Supreme Court Rejects Amway Free-Speech Appeal
Amway Corp. lost a Supreme Court appeal Monday in its six-year fight with rival Procter & Gamble Co. over rumors that P&G; was linked to devil worship.
The court declined to review a lower court’s decision that rumors spread to hurt a company are not entitled to free-speech protection. The case grew from P&G;’s allegation that Amway and a group of Amway distributors spread an 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 reports also said P&G;’s president had revealed his association with the Church of Satan during a national television interview.
P&G; said distributors for Amway revived the rumors in 1995 after a distributor recounted a version of the TV-show rumor on the company’s national voice mail system for distributors. Ada, Mich.-based Amway sells household products--many of which compete with Procter & Gamble’s brands--directly to customers.
Cincinnati-based P&G; has sued 15 times to stop the rumors, eight times involving Amway or its distributors. P&G; won’t disclose how much it has spent on the fight, but Amway, now known as Alticor Inc., said it has tallied $30 million in legal bills since the suits began six years ago.
Amway has said the company has tried to help P&G; stamp out the rumors. The Amway distributor who left the first message issued a retraction days later, but P&G; said the damage was done.
Amway argued in court that even though the rumor was false, spreading it was allowed as a matter of free speech.
The company drew the backing of several media organizations when it asked the full 5th Circuit Court to rehear the issue. P&G; was trying to stifle what the media, consumer advocates and others can say about businesses, Amway argued.
When that argument failed, Amway hired Kenneth Starr, a former solicitor general and independent counsel, and appealed to the Supreme Court.
Starr argued that the high court should clarify its views on the 1st Amendment and commercial speech, such as advertisements.
It is a tangled area of the law, and the Supreme Court has been unable to work out a single, clear test for defining commercial speech and its coverage under the 1st Amendment. Advertisements are subject to government regulation that is not applied to other kinds of speech.
