TRACY H. FOWLER (USB #1106)
WlLLIAM H. CHRISTENSEN (USB #4810)
SEAN N. EGAN (USB #7191 )
CAMPBELL MAACK & SESSIONS
One Utah Center, Thirteenth Floor
201 South Main Street
Salt Lake City, Utah 8411
(801) 537-5555 telephone
THOMAS S. CALDER
JOHN E. JEVICKY
ROBERT HEUCK II
DINSMORE & SHOHL
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
(513) 977-8200 telephone
STANLEY M. CHESLEY
THERESA L. GROH
WAITE, SCHNEIDER, BAYLESS & CHESLEY
1513 Central Trust Tower
Cincinnati, Ohio 45202
(513) 521-0267 telephone
Attorneys for Plaintiffs
The Procter & Gamble Company and
The Procter & Gamble Distributing Company
IN THE UNITED STATES DISTRlCT COURT FOR THE DISTRICT OF UTAH
NORTHERN DIVISION
THE PROCTER & GAMBLE COMPANY, et : THIRD AMENDED COMPLAINT
al., : FOR INJUNCTIVE RELIEF AND
: ACTUAL DAMAGES
Plaintiffs, :
: (Jury Trial Demanded)
vs.
: Civil No. 1:95-CV-0094W
RANDY L. HAUGEN, et al., :
: Honorable David K. Winder
Defendants. : Magistrate Judge Ronald N. Boyce
:
The Procter & Gamble Company and the Procter & Gamble Distributing
Company
(collectively "Plaintiffs"), for their third amended complaint
in this action,
state as follows:
I. JURISDICTION AND VENUE
1. The matter in controversy exceeds, exclusive of interest and costs,
the sum of Fifty Thousand ($50,000.00) Dollars. 2. The
jurisdiction of this Court is based upon a federal question and
diversity of citizenship pursuant to 28 U.S.C. §§1331 and
1332. In addition, this Court has general and specific
jurisdiction over each and every defendant in this action. 3.
Venue is proper in the United States District Court for the District
of Utah under 28 U.S.C. §1391 because the Defendants reside
in or conduct business within the State of Utah and/or committed
some or all of the acts giving rise to the claims in this action
within this judicial district.
II. THE PARTIES
4. The Procter & Gamble Company (hereinafter sometimes referred to
as "P&G") is an Ohio corporation with its principal place
of business in Cincinnati, Ohio, and P&G is therefore a citizen of
Ohio. P&G and its subsidiary and affiliated companies manufacture
and distribute consumer products and sell them in Utah and throughout
the United States. These products include TIDE laundry detergent, CREST
toothpaste, BIZ laundry bleach, IVORY soap, CASCADE dish washing
detergent, FOLGER coffee, MR. CLEAN household cleaning products, and
many other food, laundry, cleaning, and personal care products.
5. The Procter & Gamble Distributing Company (hereinafter sometimes
referred to as "P&G Distributing") is an Ohio corporation
with its principal place of business in Cincinnati, Ohio, and P&G
Distributing is therefore a citizen of Ohio. P&G Distributing sells
and distributes P&G products, including those identified in
Paragraph 4, to retailers and distributors throughout the United States,
including the State of Utah. P&G Distributing is a subsidiary of
P&G.
6. Defendant Randy L. Haugen is a citizen of the State of Utah and an
"Executive Diamond" level distributor of Amway consumer
products and developer of Amway business in the distribution chain of
Amway Corporation ("Amway"). At all relevant times, Haugen was
directly involved in the wrongful conduct alleged herein. Haugen engaged
in this wrongful conduct in his individual capacity and in his capacity
as a representative and agent of defendant Freedom Associates, Inc.,
defendant Freedom Tools Incorporated and defendant Amway Corporation.
Freedom Associates, Inc., and Freedom Tools Incorporated are Utah
corporations through which Haugen conducts his Amway business
activities. Randy L. Haugen, Freedom Associates, Inc., and Freedom Tools
Incorporated are hereinafter referred to collectively as
"Haugen."
7. Haugen has established a network and chain of distributors of Amway
products throughout Utah, Nevada, Texas, Mexico, and Canada, among other
places, totaling upon information and belief more than 100,000
distributors. The Haugen distributor network grossed sales of
approximately $50 million of Amway products in 1995. This network is
based or headquartered in Ogden, Utah.
8. Defendant Randy L. Haugen owns stock in subsidiaries or affiliates of
Amway.
9. Defendant Randy L. Haugen is a past co-chairman of the Business
Operations Committee of the Amway Distributors Association Council
(hereinafter "ADAC"). Thirty Amway distributors serve on the
ADAC. Fifteen of the thirty distributors on the ADAC are appointed
directly by Amway Corporation. Defendant Randy L. Haugen was appointed
to the ADAC by Amway Corporation. The "mission" of the ADAC is
to "advise and consult" with Amway "in all aspects of the
business and to take an active role in shaping Amway's future."
(See Exhibit A.) As announced in Amway's May 1995 AMAGRAM publication, a
copy of which is attached as Exhibit B and made a part of this
Complaint, Defendant Randy L. Haugen at the time of the actions giving
rise to this Complaint was a member of the Executive Committee of the
ADAC. The Executive Committee establishes goals and objectives for the
Business Operations and the Legal and Ethics Committees of the ADAC.
10. Defendant Roger D. Patton is a citizen of the State of Texas,
residing in The Woodlands, Texas. At all relevant times, Patton was an
agent of Amway Corporation and an Amway distributor in Haugen's
distribution network which is based or headquartered in Ogden, Utah.
Patton communicates and transacts business regularly with Haugen's
distributor network based or headquartered in Ogden, Utah, and was
directly involved in the wrongful conduct alleged herein.
11. Defendant Jeffery G. Musgrove is a citizen of the State of Texas,
residing in Katy, Texas. At all relevant times, Musgrove was an agent of
Amway Corporation and an Amway distributor in Haugen's distribution
network which is based or headquartered in Ogden, Utah. Musgrove
communicates and transacts business with Haugen and others in the Haugen
distributor network and was directly involved in the wrongful conduct
alleged herein. Musgrove engaged in the wrongful conduct in his
individual capacity and in his capacity as a representative and agent of
Amway Corporation and defendant Musgrove Enterprises, a Texas
partnership entity through which Musgrove conducts his Amway business
activities. Musgrove and Musgrove Enterprises are hereinafter referred
to collectively as "Musgrove."
