FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MAVRIX PHOTOGRAPHS,

LLC, a California limited

liability company,

Plaintiff-Appellant,

v.

LIVEJOURNAL, INC.,

Defendant-Appellee.

No. 14-56596

D.C. No.

8:13-cv-00517-CJC-JPR

OPINION

Appeal from the United States District Court

for the Central District of California

Cormac J. Carney, District Judge, Presiding

Argued Submitted October 7, 2016

Pasadena, California

Filed April 7, 2017

Before: Harry Pregerson, Richard A. Paez,

and Morgan Christen, Circuit Judges.

Opinion by Judge Paez
2 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

SUMMARY*

Digital Millennium Copyright Act

The panel (1) reversed the district court’s holding, on

summary judgment, that the defendant was protected by the

safe harbor of the Digital Millennium Copyright Act from

liability for posting the plaintiff’s photographs online and

(2) vacated a discovery order.

The panel held that the safe harbor set forth in 17 U.S.C.

§ 512(c) would apply if the photographs were posted at the

direction of users. The defendant, a social media platform,

posted the photographs after a team of volunteer moderators,

led by an employee of the defendant, reviewed and approved

them. The panel held that whether the photographs were

posted at the direction of users depended on whether the acts

of the moderators could be attributed to the defendant. 

Disagreeing with the district court, the panel held that the

common law of agency applied to the defendant’s safe

harbor defense. Because there were genuine factual disputes

regarding whether the moderators were the defendant’s

agents, the panel reversed the district court’s summary

judgment and remanded the case for trial.

The panel also discussed the remaining elements of the

safe harbor affirmative defense. If an internet service

provider shows that the infringing material was posted “at

the direction of the user,” it must then also show that (1) it

lacked actual or red flag knowledge of the infringing

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 3

material; and (2) it did not financially benefit from

infringements that it had the right and ability to control. The

panel held that to fully assess actual knowledge, the fact

finder must consider not only whether the copyright holder

has given notice of the infringement, but also the service

provider’s subjective knowledge of the infringing nature of

the posts. The panel held that to determine whether the

defendant had red flag knowledge, the fact finder would need

to assess whether it would be objectively obvious to a

reasonable person that material bearing a generic watermark

or a watermark referring to the plaintiff’s website was

infringing. When assessing the service provider’s right and

ability to control the infringements, the fact finder should

consider the service provider’s procedures that existed at the

time of the infringements and whether the service provider

had “something more” than the ability to remove or block

access to posted materials.

Finally, the panel vacated the district court’s order

denying discovery of the moderators’ identities.

COUNSEL

Peter Afrasiabi (argued), Christopher W. Arledge, and John

Tehranian, One LLP, Newport Beach, California, for

Plaintiff-Appellant.

Wayne Mitchell Barsky (argued), Blaine H. Evanson, and

Brandon J. Stoker, Gibson Dunn & Crutcher LLP, Los

Angeles, California, for Defendant-Appellee.
4 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

OPINION

PAEZ, Circuit Judge:

Plaintiff Mavrix Photographs (“Mavrix”) appeals the

district court’s summary judgment in favor of Defendant

LiveJournal. Mavrix sued LiveJournal for posting twenty of

its copyrighted photographs online. The district court held

that the Digital Millennium Copyright Act’s (“DMCA”)

§ 512(c) safe harbor protected LiveJournal from liability

because Mavrix’s photographs were posted at the direction of

the user. 17 U.S.C. § 512(c).

To be eligible at the threshold for the § 512(c) safe

harbor, LiveJournal must show that the photographs were

posted at the direction of the user. Although users submitted

Mavrix’s photographs to LiveJournal, LiveJournal posted the

photographs after a team of volunteer moderators led by a

LiveJournal employee reviewed and approved them. 

Whether these photographs were truly “posted at the direction

of the user,” or instead whether LiveJournal itself posted the

photographs, depends on whether the acts of the moderators

can be attributed to LiveJournal. The issue we must decide

is whether the common law of agency applies to

LiveJournal’s safe harbor defense. The district court ruled

that the common law of agency does not apply to this

analysis. We disagree and conclude that it does. As there are

genuine factual disputes regarding whether the moderators

are LiveJournal’s agents, we reverse the district court’s

summary judgment and remand for trial.

Because the district court ruled on the remaining elements

of the safe harbor, we also proceed to discuss those elements

in order to provide guidance to the district court and parties
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 5

on remand. Finally, we vacate the district court’s order

denying discovery of the moderators’ identities because the

agency determination may affect this analysis.

I.

LiveJournal1

LiveJournal is a social media platform. Among other

services, it allows users to create and run thematic

“communities” in which they post and comment on content

related to the theme. LiveJournal communities can create

their own rules for submitting and commenting on posts.

LiveJournal set up three types of unpaid administrator

roles to run its communities. “Moderators” review posts

submitted by users to ensure compliance with the rules.2

“Maintainers” review and delete posts and have the authority

to remove moderators and users from the community. Each

community also has one “owner” who has the authority of a

maintainer, but can also remove maintainers.

