Hollywood Docket: SmileDirectClub Sues NBC for $2.85 Billion

A roundup of entertainment legal news involving NBC, Spotify, Uma Thurman, Ellen DeGeneres and more.
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In 2017 ABC settled a defamation suit from a beef manufacturer over its use of "pink slime" as a descriptor in its newscasts — but not before the multibillion-dollar suit went to trial after surviving a First Amendment challenge — and now members of the Beef Products Inc. legal team are taking on NBC on behalf of SmileDirectClub.

On May 18, SDC sued NBC in Tennessee federal court seeking more than $2.85 billion. The teledentistry company claims the network made more than 40 false and misleading statements in a February 2020 broadcast of NBC Nightly News With Lester Holt, including that SDC-affiliated doctors aren't involved in treating patients, that the company's platform amounts to "do it yourself" dentistry and that it flouts state and federal regulations. 

"The breadth of its misconduct is staggering. NBC misled its viewers and readers about the safety of the treatment that patients receive when using SDC’s platform, the very real involvement of licensed dentists and orthodontists in the treatment of patients using SDC’s platform, and the effectiveness of the treatment that patients receive when they are treated using SDC’s platform," states the complaint. "Incredibly, nearly everything that NBC stated and implied about SDC in its broadcast and online report was factually inaccurate."

SmileDirectClub also alleges NBC was aware of the inaccuracies because the company had sent hundreds of pages of documents about its treatments, made senior officers available for questions, and offered to arrange interviews with dentists, orthodontists and patients. It also alleges that it told the network "dental trade associations and organizations have orchestrated a campaign to discredit SDC and, therefore, had a motivation to publish false information about SDC, including regarding the safety of treatment" and says reporter Vicky Nguyen had a conflict of interest because her husband is an anesthesiologist at a brick-and-mortar oral surgery practice that competes with SDC.

SDC is suing for defamation and violation of the Tennessee Consumer Protection Act. It is being represented by pink slime suit alums J. Erik Connolly and Nicole E Wrigley of Benesch Friedlander as well as John R. Jacobson and Katharine R. Cloud of Riley Warnock & Jacobson.

The complaint emphasizes that Nguyen used the hashtags #smiledirectclub and #smiledirect in her social media posts to "ensure that consumers, prospective patients, investors, and others interested in SDC" would see the story. It also notes that the network's story was picked up by NBC affiliates across the country and described it as a "multipronged attack." As a result of the story, SDC alleges, its stock dropped 15 percent and its market capitalization decreased by $950 million. (Read the full filing here.)

When the story first broke NBC sent a brief statement to multiple outlets saying, "We stand by our reporting and believe this is a meritless claim."

In other entertainment legal news:

— The Academy can't get registration for a new logo that shows a white Oscar statuette inside a simple black triangle. The U.S. Copyright Office in May rejected the Academy's second request for reconsideration of its refusal to register the logo. The Academy in June 2017 first attempted to register the work for copyright protection and was initially rejected in June 2018. The Copyright Office found the logo lacks sufficient originality to warrant protection. It also refused to register the logo as a derivative work. "Specifically, the Board finds that the new expression contained in the Work consists of 'merely trivial' combinations of standard shapes and colors and therefore does not possess the “modicum of creativity” required to merit registration as a derivative work," writes Regan A. Smith, general counsel and associate register of copyrights. "Here, the new contributions are too few and their use too standard to make the work distinctive from the pre-existing Oscar silhouette in a meaningful way."

— Spotify is shifting blame to Kobalt Music Publishing in a copyright dispute involving hundreds of Eminem songs, according to a third-party complaint filed May 29. Eminem's publisher, Eight Mile Style, in August 2019 sued Spotify in Tennessee federal court. The suit claims the streamer has infringed about 250 song copyrights by reproducing works like “Lose Yourself.” Now, Spotify is arguing Kobalt granted it a mechanical license, so if Eight Mile is successful in its suit it's Kobalt that should be liable. "Eight Mile’s story defies logic," states the filing. "But its lawsuit fails from the start for an even simpler reason: Spotify was, in fact, licensed by Eight Mile’s agent, Kobalt, to reproduce and distribute the Compositions." Spotify is suing Kobalt for breach of contract and negligent misrepresentation, among other claims. In a statement to Billboard, Kobalt said it has not breached its agreement with Spotify and it "will vigorously defend against these baseless allegations."

