Kanti Gala sues mentor and upline Bill Britt

I am a bit late in reporting the suit.   I only found out about it last night.   The suit was filed on 1/10/2010 but from what I gather the dispute has been going on since 2006. 

This is another great example of how a Diamond's tools income can get turned off at a drop of a hat by the upline "triple super awesome diamond grand master dragon wizard".  

Kanti_Hemi_Gala .jpg (17916 bytes)In or around May of 2006, Kanti and Hemi Gala were terminated from their membership in BWW, and all sales of BSM’s (including tool sales) sales to Kanti and Hemi Gala were cut off by Defendants.  Kanti and Hemi Gala were allegedly subject to a April, 2006, “hearing” regarding their termination, conducted by the Executive Committee of BWW. The notice for the alleged BWW hearing was sent to Kanti and Hemi Gala by counsel for Defendants when Defendants were aware that Kanti and Hemi Gala were travelling in India and would not receive actual notice of such “hearing.”  Defendants’ termination and cutoff of tool sales and income to Kanti and Hemi Gala caused harm to Plaintiffs through a substantial loss of all income from their down-line LOS for all products and services associated with Defendants. 
pdf_icon.gif (914 bytes)Complaint

The Gala's also allege defamation and disparagement, which is a common claim after a falling out with the line of sponsorship.      Most court cases I've read concerning Amway highlight this sudden change from "positivity" to "negativity".

23 In conjunction with their improper termination, Kanti and Hemi Gala were defamed and disparaged by Defendants Britt and Kanti Gala (II), along with other members of the BWW Executive Committee. The defamation included statements disparaging the Gala’s work ethic, dedication, and commitment to their down-line LOS.

24. Defendants’ defamatory statements damaged Plaintiffs’ reputations and their ability to work with, lead, and gain compensation for BSM sales, speaking engagements, and event ticket sales to the Galas’ large down-line organization which they had build and cultivated for over twenty years.

The Gala's are claiming breach of contract, unjust enrichment, fraudulent inducement, and defamation. 

Before the suit was filed the Gala's attempted to file an arbitration demand against the Britt plaintiffs under Rule 11 of the Amway code of conduct.   From what I gather the Gala's did not want to risk the "wrath of Amway" by taking a dispute outside the JAMs/Amway "sphere of influence". 

britt4.jpg (5730 bytes)Britt did not dispute the arbitration with JAMS until the oral argument on the scope of arbitration in Atlanta.     The JAMs arbitrator ruled that the Amway rule 11 did not apply and the BWW arbitration clause would apply.  After this the suit in Nevada was file in January of 2010. 

On 2/22/2010 Gala file an pdf_icon.gif (914 bytes) emergency motion to stay the AAA arbitration. 

On March 1, 2010 the arbitration took place.    The Gala's did not participate.  The Britt's issued their pdf_icon.gif (914 bytes) response to the emergency motion on 3/11/2010

On 3/15/2010 the Gala's then filed a pdf_icon.gif (914 bytes) Supplement to Opposition to Emergency Motion to Stay Arbitration after the arbitration handed them an pdf_icon.gif (914 bytes) unfavorable decision and a bill for $5,184,000 to be paid to BWW!

On 3/22/2010 the Gala's pdf_icon.gif (914 bytes) respond to the motion to stay arbitration in which they contend they would never have filed an arbitration demand if they had know it would not be handled under Amway's Rule 11.  The Gala's challenge that the arbitration provision in the BWW Operating Agreement is adhesive, unconscionable, and unenforceable.   That is what other courts have ruled about the Amway rules as well!    I can't see why the corrupt Amway rules would be of any benefit to them unless they think Amway can somehow manipulate the outcome to their favor.

On 6/21/2010 pdf_icon.gif (914 bytes) motion the court to dismiss the case and challenge jurisdiction as none of the parties have any material presence in the State of Nevada!  But then on the same day he Britt's motion the court in Nevada to pdf_icon.gif (914 bytes) confirm the arbitration award and enter a judgement.   pdf_icon.gif (914 bytes)Exhibits 1-3 pdf_icon.gif (914 bytes)Exhibits 4-6

On 6/28/2010 the judge denied the motion to stay arbitration. 

