YTB Travel v. McLaughlin (2009) , Case No. 09-cv-369-JPG

Can a federal court judge vacate a TRO issued by a state court judge under its inherent contempt powers?

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The Federal Court held that it could not vacate the order issued under the state court's inherent contempt powers. At the state court hearing on the matter, the court found that one of the defendants had actually increased the conduct prohibited under the TRO. Finding the action to be contemptuous, the court extended the TRO despite the filing of a petition to remove the case to federal court. The state court's action continued to prohibit the defendants from recruiting away their downline until the federal court had an opportunity to consider the matter. The federal court held that principles of comity prevented it from vacating the state courts actions, and continued the TRO under its federal authority until it could properly consider the matter at a hearing.

Full case and case summary also available at: http://www.mlmlegal.com/legal-cases/YTBTravel_v_McLaughlin-2009.php

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

Reference Info:State, 7th Circuit, Illinois | United States

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