REI Industries, Inc. v. Texas

Should the sale of a product be enjoined for inflated sales figures and exaggerated claims of performance?

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The Texas Court of Civil Appeals held that sales of the "phaser magnum" should be enjoined. REI Industries claimed that the product reduced air pollution in cars and offered a money back guarantee for the product, subject to several caveats. The product was sold through a network of distributers recruited at informational meetings. The promoters of the meetings claimed that distributors could make $1,000 a week using "conservative" estimates. The court found that the evidence produced at trial did not support either claim by the company and that they were false claims. The sale and distribution of the Phaser Magnum was thereby enjoined.

The case and case summary are also available at: http://www.mlmlegal.com/legal-cases/REIIndustriesInc_v_Texas.php

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

Reference Info:State, 5th Circuit, Texas | 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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