Thursday, April 3, 2008
Quixtar"s arbitration process defeated in Federal court in Northern California. It seems the crack in the wall of Amway's oppressive rules of conduct is ever widening as the truth becomes more apparent in courts of law. It makes me wonder if perhaps when the crack in that wall gets wide enough will 31,000+ people be filing a class action suit seeking damages for loss of income due to illusory non compete, pain and suffering and such. I'm no lawyer and am not necessarily advocating that, But I do wonder if it's possible. The following article is posted on The IBO Rebellion Blog.
Quixtar continues to get pounded in courts across America. The latest fissure was opened by a decision handed down on March 31st in United States District Court for the Northern District of California. The decision, rendered by Senior Judge Samuel Conti, found Quixtar's arbitration process to be "procedurally and substantively unconscionable, and therefore unenforceable."
Judge Conti's written opinion was very comprehensive and quite impressive. Judge Conti meticulously detailed why each and every part of Quixtar's arbitration and dispute resolution process is inherently flawed and unfair.
The motion ruled on by Judge Conti was the result of a suit brought by former IBO Jeff Pokorny. Pokorny and others alleged the Quixtar is an illegal pyramid scheme. It appears that the California suit filed by the TEAM affiliated IBOs and Pokorny's class action suit are very similar. If you recall Quixtar has yet to refute any of the allegations claimed in the suit filed by Woodward and company. Pokorny's suit also named Bill Britt, Ron Puryear and their related tools organizations. Quixtar, Britt, and Puryear all made motion to have the suit removed from court and into arbitration where they can hide their mischief.
The Court attacked Quixtar's arbitration clause on the basis of how it is procedurally applied. The Court stated:
As most of you know by now the arbitration clause was added to distributor agreements in 1998. Quixtar then added the non-compete and non-solicitation clauses in the same underhand way in 2004. In both of these instances IBOs were not fully disclosed the information nor were they given any ability to opt out or negotiate. Again the unilateral actions of Amway / Quixtar will likely result in the striking down of the Quixtar's non-compete and non-solicitation clauses on the same grounds Judge Conti notes here.
To determine whether a contract provision is procedurally
unconscionable, the Court looks for oppression or surprise, where oppression "'arises from an inequality of bargaining power that results in no real negotiation and absence of meaningful choice.'"
What is interesting is that Quixtar admits that there is no negotiation but instead claims that the IBOAI is the "voice of IBOs." Judge Conti noted that IBOs have the option to join the IBOAI or not but that those that do join aren't allowed to vote until reaching the level of "Platinum." Quixtar did not present any evidence to suggest that the IBOAI did represent the best interests of IBOs. As we know the IBOAI failed miserably to represent IBOs. Outside of the 15 martyrs led by Woodward, the rest of the IBOAI laid down with the company over pricing issues as well as the dreaded name change to the notorious AMWAY. Judge Conti also noted that in Pokorny's case he was not only suing Quixtar but those in his upline and that believing the IBOAI would act in his interest was described as:
In such a scenario, allowing the most senior IBOs to "negotiate" the rights of all other IBOs would be leaving the proverbial fox in charge of the henhouse.Pokorny's attorneys raised the following issues with Quixtar's arbitration process and all of the steps required leading to arbitration:
Plaintiffs, however, advance a number of problems with theJudge Conti covers in great detail the short comings of the pre-arbitration procedures IBOs are forced to endure. Judge Conti sums it up as follows:
Conciliation stages of the Quixtar process, and argue that the
agreement is not enforceable. The specific defects Plaintiffs
1. The Hearing Panel must make recommendations that promote
the RoC being challenged here.
2. The Conciliation requirement is not mutual. IBOs must
bring claims against Quixtar using the Quixtar ADR
process, but Quixtar is not required to do so.
3. The Conciliation process is not neutral because the
IBOAI board is dominated by the "Kingpin" IBOs that
Plaintiffs allege are part of the same unlawful
enterprise as Quixtar.
4. At most, the Hearing Panel or IBOAI board can make a
recommendation, which Quixtar may accept, reject, or
modify at its discretion.
5. Quixtar may unilaterally modify the RoC.
6. The procedure is burdensome, time-consuming, and
designed to encourage compliance with the very rules
Plaintiffs are challenging here.
