From the category archives:

MLM Legal Issues

Important DRA call: Legal MLMs vs. Illegal Pyramid Schemes

by louabbott03.02.2010 MLM Legal Issues

Where’s the Line?
Thursday March 4th Training Call with Len Clements and Attorney Kevin Grimes

Presented by the Association of Network Marketing Professionals (aka DRA)
Featured Trainer: Kevin Grimes, co-founder, Grimes & Reese, PLLC
Interviewed by Len Clements, founder and CEO of MarketWave Inc.As the number of network marketing companies in the U.S. [...]

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MLM & Coupons, Vouchers, Gift Certificates, and Down Payments

by louabbott01.26.2010 MLM Articles

MLM Legal Article by Gerald P. Nehra, Attorney at Law
The title of this article lists names of pieces of paper and business transactions that are perfectly legal. Even paying commissions to the person arranging the transaction can be structured so as to be perfectly legal.
So why am I writing about it? Because the payment of [...]

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Melaleuca wins two victories in Idaho courts

by louabbott01.09.2010 MLM Legal Issues

Last week marked a very successful week for Melaleuca in the legal arena:
First and foremost, Melaleuca was granted a TRO (temporary restraining order) against Max International.  The conclusion of the rather remarkable order from the United States District Court for the District of Idaho reads this way:
The Court finds that the plaintiff has met its [...]

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Your Travel Biz, YTB, Faces New Challenge to its claim to be a legal MLM

by louabbott01.07.2010 MLM Legal Issues

YTB sued for $100 million
If you look at any of the “Related Posts” below, you will know that YTB, Your Travel Biz, has faced more than its share of legal challenges because of its business model.  This new class action suit, at $100 million, may be the biggest yet. This is according to George Dooley [...]

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MonaVie sues XOWii in yet another MLM lawsuit

by louabbott12.25.2009 MLM Legal Issues

Does this lawsuit raise legal and moral issues in MLM that we all need to think about?
I guess any industry that has big business is going to have to endure it’s share of lawsuits. “Why can’t they just all get along?” seems to be a Utopian dream.
Here’s the latest news from the capital of network [...]

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Evolv Health now getting sued over misuse of M.D. Anderson trademark

by louabbott11.24.2009 MLM Legal Issues

 On September 9th, we posted the article called “We Don’t Recommend You Drink the Water …” that revealed the M. D. Anderson Cancer Center’s concerns that Evolv Health’s use of their name would imply an endorsement.
At that time, they issued a statement to clarify their position:
M. D. Anderson does not have any involvement with the [...]

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Pre-Paid Legal Services Announces FTC Developments

by louabbott11.20.2009 MLM Legal Issues

As a publicly traded company, Pre-Paid Legal (PPD) is required to disclose anything that may materially affect the stock and investors. Thus …
… on November 18, 2009, we received a proposed draft complaint from the Federal Trade Commission (“FTC”) seeking permanent injunctive relief, disgorgement of proceeds and other relief, including costs, relating to our [...]

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Stream Energy / Ignite Announce Dismissal of Federal Lawsuit

by louabbott11.10.2009 MLM Legal Issues

Judge Rules Plaintiffs Must Resolve Complaints with Ignite Through Arbitration
In a nutshell, the above was the ruling by the judge in response to the lawsuit filed last July against the MLM arm of Stream Energy, Ignite.  More details of the case can be found here: Natural gas retailer charged in pyramid scheme
DALLAS, Nov. 10 /PRNewswire/ [...]

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Market Report — In Play (PPD)

by louabbott10.31.2009 MLM Legal Issues

MSN Money July 23, 2009
[link no longer available]
Pre-Paid Legal wins cross-recruiting judgment … announced that on July 7, 2009, a federal court entered judgment against a former Pre-Paid Legal Services, Inc. sales associate, Benson W. Kane, in a lawsuit involving Pre-Paid Legal Services, Inc., its Founder & CEO Harland Stonecipher, and Platinum Executive Director Mark [...]

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Judge rules against Amway

by louabbott10.27.2009 MLM Legal Issues

Former Amway/Quixtar distributors sued to stop arbitration
One of the continuing legal issues that needs further resolution in law concerns the rights of distributors, who are independent contractors, who leave their former MLM company.  This Amway ruling comes down in favor of the distributors (for a change).

GRAND RAPIDS, Mich. (WOOD) – A federal judge has ruled [...]

