It turns out that while Chanel and Chanel West Coast have managed to co-exist peacefully despite their similar names, the rapper has ruffled the feathers of actress Sharon Stone thanks to a 2018 song called … Sharon Stoned, and the recently-released music video for the single, which was “shot to evoke Sharon Stone’s name, likeness, image, identity, and persona associated with her iconic movie roles,” the actress asserts in a newly-filed lawsuit against Chelsea Dudley, who is best known by her stage name, Chanel West Coast.

According to the complaint that counsel for Sharon Stone filed in a California federal court early this week, thanks to her starring roles in feature films, such as Basic Instinct, Casino, and Total Recall, among many other feature films and television shows, Stone has “attained an extraordinary level of popularity and fame” across the globe. As such, her “name, likeness, image, identity, and persona are widely known by a substantial segment of the public in the U.S. and internationally,” and thus, are “valuable commercial assets … that symbolize the level of quality associated with Ms. Stone’s products, services and entertainment performances.”

With the foregoing in mind, Stone asserts in her complaint that 31-year old Dudley, “challenged to achieve success as a rap artist … has sought to enhance her stature as a rapper by invoking and trading on the celebrity status and fame of others,” including herself. For instance, in 2018, Dudley recorded a song entitled “Sharon Stoned,” in which she “gratuitously repeats the name ‘Sharon Stone’ thirty-three times and the name ‘Sharon’ ninety-nine times,” without ever requesting or receiving Stone’s consent.

Shortly after the song was released, Stone claims that Dudley “created an infringing promotional music video,” and just as she did with the allegedly infringing song, Dudley’s “intention from the outset was to create a video that would trade on the fame and publicity rights of Sharon Stone for [her own] commercial gain.”

In addition to using Stone’s name in the written title that appears in the video, which was released in April 2019, Dudley “also purposefully designed and shot [the video] to evoke Sharon Stone’s name, likeness, image, identity, and persona associated with her iconic movie roles.” To be exact, Stone claims that the video “wrongfully exploits [her] rights associated with her performance in the Interrogation Scene [from] Basic Instinct,” which the complaint asserts is not only “one of the most iconic performances in contemporary film” but one that is “inextricably associated with Sharon Stone … in the minds of the public” nearly 30 years after the film was first released. 

Stone in Basic Instinct (left) & Dudley in the “Sharon Stoned” video

By using Stone’s name and by recreating the Basic Instinct scene for the music video, including Stone’s “physical appearance, attributes, traits, looks, mannerisms, qualities, characteristics, clothing, treatment and imagery,” counsel for the actress asserts that Dudley is acting “intentionally” and in “conscious disregard of Sharon Stone’s” rights, including her exclusive right to control commercial uses of her name, image, and likeness.

Such use, Stone argues, is squarely at odds with the fact that she “maintains strict control over the manner in which her likeness is used.” Stone asserts that she “has selectively endorsed, and continues to selectively endorse, various products and services, including clothing, shoes, fashion accessories, jewelry, perfume, skin care products, and fashion styling services,” but restricts the use of her likeness “to products, services and performances that are of acceptably high quality to her, in her sole discretion, and for which compensation is commensurate with the exploitation and value thereof.”

At the heart of such selectivity – which has been cited in a handful of recent lawsuits, such as those filed by Kim Kardashian against Missguided and Ariana Grande against Forever 21 – is the attempt to carefully maintain the value and marketability of Stone’s name and image and her future ability to enter into endorsements deals at the most competitive rate, particularly since, more often than not, large-scale endorsement deals depend on exclusivity, which could, in theory, be limited by Stone’s seeming involvement in Dudley’s projects.

Dudley’s use is particularly problematic, per Stone, because in addition to merely banking on the appeal of her name and likeness, Dudley is also using her “name as a celebrity endorser to promote the sale of cannabis paraphernalia without her permission or consent,” referring to the various product placements in the video, including Shine Rolling Papers, Emerald Triangle Seeds-branded marijuana, and Cured Joints. By using “Stone’s name as a celebrity endorser to promote [her] song and video” – and third-party products – “without [Stone’s] permission or consent,” Dudley has misappropriated Stone’s likeness in a way that was “purposefully designed and intended to confuse, to cause mistake, and to deceive the public into believing that Sharon Stone sponsored, endorsed, or was associated with [Dudley’s]’ products, performances, and commercial activity.”

