The First LuLaRoe Scam Settlement – Class action

We were made aware of a previous unknown LuLaRoe class action lawsuit on Thursday. And this contains the first LuLaRoe scam settlement. You may be asking yourself, how can a settlement be a scam? The settlement offer is ONLY for retailers or ex-retailers that reside in California. But that’s not the reason why.

Click on the links above to see both the initial complaint (that was obtained by one of the other class action attorneys) and the settlement letter.

The First LuLaRoe Scam Settlement

Here’s the deal. The suit was filed in Hollister, California. This is a small, rural community in central California. Their legal documents are not found online and they aren’t linked to the Pacer (acronym for Public Access to Court Electronic Records) which is an electronic public access service of United States federal court documents. It allows users to obtain case and docket information from the United States district courts, United States courts of appeals, and United States bankruptcy courts. The system is managed by the Administrative Office of the United States Courts in accordance with the policies of the Judicial Conference, headed by the Chief Justice of the United States. As of 2013, it holds more than 500 million documents). This fact will become important later in this article.

This suit was filed on July 5, 2017.  The mailings arrived in people’s mailboxes starting on Wednesday and Thursday of this week.

You have FOUR options in regards to actions you can take on this settlement.

  1. Do nothing
  2. Submit the form and receive the proposed monetary settlement
  3. Object to the settlement
  4. Opt out

For option #1 in the first LuLaRoe scam settlement, if you do nothing, you LOSE YOUR RIGHT TO PARTICIPATE IN ANY FURTHER CLASS ACTIONS SUITS OR LITIGATION AGAINST LULAROE. This, right here, is what they are hoping that retailers do: ignore the notice, do nothing, and lose all rights for any further legal action against LuLaRoe. THIS INCLUDES PARTICIPATING IN ANY OF THE OTHER PENDING CLASS ACTION LAWSUITS OR ANY OTHERS THAT MAY BE BROUGHT AGAINST LULAROE IN THE FUTURE.

In my opinion, and I’m not an attorney, it is EXTREMELY suspect for option 1 to terminate your rights for any further legal action against LuLaRoe by doing nothing. I have received settlements from a few class actions and do not ever recall being excluded from any further legal action if I did not respond to a class action settlement notification and ignoring it. THIS TERMINATES ALL YOUR RIGHTS. Why any attorney would allow a settlement to contain this verbiage is beyond me. It makes no damn sense. But we’ll get to that later.

If you take option 2 in the first LuLaRoe scam settlement, you get the pittance amount that’s on your settlement letter, terminate your contract with LuLaRoe and LOSE YOUR RIGHT TO PARTICIPATE IN ANY FURTHER CLASS ACTIONS SUITS OR LITIGATION AGAINST LULAROE. That’s not really surprising. Also, the totals that have been provided to the court are woefully inaccurate. Some totals have been an amount that is not possible because of the initial cost of the onboarding package. The amount being offered is approximately 1.18% of the total amount you’ve spent on inventory, and that is calculated against the total provided by LuLaRoe, which has shown to be completely inaccurate.

Taking option 3 in the first LuLaRoe scam settlement allows you to formally object to the settlement. There are forms that are required. You can object to any terms of the settlement before the final approval hearing.

Option 4 allows your to opt out of this settlement and retain all your rights for future legal action against LuLaRoe.

But wait, there’s more!

There’s a theory being discussed that the plaintiff in this case is a shill; meaning that LuLaRoe planned and had this lawsuit filed to  specifically narrow the pool of former and current retailers that can file legal action against LuLaRoe in the future. Taking option 1, or “doing nothing” in the case, excludes you from being able to pursue any further legal action against LuLaRoe.

Also, this being filed in such a small court with no online access to their filings speaks volumes. This suit flew under the radar UNTIL a settlement was reached. No one was aware of it until then. Was this purposefully done? Was it intentional? YOU be the judge on that one.

How many times have you gotten a class action settlement notice and not read the fine print? Or just thrown it in the trash? Or the verbiage was so confusing that you weren’t able to tell what you were supposed to do? LuLaRoe is counting on that fact. They are counting on the fact that people will get confused and not opt out or throw it in the trash, which will exclude you from any further legal action against LuLaRoe.

Take a look at the old retailer map from LuLaRoe. See all those black dots? Those were all active retailers at one time. They’ve since reformatted this map so you cannot see ALL the retailers, so the apparent saturation of retailers isn’t as visible.
All those black dots in the red area are California retailers. LuLaRoe is trying to exclude those retailers from pursuing further legal action with the unclear and confusing language in the settlement letter.

LuLaRoe also sent out an email to it retailers that does not make ONE MENTION of giving up your rights to further legal action, in any of the scenarios. This, in and of itself, is a tell-tale sign.

I’m not here to give legal advice. But I will offer my opinion. If I was in California and received this letter, I would opt out immediately. The pittance being offered in this settlement is not worth it and in my opinion, the other class action lawsuits will gain a higher monetary settlement.

YOU MUST PERFORM AN ACTION BY JANUARY 11, 2018.

LuLaRoe is know to be devious and unscrupulous. IT’S NOT A BAD IDEA TO MAIL YOUR OPT OUT VIA CERTIFIED MAIL.

Chose wisely. LuLaRoe is counting on the fact that most people WILL NOT ACT. And that will terminate their rights completely. Don’t fall into the trap set by LuLaRoe in the first LuLaRoe scam settlement; we’ve already endure enough pain from this sham of a company. RETAIN YOUR RIGHTS. 

PLEASE contact me if you have any question, or comment on this post. I’m happy to offer my opinion but it must not be misconstrued as legal advice; it is presented as legal information only.

For further opinions on this suit, check here.

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