Amway Corp v. Procter & Gamble ( 2003 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Amway Corp. v. Procter No. 01-2561
ELECTRONIC CITATION: 2003 FED App. 0360P (6th Cir.) & Gamble Co., et al.
File Name: 03a0360p.06
Before: BATCHELDER and CLAY, Circuit Judges;
SCHWARZER, Senior District Judge.*
UNITED STATES COURT OF APPEALS
_________________
FOR THE SIXTH CIRCUIT
_________________ COUNSEL
AMWAY CORPORATION , X ARGUED: Charles L. Babcock, JACKSON WALKER,
Plaintiff-Appellant, - Houston, Texas, for Appellant. Daniel J. Stephenson,
- DYKEMA GOSSETT, Ann Arbor, Michigan, Stephen M.
- No. 01-2561 Shapiro, MAYER, BROWN, ROWE & MAW, Chicago,
v. - Illinois, for Appellees. ON BRIEF: Charles L. Babcock,
> David T. Moran, JACKSON WALKER, Houston, Texas, J.
,
THE PROCTER & GAMBLE A. Cragwall, Jr., WARNER, NORCROSS & JUDD, Grand
-
COMPANY ; PROCTER & Rapids, Michigan, Jack C. Berenzweig, James P. Sobieraj,
- BRINKS, HOFER, GILSON & LIONE, Chicago, Illinois, for
GAMBLE DISTRIBUTING - Appellant. Daniel J. Stephenson, Michael P. Farrell,
COMPANY ; DINSMORE & - DYKEMA GOSSETT, Ann Arbor, Michigan, Kathleen
SHOHL, LLP, - McCree Lewis, Donald S. Young, DYKEMA GOSSETT,
Defendants-Appellees, - Detroit, Michigan, Eric C. Lund, DYKEMA GOSSETT,
- Grand Rapids, Michigan, Stephen M. Shapiro, MAYER,
-
SIDNEY SCHWARTZ; KENNETH - BROWN, ROWE & MAW, Chicago, Illinois, Stanley M.
Chesley, Fay E. Stilz, WAITE, SCHNEIDER, BAYLESS &
LOWNDES, - CHESLEY, Cincinnati, Ohio, John M. Kunst, Jr., John W.
Defendants. - Beatty, Brian S. Sullivan, DINSMORE & SHOHL,
- Cincinnati, Ohio, John M. DeVries, MIKA, MEYERS,
N BECKETT & JONES, Grand Rapids, Michigan, for
Appeal from the United States District Court Appellees. David L. Marburger, BAKER & HOSTETLER,
for the Western District of Michigan at Grand Rapids. Cleveland, Ohio, for Amici Curiae.
No. 98-00726—Robert Holmes Bell, Chief District Judge.
BATCHELDER, J., delivered the opinion of the court, in
Argued: June 12, 2003 which CLAY, J., joined. SCHWARZER, D. J. (pp. 17-21),
delivered a separate concurring opinion.
Decided and Filed: October 8, 2003
*
The Honorab le William W S chwarzer, Senior United States District
Judge for the Northern District of California, sitting by designation.
1
No. 01-2561 Amway Corp. v. Procter 3 4 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
_________________ PROCEDURAL HISTORY
OPINION 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
ALICE M. BATCHELDER, Circuit Judge. Plaintiff originally brought this action against P&G, alleging tortious
Amway Corporation (“Amway”) appeals from the district interference with business relations, after Sidney Schwartz
court’s order granting summary judgment in favor of (“Schwartz”), the creator and editor of an anti-Amway
defendants The Procter and Gamble Company, The Procter website entitled Amway: The Untold Story, published a
and Gamble Distributing Company (collectively “P&G”), and complaint filed by P&G against Amway in a Texas federal
the law firm of Dinsmore & Shohl (“Dinsmore”) (P&G and district court, alleging, among other things, that Amway
Dinsmore collectively “Appellees”), in Amway’s diversity operates as an illegal pyramid scheme. Amway amended its
action raising a Michigan state-law claim of “tortious complaint to add Dinsmore, Schwartz, and Kenneth Lowndes
interference with contract and with actual and prospective (“Lowndes”) as defendants.
