Memorandum Of Law in Support of Defendant's Motion

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

NORTH JERSEY MEDIA GROUP INC.,

Plaintiff,v.

JEANINE PIRRO and FOX NEWSNETWORK, LLC,

Defendants.

No.: 13-CV-07153 (ER)(FM)

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS MOTIONFOR CERTIFICATION OF FEBRUARY 10, 2015 ORDER

FOR INTERLOCUTORY APPEAL UNDER 28 U.S.C. 1292(b)AND FOR ISSUANCE OF STAY PENDING APPEAL

HOGAN LOVELLS US LLPDori Ann Hanswirth

[email protected] S. Boyer

[email protected] A. Fleming

[email protected] C. Wilson

[email protected] Third AvenueNew York, New York 10022Tel: (212) 918-3000Fax: (212) 918-3100Attorneys for Defendants

Case 1:13-cv-07153-ER Document 82 Filed 03/19/15 Page 1 of 22

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TABLE OF CONTENTS

Page

PRELIMINARY STATEMENT .....................................................................................................1

ARGUMENT...................................................................................................................................3

I. INTERLOCUTORY APPEAL IS WARRANTED TO DETERMINE THEAPPROPRIATE LEGAL STANDARD FOR EVALUATING WHETHER USE OFA VISUAL WORK WAS FAIR..........................................................................................3

A. There is Substantial Ground for Difference of Opinion Over The AppropriateStandard for Transformation of Visual Works. .......................................................9

B. Certification Would Materially Advance the Termination of This Litigationand Promote Judicial Economy. ............................................................................11

C. The Public Interest Strongly Favors Interlocutory Appeal ....................................12

II. A STAY OF PROCEEDINGS IN THE DISTRICT COURT PENDINGINTERLOCUTORY APPEAL WOULD FURTHER THE INTERESTS OFJUSTICE AND PROMOTE EFFICIENCY. .....................................................................14

CONCLUSION..............................................................................................................................16


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TABLE OF AUTHORITIES

Page(s)CASES

Allstate Ins. Co. v. Elzanaty,No. 11-cv-3862(ADS)(ARL), 2013 U.S. Dist. LEXIS 70579(E.D.N.Y. May 16, 2013) ........................................................................................................12

Am. Geophysical Union v. Texaco Inc.,60 F.3d 913 (2d Cir. 1994).........................................................................................................7

Am. Geophysical Union v. Texaco Inc.,802 F. Supp. 1 (S.D.N.Y. 1992)....................................................................................... passim

Atl. Holdings, Inc. v. Sovereign Wealth Fund Samruk-Kazyna JSC,No. 12-cv-8852 (JMF), 2014 WL 1881075 (S.D.N.Y. May 9, 2014) .....................................10

Authors Guild, Inc. v. Hathitrust,755 F.3d 87 (2d Cir. 2014).........................................................................................................9

Bartnicki v. Vopper,200 F.3d 109 (3d Cir. 1999).....................................................................................................13

Bartnicki v. Vopper,532 U.S. 514 (2001).................................................................................................................13

Bill Graham Archives v. Dorling Kindersley Ltd.,448 F.3d 605 (2d Cir. 2006)...............................................................................................2, 7, 9

Blanch v. Koons,467 F.3d 244 (2d Cir. 2006).......................................................................................................9

Campbell v. Acuff-Rose Music, Inc.,510 U.S. 569 (1994)...................................................................................................................7

Capitol Records, LLC v. Vimeo, LLC,972 F. Supp. 2d 537 (S.D.N.Y. 2013)......................................................................................11

Cariou v. Prince,714 F.3d 694 (2d Cir. 2013).............................................................................................2, 9, 10

Facebook, Inc. v. Pedersen,868 F. Supp. 2d 953 (N.D. Cal. 2012) .......................................................................................6

Flo & Eddie, Inc v. Sirius XM Radio Inc.,No. 13 CIV. 5784 CM, 2015 WL 585641 (S.D.N.Y. Feb. 10, 2015).............................. passim


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Gramercy Advisors, LLC v. Coe,No. 13-CV-9069 VEC, 2014 WL 5847442 (S.D.N.Y. Nov. 12, 2014).................................3, 4

In re Facebook, Inc., IPO Sec. & Derivative Litig.,986 F. Supp. 2d 524 (S.D.N.Y. 2014)......................................................................................11

In re Lehman Bros. Holdings, Inc.,No. 13-CV-2211(RJS), 2014 WL 3408574 (S.D.N.Y. June 30, 2014) .....................................3

In re Trace Intl Holdings, Inc.,No. 04-cv-1295(KMW), 2009 WL 3398515 (S.D.N.Y. 2009)............................................9, 10

