may desire to do it later. . . . It is unfair that one should be permitted to commercialize or exploit or capitalize upon another's name, reputation or accomplishments merely because the owner's accomplishments have been highly publicized."

In Haelan Laboratories, supra, the court was concerned with whether a celebrity has the right to the exclusive use of his or her name and likeness. In Palmer, supra, the court was concerned with whether a person using the celebrity's name for the user's commercial benefit has the right to do so without authorization. At this point it should be emphasized that we deal here with the unauthorized use of a person's name and likeness for the commercial benefit of the user, not with a city's use of a celebrity's name to denominate a street or school.

The right to publicity is not absolute. In Hicks v. Casablanca Records, 464 FSupp. 426 (S. D. N. Y. 1978), the court held that a fictional novel and movie concerning an unexplained eleven-day disappearance by Agatha Christie, author of numerous mystery novels, were permissible under the first amendment. On the other hand, in Zacchini v. Scripps-Howard Broadcasting Co., 433 U. S. 562 (97 SC 2849, 53 LE2d 965) (1977), a television station broadcast on its news program plaintiff's 15-second "human cannonball" flight filmed at a local fair. The Supreme Court held that freedom of the press does not authorize the media to broadcast a performer's entire act without his consent, just as the media could not televise a stage play, prize fight or baseball game without consent. Quoting from Kalven, Privacy in Tort Law — Were Warren and Brandeis Wrong?, 31 Law & Contemp. Prob. 326, 332 (1966), the Court said (433 U. S. at 576): "The rationale for [protecting the right of publicity] is the straight-forward one of preventing unjust enrichment by the theft of good will. No social purpose is served by having the defendant get free some aspect of the plaintiff that would have market value and for which he would normally pay."

The right of publicity was first recognized in Georgia by the Court of Appeals in Cabaniss v. Hipsley, 114 Ga. App. 367 (151 SE2d 496) (1966). There the court held that the plaintiff, an exotic dancer, could recover from the owner of the Atlanta Playboy Club for the unauthorized use of the dancer's misnamed photograph in an entertainment magazine advertising the Playboy Club. Although plaintiff had had her picture taken to promote her performances, she was not performing at the Playboy Club. The court used Dean William L. Prosser's four-pronged analysis of the right of privacy, saying: ". . . Dean Prosser has analyzed the many privacy cases in an article entitled `Privacy,' published in 48 Calif. L. Rev. 383 (1960), [142] and in reviewing the cases he suggests that the invasion of privacy is in reality a complex of four loosely related torts; that there are four distinct kinds of invasion of four different interests of plaintiff; that there are four disparate torts under a common name. These four torts may be described briefly as: (1) intrusion upon the plaintiff's seclusion or solitude, or into his private affairs; (2) public disclosure of embarrassing private facts about the plaintiff; (3) publicity which places the plaintiff in a false light in the public eye; (4) appropriation, for the defendant's advantage, of the plaintiff's name or likeness." 114 Ga. App. at 370 (151 SE2d at 499-500). Finding no violation of the first three rights of privacy, the court found a violation of the fourth, saying (114 Ga. App. at 377): "Unlike intrusion, disclosure, or false light, appropriation does not require the invasion of something secret, secluded or private pertaining to plaintiff, nor does it involve falsity. It consists of the appropriation, for the defendant's benefit, use or advantage, of the plaintiff's name or likeness. . . . `The interest protected (in the "appropriation" cases) is not so much a mental as a proprietary one, in the exclusive use of the plaintiff's name and likeness as an aspect of his identity.' Prosser, supra, at 406." Although Ms. Hipsley was an entertainer (i.e., a public figure), the court found she was entitled to recover from the Playboy Club (but not from the magazine which published the Club's ad) for the unauthorized use of her photograph. However the court noted a difference in the damages recoverable in traditional right of privacy cases as opposed to right of publicity cases saying (114 Ga. App. at 378): "Recognizing, as we do, the fundamental distinction between causes of action involving injury to feelings, sensibilities or reputation and those involving an appropriation of rights in the nature of property rights for commercial exploitation, it must necessarily follow that there is a fundamental distinction between the two classes of cases in the measure of damages to be applied. In the former class (which we take to include the intrusion, disclosure, and false light aspects of the privacy tort), general damages are recoverable without proof of special damages. Pavesich v. New England Life Ins. Co., supra. In the latter class, the measure of damages is the value of the use of the appropriated publicity."

In McQueen v. Wilson, 117 Ga. App. 488 (161 SE2d 63), reversed on other grounds, 224 Ga. 420 (1968), the Court of Appeals upheld the right of an actress, Butterfly McQueen, who appeared as "Prissie" in the movie Gone With the Wind, to recover for the unauthorized use of her photograph, saying: "Both before and since Pavesich it has been recognized that the appropriation of another's identity, picture, papers, name or signature without consent and for financial gain [143] might be a tort for which an action would lie. . . ." 117 Ga. App. at 491 (161 SE2d at 65).

Thus, the courts in Georgia have recognized the rights of private citizens, Pavesich, supra, as well as entertainers, Cabaniss and McQueen, supra, not to have their names and photographs used for the financial gain of the user without their consent, where such use is not authorized as an exercise of freedom of the press. We know of no reason why a public figure prominent in religion and civil rights should be entitled to less protection than an exotic dancer or a movie actress. Therefore, we hold that the appropriation of another's name and likeness, whether such likeness be a photograph or sculpture, without consent and for the financial gain of the appropriator is a tort in Georgia, whether the person whose name and likeness is used is a private citizen, entertainer, or as here a public figure who is not a public official.

In Pavesich, supra, 122 Ga. 190, this right not to have another appropriate one's photograph was denominated the right of privacy; in Cabaniss v. Hipsley, supra, 114 Ga. App. 367, it was the right of publicity. Mr. Pavesich was not a public figure; Ms. Hipsley was. We conclude that while private citizens have the right of privacy, public figures have a similar right of publicity, and that the measure of damages to a public figure for violation of his or her right of publicity is the value of the appropriation to the user. Cabaniss v. Hipsley, supra; see also Uhlaender v. Henricksen, 316 FSupp. 1277, 1279-1280 (Minn. 1970). As thus understood the first certified question is answered in the affirmative.

2. Does the "right of publicity" survive the death of its owner (i.e., is the right inheritable and devisable)?

Although the Pavesich court expressly did not decide this question, the tenor of that opinion is that the right to privacy at least should be protectable after death. Pavesich, supra, 122 Ga. at 210 (50 SE at 76).

The right of publicity is assignable during the life of the celebrity, for without this characteristic, full commercial exploitation of one's name and likeness is practically impossible. Haelan Laboratories v. Topps Chewing Gum, supra, 202 F2d at 868. That is, without assignability the right of publicity could hardly be called a "right." Recognizing its assignability, most commentators have urged that the right of publicity must also be inheritable. Felcher and Rubin, The Descendibility of the Right of Publicity: Is there Commercial Life After Death?, 89 Yale L. J. 1125 (1980); Gordon, Right of Property in Name, Likeness, Personality and History, 55 U. L. Rev. 553 (1960); Comment, 14 Ga. L. Rev. 831 (1980); Note, 47 Tenn. L. Rev. 886 (1980); Note, 33 Vand. L. Rev. 1251 (1980); [144] Comment, 29 Hastings L. J. 751 (1978); Comment, 42 Brooklyn L. Rev. 527 (1976); Comment, 22 UCLA L. Rev. 1103 (1975).

The courts that have considered the problem are not as unanimous. In Price v. Hal Roach Studios, supra, 400 FSupp. 836, the court reasoned that since the right of publicity was assignable, it survived the deaths of Stanley Laurel and Oliver Hardy. Other decisions from the Southern District of New York recognize the descendibility of the right of publicity, which has also been recognized by the Second Circuit Court of Appeals (infra).

In Factors Etc., Inc. v. Pro Arts, Inc., 579 F2d 215 (2d Cir. 1978), Elvis Presley had assigned his right of publicity to Boxcar Enterprises, which assigned that right to Factors after Presley's death. Defendant Pro Arts published a poster of Presley entitled "In Memory." In affirming the grant of injunction against Pro Arts, the Second Circuit Court of Appeals said (579 F2d at 221): "The identification of this exclusive right belonging to Boxcar as a transferable property right compels the conclusion that the right survives Presley's death. The death of Presley, who was merely the beneficiary of an income interest in Boxcar's exclusive right, should not in itself extinguish Boxcar's property right. Instead, the income interest, continually produced from Boxcar's exclusive right of commercial exploitation, should inure to Presley's estate at death like any other intangible property right. To hold that the right did not survive Presley's death, would be to grant competitors of Factors, such as Pro Arts, a windfall in the form of profits from the use of Presley's name and likeness. At the same time, the exclusive right purchased by Factors and the financial benefits accruing to the celebrity's heirs would be rendered virtually worthless."

In Lugosi v. Universal Pictures, 160 Cal. Rptr. 323 (603 P2d 425) (1979), the Supreme Court of California, in a 4 to 3 decision, declared that the right of publicity expires upon the death of the celebrity and is not descendible. See Guglielmi v. Spelling-Goldberg Productions, 160 Cal. Rptr. 352 (603 P2d 454) (1979), decided two days after Lugosi, supra. Bela Lugosi appeared as Dracula in Universal Picture's movie by that name. Universal had acquired the movie rights to the novel by Bram Stoker. Lugosi's contract with Universal gave it the right to exploit Lugosi's name and likeness in connection with the movie. The majority of the court held that Lugosi's heirs could not prevent Universal's continued exploitation of Lugosi's portrayal of Count Dracula after his death. The court did not decide whether Universal could prevent unauthorized third parties from exploitation of Lugosi's appearance as Dracula after Lugosi's death.

In Memphis Development Foundation v. Factors Etc., Inc., 616 F2d 956 (6th Cir. 1980), Factors, which had won its case against Pro [145] Arts in New York (see above), lost against the Memphis Development Foundation under the Court of Appeals for the Sixth Circuit's interpretation of Tennessee law. There, the Foundation, a non-profit corporation, planned to erect a statue of Elvis Presley in Memphis and solicited contributions to do so. Donors of $25 or more received a small replica of the proposed statue. The Sixth Circuit reversed the grant of an injunction favoring Factors, holding that a celebrity's right of publicity was not inheritable even where that right had been exploited during the celebrity's life.^[4] The court reasoned that although recognition of the right of publicity during life serves to encourage effort and inspire creative endeavors, making the right inheritable would not. The court also was concerned with unanswered legal questions which recognizing inheritability would create. We note, however, that the court was dealing with a non-profit foundation attempting to promote Presley's adopted home place, the City of Memphis. The court was not dealing, as we do here, with a profit making endeavor.

In Estate of Presley v. Russen, supra, 513 FSupp. 1339, the court found in favor of descendibility, quoting from Chief Justice Bird's dissent in Lugosi v. Universal Pictures, supra, 603 P2d at 434, and saying: "If the right is descendible, the individual is able to transfer the benefits of his labor to his immediate successors and is assured that control over the exercise of the right can be vested in a suitable beneficiary. `There is no reason why, upon a celebrity's death, advertisers should receive a windfall in the form of freedom to use with impunity the name or likeness of the deceased celebrity who may have worked his or her entire life to attain celebrity status. The financial benefits of that labor should go to the celebrity's heirs. . . .' " 513 FSupp. at 1355.

For the reasons which follow we hold that the right of publicity survives the death of its owner and is inheritable and devisable. Recognition of the right of publicity rewards and thereby encourages effort and creativity. If the right of publicity dies with the celebrity, the economic value of the right of publicity during life would be diminished because the celebrity's untimely death would seriously impair, if not destroy, the value of the right of continued commercial use. Conversely, those who would profit from the fame of a celebrity after his or her death for their own benefit and without authorization have failed to establish their claim that they should be the beneficiaries of the celebrity's death. Finally, the trend since the [146] early common law has been to recognize survivability, notwithstanding the legal problems which may thereby arise. We therefore answer question 2 in the affirmative.

3. Must the owner of the right of publicity have commercially exploited that right before it can survive?

Exploitation is understood to mean commercial use by the celebrity other than the activity which made him or her famous, e.g., an inter vivos transfer of the right to the use of one's name and likeness.

The requirement that the right of publicity be exploited by the celebrity during his or her lifetime in order to render the right inheritable arises from the case involving Agatha Christie, Hicks v. Casablanca Records, supra, 464 FSupp. at 429. The Hicks court cited three authorities, Factors Etc., Inc. v. Pro Arts, Inc., supra, 579 F2d at 222 (n.11); Guglielmi v. Spelling-Goldberg Prods., 73 Cal.App.3d 436 (140 Cal. Rptr. 775) (1977); and "see also" Price v. Hal Roach Studios, Inc., supra, 400 FSupp. 836. However, footnote 11 in Factors v. Pro Arts, supra, shows that the issue was not decided there. The Guglielmi case, brought by an heir of Rudolph Valentino, involved the movie "Legend of Valentino: A Romantic Fiction," and the California Court of Appeals decision in that case was affirmed on the ground of nondescendibility. Guglielmi v. Spelling-Goldberg Prods., supra, 603 P2d 459. And in Price v. Hal Roach Studios, Inc., supra, the court said: "There cannot, therefore, be any necessity to exercise the right of publicity during one's life in order to protect it from use by others or to preserve any potential right of one's heirs." 400 FSupp. at 846. Moreover, the Hicks court held that the fictional account of Agatha Christie's 11-day disappearance was protected by the first amendment. Thus, the finding that exploitation during life was necessary to inheritability was actually unnecessary to that decision.

Nevertheless, the Hicks dicta has been relied upon. See Groucho Marx Productions v. Day & Night Co., 523 FSupp. 485, 490 (S.D.N.Y. 1981).^[5] However, in this case, involving the Marx brothers, it was found that, although Leo and Adolpho Marx ("Chico" and "Harpo") had not made inter vivos or specific testamentary dispositions of their rights, they had earned their livelihoods by exploiting the unique characters they created and thus had exploited their rights to publicity so as to make such rights descendible. Thus, even in the Southern District of New York where the requirement arose, [147] exploitation beyond the "activity which made him or her famous" is not now required.

The cases which have considered this issue, see above, involved entertainers. The net result of following them would be to say that celebrities and public figures have the right of publicity during their lifetimes (as others have the right of privacy), but only those who contract for bubble gum cards, posters and tee shirts have a descendible right of publicity upon their deaths. See Groucho Marx Prods. v. Day & Night Co., supra, 523 FSupp. at 490, 491-492. That we should single out for protection after death those entertainers and athletes who exploit their personae during life, and deny protection after death to those who enjoy public acclamation but did not exploit themselves during life, puts a premium on exploitation. Having found that there are valid reasons for recognizing the right of publicity during life, we find no reason to protect after death only those who took commercial advantage of their fame.

Perhaps this case more than others brings the point into focus. A well known minister may avoid exploiting his prominence during life because to do otherwise would impair his ministry. Should his election not to take commercial advantage of his position during life ipso facto result in permitting others to exploit his name and likeness after his death? In our view, a person who avoids exploitation during life is entitled to have his image protected against exploitation after death just as much if not more than a person who exploited his image during life.^[6]

Without doubt, Dr. King could have exploited his name and likeness during his lifetime. That this opportunity was not appealing to him does not mean that others have the right to use his name and likeness in ways he himself chose not to do. Nor does it strip his family and estate of the right to control, preserve and extend his status and memory and to prevent unauthorized exploitation thereof by others. Here, they seek to prevent the exploitation of his likeness in a manner they consider unflattering and unfitting. We cannot deny them this right merely because Dr. King chose not to exploit or commercialize himself during his lifetime.

Question 3 is answered in the negative, and therefore we need not answer question 4.

Certified questions 1 and 2 answered in the affirmative, question 3 answered in the negative, and question 4 not answered. All [148] the Justices concur, except Weltner, J., who concurs specially.

WELTNER, Justice, concurring specially.

I concur specially because, although this matter is one of certified questions, I believe that the complaint states a claim upon which relief can be granted. I disagree most decidedly with the substantive portion of the majority opinion, for reason that it generates more unsettling questions than it resolves.

In this opinion, we have taken the "right of privacy" as enumerated in Pavesich, supra, and added thereto a new thing, now called a "right of publicity." That seems to me to be more an exercise in verbal juxtaposition than a careful examination of legal issues and practical results.

At heart, the whole body of tort law is but an expression of what the community perceives to be the civil, as opposed to moral or ethical, responsibility of its members to each other. That concept changes with the cumulative experiences and assessments of succeeding generations, through constitutional, legislative, and judicial pronouncement. And well it should, for, in Thomas Jefferson's words, "Laws and institutions must go hand in hand with the progress of the human mind."

Pavesich, as example, found that it was contrary to good conscience (the conscience, that is, of the community as delineated and declared by this Court) that New England Life Insurance Company, for financial gain, might expropriate an aspect of the personality of Paolo Pavesich by the unauthorized publication of his photograph. That conduct did not meet community standards, as assayed by our Court in the year 1905. Because a remedy must need be provided, we became the first high court in the Republic to "discover" a new right — the right to privacy.

Justice Cobb wrote, at the outset: "The novelty of the complaint is no objection when an injury cognizable by law is shown to have been inflicted on the plaintiff.... This results from the application of the maxim ubi jus ibi remedium, which finds expression in our code, where it is declared that `For every right there shall be a remedy, and every court having jurisdiction of the one may, if necessary, frame the [149] other.' Civil Code § 4929." 122 Ga. at 193-94 (Code Ann. § 3-105).

This maxim appears at the second page of his noted opinion. Twenty-four pages later, in concluding an exhaustive and learned examination, he wrote: "The conclusion reached by us seems to be so thoroughly in accord with natural justice, with the principles of the law of every civilized nation, and especially with the elastic principles of the common law, and so thoroughly in harmony with those principles as molded under the influence of American institutions, that it seems strange to us that not only four of the judges of one of the most distinguished and learned courts of the Union, but also lawyers of learning and ability, have found an insurmountable stumbling block in the path that leads to a recognition of the right which would give to persons like the plaintiff in this case, ... redress for the legal wrong, or, what is by some of the law-writers called, the outrage perpetrated by the unauthorized use of their pictures for advertising purposes." (Emphasis supplied.) 122 Ga. at 218-19.

Thus it is shown that, while our learned forefather on this Court embraces as the foundation of his opinion the maxim ubi jus ibi remedium, jus comes into being through a necessity for remedium. He has applied therefore, what is in reality the converse of his professed authority — a rule of ubi remedium ibi jus!

Our ancient maxim — "for every right a remedy" — is, in truth, stated hind part before. The reality of the judicial process is this: wherever there ought to be a remedy, the Court will declare a corresponding right.

Pavesich demonstrates this process beyond cavil. Our Court therefore found, as to Pavesich, that the company's conduct was unconscionable; that for it he should have his remedy; that because there must be a remedy, there must also be, in the interest of logical tidiness and Hohfeldian system, a corresponding right. We named that right, necessarily induced by the determination to provide a remedy, the "right of privacy," just as Adam named the animals in the Garden. (That Pavesich is perhaps the most noted product of our Court in terms of nationally recognized precedent proves, again, the generative force which lies in the power to bestow the name.)

There can be little difficulty in approaching this case in precisely the same manner. I believe we would correctly assess community concepts of responsibility in declaring that the complaint alleges conduct on the part of the defendants which, if true, would be, simply put, unconscionable. Conduct which is unconscionable under all the facts and circumstances of a given case is conduct which demands remedy. Thus we are saved the rigors and toils and perils of creating some new "right" and then declaring that it, like some Cardiff Giant, has been there all the while, waiting to be unearthed.

[150] I would, therefore, answer the questions of the United States Court of Appeals in this manner: "The complaint in this case states a claim upon which relief can be granted." The authority for this response is no new "right," but this ancient remedy: "`An action for money had and received lies in all cases where another has received money which the plaintiff, ex aequo et bono, is entitled to recover and which the defendant is not entitled in good conscience to retain.' " Fain v. Neal, 97 Ga. App. 497, 498 (103 SE2d 437) (1958).

Why, then, this exercise?

Because in proclaiming this new "right of publicity," we have created an open-ended and ill-defined force which jeopardizes a right of unquestioned authenticity — free speech. It should be noted that our own constitutional provision, Art. I, Sec. I, Par. IV, Constitution of Georgia (Code Ann. § 2-104), traces its lineage to the first Constitution of our State, in 1777, antedating the First Amendment by fourteen years. Its language is plain and all-encompassing: "No law shall ever be passed to curtail, or restrain the liberty of speech, or of the press; any person may speak, write and publish his sentiments, on all subjects, being responsible for the abuse of that liberty." Its authority is firmly established. Ga. Gazette Pub. Co. v. Ramsey, 248 Ga. 528, 529 (284 SE2d 386) (1981).

But the majority says that the fabrication and commercial distribution of a likeness of Dr. King is not "speech," thereby removing the inquiry from the ambit of First Amendment or Free Speech inquiries. (Page 138, ante.)

To this conclusion I most vigorously dissent. When our Constitution declares that anyone may "speak, write and publish his sentiments, on all subjects" it does not confine that freedom exclusively to verbal expression. Human intercourse is such that ofttimes the most powerful of expressions involve no words at all, e.g., Jesus before Pilate; Thoreau in the Concord jail; King on the bridge at Selma.

Do not the statues of the Confederate soldiers which inhabit so many of our courthouse squares express the sentiments of those who raised them?

Are not the busts of former chief justices, stationed within the rotunda of this very courthouse, expressions of sentiments of gratitude and approval?

Is not the portrait of Dr. King which hangs in our Capitol an expression of sentiment?

Manifestly so.

If, then, a two-dimensional likeness in oil and canvas is an expression of sentiment, how can it be said that a three-dimensional likeness in plastic is not?

[151] But, says the majority, our new right to publicity is violated only in cases involving financial gain. (Page 142, ante.)

Did the sculptors of our Confederate soldiers, and of our chief justices, labor without gain? Was Dr. King's portraitist unpaid for his work?

If "financial gain" is to be the watershed of violation vel non of this new-found right, it cannot withstand scrutiny. It is rare, indeed, that any expression of sentiment beyond casual conversation is not somehow connected, directly or indirectly, to "financial gain." For example, a school child wins a $25 prize for the best essay on Dr. King's life. Is this "financial gain?" Must the child then account for the winnings?

The essay, because of its worth, is reprinted in a commercial publication. Must the publisher account?

The publication is sold on the newsstand. Must the vendor account?

The majority will say "free speech." Very well. The same child wins a $25 prize in the school art fair. His creation — a bust of Dr. King.

Must he account?

The local newspaper prints a photograph of the child and of his creation. Must it account?

UNICEF reproduces the bust on its Christmas cards. Must it account?

Finally, a purely commercial venture undertakes to market replicas of the bust under circumstances similar to those of this case. Must it account?

Obviously, the answers to the above questions will vary, and properly so, because the circumstances posited are vastly different. The dividing line, however, cannot be fixed upon the presence or absence of "financial gain." Rather, it must be grounded in the community's judgment of what, ex aequo et bono, is unconscionable.

Were it otherwise, this "right of publicity," fully extended, would eliminate scholarly research, historical analysis, and public comment, because food and shelter, and the financial gain it takes to provide them, are still essentials of human existence.

Were it otherwise, no newspaper might identify any person or any incident of his life without accounting to him for violation of his "right to publicity."

Were it otherwise, no author might refer to any event in history wherein his reference is identifiable to any individual (or his heirs!) [152] without accounting for his royalties.

A careful analysis of the right of free speech yields conclusions not inconsistent with the above. All speech is not "free," in the sense of being immune from all consequence.

Over the years our law has imposed and sustained restraints — criminal, equitable, and remedial — upon forms of speech which inter alia include: treason, pornography, inciting to riot, fighting words, defamation, criminal conspiracy and criminal solicitation, false official statements, and perjury.

It is undeniable that the acts controlled by these sanctions can be that of "speaking, writing, or publishing of sentiments." Yet, we have little difficulty in excluding proper cases from the privileged realm of "free speech" because in each such instance the calculable evil of its license plainly outweighs the potential evil of its prohibition.

As example, the community deems it "better" (and the courts so declare it) that treason be controlled than that an untrammeled free speech should give license to treasonable conduct.

Each lawful restraint finds its legitimacy, then, not because it is laid against some immutable rule (like the weights and measures of the Bureau of Standards) but because it is perceived that it would be irresponsible to the interest of the community — to the extent of being unconscionable — that such conduct go unrestrained.

The doctrine of unjust enrichment finds its genesis in such a reckoning. It can be applied to just such a matter as that before us. Were we to do so, we could avoid entering the quagmire of combining considerations of "right of privacy," "right of publicity," and considerations of inter vivos exploitation. We would also retain our constitutional right of free speech uncluttered and uncompromised by these new impediments of indeterminate application.

And we could sanction relief in this case — where relief is plainly appropriate.

[1] The statement of facts is taken almost verbatim from the Court of Appeals' certification. For convenience, the parties will be identified as they appeared in the district court.

[2] The Center is a non-profit corporation which seeks to promote the ideals of Dr. King.

[3] Following Pavesich, supra, this court has continued to recognize the right of privacy. In Bazemore v. Savannah Hospital,171 Ga. 257 (155 SE 194) (1930), the court held that the parents of a child born with his heart outside his body, who died following surgery, could maintain a suit for invasion of their privacy against the hospital, a photographer and a newspaper which respectively allowed, photographed and published a nude post mortem picture of the child.

On the other hand, in Waters v. Fleetwood, 212 Ga. 161 (91 SE2d 344) (1956), it was held that the mother of a 14-year-old murder victim could not recover for invasion of the mother's privacy from a newspaper which published and sold separately photographs of her daughter's body taken after it was removed from a river. There the court found that publication and reproduction for sale of a photograph incident to a matter of public interest or to a public investigation could not be a violation of anyone's right of privacy. See also Ga. Gazette Pub. Co. v. Ramsey, 248 Ga. 528 (284 SE2d 386) (1981). For other Georgia cases involving the right of privacy, see Tanner-Brice Co. v. Sims, 174 Ga. 13 (4) (161 SE 819) (1931); Goodyear Tire &c.; Co. v. Vandergriff, 52 Ga. App. 662 (184 SE 452) (1935).

[4] The Second Circuit has now accepted the Sixth Circuit's interpretation of Tennessee law. Factors Etc., Inc. v. Pro Arts, Inc., 652 F2d 278 (2d Cir., 1981).

[5] On appeal of this case, the Second Circuit reversed, finding the law of California applicable, where, as noted above, the right of publicity is not inheritable. Groucho Marx Productions v. Day & Night Co., ___ F2d ___ (2d Cir. 1982).

[6] Although the conclusion reached in answer to question 2 was based in part upon commercial considerations, and our answer to question 3 is based upon the absence of exploitation, the reasoning supporting the answer to question 3 also supports the answer to question 2.

[985] Douglas E. Mirell, Laura A. Wytsma and Benjamin R. King, Loeb & Loeb LLP, Los Angeles, CA, for appellants and cross-appellees Anna Strasberg and Marilyn Monroe LLC.

Theodore J. Minch, Sovich Minch LLP, McCordsville, IN, and William Weinberger, Parker, Milliken, Clark, O'Hara & Samuelian, Los Angeles, CA, for appellant and cross-appellee, CMG Worldwide, Inc.

Surjit P. Soni, Leo E. Lundberg, Jr. and M. Danton Richardson, The Soni Law Firm, Pasadena, CA, for appellees and cross-appellants The Milton Green Archives, Inc. and Tom Kelley Studios, Inc.

[986] Before: ALFRED T. GOODWIN and KIM McLANE WARDLAW, Circuit Judges, and WILLIAM K. SESSIONS III, District Judge.^[1]

OPINION

WARDLAW, Circuit Judge:

An enduring American celebrity, Marilyn Monroe continues to inspire both admiration and litigation a half-century after her death.^[2] At issue is whether appellants inherited a right of publicity, which was created and deemed posthumous by the states of California and Indiana decades after her death, through a residual clause in her Last Will and Testament. The will was subject to probate in the state of New York, which does not recognize a posthumous right of publicity. The issue of appellants' rights turns on whether Monroe was domiciled in California or New York at the time of her death. We conclude that because Monroe's executors consistently represented during the probate proceedings and elsewhere that she was domiciled in New York at her death to avoid payment of California estate taxes, among other things, appellants are judicially estopped from asserting California's posthumous right of publicity. We therefore affirm the district court's order so holding.^[3]

I.

Following her divorce from Arthur Miller, while in New York City, Marilyn Monroe executed her Last Will and Testament on January 14, 1961. She named New York attorney Aaron Frosch executor. She then traveled to California in the spring of 1961, where she first stayed in a hotel, then moved to a rental apartment, and again moved into a home in Brentwood which she purchased in 1962. In April 1962, Monroe began filming Something's Got to Give on the 20th Century Fox Studios lot in Los Angeles. Fox fired her during filming in June for repeated absences and tardiness. Monroe was found dead in her Brentwood home on August 5, 1962. She maintained her New York apartment and staff throughout this period.

A.

Consistent with New York law, the New York Surrogate's Court admitted Monroe's will to probate on October 30, 1962. Frosch, who drafted the will, served as the executor of the estate from that time until his death in 1989. The will sets forth several bequests, but does not explicitly address the right of publicity asserted here. Assuming that such a right existed, [987] it could pass, if at all, through only the will's residual clause, which distributed the "rest, residue and remainder" of Monroe's estate as follows:

(a) To MAY REIS the sum of $40,000.00 or 25% of the total remainder of my estate, whichever shall be the lesser.

(b) To DR. MARIANNE KRIS 25% of the balance thereof, to be used by her as set forth in ARTICLE FIFTH (d) of this my Last Will and Testament.

(c) To LEE STRASBERG the entire remaining balance.

May Reis, Monroe's private secretary, inherited the sum of $40,000 because the residual estate was "significantly greater than $160,000." The estate distributed 25% of the remainder to Dr. Marianne Kris, Monroe's psychiatrist, "for the furtherance of the work of such psychiatric institutions or groups as she shall elect." Kris passed away in 1980, bequeathing her interest in the Monroe estate to the Hampstead Child-Therapy Clinic of London, England (now the Anna Freud Center for the Psychoanalytic Study and Treatment of Children). Frosch apportioned 75% of the remainder of the estate to Lee Strasberg, Monroe's acting coach and close friend. Lee Strasberg died testate in 1982, leaving his share of Monroe's estate to his wife, Anna Strasberg. Following Frosch's death in 1989, the Surrogate's Court appointed Anna Strasberg executor of the Monroe estate. In 2001, the Surrogate's Court decreed the estate settled and authorized the estate to transfer all remaining assets to Marilyn Monroe LLC ("Monroe LLC"), a newly-formed Delaware Limited Liability Company, managed by Anna Strasberg. Anna Strasberg and the Anna Freud Center are the only members of Marilyn Monroe LLC, holding 75% and 25% membership interests, respectively.

B.

During the forty-year probate proceedings, Frosch, in his capacity as executor of the estate, consistently represented in numerous judicial and quasi-judicial settings that Monroe was domiciled in New York when she died.^[4] In New York, Frosch (and later Anna Strasberg) represented to the Surrogate's Court that Monroe died a domiciliary of New York. In California, Frosch also represented to the California tax authorities that Monroe died a domiciliary of New York.

Because Monroe owned property in California when she died, her estate, represented by the California law firm of Gang, Tyre, Rudin & Brown, initiated ancillary probate proceedings in Los Angeles County Superior Court. Frosch successfully avoided substantial California estate taxes by proving that Monroe was a domiciliary of New York. On behalf of the Monroe estate, he sought a "no tax certificate" from the Inheritance Tax Appraiser. The Tax Appraiser required additional substantiation of Monroe's New York domicile to accept California counsel's representation that she died a non-California resident. On April 24, 1964, Hermione Brown, the estate's California counsel, wrote Frosch seeking "information to counteract the fact that Miss Monroe owned a home and actually was living in California at the time of her death, and that her mother is physically in California." Brown further advised Frosch that it was important that he answer all the questions in the "Affidavit [988] Concerning Residence," and "in doing so build as strong a case as possible."

Frosch provided Brown with a completed Affidavit Concerning Residence, and supporting affidavits from four Monroe intimates. Brown, in turn, sent the affidavits to the Inheritance Tax Appraiser, representing that "Miss Monroe was a non-resident of the State of California at the time of her death" in a letter dated March 4, 1966. In the Affidavit Concerning Residence, Frosch represented that Monroe filed her last income tax return in New York City, New York in April 1962, and that she purchased her home "in Los Angeles to live at while engaged in performing services in a motion picture film." To the next question, which asked where she was "actually living at the time of her death," Frosch declared that Monroe was "[r]esiding temporarily in Los Angeles while performing as aforesaid," and that she "had a fully furnished apartment in New York City, which was her permanent residence." Frosch explained that Monroe resided "temporarily in California performing services as a motion picture actress... for approximately six months prior to death." In response to a question about Monroe's business interests outside of California, Frosch attested that she was "[a]ctive as principal, sole shareholder and officer and director in Marilyn Monroe Productions, Inc., A New York Corporation with offices in New York City."

In response to questions about any statements or acts by Monroe indicating her intended residence, Frosch elaborated that Monroe's actions before her death showed that she intended to remain a resident of New York. He represented that Monroe: "in all respects retained her New York Residence. Said residence was not sublet. It remained fully furnished and contained Decedent's personal effects, clothing, and substantially all of its contents. Furthermore Decedent's maid continued to look after and maintain said residence." Finally, Frosch represented that on a number of occasions, Monroe told Ralph L. Roberts and May Reis that she "was returning to New York after completing [her] motion picture commitment — that she considered N.Y. her residence." Frosch attached affidavits from Ralph L. Roberts, Hattie Amos, May Reis and Patricia Newcomb recounting statements by Monroe that indicated her intent to remain a New York resident.

In Roberts's affidavit, he attested that he and Monroe had been "close personal friends" since 1955, and that from April 1962 "until her death, [he] spoke to her on an average of at least once each day and had personal meetings with her on an average of at least three times a week."^[5] According to Roberts, Monroe purchased the Brentwood home

primarily for the reason that she disliked living in hotels and preferred both the comfort and privacy of a private home. She indicated that her California house would be used only on such occasions when she was in California performing in a motion picture film or otherwise engaged in similar activities.

He explained that in several conversations shortly before her death, Monroe "specifically told [him] that she intended vacating her California house and was going to return to her New York apartment which she considered her permanent home and residence and to reside permanently thereat."

The Hattie Amos affidavit identified her as Monroe's personal housekeeper for four [989] years before her death. Amos declared that Monroe instructed her "to be at her said New York City apartment every day while she was temporarily away, and to clean said apartment and perform all of the same functions that [Amos] had been performing while she had been in residence thereat." Monroe told Amos "on several occasions that she considered her said New York apartment as her permanent residence and told [Amos] that her said New York apartment was her permanent home." Amos knew "for a fact that [Monroe] intended returning to her permanent residence in New York." She recounted that, approximately two days before Monroe's death, Monroe requested that Amos "proceed to her California house to stay with her for approximately one month and then ... return back to New York with decedent."

Reis, Monroe's private secretary from 1958 to 1961 and a beneficiary of her will, declared that:

When decedent was required to leave New York for the purpose of appearing in a motion picture film, it was generally her practice and custom to temporarily depart from her New York apartment approximately two to three weeks prior to the commencement of the motion picture film.... Generally she would remain away from her New York residence until after the completion of the film and any consultations thereafter required. She would then return to her permanent residence in New York.

It was always Reis's understanding that "subsequent to decedent's divorce and while [Reis] was employed by decedent, she considered her said New York apartment as her official and permanent residence."

Patricia Newcomb, a close personal friend who served as Monroe's Public Relations Counsel, attested that Monroe usually stayed in hotels while in California making films. Monroe "advised [Newcomb] at the time she purchased the [Brentwood house], that she acquired same solely for the reason that she disliked living in hotels, and that she desired and preferred the privacy of living in a private home, even though it was a temporary residence." Newcomb further stated that Monroe "had no intention of making her permanent residence in her said California house, but intended leaving California and returning to her New York residence upon the completion of her assignment in [Something's Got to Give]." Newcomb explained that "[a]t the time of her death,[Monroe] was still living in California because the said film had not as yet been completed, and she was awaiting resolution of certain controversies relating thereto." Monroe told Newcomb "that she intended to return to her New York residence for the reasons, among others, that her closest personal friends resided in New York, and that she wished to continue her permanent activities at the Actors Studio, which activities she considered most important to her, and with which project she was closely affiliated with her close personal friends, Mr. and Mrs. Lee Strasberg."

