Amway Corp. v. Procter & Gamble Co.

Decision Date08 October 2003
Docket NumberNo. 01-2561.,01-2561.
Citation346 F.3d 180
PartiesAMWAY CORPORATION, Plaintiff-Appellant, v. The PROCTER & GAMBLE COMPANY; Procter & Gamble Distributing Company; Dinsmore & Shohl, LLP, Defendants-Appellees, Sidney SCHWARTZ; Kenneth Lowndes, Defendants.
CourtU.S. Court of Appeals — Sixth Circuit

Charles L. Babcock, JACKSON WALKER, Houston, Texas, for Appellant.

Daniel J. Stephenson, DYKEMA GOSSETT, Ann Arbor, Michigan, Stephen M. Shapiro, MAYER, BROWN, ROWE & MAW, Chicago, Illinois, for Appellees.

ON BRIEF:

Charles L. Babcock, David T. Moran, JACKSON WALKER, Houston, Texas, J. A. Cragwall, Jr., WARNER, NORCROSS & JUDD, Grand Rapids, Michigan, Jack C. Berenzweig, James P. Sobieraj, BRINKS, HOFER, GILSON & LIONE, Chicago, Illinois, for Appellant.

Daniel J. Stephenson, Michael P. Farrell, DYKEMA GOSSETT, Ann Arbor, Michigan, Kathleen McCree Lewis, Donald S. Young, DYKEMA GOSSETT, Detroit, Michigan, Eric C. Lund, DYKEMA GOSSETT, Grand Rapids, Michigan, Stephen M. Shapiro, MAYER, BROWN, ROWE & MAW, Chicago, Illinois, Stanley M. Chesley, Fay E. Stilz, WAITE, SCHNEIDER, BAYLESS & CHESLEY, Cincinnati, Ohio, John M. Kunst, Jr., John W. Beatty, Brian S. Sullivan, DINSMORE & SHOHL, Cincinnati, Ohio, John M. DeVries, MIKA, MEYERS, BECKETT & JONES, Grand Rapids, Michigan, for Appellees.

David L. Marburger, BAKER & HOSTETLER, Cleveland, Ohio, for Amici Curiae.

Before: BATCHELDER and CLAY, Circuit Judges; SCHWARZER, Senior District Judge.*

BATCHELDER, J., delivered the opinion of the court, in which CLAY, J. joined. SCHWARZER, District Judge (pp. 188-90), delivered a separate concurring opinion.

OPINION

BATCHELDER, Circuit Judge.

Plaintiff Amway Corporation ("Amway") appeals from the district court's order granting summary judgment in favor of defendants The Procter and Gamble Company, The Procter and Gamble Distributing Company (collectively "P & G"), and the law firm of Dinsmore & Shohl ("Dinsmore") (P & G and Dinsmore collectively "Appellees"), in Amway's diversity action raising a Michigan state-law claim of "tortious interference with contract and with actual and prospective business relations," over the publication on the internet of an allegedly defamatory complaint filed by P & G in federal court. Following the close of extensive discovery in this corporate grudge match, which included the depositions of some eighty witnesses, the district court found that there was no evidence of a conspiracy between the Appellees and the other defendants to publish the complaint; that Amway had failed to show that the Appellees acted with actual malice; and, in the alternative, that the Appellees' actions were protected by Michigan's "fair reporting privilege." On appeal, Amway argues that, because the Appellees engaged in commercial speech, Amway does not need to prove actual malice in this case; that questions of material fact exist as to the existence of a conspiracy; and that Michigan's reporting privilege for public documents does not protect parties such as P & G and Dinsmore who participated in both the filing of the documents in a court proceeding and the publication of those court documents on the internet. Because we find that the Michigan fair reporting privilege does apply to the Appellees' presumed publication of public court documents on the internet, we will affirm the judgment of the district court.

PROCEDURAL HISTORY

This case represents the third lawsuit in what the district court below correctly described as "a long history of corporate warfare between Amway and P & G." Amway originally brought this action against P & G, alleging tortious interference with business relations, after Sidney Schwartz ("Schwartz"), the creator and editor of an anti-Amway website entitled Amway: The Untold Story, published a complaint filed by P & G against Amway in a Texas federal district court, alleging, among other things, that Amway operates as an illegal pyramid scheme. Amway amended its complaint to add Dinsmore, Schwartz, and Kenneth Lowndes ("Lowndes") as defendants.

