Tag Archives: Pokorny

Amway News

Quixtar class action settlement – a brief analysis

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Regular follows of this blog will be aware of the settlement in a class action case against Quixtar by Pokorny, Blenn, and Busiere. Today most IBOs and former IBOs covered by the class action have received their second notice about the settlement, so I’ve been receiving a few inquiries about it.

The case was originally against Quixtar, the Puryears and World Wide Group and the Britts and BWW, Amway (formally Quixtar) . Through the process of negotiating the settlement, Amway extended it to include a whole range of BSM (business support material) companies. The second amended complaint lists the following as defendants –

This was a smart move by Amway, as the settlement essentially immunizes both Amway and all the BSM companies against any lawsuits by anyone who was an IBO in the past decade. Amway has made a lot of significant changes in the last few years to better control the activities of the field and BSM companies, as well as make for a better, potentially more profitable business for all. An ongoing lawsuit of this nature, no matter it’s lack of merit, is a costly distraction. Following on from Woodward and TEAM settling their case, the settlement of the Morrison case, the Ribbon gift card settlement, and the Canadian class action being thrown out, Amway has pretty much cleared the deck and can move forward with a clean slate. Continue reading Quixtar class action settlement – a brief analysis →

Amway News

Judge rejects Pokorny, Blenn et.al vs Amway/Quixtar class action settlement

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I’ve been meaning for some time to write a blog post about the Amway/Quixtar class action settlement in the Pokorny, Blenn etal lawsuit in California. Back in November I reported that Amway had settled the case and even posted an apology of sorts on one of the Amway corporate blogs. Right from the beginning of the case it was my opinion that it was legally meritless. Amway’s problem is that the court has rejected private  arbitration as the solution, meaning the case could head to a public jury trial. No company likes either the cost, or publicity, that a lawsuit like this could bring, even if you believe you could win it.

So I wasn’t entirely surprised when they announced the settlement.

Having followed the case and retrieved related court documents, I was expecting my post today to be about how Quixtar IBOs from around 2003 until now would shortly be contacted with information on how they could request various refunds and other relief as a result of the class action settlement. I was having problems retrieving the last submitted court document though (from December 29, 2010) which I expected would have all the final details.

Needless to say, I was more than surprised to finally obtain it and discover the judge has rejected the settlement – and, in my opinion, in pretty scathing terms. I’ll post the document on Amway Wiki in the next few days so you can read it for yourself, but essentially you get the impression he feels the settlement was little more than what I think it was – a way out for the plaintiffs to pay their lawyers and for Amway to get the case to disappear. Many of the details he requests the plaintiffs supply are I think next to impossible to assess – for example asking how much BSM did IBOs who bought BSM buy.  I’ll post some more details and discussion on Amway Talk. It will be interesting to see how this one plays out!

UPDATE 2011-01-21: Cindy Droog from Amway Corp Communications has pointed out that the judge hasn’t actually rejected the settlement, he’s deferred a decision and requested more details. Next hearing is in April.

 UPDATE 2012-04-16: The settlement has now been approved, details at www.quixtarclass.com

Amway News

Amway settles class action, and apologises

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I’m still wrapped in various time consuming issues in my personal life so been unable to write much here, but some things just have to be commented on. In the last couple of days has come the quite stunning decision by Amway to reach a settlement in the Pokorny & Blenn vs Quixtar et.al Class Action case.

I’ve obtained copies of the settlement and will post further comments shortly, as well as post the relevant court documents to AmwayWiki.

Commentary, Robert FitzPatrick

Pokorny and Blenn vs Quixtar et.al update – Arbitration denied

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In a California case two former IBOs, Jeff Porkony and Larry Blenn, are attempting a class action lawsuit against Quixtar, Britt WorldWide, World Wide DreamBuilders and associated parties, alleging Quixtar is an illegal pyramid scheme in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).

As per most previous litigation, Quixtar’s first step was to claim the whole thing should be sent through Quixtar’s arbitration and dispute resolution procedures. To summarize the courts view –

“The Quixtar arbitration agreement is simply too tainted to be 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 unenforceable.”

In essence, the court found the whole arbitration procedure unfair for IBOs. It highlighted the fact that IBOs below platinum did not even have the opportunity to vote for representation on the IBOAI board which “negotiated” the agreement, and then Quixtar itself can ignore it if it choses. Interestingly, in this case the court was reviewing the new “updated” dispute resolution procedure, which had been modified following concerns raised in earlier cases. Furthermore, the court also struck down the BSMAA provisions, which should have governed the part of this dispute between IBOs.

I’ve said this before, but I’ll say it again anyway – I agree with the court, Quixtar’s arbitration provisions are unfair. The only proviso I’d add to that is that I’m not sure whether a “rank and file” IBO going up against a multi-national, multi-billion dollar corporate would have a particularly “fair” chance in the normal legal system either. If anyone has some suggestions for a better system, I’m open to hearing it. Having read the original Porkony & Blenn complaint, I suspect they’d be saved much embarassment behind closed doors, it really is a poorly formulated case.

There is one interesting aside in the court documents, and that is that the court struck out the declarations of two “purported experts” on behalf of the plaintiffs. The phrasing implies the court found these “experts”, Stephen Hayford and Robert FitzPatrick, were anything but. Stephen Hayford appears to be a JAMs arbitrator, and I’m guessing his testimony related to the arbitration procedure.

Robert FitzPatrick is a well known anti-mlm zealot who has unilaterally decided all MLMs are illegal pyramids, and then rants against the evils of MLMs, when in fact he’s ranting against the evils of illegal pyramids. Just recently I listened to him in an interview where he attacks Amway and brings up this case as well as the recent TEAM class action case in California claiming Quixtar is an illegal pyramid. To give you an idea of his level of “independence” as an expert – he completely fails to mention the TEAM case had been thrown out!

Update: Many of the court documents are now available at Amway Wiki – Pokorny & Blenn vs Quixtar, Inc. et.al.

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