Court Urges Marketers to Call Cease-fire in Strange Legal Case

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CINCINNATI (AdAge.com) -- A federal court yesterday pleaded for Procter & Gamble Co. and Amway Corp. to stop suing each other as it rejected Amway's appeal, the latest
This is P&G's old 'Man in the Moon' logo that is at the center of the Satan-worship lawsuit.
development in seven years of litigation between the two over unfounded rumors linking P&G to Satan worship.

Libel suit dismissed
The U.S. Sixth Circuit Court of Appeals upheld dismissal by a lower court of a libel suit Amway filed against P&G in 1999. Amway's suit claimed P&G; its Cincinnati law firm Dinsmore & Shohl; and anti-Amway activist Sidney Schwartz libeled Amway when Mr. Schwartz posted information from a P&G lawsuit that charged Amway with spreading the Satan rumors. P&G's suit was dismissed by a federal court in Utah in a decision upheld earlier this year by the 10th Circuit Court of Appeals.

"Although no decision from this Court -- or any other, we predict -- will end the hatred these two corporate giants harbor for each other," today's ruling said, "we hope that they will consider the impact of their continuing legal battle on the scarce resources of the courts, and decide to concentrate their creative talents on the more traditional methods of gaining competitive advantage and declare a ceasefire in the judicial arena."

False rumors
P&G has been dogged for many years by false rumors alleging links to Satanism, based on interpretations of its man-in-the-moon logo -- now no longer used publicly -- and reports that an unnamed P&G president espoused Satanism on a talk show, with the talk show changing over time in various incarnations of the rumor. Though the rumor predates the Internet, it still surfaces regularly in Internet discussion groups.

P&G originally sued Amway in 1996 after discovering a Utah distributor had used the corporate voice-mail system to spread the Satan rumor. In handling that lawsuit, Dinsmore & Shohl discovered Mr. Schwartz, hired him as a consultant and provided him with a copy of P&G's complaint, some of which was quoted on his Web site. Mr. Schwartz later published excerpts of a similar Texas lawsuit after the Utah suit had been dismissed in 1999. Amway and Mr. Schwartz ultimately reached a settlement, but Amway's litigation against P&G and its law firm continued.

The Sixth Circuit said publication of court documents enjoys privilege against libel suits, regardless of the publisher. But the court declined to address Amway's allegation that P&G's complaints and the anti-Amway Web site do not enjoy First Amendment protections because they constituted commercial speech.

Humorously worded decision
A P&G spokeswoman acknowledged the humorously worded decision, which at one point says "recitation of the extensive and hate-filled history between P&G and Amway would take a writing as long as both the Old and New Testaments," was "really kind of funny." But she added: "It fully demonstrates that Amway's allegations against P&G are without merit."

However, the spokeswoman said the packaged-goods giant is still involved in litigation. "We're appealing the decisions in Texas and Utah and we will continue to protect the interests and the reputation of the company against the spread of this malicious and false rumor," she said.

"We're disappointed with the Court's decision," an Amway spokesman said in a statement. "We are still at a loss to understand how Procter & Gamble can attack a competitor under the cloak of journalistic privilege. Still, we accept the Court's decision because we respect the legal process in this country."

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