Jones v. Dirty World Entmt Recordings LLC,755 F.3d 398 (6th Cir. 2014) ...................................................................................................13

Klinghoffer v. S.N.C. Achille Lauro Ed AltriGestione Motonave Achille Lauro inAmministrazione,921 F.2d 21 (2d Cir. 1990).....................................................................................................3, 9

Nederlandse Erts-Tankersmaatschappij, N.V. v. Isbrandtsen Co.,339 F.2d 440 (2d Cir. 1964).....................................................................................................14

Pearson Educ., Inc. v. Liu,No. 1:08-cv-06152-RJH, 2010 WL 623470 (S.D.N.Y. Feb. 22, 2010)...................................11

Sec. Investor Prot. Corp. v. Bernard L. Madoff Inv. Secs. LLC,No. M-47, 2010 U.S. Dist. LEXIS 3037 (S.D.N.Y. Jan. 11, 2010)...........................................4

Soler v. G & U, Inc.,86 F.R.D. 524 (S.D.N.Y. 1980) .........................................................................................14, 15

Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P.,756 F.3d 73 (2d Cir. 2014).....................................................................................................2, 9

DOCKETED CASES

N. Jersey Media Grp. Inc. v. Fox News Network, LLC and John Doe Nos. 1-5,No. 1:14-cv-07630-ER..................................................................................................... passim

Noble v. Nike,No. 13-cv-04371-LGS (S.D.N.Y. June 24, 2013) .....................................................................8

STATUTES

17 U.S.C. 107................................................................................................................................6

28 U.S.C. 1292(b) ............................................................................................................... passim

28 U.S.C. 1400(a) .........................................................................................................................8


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OTHER AUTHORITIES

Bethany C. Stein, A Bland Interpretation: Why a Facebook Like Should Be ProtectedFirst Amendment Speech, 44 Seton Hall L. Rev. 1255 (2014) ............................................6, 11

Dan Fletcher, How Facebook is Redefining Privacy, Time, May 20, 2010 ....................................8

John G. Browning, Facebook, Twitter and LinkedIn Oh My! The ABA Ethics 20/20Commission and Evolving Ethical Issues in the Use of Social Media, 40 N. Ky. L.Rev. 255 (2013) .....................................................................................................................5, 6

Kathryn R. Brown, The Risks of Taking Facebook at Face Value: Why the Psychology ofSocial Networking Should Influence the Evidentiary Relevance of FacebookPhotographs, 14 Vand. J. Ent. & Tech. L. 357 (2012)..............................................................8

Rebecca Tushnet, Fox Hurts America Yet Again, Losing Fair Use SJ Motion(Feb. 13, 2015).........................................................................................................................10

Robert H. Jerry II and Lyrissa Lidsky, Public Forum 2.1: Public Higher EducationInstitutions and Social Media, 14 Fla. Coastal L. Rev. 55 (2012-13) .......................................5

Spencer Kuvin & Chelsea Silvia, Social Media in the Sunshine: Discovery and Ethics ofSocial Media - Florida's Right to Privacy Should Change the Analysis,25 St. Thomas L. Rev. 335 (2013).............................................................................................8

Wright & Miller, 16 Fed. Prac. & Proc. Juris. 3930 (3d ed.)......................................................12


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PRELIMINARY STATEMENT

Defendants Jeanine Pirro and Fox News Network, LLC submit this memorandum of law

in support of their motion to certify the Courts February 10, 2015 opinion and order [ECF No.

71] (the Order) for immediate appeal, under 28 U.S.C. 1292(b), and for a stay pending

appeal in this and a related action.1 In the Order, the Court denied Defendants motion for

summary judgment on their fair-use affirmative defense, declining to find that Fox News use of

a historical photograph in a Facebook post commemorating the anniversary of the September 11

attacks was substantially transformative. The Order thus presents a controlling question of

law:

For fair use purposes, whether a secondary user may transform a visualwork by placing that work in a new context and for a new purpose, withoutsubstantial physical alterations.

In the Order, the Court implicitly answered the question no by limiting the scope of its

inquiry on transformation; the Court assessed only the quantum of physical alteration to the

photograph and the quantum and perceived quality of the Defendants accompanying written

commentary. But a contrary answer from the Court of Appeals would upend that legal

framework. And the answer is anything but clear. Litigants and commentators alike have

struggled to identify the proper fair-use test for visual works, and courts have grappled with the

apparent tensions in the Second Circuits fair use jurisprudence. A square ruling from the Court

of Appeals would bring much-needed clarity to this murky area of law.

Certification is therefore warranted because the Order involves a controlling question of

law as to which there is substantial ground for difference of opinion[,] and . . . an immediate

appeal from the order may materially advance the ultimate termination of the litigation. 28

1 See N. Jersey Media Grp. Inc. v. Fox News Network, LLC and John Doe Nos. 1-5, No. 1:14-cv-07630-ER (Baier). Together with this motion, Defendants will file a separate motion for astay pending appeal in the Baier docket.


