Kugler v. Koscot

Were Koscot's marketing practices inherently deceptive?


The court held that Koscot's structure was inherently fraudulent under the New Jersey Consumer Fraud Act. The State attorney general alleged that the marketing practices used by Koscot were deceptive. Koscot overstated potential compensation during recruitment meetings and failed to disclose to potential distributors all of the fees and commissions that they would have to pay to the company to remain in good standing. Koscot defended on the grounds that all of the distributors who made the deceptive statements were independent contractors, not employees, and because of this Koscot could not be held liable for their statements. The court, stating that it could find not general rule of law that independent contractors who were acting under the direction of their principle could not make the principle liable through the contractor’s actions, categorically rejected this argument. To hold so would allow Koscot to use its independent distributors as a shield against liability, while continuing to direct their fraudulent activities.

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

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

Reference Info:State, 3rd Circuit, New Jersey | 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.