Grab Your Popcorn: False Advertising Battle Over Movie Trailer Survives Motion to Dismiss

We’ve all seen movie trailers that gets us excited to see the movie. And if you’re like me, you’ve seen a movie or two that doesn’t meet expectations because it was nothing like the trailer. In Woulfe v. Universal City Studios, LLC, the United States District Court for the Central District of California refused to dismiss Woulfe’s false advertising claims, finding that a deceptive movie trailer can form the basis of false advertising claims and that trailers are not necessarily immune from suit by the First Amendment because trailers are commercial in nature.

The cast of characters here involves two individuals as the plaintiffs, one from California and the other from Maryland, who each rented and watched the movie Yesterday on Amazon after watching the trailer for that movie. Yesterday is owned by Universal Studios, who plays the role of defendant. Yesterday is a fictional tale about a failed musician who, after a traumatic head injury, wakes up in a world with no knowledge of the Beatles or any of the band’s famous songs.  The movie follows this musician as he becomes one of the most famous musicians in the world by adopting the Beatles songs as his own.

The litigation centers on one of the trailers for Yesterday, which included a scene that did not make the final cut of the released film. That deleted scene (the “Segment”) featured well-known actress Ana de Armas, alongside the protagonist, on a talk show where the protagonist was asked to write a song about “something.” The protagonist then plays Something by the Beatles while Ms. de Armas gazes at him, embracing him when the song is finished, which upsets the film’s female lead, who is watching the show. The Segment lasts about 15 seconds in the three-and-a-half minute trailer and can be seen here.

After watching this trailer, both plaintiffs were apparently persuaded to rent Yesterday (for $3.99) because they expected Ms. de Armas to appear in the movie. To their disappointment, she did not. But for the trailer Segment showing Ms. de Armas, the plaintiffs claim they never would have rented the movie.

Refusing to let it be, the plaintiffs, having come together on behalf of a class, brought a blunderbuss of false advertising and other claims against Universal, but its most important claims arose out of California’s Unfair Competition Law (“UCL”) and False Advertising Law (“FAL”) and unjust enrichment. Universal Studios filed an anti-SLAPP motion to strike and a motion to dismiss all of plaintiffs’ claims.

California’s anti-SLAPP laws prohibit lawsuits “arising from any act of that person [or organization] in furtherance of that person’s right of petition or free speech.” Cal. Civ. Proc. Code § 425.16(a). Typically, anti-SLAPP laws do not apply to commercial speech, and plaintiffs thus argued the anti-SLAPP laws could not apply because the trailer was commercial speech. Although the Court agreed the trailer was commercial speech (more on that below), the commercial speech exception to the anti-SLAPP laws expressly do not apply to “advertisements or other similar promotion . . . of a motion picture.” Cal. Civ. Proc. Code § 425.17(d)(2).  So, the anti-SLAPP laws could apply, and if Universal could show that plaintiffs’ claims arose from an act by Universal made in connection with a public issue in furtherance of Universal’s right to free speech and that plaintiffs’ claims were legally and factually insufficient, then all of plaintiffs’ claims would be stricken.

Each of plaintiffs’ claims arose out of the creation and dissemination of the Yesterday trailer, and the Court found this trailer was both in furtherance of Universal’s free speech—because the trailer furthered Universal’s free speech rights about the movie— and in furtherance of a public issue—namely, because the movie explored what the world would be like without the iconic Beatles, there is widespread interest in the creation of movies and trailers, and Ms. de Armas (featured in the trailer) is the subject of “immense public interest.”

Having established the Yesterday trailer furthered Universal’s right to free speech over an issue of public interest, the Court moved onto whether plaintiffs’ claims were sufficient to overcome Universal’s objections. Spoiler alert: the important ones (the FAL and UCL claims) were.

Despite plaintiffs’ bevy of claims, the central issue was whether Universal made an actionable misrepresentation by including the deleted Segment in its trailer for Yesterday. In other words, is the trailer likely to deceive a significant portion of the general consuming public, acting reasonably in the circumstances. According to the Court, the plaintiffs did enough at this early stage to show that Universal’s Yesterday trailer could be an actionable misrepresentation.

In coming to this conclusion, the Court rejected three arguments from Universal. First, Universal claimed it made no representation, in the trailer or otherwise, that Ms. de Armas would be in the film. The Court disagreed, finding that her feature in the trailer, while not an “express” representation, could be viewed as a “specific measurable claim” that she would indeed be in the movie. Second, Universal argued that plaintiffs’ interpretation of the trailer—that Ms. de Armas would be in the movie because she appeared in the trailer—was unreasonable because Ms. de Armas appeared for only 15 seconds, never spoke, and the trailer made no explicit statements she would appear in the movie. While characterizing this argument as a close call, the Court again disagreed. Because Ms. de Armas appeared with the main character (even embracing him), was the only person in view for part of the trailer, and appeared to be part of a potential conflict with the main love interest in the story, the Court found it was reasonable for a consumer to believe that Ms. de Armas was more than a “background extra” and was someone viewers “would expect to see in the movie.” Finally, Universal argued that allowing plaintiffs claims would open the floodgates for false advertising claims that “depend purely on subjective judgments.” The Court was again unconvinced. The Court noted, however, that its holding was narrow, “limited to representations as to whether and actress or scene [in a trailer] is in the movie, and nothing else. For all these reasons, the Court found plaintiffs had adequately pleaded an actionable misrepresentation, and plaintiff’s claims could not be dismissed on that ground.

With an actionable misrepresentation, the Court went on the find that the plaintiffs also adequately pleaded actionable economic damage. Specifically, the plaintiffs alleged that they “were not provided with the movie product that they were promised” and they thus were either “provided with no value at all”  or “less value” than what they were promised. According to the Court, this was enough to establish damage at the pleading stage.

The Court also evaluated whether the First Amendment barred plaintiffs’ claims. Because the plaintiffs sufficiently alleged that the Yesterday trailer constituted false, commercial speech, the Court found the First Amendment did not apply. Commercial speech is speech that is an advertisement about a product where the speaker has an economic motivation. Plaintiff alleged that the trailer is an advertisement for a movie, it refers to a specific product (namely, the Yesterday movie), and it was created by Universal for the economic purpose of enticing consumers to purchase and view that movie. Even though the Court acknowledged that the scenes of  movies themselves are non-commercial expressive speech, when those scenes are used in a trailer, the Court held they become commercial speech. As a result, the First Amendment did not bar plaintiffs’ claims.

The Court did dismiss plaintiffs’ auxiliary breach of warranty and California Legal Remedies Act claims, along with plaintiffs’ request for injunctive relief, but plaintiffs’ core false advertising claims under the UCL and FAL remain. With those claims surviving, the case will now proceed to discovery and class certification.

The case is Conor Woulfe et al v. Universal City Studios LLC et al, No. 2:22-cv-00459 (C.D. Cal. Dec. 20, 2022).