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MLM industry hopes to pick up after Sunshine Empire saga

by louabbott10.27.2009 MLM Legal Issues

Source:  Saifulbahri Ismail/Evelyn Choo, Channel NewsAsia
This article properly identifies one of the causes of the bad reputation of MLM (multilevel marketing).  It is that people, including journalists who write about the industry, don’t know the difference between legitimate MLM companies and illegal pyramid schemes or other types of fraudulent operations.
SINGAPORE: The Consumers Association of Singapore [...]

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Distributor Group Represented by Shughart, Thomson & Kilroy

by louabbott10.24.2009 MLM Legal Issues

Business Wire (press release) – Released August 15, 2007
[link no longer available]
… In fact, the distributors resigned from Quixtar on Thursday, prior to filing their class-action lawsuit against the company in Los Angeles Thursday …
Also, read our company overview:  Amway Facts, News and Review

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Pyramid Scheme or Legal MLM: How to tell the difference

by louabbott10.20.2009 Free Video Presentations

The question comes up all of the time for network marketers, “Is this one of those MLM pyramid deals?”
The fact is, most people do not really understand the difference between a pyramid scheme and a legal MLM or network marketing business opportunity.  Even most journalists writing on the subject do not understand the differences.
The reason [...]

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Mannatech sues over five patents

by louabbott07.16.2009 MLM Legal Issues

Dallas Business Journal – Published July 16, 2009
Mannatech Inc., a local maker of nutritional supplements, has sued two rivals for the alleged infringement of five of its patents.
The Coppell company brought the action in federal district court in Dallas against Fayetteville, Ark.-based Boston Mountain Laboratories Inc, which does business as Natural Health [...]

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Natural gas retailer charged in pyramid scheme

by louabbott07.01.2009 MLM Legal Issues

Atlanta, GA – Published July 01, 2009
Stream Energy, a fast-growing Texas-based natural gas retailer that entered Georgia last year, is being charged with running a pyramid scheme in a federal class action lawsuit filed this week.
Stream, in a statement, called the suit “groundless and without merit.”
A Houston law firm says in the complaint [...]

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Reco McDaniel Resigns from Lightyear Alliance

by louabbott05.17.2009 MLM Legal Issues

May 17, 2009 C.O.D.E.
R.E.D. Marketing Team site
[link no longer available]
It is now official – … has broken ties with Lightyear Wireless aka Lightyear Alliance. This information has
been posted so you will get the TRUE story here … The McDaniels and their attorneys began to research Lightyear’s business practices. After an investigation of Lightyear’s business [...]

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8th Circ. Upholds Dismissal Of Amway Antitrust Suit

by louabbott05.05.2009 MLM Legal Issues

Law360 – Published May 05, 2009
The U.S. Court of Appeals for the Eighth Circuit has affirmed a judgment that Amway Corp. did not unfairly restrict competition among the individual contractors that distribute its products.
Read the entire article at Law360
Also, read our company overview:  Amway Facts, News and Review

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Man accuses Usana of operating as pyramid scheme

by louabbott04.24.2009 MLM Legal Issues

Las Vegas Sun – April 24, 2009
A Clark County man has sued Usana Health Sciences Inc., alleging the big direct marketer of nutritional and cosmetic products operates as a pyramid scheme in which independent distributors must focus on signing up more distributors as opposed to selling products.
Joseph Chirco, in his lawsuit filed [...]

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Melaleuca claims pesticide giant infringes on its eco-friendly trademark

by louabbott04.23.2009 MLM Legal Issues

Idaho Business Review – Published April 23, 2009
Melaleuca Inc., the Idaho Falls-based wellness products company, filed a federal lawsuit on April 14 that claims lawn and garden products giant The Scotts Miracle-Gro Co. violated its EcoSense trademark to sell caustic, insect-killing products.
The lawsuit says Melaleuca, which employed more than 3,400 [...]

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Multilevel marketing ? ForeverGreen is struggling financially and being sued by vendor

by louabbott04.23.2009 MLM Legal Issues

Trading Markets – Published April 23, 2009
A 5-year-old Orem-based network marketing company is struggling under the twin challenges of financial losses and a legal attack by a vendor that is turning itself into a competitor.
ForeverGreen Worldwide Corp., a seller of natural food, nutritional supplements and personal-care products, lost $1 million in 2008, had [...]

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