business relations,” over the publication on the internet of an
allegedly defamatory complaint filed by P&G in federal court. P&G, Dinsmore, and Schwartz moved for summary
Following the close of extensive discovery in this corporate judgment, arguing that the website was protected speech; that
grudge match, which included the depositions of some eighty Amway was a public figure and needed to prove actual
witnesses, the district court found that there was no evidence malice; that there was no evidence that the defendant’s
of a conspiracy between the Appellees and the other actions interfered with any of Amway’s business
defendants to publish the complaint; that Amway had failed relationships; and that Amway could not prove the existence
to show that the Appellees acted with actual malice; and, in of a conspiracy among the defendants. Amway filed a 119-
the alternative, that the Appellees’ actions were protected by page brief in opposition to the motion, with more than 200
Michigan’s “fair reporting privilege.” On appeal, Amway exhibits, arguing that sufficient evidence existed for a
argues that, because the Appellees engaged in commercial reasonable trier of fact to find in Amway’s favor. The district
speech, Amway does not need to prove actual malice in this court, who had jurisdiction over this diversity action pursuant
case; that questions of material fact exist as to the existence to 28 U.S.C. § 1332, entered an Order and Partial Judgment
of a conspiracy; and that Michigan’s reporting privilege for granting Appellees’ motions for summary judgment, but
public documents does not protect parties such as P&G and denied Schwartz’s motion after finding him to be in a
Dinsmore who participated in both the filing of the “completely different posture” than P&G and Dinsmore.
documents in a court proceeding and the publication of those Amway and Schwartz subsequently “settled their differences”
court documents on the internet. Because we find that the and entered into a stipulation dismissing all claims and
Michigan fair reporting privilege does apply to the Appellees’ counterclaims between them. The district court made its
presumed publication of public court documents on the summary judgment order final by entering a default judgment
internet, we will affirm the judgment of the district court. 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
No. 01-2561 Amway Corp. v. Procter 5 6 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
in opposition to Defendant’s summary judgment motions.” the rumor throughout the world. Following this new
This Court has jurisdiction to hear this appeal pursuant to 28 “outbreak,” P&G learned that Randy Haugen, an Amway
U.S.C. § 1291. distributor in Utah, had broadcast an audio version of the
rumor via Amway’s internal business communications system
FACTUAL BACKGROUND in 1995. In 1996, P&G brought suit against Haugen and
Amway in the Federal District Court of Utah, Procter &
Recitation of the extensive and hate-filled history between Gamble Co. v. Haugen, No. 1:95-CV-0094, 1998 U.S. Dist.
P&G1 and Amway2 would take a writing as long as both the LEXIS 22984 (D. Utah Sept. 4, 1998), “claiming that as a
Old and New Testaments and involve at least one of the Good result of the subject message and other similar missives
Book’s more prominent players. Although each side would disseminated by defendants, P&G lost customers concerned
likely argue, if given the chance, that its opponent was in the about supporting Satan through their purchase of P&G
garden advising the serpent when Eve took her first bite of the products.” Haugen I, 222 F.3d at 1269. The district court
apple, for our purposes we need only go back to the 1970s granted Amway’s motion for summary judgment, finding that
and Satan’s rumored more recent activity with and interest in the message did not relate to qualities or characteristics of
soap products. P&G’s products and, therefore, the claim fell outside the
ambit of the Lanham Act. Id. at 1267. The Tenth Circuit
For more than twenty years, rumors of a relationship agreed with the district court’s holding, but nonetheless
between Lucifer and the soap manufacturer P&G—some reversed the district court, deciding that the lower court
spread by Amway’s distributors—have circled the globe, should also look at whether the subject message was clearly
dogging P&G like a hound of hell “despite every effort to related to P&G’s “commercial activities,” a question the
eliminate [the rumors] through both public relations and appellate court admitted P&G failed properly to raise below.
litigation.” See Procter & Gamble Co. v. Haugen, 222 F.3d Id. at 1272. On remand, the district court dismissed all of
1262, 1267-69 (10th Cir. 2000) (“Haugen I”).3 The 1990s P&G’s claims that remained. Procter & Gamble Co. v.
and the widespread use of the internet brought a resurgence of 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”).
