Amway, P&G still toe-to-toeover rumor

AUSTIN, Texas — After nearly a decade of litigation in several states, Procter & Gamble asked a federal appeals court Thursday to reinstate a Texas lawsuit against Amway Corp. over false rumors that P&G was linked to Satanic cults.

The case had been dismissed after another appeals court ruled in favor of Amway in a Utah case in 2003. Procter & Gamble attorneys told a panel of the New Orleans-based U.S. Fifth Circuit Court of Appeals it was not required to follow the other court’s lead.

Amway lawyers said judicial doctrine required the Texas case be dismissed once the same issue was decided in Utah.

Noting that Amway has won several rounds of legal battles in federal courts, Amway General Counsel Michael Mohr called P&G’s latest appeal a “waste of judicial resources.”

Procter & Gamble spokeswoman Vicky Mayer said, “We will continue to protect the interest and reputation of the company and its employees against the spread of this malicious and false rumor.”

Amway sells household products, many of which compete with P&G’s products, directly to customers.

The case grew from P&G’s allegation that Amway and a group of Amway distributors spread the old, baseless story about P&G and Satanism.

False rumors began linking P&G’s former crescent-shaped “man in the moon” logo to Satanism in the late 1970s. The false story also spread that the company’s president had revealed his association with the Church of Satan during a national television interview.

P&G claims distributors for Amway revived the rumors in 1995 when a distributor in Utah recounted a version of the TV-show rumor on the company’s national voice mail system.

Vigorous rounds of litigation followed, with more than 2 million pages of documents in three federal lawsuits filed by the companies in Utah, Texas and Michigan.

A federal judge in Utah dismissed the charges against Amway, ruling that the rumors were not defamatory and that P&G had not made a case for specific damages. That ruling was upheld last year by the Denver-based 10th Circuit Court of Appeals.

Within days of the appeals court ruling, the Texas case was dismissed as well.

“Amway has won against these claims four times in the trial courts,” Mohr said in a statement released by Amway. “Twice in Utah, where we were affirmed on appeal. We’ve also won twice in Texas and are confident about this remaining appeal.”

At Thursday’s hearing in Austin, Arthur Miller, a Harvard law professor representing Procter & Gamble, urged the 5th Circuit court to allow the Texas case to proceed.

He said the Utah case decision did not consider the 10 days of testimony already given in the Texas case and “did not give Procter & Gamble fair opportunity to litigate.”

Chip Babcock, an attorney representing Amway, said the Texas case should be dismissed because the lawsuit involved the same parties — Procter & Gamble and Amway — as the Utah case.

The court did not make an immediate ruling.

Amway has said the company has tried to help P&G stamp out the rumors. The Amway distributor who left the message on the voice mail system issued a retraction days later but P&G said the damage was done.

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