The Utica City Court held that the sales program was a pyramid scheme and enforcing the contract would be a violation of state public policy. Schaffer managed a sales program between Amway distributors where they would circulate products among themselves for bonuses and recruitment fees. The products did not actually change hands; invoices were merely circulated representing their sale and shipment. The Court found that the plan was a pyramid scheme because no products were actually sold, and the scheme depended on the recruitment of additional member to be viable. The court refused to honor the claim or counter-claims of the parties.

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