Setting forth claims of unfair competition and violation of her right of publicity, Stone is seeking damages “in an amount to be determined at trial,” including the disgorgement of any profits that Dudley has made in connection with the song and video, and any lost profits that Stone has suffered as a result of Dudley’s allegedly infringing activities, among other things. Stone has also asked the court for a preliminary and permanent injunction in order to keep Dudley from “using [her] name, likeness, image, identity, or persona for commercial purposes without her consent.”

UPDATED (May 21, 2020): According to the case’s docket, the parties have settled their differences even before Dudley formally responded to Stone’s complaint. In a filing on May 21, counsel for Dudley notified the court the matter has been settled “to the mutual satisfaction of the parties pursuant to a confidential settlement agreement,” and Dudley thereby “respectfully requests that the Court give [Stone] 10 days to file a dismissal of the action, and any related documents, in accordance with the parties’ agreement.”

*The case is Sharon Stone v. Chelsea Dudley, 2:19-cv-09492 (C.D.Cal).

A year after buzzy skincare startup Sunday Riley first came under fire after a former employee revealed that the company enlists individuals within its ranks to “write fake reviews [about its products] on Sephora.com” in order to entice consumers to purchase its skincare goods, the company and its CEO have agreed to enter into a settlement with the Federal Trade Commission (“FTC”) to bring an end to an until-recently-pending complaint, which accused the beauty co. of running afoul of the law.

According to the complaint that the FTC filed last year, Sunday Rose and her eponymous Houston, Texas-based beauty brand allegedly “violated the provisions of the FTC Act” when managers for the buzzy startup, “including Ms. Riley herself,” posted fake 5-star “reviews of [the brand’s] products on Sephora’s website” between November 2015 and August 2017, all while obscuring their identities by creating “fake accounts” and using “an Express VPN account [to] . . . hide [their] IP addresses and locations.”

In its complaint, the FTC pointed to a July 2016 email that Ms. Riley allegedly wrote to her staff directing them to “create three accounts on Sephora.com, registered as different identities” as proof that the company’s management also “requested that other Sunday Riley Skincare employees” also post fake reviews endorsing the brand’s products. The email “included step-by-step instructions for setting up new personas and [how to] use a VPN to hide [an individual’s] identity.” It also “directed employees to focus on certain products,” to “[a]lways leave 5 stars” when reviewing Sunday Riley Skincare products, and to “dislike” negative reviews. “If you see a negative review – DISLIKE it,” Ms. Riley wrote, “After enough dislikes, it is removed. This directly translates into sales!!”

Such actions by the company’s founder and employees give rise to two violations of the FTC Act, according to the government agency, including: 1) making false or misleading claims that the fake reviews reflected the opinions of ordinary users of the products; and 2) deceptively failing to disclose that the reviews were written by Ms. Riley or her employees.

Following a formal FTC investigation of Ms. Riley’s and Sunday Riley Modern Skincare, LLC’s “use of fake reviews to boost sales,” the FTC – a federal entity tasked with promoting consumer protection, and eliminating and preventing anti-competitive business practices – weighed in on a proposed consent order on October 21, with three of the Commissioners voting in favor, while two dissented.

True to FTC form (when it comes to fashion/beauty and influencer endorsements, at least), in lieu of any monetary penalty, the proposed settlement means that Sunday Riley – the company and the individual – will be prohibited “from misrepresenting the status of any endorser or person reviewing the product.”

The settlement also bans Sunday Riley from “making any representation about any consumer or other product endorser without clearly and conspicuously disclosing any unexpected material connection between the endorser and any respondent or entity affiliated with the product.”

Additionally, the FTC’s proposed settlement order – which will only be finalized after a 30 day comment period after which the Commission will decide whether to make the proposed settlement final or not – “requires [Sunday Riley] to instruct their employees and agents about their responsibilities to clearly and conspicuously disclose their connections to the [the company’s] products in any endorsements.”

More striking than the FTC’s proposed settlement is a separate statement issued by Commissioner Rohit Chopra, joined by Commissioner Kelly Slaughter, both of whom voted against the terms of settlement and who argue that the settlement in its current form simply is not strong enough.

