DOWNING ABERCROMBIE & FITCH

Circuit Judges, and Samuel P. King, District Judge.*

Opinion by Judge Hug

_________________________________________________________________

*Honorable Samuel P. King, Senior United States District Judge, sitting

by designation.

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Brent H. Blakely, Manhattan Beach, California, for the appel-

lants.

Joel McCabe Smith and David Aronoff, Leopold, Petrich &

Smith, P.C., Los Angeles, California, for the appellee.

_________________________________________________________________

OPINION

HUG, Circuit Judge:

Appellants brought this diversity action against Abercrom-

bie and Fitch ("Abercrombie") for publishing a photograph of

them, with identification of their names, for Abercrombie's

commercial benefit without the Appellants' authorization.

They allege a violation of California's common law and statu-

tory prohibition against misappropriation of a person's name

and likeness for commercial purposes, a violation of the Lan-

ham Act for confusion and deception indicating sponsorship

of Abercrombie goods, and a claim for negligence and defa-

mation. The district court entered summary judgment for

Abercrombie, holding that their California state claims were

foreclosed because Abercrombie's use of the photograph was

protected by the First Amendment, and those claims were also

preempted by the federal Copyright Act; that Hawaii law was

the proper choice of law for some of these claims; that the

Lanham Act claim was precluded by the First Amendment

and it was also precluded by the nominative fair use doctrine;

and that there was insufficient evidence to sustain the negli-

13169

gence or defamation claims. The district court had jurisdiction

under 28 U.S.C. § 1332, and we have appellate jurisdiction

under 28 U.S.C. § 1291. We reverse the grant of summary

judgment and remand for trial.

BACKGROUND

I. Factual Background

Abercrombie is an outfitter catering to young people. The

upscale retailer sells casual apparel for men and women,

including shirts, khakis, jeans, and outerwear. In addition to

sales in approximately 200 stores nationwide, Abercrombie

also sells merchandise through its subscription catalog, the

"Abercrombie and Fitch Quarterly" ("Quarterly").

The Quarterly is Abercrombie's largest advertising vehicle.

It accounts for approximately 80% of Abercrombie's overall

advertising budget. The primary purpose of the Quarterly is

to build brand awareness and increase sales. Each issue is

over 250 pages in length and embraces a theme such as colle-

giate lifestyle, back to school, or winter wear. The Quarterly

contains photographs of models wearing Abercrombie's gar-

ments as well as pictures of the clothing displayed for sale. In

addition, approximately one-quarter of each issue is devoted

to stories, news and other editorial pieces.

In 1998, Michael Jeffries, Abercrombie's CEO, developed

a surfing theme for the upcoming Quarterly. Abercrombie

held the photo shoot for the upcoming issue at San Onofre

Beach, California. While at the photo shoot, Abercrombie

employees Sam Shahid and Savas Abadsidis looked through

a compilation of surfing photographs by surf photographer

LeRoy Grannis. The photo book contained a picture of Appel-

lants which Grannis had taken at the 1965 Makaha Interna-

tional Surf Championship in Hawaii. Sam Shahid purchased

the photograph, along with three other photographs from the

book, for $100 each. LeRoy Grannis then handwrote the

names of Appellants at the bottom of the photograph.

Subsequently, Sam Shahid showed Appellants' photograph

to Jeffries who decided to use the photograph in the upcoming

Quarterly. Abercrombie did not obtain Appellants' permis-

sion. Jeffries also decided to create t-shirts, exactly like those

worn by the Appellants in the photograph, for sale in the

upcoming issue. Abercrombie labeled the t-shirts"Final Heat

Tees." The t-shirts were advertised for sale in the Quarterly.

The Spring 1999 Quarterly, "Spring Fever," contains a sec-

tion entitled "Surf Nekkid." The "Surf Nekkid" section

includes an article recounting the history of surfing. Aber-

crombie also included a 700-word story, entitled"Your Beach

Should Be This Cool," describing the history of Old Man's

Beach at San Onofre, California. The following page exhibits

the photograph of Appellants. The two pages immediately

thereafter feature the "Final Heat Tees."

The "Spring Fever" issue contains other articles about the

surfing lifestyle. An article entitled "Beachcombing" docu-

ments the efforts of the Surfrider Foundation, an ecological

group founded by surfers. Still another article entitled "Where

the Wild Things Are," written by the editor of Surfer Maga-

zine, describes various surfer "types." Also contained in the

issue is an interview of Nat Young, former world surfing

champion and the first professional surfer. The interview is

accompanied by photographs of Young and his son wearing

Abercrombie clothing.

