Wednesday, September 12, 2007


Original Source

Pyramid Scheme Lawsuit Against Quixtar Will Continue
Federal Judge adjourns case until September 19th

Wednesday, September 12, 2007

Los Angeles, California -
United States District Court Judge Gary Feess will continue to hear arguments on September 19th in a lawsuit brought by top ex-Quixtar Independent Business Owners (IBOs) against Quixtar alleging that the company is an illegal pyramid scheme. Quixtar is a sister company of Amway Corporation based in Ada, Michigan. Amway was started by Jay Van Andel and Richard DeVos and is still controlled by their families.

A nationwide class of IBOs filed a lawsuit (Woodward et al. v. Quixtar,Inc. CV 07-5194 GAF) against Quixtar August 9, 2007, in the United States District Court for the Central District of California, Los Angeles. The complaint alleges that Quixtar is operating as an illegal pyramid scheme. The complaint asks the court to find the Quixtar uniform distributor contracts unenforceable as they promote an illegal result and the purpose of entering into the contract has been frustrated by the illegal activities of Quixtar. The plaintiffs in the California case are seeking to be released from their contract.

"Everyday in court is a big win for the IBOs," said D.J. Poyfair, attorney for Denver-based Shughart, Thomson & Kilroy, the firm representing the IBOs. "The more documents and information that becomes public about how Quixtar operate the better it is for my clients."
"For the first time in history, the truth about Quixtar is coming out into public view," Poyfair added. "If the Van Andel and DeVos families truly believe in free enterprise they will do the right thing and let my clients go."

Documents filed in the case clearly outline the IBO's reasons for filing the lawsuit. The documents state in part:

"Quixtar knows its products are priced so high they cannot be sold and yet it continues to recruit distributors in a concerned effort to enrich the founding families at the expense of the rank and file simply trying to earn a living. Quixtar holds itself out as a legitimate, multi-level home-based business opportunity, but in fact operates as an illegal pyramid recruitment scheme. Quixtar leads participants to believe that they can build a viable business retailing Quixtar products; but once the participants sign up and pay their initial investment into the pyramid, it quickly becomes evident that Quixtar's products cannot be retailed because they are hopelessly overpriced. Quixtar no longer makes any pretense of retailing products to consumers outside of Quixtar's network of distributors, but relies entirely on the purchase and internal consumption of products by distributors to fuel its pay plan."

Posted by The IBO Rebellion at 4:05 PM


Anonymous said...

See my post on Alticor's blog below..
The press releases I am talking about are from Alticor's blog site, not this one.

Just Go Team? Who threw the coffee in Team’s face to start with? Woodward obviously gave Quixtar time to keep all of us out of this mess, and Quixtar wouldn't set down on Aug. 9th. Quixtar filed a Brief a week ago, why did they need more time to file a brief today?

If any of the things that Randy Haugen, Ron Simmons, Chuck G. are saying are true, Quixtar messed up. That being said, should Team have changed a couple of things, like not requiring BSM or products when signing up - yes. Were they willing to talk about changing this - yes.

Woodward’s affidavit does list several prices of items that are competitive per use. Unfortunately, if Quixtar wanted to set down and discuss this over coffee, it is a little late. I told you want to do a month ignored my suggestions. The whole bunch of IBO leaders have been telling Quixtar what needed to be fixed for years, particularly since June.

Alicor could tell the truth instead of spinning the news. Quixtar has lost lots of rulings the last couple of weeks.

You better figure out how to win this one or we are all toast.

#32 continued..Perhaps I should repeat what I suggested a month ago: Allow all IBOs, in an LOS to have the same choice that we had in 1999. Renew in the new direction Quixtar becoming Amway, or stay in the Quixtar that existed in June of this year. If the corporation really can solve the PR for the Amway name that they claim in US and Canada, IBOs will choose Amway, just like they choose Quixtar in 1999.

Quixtar can not ignore the IBOAI like they have done since June and before. Jody Victor for decades has told any LOS that had him speak that the Corporation could not change the rules without the IBOAI agreeing. It has been shown that that no longer applies. That has to be fixed.

The 3rd thing to do is allow all terminated IBOs, or those resigning since August 9th, to come back, same upline/downline, providing they drop any lawsuits. This would have to include allowing TEAM to be an approved BSM provider, along with allowing Team system. You need to toss the "stacking" rule sent out in July and have Team change a couple of things, like not requiring BSM or products when signing up. They had already made sure that no one would be "stacked". See TEAM sign up packet that was in use in July.

4th, Pricing needs to be worked on further, and not just the token things. Nutilite did that with Daily vitamins. Quixtar needs to do that with everything, starting with the most popular items, including DoubleX, SA8, XS, etc...

5th, Simply Nutrilite can not be an open ordering website. They need an IBO number to order, or run them through the process of getting one just like has for 8 years. I know you will assign one for Simply Nutrilite customers without an IBO, but the whole site, and all the posts from Alticor, lets the IBOs think you don't need us anymore.

This fight should never have started. Mistakes were made of both sides, but Alticor has been so mean and prideful in their moves that they need to fix this now. You have one week. I, for one hope you don't loose the LA lawsuit as Amway and Quixtar will either be finished in the US or the Court will require you to do what I have just posted just to survive.

Both sides have been acting Junior high. Perhaps if Alticor/Quixtar had not been acting like a bunch of bullies, Orin and Chris wouldn't have acted like tattletale go to the press whiners. You really didn't give them a choice. They hoped they had enough protection, you didn't think they would do it, and they called your bluff. Can you say stupid?

That being said, the person that writes the press releases for Alticor, this one and the ones since Go Team Go, should have already been fired. Corporate Communications is a disgrace for all IBOs and employees.

Anonymous said...

Here's another take on things -- assuming you're interested.

The following is directly from an eyewitness (me) to the hearing in Los Angeles on September 12, 2007, and is being posted because inaccurate information has appeared elsewhere on the Internet. We are not inviting any comment or discussion on this, out of respect for the Court. We simply want to ensure that there is no misunderstanding.

On September 12, 2007, at the US District Court for the Central District of California, a hearing was held on the class action lawsuit filed by Team members against Quixtar and, specifically, related motions by parties on both sides of the issue. The hearing was under two hours in length and was attended mostly by legal counsel, the plaintiffs, and a handful of their supporters. This is what occurred:

Comments were strictly by legal counsel, the Court did not take any testimony during the hearing

The Court invited counsel to present their arguments and rebuttals related to the motions before the Court, which they did.

Near the end of the hearing, plaintiffs asked for and received permission to submit a 15-page memorandum to the Court which had not previously been introduced and therefore had not yet been reviewed by Quixtar. The Court noted that, therefore, Quixtar needed to have time to review and respond to the memorandum, which he granted. Quixtar will respond by September 19 (which does not, contrary to some reporting elsewhere, require another hearing).

The Court also required the parties to submit copies of all documents the attorneys referenced during their arguments, to the extent such documents had not been submitted in advance.

The Court said that after receiving Quixtar's reply to the memorandum, the matter would be taken under advisement and a decision rendered thereafter. However, the Court also noted that it reserved the right to call the parties back for another hearing, if necessary, although the Court indicated that wasn't likely to happen.

The Court did not indicate when a decision on the motion would be issued, but it is likely that it may not be until the latter part of September or later.

Jonathan Bernstein
IBOAI Blog Moderator

chris said...

any word on if Quixtar actually did what they were supposed to by the 19th?