LiveJournal protects against copyright infringement in its

communities through various mechanisms. LiveJournal

follows the formal notice and takedown procedures outlined

in the DMCA by designating an agent and form to report

infringement, and by promptly removing infringing posts and

prohibiting repeat abusers from the community. 17 U.S.C.

1

 The facts are undisputed unless otherwise noted.

2 Because moderators, maintainers, and owners all can review posts,

we refer to all three as moderators when discussing the act of reviewing

posts.
6 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

§ 512(c)(1)(C). LiveJournal’s Terms of Service instructs

users not to “[u]pload, post or otherwise transmit anyContent

that infringes any patent, trademark, trade secret, copyright or

other proprietary rights.”

Oh No They Didn’t! (“ONTD”)

ONTD is a popular LiveJournal community which

features up-to-date celebrity news. Users submit posts

containing photographs, videos, links, and gossip about

celebrities’ lives. ONTD moderators review and publicly

post some of the submissions. Other users engage in

conversations about the celebrity news in the comments

section of each post. For example, one of the ONTD posts at

issue contained photographs that Mavrix had taken which

appeared to show that super-celebrityBeyoncé was pregnant. 

Users speculated in the comments section of that post that

Beyoncé was indeed pregnant.3

Like other LiveJournal communities, ONTD created rules

for submitting and commenting on posts. ONTD’s rules

pertain to both potential copyright infringement and

substantive guidance for users. For example, one rule

instructs users to “[i]nclude the article and picture(s) in your

post, do not simply refer us off to another site for the goods.” 

Another rule provides “Keep it recent. We don’t need a post

in 2010 about Britney Spears shaving her head.” ONTD’s

3

In a more recent post about Beyoncé, a user speculated that she

would performher song “Formation” at the 2016 Super Bowl. Other users

commented on the post, debating howBeyoncé might incorporate feminist

and racial justice themes into her performance. XOXOBLISS, Beyoncé

Is Performing Formation at the Super Bowl + Celebrities React to

F o r m a ti o n , O N T D ( F e b . 6 , 2 0 1 6 , 0 5 : 4 9 P M ),

http://ohnotheydidnt.livejournal.com/100179096.html.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 7

rules also include a list of sources from which users should

not copy material. The sources on the list have informally

requested that ONTD stop posting infringing material. 

ONTD has also automatically blocked all material from one

source that sent ONTD a cease and desist letter.

ONTD has nine moderators, six maintainers, and one

owner. ONTD users submit proposed posts containing

celebrity news to an internal queue. Moderators review the

submissions and publicly post approximately one-third of

them. Moderators review for substance, approving onlythose

submissions relevant to new and exciting celebrity news. 

Moderators also review for copyright infringement,

pornography, and harassment.

When ONTD was created, like other LiveJournal

communities, it was operated exclusively by volunteer

moderators. LiveJournal was not involved in the day-to-day

operation of the site. ONTD, however, grew in popularity to

52 million page views per month in 2010 and attracted

LiveJournal’s attention. By a significant margin, ONTD is

LiveJournal’s most popular community and is the only

community with a “household name.” In 2010, LiveJournal

sought to exercise more control over ONTD so that it could

generate advertising revenue from the popular community. 

LiveJournal hired a then active moderator, Brendan Delzer,

to serve as the community’s full time “primary leader.” By

hiring Delzer, LiveJournal intended to “take over” ONTD,

grow the site, and run ads on it.4

4 When Delzer was hired in 2010, LiveJournal had not yet created the

owner administrator position. In 2011, when LiveJournal created the

owner position, Delzer was elected by the community and became the
8 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

As the “primary leader,” Delzer instructs ONTD

moderators on the content they should approve and selects

and removes moderators on the basis of their performance. 

Delzer also continues to perform moderator work, reviewing

and approving posts alongside the other moderators whom he

oversees. While Delzer is paid and expected to work full

time, the other moderators are “free to leave and go and

volunteer their time in any way they see fit.” In his

deposition, Mark Ferrell, the General Manager of

LiveJournal’s U.S. office, explained that Delzer “acts in some

capacities as a sort of head maintainer” and serves in an

“elevated status” to the other moderators. Delzer, on the

other hand, testified at his deposition that he does not serve as

head moderator and that ONTD has no “primary leader.”

Mavrix

Mavrix is a celebrity photography company specializing

in candid photographs of celebrities in tropical locations. The

company sells its photographs to celebrity magazines. 

According to Mavrix, infringement of its photographs is

particularly devastating to its business model. Since

Mavrix’s photographs break celebrity news, such as the

pregnancy of Beyoncé, infringing posts on sites like ONTD

prevent Mavrix from profiting from the sale of the

photographs to celebrity magazines.

Procedural History

Mavrix filed an action for damages and injunctive relief

against LiveJournal alleging copyright infringement on the

owner. After this lawsuit was filed, LiveJournal’s parent company

became the owner.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 9

basis of twenty Mavrix photographs posted on ONTD. 

ONTD posted the photographs in seven separate posts

between 2010 and 2014. Some of these photographs

contained either a generic watermark or a specific watermark

featuring Mavrix’s website “Mavrixonline.com.” To the best

of his recollection, Delzer did not personally approve the

seven posts. LiveJournal has no technological means of

determining which moderator approved any given post. 

