In response to Plaintiffs Rui Chen’s and Wenjian Gozales’ pyramid scheme lawsuit, Premier Financial Alliance attempted to compel arbitration.

The motion was denied January 22nd, 2019, prompting PFA to file a Motion for Reconsideration.

On December 19th, PFA’s Motion for Reconsideration was also denied.

The decision to deny reconsideration was based on PFA’s

failure to submit sufficient evidence that plaintiffs affirmatively agreed to the terms of the Premier Financial Alliance Associate Marketing Agreement (“AMA”) by clicking a box in an online registration form.

This is based on one of the Plaintiffs in a parallel fraud case alleging the affiliate who recruited them signed them up. I.e. they never personally agreed to PFA’s AMA.

In the event reconsideration was denied, PFA sought a venue transfer from California to Georgia.

This was again based on a clause in the AMA, which lead to it being denied for the same reason as arbitration.

PFA’s argument that the company and its employees are based out of Georgia was also rejected.

PFA has not persuaded the Court that any other factors—costs of litigation, ease of access to sources of proof, availability of compulsory process as to former employees or associates, etc.—would favor transfer to Georgia.

The court also noted that “so many” of PFA’s affiliates reside in California.

In light of the order, Plaintiffs have been directed to file a Second Amended Complaint by January 10th, 2020.

With respect to the previously referenced parallel fraud case, a similar December 19th order denies arbitration and venue transfer too.

A case management conference has been scheduled for January 13th, 2020.

Stay tuned for updates as we continue to track both cases going forward.

 

Update January 14th 2020 – A Second Amended Complaint was filed as directed on January 10th.