12. Defendant Steven E. Brady is a citizen of the State of Nevada,
residing in Las Vegas, Nevada. At all relevant times, Brady was an agent
of Amway and an Amway distributor in Haugen's distribution network which
is based or headquartered in Ogden, Utah. Brady communicates and
transacts business with Haugen and others in the Haugen distributor
network and was directly involved in the wrongful conduct alleged
herein.
13. Defendant Stephen L. Bybee is a citizen of the State of Utah,
residing in Logan, Utah. At all relevant times, Bybee was an agent of
Amway and an Amway distributor in Haugen's distribution network which is
based or headquartered in Ogden, Utah. Bybee communicates and transacts
business with Haugen and others in the Haugen distributor network and
was directly involved in the wrongful conduct alleged herein. Upon
information and belief, defendant Eagle Business Development, Inc., is a
Utah business entity through which Bybee conducts and has conducted his
Amway business activities since December 1995. Bybee and Eagle Business
Development, Inc., are hereinafter referred to collectively as
"Bybee."
14. Defendant Ted Randal Walker is a citizen of the State of Texas,
residing in Houston, Texas. At all relevant times, Walker was an agent
of Amway Corporation and a "Diamond" level Amway distributor
in Haugen's distribution network which is based or headquartered in
Ogden, Utah. Walker communicates and transacts business with Haugen and
others in the Haugen distributor network, and was directly involved in
the wrongful conduct alleged herein. Walker engaged in this wrongful
conduct in his individual capacity and in his capacity as a partner of
defendant Walker International Network, a Texas partnership with its
principal place of business in Houston, Texas, and as an agent of Amway
Corporation. Upon information and belief, Walker International Network
is a Texas business entity through which Walker conducts his Amway
business activities. Walker and Walker International Network are
hereinafter referred to collectively as "Walker."
15. Defendants John Does 1-5, whose complete identities and addresses
are unknown at this time, upon information and belief, are individual
distributors and/or businesses who are agents of Amway Corporation and
members of Haugen's distribution network centered in Ogden, Utah, and
are involved in the sale and distribution of Amway consumer products and
the development of Amway business. Haugen, Patton, Musgrove, Brady,
Bybee, Walker, and John Does 1-5 shall be known as "Distributor
Defendants" unless expressly stated otherwise. .
16. Defendant Amway is a Michigan corporation with its principal place
of business in Ada, Michigan. Amway, through its employees and its chain
of distributor agents, including the Defendants, develops its business,
including the recruitment of new distributors, and sells and distributes
nationwide consumer products such as GLISTER anti-plaque fluoride
toothpaste, SA8 PLUS PREMIUM laundry detergent, CRYSTAL BRIGHT dish
washing detergent, EXQUISITE and NINE TO FIVE coffee products, DURISHINE
household cleaning product, and many other food, laundry, cleaning and
personal care products. These Amway products distributed by Defendants
compete with P&G's products in the consumer market nationwide.
Furthermore, Amway specifically advertises against P&G's products in
its publications such as AMAGRAM and the Amway Product Demonstrations
Guide which are sent through the U.S. Mails. Copies of such
advertisements are attached as Exhibit C and made a part of this
Complaint.
17. Distributor Defendants receive compensation directly from Amway
Corporation based on sales performance and recruitment of Amway
distributors.
18. At all relevant times, Distributor Defendants have been actively
engaged in the recruitment of additional Amway distributors and in the
development of Amway business through these distributors
III. FACTS
19. Defendants distribute Amway products through a distribution network
that is sometimes referred to as a multi-level marketing plan. In the
United States, this network is comprised of hundreds of thousands of
Amway distributors who are linked together through their
"uplines" and downlines."
20. The "upline" of an Amway distributor is comprised of his
or her recruiter, his or her recruiter's recruiter, and so on up the
line of distributors. The "downline" of an Amway distributor
includes those distributors that the distributor recruited, as well as
those who have been recruited by those recruits, and so on down the line
of distributors. The "downlines" and "uplines" of
Amway distributors form a pyramid-shaped hierarchy.
21. Amway; through its employees and distributor agents, including high
level distributors who are continuous members of the ADAC, promotes,
encourages and demands that Amway distributors call upon consumers,
present the Amway Sales and Marketing Plan and convert them into
becoming Amway distributors by persuading the consumers to sign the
Amway distributorship agreement and pay the application fee.
22. Amway distributors purportedly receive commissions and bonuses from
Amway for the sale of Amway products in at lest two ways: ( 1 ) by
selling products, either personally or through downline distributors, to
retail consumers who are not Amway distributors, and (2) by selling
products, either to themselves or to downline Amway distributors for
personal consumption.
23. In the 1970's, the Federal Trade Commission investigated Amway for
unfair methods of competition, unfair or deceptive acts or practices,
and unreasonable restraints on trade. In 1979, the FTC found that Amway
had committed acts of illegal resale price maintenance and illegal
misrepresentations concerning specific earnings and sales claims made to
potential distributors. In defending against the claim that Amway,
including its distributor organization, constituted an illegal pyramid
scheme, Amway relied upon several Amway rules regulating distributor
conduct that purport to ensure that commissions or bonuses are not paid
unless the products are sold to retail consumers who are not Amway
distributors.
24. These rules included: (1) Amway's "Ten-customer" rule,
which requires that before Amway distributors receive a performance
bonus, they must prove they made a retail sales to each of ten different
retail customers who are not Amway distributors during each month; (2)
Amway's "70%" rule, which requires that before Amway
distributors receive a performance bonus, they must prove that they have
resold at least 70% of the products they have purchased each month; and
(3) the "Buy-back" rule, which requires direct Distributors
and/or sponsoring distributors to buy back any unused marketable
products from a distributor who is unable to sell his or her inventory
or who wishes to leave the business. Based upon its findings that in the
1970's these rules were enforced, complied with and effective to ensure
that the income of Amway distributors was based on Amway product sales
to retail consumers who are not Amway distributors, the FTC found that
Amway was not a pyramid scheme at that time.
25. The enforcement and effectiveness of these rules are critical in
determining whether Amway is an illegal pyramid. Amway and its
distributors have not enforced, and do not presently enforce, these
rules, and the rules are not effective in ensuring that Amway
distributors are engaged primarily in selling Amway products, rather
than recruiting new distributors, or that commissions and bonuses and
other payments made to Amway distributors are based upon sales of Amway
products to retail consumers who are not Amway distributors.