“Today’s proposed settlement includes no redress, no disgorgement of ill-gotten gains, no notice to consumers, and no admission of wrongdoing. Sunday Riley and its CEO have clearly broken the law, and the Commission has ordered that they not break the law again,” the statement asserts. Commissioners Chopra and Slaughter argue that “the proposed settlement is unlikely to deter other would-be wrongdoers,” and instead, actually “sends the wrong message to the marketplace: dishonest firms may come to conclude that posting fake reviews is a viable strategy, given the proposed outcome here.”

The fact that “monetary relief can be difficult to calculate should not deter the FTC from seeking it,” the Commissioners assert, noting that “when the agency’s estimates are uncertain, the Commission sometimes demands no monetary relief whatsoever, which leads to under-deterrence of blatant fraud and dishonesty.”

As such, they declare that “going forward, the FTC should seek monetary consequences for fake review fraud, even if the exact level of ill-gotten gains is difficult to measure,” particularly since “fake reviews distort our markets by rewarding bad actors and harming honest companies, [and] the problem is growing.”

Founded in 2009, Sunday Riley made its name thanks to its eponymous founder’s quest “to buy the purest, A-grade raw materials and to make sure they’re formulated in a way that’s effective,” according to the Wall Street Journal. As for the complexity of the brand’s “transformative ingredients,” Ms. Riley told the paper that “the person selling [advanced skincare products] at Sephora probably has no idea.” It turns out, the reviews on Sephora’s website when it comes to Sunday Riley products are not terribly helpful, either.

On January 15, 2012, hackers accessed Zappos’ system and stole the names, addresses, passwords, and the last four digits of the credit and debit card numbers of 24 million footwear-seeking customers. Fast forward almost 8 years and the Amazon-owned e-commerce site and the group of nine class action plaintiffs have reached a settlement: in exchange for having their personal information stolen, anyone who had a Zappos account – or for whom Zappos had an email address – prior to the January 2012 data breach is entitled to a one-time-use 10 percent off coupon.

Submitted for approval in mid-September, and granted on a preliminary basis by the U.S. District Court for the District of Nevada, the 9 named plaintiffs will each net $2,500, while the rest of the $1.6 million sum that Zappos has agreed to pay will be used to cover their attorneys’ fees and other legal costs. As for the 24 million or so other individuals impacted by the breach, there will not be a $350 check coming in the mail (as is the case for the recent Yahoo settlement). No, relief is limited to a 10 percent code to be used before December 31, 2019, assuming, of course, the settlement is finalized.

As Slate’s Josephine Wolff wrote last week, the Zappos terms are “an astonishing step backward in data breach settlements and a disheartening reminder of how easy it is for major companies to still walk away from data breaches with minimal consequences.” Wolff further asserted that the settlement “seems less like an actual penalty than a business tactic for Zappos to generate additional revenue in the final quarter of 2019,” since it “forces customers who want to get anything out of the settlement to provide more of their money and information to a business that has already let them down on the data protection front.”

At the same time, Kirkland & Ellis class action litigators Dan Donovan, Ragan Naresh, and Carrie Bodner stated early this year that “nearly 15 years ago, Congress passed the Class Action Fairness Act to curb perceived abuses in the class action settlement process,” including the requirement that federal courts approve class action settlements. As a result, “Courts have been reviewing proposed class action settlements with greater rigor, resulting in several high profile rejections of settlements – sometimes early in the settlement approval process.”

With that law and courts’ larger pattern of “taking seriously their obligation to scrutinize class action settlements” – as Donovan, Naresh, and Bodner assert – in mind, it is difficult not to wonder how Zappos’ 10 percent off settlement terms could be deemed “fair,” even in a preliminary capacity.

Yet, it seems the facts are very much on Zappos’ side. As class-action attorney Adam Moskowitz recently told LifeHacker, while the Zappos settlement – the $1.6 million and the 10 percent off coupons, alike – “seems quite low,” that is likely due to the fact that there was a general lack of “evidence that consumers suffered [harm] from the breach beyond the hassle of changing their passwords.”

Add to that the fact that Zappos acted diligently. The National Law Review reported this spring that “Zappos did everything a responsible corporate citizen would do upon learning of a breach: [it] immediately cut access between its systems and the outside world, suspended online ordering until customers’ passwords were reset, and notified its customers to change their passwords.”

The consensus has been that, taken together, Zappos’ “actions prevented widespread harm and, as a result, only a handful of customers out of 24 million reported concerns that their information was misused in the six years following the breach.”

