IBOA nervous about documents in Nitro case

Nervous about the potential release of damning information in a brief and exhibits from the Nitro case, the IBOA has filed a motion and a new brief in Federal Court in Grand Rapids, MI for sealing or return of discovery three bankers boxes of documents and a 63 page deposition of Jody Victor used to break the arbitration agreement in the Nitro vs. Alticor case.  

These documents were critical in Judge Dorr's decision stating that the Amway/Quixtar arbitration agreement was substantively and procedurally unconscionable.  The Nitro vs. Alticor case, filed in Missouri alleged anti-trust violations in the Amway/Quixtar motivational tools business and has been updated to include RICO violations.    The Missouri court had been asked to consider declassification of certain documents relating to the IBOA materials acquired in discovery.  
This motion was denied on the grounds to maintain the status quo until the 8th Circuit Court of appeals made its decision.

The 8th Circuit Court has since ruled in Nitro's favor and the issue of unsealing is once again before the Missouri court.   The IBOA motion hopes to circumvent a negative outcome for them in the Missouri court.  

The IBOA brief clearly highlights the IBOA's fears that the information would be made public on websites critical of the Amway/Quixtar business. 

"Certain of these individuals maintain web sites on the Internet where they publish information about the IBOAI with a very negative slant.   The IBOAI is reasonably certain that if the Produced "Documents are declassified , those documents will promptly find their way to these internet web sites to the significant detriment and damage of the IBOAI."

In Nitro's 13 page response to the IBOA's brief it was mentioned that the IBOA was represented through two corporate designees, Constance Altschwager and Jody Victor.   A protective order was entered into between Amway and Nitro.   The IBOA never opted into the protective order.

After September 17, 2005 when the Missouri court ruled that the Amway arbitration provision is unconscionable and unenforceable, Nitro sought to declassify and unseal their brief and most of the exhibits upon which the Missouri Court relied in reaching its decision.    Nitro attempting to unseal a deposition of Jody Victor and Depo. Ex 82.     Nitro's sought declassification to unseal some documents that do not meet the requirements for sealing and also to unseal documents important to the public's interest.  The brief states:

"The discovery obtained from the IBOA relates to adoption of the Amway arbitration provision and drafting of the arbitration rules in 1997, as well as to the nature and extent of the IBOAI's involvement in that process.    It cannot seriously be contended that this nearly ten-year old information is proprietary, particularly because the arbitration provision and rules have since been adopted and are available to every Amway distributor.   Because the IBOAI-produced information that the Plaintiffs seek to declassify and unseal does not fall within any of the protected categories set forth in the Protective Order, it was never entitled to confidentiality."

"III.  THE PUBLIC HAS A COMPELLING INTEREST IN SEE THE DOCUMENTS UPON WHICH THE MISSOURI COURT BASED ITS RULING.

It is important that the documents upon which the Missouri Court based its decision be made available to the public.  The Missouri Court's arbitration ruling did not decide issues unique only to the parties before it.    Its ruling that the Amway arbitration provision is unconscionable and unenforceable is equally applicable to thousands of other Amway distributors whom Amway may attempt to force into arbitration, just as it did these Plaintiffs.  Depo. Ex. 82 and Jody Vicotr's deposition testimony are pertinent to that ruling.   The evidence that the Missouri Court relied on to strike the Amway arbitration provision as unconscionable should, in the interests of justice, be made available to the public."...

"Public records may not be sealed merely because the document may result in negative publicity, be harmful to one's reputation, or be embarrassing or incriminating".....

"Depo. Ex. 82 and Jody Vicotr's deposition are not the type of information that is properly subject to a protective order and , indeed, do not fall within any category set forth in the Missouri Court's protective order that may be legitimately be designated as "confidential".

"The public's need to know in this case far outweighs the IBOAI's unsubstantiated claim that the information is proprietary.  Plaintiffs spend six years (beginning with related state court cases) uncovering, at great expense, information to establish that a distributor cannot get a fair hearing under Amway's arbitration program.  It is highly doubtful that any other distributor facing arbitration under Amway's unenforceable system would have the financial wherewithal to re-create the evidence that convinced the Missouri Court to invalidate it. "

"As the IBOAI alluded, there is a strong public interest in the issues raised in Nitro.  The overwhelming majority of that interest is from the IBOAI's own constituency.   Those distributors, above all, should be entitled to know what their representative body was doing.  And they have the greatest need for the disclosure of this information because they are the ones at risk at being forced into the same unenforceable arbitration program.   Yet the IBOAI wants to keep information about the adoption of that program a secret from the very members on whose behalf it was acting."

"Even if the IBOAI's documents were properly classified as confidential, the interests of justice far outweigh any interest the IBOAI may have in the non-disclosure of this stale information. 

The Michigan court was to review the case on December 14, 2006.