On April 5, 1967, the Inheritance Tax Appraiser reported to the Los Angeles County Superior Court that Monroe had died a resident of the County of New York, State of New York. Although this conclusion exempted substantially all of Monroe's assets from California taxes, a small portion of her estate remained taxable under California law. The estate paid a total of $777.63 in California inheritance taxes.

Monroe's estate also received a stream of royalties from profit participation agreements for motion pictures in which Monroe had appeared. See Milton H. Greene, 568 F.Supp.2d at 1186-88. This income in California led to additional assertions by the [990] estate, separate and apart from those made in the probate proceedings, that Monroe died a domiciliary of New York. In 1971, the California Franchise Tax Board found that the estate owed income taxes on a portion of Monroe's profit participation for the films Some Like It Hot and The Misfits. Frosch paid income taxes for the estate on the participation income in New York, but took the position with the Franchise Tax Board that no California income tax was owed because the estate was a resident of New York, not California. Frosch appealed the tax decision to the California State Board of Equalization, which, on April 22, 1975, found the estate liable for $51,243 in past due California income taxes and $12,810 in penalties. The Board also concluded that, because Monroe and the estate were residents of New York, the estate was not entitled to any credit for taxes paid in New York.

Until recently, Anna Strasberg also represented in judicial proceedings on behalf of the estate that Marilyn Monroe died domiciled in New York. For example, in 1992, Nancy Miracle sued Anna Strasberg as the executor of the Monroe estate in the federal district court for the District of Hawaii, claiming that she was Monroe's biological child and seeking 50% of the Monroe estate as a pretermitted heir under California law.^[6] Strasberg moved to dismiss the complaint for failure to state a claim and for lack of personal jurisdiction, arguing that New York law applied because "the decedent's domicile at the time of death determines what law will be applied," and that it was undisputed that Monroe "was a New York domiciliary at the time of her death." Agreeing with Strasberg, the district court determined that New York, and not California, law applied to Miracle's pretermitted heir claims. This distinction was "critical" because "under the California law in effect at Monroe's death, pretermitted children could bring claims even if [, like Miracle,] they were born prior to execution of a will, while under the relevant New York law, claims could be brought only by `after-born children.'" Because New York law applied, the district court held that Miracle failed to state a claim.^[7] In 2002, Miracle petitioned the New York Surrogate's Court to reopen and vacate its orders in the probate of the Monroe estate. Strasberg, on behalf of the estate, argued that the claims were foreclosed under New York law and that the Hawaii court's decision to apply New York law precluded Miracle's claims under the doctrine of res judicata. The Surrogate's Court ultimately applied New York law and dismissed the petition on the merits.

C.

In March 2005, Marilyn Monroe LLC and its licensee, CMG Worldwide, Inc., sued Milton Greene Archives, Inc. and Tom Kelley Studios, Inc. (collectively, "Milton Greene")^[8] in the federal district [991] court for the Southern District of Indiana, claiming ownership of Marilyn Monroe's right of publicity and alleging that Milton Greene was violating Monroe LLC's rights by using Monroe's image and likeness for unauthorized commercial purposes, including the advertising and sale of photographs of Monroe. Shortly thereafter, Milton Greene sued CMG Worldwide, Monroe LLC and Anna Strasberg in the federal district court for the Central District of California, seeking a declaration that Monroe LLC does not own Monroe's right of publicity. Although Anna Strasberg is named as a defendant in her personal capacity, she does not assert that she owns Monroe's right of publicity other than through her interest in Monroe LLC. The Indiana cases were transferred to the Central District of California and consolidated with the California cases. In addition to the dueling declaratory relief claims about Monroe's right of publicity, each of the complaints asserted numerous other claims, including business torts and violations of the Copyright and Lanham Acts. In the course of the litigation, the parties dismissed all claims other than those alleging violations of Monroe's right of publicity and those seeking declaratory relief regarding Monroe LLC's claim to own that right.^[9]

On May 14, 2007, the district court granted summary judgment in favor of Milton Greene, holding that Monroe LLC did not own Monroe's right of publicity. The court concluded that, at the time of Monroe's death in 1962, the states of New York, California and Indiana did not recognize "a descendable, posthumous right of publicity." Acknowledging that "California created a descendable, posthumous right of publicity in 1984, with the passage of its post-mortem right of publicity statute,"^[10] the district court held that as of 1962, applying either New York or California law, no right of publicity could have passed through Monroe's will, reasoning that Monroe "had no testamentary capacity to devise, through the residual clause of her will, statutory rights of publicity that were not created until decades after her death." The district court granted summary judgment in favor of Milton Greene, concluding that, because Monroe LLC was not entitled to exercise Monroe's posthumous right of publicity, it lacked standing to assert those rights against Milton Greene.

On June 28, 2007, in direct response to the district court's grant of summary judgment, California State Senator Sheila Kuehl introduced Senate Bill 771 ("SB 771"), which, when enacted in early September 2007, amended California Civil Code § 3344.1.^[11] The bill states:

[992] It is the intent of the Legislature to abrogate the summary judgment orders entered in The Milton H. Greene Archives, Inc. v. CMG Worldwide, Inc., United States District Court, Central District of California, Case No. CV 05-2200 MMM (MCx), filed May 14, 2007, and in Shaw Family Archives Ltd. v. CMG Worldwide, Inc. [486 F.Supp.2d 309 (S.D.N.Y.2007)], United States District Court, Southern District of New York, Case No. 05 Civ. 3939(CM), dated May 2, 2007.^[12]

SB 771 amended Civil Code § 3344.1 to provide that the California statutory right of publicity is deemed to have existed at the time of death of any deceased personality who died before January 1, 1985; is a property right, freely transferable and descendible; and, in the absence of an express testamentary transfer, could pass through the residual clause in the will of the deceased personality.

Based on the passage of SB 771, Monroe LLC sought reconsideration of the district court's grant of summary judgment for Milton Greene. Granting the motion for reconsideration, the district court held that SB 771 applied retroactively and that Civil Code § 3344.1, as amended, permitted Monroe's right of publicity to pass to Monroe LLC through the residual clause of her will, if California's substantive right of publicity law applied. Unlike the California legislature, the New York legislature had rejected Monroe LLC's efforts to amend its laws to enact a similar descendible, posthumous right of publicity. Therefore, if New York law applied — which it would if Monroe was domiciled in New York at the time of her death — Monroe's right of publicity would have been extinguished at her death. Addressing the questions of domicile and choice of law, the district court again granted summary judgment to Milton Greene, reasoning that principles of judicial estoppel precluded Monroe LLC from advocating that Monroe was domiciled in California when she died.

II.

We review a district court's order granting summary judgment de novo. See Bamonte v. City of Mesa, 598 F.3d 1217, 1220 (9th Cir.2010). We view the evidence in the light most favorable to the nonmoving party on each issue and determine whether the district court correctly applied the relevant substantive law. Id. We also review a district court's interpretation of a statute de novo. Beeman v. TDI Managed Care Servs., Inc., 449 F.3d 1035, 1038 (9th Cir. 2006). We may affirm a district court's judgment on any basis supported by the record. Id.

Federal law governs the application of judicial estoppel in federal courts, and a district court's application of judicial estoppel is reviewed for abuse of discretion. Johnson v. Oregon, 141 F.3d 1361, 1364 (9th Cir.1998). We apply a two-part test to determine whether a district court has abused its discretion. See Associated Press v. Otter, 682 F.3d 821, 824 (9th Cir.2012). First, we determine de novo whether the trial court identified the correct legal rule to apply to the relief requested. Id. If the trial court identified the correct legal rule, we then evaluate whether the trial court's application of the correct legal standard was (1) "illogical," (2) "implausible," or (3) "without support [993] in inferences that may be drawn from the facts in the record." Id. (quotation marks omitted).

III.

Monroe LLC now asserts that Monroe died domiciled in California, not New York, and contends that the district court improperly extended the doctrine of judicial estoppel to preclude litigation of the question of Monroe's domicile at death.^[13] "[J]udicial estoppel, `generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.'" New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (quoting Pegram v. Herdrich, 530 U.S. 211, 227 n. 8, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000)). It is an equitable doctrine invoked "not only to prevent a party from gaining an advantage by taking inconsistent positions, but also because of `general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings,' and to `protect against a litigant playing fast and loose with the courts.'" Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir.2001) (quoting Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir.1990)) (alteration omitted). Some commentators have suggested, however, that judicial estoppel "is not so much a single doctrine as a set of doctrines that have not matured into a fully coherent theory." 18B Wright & Miller, Fed. Prac. & Proc. Juris. § 4477 (2d ed.2012).^[14]

The Supreme Court has provided little guidance on the contours of judicial estoppel. It has acknowledged that circumstances where the doctrine may apply "are probably not reducible to any general formulation." New Hampshire, 532 U.S. at 750, 121 S.Ct. 1808. In New Hampshire, however, the Court identified three factors [994] that courts should consider in determining whether the doctrine is applicable in a given case:

First, a party's later position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.... A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Id. at 750-51, 121 S.Ct. 1808 (citations and quotations omitted). In precedent that predates New Hampshire, we have held that the doctrine of judicial estoppel applies "when a party's position is tantamount to a knowing misrepresentation to or even fraud on the court." Wyler Summit P'ship v. Turner Broad. Sys., Inc., 235 F.3d 1184, 1190 (9th Cir.2000) (quoting Johnson, 141 F.3d at 1369 (quoting Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 362-63 (3d Cir. 1996))).

A.

Relying on Wyler Summit, 235 F.3d at 1190, Monroe LLC contends that we must find "a knowing antecedent misrepresentation by the person or party alleged to be estopped," and that the district court erred when it held that Frosch's now-disavowed statements about Monroe's domicile were knowing misrepresentations. It is unclear when Monroe LLC decided that Frosch's position was so fraught with error, since the Monroe estate continued to make the same representations about Monroe's domicile as Frosch did well past the latter's demise.

In Wyler Summit, we explained that "[i]f a litigant's current position is manifestly inconsistent with a prior position such as to amount to an affront to the court, judicial estoppel may apply." Id. (quotation marks omitted). There, the plaintiff was owed $1.5 million in profit participation payments under a 1958 contract for William Wyler to direct the film Ben Hur. Id. at 1188-89. The Wyler contract called for $50,000 annual payments of profit participation proceeds, but in 1995, Wyler's successor in interest sought to waive the annual payment term and collect the remaining funds in a lump sum. Id. at 1189. The district court held that "because Mr. Wyler claimed only $50,000 per year in percentage compensation when declaring his taxable income to the I.R.S., he was judicially estopped from claiming the right to waive the provision" and collect the remaining balance due to him as a lump sum. Id. at 1190. We reversed the district court's ruling because Wyler's representations to the I.R.S. about the money he received each preceding year were accurate; there was no inconsistency in his positions with the I.R.S. and the district court, let alone a knowing misrepresentation. Id.

In Johnson, a case cited and relied upon by Wyler Summit, we explained that, "[i]f incompatible positions are based not on chicanery, but only on inadvertence or mistake, judicial estoppel does not apply." 141 F.3d at 1369. There, we reversed a magistrate judge's application of judicial estoppel against a plaintiff suing for disability discrimination. Id. at 1363-64. Before filing her disability suit, Johnson represented that she was disabled in applications for benefits from her insurance company and from the Social Security Administration. Id. at 1364-65. She also wrote a letter to the I.R.S. explaining her inability to work and that her disabilities caused her to file her 1992 tax return late. [995] Id. at 1365. The magistrate judge held that, because of those statements, Johnson was estopped from asserting that she was "capable of performing the essential functions of her job" under the Americans with Disabilities Act. Id. at 1366. Johnson's representations to her insurance company and the Social Security Administration, however, were not actually inconsistent with the claims in her disability suit, and her statements to the I.R.S. were made only in the context of seeking leniency for a late return, and not in a proceeding adjudicating a claim of disability. Id. at 1370-71. We explained that her representations were evidence to be weighed in evaluating her discrimination claim, but that they were not "so inconsistent that they amount to an affront to the court." Id. at 1369.

The Supreme Court has instructed that there are no "inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estoppel." New Hampshire, 532 U.S. at 751, 121 S.Ct. 1808. "[W]here the reasoning or theory of our prior circuit authority is clearly irreconcilable with the reasoning or theory of intervening higher authority, a three-judge panel should consider itself bound by the later and controlling authority, and should reject the prior circuit opinion as having been effectively overruled." Miller v. Gammie, 335 F.3d 889, 893 (9th Cir.2003) (en banc). Our decisions in Wyler Summit and Johnson are largely harmonizable with the Supreme Court's in New Hampshire: In Wyler Summit we held that there was no judicial estoppel because there was no inconsistency at all in the positions asserted; and in Johnson, we held that a minor inconsistent statement in an ancillary matter was insufficient to justify application of judicial estoppel.

However, to the extent that we have suggested, as in Johnson, that a showing of chicanery is an "inflexible prerequisite" to judicial estoppel, Wyler Summit and Johnson are inconsistent with New Hampshire. In the wake of New Hampshire, we have treated fraud on the court as a factor rather than as a requisite element of the judicial estoppel analysis. See Samson v. NAMA Holdings, LLC, 637 F.3d 915, 935 (9th Cir.2011). We acknowledge that we have also continued to describe judicial estoppel as inapplicable "when a party's prior position was based on inadvertence or mistake." United States v. Ibrahim, 522 F.3d 1003, 1009 (9th Cir.2008) (quoting Helfand v. Gerson, 105 F.3d 530, 536 (9th Cir.1997)). However, in Ibrahim, despite discussing and relying in part on the lack of chicanery, we nonetheless applied the New Hampshire test to find against a party asserting judicial estoppel. Id. at 1009-10. We now clarify that chicanery or knowing misrepresentation by the party to be estopped is a factor to be considered in the judicial estoppel analysis and not an "inflexible prerequisite" to its application.

Although an antecedent knowing misrepresentation is not a prerequisite for judicial estoppel, we do not believe that the district court erred in finding such a misrepresentation here. Monroe LLC itself makes the case that, at a minimum, Frosch, as the executor of the Monroe estate, made representations and submitted affidavits by others that were "patently inconsistent with the objective, contemporaneous evidence" and "riddled with blatant inaccuracies." Monroe LLC also contends that the affidavits provided by Frosch were "prepared years after Marilyn's death for the express purpose of trying to avoid tax liability at a time when the Monroe Estate was believed to be insolvent." Monroe LLC has repeatedly insinuated that Frosch misrepresented Monroe's true domicile to obtain favorable tax assessments, both as to inheritance and income.

[996] When and why the fact of Monroe's domicile at death changed is unclear. Monroe LLC also suggests that it has always believed that Monroe died domiciled in California, and that Frosch was simply mistaken in his belief and representations because he did not have access to some documents that allegedly contradict the materials and declarations he relied upon. This assertion by Monroe LLC is dubious, at best. Frosch had contemporaneous access to people knowledgeable about Monroe's intentions, including Ralph L. Roberts, her close friend and confidant and reportedly the last person to see her alive. To the extent that there was any debate, Frosch represented, with significant evidentiary support, that Monroe's intention was to remain domiciled in New York, though she temporarily relocated to California for a movie shoot. Another possibility, for which we have insufficient evidence, is that Monroe LLC's present position on Monroe's domicile is a knowing misrepresentation, or tantamount to a fraud on the court. In light of this irreconcilable conflict between diametrically opposed representations about Monroe's intended domicile, the district court's determination that Frosch intentionally misled the courts is supported by "inferences that may be drawn from the facts in the record" and is therefore not an abuse of discretion. See Otter, 682 F.3d at 824.

B.

Turning to the New Hampshire factors, we must first determine whether Monroe LLC has taken clearly inconsistent positions in prior judicial proceedings. Monroe could not have been domiciled in both California and New York at the time of her death. See Gaudin v. Remis, 379 F.3d 631, 636 (9th Cir.2004) ("[S]he may have only one domicile at a time."). Until this litigation, in every prior judicial and quasi-judicial proceeding, the Monroe entities took the position that Monroe died domiciled in New York; Monroe LLC now asserts that Monroe died domiciled in California. These positions are plainly inconsistent. Because judicial estoppel bars only inconsistent positions taken by the same party in two different matters, the question thus becomes whether the successive executors' representations on behalf of the estate that Monroe died a domiciliary of New York are attributable to Monroe LLC.

We apply other estoppel doctrines, like collateral estoppel, "not only against actual parties to prior litigation, but also against a party that is in privity to a party in a previous litigation." Wash. Mut. Inc. v. United States, 636 F.3d 1207, 1216 (9th Cir.2011). It is well-established that "a non-party may be bound by a judgment if one of the parties to the earlier suit is so closely aligned with the non-party's interests as to be its virtual representative." Mother's Rest., Inc. v. Mama's Pizza, Inc., 723 F.2d 1566, 1572 (Fed.Cir. 1983) (collecting cases). Because the doctrine of judicial estoppel is intended to protect the courts, we are particularly mindful that the "[i]dentity of parties is not a mere matter of form, but of substance. Parties nominally the same may be, in legal effect, different; and parties nominally different may be, in legal effect, the same." Chicago, Rock Island & Pac. Ry. Co. v. Schendel, 270 U.S. 611, 620, 46 S.Ct. 420, 70 L.Ed. 757 (1926) (citation omitted).

We have not previously addressed the question of whether privity lies between an executor and the beneficiaries of an estate. Supreme Court precedent, however, supports the district court's conclusion that, particularly under the circumstances presented here, Frosch is the privy of Monroe LLC. For example, in Schendel, the Supreme Court found privity, for the purposes of applying res judicata, between a [997] special administrator for the deceased spouse's estate and the decedent's widow, whom the administrator represented in a lawsuit to recover benefits where the widow was not personally a party. 270 U.S. at 622, 46 S.Ct. 420. The widow was the sole beneficiary of the action filed by the special administrator, who had statutory authority to represent the estate. Id. at 620, 46 S.Ct. 420. Because the interests represented by the administrator were substantially identical to those of the widow, the Court concluded that the application of equitable principles deemed the administrator and the widow in privity for res judicata purposes. See id. at 620-22, 46 S.Ct. 420. The Shendel Court also cited with approval older precedent "that a judgment against a trustee for bondholders was conclusive in a suit involving the same subject-matter, brought by him in his individual character." Id. at 621, 46 S.Ct. 420 (citing Corcoran v. Chesapeake & Ohio Canal Co., 94 U.S. 741, 745, 24 L.Ed. 190 (1876)).

Other circuits have also concluded that privity lies between the administrator of an estate and the beneficiaries of that estate. The Second Circuit has held that "[t]he administrator of a decedent's estate is in privity both with the decedent and with the decedent's beneficiaries." Bender v. City of Rochester, 765 F.2d 7, 12 (2d Cir.1985). Similarly, the Seventh Circuit has held that "a trust beneficiary is collaterally estopped by a previous adjudication for or against a trustee, so long as the trustee and beneficiary did not have adverse interests in the conduct of the prior litigation and the trustee was authorized to prosecute and defend litigation on behalf of the trust." Pelfresne v. Vill. of Williams Bay, 865 F.2d 877, 881 (7th Cir. 1989).

Because tax and estate matters are generally governed by state law, the laws of California and New York are also instructive, if not controlling, here. Courts in both California and New York have held that the administrator and the beneficiaries of an estate are in privity for estoppel purposes. In California, it has long been the law that:

A judgment entered in an action in which an administratrix of an estate of a deceased person is a party, is binding not only upon the administratrix but also upon the heirs of the deceased person, even though the heirs have not been made parties to the action. The rule in this state is that the judgment concludes not only the adverse party but also all those claiming under the title he represents.

Luckhardt v. Mooradian, 92 Cal.App.2d 501, 519, 207 P.2d 579 (1949). See also Spotts v. Hanley, 85 Cal. 155, 167, 24 P. 738 (1890) ("The administrator is in privity with and represents both heirs and creditors, and a judgment in ejectment recovered by or against an administrator is an estoppel in favor or against the heir and those claiming under him."). Similarly, under New York state law, the executor of a decedent's estate is a fiduciary of the estate's beneficiaries. See Knox v. HSBC Bank, USA, 16 A.D.3d 199, 791 N.Y.S.2d 101, 101 (App.Div.2005) ("[A]n estate trustee's fiduciary duties to estate beneficiaries persist until the affairs of the estate are finally wound up.").

The Restatement of Judgments (Second) § 41 (1982), explains that "[a] person who is not a party to an action but who is represented by a party is bound by and entitled to the benefits of a judgment as though he were a party" if the person was represented by the "trustee of an estate or interest of which the person is a beneficiary." Similarly "[a] person represented by a party to an action is bound by the judgment even though the person himself does not have notice of the action, is not served [998] with process, or is not subject to service of process." Id. The exception to the general rule against nonparty preclusion was recently reaffirmed by the Supreme Court in Taylor v. Sturgell, 553 U.S. 880, 893-95, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008) (identifying six "established categories" where nonparties are subject to estoppel). The Sturgell Court expressly noted that nonparty "preclusion may be justified based on a variety of pre-existing substantive legal relationships between the person to be bound and a party to the judgment" and when the nonparty was adequately represented in a prior litigation by "trustees, guardians, and other fiduciaries." Id. at 894, 128 S.Ct. 2161 (quotations and alterations omitted).

Here, Frosch and, later, Anna Strasberg represented the Monroe estate in their capacities as executor. Both Frosch and Strasberg consistently stated in judicial proceedings, from 1962 to at least 2002, that Monroe died domiciled in New York, and not California. There is no dispute that Frosch dealt in a representative and not a personal capacity in his representations to the courts. In the Affidavit Concerning Residence submitted to the Inheritance Tax Appraiser, Frosch stated that his "relationship or representative capacity" was as executor of the Monroe estate. And in the 1971 to 1975 proceedings before the California Franchise Tax Board and the State Board of Equalization, Frosch participated as the executor for the Monroe estate. In those proceedings, as executor, Frosch acted on behalf of the estate and its beneficiaries to minimize exposure to California taxes. Monroe LLC, as beneficiary of the estate, is thus in privity with Frosch. Therefore, the representations made over the years by Frosch are attributable to Monroe LLC for judicial estoppel purposes.

After she became executor, Strasberg continued to assert the position that Monroe died domiciled in New York. As a 75% beneficiary of the residual estate, Strasberg's personal interests are arguably even more closely aligned with those of the estate than Frosch's were. In 1992, Strasberg successfully defended the Miracle action filed in the District of Hawaii by representing that Monroe had died domiciled in New York. By asserting that position while representing the Monroe estate, she obtained the benefit of New York law to avoid Miracle's claims under California law. When Miracle later petitioned the New York Surrogate's Court to reopen and vacate its orders related to the Monroe estate, Strasberg moved to dismiss the petition, asserting that the Hawaii court's holding that New York law governed Monroe's estate because she died a domiciliary of New York was res judicata and barred Miracle's claims. In each of these judicial proceedings, Strasberg, as executor, acted on behalf of the Monroe estate. Moreover, Strasberg's status as a beneficiary of the will and as an owner of Monroe LLC further supports a finding of privity. Strasberg's representations about Monroe's domicile are thus also attributable to Monroe LLC.

Monroe LLC's new litigation position that Monroe died domiciled in California, asserted to obtain the benefit of California's posthumous right of publicity statute, is inconsistent with the preceding forty years of representations on behalf of the estate that Monroe died domiciled in New York.

C.

Although Monroe LLC acknowledges that Frosch and Strasberg represented that Monroe died a domiciliary of New York, they contend that the estate did not successfully advance these positions. However, the estate succeeded in persuading numerous judicial and quasi-judicial [999] bodies to accept that Monroe died a domiciliary of New York. In the Los Angeles County Superior Court probate proceedings, the Inheritance Tax Appraiser reported, and the court agreed, that Monroe died domiciled in New York. And in the District of Hawaii, the court relied upon Strasberg's representations that Monroe died domiciled in New York to conclude that Miracle failed to state a claim against the estate. Although the New York Surrogate's Court did not accept the Hawaii decision as res judicata, it also applied New York law, and not California law, to dismiss Miracle's claims, based on its acceptance of the representation that Monroe died a domiciliary of New York. Indeed, the very fact that the New York Surrogate's Court exercised jurisdiction over Monroe's probate proceedings demonstrates that it was persuaded by Frosch's representations that it had jurisdiction over Monroe's estate. See N.Y. Surr. Ct. Proc. Act § 205 ("The surrogate's court of any county has jurisdiction over the estate of a decedent who was a domiciliary of the state at the time of his death, disappearance or internment."). That Monroe died a domiciliary of New York was a predicate for the Surrogate Court's exercise of jurisdiction for almost forty years. Never did Frosch, Strasberg, or any party to the probate proceedings dispute the authority of the New York courts to probate Monroe's will. Judicial and quasi-judicial officers repeatedly accepted and relied upon the estate's representations about Monroe's New York domicile.

D.

The district court concluded that permitting Monroe LLC to assert that Monroe died a domiciliary of California in this litigation would unfairly allow it to obtain a "second advantage." Milton H. Greene, 568 F.Supp.2d at 1197. We agree. Judicial estoppel is intended to protect the courts, and Milton Greene need not prove that it detrimentally relied on the prior representations about Monroe's domicile to justify our application of judicial estoppel. See In re Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir.1999). It is clear that Monroe LLC desires to prove that when Monroe died she was domiciled in California so that it can gain the significant advantage of California law, which, at its behest, now provides for a descendible, posthumous right of publicity that may pass through the residual clause of the decedent's will. If this position is accepted by the courts, this right would have passed through the residual clause of Monroe's will, as specifically provided in the amended California Civil Code § 3344.1. Monroe LLC would gain Monroe's right of publicity, which carries the "immeasurable value of the name, likeness, and persona of Marilyn Monroe."

We have no doubt that the only way that Monroe LLC would ever secure the right to assert Monroe's right of publicity is if we accept its current representation that Monroe died domiciled in California and allow Monroe LLC to attempt to prove up that fact at trial. Monroe LLC would reap tremendous financial benefits if it could lay claim to Monroe's right of publicity. Forbes Magazine identifies Monroe as the third-highest money-maker in its annual ranking of "The Top-Earning Dead Celebrities," with an income of $27 million in 2011.^[15] Ownership of Monroe's right of publicity would allow Monroe LLC to control and profit from most, if not all, commercial exploitations of Monroe's name, likeness and persona. Monroe LLC would [1000] thus derive a substantial advantage — one which it contrived to create through the California legislature — were it not estopped from asserting its current position.

Conversely, Milton Greene has already suffered a detriment as a result of Monroe LLC's litigation of its asserted rights to Monroe's right of publicity. The Milton Greene cases and other attempted enforcement actions by Monroe LLC, like those that led to the Shaw Family Archives case, have forced Monroe photographers into lengthy litigation in order to simply defend their right to profit from their copyrighted photographs. If Monroe LLC were to succeed in establishing ownership of Monroe's right of publicity, Milton Greene's ability to commercially exploit the photographs that it created and in which it owns copyrights would be subject to Monroe LLC's control. Further, allowing Monroe LLC to now represent that Monroe died domiciled in California would create the perception that either prior courts or we have been misled by representations about her domicile. The need to preserve the dignity of judicial proceedings weighs heavily against allowing Monroe LLC to proceed down its newly charted path.

This is a textbook case for applying judicial estoppel. Monroe's representatives took one position on Monroe's domicile at death for forty years, and then changed their position when it was to their great financial advantage; an advantage they secured years after Monroe's death by convincing the California legislature to create rights that did not exist when Monroe died. Marilyn Monroe is often quoted as saying, "If you're going to be two-faced, at least make one of them pretty."^[16] There is nothing pretty in Monroe LLC's about-face on the issue of domicile. Monroe LLC is judicially estopped from taking the litigation position that Monroe died domiciled in California. Our conclusion in this regard is guided by the need to preserve the dignity of judicial proceedings that have taken place over the last forty years and to discourage litigants from "playing fast and loose with the courts." See Hamilton, 270 F.3d at 782.

IV.

Because Monroe died domiciled in New York, New York law applies to the question of whether Monroe LLC has the right to enforce Monroe's posthumous right of publicity. Because no such right exists under New York law, Monroe LLC did not inherit it through the residual clause of Monroe's will, and cannot enforce it against Milton Greene or others similarly situated. We observe that the lengthy dispute over the exploitation of Marilyn Monroe's persona has ended in exactly the way that Monroe herself predicted more that fifty years ago: "I knew I belonged to the Public and to the world, not because I was talented or even beautiful but because I had never belonged to anything or anyone else."^[17]

We AFFIRM the district court's judgment.

---------

[1] The Honorable William K. Sessions III, District Judge, United States District Court for Vermont, sitting by designation.

[2] Just within the past year, Monroe was the subject of both a major motion picture, My Week with Marilyn, and a network television series, Smash. Numerous books tell and retell her life story and hypothesize about her death. Several new books were released to coincide with the fiftieth anniversary of her death, and a Westlaw search yields 153 articles about Monroe that were published on the day of the anniversary of her death. Hip hop artist Nicki Minaj sings about her. See Nicki Minaj, Marilyn Monroe, on Pink Friday: Roman Reloaded (Universal Republic Records 2012). Plans have been announced for Monroe-themed cafes and nail salons. See Maureen Dowd, The Love Goddess Who Keeps Right on Seducing, N.Y. Times, Aug. 5, 2012. And in the wake of deceased rapper Tupac's recent performance at the Coachella Valley Music and Arts Festival, there are even plans to resurrect Monroe as a holographic "performer, spokesperson, cultural pundit and computer avatar." Eriq Gardner, Holograms: A New Dangerous Frontier, The Hollywood Reporter, June 8, 2012.

[3] The district court issued a number of orders, culminating in its July 31, 2008, order granting summary judgment in favor of Milton Greene. See Milton H. Greene Archives, Inc. v. CMG Worldwide, Inc., 568 F.Supp.2d 1152 (C.D.Cal.2008).

[4] Frosch used the term "residence" in his representations about Monroe's domicile. Under California's inheritance laws, residence and domicile are synonymous. See Cal.Code Regs. tit. 18, § 13303.4 (formerly Cal.Code Regs. tit. 18, § 640 (1945)) ("For the purpose of the Inheritance Tax Law the term `residence' is synonymous with legal residence or domicile.").

[5] Although his affidavit does not so state, Roberts is widely reported to have been Monroe's personal masseur, close friend and confidant. See Lois Banner, Marilyn: The Passion and the Paradox 57 (2012); Keith Badman, Marilyn: The Final Years 157 (2012).

[6] A pretermitted heir is a child or spouse omitted from a will, most commonly when the marriage or birth of the child postdates the execution of the will. See Black's Law Dictionary 792 (9th ed.1999). Many states provide that, unless intentionally omitted, a pretermitted heir receives the share of the estate they would have received if the testator had died intestate. See, e.g., Cal. Prob.Code §§ 21620-23; N.Y. Est. Powers & Trusts Law § 5-3.2.

[7] The Hawaii district court dismissed the case both for failure to state a claim and for lack of personal jurisdiction. A district court may decide that a complaint fails to state a claim even when it does not have personal jurisdiction. See Wages v. I.R.S., 915 F.2d 1230, 1234-35 (9th Cir.1990) (discussing a court's authority to address alternate bases for dismissal when it finds a lack of personal jurisdiction, as opposed to when it finds a lack of subject matter jurisdiction).

[8] Milton Greene and Tom Kelley were well known photographers whose bodies of work include collections of Monroe photographs.

[9] We deny Milton Greene's request to take judicial notice of appeals pending in the Second Circuit in cases related to Shaw Family Archives, Ltd. v. CMG Worldwide, Inc., 589 F.Supp.2d 331 (S.D.N.Y.2008). Although those cases also involve claims about the ownership of Marilyn Monroe's right of publicity, the issues on appeal bear no relation to the claims at issue here. See Fed.R.Evid. 201; United States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.1992) ("[W]e may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.") (quotation marks omitted).

[10] Before the passage of Civil Code § 3344.1, which created the posthumous right of publicity, California courts had held that a celebrity's right of publicity terminated upon the individual's death. See Lugosi v. Universal Pictures, 25 Cal.3d 813, 160 Cal.Rptr. 323, 603 P.2d 425 (1979). As enacted in 1984, Civil Code § 3344.1 did not address whether it was intended to have retroactive effect.

[11] In her formative years, Senator Kuehl was a child actor, best known for her role as Zelda Gilroy in the television series The Many Loves of Dobie Gillis. Kuehl originally introduced SB 771 on February 23, 2007 as a stem cell research law, but then revised it in June to make it an amendment to Civil Code § 3344.1.

[12] In Shaw Family Archives, the district court for the Southern District of New York held, like the district court here, that before the 2007 amendment, Civil Code § 3344.1 did not retroactively allow deceased personalities like Monroe to transfer the statutory right of publicity through a will. 486 F.Supp.2d at 319-20. Briefing in the appeal from that decision to the Second Circuit was stayed pending the outcome of this appeal.

[13] CMG Worldwide separately appeals the district court's grant of summary judgment on its Indiana state law claims. It asserts that Indiana's 1994 Right of Publicity Act, Ind. Code §§ 32-36-1-1 to -20, posthumously vested Monroe's estate and, hence, Monroe LLC with Monroe's right of publicity. Indiana choice-of-law rules dictate that in resolving these state law claims we must apply the law of Monroe's domicile, New York, as controlling on all substantive matters related to the estate and disposition of property. See Maurice F. Jones Trust v. Barnett Banks Trust Co., 637 N.E.2d 1301, 1304 (Ind.App.1994) (citing Lovett v. Lovett, 87 Ind.App. 42, 155 N.E. 528, 530 (1927)). In New York, a will can dispose only of property owned at the time of death. See In re Van Winkle's Will, 86 N.Y.S.2d 597, 600 (N.Y.Sur.1949) ("Of course, under no circumstances, in the absence of a valid power, can any amount of testamentary intent produce the effect of subjecting property not owned by a testator at the date of his death to any disposition whatever."). Because no descendible right of publicity existed in New York in 1962, Monroe's right of publicity was extinguished at her death, and did not become a part of her estate. Therefore, the district court correctly granted summary judgment in favor of Milton Greene on the Indiana state law claims. Because we hold that Monroe LLC is judicially estopped from asserting that Monroe died a domiciliary of California, we need not, and do not, address the various other rulings sought by the parties on the validity, meaning, scope and constitutionality of California's and Indiana's right of publicity laws. Cf. Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 341-49, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring).

[14] A party can be estopped by statements successfully advanced in both judicial and administrative proceedings. Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 604 (9th Cir.1996). California inheritance tax appraisers are appointed by the courts and act in a quasi-judicial capacity. See Greenaway v. Workmen's Comp. Appeals Bd., 269 Cal.App.2d 49, 54, 74 Cal.Rptr. 452 (1969). And the California State Board of Equalization "is a constitutional agency that exercises quasi-judicial powers." EHP Glendale v. Cnty. of Los Angeles, 193 Cal.App.4th 262, 274, 122 Cal.Rptr.3d 378 (2011).

[15] See Dorothy Pomerantz, The Top-Earning Dead Celebrities, Forbes Mag. (Oct. 25, 2011), http://www.forbes.com/sites/dorothypomerantz/2011/10/25/the-top-earning-dead-celebrities/.

[16] Although numerous persons have attributed this quote to Monroe, we have been unable to locate a definitive source.

[17] Marilyn Monroe, My Story 123-24 (Cooper Square Press 2000).

[784] [785] [786] [787] W. Mack Webner, Cynthia Clarke Weber, Sughrue Mion Zinn MacPeak and Seas, Washington, DC, for Elvis Presley Enterprises, Inc.

Wayne D. Davidson, Wayne D. Davidson & Associates, Houston, TX, Terry Fitzgerald, Fitzgerald Gartner & Follis, Houston, TX, William Dean Raman, Arnold White & Durkee, Austin, TX, John Paul Venzke, Houston, TX, for Barry Capece, Velvet Ltd., Audley, Inc.

