Waits v. Frito-Lay, Inc.

Citation: 978 F.3d 1093Docket: No. 90-55981

Court: Court of Appeals for the Ninth Circuit; August 5, 1992; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

An order amending the opinion in case No. 90-55981 was issued, specifically altering footnote 4 on page 9449 and noting that the change is reflected in the published opinion. The panel denied the petition for rehearing, with Judges Browning and Reinhardt rejecting the suggestion for rehearing en banc, and Judge Boochever recommending the same. The full court was informed of the en banc suggestion, but no active judge requested a vote on it. The petition for rehearing was denied, and the suggestion for en banc rehearing was rejected.

In the opinion, Circuit Judge Boochever addressed the appeal by defendants Frito-Lay, Inc. and Tracy-Locke, Inc. against a jury verdict awarding singer Tom Waits $2.6 million in damages for voice misappropriation and false endorsement related to a radio commercial that imitated Waits' distinctive raspy voice. The defendants challenged various aspects of the judgment, including the validity of the voice misappropriation tort established in Midler v. Ford Motor Co., the jury instructions, and the grounds for the damage awards. They also argued that Waits lacked standing under the Lanham Act because he was not in competition with them and claimed that he did not sufficiently establish his false endorsement claim during the trial.

The court vacated the damages awarded under the Lanham Act as duplicative but affirmed all other aspects of the judgment. Background information provided details about Tom Waits' successful career, noting his distinctive voice and refusal to participate in commercial endorsements over the past decade, despite his critical and commercial acclaim.

Waits publicly advocates against musical artists doing commercials, claiming it undermines artistic integrity. Frito-Lay, Inc. produces snack foods, including Doritos, and engaged Tracy-Locke, Inc., an advertising agency, to create a campaign for a new product, SalsaRio Doritos. The agency drew inspiration from Waits' 1976 song "Step Right Up," which parodies commercialism. In presenting the campaign to Frito-Lay, Tracy-Locke showcased a preliminary rendition sung by a copywriter and played Waits' original song to convey the intended feeling. 

The search for a lead singer focused on someone who could imitate Waits' voice, leading to auditions for singers with gravelly styles. Stephen Carter, a Dallas musician and Tom Waits fan, was recommended due to his ability to closely mimic Waits. Upon auditioning, the creative team was impressed with Carter's imitation, though there were concerns over potential legal issues due to its accuracy. Despite warnings, Carter was hired.

During the recording session, concerns about legal implications resurfaced, prompting attempts to reduce Carter's imitation. Carter expressed that Waits would disapprove of the commercial due to his stance against endorsements, a sentiment acknowledged by David Brenner, Tracy-Locke’s executive producer, who had faced previous rejection from Waits for a different commercial. Before the commercial's release, Tracy-Locke's managing vice president, Robert Grossman, consulted with their attorney regarding the legal risks of using a voice closely resembling Waits'. The attorney indicated a low likelihood of a successful lawsuit, as a singer's style isn't protected, but Grossman still presented both Carter's version and an alternate version to Frito-Lay, highlighting the legal risks associated with Carter's rendition.

The Carter version of a commercial was chosen by Frito-Lay, with Tracy-Locke agreeing to indemnify Frito-Lay against lawsuits. The commercial aired on over 250 radio stations across 61 markets in September and October 1988. Tom Waits, upon hearing the commercial during a Los Angeles radio appearance, was shocked, believing listeners would think he endorsed Doritos. In November 1988, Waits sued Tracy-Locke and Frito-Lay for misappropriation under California law and false endorsement under the Lanham Act. The jury ruled in favor of Waits in April-May 1990, awarding him $375,000 in compensatory damages, $2 million in punitive damages for voice misappropriation, and $100,000 for the Lanham Act violation, along with attorneys’ fees.

The excerpt elaborates on the legal principles regarding voice misappropriation, referencing the case of Midler v. Ford Motor Co., which established that imitating a distinctive voice for commercial purposes without consent constitutes a tort in California. The jury found that Waits' voice was distinctive and widely known, leading to the conclusion that his right of publicity was violated. The defendants challenged the legal foundation of the Midler ruling, claiming it was outdated and preempted by federal copyright law, and contested the jury's damage awards. The court indicated that these legal questions would be reviewed de novo, referencing the Bonito Boats case to illustrate the complexities of preemption in intellectual property law.

