The opinion of the court was delivered by: Robert L. Carter, District Judge.
Plaintiff New York Stock Exchange moves for summary judgment on its
claims that defendants David Gahary and John Zito have used variations of
the name "Richard Grasso," without plaintiff's permission, to post
offensive messages to certain internet bulletin boards, in violation of
Section 43(a) of the Lanham Act,*fn1 New York State's General Business
Law Sections 349 and 350, and New York common law. Plaintiff also moves,
pursuant to Rule 12(c), Fed. R. Civ. P., for judgment on the pleadings
with respect to counterclaims brought by defendants for harassment and
abuse of process. Defendants oppose both motions and bring their own
motion for summary judgment on grounds that their use of the Grasso name
is parody protected by the First Amendment, and that defendant Zito never
posted any messages under any variation of the Grasso name. For the
reasons set forth below, both parties' motions for summary judgment are
denied. However, plaintiff's motion for judgment on the pleadings
regarding defendants' counterclaims is granted.
The parties disagree on much to do with this case. What is undisputed
is that, in or about August 1999, defendant David Gahary ("Gahary") began
posting messages to certain internet bulletin boards hosted by the website
RagingBull.com.*fn2 (Gahary Tr. 97-99.) The RagingBull.com website is
home to a number of such on-line forums, which are devoted to discussion
of a wide variety of issues. (Id. at 89-90.) As the name RagingBull.com
suggests, however, the site's primary focus is on financial subjects,
such as the stock market. (Id. at 89.) The typical stock-related bulletin
board on RagingBull.com is ostensibly organized around discussion of a
specific stock, such as Biocontrol Technology (BICO)*fn3, Cyber-Care
(CYBR), or Evironmental Solutions Worldwide (ESWW). In practice,
however, the dialogue seems to range well beyond that, routinely
encompassing talk of financial matters and the stock market generally.
(Gahary Tr. 90-91.) Participants post messages under "screen names"
(essentially, on-line aliases) that they choose for themselves.*fn4 For
his screen names, Gahary chose several variations of the name "Richard
Grasso," who has been the Chairman and Chief Executive Officer of the New
York Stock Exchange ("the Exchange" or "NYSE") since 1995. This choice
was no mere coincidence: Gahary concedes that he consciously sought to
evoke the name and identity of Richard Grasso, C.E.O. of NYSE. (Gahary
Tr. 94-95, 163, 164.)
Gahary posted most of the messages at issue in this case using one of
five similar screen names: "dickgrasso," "DickGrasso,"
"RichAGrasso," and "Grasso2." (Gahary Decl. ¶ 5.) It further
appears, though the record is not completely clear on this point, that he
did not mean to use the aforementioned aliases contemporaneously.
Rather, when one name would be "TOS'ed" (or deleted) by administrators at
RagingBull.com,*fn5 Gahary would simply create a related but distinct
alias and resume posting messages. Defs.' Opp'n Mem. at 4 n. 8. In this
way, he was able to maintain the continuity of his on-line identity. Id.
Eventually, however, the five aforementioned screen names were all
TOS'ed, and Gahary found himself unable to create new ones.*fn6 Eager to
continue posting, he turned to defendant John Zito ("Zito"), whom he had
met while posting to certain RagingBull.com bulletin boards under the
alias "richardgrasso." (Zito Decl. ¶ 5.) On or about July 24, 2000,
Zito secured three new screen names at Gahary's request —
"richardgrasso 3," "richardgrasson4," and "RichieGrass" — bringing
the total number of Grasso aliases to eight. (Zito Answer and
Countercls. — 17.) While Zito does not deny that he created these
names for Gahary, he insists (and nothing on the record contradicts his
claim) that he never personally posted any messages using them.*fn7
(Id.) Whatever reprieve Zito's efforts may have earned Gahary, however,
was apparently short-lived. The latter's final post, using any of the
eight aforementioned screen names, was recorded only a few days later, on
or about July 27, 2000.*fn8 (Compl., Exs. 1A-4Q.)
Gahary concedes the controversial character of the messages he posted
using the eight Grasso aliases. He freely admits that his comments were
frequently rude, crude, and demeaning:
Grasso [the on-line persona] is very confrontational.
He was abusive. He was hopefully obscene, harassing,
definitely — he was not unlawful. He was not
harmful. But you can't harm anybody. He did not invade
anyone's privacy. Tortious, I don't know. He was
hopefully very objectionable.
(Gahary Tr. 113.) A representative rant confirms this
sellnow: no, the U235 is actually from merlin olsen's
rectum: seems that stan cottrell got a little close to
that area recently and developed testicular cancer
hence the discovery of olsen's radioactive poop chute.
I know it sounds weird, but it's right up Bico's alley,
wouldn't you agree?
Gahary's tirades were even, on occasion, explicitly vulgar:
to all you new fuckkin fools:
you will all be crushed soon by bico's mm's simply b/c
you are here, don't even think about insulting sell
now, sell low, 2centsin, big fish, and a few others.
they forgot more than you know or will ever know about
this stock, that will certainly separate you from your
$$. just shut the fuckk up and watch, and then come
back humbly and share in the successful stock tips some
of these good men freely hand out.
