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

Bounds v. Figurettes

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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.

This case is also available at: http://www.mlmlegal.com/legal-cases/Bounds_v_Figurettes.php.

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

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

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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