Mavrix did not utilize LiveJournal’s notice and takedown

procedure to notify LiveJournal of the infringements. When

Mavrix filed this lawsuit, LiveJournal removed the posts.5

During discovery, Mavrix filed two motions to compel

responses to its interrogatories seeking the identity of the

ONTD moderators. The magistrate judge denied the first

motion, finding that Mavrix had not met and conferred with

LiveJournal in good faith. The magistrate judge denied the

second motion to compel because Mavrix failed to notify the

anonymous parties of the pending motion. Mavrix moved the

district court for review of the magistrate judge’s order,

which the district court denied on the basis of the moderators’

First Amendment right to anonymous internet speech.

LiveJournal moved for summary judgment on the basis of

the § 512(c) safe harbor. The district court granted

LiveJournal’s motion and denied Mavrix’s cross-motion for

partial summary judgment, concluding that the § 512(c) safe

harbor shielded LiveJournal from liability for copyright

infringement. Mavrix timely appealed.

5 Because LiveJournal removed the posts, Mavrix’s request for

injunctive relief is likely moot.
10 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

II.

We review de novo a district court’s grant of summary

judgment. Curley v. City of N. Las Vegas, 772 F.3d 629, 631

(9th Cir. 2014) (citing Smith v. Clark Cnty. Sch. Dist.,

727 F.3d 950, 954 (9th Cir.2013)). We must determine,

“viewing the evidence in the light most favorable to the

nonmoving party, whether there are any genuine issues of

material fact and whether the district court correctly applied

the substantive law.” Id.

The district court’s denial of a motion to reconsider a

magistrate judge’s pretrial discovery order under Federal

Rule of Civil Procedure 72(a) will be reversed only if “clearly

erroneous or contrary to law.” Rivera v. NIBCO, Inc.,

364 F.3d 1057, 1063 (9th Cir. 2004) (citing Osband v.

Woodford, 290 F.3d 1036, 1041 (9th Cir.2002)).

III.

A.

The DMCA strikes a balance between the interests of

“copyright holders in benefitting from their labor; . . .

entrepreneurs in having the latitude to invent new

technologies without fear of being held liable if their

innovations are used by others in unintended infringing ways;

and those of the public in having access [to] both . . . .” 

Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020, 1037

(9th Cir. 2013). The DMCA balances these interests by

requiring service providers to take down infringing materials

when copyright holders notify them of the infringement and

by limiting service providers’ liability for unintentional
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 11

infringement through several safe harbors. Ellison v.

Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004).

The DMCA established four safe harbors to “provide

protection from liability for: (1) transitory digital network

communications; (2) system caching; (3) information residing

on systems or networks at the direction of users; and

(4) information location tools.” Id. at 1076–77 (citing

17 U.S.C. § 512(a)–(d)). LiveJournal claimed protection

from damages under the § 512(c) safe harbor for

“infringement of copyright by reason of the storage [of

material] at the direction of a user.” 17 U.S.C. § 512(c)(1). 

To be eligible at the threshold for the § 512(c) safe harbor, a

service provider must show that the infringing material was

posted “at the direction of the user.” 17 U.S.C. § 512(c)(1).6

6

 Section 512(c)(1) provides in relevant part:

A service provider shall not be liable . . . for

infringement of copyright by reason of the storage at

the direction of a user of material that resides on a

system or network controlled or operated by or for the

service provider, if the service provider–

(A)(i) does not have actual knowledge that the

material or an activity using the material on the

system or network is infringing;

(ii) in the absence of such actual knowledge,

is not aware of facts or circumstances from

which infringing activity is apparent; or

(iii) upon obtaining such knowledge or

awareness, acts expeditiously to remove, or

disable access to, the material;
12 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

If it meets that threshold requirement, the service provider

must then show that (1) it lacked actual or red flag knowledge

of the infringing material; and (2) it did not receive a

“financial benefit directly attributable to the infringing

activity, in a case in which the service provider has the right

and ability to control such activity.” Id.7 Because the

§ 512(c) safe harbor is an affirmative defense, LiveJournal

must establish “beyond controversy every essential element,”

and failure to do so will render LiveJournal ineligible for the

§ 512(c) safe harbor’s protection. See S. Cal. Gas Co. v. City

of Santa Ana, 336 F.3d 885, 888 (9th Cir. 2003); see also

UMG Recordings, Inc. v. Shelter Capital Partners LLC,

718 F.3d 1006, 1013 (9th Cir. 2013).

B.

1.

LiveJournal must make a threshold showing thatMavrix’s

photographs were posted on ONTD at the direction of the

user. The district court held that although moderators

(B) does not receive a financial benefit directly

attributable to the infringing activity, in a case in

which the service provider has the right and ability

to control such activity; and

(C) upon notification of claimed infringement . . . ,

responds expeditiously to remove, or disable

access to, the material that is claimed to be

infringing . . . .