II. Procedural History

On April 28, 1999, Appellants George Downing, Paul

Strauch, Rick Steere, Richard Buffalo Keaulana, and Ben

Aipa filed a complaint in the United States District Court for

the Central District of California. Appellants later amended

the complaint to add Joey Cabell and Mike Doyle. Appellants

alleged that Abercrombie misappropriated their names and

likenesses in violation of California's statutory and common

law protections against commercial misappropriation, that the

publication of the photograph in the catalog violated the Lan-

ham Act and they alleged claims for negligence and defama-

tion. Subsequently, Appellants and Abercrombie both filed

motions for summary judgment. The district court entered

summary judgment for Abercrombie. Appellants timely

appealed. Abercrombie then filed a motion for attorneys' fees

and other expenses. The district court granted the motion,

awarding Abercrombie approximately one-fourth of the attor-

neys' fees that it sought. Appellants timely filed a notice of

appeal from that order. We consolidated the two appeals.

On appeal, Appellants contend: (1) Abercrombie's use of

the photograph is not protected under the First Amendment;

(2) the state law publicity claims are not preempted by the

Copyright Act; (3) California law is the proper choice of law

for the claim under California Civil Code § 3344; (4) triable

issues of fact exist with regard to the Lanham Act claims; (5)

triable issues of fact exist with regard to the defamation claim;

(6) the district court erred in denying the motion for a contin-

uance; (7) the district court erred in awarding attorneys' fees

and costs to Abercrombie. 1

STANDARD OF REVIEW

The district court's grant of summary judgment is reviewed

de novo. Botosan v. Paul McNally Realty, 216 F.3d 827, 830

(9th Cir. 2000). We must determine, viewing the evidence in

the light most favorable to the nonmoving party, whether

there are any genuine issues of material fact and whether the

district court correctly applied the relevant substantive law.

Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en

banc).

_________________________________________________________________

1 The Appellants do not appeal the summary judgment on their negli-

gence claim.

ANALYSIS

I. First Amendment and Right of Publicity Claims

The district court concluded that Abercrombie's use of the

photograph containing Appellants' names and likenesses was

proper because it constituted expression protected under the

First Amendment. We disagree.

California has long recognized a common law right of

privacy for protection of a person's name and likeness against

appropriation by others for their advantage. See Eastwood v.

Superior Court, 149 Cal. App. 3d 409, 416 (Ct. App. 1983).

To sustain a common law cause of action for commercial mis-

appropriation, a plaintiff must prove: "(1) the defendant's use

of the plaintiff's identity; (2) the appropriation of plaintiff's

name or likeness to defendant's advantage, commercially or

otherwise; (3) lack of consent; and (4) resulting injury." Id. at

417.

In addition to the common law cause of action, Califor-

nia has provided a statutory remedy for commercial misappro-

priation under California Civil Code § 3344. The remedies

provided for under California Civil Code § 3344 complement

the common law cause of action; they do not replace or codify

the common law. See Newcombe v. Adolf Coors Co. , 157 F.3d

686, 691-92 (9th Cir. 1998). Section 3344 provides in relevant

part, "any person who knowingly uses another's name, voice,

signature, photograph, or likeness, in any manner . . . for pur-

poses of advertising . . . without such person's prior consent

. . . shall be liable for any damages sustained by the person."

Cal. Civ. Code § 3344(a). Under section 3344, a plaintiff must

prove all the elements of the common law cause of action. In

addition, the plaintiff must allege a knowing use by the defen-

dant as well as a direct connection between the alleged use

and the commercial purpose. See Eastwood, 149 Cal. App. 3d

at 417.

[3] Under both the common law cause of action and the

statutory cause of action "no cause of action will lie for the

publication of matters in the public interest, which rests on the

right of the public to know and the freedom of the press to tell

it." Montana v. San Jose Mercury News, Inc., 34 Cal. App.

4th 790, 793 (Ct. App. 1995). This First Amendment defense

extends "to almost all reporting of recent events," as well as

to publications about "people who, by their accomplishments,

mode of living, professional standing or calling, create a legit-

imate and widespread attention to their activities. " Eastwood,

149 Cal. App. 3d at 422. However, the defense is not abso-

lute; we must find "a proper accommodation between [the]

competing concerns" of freedom of speech and the right of

publicity. Id.

