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Amway Offers To Settle Morrison Lawsuit
#1
Amway offers to settle the 12 year old Morrison court case.

Here is the history….

A group of Amway distributors sued Amway, Internet, Yager, Don Wilson, Randy Haugen, etc in 1998. The group of Diamonds, Emeralds and Directs (Platinums) claimed financial damages due to well known excesses of the "systems" (AMOs) that dominated the way of doing business in North America.

Basically, the lawsuit alleges that:

* The defendant distributors make the majority of their income selling motivational tools rather than Amway products
* Distributors in the defendant's downlines are coerced into spending money on tapes and functions by being told that they will have no chance of succeeding unless they do so
* Tools profits are used to control and coerce downline distributors, and those who ask questions or refuse to play the game risk having their businesses destroyed
* Emerald and Diamond distributors in the defendant Diamond's downlines are created through the manipulation of the Amway points system, and not through individual achievement
* These blatant violations of Amway's rules by the defendant Diamonds is done not only with Amway's knowledge, but with Amway's active support and assistance.


http://www.amquix.info/aus/morrison.htm



The distributors in 1998 were forced into arbitration. Amway agued that these distributors were bound to the terms of an arbitration agreement that was added to the distributor contract years after they had quit the business. The court at the time agreed.

Subsequently, the arbitrator (hand-picked by Amway) found in Amway's favor and awarded Amway $6 million in legal expenses from the distributors.

These distributors appealed the decision. An Appeals Court found that the Amway arbitration process was extremely unfair to distributors, and threw out the award.

Specifically, the Court said Amway's arbitration process "was illusory and unenforceable." In other words, it gave the "illusion" of fairness to the distributors. But it was "unenforceable" because it violated federal laws due to the fact that is was tilted so far in Amway’s favor.

Then…. after 10 years, the distributors again sued Amway. They began to make some progress and were finally promised their day in court.

Add two more years, and we find out that Amway has finally offered to settle with these distributors for what they experienced in Amway at the hands of the Motivational Organizations (AMOs). The only reason this settlement has been made public is because of a bankruptcy lawsuit of one of the 24 distributors.

Thirteen of these 24 distributors were forced into bankruptcy after starting this process with Amway.

Below is part of the agreement that was made public due that bankruptcy. This bankruptcy judge is recommending that the Amway settlement be approved by the primary court. Up to this point, I don't believe that details of Amway's settlement offer have been made public. Below is a judgment from the bankruptcy judge:

In 1998, Debtor, along with a group of other distributors, filed suit against Amway and others in Texas state court, asserting, inter alia, defamation and RICO claims. The Amway parties[3] removed the case to the United States District Court for the Southern District of Texas, and moved for a stay pending arbitration. The Amway parties counterclaimed against the distributors, including Debtor. Morrison v. Amway Corp., 517 F.3d 248 (5th Cir. 2008).

Trustee testified that the arbitrator's award provided that the distributors would take nothing, and Amway would take nothing, but awarded a $6 million judgment to Amway for attorney fees.

The arbitrator made her award on January 13, 2005. The United States District Court confirmed the arbitration award, by order entered September 15, 2005. The distributors, including Debtor, appealed. On appeal, the Fifth Circuit held that the arbitration agreement was illusory and unenforceable. The Fifth Circuit reversed and remanded for proceedings not inconsistent with its decision. Morrison v. Amway Corp., 517 F.3d 248 (5th Cir. 2008).

On July 21, 2008, Debtors and others filed suit against Amway and others, in Adv. No. 08-3260. In the Second Amended Complaint, the plaintiffs in that adversary proceeding assert claims based on what they believe was an unfair selection of an arbitrator partial to Amway. (Debtor's Exhibit 4).

On May 17-19, 2010, Trustee, along with several other entities, participated in a mediation with the Amway parties. The mediation has resulted in the proposed settlement which is the subject of the instant motion. Under the proposed settlement, the Amway parties will pay $2.86 million, to be disbursed to eleven individuals and thirteen bankruptcy estates. The amount to be disbursed to the estate in the instant case is $221,000.26. The plaintiff parties to the settlement, including Trustee in the instant case, will release the defendants, and the defendants will release the plaintiffs, for all causes of action arising through June 10, 2010.


http://scholar.google.com/scholar_case?c...s_ylo=2011
 Reply
#2
Interesting. Looks like Amway has taken the sensible decision to settle and just clear all these outstanding cases (TEAM, Morrison, Pokorny) off the table and move on. Looks like settling would save them money as well (ref $6million in legal fees in the arbitration decision), compared with continuing to fight.

I wonder if they're going to settle in Canada as well? I haven't checked how that is going lately.
 Reply
#3
I know nothing of "legal precedent" - but can see this going two ways:

1. It's good to get rid of all this old "baggage". Amway can now move forward and prove they've really changed and halted the old-school abuses....
or
2. Every ex-IBO with a chip on their shoulder is going to file a complaint Confusedcratch:
 Reply
#4
Deb Wrote:I know nothing of "legal precedent" - but can see this going two ways:

1. It's good to get rid of all this old "baggage". Amway can now move forward and prove they've really changed and halted the old-school abuses....
or
2. Every ex-IBO with a chip on their shoulder is going to file a complaint Confusedcratch:

Agreed.
I also wonder how this will affect the teachings of being CORE in WWDB. (???) Confusedcratch:

Time will tell.
 Reply
#5
Deb Wrote:Every ex-IBO with a chip on their shoulder is going to file a complaint Confusedcratch:


In the case the settlement seems to be nothing more than covering everyone's legal fees. The class action settlement in theory will prevent anyone who has been an IBO since 2003 filing a complaint
 Reply
#6
ibofightback Wrote:In the case the settlement seems to be nothing more than covering everyone's legal fees. The class action settlement in theory will prevent anyone who has been an IBO since 2003 filing a complaint


Ah - but the really peeved ex-IBOs were in well before that ;-) The unhappiest ones seemed to be from the late-80's and '90's. Judging by the traffic on places like I used to hang out - about 99% have moved on, though.
 Reply
#7
Deb Wrote:Ah - but the really peeved ex-IBOs were in well before that ;-) The unhappiest ones seemed to be from the late-80's and '90's. Judging by the traffic on places like I used to hang out - about 99% have moved on, though.


yup, and I believe they're also outside the time to file a class action so are own their own.
 Reply
#8
Is there any way to recoup money lost to AMWAY during the 1996-2000 period of time as we purchased numerous books, tapes, etc. and went to recommended functions and conventions all over the tri-state area and basically lost about $10,000 over 3-4 years? I keep reading about a Settlement. Are there any ways to get a sliver of the settlement?
 Reply
#9
(a) the settlement hasn't been approved
(b) it applies only to IBOs from 2003 to present

and I would add, without wanting to sound too harsh ...

© why do you deserve one? You're claiming business expenses of no more than around $3000/yr, a ridiculously small amount to spend on a business. Did Amway deceive you in any way?
 Reply
#10
dholdefer Wrote:Is there any way to recoup money lost to AMWAY during the 1996-2000 period of time as we purchased numerous books, tapes, etc. and went to recommended functions and conventions all over the tri-state area and basically lost about $10,000 over 3-4 years? I keep reading about a Settlement. Are there any ways to get a sliver of the settlement?


The statue of limitations is usually 4-7 years depending on the state. I don't know what it is for a federal case but I am guessing you are late.

But yes, if your loss was more recent and you were victimized in the same way, then you would deserve to be compensated.

And Amway people should be helping people like you get a settlement, not discouraging it.

*********

edit: The settlement I was talking about was in the Pokorny class action lawsuit, not the Morrison case.
 Reply
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