The Free Business For Home App: Direct Selling News, Company Analysis and Market Data

Download for free:

Isagenix Lawsuit Allegations: Secret Deals To Sell On Amazon?

Isagenix Lawsuit Allegations: Secret Deals To Sell On Amazon?

Jim Coover, Isagenix founder, stated in a leadership call:

“With respect to the (below) allegations in the lawsuit, which revolve around Isagenix corporate being in on a secret top earner retail racket, I want to look you right in the eye and say there is no truth to these allegations.”

 

“Isagenix has never actively promoted products on Amazon or encouraged others to do the same. Bryan Lund and Scott Christensen were ‘terminated for unlawful sales on Amazon.”

 

“In fact we have a concerted effort in our compliance department, to thwart unauthorised sales. And in fact they’ve done a lot in that regard to dial back dramatically the amount of unauthorised sales that were actually happening. Isagenix intends to file a motion to dismiss the Utah lawsuit.”

 

According to a recent law suit filed in Utah:

IN THE THIRD DISTRICT COURT, STATE OF UTAH, SALT LAKE COUNTY

BRYAN LUND, an                                       :  COMPLAINT FOR FRAUD, BREACH

Individual, and SCOTT                               :  OF CONTRACT, CIVIL CONSPIRACY

CHRISTENSEN, an                                     :  AND RICO

individual,                                                      :

The Plaintiffs, Bryan Lund and Scott Christensen allege against the Defendants, Jay Bennett, Siv Bennett, Jennifer Rodriquez, Isagenix International LLC and Does 1-10 as follows:

  1. Plaintiff Bryan Lund (“Lund”) is an individual residing in and doing business in the State of Utah, County of Salt Lake.  Lund is one of the principals of the Defendant Premier Home Solutions, LLC.
  2. Plaintiff Scott Christensen(“Christensen”) is an individual residing in and doing business in the State of Utah, County of Salt Lake.  Christensen is one of the principals of the Plaintiff Premier Home Solutions, LLC.
  3. Defendant Jay Bennett (“Jay”) is an individual.  Plaintiffs are informed and believe and thereon allege that Jay Bennett resides in the State of Nevada and does business throughout the United States of America, including in the State of Utah, County of Salt Lake.
  4. Defendant Siv Bennett (“Siv”) is an individual.  Plaintiffs are informed and believe and thereon allege that Siv Bennett resides in the State of Nevada and does business throughout the United States of America, including in the State of Utah, County of Salt Lake.
  5. Defendant Jennifer Rodriguez (“Rodriguez”) is an individual.  Plaintiffs are informed and believe and thereon allege that Jennifer Rodriquez resides in the State of California and does business throughout the United States of America, including in the State of Utah, County of Salt Lake.
  6. Defendant Isagenix International, LLC (“Isagenix”) is a limited liability company.  Plaintiffs are informed and believe and thereon allege that Isagenix is an Arizona limited liability company with its principal place of business in Arizona. Isagenix does business throughout the United States of America, including in the State of Utah, County of Salt Lake.
  7. Defendant Does 1-10 are individuals or entities whose true identities are unknown at this time.  This complaint will be amended when their identities and acts in connection with the wrongful activities alleged herein are discovered.
  8. Jurisdiction and venue are proper in this Court and this venue in that all of the Defendants do business within the district, the wrongful acts alleged herein occurred within the district and the damages were incurred within the district.