ORDER

GILMORE, District Judge.

On the 25th day of November, 1996, the above-styled and numbered case came on for trial. Both sides appeared and announced ready for trial, and the case was tried to the Court from November 25 to November 26, 1996. At the conclusion of Plaintiff's case in chief, Defendants moved for judgment as a matter of law as to Plaintiff's claims. Defendants' motion was denied. The Court enters the following findings of fact and conclusions of law on the evidence presented.

I. BACKGROUND

Elvis Presley Enterprises ("EPE") is a Tennessee corporation formed in 1981 under the terms of a testamentary trust created by Elvis Presley ("Presley"). EPE is the assignee and registrant of all trademarks, copyrights, and publicity rights belonging to the Presley estate, including over a dozen United States federal trademark registrations and common law trademarks of Presley's name and likeness. None of these marks, however, are registered service marks for use in the restaurant and tavern [788] business. EPE's exclusive rights are marketed through a licensing program which grants licensees the right to manufacture and sell Elvis Presley merchandise worldwide. Products range from t-shirts to juke boxes. Merchandise sales have generated over $20 million dollars in revenue in the last five years and account for the largest percentage of EPE's annual earnings. In addition, EPE operates a mail order business and several retail stores at Graceland, the Elvis Presley home in Memphis, Tennessee, including two restaurants and an ice cream parlor. EPE recently announced plans to open an Elvis Presley night club in 1997 on Beale Street in Memphis and is also currently exploring the possibility of opening similar establishments throughout the world.

In April of 1991, Barry Capece ("Capece"), operating through the now dormant limited partnership, Beers `R' Us, opened a nightclub on Kipling Street in Houston, Texas named "The Velvet Elvis." The name, "The Velvet Elvis," referring to one of the more coveted velvet paintings, was selected for the powerful association it immediately invokes with a time when lava lamps, velvet paintings, and bell bottoms were popular. Capece intended the bar to parody an era remembered for its sensationalism and transient desire for flashiness. By taking bad, albeit once widely popular, art and accentuating it with gallery lights and by showcasing decor which mocks society's idolization of less than scrupulous celebrities, Capece ridiculed a culture's obsession with the fleeting and unimportant. His biting criticism provides his patrons with a constant reminder not to take themselves nor the world they live in too seriously.

In order to register the new bar's name, Capece filed a federal service mark application with the United States Patent and Trademark Office (PTO) on August 28, 1991. In December of 1992, pursuant to § 12(a) of the Trademark Act of 1946, the service mark was published in the Official Gazette of the Patent Office for the purpose of providing notice of the mark's pending registration and an opportunity for parties to object to the application's approval. Although aware of the service mark's publication in the Official Gazette, EPE did not file an opposition to the mark within the proscribed thirty day period. On March 9, 1993, registration for the service mark, "The Velvet Elvis," was issued to Capece for use in the restaurant and tavern business. For business reasons, however, the Kipling Street nightclub was closed in July of 1993.

Shortly thereafter, Capece began soliciting investors and quickly obtained the financial backing to reopen "The Velvet Elvis" at a different location. Another limited partnership, Velvet Ltd., comprised of general partner, Audley, Inc. and three limited partners, was formed to replace Beers `R' Us as "The Velvet Elvis'" new owner. With the necessary funds in hand, Capece leased a vacant sports bar on Richmond Avenue and began renovation in January of 1994. In July of that same year, EPE sent a cease and desist letter to Capece, threatening legal action if the bar opened with EPE's trademark, "Elvis," in its name. Capece was "All Shook Up." Despite the warning letter, however, the Richmond Street "Velvet Elvis" opened for business in August of 1994.

The bar currently serves a wide selection of liquors, including premium scotches, bourbons and tequilas. Food is available and menu items range from appetizers to complete entrees. "The Velvet Elvis" also claims to be the first cigar bar in Houston, specializing in high quality cigars. "The Velvet Elvis's" decor, consistent with its theme, features velvet paintings along with a widely divergent assortment of eclectic art. In addition to the velvet Elvis painting in the back lounge, velvet portraits of Stevie Wonder, Chuck Berry, Bruce Lee, and a collection of velvet nudes are hung throughout the bar. Also a part of the bar's decor are lava lamps, cheap ceramic sculptures, beaded curtains, and vinyl furniture. A painting of the Mona Lisa exposing her breasts hangs prominently in the front room. Centerfolds from Playboy magazines dating back to the sixties completely cover the walls of the men's room. Reminders of Elvis Presley, including numerous magazine photographs and a statute of Elvis playing the guitar, were at one time amongst the bar's decorations, but have since been replaced with art work unrelated to [789] Elvis or his music but equally as reminiscent of the forgotten era the bar attempts to mimic.

Pictures and references to Elvis Presley were also used in advertisements promoting the establishment until 1995. A number of ads contained actual pictures of Elvis Presley. Some ads made direct references to the deceased singer or Graceland using phrases such as "The King Lives," "Viva la Elvis," or "Elvis has not left the building." Others, while avoiding explicit references to Elvis or his persona, boldly displayed the "Elvis" portion of "The Velvet Elvis" insignia with an almost unnoticeable "Velvet" appearing alongside in smaller script. The bar's menu bears a caption, "The King of Dive Bars." A frozen drink, "Love Me Blenders," is served in the bar and the menu features items such as peanut butter and banana sandwiches, and "Your Football Hound Dog."

Plaintiff claims that the focal point of the bar's name, decor, and advertisements is Elvis Presley. To protect its exclusive right to license the commercial use of Elvis Presley's name, image, and likeness, Plaintiff filed suit against the Velvet, Ltd., Audley, Inc., and Capece, as owner of "The Velvet Elvis" service mark, on April 21, 1995. Plaintiff sued Defendants for unfair competition, trademark infringement, and dilution, under both the common law and the Lanham Act, 15 U.S.C. § 1051 et seq. (1994), and for infringement of its common law and corresponding statutory right of publicity. Plaintiff seeks injunctive relief, an accounting for profits, attorneys fees, costs, and an Order to the Commissioner of Trademarks to cancel Capece's registration for "The Velvet Elvis."^[1]

Defendants, on the other hand, maintain that Plaintiff is merely a victim of "Suspicious Minds." Defendants contend that its valid, registered service mark presumptively entitles it to the exclusive right to use the mark in its business. Further, because the bar is meant and viewed as a parody, Defendants also argue that use of its service mark has not yet nor will in the future cause confusion as to the identity of the bar's owners, sponsors, or affiliates. Defendants claim that all possibility of confusion or dilution of Plaintiff's trademarks is negated with the customer's immediate appreciation of the bar's parodic message. Defendants also assert that their parody is protectable expression under the First Amendment, further warranting the Court's dismissal of all Plaintiff's claims. Alternatively, Defendants argue that to allow Plaintiff to succeed in this suit after its inexcusable delay in asserting opposition to Defendants' use of "The Velvet Elvis" as a service mark would result in extreme prejudice to Defendants and, consequently, that this action is subject to the equitable defenses of laches and acquiescence.

II. UNFAIR COMPETITION AND TRADEMARK INFRINGEMENT

Liability in this case will depend on whether Defendants have improperly utilized the Elvis moniker or Elvis's image and likeness in the promotion and operation of its tavern. Stated simply, the Court must determine whether Defendants stepped on Plaintiff's blue suede shoes. Plaintiff claims the inclusion of its "Elvis" trademark in the service mark "The Velvet Elvis" coupled with Defendants' use of the image and likeness of Elvis Presley in advertising, promoting, and rendering bar services creates confusion as to whether EPE licensed, approved, sponsored, endorsed or is otherwise affiliated with "The Velvet Elvis," constituting unfair competition and trademark infringement under the common law and Lanham Act.

To prevail on its trademark infringement and unfair competition claims under the Lanham Act, Plaintiff needs to demonstrate that Defendants' use of "The Velvet Elvis" service mark and the image, likeness, and other indicia of Elvis Presley was likely to cause confusion in the mind of the ordinary consumer as to the source, affiliation, or sponsorship of Defendants' bar. Conan Properties, Inc. v. Conans Pizza, Inc., 752 F.2d 145, 149 (5th Cir.1985); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252, 258 (5th [790] Cir.1980) cert. denied, 449 U.S. 899, 101 S.Ct. 268, 66 L.Ed.2d 129 (1980). The focus is whether a defendant's use of a mark and image creates a "`likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.'" Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 502 (2d Cir.1996) (quoting Mushroom Makers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2d Cir.1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979)); see also Fuji Photo Film v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591, 594 (5th Cir.1985) (holding that likelihood of confusion is the central issue in any suit for trademark infringement or unfair competition). Liability is established if the evidence demonstrates that consumers will mistakenly believe the goods or services in dispute actually originated with the plaintiff or if it appears that plaintiff may have sponsored or otherwise approved of defendant's use. Tetley, Inc. v. Topps Chewing Gum, Inc., 556 F.Supp. 785, 789 (E.D.N.Y.1983); see also Professional Golfers Ass'n of America v. Bankers Life & Casualty Co., 514 F.2d 665, 670 (5th Cir. 1975) (finding trademark infringement where a defendant uses a mark that falsely suggests affiliation with a trademark owner in a manner that is likely to cause confusion as to source of sponsorship). The governing standard for common law trademark infringement and unfair competition is the same "likelihood of confusion" test applied to claims brought under the Lanham Act. Universal City Studios, Inc. v. Kamar Industries, 217 U.S.P.Q. 1162, 1167, 1982 WL 1278 (S.D.Tex.1982).

Although the standards are similar, there is a fundamental distinction between trademark infringement and unfair competition. See Professional Golfers Ass'n of America, 514 F.2d at 671. Trademark law is based on a relatively narrow principal as compared to its frequent companion unfair competition — its goal is to provide the holder of a trademark the exclusive right to use a phrase, word, symbol, image, or device to identify and distinguish his product. Jean Patou, Inc. v. Jacqueline Cochran, Inc., 201 F.Supp. 861, 863 (S.D.N.Y.1962), aff'd, 312 F.2d 125 (2d Cir.1963); see also 15 U.S.C. § 1114. Unfair competition, on the other hand, is more encompassing. "[A] claim of unfair competition considers the total physical image given by the product and the name together." Jean Patou, Inc., 201 F.Supp. at 863. "[E]very facet of the parties' selling program is relevant — from the symbols, letters, pictures, colors, shapes, and sizes connected with the products to the advertising representations made." J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 2.02 (3d ed. 1992); see also 15 U.S.C. § 1125(a). Due to this difference, there may be some instances where "a defendant is guilty of competing unfairly without having technically infringed." Professional Golfers, 514 F.2d at 671.

In this circuit, courts have relied on the following list of factors in determining whether a defendant's use of a mark or image creates a likelihood of confusion:

(1) the type of trademark alleged to have been infringed;

(2) the similarity of design between the two marks;

(3) the similarity of the products or services;

(4) the identity of the retail outlets and purchasers;

(5) the identity of the advertising medium utilized;

(6) the defendant's intent; and

(7) evidence of actual confusion.

Conan, 752 F.2d at 149; see also Roto-Rooter Corp. v. O'Neal, 513 F.2d 44, 45 (5th Cir.1975). This list is neither exhaustive nor exclusive. In fact, "[t]he absence or presence of any one factor ordinarily is not dispositive; indeed, a finding of likelihood of confusion need not be supported by even a majority of the seven factors." Conan, 752 F.2d at 150. Further, the Court is not limited to the factors enunciated in Conan to determine likelihood of confusion and is free to consider other relevant evidence of confusion. Armco, Inc. v. Armco Burglar Alarm Co., Inc., 693 F.2d 1155, 1160 (5th Cir.1982). An additional factor that impacts the analysis in this case is whether Defendants' attempt [791] to parody the Elvis era and the eclectic bars of the sixties successfully eliminated the potential for a customer to be misled or whether it simply increased the likelihood of confusion. Nike v. "Just Did It" Enterprises, 6 F.3d 1225, 1228 (7th Cir.1993) (holding that parody is not an affirmative defense to trademark infringement and unfair competition claim but can be an additional factor in analyzing the likelihood of confusion); Jordache Enterprises, Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1485 (10th Cir.1987) (considering the product's use as a parody to be a factor weighing against the finding of a likelihood of confusion).

At the outset, Defendants plea, "Don't be cruel, we have a registered service mark." The length of the time the mark "The Velvet Elvis" has been used continuously in commerce will impact the deference accorded to the PTO's issuance of the registration. In its evaluation of each application submitted, the PTO employs the same "likelihood of confusion" test used by courts in infringement actions. See 15 U.S.C. § 1052; see also McCarthy, supra, § 23.24. Generally, the PTO will issue a registration upon concluding that the purchasing public would not assume mistakenly that the applicant's goods or services originate from or are sponsored by another registered trademark holder and after an appropriate period for opposition to the pending application. See McCarthy, supra, § 23.24[1][a].

Proof of registration of a service mark with the PTO is prima facie evidence of the validity of the mark and the registrant's exclusive right to use the mark in commerce for the services specified in the registration. 15 U.S.C. § 1115(a). Such proof, however, is not irrefutable and in the appropriate circumstances can be defeated by any legal or equitable defense which may have been asserted had the mark not been registered. See 15 U.S.C. § 1115(a). Ownership of a registered mark becomes conclusive evidence of the holder's exclusive right of use, subject to the few defenses under 15 U.S.C. § 1115(b), only after it has been used continuously in commerce for five consecutive years. As this is not the case here, the Court will determine whether Plaintiff's evidence is sufficient to sustain its burden of rebutting Defendants' presumptive right to use "The Velvet Elvis" service mark in its business. The Court will first analyze whether Defendants' use of the Elvis name in its service mark and Elvis memorabilia as bar decor is likely to create consumer confusion. Defendants' employment of the image, likeness, and other indicia of Presley in advertisements will be addressed separately.

A. Service Mark and Bar Decor

1. Type of Trademark (Strength of the Mark)

The "type" of trademark refers to the "strength" of the trademark and its ability to invoke an immediate association in the consumer's minds with a plaintiff's goods. See Hormel, 73 F.3d at 503. The stronger the mark the broader the protection it is afforded. Domino's, 615 F.2d at 259. The strength of the mark "refers to the distinctiveness of the mark, or more precisely, its tendency to identify the goods sold under the mark as emanating from a particular, although possibly anonymous, source." McGregor-Doniger Inc. v. Drizzle, Inc., 599 F.2d 1126, 1131 (2d Cir.1979) (citations omitted).

Trademarks fall into three major categories, each accorded a different degree of protection under the law. Least protected are the generic trademarks. A "generic" term is a common descriptive name for a type of product or service, such as "milk" or "cigarettes." Oleg Cassini, Inc. v. Cassini Tailors, Inc., 764 F.Supp. 1104, 1108 (W.D.Tex.1990). Because of its widespread use, the term cannot adequately identify a specific product from a single source, thereby justifying the lack of protection given its user. Id. Moderate protection is afforded descriptive or suggestive marks which are marks that either evoke some quality of the product or describe it directly. Little Caesar Enterprises, Inc. v. Pizza Caesar, Inc., 834 F.2d 568, 571 (6th Cir.1987). Fanciful or arbitrary trademarks are awarded the greatest protection. Nutri/System, Inc. v. Con-Stan Industries, Inc., 809 F.2d 601, 605 (9th Cir.1987). In this category fall coined marks such as KODAK or XEROX and marks [792] which use ordinary words in a manner that neither describe nor suggest the product or service to which the mark has been assigned, such as IVORY soap or APPLE computers. Little Caesar, 834 F.2d at 571. These marks are considered to be "inherently distinctive" and capable of serving as unique product identifiers, easily distinguishing one merchant's products from those manufactured by others. Cassini, 764 F.Supp. at 1108.

While names generally fall in the descriptive category, they may be entitled to greater protection "with a showing that through usage the name has acquired distinctiveness ... in the minds of ordinary consumers." Conan, 752 F.2d at 155 (citations omitted); see also Cassini, 764 F.Supp. at 1109. Defendants concede that the worldwide fame and almost instantaneous recognition that the Elvis or Elvis Presley name has acquired enhance Plaintiff's claim that its trademark is a strong mark. "The more deeply a plaintiff's mark is embedded in the consumer's mind, the more likely it is that the defendant's mark will conjure up the image of the plaintiff's product instead of that of the junior user." Hormel, 73 F.3d at 503.

Even though Plaintiff's widely recognized trademarks are deserving of protection, this fact alone does not support a finding of confusion. Confusion is avoided when the defendant uses the plaintiff's mark as a part of a parody, jest, or societal commentary. Hormel, 73 F.3d at 503; Yankee Publishing Inc. v. News America Publishing Inc., 809 F.Supp. 267, 273 (S.D.N.Y.1992). Parody has been defined as a subtly humorous, imitative form of criticism, which provides "social benefit by shedding light on an earlier work, and in the process, creating a new one." Campbell v. Acuff-Rose Music, 510 U.S. 569, 579, 114 S.Ct. 1164, 1171, 127 L.Ed.2d 500 (1994). By assailing prevalent vices and mores with ridicule, parody has become an especially effective method of exposing the weakness in an idea or value and plays an important role in social commentary. See L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 28 (1st Cir.1987) cert. denied 483 U.S. 1013, 107 S.Ct. 3254, 97 L.Ed.2d 753 (1987). Because "the keystone of parody is imitation," Nike, 6 F.3d at 1228, a successful parodist must conjure up enough of the original to "convey two simultaneous — and contradictory — messages: that it is the original, but also that it is not the original but instead a parody." Cliffs Notes, Inc. v. Bantam Doubleday Dell Publishing Group, Inc., 886 F.2d 490, 494 (2d Cir.1989). "Parody's humor, or in any event its comment, necessarily springs from recognizable allusion to its object through distorted imitation." Campbell, 510 U.S. at 588, 114 S.Ct. at 1176.

Defendants' use of the service mark "The Velvet Elvis" when combined with the bar's gaudy decor form an integral part of Defendants' parody of the faddish, eclectic bars of the sixties. The phrase "velvet Elvis" has a meaning in American pop culture that is greater than the name, image, or likeness of Elvis Presley. The phrase symbolizes tacky, "cheesy," velvet art, including, but not limited to velvet Elvis paintings. Here, the image of Elvis, conjured up by way of velvet paintings, has transcended into an iconoclastic form of art that has a specific meaning in our culture, which surpasses the identity of the man represented in the painting. That image is confirmed upon entering the bar. Plaintiff's own witnesses testified that despite their thoughts about the bar's name, they immediately realized the tacky bar they had just encountered was in no way associated or affiliated with EPE. The humorous jab at the trends of the sixties is almost overpowering and readily apparent with one quick look around a lounge cluttered with tasteless art, long strand beads, and a lighted disco ball conspicuously hung from the ceiling. The customer's recognition and appreciation of Defendants' parody decreases the probability of confusion that would otherwise result from use of a trade name which partially incorporates a relatively strong mark. See Tetley, 556 F.Supp. at 794 ("[T]he very heavy handedness of defendant's parody would appear to assure that a clear distinction will be preserved in the consumer's mind between plaintiff's product and [defendant's product]."). Thus, the Court finds that while Plaintiff's mark is entitled to protection, it is doubtful that its inclusion within the name "The Velvet Elvis" will mislead consumers [793] into believing that the bar is affiliated or somehow associated with EPE. Nor will customers mistake "The Velvet Elvis" for an EPE owned or sponsored business because Elvis related items are used in the bar's decor. This factor therefore weighs against finding a likelihood of confusion exists both with respect to Defendants' use of "The Velvet Elvis" service mark and Elvis memorabilia as bar decor.

2. Degree of Similarity Between the Two Marks

The similarity of the disputed marks is determined by comparing their appearance, sound, and meaning. Jordache, 828 F.2d at 1484; McCarthy, supra, § 23.04. "The proper test is whether the average consumer, upon encountering the allegedly infringing mark in the isolated circumstances of the marketplace and having only a general recollection of the plaintiff's mark, would be likely to confuse or associate the defendant or his services with the plaintiff." American Automobile Association v. AAA Insurance Agency, Inc., 618 F.Supp. 787, 792 (W.D.Tex. 1985). In determining the degree of similarity, the respective marks should be compared as a whole and not by their component parts. General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 627 (8th Cir.1987); see also McCarthy, supra, § 23.15[1][a]. "The commercial impression of a trademark is derived from it as a whole, not from its elements separated and considered in detail. For this reason it should be considered in its entirety." Estate of P.D. Beckwith, Inc. v. Commissioner of Patents, 252 U.S. 538, 545-46, 40 S.Ct. 414, 417, 64 L.Ed. 705 (1920).

As a general rule, "a subsequent user may not avoid likely confusion by appropriating another's entire mark and adding descriptive or non-distinctive matter to it." McCarthy, supra, § 23.15[8]. An exception to the general rule is found where the marks in their entireties convey two different meanings. Long John Distilleries, Ltd. v. Sazerac Co., 426 F.2d 1406, 1407, 57 CCPA 1286, (1970) (holding "Long John" and "Friar John" not substantially similar because the marks communicate very different ideas). The Court finds Defendants' service mark falls within this narrow category of exception because each party's mark creates a very different overall impression. Plaintiff's trademarks obviously refer to the legendary singer, Elvis Presley and products of his image and likeness marketed through EPE and its licensees. The term "The Velvet Elvis," on the other hand, is symbolic of a faddish art style that belongs to the culture that created it. It has no specific connection with the singer other than the coincidence of its use to portray him. Marked dissimilarity in the meaning of two marks can be determinative and weigh against a finding of confusion under this factor. See Jordache, 828 F.2d at 1484. "[P]sychological imagery evoked by the respective marks' may overpower the respective similarities or differences in appearance and sound." McCarthy, supra, § 23.08[1]; see also Jordache, 828 F.2d at 1484. The Court finds any similarity between the marks is outweighed by their strikingly different meanings. Accordingly, the Court finds the lack of similarity between the two marks weighs against a finding of confusion.

3. Similarity of Products or Services

"The greater the similarity between products and services, the greater the likelihood of confusion." Moore Business Forms, Inc. v. Ryu, 960 F.2d 486, 490 (5th Cir.1992). Direct competition between the parties is not necessary for infringement to occur, Cassini, 764 F.Supp. at 1111. Rather, "the gist of the action [for trademark infringement] lies in likelihood of confusion to the public." Professional Golfers, 514 F.2d at 669. Confusion may exist "when the sponsor or maker of one business product might naturally be assumed to be the maker or sponsor of another business or product," although the parties' products or services are non-competitive. Id. at 670. In addition, a trademark owner has a definite interest in "preserving avenues of expansion" and is entitled to protection in related fields where the possibility for future growth exists even though he had not entered that particular area at the time the infringement action is brought. See C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc., 753 F.2d 14, 18 (2d Cir.1985). [794] Thus, protection is extended in cases where it is clear that the plaintiff intends to expand his sales efforts to compete directly with the defendant or it is possible that the public will assume or perceive that an expansion of the plaintiff's operations has in fact occurred although there is no evidence of the plaintiff's expectation to do so. See Lambda Electronics Corp. v. Lambda Technology, Inc., 515 F.Supp. 915, 926 (S.D.N.Y.1981).

The evidence produced at trial showed that Defendants' bar caters to a young, "hip" crowd, providing patrons with a place to socialize. A customer can go to "The Velvet Elvis" to eat, drink, watch one of many television sets, or smoke a cigar in the bar's smoking room. At the present time, EPE does not provide services comparable to those of "The Velvet Elvis," although it currently operates two family oriented restaurants, one of which serves beer. EPE's operations are based on the sale of Elvis Presley merchandise. Its on-site eateries and ice cream parlors are a byproduct of the commercialization of Graceland rather than a venture into the restaurant business. Plaintiff has, however, indicated its intention to enter Defendants' field and plans to open an "Elvis Presley's" nightclub in Memphis sometime in 1997. Also, Debbie Johnson, General Manager of EPE, testified that an international chain of Elvis Presley restaurant/nightclubs with an Elvis motif is currently under contemplation.

While the Court finds the majority of Plaintiff's revenue is derived from a merchandising market unrelated to the service market Defendants occupy, there is some overlap between the parties' present services. Both parties do in fact operate restaurants, although the businesses are not directly competitive due to the very different clientele and purposes of the respective establishments. As the Plaintiff has presented testimony of its immediate plans to open a Memphis nightclub and future intent to open a chain of similar bars throughout the world, this factor might favor Plaintiff, were it not for the relative clarity of "The Velvet Elvis'" parodic purpose. In Jordache Enterprises, Inc. v. Hogg Wyld, Ltd., the Tenth Circuit, faced with determining a parody's effect on directly competitive products, held against infringement finding that "[t]he benefit to the one making the parody, however, arises from the humorous association, not from public confusion as to the source of the mark." Jordache, 828 F.2d at 1486. The Court, in its reasoning, recognized that in order for a parody to convey its message effectively, there must be a clear and obvious difference from the original mark, leaving no room for confusion. To the extent the marks were associated, the Court found that it was for purposes of the parody only. The Court held that because consumers did not associate the two sources of the products, the plaintiff had suffered no actionable injury. Jordache, 828 F.2d at 1491. As in Jordache, this Court concludes that "The Velvet Elvis" is a successful parody. Defendants' bar is sufficiently dissimilar from any establishment EPE currently operates or has plans to operate in the future to prevent confusion as to the bar's source or origin.

4. Identity of Retail Outlets and Purchasers

Plaintiff claims that because its operations, specifically, Graceland and EPE-owned restaurants, and "The Velvet Elvis" are open to the general public, this factor should weigh in its favor. The Court nonetheless finds obvious distinctions between the customers of each business. Evidence at trial indicated that the majority of Plaintiff's customers are middle-aged white women while Defendants' customers generally are young professionals, ranging in age from early twenties to late thirties. In this circuit, "[d]issimilarities between ... the predominant consumers of plaintiff's and defendant's goods lessen the possibility of confusion, mistake, or deception." Domino's Pizza, 615 F.2d at 262. In Domino's Pizza, the Fifth Circuit found that the striking difference between Domino's Pizza customers, single, young males, and purchasers of Domino sugar products, middle-aged housewives, was not only substantial but significant enough to support an ultimate finding of no confusion. Id. With the same type of disparity between customers here, this Court finds a lack of confusion under this factor as well.

[795] 5. Similarity of Advertising Media

This factor does not weigh in the balance at this time — the parties are not operating in the same geographic market and Plaintiff admits that it rarely advertises because of the widespread and instant recognition of its marks and the Elvis image. Accordingly, this factor is irrelevant.

6. Defendants' Intent

A defendant's intent in adopting a particular trademark is critical "since if the mark was adopted with the intent of deriving benefit from the reputation of [the senior user] that fact alone `may be sufficient to justify the inference that there is confusing similarity.'" Domino's Pizza, 615 F.2d at 263 (quoting RESTATEMENT OF TORTS § 729 cmt. f (1938)). The "deliberate adoption of a similar mark may lead to an inference of intent to pass off goods as those of another which in turn supports a finding of likelihood of confusion." Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 925 (10th Cir.1986). Thus, the proper focus "is whether defendant had the intent to derive benefit from the reputation or goodwill of plaintiff." Sicilia Di R. Biebow & Co. v. Cox, 732 F.2d 417, 431 (5th Cir.1984).

The Court does not find that Defendants had an improper intent when adopting "The Velvet Elvis" as its establishment's name and service mark. Capece testified that the name refers to a particular type of painting and gaudy decor that was characteristic of bars during the sixties. In fact, he claims he was looking at a velvet Elvis painting when he determined that the name would be fitting for the kind of tacky, "cheesy," bar he had envisioned. His intent was to parody a time or concept from the sixties — the Las Vegas lounge scene, the velvet painting craze and perhaps indirectly, the country's fascination with Elvis. By furnishing his bar with tasteless, tacky decor similar to that seen in a typical sixties nightclub, his intent was not only to mock what was once considered the height of sophistication and class but also to provide critical commentary on society as a whole. Reference to Elvis Presley is indirect, yet use of his name is an essential part of the parody because the term, "velvet Elvis," has become a synonym for garish, passe black velvet art. Any association between Elvis and velvet art is attributable to the public's linking Elvis Presley with this particular art form and not to any aspect of Elvis' persona cultivated by Plaintiff for the purpose of achieving national prominence.

Admittedly, a parody derives benefit from the reputation of the trademark holder — it could not be a parody unless it imitated or evoked the original — but parody by its nature depends on a distinguishable difference between the original and the imitation for its success. See Jordache, 828 F.2d at 1486. Therefore, because parody relies upon a difference from the original, an intent to parody cannot be equated with an intent to confuse. See Cardtoons v. Major League Baseball Players Ass'n, 95 F.3d 959, 967 (10th Cir. 1996) (holding defendant's success depends upon a humorous association of its parody baseball cards with the traditional licensed baseball cards and not on public confusion); Nike, 6 F.3d at 1231 ("An intent on the part of the [defendant] to palm off his products as those of another would raise an inference that the customer would likely be confused. An intent to parody raises the opposite inference"). In addressing this very issue, the Second Circuit in Hormel Foods Corp. v. Jim Henson Productions, Inc., considered the lack of subtlety in a parodist's intent as evidence that the defendant did not intend to deceive or mislead customers. Hormel, 73 F.3d at 505. The Court noted that a parodist has absolutely nothing to gain from causing confusion among its customers as his parody serves an entirely unique and different function from the original he imitates. Id. Likewise, this Court finds that, due to the clarity of Defendants' parody, use of the service mark, "The Velvet Elvis," was not intended to cause confusion among consumers as to the source or sponsorship of Defendants' bar.

7. Actual Confusion

Regarding this last factor, the Fifth Circuit stated that "[t]here can be no more positive or substantial proof of the likelihood of confusion than proof of actual confusion." World Carpets, Inc. v. Dick Littrell's New World Carpets, 438 F.2d 482, 489 (5th Cir. [796] 1971); see also Roto-Rooter Corp. v. O'Neal, 513 F.2d 44, 45 (5th Cir.1975) (holding that very little proof of actual confusion is necessary to sustain a finding of a likelihood of confusion). It is well settled, however, that the plaintiff is not required to prove any instances of actual confusion in order to be entitled to a finding of a likelihood of confusion. Domino's Pizza, 615 F.2d at 263; see also Standard Oil Co. v. Standard Oil Co., 56 F.2d 973, 976 (10th Cir.1932) ("One does not have to await the consummation of threatened injury to obtain preventive relief."). However, an absence of actual confusion after a long period of concurrent use of the marks raises a presumption against a likelihood of confusion in the future. Domino's Pizza, 615 F.2d at 263; see Oreck Corp. v. U.S. Floor Systems, Inc., 803 F.2d 166, 173 (5th Cir.1986), cert. denied, 481 U.S. 1069, 107 S.Ct. 2462, 95 L.Ed.2d 871 (1987) (holding that concurrent use for seventeen months with no actual confusion is "highly significant" in overall assessment when evidence as to other factors is lacking); Greentree Laboratories, Inc. v. G.G. Bean, Inc., 718 F.Supp. 998, 1002 (D.Me.1989) (holding that concurrent use for five years without confusion creates a presumption that confusion is unlikely); see also McCarthy, supra, § 23.02[3].

In an attempt to prove actual confusion, Plaintiff offered the testimony of four witnesses. Three of the four witnesses were members of the Elvis Presley fan club in Austin, Texas. These fan club members were all women ranging in age from mid-forties to early seventies. They had been shown samples of ads for "The Velvet Elvis" one month before trial and had the opportunity to visit the bar the day before testifying. The first woman, an Elvis fan since age seven and a five time visitor to Graceland, testified that she was offended by the nude paintings of women and the audacity of the bar's owner to hang these paintings in the same room with pictures of Elvis. The second woman, who had an extensive collection of Elvis memorabilia and had been to Graceland twenty-five times, testified that she was also not pleased to see Elvis's memorabilia in a bar, much less a bar that openly displayed portraits of nude women. The third woman, who was the President of the Austin Elvis Presley Fan Club and claimed to have been to Graceland between forty and fifty times, was likewise offended by the nudity in the decor and was disappointed to have Elvis's name associated with an establishment of this type. The fourth witness was a man who had been to both "The Velvet Elvis" bars. He testified that when first visiting the original "The Velvet Elvis," he initially thought he might be able to buy some Elvis merchandise. He quickly realized, though, upon closer inspection of the bar's decor, that the bar had nothing to do with Elvis Presley. Consistently, each witness acknowledged that once inside "The Velvet Elvis" and given an opportunity to look around, each had no doubt that the bar was not associated or in any way affiliated with EPE.

In addition, Plaintiff was not able to produce evidence of customer complaints or other instances of confusion although "The Velvet Elvis" had been in business at the Richmond Avenue location for more than two years. In fact, Carol Butler, Director of Worldwide Licensing for EPE since July of 1994, testified that she was not aware of any complaints or inquiries from customers, licensees, or employees of EPE regarding the sponsorship of "The Velvet Elvis" or EPE's connection to the Houston establishment. Capece, who oversaw the bar's day to day operations, also testified that he was never contacted or asked whether "The Velvet Elvis" was affiliated, endorsed or licensed by EPE. Based on the evidence presented, the Court concludes that there was an insufficient showing of actual confusion to allow this factor to weigh in Plaintiff's favor. An absence of actual confusion after a period of concurrent use by Plaintiff and Defendants of their respective marks supports the Defendants' position and raises a presumption under Domino's Pizza against a likelihood of confusion in the future. Domino's Pizza, 615 F.2d at 263.

After reviewing the evidence presented, the Court concludes that Defendants' service mark, "The Velvet Elvis," as currently used, and Defendants' use of Elvis memorabilia as bar decor does not create a likelihood of customer confusion under either the Lanham Act or the common law. Accordingly, the [797] Court finds this aspect of Plaintiff's infringement claim to be without merit. In light of the Court's disposition of this claim, Defendants' laches, acquiescence, and First Amendment defenses need not be addressed.

B. The Advertisements

The Court reaches a different conclusion with respect to the use of Elvis imagery and indicia of his persona in Defendants' advertisements. The ads clearly lack a recognizable connection with Defendants' parodic purpose. Pictures and images of Elvis Presley would, to the ordinary customer without knowledge of the underlying parody, leave the distinct impression that the bar's purpose was to pay tribute to Elvis Presley or to promote the sale of EPE related products and services. Consequently, use of this type of advertisement can only indicate a marketing scheme based on the tremendous drawing power of the Presley name and its ability to attract consumer interest and attention. Further, without the backdrop of parodic meaning, these ads and their continued circulation will cause confusion, leading customers to wonder if they might find memorabilia of their beloved singer somewhere behind the doors of "The Velvet Elvis." The Court also finds ads which overemphasize the "Elvis" portion of "The Velvet Elvis" service mark to have a comparable effect. The meaning conveyed by the composite mark, "The Velvet Elvis," is lost when the word "Elvis" is overemphasized and dominates a much smaller "Velvet." This transmuted display of Defendants' service mark focuses attention on "Elvis" instead of the meaning of the combined words "The Velvet Elvis" and what they represent together, creating a definite risk that consumers will identify the bar with Presley or EPE.

Plaintiff also presented evidence that this style of advertising did in fact confuse consumers as to the source of the bar's sponsorship. About one month before trial, Plaintiff's counsel showed each witness a sample of Defendants' previous advertisements. They all testified that the ads' use of pictures and images of Elvis led them to believe that "The Velvet Elvis" was connected or otherwise affiliated with Elvis Presley and EPE. Because "there can be no more positive or substantial proof of the likelihood of confusion than proof of actual confusion," the Court concludes that Defendants' ads, published between 1992 and 1995, were confusing and misleading. See World Carpets, 438 F.2d at 489. Accordingly, the Court finds Defendants' former advertisements which depicted the image and likeness of Elvis, made explicit references to Elvis, or overemphasized the "Elvis" segment of "The Velvet Elvis" service mark to be actionable infringement and conduct amounting to unfair competition, violative of both the common law and Lanham Act.

III. DILUTION

Plaintiff also requests relief under the Federal Trademark Dilution Act of 1995. 15 U.S.C.A. § 1125(c) (West Supp.1996). Dilution is defined as:

the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.