— In an answer to a lawsuit filed by a street artist over a heart design used in an apparel line called EV1, which was created through a partnership between Walmart and Ellen DeGeneres, the comedian's company asserts she didn't actually approve the design at issue. In July 2019, Julian Rivera sued the superstore and DeGeneres, claiming his "love" graffiti was used without permission and the merchandise is hurting his image by making him look like a sellout. The talk show host's company BCL-ED Newco admits "that ED sometimes approved certain designs for the EV1 Collection, but denies ED approved the Design." The company also asserted 31 affirmative defenses, including fair use and independent creation, and asked U.S. District Judge Philip S. Gutierrez to dismiss the complaint with prejudice. In its answer, Walmart also asserted a variety of affirmative defenses including that the designs aren't substantially similar and that Rivera's work is too commonplace to warrant copyright protection.

— A Maine federal judge has denied a request from the Internet & Television Association (NCTA) to pause enforcement of a new state law pending an appeal. Maine's Act to Ensure Nondiscriminatory Treatment of Public, Educational and Governmental Access Channels by Cable System Operators addresses channel numbering, broadcast quality and electronic programming guides — and requires cable operators to make sure areas above a certain population density have access to cable service. The NCTA alleges the rules flout federal law and the Constitution, and in March U.S. District Judge Nancy Torresen denied the organization's claims for declaratory and injunctive relief. On May 18, Torresen denied their request for a temporary injunction pending an appeal of that decision. "While the Plaintiff’s challenge presents questions of first impression in this Circuit, and there is a possibility that the First Circuit could go in a different direction, the Plaintiff has offered nothing that would change my belief that it is unlikely to succeed on the merits," finds Torresen. "I found that the Federal Cable Law is quite clearly designed to allow states and local communities considerable regulatory authority, and that local franchising authorities, as opposed to cable operators, possess the First Amendment rights when it comes to PEG channels." (Read the full decision here.)

— A photographer who took a photo of Uma Thurman depicted as her iconic character Mia Wallace from Pulp Fiction is suing over a line of T-shirts bearing the image. On May 19, Firooz Zahedi sued Miramax, Amazon, Urban Outfitters and others for copyright infringement. He claims he retained the copyright in the photo and granted Miramax a license to use it on a promotional poster — but didn't give permission for it to be exploited on merchandise. (Read Zahedi's complaint, which includes the photo, here.)

— A Virginia federal judge has upheld a $1 billion verdict against Cox Communications in a music piracy case. Sony Music, Universal Music Group, Warner Music Group, EMI and their music publishing subsidiaries in June 2018 sued Cox, claiming the internet giant "knowingly contributed to, and reaped substantial profits from, massive copyright infringement committed by thousands of its subscribers." In December, a jury unanimously found found Cox liable for both contributory and vicarious infringement, and that the infringement was willful. Cox asked the court to either reconsider its motion for judgment as a matter of law, which was filed at the close of trial, to remit damages, or to grant a new trial. U.S. District Judge Liam O'Grady found the jury's award of $99,830.29 per infringed work is well within the statutory range and "there is nothing before the Court to suggest that the per-work award is improper." (Read the full decision here.)

— On May 27, Kim Kardashian West filed a voluntary request for dismissal with prejudice of her right of publicity lawsuit against iHandy and Taplogic, who she claimed used her image without permission to promote the Sweet Cam photo editor app.

— L.A. County Superior Courts are expanding their remote operations amid the novel coronavirus pandemic with a new system called LACourtConnect, according to a Tuesday announcement. It will launch the week of June 22 for civil settlements and probate matters and will become available in the other departments throughout the summer. The service is open to attorneys and self-represented litigants and costs $15 per audio appearance and $23 per video appearance. (There’s no cost to individuals with fee waivers.) Said Presiding Judge Kevin C. Brazil in the announcement, “The COVID-19 pandemic — and the Court’s response — will lead to lasting changes in court operations as we develop and introduce even more technology solutions to modernize the largest trial court in the nation.”

— Former U.S. Ambassador to the United Nations Security Council David Pressman has joined Jenner & Block as a partner in its New York office. Pressman also served as the founding executive director of George and Amal Clooney’s family foundation, the Clooney Foundation for Justice, and co-founded  human rights organization Not on Our Watch with Clooney, Brad Pitt and Matt Damon. He'll practice in the Complex Commercial Litigation and Government Controversies and Public Policy Litigation groups and focus on international disputes, national security-related litigation and crisis management.