Court Rejects Idea Theft / "Hot News" Claim by Occasional Fox Guest Against Fox

In Greer v. Fox Corp., decided Wednesday, Judge Laura Taylor Swain (S.D.N.Y.) largely adopted Magistrate Judge Stewart Aaron's report and recommendation from June 2021; here's an excerpt of that report and recommendation, which the District Judge adopted (and which strikes me as quite correct):

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

Greer is "an expert used by TV and radio for interviews." During the period 2008 through 2013, he appeared as a guest on FBN and Fox News. Defendant [Charles] Gasparino, a reporter for FBN, interviewed Greer and used his news 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 healthcare-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 about it.

From 2010 to 2013, Greer provided news tips to [Jennifer] Strasburg, who was a reporter at the WSJ, for articles she wrote about "expert networks." Strasberg never informed her editor about Greer's contributions to the articles and Greer "believes that Strasburg was reprimanded by her bosses" as a result. Greer apparently also believes that Strasburg "smeared" his name with other journalists. …

Commencing in 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 previously had coined the term "Demplosion." In 2019, Carlson "used the words 'civil war' to describe the national unrest," in circumstances where Greer previously had made the "the novel analogy that the partisan division in the country was actually like a second civil war." In 2021, Greer provided news tips to Carlson about the nursing home scandal engulfing Governor Cuomo, but Carlson never gave Greer "due credit for being the person who exposed" the scandal….

Greer sued on various state law theories, including unfair competition, unjust enrichment, misappropriation of hot news, and the like, but the court held that they were preempted by the Copyright Act:

Plaintiff alleges with respect to his unfair competition claim that the Fox News Defendants and the News Corp. Defendants engaged in unfair competition by misappropriating "Plaintiff's works," including his "original and nonobvious news stories" and his books. The two elements required for copyright preemption are present here: (1) "the particular work to which the claim is being applied falls within the type of works protected by the Copyright Act," and (2) "the claim seeks to vindicate legal or equitable rights that are equivalent to one of the bundle of exclusive rights already protected by copyright law." First, the works fall within the type of works protected by the Copyright Act, since they are "original works of authorship fixed in [a] tangible medium of expression."

Second, the unfair competition claim seeks to vindicate Plaintiff's legal rights equivalent to the exclusive rights protected by copyright law….

Plaintiff alleges with respect to his unjust enrichment claim that Plaintiff provided Defendants with his "valuable creative content with expectations of being rewarded by credit for his work and payment" and that Defendants benefited from his misappropriated work. This claim also is preempted [for similar reasons]….

With his Third Cause of Action, Plaintiff seeks to circumvent copyright preemption by asserting that his works were "hot news." However, Plaintiff has not plausibly alleged the "narrow 'hot-news' misappropriation claim [that] survives preemption for actions concerning material within the realm of copyright." See NBA v. Motorola (2d Cir. 1997); see also Barclays Cap. Inc. v. Theflyonthewall.com, Inc. (2d Cir. 2011).

In International News Service v. Associated Press (1918) (hereinafter, INS), the Supreme Court established what is now known as "hot news" misappropriation. In that case, plaintiff, Associated Press ("AP"), and defendant, International News Service ("INS"), were both in the news wire business in which they competed to gather and distribute news to member newspapers. INS would lift factual stories from AP bulletins and send them by wire to INS papers. INS also would take factual stories from east coast AP papers and wire them to INS papers on the west coast that had yet to publish because of time differentials. The Supreme Court held that INS's conduct was a common law misappropriation of AP's property.

The provisions of the Copyright Act preempting state law claims that enforced rights "equivalent" to exclusive copyright protections were added by amendments enacted in 1976. "Based on legislative history of the 1976 amendments, it is generally agreed that a 'hot-news' INS-like claim survives preemption." In NBA, the Second Circuit stated "that the surviving 'hot-news' INS-like claim is limited to cases where: (i) a plaintiff generates or gathers information at a cost; (ii) the information is time-sensitive; (iii) a defendant's use of the information constitutes free riding on the 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 free-ride on 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 time-sensitive when it was gathered, but that it was time-sensitive when it was misappropriated."

In the present case, Plaintiff has not met the elements of an INS-like "hot news" misappropriation claim. First, he has not plausibly alleged that he gathers information at a cost to himself. Unlike AP, the plaintiff in INS, which gathered news through its individual members, "who [were] either proprietors or representatives of about 950 daily newspapers published in all parts of the United States," at a cost in 1918 of $3.5 million per annum, Plaintiff is a medical doctor in private practice who takes time away from his "day jobs" to create what he refers to as "citizen journalism." Second, he has not plausibly alleged that the information that purportedly was misappropriated was time-sensitive both when it was gathered and when it was misappropriated. In his opposition memorandum, Plaintiff recognizes the "time lag" between his reporting and the purported misappropriation and argues that "there is no expiration date for hot news." Regardless of the merit of that argument, Plaintiff has not properly pled the time-sensitive element of an INS-like claim. Third, Plaintiff has not plausibly alleged that he is in direct competition with Defendants. Unlike the parties in INS, who were in the business of "gathering and distribution of news and its publication for profit in newspapers throughout the United States," and who were "in the keenest competition between themselves," the parties here are not in direct competition with one another. While the defendant news organizations in this case are in the business of 24/7 news reporting, Plaintiff is by his own account a solo citizen journalist.

Fourth, Plaintiff has not plausibly alleged that "the ability of other parties to free-ride on [his efforts] would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened." By Plaintiff's own account, he was able to successfully disseminate his material via various media; for example, according to his pleadings, he was the first—and, for over six weeks, the sole—media persona providing his particular take on Governor Cuomo's conduct, both online and on various radio shows. This is a far cry from the circumstances of INS, in which INS's wrongful practices caused "pirated news to be placed in the hands of [INS's] readers sometimes simultaneously with the service of competing Associated Press papers, occasionally even earlier." Moreover, to the extent Plaintiff is concerned that Defendants' "free-rid[ing]" threatens the "existence or quality" of his own work, his own pleadings suggest a potential solution, the insufficiency of which he does not plead: He could cease voluntarily passing news tips to Defendants. Since Plaintiff has not plausibly met the elements of a "hot news" misappropriation claim, his Third Cause of Action should be dismissed….

There's also more related to defamation and tortious interference claims (based, among other things, on Greer's belief "that his 'promising media career' was 'shut down by Defendants around 2013′"), which were basically dismissed for lack of adequate factual allegations.

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