17 U.S.C. § 512(c)(1).

7 LiveJournal must also show that it complied with § 512(c)’s notice

and takedown procedure, but that issue is not contested in this case.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 13

screened and publicly posted all of the ONTD posts, the posts

were at the direction of the user. The district court focused

on the users’ submission of infringing photographs to

LiveJournal rather than LiveJournal’s screening and public

posting of the photographs. A different safe harbor, § 512(a),

protects service providers from liability for the passive role

they play when users submit infringing material to them. 

17 U.S.C. § 512(a); see, e.g., Perfect 10, Inc. v. CCBill LLC,

488 F.3d 1102, 1116 (9th Cir. 2007) (describing infringing

material passively and temporarily placed on a computer

server as within the § 512(a) safe harbor). The § 512(c) safe

harbor, however, focuses on the service provider’s role in

publicly posting infringing material on its site. See Shelter

Capital, 718 F.3d at 1018; S. Rep. No. 105-190, at 43–44

(1998). Contrary to the district court’s view, posting rather

than submission is the critical inquiry. See Perfect 10, Inc. v.

Giganews, Inc., 847 F.3d 657, 668–69 (9th Cir. 2017)

(distinguishing between the service provider’s passive role

when users “upload[] infringing content onto [] servers” and

“any sort of active role” on the basis of who “caused the

images to be displayed”). In the context of this case, that

inquiry turns on the role of the moderators in screening and

posting users’ submissions and whether their acts may be

attributed to LiveJournal.

2.

Mavrix, relying on the common law of agency, argues

that the moderators are LiveJournal’s agents, making

LiveJournal liable for the moderators’ acts. The district court

erred in rejecting this argument.

“[S]tatutes are presumed not to disturb the common law,

‘unless the language of a statute [is] clear and explicit for this
14 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

purpose.’” State Eng’r of Nev. v. S. Fork Band of Te-Moak

Tribe of W. Shoshone Indians of Nev., 339 F.3d 804, 814 (9th

Cir. 2003) (quoting Norfolk Redevelopment & Hous. Auth. v.

Chesapeake & Potomac Tel. Co. of Va., 464 U.S. 30, 35

(1983)). Pursuant to this principle, the Supreme Court and

this court have applied common law in cases involving

federal copyright law, including the DMCA. The Supreme

Court has applied the common law of agency in interpreting

the Copyright Act. Cmty. for Creative Non-Violence v. Reid,

490 U.S. 730, 751–52 (1989). We have applied the common

law of vicarious liability in analyzing the DMCA, reasoning

that Congress intended that the DMCA’s “limitations of

liability” be interpreted “under existing principles of law.” 

Ellison, 357 F.3d at 1076–77 (quoting S. Rep. 105-190, at 19

(1998)). We have also applied the common law of agency to

determine a service provider’s intent to infringe under the

DMCA. Fung, 710 F.3d at 1038.

Along with other courts, we have applied agency law to

questions much like the question of LiveJournal’s liability for

the moderators’ acts. We applied agency law to determine

whether a service provider was responsible under the DMCA

for copyright infringement by its employees. Fung, 710 F.3d

at 1038. The Tenth Circuit applied agency law to determine

whether a service provider was responsible under the DMCA

for copyright infringement by its contractors. See BWP

Media USA, Inc. v. Clarity Dig. Grp., LLC, 820 F.3d 1175,

1180 (10th Cir. 2016).8 Finally, a district court applied

8 The Tenth Circuit held that the service provider’s contractors were

“users” rather than agents under the DMCA. BWP, 820 F.3d at 1180. The

court also held that even if the contractors were agents, they were not

employees. Id. at 1181. Finally, the court held that even if the contractors

were employees, they could still be users. Id. To the extent that BWP’s
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 15

agency law to determine whether a service provider was

responsible under the DMCA for the acts of moderators. 

Columbia Pictures Indus., Inc. v. Fung, No. CV 06-5578

SVW(JCx), 2009 WL 6355911, at *13 n.21 (C.D. Cal. Dec.

21, 2009), aff’d in part, 710 F.3d 1020 (9th Cir. 2013).9 We

therefore have little difficulty holding that common law

agency principles apply to the analysis of whether a service

provider like LiveJournal is liable for the acts of the ONTD

moderators.

3.

In light of the summary judgment record, we conclude

that there are genuine issues of material fact as to whether the

moderators are LiveJournal’s agents. The factual dispute is

evident when we apply common law agency principles to the

evidentiary record.

holding contradicts our case law that common law principles of agency

apply to the DMCA such that a service provider is liable for the acts of its

agents, including its employees, we reject it. See, e.g., Fung, 710 F.3d at

1038 (“When dealing with corporate or entity defendants, . . . the relevant

intent must be that of the entity itself, as defined by traditional agency law

principles . . . .”).

9 Although the district court’s order does not specify whether the

moderators were paid, the parties’ filings before the district court make

clear that the moderators were unpaid. See Defendant’s Memorandum of

Points and Authorities in Opposition to Plaintiff’s Motion for Summary

Judgment on Liability at 2, Columbia Pictures Indus., Inc. v. Fung, No.

