Haeggquist & Eck has filed a class action lawsuit against clothing retailer LuLaRoe on behalf of the company’s independent representatives and consultants, the firm announced today.
The complaint, which was filed October 13 in the Central District of California, alleges that LuLaRoe is a multi-level marketing scheme that requires consumers through consultants to buy products ranging from baseball tees to dresses to leggings. To be a consultant, however, LuLaRoe requires an initial expenditure upwards of $5,000 for a start-up inventory kit of clothing and other promotional materials.
The HAE team maintains that as bait to lure consultants to sign up and to purchase more inventory, LuLaRoe promised consultants in April 2017 that they could cancel their agreements with the company and be refunded 100% of the wholesale amount of inventory they purchased, including shipping charges. The 100% refund had no conditions or exceptions attached, the complaint alleges, and to further induce consultants, LuLaRoe uniformly promised that the 100% buyback policy would never expire.
“Unfortunately, LuLaRoe changed its mind seemingly overnight in September 2017 and reneged on its end of the bargain,” says Amber Eck, a partner at Haeggquist & Eck who filed the complaint alongside HAE partner Aaron Olsen and attorneys from Cohn Lifland Pearman Hermann & Knopf in New Jersey. “Instead of honoring its 100% buyback and free shipping agreement, LuLaRoe is not providing fee shipping and is honoring at most a 90% refund and even then it comes with numerous exceptions, cheating class members out of thousands of dollars.”