On 7/09/2010 the Gala's filed their pdf_icon.gif (914 bytes) response to the motion to grant judgement.  The Gala's argue that the Amway rule 11 must be followed.  The Britt's did not bring their counter claims through the Amway dispute resolution process as would apply with Rule 11. The Gala's also argue that Britts' counter claims were too old when using the Amway rule 11.  The Gala's also argue that the supposed original violations occurred in India, where separate Indian law and corporations for the Gala's and Britt's are involved.    The Gala's contend that BWW LLC cannot sue on behalf of
BWW India.     The Gala's contend they have never entered into any non compete contract with BWW India or any contract regarding Amway India business to be conducted in India. No alleged claim against Plaintiffs Kanti and Hemi Gala is maintainable at the instance of BWW LLC through their alleged relationship with BWW INDIA or on the basis of their operating agreement with BWW LLC.  The Gala's also contend that local Amway rules in India allow for transfer of distributors to one support system to another without penalty.    BWW was with full knowledge of this Amway rule and never opposed it. Exhibits

The response also mentioned Britt's pervious acceptance of the Rule 11 when dealing with the  pdf_icon.gif (914 bytes)Britt vs. Larry Winters lawsuit.

DEFENDANTS HAVE WAIVED ANY RIGHT TO ENFORCEMENT OF THE AWARD AT ISSUE THROUGH JUDICIAL ESTOPPEL, AS THEY HAVE PREVIOUSLY ACKNOWLEDGED THE BINDING NATURE OF AMWAY’S RULE 11 CLAUSE.

On April 19, 2006 Amway’s Director of Global Business Conduct and Rules, Gary Vander Ven, sent a stern letter to BWW and certain subsidiaries regarding numerous Amway related lawsuits filed in Nevada State Court. See Amway Vander Ven Letter, attached hereto as Exhibit 3. Page three of the Amway letter states:

“Britt Volation of Rule 11 Dispute Resolution Provisions: Quixtar has determined that the court complaints styled Britt Worlwide LLC v. Larry Winters, et al (Second Judicial District Court of the State of Nevada in and for the County of Washoe, Case No. CV06 00700)…filed by entities owned and controlled by IBOs against other IBOs and their Companies. The disputes clearly arise from and relate to the Quixtar (Amway) business. These lawsuits constitute a violation of Quixtar Rule 11 by the IBOs that control the plaintiff entities. Any IBO who authorized these actions, including the entire LLC management group, is in violation of the Quixtar Rules of Conduct. Accordingly, these lawsuits must be dismissed immediately (with or without prejudice). Failure to dismiss these court cases by April 28, 2006 will result in rule enforcement by Quixtar under the enforcement procedure described below.”

After receiving the Amway letter, Defendants (i) immediately dismissed their Nevada state lawsuits, (ii) brought the case in Arbitration pursuant to the express terms of Rule 11, and (iii) selected Arbitrator Wayne Thorpe -- the same Arbitrator at issue in the instant action-- to arbitrate their claims. In fact, the very same law firm and counsel representing Defendants in this action were representing Defendants as Claimants in their previous Rule 11 arbitration with Wayne Thorpe. During that prior action, neither Defendants nor Thorpehad any issue or objection to the clear procedural rules in Rule 11. Neither Defendants nor the Arbitraor ever mentioned the one sentence arbitration clause in the BWW Operating Agreement. As such, Defendants late objection to Rule 11, and late insistence upon use of the BWW “substitute” Arbitration clause in this action, is both improper and disingenuous. Defendants would have never “switched” their required Rule 11 arbitration provisions -- risking another possible sanctions warning from Amway -- unless they were clearly timebarred on their proposed counterclaims against Plaintiffs.

It will be interesting to see how this all ends!