The Iowa Supreme Court held that the statutes prohibiting referral sales programs were constitutional. The legislature is free to enact statues that protect the public welfare and suppress fraud, and may constitutional regulate legitimate business that is detrimental to the public. The sales practices of referral sales programs, like those promoted by Koscott, were deemed to be fraudulent, and could be either prohibited or regulated by the legislature without violating the State or Federal Constitutions.
The full case and case summary are also available at: http://www.mlmlegal.com/legal-cases/Iowa_v_KoscottInterplanetaryInc.php
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