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U.S.C. 1292(b). The question is controlling because reversal of the Order would at the very

least inform the applicable standard for fair use in this action. The more likely scenario,

however, is that reversal would terminate this action; a finding that Fox News use was

transformative would tip the overall fair use analysis in Defendants favor and result in a grant of

summary judgment. The controlling nature of this question is further highlighted by its import

for other cases, including the follow-on Baier action brought by Plaintiff against Fox News

based on a similar alleged infringement.

There is also substantial ground for difference of opinion on this controlling question,

seen most clearly in the divide in the Court of Appeals own fair use jurisprudence. On one side

of the fault line lie cases such as Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 756 F.3d 73,

84 (2d Cir. 2014) and Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir.

2006), which hold that a person need not physically alter a copyrighted workvisually or

otherwisein order for a use to be transformative. On the other side, cases such as Cariou v.

Prince, 714 F.3d 694 (2d Cir. 2013), seem to place commanding weight on the degree of visual

alteration. An immediate appeal would allow the Court of Appeals to reconcile these precedents

and provide clear guidance for the parties and the public.

That guidance is sorely needed. The type of use at issue in this action and in the pending

Baier matterthe use of visual works on social mediais widespread. Under the Orders legal

analysis, the unique, transformative qualities of social media are not taken into account when

considering a fair use defense. In other words, the uses particular context does not factor into

the equation. But that finding has massive implications for the millions of Americans who use

social media on a regular basis. If social medias new and different aspects are not relevant to a

fair use analysis, then users who share copyrighted content are far more likely to be infringing


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the copyrights of others. Such a regime would effectively proscribe a wide swath of ongoing

online speech. The public has a strong interest in having these fundamental free-speech concerns

addressed at the earliest possible juncture. The Court should certify the Order for immediate

appeal to allow the Court of Appeals to address these core fair use issues.

ARGUMENT

I. INTERLOCUTORY APPEAL IS WARRANTED TO DETERMINE THEAPPROPRIATE LEGAL STANDARD FOR EVALUATING WHETHER USE OFA VISUAL WORK WAS FAIR.

A district judge may certify an order for interlocutory appeal if (1) such order involves a

controlling question of law (2) as to which there is substantial ground for difference of opinion,

and (3) an immediate appeal from the order may materially advance the ultimate termination of

the litigation. Flo & Eddie, Inc v. Sirius XM Radio Inc., No. 13 CIV. 5784 CM, 2015 WL

585641, at *1 (S.D.N.Y. Feb. 10, 2015) (certifying summary judgment decision in copyright

action for interlocutory appeal). All three factors support certification of the Order.

A. Whether A Visual Work May Be Transformed by Uses in New Contexts andFor New Purposes, Rather Than By Physical Transformation, Presents aControlling Question of Law.

A question of law is controlling if reversal of the [certified] order would terminate the

action. Klinghoffer v. S.N.C. Achille Lauro Ed AltriGestione Motonave Achille Lauro in

Amministrazione, 921 F.2d 21, 24 (2d Cir. 1990). A legal question is also controlling if reversal

even though not resulting in dismissal, could significantly affect the conduct of the action[,]

or[] the certified issue has precedential value for a large number of cases. Gramercy Advisors,

LLC v. Coe, No. 13-CV-9069 VEC, 2014 WL 5847442, at *3 (S.D.N.Y. Nov. 12, 2014) (quoting

In re Lehman Bros. Holdings, Inc., No. 13-CV-2211(RJS), 2014 WL 3408574, at *1 (S.D.N.Y.

June 30, 2014)); accord Flo & Eddie, 2015 WL 585641, at *1 (noting that certification is

warranted where the legal issue has precedential value for a large number of cases). Whether a


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particular use of a copyrighted work is fair can be a controlling question of law. Am.

Geophysical Union v. Texaco Inc., 802 F. Supp. 1, 28, 30 (S.D.N.Y. 1992), amended (Oct. 26,

1992) (Texaco).

Defendants do not ask this Court to certify the broad issue of whether the complained-of

use was fair. Rather, Defendants request certification on the narrower question of law

identified above: for fair use purposes, whether a secondary user may transform a visual

work by placing that work in a new context and for a new purpose, without substantial

physical alterations. That legal question may be answered by the Court of Appeals without

having to conduct extensive analysis and review of the underlying record. See Sec. Investor

Prot. Corp. v. Bernard L. Madoff Inv. Secs. LLC, No. M-47, 2010 U.S. Dist. LEXIS 3037, at *3

(S.D.N.Y. Jan. 11, 2010).

