Like most media companies, Playboy Enterprises Inc. and People Magazine owner Meredith Corp. have for months been trying to navigate the coronavirus crisis as advertising plunges. Now, there’s also a lawsuit to deal with.
Playboy is suing Meredith and two other companies and seeking millions of dollars of damages it suffered for losses related to a separate subscriber privacy suit.
In a suit filed in New York state court last week, Playboy alleges that Meredith, Pubworx Services and Specialists Marketing Services improperly disclosed the information of Playboy magazine subscribers to third parties in violation of Michigan law. The print arm of the iconic magazine was recently shuttered after 66 years as part of cost-cutting measures implemented amid the pandemic.
As a result of this alleged disclosure, Playboy faced liability of at least $50 million in a class action lawsuit filed by magazine subscriber Mark Kokoszki on behalf of him and others in 2019, but it was settled for approximately $3.85 million in February of this year.
Now, Playboy is arguing that Meredith, Pubworx Services and Specialists Marketing Services are contractually obligated to indemnify it for all losses it incurred as a result of the breaches of defendants’ duties under their respective distribution and service contracts.
Kokoszki, through his attorneys, alleged that data about the subscribers to Playboy magazine was offered for sale between January 30, 2016 and July 30, 2016, which resulted in them receiving much junk mail.
According to Playboy, this stemmed from a 2016 agreement it made with Time Customer Service Inc., which Meredith acquired as part of its 2018 multibillion-dollar purchase of Time Inc.
TCS provided fulfillment services, such as mail processing and order and payment to Playboy during 2016, while ProCirc, of which Pubworx is the successor-in-interest to, provided circulation services at the time.
Playboy alleges that TCS and ProCirc disclosed subscriber data for Michigan subscribers to Specialists Marketing Services, which provided services, including the management and rental of Playboy’s subscriber list, to Playboy during 2016. In turn, Specialists offered the details of those subscribers for rent in violation of Michigan law.
“As a direct result of the actions of TCS, ProCirc and Specialists Marketing Services, Playboy has incurred obligations, liabilities, damages and losses for which it is entitled to recovery from Defendants,” the suit said.
“Playboy has spent more than $145,000 defending the Kokoszki lawsuit, which seeks damages at a statutory rate of $5,000 per subscriber, plus attorneys’ fees and costs. In addition, Playboy will incur approximately $3.85 million in settlement costs. Playboy’s damages are a direct result of TCS, ProCirc and Specialists Marketing Services’ conduct, which each Defendant is bound to indemnify under their respective contracts.”
A Meredith spokeswoman said: “The lawsuit, which involves work performed by TCS (Time Customer Service) when it was owned by Time Inc., is completely without merit and we plan to fight it vigorously.” After the acquisition, Meredith moved the legacy Time Inc. titles to CDS Global, which it continues to use.
Playboy declined to comment, while the two other companies involved did not immediately respond to request for comment.
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