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Even though Amway's claim is for tortious interference with business relations, because this case against P&G and Dinsmore is solely about speech, First Amendment protections regarding speech apply. When a claim for tortious interference with business relations is premised on the publication of defamatory statements, First Amendment protections apply. Lakeshore Community Hosp., Inc. v. Perrv, 212 Mich. App. 396.401.538 N.W.2d 24 (1995), "As with defamation actions, where the conduct allegedly causing the business interference is a defendant's utterance of negative statements concerning a plaintiff, privileged speech is a defense." Id. See also Arim v. General Motors Corp,. 206 Mich. App. 178 193, 520 N.W.2d 695 (1994) (a private party does not lose First Amendment protection, notwithstanding improper means or motives.); Meyer v. Hubbell. 117 Mich. App. 699. 710-11, 324 N.W.2d 139 (1982) (absolute privilege for statements made in judicial proceedings is a defense to suits for interference with prospective economic advantage). See also Hustler Magazine v. Falwell, 485 U.S. 46, 56 (1988) (applying the actual malice requirement to a public figure's claim of intentional infliction of emotional distress based on a publication of allegedly defamatory material).

Because Amway's action against P&G and Dinsmore involves only speech, the Court must consider First Amendment protections that might be accorded that speech. The First Amendment prohibits public figures from recovering damages caused by a defendant's statement unless they prove that the statement was a defamatory falsehood and that it was made with actual malice, that is, "with knowledge that it was false or with reckless disregard of whether it was false or not." New York Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964). See also Hustler Magazine v. Falwell. 485 U.S. 46, 52 (1988). The plaintiff alleging defamation against a public figure must produce "sufficient evidence to permit the conclusion that [the defendant] in fact entertained serious doubts as to the truth of the publication," or "actually had a high degree of awareness of probable falsity." Southwell v. Southern Povertv Law Ctr., 949 F. Supp. 1303, 1305 (W.D. Mich. 1996).

"When determining if a genuine factual issue as to actual malice exists in a libel suit brought by a public figure, a trial judge must bear in mind the actual quantum and quality of proof necessary to support liability under New York Times. For example, there is no genuine issue if the evidence presented in the opposing affidavits is of insufficient caliber or quantity to allow a rational finder of fact to find actual malice by clear and convincing evidence." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986) (citing New York Times v. Sullivan, 376 U.S. 254, 279-80 (1964)

"Those who, by reason of the notoriety of their achievements or the vigor and success with which they seek the public's attention, are properly classed as public figures." Gertz v. Robert Welch, Inc., 418 U.S. 323, 342 (1974). A corporation attains public figure status "by voluntarily assuming a role of special prominence in the affairs of society." Lakeshore Hosp. v. Perry, 212 Mich. App. 396, 403 (1995).

Amway has alleged in its third amended complaint that it has affiliated operations in 45 countries with over 14,000 employees, and that its estimated retail sales for 1998 was $5.7 billion. (19) Amway has approximately one million independent distributors in the United States and three million distributors worldwide. (20) P&G has presented substantial evidence that Amway is a multi-billion dollar corporation, that it is well known world-wide, that it has advertised extensively, and that it has been the subject of public debate since long before the actions at issue in this case took place. (21) Amway does not concede that it is a public figure, but it has not come forward with any evidence to dispute the characterization of the corporation as a public figure. The Court is satisfied for purposes of this motion that Amway is a public figure.

Amway contends, nevertheless, that Defendants are precluded from raising the First Amendment actual malice defense. As a preliminary matter, Amway contends P&G and Dinsmore are judicially estopped from arguing that Amway must prove actual malice because this position is diametrically opposed to their successful argument in the Texas case that actual malice is not required of a public figure to recover for injury to reputation when commercial speech is involved. In the Texas case the Fifth Circuit held that P&G would not have to prove actual malice to succeed on its Lanham Act claim for disparagement of commercial activities, P&G v. Amway, 242 F.3d at 546-47.