In the instant case, Abercrombie defends on the basis of the

First Amendment arguing that the photograph illustrates an

article about surfing, a matter in the public interest. To sup-

port its defense, Abercrombie relies on Dora v. Frontline

Video, Inc., 15 Cal. App. 4th 536 (Ct. App. 1993). In Dora,

the court held that a surfing documentary was in the public

interest because it was "about a certain time and place in Cali-

fornia history and, indeed, in American legend." Id. at 543.

Dora involved a surfing legend, Mickey Dora, who sued the

producer of a video documentary on surfing claiming com-

mon law and statutory appropriation of his name and likeness.

See id. at 540. The trial court entered summary judgment for

the film's producer and the California Court of Appeal

affirmed. See id. In addressing the First Amendment issue, the

court found that the documentary was about a matter of public

interest, specifically surfing, and, therefore, the producer was

protected by the defense. See id. at 544. In so concluding the

court stated:

surfing is of more than passing interest to some. It has created a life-style that influences speech, behav- ior, dress, and entertainment, among other things. A phenomenon of such scope has an economic impact, because it affects purchases, travel, and the housing market. Surfing has also had a significant influence on the popular culture, and in that way touches many people. It would be difficult to conclude that a surf- ing documentary does not fall within the category of public affairs.

Id. at 546.

Although the theme of Abercrombie's catalog was surfing

and surf culture, a matter of public interest, the use of Appel-

lants' names and pictures is quite different from that involved

in the Dora case. In Dora, Mickey Dora's contribution to the

development of the surf life-style and his influence on the

sport was "the point of the program." Id . at 543. Dora was

depicted in the documentary because his identity directly con-

tributed to the story about surfing which came within the pro-

tected public interest.

In the current action, there is a tenuous relationship

between Appellants' photograph and the theme presented.

Abercrombie used Appellants' photograph essentially as

window-dressing to advance the catalog's surf-theme. The

catalog did not explain that Appellants were legends of the

sport and did not in any way connect Appellants with the

story preceding it. In fact, the catalog incorrectly identifies

where and when the photograph was taken. We conclude that

the illustrative use of Appellants' photograph does not con-

tribute significantly to a matter of the public interest and that

Abercrombie cannot avail itself of the First Amendment

defense. 2 Accordingly, we reverse the district court's grant of

summary judgment in favor of Abercrombie.

_________________________________________________________________

2 This case is also distinguishable from Hoffman v. L.A. Magazine, Nos.

99-55363, 99-55686, slip op. at 8591 (9th Cir. July 6, 2001), in which the

defendant magazine successfully asserted a First Amendment defense to

Dustin Hoffman's claim of misappropriation. In that case, L.A. Magazine

used a digitally-altered picture of Hoffman, as"Tootsie," in a current

II. Federal Copyright Preemption

Abercrombie contends that its right to reproduce and pub-

lish the photograph of the Appellants is governed by the fed-

eral Copyright Act, 17 U.S.C. §§ 101-1101, and that

Appellants' state law claims are preempted by federal copy-

right law.

"[W]hen acting within constitutional limits, Congress is

empowered to pre-empt state law by so stating in express

terms." California Fed. Sav. & Loan Ass'n v. Guerra, 479

U.S. 272, 280 (1987). Under 17 U.S.C. § 301, States are

expressly prohibited from legislating in the area of copyright

law. 3 In order for preemption to occur under the federal Copy-

right Act, two conditions must be satisfied. First, the content

of the protected right must fall within the subject matter of

copyright as described in 17 U.S.C. §§ 102 and 103. Second,

_________________________________________________________________

designer dress to illustrate its "Grand Illusions " article. We concluded that

such use was noncommercial speech entitled to full First Amendment pro-

tection. Id. at 8600. In contrast to the present case, where Abercrombie,

itself, used Appellants' images in its catalog to promote its clothing, L.A.

Magazine was unconnected to and received no consideration from the

designer for the gown depicted in the article. Id. at 8599. Further, while

L.A. Magazine merely referenced a shopping guide buried in the back of

the magazine that provided stores and prices for the gown, id., Abercrom-

bie placed the Appellants' photograph on the page immediately preceding

the "Final Heat Tees" for sale. Based on these factors, we conclude that

Abercrombie's use was much more commercial in nature and, therefore,

not entitled to the full First Amendment protection accorded to L.A. Mag-

azine's use of Hoffman's image. Id. at 8601.