Defendants argue that the case of Midler was incorrectly decided, claiming it disregards the precedent set by Sears and Comyco, which they interpret as supporting broad preemption principles in copyright law. They assert that earlier cases dismissing entertainers' challenges to imitations of their performances were correctly decided based on these precedents. However, this reasoning is flawed, as Bonito Boats warns against interpreting Sears and Comyco too broadly and cites later Supreme Court decisions that limit such interpretations. It affirms that the Patent and Copyright Clauses do not strip states of the power to regulate intellectual creation and allows states to impose limited regulations to prevent consumer confusion. The Court also recognized, in Zacchini, the validity of state right-of-publicity laws, which align with federal copyright law, specifically ruling against unconsented broadcasts of entertainers' performances. The cases the defendants cite are outdated and do not account for the evolving legal landscape established by Zacchini and others. The Midler holding, which underpins Waits' voice misappropriation claim, remains intact, and the defendants' request to reconsider it is denied. Waits' claim, akin to Midler's, pertains to voice infringement, not copyrightable works. Additionally, legislative history of section 114 indicates that state rights of privacy, publicity, and trade secrets are not preempted by copyright law if they involve distinct elements from copyright infringement.

Waits' voice misappropriation claim is characterized as an invasion of his personal property right, specifically his right of publicity concerning the use of his voice. The case hinges on whether the defendants deliberately imitated Waits' voice, which is argued to be as unique and personal as a face, rather than merely his style. The court emphasized that this claim is distinct from copyright infringement and is not preempted by federal copyright law.

The defendants challenged the district court's refusal to accept their proposed jury instructions related to the elements of the Midler tort: the deliberate misappropriation of a voice that is distinctive and widely known. The court reviews jury instructions for clarity and adequacy as a whole and assesses legal misstatements de novo.

During the trial, the defendants contended they only copied Waits' style and not his voice, seeking a jury instruction to differentiate between the two. The district court’s instructions closely followed Midler's criteria, focusing the jury on whether Waits' voice was distinctive and widely known, and whether it was deliberately imitated. The defendants argued that the court misled the jury by not distinguishing between voice and style, particularly since the jury was informed they could consider Waits' style in relation to his Lanham Act claim.

However, the court maintained that its instructions were clear and not misleading. It explicitly directed the jury to focus solely on Waits' voice, reinforcing that mere imitation of style would not suffice for liability. The court also highlighted that for the defendants to be liable, their imitation must be convincing enough that those familiar with Waits' voice would believe he performed in the commercial. This instruction aimed to clarify any potential confusion regarding the distinction between voice and style, ensuring the jury understood the legal standards necessary for a finding of voice misappropriation.

Defendants contested the court's instruction on the term 'distinctive,' claiming it conflated 'distinctiveness' with 'identifiability' or 'recognizability.' The court defined a distinctive voice as one that is distinguishable from others and possesses unique qualities tied to a particular singer. Defendants' experts argued that identifiability relies on listener expectations, asserting that distinctiveness and recognizability differ, with style similarity enhancing recognizability. The court found no legal basis for treating distinctiveness and identifiability as separate concepts, asserting that identifiability is integral to evaluating distinctiveness in right of publicity claims. Citing Midler v. Ford, the court emphasized that a voice is as identifiable as a face and that this principle applies to singing as well. The jury's instruction allowed them to assess the recordings of Waits’ voice and expert testimonies using common sense, which the court deemed appropriate. The defendants' claim that the jury could find liability based on a voice identifiable by only a few was dismissed, as Midler also required that the plaintiff’s voice be 'widely known.'

Regarding the term 'widely known,' defendants challenged the vagueness of the instruction that stated a singer's voice is widely known if recognized by a large number of people across a broad geographic area. The court rejected the defendants' proposed instruction, which suggested that Waits was known only to a niche audience, clarifying that a singer does not meet the 'widely known' standard if recognized solely by dedicated fans or specific music enthusiasts. The legal basis for the defendants' proposed instruction was deemed questionable.

Defendants contend that Tom Waits does not meet the level of celebrity required for legal protection under the Midler standard, specifically comparing him to Bette Midler. This argument is rejected, as the term "well known" is relative, and variations in celebrity status can be reflected in the damages awarded. The court finds that substantial evidence indicates Waits is widely recognized, thereby upholding the jury's instructions regarding his voice misappropriation claim.

