People publisher Meredith Corp. is off the hook when it comes to a Playboy Enterprises lawsuit over subscription data.
Playboy filed a suit in June against Meredith, PubWorx Services and Specialists Marketing Services, seeking millions of dollars in damages it allegedly suffered for losses related to a separate subscriber privacy suit.
At the time, Playboy alleged that the three companies had previously improperly disclosed the information of Playboy magazine subscribers to third parties in violation of Michigan law. As a result of this alleged disclosure, Playboy faced liability of at least $50 million in a class-action lawsuit filed by subscriber Mark Kokoszki in 2019, who received a barrage of unwanted junk mail. It was settled for about $3.85 million in 2020 and Playboy believes the three companies are contractually obligated to indemnify it for all losses it incurred, plus breach of contract.
But New York State Supreme Court judge Joel Cohen did not agree in the case of Meredith, recently granting the Des Moines, Iowa-based company’s motion to dismiss the complaint.
Meredith inherited the issue through its 2018 acquisition of Time Inc. as Time Customer Service Inc. had made an agreement with Playboy two years prior to provide fulfillment services such as mail processing and distribution and the judge noted that when this contract ended in 2018, “so, too, did Meredith’s contractual obligation to indemnify Playboy.”
“Because Playboy’s underlying claim and its indemnification demand arose only after the contract with TCS terminated, Meredith is not bound by the indemnification provision,” a court filing stated.
A spokeswoman for Meredith said: “The actions alleged by Playboy occurred while TCS was part of Time Inc., prior to Meredith’s acquisition. The court concluded that any obligations Meredith may have had (which obligations Meredith specifically denied) ended with the termination of the TCS/Playboy agreement. Meredith is very pleased to be dismissed from this lawsuit.”
As for the other two companies in question, the judge ordered that Specialists Marketing Services’ motion to dismiss the complaint herein is “granted to the extent of dismissing the breach of contract claim against it, and is otherwise denied.”
The company, which provided services including the management and rental of Playboy’s subscriber list, had previously argued that it was not required to monitor compliance with Michigan law, nor was it obligated to stop the dissemination of customer information once Playboy gave its approval of the customer lists.
The judge also denied the motion to dismiss the complaint against PubWorx Services, the successor-in-interest to ProCirc, which provided circulation services at the time. PubWorx had argued that the complaint should be dismissed because it did not assume the liability that Playboy alleges when it purchased ProCirc’s assets in 2017.
Representatives for Playboy, PubWorx and Specialists Marketing Services did not respond to request for comment.
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