3 Section 301(a) of 17 U.S.C. preempts:

all legal or equitable rights that are the equivalent to any of the exclusive rights within the general scope of copyright as speci- fied by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclu- sively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

13176

the right asserted under state law must be equivalent to the

exclusive rights contained in section 106 of the Copyright

Act. See Del Madera Properties v. Rhodes & Gardner, Inc.,

820 F.2d 973, 976 (9th Cir. 1987) (overruled on other

grounds).

The subject matter protected by the Copyright Act is set

forth in 17 U.S.C. § 102, which provides in relevant part as

follows:

Copyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or other- wise communicated, either directly or with the aid of a machine or device. Works of authorship include . . . pictorial, graphic, and sculptural works.

Section 103 provides that the subject matter specified in § 102 also includes compilations and derivative works,"but the copyright in a compilation or derivative work extends only to the material contributed by the author of such works as distin- guished from the preexisting material employed in the work." Section 106 gives the copyright holder exclusive rights to copy the copyrighted work or derivatives and to distribute it to the public.

The photograph itself, as a pictorial work of authorship,

is subject matter protected by the Copyright Act. See 17

U.S.C. § 101 (providing that "pictorial, graphic, and sculp-

tural works include . . . photographs.") However, it is not the

publication of the photograph itself, as a creative work of

authorship, that is the basis for Appellants' claims, but rather,

it is the use of the Appellants' likenesses and their names pic-

tured in the published photograph. The Nimmer treatise on

copyright law states:

[T]he "work" that is the subject matter of the right of publicity is the persona, i.e., the name and like-

13177

ness of a celebrity or other individual. A persona can hardly be said to constitute a "writing" of an"au- thor" within the meaning of the copyright clause of the Constitution. A fortiori it is not a"work of authorship" under the Act. Such name or likeness does not become a work of authorship simply because it is embodied in a copyrightable work such as a photograph.

1 Nimmer on Copyright § 1.01[B][1][c] at 1-23 (1999). The same point is made in McCarthy's Treatise on Right of Pub- licity and Privacy:

The "subject matter" of a Right of Publicity claim is not a particular picture or photograph of plaintiff. Rather, what is protected by the Right of Publicity is the very identity or persona of the plaintiff as a human being . . . While copyright in a given photo- graph may be owned by the person depicted in it, the exact image in that photograph is not the underlying "right" asserted in a Right of Publicity case. To argue that the photograph is identical with the person is to confuse illusion and illustration with reality. Thus, assertion of infringement of the Right of Pub- licity because of defendant's unpermitted commer- cial use of a picture of plaintiff is not assertion of infringement of copyrightable "subject matter " in one photograph of plaintiff.

McCarthy, Rights of Publicity and Privacy §11.13[C] at 11- 72-73 (1997).

A recent case in the Fifth Circuit held that the Texas tort

of misappropriation, which provides protection from the

unauthorized appropriation of one's name, image, or likeness

was not preempted by the Copyright Act. See Brown v. Ames,

201 F.3d 654, 661 (5th Cir. 2000). The case involved a record

company's misappropriation of the names and likenesses of

individual musicians, song writers, and music producers on

the company's CD's, tapes, catalogs, and posters. See id. at

656-57. The court stated that "the tort of misappropriation of

a name or likeness protects a person's persona . A persona

does not fall within the subject matter of copyright." Id. at

658. Thus, the court held that § 301 preemption does not

apply.

A similar result was reached in a case decided by a Califor-

nia Court of Appeal, KNB Enterprises v. Matthews , 78 Cal.

App. 4th 362 (Ct. App. 2000). The California Court of Appeal

held that the state law right of publicity claims were not pre-

empted by the Copyright Act. See id. at 374-75. The copy-

right owner of erotic photographs, which had been displayed

without authorization and for profit on an Internet website,

brought suit against the website's operator asserting a misap-

propriation claim under California Civil Code § 3344. See id.

at 365-66. The court applied the two-part test for determining

preemption and found that neither condition had been met.

See id. at 374. The court found that "because a human like-

ness is not copyrightable, even if captured in a copyrighted

photograph, the models' section 3344 claims against the

unauthorized publisher of their photographs are not the equiv-

alent of a copyright infringement claim and are not preempted

by federal copyright law." Id. at 365.