The jury awarded Waits $100,000 for the fair market value of his services, $200,000 for emotional distress, and $75,000 for harm to his goodwill and future publicity. Defendants challenge the latter two amounts, questioning the availability and evidential support for such damages in voice misappropriation cases. The court disagrees with defendants' assertion that only economic damages are permissible, affirming that mental distress damages are also recoverable, as the appropriation of a celebrity's identity can induce significant emotional harm. 

Citing precedent, the court highlights that mental distress damages can stem from the nature of the infringement and its humiliating impact on the plaintiff. Relevant case law supports the idea that emotional injuries, such as embarrassment and humiliation, are valid grounds for damages. The court concludes that evidence indicating the commercial exploitation of Waits' voice was particularly distressing justifies the jury's consideration of mental distress damages, rejecting the defendants' claims that the evidence was insufficient under California law.

Waits expressed significant emotional distress upon hearing the Doritos commercial, feeling shocked, angry, and embarrassed due to his public opposition to commercial endorsements. He communicated his discomfort to friends, trying to clarify that the ad did not reflect his views, which contributed to his humiliation and the perception of hypocrisy. The jury was permitted to consider these feelings for mental distress damages.

Regarding reputational damages, the defendants claimed that such damages apply only in defamation cases and argued that Waits failed to demonstrate career harm. However, the court rejected this, affirming that damages for reputational injury can arise from the misappropriation of identity. The jury could infer that the commercial harmed Waits' reputation by creating an impression of hypocrisy and negatively impacting his artistic image, leading to a potential future loss in advertising fees. Consequently, the jury awarded Waits $75,000 for damage to his goodwill and future publicity value.

In terms of punitive damages, the jury awarded Waits $2 million, divided between Tracy-Locke and Frito-Lay. The defendants contested this, arguing that punitive damages were not legally available and that evidence was insufficient to justify the award. Under California law, punitive damages require clear evidence of oppression, fraud, or malice. The defendants contended that they could not have known their actions infringed upon Waits' rights due to the ambiguity following a recent legal decision. The court noted that punitive damages are typically not granted when a legal right is not clearly established.

A well-known professional singer's right to control the commercial use of their distinctive voice was affirmed in this case, referencing the precedent set by Midler. The evidence indicated that shortly after the Midler decision, Tracy-Locke personnel were aware of the legal risks associated with using a voice similar to Waits' in a Doritos commercial. Despite these concerns and having cautioned Frito-Lay about potential liability for voice misappropriation, Tracy-Locke offered to indemnify Frito-Lay, leading to Frito-Lay's decision to proceed with the Carter version, which imitated Waits. The defendants acknowledged the legal risks but claimed they believed they would not infringe on Waits' rights, a stance the court found unconvincing. The court emphasized that good faith cannot be established by misinterpreting laws from other jurisdictions regarding California residents' rights. It was highlighted that Waits, a California resident, has a recognized property right in his voice, and the defendants acted with conscious disregard for these rights by choosing to air the commercial nationally. 

Regarding punitive damages, the defendants contested their availability, arguing insufficient evidence supported a finding of malice as required by California law. The court must assess if a rational jury could find a high probability of malice based on the evidence, which included testimony about Carter's awareness of Waits' aversion to commercials and Brenner's warnings about legal concerns. Despite receiving legal advice that downplayed the risks, Grossman misrepresented the situation to the lawyer and still recommended the Carter version, while also assuring Frito-Lay of indemnification. Ultimately, the decision to use the imitative voice was made by a Frito-Lay executive familiar with Waits, reinforcing the claim of willful disregard for Waits' rights.

Waits testified that the defendants’ actions diminished his artistic integrity, providing evidence that could support a finding of malice on the part of Tracy-Locke and Frito-Lay. A jury could reasonably conclude that the defendants' conduct was despicable, as they knowingly tarnished Waits’ reputation and disregarded his legal rights concerning the commercial use of his voice by broadcasting the commercial. Consequently, the award of punitive damages was upheld.

Under the Lanham Act, Section 43(a), which prohibits false designations and representations in advertising, Waits claimed that the defendants misrepresented his association with SalsaRio Doritos by using an imitation of his voice in a parody of one of his songs. The jury ruled in favor of Waits, awarding him $100,000 in damages and attorneys’ fees. The defendants challenged Waits’ standing, the merits of his false endorsement claim, the duplicative nature of the damage award, and the appropriateness of the attorneys’ fees. 