26. Since 1979, the focus and operation of Amway and its distributors
have changed from retail sales to recruitment. Amway distributors now
make few retail sales and invest most of their time, effort, and money
in recruiting new Amway distributors. As encouraged and directed by
Amway, all or nearly all Amway distributors engage in recruitment, and
recruits are specifically told that retail selling is not necessary to
succeed in Amway. Instead, recruits are told that they merely need to
purchase Amway products for their own personal consumption and to
recruit others to do the same. As a result, the majority or a large
percentage of Amway's products are consumed by Amway's distributors and
are not sold to retail customers.
27. Defendants use misleading, deceptive, and high-pressure practices
when showing the Amway Sales and Marketing Plan to lure consumers into
becoming Amway distributors with false promises of immediate income and
future wealth. Defendants misrepresent the amount of time, effort, and
monetary expenditures that are required to succeed in Amway. After
consumers have become enticed to become Amway distributors, Amway and
its distributors use misleading, deceptive, and high-pressure tactics
thereafter to force them not to buy any products of Plaintiffs and
instead to purchase competing Amway products exclusively.
28. Amway controls and supervises, and has the ability to control and
supervise, its distributors directly and indirectly through several
means, including, but not limited to, the following:
a. Amway's Sales and Marketing Plan, and the terms of its contracts with
individual distributors, including Distributor Defendants,
b. Amway's Code of Ethics, Rules of Conduct, and other various rules,
prohibitions, regulations, and requirements promulgated by Amway,
c. The Amway Distributors Association, the ADA Board, the ADAC and
similar organizations controlled and/or influenced by Amway,
d. Amway literature and publications, such as the Business Reference
Manual, which detail the rules and standards of conduct required of
Amway distributors and explain that violations of these rules and
standards can result in termination of the distributorship. For example,
the following rules are included in the Business Reference Manual:
RULE 10. Do not engage in any deception or unlawful trade practices.
RULE 11. Do not operate or engage in illegal or unlawful business
enterprises or be convicted of an illegal or unlawful activity.
e. Tapes, speeches, rallies, seminars, functions, conferences, and
meetings at which Amway representatives, distributors, potential
distributors, and/or other Amway-related individuals gather,
f. Control of trademarks, service marks, and trade names,
g. Other forms of exercising control and authority, including but not
limited to providing education, information, and/or training, and taking
disciplinary action, such as censure, admonishment, reprimand,
penalties, suspension or removal of certain rights and/or privileges,
including termination of distributorship, agency, employment, and/or any
other relationship with Amway.
29. Amway also exercises control and authority over its distributors by
establishing detailed requirements about what Amway distributors can and
cannot say to customers and potential distributors in the areas of
marketing, religion and politics, among other things, in connection with
the presentation of the Amway Sales and Marketing Plan.
30. Amway exercises control and supervision over its distributors by
requiring material produced and distributed to develop the sales and
distribution of Amway products and the solicitation of new Amway
distributors to be pre-approved by Amway corporate headquarters.
31. Amway sells to its distributors communication systems known as
"Amvox Network Voice Messaging" and "Amvox by
Voice-Tel" which use the telephone lines of interstate commerce.
Specifically, Amway advertises and provides for cash and other valuable
consideration subscriptions to Amway's Amvox communication systems for
its distributors. Copies of Amway's Amvox advertisement and Amway's
Amvox subscription order form are attached as Exhibit D and made a part
of this Complaint.
32. Amway offers the Amvox system to its distributors in order to
promote the Amway business, to recruit new Amway distributors, and to
provide another means for communicating among and to its distributors.
Amway possesses business records which contain the telephone numbers of
all Amway distributors who utilize the Amvox system.
33. Amway has the capability to receive messages on the Amvox system
from distributors and to send messages to all distributors who subscribe
to Amvox.
34. Amway and Distributor Defendants also exert mental, emotional, and
financial control over downline distributors and instruct them to edify
and obey their upline distributors without questioning and to have
complete faith in the Amway system. Certain Amway distributors abuse
their control over their downline Amway distributors by forcing them to
purchase tapes, books, videos, and other motivational materials
sometimes referred to as "tools" or "business support
materials" and to attend motivational seminars, functions,
meetings, and rallies at their own substantial cost. The motivational
materials sold are not intended for resale and are not resold to any
individuals who are not Amway distributors. Certain upline Amway
distributors derive a significant portion of their Amway- related income
from these motivational products and services which have little or no
real economic value. Amway has known of the sale of such materials and
has consented to their sale in violation of Amway's own rules.
35. The actions and business practices of Amway and Distributor
Defendants constitute an unlawful and harmful pyramid scheme under
federal and state law, which is inherently fraudulent and deceptive and
benefits Amway and certain high-level Amway distributors but which
causes great economic harm and detriment to consumers, Amway
distributors, the general public, and Plaintiffs, P&G and P&G
Distributing.
36. P&G was formed in 1837. In 1882, P&G registered in the
United States Patent and Trademark Office a trademark called the
"Moon and Stars" design. Successive minor variations of this
design were also federally registered. A copy of one such registration
for P&G's "Moon and Stars" trademark, United States
Registration No. 298059, is attached as Exhibit E and made a part of
this Complaint.
37. The "Moon and Stars" trademark is a corporate symbol under
which P&G has conducted business throughout the United States for
over a hundred years. This business has been based upon the principle of
providing products of superior quality and value that best meet the
needs of consumers.
38. In or about April and May 1995, Distributor Defendants, with actual
knowledge of their falsity or with malicious and reckless disregard as
to their truth or falsity, circulated and published or allowed to be
circulated and published in the States of Utah, Texas, and Nevada, and
elsewhere through the Amvox communication systems and through other
media, completely false and defamatory written and oral statements. Both
forms of defamatory expression disparaged Plaintiffs' products,
trademark, business interests, reputation, and goodwill. A transcript of
certain such false and defamatory oral statements that were published
through the Amvox communication system is attached as Exhibit F and made
a part of this Complaint. The statements falsely and maliciously
associate P&G and P&G Distributing with Satanism and falsely and
maliciously describe the "Moon and Stars" trademark as a
satanic symbol. The statements also falsely and maliciously assert that
the President of P&G appeared on a nationally televised talk show
and discussed P&G's relationship to Satanism and P&G's support
for the Church of Satan. The statements further promote a boycott of
P&G products and the purchase of competing Amway products, which
Defendants promote and distribute for profit.
