The Financial Education Services “terminations” class-action has been partially dismissed.

And following the March 21st partial dismissal order, what’s left of the case has been sent to arbitration.

At issue in FES’ motion to dismiss was Plaintiffs, former FES distributors, having signed a contract compelling disputes to arbitration (ISR agreement).

In handing down its decision, the court noted that FES had met the burden to “produce evidence that would allow a reasonable jury to find that a contract exists.”

Within FES’ ISR agreement is an arbitration provision. With respect to the provision, the court determined;

Plaintiffs never explicitly claim they did not agree to arbitrate, they were unaware of the arbitration agreement, or the arbitration agreement was added after they signed the ISR Agreements.

Plaintiffs did not submit any sworn affidavits or other evidence tending to show they did not enter into an agreement to arbitrate.

Instead, Plaintiffs’ sole argument challenging the existence or enforceability of the arbitration provision is that they were “not provided copies of their agreements,” “Defendants often changed the terms of the Agreement without Plaintiffs’ knowledge or consent,” and they “cannot be certain whether they actually signed an Agreement with Defendants or which version of the Agreement they signed.”

The court dismissed these arguments, going on to rule;

Because Plaintiffs have failed to put the making of the arbitration agreement “in issue,” the court must now dismiss this case and require the parties to engage in arbitration.

This opinion should not be construed as a determination on any of Defendants’ arguments as to the merits of Plaintiffs’ claims.

The Complaint as originally filed in November 2022 has been dismissed. Any further disputes between the parties must be resolved through arbitration.

The reason for the partial dismissal of the case is a pending motion for sanctions filed by FES, a decision on which remains pending.

Depending on what that decision is, I’ll either leave an update below noting the decision or pointing to a separate article.

Separately the FTC sued FES in 2022. In their Complaint, the FTC accused FES of running a $467 million pyramid scheme.

The FTC’s FES case trial is scheduled to begin on September 17th, 2024.