Stratton Oakmont, Inc., Plaintiffs


Prodigy Svcs. Co., Defendants

1995 WL 805178 (N.Y.Sup.)

Supreme Court of New York.

Dec. 11, 1995.


STUART L. AIN, Justice.


Upon the foregoing papers, it is ordered that this motion by Defendant, for an order granting renewal and/or reargument of the Plaintiff's motion for partial summary judgment is disposed of as hereinafter provided.


By order dated May 24, 1995, this Court determined, inter alia, that the Defendant PRODIGY SERVICES COMPANY ("PRODIGY"), was a "publisher" of certain statements concerning Plaintiffs which appeared on its "Money Talk" computer bulletin board for the purposes of Plaintiffs' libel claims in this action.


It will suffice, to note that the Court's decision has received wide attention. Obviously, recent advances in computer technology have caused what some commentators have called "explosive growth" in the Internet and its usage. What was once a tool used only by a handful of researchers and scientists has become a means of entertainment, education and business which is used by millions of people on a daily basis.


As a result, and largely because there is very little legal precedent directly on point, the Court's decision of May 24, 1995, has been highly publicized in the media and in legal circles. Presumably, the reason for this attention is that the decision offers some guidance for the "cyber-content provider [in determining] what its responsibilities and/or liabilities are ... (Lieberstein and Landa, Content Provider Liability: Publishers or Vendors?), State Bar News, Vol 37, No.6,p.11).


Against this background, PRODIGY moves for reargument and/or renewal of the motion and the Plaintiffs have decided not to oppose the motion (Affidavit of Jacob Zamansky, sworn to October 23, 1995). Indeed, there have been media reports that the parties have decided to "settle" this case. Those reports are, to the best of the Court's knowledge, inaccurate as PRODIGY has thus far insisted that any settlement be conditioned upon vacatur of the Court's May 24, 1995 decision. The Court has declined to vacate the order as part of a settlement package. As recently noted by the Appellate Division, First Department:

"While we appreciate the desirability of settlement, we do not believe it would be advisable to allow private parties to demand that the Court eradicate precedent which they personally find unacceptable on threat of burdensome litigation should the Court refuse. Moreover, we note the conclusion of the Supreme Court that, to follow a policy in which private parties could agree to vacate a decision and order by agreement would not necessarily, as a general matter, serve the purpose of encouraging settlement, as the prospect of being able to eradicate a decision would it be unfavorable could well encourage the parties to postpone settlement until after a decision has been rendered (U.S. Bancorp Mortgage Co. v Bonner Mall Partnership [ --- U.S. ----, 115 S.Ct.386,393])" (Paramount Communications v Gibraltar Casualty Co., 212 AD2d 490, 490-491; 623 NYS2d 850).


This logic is persuasive in this case especially considering the lack of guidance concerning, the "Internet" prior to the Court's decision. In other words, the Court finds that this is a developing area of the law (in which it appears that the law has thus far not kept pace with the technology) so that there is a real need for some precedent. To simply vacate that precedent on request because these two parties (or this Plaintiff) has lost interest or decided that the litigation would be too costly or time consuming would remove the only existing New York precedent in this area leaving the law even further behind the technology.


Turning then to the issue of renewal or reargument, it is clear beyond question that this is a motion for renewal.

"A motion to reargue is based on no new proof; it simply seeks to convince the court that it was wrong and ought to change it's mind. The motion to renew is based on new or additional proof not used the first time around." (Siegel, New York Practice, Second Edition, 254).

By this standard, there can be no doubt that this is a motion for renewal rather than reargument. Indeed, PRODIGY's counsel, in his supporting affidavit refers to PRODIGY's failure to provide this "new" information on the original motion as an "oversight" (Affidavit of Martin Garbus, Esq., sworn to July 6, 1995 para.2, p.1).


Indeed, an examination of the original papers in comparison with the renewal papers reveals a number of drastic differences. For example, PRODIGY's former employee Willard McDowell has submitted an Affidavit upon this application in which he now states that when he answered Plaintiffs' counsel's questions at a deposition concerning the Board Leaders he (McDowell) was "speculating" (Affidavit of Willard McDowell, sworn to July 5, 1995, para.10, p.3). Similarly, Jennifer Ambrozek, PRODIGY' "Manager of Bulletin Board Communications" submits, upon renewal, her Affidavit concluding (inter alia) that upon the prior motion, the Court "was given the false impression that Prodigy possesses and exercises significant editorial control and judgment over the content of its bulletin boards." (Affidavit of Jennifer Ambrozek, sworn to June 30, 1995, para.2,p.1). Neither Mr. McDowell nor Ms. Ambrozek submitted anything to the Court in opposition to the original motion notwithstanding the fact that portions of their deposition transcripts were appended by Plaintiffs to the original moving papers. There has been no explanation for the failure to include an affidavit from Mr. McDowell or Ms. Ambrozek on the original application.

"In support of a motion to renew pursuant to CPLR 2221, the moving party must show new facts as well as a justifiable excuse for not placing such facts before the Court in the first instance (see, Matter of Barnes v State of New York, 159 AD2d 753, lv.dismissed 76 NY2d 935; Lansing Research Corp. v Sybron Corp., 142 AD2d 816, 819; Foley v Roche, 68 AD2d 558, 568)." (Zebrowski v Kitchens, 172 AD2d 972, 973).


While it is indeed true that the requirement for showing of a justifiable excuse is a "flexible" one, (i.e., the Court has some discretion in this regard) (see, Saferstein v Stark, 171 AD2d 856; Oremland v Miller Minuteman Constr. Corp., 133 AD2d 816, 817-818; Sciascia v Nevins, 130 AD2d 649, 650; Albanese v Village of Floral Park, 128 AD2d 612, 614), in this case, it is clear that the "new" facts set forth by PRODIGY were well known to it at the time of the original application. While this, standing alone, is insufficient to preclude an exercise of discretion to permit reargument, there has been absolutely no explanation offered for the failure to include these facts in the original opposing papers. Before the Court can exercise its discretion, it must be presented with some reason to do so. "Renewal is by no means guaranteed and 'is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation' (Matter of Beiny, 132 AD2d 190, 210, lv. dismissed 71 NY2d 994; see, Gulledge v Adams, 108 AD2d 950)." (Matter of Barnes v State of New York, supra, p.754).


Accordingly, in the absence of an acceptable excuse for the failure to include this new proof in the original motion papers, PRODIGY's motion for renewal is denied.