39. P&G, P&G Distributing, related subsidiaries, and affiliates
do not have and never have had any connection, relationship, or
association whatsoever with Satanism, devil worship or any Church of
Satan. P&G representatives, executives and employees have never
appeared on any television program or show asserting any connection with
Satanism, devil worship or the church of Satan.
40. Defendants, individually and in concert, have made or have allowed
to be made the false, defamatory, and product-disparaging statements
contained in Exhibit F to increase Defendants' economic gain, to enhance
Amway distributorships, and to sell Amway products, all to the benefit
of Defendants and to the detriment of Plaintiffs.
41. The statements published and circulated by Distributor Defendants as
set forth in Exhibit F contain vicious misrepresentations of fact and
false statements which were known by Defendants to be false or were
made, or were allowed to be made, maliciously and with reckless
disregard as to their truth or falsity and which have caused harm and
damages to Plaintiffs and their business.
42. Since the 1980's and continuing to the present day, Amway and its
distributors have advertised, circulated, published, communicated, or
allowed such to be done in the States of Utah, Tennessee, Virginia,
Michigan, and all other States of the United States additional false
written and oral statements and have done so with actual knowledge of
their falsity or with malicious and reckless disregard as to their truth
of falsity.
43. These additional false statements have disparaged Plaintiffs'
products, brand names, reputation, goodwill, and business interests and
falsely and maliciously claim that Plaintiffs' products are negative,
evil, the devil's work, and/or contain sludge, harmful abrasives,
harmful ingredients, adulterants, and/or fillers (such as beach sand,
peanut shells, walnut shells, or egg shells), and/or are harmful to
consumers, clothing, appliances, and homes. For example, Amway published
certain written statements that wrongfully disparaged Plaintiffs'
products in the December 1996 issue of Amway's monthly AMAGRAM magazine,
which has a monthly world-wide circulation exceeding two million.
Relevant portions of this issue are attached hereto and made a part of
this Complaint as Exhibit G.
44. Plaintiffs products are not negative, evil, the devil's work, and do
not contain sludge, harmful abrasives, harmful ingredients, adulterants,
and/or fillers (such as beach sand, peanut shells, walnut shells, or egg
shells), and are not harmful to consumers, clothing, appliances, and
homes.
45. Amway and its distributors have made these false and
product-disparaging statements with malice to decrease the sales and
profits of Plaintiffs' products, to support their illegal pyramid
scheme, to increase Amway's economic gain, to enhance Amway
distributorships, and to sell Amway products, all to the benefit of
Amway and to the detriment of Plaintiffs.
46. The statements published and circulated by Amway and its
distributors regarding Plaintiffs' products contain vicious
misrepresentations of fact and false statements which were known by
Amway to be false and were made, or were allowed to be made, maliciously
and with reckless disregard as to their truth or falsity and which have
caused great harm and damage to plaintiffs, their products, and their
business.
47. Amway and Distributor Defendants have admitted that the statements
associating Plaintiffs with Satanism and the Church of Satan were false
and that these statements were disseminated by Distributor Defendants
through Amway's Amvox communication system.
48. The instant action is not the first time that Amway distributors
have been involved in propagating and circulating false statements of
the sort alleged in this case. Procter & Gamble learned of
involvement of Amway distributors in the early 1980's and brought
lawsuits against such distributors for circulating such false and
defamatory statements. For example, in 1991, Procter & Gamble
obtained a judgment for $75,000 against two Amway distributors for
spreading lies linking Procter & Gamble's trademark with Satanism.
49. Moreover, Amway was directly informed by Plaintiffs at various times
in the 1980's and 1990's that Amway distributors have been involved in
spreading lies about Plaintiffs and Satanism, and have been making false
and disparaging statements regarding Plaintiffs' products. Despite this
information, Amway has done little or nothing to educate inform, train
or discipline its distributors regarding such wrongful acts or to
prevent such wrongful actions from occurring, all to Plaintiffs'
substantial disadvantage.
50. For example, despite the fact that Randy L. Haugen has been an Amway
distributor since the early 1980's, has achieved the "Executive
Diamond" status, and has served on the ADAC and its Executive
Committee, he claims that prior to April or May 1995, he never received
notice from Amway informing him that the rumors regarding Plaintiffs'
connection with Satanism or the Church of Satan in this case were false.
In addition, upon information and belief, Amway has never terminated the
distributorship of any Amway distributor in connection with any of the
activities and conduct alleged herein, despite knowing that its
distributors were repeatedly and persistently involved in the
dissemination and circulation of such rumors and wrongful product
disparagement activities and despite the fact that Amway has publicly
pledged to help Proctor & Gamble stop the spread of these rumors.
51. Amway was and is in a position of control and authority over
Distributor Defendants such that it knew, or should have known, of
Distributor Defendants' conduct as alleged herein. Moreover, Amway had
the ability and the obligation to prevent its distributors, including
Distributor Defendants, from engaging in the conduct alleged herein. For
example, even though Amway has the telephone numbers of all its
distributors who subscribe to Amvox services, Amway made no effort to
inform all such distributors that the rumors described herein are false
or that the product disparagement activities are illegal. In fact, Amway
has encouraged disparagement of Procter & Gamble products through
false and misleading product demonstrations and comparisons in Amway's
AMAGRAM magazines and product demonstration guides. (See Exhibits C and
G.)
52. Amway has falsely and fraudulently made various material
misrepresentations to Plaintiffs and others since the 1980's promising
to control, discipline, and to do whatever it can to prevent Amway
distributors from spreading defamatory statements linking Plaintiffs
with Satanism, disparaging Plaintiffs' products, and committing other
wrongful conduct, including violations of Amway's own rules. To their
detriment, Plaintiffs have reasonably relied upon these
misrepresentations, which Amway never intended to fulfill.
53. Despite Amway's control over its distributors and in direct conflict
with its representations to Plaintiffs, Amway has acted with reckless
indifference and has failed to control its distributors, who on numerous
occasions over the last fifteen years have continued to spread
defamatory statements about Plaintiffs, to disparage Plaintiffs'
products, and to commit other wrongful conduct detrimental to
plaintiffs.