We agree with the approach taken by the Fifth Circuit and

the reasoning employed in KNB Enterprises. The subject mat-

ter of Appellants' statutory and common law right of publicity

claims is their names and likenesses. See Newcombe, 157 F.2d

at 691. A person's name or likeness is not a work of author-

ship within the meaning of 17 U.S.C. § 102. This is true not-

withstanding the fact that Appellants' names and likenesses

are embodied in a copyrightable photograph. The same con-

cept is specifically embodied in 17 U.S.C. § 103, which pro-

vides that the copyright in derivative works extends only to

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the material contributed by the author as distinguished from

preexisting material employed in the work. 4

The second requirement for copyright preemption as

noted above is that the right asserted under state law must be

equivalent to the exclusive rights contained in§ 106 of the

Copyright Act. This requirement also is not met. Because the

subject matter of the Appellants' statutory and common law

right of publicity claims is their names and likenesses, which

are not copyrightable, the claims are not equivalent to the

exclusive rights contained in § 106.

III. Choice of Law

We review de novo a district court's decision concerning

the appropriate choice of law. Abogados v. AT&T, Inc., 223

F.3d 932 (9th Cir. 2000). "In reviewing the factual findings

that underlie the choice of law determination, this court must

apply the clearly erroneous standard." Contact Lumber Co. v.

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4 Abercrombie relies on the California case of Fleet v. CBS, 50 Cal. App.

4th 1911 (Ct. App. 1996). This case was distinguished by both the Fifth

Circuit in Brown , 201 F.3d at 658, and the California Court of Appeals in

KNB Enterprises, 78 Cal. App. 4th at 370-71. In Fleet, the plaintiffs were

actors in a copyrighted film. The claims of the plaintiffs were based on

their dramatic performance in a film CBS sought to distribute. The court

stated:

We agree that as a general proposition Civil Code section 3344 is intended to protect rights which cannot be copyrighted and that claims made under its provisions are usually not preempted. But appellants' analysis crumbles in the face of one obvious fact: their individual performances in the film White Dragon were copyrightable. Since their section 3344 claims seeks only to pre- vent CBS from reproducing and distributing their performances in the film, their claims must be preempted by federal copyright law.

Fleet, 50 Cal. App. 4th at 1919. This is clearly distinguishable from this case where the Appellants' claim is based on the use of their names and likenesses, which are not copyrightable.

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P.T. Moges Shipping Co., Ltd., 918 F.2d 1446, 1450 (9th Cir.

Applying choice of law principles, the district court dis-

missed Appellants' statutory misappropriation claim as to the

five Appellants who reside in Hawaii: George Downing, Rick

Steere, Richard Keaulana, Ben Aipa, and Joey Cabell. We

conclude that the district court erred in dismissing these

claims.

In a diversity case, "federal courts apply the substantive

law of the forum in which the court is located, including the

forum's choice of law rules." Insurance Co. of North Am. v.

Federal Express Corp., 189 F.3d 914, 921 (9th Cir. 1999).

This action was brought in a district court in California.

Therefore, we look to the choice of law rules applied in that

state.

California applies a three-step"governmental interest"

analysis to choice-of-law questions: (1) "the court examines

the substantive laws of each jurisdiction to determine whether

the laws differ as applied to the relevant transaction", (2) "if

the laws do differ, the court must determine whether a true

conflict' exists in that each of the relevant jurisdictions has an

interest in having its law applied", and (3)"if more than one

jurisdiction has a legitimate interest . . . the court [must] iden-

tify and apply the law of the state whose interest would be

more impaired if its law were not applied." Abogados, 223

F.3d at 934; Liew v. Official Receiver & Liquidator, 685 F.2d

1192, 1196 (9th Cir. 1982). Only if both states have a legiti-

mate but conflicting interest in applying its own law will the

court be confronted with a "true conflict" case. See Insurance

Co. of North Am. , 189 F.3d at 921.

The California Supreme Court's decision in Hurtado v.

