Fair Use Shields Satirical Broadcasts of Commissioned Cameo Videos; No Bad-Faith Bar, and Platform Terms Not Enforceable by Creators Absent Express Third-Party-Beneficiary Status

Case: Santos v. Kimmel, No. 24-2196-cv (2d Cir.)

Court: United States Court of Appeals for the Second Circuit

Panel: Judges Cabranes, Lohier, and Sullivan (opinion by Judge Lohier)

Argued: March 24, 2025 | Decided: September 15, 2025 | Amended: October 6, 2025

Introduction

In Santos v. Kimmel, the Second Circuit affirmed dismissal of former Congressman George Santos’s copyright and state-law claims against Jimmy Kimmel, American Broadcasting Companies, Inc. (ABC), and The Walt Disney Company. The suit arose after Kimmel, using pseudonyms, requested and received personalized Cameo videos from Santos and then aired several as part of Jimmy Kimmel Live!’s recurring segment “Will Santos Say It?,” which mocked the willingness of Santos to say outlandish things for a fee.

The central legal issues were whether the broadcast use constituted fair use at the pleading stage and whether various state-law claims—breach of contract (based on Cameo’s Terms of Service), breach of implied contract, and fraudulent inducement—could proceed. The district court dismissed under Rule 12(b)(6), finding fair use as a matter of law and concluding that the state-law claims were either preempted by the Copyright Act or inadequately pleaded. On de novo review, the Second Circuit agreed that fair use defeated the copyright claims and held that each state-law claim failed to state a claim, while declining to resolve preemption.

Summary of the Opinion

The Second Circuit held that the late-night program’s use of the Cameo videos was protected fair use. Applying the four statutory factors in 17 U.S.C. § 107, the court emphasized:

Transformative purpose (Factor 1): The show used the videos to comment on and mock Santos’s willingness “to say absurd things for money,” a different purpose from the videos’ original communicative content (which Santos’s complaint characterized as conveying “hope, strength, perseverance, encouragement, and positivity”). Importantly, the court reaffirmed that the “reasonable observer” standard—not either party’s subjective intent—governs the transformative inquiry.
Bad faith does not defeat fair use: Although Kimmel used fictitious names to procure the videos, the court rejected the idea that this “bad faith” vitiates fair use, noting the Supreme Court’s skepticism that bad faith has any role in the analysis and, in any event, finding no allegation that defendants sought to “supplant” a market for the videos.
Nature of the work (Factor 2): The videos were published on the day they were created, which weighed against any claim that the use invaded a protected first-publication interest.
Market effect (Factor 4): The relevant question is market substitution, not reputational harm from criticism. The broadcast did not offer a substitute for Santos’s personalized videos and therefore did not usurp his market.

The court concluded fair use was apparent on the face of the complaint and the videos themselves, making dismissal at the pleadings appropriate. On the state-law claims:

Breach of contract: Under Illinois law (governing Cameo’s Terms of Service), Santos, who was not a signatory to the user-facing agreement, could not enforce it as a third-party beneficiary absent an express declaration—none existed for the provisions he invoked.
Breach of implied contract: Under New York law, Santos failed to plead essential terms or a meeting of the minds that Kimmel would adhere to Cameo’s Terms; the implied-in-fact theory therefore failed.
Fraudulent inducement: Also under New York law, Santos did not allege any out-of-pocket loss, a necessary element of damages for fraud.

The court affirmed dismissal in full, without reaching preemption of the contract claims.

