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Two multilevel marketing companies, Utah-based MonaVie and Amway of Michigan, have settled acrimonious lawsuits. Each was claiming the other made false statements about its products and companies.
The companies filed a joint statement this week in federal court in Utah saying they had settled their differences in the lawsuits originally filed in 2008. The legal battles began when Amway claimed MonaVie used false premises to steal away thousands of its independent distributors.
According to a statement filed in court, each side is to bear its own costs of the suits; no mention was made of any money changing hands.
MonaVie did not respond to several requests for comment on the settlement. An Amway spokesperson said only that the various parties "reached agreement to resolve all pending legal and arbitration disputes between them. The terms of the agreement are confidential."
Both are multilevel marketing companies that sell products through a network of independent distributors. The distributors earn money on any retail sales but are told they can earn much more on commissions on sales to other distributors they bring into the company in "downlines," meaning they continue to earn commissions as layers of distributors are added beneath them.
The disputes began in 2007, when some of what eventually was more than 20,000 Amway distributors began to leave and join MonaVie. The South Jordan company launched publicly in 2005 and has claimed it is growing rapidly in revenues and in recruiting distributors who mostly sell the company's nutritional juice based on the acai berry found in the Amazon rain forest of South America.
Amway sued a number of its former top-level distributors and MonaVie in March of 2008, claiming the distributors had violated their contracts with Amway. Amway charged MonaVie had lured away distributors by falsely advertising the health benefits of its juice and misleading them about the how much they might earn by switching companies.
It further claimed the Utah company illegally used Amway's distributor lists to put many former distributors into the same position in the downlines they had been with at Amway.
Amway also alleged in court filings that MonaVie failed to disclose that the biggest ingredient in its juice was water.
MonaVie denied the allegations. The company also sued Amway, saying it was harassing and intimidating distributors affiliated with a group called TEAM that had changed companies. It also charged that Amway's contracts unlawfully sought to restrict distributors from joining competing multilevel marketers.
At one point, the Utah company also claimed Amway was a pyramid scheme.
The companies had been dueling back and forth in court before federal Judge Bruce Jenkins and were getting close to trial when they reached a settlement.