Superior Court, 522 P.2d 666 (Cal. 1974), is the primary case

setting forth California's choice of law rules and analyzing

the approach to be taken in determining the interest of each

jurisdiction in enforcing its own law. In that case, a wrongful

death action had been brought in California, where the auto-

mobile accident causing the death had occurred. The plaintiffs

were residents of Mexico and the defendants residents of Cal-

ifornia. Mexican law placed a limitation on the amount that

could be received in a wrongful death action (24,334 pesos or

$1,946.72) whereas California law provided no such limita-

tion. See id. at 668. The California Supreme Court stated:

generally speaking the forum will apply its own rule of decision unless a party litigant timely invokes the law of a foreign state. In such event he must demon- strate that the latter rule of decision will further the interest of the foreign state and therefore that it is an appropriate one for the forum to apply to the case before it. In the case at bench, California as the forum should apply its own measure of damages for wrongful death, unless Mexico has an interest in having its measure of damages applied.

Id. at 670 (citations omitted). In assessing the interest of Cali- fornia in applying its law the Court stated:

It is manifest that one of the primary purposes of a state in creating a cause of action in the heirs for the wrongful death of the decedent is to deter the kind of conduct within its borders which wrongfully takes life. It is also abundantly clear that a cause of action for wrongful death without any limitation as to the amount of recoverable damages strengthens the deterrent aspect of the civil sanction: the sting of unlimited recovery . . . more effectively penalize(s) the culpable defendant and deter(s) it and others sim- ilarly situated from such future conduct.

Id. at 672 (internal quotations and citations omitted). The court went on to emphasize that the interest in deterrence of conduct extends to "all persons within its borders." Id. at 584. With regard to the interest Mexico had in applying its law, the California Supreme Court stated that "[t]he interest of a state in a tort rule limiting damages for wrongful death is to protect defendants from excessive financial burdens or exag- gerated claims. [A] state by enacting a limitation on damages is seeking to protect its residents from the imposition of these excessive financial burdens." Id. at 670 (citations omitted). The California Supreme Court then summarized its holding:

To recapitulate, we hold that where as here in a Cali- fornia action both this state as the forum and a for- eign state (or country) are potentially concerned in a question of choice of law with respect to an issue in tort and it appears that the foreign state (or country) has no interest whatsoever in having its own law applied, California as the forum should apply Cali- fornia law.

Id. at 671.

The California Supreme Court's ruling in the Hurtado

tort case is directly applicable to this case. Abercrombie dis-

tributed its Spring Quarterly in California, and any misappro-

priation of the names and likenesses of the Appellants would

have occurred there. As the court stated, one of the primary

purposes of creating a cause of action in tort is to deter mis-

conduct within its borders by persons present within its bor-

ders. By distributing its catalog within California,

Abercrombie was operating within its borders.

Hawaii, on the other hand, like Mexico in Hurtado,

had no interest in limiting the extent of relief that its residents

could obtain for a wrongful act against them in California. It

is even more clear in this case because Hawaii did not place

any limitation on recovery; instead it simply did not provide

for the extent of relief California does in this type of action.

It is pure fancy to believe that Hawaii would wish to restrict

its residents from recovery that others could obtain in Califor-

nia solely because it had not enacted a statute like California's

to complement its common law action for the same offense.

Hawaii had no interest in having its law applied to this action

brought in California.

The California Supreme Court has made it clear that

when California has an interest in enforcing its law within its

borders and a foreign state (in this case Hawaii) has no inter-

est in having its law applied, then the law of California should

be applied. In this case, there is no "true conflict" of Hawaii

law with California law, and thus the district court erred when

it applied Hawaii law to some claims. California law is appli-

cable to all of Appellants' claims.

IV. Lanham Act

Appellants contend that the district court erred in

denying their claim under section 43(a) of the Lanham Act,

15 U.S.C. § 1125(a). In relevant part section 43(a)(1)(A) pro-

vides:

[A]ny person who, or in connection with any goods or services, uses any . . . false or misleading repre- sentation of fact, which . . . is likely to cause confu- sion, or to cause mistake, or deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commer- cial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

In several past cases involving celebrity plaintiffs we have looked to our decision in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), for the appropriate factors to con- sider in determining whether there exists a likelihood of con- fusion. The factors enumerated in AMF are:

1. strength of the plaintiff's mark; 2. relatedness of the goods; 3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. likely degree of purchaser care; 7. defendant's intent in selecting the mark; and 8. likelihood of expansion of the product lines.

AMF, 599 F.2d at 348-49.

In our celebrity cases using the AMF factors we have

adapted these factors so as to be applicable to the celebrity

cases. We noted that the term "mark" applies to the celebri-

ty's persona, the "strength" of the mark refers to the level of

recognition that the celebrity has among the segment of the

public to whom the advertisement is directed, and the term

"goods" concerns the reasons for or source of the celebrity's

fame. See White v. Samsung Elec. Am., Inc., 971 F.3d 1394,

1400-1401 (9th Cir. 1992).