7. IBOs must initiate all arbitration proceedings within 2
years, even if the applicable statute of limitations is
The Court finds, without reaching every possible defectQuite frankly there is just too much quotable information to note in one post. I strongly urge you to read the attached opinion from Judge Conti. In item after item addressed by the judge, Quixtar and its processes and actions, all were found to be blatantly unfair. Even the issue of severability, where the judge can strip away parts that are unconscionable and leave the clause mostly intact, Quixtar failed to convince. In fact Judge Conti found the entire process so afoul of due process that he noted:
identified by Plaintiffs, that the RoC requirement that an IBO
engage in Informal and Formal Conciliation prior to arbitration is
substantively unconscionable, and exceedingly so. The ADR deck
could not possibly be stacked more in Quixtar's favor than it is
here. Having already concluded that the agreement is procedurally
unconscionable because the Plaintiffs did not have a chance to
negotiate its terms, the Court holds that the pre-arbitration
provisions of the agreement are unconscionable, and declines to
The Quixtar arbitration agreement is simply too tainted to beIn the end Judge Conti denied the motions of the defendants Quixtar, Britt, and Puryear. Judge filed his conclusion as follows.
saved through minor adjustments. Therefore, though mindful of the
strong state and federal policies favoring arbitration, the Court
holds that the entire Quixtar ADR scheme is unconscionable and
For the foregoing reasons, the Court finds that the
arbitration agreement contained in the Registration, the BSMAA,
and the DM Terms and Conditions, and incorporating the RoC, is
procedurally and substantively unconscionable, and therefore
unenforceable. The Court therefore ORDERS as follows:
1. Quixtar's Motion to Dismiss or Stay and Compel
Compliance With Dispute Resolution Agreement is DENIED.
2. The Britt Defendants' Motion to Dismiss and Compel
Compliance With Dispute Resolution Agreement is DENIED.
3. The Puryear Defendants' Motion in Support of Joinder in
Quixtar's and Britt's Motion to Dismiss or Stay
Litigation and Compel Compliance With Dispute Resolution
Agreement is DENIED.
4. Plaintiffs' Motion to Strike Quixtar's Reply Re:
Statement of Recent Decision is VACATED AS MOOT.
IT IS SO ORDERED.
Full Court Document Here
Sunday, March 30, 2008
Enjoy and God Bless
Thursday, March 27, 2008
Remember when Hitler launched the air assault on Great Brittan he was blind with rage (much like Mr. Mohr, Amway’s chief council ) and he unleashed a cowardly bombardment of civilian target in London. Therefore please understand the need to support the IBO legal defense fund is probably greater now than ever. The hyena is wounded and dangerous.
So hears the challenge. Every time you take a swig of Mona Vie put at least a quarter in the jar to send into the IBO legal defense fund.
God Bless and have a great week
Saturday, March 8, 2008
Friday, February 29, 2008
Thursday, February 28, 2008
A short post to help spread awareness of the IBO legal defense fund. As you know there are several lawsuits throughout the country that involve Quixtar vs. TEAM or TEAM members. The strategy of Amway’s lawyers is a simple one: Keep litigating until TEAM runs out of money. If that happens Amway wins. The Amway owners are billionaires and that’s the way they have always won their legal battles. It’s the only way they can win against TEAM. Their attorney’s are highly played but in the courtroom they are incompetent . Their rules of conduct are illusory , their non compete is bogus, and they have no hard evidence that we are building a competing business during that non compete. because we aren’t. The TEAM leaders and the rest of us have honored the non compete clause. The only ammunition Amway has in their arsenal is money and lots of it.
Amway’s aim is to harass and pour money into litigation and force the leadership and members of TEAM into spending every dime in legal fees until we can’t fight them. That’s how they have never been beaten and believe me they have bankrupted many people this way. But I believe they have underestimated TEAM resolve.
The Policy Council members who are involved in the lawsuits have already spent fortunes in legal fees and continue to do so. Every one of them could do an about face, head for warm weather and sunshine and live out the rest of their lives without a care in the world without TEAM if they wished. Yet all of them have thrown themselves into the center of the enemy’s line to fight this fight. So far these men and women have born the full burden of this fight, keeping the dream alive for you and me, Mr. and Mrs. Little guy.
Individually you and I wouldn’t last 2 seconds in a legal fight with Amway . They would own my house your house our cars etc………
If we fight together however they can’t win. My self and some of my little guy friends have begun to implement a plan that if followed by the rest of the people with an interest in this fight will ensure rapid victory. POCKET CHANGE, yes that’s right POCKET CHANGE, Piggy Banks, Change Jars, Couch Diving, Change in the ashtray of your car, on the floor of your car. Anywhere you can find it, collect it count it, deposit it, and contribute it to the IBO Legal Defense fund. If 20,000 people contribute $5/ month that’s $100,000/month. That should put a huge dent in the legal fees needed to keep going. Even more important than money is the moral damage it would do to Amway. This is the dagger to the heart that we need. Once they see they can’t spend us into the dust they will retreat and put up a white flag.
Here is the challenge, WILL YOU SPREAD THE WORD to everyone and anyone who has an interest in TEAM. This is a painless way that you and your team mates and friends can drive the wooden steak into the heart of Mike Mohr and the rest of the Amway legal team. I will watch the # of hits to this site, if I see the hit count increase over the next couple of weeks I will know your spreading the word.
THIS IS YOUR WAY OF JOINING THE FIGHT. YOU CAN MAKE A DIFFERENCE. YOUR NOT POWERLESS AND YOU CAN GET BACK AT THEM.
I will leave this post up for the next few weeks to see your responses. At a later date I will issue challenges to make this a fun process on our way to $100,000 / month