In Flo & Eddie, Inc. v. Pandora Media, Inc., the Central District of California recently refused to apply California’s anti-SLAPP statute to dismiss a copyright infringement lawsuit against Pandora, a leading operator of internet radio service. Although the court found that Pandora was furthering its First Amendment right to free speech by streaming the plaintiff’s music to Pandora’s internet users, the court rejected Pandora’s motion to strike because the plaintiff recording artists showed that their copyright claims had enough merit to go forward.  California’s anti-SLAPP statute was enacted more than 20 years ago to discourage “Strategic Lawsuits Against Public Participation.” The law gives California state and federal courts the authority to dismiss, at an early stage, a meritless lawsuit that challenges various kinds of protected activities. Conduct can be protected if it furthers the right of free speech in connection with an issue of public interest.

In Flo & Eddie, Pandora argued that “streaming music to its users is, beyond dispute, an exercise of its First Amendment rights” because music is a form of expression and communication protected under the First Amendment. Pandora further asserted that the protection extends not just to the original creators of the musical works and recordings, but also to third parties, like Pandora, who disseminate them.  In response, plaintiff argued that Pandora’s streaming of the plaintiff’s music could not further Pandora’s free speech rights because Pandora did not have authority to stream the music and because the First Amendment does not protect copyright infringement. In other words, plaintiff’s position was that, where conduct infringes a copyright, that conduct cannot qualify as “protected activity” under California’s anti-SLAPP statute.

The Flo & Eddie court, however, sided with Pandora on the First Amendment analysis. In particular, it explained that plaintiff “inappropriately conflate[d] the two distinct prongs of the anti-SLAPP statute” – (i) whether Pandora made a threshold showing that its challenged conduct arose from protected activity (which the court found Pandora had), and (ii) whether the plaintiff made a prima facie showing that it would succeed on its copyright claims (which, under this distinct second prong, the court found plaintiff had and, therefore, denied Pandora’s motion to dismiss on that basis).  Flo & Eddie recognizes the “basic inquiry” and “loosely” applied standard in California for determining whether conduct furthers the right to free speech. Based upon Ninth Circuit and California court decisions, the Flo & Eddie court found that “it seems to suffice that the defendant’s activity is communicative.” For example, selling a birthday card featuring celebrity Paris Hilton’s face and her “that’s hot” catchphrase qualifies as an activity in furtherance of free speech. As does making the video game “Band Hero” using the likenesses of the band members from No Doubt.

However, moving on to the second prong of the anti-SLAPP statute regarding the merits of the plaintiff’s copyright claims, the court rejected Pandora’s argument that plaintiff did not hold any rights to music that plaintiff recorded pre-1972 (when the federal copyright law took effect) that plaintiff sold, and thereby “published,” to the public in the 1960’s. Specifically, the court disagreed with Pandora’s theory that “California’s copyright law protected unpublished rights only, and [that] the [California] legislature did not intend to resurrect previously extinguished rights in published sound recordings when it passed [its copyright law] in 1982.” The court explained that “[t]he case law indicates that sound recordings never dropped into the public domain so that people could freely exploit them.” In fact, “[t]his jurisprudence was the existing landscape for sound recordings rights in California when the legislature passed [its copyright law] in 1982, not a free-for-all where exploitation of sound recordings after first sale was the accepted status quo.” The court further reasoned that, if it were to adopt Pandora’s position, then California’s copyright law “would cover practically nothing.”

California’s anti-SLAPP statute generally has been known to provide broader protections than other states’ similar statutes. California is unique in that the state has been responsible for a significant portion of the anti-SLAPP litigation in the U.S. For example, it is often recounted that, in 2009, more than 1,300 of the reported anti-SLAPP cases originated in California, while the rest of the states collectively saw less than 400 cases. Although Pandora’s anti-SLAPP motion was denied under that second prong, the Flo & Eddie decision is a victory for proponents of the First Amendment in California.