It is perhaps clearer to restate the eight factors as applicable

to the celebrity case, which can be stated as:

1. the level of recognition that the plaintiff has among the segment of the society for whom the defendant's product is intended; 2. the relatedness of the fame or success of the plaintiff to the defendant's product; 3. the similarity of the likeness used by the defen- dant to the actual plaintiff; 4. evidence of actual confusion; 5. marketing channels used; 6. likely degree of purchaser care; 7. defendant's intent on selecting the plaintiff; and 8. likelihood of expansion of the product lines.

Although these are all factors that are appropriate for consid- eration in determining the likelihood of confusion, they are not necessarily of equal importance, nor do they necessarily apply to every case.

"The Lanham Act's likelihood of confusion standard

is predominantly factual in nature." Wendt v. Host Int'l, Inc.

125 F.3d 806, 812 (9th Cir. 1997). Thus, summary judgment

is inappropriate when a jury could reasonably conclude that

there is a likelihood of confusion. Application of the eight

factors to the current action leads us to conclude that the dis-

trict court erred in rejecting Appellants' Lanham Act claim at

the summary judgment stage.

In applying the factors to this case we reach the following

conclusions. First, in considering the recognition that the

Appellants have among those persons toward whom the Aber-

crombie catalog is directed, Appellants cite to a declaration

submitted by surf historian Steve Pezman. In the declaration,

Pezman asserts that Appellants "are considered legends in the

surf community and are still highly well-known and regard-

ed." This declaration from a surf historian provides some evi-

dence that Appellants' names and images enjoy a high level

of recognition among average members of society as a whole.

In addition, it is undisputed that Appellants are legendary sur-

fers, and thus there is a reasonable inference that Appellants

would be known to the young people to whom the Quarterly

is directed and who would be purchasing Abercrombie's surf

wear.

The second factor is the relatedness of the Appellants' fame

and success to the Defendant's product. Appellants' fame is

due to their surfing success. Appellants' surfing success could

be seen as closely-related to the Abercrombie's surf-related

clothing.

Applying the third factor, the similarity of the likeness, to

the Appellants is clear because it is an actual photograph of

the Appellants with their names designated.

The fourth factor, evidence of actual confusion, also sup-

ports Appellants' position. Appellants provided declarations

demonstrating that several individuals actually believed that

Appellants were endorsing Abercrombie merchandise.

Under the fifth factor, marketing channels used, the catalog

was the only marketing channel. It is therefore the likelihood

of confusion in that marketing channel that is at issue.

In applying the sixth factor, the inquiry is whether consum-

ers are likely to be particularly careful in determining who

endorses the Abercrombie surf apparel, making confusion as

to Appellants' endorsement more likely. A jury could reason-

ably find that young consumers are not likely to be particu-

larly careful when purchasing surf-related clothing.

As to the seventh factor, the relevant question is whether

the Defendants intended to profit by confusing consumers

concerning the endorsement of the Abercrombie apparel. A

jury could reasonably find that Abercrombie intended to indi-

cate to consumers that these legendary surfers were endorsing

Abercrombie's merchandise.

The eighth factor is the likelihood of expansion of the prod-

uct lines. Neither party discusses this factor, however, no evi-

dence has been produced that Abercrombie intends to utilize

these photographs in additional product lines.

Application of these factors, leads us to conclude that

the district court erred in rejecting Appellants' Lanham Act

claim at the summary judgment stage. Viewing the evidence

in the light most favorable to Appellants, we conclude that

Appellants have raised a genuine issue of material fact con-

cerning a likelihood of confusion as to their endorsement.

V. Doctrine of Nominative Fair Use

The district court concluded that Appellants' Lanham Act

claim was barred by the doctrine of nominative fair use. In

support of its position that the district court was correct in

concluding that Appellants' Lanham Act claim was barred,

Abercrombie relies upon New Kids on the Block v. News

America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992). In

New Kids, two newspapers conducted "900" number tele-

phone polls concerning their readers' reactions to the musical

group "New Kids on the Block." The newspapers charged

their readers 95 cents per minute to respond to the poll. The

band, which had its own competing "900" numbers for its

fans, filed Lanham Act claims against the two newspapers.