Resolution of the question would, at the very least, significantly affect the conduct of the

action. Gramercy Advisors, 2014 WL 5847442, at *3. The Court denied Defendants summary

judgment motion because it declined to contrast Plaintiffs original purpose in creating its

photofor breaking newswith Fox News purpose in using ithistorical remembrance and

discussion on social media. Rather, the Court focused on Fox News physical alterations to the

photo and found them minimal. Order at 15-16. Likewise, the Court evaluated the perceived

quality of Fox News commentary, id. at 15, and found it marginal in light of the many other

similar commemorative messages on social media. Id. at 15-16. But if the Court of Appeals

held that context and purpose were key in the first-factor analysis for visual works, then the

Courts analysis would no longer follow: neither the quality nor the ubiquity of Fox News

message speaks to the purpose of Fox News use, nor the context in which it was made. That

alone renders the question controlling. See Flo & Eddie, 2015 WL 585641, at *1 (finding


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question of law controlling because reversal of this Courts ruling might well require

reconsideration of the Courts fair use analysis).

Under these circumstances, however, reversal would likely compel a finding that Fox

News use was transformative, and therefore fair. That is not only because Fox News used

Plaintiffs photo for a different purpose from that for which it was created; it is because Fox

News used Plaintiffs photo in an inherently transformative context: on social media.

Social networking platforms like Facebook, Twitter, LinkedIn, and YouTube have

caused a paradigm shift in how people communicate and share information. John G. Browning,

Facebook, Twitter and LinkedIn Oh My! The ABA Ethics 20/20 Commission and Evolving

Ethical Issues in the Use of Social Media, 40 N. Ky. L. Rev. 255, 255 (2013) (Browning). The

old paradigm in traditional methods of expression resembled a one-way street: the speaker

communicated its chosen message to an audience that passively received the message. The new

paradigm, exemplified by social media, is different. In social media, the traditional, one-way

flow of expression gives way to an ongoing exchange of views and information. Rather than

playing a single, static role, social media users join the fray as both speakers and listeners, as

both authors and readers, all at once.

Facebook in particular highlights this ongoing shift to interactive methods of

communication. From an objective standpoint Facebook pages operate as digital spaces

where public conversations can occur; the communicative nature of such pages is apparent

from the structure of the Facebook wall and the devices on the pages that promote postings

and comments. Robert H. Jerry II and Lyrissa Lidsky, Public Forum 2.1: Public Higher

Education Institutions and Social Media, 14 Fla. Coastal L. Rev. 55, 72 (2012-13). Indeed, [b]y

providing these various channels of communication, Facebook strives to create an online


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environment that facilitates communication, social connection, and the sharing of ideas, and in

which [u]sers can engage in debate and advocate for the political ideas, parties, and candidates of

their choice. Bethany C. Stein, A Bland Interpretation: Why a Facebook Like Should Be

Protected First Amendment Speech, 44 Seton Hall L. Rev. 1255, 1260 (2014) (Stein). Such a

constant sharing of ideas is compelled by the architecture of the website; every Facebook post

is presented for public comment and debate.

Expression on social media, and on Facebook in particular, is thus inherently intertwined

with comment and criticism, purposes that the Copyright Act sets forth as presumptively

fair. See 17 U.S.C. 107. Of course, at the time that the 1976 Copyright Act was drafted, social

media had not yet been conceived of, much less adopted for everyday use by a majority of

Americans. See, e.g., Browning, 40 N. Ky. L. Rev. at 256 (noting that as of 2011, Sixty five

percent of all adult Americans have at least one social networking profile).2 But unlike the

legacy media known to Congress at the time, social media is transformative by design. Every

post is an invitation for others to comment and criticize; every message and image invites

reciprocal expression. A context-sensitive test for transformativeness, then, will necessarily

account for the fact that Facebook and other social media sites are by design used for purposes of

comment and criticism, and such a test will inevitably favor uses on social media.

The Court of Appeals need not address the particular features of the Pirro Facebook page

in order to offer broad and helpful guidance as to how the context of social media informs the

first-factor fair use analysis. But Texaco belies any suggestion that the Court of Appeals may

never consider facts from the record below on an interlocutory appeal. Indeed, in Texaco, Judge

2 See also Facebook, Inc. v. Pedersen, 868 F. Supp. 2d 953, 956 (N.D. Cal. 2012) (Facebookprovides online networking services to more than 500 million monthly users; these servicesinclude allowing users to create profiles, upload photos and videos, and connect with others).


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Leval certified the entire fair use issuefindings of fact and allfor interlocutory appeal. 802

F. Supp. at 30. The Court of Appeals accepted the appeal and analyzed the merits of the fair use

question in depth, including full consideration of record evidence peculiar to the specific parties.

See Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 914 (2d Cir. 1994) (affirming result

below [t]hough not for precisely the same reasons stated by the district court); see also n.6

below.

The question presented by Fox News is thus controlling for 1292(b) purposes. A

finding that Fox News use was transformative would tip the overall fair use analysis in

Defendants favor because the more transformative the new work, the less will be the

significance of other factors, like commercialism, that may weigh against a finding of fair use.

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994). A finding of transformativeness

would not only flip the first statutory factor in favor of fair use, but also the fourth because

transformative uses lessen the likelihood of cognizable market harm. See id. at 591 (when . . .

the second use is transformative, market substitution is at least less certain, and market harm may

not be so readily inferred.); see also Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d

605, 615 (2d Cir. 2006) (Since [Defendants] use of [Plaintiffs] images falls within a

transformative market, [Plaintiff] does not suffer market harm due to the loss of license fees.).3

Finally, the question of law is also controlling because it has precedential value for many

cases. That includes the Baier action Plaintiff has brought against Fox News based on a similar

3 The Courts lengthy discussion of commerciality under the first fair use factor and its treatmentof the fourth fair use factor were expressly tied to its finding that Fox News had not sufficientlychanged the aesthetic of the original work to support a finding of transformativeness. Order at17-18.


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alleged infringement.4 But it goes further. Both Pirro and Baier are part of Plaintiffs larger

plan to bring infringement suits based on the use of its photo on social media, see Hanswirth

Decl. Exhibits A, Q, R, ECF No. 32, and is entirely likely that Plaintiff will bring more actions in

this district based on similar alleged infringements. Nor is Plaintiff uniquely situated, as cases

involving the alleged infringement of photos on social media continue to be filed in this Court.

See, e.g., Complaint & Demand for Jury Trial, Noble v. Nike, No. 13-cv-04371-LGS (S.D.N.Y.

June 24, 2013), ECF No. 1. And the sheer volume of activity on social media all but guarantees

that fair use questions will recur. To consider but a few metrics:

The average Facebook user creates ninety pieces of content each month.Kathryn R. Brown, The Risks of Taking Facebook at Face Value: Why thePsychology of Social Networking Should Influence the Evidentiary Relevance ofFacebook Photographs, 14 Vand. J. Ent. & Tech. L. 357, 360 (2012).

As of five years ago, Facebook users uploaded nearly one billion photos toFacebook per week. See Dan Fletcher, How Facebook is Redefining Privacy,Time, May 20, 2010, available athttp://www.time.com/time/magazine/article/0,9171,1990798,00.html (last visitedMarch 19, 2015).

Over 700 billion minutes per month are spent on Facebook, twenty millionapplications are installed per day, and over 250 million people interact withFacebook from outside the official website on a monthly basis, across two millionwebsites. In just twenty minutes on Facebook, one million links are shared,almost two million friend requests are accepted, and almost three millionmessages are sent. Spencer Kuvin & Chelsea Silvia, Social Media in theSunshine: Discovery and Ethics of Social Media Florida's Right to PrivacyShould Change the Analysis, 25 St. Thomas L. Rev. 335, 338 (2013).

4 On March 16, 2015, Fox News submitted a pre-motion letter in connection with a plannedmotion to dismiss the Baier action for improper venue or transfer the action. The prospect ofsuch a motion does not detract from the importance of a legal ruling from the Court of Appealson the proper standard for transformativeness. Fox News contemplated motion is based on thefact that the John Doe defendants are not subject to personal jurisdiction in this district, makingvenue improper under 28 U.S.C. 1400(a). Plaintiff could file an amended pleading removingthe John Doe defendants as parties, in which case venue would be proper in this district. Even ifthe Baier action were ultimately transferred to another district (or re-filed there), any precedentfrom the Court of Appeals on this novel issue would be highly persuasive.


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There are thus numerous existing actions involving alleged infringements on social

media, and more on the way. Receiving authoritative guidance from the Second Circuit will

help resolve those actions quickly and consistently. Flo & Eddie, 2015 WL 585641, at *2.

B. There is Substantial Ground for Difference of Opinion Over TheAppropriate Standard for Transformation of Visual Works.

There is a substantial ground for difference of opinion regarding the proper standard

for evaluating transformation of visual works because there is conflicting authority on the

issue. In re Trace Intl Holdings, Inc., No. 04-cv-1295(KMW), 2009 WL 3398515, at *3

(S.D.N.Y. 2009) (citing Klinghoffer, 921 F.2d at 25).

In Defendants view, the Court failed to recognize the applicability of Bill Graham,

perhaps because the Court of Appeals opinions in this area have not yet been fully synthesized.

As noted above, the leading cases hold that a person need not physically alter a copyrighted

workvisually or otherwisein order for a use to be transformative. See Authors Guild, Inc. v.