UNDERLYING FACTS

  1. Isagenix is a network marketing company.  Jay is one of the top Isagenix distributors in the United States.
  2. In or about October 2017, Jay approached Rich Ferguson and encouraged Ferguson to join Isagenix as a distributor within Jay’s downline.  Jay also encouraged Ferguson to approach Lund and propose that they join Isagenix together and use Lund’s ecommerce activities to resell Isagenix product. 
  3. Lund initially declined because his specialty was as a product reseller on Amazon.com, and he was aware that multi-level marketing companies, such as Isagenix, generally discourage Amazon and other on-line resales of their products.
  4. However, Jay and Ferguson continued to encourage Lund to explore such a relationship with Isagenix.  Ferguson arranged for multiple phone calls between Lund and Jay.  In those phone calls, Jay stated that although Isagenix’s general rule was that Amazon resales were not allowed, because of his status as one of the highest ranked Isagenix distributors, as well as his personal relationship with Isagenix’s founders and owners, Jim and Kathy Coover, he had an agreement with Isagenix that it would allow Amazon and other online resales that Jay supervised..
  5. Indeed, to bolster his representation of his “special” status within Isagenix, Jay arranged for Lund and Ferguson to travel to Arizona and go to dinner with Jay and Jim and Kathy Coover together with 10-15 traditional distributor prospects.  Lund sat next to Jim Coover and Kathy Coover.  Ferguson and Jay also participated in the dinner conversation.  Over the course of dinner, Lund explained to Jim and Kathy Coover at length and in detail that he was an Amazon, Ebay and e-commerce reseller and that, if he joined Isagenix as Jay was encouraging, it would be solely based upon his ability to resell Isagenix products on Amazon and through other online retail sites.  Jim and Kathy Coover indicated that they understood Lund’s position, and that they supported Jay’s efforts to recruit Lund and Ferguson.  Additionally, Jim Coover expressed his hope that this venture would help increase Isagenix US sales volume, as it had been decreasing.
  6. Thereafter Lund and Ferguson provided their sign-up information to Jay.  Jay used this information to enroll both Ferguson and Lund as Isagenix distributors.  They began to prepare for online resales of Isagenix products, however, before any significant sales could occur, Ferguson and Jay had a disagreement.
  7. Plaintiffs are informed and believe and thereon allege that the disagreement between Ferguson and Jay involved Ferguson’s attempts to go directly to Isagenix and create and relationship that did not involve Jay.
  8. Plaintiffs are informed and believe and thereon allege that the disagreement between Ferguson and Jay was resolved with Jay paying Ferguson at least $50,000.
  9. Jay met with Lund and his ecommerce team in Park City, Utah to communicate in person the removal of Ferguson from the arrangement and encourage Lund to continue as planned.
  10. Lund and team purchased approximately $20,000 of Isagenix products and listing them for resale on their Ebay, Amazon, etc.  Within approximately two weeks, Lund’s ecommerce websites received a cease and desist letter from Isagenix’s legal department.  Rather than risk being banned from Ebay and Amazon, Lund withdrew the Isagenix products from the sites and withdrew from any further participation with Isagenix at that time.
  11. For approximately one year, Lund had no further contact with Jay or Isagenix.
  12. In or about January 2019, Jay phoned Lund and indicated that he had resolved the issues with Isagenix and Isagenix’s cease and desist.  Jay stated that he would like to pursue Amazon resales by using Lund and his online resellers.
  13. Lund expressed his hesitance to go down the same path.  However, Jay was insistent.  Jay represented to Lund that the cease and desist Lund had previously received from Isagenix was the result of Ferguson trying to go around Jay directly to Isagenix.  Jay represented that, in the future, if Lund were to receive a cease and desist from Isagenix, he should give the letter the Jay and he would “take care of it” through his special relationship with Isagenix.
  14. Jay represented once again that he had Isagenix’s approval to engage in Amazon and other online resales. 
  15. Jay again cited his personal relationship with Jim and Kathy Coover.  He stated that Jim Coover and Isagenix were fully behind e-tail resales of the Isagenix products because sales volumes in the United States had declined even further.  Jay represented that the top 10 Isagenix distributors had been approved for internet resale as long as they did not allow other distributors to be aware and “kept it under the radar”.
  16. Jay then proceeded to explain the impacts and earnings that could be had from a carefully and strategically placed group of distributorships that would maximize the commission payout from Isagenix. Jay indicated that given such a combined payout, if Lund’s positions were qualified at easily attainable levels in the compensation plan and the Isagenix products were resold at a breakeven or even a small loss, the monthly earnings would be well in excess of $50,000 per month.
  17. Jay, however, insisted that he be fully in charge of Lund’s team’s placement and operation of the Isagenix positions.  Even though Lund would receive the commissions from the Isagenix positions, Plaintiffs’ sole operational role was to be on the e-commerce resale of the products.
