Plaintiff Jessica Ponkey has prevailed in an appeal against a decision to close her LuLaRoe class-action.
Ponkey’s class-action was closed last year, following a Final Arbitration Award issued in April 2022.
Ponkey filed an appeal with the Ninth Circuit on May 27th.
On July 31st, 2023, the Ninth Circuit issued a memorandum, ordering the arbitration proceedings be reversed.
In handing down their decision, the Ninth Circuit determined LuLaRoe compelled arbitration to resolve Ponkey’s case “in an inferior forum that work[ed] to LuLaRoe’s advantage”.
Therefore, we conclude that the parties’ arbitration agreement is unenforceable under California’s sliding-scale approach, and we also conclude that the district court cannot sever the offending terms to preserve the agreement’s enforceability.
Because we conclude that the arbitration provision is unenforceable, we need not reach the issue of whether the district court erred in compelling arbitration against the non-signatory defendants.
With arbitration unenforceable, Ponkey’s case returns to the Central Distric tof California.
As of August 23rd, there are no further entries on Ponkey’s class-action docket.
Ponkey sued LuLaRoe back in March 2021, alleging the MLM company operated as “an unlawful, fraudulent pyramid scheme”.
Stay tuned for updates as BehindMLM continues to track the reopened case.