1
P&G manufacturers and distributes numerous products for personal
care, household use, and consumption, including detergents, cosmetics, While searching for information on the Amway
and cleaning agents. Corporation during the prosecution of the Utah suit, an
attorney at Dinsmore who was representing P&G in that
2 action discovered the website created and maintained by
Amway also sells numerous consumer products that are in direct
competition with P&G products. Amway sells through a network of Schwartz, a self-described “long-time Amway opponent.”
distributors, who in turn sell the prod ucts to other distributors and The website contained extensive information and
consum ers. documentation on Amway. Schwartz had maintained his site
3 for eight months and accumulated thousands of pages of news
The most common version of the ru mor involve s P& G’s President’s articles, emails, and court documents from cases filed against
appearing on a contemp orary television talk show, from Merv G riffin to
Oprah W infrey, and confessing that profits from P& G go to suppo rt the Amway. In October of 1996, Dinsmore attorneys met with
Church of Satan. Schwartz at his Oregon home and retained him as a “non-
No. 01-2561 Amway Corp. v. Procter 7 8 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
testifying consultant,” to assist Dinsmore in “obtaining holding, including the judgment based upon res judicata, the
evidence and information about Amway that might be useful dismissal of P&G’s Lanham Act claims, and the dismissal of
in the Utah litigation, and to provide leads concerning other P&G’s civil RICO claims. See Procter & Gamble Co. v.
potential sources of such evidence.”4 To aid Schwartz’s Amway Corp., 242 F.3d 539, 567 (5th Cir. 2001). It appears
ability to assist in the Utah proceedings, Dinsmore provided from the record that the remaining claims in this case were
Schwartz with copies of some of the filings in the Utah case, scheduled for trial in January of 2003, but it is unclear from
as well as copies of public filings in two other cases: Cairns the parties’ briefs whether there has been any conclusion to
v. Amway Corp., No. C-1-84-0783 (S.D. Ohio 1984), and the proceedings.
Setzer v. Amway Corp., No. 6:86-1898-3 (D.S.C. 1986).
At some point after P&G filed its lawsuit in Texas,
P&G discovered in the course of the Utah litigation that Schwartz asked Dinsmore for a copy of the Texas complaint.
Haugen’s dissemination of the rumor of P&G’s satanic After Dinsmore refused to supply Schwartz with any
connections extended into Texas. P&G eventually brought documents filed in the Texas litigation, Schwartz obtained a
suit in Texas, alleging claims almost identical to the claims copy of the complaint on his own and billed Dinsmore for his
brought in the Utah case, and also claiming fraud and specific copying expenses.6 Schwartz eventually posted the entirety
violations of the RICO Act stemming from Amway’s of some of the documents from the earlier cases—including
allegedly illegal pyramid structure. Procter & Gamble Co. v. the Setzer complaint—that Dinsmore had provided him, as
Amway Corp., 80 F. Supp. 2d 639 (S.D. Tex. 1999).5 The well as the Texas complaint he had obtained on his own.
Texas district court dismissed a majority of P&G’s claims on
res judicata grounds following the dismissal of the factually In the present action, Amway identified ninety-nine
similar claims by the Utah district court. The Texas district statements published on Schwartz’s website that it claims are
court dismissed the remaining claims on several other falsehoods. Of those, eighteen were attributable to the
grounds, including standing and the expiration of state Appellees. These eighteen statements include sixteen
statutes of limitation. Although the Fifth Circuit affirmed paragraphs in the Texas complaint, involving allegations that
part of the district court’s dismissal of P&G’s claims, the Amway is an illegal pyramid scheme and that Amway
circuit court reversed a majority of the district court’s violated the RICO Act, and two statements in the complaint
filed in the Setzer case, in which neither P&G nor Dinsmore
was involved. Amway concedes that both complaints are
4 public documents filed in a federal district court and available
Dinsmore retained Schwartz from N ovember, 199 6, through
Janu ary, 1998 , at a rate o f $25 .00 p er hour for his tim e, and they
to the public.
reimbursed him for any copying costs. In total, P&G , through Dinsmore,
paid Schwartz $2,704.11 before terminating the relationship.
