In a recent case, the United States Court of Appeals for the Second Circuit was called on to examine who owns a social media account – the creator of the account or her employer? While social media is a relatively new phenomenon, the Court nevertheless found that long-standing principles of property law apply to the question of ownership, including principles concerning who owns a dead fox. Let me explain . . .
JLM Couture, Inc. v. Gutman 1
This case involves a dispute over an employment contract. Plaintiff JLM Couture hired the defendant, Hayley Paige Gutman, to design wedding dresses for JLM. Ms. Gutman signed a contract with JLM that included certain restrictive covenants, including covenants that Ms. Gutman would not use her name or any derivative of her name in commerce, as well as a covenant not to compete with JLM.
Shortly after signing the contract with JLM, Ms. Gutman created an Instagram account and a Pinterest account, both of which used the name “@misshayleypaige.” These social media accounts were not created at the direction of JLM, but over time they came to be used as advertising platforms for JLM products. JLM employees had access to the accounts to help manage, post content, and respond to inquiries.
This employment arrangement lasted for several years. In 2019, JLM and Gutman discussed but were unable to reach an agreement to extend the employment agreement. Ms. Gutman then changed the passwords on the social media accounts, effectively blocking JLM’s access. She also announced that she was leaving JLM.
JLM sued Ms. Gutman for breaching her employment contract. The case is ongoing, has been very contentious, and presents the court with many different issues. This post will focus on the issue of ownership of the social media accounts.
The Preliminary Injunction
At the district court level, JLM sought a preliminary injunction giving it control over the social media accounts. A preliminary injunction is an extraordinary remedy. To grant a motion for a preliminary injunction, a court must find, long before the case is actually decided, that the party seeking the injunction is likely to succeed on the merits of the case. In other words, the court is asked to project which side is most likely to win the case in the end.
JLM argued that it had the best claim to ownership of the social media accounts. They had a contract forbidding Ms. Gutman from using her name in commerce, and they had a long history of developing, promoting, posting to, and managing the social media accounts. Ms. Gutman argued that JLM could not stop her from using her own name, and she had created the social media accounts on her own for her own use.
The district court examining the issue found that social media accounts were a different kind of property, and therefore the court needed a different test to determine which party owned the accounts. The court came up with a multi-factor test that it applied to the ownership of the social media accounts. Applying that test, the court determined that JLM had the best claim to ownership of the accounts and granted the injunction, ordering Ms. Gutman to turn the accounts over to JLM.
The appeals court disagreed. While acknowledging the somewhat novel issue presented, the court nevertheless found that there was no need for a multi-factor test for ownership of the social media accounts. Instead, traditional analysis of property rights was sufficient to determine ownership of social media accounts. The court summarized its holding: To summarize: the analysis of social-media-account ownership begins where other property ownership analyses usually begin—by determining the account’s original owner. The next step is to determine whether ownership ever transferred to another party. If a claimant is not the original owner and cannot locate their claim in a chain of valid transfers, they do not own the account.
But what does a dead fox have to do with it?
I was getting to that part. The court of appeals, in rejecting the multi-factor test used by the lower court, noted that property rights have long been litigated, and we have clear rules. In making this point, the court cited the somewhat famous case of Pierson v. Post 2 a case out of New York decided in 1805, almost 220 years ago.
Pierson v. Post is a case often used in law school property classes. The facts of the case are succinct and a bit comical: The declaration stated that Post, being in possession of certain dogs and hounds under his command, did, “upon a certain wild and uninhabited, unpossessed and wasteland, called the beach, find and start one of those noxious beasts called a fox,” and whilst there hunting, chasing and pursuing the same with his dogs and hounds, and when in view thereof, Pierson, well knowing the fox was so hunted and pursued, did, in the sight of Post, to prevent his catching the same, kill and carry it off.
Post, a fox hunter with his “dogs and hounds,” found and was chasing a fox at the beach. Pierson saw Post on the hunt, but rather than let Post shoot the fox, Pierson shot and killed the “noxious beast.” Post, angry at losing his prey, sued Pierson for trespass, claiming that Pierson had shot Post’s fox.
Post argued that by expending his time and effort to locate and chase the fox, the fox became Post’s property. Therefore, Pierson trespassed on Post’s property by killing the fox. Pierson argued that the fox did not belong to Post or anyone else until Pierson killed it, at which time Pierson owned the fox.
The court agreed with Pierson. In its analysis, the court cited even older law, referring to the Justinian Institutes, a written compilation of Roman law first published in 533 AD. According to the court, referring to the Justinian Institutes, “pursuit alone vests no property or right in the huntsman; and that even pursuit, accompanied with wounding, is equally ineffectual for that purpose, unless the animal be actually taken.” The analysis went on to find that wild animals are no one’s property until someone “deprive[s] them of their natural liberty.”
Post was out of luck. Simply chasing the fox did not make him the owner. Pierson became the owner of the fox when he killed it.
Are Social Media Accounts Like Dead Foxes?
The simple takeaway from the court’s holding in the JLM v. Guttman case is that property is property, and the same principles that have always governed property ownership will continue to apply. The court of appeals sent the case back to the district court to look at the chain of title. Did Ms. Guttman “kill” her fox when she opened the social media accounts? If so, did she do anything after that to transfer the social media accounts to JLM? These basic questions of property ownership, centuries old, still form the basis of private property rights today.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.
1 JLM Couture, Inc. v. Gutman, Nos. 21-2535, 22-1694, 2024 U.S. App.</ br>
LEXIS 1050 (2d Cir. Jan. 17, 2024).
2 Pierson v. Post, 3 Cai. R. 175 (1805).