Foley & Lardner LLP announced today that after a more than seven-year battle, the firm has secured a complete victory for leading direct-selling wellness company Neora and its founder Jeff Olson in a landmark case against the FTC. On September 28, the court denied the FTC’s requested relief on all five of its claims: pyramid, income, product, agency, and means and instrumentalities, ruling that the FTC’s claims were invalid.
This is the first time a direct-selling company has defeated the FTC’s pyramid scheme claims in a court trial. It is also the first victory of its kind since Amway’s 1979 administrative law defeat of the FTC. The win is significant for Neora and the entire direct-selling industry, which consists of over 1,000 companies in the U.S. alone, as it emphasizes the importance of protecting the rights of legitimate direct-selling businesses.
As summarized by the Direct Selling Association in its amicus brief, had the FTC been successful in pursuing its new and vague “overemphasis on recruiting” test, it would have had “a profound impact on the state of the law and negatively impact[ed] operations of a sizeable portion of the United States economy.”
Edward Burbach, chair of Foley’s Government Solutions Practice and co-chair of its State Attorneys General Practice, commented, “We at Foley are very proud of our interdisciplinary team who worked tirelessly together to achieve this victorious result for Neora.” Burbach attributed the win to the excellent testimony of Neora executives Jeff Olson, Deborah Heisz, and Amber Olson, the support of Neora General Counsel Gail Lane, and the top-notch Foley team.
In addition to Burbach, the Foley team representing Neora in this landmark victory was led by litigation partners Craig Florence and Michelle Ku and included of counsel John Sepehri, special counsels Robert Johnson and Kristina Silcocks, and associate Stephanie McPhail.
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