United States District Court Judge Gary Feess will continue to hear arguments on September 19th in a lawsuit brought by top ex-Quixtar Independent Business Owners (IBOs) against Quixtar alleging that the company is an illegal pyramid scheme. Quixtar is a sister company of Ada, Michigan-based Amway Corporation which was founded by Jay Van Andel and Richard DeVos and is still controlled by their families.
A nationwide class of IBOs filed a lawsuit (Woodward et al. v. Quixtar, Inc. CV 07-5194 GAF) against Quixtar August 9, 2007, in the United States District Court for the Central District of California, Los Angeles. The complaint alleges that Quixtar is operating as an illegal pyramid scheme and asks the court to find the Quixtar uniform distributor contracts unenforceable as they promote an illegal result and the purpose of entering into the contract has been frustrated by Quixtar's illegal activities.
The plaintiffs in the California case are seeking to be released from their contracts.
"Everyday in court is a big win for the IBOs," said D.J. Poyfair, attorney for Denver-based Shughart, Thomson & Kilroy, the firm representing the IBOs. "The more documents and information that becomes public about how Quixtar operates the better it is for my clients.
"For the first time in history, the truth about Quixtar is coming out into public view," Poyfair added. "If the Van Andel and DeVos families truly believe in free enterprise they will do the right thing and let my clients go."
Documents filed in the case clearly outline the reasons for filing the lawsuit, stating in part:
"Quixtar knows its products are priced so high they cannot be sold and yet it continues to recruit distributors in a concerned effort to enrich the founding families at the expense of the rank and file simply trying to earn a living. Quixtar holds itself out as a legitimate, multi-level home-based business opportunity, but in fact operates as an illegal pyramid recruitment scheme. Quixtar leads participants to believe that they can build a viable business retailing Quixtar products; but once the participants sign up and pay their initial investment into the pyramid, it quickly becomes evident that Quixtar's products cannot be retailed because they are hopelessly overpriced. Quixtar no longer makes any pretense of retailing products to consumers outside of Quixtar's network of distributors, but relies entirely on the purchase and internal consumption of products by distributors to fuel its pay plan."
About Woodward v. Quixtar, Inc.
On August 9, 2007, a group including eight of the largest Quixtar distributors filed a lawsuit seeking to enjoin Quixtar from enforcing its distributor contracts, including the non-competition and non-solicitation provisions. The plaintiffs allege that the company knowingly operates as a pyramid scheme, and prevents its distributors from leaving the organization through the aforementioned provisions. On August 10, 2007, the group sought a preliminary and permanent injunction restraining Quixtar from enforcing or attempting to enforce the non-competition and non-solicitation provisions. More information regarding Woodward v. Quixtar, including relevant court documents, is available at www.FreeTheIBO.com.