2017-2019 Pyramid Scheme Class Actions

 

TINA.org has seen a marked uptick in federal pyramid scheme class-action complaints filed against various multi-level marketing (MLM) companies since 2017. Eight of the cases involve DSA member companies with three companies – Advocare, Arbonne, and Nerium – ranked as DSA top 20 members in both 2017 and 2018 based on 2016 and 2017 net sales in the United States. (Advocare was also the subject of a 2019 pyramid scheme lawsuit filed by the FTC that resulted in Advocare, its former CEO, and two top promoters being permanently banned from multilevel marketing, as well as the company paying $150 million.) Five of the cases involve LuLaRoe, a company that is the subject of a 2019 pyramid scheme lawsuit filed against it, as well as its founders and one of its promoters, by the Attorney General of the state of Washington.

For more of TINA.org’s coverage of lawsuits alleging that MLM companies are pyramid schemes, click here.

For more coverage of MLMs and pyramid schemes, click here.

Case Name
(Court, Case Number)
Date Originally Filed Status
1 Ranieri v. Advocare International
(N. D. TX., 17-cv-691)
Mar. 2017 Pending
2 Yiru v. Worldventures
(N. D. TX., 17-cv-2155**)$
May 2017* Stayed pending arbitration
3 Dagnall v. Arbonne International
(C. D. CA., 17-cv-1214)
May 2017* Settled
4 Yang v. MarketAmerica
(C. D. CA., 17-cv-4012)$
May 2017 Granted arbitration
5 Wu v. Sunrider
(C. D. CA., 17-cv-4825)$
May 2017* Appeal pending
6 Jia v. Nerium International
(N. D. TX., 17-cv-3057**)$
Aug. 2017 Stayed pending arbitration; Appeal filed
7 Wu v. Jeunesse
(C. D. CA., 17-cv-7475)
Oct. 2017 Voluntarily dismissed
8 Lemberg v. LuLaRoe
(C. D. CA., 17-cv-2102)
Oct. 2017## Voluntarily dismissed (Lemberg); Stayed pending arbitration (others)
9 Berry v. LuLaRoe
(C. D. CA., 17-cv-2176)
Oct. 2017 Voluntarily dismissed***
10 Haskett v. LuLaRoe
(C. D. CA., 17-cv-2212)
Oct. 2017 Voluntarily dismissed***
11 Guo v. Kyani
(C. D. CA., 17-cv-8257)$
Nov. 2017 Granted arbitration; Appeal filed
12 Atkinson v. LuLaRoe
(C. D. CA., 17-cv-2287)
Nov. 2017 Voluntarily dismissed***
13 Rocke v. LuLaRoe
(C. D. CA., 17-cv-2414)
Nov. 2017 Voluntarily dismissed***
14 Smith v. LifeVantage
(D. UT., 18-cv-621####)
Jan. 2018 Pending
15 Paige v. Bitconnect
(S. D. FL., 18-cv-81549)$$
Jan. 2018 Pending
16 Mengesha v. Bitconnect
(S. D. FL., 18-cv-81329)$$$
Jan. 2018 Pending
17 Whitmire v. Monat Global###
(S. D. FL., 18-cv-20636)
Feb. 2018 Transferred to MDL****
18 Alabaster v. Monat Global###
(W. D. OK., 18-cv-224)
Mar. 2018 Transferred to MDL****
19 Merritt v. Monat Global###
(N. D. TX., 18-cv-657)
Mar. 2018 Transferred to MDL****
20 Hoffpauir v. Monat Global###
(S. D. FL., 18-cv-21606)
Apr. 2018 Transferred to MDL****
21 Maur v. Monat Global###
(S. D. FL., 18-cv-21915)
May 2018 Transferred to MDL****
22 In Re: Monat Hair Care Products Marketing, Sales Practices and Products Liability Litigation
(18-md-2841, S. D. FL.; MDL No. 2841)
June 2018# Pending****
23 Chen v. Premier Financial Alliance
(N. D. CA., 18-cv-3771)$
June 2018 Stayed
24 Xiong v. Jeunesse
(C. D. CA., 18-cv-1430)$
Aug. 2018 Dismissed for lack of subject matter jurisdiction
25 Wang v. Premier Financial Alliance et al
(N. D. CA., 19-cv-1150)
Feb. 2019 Motion to compel arbitration pending
26 Sperring v. LuLaRoe
(C. D. CA., 19-cv-433)
Mar. 2019 Stayed pending arbitration
27 Zou v. MarketAmerica
(M. D. NC., 19-cv-954)
Mar. 2019 Pending
28 O’Shaughnessy v. Young Living Essential Oils
(W. D. TX., 19-cv-412)
Apr. 2019 Motion to compel arbitration pending

* Originally filed in state court

** Originally filed in California and transferred to Texas

*** The named plaintiffs in the Atkinson, Berry, Haskett, and Rocke cases were added to another class action against LulaRoe (Lemberg v. LuLaRoe) that was amended in January 2018.  The Lemberg amended complaint also added pyramid scheme allegations. In April 2018, the Lemberg case was stayed pending arbitration.

**** Several similar cases against Monat Global were transferred to a court in Florida to be heard together as part of a multidistrict litigation (MDL), In Re: Monat Hair Care Products Marketing, Sales Practices and Products Liability Litigation (Case No. 18-md-2841, S. D. FL.; MDL No. 2841). These complaints similarly allege that the company falsely advertises its hair care products and some of them claim that the company functions as a pyramid scheme.

# This is the date that cases began being transferred to the MDL.

## The original complaint in Lemberg v. LuLaRoe did not include pyramid scheme allegations. The pyramid scheme allegations were added to the case in the January 2018 amended complaint, which also added several named plaintiffs.

### The main allegation in this complaint is that the company falsely advertises its products. It is included in the chart because it also claims that the company functions as a pyramid scheme.

#### Originally filed in Connecticut and transferred to Utah

$ Lawsuit filed by Lindemann Law Firm

$$ Originally filed in Kentucky and transferred to Florida

$$$ Originally filed in Minnesota and transferred to Florida

Updated 10-3-19

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Multi-Level Marketing – a way of distributing products or services in which the distributors earn income from their own retail sales and from retail sales made by their direct and indirect recruits.

The Direct Selling Association (DSA) is a national trade association for direct selling companies that primarily use multi-level marketing compensation plans.

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