Analysis

Precedents Cited and How They Shaped the Decision

Hachette Book Group, Inc. v. Internet Archive, 115 F.4th 163 (2d Cir. 2024): The court drew on Hachette’s articulation of fair use’s purpose and especially the fourth factor’s focus on market substitution. It cited Hachette for the proposition that criticism’s negative economic effects are not cognizable “market harm” unless the secondary work serves as a market substitute. This framed why the broadcast segments did not infringe Santos’s market for paid, personalized greetings.
Andy Warhol Foundation v. Goldsmith: The panel relied on both the Second Circuit’s earlier decision (11 F.4th 26) and the Supreme Court’s 2023 decision (598 U.S. 508). From Warhol, the opinion emphasized that the transformative inquiry turns on what a reasonable observer would perceive, not on either party’s subjective intent. This allowed the court to reject Santos’s argument that Kimmel’s instigation determined the videos’ “original purpose.”
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994): Campbell supplied two key points: (1) fair use is flexible and can encompass parody/criticism even where the entire work is used, and (2) the “potential market” does not include a market for licensing criticism or lampoons of the original work, reinforcing that harm from mockery is not cognizable “market harm.”
Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985): Although Harper & Row ventures that fair use presupposes good faith, the court noted subsequent Supreme Court decisions have questioned whether bad faith plays any role. This undermined Santos’s attempt to use alleged deception to defeat fair use.
Google LLC v. Oracle America, Inc., 593 U.S. 1 (2021): The Second Circuit quoted the Supreme Court’s observation that skepticism about a “bad faith” factor in fair use is “justifiable,” because “copyright is not a privilege reserved for the well-behaved.” This signaled that deception in obtaining the work does not, by itself, foreclose fair use.
Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015): The opinion invoked Authors Guild to underscore that commentary and public-interest uses can be transformative and that the defendants’ purpose here was critical commentary, not commercial substitution.
Swatch Group Mgmt. Servs. Ltd. v. Bloomberg L.P., 756 F.3d 73 (2d Cir. 2014): Used to clarify that fair use analysis considers whether the defendant seeks to supplant the plaintiff’s “commercially valuable right” by offering a competing substitute, which was not alleged here.
Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013): Cited to confirm that a court may resolve fair use by examining the original and secondary works themselves, facilitating resolution at the pleading stage when the record consists of the complaint and the works.
TCA Television Corp. v. McCollum, 839 F.3d 168 (2d Cir. 2016): Reinforced that fair use can be “so clearly established by a complaint” as to justify Rule 12(b)(6) dismissal, which the panel found applicable.
DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104 (2d Cir. 2010): Set out the de novo standard and the materials a court may consider on a motion to dismiss, including exhibits and incorporated documents.
Island Software & Computer Services, Inc. v. Microsoft Corp., 413 F.3d 257 (2d Cir. 2005): Allowed judicial notice of copyright registrations, which the court used to note the videos’ publication status under 17 U.S.C. § 101.
Melendez v. Sirius XM Radio, Inc., 50 F.4th 294 (2d Cir. 2022): Referenced for the preemption rubric (qualitative difference), though the court ultimately bypassed that question and dismissed the contract claims on their own terms.
State-law authorities:
- Barry v. St. Mary’s Hosp. Decatur, 68 N.E.3d 964 (Ill. App. Ct. 2016): Illinois’s strong presumption against third-party beneficiaries absent an express declaration guided rejection of Santos’s attempt to enforce Cameo’s user Terms.
- Rocky Point Props., Inc. v. Sear-Brown Grp., Inc., 744 N.Y.S.2d 269 (4th Dep’t 2002): Instructed on assessing implied-in-fact contracts under New York law.
- Caniglia v. Chicago Tribune–N.Y. News Syndicate, Inc., 612 N.Y.S.2d 146 (1st Dep’t 1994): Required pleading of essential terms for contract claims, which Santos failed to do for his implied contract theory.
- DG & A Mgmt. Servs., LLC v. Secs. Indus. Ass’n Compliance & Legal Div., 859 N.Y.S.2d 305 (3d Dep’t 2008); Tjoa v. Julia Butterfield Mem’l Hosp., 612 N.Y.S.2d 676 (2d Dep’t 1994): Emphasized the need for a “meeting of the minds” to form an implied-in-fact contract.
- Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413 (1996); Connaughton v. Chipotle Mexican Grill, Inc., 29 N.Y.3d 137 (2017): Anchored the “out-of-pocket” loss rule for fraud damages, dooming Santos’s fraudulent inducement claim.

