Read the new article at the IBOAI website about the UK dismissal of claims against Amway UK called “UK Case Against Amway UK Dismissed.” That website isn’t a blog, so you can’t comment there, but you sure can here!
There are already false rumors online about an appeals court decision in the Morrison v. Amway Corp. case. The decision, which is not yet final, and could be changed in future court proceedings, does not apply to current arbitration rules, which can't be changed except by mutual agreement of Quixtar and the IBOAI, and it also doesn't apply to disputes that arose after arbitration became part of the IBO contract in 1998. This ruling therefore should not affect any current case (the Morrison case was more than ten years old).
The ruling issued on February 6 by the Fifth Circuit Court of Appeals in Morrison v. Amway Corp. specifically states only that it applies "to the claims asserted in the instant suit." The Court's discussion of the claims in Morrison and the arbitration agreement as it existed in 1998 show that the ruling does not apply to the Quixtar-IBOAI arbitration rules as they currently exist, and also does not apply to disputes that arose after the arbitration agreement became part of the IBO contract in 1998.
First, the court (describing the 1998 version of the arbitration rules) stated that "[t]here is no express exemption of the arbitration provisions from Amway's ability to unilaterally modify all rules . . . ." This is certainly not true of the Quixtar-IBOAI arbitration rules as they exist today and have existed for many years. Rule 11.5.1 of the Rules of Conduct specifically provides:
"These Rules shall be amended only by mutual agreement
between the Corporation [Quixtar] and the IBOA International
Board."
This language is clear and unequivocal - Quixtar cannot change the Quixtar-IBOAI arbitration agreement without the agreement of the IBOAI Board. Whatever the court believed about Amway's ability to modify the 1998 rules is not true of the present day rules.
Second, the court stressed that the disputes between the Morrison plaintiffs and Amway arose before the arbitration agreement became part of the Amway contract effective January 1, 1998. This reasoning would not apply to any IBO whose dispute arose after 1998.
As has been widely reported, TEAM attorneys have been filing lawsuits in State courts nationwide, hoping that somewhere they can achieve more than a TRO. However, they just lost another legal decision, this time in McKinney, Texas, where a judge refused to hear their case because TEAM is a Michigan-based organization trying to sue a Michigan-based corporation, which apparently made no sense to a Texas judge. He did hear TEAM's arguments -- but rejected them.
The following is directly from an eyewitness (me) to the hearing in Los Angeles on September 12, 2007, and is being posted because inaccurate information has appeared elsewhere on the Internet. We are not inviting any comment or discussion on this, out of respect for the Court. We simply want to ensure that there is no misunderstanding.
On September 12, 2007, at the US District Court for the Central District of California, a hearing was held on the class action lawsuit filed by Team members against Quixtar and, specifically, related motions by parties on both sides of the issue. The hearing was under two hours in length and was attended mostly by legal counsel, the plaintiffs, and a handful of their supporters. This is what occurred:
Comments were strictly by legal counsel, the Court did not take any testimony during the hearing.
The Court invited counsel to present their arguments and rebuttals related to the motions before the Court, which they did.
Near the end of the hearing, plaintiffs asked for and received permission to submit a 15-page memorandum to the Court which had not previously been introduced and therefore had not yet been reviewed by Quixtar. The Court noted that, therefore, Quixtar needed to have time to review and respond to the memorandum, which he granted. Quixtar will respond by September 19 (which does not, contrary to some reporting elsewhere, require another hearing).
The Court also required the parties to submit copies of all documents the attorneys referenced during their arguments, to the extent such documents had not been submitted in advance.
The Court said that after receiving Quixtar's reply to the memorandum, the matter would be taken under advisement and a decision rendered thereafter. However, the Court also noted that it reserved the right to call the parties back for another hearing, if necessary, although the Court indicated that wasn't likely to happen.
The Court did not indicate when a decision on the motion would be issued, but it is likely that it may not be until the latter part of September or later.
Jonathan Bernstein
IBOAI Blog Moderator
