Factors Etc., Inc. v. Pro Arts, Inc.

Elvis Presley, a world-famous singer and performer, incorporated Boxcar Enterprises, Inc. (Boxcar) in Tennessee, where he was domiciled. Presley assigned the rights to his name and likeness to Boxcar. Presley died on August 16, 1977, and on August 18, 1977, Boxcar granted an exclusive license to Factors Etc., Inc. (Factors) (plaintiff), a Delaware corporation, to manufacture products bearing Presley’s name and likeness. The licensing agreement, reached in Tennessee, was in effect through February 1979. On August 19, 1977, Pro Arts, Inc. (defendant), an Ohio corporation, published and marketed a poster of a photograph of Presley. One point of sale was within the jurisdiction of the United States District Court for the Southern District of New York, where Factors brought suit under diversity jurisdiction. Factors sought a preliminary injunction preventing Pro Arts from manufacturing, selling, or distributing the poster and from making commercial use of Presley’s name or likeness. The district court granted the preliminary injunction, and Pro Arts appealed to the United States Court of Appeals for the Second Circuit, which affirmed. Meanwhile, in Memphis Development Foundation v. Factors, Etc., Inc., 441 F. Supp. 1323 (1977), the Sixth Circuit, which included Tennessee, addressed whether Tennessee recognized that the right of publicity survived death. Tennessee courts had not previously addressed the issue, and the Sixth Circuit had no guidance in reaching its holding that under Tennessee law, Presley’s right of publicity did not survive his death. Afterwards, in Factor’s litigation with Pro Arts in the Southern District of New York, Factors moved for summary judgment. Pro Arts argued that the Sixth Circuit’s ruling estopped Factors from asserting the right of publicity after Presley’s death. The district court found that New York State substantive law applied because the court had diversity jurisdiction and thus the law of the forum state applied. The court granted Factors’ motion and permanently enjoined Pro Arts from using Presley’s name or likeness. Pro Arts appealed, arguing that the court should apply the substantive law of Tennessee, where Presley was domiciled, Boxcar was incorporated, and the licensing agreement between Boxcar and Factors was reached. Factors argued that the applicable substantive law was that of New York State because the wrongful conduct occurred there.