"Judicial estoppel forbids a party from taking a position inconsistent with one successfully and unequivocally asserted by that same party in an earlier proceeding." Warda v. Commissioner of Internal Revenue, 15 F.3d 533, 538 (6th Cir. 1994). This doctrine preserves the integrity of the courts by preventing a party from abusing the judicial process through cynical gamesmanship, achieving success on one position, then arguing the opposite to suit an exigency of the moment." Id. (quoting Teledyne Indus. v. National Labor Relations Bd.. 911 F.2d 1214, 1218 (6th Cir. 1990)).

Judicial estoppel does not bar P&G and Dinsmore's actual malice defense in this action. The differences between the actual malice issue in the two cases are too significant to call the two positions inconsistent. As a preliminary matter, Dinsmore was not a party to the Texas case, and would not come within the judicial estoppel doctrine. Moreover, the speech at issue in this case is not the same speech or even the same kind of speech that was at issue in the Texas case. In the Texas case the Fifth Circuit held that the Satanism rumor was commercial speech, deserving of less constitutional protection, because it had an economic motivation. P&G v. Amway, 242 F.3d at 567. The Court finds no support for Amway's argument that litigation documents in this case are commercial speech under the three factors identified in Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66-67 (1983). (22) Finally, unlike the Texas case. this case does not arise under the Lanham Act. For all these reasons the Court declines to apply the judicial estoppel doctrine to bar P&G and Dinsmore from raising the actual malice defense.

Amway also contends that Defendants have waived their right to raise the actual malice defense by raising a reliance on counsel defense and arguing a lack of subjective awareness of falsity of the complaints, at the same time that they have refused discovery into what the advice of counsel was or what counsel's subjective beliefs and mental impressions were. Amway's at-issue argument was rejected by the Magistrate Judge and affirmed by this Court on appeal. (23) Amway's more recent argument that P&G has waived the attorney-client privilege was also rejected by the Magistrate Judge and affirmed by this Court on appeal. (24)

With respect to the substance of P&G and Dinsmore's actual malice defense, Amway contends it has come forward with sufficient evidence to raise an issue of fact as to whether P&G and Dinsmore knew the pyramid scheme and RICO allegations were false. In support of this contention Amway contends the allegations were so objectively false that a reasonable jury could conclude that P&G and Dinsmore did not believe them to be valid; that P&G's litigation campaign against Amway is evidence of actual malice; and that Schwartz's malice can be imputed to the P&G Defendants.

"Whether the evidence in a defamation case is sufficient to support a finding of actual malice is a question of law." Ireland v, Edwards, 230 Mich. App. 607, 639. 584 N.W. 2d 632, 636 (1998). See also Lakeshore Hosp. v. Perry, 212 Mich. App. 396, 404. 538 N.W.2d 24 (1995). "In considering a motion for summary disposition, a court must consider whether the evidence is sufficient to allow a rational finder of fact to find actual malice by clear and convincing evidence." Id. (citing Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986)). "Because a jury verdict in a defamation case involving a public figure may rest only on clear and convincing evidence of actual malice, to survive a motion for summary disposition in such a case, the nonmovant must show actual malice by clear and convincing evidence rather than by a mere preponderance." Kefgen v. Davidson, 241 Mich. App. 611, 624,617 N.W.2d 351, 360 (2000). See also Southwell v. Southern Poverty Law Center, 949 F. Sup. 1303, 1310 (W.D. Mich. 1996) ("[A] public figure plaintiff must provide substantial evidence that he can prove actual malice by clear and convincing evidence, even at the summary judgment stage.").

Amway has presented substantial evidence in support of its assertion that it is not an illegal pyramid scheme and has not violated RICO, and that the allegations in the Texas and Utah cases to the contrary are false. P&G and Dinsmore have produced evidence that their claims are true. Although this conflicting evidence presents an issue of fact as to whether the illegal pyramid and RICO allegations are true or false, that factual issue does not require the Court to deny summary judgment. Even where there are questions of fact regarding the falsity of the alleged defamatory statements, summary judgment may still be appropriate where the evidence is not sufficient to allow a rational finder of fact to find actual malice by clear and convincing evidence. Ireland, 230 Mich. App. at 622. For purposes of this motion the Court will assume the allegations are false. The only issue for this Court's determination is whether Amway has come forward with sufficient evidence to allow a rational finder of fact to find by clear and convincing evidence that Defendants P&G and Dinsmore knew the pyramid and RICO allegations were false or that they made these allegations with reckless disregard as to their falsity.

