Michigan v. Cooper , 166 Mich. App. 638 (1987)

Is the incidental sale of a product a defense to the application of the Michigan pyramid statutes?


The Court of Appeals held that the scheme was an illegal pyramid and a security. Cooper and others promoted a selling scheme where participants would pay a monthly fee and receive shipments of lotion. In addition to the product, they would receive the right to recruit additional people to sign up and would receive bonuses based on the number of active paying participants in their downline. Participants were sent additional product regardless of their need for it. Cooper argued that the plan was not an illegal pyramid because bonuses were paid based on products sold, and not on the recruitment of additional members as was required by the pyramid statute. The Court held that the sale of the product was incidental to the recruitment of additional participants and an attempt to avoid the application of the pyramid statute.

Full case and case summary are available at: http://www.mlmlegal.com/legal-cases/Michigan_v_Cooper.php

LOADING PDF: If there are any problems, click here to download the file.

Reference Info:State, 6th Circuit, Michigan | 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.

© Babener & Associates | Attorney Advertising

Written by:


Babener & Associates on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.