Thread: Reps Suing Ignite / Stream Have Won in Appeals Court

Wonderful news for those folllowing the legal developments on these MLM cases. The district court has been reversed and the case against Ignite / Stream remanded back for further proceedings! Bless these reps for having the courage to go forward and see justice done!

http://www.clearmanlaw.com/uploads/5th_Torres.pdf

Soapboxmom

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Recent and Prior Cases



Recent events

Stream and Ignite RICO Litigation: October 5, 2010: The United States Fifth Circuit Court of Appeals held Ignites's "arbitration provision is illusory and unenforceable.” The Court observed “Ignite essentially could renege on its promise to arbitrate by merely posting an amendment to the agreement on its website.” The Fifth Circuit returned the case to the district court for further proceedings. Here is the Court's opinion.

For those who want to know more, we have a page devoted to the Stream Energy and Ignite RICO Litiagation. Here is the link.

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Congratulations Mr. Clearman. This will definitely be one to watch!

Soapboxmom

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Suit against Stream Energy reignited

Dallas Business Journal

Date: Wednesday, October 6, 2010, 3:35pm CDT
Related:

Legal Services, Bankruptcies

The Fifth Circuit Court of Appeals has overturned a lower court’s ruling to dismiss a lawsuit filed against Stream Energy.
The original lawsuit accused the Dallas-based energy retailer of running a marketing arm that operates as a pyramid scheme.
In November last year, a U.S. District judge dismissed the plaintiffs' lawsuit.
At the time, U.S. District Judge Kenneth M. Hoyt said the plaintiffs had to honor arbitration agreements they originally signed with the Dallas-based electricity retailer.
The original suit filed by attorney Scott Clearman in Houston alleged that Stream Energy and its Ignite marketing arm operated a pyramid scheme that allowed a few on the top to get rich on the returns of investors who were asked to pay close to $400 for their own “Ignite Homesite” Web page.
Clearman appealed to the Fifth Circuit and received a favorable ruling from a panel of judges this week. The panel agreed the arbitration clause in the contract may be “illusory,” prompting the court to reverse the dismissal, sending the case back to a lower court for review.

Read more: Suit against Stream Energy reignited | Dallas Business Journal

Here’s the full release from Clearman:

The Clearman Law Firm Announces Federal Lawsuit Against Stream Energy, Executives, Alleging Unlawful Pyramid Scheme

HOUSTON — Attorneys from Houston’s The Clearman Law Firm are announcing a federal class action lawsuit filed yesterday under the Racketeer Influenced Corrupt Organizations Act against Dallas-based Stream Gas & Electric, Ltd., Ignite Holdings, Ltd., their related companies and several affiliated individuals.
A retail electricity and gas provider in Texas and Georgia, Stream has grown in only three years to become the 29th largest private company in the Dallas/Fort Worth area based on revenues of more than $800 million in 2008. Stream’s marketing division, Ignite, has fueled Stream’s growth through what the company calls a “multilevel marketing program.”

The 89-page federal complaint alleges that Stream and Ignite’s multilevel marketing program is actually an unlawful pyramid scheme. Pyramid schemes are inherently doomed programs in which investors recruit people to pay money to those above them in a first-come-first-served hierarchy with the expectation that they will get payments from other investors who enter the program later. When the number of newly recruited investors eventually dwindles, the payment structure collapses.

Specifically, the lawsuit filed in the U.S. District Court for the Southern District of Texas in Houston alleges that Stream and Ignite induced the plaintiffs and others to invest in the “Ignite Services Program” at a cost of $329 and purchase an “Ignite Homesite” web page for a charge of $29 per month. The lawsuit claims that a large portion of the $329 is paid to those higher in the pyramid.

“Some of the individuals at the top of the Stream and Ignite pyramid earn millions of dollar a year, while most of those that are now joining the scheme will likely never recover their investment,” says Scott Clearman of The Clearman Law Firm, lead counsel for the plaintiffs. “Stream promises recruits that they can make vast sums of money, but the fact is that most will lose their money.”
In addition to Stream and Ignite, individual defendants named in the complaint include Ignite founders Chris Domhoff, Rob Snyder and Pierre Koshakj [sic], as well as several Stream employees. Additional defendants include Donny Anderson, Steve Fisher, Randy Hedge, Logan Stout and Presley Swagerty, all of whom are near the top of the alleged pyramid.

In addition to Mr. Clearman, the plaintiffs are represented by Brian D. Walsh of The Clearman Law Firm.

A copy of the lawsuit and more information about The Clearman Law Firm is available at Home Page.

http://pdfs.streamenergy.net/pdfs/Disclosure_Page.pdf