15 U.S.C. § 1127 (West Supp.1996).

The dilution theory grants "protection to strong, well-recognized marks even in the absence of a likelihood of confusion" and depends neither upon a showing of a competitive relationship nor a certain degree of correlation or association between the parties goods or services. McCarthy, supra, §§ 24.13[1][b], 24.13[1][c]. The goal of dilution theory is to eliminate any "risk of an erosion of the public's identification of [a] very strong mark with the plaintiff alone" and to prevent another user from "diminishing [a mark's] distinctiveness, uniqueness, effectiveness and prestigious connotations." Tiffany & Co. v. Boston Club, Inc., 231 F.Supp. 836, 844 (D.Mass.1964).

To prevail on a claim of dilution, the plaintiff must establish the following two elements: (1) ownership of a distinctive mark, and (2) the likelihood of dilution. Hormel, 73 F.3d at 506. Undeniably, Plaintiff owns extremely strong marks. Thus, a finding of dilution in the present case depends on [798] whether there is the likelihood of dilution. The likelihood of dilution can be shown in two ways — either through blurring or tarnishment. Id. Plaintiff claims both blurring and tarnishment have occurred in this case. The Court disagrees.

A. Blurring

Blurring involves "the gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non competing goods." Frank I. Schechter, The Rational Basis of Trademark Protection, 40 HARV.L.REV. 813, 825 (1927); see also Deere & Co. v. MTD Products, Inc., 41 F.3d 39, 43 (2d Cir.1994) ("`[B]lurring has typically involved the `whittling away of any established trademark's selling power through its unauthorized use by others upon dissimilar products.'" (quoting Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir.1989))). Accordingly, dilution is only likely where the junior mark is substantially similar to the senior user's mark. Mead Data Central, 875 F.2d at 1028-29; McDonald's Corp. v. McBagel's, Inc., 649 F.Supp. 1268, 1281 (S.D.N.Y.1986). "The paradigmatic dilution case involves the situation where the same or very similar marks are being used on vastly different products," thus diminishing the mental association once made between a specific trademark and a certain line of goods. Jordache Enterprises v. Hogg Wyld, Ltd., 625 F.Supp. 48, 56 (D.N.M.1985) (emphasis added). In such cases, "the ability of the senior user's mark to serve as a unique identifier of the plaintiff's goods or services is weakened because the relevant public now also associates that designation with a new and different source." McCarthy, supra, § 24.13[1][b].

Under some circumstances, "lack of similarity alone is sufficient to defeat a dilution claim." Mead Data, 875 F.2d at 1035-36 (Sweet, J., concurring); see also Universal City Studios, Inc. v. Nintendo Co., 746 F.2d 112, 120 (2d Cir.1984) (holding names and characters King Kong and Donkey Kong are so vastly different there could be no reasonable question raised as to the validity of plaintiff's blurring claim); Warner Bros., Inc. v. American Broadcasting Cos., 530 F.Supp. 1187, 1198 (S.D.N.Y.1982) (holding plaintiff's Superman character was so different from defendant's The Greatest American Hero that there was no danger of dilution), aff'd, 720 F.2d 231 (2d Cir.1983). As previously noted, the Court finds a marked dissimilarity between the parties' marks, particularly with respect to the meaning and the overall impression each mark conveys. The phrase "velvet Elvis" references a particular type of art associated with the sixties era. "Elvis" or "Elvis Presley," on the other hand, suggests only the singer. While the Court finds this distinction to be determinative, the Court also notes that there is very little likelihood that Defendants' parody will weaken the association among the "Elvis" or "Elvis Presley" trademarks and products marketed by EPE.

In a similar case, the Court in Hormel, determined whether use of a wild boar muppet named Spa'am as a character in Jim Henson's hit movie Muppet Treasure Island blurred the SPAM trademark Hormel had been using for its canned luncheon meat. The Court concluded that Henson's muppet character was created "to poke a little fun at Hormel's famous luncheon meat by associating its processed gelatinous block with a humorously wild boar." See Hormel, 73 F.3d at 501. In finding no blurring had occurred, the Court held that parodies did little to diminish the mental connection already formed between a plaintiff's mark and its product. Id. at 506. In fact, the Court found their effect was quite the opposite, public identification was increased rather than diluted. Id.; see also Jordache, 828 F.2d at 1490.

Again, in Tetley, Inc. v. Topps Chewing Gum, Inc., the Court addressed parody's effect on a mark's capacity as a product identifier. In that case, Tetley, maker of Tetley Tea Bags, sought to enjoin Wacky Packs, a brand of gummed stickers, from distributing a sticker satirically depicting the tea manufacturer's retail packaging entitled "Petley Flea Bags." In rejecting the plaintiff's dilution claim, the Court held that "the broad humor defendant employs serves to prevent the type of blurring which might result from [799] a more subtle or insidious effort at humor at plaintiff's expense." Tetley, 556 F.Supp. at 794. Defendants' overt style of commentary is similar to that employed in Hormel and Tetley and consequently, this Court finds that Defendants' use of "The Velvet Elvis" as its logo does not blur Plaintiff's marks.

B. Tarnishment

Tarnishment generally arises when "a plaintiff's trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner's product." Deere, 41 F.3d at 43 (footnote omitted). The threat of tarnishment occurs when the reputation and goodwill of the plaintiff's trademark is connected with products that "conjure associations that clash with the associations generated by the owner's lawful use of the mark." L.L. Bean, 811 F.2d at 31. Generally, tarnishment has been found in cases where a distinctive mark is depicted in a context of sexual activity, obscenity, or illegal activity, see Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir.1979) (Dallas Cowboy Cheerleader uniforms used in sexually depraved movie); Coca-Cola Co. v. Gemini Rising, Inc., 346 F.Supp. 1183, 1189 (E.D.N.Y.1972) (Coca-Cola logo used in poster stated "Enjoy Cocaine"); Pillsbury Co. v. Milky Way Productions, Inc., 215 U.S.P.Q. 124, 135, 1981 WL 1402 (N.D.Ga.1981) (Pillsbury dough boy depicted engaging in sexual intercourse). Courts have also found tarnishment to occur even though the plaintiff's mark was not portrayed in an unwholesome manner but have done so only in cases involving identical or almost identical trade names, see Steinway & Sons v. Robert Demars & Friends, 210 U.S.P.Q. 954, 961, 1981 WL 40530 (C.D.Cal.1981) (Steinway pianos tarnished by Stein-Way clip-on beverage can handles); Jordache, 828 F.2d at 1491 (discussing cases where tarnishment was found although there was no unwholesome context and finding that they all involved the use of identical or almost identical trade names on different products), or cases where alterations of a mark are "made by a competitor with both an incentive to diminish the favorable attributes of the mark and ample opportunity to promote its products in ways that make no significant alteration." Deere, 41 F.3d at 45.

This Court has already determined that the marks in dispute are not sufficiently similar to constitute tarnishment on this basis. Further, because the parties are not currently in direct competition nor were they when "The Velvet Elvis" opened, the Court also finds that Defendants' parody does not ridicule Plaintiff's mark for the purpose of promoting its own competitive product. Regardless of the context, however, a finding of dilution by tarnishment must be supported by evidence that the plaintiff's mark will suffer negative associations from the defendant's use. Hormel, 73 F.3d at 507. There has been no evidence in this case to indicate that Defendants' service mark has had an actionable impact on the image cultivated by either the "Elvis" or "Elvis Presley" trademarks.

Plaintiff bases its tarnishment claim on the unsupported assumption that Defendants' use of the Elvis name in association with a tacky bar that indiscriminately displays explicit and almost pornographic paintings of nude women has tainted the wholesome image of Elvis and EPE sponsored products and services. The Court finds, however, without any evidence to the contrary, that nude portraits hung in a bar for the purpose of mocking the tasteless decor of the sixties does not inspire negative or unsavory images of Elvis or Elvis related products or services in the minds of EPE customers. See Tetley, 556 F.Supp. at 794 (finding plaintiff produced no evidence from either lay consumers or experts to support a claim of tarnishment). Furthermore, the nude pictures and the bar's intentional tackiness are an obvious part of the parody and are associated, to the extent any association is made, for purposes of the parody only, rather than for creating a permanent derogatory connection in the public's mind between the two businesses. See Jordache, 828 F.2d at 1491 ("Association of marks for parody purposes without corresponding association of manufacturers does not tarnish or appropriate the good will of the manufacturer of the high quality similar product"). Although "The Velvet Elvis" [800] might be considered by some customers to be in poor taste, the Court is convinced that it is not likely to prompt an unsavory or unwholesome association in consumers minds with the "Elvis" or "Elvis Presley" trademarks. Absent such a showing, a tarnishment claim cannot be sustained. See Hormel, 73 F.3d at 507.

IV. RIGHT OF PUBLICITY

Plaintiff claims that Defendants' use of the name, image, likeness, and other indicia of Elvis for the purposes of trade constitutes an appropriation of Elvis Presley's right of publicity. As owner of the exclusive rights in the identity of Elvis, Plaintiff seeks redress for a violation of its common law right as well as its corresponding statutory rights under either Tennessee or Texas law. At the outset, the Court must determine whether to apply Tennessee or Texas law to Plaintiff's claims. Although subject matter jurisdiction in this case is based on an alleged violation of a federal statute, the Lanham Act, Texas choice of law principles will dictate which state's substantive law applies to the pendent state law claims. Klaxon Co. v. Stentor Elec. Mfg., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). Texas has adopted the "most significant relationship" test, as enunciated in the Restatement (Second) of Conflicts, to resolve all conflict of law cases sounding in tort. Gutierrez v. Collins, 583 S.W.2d 312, 318 (Tex.1979). The test provides that "`law of the state with the most significant relationship to the particular substantive issue will be applied to resolve that issue.'" Caton v. Leach Corp., 896 F.2d 939, 943 (5th Cir.1990) (quoting Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984)). The application of the "`most significant relationship' test does not `turn on the number of contacts,' but more importantly on the qualitative nature of those contacts as affected by the policy factors enumerated in Section 6."^[2] De Aguilar v. Boeing Co., 47 F.3d 1404, 1413 (5th Cir.1995) (quoting Gutierrez, 583 S.W.2d at 318), cert. denied, ___ U.S. ___, 116 S.Ct. 180, 133 L.Ed.2d 119 (1995). Before this determination is made, the Court must first identify all relevant contacts as a Texas court would. De Aguilar, 47 F.3d at 1414. In doing so, the Court is guided by the following factors which are considered when applying the principles of Section 6: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (4) the place where the relationship, if any, between the parties is centered. Gutierrez, 583 S.W.2d at 318-19 (citing RESTATEMENT (SECOND) OF LAWS, § 145 (1971)).

The Court finds that Plaintiff's right of publicity was violated, if at all, in Texas where aspects of Elvis's persona have been used without consent, see Baltimore Orioles v. Major League Baseball Players Ass'n, 805 F.2d 663, 681 (7th Cir.1986) (holding players right of publicity might be violated wherever their performances were broadcast without authorization), cert. denied, 480 U.S. 941, 107 S.Ct. 1593, 94 L.Ed.2d 782 (1987), that the conduct causing the injury occurred in Texas, and that at least one of the parties is domiciled in Texas. Since the "locus of the conduct" is in Texas, the Court believes that Texas has a "greater interest in seeing that its standard of care is applied" because of the affect it will have on the way parties tailor their conduct within the state. De Aguilar, 47 F.3d at 1414. "[S]ubject only to rare [801] exceptions, the local law of the state where the conduct and injury occurred will be applied to determine whether the actor satisfied minimum standards of acceptable conduct and whether the interest affected by the actor's conduct was entitled to legal protection." RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145, cmt. d, at 417-18. The Court therefore concludes that Texas law will apply to Plaintiff's right of publicity claims.

The right of publicity has been defined as the "inherent right of every human being to control the commercial use of his or her identity" and prevent the exploitation of any aspect of their persona without permission. McCarthy, supra, § 28.01[2][a]; see also J. McCarthy, Melville B. Nimmer and the Right of Publicity: A Tribute, 34 UCLA L.REV. 1703, 1704 (1987). It is considered a property right and is descendible as an asset of the estate upon an individual's death. See TEX.PROP.CODE.ANN. § 26.002 (Vernon 1984 & Supp.1996). Publicity rights do not have a "likelihood of confusion" requirement and are more expansive than any statutory or common law right to protection against trademark infringement. Rogers v. Grimaldi, 875 F.2d 994, 1003 (2d Cir.1989). To violate a plaintiff's right of publicity, however, the defendant must employ an aspect of persona in a manner that symbolizes or identifies the plaintiff, such as the use of a name, nickname, voice, picture, achievements, performing style, distinctive characteristics or other indicia closely associated with a person. McCarthy, supra, § 28.01[4]. Appropriation becomes actionable when "it is used to advertise the defendant's business or product, or for some similar commercial purpose." RESTATEMENT (SECOND) OF TORTS § 652C, cmt. b; Matthews v. Wozencraft, 15 F.3d 432, 437 (5th Cir.1994).

Under Texas law a person is specifically prohibited from using:

without the written consent of a person who may exercise the property right, a deceased individual's name, voice, signature, photograph, or likeness in any manner, including: (1) in connection with products, merchandise or goods; or (2) for purpose of advertising, selling, or soliciting the purchase of products, merchandise, goods or services.

TEX.PROP.CODE § 26.011 (Vernon 1984 & Supp.1996). A prima facie case requires proof that (1) the defendant has appropriated another's identity and (2) is using it for trade or commercial benefit. Matthews, 15 F.3d at 437.

Plaintiff claims that Defendants have violated its publicity rights by using the Elvis name as part of its service mark, by promoting its bar services through ads containing pictures or using the image or likeness of Elvis, by making reference to Elvis on its dinner menu, and by using Elvis memorabilia as bar decor. In essence, the Plaintiff's complaint is that "The Velvet Elvis" is simply a disguised attempt at capitalizing on the identity of Elvis Presley.

Unquestionably, use of pictures or images of Elvis in "The Velvet Elvis" advertisements is an unlawful appropriation of the identity of Elvis Presley. Elvis is clearly identifiable and the only distinguishable purpose of the ads is to exploit the persona of Elvis for commercial advantage. Defendants admitted as much when they expressed a willingness at trial to be permanently enjoined from using similar advertisements in the future. The mention of Graceland or use of phrases in ads that are linked inextricably to the identity of Elvis as a celebrity, such as "Elvis has left the building" is also violative of Plaintiff's publicity rights. A celebrity's identity can be appropriated unlawfully even without use of his name or likeness. See Carson v. Here's Johnny Portable Toilets, Inc., 698 F.2d 831, 835 (6th Cir.1983) (holding Defendant "Here's Johnny Portable Toilets, The World's Foremost Commodian" appropriated the identity of Johnny Carson by using the phrase "Here's Johnny" as a trade name); Ali v. Playgirl, Inc., 447 F.Supp. 723, 729 (S.D.N.Y.1978) (holding picture published in defendant's magazine of a nude man closely resembling Muhammad Ali accompanied by verse "The Greatest" violated Ali's right of publicity). A violation can occur simply in the use of a phrase that clearly identifies the celebrity such as "Here's Johnny." Carson, 698 F.2d at 836.

[802] Use of Elvis memorabilia as decor, on the other hand, does not amount to any violation as it is not intended for the purpose of advertising, selling, or soliciting the purchase of products, merchandise, goods or services. In other words, the function of the memorabilia is not to promote a product or capitalize on the personality of Elvis himself but rather to recreate an era of which Elvis was a public part. In fact, with the exception of the now infamous velvet Elvis portrait, Defendants have removed most of the Elvis related objects with no apparent effect on the bar's message or success. Likewise, the Court finds the menu's use of the expression "King of Dive Bars" and its incorporation of peanut butter and banana sandwiches as a menu item are not actionable. While it may be true that Elvis enjoyed peanut butter and banana sandwiches, this fact alone will not support a claim for violation of the Plaintiff's right of publicity. To trigger infringement the plaintiff must be clearly identifiable from use of the item or phrase in question. McFarland v. Miller, 14 F.3d 912, 920 (3d Cir.1994) (recognizing that without identification, the right of publicity is worthless); see also McCarthy, supra, § 28.01[4]. Such is not the case here.

Additionally, the Court finds Defendants' use of the service mark, "The Velvet Elvis," does not amount to an unauthorized commercial exploitation of the identity of Elvis Presley. The service mark represents an art form reflective of an era that Elvis helped to shape. "The velvet Elvis" became a coined phrase for the art of velvet paintings and was adopted by Defendants for this reason — not because of its identification with Elvis Presley. Elvis's association with velvet paintings was not a product of his own doing nor can it be considered a part the character or personality of Elvis that Plaintiff has the right to control. Unlike "Here's Johnny," this phrase is not the thumbprint, work product, or tangible expression of Elvis Presley's celebrity identity. The mere association of a phrase or expression with a celebrity without the intent or effect of exploiting his identity or persona is insufficient cause for a violation of publicity rights.

Even assuming a violation of Plaintiff's right of publicity, Defendants' use of "The Velvet Elvis" as its service mark should be protected expression under the First Amendment. Consistently, courts have held that book, movie, or song titles using celebrities names are not violative of publicity rights and are protected speech under the First Amendment where the use of the celebrity's name "is clearly related to the content of the [underlying commodity] and is not a disguised advertisement for the sale of goods or services or a collateral commercial product." Rogers, 875 F.2d at 1004; Hicks v. Casablanca Records, 464 F.Supp. 426, 433 (S.D.N.Y.1978); Guglielmi v. Spelling-Goldberg Productions, 25 Cal.3d 860, 160 Cal.Rptr. 352, 353, 603 P.2d 454, 455 (1979). The Second Circuit in Rogers v. Grimaldi, despite acknowledging a title's commercial component, nonetheless held the expressive element of titles "requires more protection than the labeling of ordinary commercial products." Rogers, 875 F.2d at 998 (footnote omitted). With concern for the preservation of free expression and the special protection this category of speech should be given, the Court concluded that publicity rights should not be permitted to serve as a categorical bar to the use of celebrities' names in titles. Rogers, 875 F.2d at 1004. This Court believes the reasoning of Rogers to be applicable in this case.

Finally, Plaintiff also accuses Defendants of violating its right of publicity by selling a frozen drink called "Love Me Blenders" and a food item named "Your Football Hound Dog." The Court finds that the connection with Elvis's hit songs "Love Me Tender" and "Hound Dog" is an obvious attempt at humor and plays a supporting part in the overall parody. Its use, therefore, is not actionable. Deference under the First Amendment has been afforded to the commercial use of celebrity identities when included as a part of a parody. In Cardtoons v. Major League Baseball Players Ass'n, the Tenth Circuit rejected a claim brought by professional baseball players that their publicity rights were violated by the sale of parody trading cards featuring their caricatures and humorous commentary about their careers. 95 F.3d 959, 973 (10th Cir.1996). [803] The Court viewed parody as a "valuable communicative resource" and "a vital commodity in the marketplace of ideas" through which "a parodist can, with deft and wit, readily expose the foolish and absurd in society." Cardtoons, 95 F.3d at 972. After carefully balancing the possible speech restriction against the government's interest in protecting an individual's right of publicity, the Court found that a celebrity's interest in preserving his property rights must yield to society's more compelling interest in free expression, ultimately holding that a restriction on the use of celebrity identities in parodies was an unconstitutional restraint on the communication of ideas. Cardtoons, 95 F.3d at 972. Although the baseball players in Cardtoons were the direct focus of the parody, this Court nonetheless finds that the balancing test employed by the Cardtoons court would also apply and weigh in favor of expression in cases such as the instant case where the name, image, or identity of the celebrity is an indirect, yet vital part of the overall success of the parody. For the foregoing reasons, the Court therefore determines that Plaintiff's claims under TEX.PROP. CODE § 26.011 must fail.

V. REMEDIES

The Court has found Defendants liable for the following with respect to Defendants' mode of advertisement: trademark infringement and unfair competition under the Lanham Act and the common law and a violation of Plaintiff's publicity rights under TEX.PROP. CODE § 26.011. The Court will now address the appropriate remedy. Plaintiff seeks injunctive relief, an accounting of profits, and attorney's fees and costs.

Under both the Lanham Act and common law, the Court has the discretion to issue an injunction to prevent the continuation of trademark infringement or acts of unfair competition. 15 U.S.C. § 1116; see also McCarthy, supra, § 30.01. While the Court is not sure if Elvis has left the building, it is clear that Elvis left Defendants' ads sometime in 1995. Ordinarily, since Defendants have discontinued their use of this type of advertisement and Capece renounced any intent to resume similar advertising in the future, injunctive relief might not be available as a remedy. However, the Court still believes there is a definite possibility that ads including the image or likeness of Elvis Presley, references to Elvis, or his name disproportionately displayed may be used in connection with "The Velvet Elvis" again. Capece acknowledged that employees of "The Velvet Elvis" published ads, without his approval or awareness, containing pictures and direct references to Elvis Presley even after he specifically requested they stop. The Court thereby finds that with a management style that leaves day to day operations in the hands of its employees, injunctive relief is the proper remedy and necessary to prevent the continuation of advertisements which improperly display the image of Elvis, which make direct references to his identity as a celebrity or which emphasize the word "Elvis" in the mark "The Velvet Elvis."

The Court declines to order an accounting of profits or an award of attorney fees. Plaintiff's request for an accounting of profits is denied based on the complete absence of evidence showing lost or diverted sales. See Pebble Beach Company v. Tour 18 I, Ltd., 942 F.Supp. 1513 (S.D.Tex.1996). The Court also denies Plaintiff's request for attorney fees because the evidence does not support a finding that the violative acts in this case were malicious, fraudulent, deliberate or willful as necessary for an award of attorney fees under the Lanham Act. Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir.1996).

Therefore, the Court ORDERS that Plaintiff is entitled to permanent injunctive relief as follows: Defendants and all persons in active concert or participation with Defendants are permanently enjoined from using in connection with the promotion or advertising of "The Velvet Elvis" the image and likeness of Elvis Presley, phrases that are inextricably linked to the identity of Elvis, or from displaying the "Elvis" portion of their service mark in print larger than that used for its counterpart "Velvet." The Defendants shall comply with this injunction immediately upon entry of final judgment. All additional relief requested by Plaintiff not specifically granted is herein denied.

[804] This Order is a FINAL JUDGMENT.

The Clerk shall enter this Order and mail a copy to all parties. If said parties can no longer be reached at their disclosed addresses, the Court further ORDERS all correspondence be "Returned to Sender."

Thank you. Thank you very much.

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[1] Although Plaintiff's petition also included a claim for damages, no evidence of damages was presented at trial. Plaintiff argued only for injunctive relief and cancellation of Capece's service mark.

[2]Section six of the Restatement provides:

(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.

(2) When there is no directive, the factors relevant to the choice of the applicable rule of law include:

(a) the needs of the interstate and international systems;

(b) the relevant policies of the forum;

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue;

(d) the protection of justified expectations;

(e) the basic policies underlying the particular field of law;

(f) certainty, predictability, and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

RESTATEMENT (SECOND) OF CONFLICT OF LAWS, § 6 (1971).

[913] Angelo G. Garubo, Hochberg, Krieger, Danzig & Garubo, Roseland, NJ, Marshall H. Tanick (argued) Mansfield & Tanick, P.A., Minneapolis, MN, for appellant.

Bernard M. Reilly (argued) Dowd & Reilly, Red Bank, NJ, for appellees Joseph Miller, an individual, and Anaconda, Inc. t/a Spanky McFarland's, a New Jersey corporation.

Present: HUTCHINSON and ALITO, Circuit Judges, FULLAM, District Judge^[1]

OPINION OF THE COURT

HUTCHINSON, Circuit Judge.

Appellant Doris McFarland, personal representative of George "Spanky" McFarland ("McFarland"), now deceased,^[2] appeals orders of the United States District Court for the District of New Jersey on cross-motions for summary judgment. On those motions, the district court granted summary judgment to appellees Joseph Miller ("Miller") and Anaconda, Inc. ("Anaconda")^[3], dismissing all [914] of McFarland's claims against them, and denied McFarland's cross-motion for summary judgment as to liability. We have appellate jurisdiction over these final orders of the district court. See 28 U.S.C.A. § 1291 (West 1993). The district court had subject matter jurisdiction under 28 U.S.C.A. § 1332 (West 1993) (providing for subject matter jurisdiction based on diversity of citizenship) and under 28 U.S.C.A. § 1331 (West 1993) because the case presented a federal question arising under the Lanham Act, 15 U.S.C.A. § 1125(a) (West Supp.1993).

McFarland was once a child actor in the "Our Gang" series, a popular short subject comedy series shown in movie theaters from the 1920s to the 1940s, thereafter on television, and later revived under the name of the "Little Rascals." In the series, McFarland played a lovable but mischievous urchin under the nickname "Spanky." He filed this action challenging the use, without his authorization, of the name Spanky McFarland by a restaurant located in Ocean Township, New Jersey, owned by Anaconda and operated by Miller. This restaurant also utilized McFarland's image as it appeared in his "Our Gang" days. McFarland contends that the district court erred in granting Miller and Anaconda's motion for summary judgment solely because Hal Roach Studios, Inc. (the "Studio"), the producer of the "Our Gang" movie series, or its successor, was the owner of whatever rights McFarland had to the name "Spanky McFarland" under a 1936 contract between McFarland's parents, acting on his behalf, and the Studio.

Because McFarland died while his appeal was pending, we must decide initially whether a person's right to prevent unauthorized commercial use of a name survives the person's death under New Jersey law. If it does, we must determine whether McFarland received or retained any right to commercial use of the name "Spanky McFarland" that would give him standing to bring an action for unauthorized commercial use of that name. We apply New Jersey law to the question of unauthorized commercial use because the alleged unauthorized use occurred in New Jersey, the parties do not suggest application of the law of any other forum, and our own research indicates a New Jersey court would apply New Jersey law to the question of unauthorized use.

After considering the issues, we conclude that infringement of a person's right to exploit commercially his own name or the name of a character so associated with him that it identifies him in his own right is a cause of action that under New Jersey law survives the death of the person with whom the name has become identified. Therefore, we hold that McFarland's action to prevent unauthorized use of the name "Spanky McFarland" survived his death and passed to his personal representative, Doris McFarland. We also hold that there is evidence on this record which shows that the name Spanky McFarland has become so identified with McFarland that it could be considered his own name or the name of a character so associated with him as to be indistinguishable from him in public perception. Finally, we hold that the district court erred in concluding that the 1936 contract with the studio deprived McFarland of all standing to enforce his right of publicity in the name Spanky McFarland. Thus, if McFarland's personal representatives can demonstrate on remand that the name Spanky McFarland identified George McFarland and not just the little urchin Spanky he portrayed in the movie and television series, McFarland's right of publicity to exploit the name Spanky McFarland is superior to that of Miller and Anaconda. We will, therefore, remand this case to the district court in order to determine whether McFarland is inextricably linked to the name and image of Spanky McFarland.

Our reasons follow.

I.

In 1931, at the age of three, George McFarland joined "Our Gang" (later known as the "Little Rascals"), a theatrical group of mischievous children whose adventures were chronicled in a number of movie short films, known as serials, in the 1920s, 30s, and 40s.^[4] [915] The "Gang" was a creation of the legendary Hollywood producer Hal Roach.

Initially, McFarland was hired to portray an unnamed small child in the group. Before his first appearance, a newspaper reporter dubbed McFarland "Spanky." The producer picked up on this nickname and the "Our Gang" series then used "Spanky" as the name of the character McFarland played. The nickname "Spanky" remained identified with McFarland throughout his movie career. See Leonard Maltin & Richard Bann, The Little Rascals: The Life and Times of Our Gang 118 (1992).

In 1931, McFarland entered into a five-year agreement with the Studio governing his employment ("1931 contract"). Shortly after the 1931 contract was signed, McFarland made his first appearance in the series, entitled "Free Eats." McFarland was a featured performer in his second film in the series, entitled "Spanky." He would eventually appear as Spanky in a total of ninety-five "Our Gang" films from 1937 through 1942.^[5]

In 1936, McFarland's initial contract expired and, through his parents, he entered into a new agreement ("1936 contract") with the Studio. The agreement was similar to those entered into by other studio employees, see Price v. Hal Roach, Studios, Inc., 400 F.Supp. 836, 839-43 (S.D.N.Y.1975) (construing similar contract between comic team of Laurel and Hardy and Studio). It provided McFarland would continue to appear as a member of the Gang in return for $250 a week during filming and $25.00 a week in "suspension time."^[6]

In 1938, the Studio sold the entire "Our Gang" series, directors, writers, talent contracts and all, to Loew's Inc., (a/k/a Metro-Goldwyn-Mayer). McFarland renegotiated his contract in 1938 and remained with the Gang until 1942. M-G-M subsequently assigned the rights to the Little Rascals to King World Productions. In 1987, Turner Entertainment Company purchased M-G-M properties and now jointly licenses Our Gang/Little Rascals merchandise with King World.

Sadly, George McFarland passed away during the pendency of this appeal at the age of sixty-four. At the time of his death, he was still receiving income from the licensing of his name "Spanky" and from various commercial ventures under the name "Spanky McFarland."^[7]

[916] Miller is the principal shareholder and president of Anaconda. Anaconda leases a facility at 821 West Park Avenue in Ocean Township, New Jersey known as "Spanky McFarland's" (the "Restaurant"). Anaconda also holds the liquor license for the establishment.

On July 31, 1989, the restaurant opened for business. In a deposition, Miller admitted he was solely responsible for choosing Spanky McFarland's as the name for his restaurant. He claimed he picked the name "McFarland" because it sounded Irish and "Spanky" was a nickname he once used for his son.^[8] He also admitted he was aware that the restaurant shared the name of an "Our Gang" character. In the restaurant, Miller has over 1,000 photos of movie characters including some of the "Little Rascals." The restaurant also displays two four-by-six-foot murals of "Our Gang." They include McFarland. Furthermore, the establishment's menu makes numerous references to the characters.^[9] McFarland never consented to the restaurant's use of his name or likeness.

On September 17, 1990, McFarland began this action for injunctive relief and damages on claims based upon the right of publicity; common law invasion of privacy; unjust enrichment; the Lanham Act, 15 U.S.C.A. § 1125 (West 1982 & Supp.1993); and the New Jersey Consumer Fraud Act, N.J.Stat. Ann. § 56:8-1 to 2 (West 1979). After limited discovery, the parties filed cross-motions for summary judgment. On January 6, 1992, the district court denied McFarland's motion and granted Miller's on all counts. It reasoned whatever right George McFarland ever had to exploit the name Spanky McFarland passed to the Studio in 1936.

An analysis of the contract ... clearly indicates that plaintiff has no right to the character of Spanky McFarland other than the right to use the nickname Spanky.... The style may be somewhat archaic, but the contract's import is clear. By executing it, plaintiff relinquished all rights he had to the name and image of the Spanky character.

McFarland v. Miller, No. 90-3779, slip op. at 3-4, 1992 WL 4967, *2, 1992 U.S. Dist. LEXIS 150, *4-5 (D.N.J.1992).

McFarland made a motion for reconsideration and included with it as exhibits a number of subsequent contracts between himself and other parties in an effort to demonstrate that the parties to the 1936 contract understood it differently than the court. The district court denied the motion for reconsideration on March 2, 1992. It refused to consider the additional material because McFarland did not comply with district court General Rule 12I. That local rule requires all motions for reconsideration to be accompanied by a memo setting forth the items and principles the parties believe the court has overlooked.

On March 30, 1992, McFarland filed a timely notice of appeal challenging both the grant of summary judgment against him and the district court's denial of his motion for summary judgment.^[10]

[917] II.

In reviewing an order granting or denying a motion for summary judgment, "the appellate court is required to apply the same test the district court should have utilized...." Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). Generally, an order denying a motion for summary judgment is not appealable; however, it becomes so "when accompanied by an order granting a cross motion for summary judgment." Stroehmann Bakeries, Inc. v. Local 776, Int'l Bhd. of Teamsters, 969 F.2d 1436, 1440 (3d Cir.) (citation omitted), cert. denied, ___ U.S. ___, 113 S.Ct. 660, 121 L.Ed.2d 585 (1992). This Court exercises plenary review over the grant or denial of such motions and "appl[ies] the same test the district court applied: (1) are there no material facts in dispute; and (2) is one party entitled to judgment as a matter of law?" Id. at 1441; see also Mellon Bank Corp. v. First Union Real Estate Equity & Mortgage Inv., 951 F.2d 1399, 1404 (3d Cir.1991). These inquiries are designed to determine whether a "genuine issue" of "material fact" exists. Fed.R.Civ.P. 56(c). A genuine issue is defined as an issue on which "a reasonable [fact finder] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

A federal court sitting in diversity is bound to apply the choice of law rules of the forum state. Van Dusen v. Barrack, 376 U.S. 612, 644-46, 84 S.Ct. 805, 823-24, 11 L.Ed.2d 945 (1964); Shields v. Consolidated Rail Corp., 810 F.2d 397, 399 (3d Cir.1987). New Jersey applies a governmental interest test to resolve choice of law issues. Veazey v. Doremus, 103 N.J. 244, 510 A.2d 1187, 1189 (1986). We have held the governmental interest test involves a two-part analysis. Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 32 (3d Cir.1975). "The court determines first the governmental policies evidenced by the laws of the related jurisdiction and second the factual contacts between the parties and each related jurisdiction." Id. This approach is primarily concerned with the "qualitative nature of the contacts" rather than the number of them because New Jersey places primary emphasis on those facts which relate to the governmental interest. Id.

In New Jersey, McFarland's claim to a right of publicity sounds in tort. To the extent McFarland seeks to recover in tort for injury in the state of New Jersey, we will apply New Jersey law.

III.

Lamentably, as mentioned supra, George McFarland passed away while we entertained this appeal. We are thus first required to consider whether an infringement of a decedent's right of publicity in his name or image creates a cause of action that survives his death under New Jersey law so that the personal representative of a public figure may assert or continue an action to enforce that right.

At first glance, it would seem that we have before us the same issue that was decided in Estate of Presley v. Russen, 513 F.Supp. 1339 (D.N.J.1981). There, the court concluded that the common law right of publicity is descendible under New Jersey law. Presley, 513 F.Supp. at 1355. The issue in Presley was whether the estate of Elvis Presley could assert the late singer's right of publicity in New Jersey to enjoin the performance of a stage show in New Jersey employing Presley imitators. Id. Our case presents a slightly different aspect of that issue because the infringement here took place during McFarland's lifetime.

The New Jersey statute governing the survival of civil actions provides in relevant part,

Executors and administrators may have an action for any trespass done to the person or property, real or personal, of their testator or intestate against the trespasser, and recover their damages as their testator or intestate would have had if he was living.

N.J.Stat.Ann. § 2A:15-3 (West 1987). In New Jersey, the right of publicity is a property right. Presley, 513 F.Supp. at 1355; Canessa v. J.I. Kislak, Inc., 235 A.2d 62, 76 [918] (N.J.Super.1967); cf. Piscopo v. Piscopo, 232 N.J.Super. 559, 557 A.2d 1040, 1042-43 (celebrity good will is marital property), cert. denied, 117 N.J. 156, 564 A.2d 875 (1989). But see Palmer v. Schonhorn Enters., Inc., 96 N.J.Super. 72, 232 A.2d 458 (1967) (failing to characterize right as one of property). Certainly if McFarland had a proprietary interest in the name Spanky McFarland, an action for its misappropriation would survive and give McFarland's personal representative the same right to recover damages and prevent continuing interference with that right that McFarland had while living.

Two New Jersey defamation cases support this conclusion. In Fasching v. Kallinger, 211 N.J.Super. 26, 510 A.2d 694, 700-01 (1986), the court had held that neither the dead nor their relatives had any cause of action for defamation because defamation inflicts a harm that is personal to the individual. In Canino v. New York News, Inc., 96 N.J. 189, 475 A.2d 528 (1984), however, the New Jersey Supreme Court read that state's act to permit a cause of action for defamation where the claim arose out of acts that occurred before the death of the person defamed. Rejecting the common law maxim actio personalis moritur cum persona,^[11] the court held that where the cause of action accrues during the lifetime of the individual, the personal representative could continue the defamation action. Id. at 529-32.

