The case between Woody Allen and American Apparel Inc. (AAI) finally came to close this week, as the parties agreed to a $5 million settlement. According to Woody Allen, the settlement marks the largest amount ever paid under the New York right to privacy law.

Allen filed the complaint against AAI in March 2008 in the US District Court for the Southern District of New York after AAI posted billboards portraying his image as he appeared in the film Annie Hall. The billboards were displayed in New York City and Hollywood, California. Allen complained that the billboards implied that he sponsors and endorses AAI and his complaint sought exemplary, punitive and compensatory damages in the amount not less than $10 million, for right of privacy violations under state law and false advertisement violations under the Lanham Act.

In response, AAI sought to have the claims thrown out on First Amendment grounds. Specifically, AAI’s motion to dismiss claimed that Allen’s image was not used in a commercial manner, but was used to promote social awareness. AAI argued that the purpose of the advertisements was not for commerce, but to draw attention to the parallels between public controversies surrounding Allen and the allegations of sexual improprieties made against AAI CEO Dov Charney.

The judge did not agree with AAI’s claims and the case was set to go to trial this week. The settlement was announced on May 18, 2009, the morning of the trial.

If you have any questions about this case, or any similar issues, please contact Anthony V. Lupo or Sarah Bruno.