  18. In or about January 2019 Jay arranged for Lund to visit Isagenix’s major convention in Arizona.
  19. During the course of that visit, Jay insisted that Lund bring his Amazon resale expert, Darin Asay, to Phoenix to explain to Jay all that he would be doing and what he would need from Jay to move the project along.
  20. Jay, Lund and Asay’s meeting lasted approximately two hours.  During that time, Asay and Lund explained to Jay in extreme detail the things that they would do and the things that they would need from Jay in order to begin Amazon and other online sales.
  21. Asay stated to Jay that Amazon would not accept any Isagenix products for resale unless the reseller was able to provide certificates of “Good Manufacturing Practice” (“GMP”) with respect to each Isagenix product that would be resold.
  22. On February 12, 2019, Jay emailed certificates of GMP from Isagenix as to the products that were going to be resold.  This ability to obtain certificates of GMP from Isagenix further bolstered Jay’s representations that he had Isagenix’s full cooperation and consent to the proposed online resale operations.
  23. Based on Jay’s representations and the demonstrated co-ordination between Jay and Isagenix, Plaintiffs agreed to move forward with Jay’s e-commerce resale scheme.
  24. Isagenix has what is referred to as a “binary” compensation plan.  Sales are split between two sales organizations, which are referred to as “legs”.  Binary plans refer to the organization with the highest sales volume as a “strong leg”.  The organization with the lower volume is referred to as the “weak leg”.  Generally, earnings in a binary plan are calculated based on the “weak” leg’s volumes.
  25. In order to make Jay’s scheme profitable and as a necessary part of the agreement with the Plaintiffs,  Jay represented to Plaintiffs that they would have the benefit of a position with substantial accumulated sales volume on the strong leg of the downline (the “Preferred Position”).
  26. Jay represented that because of the accumulated volume on the strong leg of the Preferred Position, Plaintiffs would only have to generate sales volume on the weak leg in order to earn commissions.
  27. Jay promised in writing that the Preferred Position would be transferred to Lund or his designee.  Plaintiffs are informed and believe and thereon allege that Jay bought the Preferred Position for $50,000.
  28. Shortly thereafter, Lund also participated in a phone call with Siv.
  29. Plaintiffs are informed and believe and thereon allege that Siv is Jay’s wife and has either a direct interest in Jay’s Isagenix position and earnings or a legally imposed interest in that position and its earnings through her community property interest in the marital property.
  30. Siv questioned Lund at length about the nature of the proposed online sales operations.  Lund told her that he would be reselling Isagenix’s products exclusively online through Amazon and other online resellers.  Lund also repeated to her Jay’s statements that Jay had Isagenix’s approval to engage in such actions.  Siv reinforced Jay’s representations and at the end of the phone call indicated that she fully supported the operation.
  31. Based upon Jay’s and Siv’s representations and recruiting, Lund agreed to participate in the Defendants’ joint operation to engage in online resale of Isagenix products.
  32. Lund and Jay executed a written agreement to that effect.  A true and correct copy of that agreement is attached hereto as Exhibit 1.  The agreement was drafted by Jay.  A part of that agreement was that Plaintiffs would follow Isagenix’s Policies and Procedures.  However, Plaintiffs’ understood that clause to mean the Isagenix Policies and Procedures as subject to the personal modifications and understandings that Jay represented that he had with Isagenix as those representations had been supported through Lund’s contact with Jim and Kathy Coover and the actions Isagenix took at Jay’s request.
  33. Jay agreed to loan Lund $10,000 to be used for product orders on the first month.
  34. Lund recruited Christensen, his business partner in other operations, to join with him in the Isagenix scheme that Jay had outlined.  Lund then introduced Christensen to Jay.
  35. Jay introduced Rodriguez to both Lund and Christensen and indicated that she was his “agent” and would be their day-to-day contact in dealing with Isagenix and in arranging their downline organization.
  36. Plaintiffs are informed and believe and thereon allege that Rodriguez has a monetary interest in the commissions earned by the Preferred Position, either directly through her own commissions, or indirectly through a compensation agreement with Jay.  This monetary interest gave Rodriguez an incentive to participate in and assist Jay in the wrongful acts alleged herein.
  37. Thereafter, Rodriguez took steps to create the downline organization that included the Preferred Position and other positions through which the Plaintiffs could earn commissions.
