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DrP79

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  • New DSA Study Casts Shadow Over Herbalife [View article]
    perhaps you would be so kind as to actually provide the information required for the accusation
    Dec 18, 2014. 11:43 PM | Likes Like |Link to Comment
  • New DSA Study Casts Shadow Over Herbalife [View article]
    what you believe is immaterial to me or more importantly Herbalife or
    - the law
    - the case law
    - the economics
    - the facts
    - logic of the argument
    Dec 18, 2014. 10:50 PM | Likes Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    I have a hard time understanding your question. Why would anyone care about rewards to salesmen about sales to EXTERNAL customers?

    LOTS of firms, regardless of structure, MLM or not, reward salesmen for the amount of sales.

    The key holding is that court recognized that the internal sales were to ULTIMATE users. Internal users can and do consume products themselves. Further, recruiting, by itself, is also legal as long as it is NOT the primary source for rewards.

    This issue arose because of the nature of sales to INTERNAL customers. The court spent lots of time to analyse the practical effects of how a firm would allocate rewards in practice.

    The court was concerned that a firm might have policies that use incidental sales as front for recruiting. Their analysis showed that BL did indeed do that, which is why they lost.

    OTOH, Herbalife sells real products to users instead of as incidental to merely recruiting. This is easily seen by the number of members who have NO downline and join just to get the products at a discount for themselves, their families and friends.
    Dec 18, 2014. 04:13 PM | 1 Like Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    The key is ULTIMATE users no matter who they are. Internal customers count just as much as external ones.

    Then the issue is the PRIMACY of recruiting. Note it is NOT illegal to have recruiting but that recruiting cannot be the PRIMARY source of revenues.

    The MLM industry cheered the ruling, despite the fact that BL was a bad actor.
    Dec 18, 2014. 03:29 PM | 1 Like Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    "BurnLounge is CORRECT that when participants bought packages in part for INTERNAL consumption (to obtain the ability to sell music through BurnPages and to use the package merchandise), the participants were the “ULTIMATE USERS” of the merchandise and that this INTERNAL sale alone does NOT make BurnLounge a pyramid scheme."
    ------

    The court goes on to say

    ----
    But it is incorrect to conclude that all rewards paid on these sales were related to the sale of products to ultimate users.

    Whether the rewards are related to the sale of products depends on how BurnLounge’s bonus structure operated IN PRACTICE. See Omnitrition, 79 F.3d at 781.

    In practice, the rewards BurnLounge paid for package sales were not tied to the consumer demand for the merchandise in the packages; they were paid to Moguls for recruiting new participants.

    The fact that the rewards were paid for recruiting is shown by the necessity of recruiting to earn cash rewards and the evidence that the scheme was set up to motivate Moguls through the opportunity to earn cash. Rewards for recruiting were “unrelated” to sales to ultimate users because BurnLounge incentivized recruiting participants, not product sales.

    ------
    BurnLounge and Arnold cite a passage from an FTC advisory letter, Exhibit 3 at trial, to argue that proof of INTERNAL consumption does not establish that BurnLounge was a pyramid. Read in its entirety, the relevant passage of the letter is consistent with the district court’s analysis. The relevant passage reads:

    --Much has been made of the personal, or INTERNAL, consumption issue in recent years. In fact, the amount of INTERNAL consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.

    The CRITICAL QUESTION for the FTC is whether the revenues that PRIMARILY support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.--

    As discussed above, the rewards BurnLounge paid to Moguls were PRIMARILY in return for selling the right to participate in the money-making venture—the Mogul program. The merchandise in the packages was simply incidental.

    ------
    IV. CONCLUSION

    We affirm the district court’s holding that BurnLounge was an illegal pyramid scheme, in violation of § 5(a) of the FTCA. BurnLounge’s scheme satisfied both prongs of the Omnitrition test because Moguls paid for the right to sell products, the rewards BurnLounge paid were PRIMARILY for
    recruitment, and Moguls were clearly motivated by the opportunity to earn cash rewards from recruitment.

    http://1.usa.gov/1nJ3tSe

    NOTE

    I capitalized some words, such as PRIMARILY, but otherwise comes directly from the decision.

    The key is PRIMARILY. Hence the emphasis on sales from recruiting or not.

    BL had 95% of their sales from recruiting. Herbalife has less than 5%. They are polar opposites. BL was a bad actor, but the industry cheered the ruling.