See id. at 304-05. The district court granted summary judg-

ment for the defendant newspapers on First Amendment

grounds. See id. at 305. On appeal, we affirmed on a non-

constitutional ground, as appropriate when the constitutional

issue can be avoided. We concluded that the newspapers' use

of the band name constituted a nominative fair use. See id. at

309.

We found that where the defendant uses a trademark to

describe the plaintiff's product rather than its own product, a

commercial user is entitled to a nominative fair use defense

provided the defendant meets three requirements:

1. the product or service in question must be one not readily identifiable without use of the trade- mark; 2. only so much of the mark or marks may be used as is reasonably necessary to identify the prod- uct or service; and 3. the user must do nothing that would, in conjunc- tion with the mark, suggest sponsorship or endorsement by the trademark holder.

Id. at 308. Applying the three-part test, we concluded that the newspaper was entitled to the nominative fair use defense. See id. at 308-309.

Abercrombie argues that its use of the photograph was

nominative fair use in the same manner as the defendants'

purported infringement in New Kids. We disagree. In New

Kids, we stated that the test applies only "where the defendant

uses a trademark to describe the plaintiff's product, rather

than its own." Id. at 308. Here, Abercrombie used the photo-

graph in its catalog that was intended to sell its goods. As we

have noted in this case involving a celebrity endorsement

claim, the mark being protected is the Appellants' names and

pictures. There is a genuine issue of material fact as to

whether the third criterion is met, whether Abercrombie did

nothing that would in conjunction with the Appellants' names

and pictures suggest sponsorship or endorsement by the

Appellants.

VI. Defamation Claim

Appellants contend they were defamed by Abercrombie's

publication of the photograph in the "Surf Nekkid " section of

the Quarterly. Specifically, they maintain that inclusion of

their names and likenesses in a section depicting naked and

scantily clothed models caused them shame and embarrass-

ment.

Under California Civil Code § 45a, Appellants may only

prevail on a libel claim if the publication is (1) libelous on its

face, or (2) if special damages have been proven. See New-

combe, 157 F.3d at 694. A publication is libelous on its face

only if there is no need to have explanatory matter introduced.

See Cal. Civ. Code § 45a. The determination as to whether a

publication is libelous on its face is one of law, and must be

measured by "the effect the publication would have on the

mind of the average reader." Newcombe, 157 F.3d at 695.

To support their argument that inclusion of the photograph

was libelous on its face, Appellants provide three declara-

tions. However, all three declarations are from lifetime surfers

and leaders in the surf industry. The declarations do not pro-

vide evidence that an average person viewing the Quarterly

would think it defamatory if Appellants' picture was included

in a section in which nude models were shown. Thus, Appel-

lants fail to satisfy the first requirement under California Civil

Code § 45a that the publication is libelous on its face.

In order to satisfy the alternate requirement, Appellants

must allege and prove that they suffered special damages as

a proximate result of the publication of the photograph. See

id. at 695. Special damages are defined as "all damages which

plaintiff alleges and proves that he has suffered in respect to

his property, business, trade, profession or occupation, includ-

ing such amounts of money as the plaintiff alleges and proves

he has expended as a result of the alleged libel, and no other."

Cal. Civ. Code § 48a(4)(b). Appellants did not submit any

evidence demonstrating that they incurred special damages

due to Abercrombie's publication of the photograph. Thus,

Appellants failed to meet either requirement under California

Civil Code § 45a. Accordingly, we conclude that the district

court did not err in denying the Appellants' defamation claim.

VII. Continuance

Because we reverse the summary judgment, we need not

address the issue the Appellants raise concerning the district

judge's denial of a continuance.

VIII. Attorneys' Fees

California Civil Code § 3344(a) mandates the award of

attorneys' fees and costs to the "prevailing party" in actions

brought under the section. See Newton v. Thomason, 22 F.3d

1455, 1464 (9th Cir. 1994). Because we reverse the judgment

of the district court, the district court's award of attorneys'

fees and costs to Abercrombie under California Civil Code

§ 3344 is vacated.

IX. Conclusion

Neither the California state law claims or the Lanham Act

claim are precluded by the First Amendment; the California

state claims are not preempted by the federal Copyright Act;

the proper choice of law to apply to these claims is California

law; there is insufficient evidence to support the defamation

claim; and the attorneys' fee award is vacated.

REVERSE AND REMAND FOR TRIAL.