  38. Rodriguez took all steps necessary to create and place the downline positions.  The only thing she sought from the Plaintiffs were names and shipping addresses to be associated with the positions and the charge card information necessary to place orders through the organization.  The Plaintiffs never went to the Isagenix website, never entered any information and never “checked any boxes” agreeing to any Isagenix conditions associated with the enrollment process.  Plaintiffs are informed and believe and thereon allege that Jay instructed Rodriguez to take those actions and that, thereafter, Rodriguez undertook and completed all enrollments and placements associated with the downline organization through which the Plaintiffs were to earn commissions.
  39. Pursuant to Rodriguez’s instructions on the Defendants’ behalves, Lund and Christensen provided her with names, addresses and other information to be used in connection with the downline organization.  However, both the Plaintiffs and the Defendants knew that the information related to “nominees” for the positions, and that Plaintiffs would receive all product shipments and commissions from the organization.
  40. Pursuant to Rodriguez’s instructions, Plaintiffs provided Rodriguez with multiple VISA gift cards for payment for the product purchases.  They also identified separate shipping addresses for each of the positions being created.
  41. Rodriquez used this information to order more than $10,000 in Isagenix product through the new accounts (“Initial Test”).
  42. After the Initial Test, Lund expressed dissatisfaction with time needed to pick-up the product from multiple addresses and deliver the shipments to the processing centers for resale.
  43. Rodriguez also complained that the Plaintiffs’ use of VISA gift cards required her to spend inordinate amounts of time placing the orders since she could not associate a single credit card with the account and make recurring orders based on that card.  She was having to enter new payment information with each payment.
  44. Lund stated that his willingness to proceed was contingent on having product delivered to a single address.
  45. Also, the Initial Test was unsatisfactory because the commissions paid by Isagenix on the purchases made through the downline organization were much less than the amounts projected by Jay and Rodriquez.
  46. After a few weeks, Jay contacted Lund and Christensen.  Jay explained that he had used his special relationship with Isagenix to secure approval for a single credit card and a single delivery address.
  47. As Jay had represented it would, Isagenix initially accepted all of this information and the orders associated with the positions.  Although Lund knew this was unusual, it was consistent with the representations Jay had made about the nature of his position and his “special” relationship with Isagenix.
  48. Additionally, Jay agreed to release Lund from repayment of the loan as compensation for Isagenix failure to pay bonuses to the Preferred Position if Plaintiffs would continue the Initial Test for another month.  Plaintiffs agreed.
  49. As the organization developed, Isagenix’s Compliance Department made some inquiries as the nature of the placements and the orders.  As Jay had directed, the Plaintiffs simply forwarded those inquiries to Jay for handling.  This was consistent with his representations as to his “special” relationship with Isagenix. 
  50. At times, Jay would direct the Christensen to join a conference phone call to deal with Isagenix’s Compliance Department’s inquiries.  Jay represented to Christensen that Jay had coordinated with Isagenix’s compliance executives to present a rationale to the lower level workers that would allow the normal compliance programs to be circumvented.   Jay would provide Christensen with a story to be relayed to Isagenix in those conference calls.
  51. Christensen complied with Jay’s requests.  Christensen would relay the information that Jay had coached Christensen to provide.
  52. Jay stated that executives at Isagenix knew of and approved the story that Jay had told Christensen to relate, and that the story and phone call were simply to allow the Jay and Isagenix upper management to circumvent the normal red flags that would be generated from the sales that Rodriquez was entering pursuant to Jay’s instructions.  While it was an unusual arrangement, it was consistent with Jay’s representations as to his “special” relationship with Isagenix as supported by Lund’s prior conversation with Jim and Kathy Coover.  It was also consistent with Jay’s representations that Isagenix executives wanted their upper sales representatives to disregard policies that they applied to lower level sales representatives, but that they didn’t want to breed discontent by allowing those lower level representatives to learn of the preferential treatment given to upper level sales representatives.  
  53. Jay stated that he had coordinated with the Director of Isagenix Global Compliance, Kimberly Valenzuela, to speak with Christensen.  Jay and Rodriguez informed Christensen that they had arranged with Valenzuela that Isagenix would override system controls if Christensen would state that the Plaintiffs’ development company, Premier Home Solutions, had adopted a wellness program and that Isagenix products were part of that program.  Subsequently, Christensen would join a conference call and provide details to Valenzuela, as coached by Jay and Rodriguez.  Plaintiffs believed Jay’s narrative was part of the “special” arrangement for the top 10 distributors to be able to purchase and resell large volumes without alerting lower ranking distributors of their activities.
