Defense disputes consumer giant's award in 'urban-myth' lawsuit

Legal News Line Apr. 3, 2007, 10:00am

P&G's controversial logo

A contentious high-stakes Utah case that's become known as the "satanic-rumor suit" is having a devil of a job getting resolved. Three of the jurors who awarded Proctor and Gamble (P&G) $19.25 million in a long-running civil lawsuit against four Amway distributors two weeks ago now charge misconduct from their fellows in figuring the award. Based on juror affidavits, lawyers for the defendants allege the verdict was not unanimous as required by law. They also charge some jurors based their award amount on the plaintiffs' estimated legal fees, according to the Salt Lake Tribune P&G originally brought the suit against the distributors and Amway in 1995, charging that the four spread false rumors that P&G promoted satanic beliefs. Such an "urban myth" has been circulating in the U.S. for more than 25 years, partly due to misinterpretations of the company's logo. P&G charged Amway (eventually dropped as a defendant) and the four distributors with breaches of the federal Lanham Act. This prohibits "unfair competition" and "false advertising." Since then, according to David Nieporent at blogsite Overlawyered, the case has "featured several trips to the Tenth Circuit Court of Appeals, an unsuccessful petition for Supreme Court review, and related litigation filed in Texas and Michigan." According to a filing with the U.S. District Court in Salt Lake City, lawyers for the Amway sellers allege the jurors used attorney fees to calculate the award because P&G couldn't prove it had lost sales in the case. Some jurors allegedly did so by multiplying the number of lawyers at P&G's table by their estimated hourly rates. P&G hit back last week, filing with Judge Ted Stewart to have their $19.25 million damages award tripled to almost $58 million plus interest since 1995. "An award of enhanced damages would be grounded in part on compensating P&G for its loss of goodwill," P&G's filing stated. Legal commentators expressed surprise at the $19.25 million award, especially considering the legal difficulties P&G had with the case. The U.S. Circuit Court of Appeals in Denver ruled in 2003 that P&G could not prove that the rumors were defamatory or caused specific damage. P&G had it reinstated on appeal. "It seems hard to believe that a rumor such as this could possibly have damaged P&G to the tune of $19.25 million," Nieporent wrote. "The litigation seems drastically out of proportion to the offense." A spokeswoman for Amway's parent company, Alticor, expressed amazement that P&G had pursued the matter so long. "P&G is a $68 billion company. What they got out of this case was what they could earn in about 21/2 hours. We think that's shameful." P&G is the world's largest consumer-products company, with products under the Pringles, Pampers and Folgers brand names.

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