UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION AMWAY CORPORATION, Plaintiff and Counter-Defendant, v. THE PROCTER & GAMBLE COMPANY; THE PROCTER & GAMBLE DISTRIBUTING COMPANY; and SIDNEY SCHWARTZ, Defendants and Counter- Plaintiffs, and DINSMORE & SHOHL, LLP; and KENNETH LOWNDES, Defendants |
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File No. 1:98-CV-726 HON. ROBERT HOLMES BELL |
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0 P I N I O N
In this diversity action Plaintiff Amway Corporation has alleged tortious interference with contract and with actual and prospective business relations. This matter comes before the Court on motions for summary judgment filed by Defendants Procter & Gamble Company and Procter & Gamble Distributing Company (collectively referred to as "P&G"), Defendant Dinsmore & Shohl, LLP and Defendant Sidney Schwartz.
I.
This action was not filed in a vacuum. It is only one small episode in a long history of corporate warfare between. Amway and P&G, The apparent pervasive ill will between the parties has resulted in a long corporate battle that has most recently led to the filing of a series of three tortured, over-litigated federal court cases in Utah,(1) Texas,(2) and now in Michigan.
In Utah P&G sued several Amway distributors under a variety of legal theories based on their dissemination of the Satanism rumor.(3) In its third amended complaint P&G joined Amway as a defendant, alleging that Amway is an illegal pyramid and alleging fraud and product disparagement. The district court granted summary judgment to the defendants on all claims. The Tenth Circuit reversed in part and remanded the Lanham Act and tortious interference claim for further proceedings. Procter & Gamble Co. v. Haugen. 2122 F.3d 1262 (10th Cir. 2000).. Amway has been dismissed from the Utah case. Procter & Gamble Co. v. Haugen, _ F. Supp.2d _, 2001 WL 957683 (D. Utah June 7, 2001).
In Texas P&G sued Amway and others for defamation, fraud, and violations of the Lanham Act, RICO and Texas state law. Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 541-42 (5th Cir. 2001). The district court dismissed the case. The Fifth Circuit affirmed the dismissal the Lanham Actt and RICO claims based on Amway's allegedly illegal pyramid scheme for lack of standing, but reversed the dismissal of Lanham Act and RICO and claims based on Amway's spreading of the Satanism rumor and remanded for further proceedings. Id. at 564-65.
Defendant Sidney Schwartz created an Internet website that is highly critical of Amway. In connection with its suit against Amway in Utah, P&G, through its counsel, Defendant Dinsmore & Shohl, LLP ("Dinsmore"), hired the services of Sidney Schwartz as a non-testifying consultant. Dinsmore allegedly provided Schwartz with copies of litigation documents from P&G's suits against Amway, as well as from other suits against Amway. Schwartz posted some of those documents on his website. This case stems from P&Gs relationship with Mr. Schwartz.
Amway alleges in its third amended complaint that Defendants, individually and in concert with one another, disseminated malicious attacks against Amway on the internet with the intent and effect of interfering with Amway's contracts and prospective and actual business relationships with independent distributors of Amway products, potential distributors, and consumers of Amway products. Third Amended Complaint at ¶ 68.
(1) Procter & Gamble v. Haugen, No. 95-NC-94W (D. Utah).
(2) Procter & Gamble v. Amway, No. H097-2385 (D. Tex.).
(3) P&G has been plagued by rumors of links to Satanism since the late 1970s or early 1980s:
The most common variant of the rumor is that the president of P&G revealed on a television talk show that he worships Satan; that many of P&G's profits go to the church of Satan; and that there is no harm in such disclosure, because there are no longer enough Christians left in the United States for such devilish activities to make a difference. The rumor often was circulated in the form of a written flier that listed numerous P&G products and called for a boycott.
Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 542 (5th Cir. 2001).
