Tuesday, November 23, 2021

No. 447: A Class Action Relating to an Alleged Pyramid Scheme

On June 25, 2018, two individuals filed, in federal court in California, a class action lawsuit against a suspended California corporation, five individuals, a Texas corporation, and a California limited liability company. (See In Re Premium Financial Alliance, Inc. Insurance Marketing Litigation, U.S. District Court, Northern District of California, Oakland Division, Case No. 4:18-cv-3771.)

The Original Complaint
The plaintiffs alleged in the 29-page original complaint that they had been victimized by a "classic pyramid scheme." The first paragraph of the "Introduction to the Case" section of the original complaint reads:
The Defendants are operating a classic pyramid scheme. What makes this scam particularly egregious is that the Defendants have never marketed or sold insurance policies to any retail customers, but instead derive 100% of the scheme's revenue from chain recruitment. These practices have been prohibited by the Federal Trade Commission, and violate State and Federal Laws. Plaintiffs and tens of thousands have joined PFA and have become "Associates." Plaintiffs did not make money as promised. The Associates failed because they were doomed from the start by a PFA marketing plan that systematically rewards recruiting Associates over the sale of overpriced insurance product or service to retail customers.
The original complaint does not describe the targets of the pyramid scheme. Other case documents, however, indicate that the program was aimed at Chinese, Vietnamese, and other immigrants who may have limited fluency in the English language.

Subsequent Developments
Subsequent to the filing of the original complaint, there have been amended complaints, answers to the complaints, and unsuccessful motions to dismiss. On May 14, 2021, the plaintiffs filed a motion for class certification.

General Observations
This is an interesting case. Because I am not an attorney, it would be inappropriate for me to express a legal opinion on it. The case has a long way to go, and I plan to provide an update fairly soon.

===================================

Wednesday, November 17, 2021

No. 446: The Bounty Trilogy

Recently I completed some pleasurable reading. I decided to prepare this blog post in case some of you might want to do the same.

The Bounty was a small English warship that in 1787 set out on a very long voyage to Tahiti to pick up breadfruit trees, which would provide a source of inexpensive food for slaves in the West Indies. Lieutenant William Bligh captained the Bounty. Fletcher Christian was the Master's Mate on the Bounty and the leader of the mutineers.

Charles Nordhoff and James Norman Hall wrote a trilogy of historical novels describing the voyage. The titles of the three books, all published in the early 1930s, are Mutiny on the Bounty, Men Against the Sea, and Pitcairn's Island. The first book is about the mutiny and its immediate aftermath. Instead of killing Bligh, the mutineers put him and 18 others in a small open boat, called a "launch," with food and supplies, and set them adrift. The second book is about Bligh's incredibly long and successful voyage in the launch, after which he returned to England. The third book is about a remote island where Christian and some of the mutineers settled permanently and destroyed the Bounty.

I read the trilogy about 70 years ago. Recently, on a whim, I decided to reread Mutiny on the Bounty. In addition to describing the mutiny, it also discusses what happened in the first several years after the mutiny, and, in an epilogue, what happened many years after the mutiny.

Several movies have been made about the Bounty. My favorite is the 1935 black-and-white film starring Clark Gable as Fletcher Christian and Charles Laughton as William Bligh. The narrator was Englishman Roger Byam, who was played in the film by actor Franchot Tone.

===================================

Wednesday, November 10, 2021

No. 445: Kemper's Long Legal Struggle Relating to Lost Policyholders: An Update

In No. 424 (June 10, 2021), I wrote about Kemper's long legal struggle relating to lost policyholders. The struggle is now in the Florida Supreme Court. Here I provide an update on the case. (See United Insurance Company of America v. Patronis, Florida Supreme Court, Case No. SC20-1306.)

On October 12, 2021, the Florida Supreme Court issued an order setting oral argument at 9:00 a.m. on December 8, 2021. Each side is given a maximum of 20 minutes. No continuances will be granted except upon a showing of extreme hardship. I plan to provide a further update when I consider it warranted.

===================================

Thursday, November 4, 2021

No. 444: Adam Schiff's Important Book

Adam Schiff's important book was published on October 12, 2021. It is entitled Midnight in Washington: How We Almost Lost Our Democracy and Still Could.

Schiff represents California's 28th congressional district. As chair of the House Permanent Select Committee on Intelligence, he was heavily involved in both impeachments of Donald Trump. Schiff's book presents a tremendous amount of detail about Trump's attack on our democracy. Here is what presidential historian Michael Beschloss says about Schiff's book: "In this thoughtful, absorbing and revelatory memoir, an important champion and defender of American democracy shows us how he became a national leader and, drawing on his experience on the inside, how close the Trump regime brought us to losing our system." Here is the final paragraph in the epilogue of Schiff's book:
Seventeen years from now, when the present is a distant memory for all but the cicadas, we will look back on this time as a decisive moment for our country, when we were at sea and our destination remained unknown, our future obscure, the great enterprise in self-rule in doubt. Did we turn back toward the shores of our Founders, or was this the moment when the clouds descended, the stars disappeared, and we became irretrievably lost? We must understand that we are not passengers on this journey, unable to steer the country we all love in one direction or another. It is within our power to take hold of the rudder, choose the future we want for our children and grandchildren, and, with the grace of God, make it so.
===================================