We think McFarland's action is a trespass within the ambit of N.J.Stat.Ann. § 2A:15-3's abrogation of the common law rule against survival. If the defamation action survives, the publicity action does so á fortiori because the right of publicity has become largely proprietary, not personal as in defamation. McFarland's claims did not abate on his death and his personal representative has the right to continue this action. We must therefore consider it on the merits.

IV.

The district court held, in essence, that George McFarland had an extremely limited interest in exploitation of his childhood image or the name Spanky McFarland because Spanky was merely a character whom McFarland was employed to play. That holding naturally implied that the character belonged to some entity other than McFarland. That other party, the court concluded, was the Studio or its successors in interest. The court based that holding on its construction of the 1936 contract. Specifically, it determined that the 1936 contract did not show that the parties believed McFarland's name was "Spanky," nor did it convey to McFarland any right to exploit either the name and image of the character Spanky, aside from using the name in personal appearances, or the right to prevent others from doing so. The law in this area has been likened to a "haystack in a hurricane." See Ettore v. Philco Television Broadcasting Corp., 229 F.2d 481, 485 (3d Cir.), cert. denied, 351 U.S. 926, 76 S.Ct. 783, 100 L.Ed. 1456 (1956). Still, we think the district court grasped the wrong bundle when it concluded that McFarland had no interest in the exploitation of the image or name Spanky McFarland.

The "right of publicity" "signif[ies] the right of an individual, especially a public figure or a celebrity, to control the commercial value and exploitation of his name and picture or likeness and to prevent others from unfairly appropriating this value for commercial benefit." Presley, 513 F.Supp. at 1353 (footnote omitted); see also Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 573, 97 S.Ct. 2849, 2856, 53 L.Ed.2d 965 (1977) (identifying right of publicity as proprietary interest in performer's actions); Haelan Lab., Inc. v. Topps Chewing Gum, Inc., 202 F.2d 866, 868 (2d Cir.) (recognizing common law right in publicity), cert. denied, 346 U.S. 816, 74 S.Ct. 26, 98 L.Ed. 343 (1953); Lugosi v. Universal Pictures, 25 Cal.3d 813, 160 Cal.Rptr. 323, 329, 603 P.2d 425, 431 (1979) (in banc) ("The so-called right of publicity means in essence that the reaction of the public to name and likeness, which may be fortuitous or which may be managed or planned, endows the name and likeness of the person involved with commercially exploitable opportunities."); Sheldon W. Halpern, The Right of Publicity, Commercial Exploitation [919] of the Associative Value of Personality, 39 Vand.L.Rev. 1199, 1201 (1986).

Federal courts first recognized the right of publicity in Haelan Laboratories. There, with words still trenchant today, the court observed "that many prominent persons (especially actors and ball players), far from having their feelings bruised through public exposure of their likenesses, would feel sorely deprived if they no longer received money for authorizing advertisements, popularizing their countenances, displayed in newspapers, magazines, buses, trains and subways." Haelan Lab., 202 F.2d at 868. The New Jersey courts have recognized a similar right of exploitation.

[A]lthough the publication of biographical data of a well known figure does not per se constitute an invasion of privacy, the use of the same data for the purpose of capitalizing upon the name by using it in connection with a commercial project other than the dissemination of news or articles or biographies does. The names of plaintiffs have become internationally famous, undoubtedly by reason of talent as well as hard work in perfecting it. This is probably true in the cases of most so-called celebrities.... Perhaps the basic and underlying theory is that a person has the right to enjoy the fruits of his own industry free from unjustified interference. It is unfair that one should be permitted to commercialize or exploit or capitalize upon another's name, reputation or accomplishments merely because the owner's accomplishments have been highly publicized.

Palmer, 232 A.2d at 462 (citations omitted) (granting recovery against unauthorized use of professional golfers' names and vital statistics in golf game).^[12] A famous individual's name, likeness, and endorsement carry value and an unauthorized use harms the person both by diluting the value of the name and depriving that individual of compensation. Unauthorized use of an individual's name is nothing short of "an appropriation of the attributes of one's identity." Motschenbacher v. R.J. Reynolds Tobacco Co., 498 F.2d 821, 824 (9th Cir.1974).

The district court held, in effect, that an actor who portrays a character in such a manner that the character becomes inextricably intertwined with the individual, to such an extent that the individual comes to utilize the character's name as his own, has no proprietary interest in the exploitation of the name or image. We disagree. At its heart, the value of the right of publicity is associational. People link the person with the items the person endorses and, if that person is famous, that link has value. Celebrities' names and likenesses "are things of value. Defendant has made them so, for it has taken them for its own commercial benefit." Canessa, 235 A.2d at 76.

Other courts have concluded that the value of the right of publicity lies in the association between celebrity and product. For example, in White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 2443, 124 L.Ed.2d 660 (1993), the United States Court of Appeals for the Ninth Circuit considered whether an appliance manufacturer that showed a nattily adorned, unnamed robot standing in front of a board of letters infringed on the publicity rights of Wheel of Fortune persona Vanna White. Id. at 1396. White argued on appeal because the robot resembled her, albeit farcically, and was obviously used to invoke images of her, that her right of publicity had been infringed. The court of appeals agreed and reversed an order granting summary judgment to Samsung. Id. at 1399. Although White did not own the show that created the association, the court held that she possessed the image invoked and this raised a triable issue as to infringement. Id.; cf. White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, 1515 (9th Cir.1993) (Kozinski, J., dissenting from denial of petition for rehearing in banc) ("It's the `Wheel of Fortune' set, not the robot's face or [920] dress or jewelry that evokes White's image.").

Another somewhat offensive example is seen in Carson v. Here's Johnny Portable Toilets, 698 F.2d 831 (6th Cir.1983). There, late-night entertainer Johnny Carson sought a remedy for unauthorized use of the introductory phrase "Here's Johnny" in the marketing of a portable toilet. This phrase was used to announce his entrance on the Tonight Show even though Carson himself never actually used the phrase. Rejecting the contention that a common law right of publicity does not extend beyond an individual's actual name and likeness, the United States Court of Appeals for the Sixth Circuit stated:

It is our view that, under the existing authorities, a celebrity's legal right of publicity is invaded whenever his identity is intentionally appropriated for commercial purposes.... It is not fatal to appellant's claim that appellee did not use his "name." Indeed, there would have been no violation of his right of publicity even if appellee had used his name, such as "J. William Carson Portable Toilet" or the "John William Carson Portable Toilet" or the "J.W. Carson Portable Toilet." The reason is that, though literally using appellant's "name," the appellee would not have appropriated Carson's identity as a celebrity. Here there was an appropriation of Carson's identity without using his "name."

Id. at 837.

Both of these decisions recognize that without identification, the right of publicity is worthless. Here, we are presented with two subtly different questions: Was there an identification of George McFarland with the character Spanky and, if so, does a right of publicity follow and vest in the performer with whom the character has become identified?

The district court saw this case as one in which George McFarland had been an actor playing the role of Spanky in the course of an employment relationship with the Studio that produced "Our Gang."^[13] Where an actor plays a well-defined part which has not become inextricably identified with his own person, it has been suggested the actor receives no right of exploitation in his portrayal of the character. See Lugosi, 160 Cal.Rptr. at 330, 603 P.2d at 432 (Mosk, J., concurring) ("Merely playing a role [such as Bela Lugosi as Dracula] ... creates no inheritable property right in an actor, absent a contract so providing."). But see id. at 344, 603 P.2d at 444 (Bird, C.J., dissenting) ("Substantial publicity value exists in the likeness of [famous actors] in their character roles. The professional and economic interests in controlling the commercial exploitation of their likenesses while portraying these characters are identical to their interest in controlling the use of their own `natural' likeness.").^[14]

In his concurrence in Lugosi, Justice Mosk recognized another distinct situation where the actor could obtain proprietary interests in a screen persona: "An original creation of a fictional figure played exclusively by its creator may well be protectible." Id. at 330, 603 P.2d at 432 (Mosk, J., concurring).^[15] We are inclined to agree, but we think the difference between the two situations Justice Mosk contrasts is not wholly dependent on originality as his concurrence suggests. While originality plays a role, a court should also consider the association with the real life actor. Where an actor's screen persona becomes so associated with him that it becomes inseparable from the actor's own public image, the actor obtains an interest in the image which gives him standing to prevent mere interlopers from using it without authority.^[16] This [921] principle may be seen in a number of other cases. See, e.g., Allen v. Men's World Outlet, Inc., 679 F.Supp. 360, 362, 371 (S.D.N.Y. 1988) (enjoining look-alike's misappropriation of "schlemiel" persona of Woody Allen cultivated in the film Annie Hall); Groucho Marx Prod. Inc. v. Day & Night Co., 523 F.Supp. 485, 491 (S.D.N.Y.1981) (Marx Brothers had protected right in on-screen images and actions), rev'd on other grounds, 689 F.2d 317 (2d Cir.1982); Price v. Hal Roach Studios, Inc., 400 F.Supp. 836, 843-44 (S.D.N.Y.1975) (comic duo Stan Laurel and Oliver Hardy had common law right of publicity in on-screen images). Much as the court observed in Price, "we deal here with actors portraying themselves and developing their own characters...." Price, 400 F.Supp. at 845. A misappropriation took place in Allen and Price because the performers were identified with the image developed on-screen. Thus, the actor who developed the image had the right to exploit it as superior to third parties which had nothing to do with the actor or the character identified with the actor.

In the current posture of this case, we do not have to decide whether Spanky McFarland was truly identical to George McFarland or whether Spanky was merely a character created by Hal Roach. Likewise, we do not have to determine whether McFarland had done a metamorphosis into Spanky McFarland over the years before or after the 1936 contract. The successor to the Studio is not before us. Therefore, we need not decide who would prevail in a contest between that entity and McFarland's estate. We hold only that there exists at least a triable issue of fact as to whether McFarland had become so inextricably identified with Spanky McFarland that McFarland's own identity would be invoked by the name Spanky. As the Wisconsin Supreme Court stated in Hirsch v. S.C. Johnson & Son, Inc., 90 Wis.2d 379, 280 N.W.2d 129, 137 (1979), "[a]ll that is required is that the name clearly identify the wronged person." Id. (holding that "Crazylegs Shaving Gel" infringes on the right of publicity of football great Elroy "Crazylegs" Hirsch). On the record now before us, there is evidence of identification between the name Spanky and the actor McFarland sufficient to show that he, and now his estate, have a right of publicity superior to that of the interloper, Miller, in exploiting the name and image of Spanky McFarland. Accordingly, summary judgment was inappropriate. While others may be able to claim that they were entirely responsible for the value of the name and image or, by assignment, own the right to exploit the publicity value of the name and image of Spanky McFarland, Miller has no such claim or defense. George McFarland has alleged facts sufficient to support a right superior to that of Miller or Anaconda to exploit the items that invoke his own image.

This result seems to us consistent with the New Jersey courts' view of the right of publicity. As far back as 1909, New Jersey recognized an individual's proprietary interest in the use of his or her name and appearance to endorse or sell a product. See Edison v. Edison Polyform Mfg. Co., 73 N.J.Eq. 136, 67 A. 392 (1909) (enjoining a third party from using the name or likeness of inventor Thomas Edison to promote its own products). We recognized that principle of New Jersey law in Ettore v. Philco Television Broadcasting Corp., 229 F.2d 481, 491-92 (3d Cir.), cert. denied, 351 U.S. 926, 76 S.Ct. 783, 100 L.Ed. 1456 (1956). In Palmer, the New Jersey Superior Court had before it an unauthorized use of certain professional golfers' names and biographical information. It held unauthorized use violated the athletes' rights to exploit their own image. See Palmer, 232 A.2d at 462 ("[T]he basic and underlying theory is that a person has the right to enjoy the fruits of his own industry free from unjustified interference."). In Canessa v. J.I. Kislak, Inc., 97 N.J.Super. 327, 235 A.2d 62 (1967), the court stated:

[922] Entirely apart, however, from the metaphysical niceties, the reality of a case such as we have here is, in the court's opinion, simply this: plaintiffs' names and likenesses belong to them. As such they are property. They are things of value. Defendant has made them so, for it has taken them for its own commercial benefit.... New Jersey has always enjoined the use of plaintiff's likeness and name on the specific basis that it was a protected property right. It is as much a property right after its wrongful use by defendant as it might be before such use.

Canessa, 235 A.2d at 76 (citations omitted).

When Miller appropriated the name Spanky McFarland and McFarland's likeness in pursuit of a commercial goal, McFarland became entitled to the same protection the New Jersey courts gave in Edison, Canessa, and Palmer. In Palmer the court observed, "It is unfair that one should be permitted to commercialize or exploit or capitalize upon another's name, reputation or accomplishments merely because the owner's accomplishments have become highly publicized." Palmer, 232 A.2d at 462. In taking McFarland's name, Miller unfairly sought to capitalize on its value. The very act of taking it for that purpose demonstrates the name itself has worth. See, e.g., Canessa, 235 A.2d at 75; see also Midler v. Ford Motor Co., 849 F.2d 460, 463 (9th Cir.1988). The right to publicity protects the value a performer's identity has because that identity has become entwined in the public mind with the name of the person it identifies. It is this value that Miller sought to use without authority or right. McFarland, not Miller, crafted the irrepressible persona of "Our Gang"'s Spanky. Spanky's image is not Miller's to exploit or convey. If McFarland can demonstrate his identification with the name "Spanky," we do not think New Jersey law would permit Miller to appropriate the nickname Spanky for his own commercial advantage without McFarland's consent, in the absence of a valid license or assignment from the true owner. See Canessa, 235 A.2d at 76 ("`If there is value in it, sufficient to excite the cupidity of another, why is it not the property of him who gives it the value and from whom the value springs?'") (quoting Munden v. Harris, 153 Mo.App. 652, 134 S.W. 1076, 1078 (Mo.Sup.Ct.1911)). The value of that right is what the market would pay to receive such an endorsement. Midler, 849 F.2d at 463.

The evidence Miller presented concerning his disclosure of his intended use to the successor to the Studio's rights on the 1936 contract and the absence of objection on its part do not help him. We do not believe, under the record presented on this motion for summary judgment, that the 1936 contract as written could divest McFarland of all proprietary interest in the exploitation of his own name, assuming McFarland establishes the connection between the name utilized by Miller and McFarland as an individual. Paragraph 13 of the 1936 contract clearly contemplates a transfer of the right of publicity to the name of McFarland, but this transfer is restricted to the duration of the contract plus one year. See App. at A-143. In addition, Paragraphs 19 and 20 transfer certain rights regarding the use of the nickname and image of the character "Spanky," but the restaurant, by using the name "Spanky McFarland's," appears to be commercially exploiting the image not only of the character "Spanky" but of the actor known through most of his life as George "Spanky" McFarland. Nothing on this record suggests Miller has any rights to the name "Spanky McFarland" other than an allusion that McFarland's right of publicity in his own name has fallen into the public domain, a contention we reject. Thus, we conclude that if McFarland establishes a personal connection with the name Miller sought to profit from, Miller is liable for that misappropriation. The amount of damages, however, may be influenced by the quantum of the right retained by McFarland.

Accordingly, we hold that McFarland has set out a claim that raises a triable issue under New Jersey law as to whether he retains a proprietary interest in the name Spanky McFarland.

Miller's reliance on the 1936 contract is otherwise misplaced. It defined, inter alia, the relationship between McFarland and a third party, the Studio. We have held, supra, that by virtue of his actions while in the employ of the Studio McFarland generated a proprietary interest in his name and [923] image. The 1936 contract does not seek to convey such publicity rights in perpetuity.^[17] Thus, McFarland has alleged facts that would support rights superior to Miller, and the 1936 agreement is ineffective in providing Miller with a defense to McFarland's claim of infringement.^[18]

V.

In summary, we hold that in New Jersey, the right of publicity is a proprietary right based on the identity of a character or defining trait that becomes associated with a person when he gains notoriety or fame. The right to exploit the value of that notoriety or fame belongs to the individual with whom it is associated and a cause of action for its infringement that took place during the lifetime of the individual with whom the fame is associated descends to the personal representative of the holder in New Jersey. We conclude that by virtue of his on-screen portrayal of a cherubic boy in the "Our Gang" comedy series, McFarland developed an exploitable interest to which he may lay claim if he can persuade a fact finder that he has become identified with the name Spanky. There is no individual or entity presently before this court that has superior claim to the publicity value of the nickname Spanky. Accordingly, we will remand to the district court with instruction to vacate the summary judgment entered in favor of Miller and Anaconda and for further proceedings consistent with this opinion.

[1] Hon. John P. Fullam, District Judge of the United States District Court for the Eastern District of Pennsylvania, sitting by designation.

[2] During the pendency of this appeal, the initial plaintiff, George McFarland, passed away. Pursuant to Federal Rule of Appellate Procedure 43(a), McFarland's wife and personal representative, Doris, has been substituted as a party.

[3] The caption of this case indicates that the appellees are Miller and "Andaconda, Inc." However, in the answer to the complaint, as well as the bankruptcy order lifting the automatic stay and permitting this appeal to proceed, "Andaconda" is referred to as "Anaconda." We will call the appellee "Anaconda" in this opinion.

[4] The "Our Gang" series ultimately spanned 221 films and three decades. For the benefit of later generations, we quote the following description of its theme: "The series' foundation was pitting scruffy, mischievous have-not kids against pretentious rich kids, sissy kids, and in general a hardened, rule-governed, class-conscious adult world that would stand between them and the only thing they were interested in — making their own fun." Leonard Maltin & Richard Bann, The Little Rascals: The Life and Times of Our Gang 4 (1992). Usually light hearted, the "Our Gang" series was quite successful and received an Academy Award as the best short subject film of 1936 for the film Bored of Education. Id. at 5.

[5] Although McFarland attained his greatest fame as a member of the Gang, he also appeared in minor roles in a number of full-length feature films such as M-G-M's Day of Reckoning (1933), Paramount's Miss Fane's Baby is Stolen (1934), RKO-Radio's Kentucky Kernels (1935) (playing a character named "Spanky"), M-G-M's O'Shaughnessy's Boy (1935) (also starring Jackie Cooper and Wallace Beery), Paramount's early Technicolor western Trail of the Lonesome Pine (1936), Warner Bros. Variety Show (1937) (with Dick Powell), and RKO's Peck's Bad Boy with the Circus (1938). See Maltin, supra note 3 at 262. Apparently McFarland's name only appeared once as "George McFarland" in the credits for Variety Show. In all other appearances, he was called Spanky McFarland. Id.

After leaving the Gang, McFarland had a small part in Republic's Johnny Doughboy (1943) with fellow former Gang member Carl "Alfalfa" Switzer.

[6] While $250.00 a week may indeed have been a handsome sum in 1936, we note that the "Our Gang" dog, Pete, had been signed to a contract in 1927 that ultimately paid his owners $225.00 a week for Pete's services. Maltin, supra note 3 at 282.

[7] McFarland admitted in deposition that there was a time when he attempted to distance himself from his screen persona and identified himself simply as George McFarland in his business activities. He had, however, usually appeared as Spanky McFarland. Included in the appearances as Spanky were a 1958 stint hosting an "Our Gang" revival in Tulsa, Oklahoma, a 1984 appearance at the Academy Awards where he presented a special Oscar to Hal Roach, and an April 22, 1993, appearance on the television series Cheers.

As Spanky, McFarland also endorsed the products of a boot company, promoted Republic studios, participated in celebrity events, performed at college campuses, signed autographs at shows and derived income from "Spanky McFarland's Bar-B-Que" and "Spanky's Clubhouse," two Oklahoma City, Oklahoma, restaurants.

McFarland actively protected the right to license his name. We are aware of at least four other actions where he sought a judicial remedy for misappropriation of his name and likeness. See McFarland v. E & K Corp., Civ. No. 4-89-727, 1991 WL 13728, 18 U.S.P.Q.2d 1246 (D.Minn.1991) (settled and dismissed); McFarland v. Eklund Rascals, Inc. d/b/a/ Spanky's Famous Deli-Best of Medford, et al., CV-91-2895 (E.D.N.Y.) (granting injunctive relief and damages, resolved by a consent order and dismissed); McFarland v. Falango, CV-92-2177 (E.D.N.Y.) (pending action to enjoin the operation of an establishment named "Spanky's Famous Deli"); McFarland v. Speakeasy of Collier County, Inc., (M.D.Fla.) (pending action to enjoin the operation of an establishment named "Spanky's Speakeasy").

[8] Miller stated in his deposition that he commissioned a copyright and trademark search that yielded no conflict. He also contacted King World, the current owner of the "Our Gang" series, at some later date to confirm the absence of a copyright on the name.

[9] At Anaconda's restaurant, one can choose among "Spanky's Steak Sandwich," "Rascal's Choice," "Buckweet's Basket," and "Alfalfa's Sprout Burger."

[10] Between the filing of this appeal and oral argument, Anaconda filed a bankruptcy petition. As a result, this case was stayed for a time, but McFarland sought and received relief from the stay by order of the bankruptcy court dated December 15, 1992, permitting the appeal to proceed. In re Anaconda, Inc., No. 92-35921 (Bankr.N.J. Dec. 15, 1992).

[11] The Latin translates "a personal action dies with the person."

[12] In New Jersey, to sustain an action claiming misappropriation of the image of another, a commercial purpose must be present. Tellado v. Time-Life Books, Inc., 643 F.Supp. 904, 909 (D.N.J.1986); Bisbee v. John C. Conover Agency, 186 N.J.Super. 335, 452 A.2d 689, 693 (1982). In the instant case, it is undisputed that Miller utilized McFarland's nickname "Spanky" in a commercial manner.

[13] It is for this reason that the district court relied on the 1936 contract to define the rights of the parties.

[14] While this issue would have controlled Lugosi, the court instead held that any exploitable proprietary interest Bela Lugosi had in his portrayal of Count Dracula did not descend to his personal representative.

[15] Justice Mosk contrasted that case with Gregory Peck's role as General MacArthur, George C. Scott's role as General Patton, James Whitmore playing Will Rogers and Charlton Heston playing Moses, as well as Bela Lugosi as Dracula. Justice Mosk believed these actors had no proprietary interest in their roles.

[16] We think the case in which an actor becomes known for a single role such as Batman is different. See Carlos V. Lozano, West Loses Lawsuit Over Batman TV Commercial, L.A. Times, Jan. 18, 1990, at B3 (Actor Adam West failing in bid to stop retail chain from using a Batman in a commercial that West argued invoked his portrayal). West's association with the role of Batman or Johnny Weismuller's with the role of Tarzan is different than McFarland's identification with Spanky. West's identity did not merge into Batman and Weismuller did not become indistinguishable from Tarzan. McFarland, like Groucho Marx, may have become indistinguishable in the public's eye from his stage persona of Spanky.

[17] In fact, paragraph thirteen of the agreement makes a limited conveyance to the Studio of the "right to make use of the name of McFARLAND, for advertising, commercial and/or publicity purposes, as well as the sole and exclusive right to make use of and distribute his pictures, photographs and/or other reproductions of his physical likeness for such purposes" for only the term of the agreement plus one year. App. at A-143.

[18] We will, however, affirm the district court's grant of summary judgment for Miller on McFarland's claim for an invasion of his right of privacy, count one of his complaint. In his complaint, McFarland alleges that the restaurant's use of his name caused him "deprivation of property, lost earnings, humiliation, embarrassment, emotional and mental distress, pain and suffering." App. at A-12. The first two elements are properly considered under the right of publicity claim and McFarland has not presented evidence of humiliation, embarrassment, or mental distress sufficient to support a claim of invasion of privacy.With respect to McFarland's claims under the Lanham Act, the New Jersey Consumer Fraud Act and unjust enrichment, it follows from our holding on the right of publicity that the district court also erred in granting summary judgment for Miller on these claims. On them, there also remain disputed material facts. Accordingly, McFarland's motion for summary judgment was properly denied.

[441] Jerry Cohen, Boston, Mass., with whom M. Lawrence Oliverio, Quincy, Mass., Mark A. Fischer, and Cohen & Burg, Boston, Mass., were on brief, for defendants, appellants.

Jules D. Zalon, Orange, N.J., with whom David J. O'Driscoll, Orange, N.J., was on brief, for plaintiffs, appellees.

Before COFFIN and BOWNES, Circuit Judges, and WEIGEL,^[1] Senior District Judge.

WEIGEL, Senior District Judge.

This is an appeal from a preliminary injunction prohibiting distribution of posters depicting certain popular music performers.^[2]

Plaintiffs Bi-Rite Enterprises Inc. (Bi-Rite), an Illinois corporation, and Artemis, Inc. (Artemis), a Connecticut corporation, are manufacturers and distributors of novelty merchandise. Their wares include posters of British popular music performers from whom they hold exclusive licenses.

There are also fourteen individual plaintiffs, all residents of Great Britain. Each is a member of one or another of the popular musical groups known as Judas Priest, Duran Duran, and Iron Maiden. The groups license commercial exploitation of their names and likenesses through their United States merchandizing representative, the Great Southern Company, Inc., a Georgia corporation, which is not a party here.

The defendants, Bruce Miner and Bruce Miner Co., Inc., a Massachusetts corporation, are in the business of distributing posters of popular music performers. Neither the defendants nor the European manufacturers from whom they purchase posters hold licenses from the depicted performers. Defendants claim that the posters they distribute were made from publicity photographs legally purchased by the European manufacturers.

The preliminary injunction prohibits defendants from distributing posters depicting any of the performers from whom Bi-Rite or Artemis holds an exclusive license for posters. It also prohibits distribution [442] of posters depicting the individual plaintiffs.

The sole question on appeal is whether, under Massachusetts law, rights relating to commercial exploitation of a person's name or likeness are governed by the law of the person's domicile or by that of the residence of the person's exclusive licensee or merchandizing representative. The law of Great Britain does not recognize a right to control commercial exploitation of personal names or likenesses. The law of the American jurisdictions here involved does recognize that right. The district court applied the law of the American jurisdictions.

We affirm.

I.

American jurisdictions have recently recognized the right of well known individuals to control commercial exploitation of their names and likenesses. Called "the right of publicity," Haelan Laboratories v. Topps Chewing Gum, 202 F.2d 866, 868 (2d Cir.1953), or the tort of "appropriation" of name or likeness, Prosser and Keeton on The Law of Torts (5th ed. 1984) at 851, this right has been recognized in some form by virtually all states. See id. at 850-51. As a commercial, rather than a personal right, it is fully assignable.

[T]he effect ... is to recognize or create an exclusive right in the individual plaintiff to a species of trade name, his own, and a kind of trade mark in his likeness.... Once protected by law, it is a right of value upon which the plaintiff can capitalize by selling licenses.

Prosser and Keeton on The Law of Torts (5th ed. 1984) at 854.

Great Britain does not recognize a right of publicity. See Tolley v. Fry, 1 K.B. 467 (1930). Consequently, the choice between United States and British law is determinative in this case.

II.

When a federal court exercises pendent jurisdiction over state law claims, as here, it must apply the substantive law of the state in which it sits. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966) (citing Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). This includes the forum state's choice of law rules. Klaxon v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), reaffirmed, Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975). Thus, we must determine what law the Massachusetts courts would apply.

As in most American jurisdictions, Massachusetts' choice of law rules are in transition. The state has turned away from the rigid, single-factor analysis associated with the first Restatement of Conflict of Laws (1934) in favor of the more flexible, multiple-factor, "interest analysis" or "most significant relationship" analysis exemplified by the Restatement (Second) of Conflict of Laws (1971). Compare Cameron v. Gunstock Acres, Inc., 370 Mass. 378, 381-82, 348 N.E.2d 791, 793 (1976) (applying single-factor test) with Choate, Hall & Stewart v. SCA Servs., Inc., 378 Mass. 535, 541, 392 N.E.2d 1045, 1048-49 (1979) (announcing "more functional" approach). Under the older approach, courts determined which jurisdiction's law governed by categorizing an action (as a tort, contract, or property dispute, for example) and then looking to a single connecting factor (such as place of injury, place of agreement, or situs of property).^[3]

[443] Massachusetts' first decisive step toward a modern approach to choice of law was its decision in Pevoski v. Pevoski, 371 Mass. 358, 358 N.E.2d 416 (1976), a tort action in which the Supreme Judicial Court rejected a single-factor, lex locus delicti test. The court stated, "[w]e agree with the conflicts approach suggested by" Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S. 743, 191 N.E.2d 279 (1963), a case which explicitly weighed the policy interests underlying laws of the various states whose citizens were involved. Pevoski, 371 Mass. at 361, 358 N.E.2d at 418. In Choate, Hall & Stewart, supra, the Supreme Judicial Court amplified its commitment to such an analysis, even though the outcome of the contract action before the court did not depend upon application of an interest analysis. The court noted:

[A]lmost all States have replaced place-of-making or other one-factor tests with a more functional approach. See Breslin v. Liberty Mut. Ins. Co., 134 N.J.Super. 357, 341 A.2d 342 (1975) ("interest" analysis); Restatement (Second) of Conflict of Laws § 188 (1971) ("most significant relationship"); R. Leflar, American Conflicts Law § 150 (3d ed. 1977). Similar ideas have been at work in our recent decisions transforming the rule about applying to a tort the law of the place of the happening.

Choate, Hall & Stewart, 378 Mass. at 541, 392 N.E.2d at 1049.

Most recently, in Bushkin Associates, Inc. v. Raytheon Co., 393 Mass. 622, 473 N.E.2d 662 (1985), responding to questions we certified, the Supreme Judicial Court reaffirmed its adherence to the "more functional approach" of Choate, Hall & Stewart. Declining to "tie Massachusetts conflicts law to any specific choice-of-law doctrine", Bushkin, at 668, the court made clear that the relevant factors for consideration are those set forth in the Restatement (Second) of Conflict of Laws § 6(2), and in R.A. Leflar, American Conflicts Law (3d ed. 1977). We are, therefore, satisfied that they would reach the same result as we do.^[4]

III.

In light of Massachusetts' adoption of modern choice of law rules, we reject at the outset defendants' contention that a court need only consider the domicile of the person whose name or likeness is being exploited to determine the law governing this action. To focus solely on that domicile would disregard the development of Massachusetts law which now calls for the "more functional approach" set forth in Bushkin, supra. Under such an approach, domicile is significant only to the extent that it implicates interests that are cognizable under an "interest" or "most significant relationship" analysis.^[5]

The Second Restatement of Conflict of Laws, section 6(2) sets forth the perimeters for the kind of analysis the Massachusetts courts would employ:

[444] (2) When there is no [contrary statutory] directive, the factors relevant to the choice of applicable rule of law include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

Restatement (Second) Conflicts of Laws (1971), quoted in Bushkin, supra, at 669.

We begin our choice of law analysis with the first of the factors listed in section 6(2) of the Second Restatement — here, the needs of the international system. In the popular music industry, trade between Great Britain and the United States is pervasive and much prized. It is nurtured in part by the policy in both countries of affording the same commercial rights to foreigners as to nationals. Moreover, it might very well be unconstitutional for an American jurisdiction to extend lesser contractual rights to foreign performers in this country than to their American counterparts. Cf. Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220 (1886).

Defendants urge that the law of Great Britain should be applied to the American merchandising activities of British performers. To do so would extend lesser commercial rights to British than to American performers. A British performer could not enter into an exclusive licensing agreement with an American merchandiser while an American performer could. Such a result cannot be squared with the needs of the international system in this area.

Turning next to the relevant policies of the forum, it is clear that Massachusetts recognizes a right of publicity. Mass.Gen. Laws ch. 214, § 3A; see also Tropeano v. Atlantic Monthly Co., 379 Mass. 745, 400 N.E.2d 847 (1980). However, since none of the plaintiffs is domiciled there, Massachusetts courts, in the interest of comity, would look to the laws of other jurisdictions to determine whether plaintiffs can validly claim a right of publicity. This calls for determining the jurisdictional law which Massachusetts would apply.

Making that determination calls, in turn, for consideration of the policy interests underlying the relevant rules of Illinois, Connecticut, Georgia and Great Britain — i.e. the four jurisdictions involved in this case.

Although Illinois, Connecticut and Georgia may differ in the extent to which they recognize a "right of publicity," they can be considered together for purposes of choice of law. They share the basic policy interests underlying the right of publicity as recognized in most American jurisdictions:

"The rationale for [protecting the right of publicity] is the straight-forward one of preventing unjust enrichment by the theft of good will. No social purpose is served by having the defendant get free some aspect of the plaintiff that would have market value and for which he would normally pay." Kalven, Privacy in Tort Law — Were Warren and Brandeis Wrong?, 31 Law & Contemp. Prob. 326, 331 (1966).

* * * * * *

Of course, [the] right of publicity here rests on more than a desire to compensate the performer for the time and effort invested in his act; the protection provides an economic incentive for him to make the investment required to produce a performance of interest to the public. This same consideration underlies the patent and copyright laws long enforced by this Court.

Zacchini v. Scripps-Howard Broadcasting, 433 U.S. 562, 576, 97 S.Ct. 2849, 2857, 53 L.Ed.2d 965 (1977) (discussing Ohio law).

It is more difficult to ascertain the policy interests underlying Britain's refusal to [445] recognize a right of publicity. Indeed, in the very case confirming that refusal, the wisdom of the rule was challenged by Lord Greer:

I have no hesitation in saying that in my judgment the defendants in publishing the advertisement in question, without first obtaining Mr. Tolley's consent, acted in a manner inconsistent with the decencies of life, and in doing so they were guilty of an act for which there ought to be a legal remedy.

Tolley v. Fry, 1 K.B. 467, 478 (1930), supra.

Even though the policy interests underlying the British rule have not been fully articulated, the British refusal to recognize a right of publicity should be taken into account. In the area of publicity rights, as in the areas of trademark, patent, and copyright, the law must balance the competing goals, on the one hand, of facilitating public access to valuable images, inventions and ideas and, on the other, rewarding individual effort. In American law there are some areas in which the public interest is thought to be served best by allowing unrestricted competitive commerce in images and information. See, e.g., Fashion Originators' Guild of America, Inc. v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949 (1941) (fashion design). For purposes of choice of law analysis, it must be assumed that Britain's refusal to recognize a right of publicity represents a policy choice favoring unrestricted competition in the area of commercial exploitation of names and likenesses.

Even so, the differing policy choices behind American and British law do not necessarily call for application of British law in the present case. Recognizing American publicity rights for British performers does not restrict free commerce in Britain. That is to say, Britain's presumed interest in allowing its citizens unrestricted access to the names and likenesses of performers is not disserved by allowing those performers to restrict the merchandising of their names and likenesses in the United States. Nor does it follow that because Britain has not seen fit to provide direct economic incentives for performers to market their public images in England, there need be any proscription of allowing those performers such incentives in the United States. The British public is not harmed if the laws of the United States aggrandize British performers.

The next consideration listed in section 6(2) of the Second Restatement, protecting justifiable expectations, is somewhat problematic. On the one hand, American merchandisers justifiably expect that the performers with whom they have entered into exclusive merchandising contracts have the right to license their publicity rights. On the other hand, defendants argue that the posters they sell are in fact authorized wares because they come from publicity photographs which the photographers sell to the European manufacturers of the posters. Under British law, photographers and their assignees enjoy copyright protection and justifiably expect to possess a broad range of rights with respect to the photographs. Defendants' argument merits some discussion.

Defendants claim that the posters they sell are made from publicity photographs taken at British "photosessions." According to defendants, these photosessions are customary in the British popular music industry. The photographers distribute the resultant photographs through syndicating agencies to newspapers, to magazines, and occasionally to poster manufacturers. While some photosessions are conducted on an express understanding that resulting pictures may only be used for specific purposes, such as newspaper publication, others, so-called "unrestricted photosessions", are conducted without any discussion of limitations. Thus, defendants claim, performers who agree to pose at unrestricted photosessions do so with the understanding that the photographers may use the resultant photographs however they choose.

The claim is too broad. To be sure, British performers who participate in unrestricted photosessions know or may reasonably be charged with knowledge, that, under [446] British law, they retain no publicity rights in Great Britain. But nothing in the record justifies an assumption that any performers in this case intended to convey American publicity rights to the photographers. The relevant British law speaks only to uses in Great Britain. It does not purport to speak to uses in other nations.

