Re NCN Communications

Can PUC authorization to do business in the state be rescinded based on the operation of an MLM program?

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The ALJ held that NCN's authorization to do business in the state of California should be revoked because of the serious questions surrounding the operation of the business. A protest to NCN's application for authorization to do business in California alleged that the company had a history of serious shortfalls in customer services because it made more money signing up distributers to sell the long distance program than it did providing long distance services. The evidence produced at a hearing tended to corroborate the claims that new customers were not hooked up to the network and that the company made more money from distributors than from users of the service. This raised serious questions in the PUC's opinion about the company’s fitness to do business in the state. NCN's authorization to do business in the state was revoked.

Case and case summary are also available online at: http://www.mlmlegal.com/legal-cases/ReNCNCommunications.php

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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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