Reckless disregard in this context is defined as a high degree of subjective awareness of probable falsity. New York Times, 376 U.S. at 280.

Reckless disregard for the truth is not established merely by showing that the statements were made with preconceived objectives or insufficient investigation. Furthermore, ill will, spite or even hatred, standing alone, do not amount to actual malice. "Reckless disregard" is not measured by whether a reasonably prudent man would have published or would have investigated before publishing, but by whether the publisher in fact entertained serious doubts concerning the truth of the statements published.

Ireland. 230 Mich. App. at 622.

A pyramid scheme is one in which the profits of a few people at the "top" of an organization are made primarily from those below them within the organization, rather than from sales to persons outside the organization. The focus of a pyramid is to recruit more people into the group, rather than on retail sales. See Webster v. Omnitrition Int'l, 79 F.3d 776, 782 (9th Cir. 1996). The Sixth Circuit has given its approval to an instruction defining a pyramid scheme as a "process characterized by the payment of money to the company in return for the right to sell a product and the right to receive in return for recruiting other participants into the program rewards which are unrelated to the sale of the product to ultimate users." United States v. Gold Unlimited. Inc., 77 F.3d 472, 479 (6th Cir. 1999).

In 1975 the Federal Trade Commission ("FTC") charged Amway with violations of the Federal Trade Commission Act, 15 U.S.C. 45. The FTC complaint included an allegation that Amway was an illegal pyramid scheme. After a comprehensive review of Amway practices, the FTC determined in 1979 that Amway was not an illegal pyramid because its policies prevented inventory loading and encouraged retail sales, In re Amwav Corp., 93 F.T.C. 618, 715-16 (1979). The ALJ found that Amway's buy-back rule, 70% rule and ten customer rule were enforced by Amway and that they in fact served to encourage retail sales and prevent inventory loading by Amway distributors. Id. at 646, 668.

The Ninth Circuit noted in Omnitrition that the FTC's 1979 Amway decision did not hold that any "multi level marketing" program employing policies like Amway's is not a pyramid scheme as a matter of law. "The FTC held that Amway was not a pyramid scheme as a matter of fact because its policies were enforced and were effective in encouraging retail sales." 79 F.3d at 784 (emphasis in onginal.) Omnitrition could not rebut claims that it was an illegal pyramid merely by showing it had adopted the rules approved in Amway. It also had to come forward with evidence that the safeguards were enforced and actually served to deter inventory loading and encourage retail sales. Id. at 783. See also SEC v. International Heritage, Inc., 4 F. Supp.2d 1378, 1384 (N.D.Ga. 1998) ("[T]he critical determination of the legality of [defendant's] operations will not be based on the written plan but on the actual practices of the company."); FTC v. Equinox Int'l Corp., 1999 U.S. Dist. Lexis 19866, * 18-24 (D. Nev. Sept. 14, 1999 (having rules like Amway's does not insulate a company from a pyramid finding; policies must be shown to be enforced in practice and to effectively promote retail sales.). In other words, the question of whether a particular company operates an illegal pyramid involves a fact-intensive analysis.

(19) Amway's third amended complaint at ¶1-2.

(20) Amway's third amended complaint at ¶ 3.

(21) See exhibits 42-51 to P&G's motion for summary judgment.

(22) The Fifth Circuit applied the following test for commercial speech:

In Bolger, the Court recognized three factors that help determine whether speech is commercial: (1) whether the communication is an advertisement, (ii) whether the communication refers to a specific product or servie, and (Iii) whether the speaker has an economic motivation for the speech. If all three factors are present, there is "strong support" for the conclusion that the speech is commercial.

P&G v Amway, 242 F.3d at 552 (citing Bolger. 463 U.S. at 67).

(23) See 1/24/01 discovery order (Docket # 319), affirmed, 2/23/01 opinion and order (Docket #402 & #403).

(24) See 7/2/01 order (Docket # 646), affirmed, 9/13/01 Opinion and Order (Docket # ___).