In the case at bar, the law of the United States governs. It has long been established here, as the district court noted, that "[b]y authorizing photographs, a performer does not, without more, license their commercial exploitation." See Ali v. Playgirl, Inc., 447 F.Supp. 723, 727 (S.D.N.Y.1978); Eick v. Perk Dog Food Co., 347 Ill.App. 293, 106 N.E.2d 742 (1952) (and cases therein); see also Ettore v. Philco Television Broadcasting Corp., 229 F.2d 481, cert. denied, 351 U.S. 926, 76 S.Ct. 783, 100 L.Ed. 1456 (1956). The automatic legal consequences of posing for photographs in Britain cannot be construed to constitute a contractual undertaking with respect to American publicity rights.

The final considerations listed in section 6(2) of the Second Restatement are "certainty, predictability, and uniformity of result, and ease in the determination and application of the law to be applied." With respect to these considerations, the better decision is obvious. Any rule basing publicity rights on the nationality of the performer would give rise to unnecessary confusion. To require American producers and merchandisers of novelties to tailor their expectations and actions according to the nationality of the individuals depicted would be anomalous and unworkable. Such a rule would also create tremendous uncertainty for foreign performers, such as the individual plaintiffs, who seek to do business in this country.

V.

In light of the foregoing considerations, we conclude that the district court correctly decided that, for Bi-Rite's claims, the law of Illinois governs, for those of Artemis, the law of Connecticut, and for those of the individual plaintiffs, the law of Georgia.

The judgment of the district court is AFFIRMED.

----------

[1] Of the Northern District of California, sitting by designation.

[2] Defendants do not challenge the preliminary injunction's prohibition relating to distribution of posters depicting American performers.

[3] The "right of publicity" does not fit neatly into any of the categories — Tort, Property, Contract, etc. — which provided the framework for traditional (First Restatement) choice of law analysis. The alleged infringement in the present action implicates elements of both Tort and Property law. Cf. Factors, Etc., Inc. v. Pro Arts, Inc.,652 F.2d 278, 281 (2d Cir.1981) ("noting that tort conflicts rules apply to issue of conversion of property, but property conflicts rules apply to whether plaintiff has title to property allegedly converted"). Appellants' assertion that their rights derive from implied consent and trade custom invokes Contract principles as well.

If Massachusetts still adhered to the single-factor mode of analysis of the First Restatement, categorizing this action would be critical. Indeed, the parties' briefs are largely dedicated to asserting that one categorization or another is appropriate. However, Massachusetts' choice of law rules no longer rest on such a rigid system. Massachusetts' current approach is based on a set of overarching principles and considerations applicable to all choice of law questions. Cf. Restatement (Second) of Conflict of Laws § 6(2), infra part III.

[4] Although Massachusetts allows certification of difficult questions of state law to the Supreme Judicial Court, it is inappropriate for a federal court to use such a procedure when the course state courts would take is reasonably clear. See Florida ex rel. Shevin v. Exxon Corp., 526 F.2d 266, 274-75 (5th Cir.1976), cert. denied, 429 U.S. 829, 97 S.Ct. 88, 50 L.Ed.2d 92 (1976); see also C. Wright, A. Miller, E. Cooper, Federal Practice and Procedure § 4248 (1978).

[5] Some choice of law decisions involving the right of publicity mention the domicile of the person whose name or likeness is being used commercially as part of a "contacts" analysis of the choice of law question. See, e.g., Factors Etc., Inc. v. Pro Arts, Inc., 652 F.2d 278, 281 (2d Cir.1981); Groucho Marx Productions v. Day and Night Co., 689 F.2d 317, 320 (2d Cir.1982); Bi-Rite Enterprises, Inc. v. Button Master, 555 F.Supp. 1188, 1196 (S.D.N.Y.1983). But in most cases this mention is merely cumulative; performers' domiciles generally coincide with the places where they exploit their rights. See, e.g., Button Master, 555 F.Supp. at 1197.

[995] [996] [997] [998] [999] Brent H. Blakely, Manhattan Beach, California, for the appellants.

Joel McCabe Smith and David Aronoff, Leopold, Petrich & Smith, P.C., Los Angeles, California, for the appellee.

Before: HUG and B. FLETCHER, Circuit Judges, and KING, District Judge.^[1]

HUG, Circuit Judge:

Appellants brought this diversity action against Abercrombie and Fitch ("Abercrombie") for publishing a photograph of them, with identification of their names, for Abercrombie's commercial benefit without the Appellants' authorization. They allege a violation of California's common law and statutory prohibition against misappropriation of a person's name and likeness for commercial purposes, a violation of the Lanham Act for confusion and deception indicating sponsorship of Abercrombie goods, and a claim for negligence and defamation. The district court entered summary judgment for Abercrombie, holding that their California state claims were foreclosed because Abercrombie's use of the photograph was protected by the First Amendment, and those claims were also preempted by the federal Copyright Act; that Hawaii law was the proper choice of law for some of these claims; that the Lanham Act claim was precluded by the First Amendment and it was also precluded by the nominative fair use doctrine; and that there was insufficient evidence to sustain the negligence or defamation claims. The district court had jurisdiction under 28 U.S.C. § 1332, and we have appellate jurisdiction under 28 U.S.C. § 1291. We reverse the grant of summary judgment and remand for trial.

BACKGROUND

I. Factual Background

Abercrombie is an outfitter catering to young people. The upscale retailer sells casual apparel for men and women, including shirts, khakis, jeans, and outerwear. In addition to sales in approximately 200 stores nationwide, Abercrombie also sells merchandise through its subscription catalog, the "Abercrombie and Fitch Quarterly" ("Quarterly").

The Quarterly is Abercrombie's largest advertising vehicle. It accounts for approximately 80% of Abercrombie's overall advertising budget. The primary purpose of the Quarterly is to build brand awareness and increase sales. Each issue is over 250 pages in length and embraces a theme such as collegiate lifestyle, back to school, or winter wear. The Quarterly contains photographs of models wearing Abercrombie's garments as well as pictures of the clothing displayed for sale. In addition, approximately one-quarter of each issue is devoted to stories, news and other editorial pieces.

In 1998, Michael Jeffries, Abercrombie's CEO, developed a surfing theme for the upcoming Quarterly. Abercrombie held the photo shoot for the upcoming issue at [1000] San Onofre Beach, California. While at the photo shoot, Abercrombie employees Sam Shahid and Savas Abadsidis looked through a compilation of surfing photographs by surf photographer LeRoy Grannis. The photo book contained a picture of Appellants which Grannis had taken at the 1965 Makaha International Surf Championship in Hawaii. Sam Shahid purchased the photograph, along with three other photographs from the book, for $100 each. LeRoy Grannis then handwrote the names of Appellants at the bottom of the photograph.

Subsequently, Sam Shahid showed Appellants' photograph to Jeffries who decided to use the photograph in the upcoming Quarterly. Abercrombie did not obtain Appellants' permission. Jeffries also decided to create t-shirts, exactly like those worn by the Appellants in the photograph, for sale in the upcoming issue. Abercrombie labeled the t-shirts "Final Heat Tees." The t-shirts were advertised for sale in the Quarterly.

The Spring 1999 Quarterly, "Spring Fever," contains a section entitled "Surf Nekkid." The "Surf Nekkid" section includes an article recounting the history of surfing. Abercrombie also included a 700-word story, entitled "Your Beach Should Be This Cool," describing the history of Old Man's Beach at San Onofre, California. The following page exhibits the photograph of Appellants. The two pages immediately thereafter feature the "Final Heat Tees."

The "Spring Fever" issue contains other articles about the surfing lifestyle. An article entitled "Beachcombing" documents the efforts of the Surfrider Foundation, an ecological group founded by surfers. Still another article entitled "Where the Wild Things Are," written by the editor of Surfer Magazine, describes various surfer "types." Also contained in the issue is an interview of Nat Young, former world surfing champion and the first professional surfer. The interview is accompanied by photographs of Young and his son wearing Abercrombie clothing.

II. Procedural History

On April 28, 1999, Appellants George Downing, Paul Strauch, Rick Steere, Richard Buffalo Keaulana, and Ben Aipa filed a complaint in the United States District Court for the Central District of California. Appellants later amended the complaint to add Joey Cabell and Mike Doyle. Appellants alleged that Abercrombie misappropriated their names and likenesses in violation of California's statutory and common law protections against commercial misappropriation, that the publication of the photograph in the catalog violated the Lanham Act and they alleged claims for negligence and defamation. Subsequently, Appellants and Abercrombie both filed motions for summary judgment. The district court entered summary judgment for Abercrombie. Appellants timely appealed. Abercrombie then filed a motion for attorneys' fees and other expenses. The district court granted the motion, awarding Abercrombie approximately one-fourth of the attorneys' fees that it sought. Appellants timely filed a notice of appeal from that order. We consolidated the two appeals.

On appeal, Appellants contend: (1) Abercrombie's use of the photograph is not protected under the First Amendment; (2) the state law publicity claims are not preempted by the Copyright Act; (3) California law is the proper choice of law for the claim under California Civil Code § 3344; (4) triable issues of fact exist with regard to the Lanham Act claims; (5) triable issues of fact exist with regard to the defamation claim; (6) the district court erred in denying the motion for a continuance; (7) the district court erred in awarding [1001] attorneys' fees and costs to Abercrombie.^[2]

STANDARD OF REVIEW

The district court's grant of summary judgment is reviewed de novo. Botosan v. Paul McNally Realty, 216 F.3d 827, 830 (9th Cir.2000). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000) (en banc).

ANALYSIS

I. First Amendment and Right of Publicity Claims

The district court concluded that Abercrombie's use of the photograph containing Appellants' names and likenesses was proper because it constituted expression protected under the First Amendment. We disagree.

California has long recognized a common law right of privacy for protection of a person's name and likeness against appropriation by others for their advantage. See Eastwood v. Superior Court, 149 Cal.App.3d 409, 416, 198 Cal.Rptr. 342 (1983). To sustain a common law cause of action for commercial misappropriation, a plaintiff must prove: "(1) the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or likeness to defendant's advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury." Id. at 417, 198 Cal.Rptr. 342.

In addition to the common law cause of action, California has provided a statutory remedy for commercial misappropriation under California Civil Code § 3344. The remedies provided for under California Civil Code § 3344 complement the common law cause of action; they do not replace or codify the common law. See Newcombe v. Adolf Coors Co., 157 F.3d 686, 691-92 (9th Cir.1998). Section 3344 provides in relevant part, "any 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." Cal. Civ.Code § 3344(a). Under section 3344, a plaintiff must prove all the elements of the common law cause of action. In addition, the plaintiff must allege a knowing use by the defendant as well as a direct connection between the alleged use and the commercial purpose. See Eastwood, 149 Cal.App.3d at 417, 198 Cal.Rptr. 342.

Under both the common law cause of action and the statutory cause of action "no cause of action will lie for the 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." Montana v. San Jose Mercury News, Inc., 34 Cal.App.4th 790, 793, 40 Cal.Rptr.2d 639 (1995). 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, 149 Cal.App.3d at 422, 198 Cal.Rptr. 342. However, the defense is not absolute; we must find "a proper accommodation between [the] competing concerns" of freedom of speech and the right of publicity. Id.

[1002] In the instant case, Abercrombie defends on the basis of the First Amendment arguing that the photograph illustrates an article about surfing, a matter in the public interest. To support its defense, Abercrombie relies on Dora v. Frontline Video, Inc., 15 Cal.App.4th 536, 18 Cal.Rptr.2d 790. (1993). In Dora, the court held that a surfing documentary was in the public interest because it was "about a certain time and place in California history and, indeed, in American legend." Id. at 543. Dora involved a surfing legend, Mickey Dora, who sued the producer of a video documentary on surfing claiming common law and statutory appropriation of his name and likeness. See id. at 540, 18 Cal.Rptr.2d 790. The trial court entered summary judgment for the film's producer and the California Court of Appeal affirmed. See id. In addressing the First Amendment issue, the court found that the documentary was about a matter of public interest, specifically surfing, and, therefore, the producer was protected by the defense. See id. at 544, 18 Cal.Rptr.2d 790. In so concluding the court stated:

surfing is of more than passing interest to some. It has created a life-style that influences speech, behavior, dress, and entertainment, among other things. A phenomenon of such scope has an economic impact, because it affects purchases, travel, and the housing market. Surfing has also had a significant influence on the popular culture, and in that way touches many people. It would be difficult to conclude that a surfing documentary does not fall within the category of public affairs.

Id. at 546, 18 Cal.Rptr.2d 790.

Although the theme of Abercrombie's catalog was surfing and surf culture, a matter of public interest, the use of Appellants' names and pictures is quite different from that involved in the Dora case. In Dora, Mickey Dora's contribution to the development of the surf life-style and his influence on the sport was "the point of the program." Id. at 543, 18 Cal.Rptr.2d 790. Dora was depicted in the documentary because his identity directly contributed to the story about surfing which came within the protected public interest.

In the current action, there is a tenuous relationship between Appellants' photograph and the theme presented. Abercrombie used Appellants' photograph essentially as window-dressing to advance the catalog's surf-theme. The catalog did not explain that Appellants were legends of the sport and did not in any way connect Appellants with the story preceding it. In fact, the catalog incorrectly identifies where and when the photograph was taken. We conclude that the illustrative use of Appellants' photograph does not contribute significantly to a matter of the public interest and that Abercrombie cannot avail itself of the First Amendment defense.^[3] Accordingly, we reverse the district [1003] court's grant of summary judgment in favor of Abercrombie.

II. Federal Copyright Preemption

Abercrombie contends that its right to reproduce and publish the photograph of the Appellants is governed by the federal Copyright Act, 17 U.S.C. §§ 101-1101, and that Appellants' state law claims are preempted by federal copyright law.

"[W]hen acting within constitutional limits, Congress is empowered to pre-empt state law by so stating in express terms." California Fed. Sav. & Loan Ass'n v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 93 L.Ed.2d 613 (1987). Under 17 U.S.C. § 301, States are expressly prohibited from legislating in the area of copyright law.^[4] In order for preemption to occur under the federal Copyright Act, two conditions must be satisfied. First, the content of the protected right must fall within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103. Second, the right asserted under state law must be equivalent to the exclusive rights contained in section 106 of the Copyright Act. See Del Madera Properties v. Rhodes & Gardner, Inc., 820 F.2d 973, 976 (9th Cir.1987) (overruled on other grounds).

The subject matter protected by the Copyright Act is set forth in 17 U.S.C. § 102, which provides in relevant part as follows:

Copyright protection subsists ... in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include ... pictorial, graphic, and sculptural works.

Section 103 provides that the subject matter specified in § 102 also includes compilations and derivative works, "but the copyright in a compilation or derivative work extends only to the material contributed by the author of such works as distinguished from the preexisting material employed in the work." Section 106 gives the copyright holder exclusive rights to copy the copyrighted work or derivatives and to distribute it to the public.

The photograph itself, as a pictorial work of authorship, is subject matter protected by the Copyright Act. See 17 U.S.C. § 101 (providing that "pictorial, graphic, and sculptural works include ... photographs.") However, it is not the publication of the photograph itself, as a creative work of authorship, that is the basis for Appellants' claims, but rather, it is the use of the Appellants' likenesses and their names pictured in the published photograph. The Nimmer treatise on copyright law states:

[T]he "work" that is the subject matter of the right of publicity is the persona, i.e., the name and likeness of a celebrity or other individual. A persona can hardly be said to constitute a "writing" of an "author" within the meaning of the copyright clause of the Constitution. A fortiori it is not a "work of authorship" under the Act. Such name or likeness [1004] does not become a work of authorship simply because it is embodied in a copyrightable work such as a photograph.

1 Nimmer on Copyright § 1.01[B][1][c] at 1-23 (1999). The same point is made in McCarthy's Treatise on Right of Publicity and Privacy:

The "subject matter" of a Right of Publicity claim is not a particular picture or photograph of plaintiff. Rather, what is protected by the Right of Publicity is the very identity or persona of the plaintiff as a human being ... While copyright in a given photograph may be owned by the person depicted in it, the exact image in that photograph is not the underlying "right" asserted in a Right of Publicity case. To argue that the photograph is identical with the person is to confuse illusion and illustration with reality. Thus, assertion of infringement of the Right of Publicity because of defendant's unpermitted commercial use of a picture of plaintiff is not assertion of infringement of copyrightable "subject matter" in one photograph of plaintiff.

McCarthy, Rights of Publicity and Privacy § 11.13[C] at 11-72-73 (1997).

A recent case in the Fifth Circuit held that the Texas tort of misappropriation, which provides protection from the unauthorized appropriation of one's name, image, or likeness was not preempted by the Copyright Act. See Brown v. Ames, 201 F.3d 654, 661 (5th Cir.2000). The case involved a record company's misappropriation of the names and likenesses of individual musicians, song writers, and music producers on the company's CD's, tapes, catalogs, and posters. See id. at 656-57. The court stated that "the tort of misappropriation of a name or likeness protects a person's persona. A persona does not fall within the subject matter of copyright." Id. at 658. Thus, the court held that § 301 preemption does not apply.

A similar result was reached in a case decided by a California Court of Appeal, KNB Enterprises v. Matthews, 78 Cal.App.4th 362, 92 Cal.Rptr.2d 713 (2000). The California Court of Appeal held that the state law right of publicity claims were not preempted by the Copyright Act. See id. at 374-75, 92 Cal.Rptr.2d 713. The copyright owner of erotic photographs, which had been displayed without authorization and for profit on an Internet website, brought suit against the website's operator asserting a misappropriation claim under California Civil Code § 3344. See id. at 365-66, 92 Cal.Rptr.2d 713. The court applied the two-part test for determining preemption and found that neither condition had been met. See id. at 374, 92 Cal.Rptr.2d 713. The court found that "because a human likeness is not copyrightable, even if captured in a copyrighted photograph, the models' section 3344 claims against the unauthorized publisher of their photographs are not the equivalent of a copyright infringement claim and are not preempted by federal copyright law." Id. at 365, 92 Cal.Rptr.2d 713.

We agree with the approach taken by the Fifth Circuit and the reasoning employed in KNB Enterprises. The subject matter of Appellants' statutory and common law right of publicity claims is their names and likenesses. See Newcombe, 157 F.3d at 691. A person's name or likeness is not a work of authorship within the meaning of 17 U.S.C. § 102. This is true notwithstanding the fact that Appellants' names and likenesses are embodied in a copyrightable photograph. The same concept is specifically embodied in 17 U.S.C. § 103, which provides that the copyright in derivative works extends only to the material contributed by the author as distinguished from preexisting material [1005] employed in the work.^[5]

The second requirement for copyright preemption as noted above is that the right asserted under state law must be equivalent to the exclusive rights contained in § 106 of the Copyright Act. This requirement also is not met. Because the subject matter of the Appellants' statutory and common law right of publicity claims is their names and likenesses, which are not copyrightable, the claims are not equivalent to the exclusive rights contained in § 106.

III. Choice of Law

We review de novo a district court's decision concerning the appropriate choice of law. Abogados v. AT&T;, Inc., 223 F.3d 932 (9th Cir.2000). "In reviewing the factual findings that underlie the choice of law determination, this court must apply the clearly erroneous standard." Contact Lumber Co. v. P.T. Moges Shipping Co., Ltd., 918 F.2d 1446, 1450 (9th Cir.1990).

Applying choice of law principles, the district court dismissed Appellants' statutory misappropriation claim as to the five Appellants who reside in Hawaii: George Downing, Rick Steere, Richard Keaulana, Ben Aipa, and Joey Cabell. We conclude that the district court erred in dismissing these claims.

In a diversity case, "federal courts apply the substantive law of the forum in which the court is located, including the forum's choice of law rules." Insurance Co. of North Am. v. Federal Express Corp., 189 F.3d 914, 921 (9th Cir.1999). This action was brought in a district court in California. Therefore, we look to the choice of law rules applied in that state.

California applies a three-step "governmental interest" analysis to choice-of-law questions: (1) "the court examines the substantive laws of each jurisdiction to determine whether the laws differ as applied to the relevant transaction", (2) "if the laws do differ, the court must determine whether a true conflict' exists in that each of the relevant jurisdictions has an interest in having its law applied", and (3) "if more than one jurisdiction has a legitimate interest ... the court [must] identify and apply the law of the state whose interest would be more impaired if its law were not applied." Abogados, 223 F.3d at 934; Liew v. Official Receiver & Liquidator, 685 F.2d 1192, 1196 (9th Cir.1982). Only if both states have a legitimate but conflicting interest in applying its own law will the court be confronted with a "true conflict" case. See Insurance Co. of North Am., 189 F.3d at 921.

The California Supreme Court's decision in Hurtado v. Superior Court, 11 Cal.3d [1006] 574, 114 Cal.Rptr. 106, 522 P.2d 666 (1974), is the primary case setting forth California's choice of law rules and analyzing the approach to be taken in determining the interest of each jurisdiction in enforcing its own law. In that case, a wrongful death action had been brought in California, where the automobile accident causing the death had occurred. The plaintiffs were residents of Mexico and the defendants residents of California. Mexican law placed a limitation on the amount that could be received in a wrongful death action (24,334 pesos or $1,946.72) whereas California law provided no such limitation. See id. at 668. The California Supreme Court stated:

generally speaking the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state. In such event he must demonstrate that the latter rule of decision will further the interest of the foreign state and therefore that it is an appropriate one for the forum to apply to the case before it. In the case at bench, California as the forum should apply its own measure of damages for wrongful death, unless Mexico has an interest in having its measure of damages applied.

Id. at 670 (citations omitted). In assessing the interest of California in applying its law the Court stated:

It is manifest that one of the primary purposes of a state in creating a cause of action in the heirs for the wrongful death of the decedent is to deter the kind of conduct within its borders which wrongfully takes life. It is also abundantly clear that a cause of action for wrongful death without any limitation as to the amount of recoverable damages strengthens the deterrent aspect of the civil sanction: the sting of unlimited recovery ... more effectively penalize(s) the culpable defendant and deter(s) it and others similarly situated from such future conduct.

Id. at 672 (internal quotations and citations omitted). The court went on to emphasize that the interest in deterrence of conduct extends to "all persons within its borders." Id. at 584, 114 Cal.Rptr. 106, 522 P.2d 666.

With regard to the interest Mexico had in applying its law, the California Supreme Court stated that "[t]he interest of a state in a tort rule limiting damages for wrongful death is to protect defendants from excessive financial burdens or exaggerated claims. [A] state by enacting a limitation on damages is seeking to protect its residents from the imposition of these excessive financial burdens." Id. at 670 (citations omitted). The California Supreme Court then summarized its holding:

To recapitulate, we hold that where as here in a California action both this state as the forum and a foreign state (or country) are potentially concerned in a question of choice of law with respect to an issue in tort and it appears that the foreign state (or country) has no interest whatsoever in having its own law applied, California as the forum should apply California law.

Id. at 671.

The California Supreme Court's ruling in the Hurtado tort case is directly applicable to this case. Abercrombie distributed its Spring Quarterly in California, and any misappropriation of the names and likenesses of the Appellants would have occurred there. As the court stated, one of the primary purposes of creating a cause of action in tort is to deter misconduct within its borders by persons present within its borders. By distributing its catalog within California, Abercrombie was operating within its borders.

Hawaii, on the other hand, like Mexico in Hurtado, had no interest in limiting the [1007] extent of relief that its residents could obtain for a wrongful act against them in California. It is even more clear in this case because Hawaii did not place any limitation on recovery; instead it simply did not provide for the extent of relief California does in this type of action. It is pure fancy to believe that Hawaii would wish to restrict its residents from recovery that others could obtain in California solely because it had not enacted a statute like California's to complement its common law action for the same offense. Hawaii had no interest in having its law applied to this action brought in California.

The California Supreme Court has made it clear that when California has an interest in enforcing its law within its borders and a foreign state (in this case Hawaii) has no interest in having its law applied, then the law of California should be applied. In this case, there is no "true conflict" of Hawaii law with California law, and thus the district court erred when it applied Hawaii law to some claims. California law is applicable to all of Appellants' claims.

IV. Lanham Act

Appellants contend that the district court erred in denying their claim under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). In relevant part section 43(a)(1)(A) provides:

[A]ny person who, or in connection with any goods or services, uses any ... false or misleading representation of fact, which ... is likely to cause confusion, or to cause mistake, or deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ... shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

In several past cases involving celebrity plaintiffs we have looked to our decision in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979), for the appropriate factors to consider in determining whether there exists a likelihood of confusion. The factors enumerated in AMF are:

1. strength of the plaintiff's mark;

2. relatedness of the goods;

3. similarity of the marks;

4. evidence of actual confusion;

5. marketing channels used;

6. likely degree of purchaser care;

7. defendant's intent in selecting the mark; and

8. likelihood of expansion of the product lines.

AMF, 599 F.2d at 348-49.

In our celebrity cases using the AMF factors we have adapted these factors so as to be applicable to the celebrity cases. We noted that the term "mark" applies to the celebrity's persona, the "strength" of the mark refers to the level of recognition that the celebrity has among the segment of the public to whom the advertisement is directed, and the term "goods" concerns the reasons for or source of the celebrity's fame. See White v. Samsung Elec. Am., Inc., 971 F.2d 1395, 1400-1401 (9th Cir.1992).

It is perhaps clearer to restate the eight factors as applicable to the celebrity case, which can be stated as:

1. the level of recognition that the plaintiff has among the segment of the society for whom the defendant's product is intended;

2. the relatedness of the fame or success of the plaintiff to the defendant's product;

[1008] 3. the similarity of the likeness used by the defendant to the actual plaintiff;

4. evidence of actual confusion;

5. marketing channels used;

6. likely degree of purchaser care;

7. defendant's intent on selecting the plaintiff; and

8. likelihood of expansion of the product lines.

Although these are all factors that are appropriate for consideration in determining the likelihood of confusion, they are not necessarily of equal importance, nor do they necessarily apply to every case.

"The Lanham Act's likelihood of confusion standard is predominantly factual in nature." Wendt v. Host Int'l, Inc. 125 F.3d 806, 812 (9th Cir.1997). Thus, summary judgment is inappropriate when a jury could reasonably conclude that there is a likelihood of confusion. Application of the eight factors to the current action leads us to conclude that the district court erred in rejecting Appellants' Lanham Act claim at the summary judgment stage.

In applying the factors to this case we reach the following conclusions. First, in considering the recognition that the Appellants have among those persons toward whom the Abercrombie catalog is directed, Appellants cite to a declaration submitted by surf historian Steve Pezman. In the declaration, Pezman asserts that Appellants "are considered legends in the surf community and are still highly well-known and regarded." This declaration from a surf historian provides some evidence that Appellants' names and images enjoy a high level of recognition among average members of society as a whole. In addition, it is undisputed that Appellants are legendary surfers, and thus there is a reasonable inference that Appellants would be known to the young people to whom the Quarterly is directed and who would be purchasing Abercrombie's surf wear.

The second factor is the relatedness of the Appellants' fame and success to the Defendant's product. Appellants' fame is due to their surfing success. Appellants' surfing success could be seen as closely-related to the Abercrombie's surf-related clothing.

Applying the third factor, the similarity of the likeness, to the Appellants is clear because it is an actual photograph of the Appellants with their names designated.

The fourth factor, evidence of actual confusion, also supports Appellants' position. Appellants provided declarations demonstrating that several individuals actually believed that Appellants were endorsing Abercrombie merchandise.

Under the fifth factor, marketing channels used, the catalog was the only marketing channel. It is therefore the likelihood of confusion in that marketing channel that is at issue.

In applying the sixth factor, the inquiry is whether consumers are likely to be particularly careful in determining who endorses the Abercrombie surf apparel, making confusion as to Appellants' endorsement more likely. A jury could reasonably find that young consumers are not likely to be particularly careful when purchasing surf-related clothing.

As to the seventh factor, the relevant question is whether the Defendants intended to profit by confusing consumers concerning the endorsement of the Abercrombie apparel. A jury could reasonably find that Abercrombie intended to indicate to consumers that these legendary surfers were endorsing Abercrombie's merchandise.

The eighth factor is the likelihood of expansion of the product lines. Neither party discusses this factor, however, no [1009] evidence has been produced that Abercrombie intends to utilize these photographs in additional product lines.

Application of these factors, leads us to conclude that the district court erred in rejecting Appellants' Lanham Act claim at the summary judgment stage. Viewing the evidence in the light most favorable to Appellants, we conclude that Appellants have raised a genuine issue of material fact concerning a likelihood of confusion as to their endorsement.

V. Doctrine of Nominative Fair Use

The district court concluded that Appellants' Lanham Act claim was barred by the doctrine of nominative fair use. In support of its position that the district court was correct in concluding that Appellants' Lanham Act claim was barred, Abercrombie relies upon New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir.1992). In New Kids, two newspapers conducted "900" number telephone polls concerning their readers' reactions to the musical group "New Kids on the Block." The newspapers charged their readers 95 cents per minute to respond to the poll. The band, which had its own competing "900" numbers for its fans, filed Lanham Act claims against the two newspapers. See id. at 304-05. The district court granted summary judgment for the defendant newspapers on First Amendment grounds. See id. at 305. On appeal, we affirmed on a non-constitutional ground, as appropriate when the constitutional issue can be avoided. We concluded that the newspapers' use of the band name constituted a nominative fair use. See id. at 309.

We found that where the defendant uses a trademark to describe the plaintiff's product rather than its own product, a commercial user is entitled to a nominative fair use defense provided the defendant meets three requirements:

1. the product or service in question must be one not readily identifiable without use of the trademark;

2. only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and

3. the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

Id. at 308. Applying the three-part test, we concluded that the newspaper was entitled to the nominative fair use defense. See id. at 308-309.

Abercrombie argues that its use of the photograph was nominative fair use in the same manner as the defendants' purported infringement in New Kids. We disagree. In New Kids, we stated that the test applies only "where the defendant uses a trademark to describe the plaintiff's product, rather than its own." Id. at 308. Here, Abercrombie used the photograph in its catalog that was intended to sell its goods. As we have noted in this case involving a celebrity endorsement claim, the mark being protected is the Appellants' names and pictures. There is a genuine issue of material fact as to whether the third criterion is met, whether Abercrombie did nothing that would in conjunction with the Appellants' names and pictures suggest sponsorship or endorsement by the Appellants.

VI. Defamation Claim

Appellants contend they were defamed by Abercrombie's publication of the photograph in the "Surf Nekkid" section of the Quarterly. Specifically, they maintain that inclusion of their names and likenesses in a section depicting naked and scantily [1010] clothed models caused them shame and embarrassment.

Under California Civil Code § 45a, Appellants may only prevail on a libel claim if the publication is (1) libelous on its face, or (2) if special damages have been proven. See Newcombe, 157 F.3d at 694. A publication is libelous on its face only if there is no need to have explanatory matter introduced. See Cal. Civ.Code § 45a. The determination as to whether a publication is libelous on its face is one of law, and must be measured by "the effect the publication would have on the mind of the average reader." Newcombe, 157 F.3d at 695.

To support their argument that inclusion of the photograph was libelous on its face, Appellants provide three declarations. However, all three declarations are from lifetime surfers and leaders in the surf industry. The declarations do not provide evidence that an average person viewing the Quarterly would think it defamatory if Appellants' picture was included in a section in which nude models were shown. Thus, Appellants fail to satisfy the first requirement under California Civil Code § 45a that the publication is libelous on its face.

In order to satisfy the alternate requirement, Appellants must allege and prove that they suffered special damages as a proximate result of the publication of the photograph. See id. at 695. Special damages are defined as "all damages which plaintiff alleges and proves that he has suffered in respect to his property, business, trade, profession or occupation, including such amounts of money as the plaintiff alleges and proves he has expended as a result of the alleged libel, and no other." Cal. Civ.Code § 48a(4)(b). Appellants did not submit any evidence demonstrating that they incurred special damages due to Abercrombie's publication of the photograph. Thus, Appellants failed to meet either requirement under California Civil Code § 45a. Accordingly, we conclude that the district court did not err in denying the Appellants' defamation claim.

VII. Continuance

Because we reverse the summary judgment, we need not address the issue the Appellants raise concerning the district judge's denial of a continuance.

VIII. Attorneys' Fees

California Civil Code § 3344(a) mandates the award of attorneys' fees and costs to the "prevailing party" in actions brought under the section. See Newton v. Thomason, 22 F.3d 1455, 1464 (9th Cir.1994). Because we reverse the judgment of the district court, the district court's award of attorneys' fees and costs to Abercrombie under California Civil Code § 3344 is vacated.

IX. Conclusion

Neither the California state law claims or the Lanham Act claim are precluded by the First Amendment; the California state claims are not preempted by the federal Copyright Act; the proper choice of law to apply to these claims is California law; there is insufficient evidence to support the defamation claim; and the attorneys' fee award is vacated.

REVERSE AND REMAND FOR TRIAL.

[1] Honorable Samuel P. King, Senior United States District Judge, sitting by designation.

[2] The Appellants do not appeal the summary judgment on their negligence claim.

[3] This case is also distinguishable from Hoffman v. L.A. Magazine, 255 F.3d 1180 (9th Cir.2001), in which the defendant magazine successfully asserted a First Amendment defense to Dustin Hoffman's claim of misappropriation. In that case, L.A. Magazine used a digitally-altered picture of Hoffman, as "Tootsie," in a current designer dress to illustrate its "Grand Illusions" article. We concluded that such use was noncommercial speech entitled to full First Amendment protection. Id. at 1189. In contrast to the present case, where Abercrombie, itself, used Appellants' images in its catalog to promote its clothing, L.A. Magazine was unconnected to and received no consideration from the designer for the gown depicted in the article. Id. at 1189. Further, while L.A. Magazine merely referenced a shopping guide buried in the back of the magazine that provided stores and prices for the gown, id., Abercrombie placed the Appellants' photograph on the page immediately preceding the "Final Heat Tees" for sale. Based on these factors, we conclude that Abercrombie's use was much more commercial in nature and, therefore, not entitled to the full First Amendment protection accorded to L.A. Magazine's use of Hoffman's image. Id. at 1190.

[4]Section 301(a) of 17 U.S.C. preempts:

all legal or equitable rights that are the equivalent to any of the exclusive rights within the general scope of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

[5] Abercrombie relies on the California case of Fleet v. CBS, 50 Cal.App.4th 1911, 58 Cal.Rptr.2d 645 (1996). This case was distinguished by both the Fifth Circuit in Brown, 201 F.3d at 658, and the California Court of Appeals in KNB Enterprises, 78 Cal.App.4th at 370-71, 92 Cal.Rptr.2d 713. In Fleet,the plaintiffs were actors in a copyrighted film. The claims of the plaintiffs were based on their dramatic performance in a film CBS sought to distribute. The court stated:

We agree that as a general proposition Civil Code section 3344 is intended to protect rights which cannot be copyrighted and that claims made under its provisions are usually not preempted. But appellants' analysis crumbles in the face of one obvious fact: their individual performances in the film White Dragon were copyrightable. Since their section 3344 claims seeks only to prevent CBS from reproducing and distributing their performances in the film, their claims must be preempted by federal copyright law.

Fleet, 50 Cal.App.4th at 1919, 58 Cal.Rptr.2d 645. This is clearly distinguishable from this case where the Appellants' claim is based on the use of their names and likenesses, which are not copyrightable.

[1140] [1141] [1142] [1143] Barbara A. Solomon, Fross Zelnick Lehrman & Zissu, P.C., New York, NY, for the plaintiffs-appellants.

Robert A. Meyer, Douglas E. Mirell and Daniel J. Friedman, Loeb & Loeb LLP, Los Angeles, CA, for the defendants-appellees.

[1144] Before: PREGERSON, RYMER, and T.G. NELSON, Circuit Judges.

PREGERSON, Circuit Judge.

Plaintiffs-Appellants are the trustees of the Diana Princess of Wales Memorial Fund ("the Fund") and the executors of the Estate of Diana, Princess of Wales ("the Estate"). We will refer to them collectively as "the Fund." The Fund brought several state and federal claims against Defendant-Appellee Franklin Mint. The Fund based these claims on Franklin Mint's use of the name and likeness of the late Princess Diana on commercially sold jewelry, plates, and dolls, and in advertisements for these products. The Fund appeals three holdings by the District Court: (1) the District Court's denial of the Fund's motion to reinstate its dismissed post-mortem right of publicity claim under California Civil Code § 3344.1(a)(1); (2) the District Court's grant of summary judgment in favor of Franklin Mint on the Fund's Lanham Act claim for false endorsement under 15 United States Code § 1125(a)(1); and (3) the District Court's award of attorneys' fees to Franklin Mint. We have jurisdiction under 28 United States Code § 1291, and we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Since 1981, when Princess Diana married Prince Charles, Franklin Mint has produced, advertised, and sold collectibles — jewelry, plates, and dolls — bearing her name and likeness. Similar products bearing Princess Diana's name and likeness were sold by other companies. Princess Diana neither authorized nor objected to any of these products.

