Premier Financial Alliance pyramid class certification granted
Plaintiffs in the Premier Financial Alliance pyramid fraud case have been granted California-specific class certification.
Both cases allege Premier Financial Alliance is a pyramid scheme.
Premier Financial Alliance had argued jurisdictional issues against class-certification (that California and New Jersey law couldn’t be allied to out of state claims), but that opposition was rejected.
As part of the granted class-certification, two smaller California and New Jersey subclasses were proposed, specifically pertaining to alleged violations of those states’ respective laws.
The court then went on to permit the Californian subclass but deny the New Jersey one.
This decision was made on the basis how many class members in New Jersey was not specified.
With respect to commonality between class members, the court ruled the following questions will be addressed:
(1) whether defendants’ alleged scheme satisfies each of the two requirements for finding an endless chain scheme in violation of California’s Endless Chain Scheme Law according to the Koscot test; and
(2) whether defendants’ alleged scheme is unfair under the unfair prong of the UCL because it “offends an established public policy” or is “tethered to some legislatively declared policy.”
As per the court’s November 3rd order, the certified class covers
all persons who enrolled as Premier Financial Alliance members and purchased one or more Living Life Indexed Universal Life Insurance policies in California or New Jersey between January 1, 2014, and the present.
Current and former PFA affiliates with active insurance policies do not need to rescind them to participate as class members.
As I understand it PFA recruitment in California is/was pretty significant. It’ll be interesting to see how the case continues to play out.
Update 30th January 2022 – Premier Financial Alliance filed an appeal against the class-certification decision in the Ninth Circuit.
On January 20th the Ninth Circuit denied the appeal.
Update 16th June 2022 – Just a very brief update, a forty-nine page order has mostly denied motions for summary judgment filed by the parties.
The three orders of note are
- request for prospective injunctive relief (motion for summary judgment by Defendant Life Insurance Company of the Southwest granted, so this claim from Plaintiff is gone);
- “theory of liability against LSQ predicated on the existence of a partnership between LSW and PFA” (motion for summary motion by Defendants granted, so related claims from the Plaintiffs are gone); and
- Plaintiff Youxiang Eileen Wang’s individual claim for fraud against FDA (motion for summary judgment by Defendants granted, so this claim is gone).
A Case Management Conference has been scheduled for July 11th.
Update 12th July 2022 – Following the July 11th Case Management Conference, a jury trial has been scheduled for February 6th, 2023.