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Sunbeam sues AMA
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September 8, 1997: 6:25 p.m. ET
Takes action after medical association backs out of endorsement deal
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CHICAGO (CNN) - Sunbeam Corp. filed suit against the American Medical Association in U.S. District Court in Chicago Monday as a result of the AMA's decision to back out of a contract to put the AMA seal on several Sunbeam products.
The Chicago-based doctors' organization, which was to have been paid for the use of its seal, backed out of the five-year contract after it was met with public criticism. Sunbeam, in a news release, said it received a letter from the AMA Monday confirming that it would not honor the agreement.
"We regret that the refusal of the AMA to honor its contractual commitments has necessitated taking this matter to court," Sunbeam Chairman All Dunlap said.
"If the AMA is to stand for integrity and honoring commitments, then it must honor its contract with Sunbeam," Dunlap said. "The AMA cannot just change its mind and expect to walk away from our agreement because of adverse publicity directed at the AMA."
A statement issued by the AMA said the deal was ditched because it "contained elements that were inconsistent with American Medical Association policy and mission."
"Although our intent was to use any revenue generated from the program to fund AMA public health campaigns, in the form executed, the agreement was a mistake," said Dr. Thomas Reardon, chairman of AMA Board of Trustees.
"The Board of Trustees had neither reviewed nor approved the agreement and it has now directed -- within two weeks of the agreement's execution - that the AMA not go forward with it," Dr. Reardon said. 
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