The Fund was established in 1997 after Princess Diana's death to accept donations to be given to various charities with which Princess Diana was associated during her lifetime. The Estate exclusively authorized the Fund to use Princess Diana's name and likeness for this purpose. The Fund in turn authorized about twenty parties — but not Franklin Mint — to use the name and likeness of Princess Diana in conjunction with products sold in the United States. Franklin Mint continued to market unauthorized Diana-related products.

On May 18, 1998, the Fund brought suit against Franklin Mint in the United States District Court for the Central District of California. The complaint alleged violations of the Lanham Act for false endorsement and false advertisement under 15 United States Code § 1125(a)(1), and dilution of trademark under 15 United States Code § 1125(c)(1). The complaint also alleged violations of California's post-mortem right of publicity statute, California Civil Code § 990(a) (now California Civil Code § 3344.1(a)).^[1] The complaint finally alleged unfair competition and false and misleading advertisement under California Business and Professions Code §§ 17200 and 17500 et seq.

On October 16, 1998, the District Court granted Franklin Mint's motion to dismiss the Fund's post-mortem right of publicity claim under California Civil Code § 990. Cairns v. Franklin Mint Co., 24 F.Supp.2d 1013, 1022 (C.D.Cal.1998) ["Cairns I"]. [1145] The District Court reasoned that California's default personal property choice of law provision, California Civil Code § 946,^[2] applied to the Fund's post-mortem right of publicity claim and required application of the law of Great Britain, which does not recognize a post-mortem right of publicity. Cairns I, 24 F.Supp.2d at 1023-29. The District Court denied Franklin Mint's motion to dismiss the Fund's Lanham Act claims for false endorsement, false advertisement, and dilution of trademark. Id. at 1022-23. The District Court also denied the Fund's motion for a preliminary injunction on these Lanham Act claims. Id. at 1023. On December 30, 1999, on interlocutory appeal under 28 United States Code § 1292(a)(1), we affirmed the District Court's dismissal of the Fund's post-mortem right of publicity claim and the denial of a preliminary injunction on the Fund's Lanham Act claims in an unpublished memorandum disposition which was amended on February 24, 2000. Diana Princess of Wales Memorial Fund v. Franklin Mint Co., Nos. 98-56722, 99-55157, 1999 WL 1278044 (9th Cir. Feb. 24, 2000).

After the District Court dismissed the Fund's post-mortem right of publicity claim, the California Legislature renumbered the post-mortem right of publicity statute from § 990 to § 3344.1 and amended it to "apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state." CAL. CIV. CODE § 3344.1(n). Based on this amendment, the Fund filed a motion to reinstate its dismissed post-mortem right of publicity claim. The Fund argued that § 3344.1(n) is a choice of law provision that requires application of California law, which recognizes a post-mortem right of publicity.

On June 22, 2000, the District Court denied the Fund's motion to reinstate its post-mortem right of publicity claim and motion for a preliminary injunction. Cairns v. Franklin Mint Co., 120 F.Supp.2d 880, 887 (C.D.Cal.2000) ["Cairns II"]. The District Court concluded, based on the plain language of § 3344.1(n) and its legislative history, that this section is not a choice of law provision. Id. at 883-85. The District Court further concluded that California's default personal property choice of law provision, California Civil Code § 946, continues to apply to the Fund's post-mortem right of publicity claim and requires application of the law of Great Britain, which does not recognize a post-mortem right of publicity. Cairns II, 120 F.Supp.2d at 881-82.

On June 27, 2000, the District Court granted Franklin Mint's motion for summary judgment on the Fund's Lanham Act false endorsement claim. Cairns v. Franklin Mint Co., 107 F.Supp.2d 1212, 1223 (C.D.Cal.2000) ["Cairns III"]. The District Court concluded that Franklin Mint's use of Princess Diana's name and likeness did not implicate the source identification purpose of trademark protection. Id. at 1214-16. The District Court also applied AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979), and concluded that there was no likelihood of consumer confusion as to the origin of Franklin Mint's Diana-related products. Cairns III, 107 F.Supp.2d at 1216-21.^[3]

[1146] On September 12, 2000, the District Court granted Franklin Mint's motion for attorneys' fees and awarded Franklin Mint $2,308,000 in attorneys' fees out of $3,124,121.85 requested. Cairns v. Franklin Mint Co., 115 F.Supp.2d 1185, 1190 (C.D.Cal.2000) ["Cairns IV"].

The Fund timely appealed the District Court's denial of its motion to reinstate the post-mortem right of publicity claim and the District Court's grant of Franklin Mint's motion for summary judgment on the Lanham Act claim for false endorsement (No. 00-56217). Separately, the Fund timely appealed the District Court's award of attorneys' fees to Franklin Mint (No. 00-56796). The two appeals have been consolidated.

II. POST-MORTEM RIGHT OF PUBLICITY CLAIM

A. Introduction

California's post-mortem right of publicity statute, in both its former version, California Civil Code § 990(a) (West 1998), and its current version, California Civil Code § 3344.1(a) (West 2002), provides in part that "[a]ny person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the [decedent's successor or successors in interest], shall be liable for any damages sustained by the person or persons injured as a result thereof." It further provides that "[t]he rights recognized under this section are [personal] property rights." CAL. CIV. CODE § 990(b) (West 1998); CAL. CIV. CODE § 3344.1(b) (West 2002).

As enacted in 1984 and amended in 1988, California's post-mortem right of publicity statute did not contain a choice of law provision. See CAL. CIV. CODE § 990 (West 1998). The District Court concluded that California's default personal property choice of law provision in California Civil Code § 946 applied to the Fund's post-mortem right of publicity claim and required application of the law of the decedent's domicile.^[4] The law of Great Britain, where Princess Diana was domiciled, does not recognize post-mortem right of publicity claims. See Bi-Rite Enters. v. Bruce Miner Co., 757 F.2d 440, 442 (1st Cir.1985) (citing Tolley v. Fry, 1 K.B. 467 (1930)); J. Thomas McCarthy, Rights of Publicity & Privacy, § 6.21 (1998). Accordingly, the District Court dismissed the claim. On interlocutory appeal of this dismissal and the accompanying denial of a preliminary injunction, we affirmed by memorandum disposition.

Effective January 1, 2000, the Legislature renumbered California's post-mortem right of publicity statute from § 990 to § 3344.1 and amended it to "apply to the [1147] adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state." CAL. CIV. CODE § 3344.1(n) (West 2002). The former version of the statute contained no comparable provision. See CAL. CIV. CODE § 990 (West 1998). Following this amendment, the Fund moved to reinstate its post-mortem right of publicity claim, arguing that § 3344.1(n) is a choice of law provision that requires application of California law. The District Court denied the motion, concluding that § 3344.1(n) is not a choice of law provision. The District Court further concluded that California's default personal property choice of law provision in California Civil Code § 946 applies to the current version of the post-mortem right of publicity in § 3344.1 — as it did to the former version of that right in § 990 — and requires the application of the law of the decedent's domicile, Great Britain, which does not recognize a post-mortem right of publicity.

The Fund argues before us — as it did before the District Court — that § 3344.1(n) is a choice of law provision requiring application of California law to its post-mortem right of publicity claim. We review questions of statutory interpretation de novo. See In re MacIntyre, 74 F.3d 186, 187 (9th Cir.1996). We conclude that the plain language of § 3344.1(n), as well as its legislative history, supports the District Court's decision not to reinstate the Fund's post-mortem right of publicity claim.

B. Plain Language of the Statute

Courts "must interpret a ... statute according to its plain meaning, except in the rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters." In re Arden, 176 F.3d 1226, 1229 (9th Cir.1999) (quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989)) (internal quotation marks omitted). Section 3344.1(n) limits the application of California's post-mortem right of publicity statute to "cases in which the liability, damages, and other remedies arise from acts occurring directly in this state." The District Court concluded that by the plain meaning of its language, this provision is not a choice of law provision, but "simply addresses the reach of the statute's coverage." Cairns II, 120 F.Supp.2d at 883.

We agree. Section 3344.1(b) provides that the post-mortem right of publicity is a (personal) property right. Section 3344.1(n) states that California's post-mortem right of publicity statute "shall apply to cases ... aris[ing] from acts occurring directly in [California]." Section 3344.1(n) does not state that California's post-mortem right of publicity statute applies to such cases regardless of the domicile of the owner of the right. Section 946 provides that personal property is governed by the law of the domicile of its owner unless there is law to the contrary in the place where the personal property is situated, i.e., California. See supra note 5. The statement in § 3344.1(n) that California's post-mortem right of publicity statute "shall apply to cases ... aris[ing] from acts occurring directly in [California]" is compatible with the post-mortem right of publicity being governed by the law of the domicile of its owner, because the statute does not state by its plain language that such cases are not governed by the law of the domicile of the owner. Thus, there is no "law to the contrary" to prevent application of the default choice of law provision in § 946 to the post-mortem right of publicity statute in § 3344.1. Accordingly, unless the "literal application" of the statute [1148] will produce "a result demonstrably at odds with the intentions of its drafters," Arden, 176 F.3d at 1229, § 946 applies to § 3344.1, and the Fund's post-mortem right of publicity claim is foreclosed.

The Fund argues that "[t]here is nothing in [§ 3344.1] to suggest that a court should look to Cal. Civil Code § 946 ... to determine whether the post-mortem right of publicity applies to a particular plaintiff or her heirs." Section 946, however, is a default choice of law provision that applies "[i]f there is no law to the contrary," and no explicit reference to this default provision should be expected in § 3344.1 — let alone required — for § 946 to apply.

C. Legislative History

The legislative history of § 3344.1 further supports our conclusion that § 3344.1(n) is not a choice of law provision. On January 20, 1999, Senator Burton introduced Senate Bill 209 seeking to amend the former version of the post-mortem right of publicity statute in § 990. The proposed amendment initially contained a subsection (o) that stated: "[A] plaintiff has standing to bring an action pursuant to this section if any of the acts giving rise to the action occurred in this state, whether or not the plaintiff is a domiciliary of this state." Cairns II, 120 F.Supp.2d at 884 (emphasis added). The "domiciliary of this state" language was later deleted from the proposed amendment. The amendment was ultimately adopted without this language as § 3344.1(n), which reads as follows: "This section shall apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state." CAL. CIV. CODE § 3344.1(n) (West 2002).

The California Assembly Judiciary Committee Hearing of June 22, 1999 provides evidence that the Legislature did not intend § 3344.1(n), as adopted, to prevent application of § 946 to the post-mortem right of publicity. During that hearing, Senator Burton attempted to re-introduce the "domiciliary of this state" language. Assembly Member and Committee Vice-Chair Pacheco asked whether such an addition was necessary and whether there was "any law that says you have to be domiciled in the state at the time of death." Mark Lee, counsel for the Fund in this case before the District Court and present at the hearing on behalf of the Fund as a proponent of Senate Bill 209, answered that the District Court in Cairns I had "held that domicile was required."^[5] After further discussion, Senator Burton withdrew his proposed amendment to add the "domiciliary of the state" language to what became § 3344.1(n).

We have observed that "California courts give substantial weight to the deletion of a provision during the drafting stage. `The rejection by the Legislature of a specific provision contained in an act as originally introduced is most persuasive to the conclusion that the act should not be construed to include the omitted provision.'" Jimeno v. Mobil Oil Corp., 66 F.3d 1514, 1530 (9th Cir.1995) (quoting [1149] Rich v. State Bd. of Optometry, 235 Cal. App.2d 591, 45 Cal.Rptr. 512, 522 (1965)). Here, the Committee deleted the "domiciliary of this state" language and resisted Senator Burton's attempt to reinsert this language. The Legislature ultimately passed § 3344.1(n) without the "domiciliary of this state" language. Under Jimeno, this "rejection by the Legislature" of the "domiciliary of this state" language is "most persuasive to the conclusion that [§ 3344.1(n)] should not be construed to include the omitted [`domiciliary of this state' language]." 66 F.3d at 1530. The rejection of the "domiciliary of this state" language is made more persuasive by the California Assembly Judiciary Committee's insistence on deleting this language although the Committee was made aware that the District Court's decision in Cairns I required domicile in California in the absence of such language.

Taken together, the legislative history strongly indicates that the Legislature did not intend to statutorily overrule the District Court's requirement of California domicile in Cairns I. Thus, a "literal application" of § 3344.1(n) will not produce "a result demonstrably at odds with the intentions of its drafters." Arden, 176 F.3d at 1229. Accordingly, the Fund's post-mortem right of publicity claim must fail because the law of Princess Diana's domicile, Great Britain, governs and that law does not recognize a post-mortem right of publicity.

III. FALSE ENDORSEMENT

A. Introduction

The District Court granted Franklin Mint's motion for summary judgment on the Fund's Lanham Act claim for false endorsement because Franklin Mint's use of Princess Diana's name and likeness did not implicate the source-identification purpose of trademark protection, and because there was no likelihood of customer confusion as to the origin of Franklin Mint's Diana-related products. We review a grant of summary judgment de novo. Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir.2000) (en banc). We must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact and whether the District Court correctly applied the relevant substantive law. Id.

Under the Lanham Act's false endorsement provision,

Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which ... is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, ... shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.

15 U.S.C. § 1125(a)(1).

Under the law of false endorsement, likelihood of customer confusion is the determinative issue. See Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1403 (9th Cir.1997) ("`Likelihood of Confusion' is the basic test for ... trademark infringement."). Between 1981 and 1997, many products, including some that were largely indistinguishable from Franklin Mint products, bore the name and likeness of Princess Diana, who neither endorsed nor objected to any of these products. Consumers, therefore, had no reason to believe Franklin Mint's [1150] Diana-related products were endorsed by the Princess. This did not change when, following Princess Diana's death in 1997, the Fund endorsed approximately twenty products — but not Franklin Mint's — amidst a flood of un-endorsed Diana-related memorabilia. Under these circumstances, there was no likelihood of confusion as to the origin of Franklin Mint's Diana-related products. In addition, Franklin Mint is entitled to a "fair use" defense for its references to Princess Diana to describe its Diana-related products. Accordingly, the District Court did not err when it granted summary judgment in favor of Franklin Mint on this claim.

B. The Distinction Between the Classic Fair Use and Nominative Fair Use Defenses

The District Court held:

Defendants' use of the image of Princess Diana on their products and the words "Diana, Princess of Wales," to describe their products does not imply endorsement by plaintiffs. Because defendants' use does not implicate the source-identification purpose of trademark protection, it falls outside the scope of § 1125(a), and defendants are entitled to summary adjudication of the false endorsement claim as a matter of law.

Cairns III, 107 F.Supp.2d at 1216 (emphasis added). In support of this holding, the District Court quoted our conclusion in New Kids on the Block v. News Am. Publ'g, Inc., 971 F.2d 302, 308 (9th Cir.1992), that "nominative [fair] use of a mark ... lies outside the strictures of trademark law ... [b]ecause it does not implicate the source-identification function that is the purpose of trademark." The District Court stated: "Although the New Kids court reached the above conclusion in analyzing defendants' [nominative] fair use defense, the same threshold consideration is applicable to this case...." Cairns III, 107 F.Supp.2d at 1216. We agree that New Kids' "threshold consideration" applies in the present case and conclude that Franklin Mint is entitled to a nominative fair use defense for its references to Princess Diana to describe its Diana-related products.

We distinguish two types of fair use: "classic fair use," in which "the defendant has used the plaintiff's mark to describe the defendant's own product," and "nominative fair use," in which the defendant has used the plaintiff's mark "to describe the plaintiff's product" for the purpose of, for example, comparison to the defendant's product. New Kids, 971 F.2d at 308 (second emphasis added). The distinction between classic and nominative fair use is important for two reasons: (1) classic and nominative fair use are governed by different analyses; and (2) the classic fair use analysis only complements the likelihood of customer confusion analysis set forth in Sleekcraft,^[6] whereas the nominative fair use analysis replaces the Sleekcraft analysis.

Under the common law classic fair use defense codified in the Lanham Act at 15 United States Code § 1115(b), "[a] junior user is always entitled to use a descriptive term in good faith in its primary, descriptive sense other than as a trademark." 2 McCarthy on Trademark and Unfair Competition § 11:45 (4th [1151] ed.2001). To establish a classic fair use defense, a defendant must prove the following three elements: "1. Defendant's use of the term is not as a trademark or service mark; 2. Defendant uses the term `fairly and in good faith'; and 3. [Defendant uses the term] `[o]nly to describe' its goods or services." Id. at § 11:49 (quoting 15 U.S.C. § 1115(b)). In our Circuit, the classic fair use defense is not available if there is a likelihood of customer confusion as to the origin of the product. See Transgo, Inc. v. Ajac Transmission Parts Corp., 911 F.2d 363, 365 n. 2 (9th Cir.1990) (classic fair use defense available only so long as such use does not lead to customer confusion as to the source of the goods or services); Lindy Pen Co. v. Bic Pen Corp., 725 F.2d 1240, 1248 (9th Cir.1984) (same). The classic fair use analysis, therefore, only complements the likelihood of customer confusion analysis set forth in Sleekcraft.

In New Kids, by contrast, we developed a nominative fair use analysis that replaces the likelihood of customer confusion analysis set forth in Sleekcraft. See Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir.2002) (stating that "[i]n cases in which the defendant raises a nominative [fair] use defense, the [New Kids] test should be applied instead of the test for likelihood of confusion set forth in Sleekcraft" because it "better evaluates the likelihood of confusion in nominative [fair] use cases"). To establish a nominative fair use defense, a defendant must prove the following three elements:

First, the [plaintiff's] product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the [plaintiff's] product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

New Kids, 971 F.2d at 308 (footnote omitted).

The nominative fair use analysis is appropriate where a defendant has used the plaintiff's mark to describe the plaintiff's product, even if the defendant's ultimate goal is to describe his own product.^[7] Conversely, the classic fair use analysis is appropriate where a defendant has used the plaintiff's mark only to describe his own product, and not at all to describe the plaintiff's product.^[8] We hold that Franklin Mint's use of Princess Diana's name and likeness fits the former definition and that, therefore, the nominative fair use analysis rather than the classic fair use analysis is appropriate in the present case.

New Kids involved the use by the defendants — two newspapers — of the trademarked name of the plaintiff — a teen band — to publicize the newspapers' telephone polls about the band. See 971 F.2d [1152] at 304. The newspapers used the trademark, i.e., "The New Kids," to describe the plaintiff's product, i.e., the band "The New Kids on the Block." The newspapers' ultimate goal, however, was to describe their own products, i.e., telephone polls about the band "The New Kids on the Block." Application of the nominative fair use analysis was appropriate in New Kids because the defendants had used the plaintiff's mark to describe the plaintiff's product, even though the defendants' ultimate goal was to describe their own products.

The same is true of the three cases we cited in New Kids as nominative fair use cases. Id. at 307-08. In Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), an automobile repair business specializing in the repair of Volkswagen and Porsche vehicles placed a large sign on the front of the premises that read "Modern Volkswagen Porsche Service." Id. at 351. "Volkswagen" was a registered trademark of the plaintiff. Id. In WCVB-TV v. Boston Athletic Ass'n, 926 F.2d 42 (1st Cir.1991), a television station made unauthorized broadcasts of — and referred by name to — the "Boston Marathon," an annual sports event organized and trademarked under that name. Id. at 44. And in Smith v. Chanel, Inc., 402 F.2d 562 (9th Cir.1968), an imitator of brand perfumes advertised his "2d Chance" perfume as indistinguishable from the trademarked "Chanel # 5" perfume. Id. at 563.

In each of these three cases, the alleged infringer used the trademark — "Volkswagen," "Boston Marathon," and "Chanel # 5" — to describe the alleged infringee's product — the automobile, sports event, and perfume designated by that name. In each of these cases, however, the alleged infringer's ultimate goal was to describe his own product — an automobile repair business specializing in the repair of Volkswagens, a television broadcast of the Boston Marathon, and a perfume indistinguishable from Chanel # 5. As in New Kids, application of the nominative fair use analysis was appropriate in each of these cases because the alleged infringer had used the alleged infringee's mark to describe the product of the infringee, even though the infringer's ultimate goal was to describe his own product.^[9]

To summarize, courts should use the New Kids nominative fair use analysis in cases where the defendant has used the plaintiff's mark to describe the plaintiff's product, even if the defendant's ultimate goal was to describe his own product. By contrast, courts should use the traditional classic fair use analysis in cases where the defendant has used the plaintiff's mark only to describe his own product, and not at all to describe the plaintiff's product.

C. Application of the Nominative Fair Use Defense

In the present case, Princess Diana is the Fund's "product" and Princess Diana's name and likeness are the Fund's marks. Franklin Mint used Princess Diana's name and likeness to describe [1153] Princess Diana, although Franklin Mint's ultimate goal was to describe its own Diana-related products.^[10] Because Franklin Mint used the Fund's mark to describe the Fund's product, we apply the New Kids nominative fair use analysis, even though Franklin Mint's ultimate goal was to describe its own products.

The first element of the New Kids nominative fair use test is that "the [Fund's] product ... must be one not readily identifiable without use of the trademark." 971 F.2d at 308. We explained in New Kids that "one might refer to `the two-time world champions' or `the professional basketball team from Chicago,' but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls." Id. at 306. Similarly, one might refer to "the English princess who died in a car crash in 1997," but it is far simpler (and more likely to be understood) to refer to "Princess Diana." We therefore hold that Princess Diana's person is not readily identifiable without use of her name.

There is no substitute for Franklin Mint's use of Princess Diana's likeness on its Diana-related products. Nor is there a substitute for Franklin Mint's use of Princess Diana's likeness in its advertisements for these products. For example, one might explain — as Franklin Mint in fact did — that the "Diana, The People's Princess Doll" is "[d]ressed in the stylish light-blue suit [Princess Diana] wore when she was presented with her signature flower" and "[c]ompletely accessorized with [a] purse and a tiny bouquet of Princess of Wales Roses" that Princess Diana carried on the same occasion. But it is far simpler (and more likely to be understood) to juxtapose — as Franklin Mint also did — a picture of the doll and a photograph of Princess Diana wearing the same suit and carrying the same purse and the same bunch of flowers.^[11] We therefore hold that Princess Diana's physical appearance is not readily identifiable without the use of her likeness. Thus, the first element of the New Kids nominative fair use test is met.

The second element of the New Kids nominative fair use test is that "only so much of the mark or marks may be used as is reasonably necessary to identify the [Fund's] product or service." Id. at 308. We explained in New Kids:

Thus, a soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but would not be entitled [1154] to use Coca-Cola's distinctive lettering. See Volkswagenwerk, 411 F.2d at 352 ("Church did not use Volkswagen's distinctive lettering style or color scheme, nor did he display the encircled `VW' emblem")....

Id. at 308 n. 7.

In the present case, there is no allegation that Franklin Mint used any "distinctive lettering" or any particular image of Princess Diana intimately associated with the Fund. See, e.g., Toho Co. v. William Morrow & Co., 33 F.Supp.2d 1206, 1209, 1211 (C.D.Cal.1998) (holding that a publisher who used the trademark "Godzilla" as the title of a book about the movie-monster by the same name used more of the mark than was "reasonably necessary" where "the title[was] written in the distinctive lettering style used by [the trademark holder] and its licensees in their merchandising activities").

What is "reasonably necessary to identify the plaintiff's product" differs from case to case. Compare Playboy Enters., Inc., 279 F.3d at 804 (holding that "[t]he repeated depiction of `PMOY '81' is not necessary to describe" a former "Playmate of the Year" on her website), with Mattel, Inc. v. MCA Records, Inc., 28 F.Supp.2d 1120, 1142 (C.D.Cal.1998) (holding that "the repeated use of the words `Barbie' and `Ken' are reasonably necessary for the purposes of parody" in a song lampooning the lifestyle associated with these dolls).

Where, as in the present case, the description of the defendant's product depends on the description of the plaintiff's product, more use of the plaintiff's trademark is "reasonably necessary to identify the plaintiff's product" than in cases where the description of the defendant's product does not depend on the description of the plaintiff's product. For example, General Motors would probably be able to sell its Oldsmobile Eighty-Eight without any reference to a basketball star who, like the car, received an award three years in a row. See Abdul-Jabbar, 85 F.3d at 409. But it is doubtful whether Franklin Mint would be able to sell its "Diana, Princess of Wales Porcelain Portrait Doll" without prominent reference to Princess Diana. Not every Franklin Mint customer can be expected to recognize Princess Diana's features on the doll. And even fewer Franklin Mint customers can be expected to recognize Princess Diana's royal tiara and bolero jacket on the doll. Accordingly, a caption reading "Diana" is "reasonably necessary" to identify Princess Diana. Similarly, a photograph showing Princess Diana wearing her royal tiara and bolero jacket is "reasonably necessary" to identify these accessories of Princess Diana. In a nutshell, Franklin Mint had to ensure that its customers understood the references to Princess Diana, and it did what was "reasonably necessary" for this purpose.^[12] Thus, the second element of the New Kids nominative fair use test is also met.

The third and final element of the New Kids nominative fair use test is that "the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder." 971 F.2d at 308. None of Franklin Mint's advertisements for its Diana-related products claim that these products are sponsored or endorsed by the Fund. Nor do any of these advertisements bear a disclaimer that the products are not sponsored or endorsed by the Fund. By contrast, Franklin Mint's advertisements for some of its other celebrity-related products in the same catalogue do state that [1155] they are "authorized" by a trademark holder. The absence of similar statements in Franklin Mint's advertisements for its Diana-related products suggests that they are not sponsored or endorsed by the Fund.

In addition to its other use of Princess Diana's name and likeness, Franklin Mint asked prospective purchasers of "The Princess Diana Tribute Plate" to "Join with the Franklin Mint to Continue Princess Diana's Important Work." Accompanying this request was a promise that "[a]ll proceeds" would be donated to what Franklin Mint alternatively described as "Diana, Princess of Wales' Charities" and "Diana, Princess of Wales' Favorite Charities." The District Court concluded that "[a]mple evidence before the Court demonstrates that the association between the image of Princess Diana and[the Fund] is negligible." Cairns III, 107 F.Supp.2d at 1217. The same is true regarding the association of the name of Princess Diana and the Fund. Similarly, there is no evidence that "Diana, Princess of Wales' [Favorite] Charities" have become so closely associated with the Fund that any reference to them in these terms would suggest sponsorship or endorsement by the Fund.

Franklin Mint advertised its "Diana, Princess of Wales Porcelain Portrait Doll" as "[d]ressed in the only authentic replica of the stunning designer gown with bolero jacket sold at Christie's Auction" (emphasis in original). Here, the word "authentic" suggests an authentic portrayal of the past; it does not suggest sponsorship or endorsement. Similarly, Franklin Mint promised that its "The Princess of Wales Rose" collector plate "from Capodimonte, the European Masters of floral portraiture" comes with "a special Certificate of Authenticity" (emphasis added). In this context, "authenticity" refers to the origin of the plate with Franklin Mint or Capodimonte. It does not suggest sponsorship or endorsement by the Fund.

Although the issue of suggested sponsorship or endorsement may be a closer call than the first two elements of the New Kids nominative fair use test, we conclude that this third and last element of the New Kids nominative fair use test is met as well. We therefore hold that Franklin Mint's use of the name and likeness of Princess Diana was a permissible nominative fair use. Because there are no genuine issues of material fact, even when viewing the evidence in the light most favorable to the Fund, the District Court's grant of summary judgment in favor of Franklin Mint on the Fund's false endorsement claim was appropriate.^[13]

[1156] IV. ATTORNEYS' FEES

The District Court awarded Franklin Mint $2,308,000 in attorneys' fees. We review such an award for an abuse of discretion, United States v. Lindberg, 220 F.3d 1120, 1124 (9th Cir.2000), and, finding no abuse of discretion, we affirm.

A. Entitlement to Attorneys' Fees

California's post-mortem right of publicity statute provides that "[t]he prevailing party or parties in any action under this section shall also be entitled to attorneys' fees and costs." CAL. CIV. CODE § 3344.1(a)(1) (emphasis added). Because we affirm the District Court's denial of the Fund's motion to reinstate its California post-mortem right of publicity claim, we also affirm the District Court's determination that Franklin Mint, as the prevailing party in this claim, is entitled to recover the attorneys' fees and costs associated with this claim.

We further affirm the District Court's determination that Franklin Mint is entitled to attorneys' fees and costs associated with the Fund's Lanham Act claims for false advertisement and dilution of trademark. The Lanham Act provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a) (emphasis added). We have held that this requirement is met when the case is either "groundless, unreasonable, vexatious, or pursued in bad faith." Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 881 (9th Cir.1999) (emphasis added) (quoting Stephen W. Boney, Inc. v. Boney Servs., Inc., 127 F.3d 821, 827 (9th Cir.1997)).

The District Court found that the false advertisement claim was groundless and unreasonable because the statements in the advertisements at issue were true and the Fund had no reasonable basis to believe they were false. See Cairns IV, 115 F.Supp.2d at 1189. This finding did not constitute an abuse of discretion and was, under Avery, sufficient to justify an award of attorneys' fees to Franklin Mint on this claim.

The District Court also found that the dilution of trademark claim was groundless and unreasonable because it had no legal basis, having been based on the "absurd" and "just short of frivolous" contention that the mark "Diana, Princess of Wales" has taken on a secondary meaning in the mind of the public and now primarily identifies "charitable and humanitarian services rather than Princess Diana the individual." Cairns IV, 115 F.Supp.2d at 1188-89; Cairns III, 107 F.Supp.2d at 1222. This finding again did not constitute an abuse of discretion and was, under Avery, sufficient to justify an award of attorneys' fees to Franklin Mint on this claim.^[14]

In sum, we hold that the District Court did not abuse its discretion in finding that Franklin Mint was entitled to attorneys' fees for the Fund's post-mortem right of publicity, false advertisement, and dilution of trademark claims. For the reasons discussed below, we hold that the District Court also did not abuse its discretion in calculating the amount of the attorneys' fees awarded to Franklin Mint.

[1157] B. Amount of Attorneys' Fees

According to the "lodestar" method developed by the Supreme Court, "[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The Fund mainly takes issue with the District Court's determination of the number of hours reasonably expended by Franklin Mint on the litigation.

Franklin Mint requested $3,124,121.85 in attorneys' fees for over 10,900 hours of work by forty-five timekeepers. Franklin Mint allocated some hours exclusively to the right of publicity claim, and other hours exclusively to the trademark claims. Still other hours were not exclusively allocated by Franklin Mint to either type of claim, but were instead allocated half to the right of publicity claim and half to the trademark claims. Any hours allocated in whole or in part to the trademark claims were allocated to the false endorsement, dilution of trademark, and false advertisement claims collectively and not to any one trademark claim individually.

The District Court found that the unusually large number of hours and timekeepers made application of the traditional lodestar method unworkable. Instead, the District Court concluded that Franklin Mint's fee request was an appropriate starting point because Franklin Mint had made a good faith effort to exclude from the fee request hours that were excessive, redundant, or otherwise unnecessary. The District Court then reduced the fee request by approximately twenty-six percent from $3,124,121.85 to $2,308,000 based on the following four findings.

First, the District Court found that it was inappropriate to allocate half of the hours which were not exclusively allocated to either claim to the right of publicity claim because that claim was on interlocutory appeal while the trademark claims were being litigated. Therefore, the District Court changed the allocation, allocating only one quarter of the not exclusively allocated hours to the right of publicity claim and allocating the remaining three quarters of that time to the trademark claims. Second, because the District Court found that Franklin Mint was not entitled to recover attorneys' fees for the false endorsement trademark claim, the District Court reduced the fees attributed to the trademark claims by thirty percent. Third, the District Court reduced the computer research fees by twenty-five percent because computer research charges are not an exact substitute for an attorney's hourly rate, and because a portion of these charges must be considered overhead. Fourth, the District Court found that Franklin Mint could not recover any of its fees for lobbying against attempts to change California's post-mortem right of publicity statute.

The District Court did not abuse its discretion in making an award that substantially reduced Franklin Mint's attorneys' fees request. The Supreme Court has observed that where, as 8812 in this case, the plaintiff's claims involve a "common core of facts" or are based on "related legal theories," it is "difficult to divide the hours expended on a claim-by-claim basis." Hensley, 461 U.S. at 435, 103 S.Ct. 1933. This Circuit has cautioned, however, that "the impossibility of making an exact apportionment [between recoverable Lanham Act claims and non-recoverable non-Lanham Act claims] does not relieve the district court of its duty to make some attempt to adjust the fee award in an effort to reflect an apportionment." Gracie v. Gracie, 217 F.3d 1060, 1070 (9th Cir.2000). By analogy, the same rule should apply in cases such as this one, which involves non-recoverable Lanham Act claims, rather [1158] than — as Gracie did — non-recoverable non-Lanham Act claims.

In the present case, the District Court attempted to "adjust the fee award in an effort to reflect an apportionment." Id. Far from "uncritically accept[ing] a party's representations as to the time and money reasonably spent on the case," Gracie, 217 F.3d at 1071, the District Court reduced the fees sought by twenty-six percent or several hundred thousand dollars. A percentage reduction was appropriate in this case. See Hensley, 461 U.S. at 438 n. 13, 103 S.Ct. 1933 (finding that the district court properly reduced the hours of one attorney by thirty percent to account for, inter alia, his failure to keep contemporaneous time records); see also 5 McCarthy, supra, at § 30:102 ("[I]t is appropriate for the court to reduce a total attorney fee amount by a percentage which represents work on[non-recoverable] non-Lanham Act claims."). During oral argument on Franklin Mint's motion for attorneys' fees, the Fund itself proposed a percentage reduction, arguing that ten percent — rather than twenty-five percent — of the not exclusively allocated time was "properly allocatable to the right of publicity claim" and that the fees attributed to the trademark claims should be reduced by thirty-three percent — rather than thirty percent. The District Court did not abuse its discretion by adopting a different percentage reduction that is less favorable to the Fund.

"[I]n appropriate cases, the district court may adjust the `presumptively reasonable' lodestar figure based upon the factors listed in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir. 1975)...." Intel Corp. v. Terabyte Int'l, Inc., 6 F.3d 614, 622 (9th Cir.1993) (emphasis added).^[15] "The court need not consider all ... factors, but only those called into question by the case at hand and necessary to support the reasonableness of the fee award." Kessler v. Assocs. Fin. Servs. Co. of Hawaii, 639 F.2d 498, 500 n. 1 (9th Cir.1981).

The Fund complains that the District Court failed to consider the last Kerr factor, i.e., awards in similar cases. The Fund points to the allegedly "unprecedented size of the award" and claims that "the District Court's award of over $1.6 million for the Lanham Act claims may be the first fee award in a Lanham Act case to exceed $1 million."

The allegedly "unprecedented size of the award" does not automatically make it unreasonable. See Fantasy, Inc. v. Fogerty, 94 F.3d 553, 560-561 (9th Cir.1996) (discounting party's argument that award of $1,347,519.15 in attorneys' fees in copyright litigation was three times larger than any other award it had seen, and commenting that "comparisons to fee awards in other cases are largely irrelevant, and certainly not determinative, inasmuch as the reasonableness of a particular fee award depends on a case-by-case analysis"). When considering "awards in similar cases," the amount in controversy in those cases cannot be ignored. In its Lanham Act claims, the Fund reportedly sought $32,252,000 in lost profits plus an unspecified amount for loss of goodwill and [1159] lost business opportunities.^[16] The ratio between the attorneys' fees awarded to defendant Franklin Mint and the damages sought by the Fund in this unsuccessful Lanham Act case is at most one to fourteen. This ratio is not disproportionately higher than the ratios between the attorneys' fees and the damages awarded to plaintiffs in successful Lanham Act cases. In fact, the ratio in this case is considerably lower than the ratios in some of those cases.^[17] See, e.g., Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1117 (5th Cir.1991) (affirming an award of $937,550 in attorneys' fees to a party who had been awarded less than twice as much in damages); Universal City Studios, Inc. v. Nintendo Co., 797 F.2d 70, 77 (2d Cir. 1986) (affirming an attorneys' fees award that, at $1,142,545.70, exceeded the damages by almost 150%).

