Miller v. American Professional Marketing

What are the characteristics of a pyramid sales program that make it illegal under Iowa State Statute?

more+
less-

The Iowa Supreme Court held that American Professional Marketing (APM) was not a pyramid or referral sales program prohibited by state statutes. APM used a network of distributors to sell a fuel additive to consumers. The distributors were paid commissions based on the sales of product, not on the recruitment of other downline distributors. Distributors were prohibited from purchasing more than two cases of product at a time, could not re-order unless they had sold or consumed 75% of their inventory, were not allowed to directly recruit additional downline distributors, and could sell back any sealed, unused product. The Court held that all of these elements differentiated APM from a traditional pyramid program that heavily emphasized recruiting over sales and encouraged inventory loading. The fact that distributors were compensated for sales made by their downline suppliers was not enough to make the program an illegal pyramid or referral marketing program.

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

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

Written by:

Published In:

Reference Info:State, 8th Circuit, Iowa | 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

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

CONNECT

Welcome to MLM Legal - a valuable resource to the Multi-Level Marketing and Direct Sales Industry. ... View Profile »


Follow Babener & Associates:

Reporters on Deadline

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* 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.
×
Loading...
×