Hathitrust, 755 F.3d 87, 96 (2d Cir. 2014) (Added value or utility is not the test: a

transformative work is one that serves a new and different function from the original work and is

not a substitute for it.); Swatch, 756 F.3d at 84 (audio work); Bill Graham, 448 F.3d at 609

(visual work). The Court, however, relied on Cariou and other similar precedents addressing

visual works only. See Cariou, 714 F.3d at 711 (finding minimal [visual] alterations

insufficient despite artist mov[ing] the work in a different direction); see also Blanch v. Koons,

467 F.3d 244, 253 (2d Cir. 2006) (finding work transformative based on changes of its colors, .

. . the medium, the size of the objects pictured and more).

The apparent conflict between the Bill Graham and the Cariou modes of analysis has

long been noted by commentators. As one of the Nations leading copyright scholars has

observed, Cariou and other cases the Court cited in its transformativeness analysis, despite


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speaking of purpose, seem[ ] to require transformation of content, contrary to the aims of much

appropriation art. See, e.g., Rebecca Tushnet, Fox Hurts America Yet Again, Losing Fair Use

SJ Motion, Feb. 13, 2015, available at http://tushnet.blogspot.com/2015/02/fox-hurts-america-

yet-again-losing-fair.html (last visited Mar. 18, 2015). The presence of this conflicting

authority means that appellate review is particularly appropriate. Certification would allow the

Court of Appeals to reconcile its divergent lines of authority and clarify the test for

transformativeness.

A substantial ground for difference of opinion also exists within the meaning of

1292(b) where there is an absence of on-point authority. See In re Trace, 2009 WL 3398515,

at *3; see also Atl. Holdings, Inc. v. Sovereign Wealth Fund Samruk-Kazyna JSC, No. 12-cv-

8852 (JMF), 2014 WL 1881075, at *1 (S.D.N.Y. May 9, 2014) (granting certification in part

because of the somewhat unsettled and evolving nature of the law). Here, there is an absence

of on-point authority for one aspect of Defendants proposed questionthe proper standard for

evaluating context in the modern media landscape. As described above, the relevant context of

the allegedly infringing useas part of a global conversation commemorating the anniversary of

the September 11 attacks occurring on social mediasupports a finding that Defendants use

was transformative as a matter of law.5

While the Court did not address this particular argument in the Order, it did note that Fox

News use involve[d] the secondary use of a secondary use, Order at 15, and inferred that Fox

News posting on Facebook was less transformative as a result. Id. Notably, in drawing that

inference, the Court observed that [t]he Court has not found a case addressing similar facts.

Id. at 15 n.12. But that fact pattern is utterly commonplace on social media, where once the

5 See also Memorandum of Law in Support of Motion for Summary Judgment at 13-17 [ECFNo. 35].


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words and link [of a Facebook post] are posted, the users friends can see it and can therefore

discuss it in the form of wall posts and comments, opening up a forum for debate and an

exchange of ideas. Stein, 44 Seton Hall L. Rev at 1270. Facebook and other social networks

are replete with discussion and debate regarding the meaning, merits, and import of copyrighted

content, including secondary uses of secondary uses.

The Court of Appeals has never had occasion to pass upon the question of what role, if

any, the social aspects of social media play in the fair use analysis. The absence of on-point

authority regarding this question ensures that obtaining the Court of Appeals guidance on the

proper role of purpose and context for visual works in the first-factor analysis would be that

much more helpful.

C. Certification Would Materially Advance the Termination of This Litigationand Promote Judicial Economy.

An appeal may materially advance the ultimate termination of the litigation if that

appeal promises to advance the time for trial or to shorten the time required for trial. In re

Facebook, Inc., IPO Sec. & Derivative Litig., 986 F. Supp. 2d 524, 531 (S.D.N.Y. 2014)

(internal citation omitted). The possibility of a reversal that would terminate the litigation is

enough, see Capitol Records, LLC v. Vimeo, LLC, 972 F. Supp. 2d 537, 554 (S.D.N.Y. 2013),

andas discussed abovereversal of the Order would likely lead to summary judgment for

Defendants, ending the case. See also Pearson Educ., Inc. v. Liu, No. 1:08-cv-06152-RJH, 2010

WL 623470 (S.D.N.Y. Feb. 22, 2010) (finding third prong satisfied because further motion

practice, discovery, or trial in this matter would likely be rendered moot should the Circuit find

that it disagrees with this Courts answer to the [certified] question.).

Moreover, any future phases of this litigationincluding a trial or potential settlement

before trialwould be executed with greater speed and certainty if the Court of Appeals


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provides direction on the key legal issue in the action. Cf. Flo & Eddie, 2015 WL 585641, at *4

(noting that clarity from appellate ruling would necessarily spur negotiation). Appellate

guidance of any type would also inform consideration of the Baier matter, in which Fox News

also anticipates advancing a similar fair use defense. These efficiencies counsel in favor of an

immediate appeal.