6
5
Schw artz states in his depo sition that P&G agreed to reimburse his
Over the years, Amwa y has also suffered from allegations that, copying expense for the Texas complaint, and that he prepared an invoice
because of its corporate structure and distributor network, Amway that he sent to Dinsmore. In the record, an attorney for Dinsmore adm its
operates as an illegal pyramid scheme. In 1979, in response to these receiving the invoice but claims payment was never authorized. The
allegations, and following a four-year investigation and an administrative record contains no d efinitive proof of whether Schwartz was in fact
trial, the Federal Trade Commission determined that Amway was not an reimbursed. For summary judgment purposes, we will assume Dinsmore
illegal pyramid. In re Amway, 93 F.T.C. 618 , 631, 716-17 (19 79). paid the invoice.
No. 01-2561 Amway Corp. v. Procter 9 10 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
ANALYSIS was undertaken with a malicious and manifest disregard for
the rights of Amway. The district court, clearly frustrated
Standard of Review with both parties, narrowed its focus in this case down to
what it believed to be the key issue before it—Amway’s
We review a district court’s grant of summary judgment de effort to recover damages for a speech tort committed by
novo, using the same standard under Rule 56(c) used by the Appellees. The court’s opinion correctly focuses on the fact
district court, Williams v. Mehra, 186 F.3d 685, 689 (6th Cir. that Amway’s only allegation involves the Appellees’ action
1999) (en banc), and we consider the record as it stood before of giving the documents to Schwartz with the intent that the
the district court at the time of its ruling. Niecko v. Emro documents would be posted on the internet. In finding for the
Marketing Co., 973 F.2d 1296, 1303 (6th Cir. 1992). Appellees, the court made several observations: (1) the
Summary judgment is proper if “the pleadings, depositions, evidence does not support a finding of a conspiracy; (2) not
answers to interrogatories, and admissions on file, together every document allegedly provided by the Defendants is at
with the affidavits, if any, show that there is no genuine issue issue in the case; (3) Amway attributes only eighteen
as to any material fact and that the moving party is entitled to allegedly defamatory statements to the Defendants; (4) all the
a judgment as a matter of law.” FED . R. CIV . P. 56(c). We posted documents were publically available; (5) none of the
view the evidence, all facts, and any inferences that may be allegedly defamatory statements is new; (6) Amway is a
drawn from the facts in the light most favorable to the public figure; and (7) the suit is really about business
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith competition and bad blood rather than about the spread of
Radio Corp., 475 U.S. 574, 587 (1986). To withstand rumors or the published attacks. The court went on to find
summary judgment, the non-movant must present sufficient that the relationship between Schwartz and the Appellees was
evidence to create a genuine issue of material fact. Klepper not so irregular as to require an inference of a conspiracy
v. First Am. Bank, 916 F.2d 337, 342 (6th Cir. 1990). A mere under Michigan law, and Amway failed to provide any actual
scintilla of evidence is insufficient; “there must be evidence evidence of an agreement between the parties indicating their
on which the jury could reasonably find for the [non- desire to interfere with Amway’s business relations.
movant].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, Additionally, the court found that the speech alleged to be
252 (1986). Entry of summary judgment is appropriate defamatory was privileged and subject to First Amendment
“against a party who fails to make a showing sufficient to protections, and that Amway—as a public figure—failed to
establish the existence of an element essential to that party’s prove not only that the speech was false, but that the
case, and on which that party will bear the burden of proof at Defendants acted with malice or with the knowledge that their
trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). statements were false or made with reckless disregard of
whether they were false. Finally, the district court granted the
Amway’s Claim Defendants’ motion for summary judgment by applying
Michigan’s fair reporting privilege, which protects
Amway asserts that Schwartz and Appellees conspired to individuals who fairly and accurately report information that
disrupt the business structure and relationships of Amway by substantially represents matters contained in court records.
