Fifth Circuit Creates an “Insurmountable Barrier” to Pyramid Class Actions


In the Fifth Circuit of the United States Court of Appeals, bringing a class action lawsuit against an alleged pyramid schemes just got a heck of a lot harder. According to one of the three Circuit Judges presiding over the case, the court’s decision gives illegal pyramid schemes a “Teflon coating” and protects them “not only from class actions but from any suits claiming fraud.” The entire opinion can be read here.

The case, titled Torres v. S.G.E. Mgmt. LLC (Stream Energy), was a class action suit against the multi-level marketing program Ignite Energy. Plaintiffs were formerly participants in the multi-level marketing venture Ignite, an MLM designed to promote energy services. The Plaintiffs claimed they participated in the venture and ultimately lost money as a result of Ignite’s false misrepresentations that it was a legitimate business. The backbone of Plaintiff’s cause of action rested upon their allegations that Ignite violated the Racketeer Influenced and Corrupt Organizations (“RICO”) Act through mail and wire fraud activity. In order to prove fraudulent mail and wire activity caused their injury, i.e., the loss of their money due to fraudulent promotions online, the law required that Plaintiffs prove they relied on Ignite’s fraudulent misrepresentations claiming to be a legitimate business.

In order to understand the issues surrounding the case, certain legal background and context are necessary. Before a large number of people (“class”), all with a common interest in a particular matter, can sue or be sued, the Federal Rules of Civil Procedure demand what’s called “class certification”. Basically, class certification requires, among other things, that there be questions common to all members of the class. Additionally, these common questions must predominate over any questions that affect only individual class members. As an example, if an individual ate a moldy hamburger at a restaurant, it would not be a “common” issue that would justify class certification. On the flip side, if an individual was overcharged 5% on a cell phone bill, and that strategy was used for all other customers, the “common interest” would certainly exist to justify class certification.


MLM News Report: Are The MLM Energy Wars Heating Up

MLM Energy Company News: Ten Energy Companies Launch Network Marketing Channels

This week I am covering the top 10 energy companies fighting for the energy bills of over 350 million Americans.

Ignite Energy: Ignite is owned by Stream Energy and is by far the largest energy company in terms of customers and annual revenues.
Ignite Energy

Ambit Energy: Ambit Energy is the largest retail provider to enter into the network marketing arena. In 2010 they were listed in the Inc 500 as the fastest growing in their niche.
Ambit Energy

Viridian Energy: Launched in 2009 and is demonstrating their passion to be the #1 in the world with their aggressive move internationally.

UCI Energy Services: This group of leaders see the full potential of using network marketing to build their customer base. This is one to watch in the near future.

Dynastar Ventures: Now this will surprise a few of you reading this. The Founder/Chairman of Dynastar Ventures is Josh Henderson the founder of Lightyear Wireless. Josh and his team have extensive knowledge in running a direct selling company, and with their purchase of “My Affordable Energy aka Dynastar Energy” they are flexing their marketing and business muscles. I have been watching behind the scenes as Josh formed his team and made ready for the official launch later this year.
Dynastar Energy

Momentis: This company is a little different. Not only is Momentis owned by Just Energy, JE is already international with headquarters in both the U.S. and Canada. Another unique piece of information is the fact “Just Energy” is a subsidiary of the “Just Energy Income Fund.” This may be a first in direct sales. I do not know of any other Energy Company owned by a Mutual Fund!

North American Power: Another very young company which just launched in 2010. However… already they are coming on strong. They market for several different energy providers and truly offer their customers a choice.
North American Power

ACN: Need I say more! ACN by far has the most experience in the energy niche. A decade ago they entered into the arena, just to pull out because the industry was not ready for deregulation. Today they have re-entered into the niche, moving first into Canada, and now looking at several states her in the USA. Without a doubt they have the potential to make some real head way in the fight to the top.

Ampegy: Has a unique affiliation with Spark Energy of Houston, which could allow them to do some very interesting things in 2011. With leadership who understands the energy niche, and the power (no pun intended) of Spark Energy, this brand new company may become the next Inc 500 story.
Spark Energy

Independent Energy: This company will be the new network marketing arm for Energy Plus. What I found interesting about this move by Energy Plus is they did $250 million last year without a network marketing arm. If you are already making that kind of money, there are far easier ways to grow your business than to launch a direct selling arm. Without a doubt I love our profession, but the amount of money it takes to launch, sustain and grow a network marketing channel with 9 other companies already fighting for the same clients, not counting the BIG GUYS, it kind of nuts.
Energy Plus

MLM Weekly news: Vemma, WorldVentures, 5Linx, Stream Energy, MonaVie, Ambit Energy

Dondi Scumaci

Dondi Scumaci and Bob Burg are my sponsors this week. Author of Designed for Success: The 10 Commandments for Women in the Workplace, Ready, Set…Grow! and Career Moves.

Bob Burg

Bob Burg co-wrote the best selling Go Giver series, and is known as the “E.F. Hutten” of Direct Selling.

On October 7th Dondi is hosting Bob at his Endless Referrlas Live Seminar in San Antonio, Texas.

Click Here to register.


MonaVie rumors were flying this week, when my good friend Ted Nuyten, founder of Business For Home broke a story about MonaVie’s compensation plan found against Germany laws. MonaVie was quick to respond and set the record straight. You can read the whole story here!

Vemma Nutritional Company

Vemma Nutritional Company announced some of the internationally acclaimed keynote speakers for their national conference in 2011. They also announced the theme for next years continued growth… “The Power of WHY!”

Dr. Oz and Dr. Roizen will be two of the keynote speakers. Also Darren Hardy, publisher of Success Magazine and author, will also be one of the special keynote speakers next year.

On more thing I am happy about when it comes to Vemma is the fact BK Boreyko continues to walk his talk. Vemma just inked a new deal with the Presbyterian Hospital in Charlotte, North Carolina to provide underprivileged children through their Community Care Cruiser, with Vemma Next for children. Click here to read all about it.

Ambit Energy distributors should be proud. It is the hard work of the distributors that made this happen!!! Click the image above to read the whole story!

When the media is telling folks, that American are not buying products and are hording their money, Scentsy has proven them wrong. Once again the distributors did not listen to all the dull, negative media and went out and built their business, winning the #1 spot in Inc 500 for Consumer Products. Chick the image above to read the full story.

Whit the regulators looking hard at the MLM travel sector, the distributors of WorldVentures did not let that keep them from building their business. And once again, while the press is telling us how bad the economy is, WorldVentures is growing. Click the image above to read the full report.

The MLM Wireless niche has been crazy. But instead of focusing on just one small aspect of their business 5Linx expanded into other communication and security products, and the distributors didn’t listen to all the crap the media was putting out about a down economy and rocked the house. Click the image above and read the whole story.

Stream Energy is the #1 MLM Energy company in the world, with revenues of over $80 million dollars. Although, their growth has slowed compared to Ambit, I have a feeling they are just preparing for the next surge as they start to enter into additional markets. Click the images above for the whole story.