D. The Public Interest Strongly Favors Interlocutory Appeal

While only the three statutory factors listed in 1292(b) need be satisfied, courts may

also consider whether an interlocutory appeal would be in the public interest. See Texaco, 802 F.

Supp. at 30; Allstate Ins. Co. v. Elzanaty, No. 11-cv-3862(ADS)(ARL), 2013 U.S. Dist. LEXIS

70579, at *12-13 (E.D.N.Y. May 16, 2013) (granting certification because, in part, [t]he Court

believes that it will be of significant value for the parties here, and others similarly situated, to

have a dispositive answer to this question); Wright & Miller, 16 Fed. Prac. & Proc. Juris.

3930 (3d ed.) (Section 1292(b) factors best understood as directing courts to consider the

probable gains and losses of immediate appeal). At least two strong public interests would be

furthered by an interlocutory appeal in this matter: (1) protection of First Amendment interests;

and (2) offering clarity in the emerging area of Internet law.

First, interlocutory review is warranted because the Order implicates fundamental free-

speech questions. Defendants face the prospect of a lengthy and expensive trial on their fair-use

defense, the possibility of which may chill Defendants and others from using copyrighted content

on social media to discuss issues of public concern. The Sixth Circuit recently held that in cases

involving the speech-chilling threat of the hecklers veto, district courts should certify

controlling questions of law at an earl[y] stage of litigation. Jones v. Dirty World Entmt

Recordings LLC, 755 F.3d 398, 417 (6th Cir. 2014).


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The Sixth Circuits explicit statement regarding the importance of certifying important

speech-related issues for appeal comports with the practice of other courts. For example, one of

the Supreme Courts most important speech-related decisions in recent years reached the Court

after a district court certified (and the Court of Appeals for the Third Circuit accepted) an

interlocutory appeal under 1292(b). See Bartnicki v. Vopper, 532 U.S. 514, 535 (2001)

(holding that a strangers illegal conduct does not suffice to remove the First Amendment shield

from speech about a matter of public concern). Indeed, in that case, the district court certified

its order denying summary judgment for the defendants, in part because its ruling involved the

application of free speech principles to federal and Pennsylvania wiretapping statutes. After

accepting the interlocutory appeal, the Third Circuit reversed the district courts decision and

ordered summary judgment for the defendants. Bartnicki v. Vopper, 200 F.3d 109, 129 (3d Cir.

1999). The Supreme Court then affirmed. Bartnicki, 532 U.S. at 535. The Court should take a

similar course and follow the sound guidance of the Sixth Circuit.

Second, interlocutory review is appropriate because of the strong public interest in

having prompt appellate review of the fair use issue. Texaco, 802 F. Supp. at 30. The public

interest in Texaco was strong because the allegedly infringing usecopying and circulating of

scientific journal articles by corporate employeeswas extremely widespread. Id. As a

result, the parties had shared interests in being able to determine whether that widespread

practice was fair use. Id.

The logic of Texaco applies with equal force here because the use of copyrighted images

on social media is as widespread as the copying of journal articles by corporate employees, if not

moreso.6 As described above, this is hardly surprising; social medias function is to encourage

6 At a hearing on February 26, 2015, counsel for Plaintiff attempted to distinguish Judge Levalscertification of the fair use question in Texaco on the basis that the case involved an interlocutory


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the sharing of and discussion about the trends of the day, including popular copyrighted content.

But the sheer volume of content shared on social media has created an unprecedented

opportunity for potential, if unwitting, infringements. It is thus crucially important that the

public understand how and to what extent fair use principles apply to new media, so that the

public can govern itself accordingly. An interlocutory appeal would provide needed clarity in

this emerging area of law.

II. A STAY OF PROCEEDINGS IN THE DISTRICT COURT PENDINGINTERLOCUTORY APPEAL WOULD FURTHER THE INTERESTS OFJUSTICE AND PROMOTE EFFICIENCY.

In addition to certifying the Order for interlocutory appeal, the Court should stay

proceedings in this action and the Baier matter pending disposition of the appeal. As Judge

McMahon recently observed in issuing a stay pending interlocutory appeal, [t]he power to stay

proceedings is incidental to the power inherent in every court to control the disposition of the

causes on its docket with economy of time and effort for itself, for counsel and for litigants. Flo

& Eddie, 2015 WL 585641, at *4 (quoting Nederlandse Erts-Tankersmaatschappij, N.V. v.