The overall lack of harm caused by the breach was a significant point of contention throughout the case. Zappos responded to the class action suit by arguing that customers whose data had not used in nefarious ways (i.e., in furtherance of identity theft or to make fraudulent charges) did not have the grounds to file a federal lawsuit. Counsel for the plaintiffs argued that they stood to be the targets of harm in the future, as their information could be used at any time, including years after the hack.

In hearing the plaintiffs’ case, the trial court in Nevada “rejected the claims of many plaintiffs, finding they had no standing to sue because they had not suffered an actual injury” as a result of having their information hacked, Patterson Belknap Webb & Tyler LLP’s Peter A. Kurtz and Craig A. Newman wrote last spring. As such, the plaintiffs’ case, as a whole, largely centered on the risk of future harm that would result from the breach.

On appeal, a 3-judge panel for the Ninth Circuit sided with the plaintiffs, determining that they could establish standing to sue even if they had not yet suffered an actual injury because the breach put the plaintiffs at a substantial risk of future harm, largely due to “the nature of the data that the plaintiffs allege was taken.” In addition to an actual injury, “the court said customers can sue if they can show there is a substantial risk of harm and that it is impending,” per Reuters, and that decision was ultimately left to stand when the Supreme Court denied to take on Zappos’ appeal.

That decision – one that Zappos called “manifestly insufficient” in light of the fact that “data breaches are a fact of life in an increasingly digital world” – does not appear to have dictated the settlement terms for the 24 million Zappos users who might be subject to harm in the future. Nonetheless, Moskowitz suspects that the opt-out rate for the settlement will be very low. After all, he says, a discount from the notoriously discount-averse Zappos is “better than nothing.”

Levi’s and Saint Laurent have made peace in their fight over the high fashion brand’s use of an little black pocket tab on a collection of expensive jeans, one that the American denim giant claimed was a bit too much like its own famous pocket tab, which it has used in an array of colors since in 1936 in order to provide “sight identification of its products in a crowded denim market.” By using a lookalike pocket tab of its own, Saint Laurent was inching a bit too close to Levi’s turf, the brand asserted.

Levi’s alleges in the trademark infringement, dilution, and unfair competition suit that it lodged against Saint Laurent in a California federal court in November that it maintains an arsenal of trademark registrations for the various tabs it uses on its jeans, and by putting similar tabs on its own much-pricier pants, YSL is “likely to confuse consumers about the source of [its]  products and/or [whether there is] a relationship between YSL and Levi’s,” including potentially, a collaboration.

The denim giant’s argument about potential consumer confusion – which is at the center of a trademark infringement claim – is not without legs. Not only have collaborations infiltrated the fashion industry, but San Francisco-based Levi’s has, itself, partnered with a handful of brands in recent years, ranging from an ongoing deal with Paris-based Vetements and collabs with “it” streetwear brand Supreme, Virgil Abloh’s Off-White to the very-recently launched link-up with stylist Christine Centenera’s hot young label Wardrobe.nyc.

As such and given the industry’s enduring penchant for collaboration, Levi’s argued in its complaint that when consumers see Saint Laurent’s jeans with the strategically placed pocket tabs, there is an increased likeliness that they are either Levi’s pants or that the two brands worked together to create the pants. With that in mind, it asked the court to put a halt to Saint Laurent’s alleged infringement, which it claims was “aggravated by … willfulness, wantonness, malice, and conscious indifference to the rights and welfare of [Levi’s].”

 Levi's pocket tab (left) & YSL’s pocket tab (right) Levi’s pocket tab (left) & YSL’s pocket tab (right)

YSL responded to Levi’s complaint with a handful of defenses, asserting that – among other things – “consumers regularly encounter decorative pocket ornaments sold by a large number of third party users,” such as DKNY, Stussy, Carhartt, and Paul Smith, “all of [which] are apparently able to coexist with Levi Strauss’ tab trademark in the marketplace.”

It also claimed that due to the price points at play for its jeans, between “$550 and $2,590 per pair,” versus Levi’s, whose “jeans bearing the tab trademark can be found for under $20,” and YSL’s use of “clear markings featuring the Saint Laurent trademarks” on its wares, “consumers immediately recognize the Saint Laurent Jeans as originating from Saint Laurent,” and are not likely to be confused.

