Order Granting In Part And Denying In Part Plaintiffs’ Motion For Default Judgment, Timothy Ferriss, et al. v. Alliance Publishing, Inc., et al., Case No. 15-cv-05675 (Judge Edward M. Chen)
Tim Ferriss is known for authoring The 4-Hour Workweek and other self-help books on the “4-Hour” theme. He may now become known as the “4-Hour Plaintiff” after he and a company he owns, Krisa Performance, obtained a default judgment against defendants alleged to have improperly used his name and likeness in connection with a fraudulent scheme.
Ferriss alleged that defendants Alliance Publishing and Peagan Twitty perpetrated a fraudulent “get rich quick” scheme in which they published a flyer asking their targets to mail $97 to Alliance Publishing and $100 to a “dealer” in Fort Wayne, Indiana. According to the flyer, participants would then access the “Infinity Income Dealership” program and become millionaires within three years—though how that would happen was not explained. To entice the public to send off nearly $200 without explaining what they would get in return, Alliance used, without permission, Ferriss’s name, picture, and a false quote endorsing the scheme. Defendant Candice Cunningham fell for the scheme, paying the requested amount for the right to distribute the flyer to others. She then distributed a revised version of the flyer to approximately 27,500 people.
Ferriss and Krisa Performance sued Alliance, Cunningham, and related entities for (1) violation of the right of publicity (Cal. Civ. Code § 3344); (2) false designation of origin (15 U.S.C. § 1125(a)); (3) trademark infringement (15 U.S.C. § 1114); and (4) unfair competition (Cal. Bus. & Prof. Code § 17200). The defendants defaulted (after Twitty claimed her identity was stolen, but presented no supporting evidence), and Ferriss sought an injunction, damages, and attorney’s fees and costs.
Judge Edward Chen’s opinion thoroughly evaluates the requested relief. He granted an injunction after rigorously applying the four-factor eBay test, and his analysis of the requested damages is especially interesting.
Plaintiffs requested between $1,214,275 and $2,098,275 in damages, consisting of $1,284,000 for actual damages; $714,275 in defendants’ profits; $100,000 or more in punitive damages; and trebling of plaintiffs’ actual damages. To prove actual damages, plaintiffs’ expert attempted to estimate Ferriss’s endorsement fee. The expert estimated a fee of between $400,000 and $1,284,000. Judge Chen dismissed the estimate as unreliable because it compared Ferriss to celebrities like Tiger Woods, Julia Roberts, and Leonardo DiCaprio “whose fame and influence substantially outweigh that of Ferriss.” The claimed endorsement fee also likely substantially exceeded the amount of money the defendants made on the fraudulent scheme and was substantially larger than fees Ferriss earned in other deals. Judge Chen also rejected the expert’s estimate of the defendants’ profits, which was based on estimating the amount of profit promised in the fraudulent “get rich quick” scheme. Of course, with no discovery from the defendants, plaintiffs had little else to go on in estimating profits.
Although it seems there was no reliable method by which the plaintiffs could have estimated the defendants’ profits, they could have come forward with a more palatable and reliable estimate of their own actual damages and possibly obtained some recovery as a result. In the end, along with the injunction, they obtained only their requested attorney’s fees and costs, minus expert fees.