Meta, News Anchor Settle Precedent-Setting Publicity Rights Suit

Meta Platforms Inc. and a Philadelphia news anchor have settled her lawsuit that spurred a split Third Circuit panel’s decision that said online platforms aren’t shielded from liability for user violations of publicity rights.

Karen Hepp, an anchor for Fox 29, said a picture of her had circulated without her knowledge on various online platforms through ads for dating websites, erectile dysfunction medication, and a pornography site. The case had been in mediation and discovery since 2021, after the US Court of Appeals for the Third Circuit in 2021 rejected Facebook Inc.'s argument that Section 230 of the Communications Decency Act shielded it from liability for user conduct.

Details for the settlement weren’t immediately available in the Tuesday filing noting the voluntary dismissal with prejudice in the US District Court for the Eastern District of Pennsylvania.

Despite the settlement, the case laid down one marker on the reach of the CDA’s safe harbor for online platforms. Generally social media platforms aren’t liable for user conduct under the law’s Section 230 protections, but it excludes intellectual property claims. The Digital Millennium Copyright Act has a conditional safe harbor for copyright claims, but liability for user violations of other IP law isn’t statutorily defined.

The Third Circuit panel found that publicity rights were IP rights, and reversed the lower court by finding the Section 230 exception made no distinction between state and federal IP laws. The majority framed it as siding with the First Circuit over the Ninth. But the dissent by Circuit Judge Robert E. Cowen said the majority created a circuit split, as the First Circuit had actually sidestepped the issue by assuming “without deciding.”

Hepp filed her lawsuit in 2019 against Facebook—which became Meta in 2021—as well as Reddit Inc., Imgur Inc., and Czech porn website WGCZ SRO. She alleged an “unflattering and illicit” image, taken at a convenience store unbeknownst to her, had been used in a variety of ads that damaged her reputation.

The court found all parties immune based on the exception to Section 230, which it held only applied to federal IP claims. IP-adjacent state laws vary in purpose, and expansively exempting claims under them would run contrary to the CDA’s intent of providing broad immunity, the court held.

But the appeals court pointed to the law’s broad, unqualified language stating that safe harbor doesn’t “limit or expand any law pertaining to intellectual property.” Other parts of the lawdelineated between state and federal law, the majority said.

Disregarding likeness rights also could undermine incentive to build up a commercial reputation for endorsements, the opinion said.

The dissent countered that other exceptions to the CDA were also narrowly tailored. He also suggested Congress wouldn’t have given a wide range if immunity from various laws—including state criminal laws—but allow liability under “nebulous (and expansive) state IP and right of publicity laws.”

Despite the reversal, the appeals court affirmed dismissal of WGCZ as it didn’t operate the site at the time, while the lower court didn’t have personal jurisdiction over the claims against Reddit and Imgur.

Cohen Fineman LLC represented Hepp. Kilpatrick Townsend & Stockton LLP and Royer Cooper Cohen Braunfeld LLC represented Facebook.

The case is Hepp v. Facebook Inc., E.D. Pa., No. 19-4034, Stipulation of dismissal 5/23/23.