The fashion brand also put forth a few claims of its own, all of which were declaratory judgments, or requests that the court declare that it is not infringing or diluting Levi’s pocket tab trademark or engaging in unfair competition.

Now, the two brands appear to have settled their differences out of court, pursuant to a settlement agreement, as first reported by WIPR. While the terms of their agreement remain confidential, the court has formally acted on Levi’s request that the case be dismissed without prejudice, which leaves the door open for Levi’s to file suit against Saint Laurent on the same basis at a later date, such as if/when Saint Laurent fails to uphold its end of the settlement bargain.

And that certainly isn’t an unheard of move; just last month Bulgari filed suit against Kenneth Jay Lane, accusing the costume jewelry company of running afoul of their settlement agreement by selling an allegedly infringing version of the LVMH-owned jewelry company’s patent-protected Serpenti ring.

*The case is Levi Strauss & Co. v. Yves Saint Laurent America, Inc.3:18-cv-06977 (N.D.Cal.). 

THE FASHION LAW EXCLUSIVE — Luka Sabbat, the young fashion figure that was popularly coined “the influencer who failed to influence” in connection with a Snap, Inc. deal gone awry, has to fork over $15,000 for failing to uphold his end of a $60,000 partnership. In accordance with a settlement reached by counsel for the 21-year old fashion “it” boy and PR consulting, Sabbat – who was enlisted by the New York-based public relations company to promote Snap, Inc.’s Spectacles glasses during the Spring/Summer 2019 fashion shows last fall – has to pay back some of the money he was paid upfront for the deal.

According to a stipulation entered on Tuesday by Judge Arthur Engoron of the Supreme Court of New York, Sabbat is required to “produce [an] original confession of judgment” and to also “make payment of $15,000 within 10 days” pursuant to the parties’ settlement.

The settlement, which enables Sabbat to keep $30,000 for his single Instagram post promoting Snap’s Speclales, comes just over 6 months after TFL first revealed that PR Consulting had filed suit against Sabbat. The PR company asserted that it entered into a formal influencer agreement with Sabbat on September 15, 2018 in furtherance of which he agreed “to create and post certain content on social media in connection with a ‘Spectacles Marketing Campaign’ … for PRC’s client Snap, Inc.”

In particular, the influencer, who maintains close ties with the Kardashians, as well as Off-White founder Virgil Abloh, was tasked with “creating original content for a minimum of four unique posts: one Instagram Feed Post and three Instagram Story posts. Two of the Story posts were to be in New York, related to fashion shows and parties during New York Fashion Week … and one Story post was to be in Milan or Paris, related to fashion shows and parties during [the respective] Fashion Weeks.” He also agreed “to be photographed in public wearing product tied to the ‘Spectacles Marketing Campaign’ during Milan and Paris Fashion Weeks.”

While Sabbat did, in fact, produce “one  Feed Post and one Story post,” on Instagram, where he maintains 1.4 million followers, he “failed to post 1 additional Instagram story in New York and 1 in Milan or Paris, and also failed to be photographed in public at least once in the aforementioned cities while wearing Spectacles product,” prompting PR Consulting to file suit.

The established PR company asked the court to force Sabbat to return the $45,000 it paid to him upfront and to pay interest and additional “consequential and incidental damages” for failing to uphold the contract that he signed. Still yet, PRC has asked the court to order him to foot its legal bill.

In a formal response to PRC’s lawsuit, Sabbat’s legal counsel asked the court to dismiss the case in its entirety, asserting that PRC “fail[ed] to state a cause of action upon which relief may be granted” (i.e., PRC has not presented sufficient facts that a violation of law has occurred), and failed to include a necessary party to the litigation (presumably Snap, Inc.).

Sabbat’s counsel further claimed that PRC “lacks standing to file suit” against him, or in other words, PRC is not the proper party to file the case against Sabbat. While PRC was undoubtedly working on behalf of its client, Snap, Inc., in connection with the influencer deal with Sabbat, a lack of standing claim seems like a stretch considering that the contract at the center of this breach of contract case was entered into between Sabbat and PRC, not Snap, Inc.

Moreover, Sabbat alleged that PRC “has not suffered any damages,” and thus, will be “unjustly enriched” if he is forced to turn over the $45,000 he was already paid and/or pay any additional damages.

* The case is PR Consulting, Inc., v. Luka Sabbat, 655382/2018 (NY Sup).