CV 06-5578 SVW(JCx) (C.D. Cal. Dec. 21, 2009), 2009 WL 6355911;

Plaintiff’s Reply Statement of Uncontroverted Facts in Support of

Plaintiff’s Motion for Summary Judgment on Liability at 6, Columbia

Pictures Indus., Inc. v. Fung, No. CV 06-5578 SVW(JCx) (C.D. Cal. Dec.

21, 2009), 2009 WL 6355911.
16 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

“Agency is the fiduciary relationship that arises when one

person (a ‘principal’) manifests assent to another person (an

‘agent’) that the agent shall act on the principal’s behalf and

subject to the principal’s control, and the agent manifests

assent or otherwise consents so to act.” Restatement (Third)

Of Agency § 1.01 (Am. Law Inst. 2006). For an agency

relationship to exist, an agent must have authority to act on

behalf of the principal and “[t]he person represented [must

have] a right to control the actions of the agent.” Restatement

(Third) Of Agency § 1.01, cmt. c (Am. Law Inst. 2006).

An agency relationship may be created through actual or

apparent authority. Gomez v. Campbell-Ewald Co., 768 F.3d

871, 878 (9th Cir. 2014) (citing Restatement (Third) of

Agency §§ 2.01, 2.03, 4.01 (Am. Law Inst. 2006)), cert.

granted, 135 S. Ct. 2311, (2015), and aff’d, 136 S. Ct. 663

(2016). Actual authority arises through “the principal’s

assent that the agent take action on the principal’s behalf.”

Restatement (Third) of Agency § 3.01 (Am. Law Inst. 2006). 

LiveJournal argues that it did not assent to the moderators

acting on its behalf. Mavrix, however, presented evidence

that LiveJournal gave its moderators explicit and varying

levels of authority to screen posts. Although LiveJournal

calls the moderators “volunteers,” the moderators performed

a vital function in LiveJournal’s business model.10 There is

evidence in the record that LiveJournal gave moderators

express directions about their screening functions, including

criteria for accepting or rejecting posts. Unlike other sites

10 Agents need not receive payment from their principal to be agents. 

Restatement (Third) of Agency § 1.01 cmt. d (Am. Law Inst. 2006)

(“Many agents act or promise to act gratuitously.”); Model Civ. Jury Instr.

9th Cir. 4.4 (2007) (“One may be an agent without receiving

compensation for services.”).
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 17

where users may independently post content, LiveJournal

relies on moderators as an integral part of its screening and

posting business model. LiveJournal also provides three

different levels of authority: moderators review posts to

ensure they contain celebrity gossip and not pornography or

harassment, maintainers delete posts and can remove

moderators, and owners can remove maintainers. Genuine

issues of material fact therefore exist regarding whether the

moderators had actual authority.

Apparent authority arises by “a person’s manifestation

that another has authority to act with legal consequences for

the person who makes the manifestation, when a third party

reasonably believes the actor to be authorized and the belief

is traceable to the manifestation.” Restatement (Third) of

Agency § 3.03 (Am. Law Inst. 2006); see also Hawaiian

Paradise Park Corp. v. Friendly Broad. Co., 414 F.2d 750,

756 (9th Cir. 1969). “The principal’s manifestations giving

rise to apparent authority may consist of direct statements to

the third person, directions to the agent to tell something to

the third person, or the granting of permission to the agent to

perform acts . . . under circumstances which create in him a

reputation of authority. . . .” Hawaiian Paradise Park,

414 F.2d at 756.

LiveJournal selected moderators and provided them with

specific directions. Mavrix presented evidence that

LiveJournal users may have reasonably believed that the

moderators had authority to act for LiveJournal. One user

whose post was removed pursuant to a DMCA notice

complained to LiveJournal “I’m sure my entry does not

violate any sort of copyright law. . . . I followed [ONTD’s]

formatting standards and the moderators checked and

approved my post.” The user relied on the moderators’
18 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

approval as a manifestation that the post complied with

copyright law, and the user appeared to believe the

moderators acted on behalf of LiveJournal. Such reliance is

likely traceable to LiveJournal’s policy of providing explicit

roles and authority to the moderators. Accordingly, genuine

issues of material fact exist regarding whether there was an

apparent authority relationship.

Whether an agencyrelationship exists also depends on the

level of control a principal exerts over the agent. See

Hollingsworth v. Perry, 133 S. Ct. 2652, 2657–58 (2013)

(referring to control as one of “the basic features of an agency

relationship”); United States v. Bonds, 608 F.3d 495, 505 (9th

Cir. 2010) (explaining that the “the extent of control

exercised by the employer” is the “essential ingredient” in

determining an agency relationship) (quoting NLRB v.

Friendly Cab Co., 512 F.3d 1090, 1096 (9th Cir. 2008). 

Evidence presented by Mavrix shows that LiveJournal

maintains significant control over ONTD and its moderators. 

