Flood of cases may create new opportunities for additional action against direct sellers.
“It doesn’t take a lot of work for a plaintiff’s lawyer to find a disgruntled former distributor with an axe to grind, and then piggyback onto published case law and FTC guidelines that are critical of the direct selling industry.”
—Larry Steinberg, multi-level marketing practice group chair, Buchalter
In recent years, well-publicized class action lawsuits have been filed against multiple companies including Herbalife, Stream, Jeunesse, Rodan + Fields, MONAT Global and Advocare. The majority of these cases settle out of court.
In one example, the Jeunesse settlement required the company to pay $2.5 million into a fund and buy back products for a refund of up to $2,500 per affiliate. Stream Energy also recently settled after nine years of litigation, which included two trips to the U. S. Court of Appeals.
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