disseminating untrue allegations. Similar to P&G’s
complaint against the Plaintiff, Amway’s complaint here
claims that the Appellees’ conduct cost Amway business and
No. 01-2561 Amway Corp. v. Procter 11 12 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
Michigan Fair Reporting Privilege and participated in the publication of the documents on
Schwartz’s website—are not protected by the privilege.8
Under the Michigan statute:
In support of its position, Amway cites Park v. Detroit Free
Damages shall not be awarded in a libel action for the Press Co., 40 N.W. 731 (Mich. 1888), where the Michigan
publication or broadcast of a fair and true report of Supreme Court said, “[i]f pleadings and other documents can
matters of public record, a public and official proceeding, be published to the world by any one who gets access to
or of a governmental notice, announcement, written or them, no more effectual way of doing malicious mischief with
recorded report or record generally available to the impunity could be devised than filing papers containing false
public, or act or action of a public body, or for a heading and scurrilous charges, and getting those printed as news.”
of the report which is a fair and true headnote of the Id. at 734. The Park decision is consistent with the reporting
report. This privilege shall not apply to a libel which is privilege contained in the Second Restatement of Torts.
contained in a matter added by a person concerned in the Section 611 of the Second Restatement provides:
publication or contained in the report of anything said or
done at the time and place of the public and official The publication of defamatory matter concerning another
proceeding or governmental notice, announcement, in a report of an official action or proceeding or of a
written or recorded report or record generally available to meeting open to the public that deals with a matter of
the public, or act or action of a public body, which was public concern is privileged if the report is accurate and
not a part of the public and official proceeding or complete or a fair abridgement of the occurrence
governmental notice, announcement, written or recorded reported.
report or record generally available to the public, or act
or action of a public body. RESTATEMENT (SECOND) OF TORTS § 611. This privilege,
however, is not absolute. Similar to the court’s language in
MCLA § 600.2911(3).7 Amway does not dispute that, under Park, Comment c provides, in relevant part:
this law, a verbatim reproduction of a public court document
would be privileged. Rather, Amway argues that P&G and A person cannot confer this privilege upon himself by
Dinsmore—who created the complaint in the Texas litigation making the original defamatory publication himself and
then reporting to other people what he had stated. This is
true whether the original publication was privileged or
not. Nor may he confer the privilege upon a third person,
even a member of the communications media, by making
the original statement under a collusive arrangement with
7
First Amendment protections apply in a tortious interference action
that person for the purpose of conferring the privilege
when the action com plained of was defamatory speech. It is therefore upon him.
consistent to apply the fair reporting privilege to a claim fo r torious
interference that is based upon defamato ry spee ch. See Meyer v. H ubb ell,
324 N.W.2d 139, 144 (Mich. App. 1982) (noting that in a claim for 8
defamation, the absolute judicial pro ceed ing privilege wo uld also apply For purp oses o f this argum ent, we assume the Defendants
to a related claim of tortious interferenc e). “pub lished” the do cuments on Schw artz’s website.
No. 01-2561 Amway Corp. v. Procter 13 14 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
RESTATEMENT (SECOND) OF TORTS § 611 cmt. c. If the Amway also turns to the grammatical structure of the
publication involves some form of judicial proceeding, there statute. Specifically, Amway argues that the parallel use of
must be official action in the proceeding before one can two “contained in” clauses separated by “or,” demonstrates
invoke the privilege: two distinct categories that are in the disjunctive.
Furthermore, Amway claims the clause “which was not part
A report of a judicial proceeding implies that some . . .” modifies the last antecedent and not the former. See Sun
official action has been taken by the officer or body Valley Foods Co. v. Ward, 596 N.W.2d 119, 123 (Mich.
whose proceedings are thus reported. The publication, 1999) (“It is a general rule of grammar and of statutory
therefore, of the contents of preliminary pleadings such construction that a modifying word or clause is confined
as a complaint or petition, before any judicial action has solely to the last antecedent, unless a contrary intention
been taken is not within the rule stated in this Section. appears.”). Accordingly, under Amway’s interpretation, the
An important reason for this position has been to prevent Defendants cannot find protection under the fair reporting
implementation of a scheme to file a complaint for the privilege. We are not persuaded.
purpose of establishing a privilege to publicize its
content and then dropping the action. (See Comment c). The exception to the privilege reads:
It is not necessary, however, that a final disposition be
made of the matter in question; it is enough that some This privilege shall not apply to a libel which is
judicial action has been taken so that, in the normal contained in a matter added by a person concerned in the
progress of the proceeding, a final decision will be publication or contained in the report of anything said or
rendered. So too, the fact that the proceedings are ex done at the time and place of the public and official
parte rather than inter partes is immaterial if the matter proceeding or governmental notice, announcement,
has come officially before the tribunal and action has written or recorded report or record generally available to
been taken in reference to it. the public, or act or action of a public body, which was
not a part of the public and official proceeding or
RESTATEMENT (SECOND) OF TORTS § 611 cmt. e (emphasis in governmental notice, announcement, written or recorded
original). Although P&G did not withdraw its complaint in report or record generally available to the public, or act
the Texas litigation after it was published on the website or action of a public body.