  54. Had Jay’s interventions with the Compliance Department not been so easy and so successful, underlining his “special” status, Plaintiffs would not have continued and would not have invested further money or efforts into the operation that Jay was masterminding.
  55. In May 2019, Plaintiffs agreed to another test of $50,000.  Although it accepted the orders, Isagenix did not pay bonuses to the Preferred Position as Rodriguez had projected.  Jay contacted Christensen and stated that he had used his “special” status with Isagenix to reset the bonuses on the Preferred Position if it was transferred to Christensen.  Christensen agreed to follow Jay’s instructions.  Subsequently, Isagenix locked the Preferred Position.
  56. Lund and Christensen informed Jay that they would not be able to proceed without access to the Preferred Position, it’s commissions and that it must qualify for bonuses.
  57. Subsequently, Jay coordinated with Isagenix to unlock the Preferred Position and to have the contact information of the Preferred Position changed to Jay’s brother in Hawaii.  Jay confirmed with Lund and Christensen that the commissions and bonuses would still be paid to Lund’s bank account.  Additionally, Jay agreed to pay the Plaintiffs $10,000 per month for three months if the Preferred Position maintained sufficient volume to receive 60 cycles per week for three weeks per month, totaling $30,000.  Lund and Christensen agreed.
  58. In the month of July 2019, the “idealized” commission structure engineered by Jay and Rodriquez generated commissions and bonuses from the Preferred Position and other controlled positions maintained by Rodriguez of approximately $26,000 on total product purchases by the Plaintiffs of approximately $90,000.
  59. This meant that in combination with the commissions and bonuses, the resales of the Isagenix products through Amazon and other online channels would generate a significant profit to the Plaintiffs.
  60. Based upon that result, Plaintiffs agreed to invest additional funds into the product purchases. Plaintiffs borrowed in excess of $100,000 with the promise that the commissions to be earned (as represented by Jay and Rodriguez) together with online sales proceeds would provide a substantial return.  The orders placed by Rodriquez using the Plaintiffs’ funds did, in fact, meet the sales objectives set by Jay and Rodriguez for the months of July and August 2019.
  61. However, in addition to the commissions being earned by the Plaintiffs within the idealized structure that Jay had engineered, Plaintiffs are informed and believe and thereon allege that Isagenix was paying substantial commissions and bonuses to others, including Jay and Rodriguez.
  62. The result of the combined commissions and bonuses being paid was that, as Jay stated, “We broke the commission system.”
  63. Isagenix soon realized that the disproportionate payout against the stored volume in the Preferred Position was uneconomic to it.
  64. Indeed, Plaintiff is informed and believes that thereon alleges that there are many such positions within the Isagenix downlines with volume that has not yet earned a full commission.  If each of those positions were allowed to actually earn the fully potential commission, it would make the Isagenix commission system uneconomic as a whole.  Plaintiffs are informed and believe and thereon allege that, over time, the only way that Isagenix can remain is business is to attract distributors that never earn the full potential of their commissions because they cannot generate sufficient volume in their “weak leg” to take advantage of the volume accumulating in their “strong leg”.  This failure to pay the full potential commission is referred to within the multi-level marketing industry as “breakage”.
  65. Thus, Isagenix has a strong incentive to prevent a position such as the Preferred Position from ever having large volumes occur on the “pay leg”.
  66. Isagenix realized that the Preferred Position and idealized structure that Jay and Rodriguez had engineered could “break the system” and eliminate the breakage necessary to be economically feasible.
  67. However, Isagenix continued to accept orders from each of the positions that was tied to a single address and a single credit card. During this period, Plaintiffs invested approximately $90,000 in additional orders.
  68. Thereafter, Isagenix sent the Plaintiffs requests for compliance information.  As it had been instructed by Jay, the Plaintiffs forwarded those requests to him for further handling.
  69. Unfortunately, Jay now ignored Plaintiffs.  Additionally, the Plaintiffs were unable to comply with compliance requests without the login names and passwords for each of the sales positions.  Rodriquez had sole control of that information.
  70. Without Jay’s use of his “special” relationship with Isagenix, Isagenix suspended all commission and bonus payments to Plaintiffs and locked the Plaintiffs out of the Preferred Position and all the other positions in the idealized pay structure.
  71. As a direct result of the wrongful scheme the Defendants arranged and managed, Isagenix increased its sales levels based on the purchases from Plaintiffs, and Jay increased his sales ranking within Isagenix from third to first.
  72. Plaintiffs lost more than $170,000 in connection with the scheme the Defendants masterminded and implemented.