54. Amway's conduct, acts, and failures to act as alleged above have
directly and approximately caused Plaintiffs' irreparable injury, and
such conduct will continue to the irreparable harm of Plaintiffs unless
enjoined by this Court.
COUNT ONE DEFAMATION PER SE
55. Plaintiffs incorporate as if fully restated herein their prior
allegations in Paragraphs 1 through 54 of the Third Amended Complaint.
56. Defendants knowingly and intentionally slandered, libeled, and
defamed Plaintiffs or have allowed Plaintiffs to be slandered, libeled
and defamed by publishing or allowing to be published the false,
malicious and non-privileged statements concerning Plaintiffs, their
executives and employees, and products, which proximately caused harm
and damages to Plaintiffs' reputation, prestige and standing as well as
Plaintiffs' business and products.
57. As a result of Defendants' conduct, Plaintiffs have suffered damages
in an amount to be determined at trial.
58. With the implied approval of Amway, Distributor Defendants' conduct
was undertaken in bad faith, was malicious and manifested a wanton
disregard of and reckless indifference towards the rights of Plaintiffs
thereby entitling Plaintiffs to punitive or exemplary damages.
COUNT TWO SECTION 43(a) OF THE LANHAM ACT
59. Plaintiffs incorporate as if fully restated herein their prior
allegations in Paragraphs 1 through 58 of the Third Amended Complaint.
60. With the implied approval of Amway, Distributor Defendants published
the false and deceptive statements concerning Plaintiffs and their
products in commerce, thereby committing false and deceptive trade
practices in violation of Section 43(a) of the Lanham Act, 15 U.S.C.
§1125(a), which proximately caused harm and damage to Plaintiffs'
business and products.
61. As a result of Defendants' conduct, Plaintiffs have suffered damages
in an amount to be proven at trial.
COUNT THREE TORTIOUS INTERFERENCE WITH BUSINESS RELATIONSHIPS
62. Plaintiffs incorporate as if fully restated therein their prior
allegation in paragraphs 1 through 51 of the Third Amended Complaint.
63. Plaintiffs have had existing and potential economic relationships
with customers. These customers include, but are not limited to the
following classes of individuals and entities:
a. Direct and indirect purchasers, consumers, and individual users of
products manufactured by Plaintiffs, including those products identified
in paragraph 4,
b. Grocery stores, department stores, convenience stores, pharmacies,
retailing establishments and chains, retail and wholesale buyers,
distributors, and other organizations, and
c. Past, present and future Amway distributors (including, but not
limited to, the upline and downline distributors of the named
Defendants), purchasers of Amway products, and individuals who are
considered recruiting prospects by Amway and its distributors.
Plaintiffs' customers reside in each state of the United States, as well
as in many foreign countries.
64. Plaintiffs have a reasonable expectation that their customers will
continue to purchase Plaintiffs' products and have a reasonable
expectation of developing and maintaining business relationships with
their prospective customers in the future.
65. Defendants were aware of these business relationships and of
Plaintiffs' expectancy of continued future economic benefits by sales to
customers. However, despite this knowledge, Defendants intentionally
engaged in wrongful conduct which interfered with Plaintiffs' business
relationships. Defendants' conduct included, but was not limited to:
a. Advertising, publishing, disseminating, and communicating false lies
and unfounded misrepresentations about the business, goodwill, and
reputation of Plaintiffs, including lies that Plaintiffs and/or their
corporate president were involved or connected with Satanism, the devil,
or other undesirable or negative associations.
b. Advertising, publishing, and communicating false lies and unfounded
misrepresentations about the Plaintiffs' products, including lies that
Plaintiffs' products are negative, evil, the devil's work, and that
Plaintiffs' products contain sludge, harmful abrasives, harmful
ingredients, adulterants, and/or fillers, (such as beach sand, peanut
shells, walnut shells, or egg shells), and are harmful to consumers,
clothing, appliances, and homes, and that Plaintiffs' products are less
effective, more expensive, and/or inferior to Amway's competing
products.
c. Advertising, implying, and communicating misrepresentations about the
economic benefits of using Amway's products and the economic detriments
of using Plaintiffs' products. Such statements are false and misleading,
constitute unfair competition, unfair and deceptive trade practices, and
tortiously interfere with the business relations that Plaintiffs have
with Amway distributors.
d. Conducting business as an illegal pyramid scheme and using
misrepresentations to recruit individuals into the Amway pyramid and
thereafter to force them not to buy any products of Plaintiffs and to
purchase the competing products of Amway exclusively.
66. Defendants undertook this wrongful conduct for improper purposes,
including, but not limited to, damaging the business, reputation,
goodwill of Plaintiffs and their products, inflicting an economic and
competitive injury on Plaintiffs, decreasing the sales of Plaintiffs'
products, increasing the sales of defendants' own products, and
continuing the illegal enterprise of an unlawful pyramid scheme.
67. Defendants have utilized improper means in their competition with
Plaintiffs, including, but not limited to, libel, slander, fraud,
deceptive sales practices, unfair competition, unfair and deceptive
trade practices, disparaging and injurious falsehoods, defamation,
deceit, violations of established rules and standards, and
misrepresentations concerning Plaintiffs, Plaintiffs' products, and
Amway's products. .
68. Defendants have improperly used or have allowed others to improperly
use for their own benefit, as instrumentalities to achieve this wrongful
conduct the Amvox system, Amway-related promotional literature, books,
pamphlets, tapes, videos, and other publications, face-to-face marketing
communications, presentations, speeches, and other marketing activities
by Amway distributors, Amway-related rallies, functions, seminars, and
other meetings, the interstate system of wires, and the interstate U.S.
Mail system.
69. As a result of the Defendants' wrongful and tortious conduct, past,
present, and future customers of Plaintiffs, including Amway
distributors, have refrained from purchasing, consuming, and/or using
Plaintiffs' products and, at the direction, suggestion, and/or
encouragement of Defendants, have further disseminated
misrepresentations and lies about Plaintiffs, Plaintiffs' products and
Amway`s products to other individuals.
70. As a direct and proximate result of such wrongful and tortious
conduct of the Defendants Plaintiffs have suffered damages in an amount
to be proven at trial which includes, but is not limited to the profits
that Amway made from the sales of Amway products which sales would not
have occurred if Defendants had not tortiously interfered with
Plaintiffs' business relationships.
