Lee v. Internet Entertainment Group, Inc.

MEMORANDUM **

Plaintiffs Pamela Anderson Lee and Tommy Lee sued Defendant Internet Entertainment Group, Inc. (IEG), in California Superior Court. The suit concerned IEG’s threatened broadcast of an allegedly stolen videotape that depicted Plaintiffs engaged in intimate acts. After Plaintiffs filed suit, IEG broadcast the video on its websites for about four hours.

The parties reached an agreement to settle the state-court suit (the Settlement). Thereafter, IEG continued to distribute the videotape on the Internet. IEG also expanded distribution beyond the Internet, disseminating the tape on DVD and VHS through retail stores. Plaintiffs then filed this action in federal district court, urging that the Settlement did not cover continued distribution. The district court granted summary judgment in favor of IEG. On de novo review, we affirm in part and reverse in part.

Referring to the state-court suit, the Settlement contains a broad, mutual release:

(Emphasis added.)

Because the release covers all claims that could arise out of the “facts underlying the Action,” the factual allegations contained in the state-court complaint determine the scope of the release. Although…