For years, an urban legend has floated around which claimed that Procter & Gamble has links to Satanism. P&G’s aggressive campaign to stamp out these rumors included filing numerous lawsuits against those who spread the story. On Friday, at least one of those efforts paid off. A jury in Salt Lake City awarded Procter & Gamble $19.25 million against four Amway distributors who had briefly passed the rumors throughout an Amway voice mail system, and then passed around a retraction soon afterwards. P&G had sued Amway and the distributors, but Amway was ultimately dismissed from the case after many years of litigation.
Observations:
- For a payment of only $18 million, anybody should feel free to call me a Satan-worshipper.
- While I have not yet seen all the pleadings, it seems hard to believe that a rumor such as this could possibly have damaged P&G to the tune of $19.25 million.
- This lawsuit was filed in 1995. For those of you scoring at home, that means it took twelve years to resolve a lawsuit which was, essentially, about gossip. The case 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 as well. Not to defend the conduct of the defendants, but the litigation seems drastically out of proportion to the offense, no?
11 Comments
As to the size of the award, Proctor & gamble has sales of over $55,000,000,000 annually.
$19,000,000 is in the neighborhood of 3 ten-thousandths of a percent of that figure.
Is it outrageous to assume that this ‘rumor with legs’ caused an impact in sales of some few ten-thousandths of a percent?
Put another way, could it have resulted in one customer out of 10,000 deciding to not buy one box of detergent.
Frank,
1) Note that lost profits, not lost sales, is the proper measure.
2) You moved a decimal point; it’s 3 hundredths of a percent, or 3 ten thousandths, but not 3 ten thousandths of a percent.
3) If they had started the rumor, one might be able to make that claim. Or if they had distributed the rumor through the mass media. But all they did was briefly disseminate it — and quickly retract it — through the Amway voice mail system. Hard to imagine that it would affect that many consumer decisions.
4) Assuming there were an effect of that tiny size, I’d be rather skeptical that P&G could identify it and prove a causal connection. (From what I could tell from the pleadings, P&G had to engage in multiple attempts at data mining before they could claim any damages at all.)
Here’s the complaint. To be fair, P&G has alleged that Amway has been much more involved in spreading the rumor than this one particular voice-mail, and Amway conceded fault in earlier litigation in the 1980s.
Hrmm. That works out to be $1,480,769 for each of the 13 stars in that old Proctor & Gamble logo, doesn’t it. Coincidence?
Back in my private school days, I remember the zeal with which the Baptist school I attended disseminated this rumor. There were whole lists of products sent home to parents to tell you what NOT to buy. It may not have caused 1 customer out of 10,000 to decide not to buy one box of detergent, but it caused most of the reactive parents in my school to wipe all P&G products off their shopping lists.
Lots of people have been noted to pass along the P and G rumor over the years. I recall a case where a foolish preacher acted on a tip and lambasted P and G from the pulpit, only to get a visit from a process server. He was acting negligently in spreading the rumor, but he also had personal gain involved. Hellfire and damnation preaching needs the devil, and he capitalized while disparaging the name of another.
Likewise with Amway distributors. Want to pump your own sales, then tell the public via a rumor mill that the largest commercial source of cleaning products, your largest direct competitor, is the devil. They had much to gain from their smear campaign. They also apparently had much to loose.
David: I assume if, from my blog, I posted defamatory remarks about you, you’d do nothing about it? Somehow I find it hard to believe that if I attacked your professional capabilities (or called you a child molester), you’d ignore it – especially if you could prove it was costing you clients.
I find this a very interesting case because these are the type of claims that, in an even remotely rational world, would be completely ignored. If you read the statements complained about, it’s inconceivable that any rational person could believe them. A second’s thought will show that a statement like “there aren’t enough Christians to make a difference” is utterly implausible.
Yet, people believed them. It seems reasonable that there would have been real damages.
What if I say, “Proctor and Gamble’s Board of Directors is filled with alien replacements and they steer the company to prepare our planet for takeover by a race of insects.” If people believe this and avoid P&G products, can I be sued?
Am I really responsible for the *irrational* actions of others if my speech triggers it?
Mike, of course I do not welcome defamation directed my way — although, as I said, I’m willing to negotiate — but don’t you see a slight difference between “He’s a bad lawyer” (Believable) and “He donates a share of his legal fees to Satan”? (Slightly less credible, I think.)
And don’t you see the difference between posting it on your blog vs. sending a voice mail around and then quickly retracting it?
I certainly don’t suggest that P&G should do nothing about defamation, particularly in the instances when a competitor is the culprit. That doesn’t mean that there’s not some disproportionality here. (And that doesn’t mean it’s not absurd that it takes the legal system a dozen years to resolve a relatively straightforward claim such as this.)
The P&G Satan rumors date back to the early 1980s if not before that. By 1996, anybody in competition with P&G like Amway should have known them to be false.
The major difference between a minister in his pulpit and Amway was Amway stood to profit by lost P&G sales.
“Am I really responsible for the *irrational* actions of others if my speech triggers it?”
You are responsible for the third party harm though the irrational actions of others if that was your intended goal. Many of those spreading the P and G rumor had the intent to harm P and G for their own benefit. That the harm was mediated though ‘irrational’ individuals acting in predicable and (for them) legal manner according to your design does not absolve you of responsibility for the consequences.
As for the Amway folk in question having retracted their comments. Retracting an arrow from the prey is not the same as having not shot the arrow in the first place. The injured party is never quite as whole as before the assault/retraction combination.