Isbrandtsen Co., 339 F.2d 440, 441-42 (2d Cir. 1964)). Indeed, the authority to manage a docket

is an aspect of [a courts] broad and inherent power over its own process, to prevent abuses,

oppressions and injustice, so as not to produce hardship, and to do substantial justice. Flo &

Eddie, 2015 WL 585641, at *4 (quoting Soler v. G & U, Inc., 86 F.R.D. 524, 526 (S.D.N.Y.

1980)). In issuing a stay, a court must weigh competing interests and maintain an even

balance. Soler, 86 F.R.D. at 526 (citation omitted).

appeal following a bellweather trial, not a summary judgment decision. See Feb. 26, 2015 Tr.at 11-12. But any differences in procedural posture between this action and Texaco areirrelevant. Texaco establishes that legal questions relating to fair use (including the entire fairuse issue) are properly certified for interlocutory appeal so long as the statutory factors aresatisfied and the public interest warrants an appeal. Texaco, 802 F. Supp. at 29-30. Those sameconditions are present here.


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Here, staying proceedings in the district court pending appeal is the most prudent and

efficient course. Absent a stay, both parties would be forced to expend unnecessary time and

money on discovery and additional motion practice when the dispositive issue in the casefair

usecould be resolved on appeal. That applies doubly for Baier, where discovery has not yet

begun. Precisely to serve the goals of efficiency and judicial economy, this Court has twice

stayed further proceedings while it considered the fair use question. At a hearing on July 17,

2014, the Court held further motion practice and discovery in abeyance pending resolution of

Defendants motion for summary judgment on fair use. See July 17, 2014 Tr. at 34:19-23

(holding further motion practice and discovery in abeyance due to concern[ ] about the growing

scope of this case and because the fair use issue is potentially dispositive). At a subsequent

hearing on October 28, 2014, the Court stayed the Baier action in order to advance the

efficienc[ies], both for the Court and for the parties. Oct. 28, 2014 Tr. at 11:1-2.

Plaintiff would suffer no prejudice or hardship as a result of a stay. In the recent Flo &

Eddie order, Judge McMahon noted that the plaintiff would not suffer a substantial hardship

from a stay because [i]t loses not a dimes worth of potential damages by holding up until the

legal issue is resolved. Flo & Eddie, 2015 WL 585641, at * 4. Judge McMahon also noted that

the plaintiffs established history of tolerating alleged infringements belied any suggestion that

non-monetary harm would result from an appeal. See id. (noting that plaintiff has tolerated

public performances of sound recordings in which it holds common law copyrights, by both

digital and terrestrial broadcasters, for decades). Just so here: Plaintiffs potential damages

remain unaffected by any delay, and Plaintiff accepted the widespread infringement of its photo

for nearly a decade. See, e.g., Reply Memorandum of Law in Further Support of Motion for

Summary Judgment [ECF No. 63], at 9-10. Given that lengthy period of inaction, Plaintiff


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cannot plausibly claim that an appeal would work any harm upon it. If anything, Plaintiff would

benefit from additional appellate guidance on the fair use question: its campaign against

purported infringers on social media is premised on the belief that those uses are just like uses in

any other medium. If that is not so, then Plaintiff may well reconsider its legal strategy.

CONCLUSION

For the foregoing reasons, the Court should (1) certify the Order for interlocutory appeal

and (2) stay proceedings in the district court in this action and in the Baier action pending appeal.

Dated: New York, New York HOGAN LOVELLS US LLPMarch 19, 2015

By: /s/ Dori Ann HanswirthDori Ann Hanswirth

[email protected] S. Boyer

[email protected] A. Fleming

[email protected] C. Wilson

[email protected] Third AvenueNew York, New York 10022tel: (212) 918-3000fax: (212) 918-3100Attorneys for Defendants


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CERTIFICATE OF SERVICE

I, Dori Ann Hanswirth, Esq., hereby certify that on March 19, 2015, I caused to be servedtrue and correct copies of: (1) Defendants Motion For Certification of February 10, 2015 Orderfor Interlocutory Appeal Under 28 U.S.C. 1292(b) and For Issuance of Stay Pending Appeal;and (2) a memorandum of law in support of the same, via electronic means (with Plaintiffscounsels written consent pursuant to Rule 5(b)(2)(E) of the Federal Rules of Civil Procedure)upon:

DUNNEGAN & SCILEPPI LLCWilliam Dunnegan

[email protected] Weiss

[email protected] Fifth AvenueNew York, New York [email protected] for Plaintiff

I certify that all participants in the case are registered CM/ECF users and that service willbe accomplished by the CM/ECF system.

Dated: March 19, 2015/s/ Dori A. Hanswirth /DORI ANN HANSWIRTH


Memorandum Of Law in Support of Defendant's Motion

Documents

Transcript of Memorandum Of Law in Support of Defendant's Motion