Before addressing these challenges, the court considered whether false endorsement claims are valid under Section 43(a) of the Lanham Act, an issue not previously addressed in this circuit. The statute allows civil actions for false designations that potentially harm individuals. Other jurisdictions have recognized false endorsement claims, particularly for unauthorized use of distinctive attributes resembling unregistered commercial trademarks. Cases supporting this interpretation include Better Business Bureau v. Medical Directors, Inc. and Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., which illustrate the acceptance of such claims for unauthorized imitations.

A celebrity can establish a false endorsement claim under Section 43(a) of the Lanham Act by demonstrating that an advertisement featuring their likeness falsely associates them with the advertised products. Judicial precedents, such as Allen v. National Video, recognize that celebrities hold commercial interests in their names and images akin to a trademark holder's rights in a distinctive mark. Additionally, imitation of a unique voice is actionable under common law unfair competition, though the uniqueness of the voice is critical, as seen in Sinatra v. Goodyear Tire, which rejected a claim due to insufficient uniqueness.

The 1988 amendments to the Lanham Act reinforce the cognizability of false endorsement claims, as they codify existing judicial interpretations, even though they took effect after the events in question. The amended law explicitly prohibits actions likely to deceive consumers regarding the association of goods or services with another person. Furthermore, the legislative history indicates that "symbol or device" includes distinctive sounds and appearances, broadening the scope of protection for entertainers.

Regarding standing, the defendants argue that Waits, not being a competitor, lacks the right to sue under the Lanham Act. However, this argument is countered by the understanding that parties harmed by false endorsements often are not direct competitors. Precedent from Smith v. Montoro supports the notion that standing is not limited to competitors, as the case involved a plaintiff whose name was wrongfully replaced in credits, illustrating that individuals can enforce their rights under Section 43(a) without being in direct competition.

Conduct analogous to trademark infringement was identified, focusing on economic injury linked to the misappropriation of the plaintiff's talents and workmanship. Under the Lanham Act, standing does not require actual competition; instead, the critical factor is whether the plaintiff has a reasonable interest in being protected from false advertising. The court recognized that actors, like trademark holders, have a vested interest in the proper identification of their work. 

In the case of Halicki v. United Artists Communications, Inc., a claim was dismissed because the plaintiff, a movie producer, failed to demonstrate competitive injury after his film was misrepresented with an incorrect rating, which limited its audience. The court ruled that a plaintiff must show that the injury aligns with the types of harm the Lanham Act aims to address, specifically unfair competition. It clarified that while misrepresentation could constitute a breach of contract, it was not actionable under the Lanham Act without proof of competitive injury.

The decision reaffirmed that the Lanham Act protects commercial interests against unfair competition, emphasizing the need for a discernible competitive aspect to any claims brought under it. The court sought to reconcile differing precedents, asserting that standing exists when a plaintiff's interest is a commercial one protected by the Act, consistent with its statutory purposes of combating deceptive practices in commerce.

The excerpt outlines the provisions of Section 43(a) of the Lanham Act (15 U.S.C. 1127), which addresses unfair competition through two main bases of liability: (1) false representations regarding the origin, association, or endorsement of goods or services, constituting false association; and (2) false representations in advertising concerning the qualities of goods or services, known as false advertising. Key case law examples include U-Haul Int’l, Inc. v. Jartran, Inc., which distinguishes between trademark infringement and false comparative advertising, and Halicki v. United Artists, which highlights that claims based solely on false advertising may only be actionable when they serve the purpose of preventing unfair competition. 

The discussion emphasizes that a plaintiff must demonstrate discernibly competitive injury to pursue a false advertising claim under Section 43(a). For instance, if a film distributor misrepresents a movie's rating, a competitor could claim standing if the misrepresentation affects audience choice. However, in Halicki, the plaintiff lacked competitive interest due to a contractual relationship with the distributor. In contrast, Smith v. Montoro involved a false association claim where the plaintiff did not need to be a competitor, as the Lanham Act protects noncompetitors from injuries caused by deceptive use of marks.