71. Defendants undertook this wrongful and tortious conduct in bad
faith, with malicious and wanton disregard, and in reckless indifference
towards the rights of Plaintiffs, thereby entitling Plaintiffs to
punitive or exemplary damages.
COUNT FOUR NEGLIGENT SUPERVISION
72. Plaintiffs incorporate as if fully restated herein their prior
allegations in paragraphs 1 through 71 of the Third Amended Complaint.
73. Through distributorship agreements, agencies, organizations and
entities such as ADAC, and through publications such as the Business
Reference Manual, Amway was and is in a position of authority, control
and supervision over its distributors such as Distributor Defendants and
profited from their efforts.
74. As such, Amway has a duty to Plaintiffs as well as to the general
public to ensure that its distributors, including Distributor
Defendants, engage in lawful and fair competition with their competitors
in the sale and marketing of Amway products and the development of Amway
business.
75. Amway has failed to properly control and supervise the Distributor
Defendants thereby enabling the Distributor Defendants to engage in the
conduct described herein. As such, Amway has breached its duty to
Plaintiffs.
76. As a result of Amway's negligence, Plaintiffs have suffered damages
in an amount to be proven at trial.
77. Amway has known for years that its distributors have engaged in the
unlawful practices of spreading false and defamatory rumors about
Plaintiffs and their products and trademarks. Amway has the capacity and
authority to proscribe and prevent such unlawful practices. Amway's
failure to so act was motivated by bad faith and malice and manifested a
wanton disregard of and reckless indifference towards Plaintiffs'
rights, thereby entitling Plaintiffs to punitive or exemplary damages.
COUNT FIVE VICARIOUS LIABILITY
78. Plaintiffs incorporate as if fully restated herein their prior
allegations in paragraphs 1 through 77 of the Third Amended Complaint.
79. Through distributor agreements, agencies, organizations and entities
such as ADAC and through publications, guidelines and manuals such as
the Business Reference Manual, Amway was in a position of authority,
control and supervision over its distributors such as Defendants and has
profited from their efforts.
80. Distributor Defendants were and continue to be partners, agents and
representatives of Amway and as such stand in partnership,
agency/principal and/or master/servant relationships with Amway.
81. Amway cloaked the Distributor Defendants with actual and apparent
authority to represent Amway.
82. The conduct alleged herein against Distributor Defendants took place
within the scope of their partnership/agency relationships with Amway.
83. As such, Amway is vicariously liable for the conduct of agents and
servants as alleged herein.
84. As a result of this conduct of defendants alleged herein, Plaintiffs
have suffered damages in an amount to be proven at trial.
85. Defendants' conduct as alleged herein was undertaken in bad faith
and manifested a wanton disregard of and reckless indifference towards
the rights of Plaintiffs, thereby entitling Plaintiffs to an award of
punitive or exemplary damages.
IV. RELIEF
WHEREFORE, Plaintiffs pray for relief as follows:
a. judgment against Defendants jointly and severally for compensatory
damages in excess of Fifty Thousand Dollars ($50,000.00);
b. judgment against Defendants jointly and severally for punitive
damages in an appropriate amount to deter Defendants and others from the
conduct complained of;
c. judgment against the Defendants jointly and severally for attorneys'
fees;
d. for an order permanently restraining Defendants and their partners,
agents, and corporate subsidiaries and affiliates, individually and
jointly, from: (1) publishing, circulating, or causing the publication
of circulation of the statements in Exhibit F and G or any similar false
statements purporting to connect Plaintiffs or any of their subsidiaries
or affiliated corporations or their products or trademarks to Satanism,
the devil, or the Church of Satan; (2) publishing, circulating, or
causing the publication or circulation any disparaging statement about
Plaintiffs' products, including statements that Plaintiffs' products are
negative, evil, the devil's work, or contain sludge, harmful abrasives,
harmful ingredients, adulterants, and/or fillers (such as beach sand,
peanut shells, walnut shells, or egg shells), or are harmful to
consumers, clothing, appliances, and homes, or that Plaintiffs' products
are less effective, more expensive, and/or inferior to Amway's competing
products; (3) publishing, circulating, or causing the publication or
circulation any statement that misrepresents the economic benefits of
using Amway's products and the economic detriments of using Plaintiffs'
products; and (4) committing unfair methods of competition, unfair or
deceptive acts or practices, including conducting business as an illegal
pyramid scheme, using misrepresentations to recruit individuals into the
Amway pyramid, and forcing distributors not to buy any products of
Plaintiffs and to purchase the competing products of Amway exclusively;
e. for an order requiring Amway to affirmatively communicate to all of
its distributors (through such means as its written distributorship
applications, agreements, Business Reference Manual, Amvox system and
other publications, guidelines and manuals) that the following
statements are false and must not under any circumstances or for any
purposes be published or circulated; (1) statements purporting to
associate Plaintiffs, any of their subsidiaries, affiliated
corporations, their products, or trademarks to Satanism, the devil, or
the Church of Satan or other undesirable or negative associations, (2)
statements that Plaintiffs products are negative, evil, the devil's
work, or contain sludge, harmful abrasives, harmful ingredients,
adulterants, and/or fillers (such as beach sand, peanut shells, walnut
shells, or egg shells), or are harmful to consumers, clothing,
appliances, and homes, or that Plaintiffs' products are less effective,
more expensive and/or inferior to Amway's competing products; and (3)
statements that misrepresent the economic benefits of using Amway's
products and the economic detriments of using Plaintiffs' products.
f. under the provisions of the Lanham Act, 15 U.S.C. §112 et seq.,
for judgment against the Defendants jointly and severally for attorneys'
fees since this case constitutes an exceptional case and entitles
Plaintiffs to recover attorneys' fees and costs against Defendants, and
g. for such other and further relief to which Plaintiffs are entitled.
V. JURY DEMAND
Pursuant to Rule 38(b), Federal Rules of Civil Procedure, Plaintiffs
demand trial by jury.
Respectfully submitted this 18th day of December, 1996.
CAMPBELL MAACK & SESSIONS
TRACY H. FOWLER
WILLIAM H. CHRISTENSEN
SEAN N. EGAN
One Utah Center, l3th Fl.