(indeed, P&G appears to have pursued that action well
beyond the publication), Amway argues that Comment e still MCLA § 600.2911(3). The statute excepts from the privilege
expresses a concern for the exact situation found in this case. libels that are not a part of the public and official proceeding
Amway also relies upon a case from Illinois which applied or governmental notice, written record or record generally
the same type of fair reporting privilege and invoked the available to the public. These libels are of two kinds: (1) a
Second Restatement. In Kurczaba v. Pollock, 742 N.E.2d libel which is “contained in a matter added by a person
425, 442-43 (Ill. App. Ct. 2000), the court held that the fair concerned in the publication,” or (2) a libel which is
reporting privilege does not apply to a defendant who sought “contained in the report of anything said or done at the time
to confer the privilege upon himself by filing a complaint and and place of the public and official proceeding or
then “reporting” the complaint to others. governmental notice, announcement, written or recorded
report or record generally available to the public, or act or
No. 01-2561 Amway Corp. v. Procter 15 16 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
action of a public body.” Contrary to Amway’s belief, “or” information. Amway brings suit for injuries claimed under a
in this statutory section is used as a coordinating conjunction state-created tort, but the state has seen fit to codify a general
to connect the two kinds of libel, see HARBRACE COLLEGE privilege and not to except from it the kind of conduct alleged
HANDBOOK 16 (John C. Hodges, et al. eds., rev. 12th ed. in this case. The state has not, contrary to Amway’s
1994) (coordinating conjunctions, including “or,” join two arguments, limited that privilege in a way that exposes the
clauses of equal grammatical rank); and both kinds of libel Defendants to liability.
are plainly modified by the clause “which was not a part of
the public and official proceeding or governmental notice, Finally, we consider Amway’s reliance upon Park
announcement, written or recorded report or record generally misplaced. Court filings were not public records in Michigan
available to the public, or act or action of a public body,” and when Park was decided more than one hundred years ago.
both are plainly included in the exception. Assuming that See In re Midland Pub. Co., 362 N.W.2d 580, 586 (Mich.
any allegations in the Texas complaint or the Setzer 1985) (noting that the decision in Park was premised on the
complaint—or both—were libelous, the libel was included in reasoning that pleadings in private actions were not public
the actual complaint and the Appellees did not add any records).
statements, let alone false statements, when they supposedly
published the complaint on the internet. Accordingly, we find Accordingly, we hold that the conduct of P&G and
that Michigan’s fair reporting privilege applies to the Dinsmore was protected by the Michigan fair reporting
publication of the entire complaints on Schwartz’s website, privilege, and on that basis, we affirm the judgment of the
and no exception to the privilege applies to the Appellees’ district court dismissing this action. Having thus decided, we
conduct complained of here. decline to address the commercial speech issues argued by the
parties.
Because we find that the plain language of the statute
clearly directs our decision, we find no reason to consider the Amway and P&G have each now prevailed against the
Second Restatement. See Rouch v. Enquirer & News of other at the appellate level in the federal courts. Although no
Battle Creek, 398 N.W.2d 245, 250 (Mich. 1986) (noting that decision from this Court—or any other, we predict—will end
the Second Restatement is not helpful in interpreting the hatred these two corporate giants harbor for each other,
Michigan’s fair reporting statute).9 Generally speaking, a we hope that they will consider the impact of their continuing
party’s publication of any actual court filing or statement legal battle on the scarce resources of the courts, and decide
made in a judicial proceeding is privileged because the public to concentrate their creative talents on the more traditional
has a legitimate interest in accessing and viewing that type of methods of gaining competitive advantage and declare a
ceasefire in the judicial arena.