Legal Reasoning

1) Purpose and character of the use (Transformative use):

The court credited the District Court’s finding that the broadcast purpose was “to comment on the willingness of Santos … to say absurd things for money.” That purpose materially differs from the videos’ original communicative content, which Santos himself characterized as expressing “hope, strength, perseverance, encouragement, and positivity.” Applying Warhol’s “reasonable observer” approach, the court refused to consider either Santos’s asserted intent or Kimmel’s subjective aim in procuring the videos. The objective meaning and use context—mockery and commentary—drove the transformation analysis and “strongly” supported fair use.

The panel also addressed “bad faith,” rejecting Santos’s argument that Kimmel’s alleged deceptions in obtaining the videos defeated fair use. While Harper & Row once suggested fair use presupposes good faith, the Supreme Court in Campbell and Google v. Oracle later expressed skepticism that bad faith meaningfully figures into the analysis. The Second Circuit quoted that skepticism and, more concretely, found the complaint itself portrayed defendants as motivated by criticism/commentary rather than by a scheme to replace Santos’s market. That undercut any “bad faith” bar and supported fair use under factor one.

2) Nature of the copyrighted work:

The court noted from the registrations that the videos were published the same day they were created. Publication diminishes any weight against fair use that might otherwise stem from an author’s interest in first publication. Although the videos likely contained creative expression, their published status prevented this factor from driving the analysis against fair use.

3) Amount and substantiality:

The Second Circuit rejected Santos’s criticisms of the District Court’s factor-three analysis without elaborating. In fair use, the amount taken is judged in relation to the transformative purpose; uses aimed at criticism or commentary can permissibly copy enough of the work—sometimes the whole work—to make the commentary effective. The panel’s endorsement of the District Court’s analysis signals that the quantity used here was justified by the critical purpose.

4) Market effect:

Echoing Hachette and Campbell, the panel stressed that the inquiry focuses on whether the secondary use usurps the market by offering a substitute, not whether criticism harms the original’s value or reputation. The broadcast segments did not displace Santos’s market for personalized Cameo videos; nor was there any plausible market for licensing critical lampoons of such videos. Consequently, the fourth factor favored fair use.

Pleading-stage resolution:

Citing Cariou and TCA Television, the court emphasized that fair use is a flexible doctrine that can be resolved on a motion to dismiss when the complaint and the works themselves “so clearly” establish the defense. The panel considered the complaint, the attached/incorporated materials, and judicially noticeable registrations, concluding that no discovery was necessary.

State-Law Claims

Breach of contract (Cameo Terms of Service, governed by Illinois law):

Santos was not a party to the Terms to which Cameo “users (like Kimmel)” agreed. Illinois law presumes against third-party beneficiary status and requires an express declaration for a third party to enforce a contract. The relevant provisions lacked such an express conferral. The presence of explicit third-party language elsewhere in the Terms underscored that when the parties intended to benefit third parties, they said so, and did not do so here. The claim therefore failed on its own terms; the panel did not reach preemption.

Breach of implied contract (New York law):

An implied-in-fact contract requires pleading essential terms and showing a meeting of the minds based on the parties’ conduct and surrounding circumstances. Santos’s complaint did not identify essential terms or any mutual assent that Kimmel would adhere to Cameo’s Terms. Conclusory assertions were insufficient, so the claim failed.

Fraudulent inducement (New York law):

New York’s out-of-pocket rule requires actual pecuniary loss. Santos did not allege any out-of-pocket damages attributable to the alleged misrepresentations. Absent such loss, the fraud claim could not proceed.