201 South Main Street
Salt Lake City, Utah 84111
(801 ) 537-5555 telephone
THOMAS S. CALDER
JOHN E. JEVICKY
ROBERT HEUCK II
DINSMORE & SHOHL
1900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
(513) 977-8200 telephone
STANLEY M. CHESLEY
THERESA L. GROH
WAITE, SCHNEIDER,
BAYLESS & CHESLEY
1513 Central Trust Tower
Cincinnati, Ohio 45202
(513) 621-0267 telephone
OF COUNSEL:
JOSEPH P. SUAREZ
THE PROCTER & GAMBLE COMPANY
Legal Division
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
(513) 983-4194 telephone
Attorneys for Plaintiffs
The Procter & Gamble Company
and The Procter & Gamble
Distributing Company
-------------------------------------
Exhibit F, transcript from Amvox communication system:
Thursday, 1:24 P.M.
Remote Message from Randy and Valorie Haugen
"This is a great message, listen to it."
Thursday, 12:17 A.M.
Remote Message from "This is Randy [Walker] double Your numbers."
"Hello Randy, attached is a very interesting message. Love you.
Bye, bye."
Wednesday, 11:38 P.M.
Remote Message from Jeff Musgrove
"Randy, this is Jeff -- hey you may have already
received a message like this, uh, before but, um, figured I'd send
it to you just in case you haven't. It's, uh, pretty interesting.
Anyway talk to you later. Love you man. Bye, bye."
Wednesday, 10:25 P.M.
Remote Message from Roger and Susan Patton
"Hey Jeff, it's Roger Patton.
"I wanna run something by you real quick that I think you will
find pretty interesting. Just talking to a guy the other night
about this very subject and it just so happens that a guy brings
information in and lays it on my desk this morning, so here it
goes.
"It says the president of Procter & Gamble appeared on the Phil
Donahue Show on March 1, '95. He announced that due to the
openness of our society, he was coming out of the closet about
his association with the church of satan. He stated that a large
portion of the profits from the Procter & Gamble products go to
support his satanic church. When asked by Donahue if stating
this on television would hurt his business, his reply was 'there
are not enough Christians in the United States to make a
difference.' And below it has a list of the Procter & Gamble
products which I'll read:
"Duncan Hines, Folgers, Gleem, Bold, Crisco, Jif, Bounce,
Puritan, Always, Cascade, Secret, Attends Under Garments,
Cheer, Sure, Oil of Olay, Joy, Head N Shoulders, Wondra,
Comet, Pert, Camay, Dawn, Prell, Coast, Downy, Vidal
Sassoon, Ivory, Gain, Luvs, Lava, Mr. Clean, Pampers,
Safeguard, Oxydol, Pepto Bismol, Charmin, Spic N Span,
Scope, Puffs, Tide, Crest, Zest, Top Job
"It says if you are not sure about a product, look for the symbol
of the ram's horn that will appear on each product beginning in
April. The ram's horn will form the 666 which is known as
satan's number. I'll tell you it really makes you count your
blessings to have available to all of us a business that allows us
to buy all the products that we want from our own shelf and I
guess my real question is, if people aren't being loyal to
themselves and buying from their own business, then whose
business are they supporting and who are they buying from.
Love you. Talk to you later. Bye."
----------------------------------------------------------------------------
Wall St. Journal, 8/1/90
Proctor and Gamble sued two Amway Corp. distributors.
The Cincinatti-based consumer-products giant, eager to quash rumors
linking the company to Satanism, sued the distributors for spreading the
tales and launching boycotts of P&G brands.
The lawsuit, filed in federal district court in Topeka, Kan., seeks an
order to stop the distributors, James and Linda Newton of Parsons, Kan.,
from circulating the rumors. Proctor & Gamble also seeks
compensatory damages of more than $50,000 and unspecified punitive
damages.
Previously, P&G has filed a dozen lawsuits related to the
devil-worship rumor, including actions against three other Amway
distributors. All were settled out of court, the company said.
The Newtons distributed brochures that accuse the company of supporting
the Church of Satan, P&G alleged. The couple also told others that
P&G's moon and stars logo is a Satanic symbol and encouraged them to
boycott P&G products, according to P&G officials. The Newtons
couldn't be reached for comment.
A spokewoman for Amway, Ada, Mich., said its distributors operate
independently and declined to comment on the suit. She saidd Amway has
cooperated with P&G in the past to squelch rumors about Satanism.
Distributors for Amway sell numerous products, including detergents,
cleaning and personal care products. P&G sells leading brands in all
those categories, such as Tide detergent, Spic and Span cleaner and Pert
Plus shampoo.
---------------------------------------------------------
Time Inc. 1990
Selling to beat the devil. (Amway vendors attempt to discredit Proctor
and Gamble by linking company with satanism)
Bareknuckle competition is the credo of American business, but James and
Linda Newton may have taken things too far. In a lawsuit filed last
week, Procter Gamble accuses the Parsons, Kans., couple of promoting
their independent Amway distributorship by linking P&G to satanism.
The Newtons allegedly circulated a flyer claiming that the president of
P&G "gave Satan all the credit for his riches" and
offering information on "alternative products." For more than
a decade, P&G has been bedeviled by the satanism charge. Tales that
its 108-year-old moon-and-stars logo was demonic forced the symbol off
company packaging. Three previous rumors were traced to Amway
distributors, who were repudiated by Amway officials.
---------------------------------------------------------
From Compuserve AP News - Business Section Today
AP 28 Aug 95 16:02 EDT V0107
P&G Sues Over Satanism Rumors
CINCINNATI (AP) -- Procter & Gamble Co. on Monday filed a lawsuit
alleging an employee of competitor Amway Corp. spread rumors linking
P&G to devil worship. The lawsuit was filed in U.S. District Court
in Salt Lake City against Randy Haugen, a high-ranking distributor of
Amway products. It accuses Haugen of using Amway's voice mail system to
spread the rumors to other Amway distributors. P&G is seeking more
than $50,000 from Haugen. The court will determine the exact amount of
the damages if P&G wins its case, company spokeswoman Linda Ulrey
said. Haugen, of Ogden, Utah, could not be reached for comment Monday.
His home phone number is not published. A message seeking comment was
left for Amay spokeswoman Judy Jones at the direct sales company's
headquarters in Ada, Mich. "We have been fighting this outrageous
rumor for over 15 years," said James J. Johnson, P&G senior
vice president and general counsel. "Throughout that time, people
associated with Amway have played a role." The rumors typically
claim P&G's president spoke in support of Satanism on a nationally
televised talk show and that the company's moon-and-stars trademark is a
Satanic symbol. No one from P&G ever has discussed Satanism on a
talk show, the Cincinnati-based consumer products company said. P&G
said its trademark dates back to the mid-1800s, when a man in the moon
was a popular design. The 13 stars in the design honor the 13 original
colonies. P&G has answered about 200,000 calls and letters about the
rumors during the past 15 years. Calls and letters peaked in 1982, 1985,
1990 and this year.
