Reference no: EM131274821

Penthouse International v. Barnes
United States Court of Appeals
Priscilla Barnes was a hostess at a club in Hollywood, California, when she was approached by a freelance photographer (Dunas) who sold nude photographs to Penthouse magazine. Dunas was an independent contractor. He asked Barnes to pose nude. She agreed but did not want her actual name used. Dunas agreed to her terms, and Barnes signed a "Release, Authorization and Agreement Form" that gave Penthouse the right to "republish photographic pictures or portraits." Dunas added the term AKA (also known as) on the contract to indicate that the photographs would not be published under her actual name but under a pseudonym. Penthouse did so in 1976

Later, Barnes became a well-known television broadcaster for a station in Los Angeles. When Penthouse informed her, in 1983, that it wished to republish her nude photograph, she threatened to sue, claiming that Dunas had implied agency to write the term AKA and that Penthouse was thus bound by his actions and representations. Penthouse requested a declaratory judgment from the federal district court allowing it to republish a nude photo of the defendant. The district court found for Barnes and issued an injunction against Penthouse. Penthouse appealed.

Judge Boochever
Under California law, questions regarding the existence of agency are questions of fact that we review for clear error. California Civil Code Section 2316 defines actual authority as "such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess." At issue is whether Dunas contracted to act on behalf of Penthouse.

Penthouse instructed photographers "to get a signed model release and not to alter the release in any way, without our permission." However, Penthouse carried Dunas's name on its masthead, gave him blank Penthouse contracts, may have given him business cards, and had him present contracts to models. Thus, although the record conflicts as to whether Dunas was an actual agent of Penthouse, on review, we cannot find that the district court clearly erred in finding Dunas to be a Penthouse agent.

Having found that the district court did not err in characterizing Dunas as an agent, we next turn to whether Dunas was acting within the scope of his authority by modifying the contract. Barnes does not contend nor is there evidence that Dunas possessed express actual authority to modify the contract. Dunas, however, had implied actual authority. Implied actual authority requires that (1) Dunas believe he was authorized to modify the contract based on Penthouse conduct known to him or (2) such a belief was reasonable.

Circumstantial evidence exists that Dunas placed "AKA" on other contracts with no objection from Penthouse. In June 1974, a year and a half before Barnes posed, contracts prepared by Dunas had "AKA"on them. Further, Penthouse internal memoranda reflect an understanding among Penthouse employees that "AKA" added to a contract meant that Penthouse was to associate a fictitious name with a woman's photograph. The evidence thus indicates that Dunas reasonably believed he was authorized to add "AKA" and modify the contract to require that only a fictitious name be used.

CRITICAL THINKING ABOUT THE LAW
One of the primary purposes of a judge's opinion is to explain the court's reasoning in a particular case. A judge's opinion is not arbitrary, in the sense that a judge must give due consideration to relevant facts and rules of law for any legal issue. From a judge's opinion, we are, therefore, able to know not only a judge's conclusion but also why the judge ruled for one party over another. These opinions provide the court's rationale in a particular case, which may later be used as precedent for subsequent cases that contain similar fact patterns. In Case 16-2, the judge provided several reasons to support the conclusion. The next two questions relate to the judge's reasoning in Case 16-2.

1. What reasons did the judge provide for ruling in favor of the defendant?
Clue: To ensure that you have found a reason, ask yourself whether what you have listed answers the question: "Why did the court rule for the defendant?"

2. What aspects of the court's reasoning were particularly strong or weak? (Remember that just because reasons are given does not mean that these reasons are necessarily strong.)
Clue: Reverse the roles in this case and assume that you are the plaintiff's lawyer. With which parts of the judge's opinion would you still disagree based on the court's reasoning? Would there be parts of the judge's reasoning with which, even though you were the opposing party, you would agree?