The Nerium Class Action Lawsuit

The Nerium Class Action Lawsuit is a multi-level marketing (MLM) scheme wherein individuals are required to join in the program in order to become an “Agency.” Anyone can join this scheme provided they have direct sales experience. This scheme was created by former FTC Chairwoman, Ellen Swallow Smith. The founder of Nerium International, Jeff Smith, is a former network marketing executive with Direct Sales companies.

Nerium Class Action Lawsuit

Before the founder joined Nerium International, he worked as a vice president for CitiGore, a high-end department store in New York City. There, he ran the store’s day-care division and was responsible for recruiting and training the staff. Eventually, he was promoted to the position of CFO. There, he began to realize that CFOs needed better education and career help so that they could maximize their earning potential. After he left CitiGore, he formed Nerium International with the goal of providing consumers with the latest in high-tech electronic products at affordable prices. Later, he began recruiting and training his own team of people, namely, his former CFO and COO, his two “big sisters.”

Once the Nerium Class Action Lawsuit was filed, it was alleged by the plaintiffs and former employees that Nerium International deceived consumers into purchasing inferior products which resulted in financial loss for the company.

The defendant, Jeff Smith, denied all accusations and maintained that the Nerium products were of superior quality and that any claims of the opposite were merely made by his brand partner, David Blaine. Despite these denials, the plaintiffs filed more lawsuits against Smith, eventually forcing him out of the company he founded and helped build. In a nutshell, the plaintiffs won the case against Smith because he was no longer able to protect the interests of his brand partner, David Blaine.

Now, six years later, the Toysrus vs. windsor’s lawsuit has been filed in the U.S. District Court for the Southern District of New York.

This legal battle revolves around two very important facts: (a) toysrus owns a patent on the Nerium trademark; and (b) windsor’s lawsuit was filed after he realized that there was a genuine threat of infringement of his patent. When you look at the issue from a legal perspective, it is rather easy to see how the situation developed. Let’s briefly look at how the story unfolded.

The toy store started selling the “new and improved” Nerium skincare line after Jeff Smith’s Nerium skincare became a huge success.

Jeff and his friend, Robert, decided to pursue their business dreams by starting a direct selling company. Unfortunately, Robert did not have much background in marketing or direct selling and the Nerium skincare business was considered too complicated and risky for them. They later changed their minds and decided to launch their company.

Over the course of several months, the Nerium company worked out several direct selling programs.

During this time, they had several different talks given to them by Nerium International. It was during one of these talks that the story unraveled: Nerium International knew that there were illegal activities going on with their competitor, Toysrus, so they tried to find a way to get into the competitive market by coming up with their own version of toy packaging that looked like the “real” thing.

The “legal” excuse that Nerium gave was that the RIM Company (the parent company of Toysrus) didn’t follow proper protocol when it came to the design of the Nerium toys. Essentially, Nerium wanted to be the “RIM of the toys industry.”

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