On June 30, 2009, Scott Clearman, The Clearman Law Firm, PLLC, on behalf of his clients, filed a detailed class action complaint against retail energy provider Stream, Stream’s marketing arm, Ignite, and their officers and top salespersons, alleging that they operated a pyramid scheme in violation of the federal Racketeer Influenced and Corrupt Organizations Act (“Ignite Action”). After over nine years, the case has settled.
Scott learned that Stream Energy and its sales arm, Ignite, were acting questionably in structuring its compensation to direct sales associates, known as “Ignite Independent Associates.” Stream Energy and Ignite called it a legitimate multilevel marketing business. Scott recognized what was not so obvious; these companies were operating a pyramid scheme he concluded violated the federal Racketeer Influenced and Corrupt Organizations Act, commonly called RICO. Stream and Ignite are not unique: many businesses make-believe they are legitimate multilevel marketing business, but they are not.
United States District Judge Hoyt, Southern District of Texas, initially dismissed the Ignite Action due to an arbitration agreement between the plaintiffs and Ignite. Clearman appealed Judge Hoyt’s dismissal. The United States Court of Appeals for the Fifth Circuit reversed Judge Hoyt’s decision and found that Ignite’s agreement to arbitrate was illusory and unenforceable under Texas law.
The Ignite Action involved many depositions, many motions and the production and review of hundreds of thousands of documents. After evidence was presented, Judge Hoyt certified the Ignite Action as a class action but effectively excluded Georgians from the certified class. The defendants then appealed Judge Hoyt’s certification decision with the United States Court of Appeals for the Fifth Circuit. In a rare decision entertained by all judges of the United States Court of Appeals for the Fifth Circuit, the court affirmed Judge Hoyt’s decision to certify the class.
Settlement:
Eventually, driven by the certification, other decisions by Judge Hoyt in the Ignite Action and the thoughtful efforts of all parties, and helped by an impartial fellow litigator, Murray Fogler, the parties agreed upon a settlement. However, to Clearman’s disappointment, the class settlement excluded Georgians.
The post Partial Settlement Reached in Ignite/Stream Class Action appeared first on The Clearman Law Firm | Call 713.304.9669.
Location
©2024 All Rights Reserved | Clearman Law Firm, PLLC | Privacy Policy | Terms of Use