(Compl., Ex. 4A.) Indeed, Gahary seems to have reveled in the
disconcerting effect his abrasive on-line persona had on others. In his
final message posted using any of the eight Grasso screen names, Gahary
laments: "Honestly, you guys are so much fun to rattle, or at least you
were." (Compl, Ex. 3Q.)
Understandably alarmed by the unauthorized use of the Grasso name in
such a deliberately offensive manner, the Exchange filed suit, on August
3, 2000, seeking unspecified damages and an injunction against any
further such posts using any variations of the Grasso name. (Compl.
¶ 1.A.) Initially, since the Exchange did not yet know either the
identities of the posters or how many there were, the complaint simply
named "John Doe Nos. 1-10" as defendants. On November 20, 2000, however,
the Exchange filed an amended complaint explicitly naming David Gahary,
John Zito, and Michael Watson as defendants. On December 20, 2000, Gahary
answered the complaint and interposed counterclaims against the Exchange
for harassment and abuse of process. Shortly thereafter, on December 28,
2000, Watson entered into a "Stipulated Consent Judgment" with the
court, leaving only Gahary and Zito as defendants. On January 23, 2001,
Zito also answered the complaint and interposed counterclaims identical
to Gahary's. The parties pursued discovery for several months
thereafter; then, on October 2, 2001, the Exchange moved for summary
judgment on all counts of the complaint, and for judgment on the
pleadings with respect to defendants' counterclaims. Defendants opposed
and, on November 1, 2001, cross-moved for summary judgment, bringing
events to where they now stand.
Under Rule 56(c), F.R. Civ. P., summary judgment is appropriate when
"there is no genuine issue as to any material fact." and "the moving
party is entitled to a judgment as a matter of law." The moving party
"bears the burden of establishing that no genuine issue of material fact
exists and that the undisputed facts establish her right to judgment as a
matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d
Cir. 1995). In ruling on the motion, the court must "resolve all
ambiguities and draw all reasonable inferences against the moving party."
Flanigan v. Gen. Elec. Co., 242 F.3d 78, 83 (2d Cir. 2001). If the moving
party discharges its burden of demonstrating the absence of a genuine
issue of material fact, the onus shifts to the nonmoving party to show
that a genuine issue exists for trial. Celotex Corp. v. Catrett, 477
U.s. 317, 324 (1986). To satisfy its obligation, the nonmoving party
"must do more than simply show that there is some metaphysical doubt as
to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). Moreover, in making the requisite
showing, the nonmoving party may not "rely on mere speculation or
conjecture . . . ." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.
Moving from the procedural to the substantive, one point merits
clarification at the outset. As specified previously, the Exchange
advances distinct state and federal causes of action. However, the
parties seem to agree that the central factual inquiries remain much the
same across the various legal claims. There are a few important
contrasts: most notably, a party must demonstrate that an unregistered
mark like the Grasso name has acquired "secondary meaning" to enjoy
protection under the Lanham Act, see, e.g., Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 68 (1992), whereas no such showing is
necessary to prevail on a New York state common law claim for unfair
competition. See e.g., Coach Leatherware v. Anne Taylor, Inc., 933 F.2d 162
(2d Cir. 1991). But the differences are slight, and defendants' defense
that Gahary's use of the Grasso name was protected by the First Amendment
would, if successful, trump plaintiff's state and federal claims
equally. Yankee Publ'g, Inc. v. Int'l Licensing Mgmt., Inc.,
809 F. Supp. 267 (S.D.N.Y. 1992) (Leval, J.). For simplicity's sake,
therefore, the court will follow the parties' lead and discuss the
factual disputes primarily within the framework this Circuit has
established for assessing claims of unfair competition under the Lanham
The Exchange argues that, because Gahary has conceded he intended to
appropriate the "Richard Grasso" name and evoke the identity associated
with it, this evidences a bad faith "intent to trade on the goodwill of
that name." Pl.'s Reply Mem. at 3. The Exchange is right in one sense,
but wrong in a more important one. When Company A appropriates name and
identity of Company B in the ordinary commercial context, it is
reasonable to assume that the former is acting deceptively in an attempt
to free ride illegitimately on the business success of the latter.
Defendants, however, insist that Gahary was engaged not in deception but
parody. (Gahary Tr. 108-09.) And applying such a blanket presumption in
the context of parody makes no sense.
Virtually all parody "depends upon association with the original"
— otherwise the parody would be incomprehensible. New York Stock
Exch., Inc. v. New York, New York Hotel, L.L.C., 69 F. Supp.2d 479, 487
(S.D.N.Y. 1999) (Cederbaum, J.). To presume bad faith on the part of
every parodist would be both unfair and inefficient. The critical
question, in this context, is whether the parody, in addition to
referencing the original, simultaneously conveys the contradictory
message "that it is not the original." Cliff's Notes, Inc. v. Bantam
Doubleday Dell Publ'g Group, Inc., 886 F.2d 490, 494 (2d Cir. 1989). See
also Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 503 (2d
Cir. 1996). And here, both the sheer ...