Reinsurance Focus

In one outgrowth of a thicket of litigation between Amway Global and a number of its former beauty product “independent business owners” (“IBOs”), a Michigan federal court confirmed an arbitration award in favor of Amway. Dispute arose when the IBOs allegedly breached agreements with Amway when they went to work for a competitor. The IBOs alleged that the contracts were unenforceable, as were the arbitration provisions. In Michigan litigation, the court compelled the parties to arbitrate, which they did over 16 days in Detroit in 2009. The arbitrator ruled in favor of Amway. Meanwhile, the IBOs had brought putative class action claims in Utah federal court, which claims were consolidated with two similar cases brought by Amway and its competitor, MonaVie products, and were pending (and remain pending) when the arbitration took place. When Amway filed an action in Michigan to confirm the arbitration award, the IBOs filed an identical action in Utah, seeking to vacate the award, and seeking to consolidate that action with the other consolidated Utah cases. The Michigan court refused the IBOs’ motion to stay or transfer to Utah, citing the “first to file” rule, as Amway had filed its action to confirm the award three days earlier than the IBOs filed their similar Utah action, and the IBOs failed to demonstrate a reason to depart from the rule. Amway Global v. Woodward, No. 09-12946 (E.D. Mich., Nov. 20, 2009).

This post written by John Pitblado.