9
The Michigan legislature amended the fair rep orting statute
CONCLUSION
following the state supreme court’s decision in Rouch, addressing what
the legislature felt was the supreme court’s too narrow definition of For the foregoing reasons, we AFFIRM the judgment of the
“official proceeding.” See Northland Wheels Roller Skating Ctr. v. district court.
Detroit Free P ress, 539 N.W.2d 774, 778 n.4 (Mich. App. Ct. 1995). T he
Michigan Supreme Court’s decision not to use the Second Restatement
remains applicable to our interpretation of the amended statute.
No. 01-2561 Amway Corp. v. Procter 17 18 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
_____________________ any publication is made involving such matters, they
posses no privilege . . . .
CONCURRENCE
_____________________ 40 N.W. at 734.
WILLIAM W SCHWARZER, Senior District Judge, The Park decision, an echo from a distant past, antedates
Concurring. The application of Michigan’s Fair Reporting the adoption of § 600.2911, which clearly recognized the
Statute, Michigan Compiled Laws § 600.2911(3) (2003),1 to public’s “rights to . . . information on private suits” when they
the facts of this case presents a question of first impression. are filed. See In re Midland Publ’g Co., 317 N.W.2d 284,
Neither the Michigan Supreme Court nor any other court has 288 (Mich. 1982) (stating that “Michigan has long recognized
issued a reported decision on the issue before us: whether the a common-law right to access to public records.”). Thus,
privilege applies to a party’s publication of a complaint it has Park sheds no light on the scope of the statutory privilege.
filed in court. Our task is to predict how the Michigan
Supreme Court would decide the issue. Mills v. GAF Corp., As originally enacted in 1931, § 600.2911(c) protected only
20 F.3d 678, 681 (6th Cir. 1994). reporters, editors, publishers, or proprietors of newspapers.2
Rouch v. Enquirer & News of Battle Creek, 398 N.W.2d 245,
In an early case, Park v. Detroit Free Press Co., 40 N.W. 248 (Mich. 1987). Following that decision, in 1988 the
731 (Mich. 1888), the Supreme Court addressed the validity statute was amended to significantly enlarge its scope. See
of a statute which limited the liability of newspapers for Northland Wheels Roller Skating Center, Inc. v. Detroit Free
publication of defamatory matter in the absence of bad faith Press, Inc., 539 N.W.2d 774, 777 (Mich. App. 1995). Thus,
and upon a prompt retraction. In dictum, the court referred to as amended, it no longer was limited to “public and official
testimony concerning the newspaper reporters’ difficulty in proceeding[s]” but applied as well to reports of “matters of
getting access to the judges’ files and added: public record,” and its protection extended to anyone against
whom damages might be awarded in a libel action for a
One of the reasons why parties are privileged from suit publication or broadcast, not simply members of the
for accusations made in the pleadings is that the newspaper trade. While pre-amendment the statute would
pleadings are addressed to courts where the facts can be have afforded no protection to defendants in this case, the
fairly tried, and to no other readers. If pleadings and amendment plainly protects them for publishing a fair and
other documents can be published to the world by any true report of a matter of public record.
one who gets access to them, no more effectual way of
doing malicious mischief with impunity could be devised Amway contends nevertheless that defendants fall within
than filing papers containing false and scurrilous charges, the statute’s exception for libel “which is contained in a
and getting those printed as news. The public have no
rights to any information on private suits till they come
up for public hearing or action in open court; and when 2
It read, in relevant part: “No damages shall be awarded in any libel
action brought against a reporter, editor, p ublisher, or proprietor o f a
1
newspaper for publication in it of a fair and true report of any public and
Quoted at Op. 14, above. official proceeding . . . .” Rouch, 398 N.W.2d at 248.
