Bounds v. Figurettes , 135 Cal. App. 3d 1 (1982)

Bounds v. Figurettes


The Appellate Court held that Figurettes was an illegal pyramid program in violation of state law. Figurettes' marketing program emphasized recruitment of downline distributors and inventory loading over actual retail sales. The company produced women's undergarments, yet had a significant number of male distributors who could not actually engage in retail sales. The company never required retail sales, and only began to emphasize them after an investigation by the state Attorney General. The court found that Figurettes' growth was based not on the actual sale of merchandise, but on the continued growth and inventory loading of new distributors. The program was an "endless chain" as defined by statute and unlawful.

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Reference Info:State, 9th Circuit, California | United States

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