FIRST CAUSE OF ACTION

(Breach of Contract)

(As to Defendant Jay Bennett) 

  1. The Plaintiffs and Jay entered into both written and oral agreements.
  2. The essential terms of the agreements were:
  3. Jay would deliver the Preferred Position to the Plaintiffs;
  4. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding resale e-tail of Isagenix products;
  5. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding controlling more than one Isagenix distributorship and earning commissions on more than one position;
  6. That Jay would forgive the $10,000 loan for the Initial Test if Plaintiffs would continue to try and build the sales organization that Jay masterminded;
  7. That Jay would pay an additional $30,000 to the Plaintiffs if they would meet certain purchase goals through the organization;
  8. That Jay would use his special relationship with Isagenix to assure that qualification restrictions for the Preferred Position were waived by Isagenix.
  9. Plaintiffs performed each and every condition of the written and oral contacts that were not excused by Jay’s failure to perform his duties under the agreements.
  10. Jay breached the agreements by:
  11.         Failing to deliver the Preferred Position to the Plaintiffs;
  12. Failing to circumvent Isagenix’s normal policies and procedures with respect to e-tail resales of Isagenix products through on-line stores and venders;
  13. Failing to use his special relationship with Isagenix to allow the Plaintiffs to control more than one Isagenix distributorship and earn commissions through multiple positions;
  14. Asserting that the Plaintiffs still owe Jay for the $10,000 loan for the Initial Test;
  15. Claiming that $30,000 paid to the Plaintiffs as commission was a loan that has been unrepaid;
  16. Failing to use his special relationship with Isagenix to assure that qualification restrictions for the Preferred Position were waived by Isagenix.
  17. Plaintiffs have been damaged by Jay’s breach of contract in the amount of at least $170,000.

SECOND CAUSE OF ACTION

(Intentional Misrepresentation)

(As to Jay Bennett)

  1. Plaintiffs incorporate the allegations of Paragraphs 1-87 inclusive.
  2. Jay represented to Plaintiffs that:
  3. Jay would deliver the Preferred Position to the Plaintiffs;
  4. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding resale e-tail of Isagenix products;
  5. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding controlling more than one Isagenix distributorship and earning commissions on more than one position;
  6. That Jay would forgive the $10,000 loan for the Initial Test if Plaintiffs would continue to try and build the sales organization that Jay masterminded;
  7. That Jay would pay an additional $30,000 to the Plaintiffs if they would meet certain purchase goals through the organization;
  8. That Jay would use his special relationship with Isagenix to assure that qualification restrictions for the Preferred Position were waived by Isagenix;
  9. That Isagenix would pay the full commissions due for each of the positions that were being created in the Plaintiffs’ idealized downline.
  10. Jay knew at the time the representations were made that they were false.
  11. In fact, Jay did not have a “special relationship” with Isagenix and Jim and Kathy Coover that would allow him to deliver on each of the promises made above.
  12. Plaintiffs reasonable relied upon Jay’s misrepresentations.
  13. As a direct and proximate result of Jay’s misrepresentations, Plaintiffs have been damaged in an amount to be shown at trial of at least $170,000.
  14. Jay acted willfully and with malice to defraud and deceive the Plaintiffs.  Therefore, the Plaintiffs should be awarded punitive damages in an amount of at least $1,700,000.

