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Slam Dunk or Personal Foul?

By Kari Santos | Jan. 2, 2015

Expert Advice

Jan. 2, 2015

Slam Dunk or Personal Foul?

A dispute over a congratulatory ad to Michael Jordan creates a new law.

Every so often, a public figure collides with the law to raise new and interesting legal issues - as when a supermarket chain sought to congratulate superstar Michael Jordan on his induction to the pro basketball hall of fame. The case (Jordan v. Jewel Food Stores, Inc., 743 F.3d 509 (7th Cir. 2014)) is noteworthy because it establishes important parameters for corporate advertisers seeking to publish advertisements (even purportedly well-intentioned ones) of a congratulatory or public-spirited nature.

Going to the Hoop
Jordan, who retired in 2003, was inducted into the Naismith Memorial Basketball Hall of Fame in 2009. To honor the occasion and pay tribute to Jordan's storied career, Sports Illustrated magazine produced a special commemorative edition. The publisher offered Chicago-based supermarket chain Jewel Food Stores (among others) the opportunity to place a congratulatory ad in exchange for a promise to stock the commemorative issue in its Chicago stores. Jewel accepted the offer and created an advertisement that featured two basketball shoes emblazoned with Jordan's signature number 23, along with Jewel's trademarked logo and tagline ("Good Things Are Just Around the Corner") below this copy: "A Shoe In! After six NBA championships, scores of rewritten record books and numerous buzzer beaters, Michael Jordan's elevation in the Basketball Hall of Fame was never in doubt! Jewel-Osco salutes #23 on his many accomplishments as we honor a fellow Chicagoan who was 'just around the corner' for so many years." (See 743 F.3d at 512.)

Shortly after the issue hit newsstands, Jordan filed a $5 million lawsuit against Jewel in Illinois state court, alleging violations of the Illinois Right of Publicity Act, the state deceptive-practices statute, the federal Lanham Act, and the common law of unfair competition. Jewel removed the case to federal court, filed a third-party complaint against the publisher and the ad's graphic designer, and moved to dismiss Jordan's suit on First Amendment grounds. (Jordan v. Jewel Food Stores, Inc., 851 F. Supp. 2d 1102, 1104-05 (N.D. Ill. 2012).)

In response, Jordan argued that the congratulatory ad was garden-variety commercial speech that removed it from blanket First Amendment protection: that the supermarket chain was using the ad to associate its brand with Jordan's name and image - thereby subtly encouraging Jordan's fans to shop at Jewel's stores. (851 F. Supp. 2d at 1107.)

No Harm, No Foul?
The district court found that the ad was fully protected noncommercial speech, and it entered judgment for the supermarket chain. (851 F. Supp. 2d at 1112.) The trial judge reasoned that "[t]he reader would see the Jewel page for precisely what it is - a tribute by an established Chicago business to Chicago's most accomplished athlete." (851 F. Supp. 2d at 1110.) The district court also found it dispositive, based on the test set forth by the U.S. Supreme Court, that the ad did not propose a specific commercial transaction. (See 851 F. Supp. 2d at 1106; see also City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 423 (1993) ("the proposal of a commercial transaction [is] the test for identifying commercial speech").)

Identity Protection
Undaunted, Jordan continued charging to the basket. He appealed to the Seventh Circuit and last February won a reversal: The court of appeals agreed that "the commercial-speech category is not limited to speech that directly or indirectly proposes a commercial transaction." (743 F.3d at 517.) The Seventh Circuit also noted that even advertising that links a product to a current public debate is not thereby entitled to the constitutional protection afforded noncommercial speech. (743 F.3d at 516.) In addition, the court observed: "The notion that an advertisement counts as 'commercial' only if it makes an appeal to purchase a particular product makes no sense today, and we doubt that it ever did. ...The ad implicitly encourages readers to patronize their local [Jewel] store. ..." (743 F.3d at 518-19.)

The appellate panel drew its legal guideposts from a U.S. Supreme Court decision in which a prophylactics manufacturer had sent out an informational pamphlet that discussed the general benefits of prophylactics but also described the manufacturer's products. (See Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60 (1983).) In Bolger, the high court identified a number of factors relevant for classifying speech that contains both commercial and noncommercial elements, including "whether: (1) the speech is an advertisement, (2) the speech refers to a specific product, and (3) the speaker has an economic motivation for the speech." (See 743 F.3d at 517.)

Using this test, the Seventh Circuit determined that although the supermarket chain's ad did not expressly say "shop at our store" or invite the reader to buy a particular product, the Jewel brand and slogan were prominently displayed; thus in context the congratulatory ad had an "unmistakable commercial function" that removed blanket First Amendment protection, such that Jordan's lawsuit could proceed. (See 743 F.3d at 518.) "A contrary holding would have sweeping and troublesome implications for athletes, actors, celebrities, and other trademark holders seeking to protect the use of their identities or marks," the court noted. (743 F.3d at 520.)

The clear cautionary lesson here is that congratulatory ads are no slam dunk. Advertisers should be sure to obtain express clearance from a celebrity or other rights holder referenced before publishing a laudatory ad that has even the faintest hint of commerce. The Jordan decision also paves the way for rights holders to more aggressively pursue these types of claims - which means congratulatory ads will undoubtedly be subject to much greater scrutiny.

Sara J. Epstein is an associate at Kleinberg Lange Cuddy & Carlo in Los Angeles, where she specializes in entertainment and intellectual property law.


Kari Santos

Daily Journal Staff Writer

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