The LuLaRoe victim class-action arbitration mess
LuLaRoe’s attempts to thwart a victim class-action has devolved into a legal mess.
To recap, back in late 2017 LuLaRoe was sued by several former affiliates.
The lawsuit claims damages of over $5 million and potentially 80,000 class members.
As of April 17th, the case was stayed pending the outcome of compulsory arbitration.
Three days later LuLaRoe filed arbitration demands that sought to have each plaintiff file separate claims (22 in total), which were then to also be arbitrated separately.
In other words; divide and conquer.
Arbitration proceedings played out for the rest of 2018, up until a partial decision was made on January 2nd, 2019.
As per the “partial award”, the LuLaRoe victim lawsuit cannot be arbitrated as a class-action.
I initially thought this meant it was back to court but instead it means individual arbitration is likely to go ahead.
This weakens the plaintiffs, as intended by LuLaRoe who want to split them up.
There are apparently some secondary issues still to be decided via arbitration, but nothing that affects the central issue (as I understand it).
The interim issue is LuLaRoe has asked the court to confirm the partial award.
A hearing on the motion was thus scheduled for March 8th.
This has been opposed by the plaintiffs, on the grounds the parties are waiting for new arbitrators to be appointed.
These new arbitrators are required to resolve secondary issues and individual arbitration, as the original arbitrator was limited in scope to only mediating the “can the class-action be mediated” question.
On February 15th the plaintiffs filed their opposition to LuLaRoe’s motion to confirm the partial award.
On February 22nd LuLaRoe filed its reply in support of the motion.
On March 5th the motion hearing date was continued from March 8th to March 29th.
I’m assuming that in the meantime arbitrators to resolve the other issues will be appointed, but am not entirely sure.
This has gotten pretty messy and I’m not particularly familiar with reporting on the nitty-gritty of arbitration cases.
I have done some research into it though and from what I can gather;
The partial award needs to be confirmed by the court. This will settle whether the class-action can be mediated or not.
I’m inclined to think the court will uphold the partial award, although there is the possibility it’ll be overturned.
In the meantime the secondary issues will be mediated, but they’re not that significant.
Of greater significance is the are the individual arbitration cases. If they go unresolved then that paves the way for a class-action lawsuit.
Chances of that happening though? Who knows.
From LuLaRoe’s perspective it’s easier to settle 22 individual arbitration cases then defend a class-action, otherwise we wouldn’t be here.
Also in play is the Washington AG, who filed a new pyramid scheme lawsuit against LuLaRoe in late January.
I’ve marked our next update in the case for March 30th. Hopefully we’ll have a clearer idea of where the case is at and where it’s going then.
Update 30th March 2019 – On March 28th the partial award was confirmed.
The matter will remain stayed pending the dismissal of the Plaintiffs’ class action arbitration demand and the resolution of the 22 remaining demands to arbitration filed by Defendants.
The status of the proposed class-action now depends on the outcome of the ordered individual arbitration cases.
Update 30th September 2019 – As per a September 24th motion, Plaintiff Stelle Lemberg has “resolved” her dispute with LuLaRoe.
Accordingly a September 25th order dismissed Lemberg as a plaintiff from the case with prejudice.