The opinion of the court was delivered by: Leisure, District Judge:
This is a diversity action for libel, business disparagement,
and unfair competition, based on allegedly defamatory
statements made in a publication carried on a computerized
database. Defendant CompuServe Inc. ("CompuServe") has moved
for summary judgment pursuant to Rule 56 of the Federal Rules
of Civil Procedure. For the reasons stated below, CompuServe's
motion is granted in its entirety.
CompuServe develops and provides computer-related products
and services, including CompuServe Information Service ("CIS"),
an on-line general information service or "electronic library"
that subscribers may access from a personal computer or
terminal. Subscribers to CIS pay a membership fee and online
time usage fees, in return for which they have access to the
thousands of information sources available on CIS. Subscribers
may also obtain access to over 150 special interest "forums,"
which are comprised of electronic bulletin boards, interactive
online conferences, and topical databases.
One forum available is the Journalism Forum, which focuses on
the journalism industry. Cameron Communications, Inc. ("CCI"),
which is independent of CompuServe, has contracted to "manage,
review, create, delete, edit and otherwise control the
contents" of the Journalism Forum "in accordance with editorial
and technical standards and conventions of style as established
by CompuServe." Affidavit of Jim Cameron, sworn to on April 4,
1991 ("Cameron Aff."), Exhibit A.
One publication available as part of the Journalism Forum is
Rumorville USA ("Rumorville"), a daily newsletter that provides
reports about broadcast journalism and journalists. Rumorville
is published by Don Fitzpatrick Associates of San Francisco
("DFA"), which is headed by defendant Don Fitzpatrick.
CompuServe has no employment, contractual, or other direct
relationship with either DFA or Fitzpatrick; DFA provides
Rumorville to the Journalism Forum under a contract with CCI.
The contract between CCI and DFA provides that DFA "accepts
total responsibility for the contents" of Rumorville. Cameron
Aff., Exhibit B. The contract also requires CCI to limit access
to Rumorville to those CIS subscribers who have previously made
membership arrangements directly with DFA.
CompuServe has no opportunity to review Rumorville's contents
before DFA uploads it into CompuServe's computer banks, from
which it is immediately available to approved CIS subscribers.
CompuServe receives no part of any fees that DFA charges for
access to Rumorville, nor does CompuServe compensate DFA for
providing Rumorville to the Journalism Forum; the compensation
CompuServe receives for making Rumorville available to its
subscribers is the standard online time usage and membership
fees charged to all CIS subscribers, regardless of the
information services they use. CompuServe maintains that,
before this action was filed, it had no notice of any
complaints about the contents of the Rumorville publication or
In 1990, plaintiffs Cubby, Inc. ("Cubby") and Robert
Blanchard ("Blanchard") (collectively, "plaintiffs") developed
Skuttlebut, a computer database designed to publish and
distribute electronically news and gossip in the television
news and radio industries. Plaintiffs intended to compete with
Rumorville; subscribers gained access to Skuttlebut through
their personal computers after completing subscription
agreements with plaintiffs.
Plaintiffs claim that, on separate occasions in April 1990,
Rumorville published false and defamatory statements relating
to Skuttlebut and Blanchard, and that CompuServe carried these
statements as part of the Journalism Forum. The allegedly
defamatory remarks included a suggestion that individuals at
Skuttlebut gained access to information first published by
Rumorville "through some back door"; a statement that Blanchard
was "bounced" from his previous employer, WABC; and a
description of Skuttlebut as a "new start-up scam." Affidavit
of Robert G. Blanchard, sworn to on July 11, 1991 ("Blanchard
Aff."), ¶¶ 5-9.
Plaintiffs have asserted claims against CompuServe and
Fitzpatrick under New York law for libel of Blanchard, business
disparagement of Skuttlebut, and unfair competition as to
Skuttlebut, based largely upon the allegedly defamatory
statements contained in Rumorville. CompuServe has moved,
pursuant to Fed.R.Civ.P. 56, for summary judgment on all claims
against it. CompuServe does not dispute, solely for the
purposes of this motion, that the statements relating to
Skuttlebut and Blanchard were defamatory; rather, it argues
that it acted as a distributor, and not a publisher, of the
statements, and cannot be held liable for the statements
because it did not know and had no reason to know of the
statements. Plaintiffs oppose CompuServe's motion for summary
judgment, claiming that genuine issues of material fact exist
and that little in the way of discovery has been undertaken
I. Standard for Summary Judgment
Federal Rule of Civil Procedure 56(c) provides that summary
judgment "shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett,
477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505,
2509, 91 L.Ed.2d 202 (1986). "Summary judgment is appropriate
if, `after drawing all reasonable inferences in favor of the
party against whom summary judgment is sought, no reasonable
trier of fact could find in favor of the non-moving party.'"
United States v. All Right, Title & Interest in Real Property,
901 F.2d 288, 290 (2d Cir. 1990) (quoting Murray v. National
Broadcasting Co., 844 F.2d 988, 992 (2d Cir.), cert. denied,
488 U.S. 955, 109 S.Ct. 391, 102 L.Ed.2d 380 (1988)).
The substantive law governing the case will identify those
facts that are material, and "[o]nly disputes over facts that
might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct.
2505, 2510, 91 L.Ed.2d 202 (1986); Herbert Construction Co. v.
Continental Insurance Co., 931 F.2d 989, 993 (2d Cir. 1991).
"[T]he judge's function is not himself to weigh the evidence
and determine the truth of the matter but to determine whether
there does indeed exist a genuine issue for trial." Anderson,
477 U.S. at 249, 106 S.Ct. at 2511; see also R.C. Bigelow, Inc.
v. Unilever N.V., 867 F.2d 102, 107 (2d Cir.), cert. denied,
493 U.S. 815, 110 S.Ct. 64, 107 L.Ed.2d 31 (1989). The party
seeking summary judgment "bears the initial responsibility of
informing the district court of the basis for its motion," ...