Court Dismisses Fox Casual Guest’s Theft of Ideas/”Hot News” Claim Against Fox

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In Greer vs. Fox Corp., decided on Wednesday, Judge Laura Taylor Swain (SDNY) broadly adopted Magistrate Judge Stewart Aaron’s June 2021 report and recommendation; Here’s an excerpt from that report and recommendation, which the district judge adopted (and which I think is entirely correct):

The following is a summary of the allegations contained in the [Complaint] which relate to asserted legal claims:

Greer is “an expert used by television and radio for interviews”. During the period 2008 to 2013, he appeared as a guest on FBN and Fox News. Respondent [Charles] Gasparino, a reporter for FBN, interviewed Greer and used his topical tips.

In 2012, Greer published several Op-Eds and letters in the WSJ [Wall Street Journal]. In December 2012, he approached Dow Jones with an idea about creating a health-related video website as part of the WSJ. Greer’s idea “never materialized”, but the WSJ pursued the idea on its own, without credit or payment to Greer. However, Greer never pursued litigation over it.

From 2010 to 2013, Greer provided topical advice to [Jennifer] Strasburg, who was a reporter for the WSJ, for articles she wrote on “expert networks”. Strasberg never informed his editor of Greer’s contributions to the articles and Greer “believes Strassberg was reprimanded by his bosses” as a result. Greer also apparently believes that Strasbourg “smeared” his name with other journalists. …

As of 2017, Greer “suspected” that Carlson was misappropriating Greer’s written work and using it on Carlson’s Fox News show. For example, in 2019 and 2020, Carlson used the term “Demimplosion” on his show, in circumstances where Greer had previously coined the term “Demplosion”. In 2019, Carlson “used the words ‘civil war’ to describe national unrest”, in circumstances where Greer had previously made “the new analogy that partisan division in the country was in fact like a second civil war”. In 2021, Greer provided information to Carlson about the nursing home scandal that engulfed Governor Cuomo, but Carlson never gave Greer “credit for being the person who exposed” the scandal….

Greer pursued various state law theories, including unfair competition, unjust enrichment, misappropriation of hot news, etc., but the court ruled that they were preempted by copyright law. :

Plaintiff alleges, with respect to its unfair competition claim, that the Fox News defendants and the News Corp. engaged in unfair competition by misappropriating the plaintiff’s “works”, including his “original and non-obvious short stories” and his books. The two elements required for copyright preemption are present here: (1) “the particular work to which the claim applies falls within the type of works protected by the Copyright Act” and ( 2) “the claim seeks to assert legal rights or equitable rights equivalent to one of the sets of exclusive rights already protected by copyright law.” First, the works fall into the category of works protected by the Copyright Act, since they are “original works of authorship fixed in [a] tangible means of expression.

Second, the claim for unfair competition seeks to assert the plaintiff’s legal rights equivalent to the exclusive rights protected by copyright law….

Plaintiff alleges with respect to his claim for unjust enrichment that Plaintiff provided Defendants with his “valuable creative content in expectation of being rewarded with credit for his work and payment” and that Defendants benefited of his hijacked work. This claim is also pre-empted [for similar reasons]….

With his third cause of action, plaintiff seeks to circumvent copyright preemption by asserting that his works were “hot news”. However, the plaintiff did not plausibly allege the “hot news” misappropriation claim. [that] survives preemption for actions regarding material in the field of copyright.” Watch NBA vs. Motorola (2nd Cir. 1997); see also Barclays cap. Inc. v Theflyonthewall.com, Inc. (2nd Cir. 2011).

In International News Service v. Associated Press (1918) (hereinafter, NSI), the Supreme Court established what is now known as “hot news” hijacking. In this case, the plaintiff, Associated Press (“AP”), and the defendant, International News Service (“INS”), both operated in the news broadcasting business in which they competed to collect and distribute information to member newspapers. The INS extracted factual articles from AP bulletins and cabled them to INS newspapers. The INS would also take factual stories from East Coast AP newspapers and forward them to West Coast INS newspapers that had not yet been published due to time differences. The Supreme Court ruled that INS’s conduct was a common law misappropriation of AP’s assets.

Copyright law provisions that forestall state law claims that enforced rights “equivalent” to exclusive copyright protections were added by amendments enacted in 1976.” Based on the legislative history of the 1976 amendments, it is generally accepted that a NSI– as the claim survives the preemption. NBAthe Second Circuit said “that the ‘hot news’ that survived NSI-a similar claim is limited to cases where: (i) a claimant generates or gathers information for a cost; (ii) the information is time sensitive; (iii) a defendant’s use of the information constitutes a defrauding of plaintiff’s efforts; (iv) the defendant is in direct competition with a product or service offered by the plaintiffs; and (v) the ability of other parties to profit from the efforts of the plaintiff or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened. To satisfy the second element, a plaintiff “must allege not only that the news was urgent when it was gathered, but that it was urgent when it was hijacked.”

In the present case, the applicant has not met the elements of a NSI– as a claim for misappropriation of “hot news”. First, he has not plausibly alleged that he collects information at his own expense. Unlike AP, the applicant in NSIwhich collected information through its individual members, “who [were] owners or representatives of approximately 950 daily newspapers published in all parts of the United States”, at a cost in 1918 of $3.5 million a year, plaintiff is a physician in private practice who takes time off from his “jobs of day” to create what he calls “citizen journalism”. Second, he did not plausibly claim that the information allegedly misappropriated was time-sensitive both when it was collected and when it was misappropriated. In its memorandum of opposition, the plaintiff acknowledges the “time lag”. between his reporting and the alleged hijacking and argues that “there is no expiration date for hot news.” Regardless of the merit of this argument, plaintiff has failed to properly plead the sensitive element to the time factor of a NSI– as a complaint. Third, the plaintiff has not plausibly alleged that it was in direct competition with the defendants. Unlike the parties of NSI, which were in the business of “the collection and distribution of news and their publication for profit in newspapers throughout the United States”, and which were “in the keenest competition among themselves”, the parties here are not not in direct competition with each other. While the defendant news organizations in this case are in the business of 24/7 news reporting, the plaintiff is, in his own right, a solo citizen journalist.

Fourth, the plaintiff has not plausibly claimed that “the ability of other parties to profit from [his efforts] would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened. first – and, for over six weeks, the only – media figure giving his unique perspective on Governor Cuomo’s conduct, both online and on various radio shows. NSIin which the illicit practices of the INS led to “putting pirated information into the hands of [INS’s] readers sometimes simultaneously with the Associated Press Competing Newspaper Service, sometimes even earlier.” Further, insofar as Plaintiff fears that Defendants’ “free-rid”[ing]” threatens “the existence or quality” of his own work, his own pleadings suggest a potential solution, which he does not argue is insufficient: he could voluntarily stop transmitting information to the defendants. The plaintiff having not met plausibly the elements claim for misappropriation of “hot news”, his third cause of action should be dismissed….

There are also more claims related to defamation and tortious interference (based, among other things, on Greer’s belief “that his ‘promising media career’ was ‘shut down by the defendants around 2013′”) , which were essentially dismissed for lack of adequate factual allegations.

Kudos to Kevin Michael Brown, Steven Glen Mintz and Terence William McCormick of Mintz & Gold, who represented Fox.

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