THIRD CAUSE OF ACTION

(Negligent Misrepresentation)

(As to Jay Bennett)

  1. Plaintiffs incorporate the allegations of Paragraphs 1-87 inclusive.
  2. As an alternative to the Second Cause of Action, the Plaintiffs allege that Jay’s representations were negligent as follows:
  3. Jay represented to Plaintiffs that:
  4. Jay would deliver the Preferred Position to the Plaintiffs;
  5. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding resale e-tail of Isagenix products;
  6. Jay would use his special relationship with Isagenix to circumvent normal Isagenix policies regarding controlling more than one Isagenix distributorship and earning commissions on more than one position;
  7. That Jay would forgive the $10,000 loan for the Initial Test if Plaintiffs would continue to try and build the sales organization that Jay masterminded;
  8. That Jay would pay an additional $30,000 to the Plaintiffs if they would meet certain purchase goals through the organization;
  9. That Jay would use his special relationship with Isagenix to assure that qualification restrictions for the Preferred Position were waived by Isagenix;
  10. That Isagenix would pay the full commissions due for each of the positions that were being created in the Plaintiffs’ idealized downline.
  11. At the time the representations were made the representations were false and Jay had no reasonable basis for believing that the representations were true.
  12. In fact, Jay did not have a “special relationship” with Isagenix and Jim and Kathy Coover that would allow him to deliver on each of the promises made above.
  13. Plaintiffs reasonable relied upon Jay’s misrepresentations.
  14. As a direct and proximate result of Jay’s misrepresentations, Plaintiffs have been damaged in an amount to be shown at trial of at least $170,000.

FOURTH CAUSE OF ACTION

(Intentional Misrepresentation)

(As to Isagenix)

  1. Plaintiffs incorporate the allegations of Paragraphs 1-87 inclusive.
  2. Since Jim and Kathy Coover are the founders, controlling owners and founders of Isagenix, Isagenix frequently uses them as its authorized promoters to recruit MLM industry leaders to become Isagenix distributors.
  3. Jim and Kathy Coover know Isagenix policies and procedures and know what leeway, if any, is given to Isagenix’s leading distributors.
  4. Isagenix, through its authorized representatives Jim Coover and Kathy Coover was told that Plaintiffs sole relationship with Isagenix would be as an online reseller of Isagenix products.
  5. The Coovers knew that Isagenix would not allow such sales and that Jay had no special relationship with Isagenix that would allow the Plaintiffs to circumvent Isagenix’s normal policies and procedures.
  6. Notwithstanding that knowledge, Isagenix did not warn the Plaintiffs when they were being recruited that Isagenix would not allow them to do business as the Plaintiffs had outlined to the Coovers.
  7. The Coovers also knew that Jay was presenting them to the Plaintiffs in order to ratify the scheme that Jay was concocting but intentionally failed to warn Plaintiffs not to rely on any representations that Jay might make that were outside Isagenix’s normal policies and procedures.
  8. As a direct and foreseeable consequence of Isagenix’s failure to alert Plaintiffs of the misrepresentations that Jay was making, Plaintiffs have been damaged in the amount of at least $170,000.
  9. Isagenix acted maliciously and with fraudulent intent to induce the Plaintiffs to enter into Jay’s scheme for Isagenix’s own benefit.  As a result, Plaintiffs are entitled to punitive damages of at least $1,700,000.

FIFTH CAUSE OF ACTION

(Negligent Misrepresentation)

(As to Isagenix)