Impact

Fair use and “provoked” content: The ruling squarely addresses a modern scenario: a secondary user induces or commissions the creation of a work (here, Cameo videos) and then repurposes it for commentary. The court’s focus on the reasonable observer and on market substitution, not on procurement tactics or subjective intent, reinforces robust protection for satire and criticism—even when the defendant instigated the original content’s creation.
Bad faith’s diminished role: By aligning with Supreme Court skepticism about “bad faith” in fair use, the decision reduces the likelihood that deception in obtaining a work will, by itself, defeat fair use. Media defendants gain clearer guidance that the transformative and market-substitution inquiries remain central.
Pleading-stage resolution: The opinion confirms that fair use can be resolved at Rule 12(b)(6) when the works and complaint make the defense apparent, aiding early dismissal of suits against commentary or satire uses and reducing litigation costs for media entities.
Platform Terms of Service and creator enforcement: The decision signals that creators generally cannot enforce user-facing platform Terms of Service unless the agreement expressly confers third-party beneficiary rights under the governing law. Platforms and creators may respond by drafting or revising agreements to make any intended third-party enforcement explicit.
Contract and fraud pleading standards: For implied contracts, essential terms and a meeting of the minds must be plausibly alleged; mere references to a platform’s Terms are insufficient to create an implied promise by a requesting user. Fraud claims must plead out-of-pocket losses; reputational injury, disappointment, or non-pecuniary harms will not suffice under New York law.
Limits left open: The court did not decide Copyright Act preemption of the contract claims. Other legal theories (e.g., rights of publicity or privacy, not at issue here) may follow different analyses depending on jurisdiction and facts.

Complex Concepts Simplified

Fair use: A defense allowing limited use of copyrighted material without permission for purposes like criticism, comment, news reporting, teaching, scholarship, or research. Courts weigh four non-exclusive factors focused on purpose/character, nature, amount used, and market effect.
Transformative use: A use that adds new expression, meaning, or message, or has a different purpose, such that it does not merely supersede the original. The test asks what a reasonable observer would perceive, not what either party subjectively intended.
Bad faith in fair use: Although older cases referenced “good faith,” modern Supreme Court precedent is skeptical that bad faith should affect the analysis. The core questions remain transformation and market substitution.
Published vs. unpublished (Factor 2): Using an unpublished work can weigh against fair use due to the author’s right of first publication. Here, the videos were already published, reducing that concern.
Market substitution (Factor 4): Harm to the original creator’s reputation or the fact that criticism might reduce demand is not the relevant “market harm.” The key inquiry is whether the secondary use serves as a competing substitute for the original or its derivatives.
Third-party beneficiary (Illinois law): A nonparty can enforce a contract only if the contract expressly shows an intent to confer a direct benefit on that person or class. A general “benefit” or incidental advantage is not enough.
Implied-in-fact contract (New York law): Formed by conduct and circumstances showing mutual assent. Plaintiffs must allege essential terms and a meeting of the minds; vague references or unilateral expectations are inadequate.
Out-of-pocket loss (New York fraud): Fraud damages must reflect actual pecuniary loss—money lost because of the misrepresentation—not merely lost opportunities or non-pecuniary harms.

Conclusion

Santos v. Kimmel is a significant application of fair use to contemporary creator-economy dynamics. The Second Circuit held that a satirical broadcast of commissioned Cameo videos was fair use, even though the broadcaster procured the works under pseudonyms. The decision sharpens key points: transformation is judged by the reasonable observer; alleged “bad faith” in obtaining a work does not defeat fair use; and market harm turns on substitution, not on damage from criticism. On the contract side, the court reinforced that creators cannot enforce platform Terms of Service absent an express third-party-beneficiary provision under the governing law; implied contract and fraud claims must meet exacting pleading standards, including essential terms and out-of-pocket damages.

Going forward, media entities and satirists have a stronger footing for using commissioned or solicited content in commentary segments, provided the use is transformative and non-substitutive. Creators and platforms seeking contractual protection should ensure that agreements explicitly confer enforcement rights where intended. As a whole, the opinion fortifies the space for criticism and satire while clarifying contractual and fraud pleading requirements in the context of user-generated content and platform-mediated transactions.