Delzer gives the moderators substantive supervision and

selects and removes moderators on the basis of their

performance, thus demonstrating control. Delzer also

exercises control over the moderators’ work schedule. For

example, he added a moderator from Europe so that there

would be a moderator who could work while other

moderators slept. Further demonstrating LiveJournal’s

control over the moderators, the moderators’ screening

criteria derive from rules ratified by LiveJournal.11

11 LiveJournal ratified the ONTD rules when Ferrell discussed

changing the rules with Delzer and declined to do so. See United States

v. Alaska S.S. Co., 491 F.2d 1147, 1155 (9th Cir.1974) (“Ratification is

the affirmance by a person of a prior act which did not bind him but which

was done or professedly done on his account. . . .”) (quoting Restatement
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 19

On the other hand, ONTD moderators “are free to leave

and go and volunteer their time in any way they see fit.” In

addition, the moderators can reject submissions for reasons

other than those provided by the rules, which calls into

question the level of control that LiveJournal exerts over their

conduct. This evidence raises genuine issues of material fact

regarding the level of control LiveJournal exercised over the

moderators. From the evidence currently in the record,

reasonable jurors could conclude that an agency relationship

existed.

4.

We turn briefly to a related issue that the fact finder must

resolve in the event there is a finding that the moderators are

agents of LiveJournal. In that event, the fact finder must

assess whether Mavrix’s photographs were indeed posted at

the direction of the users in light of the moderators’ role in

screening and posting the photographs. Posts are at the

direction of the user if the service provider played no role in

posting them on its site or if the service provider carried out

activities that were “narrowly directed” towards enhancing

the accessibility of the posts. See UMG Recordings, Inc. v.

Veoh Networks, Inc., 620 F. Supp. 2d 1081, 1092 (C.D. Cal.

2008); see also Shelter Capital, 718 F.3d at 1018. 

Accessibility-enhancing activities include automatic

processes, for example, to reformat posts or perform some

technological change. Shelter Capital, 718 F.3d at 1020

(referring to accessibility-enhancing activities as those where

the service provider did “not actively participate in or

supervise file uploading”). Some manual service provider

(Second) of Agency § 82 (Am. Law Inst. 1958)); see also Gomez,

768 F.3d at 878.
20 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

activities that screen for infringement or other harmful

material like pornography can also be accessibilityenhancing. Id. at 1012 n.2. Indeed, § 512(m) of the DMCA

provides that no liability will arise from “a service provider

monitoring its service or affirmatively seeking facts

indicating infringing activity.” Id. at 1022 (quoting 17 U.S.C.

§ 512(m)).12

The ONTD moderators manually review submissions and

publicly post only about one-third of submissions. The

moderators review the substance of posts; only those posts

relevant to new and exciting celebrity gossip are approved. 

The question for the fact finder is whether the moderators’

acts were merelyaccessibility-enhancing activities orwhether

instead their extensive, manual, and substantive activities

12 The district court did not assess whether the moderators’ review of

posts exceeded accessibility-enhancing activities because it focused on

submission rather than posting and did not determine whether the

moderators were agents. In Shelter Capital, we suggested that

accessibility-enhancing activities have a limit when we approved software

“processes that automatically occur when a user uploads” materials as

within accessibility-enhancing activities. 718 F.3d at 1016, 1020. Other

circuits have more squarely faced the outer edges of this limit. The

Second Circuit found it a close call and remanded when YouTube

manually selected videos for front page syndication on the basis of

substance. Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 40 (2d Cir.

2012). The district court on remand held that only those processes

“without manual intervention” satisfied the § 512(c) safe harbor. Viacom

Int’l Inc. v. YouTube, Inc., 940 F. Supp. 2d 110, 123 (S.D.N.Y. 2013). 

The Fourth Circuit extended accessibility-enhancing activities to include

a real estate website’s “cursory” manual screening to determine whether

photographs indeed depicted real estate. CoStar Grp., Inc. v. LoopNet,

Inc., 373 F.3d 544, 556 (4th Cir. 2004). The fact finder should determine

whether LiveJournal’s manual, substantive review process went beyond

the automatic processes we have approved as accessibility-enhancing

activities such that the posts were still at the direction of the user.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 21

went beyond the automatic and limited manual activities we

have approved as accessibility-enhancing.

* * *

Because the district court focused on the users’

submission of Mavrix’s photographs rather than on ONTD’s

posting of those photographs and rejected Mavrix’s argument

that unpaid moderators could be agents of LiveJournal, the

district court erred in granting summary judgment to

LiveJournal. Genuine issues of material fact exist as to

whether the moderators were LiveJournal’s agents. 

Accordingly, remand is warranted. In assessing

LiveJournal’s threshold eligibility for the § 512(c) safe

harbor, the fact finder must resolve the factual dispute

regarding the moderators’ status as LiveJournal’s agents and

in light of that determination, whether LiveJournal showed

that Mavrix’s photographs were posted at the direction of the

users.

C.

Once the district court concluded that the moderators

were not LiveJournal’s agents (except for its employee

Delzer), it proceeded to address the two remaining disputed

requirements for establishing the § 512(c) safe harbor

defense–lack of knowledge of infringements and lack of any

financial benefit from infringement that it had the right and

ability to control. Because these issues may be contested on

remand, we proceed to address them to provide guidance to

the district court.
22 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

1.