Equally important is the undisputed fact that the Fund itself has expended £ 1.7 million British pounds (approximately $2.6 million) on this case, several hundred thousand dollars more than the amount the District Court awarded to Franklin Mint. In light of the District Court's substantial reductions of Franklin Mint's fee request, the very large amount at stake in this case, and the $2.6 million expended by the Fund on this case, the District Court did not abuse its discretion when it awarded Franklin Mint $2,308,000 in attorneys' fees.

V. CONCLUSION

For the foregoing reasons, we affirm the District Court's denial of the Fund's motion to reinstate its post-mortem right of publicity claim. We also affirm the District Court's grant of Franklin Mint's motion for summary judgment on the Fund's false endorsement claim. We finally affirm the District Court's award of $2,308,000 in attorneys' fees to Franklin Mint.

AFFIRMED.

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[1] Both California Civil Code § 990(a) (West 1998), and California Civil Code § 3344.1(a) (West 2002), provide in part: "Any person who uses a deceased personality's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the[decedent's successor or successors in interest], shall be liable for any damages sustained by the person or persons injured as a result thereof."

[2] California Civil Code § 946 states: "If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile."

[3] The District Court also granted Franklin Mint's motion for summary judgment on the Fund's Lanham Act dilution of trademark and false advertisement claims and on the Fund's unfair competition and false and misleading advertisement claims under California law. Regarding the Fund's Lanham Act dilution of trademark claim, the District Court concluded that the mark "Diana, Princess of Wales" had not acquired a secondary meaning identifying Princess Diana's charitable services rather than Princess Diana as an individual. Id. at 1221-22. Regarding the Fund's Lanham Act false advertisement claim, the District Court concluded that there was no evidence that Franklin Mint had made any false statements in its advertisements. Id. at 1222-23. For the same reason, the District Court also granted summary judgment in favor of Franklin Mint on the Fund's unfair competition and false and misleading advertising claims under California Business and Professions Code §§ 17200 and 17500 et seq. Cairns III, 107 F.Supp.2d at 1223 n. 6. The Fund does not appeal these decisions.

[4] California Civil Code § 946 states: "If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile." The Fund argues, and we assume arguendo, that its alleged post-mortem right of publicity would be "situated" in California.

[5]Similarly, the Senate Rules Committee Report on Senate Bill No. 209, as amended March 3, 1999, states:

SB 209 would state that "pursuant to the jurisdiction provided under Code of Civil Procedure 410.10, a plaintiff has standing to bring an action pursuant to this section if any of the acts giving rise to the action occurred in this state, whether or not the decedent was a domiciliary of this state at the time of death." ... The author [i.e., Senator Burton] asserts that this clarification of law is necessary in light of a recent decision, Lord Simone Cairnes v. Franklin Mint.

Senate Rules Com. Rep. Cal. S.B. 209 (as amended Mar. 3, 1999) (emphasis added).

[6] In Sleekcraft,we identified a non-exclusive list of eight factors that are relevant in determining whether customer confusion is likely:

1. strength of the mark; 2. proximity of the goods; 3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. type of goods and the degree of care likely to be exercised by the purchaser; 7. defendant's intent in selecting the mark; and 8. likelihood of expansion of the product lines.

599 F.2d at 348-49.

[7] This is in fact the standard case of nominative fair use: Only rarely, if ever, will a defendant choose to refer to the plaintiff's product unless that reference ultimately helps to describe the defendant's own product.

[8] A good example of classic fair use is In re Dual-Deck Video Cassette Recorder Antitrust Litig., 11 F.3d 1460 (9th Cir.1993). In that case, the plaintiff sold a videocassette recorder, which had two decks in one machine, under the trademark "VCR-2." See id. at 1462. The defendant sold receivers and other machines to which two videocassette recorders could be attached and labeled the relevant terminals on the backs of its machines "VCR-1" and "VCR-2." See id. Thus, the defendant used the mark "VCR-2" only to describe its own products, to which any second VCR could be attached, and not at all to describe the plaintiff's product or any other particular VCR. Accordingly, the classic fair use analysis was appropriate. We held that "[t]he uses were descriptive, and there is no evidence from which an inference of bad faith could be drawn." Id. at 1467.

[9] The same is true of the cases which we have analyzed as nominative fair use cases following New Kids. See Abdul-Jabbar v. General Motors Corp., 85 F.3d 407 (9th Cir.1996) (defendant, a car company, referred to plaintiff, a basketball star who had won an award three years in a row, in a commercial for a car that had also won an award three years in a row); Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir.2001) (defendant, a clothing company, used photograph of plaintiffs, championship surfers, to market T-shirts exactly like those worn by plaintiffs in the photograph); Playboy Enters., Inc. v. Welles, 279 F.3d 796 (9th Cir.2002) (defendant, a former "Playboy Playmate of the Year," used that trademarked phrase of the plaintiff, "Playboy" magazine, on her own website, which offered information about her and free photos of her, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson).

[10] In this regard, the facts in the present case are similar to those in Abdul-Jabbar, where we applied the New Kids nominative fair use analysis. As mentioned supra in note 10, the defendant in that case, a car company, referred to the plaintiff, a basketball star who had won an award three years in a row, in a commercial for a car that had also won an award three years in a row. See 85 F.3d at 409. Thus, both in the present case and in Abdul-Jabbar, the defendants used the plaintiffs marks (the name or likeness of Princess Diana and Kareem Abdul-Jabbar, respectively) to describe the plaintiffs "products" (Princess Diana and Kareem Abdul-Jabbar, respectively), although the defendants' ultimate goal was to describe their own products (memorabilia and a car, respectively). That we applied the New Kids nominative fair use analysis in Abdul-Jabbar suggests that we should also apply this analysis in the present case.

[11] Franklin Mint's other uses of Princess Diana photographs in its advertisements for its Diana-related products are similarly justified: (1) a photograph of Princess Diana wearing a bolero jacket and a royal tiara appears opposite a picture of the similarly equipped "Diana, Princess of Wales Porcelain Portrait Doll"; (2) a photograph of Princess Diana holding a bouquet of white roses "bearing her name" appears next to a picture of "The Princess of Wales Rose" collector plate depicting the same white roses; and (3) a picture of the "Diana, Forever Sparkling Classic Drop Earrings" described as "inspired by those the princess wore at her most memorable occasions" appears below a photograph of Princess Diana wearing similar drop earrings.

[12] The same is true for Franklin Mint's use of Princess Diana's name and likeness in connection with its other Diana-related memorabilia discussed supra in note 12 and the accompanying text.

[13] The District Court did not apply the nominative fair use analysis, although it relied heavily on nominative fair use language from New Kids. See supra section III.A. Instead, the District Court held that Franklin Mint's use of Princess Diana's name and likeness did not implicate the source-identification purpose of trademark protection, and that there was no likelihood of confusion under Sleekcraft. But "we may affirm a summary judgment on any ground finding support in the record." Karl Storz Endoscopy-Am., Inc. v. Surgical Techs., Inc., 285 F.3d 848, 855 (9th Cir.2002). Moreover, even if we were to apply the 15 United States Code § 1115(b) classic fair use analysis and the Sleekcraft likelihood of confusion test to this case, we would hold that Franklin Mint's use of Princess Diana's name and likeness was a permissible classic fair use, and that there was no likelihood of confusion. First, Franklin Mint did not use Princess Diana's name and likeness "as a trademark," but used them "`fairly and in good faith'" and "`[o]nly to describe' its goods" as required by 15 United States Code § 1115(b). 2 McCarthy, supra, at § 11:49. Second, "the weak association between [Princess Diana's name and likeness] and [the Fund] weighs heavily against finding a likelihood of confusion" and is not outweighed by any Sleekcraft factors that weigh in favor of finding a likelihood of confusion. Cairns III, 107 F.Supp.2d at 1217. Franklin Mint's use of Princess Diana's name and likeness would therefore qualify as a permissible classic fair use without likelihood of confusion.

[14] By contrast, the District Court found that the false endorsement claim, although ultimately unsuccessful, was not "groundless, unreasonable, vexatious, or pursued in bad faith" and that it was, therefore, not "exceptional" within the meaning of the Lanham Act's authorization of attorneys' fees. See Avery, 189 F.3d at 881; 15 U.S.C. § 1117(a). Franklin Mint has abandoned its appeal of this holding, which is therefore not before us.

[15] The Kerrfactors are:

(1) the time and labor required, (2) the novelty and difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or the circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and ability of the attorneys, (10) the `undesirability' of the case, (11) the nature and length of the professional relationship with the client, and (12) awards in similar cases.

Kerr, 526 F.2d at 70.

[16] In its right of publicity claim, the Fund sought an additional $100-300 million in punitive damages.

[17] Because courts who reject a Lanham Act claim typically do not report how much damages the plaintiff sought in that claim, the ratio between attorneys' fees awarded and damages sought in this unsuccessful Lanham Act case cannot be compared with the corresponding ratios in other unsuccessful Lanham Act cases.

David Blasband, Nancy F. Wechsler and Robert C. Harris for appellants.

Leonard M. Marks, Jane G. Stevens and Beth M. Schillinger for respondent.

Chief Judge WACHTLER and Judges JASEN, MEYER, SIMONS, KAYE, ALEXANDER and TITONE concur in memorandum.

[911] MEMORANDUM.

The order of the Appellate Division should be reversed, without costs, the complaint dismissed, the preliminary injunction vacated, and the question certified answered in the negative.

Plaintiff, a Florida-based bank acting as personal representative of the estate of the late playwright Tennessee Williams, a Florida domiciliary at the time of his death, commenced this action to enjoin defendants, the owners of a theatre located on West 48th Street in Manhattan, from renaming the theatre the "Tennessee Williams." In its complaint, plaintiff alleges, among other things, that the renaming of the theatre without its consent violates the decedent's descendible right of publicity.

Special Term granted plaintiff's motion for a preliminary injunction and denied defendant's cross motion to dismiss the complaint. That order has been affirmed by the Appellate Division, First Department, which granted leave to appeal on a certified question. We now reverse.

The parties have assumed that the substantive law of New [912] York is dispositive of the appeal and have addressed Florida law only tangentially. Both Special Term and the Appellate Division decided the case under what they believed to be New York law. In doing so, all have overlooked the applicable choice of law principle (cf. James v Powell, 19 N.Y.2d 249, 256), followed by both New York and Florida, that questions concerning personal property rights are to be determined by reference to the substantive law of the decedent's domicile (EPTL 3-5.1 [b] [2]; [e]; Matter of Fabbri, 2 N.Y.2d 236, 239; Quintana v Ordono, 195 So 2d 577 [Fla App], cert discharged 202 So 2d 178 [Fla]; In re Tim's Estate, 161 So 2d 40 [Fla App], decree quashed on other grounds 180 So 2d 161 [Fla], judgment conformed to 180 So 2d 502 [Fla App], cert denied sub nom. Rudawski v Florida, 384 US 952; see also, Restatement [Second] of Conflict of Laws § 263; Weintraub, Conflict of Laws §§ 2.13, 8.25 [2d ed]). For choice of law purposes, at least, rights of publicity constitute personalty (see, Acme Circus Operating Co. v Kuperstock, 711 F.2d 1538, 1541; Groucho Marx Prods. v Day & Night Co., 689 F.2d 317; Factors Etc. v Pro Arts, 652 F.2d 278, cert denied 456 US 927).

Under Florida law (Fla Stats Ann § 540.08), only one to whom a license has been issued during decedent's lifetime and the decedent's surviving spouse and children possess a descendible right of publicity, which is extremely limited and which Florida courts have refused to extend beyond the contours of the statute (see, Loft v Fuller, 408 So 2d 619 [Fla App], review denied 419 So 2d 1198 [Fla]). Since Tennessee Williams did not have a surviving spouse or child and did not issue a license during his lifetime, plaintiff possesses no enforceable property right. In light of this holding, we do not pass upon the question of whether a common-law descendible right of publicity exists in this State.

We do not reach the merits of the remaining causes of action asserted in the complaint because plaintiff has no standing to assert them.

Order reversed, etc.

[1539] Robert M. Todd, Mattson, McGrady & Todd, St. Petersburg, Fla., for defendant-appellant.

Trenam, Simmons, Kemker, Scharf, Barkin, Frye & O'Neill, Stanley H. Eleff, Keith E. Rousaville, Tampa, Fla., for plaintiff-appellee.

Before RONEY and KRAVITCH, Circuit Judges, and TUTTLE, Senior Circuit Judge.

KRAVITCH, Circuit Judge:

This diversity action, involving survivability of the right of publicity of a person's name, presents a choice of law problem and a need to interpret state law. We conclude that the court below erred in granting summary judgment and reverse and remand.

This litigation resulted from a dispute between appellees, Acme Circus and Gerald Collins, Acme's owner, and appellant Jane Beatty Kuperstock, widow of Clyde Beatty, over the right of publicity in the name of Clyde Beatty and the title Clyde Beatty Circus. Beatty was an animal trainer, who prior to 1956 operated the Clyde Beatty Circus. In 1956, due to financial difficulties, he sold his circus equipment and property to appellee Collins and the predecessor to appellee Acme Circus, and entered into an employment contract with that circus. As part of the agreement and for its term, Beatty licensed to the buyers the right to use the name of Clyde Beatty and Clyde Beatty Circus. In 1958 Beatty and appellee, now Acme Circus, entered into another contract reaffirming the license of the name and allowing Acme the right to use another name in conjunction with Beatty's. The 1958 agreement was for a term of ten years and provided for payments to Beatty should he become disabled and to his wife should he die during the term. In June, 1965 Beatty assigned all of his right, title and interest in the Clyde Beatty Circus title and equipment to his wife, Jane Beatty, now Kuperstock. Beatty died on July 19, 1965.

The 1958 agreement expired by its own terms in 1968. Until that time Acme made payments to appellant. In 1969 appellant and Acme entered into another ten year contract. Therein appellant was recognized as the exclusive owner of the names Clyde Beatty and Clyde Beatty Circus. The contract provided for weekly payments to appellant in exchange for the license for Acme to use these titles. Both the 1958 and 1969 agreements contained options for Acme to purchase the title and name. Neither was ever exercised.

Unknown to appellant, in 1977, during the term of the 1969 agreement, Acme obtained a federal registration for the service mark "Clyde Beatty-Cole Bros. Circus," representing itself as the owner of the Clyde Beatty Circus.

Acme continued payments under the 1969 agreement until its expiration at the end of the 1978 circus season. An alleged oral agreement was then entered into between [1540] the parties whereby Acme was to pay Kuperstock $30,000 for the 1979 season, payable at $1,000 per week. This amount was paid for 23 weeks. Acme ceased making payments in September, 1979. When negotiations failed, this action resulted.

Acme Circus initially brought an action for declaratory judgment of its right to use the name of Clyde Beatty in conjunction with its circus. Kuperstock counterclaimed against Acme and Collins on various grounds. Counts I and II of the counterclaim allege a violation of Fla.Stat. 540.08 (1967), which provides for recovery of damages for infringement of the right to publicity. The statute specifically provides for the survival of the right to publicity of a person's name.

The action originally was brought by Acme in the state courts of California. It then was removed to federal court in the Central District of California. Thereafter, the matter was transferred to the Middle District of Florida as a more convenient forum, pursuant to 28 U.S.C. § 1404(a). The district court granted summary judgment on Counts I and II against Kuperstock and in favor of appellees Acme and Collins. Summary judgment was premised on the conclusion that California law controlled the issue of survivability of the right of publicity in this diversity case, that under California law the right of publicity in Clyde Beatty's name did not survive his death, and, therefore, Kuperstock possessed no right that could have been infringed in violation of Fla.Stat. § 540.08. The district court certified an interlocutory appeal to this court pursuant to 28 U.S.C. § 1292(b).

The thrust of the contentions by appellees Acme and Collins is that there were no enforceable contracts between Kuperstock and Acme, as any right to publicity in the name of Clyde Beatty expired at his death, and therefore Kuperstock gave no consideration for the contracts and owns no enforceable rights in the name of Clyde Beatty or Clyde Beatty Circus.

The district court determined that California law governs the decision whether the right of publicity of the name of Clyde Beatty, assigned to his wife during his life, survived his death. For the reasons stated infra, we agree. The court below concluded, however, that under California law the right to the name did not survive Beatty's death and therefore Kuperstock could not maintain an action for tortious infringement of a right she did not possess. With this conclusion we disagree and, accordingly, reverse and remand for additional proceedings.

Choice of Law

The district court correctly noted that because this diversity action was transferred from the Central District of California to the Middle District of Florida, it was to apply the choice of laws principles on which the Central District of California would have relied. Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). The Central District of California in a diversity action must apply the conflicts of law principles of the state in which it sits, i.e. California. Klaxon Co. v. Stentor Electrical Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Roofing & Sheet Metal Service v. LaQuinta Motor Inns, 689 F.2d 982, 991 (11th Cir.1982). Thus California choice of law rules properly are applicable here.

This, of course, does not lead inexorably to the conclusion that California substantive law applies to each issue in this action. On the contrary, application of one state's choice of laws principles may often dictate application of the substantive law of another state.

The first step in choice of law analysis is to ascertain the nature of the problem involved, i.e. is the specific issue at hand a problem of the law of contracts, torts, property, etc. The second step is to determine what choice of law rule the state of California applies to that type of legal issue. The third step is to apply the proper choice of law rule to the instant facts and thereby conclude which state's substantive law applies.

[1541] Here the issue before us is whether or not an intangible personal property right, the right of publicity, survives the death of the individual in whom the right arose. Whether or not a right of such a nature exists, is a question of personal property law.^[1]

In step two we must ascertain what choice of law principle California courts apply to issues of personal property law. Appellees consistently have argued that California applies the law of the domicile as its choice of law principle in property cases. Indeed, Cal.Civil Code § 946 states: "If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile."^[2] In Offshore Rental Co. v. Continental Oil Co., 22 Cal.3d 157, 148 Cal.Rptr. 867, 869, 583 P.2d 721, 723 (1978), the court stated: "Questions of choice of law are determined in California ... by the `governmental interest analysis' rather than by the ... `most significant contacts theory.'" This statement of law could be interpreted to mean that the "governmental interests analysis" applies to all California choice of law problems, regardless of the type of issue at hand. In both Offshore and in Reich v. Purcell, 67 Cal.2d 551, 553, 63 Cal.Rptr. 31, 33, 432 P.2d 727, 729 (1967), on which Offshore relies, however, the court was faced with a negligence issue, a tort question. Given the explicit language of Cal.Civil Code § 946, we can reasonably conclude that although in California the "governmental interests analysis" applies to choice of law issues arising from a question of whether an existing right has been tortiously infringed, the law of the domicile controls to decide whether the allegedly infringed property right exists in the first instance.^[3]

California indisputably was the domicile of Clyde Beatty at the time of his death. Accordingly, the law of California governs the issue of whether his right of publicity survived his death.

Interpretation of State Law

The final step in our analysis is to determine whether the right survived under California law. This is no small task. Given the development of California law in this area, however, we conclude that under that law, as applied to the facts of this case, the district court erred in concluding the right of publicity did not survive Clyde Beatty's death.^[4]

In Lugosi v. Universal Pictures, 25 Cal.3d 813, 160 Cal.Rptr. 323, 603 P.2d 425 (1979), [1542] the California Supreme Court held that the right of publicity does not survive the death of the party in whom the right arose where that right had not been exploited prior to his death sufficiently to impress on the decedent's name a secondary meaning.^[5] Id., 160 Cal.Rptr. at 325 & n. 5, 326, 327, 328, 603 P.2d at 428 & n. 5, 429, 430, 431. A reading of the majority opinion initially leaves unclear whether the court intended to hold that the right of publicity never is survivable and descendible or that the right may survive if exercised by the decedent prior to his death to an extent impressing on his name a secondary meaning. See id. 160 Cal.Rptr. at 325 & n. 5, 603 P.2d at 428 & n. 5 (discussing Johnston v. Twentieth Century Fox Film Corp., 82 Cal.App.2d 796, 187 P.2d 474); 160 Cal.Rptr. at 326, 603 P.2d at 429 (even if Lugosi had created a secondary meaning in his name "whether Lugosi's heirs would have succeeded to such property depends entirely on how it was managed before Lugosi died"); 160 Cal.Rptr. at 327, 603 P.2d at 430 (Lugosi did not transfer and capitalize on the right during his lifetime); 160 Cal.Rptr. at 328, 603 P.2d at 431 (right was "never exercised during the lifetime of [its] creator[]"). However, Chief Justice Bird, in dissent, stated: "The majority would appear to have concluded that an individual's right of publicity may be exploited after his death if exercised or assigned by the individual during his lifetime." Id. 160 Cal.Rptr. at 345 n. 33, 603 P.2d at 447 n. 33. See also id. 160 Cal.Rptr. at 345, 603 P.2d at 447 (text).

Two days after the Lugosi decision the California court reaffirmed its holding, applying it in Guglielmi v. Spelling-Goldberg Productions, 25 Cal.3d 860, 160 Cal.Rptr. 352, 603 P.2d 454 (1979). There, unlike in Lugosi, no limiting language specifically was used to indicate that the holding was limited to rights unexercised during the life of the one whose name is in issue. The majority in Guglielmi simply stated:

In Lugosi v. Universal Pictures, [25 Cal.3d 813] 160 Cal.Rptr. 323, 603 P.2d 425, we hold that the right of publicity protects against the unauthorized use of one's name, likeness, or personality, but that the right is not descendible and expires upon the death of the person so protected. Lugosi controls the disposition of the present case and makes it unnecessary to discuss any further issues raised by the parties.

Id. 160 Cal.Rptr. at 353, 603 P.2d at 455. However, all indications are that there too the right had been unexercised during the life in issue, that of Rudolph Valentino. See id., 160 Cal.Rptr. at 353-54, 603 P.2d at 455-56 (Bird, C.J., concurring).

Thus Guglielmi does little to help us resolve whether the Lugosi holding is conditioned on non-exercise of the right during a lifetime. Resolution of this issue is vital in the instant case because all indications are that Clyde Beatty, unlike Bela Lugosi, did exercise his right of publicity during his lifetime to an extent sufficient to impose on his name a secondary meaning associated with his circus and did validly transfer that right to another. Accordingly, if under California law the right of publicity does survive if a secondary meaning has been created during the lifetime and that interest is sold or transferred validly to another, the summary judgment must be reversed.

In Groucho Marx Productions v. Day and Night Co., Inc., 689 F.2d 317 (2d Cir.1982), the Second Circuit was faced with a question similar to that before us. There the issue was whether or not the heirs of Harpo [1543] and Chico and the lifetime assignee of Groucho, inherited and retained, respectively, the Marx Brothers' right of publicity, and whether or not use of the likeness of the Marx Brothers by defendant Day and Night Co., Inc., infringed that right of publicity. The court was required to decide whether the right of publicity survived the death of the Marx Brothers, so as to continue as a property right of their heirs and Groucho's assignee. All three Marx brothers were domiciled in California at the time of their deaths. New York, as we have discerned California does also, applies as its choice of law rule to property issues the law of the domicile. The Second Circuit in Groucho Marx Productions therefore applied California law to decide if the right of publicity survived the deaths of the Marx Brothers, giving their heirs and assignee a valid claim for infringement of that right.

In analyzing the survivability of the right of publicity in California, the Second Circuit stated:

Without question, Lugosi established that California law does not recognize a descendible right of publicity available to the heirs of a celebrity who did not exploit his own right during his lifetime. What is less certain, however, is whether the right is descendible when the celebrity does exploit it during his lifetime. To take the California Court's example, what rights would Lugosi's heirs have had if he had established a company to market "Lugosi as Dracula" T-shirts?

Id. at 329.

In addressing this question, it said: "At most, California would recognize a descendible right of publicity that would have enabled the heirs to prevent others from using Lugosi's name and likeness on T-shirts or any other product he had promoted during his life." Id. at 321-22 (footnote omitted). The court continued:

We conclude that Lugosi is subject to two interpretations. It may mean that California does not recognize any descendible right of publicity and that the heirs of a celebrity must rely on trademark law to protect the goodwill that the celebrity brought to a product during his lifetime. Alternatively, Lugosi might mean that, wholly apart from trademark law, California recognizes a descendible right of publicity that enables the heirs to prevent the use of a celebrity's name and likeness on any product or service the celebrity promoted by exploiting his right of publicity during his lifetime.

Id. at 323.^[6] We agree with the Second Circuit that these are the two possible interpretations of Lugosi.

In Groucho Marx Productions the court did not need to choose between these two possible interpretations because under neither interpretation did the plaintiffs there prevail. "Even if there is a limited descendible right, applicable to a product or service promoted by the celebrity, the defendants are not using the names or likenesses of the Marx Brothers in connection with any product or service that the comedians promoted during their lives." Id. (footnote omitted). The same is not true in the instant case. During his lifetime Clyde Beatty used his name in connection with a service. Plaintiffs/appellees clearly are using his name in connection with the very same product or service, a circus.

We reject the possibility that the publicity interest never survives because such a strict interpretation would mean that much of the Lugosi majority opinion is pure dicta and surplusage. Throughout the opinion the court puts Lugosi's factual situation in juxtaposition to one where the right of publicity had been exploited during the lifetime in relation to a specific product or service. An interpretation of Lugosi that [1544] the right of publicity never survives undermines the logical framework of the majority opinion.

As stated supra, the Lugosi court emphasized that "[t]here is no allegation in the complaint, no evidence in the record, and no finding of the court that Lugosi in his lifetime alone, or with others used his name and/or likeness as Dracula or otherwise in connection with any business, product or service so as to impress a secondary meaning on such business, product, or service." 160 Cal.Rptr. at 325, 603 P.2d at 428.

The court reasoned that in his lifetime Lugosi could have developed in his name and/or likeness a business or property interest by selling, for instance, shirts with "Lugosi as Dracula" printed on them. "[W]hether Lugosi's heirs would have succeeded to such property [i.e. whether such a property right would have survived his death] depends entirely on how it was managed before Lugosi died. Lugosi may have sold the property.... for installment payments and/or royalties due after his death, in which latter event such payments and/or royalties would, of course, be a part of his estate." Id. 160 Cal.Rptr. at 326, 603 P.2d at 429 (emphasis added).

At issue in Lugosi were only the rights Lugosi had not assigned to Universal, those rights left unexploited.^[7] The Lugosi court was faced with a question whether the unrealized potential to develop such a property right survives death. They concluded not, precisely because:

It is not at all unlikely that Lugosi and others in his position did not during their respective lifetimes exercise this undoubted right to capitalize upon their personalities, and transfer the value thereof into some commercial venture, for reasons of taste or judgment or because the enterprise to be organized might be too demanding or simply because they do not want to be bothered.

It seems to us rather novel to urge that because one's immediate ancestor did not exploit the flood of publicity and/or other evidence of public acceptance he received in his lifetime for commercial purposes, the opportunity to have done so is property which descends to his heirs.

Id. 160 Cal.Rptr. at 336, 603 P.2d at 439 (emphasis in original).

This reasoning leads us to conclude that where the right was exercised during the lifetime and turned into a commercial venture or other contract right, it becomes property that, under California law, survives and certainly may be assigned, giving the assignee the benefit of that assignment after the death of the assignor. See id. 160 Cal.Rptr. at 326, 603 P.2d at 429. Lugosi casts no doubt on the fact that the publicity rights Lugosi explicitly assigned during his lifetime to Universal Pictures continued as the property of Universal after his death. See id. 160 Cal.Rptr. at 326 n. 7, 328, 603 P.2d at 429 n. 7, 431.

We thus interpret Lugosi to say that where a right to publicity of a name has been exercised in conjunction with a specific product or business during a lifetime sufficiently to create a secondary meaning in that name and the right to use that name in conjunction with the same product or business has been validly assigned to another, the rights flowing therefrom survive the death of the assignor. See id. 160 Cal.Rptr. at 330, 603 P.2d at 433 (Mosk, J., concurring) ("Unquestionably an inheritable property right can be either created or eliminated by contract"). See generally Felcher & Rubin, Privacy, Publicity, and the Portrayal of Real People by the Media, 88 Yale L.J. 1577, 1618-20 & n. 182 (interpreting the California Court of Appeals opinion in Lugosi, which the California Supreme Court adopted virtually verbatim, as holding that "a cause of action originating with the individual portrayed survives him only if he has contracted for the commercial use of his attributes during his life"). See also Felcher [1545] & Rubin, The Descendibility of the Right of Publicity: Is There Commercial Life After Death?, 89 Yale L.J. 1125, 1126 (1980) (interpreting California Supreme Court in Lugosi as implying if right exploited during lifetime is survivable and descendible).

In the instant litigation the relationship between Clyde Beatty and appellant Kuperstock is more directly analogous to that of Lugosi and Universal Pictures, not Lugosi and his heirs. More to the point, however, Beatty exploited his right of publicity in his name in connection with a specific product or business during his lifetime. Bela Lugosi did not.

Accordingly we reverse the district court's grant of summary judgment and remand for further proceedings.

Because some confusion was evidenced by all in the proceedings below as to the proper approach to the question of survival and to the choice of law problems, we add a few additional comments.

In the instant case there is no dispute but that Clyde Beatty exercised his right of publicity in his name during his lifetime. Prior to his death, he assigned the property rights so created to his wife, the appellant. Given our interpretation of California law, there is at least one question bearing on the issue of survivability that the district court must resolve.^[8]

Clyde Beatty created the Clyde Beatty Circus, apparently impressing on that name a secondary meaning protected by the law of California, Cal.Civil Code § 654; Lugosi v. Universal Pictures, 160 Cal.Rptr. at 325 & n. 5, 603 P.2d at 428 & n. 5; Johnston v. Twentieth Century Fox Film Corp., 187 P.2d at 483-85, and surviving Beatty's death for the reasons stated supra. Whether such a secondary meaning was created is a question of fact, however, and must be resolved by the trial court. Johnston, 187 P.2d at 484.

Assuming arguendo that a secondary meaning in the name of Clyde Beatty was created and that a valid assignment of that right was made, and thus that appellant Kuperstock retains a surviving interest in that name, the district court then must address the question of whether that right has been tortiously infringed. At that point another choice of law problem will be presented, unless there is no real conflict between the laws of California and Florida as to the right to recover for tortious infringement of a right of publicity. See Offshore Rental Co. v. Continental Oil Co., 22 Cal.3d 157, 148 Cal.Rptr. 867, 869-70, 583 P.2d 721, 723-24 (1978); Hurtado v. Superior Court, 11 Cal.3d 574, 114 Cal.Rptr. 106, 109, 522 P.2d 666, 669 (Cal.1974). While it may be that there is no true conflict between these two states on this issue, compare Cal.Civil Code § 3344 (1971) and Fla.Stat. § 540.08 (1967), the structure of the statutes is very different. Punitive damages are available under the Florida statute. We have not at this time ascertained whether punitive damages are available under the California statute. Other possible differences may exist.

Assuming for our purposes here that a true conflict does exist, the district court must ask: What law applies to determine whether the surviving right has been infringed? For the reasons stated supra, the district court must, of course, apply the choice of law rule that a California court would apply to a tort issue. California applies a "governmental interest" choice of law rule in such cases. Offshore Rental Co. v. Continental Oil Co., 148 Cal.Rptr. at 867, 583 P.2d at 723; Hurtado v. Superior Court, 114 Cal.Rptr. at 109, 522 P.2d at 669; Reich v. Purcell, 63 Cal.Rptr. at 32, 432 P.2d at 728.

Apparently California allows recovery for infringement of the right of [1546] publicity only under specific conditions. See Cal.Civil Code § 3344. Any governmental interest California would have in applying its law in this action and limiting a right of recovery to those conditions would arise only from its desire to protect the interests of its domiciliary. Here, however, the only California domiciliary is the appellant, the plaintiff in the counterclaim, not the defendant. Thus, California would have little or no interest in limiting recovery to specific conditions. See Hurtado v. Superior Court, 114 Cal.Rptr. at 110, 572 P.2d at 670. On the other hand, appellees are residents of Florida. The circus operates out of Florida and in the southeastern section of the country. Any unauthorized use of the name of Clyde Beatty most likely has occurred in Florida. The State of Florida would have a strong governmental interest in insuring that infringements of existing rights of publicity do not occur within its borders. There would be a governmental interest in prohibiting its citizens from engaging in such infringement. Hence, applying a "governmental interest analysis" and based on the sparse record before us now, it appears that Florida law will apply to the issue of whether there has been a tortious infringement of the right of publicity.^[9]

The grant of summary judgment is REVERSED and the matter is REMANDED for further proceedings.

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[1] This is to be distinguished from the issue of whether an existing right has been infringed, which may be an issue of tort or contract law. In Lugosi v. Universal Pictures, 25 Cal.3d 813, 160 Cal.Rptr. 323, 603 P.2d 425 (1979), the California Supreme Court stated that an inquiry into whether the right of publicity is a property right or a tort is "pointless." Id. 160 Cal.Rptr. at 326, 603 P.2d at 428. The Lugosi court, however, was not faced with a choice of law problem to which the distinction clearly is relevant.

[2] It may be in fact that no real conflict of California and Florida law exists as to which law to apply on the survival question. See text infra, at 1545. In Beverly Beach Properties v. Nelson, 68 So.2d 604, 614 (Fla.1953), cert. denied, 348 U.S. 816, 75 S.Ct. 27, 99 L.Ed. 643 (1954), the Florida court indicated that under Florida law "intangible personal property in contemplation of law, accompanies the person of the owner." Given, however, that there the issue was one of jurisdiction, not choice of law, we analyze the problem, assuming a true conflict.

[3] The district court cited Factors Etc., Inc. v. Pro Arts, Inc., 652 F.2d 278 (2d Cir.1978), to support its conclusion that the law of the domicile controlled the issue of the existence of the property right. This is in error. In Factors the Second Circuit sitting in diversity was applying New York choice of law rules. There, New York applied the law of the domicile to property law issues and thus the question of survivability of the right of publicity. It so happens that California, too, applies this choice of law rule to property issues, but the Factors case, applying New York law, has no real bearing on the issue before us.

[4] See text infra,at 1545 & n. 8 (on remand district court must determine whether a secondary meaning had been impressed on the name of Clyde Beatty in conjunction with the Clyde Beatty Circus and whether valid assignment was made).

We regret that California does not afford us a procedure whereby such close questions of state law may be certified to the State Supreme Court for resolution. It also is regrettable that the turns and twists of diversity jurisdiction have lead to a federal court of appeals in Florida, Georgia, and Alabama deciding this issue.

[5] The court in Lugosi held that acting a role does not by itself suffice to create such a secondary meaning. Lugosi, 160 Cal.Rptr. at 325, 603 P.2d at 428; id. 160 Cal.Rptr. at 329, 603 P.2d at 432 (Mosk, J., concurring). See also Johnston v. Twentieth Century Fox Film Corp., 82 Cal.App.2d 796, 810, 187 P.2d 474 (1974).

[6] A third possible interpretation, that, if exercised during one's lifetime, the right of publicity survives and allows descendants and assignees to prevent others from profiting in any way from the use of the likeness or name was rejected by the Second Circuit as untenable under any reading of Lugosi and Guglielmi. Groucho Marx Productions, 689 F.2d at 329. We agree.

[7] "Assignment of the right to exploit name and likeness by the `owner' thereof is synonymous with its exercise." Lugosi, 160 Cal.Rptr. at 328, 603 P.2d at 431.

[8] There also exists, of course, the issue of the validity of the assignment. No challenge to it has thus far been made.

[9] Application of California substantive law to the issue of survivability and the existence of Kuperstock's property right obviates appellees' argument that application of Fla.Stat. § 540.08 (1967) would violate due process. Appellees argue that because the right of publicity in Beatty's name passed into the public domain in 1965 and was used exclusively by Acme before 1967, when Fla.Stat. § 540.08 was enacted, application of § 540.08 would constitute an unconstitutional taking. Given that under California law the right of publicity survived, the right did not pass into the public domain at Beatty's death. Thus no taking occurred.