| A federal appeals
panel in New Orleans has revived Procter & Gamble's decades
old lawsuit against Amway, whose distributors were accused of
spreading false and harmful rumors in the 1980s and `90s that
P&G has ties to Satanism and the Church of Satan.
The rumor implicated P&G's
corporate symbol of the "man in the moon," associating it
with the devil.
The company stopped using
the symbol on products in the late 1980s.
In the early 1980s, after
a flood of angry calls to the company and boycotts of its
products, P&G tried to kill the rumor with a PR campaign,
an effort in which Amway assisted. P&G also sued a dozen people,
half of them Amway distributors, who sold paper goods and
other household goods in competition with P&G.
The suits were settled,
with admissions of fault and retractions. But in 1995, an
Amway distributor who lives in Utah forwarded the rumor to
other distributors over a telephone messaging system.
Some distributors then printed
and distributed fliers with the message "We offer you an alternative"
and contact information for Amway distributors.
As a result, P&G decided
to go after the company as well as some of its distributors,
including the Amway distributor who disseminated the rumor.
He testified that he had believed the rumor to be true, and
retracted it shortly after sending it out.
Although the case was dismissed
by a lower court federal judge in Houston, the U.S. Court
of Appeals for the Fifth Circuit had agreed to consider P&G's
arguments to bring to justice people who have unfairly competed
by rumor-mongering.
PR professionals will be
watching the case because the decision could offer companies
powerful ammunition against mudslinging competitors.
The Fifth Circuit opinion
kept alive P&G's claim under the federal Racketeer Influenced
and Corrupt Organizations Act, known as RICO.
The law, passed in 1970
to combat organized crime, provides harsh penalties for violators
and big incentives for plaintiffs and their lawyers in the
form of triple damages plus lawyer fees.
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