In this action for defamation and an injunction, defendants Gruner + Jahr USA Group, LLC, Gruner + Jahr USA, Inc., Gruner + Jahr AG & Co. a/k/a Gruner + Jahr Worldwide (together, "G+J") and Keith H. Hammond ("Hammond") move to dismiss for failure to state a claim. CPLR 3211(a)(7). For the reasons below, the motion is granted.

G+J is in the business of publishing magazines, including Fast Company, a monthly business magazine. Hammond wrote an article titled "Dirty Little Secret About Spam" ("Article") that appeared in the August 2003 issue of Fast Company, beginning at page eighty-four. The Article discussed controversies surrounding "spam," i.e., unsolicited commercial electronic mail ("email") messages sent to consumers. Among the controversies discussed is the use of email marketing by large corporations. Some email marketers claim that they provide to corporate customers lists of email addresses of people who have consented to receive solicitations, and therefore the messages sent from these lists are not spam.

A critic of spam marketing, Andy Sernovitz, is quoted in the Article as stating that Opt In Inc., a marketing company, "lies about how it gets email addresses". Sernovitz also is quoted saying, in effect, that some marketing companies obtain the consent of consumers under false or hidden pretenses. He argues that the consent to accept email advertisements obtained by internet users who "opt in" (that is, who unwittingly agree to accept the messages when visiting a Web Site) is illusory, and that the email advertisements they receive as a result is spam. [*2]

The accusation about Opt In is denied in the article by the company's founder and president, Steve Hardigree. The Article goes on to state that:

If Hardigree is a spammer, he's hardly the worst. Still, he's playing in a murky zone. If you surf the Web, you've probably seen a banner ad linked to one of Opt In's partner sites. FreeLotto is one. Its homepage invites you to "PLAY ALL 6 GAMES FOR OVER $11,000,000.00 IN PRIZES EVERYDAY!". To play, you provide your name, mailing address, and email address. Only by reading FreeLotto's privacy policy, on a separate page, will you learn that registering gives FreeLotto and its partners permission to email their marketing pitches to you.

The Article presents the opinion of the anti-spam critic, Sernovitz, that Opt In sends unsolicited email. Hardigree, the Opt In executive, states in the Article that his company does not send spam. The reader is presented with a debate regarding the propriety of certain marketing tactics, including those used by Opt In. Companies paying Opt In to use the email addresses it collects are said to include J.P. Morgan Chase, BMG Music Service (which, the Article states, is owned by the Bertelsmann media group, the same parent company that owns the publisher of Fast Company), Weightwatchers, Kraft, and other large corporations. In closing, Hammond comments on the ineffectiveness of anti-spam legislation,^[FN1] and opines that J.P. Morgan Chase and BMG Music Service indeed engage in spam.

PlasmaNet alleges that FreeLotto is not one of Opt In's partner sites, and denies that it engages in spam. Its president and chairman of the board, Kevin J. Aronin ("Aronin"), states that FreeLotto has attracted over twenty million members since 1999, and it has awarded sixty million dollars in prizes. He also states that neither he nor anyone else in his company was contacted by Hammond before the Article was published.

Following publication, Aronin sent a letter to the [*3]managing editor of Fast Company demanding a retraction. In the October 2003 edition of Fast Company, G + J published a correction stating that Opt In and FreeLotto have never been partners. PlasmaNet found the correction unsatisfactory. Aronin alleges that FreeLotto has experienced a heightened level of email blockage by certain internet service providers, and he believes that the they are blocking FreeLotto's messages to reduce spam in response to the Article. This may cause FreeLotto to lose customers and money.

PlasmaNet commenced this action in September 2003. It seeks money damages and an injunction prohibiting defendants from continuing to publish the Article; ordering defendants to transmit a retraction drafted by PlasmaNet to all Fast Company subscribers and to prominently feature the retraction in the next edition of the magazine; and ordering defendants to recall and destroy all back copies of the Article.

In support of PlasmaNet's claim that it does not send spam, it submits a print version of part of its FreeLotto site, including the FreeLotto "privacy pledge". Aronin Affidavit, Exhibit 1. To play the FreeLotto game, one must register as a member, which entails providing a name, residence address and email address. The privacy pledge states in relevant part (on a separate Web page from where a member registers) that PlasmaNet collects personally identifying information from players, and this information is used to "pay you your winnings, confirm entries, and selectively show you ads or send your promotions." It further states that:

All registrants receive e-mail confirming their registration and subsequent entries in FreeLotto and daily FreeLotto results with information of interest from FreeLotto and our content partners. Additionally, from time to time you may receive other advertising messages from FreeLotto or our sponsors.

We may automatically register you with FreeLotto 's preferred partners if you choose to play games on preferred partner sites or otherwise use these sites, or if you have opted in by checking the box on the registration page, or clicking any other opt-in link.

When a party seeks dismissal for failure to state a cause of action, that cause of action must be liberally construed in the plaintiff's favor. See, Rovello v Orofino Realty Co., Inc., 40 NY2d 633 (1976). The court is required to view every allegation as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Leon v. Martinez, 84 NY2d 83, 87-88 (1994). Affidavits may be used freely to preserve inartfully pleaded, but potentially meritorious, claims. Rovello, 40 NY2d at 635. Affidavits may be received to remedy defects in the complaint, although there may be instances where a submission by plaintiff will conclusively establish that it has no cause of action. Id., at 636.

"Defamation has long been recognized to arise from the making of a false statement which tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society." Dillon v City of New York, 261 AD2d 34, 37-38 (1st Dept 1999) (citations omitted). In evaluating whether a cause of action for defamation is successfully pleaded, the words must be construed in the context of the entire statement or publication as a whole, tested against the understanding of the average reader, and if not reasonably susceptible of a defamatory meaning, they are not actionable. Id. "[C]ourts will not strain to find defamatory interpretation where none exists". Id., quoting Cohn v National Broadcasting Co., 50 NY25 885 (1980) , cert. denied, 449 US 1022 (1980). For the purposes of this motion, the court accepts PlasmaNet's contention that being labeled as a company that engages in spam is defamatory.

The Aronin Affidavit and the exhibits attached thereto show that personal information of FreeLotto members is made available to "partner sites", "content partners" and sponsors. By playing the games provided by FreeLotto, a member registers and consents to accept advertisements from PlasmaNet and others. In essence, the complaint and PlasmaNet's submissions on this motion demonstrate that the Article accurately describes the FreeLotto site and how member information is used. "Truth provides a complete defense to defamation claims." Rinaldi v. Holt, Rinehart & Winston, 42 NY2d 369 (1977). Therefore, the only issue is whether falsely linking FreeLotto to Opt In is defamatory.

It is not. Construed in the context of the entire Article and tested against the understanding of an average reader, it cannot be said that alleging a business relationship between FreeLotto and Opt In is defamatory. Opt In's president, Hardigree, is repeatedly quoted denying that his company engages in spam. The Article states that Opt In's services are used by [*5]corporate customers with familiar names, including the parent of the corporate defendants herein. Lumping PlasmaNet with J.P. Morgan Chase, Bertelsmann, and the other corporations the Article linked to Opt In, together with the repeated denials that Opt In engages in spam, does not expose PlasmaNet to public contempt and ridicule as a spammer. Accordingly, it hereby is

ORDERED that defendants' motion to dismiss is granted, and the Clerk of the Court is directed to enter judgment accordingly, with costs and disbursements as taxed.

DATED: March , 2004

ENTER:

_______________________

J.S.C.