P & G, Dinsmore, and Schwartz moved for summary judgment, arguing that the website was protected speech; that Amway was a public figure and needed to prove actual malice; that there was no evidence that the defendant's actions interfered with any of Amway's business relationships; and that Amway could not prove the existence of a conspiracy among the defendants. Amway filed a 119-page brief in opposition to the motion, with more than 200 exhibits, arguing that sufficient evidence existed for a reasonable trier of fact to find in Amway's favor. The district court, who had jurisdiction over this diversity action pursuant to 28 U.S.C. § 1332, entered an Order and Partial Judgment granting Appellees' motions for summary judgment, but denied Schwartz's motion after finding him to be in a "completely different posture" than P & G and Dinsmore. Amway and Schwartz subsequently "settled their differences" and entered into a stipulation dismissing all claims and counterclaims between them. The district court made its summary judgment order final by entering a default judgment against Lowndes, who was the last defendant remaining before the district court. Amway timely appealed "the Order and Partial Judgment and all prior rulings in this action," as well as an order denying its motion "to supplement the record in opposition to Defendant's summary judgment motions." This Court has jurisdiction to hear this appeal pursuant to 28 U.S.C. § 1291.

FACTUAL BACKGROUND

Recitation of the extensive and hate-filled history between P & G1 and Amway2 would take a writing as long as both the Old and New Testaments and involve at least one of the Good Book's more prominent players. Although each side would likely argue, if given the chance, that its opponent was in the garden advising the serpent when Eve took her first bite of the apple, for our purposes we need only go back to the 1970s and Satan's rumored more recent activity with and interest in soap products.

For more than twenty years, rumors of a relationship between Lucifer and the soap manufacturer P & G — some spread by Amway's distributors — have circled the globe, dogging P & G like a hound of hell "despite every effort to eliminate [the rumors] through both public relations and litigation." See Proctor & Gamble Co. v. Haugen, 222 F.3d 1262, 1267-69 (10th Cir.2000) ("Haugen I").3 The 1990s and the widespread use of the internet brought a resurgence of the rumor throughout the world. Following this new "outbreak," P & G learned that Randy Haugen, an Amway distributor in Utah, had broadcast an audio version of the rumor via Amway's internal business communications system in 1995. In 1996, P & G brought suit against Haugen and Amway in the Federal District Court of Utah, Procter & Gamble Co. v. Haugen, No. 1:95-CV-0094, 1998 U.S. Dist. LEXIS 22984 (D.Utah Sept. 4, 1998), "claiming that as a result of the subject message and other similar missives disseminated by defendants, P & G lost customers concerned about supporting Satan through their purchase of P & G products." Haugen I, 222 F.3d at 1269. The district court granted Amway's motion for summary judgment, finding that the message did not relate to qualities or characteristics of P & G's products and, therefore, the claim fell outside the ambit of the Lanham Act. Id. at 1267. The Tenth Circuit agreed with the district court's holding, but nonetheless reversed the district court, deciding that the lower court should also look at whether the subject message was clearly related to P & G's "commercial activities," a question the appellate court admitted P & G failed properly to raise below. Id. at 1272. On remand, the district court dismissed all of P & G's claims that remained. Procter & Gamble Co. v. Haugen, 158 F.Supp.2d 1286 (D.Utah 2001), and the Tenth Circuit affirmed. Procter & Gamble Co. v. Haugen, 317 F.3d 1121 (10th Cir.2003) ("Haugen II").

While searching for information on the Amway Corporation during the prosecution of the Utah suit, an attorney at Dinsmore who was representing P & G in that action discovered the website created and maintained by Schwartz, a self-described "long-time Amway opponent." The website contained extensive information and documentation on Amway. Schwartz had maintained his site for eight months and accumulated thousands of pages of news articles, emails, and court documents from cases filed against Amway. In October of 1996, Dinsmore attorneys met with Schwartz at his Oregon home and retained him as a "non-testifying consultant," to assist Dinsmore in "obtaining evidence and information about Amway that might be useful in the Utah litigation, and to provide leads concerning other potential sources of such evidence."4 To aid Schwartz's ability to assist in the Utah proceedings, Dinsmore provided Schwartz with copies of some of the filings in the Utah case, as well as copies of public filings in two other cases: Cairns v. Amway Corp., No. C-1-84-0783 (S.D.Ohio 1984), and Setzer v. Amway Corp., No. 6:86-1898-3 (D.S.C.1986).

P & G discovered in the course of the Utah litigation that Haugen's dissemination of the rumor of P & G's satanic connections extended into Texas. P & G eventually brought suit in Texas, alleging claims almost identical to the claims brought in the Utah case, and also claiming fraud and specific violations of the RICO Act stemming from Amway's allegedly illegal pyramid structure. Procter & Gamble Co. v. Amway Corp., 80 F.Supp.2d 639 (S.D.Tex.1999).5 The Texas district court dismissed a majority of P & G's claims on res judicata grounds following the dismissal of the factually similar claims by the Utah district court. The Texas district court dismissed the remaining claims on several other grounds, including standing and the expiration of state statutes of limitation. Although the Fifth Circuit affirmed part of ...

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