Huston v. Hearst Commc'ns, Inc.

53 F.4th 1097

Elizabeth HUSTON, individually and on behalf of all others similarly situated, Plaintiff-Appellant,

v.HEARST COMMUNICATIONS, INC., Defendant-Appellee.

No. 22-1489

United States Court of Appeals, Seventh Circuit.

Argued October 25, 2022

Decided November 22, 2022

James Dominick Larry, Attorney, Nick Larry Law LLC, Chicago, IL, Arun Ravindran, Attorney, Hedin Hall LLP, Miami, FL, for Plaintiff-Appellant.

Andrea Butler, Jonathan Donnellan, Attorneys, Hearst Corporation, New York, NY, for Defendant-Appellee.

Before Sykes, Chief Judge, and Flaum and Lee, Circuit Judges.

Flaum, Circuit Judge.

Elizabeth Huston, a Good Housekeeping magazine subscriber, filed a putative class action complaint alleging a media conglomerate, Hearst Communications, Inc., violated her right of publicity by offering to sell and selling mailing lists containing her, and 9.1 million other subscribers', identifying information. As redress, Huston seeks statutory damages as provided by the Illinois Right of Publicity Act (IRPA) and an injunction requiring Hearst to obtain prior written consent before selling its subscribers' information in this manner.

The district court granted Hearst's motion to dismiss because it found Huston failed to sufficiently allege an IRPA violation. Judgment was entered, and this appeal ensued. For the following reasons, we affirm the judgment of the district court.

I. Background

Huston alleges Hearst violated IRPA by offering for sale and selling mailing lists that identified its magazine subscribers, including Huston, by name, address, "gender, age, ethnicity, income, political party, religion, and charitable donation history," among other personal attributes. Two mailing lists are at issue: (1) the Good Housekeeping Mailing List and (2) the Hearst Corporate Masterfile & Enhanced Mailing List. The first contains personal information for "each of the 1,715,229 active U.S. subscribers to Good Housekeeping ." The other contains the same information for "all 9,108,589 active U.S. subscribers to all of Hearst's various publications." While Hearst directed its offer to sell these mailing lists to the "community at large," the intended audience was data miners, aggregators, and brokers who use this information to target subscribers with direct-mail advertisements.

IRPA provides: "A person may not use an individual's identity for commercial purposes during the individual's lifetime without having obtained previous written consent." 765 Ill. Comp. Stat. 1075/30(a). According to Huston, offering to sell and selling these mailing lists violates IRPA because it constitutes using or holding out her identity for a commercial purpose. Hearst filed a motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint failed to sufficiently allege a commercial purpose and thus failed to state an IRPA claim. The district court agreed and granted Hearst's motion. Huston declined to amend her complaint, the district court entered judgment in favor of Hearst, and Huston subsequently appealed.

II. Discussion

On appeal "[w]e review de novo the district court's grant of [a] Rule 12(b)(6) motion to dismiss, accepting all well-pleaded factual allegations as true and drawing all reasonable inferences in [the plaintiff's] favor." Leszanczuk v. Carrington Mortg. Servs., LLC , 21 F.4th 933, 937 (7th Cir. 2021).

A. IRPA Claim

IRPA codified and eliminated the common law tort of "appropriation of another's name or likeness," Dwyer v. American Express Co. , 273 Ill.App.3d 742, 210 Ill.Dec. 375, 652 N.E.2d 1351, 1353 (1995), and secured the right for a "person to control the commercial value of his or her identity," Toney v. L'Oreal USA, Inc. , 406 F.3d 905, 910 (7th Cir. 2005). To state a claim for a violation of IRPA, the plaintiff must allege: (1) an appropriation of the plaintiff's identity, (2) without the plaintiff's written consent, and (3) for defendant's commercial purpose. § 30(a); see also Blair v. Nev. Landing P'ship , 369 Ill.App.3d 318, 307 Ill.Dec. 511, 859 N.E.2d 1188, 1192 (2006) (discussing elements of IRPA claim where defendants used plaintiff's photograph to advertise their restaurant and casino).

Hearst does not dispute that the mailing lists identify Huston and that Huston did not consent to being included on the mailing lists. As a result, this appeal centers on the last element—whether Hearst used Huston's identity for a commercial purpose.

1. Commercial Purpose

IRPA defines "commercial purpose" disjunctively as "the public use or holding out of an individual's identity (i) on or in connection with the offering for sale or sale of a product, merchandise, goods, or services; (ii) for purposes of advertising or promoting products, merchandise, goods, or services; or (iii) for the purpose of fundraising." § 5. Huston's principal argument arises under the first prong of the Act's definition: that Hearst publicly used or held out Huston's identity "on or in connection with the offering for sale or sale of" the mailing lists. Id.

