Sedgwick Claims Management Services v. Delsman

Citation: Sedgwick Claims Management Services, Inc. v. Delsman, 2009 WL 2157573 (N.D. Cal. July 17, 2009).

Factual Background
Sedgwick Claims Management Services, Inc. provides insurance claims services to various companies and their employees, including defendant Robert A. Delsman, Jr. Defendant submitted a claim for disability benefits and at some point became unhappy with the way his claim was handled. Feeling the need to voice his concerns about Sedgwick, Delsman started what he called “Operation Going Postcard,” which consisted of writing blog posts about his complaints and sending out mailings. One of these mailings pictured two Sedgwick executives using images taken from the company website on “WANTED” posters. Delsman also allegedly “morphed” these images into likenesses of Adolph Hitler and Henrich Himler.

Trial Court Proceedings
According to Sedgwick many of Delsman’s comments were defamatory and a suit was filed alleging trespass to chattels, copyright infringement, interference with prospective economic advantage, trade libel, defamation and libel, and unfair competition. In response to Sedgwick’s suit Delsman filed a pro se motion contending, among other things, that Sedwick’s complaint is a Strategic Lawsuit Against Public Participation (also known as a “SLAPP suit”) and that his use of the photographs constitute a “fair use” under the Copyright Act.

To establish infringement under the Copyright Act a plaintiff must establish ownership of a valid copyright and copying of constituent elements of the work that are original. Sedgwick satisfied the first requirement with its convenient copyright filing just prior to filing its lawsuit. Four factors are used to determine fair use:


 * (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
 * (2) the nature of the copyrighted work;
 * (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
 * (4) the effect of the use upon the potential market for or value of the copyrighted work.

With respect to the purpose and character of the use of the photographs the Court determined that even Delsman’s unaltered copies were transformative in their use. The original photos were used for company advertising purposes whereas Delsman used them as a vehicle for criticism. As a result, Delsman’s use of the photographs was for a fundamentally different purpose than they were originally intended and the first fair use factor weighs strongly in favor of fair use.

Secondly, where transformative uses are involved, the nature of the plaintiff’s work is “not. . . terribly significant in the overall fair use balancing. . .“

Even though Delsman used the entire photographs in question, the reuse of an image may still be reasonable when fair use is being considered if it serves the defendant’s intended purpose. Clearly Delsman’s use of the entire photograph served his intended purpose of identifying company executives he held responsible for his dissatisfaction with the company.

Finally, plaintiff did not present any convincing arguments that Delsman’s use of photographs could result in a reduced ability to use them in the future. Therefore, the Court dismissed Sedgwick’s claim for copyright infringement without leave to amend.

The anit-SLAPP statute invoked by Delsman applies to claims “arising from” speech or conduct “in furtherance of the exercise of the constitutional right of. . . free speech in connection with a public issue or an issue of public interest.” Sedgwick did not dispute that Delsman’s claims were made in a public forum and focused instead on the nature of the statements made as “harassment, intimidation, defamation and trespass for the sake of pursuing a personal vendetta.” A closer look at the specific language used by Delsman shows that he invited others who felt that they had been treated unfairly by Sedgwick to express their concerns to the appropriate State and Federal authorities in an attempt to remedy the alleged failings of the company. The use of public media to rally support for a potential malfeasor is precisely the type of speech anti-SLAPP legislation was drafted to preserve. For these reasons, and because Sedgwick failed to provide sufficient evidence of the possibility its success on the merits, defendant’s motion to dismiss the claim for copyright infringement and special motion to strike the remaining state law causes of auction was granted.