In preparation for trial, American Apparel first indicated that it would follow a strategy intended to undermine Allen's celebrity endorsement value (and presumably embarrass him) by resurrecting the old scandal regarding his affair with and subsequent marriage to his then-companion Mia Farrow's adopted daughter, Soon-Yi Previn. AA founder Dov Charney, no stranger to charges of inappropriate sexual behavior himself, somehow seemed to claim kinship with Allen on on this basis -- and then went on to make generalized statements about the right to free speech.
Legally speaking, the first reported strategy was sleazy but had an outside chance of influencing the court with respect to the measure of damages; the second wasn't worth the pixels it was written in. Yes, Charney is entitled to call Allen his favorite filmmaker and even make comparisons between Allen's twisted history and his own; no, he doesn't have the right to put Allen's face on a billboard next to his own company's logo without regard for Allen's rights of publicity. End of case.
According to the New York Post, Charney remains unrepentant and insists that American Apparel's insurance company drove the settlement. He added that, for his part, there were no hard feelings.
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