  1. Plaintiffs incorporate the allegations of Paragraphs 1-87 inclusive.
  2. Since Jim and Kathy Coover are the founders, controlling owners and founders of Isagenix, Isagenix frequently uses them as its authorized promoters to recruit MLM industry leaders to become Isagenix distributors.
  3. Jim and Kathy Coover know Isagenix policies and procedures and know what leeway, if any, is given to Isagenix’s leading distributors.
  4. Isagenix, through its authorized representatives Jim Coover and Kathy Coover was told that Plaintiffs sole relationship with Isagenix would be as an online reseller of Isagenix products.
  5. The Coovers knew or should have known that Isagenix would not allow such sales and that Jay had no special relationship with Isagenix that would allow the Plaintiffs to circumvent Isagenix’s normal policies and procedures.
  6. Notwithstanding that knowledge, Isagenix negligently failed to warn the Plaintiffs when they were being recruited that Isagenix would not allow them to do business as the Plaintiffs had outlined to the Coovers.
  7. The Coovers also knew that Jay was presenting them to the Plaintiffs in order to ratify the scheme that Jay was concocting but negligently failed to warn Plaintiffs not to rely on any representations that Jay might make that were outside Isagenix’s normal policies and procedures.
  8. As a direct and foreseeable consequence of Isagenix’s failure to alert Plaintiffs of the misrepresentations that Jay was making, Plaintiffs have been damaged in the amount of at least $170,000.

SIXTH CAUSE OF ACTION

(Civil Conspiracy)

(As to All Defendants)

  1. Plaintiffs incorporate the allegations of Paragraphs 1-116 inclusive.
  2. Each of the Defendants had an incentive to induce Plaintiffs to purchase huge amounts of Isagenix products through the many distributor positions that Jim and Rodriguez created for that purpose. For Isagenix, it created additional sales.  For Jim and Siv, it increased both their commissions and their status as the highest selling distributor in the Isagenix community of distributors.  For Rodriguez, Plaintiffs are informed and believe and thereon allege that it increased her income and rank in the Isagenix distributor community.
  3. Each of the Defendants knew of, consented to and participated in the wrongful acts alleged herein as a means of enriching themselves.
  4. The Defendants’ joint agreement to participate in the wrongful acts constitutes a civil conspiracy.
  5. As a result, each of the Defendants should be held jointly and severally liable for the damages that Plaintiffs have incurred.

WHEREFORE, Plaintiffs pray from judgment as follows:

On the First Cause of Action:

  1. For Judgment against Jay Bennett in an amount to be shown at trial of at least $170,000;
  2. For costs of suit incurred herein; and,
  3. For such other relief as is proper.

On the Second Cause of Action:

  1. For damages against Jay Bennett in an amount to be shown at trial of at least $170,000;
  2. For punitive damages in an amount to be shown at trial of at least $1,700,000;
  3. For costs of suit incurred herein; and,
  4. For such other relief as is proper.

On the Third Cause of Action (as an alternative to the Second Cause of Action):

  1. For damages against Jay Bennett in an amount to be shown at trial of at least $170,000;
  2. For costs of suit incurred herein; and,
  3. For such other relief as is proper.

On the Fourth Cause of Action:

  1. For damages against Isagenix in an amount to be shown at trial of at least $170,000;
  2. For punitive damages against Isagenix in an amount to be shown at trial of at least $1,700,000;
  3. For costs of suit incurred herein; and,
  4. For such other relief as is proper.

On the Fifth Cause of Action (as an alternative to the Fourth Cause of Action):

  1. For damages against Isagenix in an amount to be shown at trial of at least $170,000;
  2. For costs of suit incurred herein; and,
  3. For such other relief as is proper.

On the Sixth Cause of Action:

  1. For a judgment against each of the Defendants declaring that each of them is jointly and severally liable for any damages awarded for the First through Fifth Causes of Action;
  2. For costs of suit incurred herein; and,
  3. For such other relief as is proper.

About Isagenix International

Established in 2002, Isagenix provides systems for weight loss, performance, vitality and well-being, personal care and beauty, and financial wellness​. With half a million customers worldwide and more than 100 products, packs, and systems globally, the company is committed to supporting healthy change in its customers’ and independent distributors’ lives.

Isagenix shares its products and solutions through a network of independent distributors in 14 markets: the United States, Canada, Puerto Rico, Hong Kong, Australia, New Zealand, Taiwan, Mexico, the United Kingdom, Ireland, the Netherlands, Belgium, Spain, and South Korea. Isagenix is a privately owned company with headquarters in Gilbert, Arizona. For more information, visit Isagenix.com​.

 

Get more information, fact and figures about Isagenix, click here for the Isagenix overview.

Load more