The district court did not explicitly consider whether Huston's identity was used or held out by Hearst to sell the mailing lists. Instead, it concluded that IRPA liability is limited to instances where a person's identity is used or held out to sell a separate product, and the mailing lists are not separate from Huston's identity.¹ However, "[w]e may affirm on any ground that the record supports and that the appellee has not waived." Albert v. Oshkosh Corp. , 47 F.4th 570, 577 (7th Cir. 2022) (citation and internal quotation marks omitted), reh'g denied , No. 21-2789, 2022 WL 4372363 (7th Cir. Sept. 21, 2022). The parties briefed the "public use or holding out" issue before the district court and on appeal, so we will consider it.

On this issue, the parties analogized to two recent IRPA cases in the background report context. In both cases, Dobrowolski v. Intelius , No. 17-CV-1406, 2018 WL 11185289, at *3 (N.D. Ill. May 21, 2018), and Lukis v. Whitepages Inc. , 542 F. Supp. 3d 831, 837-38 (N.D. Ill. 2020), the courts considered whether free previews and internet ads for paywalled background reports constitute commercial use. The previews and ads held out a limited amount of information about the plaintiffs, but a user could receive more information by purchasing a background report. Dobrowolski , 2018 WL 11185289, at *1 ; Lukis , 542 F. Supp. 3d at 835. The courts reached conflicting outcomes, hinging on whether the paywalled reports were sufficiently separate from the plaintiff's identity or whether the two were effectively merged. Dobrowolski , 2018 WL 11185289, at *3 ; Lukis , 542 F. Supp. 3d at 838. However, in both cases it was clear that the free preview was intended to encourage purchase of the background report. Dobrowolski , 2018 WL 11185289, at *1 ; Lukis , 542 F. Supp. 3d at 838.

What distinguishes this case from the background report cases—and is outcome determinative—is that Huston did not allege that Hearst solicited mailing list purchasers by publicizing her information. She did not allege prospective mailing list purchasers were able to see her or any other subscribers' information, in whole or part, prior to their purchase. She also did not allege her name was used to sell or promote the mailing lists themselves. Instead, Huston alleged that her identity was included as part of the product sold. This is different from Dobrowolski and Lukis , where a free preview held out limited information about the plaintiffs to entice a commercial transaction. Dobrowolski , 2018 WL 11185289, at *1 ; Lukis , 542 F. Supp. 3d at 838 ; cf. U.S. News & World Rep., Inc. v. Avrahami , No. 95-1318, 1996 WL 1065557, at *4, 7 (Va. Cir. Ct. June 13, 1996) (concluding that "[t]he inclusion of an individual name as part of a mailing list constitutes neither a use for an advertising purpose nor a use for the purpose of trade" under a similar Virginia publicity statute because "U.S. News did not identify any individual name that would be contained on the [list]" or "promote or advertise its list" in that manner).

Huston tries to minimize this distinction by arguing that "commercial purpose" includes both "public use" and "holding out," and that the word "public" does not modify "holding out." Consequently, she contends that Hearst did not need to publicly hold out her identity; it violated IRPA by including her name and information on a mailing list that anyone could purchase.

This is a nonstarter. Regardless of whether "public" modifies "holding out," Huston's argument ignores the timing requirement implicit in IRPA's construction. On its face, the statute prohibits the use or holding out of a person's identifying information to offer to sell or sell a product, piece of merchandise, good, or service. § 5. Thus, the statute contemplates a use or holding out of an individual's identity with the aim of effectuating a sale. Necessarily, then, any use or holding out must either accompany an offer to sell or precede the sale, see Toney , 406 F.3d at 907 (where model's image was used on the "packaging of a hair-relaxer product"), but it cannot follow the sale. A person's identity cannot be employed to sell a product if their identity is only revealed after the sale is completed.

Legislative history supports this reading. On the Illinois House of Representatives floor, the Act's sponsoring representative explained IRPA would require consent before using someone's likeness "[i]n order to sell something." 90th Ill. Gen. Assem., House Proceedings, April 24, 1997, at 226 (statements of Rep. Turner). He went on to offer an example of a commercial depicting "Fred Astaire dancing with a vacuum cleaner," explaining that the vacuum company using such an advertisement without Astaire's consent would be liable. Id.

Under the facts Huston alleged, her information is disclosed only after the sale of the mailing list is consummated and the purchaser begins perusing the 9.1 million names. Huston's identity...