---------------------------------------------------------
Tuesday August 29 6:25 a.m. EDT
P&G Fights Satanism Rumors Again
CINCINNATI (Reuter) - The maker of Pert shampoo is trying once again to
wash that rumor out of its hair -- the rumor that says its stars and
moon logo is a satanic symbol.
Procter & Gamble Co., the Cincinnati-based consumer products giant,
said Monday it launched a new battle in federal court to squelch the
rumor when it filed a lawsuit against an independent distributor of
Amway Corp. products.
Amway is one of the world's largest direct sales companies. More than
two million independent distributors sell Amway's 400 home care and
personal care products directly to consumers. Amway had $5.3 billion
sales last year.
People associated with Ada, Mich.-based Amway, which makes home care and
personal care products that compete with some P&G lines, have
"played a role" in spreading such rumors for years, P&G
said.
"We have been fighting this outrageous rumor for over 15
years," P&G senior vice president and general counsel James J.
Johnson said in a news release.
The lawsuit, filed in U.S. District Court in Utah, accuses Randy Haugen,
an independent Amway distributor, of spreading false and malicious
statements connecting P&G with satanism, Procter & Gamble said.
P&G described Haugen as a high ranking "diamond level"
distributor of Amway products who appears in Amway corporate
publications.
Haugen used Amway's electronic voice mail system to spread the rumor to
other Amway distributors, P&G said.
P&G said previous similar lawsuits have also named Amway
distributors and further legal action may do the same.
Amway said it has tried in the past to help P&G stop the rumors.
"Amway will continue to cooperate with Procter & Gamble and
will continue to enlist the support of independent Amway distributors to
stop this rumor," Amway said in a statement.
P&G was founded as a soap making concern in 1837. Its curly-haired
man in the crescent moon has been a trademark since the mid-1800s when
his portrait was "simply a popular design," P&G said.
The 13 stars represent the 13 American colonies, it added.
In 15 years, P&G has gotten nearly 200,000 calls and letters about
the rumors, with inquiries peaking in 1982, 1985 and 1990. This spring,
calls and letters on the subject jumped from 22 a day to 200 a day,
P&G said.
---------------------------------------------------------
AP 2 Apr 96 17:58 EST V0383
P&G Expands Satanism Lawsuit
CINCINNATI (AP) -- Procter & Gamble Co. said Tuesday it has added
Amway Corp. and five Amway distributors to a lawsuit over rumors linking
P&G to devil worship.
Amway independent distributor Randy Haugen was the sole defendant named
in the original lawsuit filed August in U.S. District Court at Salt Lake
City.
The lawsuit accused Haugen of using Amway's voice mail system to spread
the rumors to other Amway distributors. It seeks a minimum of $50,000 in
damages. The court will decide the exact amount.
P&G alleges Amway, which competes with P&G in some product
categories, is responsible for its distributors' conduct and has failed
to stop them from spreading the rumors.
The amended lawsuit claimed the distributors have spread the satanism
rumor to encourage consumers not to buy P&G products, said James
Johnson, P&G's general counsel and senior vice president.
Amway, from its headquarters in Ada, Mich., said Tuesday it is being
unfairly blamed by P&G. Amway said that Haugen has issued a
retraction of the rumor and that it has been cooperative in response to
P& G's lawsuit.
Amway said it doesn't condone the rumor mongering and that P&G's
action appears aimed at discrediting a competitor.
The rumors typically claim that P&G's president spoke in support of
Satanism on a nationally televised talk show and that the company's
moon-and-stars trademark is a satanic symbol.
No one from P&G has ever discussed satanism on a talk show, the
Cincinnati- based consumer products company said.
P&G said its trademark dates back to the mid-1800s, when a man in
the moon was a popular design. The 13 stars in the design honor the 13
original colonies.
P&G has answered about 200,000 calls and letters about the rumors
during the past 15 years. Calls and letters peaked in 1982, 1985, 1990
and this year.
---------------------------------------------------------
CINCINNATI, April 2 /PRNewswire/
The Procter & Gamble Company (NYSE: PG) amended its suit filed
August 31, 1995, against Randy Haugen, a high-ranking "diamond
level" distributor of Amway products, to include the Amway
Corporation and five additional Amway distributors. This suit will
remain in the U.S. District Court of Utah, where it was originally
filed.
P&G contends that Amway is responsible for its distributors' conduct
in this case. Amway has failed to stop its distributors from spreading
false and malicious statements connecting P&G with satanism.
Evidence discovered by P&G in this lawsuit revealed that the five
additional Amway distributors also spread these false stories about
P&G.
"Our efforts in the past to get the Amway Corporation itself to put
a halt to this illegal business practice by their distributors have
obviously proved futile. We are enforcing our legal rights," said
Procter & Gamble Senior Vice President and General Counsel James J.
Johnson. "We have seen little or no evidence that Amway has tried
to stop this rumor.
"Amway competes directly with P&G in a number of product lines,
and some Amway distributors have used this rumor to encourage a consumer
boycott of P&G products," Johnson added.
The false stories typically claim that P&G's president discussed
satanism on Donahue, a nationally televised talk show, and that the
company's "moon and stars" trademark is a satanic symbol. The
president of P&G has never discussed satanism on any nationally
televised talk show, nor has any other P&G executive. The moon &
stars trademark dates back to the mid-1800s, when the man in the moon
was simply a popular design. The 13 stars in the design honor the
original 13 Colonies.
P&G has answered almost 200,000 calls and letters about these false
rumors during the past 15 years. Calls and letters peaked in 1982, 1985,
1990 and 1995. In the United States, consumer contacts to the company
went from 22 a day early in 1995 to nearly 200 a day a short time later,
when the false stories began spreading.
Prominent religious leaders and organizations from virtually every
denomination have condemned spreading these false rumors. They include:
The Billy Graham Evangelistic Association; Jerry Falwell; The Southern
Baptist Convention; The Most Reverend Daniel E. Pilarczyk, Archbishop of
Cincinnati; and the Church of the Nazarene.