If LiveJournal shows that it meets the threshold

requirement for the § 512(c) safe harbor because the

photographs were posted at the direction of the user,

LiveJournal must then show that it lacked both actual and red

flag knowledge of the infringements. See 17 U.S.C.

§ 512(c)(1)(A). Actual knowledge refers to whether the

service provider had subjective knowledge while red flag

knowledge turns on whether a reasonable person would

objectively know of the infringements. Shelter Capital,

718 F.3d at 1025 (quoting YouTube, Inc., 676 F.3d at 31). 

Both actual and red flag knowledge refer to knowledge of the

specific infringement alleged. Id. at 1023, 1025.

On remand, the fact finder must first determine whether

LiveJournal had actual knowledge of the infringements. A

copyright holder’s failure to notify the service provider of

infringement through the notice and takedown procedure, as

Mavrix failed to do here, “strip[s] it of the most powerful

evidence of [actual] knowledge.” Id. at 1020 (quoting Corbis

Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1107

(W.D. Wash. 2004)). Such evidence is powerful, but not

conclusive, towards showing that a service provider lacked

actual knowledge. Id. at 1021. The district court held that

LiveJournal lacked actual knowledge of the infringing nature

of Mavrix’s photographs solely on the basis of Mavrix’s

failure to notify LiveJournal of the infringements. This was

an incomplete assessment of the issue. To fully assess actual

knowledge, the fact finder should also assess a service

provider’s subjective knowledge of the infringing nature of

the posts. See, e.g., id. at 1025 (continuing to assess

knowledge). Although Delzer does not remember approving

the posts and for this reason can be said to lack actual
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 23

knowledge, Mavrix has not had the opportunity to depose the

moderators to determine their subjective knowledge. On

remand, the fact finder should determine whether

LiveJournal, through its agents, had actual knowledge of the

infringing nature of the posts.

In the event the fact finder determines that LiveJournal

lacked actual knowledge of the infringements, it must then

assess whether LiveJournal lacked red flag knowledge. Red

flag knowledge arises when a service provider is “aware of

facts that would have made the specific infringement

‘objectively’ obvious to a reasonable person.” Fung,

710 F.3d at 1043 (quoting YouTube, 676 F.3d at 31); see also

UMG Recordings, Inc. v. Veoh Networks Inc., 665 F. Supp.

2d 1099, 1111 (C.D. Cal. 2009) (describing red flag

knowledge as a “high bar”). The infringement must be

immediately apparent to a non-expert. See Veoh Networks

Inc., 665 F. Supp. 2d at 1108; H.R. Rep. 105-551, pt. 2 at 58

(1998) (explaining that infringements must be “apparent

from even a brief and casual viewing”). Some of the

photographs at issue in this case contained either a generic

watermark13or a watermark containing Mavrix’s website,

“Mavrixonline.com.”14 To determine whether LiveJournal

13 Congress explained that red flag knowledge includes “customary

indicia . . . such as a standard and accepted digital watermark.” H.R. Rep.

105-55, pt. 1, at 25 (1998). But see Veoh Networks Inc., 665 F. Supp. 2d

at 1115 (declining to rely on this report because it addressed a “version of

the DMCA that is significantly different in its text and structure than the

version that Congress ultimately adopted”).

14 The district court stated that Delzer was unaware that Mavrix had

a website so photographs containing a “Mavrixonline.com” watermark did

not differ from the other photographs with a more generic watermark. To

the extent that the district court relied on Delzer’s purported lack of
24 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

had red flag knowledge, the fact finder should assess if it

would be objectively obvious to a reasonable person that

material bearing a generic watermark or a watermark

referring to a service provider’s website was infringing.

2.

Finally, if the fact finder determines that LiveJournal met

the § 512(c) safe harbor threshold requirement (i.e., that the

photographs were posted at the direction of the user, see

17 U.S.C. § 512(c)(1)), and that LiveJournal lacked

knowledge of the infringements (see 17 U.S.C.

§ 512(c)(1)(A)), then the fact finder should determine

whether LiveJournal showed that it did not financiallybenefit

from infringements that it had the right and ability to control. 

See 17 U.S.C. § 512(c)(1)(B).

We agree with the district court in Io Group, Inc. v. Veoh

Networks, Inc. that the fact finder should consider the service

provider’s procedures that existed at the time of the

infringements when assessing the service provider’s right and

ability to control the infringements. 586 F. Supp. 2d 1132,

1153 (N.D. Cal. 2008). The fact finder should consider the

service provider’s general practices, not its conduct with

knowledge that Mavrix had a website to suggest that Delzer lacked

knowledge of the infringements, this was error. The existence of a

watermark, and particularly this watermark with a company name, is

relevant to the knowledge inquiry.
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 25

respect to the specific infringements.15See Shelter Capital,

718 F.3d at 1023, 1030.

“Right and ability to control” involves “something more

than the ability to remove or block access to materials posted

on a service provider’s website.” Id. (quoting YouTube, Inc.,

676 F.3d at 38). The service provider does “something more”

when it exerts “high levels of control over activities of users.” 