An owner of a trademark has the exclusive right to commercially exploit the mark, ensuring it is associated solely with the owner’s goods or services, regardless of whether the competitor offers similar or different products. Only those with a commercial interest in the mark or the product misidentified with it have standing to bring a claim for wrongful use. This includes those with an economic interest similar to that of a trademark holder. For instance, a celebrity can assert a false endorsement claim if their identity is used without authorization, creating consumer confusion regarding sponsorship or approval of a product. The likelihood of consumer confusion does not require actual competition; it extends to cases where a celebrity's identity is utilized commercially. In the case of Tom Waits, his standing to sue under the Lanham Act for unauthorized use of his voice in a Doritos commercial was established by the potential commercial harm from the imitation, despite not being a traditional competitor. The court determined that the jury should assess whether ordinary consumers might be confused about Waits' involvement with the commercial, considering factors such as the uniqueness of his voice, evidence of actual confusion, and the intent behind the imitation. The jury listened to recordings of Waits and the commercial to make their determination.

Evidence presented to the jury indicated a significant likelihood of consumer confusion due to a Doritos commercial that appealed to an audience overlapping with Tom Waits’ demographic, specifically males aged 18 to 35 who listened to the radio. Numerous witnesses testified that they believed Waits was endorsing SalsaRio Doritos, which supported the jury's conclusion that consumers could be misled about his endorsement. The case referenced established precedents, highlighting that using a celebrity look-alike in a commercial can create such confusion.

The defendants contended that the damages awarded for Waits' Lanham Act claim were duplicative of those for voice misappropriation, both totaling $100,000 based on the fair market value of Waits’ services. Waits agreed to a reduction of the judgment by $100,000 to address this overlap. The court had instructed the jury that they could award damages for the fair market value of Waits’ services, leading to the duplicative damages issue, which the court vacated.

Under Section 35 of the Lanham Act, attorneys' fees can be awarded in exceptional cases where defendants act maliciously or fraudulently. The jury found that the defendants acted with malice in the voice misappropriation claim, qualifying the case for such an award. The district court acted within its discretion in granting reasonable attorneys’ fees to Waits.

The conclusions drawn affirmed the legal sufficiency of both Waits' voice misappropriation and Lanham Act claims, upheld the jury's instructions and verdicts, and recognized the need to vacate the duplicative damage award. The court also confirmed the appropriateness of the attorneys' fees award and granted Waits his costs on appeal. The decision was affirmed in part and vacated in part, with an emphasis on the critical line from Waits’ song reflecting on advertising's deceptive nature.

The excerpt addresses the interpretation of "style" in the context of music and its implications for an insurance contract case involving plaintiffs and defendants. It defines "style" as the manner of performing music, encompassing elements such as mood, phrasing, and delivery, and clarifies that styles themselves cannot be owned; thus, artists can freely perform in the same style. The instruction proposed in the case suggested that mere similarity in style does not constitute liability for misappropriation, adding a requirement for actual confusion to the standard for voice misappropriation claims. The court affirmed that the jury found the defendants acted with conscious disregard for the rights of the plaintiff, Waits, rejecting the defendants' due process argument regarding punitive damages. Although the court vacated the duplicative damage award, it indicated that the underlying issues related to false endorsement claims, Waits' standing, and the merits of his Lanham Act claim are still relevant, especially as they support a potential award of attorneys' fees. The excerpt also references a prior case where the Lanham Act's applicability was not decided, focusing instead on state unfair competition law. The current statute under Section 43(a), as amended in 1988, outlines liability for any misleading representations that cause confusion regarding the affiliation or characteristics of goods or services.

The term in question refers to a rating designation that inaccurately represents a film's content. While competition between parties is a factor considered by courts in false association claims, it is not a requirement for such claims. A false association claim necessitates that the misuse of a trademark causes consumer confusion regarding the origin, approval, or endorsement of a product, as established in International Order of Job’s Daughters v. Lindeburg. Co. The courts have clarified that confusion can arise from similar trademarks on competing goods or other circumstances, as highlighted in Lindy Pen Co. v. Bic Pen Corp. Although competition is a factor in assessing consumer confusion, it is not essential for establishing standing under section 43(a) of the Lanham Act. The case of Midler illustrates this distinction, where the plaintiff's unfair competition claim was disapproved due to a lack of competition, but it did not involve a Lanham Act claim or a false endorsement theory. Midler's attempt to amend her complaint to include a false endorsement claim was denied not due to a lack of standing, but because the delay was prejudicial. Thus, the statement in Midler concerning standing under the Lanham Act is not authoritative in this context.