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May 16, 1999

PROCTER & GAMBLE LAWSUIT AGAINST AMWAY DISMISSED

Reuters reports that a federal judge in Houston dismissed a Proctor & Gamble lawsuit against rival Amway Corp. in mid-May. The suit accused Amway of instigating "false satanic rumors" against Proctor & Gamble that cost the company millions of dollars in lost sales. A Procter & Gamble spokesperson said the company will appeal the ruling.

Procter & Gamble claimed that Amway "fomented the satanic rumors" since the early 70’s , including the assertion that the Procter & Gamble trademark incorporates satanic symbols. Dating back to the 1850’s the trademark shows a bearded "man in the moon" looking over 13 stars, representing the 13 original colonies. Although the company has kept the trademark as part of its corporate identity, it did remove it from more than 300 of its products in 1985.

Seeking $595 million in damages, Procter & Gamble’s suit centered around a 1995 voice mail from a prominent Amway distributor to other distributors, claiming that Procter & Gamble’s president, while appearing on a national talk show, said that a portion of P & G’s profits went to the "Church of Satan". The Amway distributor, who admitted sending the message, testified that he thought it was true. Although he issued two retractions the week following the voice mail, Procter & Gamble claimed its hotline was flooded with calls from angry consumers. Amway attorneys said the company did not encourage the rumor, and in fact tried to help Procter & Gamble stop it.

The Reuters story notes that in their opening arguments, Amway attorneys accused Procter & Gamble of filing the suit "because of concerns that Amway was eating into its sales in Asia." Two publicly owned Amway units in Asia had sales of $5.6 billion last year.

Procter & Gamble claims the case was dismissed on a legal technicality. Amway claims the dismissal proves "there was no actual malice in disseminating the rumor."

A similar suit filed in March directed against Amway by Procter & Gamble was dismissed before going to trial. Amway has filed a countersuit, accusing Procter & Gamble of conducting a smear campaign.

Despite the May 15th ruling, Procter & Gamble’s spokesperson said that the lawsuits have helped to quell rumors, noting that "consumer calls to Procter & Gamble about the rumors have been at their lowest levels in two decades since we filed the suits against Amway."

ORIGINAL SOURCE: Reuters, May 16, 1999

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