Id. The service provider exerts “high levels of control,” for

example, when it, “prescreens sites, gives them extensive

advice, prohibits the proliferation of identical sites,” provides

“detailed instructions regard[ing] issues of layout,

appearance, and content,” and ensures “that celebrity images

do not oversaturate the content.” Perfect 10, Inc. v. Cybernet

Ventures, Inc., 213 F. Supp. 2d 1146, 1173, 1182 (C.D. Cal.

2002); see also Shelter Capital, 718 F.3d at 1030, cited with

approval in Perfect 10, 213 F. Supp. 2d 1146.16

The district court concluded that LiveJournal did not have

high levels of control such that it had “something more” than

the right and ability to remove or block access to material

posted on ONTD. LiveJournal’s rules instruct users on the

substance and infringement of their posts. The moderators

15 This inquiry is different fromboth the threshold determination (i.e.,

whether the infringing material was posted at the direction of the user, see

17 U.S.C. § 512(c)(1)), and the knowledge showing (i.e., whether the

service provider had knowledge of the infringing material, see 17 U.S.C.

§ 512(c)(1)(A)), where the fact finder should focus on the specific

infringements, rather than on the service provider’s general practices and

procedures.

16

“Right and ability to control” may also be shown by intentional

inducement of infringement, but we agree with the district court that

inducement is not at issue here. Shelter Capital, 718 F.3d at 1030.
26 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

screen for content and other guidelines such as infringement. 

Nearly two-thirds of submitted posts are rejected, including

on substantive grounds. ONTD maintains a list of sources

that have complained about infringement from which users

should not submit posts. LiveJournal went so far as to use a

tool to automatically block any posts from one source. In

determining whether LiveJournal had the right and ability to

control infringements, the fact finder must assess whether

LiveJournal’s extensive reviewprocess, infringement list, and

blocker tool constituted high levels of control to show

“something more.”

LiveJournal must also show that it did not derive a

financial benefit from infringement that it had the right and

ability to control. See 17 U.S.C. § 512(c)(1)(B). “In

determining whether the financial benefit criterion is

satisfied, courts should take a common-sense, fact-based

approach, not a formalistic one.” S. Rep. No. 105-190, at 44

(1998). The financial benefit need not be substantial or a

large proportion of the service provider’s revenue. Ellison,

357 F.3d at 1079. In Fung, we held that a financial benefit

was shown when “there was a vast amount of infringing

material on [the service provider’s] websites . . . supporting

an inference that [the service provider’s] revenue stream is

predicated on the broad availability of infringingmaterials for

[its] users, thereby attracting advertisers.” 710 F.3d at 1045. 

On the other hand, the service provider in that case

“promoted advertising by pointing to infringing activity” and

“attracted primarily visitors who were seeking to engage in

infringing activity, as that is mostly what occurred on [the

service provider’s] sites.” Id.

LiveJournal derives revenue from advertising based on

the number of views ONTD receives. Mavrix presented
MAVRIX PHOTOGRAPHS V. LIVEJOURNAL 27

evidence showing that approximately 84% of posts on ONTD

contain infringing material, although LiveJournal contested

the validity of this evidence. The fact finder should

determine whether LiveJournal financially benefitted from

infringement that it had the right and ability to control.

D.

Mavrix also challenges the denial of its motions to

compel responses to interrogatories seeking the identities of

the moderators. The magistrate judge denied both of

Mavrix’s motions, and on review, the district court upheld the

denial, reasoning that the moderators had a First Amendment

interest in internet anonymity. When a district court denies

reconsideration of a pretrial discovery order under Federal

Rules of Civil Procedure 72(a), our review is deferential. 

Upon review of such a ruling we will disturb it only if the

complaining party shows clear legal error and actual and

substantial prejudice. See Arizona v. City of Tucson, 761 F.3d

1005, 1009 n.2 (9th Cir. 2014); In re Anonymous Online

Speakers, 661 F.3d 1168, 1177 (9th Cir. 2011) (describing the

standard as “highly deferential”). In determining whether

First Amendment protections for anonymous speech

outweigh the need for discovery, we have applied a multifactor balancing test. See, e.g., In re Anonymous Online

Speakers, 661 F.3d at 1174–76 (describing balancing factors).

Notwithstanding the deferential standard of review and

complex issues of law that govern this discovery ruling, we

vacate the district court’s order denying the motion and

remand for further consideration. Whether the moderators

are agents should inform the district court’s analysis of

whether Mavrix’s need for discovery outweighs the

moderators’ interest in anonymous internet speech. Given the
28 MAVRIX PHOTOGRAPHS V. LIVEJOURNAL

importance of the agency analysis to the ultimate outcome of

the case, and the importance of discovering the moderators’

roles to that agency analysis, the district court should also

consider alternative means by which Mavrix could formally

notify or serve the moderators with process requesting that

they appear for their deposition at a date and time certain.

IV.

For the foregoing reasons, we reverse the district court’s

grant of summary judgment to LiveJournal, vacate its order

denying discovery, and remand for further proceedings

consistent with this opinion.

REVERSED, VACATED and REMANDED.