    95% > 50% > 5%
    Dec 18, 2014. 03:04 PM | Likes Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    The court noted that the key was the primacy of recruiting to determine if the INTERNAL SALES were to the ULTIMATE USER in practice.

    BL got 95% of their sales from recruiting.

    Yet Herbalife sells their information packages for 1/8 to 1/4 of the cost of BL. If they GAVE IT AWAY FOR FREE, the affected sales would be less than 5%

    95% > 50% > 5%

    You must consider the term RETAIL as opposed to the WHOLESALE of distribution. RETAIL does NOT mean another store selling directly to a walk-in customer.

    Most of the members for Herbalife sign up to get discounts on what they buy for themselves, their families and friends. That IS RETAIL, not wholesale, for this discussion.
    Dec 18, 2014. 02:29 PM | 1 Like Like |Link to Comment
  • New DSA Study Casts Shadow Over Herbalife [View article]
    or at least being successful at his attempts
    Dec 18, 2014. 01:25 PM | 1 Like Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    Read the case yourself.

    The effects have been described many times including on the comments on this article
    Dec 18, 2014. 01:00 PM | 1 Like Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    bur•gla•ry ˈbərɡlərē/ noun

    entry into a building illegally with intent to commit a crime, especially theft.
    ----------------------...
    So you see someone who enters a building and think they are a burglar and call the police. They investigate and find the owner was locked out of his vacation home at night and broke into his own home to get out of the cold.

    Is he a burglar?
    - he did not enter the building illegally
    - he did not do so with INTENT to commit ANY crime, especially theft.

    That you call him a burglar is itself WRONG FROM THE BEGINNING.
    Dec 18, 2014. 12:56 PM | 2 Likes Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    yet the courts in BL says just the opposite
    Dec 18, 2014. 12:20 PM | 3 Likes Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    was that reality

    - the law
    - the case law
    - the economics or
    - the facts

    or just activism
    Dec 18, 2014. 12:19 PM | 3 Likes Like |Link to Comment
  • New DSA Study Casts Shadow Over Herbalife [View article]
    and yet I don't worry at all about what you think of me NOR does it matter about Herbalife on an article about Herbalife.

    The law, the case, law, the economics, and facts are enough.

    The accuser still has
    - to bear the burden of proof
    - state the crime
    - against a SPECIFIC individual or firm
    - and each and EVERY element to be proven
    - if ANY element is not proven, then the case fails

    other bad acts by OTHERS are just guilt by association that have no bearing

    - no 2 strikes is a strike out.
    - no rants
    - no name calling
    Dec 18, 2014. 09:46 AM | 1 Like Like |Link to Comment
  • Herbalife: An Open Letter To New York AG Eric T Schneiderman [View article]
    consider the internal sales to the ULTIMATE user as retail as opposed to WHOLESALE
    Dec 18, 2014. 08:51 AM | 1 Like Like |Link to Comment
  • New DSA Study Casts Shadow Over Herbalife [View article]
    such is life

    assume I'm an idiot with no background in anything

    then follow the argument and logic:

    State the crime
    Against a specific individual or firm
    Provide each and every element of the crime
    Provide overwhelming evidence to support ALL elements of the crime
    Bear the burden of proof
    Dec 18, 2014. 08:50 AM | 2 Likes Like |Link to Comment
  • New DSA Study Casts Shadow Over Herbalife [View article]
    I see someone has a new phrase as if that magically answers all questions.

    No doubt your understanding of the concept is about as good as the rules of baseball.

    Res ipsa loquitur is often confused with prima facie ("at first sight"), the common law doctrine that a party must show some minimum amount of evidence before a trial is worthwhile.

    The difference between the two is that prima facie is a term meaning there is enough evidence for there to be a case to answer. Res ipsa loquitur means that because the facts are so obvious, a party need not explain any more.

    For example:

    "There is a prima facie case that the defendant is liable. They controlled the pump. The pump was left on and flooded the plaintiff's house. The plaintiff was away and had left the house in the control of the defendant. Res ipsa loquitur."

    Yet even this term still requires the specific law to be charged and all the elements to be proven.

    Why did I not correct you, when you are ranting and making a fool of yourself and destroying your own credibility in the process. Remember I want ALL your comments preserved and everyone to read them.
    Dec 18, 2014. 08:10 AM | Likes Like |Link to Comment
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