No. 01-2561 Amway Corp. v. Procter 19 20 Amway Corp. v. Procter No. 01-2561
& Gamble Co., et al. & Gamble Co., et al.
matter added by a person concerned in the publication.”3 It would eviscerate it. What the statute requires is that matters
argues that defendants authored the defamatory statements in of public record be reported fairly and truthfully, i.e., that the
the complaints and, having arranged for their dissemination report is not “so edited and deleted as to misrepresent the
on the internet, were persons concerned in their publication. proceeding and thus be misleading.” See Doe v. Doe, 941
It argues further that the qualifying clause, limiting the F.2d 280, 289 (5th Cir. 1991) (quoting R ESTATEMENT
exception to matter “which was not part of the public and (SECOND) OF TORTS § 611 cmt. f). So long as those
official proceeding” applies only to the second part of the conditions are met, motive is irrelevant. Stablein v. Schuster,
exception dealing with reports of official proceedings. The 455 N.W.2d 315, 317 (Mich. App. 1990) (stating that “the
argument is unavailing. As the district court found, it was statute makes it clear that defendant’s motivation is irrelevant
undisputed that all the documents defendants provided and if a fair and true report is made of the proceeding.”).
that were published were publicly available court documents.
Dist. Ct. Op., Jt. App. 652. These documents were verbatim Amway further contends that defendants are excluded from
copies of what was in the court files, and thus they were the privilege under the RESTATEMENT (SECOND) OF TORTS.
“accurate reports of matters of public record.” Id. at 677, 680. It cites § 611 comment c, which states that a person cannot
And all of the allegedly defamatory statements came from confer the privilege upon himself by making the original
these complaints in the court files. Id. at 652. defamatory publication himself and then reporting to other
people what it had stated, even if the original publication was
Amway contends that the publication of the complaints, privileged. It also cites comment e, stating that “[t]he
though accurate, did not qualify as a fair and true report publication . . . of the contents of preliminary pleadings such
because it failed to present Amway’s side of the matters as a complaint or petition, before any judicial action has been
alleged in the complaints. Moreover, Amway charges that taken is not within the rule stated in this Section.”4 The
defendants abused the privilege because they acted to further argument is inapposite. Defendants claim the fair reporting
their anti-Amway motives. The statute cannot be read to privilege under § 600.2911(3), not under the Restatement.
require the publisher to give equal time to opponents of what Moreover, because the Michigan statute and the Restatement
is in the public record. To make the reporting privilege are not coextensive, citation to the Restatement “is not helpful
conditional on a balanced presentation, as Amway argues, in [the court’s] effort to interpret the statute.” Rouch, 398
N.W.2d at 250 (stating that the Restatement’s “official
action” privilege is broader than the statute’s privilege to
3 report “public and official proceedings.”).5
The exception read s:
This privilege shall not apply to a libel which is contained in a
matter added by a person concerned in the publication or
contained in the report of anything said or done at the time and
place of the public and official proceeding or governmental
notice, announcement, written or recorded repo rt or record 4
generally available to the public or act or action of a public Quoted at 13, above.
bod y, which was not part of the public and official proceeding 5
or governmental notice, announcement, written or recorded For that reason, cases decided under the Restatem ent’s rule are not
report or record generally available to the public or act or action relevant. See, e.g., Kurczaba v. Pollock, 742 N.E .2d 2 45, 442-43 (Ill.
of a public b ody. App. Ct. 2000 ).
No. 01-2561 Amway Corp. v. Procter 21
& Gamble Co., et al.
Amway’s contention that the fair reporting privilege
protects only third parties is thus at odds with the plain
language of the statute and contrary to common sense.
Suppose the Wall Street Journal’s reporter copies a complaint
on file and then reports on it in a story. The privilege would
apply to him. But suppose that instead he writes his story on
the basis of the complaint given to him by the plaintiff after
it has been filed. The reporter would still be entitled to the
privilege. It makes no sense to extend it to him but to subject
the plaintiff to liability for giving him the complaint.6 Or
suppose the plaintiff, or perhaps her lawyer, is interviewed on
a news program and responds with a fair and true summary of
the complaint’s allegations. Surely it makes no sense to
interpret the statute so as to extend the privilege to the
interviewer but not to the interviewee.
For these reasons, I join in the affirmance of the judgment.
6
See Dallas Indep. Sch. Dist. v. Finlan, 27 S.W.3d 220, 239 (Tex.
App. 200 0) (stating that “[t]he harm resulting to a defamed party from
delivery of pleadings in a lawsuit to the news m edia could
dem onstratively be no greater than if the news media found the pleadings
on their own.”).